IRA Guidance - 11.30.2022

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Federal Register / Vol. 87, No. 229 / Wednesday, November 30, 2022 / Notices

III. Public Participation
The meeting listed in this notice will
be open to the public virtually. Please
see the website not later than five
working days before the meeting for
details on viewing the meeting on
YouTube.
If you are in need of assistance or
require reasonable accommodation for
this meeting, please contact the person
listed in the FOR FURTHER INFORMATION
CONTACT section at least ten calendar
days before the meeting. Sign and oral
interpretation can be made available if
requested ten calendar days before the
meeting.
Interested members of the public may
submit relevant written statements for
the COMSTAC members to consider
under the advisory process. Statements
may concern the issues and agenda
items mentioned above and/or
additional issues that may be relevant to
the U.S. commercial space
transportation industry. Interested
parties wishing to submit written
statements should contact the person
listed in the FOR FURTHER INFORMATION
CONTACT section in writing (mail or
email) 10 DAYS IN ADVANCE OF THE
MEETING so that the information can be
made available to COMSTAC members
for their review and consideration
before the meeting. Written statements
should be supplied in the following
formats: One hard copy with the
original signature and/or one electronic
copy via email. Portable Document
Format (PDF) attachments are preferred
for email submissions. A detailed
agenda will be posted on the FAA
website at https://www.faa.gov/space/
additional_information/comstac/.
Issued in Washington, DC.
James A. Hatt,
Designated Federal Officer, Commercial
Space Transportation Advisory Committee,
Federal Aviation Administration, Department
of Transportation.
[FR Doc. 2022–26078 Filed 11–29–22; 8:45 am]
BILLING CODE 4910–13–P

DEPARTMENT OF THE TREASURY
Internal Revenue Service

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[2022–61]

Prevailing Wage and Apprenticeship
Initial Guidance Under Section
45(b)(6)(B)(ii) and Other Substantially
Similar Provisions
Internal Revenue Service (IRS),
Treasury.
ACTION: Notice of initial guidance.
AGENCY:

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This notice provides guidance
on the prevailing wage and
apprenticeship requirements that
generally apply to certain provisions of
the Internal Revenue Code (Code), as
amended by the Inflation Reduction Act
of 2022. This notice also serves as the
published guidance establishing the 60day period described in those
provisions of the Code with respect to
the applicability of the prevailing wage
and apprenticeship requirements.
Finally, this notice provides guidance
for determining the beginning of
construction of a facility for certain
credits allowed under the Code, and the
beginning of installation of certain
property with respect to the energy
efficient commercial buildings
deduction under the Code. This notice
affects facilities the construction of
which began, or certain property the
installation of which began, on or after
January 30, 2023. The Department of the
Treasury (Treasury Department) and the
IRS anticipate issuing proposed
regulations and other guidance with
respect to the prevailing wage and
apprenticeship requirements.
DATES: January 30, 2023 is the date that
is 60 days after the Secretary of the
Treasury or her delegate (Secretary)
publishes the guidance described in 26
U.S.C. 30C(g)(1)(C)(i), 45(b)(6)(B)(ii),
45Q(h)(2), 45V(e)(2)(A)(i),
45Y(a)(2)(B)(ii), 48(a)(9)(B)(ii),
48E(a)(2)(A)(ii)(II) and (a)(2)(B)(ii)(II),
and 179D(b)(3)(B)(i).
FOR FURTHER INFORMATION CONTACT:
Alexander Scott, CC:PSI:6, Internal
Revenue Service, 1111 Constitution
Avenue NW, Washington, DC 20224, at
(202) 317–6853 (not a toll-free call).
SUPPLEMENTARY INFORMATION:
SUMMARY:

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Section 1. Purpose
Public Law 117–169, 136 Stat. 1818
(August 16, 2022), commonly known as
the Inflation Reduction Act of 2022
(IRA), amended §§ 30C, 45, 45L, 45Q,
45U, 45V, 45Y, 45Z, 48, 48C, 48E, and
179D of the Internal Revenue Code
(Code) to add prevailing wage and
apprenticeship requirements to qualify
for increased credit or deduction
amounts.1 This notice provides
guidance on the prevailing wage and
apprenticeship requirements that
generally apply to those sections of the
Code. This notice also serves as the
published guidance under
§§ 30C(g)(1)(C)(i), 45(b)(6)(B)(ii),
45Q(h)(2), 45V(e)(2)(A)(i),
45Y(a)(2)(B)(ii), 48(a)(9)(B)(ii),
1 See §§ 13101(f), 13102(k), 13104(d), 13105(a),
13204(a)(1), 13303(a)(1), 13304(d), 13404(d),
13501(a), 13701(a), 13702(a), and 13704(a) of the
IRA.

