IRS Implements Prevailing Wage and Apprenticeship Requirements in the Inflation Reduction Act
The Internal Revenue Service issued Notice 2023-18 to establish the Inflation Reduction Act program to allocate $10 billion of section 48C (Qualifying Advanced Energy Product Credit) credits for qualified investments in eligible qualifying advanced energy projects (the section 48C(e) program). The term “qualifying energy project” means a project that re-equips, expands or establishes an industrial or manufacturing facility for the production or recycling of specified advanced energy property, like fuel cells, microturbines or energy storage systems and components; re-equips any industrial or manufacturing facility with equipment designed to reduce greenhouse gas emissions by at least 20 percent; or re-equips, expands or establishes an industrial facility for the processing, refining or recycling of critical materials.
Per this notice, to receive funding through the section 48C(e) program, contractors must meet the prevailing wage and apprenticeship requirements SWACCA lobbied to get included in the Inflation Reduction Act. With regard to the prevailing wage requirements, contractors must ensure that any laborers and mechanics employed by the contractor or subcontractor in the re-equipping, expansion or establishment of a manufacturing facility that is part of a qualifying advanced energy project 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 project is located, as most recently determined by the Secretary of Labor.