Bulletin No. 2023–35

Agency decision

Ask Donna

What actually matters in this document.

Text

HIGHLIGHTS

OF THIS ISSUE

Bulletin No. 2023–35

August 28, 2023

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

EMPLOYEE PLANS

INCOME TAX

Notice 2023-61, page 651.

REG-109348-22, page 662.

This notice sets forth updates on the corporate bond

monthly yield curve, the corresponding spot segment rates

for August 2023 used under § 417(e)(3)(D), the 24-month

average segment rates applicable for August 2023, and

the 30-year Treasury rates, as reflected by the application

of § 430(h)(2)(C)(iv).

EXCISE TAX

Notice 2023-52, page 650.

Section 5000D of the Internal Revenue Code imposes an

excise tax on certain sales of certain drugs by manufacturers, producers, and importers of the drugs. Notice 2023-52

announces that the Treasury Department and IRS intend to

issue proposed regulations under section 5000D. Specifically,

the notice proposes that future regulations will provide:

(1) rules on the scope of sales subject to the section

5000D tax;

(2) rules regarding the taxable sale price; and

(3) procedural rules intended to help taxpayers meet

their reporting and payment obligations with respect to the

tax.

EXEMPT ORGANIZATIONS

Announcement 2023-24, page 661.

Revocation of IRC 501(c)(3) Organizations for failure to

meet the code section requirements. Contributions made to

the organizations by individual donors are no longer deductible under IRC 170(b)(1)(A).

Finding Lists begin on page ii.

This guidance contains proposed additions to 26 CFR part 1

(Income Tax Regulations) under section 6011 of the Internal

Revenue Code (Code). These proposed regulations would

identify monetized installment sale transactions and substantially similar transactions as listed transactions, a type of

reportable transaction. Material advisors and participants in

these listed transactions would be required to file disclosures

with the IRS and would be subject to penalties for failure

to disclose. The proposed regulations would affect participants in those transactions as well as material advisors. This

document also provides a notice of a public hearing on the

proposed regulations.

Rev. Proc. 2023-27, page 655.

This revenue procedure provides clarifying and procedural

guidance applicable to the low-income communities bonus

credit program for the energy investment credit established

pursuant to the Inflation Reduction Act of 2022 (Program).

Under this Program, applicants investing in certain solar and

wind-powered electricity generation facilities may apply for

an allocation of environmental justice solar and wind capacity limitation to increase the amount of an energy investment

credit under section 48 for the taxable year in which the

facility is placed in service. These procedural rules provide

guidance necessary to implement the Program, including,

in relevant part, information an applicant must submit, the

application review process, and the manner of obtaining an

allocation. This revenue procedure is being issued simultaneously with the final regulations applicable to the Program

provided in TD 9979.

T.D. 9979, page 602.

This document contains final regulations concerning the

application of the low-income communities bonus credit

program for the energy investment credit established pursuant to the Inflation Reduction Act of 2022 (Program).

Under this Program, applicants investing in certain solar

or wind-powered electricity generation facilities for which

the applicants otherwise would be eligible for an energy

investment credit may apply for an allocation of environmental justice solar and wind capacity limitation to

increase the amount of the energy investment credit for

the taxable year in which the facility is placed in service.

This document provides definitions and requirements that

are applicable for this Program. These final regulations

affect applicants seeking allocations of the environmental

justice solar and wind capacity limitation to increase the

amount of the energy investment credit for which such

applicants would otherwise be eligible once the facility is

placed in service. In addition, the Treasury Department

and the IRS are also releasing a revenue procedure simultaneously to provide procedural and clarifying guidance

applicable to the Program.

The IRS Mission

Provide America’s taxpayers top-quality service by helping

them understand and meet their tax responsibilities and

enforce the law with integrity and fairness to all.

Introduction

The Internal Revenue Bulletin is the authoritative instrument

of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service

and for publishing Treasury Decisions, Executive Orders, Tax

Conventions, legislation, court decisions, and other items of

general interest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application

of the tax laws, including all rulings that supersede, revoke,

modify, or amend any of those previously published in the

Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of

internal practices and procedures that affect the rights and

duties of taxpayers are published.

Revenue rulings represent the conclusions of the Service

on the application of the law to the pivotal facts stated in

the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,

identifying details and information of a confidential nature are

deleted to prevent unwarranted invasions of privacy and to

comply with statutory requirements.

Rulings and procedures reported in the Bulletin do not have the

force and effect of Treasury Department Regulations, but they

may be used as precedents. Unpublished rulings will not be

relied on, used, or cited as precedents by Service personnel in

the disposition of other cases. In applying published rulings and

procedures, the effect of subsequent legislation, regulations,

court decisions, rulings, and procedures must be considered,

and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless

the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.

This part includes rulings and decisions based on provisions

of the Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A,

Tax Conventions and Other Related Items, and Subpart B,

Legislation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.

To the extent practicable, pertinent cross references to these

subjects are contained in the other Parts and Subparts. Also

included in this part are Bank Secrecy Act Administrative

Rulings. Bank Secrecy Act Administrative Rulings are issued

by the Department of the Treasury’s Office of the Assistant

Secretary (Enforcement).

Part IV.—Items of General Interest.

This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index

for the matters published during the preceding months. These

monthly indexes are cumulated on a semiannual basis, and are

published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

August 28, 2023

Bulletin No. 2023–35

Part I

26 CFR 1.48(e)-1

T.D. 9979

DEPARTMENT OF THE

TREASURY

Internal Revenue Service

26 CFR Part 1

Additional Guidance on

Low-Income Communities

Bonus Credit Program

AGENCY: Internal Revenue Service

(IRS), Treasury.

ACTION: Final regulations.

SUMMARY: This document contains

final regulations concerning the application of the low-income communities bonus

credit program for the energy investment

credit established pursuant to the Inflation

Reduction Act of 2022. Under this program, applicants investing in certain solar

or wind-powered electricity generation

facilities for which the applicants otherwise would be eligible for an energy

investment credit may apply for an allocation of environmental justice solar and

wind capacity limitation to increase the

amount of the energy investment credit

for the taxable year in which the facility

is placed in service. This document provides definitions and requirements that are

applicable for this program. These final

regulations affect applicants seeking allocations of the environmental justice solar

and wind capacity limitation to increase

the amount of the energy investment

credit for which such applicants would

otherwise be eligible once the facility is

placed in service.

DATES: Effective date: These regulations

are effective on October 16, 2023.

Applicability date: For date of applicability, see §1.48(e)-1(o).

FOR FURTHER INFORMATION

CONTACT: Concerning the regulations,

Whitney Brady, the IRS Office of the

Associate Chief Counsel (Passthroughs

and Special Industries) at (202) 317‑6853

(not a toll‑free number).

SUPPLEMENTARY INFORMATION:

Background

This document contains amendments

to the Income Tax Regulations (26 CFR

Part 1) relating to new section 48(e) of the

Internal Revenue Code (Code). Section

13103 of Public Law 117–169, 136 Stat.

1818, 1921 (August 16, 2022), commonly

known as the Inflation Reduction Act of

2022 (IRA), added new section 48(e) to

the Code to increase the amount of the

energy investment credit determined

under section 48(a) (section 48 credit)

with respect to eligible property of the

taxpayer that is part of a qualified solar

or wind facility if the taxpayer applies

for and is awarded an allocation of environmental justice solar and wind capacity

limitation (Capacity Limitation) as part

of the low-income communities bonus

credit program for the section 48 credit

(Low-Income Communities Bonus Credit

Program or Program).1 This document

contains final definitions and rules applicable to the Program.

The section 48 credit for a taxable year

is generally calculated by multiplying

the basis of each energy property placed

in service by a taxpayer during that taxable year by the energy percentage (as

defined in section 48(a)(2)). Section 48(e)

increases the taxpayer’s section 48 credit

by increasing the energy percentage used

to calculate the amount of the section 48

credit (section 48(e) Increase) in the case

of eligible property that is part of a qualified solar or wind facility that receives an

allocation of Capacity Limitation under

the Program.

On February 13, 2023, the Department

of the Treasury (Treasury Department) and

the IRS released Notice 2023-17, 2023-10

I.R.B. 505, to establish the Program. Notice

2023-17 also provided initial Program

guidance regarding applicable definitions

and Program requirements.

On June 1, 2023, the Treasury

Department and the IRS published in the

Federal Register (88 FR 35791) a notice

of proposed rulemaking (REG-110412-23,

2023-26 I.R.B. 1098) under section 48(e)

(Proposed Rules) relating to the Program.

Numerous commenters responded to the

Proposed Rules, and after consideration

of all comments received by June 30,

2023, the Proposed Rules are adopted as

modified by this Treasury decision. The

areas of comment and the revisions to

the Proposed Rules are discussed in the

following Summary of Comments and

Explanation of Revisions section of this

preamble. The comments are available

for public inspection at https://www.regulations.gov or upon request. Other minor,

editorial, and clarifying revisions made

to the Proposed Rules as adopted in these

final regulations are not discussed in the

Summary of Comments and Explanation

of Revisions section of this preamble.

As announced in Proposed Rules, the

Treasury Department and the IRS are also

providing procedural and clarifying guidance applicable to the Program in Revenue

Procedure 2023-27, 2023-35 I.R.B. This

procedural and clarifying guidance is

being issued simultaneously with these

final regulations and provides the process

for applying to the Program. These procedural rules provide guidance necessary to

implement the Program, including, in relevant part, information an applicant must

submit, the application review process,

and the manner of obtaining an allocation.

Summary of Comments and

Explanation of Revisions

I. Definition of Qualified Solar or Wind

Facility

Section 48(e)(2)(A) and the Proposed

Rules define a single qualified solar

or wind facility as any facility that (i)

This notice of proposed rulemaking uses the terms “taxpayer” and “applicant” interchangeably (as the context may require) to avoid confusion given that persons eligible to apply for an

allocation of Capacity Limitation under the Program may be exempt from or otherwise not subject to Federal income taxes imposed by chapter 1 of the Code.

August 28, 2023

602

Bulletin No. 2023–35

generates electricity solely from a wind

facility, solar energy property, or small

wind energy property; (ii) has a maximum net output of less than 5 megawatts (MW) (as measured in alternating

current (AC)); and (iii) is described in

at least one of the four facility categories described in section 48(e)(2)(A)(iii)

(Category 1, 2, 3, or 4 are described in

more detail in part III of this Summary of

Comments and Explanation of Revisions

section). In addition, for purposes of

determining allocations, administering

the Program fairly, and avoiding abuse,

the Proposed Rules provided that multiple solar or wind energy properties or

facilities that are operated as part of a

single project would be aggregated and

treated as a single facility. Whether multiple facilities or energy properties are

operated as part of a single project would

depend on the relevant facts and circumstances and would be evaluated based on

the factors provided in section 7.01(2)(a)

of Notice 2018–59 or section 4.04(2) of

Notice 2013–29, as applicable.

A few commenters suggested the

Treasury Department and the IRS should

not impose the single project factors to

aggregate multiple facilities or energy

properties into a single facility for purposes of these regulations. For example, some commenters said this does not

work well for Tribal or some other partially-consolidated “projects” that may

share ownership, financing, and other

factors for efficiency, yet are different

and distinguishable facilities. Some of

the commenters suggested that a Tribe

must be allowed to apply Capacity

Limitation allocations for multiple

projects, as separate projects, to allow

for phased deployment of projects, and

to treat each phase as a different project. Another commenter recommended

relaxing restrictions in the project definition so long as a reasonable period has

elapsed to ensure adequate competitive

forces in the market become established

or suggested a carve-out from this rule

for certain projects. An additional commenter suggested that if certain factors

are present, those single factors standing alone should result in energy properties or facilities being regarded as a

single project (that is, apart from other

properties or facilities with which they

Bulletin No. 2023–35

might otherwise be grouped) without the

need to apply all of the factors provided

in section 7.01(2)(a) of Notice 2018–59

or section 4.04(2) of Notice 2013–29, as

applicable. Similarly, a commenter noted

that co-located sites are typically permitted as a single project, even though the

interconnection, ownership, financing,

and construction of the facilities are conducted independently. This commenter

stated that maintaining the requirement

of one project per permit should not

disqualify either project from receiving

allocation under the Program.

The Treasury Department and the IRS

determined that to prevent some applicants from attempting to circumvent

the less than 5 MW maximum net output limitation provided in section 48(e)

(2)(A)(ii) by artificially dividing larger

projects into multiple facilities, it is necessary to incorporate the single project

factors tests provided in section 7.01(2)

(a) of Notice 2018–59 or section 4.04(2)

of Notice 2013–29, as applicable, into

the definition of qualified solar or wind

facility. Therefore, the final regulations

generally adopt the definition of qualified solar or wind facility provided in the

Proposed Rules. However, the final regulations clarify that if multiple facilities or

energy properties are regarded as a single

facility for purposes of this rule, they will

be regarded as a single facility for all purposes under the Program. Additionally,

to alleviate some commenters’ concerns

that multiple energy properties or facilities that satisfy any of the listed factors

will conclusively result in a single project

determination, the final regulations clarify

that whether multiple facilities or energy

properties are operated as part of a single

project and thus treated a single facility,

will depend on the relevant facts and circumstances. Thus, a single factor or factors are not determinative.

A commenter noted that the Proposed

Rules specify that a qualified facility refers

to a solar energy property with an output

of less than 5 MW and recommended

aligning the Program with the industry

standard by allowing projects that have a

capacity of up to 5 MW. This comment is

not adopted because section 48(e)(2)(A)

(ii) limits the Program to facilities that

have a maximum net output of less than 5

MW (as measured in AC).

603

II. Four Categories of Qualified Solar or

Wind Facilities

Depending on the category of the facility, an allocation of Capacity Limitation

under the Program may result in a section 48(e) Increase equal to either 10 percentage points or 20 percentage points.