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48E(a)(2)(A)(ii)(II) and (a)(2)(B)(ii)(II),
and 179D(b)(3)(B)(i) establishing the 60day period described in such sections
with respect to the applicability of the
prevailing wage and apprenticeship
requirements. Finally, this notice
provides guidance for determining the
beginning of construction under §§ 30C,
45, 45Q, 45V, 45Y, 48, and 48E, and the
beginning of installation under § 179D
solely for purposes of § 179D(b)(3)(B)(i).
The Department of the Treasury
(Treasury Department) and the Internal
Revenue Service (IRS) anticipate issuing
proposed regulations and other
guidance with respect to the prevailing
wage and apprenticeship requirements.
Section 2. Background
.01 Increased Tax Benefits For
Satisfying Certain Prevailing Wage and
Apprenticeship or Construction and
Installation Requirements.
(1) In General. Increased credit
amounts are available under §§ 30C, 45,
45Q, 45V, 45Y, 45Z, 48, 48C, and 48E,
and an increased deduction is available
under § 179D, for taxpayers satisfying
certain prevailing wage and
apprenticeship requirements. Increased
credit amounts are available under
§§ 45L and 45U for taxpayers satisfying
certain prevailing wage requirements.
The general concepts and provisions
relating to the increased tax benefits
under § 45(b)(6), (7), and (8) are similar
to those under each of these other Code
sections. Therefore, only the relevant
provisions under § 45(b)(6), (7), and (8)
are discussed in section 2.01(2) and (3)
of this notice.
(2) Prevailing Wage Requirements.
Section 45(b)(7)(A) provides that to
meet the prevailing wage requirements
with respect to any qualified facility, a
taxpayer must ensure that any laborers
and mechanics employed by the
taxpayer or any contractor or
subcontractor in: (i) the construction of
such facility, and (ii) the alteration or
repair of such facility (with respect to
any taxable year, for any portion of such
taxable year that is within the 10-year
period beginning on the date the
qualified facility is originally placed in
service), are paid wages at rates not less
than the prevailing rates for
construction, alteration, or repair of a
similar character in the locality in
which such facility is located as most
recently determined by the Secretary of
Labor, in accordance with subchapter IV
of chapter 31 of title 40, United States
Code (Prevailing Wage Rate
Requirements). Section 45(b)(7)(B)
provides correction and penalty
mechanisms for a taxpayer’s failure to
satisfy the requirements under
§ 45(b)(7)(A).

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(3) Apprenticeship Requirements.
Section 45(b)(8)(A)(i) provides that to
meet the apprenticeship requirements
taxpayers must ensure that, with respect
to the construction of any qualified
facility, not less than the applicable
percentage of the total labor hours of the
construction, alteration, or repair work
(including such work performed by any
contractor or subcontractor) with
respect to such facility is, subject to
§ 45(b)(8)(B), performed by qualified
apprentices (Apprenticeship Labor Hour
Requirements). Under § 45(b)(8)(A)(ii),
for purposes of § 45(b)(8)(A)(i), the
applicable percentage is: (i) in the case
of a qualified facility the construction of
which begins before January 1, 2023, 10
percent, (ii) in the case of a qualified
facility the construction of which begins
after December 31, 2022, and before
January 1, 2024, 12.5 percent, and (iii)
in the case of a qualified facility the
construction of which begins after
December 31, 2023, 15 percent.
Section 45(b)(8)(B) provides that the
requirement under § 45(b)(8)(A)(i) is
subject to any applicable requirements
for apprentice-to-journeyworker ratios
of the Department of Labor or the
applicable State Apprenticeship Agency
(Apprenticeship Ratio Requirements).
Section 45(b)(8)(C) provides that each
taxpayer, contractor, or subcontractor
who employs 4 or more individuals to
perform construction, alteration, or
repair work with respect to the
construction of a qualified facility must
employ 1 or more qualified apprentices
to perform such work (Apprenticeship
Participation Requirements).
Under § 45(b)(8)(D)(i), a taxpayer is
not treated as failing to satisfy the
requirements of § 45(b)(8) if: (i) the
taxpayer satisfies the requirements
described in § 45(b)(8)(D)(ii) (Good Faith
Effort Exception), or (ii) subject to
§ 45(b)(8)(D)(iii) (Intentional Disregard
Provision), in the case of any failure by
the taxpayer to satisfy the requirement
under § 45(b)(8)(A) and (C) with respect
to the construction, alteration, or repair
work on any qualified facility to which
§ 45(b)(8)(D)(i)(I) does not apply, the
taxpayer makes payment to the
Secretary of the Treasury or her delegate
(Secretary) of a penalty in an amount
equal to the product of $50 multiplied
by the total labor hours for which the
requirement described in § 45(b)(8)(A)
and (C) was not satisfied with respect to
the construction, alteration, or repair
work on such qualified facility.
Under the Good Faith Effort
Exception described in § 45(b)(8)(D)(ii),
a taxpayer is deemed to have satisfied
the apprenticeship requirements with
respect to a qualified facility if the
taxpayer has requested qualified

