73580 Federal Register / Vol. 87, No. 229 / Wednesday, November 30, 2022 / Notices

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.

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

[2022–61]

Prevailing Wage and Apprenticeship

Initial Guidance Under Section

45(b)(6)(B)(ii) and Other Substantially

Similar Provisions

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of initial guidance.

SUMMARY: 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 60-day 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:

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), 48E(a)(2)(A)(ii)(II) and (a)(2)(B)(ii)(II), and 179D(b)(3)(B)(i) establishing the 60- day 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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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. 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.

(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 repairwork 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 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

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,

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73582 Federal Register / Vol. 87, No. 229 / Wednesday, November 30, 2022 / Notices

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.

14 Notice 2016–31, section 3.

15 Notice 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.

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).

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

(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

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

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Federal Register /Vol. 87, No. 229 /Wednesday, November 30, 2022 /Notices 73583

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.

20 Prevailing wage determinations and the

applicable procedures are described in section 3.02

of this notice, above.

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 IRAprevailingwage@dol.gov

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

IRAprevailingwage@dol.gov.

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

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

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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73584 Federal Register / Vol. 87, No. 229 / Wednesday, November 30, 2022 / Notices

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.

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

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 73585

24 Described in section 2.02 of this notice, above.

25 OMB Control Number 1235–0023.

26 OMB Control Number 1205–0223.

27 See 5 CFR 1320.8(b)(3)(vi).

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

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

AGENCY: Veterans Benefits

Administration, Department of Veterans

Affairs.

ACTION: Notice.

SUMMARY: 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

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

nancy.kessinger@va.gov. 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 maribel.aponte@va.gov. Please

refer to ‘‘OMB Control No. 2900–0572’’

in any correspondence.

SUPPLEMENTARY INFORMATION: 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.

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