Section 48(e)(1)(A)(i) provides for a

section 48(e) Increase of 10 percentage

points for eligible property that is located

in a low-income community (Category 1

facility), or on Indian land (Category 2

facility). Section 48(e)(1)(A)(ii) provides

for a section 48(e) Increase of 20 percentage points for eligible property that is

part of a qualified low-income residential

building project (Category 3 facility) or

a qualified low-income economic benefit

project (Category 4 facility).

Under section 48(e)(2)(A)(iii)(I), the

term low-income community is generally

defined under section 45D(e)(1), with certain modifications described elsewhere in

section 45D(e), as any population census

tract if the poverty rate for such tract is at

least 20 percent, or, in the case of a tract

not located within a metropolitan area,

the median family income for such tract

does not exceed 80 percent of statewide

median family income, or in the case of

a tract located within a metropolitan area,

the median family income for such tract

does not exceed 80 percent of the greater

of statewide median family income or the

metropolitan area median family income.

Section 48(e)(2)(A)(iii)(I) provides that

Indian land is defined in section 2601(2)

of the Energy Policy Act of 1992 (25

U.S.C. 3501(2)). The final regulations

clarify that the poverty rate for a census

tract is generally based on the 2011-2015

American Community Survey (ACS)

low-income community data for the New

Markets Tax Credit (NMTC), however, if

updated data is released, a taxpayer can

choose to base the poverty rate for any

population census tract on either the 20112015 ACS low-income community data or

the updated ACS low-income community

data for a period of 1 year following the

date of the release of the updated data.

After the 1-year transition period, the

updated ACS low-income community

data must be used. Applicants who satisfy

the definition of low-income community

at the time of application are considered to

August 28, 2023

continue to meet the definition of low-income community for the duration of the

recapture period, unless the location of the

facility changes.

Section 48(e)(2)(B) provides that a

facility will be treated as part of a qualified

low-income residential building project if

(i) such facility is installed on a residential rental building that participates in a

covered housing program (as defined in

section 41411(a) of the Violence Against

Women Act of 1994 (34 U.S.C. 12491(a)

(3)) (VAWA), a housing assistance program administered by the Department of

Agriculture (USDA) under title V of the

Housing Act of 1949, a housing program

administered by a Tribally designated

housing entity (as defined in section 4(22)

of the Native American Housing

Assistance and Self-Determination Act

of 1996 (25 U.S.C. 4103(22)), or such

other affordable housing programs as the

Secretary may provide, and (ii) the financial benefits of the electricity produced

by such facility are allocated equitably

among the occupants of the dwelling units

of such building.

Section 48(e)(2)(C) provides that a

facility will be treated as part of a qualified

low-income economic benefit project if at

least 50 percent of the financial benefits of

the electricity produced by such facility

are provided to households with income

of less than 200 percent of the poverty

line (as defined in section 36B(d)(3)(A)

of the Code) applicable to a family of the

size involved, or less than 80 percent of

area median gross income (as determined

under section 142(d)(2)(B) of the Code).

One commenter stated that the statute does not provide for “facility categories” and that what section 48(e)(2)(A)

(iii) describes is not four distinct facility

categories, but four ways of meeting geographic or benefits-based qualifying criteria. The Treasury Department and the IRS

determined that a change in the final regulations is not necessary because the use

of facility categories as a means of differentiating the four distinct geographic or

benefits-based qualifying criteria is consistent with the statute and serves as an

administratively convenient mechanism

to distinguish among them and describe

requirements and definitions applicable

to each. Accordingly, as discussed in part

II of this Summary of Comments and

August 28, 2023

Explanation of Revisions section, the final

regulations, consistent with the Proposed

Rules, require a qualified solar or wind

facility to be described in one of the four

categories described in section 48(e)(2)

(A)(iii) (Category 1, 2, 3, or 4).

Another commenter asked for clarification on whether a project must just

be located in a low-income community

or whether benefits must also go to a

low-income community to qualify for

each category. The Treasury Department

and the IRS considered the comment

but did not make a change because the

Proposed Rules and now the final regulations clearly describe the categories that

have applicable benefits sharing requirements consistent with statutory requirements, so no change is necessary. For

Category 1 and Category 2, section 48(e)

(2)(A)(iii)(I) requires a facility to be

located in a low-income community (as

defined in section 45D(e)) or on Indian

land (as defined in section 2601(2) of the

Energy Policy Act of 1992 (25 U.S.C.

3501(2))), but the statute, and accordingly the final regulations, do not impose

any requirements to share financial benefits with low-income subscribers or

households. Conversely, for Category 3

and Category 4, section 48(e)(2)(B) and

the Proposed Rules and are provided in

these final regulations as modified. See

part V of this Summary of Comments

and Explanation of Revisions section

for more discussion regarding those

requirements.

Specific to Category 2, another commenter noted that the definition of located

on Indian land should include simple fee

and trust lands located off-reservation

owned by Tribes. Trust lands located

off-reservation are covered under the

statutory definition of Indian land referenced in section 48(e)(2)(A)(I). Fee lands,

however, would only be covered if they

are included within the boundaries of a

reservation or in the census categories

included within the Indian land definition. Therefore, the final regulations did

not adopt the commenter’s suggestion

and define “Indian land” by reference to

section 2601(2) of the Energy Policy Act

of 1992 (25 U.S.C. 3501(2)) without additional clarification.

604

Specific to Category 3, a commenter

asked for clarification that the installation of a facility on a “residential rental

building” extends to the curtilage of the

building, including carports, sheds, and

open space on the same property. Another

commenter asked for similar clarification stating that the guidance currently

defines a facility as eligible if it is a facility installed on an eligible building. This

commenter stated that this is an overly

narrow statement that would not include

adjacent carport or ground-mount solar

on the same parcel. The commenter

encouraged the Treasury Department

and the IRS to include these other solar

installation locations, as rural and suburban section 42 low-income housing

credit (commonly referred to as LIHTC)

properties often have excess land or large

parking areas due to zoning requirements

that could host solar installations. The

final regulations adopt this comment

by clarifying that a facility is treated as

installed on a residential rental building that participates in a covered housing program or other affordable housing

program (Qualified Residential Property)

even if that facility is not on the Qualified

Residential Property if the facility is

installed on the same or adjacent parcel of land as the Qualified Residential

Property, and the other requirements to

be a Category 3 facility are satisfied.

Several commenters requested that the

Treasury Department and the IRS categorically include any LIHTC project as a

Category 3 project. Section 48(e)(2)(B)(i)

provides that a covered housing program is

defined in VAWA. The statutory cross-reference is comprehensive and includes

numerous types of housing programs and

policies across Federal agencies, including the low-income housing credit under

section 42 of title 26. Accordingly, a solar

or wind facility that is installed on a “qualified low-income building” under section

42 is eligible for Category 3. In response

to commenters’ general inquiries on covered housing programs, the Treasury

Department and the IRS, in consultation

with other Federal agencies, developed

an illustrative list of Federal housing programs and policies that meet the requirements in section 48(e)(2)(B)(i). This list

will be made available on the Program

webpage and is also listed here:

Bulletin No. 2023–35

Covered housing programs and policies

(as defined in VAWA) with active affordability covenants tied to the following:

• Department of Housing and Urban

Development’s (HUD) Section 202

Supportive Housing for the Elderly,

including the direct loan program

under Section 202;

• HUD’s Section 811 Supportive Hous

ing for Persons with Disabilities;

• HUD’s Housing Opportunities for

Persons With AIDS (HOPWA) program;

• HUD’s homeless programs under

title IV of the McKinney-Vento

Homeless Assistance Act, including

the Emergency Solutions Grants program, the Continuum of Care program, and the Rural Housing Stability

Assistance program;

• HUD’s HOME Investment Partner

ships (HOME) program;

• Federal Housing Administration (FHA)

mortgage insurance under Section

221(d)(3) subsidized with a below-market interest rate (BMIR) prescribed in

the proviso of Section 221(d)(5) of the

National Housing Act;

• HUD’s Section 236 interest rate

reduction payments;

• HUD Public Housing assisted under

section 9 of the United States Housing

Act of 1937;

• HUD tenant-based and project-based

rental assistance under section 8 of

the United States Housing Act of

1937;

• HUD Section 8 Moderate Rehabili

tation Program;

• HUD Section 8 Moderate Rehabili

tation Single Room Occupancy Pro

gram for Homeless Individuals;

• USDA Section 515 Rural Rental

Housing;

• USDA Section 514/516 Farm Labor

Housing;

• USDA Section 538 Guaranteed Rural

Rental Housing;

• USDA Section 533 Housing Preser

vation Grant Program;

• Treasury/IRS Low-Income Housing

Credit under section 42 of the Code;

• HUD’s National Housing Trust Fund;

• Veterans Administration’s (VA) Com

prehensive Service Programs for

Homeless Veterans;

Bulletin No. 2023–35

•

VA’s grant program for homeless veterans with special needs;

• VA’s financial assistance for supportive services for very low-income veteran families in permanent housing;

and/or

• Department of Justice transitional

housing assistance grants for victims

of domestic violence, dating violence,

sexual assault, or stalking.

Section 48(e)(2)(B)(i) also includes the

following Federal housing programs:

• Housing assistance programs administered by the USDA under title V of

the Housing Act of 1949; and/or

• Housing programs administered by an

Indian Tribe or a Tribally designated

housing entity (as defined in section

4(22) of the Native American Housing

Assistance and Self-Determination

Act of 1996 (25 U.S.C. 4103(22)).

One commenter also requested that

Federal Weatherization Assistance Pro

gram (WAP) affordable housing categorically qualify as Category 3 covered

housing. The WAP is not a housing program. The WAP is a program of the DOE

that provides weatherization services and

support for qualifying housing but does

not provide or administer the actual housing. Therefore, the WAP program is not

included as a Category 3 housing program.

Several commenters also requested that

Category 3 include as an eligible residential rental building housing that is enrolled

under a State-specific low-income housing

program that is not enrolled, or may not

qualify, under the statutorily listed Federal

housing programs. Similarly, several commenters requested that housing authorities

under State programs be able to appeal

for qualification under the Program. One

commenter provided that housing authorities should be able to prove they meet

certain minimum criteria and thresholds

beyond enrollment in specified Federal

programs.

State specific housing programs do not

categorically qualify as Qualified Resi

dential Properties nor do the facilities

installed on such buildings categorically

meet the requirements of section 48(e)

(2)(B). The statute specifically lists

only Federal housing programs and provides that the Secretary may include

other affordable housing programs. The

Treasury Department and the IRS decline

605

to include additional housing programs in

the final regulations at this time so that the

Program will focus on the statutorily-prescribed housing programs. However, the

Treasury Department and the IRS may

include additional housing programs in

future Program guidance.

The final regulations also do not provide a special review process for housing

authorities to be considered as qualifying

under State specific programs for the same

reasons as provided earlier regarding State

program eligibility. Moreover, a housing

authority is not the same thing as a housing program. It is the solar or wind facility

that is being reviewed, upon application,

to determine whether the facility qualifies

for an allocation, and not a specific housing

authority or building that the facility will

serve. The building on which the facility

is built must already be a part of a Qualified

Residential Property, otherwise the facility is not eligible under the requirements

for Category 3.

One commenter also requested greater

protection for the tenants of a Qualified

Residential Property when a facility applies for or receives an allocation under

Category 3. The commenter requested rent

protection for the life of the solar or wind

facility to ensure tenants are not subject to

rent increases due to the installation of the

solar or wind facility. The commenter also

requested eviction protection, relocation

assistance for tenants affected by construction, with a right of return for those tenants

after construction, a sales restriction of five

years for the building on which the facility is installed, and strong enforcement

mechanisms.

The Treasury Department and the IRS

considered this comment but did not adopt

the commenter’s suggestions because the

requirements recommended by the commenter are outside the scope of section

48(e) and therefore what could be implemented by these final regulations.

III. Eligible Property, including Energy

Storage Technology Installed in

Connection with Solar or Wind Facility

“Eligible property” as defined by section 48(e)(3) means energy property that

(i) is part of a wind facility described in

section 45(d)(1) for which an election to

treat the facility as energy property was

August 28, 2023

made under section 48(a)(5) (wind facility), or (ii) is solar energy property

described in section 48(a)(3)(A)(i) (solar energy property) or qualified small

wind energy property described in section 48(a)(3)(A)(vi) (small wind energy

property). Eligible property also includes

energy storage technology (as described

in section 48(a)(3)(A)(ix)) “installed in

connection with” such energy property.

The Proposed Rules defined “installed

in connection with” for energy storage

technology to demonstrate what is required

for such energy storage technology to be

considered eligible property under section

48(e)(3), providing that this is met if both

(1) the energy storage technology and

other eligible property are considered part

of a single qualified solar or wind facility because the energy storage technology

and other eligible property are owned by a

single legal entity, located on the same or

contiguous pieces of land, have a common

interconnection point, and are described

in one or more common environmental

or other regulatory permits; and (2) the

energy storage technology is charged no

less than 50 percent by the other eligible

property.

The Proposed Rules also added a safe

harbor, which would deem the energy

storage technology to be charged at least

50 percent by the facility if the power

rating of the energy storage technology

is less than 2 times the capacity rating of

the connected wind facility (in kW AC) or

solar facility (in kW direct current (DC)).

A commenter stated that the last sentence relating to the safe harbor appears

to have the phrases “power rating” and

“capacity rating” reversed, and to have

omitted how energy storage is measured.

The commenter stated that energy storage

is measured in kWh, a measure of energy.

A generating facility such as a solar or

wind farm produces power, measured

in kW. The commenter believes that the

apparent intended meaning of the sentence would be better rendered with: “The

Treasury Department and the IRS also

propose to add a safe harbor, which would

deem the energy storage technology to be

charged at least 50 percent by the facility if

the [capacity] rating of the energy storage

technology [(in kWh)] is less than 2 times

the [power] rating of the connected wind

facility (in kW AC) or solar facility (in kW

DC).” The Treasury Department and the

IRS considered this comment, but the final

regulations do not adopt the commenter’s

suggestion.2 For energy storage, the power

rating (measured in kilowatts) indicates

how much power can flow into or out of

the battery in any given instant. It is similar to the capacity rating of a solar or wind

facility, which indicates how much power

can theoretically come out of the solar or

wind facility in any given instant. In this

context, the Treasury Department and the

IRS accurately referred to the “power rating” of the energy storage technology.