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apprentices from a registered
apprenticeship program, as defined in
§ 3131(e)(3)(B), and: (i) such request has
been denied, provided that such denial
is not the result of a refusal by the
taxpayer or any contractors or
subcontractors engaged in the
performance of construction, alteration,
or repair work with respect to such
qualified facility to comply with the
established standards and requirements
of the registered apprenticeship
program, or (ii) the registered
apprenticeship program fails to respond
to such request within 5 business days
after the date on which such registered
apprenticeship program received such
request.
Under the Intentional Disregard
Provision, if the Secretary determines
that any failure described in
§ 45(b)(8)(D)(i)(II) is due to intentional
disregard of the requirements under
§ 45(b)(8)(A) and (C), § 45(b)(8)(D)(i)(II)
is applied by substituting ‘‘$500’’ for
‘‘$50.’’
Under § 45(b)(8)(E)(i), the term ‘‘labor
hours’’ means the total number of hours
devoted to the performance of
construction, alteration, or repair work
by any individual employed by the
taxpayer or by any contractor or
subcontractor. This term excludes any
hours worked by foremen,
superintendents, owners, or persons
employed in a bona fide executive,
administrative, or professional capacity
(within the meaning of those terms in
part 541 of title 29, Code of Federal
Regulations).
Under § 45(b)(8)(E)(ii), the term
‘‘qualified apprentice’’ means an
individual who is employed by the
taxpayer or by any contractor or
subcontractor and who is participating
in a registered apprenticeship program,
as defined in § 3131(e)(3)(B).
Section 3131(e)(3)(B) defines a
registered apprenticeship program as an
apprenticeship registered under the Act
of August 16, 1937 (commonly known
as the National Apprenticeship Act, 50
Stat. 664, chapter 663, 29 U.S.C. 50 et
seq.) that meets the standards of subpart
A of part 29 and part 30 of title 29 of
the Code of Federal Regulations.2
.02 Beginning of Construction.
(1) In General. A qualified facility,
property, project, or equipment, are
hereafter referred to as a ‘‘facility’’ in
this notice. A facility generally must
meet the prevailing wage and
apprenticeship requirements to receive
the increased credit or deduction
2 Effective November 25, 2022, 29 CFR part 29 is
no longer divided into subparts A and B because
subpart B (Industry Recognized Apprenticeship
Programs) was rescinded in a final rule published
on September 26, 2022. See 87 FR 58269.

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amounts under §§ 30C, 45, 45Q, 45V,
45Y, 48, 48E, and 179D if construction
(or installation for purposes of § 179D)
of the facility begins on or after the date
60 days after the Secretary publishes
guidance with respect to the prevailing
wage and apprenticeship requirements
of the Code.3 The IRS has issued notices
under §§ 45,4 45Q,5 and 48 6
(collectively, IRS Notices) that provide
guidance for determining when
construction begins for purposes of
§§ 45, 45Q, and 48, respectively,
including a safe harbor regarding the
continuity requirement (described in
section 2.02(3) of this notice).
(2) Establishing Beginning of
Construction. The IRS Notices describe
two methods that a taxpayer may use to
establish that construction of a facility
begins: (i) by starting physical work of
a significant nature (Physical Work
Test), and (ii) by paying or incurring
five percent or more of the total cost of
the facility (Five Percent Safe Harbor).
(i) Physical Work Test. Under the
Physical Work Test, construction of a
facility begins when physical work of a
significant nature begins, provided that
the taxpayer maintains a continuous
program of construction. This test
focuses on the nature of the work
performed, not the amount or the costs.
Assuming the work performed is of a
significant nature, there is no fixed
minimum amount of work or monetary
or percentage threshold required to
satisfy the Physical Work Test. Physical
work of significant nature does not
include preliminary activities, even if
the cost of those preliminary activities
is properly included in the depreciable
basis of the facility.7 For purposes of the
Physical Work Test, preliminary
activities include, but are not limited to,
planning or designing, securing
financing, exploring, researching,
3 Certain facilities are exempt from the prevailing
wage and apprenticeship requirements. See, for
example, § 45(b)(6)(B)(i).
4 Notice 2013–29, 2013–20 I.R.B. 1085; clarified
by Notice 2013–60, 2013–44 I.R.B. 431; clarified
and modified by Notice 2014–46, 2014–36 I.R.B.
520; updated by Notice 2015–25, 2015–13 I.R.B.
814; clarified and modified by Notice 2016–31,
2016–23 I.R.B. 1025; updated, clarified, and
modified by Notice 2017–04, 2017–4 I.R.B. 541;
Notice 2018–59, 2018–28 I.R.B. 196; modified by
Notice 2019–43, 2019–31 I.R.B. 487; modified by
Notice 2020–41, 2020–25 I.R.B. 954; clarified and
modified by Notice 2021–5, 2021–3 I.R.B. 479;
clarified and modified by Notice 2021–41, 2021–29
I.R.B. 17.
5 Notice 2020–12, 2020–11 I.R.B. 495.
6 Notice 2018–59, 2018–28 I.R.B. 196; modified by
Notice 2019–43; modified by Notice 2020–41;
clarified and modified by Notice 2021–5; clarified
and modified by Notice 2021–41.
7 For § 45, see Notice 2013–29, section 4.02(1);
Notice 2016–31, section 5.03; for § 45Q, see Notice
2020–12, section 5.03; and for § 48, see Notice
2018–59, section 4.03.

