Senate Passes Inflation Reduction Act with SWACCA-Supported Prevailing Wage Protections on Clean Energy and Building Decarbonization Tax Credits
The $700 billion “Inflation Reduction Act” bill the Senate advanced to the House Sunday, using a special Budget Reconciliation procedure that allowed them to pass it with no Republican support, is a broad bill. It includes provisions requiring Medicare to negotiate on prescription drugs; sets a corporate minimum tax rate of 15%; creates a new 1% excise tax on stock buybacks; devotes more than $370 billion to fight climate change through tax incentives that encourage energy efficiency and reduced carbon emissions, opens new federal land to oil and gas drilling; extends Obamacare premium subsidies for three additional years; provides a massive budget increase to the IRS to undertake increased audits and enforcement; and extends tax credits for electric vehicles that meet specified criteria for price, purchaser income and domestic sourcing of certain materials.
Importantly, SWACCA worked with their allies in the Construction Employers of America to support provisions in the bill that apply Davis-Bacon prevailing wage protections to the clean energy and building decarbonization tax credits included in the bill. The Inflation Reduction Act provides for the extension of the Section 45 renewable energy production tax credit and the Section 28 investment tax credit for installing designated renewable energy generation equipment for construction projects that begin construction before Jan. 1, 2025. To be eligible for 100% of either the PTC or the ITC, the bill requires project sponsors to ensure compliance with prevailing wage and apprenticeship requirements.