Additionally, a couple of commenters

requested that the Treasury Department

and the IRS eliminate the requirement that

energy storage technology be charged at

least 50 percent by other eligible property.

These commenters point to the general

language in sections 48(a)(2)(A)(i)(VI)

and 48(c)(6) on energy storage technology

and argue against including the charging

requirement for section 48(e). One commenter said there is no statutory basis to

require energy storage technology to be

charged by other eligible energy property

and this goes against Congressional intent.

Another commenter said this rule may set

a problematic and inequitable precedent

in the context of the underlying section

48 credit, which Congress deliberately

moved away from this standard in the IRA

to better promote the benefits of energy

storage, and that the standard for storage

inclusion should not be more burdensome

for environmental justice communities or

Tribes than for other projects seeking the

section 48 credit.

The general language in sections 48(a)

(2)(A)(vi) and 48(c)(6) describing energy

storage technology eligible for the section 48 credit differs from what Congress

included when describing energy storage

technology eligible for a section 48(e)

Increase. Eligible property as described in

section 48(e)(3) includes energy storage

technology (as described in section 48(a)

(3)(A)(ix)) installed in connection with

other eligible energy property. The use

of the phrase “in connection with” limits

the energy storage technology eligible for

a section 48(e) Increase to energy storage

that is installed in connection with the

eligible solar or wind facility. The general energy storage technology language

in section 48 includes no such limiting

language. As required by the statute, the

Treasury Department and the IRS determined that the proposed rule serves to

ensure that energy storage technology

eligible for a section 48(e) Increase has a

sufficient nexus to the eligible property.

The Treasury Department and the IRS

provide taxpayers with the safe harbor

described earlier as a means of deeming

the energy storage technology as satisfying the requirement that it be charged no

less than 50 percent by the other eligible

property. The Proposed Rule applies uniformly to all taxpayers seeking an allocation of Capacity Limitation. Therefore,

the final regulations retain the requirement

that the energy storage technology must

be charged no less than 50 percent by the

other eligible property. However, to provide additional guidance on the application of this standard, the final regulations

clarify that “50 percent” is based on an

annual average.

Another commenter suggested eliminating the co-location requirement

applicable to energy storage technology because the language of the statute

can and should be interpreted to include

storage projects that have firm, contractual offtake agreements with offsite solar

or wind projects, and that these projects

would be located within the same balancing authority, ensuring that all benefits are

local. The final regulations do not adopt

the commenter’s suggestion because the

Treasury Department and the IRS view

the Proposed Rule that the energy storage technology be located on the same

or contiguous pieces of land as the other

eligible property as consistent with the

statutory requirement that limits energy

storage technology eligible for a section

48(e) Increase to only energy storage technology that is installed in connection with

other eligible property.

The commenter correctly identified that the Proposed Rules omitted how energy storage is measured. The omission was an error, and the Treasury Department and the IRS issued a correction to the Proposed Rules published in the Federal Register (88 FR 41340) on June 26, 2023, to clarify that the power rating of the energy storage technology is measured in kW. The final

regulations incorporate this correction.

August 28, 2023

606

Bulletin No. 2023–35

Finally, one commenter requested

clarification that the power rating of connected energy storage technology will not

be counted against a facility’s Capacity

Limitation allocation. Because the final

regulations, consistent with the Proposed

Rules, define a qualified solar or wind

facility eligible for a Capacity Limitation

without reference to energy storage technology, the Treasury Department and the

IRS believe this clarification in the final

regulations is unnecessary.

A few commenters also requested that

final regulations expand the definition of

“in connection with” under section 48(e)

(3)(B) applicable to energy storage technology to include interconnection property

under section 48(a)(8), so that interconnection costs are eligible for purposes of

calculating the section 48(e) Increase.

Section 48(e)(3)(B) provides that

energy storage technology defined under

section 48(a)(3)(A)(ix) installed in connection with eligible solar or wind property described in section 45(d)(1) or

section 48(a)(3)(A)(i) or (vi) is eligible

property for purposes of calculating the

section 48(e) Increase. Neither section

48(e)(3)(B) nor any other provision applicable to section 48(e) includes interconnection property or costs in the definition

of eligible property. Therefore, the final

regulations do not adopt these commenters’ suggestion.

IV. Location

The Proposed Rules provided that a

qualified solar or wind facility is treated

as “located in a low-income community”

or “on Indian land” under section 48(e)

(2)(A)(iii)(I) or located in a geographic

area under the Additional Selection

Criteria (see part VII of this Summary of

Comments and Explanation of Revisions

section) if the facility satisfies the nameplate capacity test (Nameplate Capacity

Test).

Under the Nameplate Capacity Test, a

facility that has nameplate capacity (for

example, wind and solar facilities) is considered located in or on the relevant geographic area if 50 percent or more of the

facility’s nameplate capacity is in a qualifying area. A facility’s nameplate capacity percentage is determined by dividing

the nameplate capacity of the facility’s

Bulletin No. 2023–35

energy-generating units that are located in

the qualifying area by the total nameplate

capacity of all the energy-generating units

of the facility.

Nameplate capacity for an electricity generating unit means the maximum

electricity generating output that the unit

is capable of producing on a steady state

basis and during continuous operation

under standard conditions, as measured

by the manufacturer and consistent with

the definition provided in 40 CFR 96.202.

Energy-generating units that generate

DC power before converting to AC (for

example, solar photovoltaic) should use

the nameplate capacity in DC, otherwise

the nameplate capacity in AC should be

used (for example, wind facilities). Where

applicable, the International Standard

Organization conditions are used to measure the maximum electricity generating

output or usable energy capacity. The

nameplate capacity of any energy storage

technology installed in connection with

the qualified solar or wind facility does

not affect the assessment of the Nameplate

Capacity Test.

A few commenters noted concerns on

the Nameplate Capacity Test and what it

means to be “located in.” Another commenter suggested that the Nameplate

Capacity Test should provide maximum

flexibility. This commenter noted that

Tribal lands are often not contiguous, and

that new housing is limited so it is often

off-reservation and there are also issues of

right of way.

The Nameplate Capacity Test to determine the location of a facility already

inherently provides flexibility because

it only requires that 50 percent or more

(rather than a larger percentage) of the

facility’s nameplate capacity be in a qualifying area. The Treasury Department

and the IRS concluded that a 50 percent

standard is a reasonable standard, which

strikes the right balance between providing flexibility to taxpayers and ensuring

that statutory requirements are satisfied.

Additionally, this standard is familiar to

taxpayers because it is the same standard

that is used to determine whether a facility

is located in an energy community under

Notice 2023-29, 2023-20 IRB 1.

Other commenters had concerns about

the use of AC and DC. These commenters said that the Treasury Department and

607

the IRS should update the Proposed Rules

to clarify that the use of DC is limited

to project location and does not apply to

the maximum output of a qualified facility. One commenter also added that the

Treasury Department and the IRS should

update the Proposed Rules to clarify that

an allocation will not be reduced if a qualified facility’s AC output is less than the

facility’s DC output. Additionally, a few

commenters suggested that the nameplate

capacity for both wind and solar facilities should be based on AC as the statute indicates and questioned the differing

standard.

In response to these comments, the

Treasury Department and the IRS added

language in the final regulations to clarify that the Nameplate Capacity Test

only applies for purposes of determining

whether a facility is located in a qualifying area. The Treasury Department and

the IRS did not modify the Nameplate

Capacity Test to remove the reference to

DC for measuring the nameplate capacity of a solar facility because nameplate

capacity for a solar facility is appropriately measured in DC. Solar facilities

produce electricity in DC, which is then

converted to AC for end use. Conversely,

wind facilities produce electricity in AC.

V. Financial Benefits for Category 3 and

Category 4 Allocations

Section 48(e)(2)(D) provides that

“electricity acquired at a below market

rate” will not fail to be taken into account

as a financial benefit. The Proposed Rules

provided definitions of the terms “financial benefit” and “electricity acquired at

a below market rate” under section 48(e)

(2)(D), as well as a manner to apply such

definitions, appropriately, to qualified

low-income residential building projects

(section 48(e)(2)(B)) and qualified economic benefit projects (section 48(e)(2)

(C)).

A. Financial benefits for qualified lowincome residential building projects

For a facility to be treated as part of a

qualified low-income residential building

project, section 48(e)(2)(B)(ii) provides

that the financial benefits of the electricity produced by such facility must

August 28, 2023

be allocated equitably among the occupants of the dwelling units of a Qualified

Residential Property. The Proposed Rules

reserved allocations under this category

exclusively for applicants that would

apply the financial benefits requirement

under Category 3 in the following manner.

The Proposed Rules provided that

financial benefits can be demonstrated

through net energy savings as defined

later. At least 50 percent of the financial value of net energy savings would

be required to be equitably passed on to

building occupants. This requirement

would recognize that not all the financial

value of the net energy savings can be

passed on to building occupants because

a certain percentage can be assumed to be

dedicated to lowering the operational costs

of energy consumption for common areas,

which benefits all building occupants. The

Proposed Rules provided that applicants

must equitably pass on net energy savings

by distributing equal shares among the

Qualified Residential Property’s units that

are designated as low-income under the

covered housing program, or by distributing proportional shares based on each

dwelling unit’s electricity usage.

The Proposed Rules accounted for the

specific nature of facilities serving low-income residential buildings and facility

ownership, as the facility may be thirdparty owned or commonly owned with the

building.

In scenarios where the facility and

the Qualified Residential Property have

the same ownership, the Proposed Rules

defined the financial value of net energy

savings as the financial value equal to

the greater of: (1) 25 percent of the gross

financial value of the annual energy produced or (2) the gross financial value of

the annual energy produced minus the

annual costs to operate the facility. Gross

financial value of the annual energy produced is calculated as the sum of (a) the

total self-consumed kilowatt-hours produced by the qualified solar or wind facility multiplied by the applicable building’s

metered price of electricity and (b) the

total exported kilowatt-hours produced

by the qualified solar or wind facility

multiplied by the applicable building’s

volumetric export compensation rate for

solar or wind kilowatt-hours. The annual

operating costs are calculated as the sum

August 28, 2023

of annual debt service, maintenance,

replacement reserve, and other costs associated with maintaining and operating the

qualified solar or wind facility.

If the facility and building are commonly owned, a signed benefit-sharing

agreement between the building owner

and the tenants would be required. The

Proposed Rules requested comments on

how to adjust definitions of gross financial

value to account for scenarios in which

building occupants are compensating the

facility owner for energy services.

In scenarios where the facility and the

Qualified Residential Property have different ownership and the facility owner

enters into a power purchase agreement

(PPA) or other contract for energy services with the Qualified Residential

Property owner, the Proposed Rules

defined net energy savings as equal to the

greater of: (1) 50 percent of the financial

value of the annual energy produced by

the facility that accrues to the owner of the

Qualified Residential Property in the form

of utility bill credit and/or cash payments

for net excess generation or (2) the financial value of the annual energy produced

by the facility that accrues to the owner

of the Qualified Residential Property in

the form of utility bill credit and/or cash

payments for net excess generation minus

any payments made by the building owner

to the facility owner for energy services

associated with the facility in a given year.

In these scenarios, the facility owner must

enter into an agreement with the building

owner for the building owner to distribute

the savings to residents.

1. Requirement to Equitably Allocate

Financial Benefits

Two commenters provided that under

certain State and Federal housing programs, housing authorities receive utility

subsidies based on historical utility costs.

These commenters also noted that a housing authority may have their utility allowance decreased if the housing authority

reduces their utility costs through savings from the facility. Additionally, these

commenters stated that the department

managing a housing authority can claim

a portion of net metering credits if the

housing authority receives net metering

credits. One of the commenters, therefore,

608

requested that the Treasury Department

and the IRS draft a rule that the housing

authority be able to retain 100 percent

of net metering credits, regardless of the

energy savings received from the program

and the facility. The other commenter

requested that the Treasury Department

and the IRS waive the requirement for

public housing authorities to pass financial benefits along to residents. This commenter stated that in public housing, all

benefits ultimately accrue to the benefit of

residents. Another commenter stated that

HUD-utility allowances may need to be

increased for buildings if net benefits are

to be shared between the owner and tenants, and the external financing is used to

build the system, such that additional proceeds will be needed to pay debt service

on the energy.

The Treasury Department and the IRS

considered these comments but did not

adopt them in the final regulations because

section 48(e)(2)(B) requires that the financial benefits of the electricity produced by

the facility be allocated equitably among

the occupants of the Qualified Residential

Property.

One commenter warned the Treasury

Department and the IRS to guard against

owner/related party financing designed

to capture all or most of the energy savings benefits by artificially manipulating

their terms of the financing to capture the

savings during the term of the credit, and

against owners seeking to purchase energy

wholesale and mark up value to tenants to

artificially inflate the value of the energy

savings. The commenter says the value of

the energy bill savings should be indexed

against the approved meter rate as authorized by the relevant public service commission (where applicable) or some other

third-party verifiable rate unrelated to the

project sponsor or affiliates.

In response to this comment, the

Treasury Department and the IRS have

maintained the baseline of 50 percent of

the net energy savings calculated from

a minimum of 25 percent of the gross

financial value of electricity produced as

described in the Proposed Rules to ensure

the statutory obligation that financial

benefits be allocated to tenants. The final

regulations clarify, consistent with the

comments received, that gross financial

value includes the sale of any renewable

Bulletin No. 2023–35

energy credits or other attributes associated with the facility’s production, if separate from the metered price of electricity

or export compensation rate.