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obtaining permits, licensing, conducting
surveys, environmental and engineering
studies, or clearing a site.8
Work performed by the taxpayer and
work performed for the taxpayer by
other persons under a binding written
contract 9 that is entered into prior to the
manufacture, construction, or
production of the property for use by
the taxpayer in the taxpayer’s trade or
business (or for the taxpayer’s
production of income) is taken into
account in determining whether
construction has begun.10 Both on-site
and off-site work (performed either by
the taxpayer or by another person under
a binding written contract) may be taken
into account for purposes of
demonstrating that physical work of a
significant nature has begun. Physical
work of a significant nature does not
include work (performed either by the
taxpayer or by another person under a
binding written contract) to produce
property that is either in existing
inventory or is normally held in
inventory by a vendor.11
(ii) Five Percent Safe Harbor. Under
the Five Percent Safe Harbor,
construction of a facility will be
considered as having begun if: (i) a
taxpayer pays or incurs (within the
meaning of § 1.461–1(a)(1) and (2)) five
percent or more of the total cost of the
facility, and (ii) thereafter, the taxpayer
makes continuous efforts to advance
towards completion of the facility. All
costs properly included in the
depreciable basis of the facility are
taken into account to determine whether
the Five Percent Safe Harbor has been
met.12 For property that is
manufactured, constructed, or produced
for the taxpayer by another person
under a binding written contract with
the taxpayer, costs incurred with respect
to the property by the other person
before the property is provided to the
taxpayer are deemed incurred by the
taxpayer when the costs are incurred by
the other person under the principles of
§ 461.13
8 For § 45, see Notice 2013–29, section 4.02(1);
Notice 2016–31, section 5.03; for § 45Q, see Notice
2020–12, section 5.03; and for § 48, see Notice
2018–59, section 4.03.
9 For § 45, see Notice 2013–29, section 4.03(1); for
§ 45Q, see Notice 2020–12, section 8.02(1); for § 48,
see Notice 2018–59, section 7.03(1).
10 For § 45, see Notice 2013–29, sections 4.01 and
4.03; for § 45Q, see Notice 2020–12, section 8.02;
and for § 48, see Notice 2018–59, section 7.03.
11 For § 45, see Notice 2013–29, section 4.02(2);
for § 45Q, see Notice 2020–12, section 5.04; and for
§ 48, see Notice 2018–59, section 4.04.
12 For § 45, see Notice 2013–29, section 5.01(1);
for § 48, see Notice 2018–59, section 5.02; and for
§ 45Q, see Notice 2020–12, section 6.02.
13 For § 45, see Notice 2013–29, section 5.01(2);
for § 48, see Notice 2018–59, section 7.03; for § 45Q,
see Notice 2020–12, section 8.02.

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(3) Continuity Requirement and
Continuity Safe Harbor. The IRS
Notices, as clarified and modified by
Notice 2021–41, provide that for
purposes of the Physical Work Test and
Five Percent Safe Harbor, taxpayers
must demonstrate either continuous
construction or continuous efforts
(Continuity Requirement) regardless of
whether the Physical Work Test or the
Five Percent Safe Harbor was used to
establish the beginning of construction.
Whether a taxpayer meets the
Continuity Requirement under either
test is determined by the relevant facts
and circumstances. The IRS will closely
scrutinize a facility and may determine
that the beginning of construction is not
satisfied with respect to a facility if a
taxpayer does not meet the Continuity
Requirement.
The IRS Notices, as subsequently
modified and clarified, also provide for
a ‘‘Continuity Safe Harbor’’ under which
a taxpayer will be deemed to satisfy the
Continuity Requirement provided a
qualified facility is placed in service no
more than four calendar years after the
calendar year during which
construction of the qualified facility
began for purposes of §§ 45 14 and 48,15
and no more than six calendar years
after the calendar year during which
construction of the qualified facility or
carbon capture equipment began for
purposes of § 45Q.16 Certain offshore
projects and projects built on federal
land under §§ 45 and 48 satisfy the
Continuity Requirement if such a
project is placed into service no more
than 10 calendar years after the calendar
year during which construction of the
project began.17
.03 Recordkeeping.
Section 6001 provides that every
person liable for any tax imposed by the
Code, or for the collection thereof, must
keep such records as the Secretary may
from time to time prescribe. Section
1.6001–1(a) provides that any person
subject to income tax must keep such
permanent books of account or records,
including inventories, as are sufficient
to establish the amount of gross income,
deductions, credits, or other matters
required to be shown by such person in
any return of such tax. Section 1.6001–
1(e) provides that the books and records
required by § 1.6001–1 must be retained
so long as the contents thereof may
14 Notice

2016–31, section 3.
2018–59, section 6.05.
16 Notice 2020–12, section 7.05.
17 Notice 2021–5. Projects under §§ 45 and 48
may also be eligible for the extended Continuity
Safe Harbors provided for in Notices 2020–41 and
2021–41 due to the COVID–19 pandemic depending
on when construction began with respect to those
projects.
15 Notice