Many commenters requested that the

final regulations provide guidance for

facility owners to prove equitable distribution of benefits to tenants. A few commenters stated that in certain cases, like

a project using community renewable

energy facility rate structures offered by

utilities, separately metered residents can

subscribe voluntarily, and some residents

may choose not to subscribe. Therefore,

these commenters requested that the regulations allow for a reduction in the equitable distribution requirement on a pro-rata

basis by the (number) of residents who

choose not to subscribe. However, one

of the commenters recommended a minimum threshold of resident participation,

suggesting 50 percent participation at

placed in service, for the distribution of

benefits to be considered equitable.

In consideration of these comments,

the Treasury Department and the IRS have

clarified in the final regulations that for

any occupant(s) that choose to not receive

utility bill savings, the portion of the

financial value that would otherwise be

distributed to non-participating occupants

must be instead distributed equitably to

the participating occupants. Additionally,

no less than 50 percent of the Qualified

Residential Property’s occupants that are

designated as low-income must participate and receive utility bill savings for the

facility to utilize this method of benefit

distribution.

2. Gross Financial Value

A few commenters suggested changes

to the definition of gross financial value.

One commenter stated that for purposes

of building occupants compensating the

facility owner, gross financial value could

be calculated based on the average monthly

local utility rate for either residential or

low-income residential (from the previous

calendar year or trailing 12 months) multiplied by the average residential kilowatt

hour usage per square foot multiplied by

the per square footage of rentable residential space in the building. The commenter

provided variation and detail on how this

would be accomplished.

Bulletin No. 2023–35

Another commenter requested clarification on how to define “gross financial

value.” The commenter stated that it is

unclear whether the “price of electricity”

means only the energy costs or also all

the delivery costs and other charges that

may be charged on a per kilowatt hour

basis. Additionally, the commenter noted

that the “export compensation rate for . . .

kilowatt hours” may not be solely tied to

the energy but may also include additional

compensation such as the value of renewable energy certiﬁcates or other incentives

provided by States.

Finally, one commenter stated that calculating the “gross ﬁnancial value of the

annual energy produced,” as deﬁned in

the Proposed Rules, would be difficult for

buildings due to the complexity of electricity rate structures in many jurisdictions, which may vary depending on the

time of day and time of year.

The Treasury Department and the IRS

considered the commenters’ suggestions

but generally did not adopt them because

the Proposed Rules provide a clear and

accurate framework for defining “gross

financial value.” However, the final regulations clarify, consistent with the comments received, that gross financial value

includes the sale of any renewable energy

credits or other attributes associated with

the facility’s production, if separate from

the metered price of electricity or export

compensation rate. The same definition of

gross financial value applies regardless of

the ownership structure.

One commenter requested clarification

about whether front of the meter (FTM)

volumetric tariff compensation rate, such

as Connecticut’s Residential Renewable

Energy Solutions Buy-All-Sell-All tariff

(BASA Tariff), may be included in the

gross financial value calculation when the

facility and Qualified Residential Property

have the same ownership. The commenter

believes that the BASA tariff $/kWh revenue would be included in the definition of

gross financial value because it is included

in the definition as part of “the total

exported kilowatt-hours produced by the

qualified solar or wind facility multiplied

by the applicable building’s volumetric

export compensation rate for solar.”

The Treasury Department and the IRS

considered this comment but ultimately

concluded that additional clarification in

609

the final regulations to address specific

State tariff rates is not necessary. The definition of gross financial value included in

the final regulations, consistent with the

Proposed Rules, already includes the total

exported kilowatt-hours produced by the

qualified solar or wind facility multiplied

by the applicable building’s volumetric export compensation rate for solar or

wind kilowatt-hours, which would include

compensation from the electricity produced from the facility.

Another commenter stated that it is not

appropriate to define financial benefits

in terms of the value of energy savings.

Instead, this commenter claimed that the

only financial benefit that can be generated by facilities in Category 3 would be

through net metering, where the facility

generates excess capacity that is sold back

to the grid for off-site consumption. The

commenter also implied that, in the case

of net metering credits, the credit would

go directly to the tenants, and that the

building owner will never receive any

financial benefit.

The Treasury Department and the IRS

considered this comment but did not adopt

it in the final regulations. The Treasury

Department and the IRS determined that

gross financial value from the electricity

produced from a qualified solar or wind

facility may stem from self-consumed

kilowatt-hours produced by the facility,

exported kilowatt-hours produced by

the facility, or the sale of any renewable

energy credits or other attributes associated with the facility’s production (if separate from the metered price of electricity

or export compensation rate). Further,

financial value of energy savings from the

electricity produced is a financial benefit

of the electricity produced by the facility

and section 48(e)(2)(B)(ii) provides that

the financial benefits of the electricity produced by such facility must be allocated

equitably among the occupants of the

dwelling units of a Qualified Residential

Property.

3. Net Financial Value

One commenter stated that rather

than creating two methods, the Treasury

Department and IRS should adopt a single method to calculate net energy savings. The commenter stated that for both

August 28, 2023

scenarios (commonly owned and thirdparty owned), the final regulations should

adopt the method from the Proposed Rules

that was only proposed to apply when the

facility and Qualified Residential Property

have the same ownership. The Treasury

Department and the IRS considered this

comment but did not adopt it in the final

regulation because it is appropriate for

“net financial value” to be defined differently depending on whether the facility is

commonly owned or third-party owned

because in third-party owned scenarios

calculating the facility’s levelized cost

of energy would be overly complex and

potentially vulnerable to manipulation.

Instead, relying on the PPA rate is simpler and more reliable. The final regulations clarify that in case of a commonly

owned facility “net financial value” is

defined as the gross financial value of the

annual energy produced minus the annual

average (or levelized) cost of the qualified solar or wind facility over the useful

life of the facility (including debt service,

maintenance, replacement reserve, capital

expenditures, and any other costs associated with constructing, maintaining, and

operating the facility). In the case of a

third-party owned facility, “net financial

value” is defined as gross financial value

of the annual energy produced minus any

payments made by the building owner

and/or building occupants to the facility

owner for energy services associated with

the facility in a given year.

Another commenter cited to the

Connecticut’s Residential Renewable

Energy Solutions BASA Tariff, which

involves FTM projects, and requested a

change to the net financial value definition for third-party owned facilities. The

commenter proposed that, to include FTM

projects in Category 3, the first definition of net financial value needs to be

amended to reference “the total financial

value of energy produced by the facility

that accrues to the owner of the qualified

residential property, or the facility owner,

the tenants, or a combination thereof.”

The commenter further provided that a set

percentage can be required to be provided,

like 25 percent, to the tenants, and the rest

of the revenue can be allocated between

the facility owner and the property

owner in whatever manner is requested.

This commenter also requested that the

August 28, 2023

second definition of net financial value

be amended to say that “the total financial value of the annual energy produced

by the facility that accrues to the owner

of the qualified residential property, or the

facility owner, the tenants, or a combination thereof minus any payments made,

or revenue allocated, to the facility owner

for energy services associated with the

facility in a given year” to consider solar

site lease structures (for FTM project like

BASA) in addition to PPAs.

Another commenter generally recommended that the Treasury Department

and the IRS adopt a baseline requirement

of passing on at least 25 percent of net

energy savings to tenants, to ensure meaningful ﬁnancial beneﬁts are afforded to

households in Category 3.

The Treasury Department and the IRS

considered these comments but did not

adopt them in the final regulations and

maintain the baseline of 50 percent of the

net energy savings calculated from a minimum of 25 percent of the gross financial

value of electricity produced as described

in the Proposed Rule, which is a higher

value of meaningful financial benefits

than the commenter suggests. The other

50 percent of the net energy savings can

be assumed to be dedicated to lowering

the operational costs of energy consumption for common areas, which benefits

all building occupants. The Treasury

Department and the IRS determined

that the baseline of 50 percent of the net

energy savings is consistent with the statutory intent for Category 3, which is to provide the financial benefits of the electricity

produced directly to building occupants.

4. Single Family Housing

One commenter generally noted

that the financial benefit definitions for

Category 3 only contemplate multi-family

housing. This commenter requests clarification for Tribal housing programs, which

the commenter states primarily consist of

Tribal single-family residences that would

have their own meter.

In response to the comment, the

Treasury Department and the IRS have

modified the financial benefit definition

to provide clarity for single-family residences that meet the criteria of a Qualified

Residential Property. The final regulations

610

state that a Qualified Residential Property

could either be a multifamily rental property or single-family rental property.

The same rules for financial benefits for

Category 3 apply to both property types.

5. Benefits Sharing Agreement

Several commenters expressed concern

over the signed benefits sharing agreement

between the building owner and the tenants if the facility and building are commonly owned. Generally, commenters

suggested the elimination of this requirement. A few commenters noted the administrative burdens and challenges on the

building owner in obtaining signed agreements from all tenants. Likewise, another

commenter said that this requirement is

overly burdensome, and that requiring

each resident to voluntarily sign a benefits

sharing agreement would prevent a facility from proceeding. This commenter also

noted the possibility that requiring such

an agreement may conflict with consumer

protection laws, and another commenter

agreed suggesting certain customer protection disclosures may be required. One

commenter also stated that this process

would potentially present a ‘false promise’ to residents should the project not be

selected for an allocation. Some commenters offered alternatives to a signed benefits

sharing agreement. Several commenters

recommended that the facility owner or

building owner provide notice to all building occupants of the expected financial

benefits and the proposed method of allocating the benefit. Similarly, another suggested that owners be required to develop

a benefits sharing plan that must be communicated to tenants, with owners ensuring that sufficient time is given for tenants

to provide feedback. Finally, a few commenters suggested that applicants instead

submit a self-attestation form certifying

that they will equitably distribute benefits

in accordance with the standards set forth

in HUD guidelines.

One commenter supported the requirement for a signed benefits sharing agreement. However, the commenter requested

additional guidance on the contents of

such a beneﬁts sharing agreement, including speciﬁc required consumer protection

disclosures, such as resources tenants can

access to better understand or renegotiate

Bulletin No. 2023–35

the agreement. This commenter additionally encouraged the Treasury Department

and the IRS to adopt a model affidavit

or agreement between building owners

and tenants based on the options considered and used in California’s Solar

on Multifamily Affordable Housing

(SOMAH) program. Another commenter

generally asked for clarification on how to

prove or attest that financial benefits are

due to cost savings associated with solar.

Several Tribal commenters requested

that facilities owned by Tribes or Tribal

housing authorities should be presumed

to result in an economic benefit to Tribal

members who reside on the reservation

or who live in Tribal-owned housing, and

thus should not be required to enter into

a benefits sharing agreement with Tribal

members to show the financial benefit to

Tribal members.

The Treasury Department and the IRS

agree that requiring a signed benefits sharing agreement between the building owner

and the tenants is burdensome and not

necessary to demonstrate compliance with

Program requirements. Instead, to better

achieve the goal of verifying Program

compliance and to provide clarification to

applicants regarding how they can demonstrate that statutory requirements are met

the final regulations require that facility

owners for all Category 3 facilities must

prepare a Benefits Sharing Statement,

which must include (1) a calculation of the

facility’s gross financial value using the

method described in the final regulations,

(2) a calculation of the facility’s net financial value using the method described in

the final regulations, (3) a calculation

of the financial value required to be distributed to building occupants using the

method described in the regulations, (4)

a description of the means through which

the required financial value will be distributed to building occupants, and (5) if the

facility and Qualified Residential Property

are separately owned, indication of which

entity will be responsible for the distribution of benefits to the occupants. In addition, the Qualified Residential Property

owner must formally notify the occupants of units in the Qualified Residential

Property of the development of the facility

and planned distribution of benefits.

6. Impact of Metering on Delivery of

Financial Benefits

Regardless of ownership, residential buildings may have master-metered

or sub-metered utilities. Therefore, the

Proposed Rules provided that for sub-metered buildings, the tenants must receive

the financial value associated with utility

bill savings in the form of a credit on their

utility bills. HUD has issued guidance for

residents of sub-metered HUD-assisted

housing that participate in community

solar, providing an analysis of how community solar credits may affect utility

allowance and annual income for rent calculations.3 The Proposed Rules provided

that applicants follow the HUD guidance

and future HUD guidance on this issue to

ensure that tenants’ utility allowances and

annual income for rent calculations are

not negatively impacted.

The Treasury Department and the IRS

are aware that in some States or jurisdictions it may not be administratively, or

legally, possible to apply utility bill savings on residents’ electricity bills. The

Proposed Rules requested comments on

this issue and how financial benefits, such

as services and building improvements,

can be provided to residents in such residential buildings.

For master-metered buildings, the

Proposed Rules provided that because residents do not have individually metered

utilities and do not receive utility bills, the

building owner must pass on the savings

through other means, such as by providing

certain benefits to the building residents

beyond those provided prior to the qualified solar or wind facility being placed

in service. HUD has issued guidance for

how residents of mastered-metered HUDassisted housing can benefit from owners’

sharing of financial benefits accrued from

an investment in solar energy generation.4

The Proposed Rules provided that applicants follow the HUD guidance and future

HUD guidance on this issue to ensure

that tenants’ utility allowances and annual

income for rent calculations are not negatively impacted.

Many commenters noted that it is difficult for utility bill credits to be distributed to residents even in sub-metered

buildings and suggested that the financial benefit structure available under the

Proposed Rules for master metered buildings be similarly applied to sub-metered

buildings. Several commenters noted that

it is not possible to distribute utility bill

credits to residents in sub-metered buildings because most States lack legislation

or regulations governing the allocation

of solar credits to consumer utility bills,

and, one commenter further stated, that

even in States that do, the utilities may

not have the administrative infrastructure

to allocate credits across bills. Another

commenter supported this by stating that

only 21 States and D.C. have statewide

policies that support sharing solar savings

in multi-family housing in the form of

utility bill credits. Many commenters also

voiced general concern that the process

of distributing utility credits is administratively burdensome on the owner of the

facility. One commenter stated that many

of the residents who would be eligible to

receive bill credits on their utility bills

will already receive a subsidized electricity price from their distribution company,

which would result in their cost of power

already being lower than other consumers

in their service territory. This commenter

asserts that it be more economical to “sell”

or “allocate” the bill credits to another

consumer in the same service territory and

offset their higher energy costs and provide a greater overall ﬁnancial beneﬁt to

tenants. The commenter states that this

system would be similar to the process

proposed for master-metered buildings.

Many commenters asked for flexibility

in providing financial benefits to residents.

A few commenters suggested that metering configuration should not be regarded

U.S. Department of Housing and Urban Development, Treatment of Community Solar Credits on Tenant Utility Bills (July 2022): MF Memo re Community Solar Credits, (https://www.hud.

gov/sites/dfiles/Housing/documents/MF_Memo_Community_Solar_Credits_signed.pdf) and Community Solar Credits in PIH Programs (August 2022), (https://www.hud.gov/sites/dfiles/

documents/Solar%20Credits_PH_HCV.pdf).

U.S. Department of Housing and Urban Development, Treatment of Solar Benefits in Mastered-metered Buildings (May 2023), MF_Memo_re_Community_Solar_Credits_in_MM_

Buildings.pdf (https://www.hud.gov/sites/dfiles/Housing/documents/MF_Memo_re_Community_Solar_Credits_in_MM_Buildings.pdf).

Bulletin No. 2023–35

611

August 28, 2023

for purposes of defining financial benefits.

One commenter stated that financial benefits should be defined by HUD, and should

be applicable to all properties, regardless

of whether the residential unit is sub-metered or if the building is master-metered.

This commenter specifically stated that

financial benefits should be allowed to

accrue to the common area meters and

then be disbursed equitably to occupants

based upon any approved method – without regard to metering configuration and

without requiring a bill credit allocation

method. Several other commenters suggested, as alternatives, services such as

free or reduced cost high speed internet,

shuttle services, public transportation subsidization, job training programs, community events, and building improvements as

alternatives to be allowed instead of utility

bill credits.

One commenter suggested that if utility bill credits are not available, applicants

could determine a baseline year and calculate the average price per kilowatt hour for

that year and then for all subsequent years

(after placed in service date) and multiply it by the kilowatt hours of production multiplied by an annual acceptable

adjustment. The commenter stated that

net energy savings from a given period

(month, quarter, or year) would then be

required to be spent on residential service

programs (available to the largest group

of residents), facility upgrades benefiting

residents, and other services that benefit a

large group of residents.

A few commenters, although supportive, noted that the HUD guidance allowing for services or other benefits to be

provided in master metered buildings,

in lieu of direct financial savings to tenants, is limited in scope. One commenter

pointed out that the HUD memorandum

cited in the Proposed Rules only covers

developments subsidized through HUD’s

multifamily programs. This commenter

noted that this guidance does not cover

HUD’s Project Voucher Program and that

the USDA does not provide matching

guidance for the USDA supported housing. Therefore, this commenter suggests

that the regulations directly define financial benefits for master metered housing,

rather than by reference to memoranda,

so that this provision is clearly applicable

to all master metered affordable housing

August 28, 2023

developments. Similarly, one commenter

stated that the types of benefits provided

under the HUD guidance for community

solar programs should be available as a

mechanism to distribute financial benefits

for all Category 3 applicants.

Similarly, another commenter noted

that certain financial benefits distributed

directly to residents may be includable in

a household’s annual income. The commenter noted that HUD has determined

that providing financial benefits in the form

of gift cards or cash payments would generally be included in income. Therefore,

this commenter supported the inclusion of

language in the rules that would state that

financial benefits can include credits on

utility bills or could include benefits that

can be equitably provided to residents but

are not direct payments to the residents,

such as resident services, free or reduced

cost internet, job training, or building

upgrades. However, another commenter

requested the opposite, stating that direct

payments or other ﬁnancial beneﬁts like

rent reductions should be the preferred

form of beneﬁts.

In response to these comments, the

Treasury Department and the IRS modified the Proposed Rules in the final regulations to provide maximum flexibility

to equitably allocate financial benefits to

residents while also ensuring the statutory

requirements are satisfied. Accordingly,

the final regulations provide that financial value can be distributed to building occupants via utility bill savings or

through different means, and depending

on the method selected, the final regulations prescribe the requirements that must

be met. For purposes of this via utility

bill savings provision, financial benefits

will be considered to be equitably allocated if at least 50 percent of the financial value of the energy produced by the

facility is distributed as utility bill savings

in equal shares to each building dwelling unit among the Qualified Residential

Property’s occupants that are designated

as low-income under the covered housing program or other affordable housing

program (described in section 48(e)(2)

(B)(i)) or alternatively distributed in proportional shares based on each low-income dwelling unit’s square footage, or

each low-income dwelling unit’s number

of occupants. For any occupant(s) that

612

choose to not receive utility bill savings

(for example, exercise their right to “opt

out” of a community solar subscription in

applicable jurisdictions), the portion of the

financial value that would otherwise be

distributed to non-participating occupants

must be instead distributed to all participating occupants. No less than 50 percent

of the Qualified Residential Property’s

occupants that are designated as low-income must participate and receive utility

bill savings for the facility to utilize this

method of benefit distribution. If financial value is not distributed via utility

bill savings, financial benefits will be

considered to be equitably allocated if

at least 50 percent of the financial value

of the energy produced by the facility is

distributed to occupants using one of the

methods described in HUD guidance, or

other guidance or notices from the Federal

agency that oversees the applicable housing program identified in section 48(e)(2)

(B).

With respect to allocating financial

value via utility bill savings, commenters

addressed the language in the Proposed

Rules that provided an alternative method

for net energy savings to be distributed in

proportional shares based on each dwelling unit’s electricity unit. The commenters

stated that this method is not permitted by

HUD. These commenters also proposed

a third option for equitable distribution,

which they claim is used in California’s

SOMAH program, where shares are distributed to each unit based on square

footage. In response to this comment, the

Treasury Department and the IRS added

language in the final regulations to clarify that the financial value should be

distributed in equal shares to each building dwelling unit among the Qualified

Residential Property’s occupants that are

designated as low-income under the covered housing program or other affordable

housing program (described in section

48(e)(2)(B)(i)) or alternatively distributed in proportional shares based on each

low-income dwelling unit’s square footage, or each low-income dwelling unit’s

number of occupants.

Another commenter suggested that in

a master-metered building, the facility

owner be allowed to allocate the value

of energy savings to the building’s tenant

association to distribute equally as the

Bulletin No. 2023–35

association sees fit. This was suggested

in addition to and as alternative to the

options provided in the HUD guidance.

In response to this comment, the

Treasury Department and the IRS considered but did not adopt this suggestion. The Treasury Department and the

IRS have provided additional clarity on

the applicability of HUD guidance in the

final regulations to provide flexibility to

the applicant to determine the methodology most appropriate for allocation of

the value of energy savings based on the

circumstances of the Qualified Residential

Property. This includes options that have

been determined to not affect a tenants

utility allowance and annual income for

rent calculations.

B. Financial benefits in qualified lowincome economic benefit projects

For a facility to be treated as part of a

qualified low-income economic benefit

project, section 48(e)(2)(C) requires that

at least 50 percent of the financial benefits

of the electricity produced by the facility

be provided to qualifying low-income

households. To satisfy this standard, the

Proposed Rules required that the facility

serve multiple households and at least 50

percent of the facility’s total output is distributed to qualifying low-income households under section 48(e)(2)(C)(i) or (ii).

In addition, to further the overall goals of

the Program, the Proposed Rules reserved

allocations under this category exclusively for applicants that would provide

at least a 20-percent bill credit discount

rate for all such low-income households.

The Proposed Rules defined a “bill credit

discount rate” as the difference between

the financial benefit distributed to the

low-income household (including utility bill credits, reductions in the low-income household’s electricity rate, or other

monetary benefits accrued by the household) and the cost of participating in the

Program (including subscription payments

for renewable energy and any other fees or

charges), expressed as a percentage of the

financial benefit distributed to the low-income household. The bill credit discount

rate can be calculated by starting with the

financial benefit distributed to the low-income household, subtracting all payments

made by the low-income customer to the

Bulletin No. 2023–35

facility owner and any related third parties as a condition of receiving that financial benefit, then dividing that difference

by the financial benefit distributed to the

low-income household.

1. Category 4 Community Solar

Because of the financial benefits

requirements that are structured for community solar projects, several commenters

thought that the Proposed Rules too narrowly limited Category 4. Commenters

noted that the Proposed Rule precluded

otherwise eligible facilities from qualifying under Category 4, including behind

the meter (BTM) facilities that meet the

Category 4 requirements. One commenter

suggested that Category 4 should be open

to projects that directly benefit Tribal

member small businesses. Similarly, a

commenter noted that Category 4 should

be open to all projects, whether FTM or

BTM, that directly benefit Tribal member

small businesses (where the small business can apply for the section 48 credit) or

Tribal enterprises, located on Tribal lands,

that may want to deploy commercial

roof-top or ground-mount solar (such as

canopies) to offset energy costs, provide

energy security, or support job creation.

Another commenter also criticized the

narrow nature of Category 4 noting that

the Proposed Rules have made eligibility

for Category 4 solely applicable to multifamily and community solar.

Some commenters also made suggestions on how to define Category 4. One

commenter suggested that projects under

Category 4 allow only on-site commercial

and industrial projects to reach overall

deployment and savings goals. Similarly,

one commenter requested that Category

4 incentivize larger agribusiness projects

that employ residents living in these areas

and working at these agribusiness facilities (or similar industries) and stated that

the 50 percent household requirement is

too complicated. This commenter felt that

residential facilities are being prioritized

in categories 1, 3, and 4, and, therefore,

that Category 4 should be modified to

incentivize facilities supplying power to

businesses but providing financial benefits

to low-income residents in the same area.

Another commenter recommended that

the Category 4 allocation give priority to

613

qualified low-income benefit projects less

than 1 MW that are located in low-income

communities.

The Treasury Department and the IRS

recognize the commenters’ concerns that

Category 4 is limited. However, projects

must meet the statutory requirements

under section 48(e)(2)(C) to be considered eligible for Category 4. To ensure

these requirements are not too narrowly

construed, the Treasury Department and

the IRS adopted a change to the FTM

definition in the final regulations applicable to Category 4 to ensure that projects meeting the intent of Category 4, as

that intent was described in the Proposed

Rules, are not unintentionally disqualified due to an overly strict definition of

FTM. The final regulations clarify that a

facility is FTM if it is directly connected

to a grid and its primary purpose is to

provide electricity to one or more offsite

locations via such grid or utility meters

with which it does not have an electrical

connection; alternatively, FTM is defined

as a facility that is not BTM. The final

regulations also clarify that for the purpose of Category 4, a qualified solar or

wind facility is also FTM if 50 percent

or more of its electricity generation on an

annual basis is physically exported to the

broader electricity grid.

However, the Treasury Department

and the IRS emphasize that this does not

change the intent of Category 4 that projects falling under the definition of BTM

are not eligible for Category 4, and that

financial benefits to eligible low-income

households can only be delivered via utility bill savings. Based on industry and

market research, community solar programs primarily use utility bill savings to

deliver financial benefits to households.

For this reason, the Treasury Department

and the IRS have defined financial benefits in this manner.

At least one other commenter

requested allowing public and affordable housing buildings to participate in

Category 4 through the use of geo-eligibility to establish qualification for

a Category 4 site. One of these commenters mentioned the process being

adopted in New York for its Inclusive

Community Solar Adder, which will

allow anyone who lives in a designated

“Disadvantaged Community” to qualify

August 28, 2023

upon demonstration that their address

is in one of the so-called DAC zones.

This commenter noted that the Climate

and Economic Justice Screening Tool

(CEJST) map is already being used to

qualify sites for Category 1 participation.

Because section 48(e)(2)(C) provides requirements for ensuring that

the financial benefits of the electricity

produced by a qualified solar or wind

facility are provided to qualifying households, establishing categorical eligibility for Category 4 based on geographic

location of the project is inappropriate.

Similarly, as discussed in more detail

later under part V.B.6. of this Summary

of Comments and Explanation of

Revisions section, qualifying households

based on geography is also inappropriate because of statutory requirements.

Similarly, establishing eligibility for

multifamily buildings (including master-metered buildings), agribusinesses,

or other arrangements that do not directly

result in utility bill savings for low-income households is also inappropriate.

As discussed earlier, financial benefits to

eligible low-income households can only

be delivered via utility bill savings under

these regulations. Therefore, the final

regulations do not adopt these comments.

2. Twenty Percent Bill Credit Discount

One commenter urged the Treasury

Department and the IRS to require a higher

bill discount rate than 20 percent, stating

the programs in Illinois, Massachusetts,

and Maryland already provide discounts

at or above the proposed threshold

level. This commenter believes that the

increased credit for qualified low-income

economic benefit projects should allow

for an increase in the amount of financial

benefit delivered to low-income customers in these markets.

Another commenter supported the

method of requiring financial benefits in

the form of bill credits, but suggested an

additional requirement to be included in

cases where beneficiaries have no cost

of participation through a subscription

fee. In this situation, the commenter suggested that the bill credit discount rate

should be calculated as the total savings

on a customer’s utility bill, annually,

divided by the total value of the electricity

August 28, 2023

produced by the project, as measured by

the income to the project paid by the utility, independent system operator (ISO),

or other customer procuring power from

the project.

Another commenter requested clarification on the interpretation of bill credit

discount rate, which the commenter

read to mean that 20 percent of the total

export credit rate would be the minimum

required revenue share with the low-income customer, rather than 20 percent of

the customer’s pre-solar electricity bill.

This commenter also requested clarification as to whether the calculation will be

annual, and whether the form of benefits

must specifically be “utility bill credits” or

could be other documented financial benefits provided to tenants.