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become material in the administration
of any internal revenue law.
Section 45(b)(12) authorizes the
Secretary to issue such regulations or
other guidance as the Secretary
determines necessary to carry out the
purposes of § 45(b), including
regulations or other guidance that
provide requirements for recordkeeping
or information reporting for purposes of
administering the requirements of
§ 45(b).18
Section 3. Guidance With Respect to
Prevailing Wage Rate Requirements
.01 How to Satisfy Prevailing Wage
Rate Requirements. The Prevailing
Wage Rate Requirements under
§ 45(b)(7)(A) and the substantially
similar provisions set forth in §§ 30C,
45L, 45Q, 45U, 45V, 45Y, 45Z, 48, 48C,
48E, and 179D will be satisfied if:
(1) The taxpayer satisfies the
Prevailing Wage Rate Requirements
with respect to any laborer or mechanic
employed in the construction,
alteration, or repair of a facility,
property, project, or equipment by the
taxpayer or any contractor or
subcontractor of the taxpayer; and
(2) The taxpayer maintains and
preserves sufficient records, including
books of account or records for work
performed by contractors or
subcontractors of the taxpayer, to
establish that such laborers and
mechanics were paid wages not less
than such prevailing rates, in
accordance with the general
recordkeeping requirements under
§ 6001 and § 1.6001–1, et seq.
.02 Prevailing Wage Determinations. If
the Secretary of Labor has published on
www.sam.gov a prevailing wage
determination for the geographic area
and type or types of construction
applicable to the facility, including all
labor classifications for the
construction, alteration, or repair work
that will be done on the facility by
laborers or mechanics, that wage
determination contains the prevailing
rates for the laborers or mechanics who
perform work on the facility as most
recently determined by the Secretary of
Labor in accordance with subchapter IV
of chapter 31 of title 40, United States
Code, as identified in § 45(b)(7)(A). The
following procedures described in
section 3.02 of this notice are designed
to be used to request an unlisted
classification only in the limited
circumstance when no labor
classification on the applicable
18 See also §§ 30C(g)(4), 45L(g)(3), 45Q(h)(5),
45U(d)(3), 45V(e)(5), 45Y(f), 45Z(e), 48(a)(16),
48E(i), and 179D(b)(6).

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prevailing wage determination applies
to the planned work.
If the Secretary of Labor has not
published a prevailing wage
determination for the geographic area
and type of construction for the facility
on www.sam.gov, or the Secretary of
Labor has issued a prevailing wage
determination for the geographic area
and type of construction, but one or
more labor classifications for the
construction, alteration, or repair work
that will be done on the facility by
laborers or mechanics is not listed, then
the taxpayer can rely on the procedures
established by the Secretary of Labor for
purposes of the requirement to pay
prevailing rates determined by the
Secretary of Labor in accordance with
subchapter IV of chapter 31 of title 40,
United States Code.19 To rely on the
procedures to request a wage
determination or wage rate, and to rely
on the wage determination or rate
provided in response to the request, the
taxpayer must contact the Department of
Labor, Wage and Hour Division via
email at [email protected]
and provide the Wage and Hour
Division with the type of facility,
facility location, proposed labor
classifications, proposed prevailing
wage rates, job descriptions and duties,
and any rationale for the proposed
classifications. The taxpayer may use
these procedures to request a wage
determination, or wage rates for the
unlisted classifications, applicable to
the construction, alteration, or repair of
the facility. After review, the
Department of Labor, Wage and Hour
Division will notify the taxpayer as to
the labor classifications and wage rates
to be used for the type of work in
question in the area in which the facility
is located.
Questions regarding the applicability
of a wage determination or its listed
classifications and wage rates should be
directed to the Department of Labor,
Wage and Hour Division via email at
[email protected].
For purposes of the Prevailing Wage
Rate Requirements, the prevailing rate
for qualified apprentices hired through
a registered apprenticeship program
may be less than the corresponding
prevailing rate for journeyworkers of the
same classification, as described in 29
CFR 5.5(a)(4)(i).
For purposes of the Prevailing Wage
Requirements for the § 179D deduction,
the prevailing wage rate for installation
of energy efficient commercial building
19 The taxpayer is not required to follow any other
procedure to request a wage determination or a
wage rate under § 45(b)(7)(A), including submission
of the Form SF–1444.

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property, energy efficient building
retrofit property, or property installed
pursuant to a qualified retrofit plan, is
determined with respect to the
prevailing wage rate for construction,
alteration, or repair of a similar
character in the locality in which such
property is located, as most recently
determined by the Secretary of Labor, in
accordance with subchapter IV of
chapter 31 of title 40, United States
Code.
.03 Definitions. For purposes of the
Prevailing Wage Rate Requirement and
the associated recordkeeping
requirements the following definitions
apply.
(1) A taxpayer, contractor, or
subcontractor is considered to ‘‘employ’’
an individual if the individual performs
services for the taxpayer, contractor, or
subcontractor in exchange for
remuneration, regardless of whether the
individual would be characterized as an
employee or an independent contractor
for other Federal tax purposes.
(2) The terms ‘‘wage’’ and ‘‘wages’’
means ‘‘wages’’ as defined under 29
CFR 5.2(p), including any bona fide
fringe benefits as defined therein.
(3) The term ‘‘laborer or mechanic’’
means ‘‘laborer or mechanic’’ as defined
under 29 CFR 5.2(m).
(4) The term ‘‘construction, alteration,
or repair’’ means ‘‘construction,
prosecution, completion, or repair’’ as
defined under 29 CFR 5.2(j).
(5) The term ‘‘prevailing wage’’ means
the wage listed for a particular
classification of laborer or mechanic on
the applicable wage determination for
the type of construction and the
geographic area or other applicable
wage as determined by the Secretary of
Labor.
(6) The term ‘‘prevailing wage
determination’’ means a wage
determination issued by the Department
of Labor and published on
www.sam.gov.20
.04 Examples.
(1) Example 1. A taxpayer employs
laborers and mechanics to construct a
facility. The taxpayer also uses a
contractor and subcontractor to
construct the facility. The Department of
Labor has issued a prevailing wage
determination that applies to the type of
construction that the laborers and
mechanics perform for the county in
which the facility is located. The
taxpayer ensures that the taxpayer,
contractor, and subcontractor pay each
laborer and mechanic a wage rate equal
to the applicable rates for their
20 Prevailing wage determinations and the
applicable procedures are described in section 3.02
of this notice, above.