One commenter stated that a 20 percent cost savings requirement will likely

be unattainable in some energy markets,

specifically States and localities that have

less amicable laws and utility regulations

for community solar. This commenter

recommended a 15 percent cost savings

for 2023, stating that 15 percent is still

on the higher end of the current industry

average for community solar cost savings. This commenter also requested that

the benefit should be an annual reduction (of 15 percent) because there can

be cost savings fluctuations throughout

a calendar year. Although the Treasury

Department and the IRS considered various percentages for required cost savings between 5 percent and 20 percent,

based on a review of various State program rates and market information, the

Treasury Department and the IRS have

decided to maintain the 20 percent rate.

This rate will allow for the greatest savings to the low-income households and

further the requirement of section 48(e)

(2)(C) that 50 percent of the financial

benefits of the electricity produced by the

facility are provided to such households.

Additionally, in response to comments,

the Treasury Department and the IRS

clarified that the 20 percent bill discount

is an annual savings.

Tribal commenters requested that projects owned by Tribes or Tribal housing

authorities should be presumed to result

in an economic benefit to Tribal members

who reside on the reservation or who live

in Tribal-owned housing.

614

The Treasury Department and the IRS

decline to adopt the suggestion of presumption of economic benefit. The statutory requirements for the Program require

that a qualified low-income economic

benefit project serves multiple households

and at least 50 percent of the facility’s

total output is distributed to qualifying

low-income households under section

48(e)(2)(C). To help applicants meet this

requirement, the Treasury Department and

the IRS have provided in the final regulations an illustrative list of categorical

eligibility options to provide maximum

flexibility to qualify low-income households. This includes eligibility based on

Tribal programs and housing programs,

among many other options.

3. Single Household

Several commenters have requested

that the Treasury Department and the IRS

add eligibility under Category 4 for projects that benefit one single-family residence where 100 percent of the facility’s

total output is distributed to the qualifying low-income household residing at that

residence, provided that the project meets

all other Category 4 criteria, and the facility provides at least a 20-percent utility

bill savings for such low-income household. Several commenters also added that

Congress’s use of the term “households”

is more properly read as a programmatic

term applying to all low-income households that can benefit from the Program,

rather than a narrower reading suggested

in the Proposed Rules. One commenter

argued that this narrow reading (excluding

single family households from Category

4) would unnecessarily and unfairly discriminate against certain households.

After consideration of all these comments, the final regulations do not adopt

the commenter’s suggestion. Section 48(e)

(2)(C) applicable to Category 4 facilities

requires that at least 50 percent of the financial benefits of the electricity produced by

the facility be provided to “households”

with certain income levels. Because the

statute uses the plural term “households,”

the Treasury Department and the IRS determined that providing financial benefits to a

single household is insufficient to meet the

requirements of section 48(e)(2)(C) applicable to Category 4 facilities.

Bulletin No. 2023–35

4. Utility Bill Savings

Several Tribal comment letters requested that Category 4 should not be limited to

projects that provide only individual benefits or community-scale projects. These

commenters urged the Treasury De

partment and the IRS to expand the

definition of “financial benefit” to include

community-wide benefits, such as direct

benefits to the Tribal government from

the additional tax credit (especially for

projects owned by the Tribe and receiving elective payments from the Treasury

Department), job creation and economic

benefits to low-income Tribal members.

These same commenters also stated that

Category 4 should be open to all projects,

regardless of metering, that directly benefit Tribal member small businesses (where

the small business can apply for the section 48 credit) or Tribal enterprises located

on Tribal lands. Additionally, some of the

Tribal comments requested flexibility

for Tribal housing or economic development projects that are serving Tribal lands

and Tribal households to define benefits

collectively (rather than individually),

because many of the Tribal commenters

are located in States that do not allow for

community solar. These commenters stated that they will have to negotiate directly

with a utility to deploy community scale

projects on the Reservation.

To promote more flexibility with

respect to financial benefits requirements in Category 4, a few commenters

requested that the Treasury Department

and the IRS extend the same flexibility is

provided for Category 3 projects regarding

financial benefits to Category 4 projects as

well. These commenters requested that a

manner other than bill credits be permitted to provide financial benefits directly

to low-income subscribers in Category 4

that still meets the nominal 20 percent discount requirement, like gift cards, direct

payments, or checks. One commenter

asked whether master-metered projects

are eligible for Category 4 if a project

adheres to the same HUD guidance used

for Category 3 projects.

The Treasury Department and the

IRS considered the comments requesting

expansion or flexibility with respect to

financial benefits for Category 4 to allow

methods other than utility bill savings

but ultimately decided not to adopt the

commenters’ suggestions in these final

regulations. Requiring financial benefits

via utility bill savings is the only means

through which the Treasury Department

and the IRS can ensure that the provision

of financial benefits to qualifying households is sufficiently regulated such that the

requirements of section 48(e)(2)(C) are

satisfied. Therefore, the final regulations

clarify that financial benefits for Category

4 must be tied to a utility bill of a qualifying household. The Treasury Department

and the IRS may consider other methods

of determining Category 4 financial benefits in future years.

The final regulations, however, address

comments regarding the potential unsuitably of the proposed rules to net-credit

billing, or other structures where the qualifying household does not make a direct

payment to the project owner by providing

an alternative methodology for calculating

a 20 percent bill credit discount rate in this

scenario. In cases where the qualifying

household has no or only a nominal cost

of participation, the bill credit discount

rate should be calculated as the financial

benefit provided to a qualifying household

(including utility bill credits, reductions in

a qualifying household’s electricity rate,

or other monetary benefits accrued by a

qualifying household on their utility bill)

divided by the total value of the electricity

produced by the facility and assigned to

the qualifying household (including any

electricity services, products, and credits

provided in conjunction with the electricity produced by such facility), as measured by paid by the utility, ISO, or other

off-taker procuring electricity (and related

services, products, and credits) from the

facility.

5. Fifty Percent of the Facility’s Total

Output to Low-Income Households

One commenter requested that the

facility should not have to provide power

to households, as long as the financial

benefits were distributed to residents of

qualifying households. In this case, the

commenter stated that a non-profit organization planned to build a facility on the

non-profit office building but distribute

the savings the non-profit derived from

the facility to the residents of apartments

the non-profit administers. Similarly,

another commenter noted that the use of

“distribute” rather than “assigned” in the

requirement in the Proposed Rules that

50 percent of the facility’s total output

is distributed to qualifying low-income

households may imply that beneficiaries

are expected to receive the physical flows

of electricity from the facility, which is

not how community solar works in most

cases, nor is it what the statute requires.

In response to these comments and to

clarify the intent of the Proposed Rules,

which was to structure Category 4 consistent with the market as it exists today

(including community solar business

models), the final regulations adopt the

suggestion of the commenter to change

“distributed” to “assigned.” Therefore,

the full clause in the final regulations is

“at least 50 percent of the facility’s total

output must be assigned to Qualified

Households.”

6. Low-Income Verification

To ensure the requirements of section 48(e)(2)(C) are met, verification of

households’ qualifying low-income status is required. The Proposed Rules provided that applicants are responsible for

proof-of-income verification and would

be required to submit documentation upon

placing the qualified solar or wind facility in service that identifies each qualifying low-income household, the output

allocated to each qualifying low-income

household in kW, and the method of

income verification utilized.

The Proposed Rules provided that

applicants may use categorical eligibility or other income verification methods to qualify low-income households.

Categorical eligibility consists of obtaining proof of household participation in a

needs-based Federal,5 State, Tribal, or utility program with income limits at or below

the qualifying income level for the specific

Federal programs may include, but are not limited to: Medicaid, Low-Income Home Energy Assistance Program (LIHEAP), Weatherization Assistance Program (WAP), Supplemental

Nutrition Assistance Program (SNAP), Section 8 Project-Based Rental Assistance, and the Housing Choice Voucher Program.

Bulletin No. 2023–35

615

August 28, 2023

facility (qualifying program). State agencies (for example, State community solar/

wind program administrators) can also

provide verification of low-income status

if the State program’s income limits are at

or below the qualifying income level for

the qualified solar or wind facility. If a

household is not enrolled in a qualifying

program, additional income verification

methods can be used such as: paystubs,

tax returns, or income verification through

crediting agencies and commercial data

sources. Eligibility based on the applicant

(or contractors or subcontractors) collecting self-attestations from households is

not permitted.

Several

commenters

commented

on the verification methods to qualify

low-income households. On self-attestation, many commenters disagree with

the Proposed Rules prohibiting eligibility based on self-attestation. Many commenters were in favor of self-attestation,

which according to one commenter could

include an attestation to the effect that the

household either participates in one of the

programs that has the relevant standard as

a criterion or otherwise meets the standard

to the best of the resident’s knowledge.

One commenter stated that self-attestation is the fastest and most efficient way

to ensure maximum low-income customer

participation. This commenter noted that

many customers will be skeptical of providing documents, and that the process of

obtaining, processing, and verifying the

documentation is administratively burdensome and time consuming. Another

commenter noted a practical consideration

that by accepting self-certification, households who are not yet enrolled in Federal

or State energy assistance programs but

are eligible or in the process of enrolling

may still participate in qualified low-income economic benefit projects. Another

commenter stated that only a fraction of

eligible households currently participate

in existing State, Federal, utility, or Tribal

programs for which they are eligible, and

many barriers – including knowledge,

time, documentation, and language fluency – prevent many households from

participating.

Some of the commenters’ recommendations also tied into the use of State

programs. One commenter suggested

removing the self-attestation limitation

August 28, 2023

where self-attestation is permitted by State

agencies. Two other commenters similarly

suggested the rules accept income verification via State-program verification

where States specifically accept self-attestation with one of the commenters noting that subscribers and applicants should

not have to double verify a household if

self-attestation is used on the State level.

Another commenter encouraged that

applicants be allowed to use benefit cards

as sufficient evidence of participation in

qualifying programs where such cards

are the means by which a State makes the

benefit available to participants.

Another commenter requested that

the rules clarify whether the use of

State-approved geo-qualification maps

or CEJST are approved income verification methods and recommended that, for

individuals who reside within a CEJST

or Persistent Poverty County (PPC), the

rules should consider allowing self-attestation as a means of income-qualification in States where it is a permissible

method for income-qualification. Another

commenter asked for clarification about

the interaction between this Program and

State agency provided income verification, as well as Department of Energy’s

(DOE) community solar subscription

tool tying eligibility, initially, to LIHEAP.

The commenter noted that some State

agencies allow self-attestation and/or

State-approved geo-qualification maps in

various programs and requested that the

rules allow self-attestation and geo-qualification (including both State maps and

CEJST) meeting certain standards to

the maximum extent allowable by law.

Another commenter suggested expanding

those who can provide verification to not

just the State agencies but also utilities. In

contrast, another commenter instead recommended removing the concept of allowing State agencies to provide verification

at all and proposed adding a requirement

to make clear that the requirement is on

applicants to receive verification directly

from the customers.

Some commenters asked for the expansion of categorical eligibility. For example,

one commenter recommended that public

housing, USDA Rural Development, and

the Project Based Voucher Program be

added to the list of categorically eligible Federal assistance programs noted in

616

footnote 5 of the Proposed Rules. Another

commenter asked if the listed methods

are the only possible methods of verification or if other State-approved methods may be considered as well. Another

commenter also suggested for purposes of

Category 4 that the rules allow participation in more programs as proof of income

and that paystubs, tax returns, and credit

checks should be removed as possibilities

as these could alienate low-income households. An additional commenter noted

their view on the importance of protecting

Tribal data sovereignty. This commenter

said the rules should not tie Tribes to

external sources of data. This commenter

believes that self-certification as to poverty levels or other metrics by Tribes

should be sufficient.

A few commenters suggested adding

geographic eligibility to verify low-income status. One commenter suggested

adding geographic eligibility to the “category eligibility” and “other income verification methods” to qualify low-income

households, where “geographic eligibility” is defined as a household that is

currently residing in a LIHTC Qualified

Census Tract (LIHTC Qualified Census

Tract) and where at least one adult in that

household has resided for at least the previous six months. The commenter claims

that the LIHTC Qualified Census Tract

household income standard is stricter than

that in section 48(e)(2)(C)(ii), and thus

this standard is an administratively efficient method of qualifying low-income

households for a tax credit similar to the

Low-Income Communities Bonus Credit.

Another commenter recommended adding

the physical location of the customer’s

home as an additional qualifying criterion,

noting a reasonable criterion for inclusion

as areas where at least 20 percent of the

population falls below the poverty line,

with prevalent harmful environmental

impacts as outlined in the 2014-2018

5-year American Community Survey

(ACS), conducted by the US Census

Bureau. Moreover, one commenter suggested including geo-qualification based

on State maps and the CEJST Tool.

In contrast, one commenter supported

the Proposed Rules noting that categorical

income verification decreases costs and

increases available low-income customer

benefits. Another commenter provided

Bulletin No. 2023–35

an entirely different suggestion stating

that income verification is a vestige of

the community solar subscription model

and is alternatively achieved by serving

communities in low-income areas as measured by area or State median income census data. The commenter suggested that

income verification through the Statewide

Shared Clean Energy Facility (SCEF) program (which is a Connecticut program)

relies on the distribution utilities determining customer eligibility.

After consideration of all of comments

on the verification methods to qualify

low-income households, the final regulations adopt these comments in part. The

Treasury Department and the IRS considered numerous verification methods in

crafting the Proposed Rules and the final

regulations to strike a balance between

reducing administrative burden for taxpayers and households and ensuring adequate checks that the facilities receiving

a Capacity Limitation under Category 4

meet the requirements of section 48(e)

(2)(C). The final regulations adopt the

Proposed Rules’ prohibition on self-attestations because they are not sufficiently

reliable or verifiable. However, this prohibition on direct self-attestation from a

household does not extend to categorical

eligibility for needs-based Federal, State,

Tribal, or utility programs with income

limits that rely on self-attestation for verification of income. The final regulations

clarify that income verification is accepted

via program verification where the relevant jurisdiction specifically accepts

self-attestation.

The Treasury Department and the IRS

agree that subscribers and applicants

should not have to double verify when

a State program accepts self-attestation.

The final regulations, consistent with the

Proposed Rules, provide flexibility for

applicants to qualify households through

several means, including categorical eligibility and paystubs, tax returns, or income

verification through crediting agencies

and commercial data sources. Moreover,

the list of Federal programs included in

footnote 5 of the Proposed Rules is not

the exclusive list of Federal programs that

could be used to demonstrate categorical

eligibility, which provide additional flexibility to qualify households. However, in

response to the comments, the final regulations will include additional examples

of programs that will be considered categorically eligible based on income status.

Therefore, in response to the commenter’s

request the following additional programs

will be added to the illustrative list that was

provided in the Proposed Rules: Federal

Communication Commission’s Lifeline

Support for Affordable Communications,

USDA’s National School Lunch Program;

U.S. Social Security Administration’s

Supplemental Security Income; or any

verified government or non-profit program serving Asset Limited Income

Constrained Employed (ALICE) persons

or households. The final regulations also

clarify that to qualify for categorical eligibility under one of these programs, an individual in the household must be currently

enrolled or must have received an award

letter or other written documentation from

the program in the last 12 months.

With respect to State programs, the

final regulations, consistent with the

Proposed Rules, provide that categorical

eligibility also consists of obtaining proof

of household participation in a needsbased State or utility program, so long

as the income limits are at or below the

qualifying income level for the specific

facility. The final regulations clarify that

the qualifying income level for a household is based on where such household is

located. Without additional information

or requirements, geographic-based eligibility verification does not prove that a

particular household necessarily meets the

income parameters of section 48(e)(2)(C).

Although one commenter, for example,

noted that LIHTC Qualified Census Tracts

have stricter income requirements, this

does not address the concern that a particular household’s income may not qualify

under the statute but only that there are

households in the census tract that would

qualify.

Two commenters requested eligibility

of low-income households be established

only at the time of enrollment and remain

for the length of the subscription and that

there should not be a continual obligation

to verify households as low-income. This

request is consistent with the Proposed

Rules, which provided that applicants are

responsible for proof-of-income verification and would be required to submit documentation once upon placing the qualified

solar or wind facility in service that identifies each qualifying low-income household as well as other information. The

final regulations maintain the Proposed

Rule but clarify that the low-income status of a household is determined at the

time the household is enrolled in the community program and does not need to be

re-verified. Similarly, the recapture rules

discussed in part XIII of this Summary of

Comments and Explanation of Revisions

section are not imposed if the low-income

status of households change in later years;

however, the Treasury Department and

the IRS determined that a change in the

final regulations to clarify this point is

unnecessary.

VII. Annual Capacity Limitation

Under section 48(e)(4)(C), the total

annual Capacity Limitation is 1.8 gigawatts (GW) of DC capacity for each of the

calendar year 2023 and 2024 programs.

Consistent with section 4.02 of Notice

2023–17, the Proposed Rules specified how

the annual Capacity Limitation would be

allocated across the four facility categories

for 2023. The Proposed Rules, consistent

with Notice 2023–17, reserved a portion of

the total annual Capacity Limitation of 1.8

GW of DC capacity for each facility category for calendar year 2023 as follows:

Category 1: Located in a Low-Income Community

700 megawatts

Category 2: Located on Indian land

200 megawatts

Category 3: Qualified Low-Income Residential Building Project

200 megawatts

Category 4: Qualified Low-Income Economic Benefit Project

700 megawatts

Bulletin No. 2023–35

617

August 28, 2023

The Proposed Rules also provided

that the Treasury Department and the IRS

would retain the discretion to reallocate

Capacity Limitation across categories and

sub-reservations to maximize allocation in

the event one category or sub-reservation

is oversubscribed and another has excess

capacity.

One commenter suggested eliminating the 1.8 GW Capacity Limitation altogether, in favor of the same uncapped

allocation that they view other solar customers, typically customers in a higher

income bracket, have previously received.

However, section 48(e)(4)(C) provides the

1.8 GW Capacity Limitation, and it cannot be modified by the final regulations.

Therefore, the final regulations do not

adopt this comment.

Another commenter suggested re-allocating the Capacity Limitation under

Category 3 to Category 4 to increase the

total number of MW that can be deployed

efficiently while yielding the highest

economic benefit. Similarly, a different

commenter recommended increasing

Category 4 by combining Category 1 and

4 into a single 1.4 GW category applicable to both. In addition, this commenter

suggested that the Treasury Department

and the IRS should layer on preferences

for economic benefits over location in

facility selection, similar to its preferences around ownership and location

(discussed in part VII of this Summary of

Comments and Explanation of Revisions

section). Procedurally, an applicant would

submit an application for this combined

category in the applicable sub-allocation

and indicate under which category qualification, and thus bonus level, for the

project is sought. The commenter added

that the Treasury Department and the

IRS can apply a similar approach to the

Proposed Rules to sub-allocate capacity

among facility types within that combined

category, subdividing among commercial,

community, and single-family residential

solar as strongly recommended by both

industry and environmental justice groups

since last year. Another commenter also

had recommendations about how to re-allocate capacity taking into account the

Additional Selection Criteria (ASC). The

commenter suggested that the Treasury

Department and the IRS reallocate unused

capacity in the same year. Specifically,

August 28, 2023

the commenter suggested that if there is

unused capacity from a category or an

ASC reservation that it be allocated in the

same year to ensure all 1.8 GW of projects can be efficiently deployed annually.

The commenter encouraged the Treasury

Department and the IRS to consider

implementing subcategory capacity carveouts within each category to effectively

allow for a rolling application system. For

example, in Category 4, there should be

more capacity dedicated to certain projects

over others. Two commenters expressed

disagreement for the large total reservation in Category 1. These commenters

suggested that some of the Category 1 reservation should be moved to Category 4.

After consideration of these comments,

the final regulations, consistent with the

Proposed Rules, provide that the total

Capacity Limitation for each Program year

will be divided across the 4 facility categories and that the Treasury Department

and the IRS retain the discretion to reallocate Capacity Limitation across categories

and sub-reservations to maximize allocation in the event one category or sub-reservation is oversubscribed and another has

excess capacity. The Treasury Department

and the IRS continue to believe that the

reservations based on facility category

best allow a wide variety of facilities and

benefits to go to low-income communities

to further the intent of the statute. Absent

category reservations, all the annual

Capacity Limitation could get allocated

to one facility category, which is contrary to the statute providing four distinct

categories.

The final regulations clarify that the

specific reservations for a Program year

are provided in guidance published in the

Internal Revenue Bulletin. For Program

year 2023, Notice 2023-17 and Revenue

Procedure 2023-27 provide the specific

reservation amounts for each category. As

clarified in the final regulations, the specific reservation amounts are established

based on factors such as the anticipated

number of applications that are expected

for each category and the amount of

Capacity Limitation that needs to be

reserved for each category to encourage

market participation in each category consistent with statutory intent.

One commenter stated that sub-allocations should be adaptable in future

618

Program years to account for lessons

learned. However, the commenter said that

the 200 MW for Indian land should not be

reallocated to other categories even if not

fully claimed by applications in any given

year, nor should any shortfall of applications be used to justify smaller future

allocations. The Treasury Department and

the IRS understand the importance of all

of the categories provided by Congress

in the statute and agree that the Capacity

Limitation allocated to each facility category should be adaptable. Accordingly,

the Treasury Department and the IRS have

retained discretion to reallocate Capacity

Limitation and to revise amounts reserved

for each category in each Program year.

After the 2023 Program year, the Treasury

Department and the IRS will determine

whether to change the facility category

reservation amounts for the 2024 Program

year based on the factors provided in the

final regulations and will announce the

specific reservation amounts in Program

guidance applicable to 2024.

VIII. Additional Selection Criteria

The Proposed Rules provided that

facilities that meet at least one of the two

categories of Ownership and Geographic

Criteria, collectively the ASC, would

receive priority for an allocation within

each facility category described in section

48(e)(2)(A)(iii). The Proposed Rules also

provided that at least 50 percent of the

total Capacity Limitation in each facility

category would be reserved for facilities

meeting ASC.

The Proposed Rules provided that in

evaluating applications received during

the initial application window, priority

would be given to eligible applications

for facilities meeting at least one of the

two ASC. If the eligible applications for

Capacity Limitation for facilities that

meet at least one of the two ASC criteria

exceed the Capacity Limitation for a category, facilities meeting both ASC criteria

would be prioritized for an allocation.

Several commenters expressed overall

agreement and support for the inclusion of

ASC, and the purpose behind these criteria, which commenters feel will promote

community ownership. One commenter

expressed disagreement with the use of

ASC in the Program or that it should not

Bulletin No. 2023–35

be used for the 2023 Program. Another

commenter echoed this by saying that the

Treasury Department and the IRS should

first assess the Program and applications

received for 2023, and then consider

including the ASC and a corresponding

capacity reserve amount.

Other commenters suggested that if

ASC is used, the percentage of the total

Capacity Limitation in each facility category for ASC should be reduced from

50 percent to 25 percent or to 10 percent. Another commenter stated that the

Ownership Criteria is too restrictive, and

few applicants will be able to meet the high

standard. This commenter recommended

giving preferential allocation of capacity

limitation to groups that meet one or both

of the ASC, without reserving 50 percent

of the capacity under each category on a

rolling basis. One commenter similarly

stated that an inflexible reservation of 50

percent of the total Capacity Limitation

in each category for facilities meeting

ASC may result in potentially hundreds

of MW of unclaimed Capacity Limitation

for 2023. This commenter suggested that

a smaller amount of reservation should

be reserved for ASC projects in 2023,

and that the amount of reservation should

be increased in future years. A few other

commenters, similarly, suggested that in

the first year of the Program, ten percent

of the capacity in each sub-reservation

should be reserved for ASC applicants,

with the Treasury Department and the IRS

retaining authority to reallocate the capacity and expand the capacity reservations in

future Program years.

One commenter separately stated that

except for reallocations (meaning reallocations of capacity between categories) for facilities meeting the ASC, the

Treasury Department and the IRS should

ensure that proposed reallocations more

than 50 MW are subject to public notice

and comment.

A few commenters who supported

reduction of the ASC reservation amounts,

stated that it will take significant time and

coordinated effort for new community

solar markets to emerge where efforts

to establish Program frameworks have

been lacking to date. These commenters stated that it is likely that there will

be few applicants who meet the ASC, or

that the projects developed by owners that

Bulletin No. 2023–35

would qualify tend to be small scale projects. Some commenters also asserted that

the restrictive Ownership Criteria would

likely encourage gaming.

In contrast, some commenters exp

ressed support for at least 50 percent of the

total Capacity Limitation being reserved

for facilities meeting ASC. Additionally,

one of the commenters supporting the

reduction in the ASC reservation amounts

stated that the Treasury Department and

the IRS should prioritize reallocations to

facility categories with more than 25 percent of the facilities meeting the ASC.

One commenter suggested that a third

set of “Market-based” criteria should be

added to ASC. The commenter stated

that these criteria would prioritize projects that maximize the benefit delivered

to the largest number of low-income

customers. The two criteria provided

by the commenter under this category

are: 1. Proposed discount rate: Savings

delivered to low-income customers; and

2. Percentage of project reserved for

low-income customers: The percentage

of the output capacity that will service

low-income customers. However, the

commenter only includes community

solar projects in discussing the reason for

this proposal. Two other commenters also

proposed a third set of criteria focused on

prioritizing projects that are participating

in State low-income renewable energy

programs, with one commenter specifically naming programs funded under

the Environmental Protection Agency’s

(EPA) Greenhouse Gas Reduction Fund

Solar For All Program. However, one of

the comments specifically limits these

criteria to Category 1 projects. Neither

of the comments explain how these criteria would be equitably applied to facilities applying from all States, especially

States that do not have such programs,

nor do the commenters explain how wind

facilities would be eligible under the

previously recommended criteria. Other

commenters provided additional criteria that could be considered including

the use of minority and woman-owned

businesses as contractors and employment of workers from low-income communities. Finally, a group of commenters

suggested that the Treasury Department

and the IRS consider applicants under

ASC if the applicant signs a binding

619

commitment to provide financial benefits for longer than the statute requires;

or if the applicant sign a binding commitment promising to provide greater

financial benefits than required. Another

commenter, similarly, suggested incorporating a new category of ASC based

on whether the project provides beneﬁts

to the local community and its members. The commenter suggested that this

would better ensure that Category 1 and

Category 2 projects are providing direct

benefits to households or the local community. This comment gives examples

of criteria for this “provision of beneﬁts”

category including: targeted hiring provisions, local procurement standards for

Minority, Women and Disadvantaged

owned Business Enterprises, Community

Workforce Agreements, and Community

Beneﬁt Agreements; provision of direct

ﬁnancial beneﬁts to community members,

such as energy bill savings or reduction of

energy burden; and for Category 1 projects, actual low-income status of households who would be beneﬁted.

After consideration of these comments,

the final regulations, consistent with the

Proposed Rules, maintain that at least 50

percent of the total Capacity Limitation

be reserved for facilities meeting ASC to

help achieve the Treasury Department and

the IRS’s stated goals of the Program in

Notice 2023-17 to (1) increase adoption

of and access to renewable energy facilities in low-income communities and

communities with environmental justice

concerns; (2) encourage new market participants in the clean energy economy; and

(3) provide social and economic benefits

to people and communities that have been

marginalized from economic opportunities and overburdened by environmental

impacts. While many of the comments

provide suggestions for alternative or additional ASC, many of the suggestions could

not be applied to all categories or applied

nation-wide such as the use of enrollment

in a specific State energy program. Other

suggestions are infeasible due to statutory

conflict such as providing benefits for a

longer duration than the statute requires.

Lastly, the Treasury Department and the

IRS are anticipating upwards of 100,000

applications annually for the Program.

Selection criteria that is qualitative, subjective, and would require significant

August 28, 2023

review such as a Community Benefits

Agreement, Workforce Agreement, or procurement or hiring targets are administratively infeasible to have timely decisions

made throughout the year. The Treasury

Department and the IRS heard from many

stakeholders that timely decisions will be

key to Program success. The ASC proposed by the Treasury Department and

the IRS are also directly connected to

the applicant (ownership) or the facility

(geography), which allows objective criteria. The Treasury Department and the IRS

may consider other ASC in future guidance that help achieve these goals and are

administratively feasible for the Program.