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respective labor classifications listed in
this prevailing wage determination. The
taxpayer maintains records that are
sufficient to establish that the taxpayer
and the taxpayer’s contractor and
subcontractor paid wages not less than
such prevailing wage rates. Such
records include but are not limited to,
identifying the applicable wage
determination, the laborers and
mechanics who performed construction
work on the facility, the classifications
of work they performed, their hours
worked in each classification, and the
wage rates paid for the work. Under
these facts, the taxpayer will be
considered to have satisfied the
Prevailing Wage Rate Requirements
with respect to the facility.
(2) Example 2. The facts are the same
as in Example 1, except that the
Department of Labor has not issued an
applicable prevailing wage
determination for the relevant type of
construction and geographic area in
which the facility is being constructed.
The taxpayer contacts the Department of
Labor, Wage and Hour Division under
the procedures described in section 3.02
of this notice. After review, the
Department of Labor, Wage and Hour
Division notifies the taxpayer as to the
labor classifications and wage rates to be
used for the type of construction work
in question in the area in which the
facility is located. The taxpayer ensures
that the taxpayer, contractor, and
subcontractor pay each laborer and
mechanic a wage rate equal to the
applicable rates for the respective
classifications listed in this wage
determination.
The taxpayer maintains records,
which include the additional prevailing
wage rates provided by the Department
of Labor to establish that the taxpayer
and the taxpayer’s contractor and
subcontractor paid wages not less than
such prevailing wage rates. Under these
facts, the taxpayer will be considered to
have satisfied the Prevailing Wage Rate
Requirements with respect to the
facility.
(3) Example 3. The facts are the same
as in Example 1, except that the
Department of Labor has issued a
prevailing wage determination that
applies to the type of construction that
the laborers and mechanics are hired to
perform for the county in which the
facility is located, but that wage
determination does not include a
classification of laborer or mechanic
that will be used to complete the
construction work on the facility (for
example, electrician, carpenter, laborer,
etc.). The taxpayer contacts the
Department of Labor, Wage and Hour
Division under the procedures

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described in section 3.02 of this notice.
After review, including confirming that
no labor classification on the applicable
prevailing wage determination that
applies to the work exists, the
Department of Labor, Wage and Hour
Division notifies the taxpayer as to the
wage rate to be paid regarding the
additional classification. The taxpayer
ensures that the taxpayer, contractor,
and subcontractor pay each laborer and
mechanic a wage rate equal to the
applicable rates for their respective
labor classifications listed in the
prevailing wage determination,
including the additional wage rates
provided by the Department of Labor.
The taxpayer maintains records,
which include the additional wage rates
provided by the Department of Labor to
establish that the taxpayer and
taxpayer’s contractor and subcontractor
paid wages not less than prevailing
wage rates. Under these facts, the
taxpayer will be considered to have
satisfied the Prevailing Wage Rate
Requirements with respect to the
facility.
Section 4. Guidance With Respect to
Apprenticeship Requirements
.01 How to Satisfy Apprenticeship
Requirements. A taxpayer satisfies the
apprenticeship requirements described
in § 45(b)(8) if:
(1) The taxpayer satisfies the
Apprenticeship Labor Hour
Requirements, subject to any applicable
Apprenticeship Ratio Requirements;
(2) The taxpayer satisfies the
Apprenticeship Participation
Requirements; and
(3) The taxpayer complies with the
general recordkeeping requirements
under § 6001 and § 1.6001–1, including
maintaining books of account or records
for contractors or subcontractors of the
taxpayer, as applicable, in sufficient
form to establish that the
Apprenticeship Labor Hour and the
Apprenticeship Participation
Requirements have been satisfied.
Under the Good Faith Effort
Exception,21 the taxpayer will be
considered to have made a good faith
effort in requesting qualified
apprentices if the taxpayer requests
qualified apprentices from a registered
apprenticeship program in accordance
with usual and customary business
practices for registered apprenticeship
programs in a particular industry.22

Pursuant to § 6001 and § 1.6001–1, the
taxpayer must maintain sufficient books
and records establishing the taxpayer’s
request of qualified apprentices from a
registered apprenticeship program and
the program’s denial of such request or
non-response to such request, as
applicable.
.02 Definitions. For purposes of the
apprenticeship requirements the
following definitions apply.
(1) A taxpayer, contractor, or
subcontractor is considered to ‘‘employ’’
an individual if the individual performs
services for the taxpayer, contractor, or
subcontractor in exchange for
remuneration, regardless of whether the
individual would be characterized as an
employee or an independent contractor
for other Federal tax purposes.23
(2) The term ‘‘journeyworker’’ means
‘‘journeyworker’’ as defined under 29
CFR 29.2.
(3) The term ‘‘apprentice-tojourneyworker ratio’’ means the ratio
described under 29 CFR 29.5(b)(7).
(4) The term ‘‘construction, alteration,
or repair’’ means ‘‘construction,
prosecution, completion, or repair’’ as
defined under 29 CFR 5.2(j).
(5) The term ‘‘State Apprenticeship
Agency’’ means ‘‘State Apprenticeship
Agency’’ as defined under 29 CFR 29.2.
.03 Example. A taxpayer employs
workers and qualified apprentices to
construct a new facility. Construction of
the facility begins in calendar year 2023,
and the construction of the facility is
completed in calendar year 2023. To
satisfy the apprenticeship labor hour
requirement, the percentage of total
labor hours to be performed by qualified
apprentices is 12.5 percent for 2023.
The total labor hours, as defined in
§ 45(b)(8)(E)(i), for the construction of
the facility is 10,000 labor hours. The
taxpayer employed qualified
apprentices that performed a total of
1,150 hours of construction on the
facility. On each day that a qualified
apprentice performed construction work
on the facility for the taxpayer, the
applicable requirements for apprenticeto-journeyworker ratios of the
Department of Labor or the applicable
State Apprenticeship Agency were met.
The taxpayer also hired a contractor
to assist with construction of the facility
for 1,000 labor hours of the 10,000 total
labor hours. The contractor employed
qualified apprentices that performed a
total of 100 hours of construction on the

21 Described in section 2.01(3) of this notice,
above.
22 Registered apprenticeship programs can be
located using the Office of Apprenticeship’s partner
finder tool, available at https://
www.apprenticeship.gov/partner-finder and
through the applicable State Apprenticeship

Agency, https://www.apprenticeship.gov/about-us/
state-offices.
23 This definition does not alter any of the
existing legal requirements pertaining to the proper
classification of qualified apprentices in registered
apprenticeship programs as employees for purposes
of certain Federal laws and regulations.

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facility. On each day that a qualified
apprentice performed construction work
on the facility for the contractor, the
applicable requirements for apprenticeto-journeyworker ratios of the
Department of Labor or the applicable
State Apprenticeship Agency were met.
The taxpayer ensured that the
taxpayer and the contractor each
employed 1 or more qualified
apprentices because the taxpayer and
contractor each employed 4 or more
individuals to perform construction
work on the qualified facility.
The taxpayer maintained sufficient
records to establish that the taxpayer
and the contractor hired by the taxpayer
satisfied the Apprenticeship Labor Hour
Requirement of 1,250 total labor hours
for the facility (12.5% of 10,000 labor
hours), and the Apprenticeship Ratio
and Apprenticeship Participation
Requirements. Under these facts, the
taxpayer will be considered to have
satisfied the Apprenticeship Labor
Hour, Apprenticeship Ratio, and
Apprenticeship Participation
Requirements of the statute with respect
to the facility.
Section 5. Determining When
Construction or Installation Begins
To determine when construction
begins for purposes of §§ 30C, 45V, 45Y,
and 48E, principles similar to those
under Notice 2013–29 regarding the
Physical Work Test and Five Percent
Safe Harbor apply, and taxpayers
satisfying either test will be considered
to have begun construction. In addition,
principles similar to those provided in
the IRS Notices regarding the Continuity
Requirement for purposes of §§ 30C,
45V, 45Y, and 48E apply. Whether a
taxpayer meets the Continuity
Requirement under either test is
determined by the relevant facts and
circumstances.
Similar principles to those under
section 3 of Notice 2016–31 regarding
the Continuity Safe Harbor also apply
for purposes of §§ 30C, 45V, 45Y, and
48E. Taxpayers may rely on the
Continuity Safe Harbor provided the
facility is placed in service no more
than four calendar years after the
calendar year during which
construction began.
For purposes of § 179D, the IRS will
accept that installation has begun if a
taxpayer generally satisfies principles
similar to the two tests described in
section 2.02 of this notice, above,
regarding the beginning of construction
under Notice 2013–29 (Physical Work
Test and Five Percent Safe Harbor). The
relevant facts and circumstances will
ultimately be determinative of whether
a taxpayer has begun installation.

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Federal Register / Vol. 87, No. 229 / Wednesday, November 30, 2022 / Notices
For purposes of §§ 45, 45Q, and 48,
the IRS Notices will continue to apply
under each respective Code section,
including application of the Physical
Work Test and Five Percent Safe Harbor,
and the rules regarding the Continuity
Requirement and Continuity Safe
Harbors.24
Section 6. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(PRA), 44 U.S.C. 3501 et seq., and its
attendant regulations, 5 CFR part 1320,
require an agency to consider the impact
of paperwork and other information
collection burdens imposed on the
public. The IRA allows taxpayers to take
certain increased credit amounts or an
increased deduction if they satisfy the
Prevailing Wage Requirements, and
Apprenticeship Requirements, where
applicable. The Department of Labor
will collect the data needed to issue
wage rates for taxpayers in connection
with facilities whose construction,
alteration, or repair is not subject to one
or more Davis-Bacon and Related Acts
(DBRA), as facilities subject to the
DBRA are already accounted for in an
existing collection approved by OMB.25
DOL data collections needed to register
apprentices and apprenticeship
programs are accounted for in an
existing collection approved by OMB.26
Under the PRA, an agency may not
collect or sponsor an information
collection requirement unless it
displays a currently valid Office of
Management and Budget (OMB) control
number.27 This collection of
information is approved under OMB
Control Number 1235–0034. The
Department of Labor estimates that it
will take an average of 15 minutes for
respondents to complete this collection
of information, including the time for
reviewing instructions, searching
existing data sources, gathering and
maintaining the data needed, and
completing and reviewing the collection
of information. The information that the
Department of Labor will collect, as
discussed in section 3.02 of this notice,
includes the type of facility, facility
location, proposed labor classifications,
proposed prevailing wage rates, job
descriptions and duties, and any
rationale for the proposed
classifications. After review, the
Department of Labor will notify the
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24 Described

in section 2.02 of this notice, above.
Control Number 1235–0023.
26 OMB Control Number 1205–0223.
27 See 5 CFR 1320.8(b)(3)(vi).
25 OMB

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taxpayer as to the labor classifications
and wage rates to be used for the type
of work in question in the area in which
the facility is located. You may view the
Department of Labor’s web page
instruction here: https://www.dol.gov/
agencies/whd/IRA.
Section 7. Drafting Information
The principal authors of this notice
are Alexander Scott and Jeremy Milton
of Associate Chief Counsel
(Passthroughs & Special Industries).
However, other personnel from the
Treasury Department and the IRS
participated in its development. For
further information regarding this notice
contact Mr. Scott at (202) 317–6853 (not
a toll-free call).
Melanie R. Krause,
Acting Deputy Commissioner for Services and
Enforcement.
Approved: November 23, 2022.
Krishna P. Vallabhaneni,
Tax Legislative Counsel.
[FR Doc. 2022–26108 Filed 11–29–22; 4:15 pm]
BILLING CODE 4830–01–P

DEPARTMENT OF VETERANS
AFFAIRS
[OMB Control No. 2900–0572]

Agency Information Collection
Activity: Application for Benefits for
Qualifying Veteran’s Child Born With
Disabilities
Veterans Benefits
Administration, Department of Veterans
Affairs.
ACTION: Notice.
AGENCY:

Veterans Benefits
Administration, Department of Veterans
Affairs (VA), is announcing an
opportunity for public comment on the
proposed collection of certain
information by the agency. Under the
Paperwork Reduction Act (PRA) of
1995, Federal agencies are required to
publish notice in the Federal Register
concerning each proposed collection of
information, including each proposed
revision of a currently approved
collection, and allow 60 days for public
comment in response to the notice.
DATES: Written comments and
recommendations on the proposed
collection of information should be
received on or before January 30, 2023.
ADDRESSES: Submit written comments
on the collection of information through
SUMMARY:

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73585

Federal Docket Management System
(FDMS) at www.Regulations.gov or to
Nancy J. Kessinger, Veterans Benefits
Administration (20M33), Department of
Veterans Affairs, 810 Vermont Avenue
NW, Washington, DC 20420 or email to
[email protected]. Please refer to
‘‘OMB Control No. 2900–0572’’ in any
correspondence. During the comment
period, comments may be viewed online
through FDMS.
FOR FURTHER INFORMATION CONTACT:

Maribel Aponte, Office of Enterprise
and Integration, Data Governance
Analytics (008), 810 Vermont Ave. NW,
Washington, DC 20006, (202) 266–4688
or email [email protected]. Please
refer to ‘‘OMB Control No. 2900–0572’’
in any correspondence.
Under the
PRA of 1995, Federal agencies must
obtain approval from the Office of
Management and Budget (OMB) for each
collection of information they conduct
or sponsor. This request for comment is
being made pursuant to section
3506(c)(2)(A) of the PRA.
With respect to the following
collection of information, VBA invites
comments on: (1) whether the proposed
collection of information is necessary
for the proper performance of VBA’s
functions, including whether the
information will have practical utility;
(2) the accuracy of VBA’s estimate of the
burden of the proposed collection of
information; (3) ways to enhance the
quality, utility, and clarity of the
information to be collected; and (4)
ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
the use of other forms of information
technology.
Authority: 38 U.S.C. 1805, 1815, 1821,
and 1822.
Title: Application for Benefits for
Qualifying Veteran’s Child Born with
Disabilities (VA Form 21–0304).
OMB Control Number: 2900–0572.
Type of Review: Revision of a
currently approved collection.
Abstract: VA Form 21–0304 is used to
determine the monetary allowance for a
child born with Spina Bifida or certain
birth defects who is the natural child of
a Vietnam and certain Thailand or
Korea service veterans. Without this
information, VA would be unable to
effectively administer 38 U.S.C. 1805,
1815, 1821, and 1822.

SUPPLEMENTARY INFORMATION:

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