However, the Treasury Department and

the IRS did not adopt the commenters’

suggestions to add other ASC at this time

because the Treasury Department and the

IRS determined the ASC provided in the

Proposed Rules best promote the Program

goals discussed earlier and should be the

focus of the Program.

The final regulations maintain that at

least 50 percent of the Capacity Limitation

in each facility category will be reserved

for facilities meeting the ASC but clarify that the method for utilizing the ASC

and the specific amount of the reservation

(at or above 50 percent) will be provided

in guidance published in the Internal

Revenue Bulletin. For program year 2023,

those procedures are provided in Revenue

Procedure 2023-27. The final regulations

clarify that the total Capacity Limitation

in each facility category reserved for qualified facilities meeting the ASC may be

reevaluated in future guidance provided

at least 50 percent is reserved. The final

regulations also clarify that after the reservation for qualified facilities meeting

the ASC is established in guidance, it may

later be re-allocated across facility categories and sub-reservations in the event one

category or sub-reservation within a category is oversubscribed and another has

excess capacity.

One commenter stated that most, if not

all, categories, will be oversubscribed,

and acknowledged that there will need to

be a selection process other than a firstcome, first-served application process.

However, this commenter recommended

against using the proposed Ownership

and Geographic Criteria as a means for

prioritizing applications. This commenter

asserted that criteria related to the ownership or location of a project provides

no indication of project viability. This

commenter stated that instead, applicants

should be prioritized based on project

maturity, providing a list of factors that

are already included in the Proposed Rules

for the Program, for some or all categories, such as site control and possession

of all non-ministerial permits. The commenter suggested that a lottery be used

in oversubscribed categories for projects

that meet the commenters stated project

maturity factors. A few other commenters

requested that applicants who have made

meaningful financial investments in relatively mature projects should be shown

preference for an allocation. Specifically,

this group of commenters suggested that

the Treasury Department and the IRS, in

addition to the Ownership and Geographic

Criteria, prioritize projects that have

signed agreements with income-qualified

customers representing 10 percent of a

project’s capacity.

After consideration by the Treasury

Department and the IRS, these comments

are not adopted. The project maturity

selection criteria that these commenters

suggest are already part of the minimum

Program requirements to apply that were

provided in the Proposed Rules. ASC are

selection factors for prioritizing projects in

addition to the already required minimum

project maturity level that this commenter

requests. Prioritizing signed agreements

with customers would not work for all

categories, and applicants in Category 4.

A. Ownership criteria

The Proposed Rules provided that the

Ownership Criteria category is based on

characteristics of the applicant that owns

the qualified solar or wind facility. A

qualified solar or wind facility will meet

the Ownership Criteria if it is owned by

a Tribal enterprise, an Alaska Native

Corporation, a renewable energy cooperative, a qualified renewable energy company meeting certain characteristics, or a

qualified tax-exempt entity. If an applicant

wholly owns an entity that is the owner of

a qualified solar or wind facility, and the

entity is disregarded as separate from its

owner for Federal income tax purposes

(disregarded entity), the applicant, and

not the disregarded entity, is treated as the

owner of the qualified solar or wind facility for purposes of the Ownership Criteria.

The Proposed Rules provided that

a Tribal enterprise, for purposes of the

Ownership Criteria, (1) is an entity that is

owned at least 51 percent, either directly

or indirectly (through a wholly owned

corporation created under its Tribal laws

or through a section 3 or section 17

Corporation)6, by an Indian Tribal government (as defined in section 30D(g)(9)

of the Code), and (2) the Indian Tribal

government has the power to appoint and

remove a majority (more than 50 percent)

of the individuals serving on the entity’s

board of directors or equivalent governing

board.

The Proposed Rules provided that an

Alaska Native Corporation, for purposes

of the Ownership Criteria, is defined in

section 3 of the Alaska Native Claims

Settlement Act, 43 U.S.C. 1602(m).

The Proposed Rules provided that a

Renewable Energy Cooperative, for purposes of the Ownership Criteria, is an

entity that develops qualified solar and/

or wind facilities and owns at least 51

percent of a facility and is either (1) a

consumer or purchasing cooperative controlled by its members who are low-income households (as defined in section

48(e)(2)(C)) with each member having an

equal voting right, or (2) a worker cooperative controlled by its worker-members

with each member having an equal voting right.

The Proposed Rules provided that a

Qualified Renewable Energy Company

(QREC), for purposes of the Ownership

Criteria, is an entity that serves low-income communities and provides pathways

for the adoption of clean energy by low-income households. In addition to its general business purpose, the Proposed Rules

noted that the Treasury Department and

the IRS were considering the following

requirements and specifically requested

A ‘‘section 17 corporation’’ is a corporation incorporated under the authority of section 17 of the Indian Reorganization Act of 1934, 25 U.S.C. 5124. A ‘‘section 3 corporation’’ is a corporation that is incorporated under the authority of section 3 of the Oklahoma Indian Welfare Act, 25 U.S.C. 5203.

August 28, 2023

620

Bulletin No. 2023–35

comments on these potential requirements

that a QREC would need to satisfy:

(1) At least 51 percent of the entity’s

equity interests are owned and controlled

by (a) one or more individuals, (b) a

Community Development Corporation

(as defined in 13 CFR 124.3), (c) an agricultural or horticultural cooperative (as

defined in section 199A(g)(4)(A) of the

Code), (d) an Indian Tribal government

(as defined in section 30D(g)(9)), (e) an

Alaska Native corporation (as defined

in section 3 of the Alaska Native Claims

Settlement Act, 43 U.S.C. 1602(m)), or

(f) a Native Hawaiian organization (as

defined in 13 CFR 124.3);

(2) After applying the controlled group

rules under section 52(a) of the Code, the

entity has less than 10 full-time equivalent

employees (as determined under section

4980H(c)(2)(E) and (c)(4) of the Code)

and less than $5 million in annual gross

receipts in the previous calendar year;

(3) The entity first installed or operated

a qualified solar or wind facility as defined

in section 48(e)(2)(A) two or more years

prior to the date of application; and

(4) The entity has installed and/or operated qualified solar or wind facilities as

defined in section 48(e)(2)(A) with at least

100 kW of cumulative nameplate capacity located in one or more Low-Income

Communities as defined in section 48(e)

(2)(A)(iii)(I).

The Proposed Rules provided that a

“qualified tax-exempt entity”, for purposes of the Ownership Criteria, is (1)

An organization exempt from the tax

imposed by subtitle A of the Code by reason of being described in section 501(c)

(3) or section 501(d); (2) Any State, the

District of Columbia, or political subdivision thereof, any territory of the United

States, or any agency or instrumentality

of any of the foregoing; (3) An Indian

Tribal government (as defined in section

30D(g)(9)), political subdivision thereof,

or any agency or instrumentality of any

of the foregoing; or (4) Any corporation

described in section 501(c)(12) operating

on a cooperative basis that is engaged in

furnishing electric energy to persons in

rural areas.

The final regulations modify the definition of “qualified tax-exempt entity”

by striking “any territory of the United

States.” The Treasury Department and the

Bulletin No. 2023–35

IRS made this change to correct a drafting

error. The tax rules in section 50(b) related

to investment tax credits (ITCs), such as

section 48, generally provide that credit-eligible property cannot be used predominantly outside the United States (the

fifty States and the District of Columbia)

unless the property is owned by a US corporation or US citizen (other than a citizen entitled to the benefits of section 931

(Guam, American Samoa, or the Northern

Mariana Islands) or section 933 (Puerto

Rico)). Therefore, property used in the

territories and owned by a territory government, or an entity created in or organized under the laws of a U.S. territory,

generally would not qualify for a section

48 credit.

Another commenter stated that the

Ownership Criteria should be eliminated

because Congress indicated no intent

in the IRA to prefer applications for the

Program on project ownership. This commenter asserts that the Ownership Criteria

results in non-profits organizations receiving outright allocation awards, while qualified business taxpayers will be subject to

a lottery system for any remaining credit.

Similarly, another commenter stated that

the ASC and the reservations for ASC

are not grounded in the statute. Although

Congress did not include Ownership

Criteria directly in the statute, it did

direct the Treasury Department to create

a Program to allocate the annual Capacity

Limitation of 1.8 GW as measured in

DC. As discussed earlier, the Treasury

Department and the IRS stated three goals

for the Program: (1) increase the adoption of and access to renewable energy

facilities in low-income communities and

communities with environmental justice

concerns; (2) encourage new market participants in the clean energy economy;

and (3) provide social and economic benefits to people and communities that have

been marginalized from economic opportunities and overburdened by environmental impacts. Based on the breadth of

research around the barriers to adoption of

renewable energy technology by low-income communities and to meet statutory

objectives and Program goals, the inclusion of Ownership Criteria will allow the

participation of institutions that are well

positioned to increase adoption of clean

energy in low-income communities and

621

by low-income households. Moreover,

all applicants, with limited exception, in a

given category and sub-category, are generally required to meet the same requirements to be awarded an allocation amount

based on the projected net output of the

facility. No applicant is being awarded

the actual bonus credit amount during the

application and selection period. All facility owner-applicants who are awarded an

allocation will then have to place the facility in service and meet certain requirements before the owner can claim the

section 48(e) Increase for the section 48

credit.

A few commenters stated that it is not

appropriate to apply the ASC to Category

3 facilities. One commenter said that

multi-family affordable housing guarantees that the benefits in Category 3 will

be provided to low-income households.

Another commenter claimed that Category

3 facilities are subject to existing rules that

conflict with the ASC.

Several commenters stated that the

current Ownership Criteria may conflict

with ownership structures typically used

for LIHTC projects. One commenter

expressed concern that a tax-exempt

applicant who is an owner of a facility

through a partnership structured as a limited liability company or a limited partnership for State law purposes would not be

considered a qualified tax-exempt entity

because the tax-exempt applicant is not

the sole owner. This commenter requested

revision of the Ownership Criteria to

ensure that tax‐exempt entities (and

other prioritized owner types) remain eligible if the entity controls the managing

member or general partner of the partnership that owns the facility for Federal

income tax purposes. Another commenter

suggested that additional language should

state that a qualified tax-exempt entity

would still meet the Ownership Criteria

if the tax-exempt entity directly serves as

the managing member or general partner

of the partnership that owns the facility

for Federal income tax purposes. A few

commenters also stated that most tax-exempt entities entering into a renewable

energy tax credit transaction related to a

LIHTC project will enter into a partnership with a tax equity investor where the

tax-exempt entity is a general partner or

managing member and has control over

August 28, 2023

the partnership’s operations, but is not the

majority owner. The tax equity investor is

usually the majority owner to allow the

investor to claim most of the tax credits

generated by the project.

The Treasury Department and the IRS

understand that for tax credit monetization

purposes, LIHTC projects and solar and

wind facilities are often financed using

tax equity partnership structures where

a tax-exempt entity (or other Ownership

Criteria entities) owns a minority interest (either directly or indirectly) in an

entity treated as a partnership for Federal

income tax purposes that owns the project

or facility. In response to these comments,

the Treasury Department and the IRS have

clarified through additional language in

the final regulations that a qualified solar

or wind facility owned by an entity treated

as a partnership for Federal income tax

purposes is eligible for ASC consideration if an entity that meets the Ownership

Criteria has at least a one percent interest (either directly or indirectly) in each

material item of partnership income, gain,

loss, deduction, and credit of the partnership and is a managing member or general

partner (or similar title) under State law of

the partnership (or directly owns 100 percent of the equity interests in the managing member or general partner) at all times

during the existence of the partnership.

Because indirect ownership is permissible, this means an entity that meets the

Ownership Criteria can hold its partnership interest through a taxable subsidiary.

This clarification should allow tax partnerships formed for the purpose of monetizing LIHTCs or section 48 credits that are

directly or indirectly owned and managed

by an entity that satisfies the Ownership

Criteria to meet the ASC and thus better

reflect potential applicants and financing

structures for all Categories. The final regulations also clarify that a facility that has

received a Capacity Limitation allocation

based, in part, on meeting the Ownership

Criteria will not be disqualified and lose

its allocation if it is transferred by the

original applicant to a tax partnership,

prior to being placed in service, in which

the original applicant retains the requisite

direct or indirect ownership of the tax

partnership and is a managing member

or general partner (or similar title) under

State law of such partnership (or directly

August 28, 2023

owns 100 percent of the equity interests

in the managing member or general partner) at all times during the existence of the

partnership.

One commenter specifically noted that

some Tribal enterprises do not have a

“board of directors or equivalent governing

board,” but the corresponding Tribes own

utilities and have the power to appoint and

remove the utility’s leadership. Therefore,

the commenter asked that the Treasury

Department and the IRS to clarify Tribally

owned utilities (or those Tribally owned

entities that do not have a “board,” such as

an LLC) meet the Ownership Criteria set

forth in the Program. The commenter also

stated that “Ownership” should stem from

a Tribe’s sovereign decision to construct a

project rather than how a managing entity

is structured and stated that Tribes should

be able to attest to ownership control

without further documentation. Several

commenters included a similar statement.

Another commenter further requested that

the Tribe be considered the applicant and

not the LLC, but that the LLC should also

be allowed to apply, if it is a disregarded

entity, and wholly owned by the Tribe (or

Tribal enterprise).

In response to these comments, the

Treasury Department and the IRS have

modified the definition of Tribal enterprise in the final regulations by providing

that a Tribal enterprise for purposes of the

Ownership Criteria is an entity that (1)

an Indian Tribal government (as defined

in section 30D(g)(9) of the Code) owns

at least a 51 percent interest in, either

directly or indirectly (through a wholly

owned corporation created under its Tribal

laws or through a section 3 or section 17

Corporation), and (2) is subject to Tribal

government rules, regulations, and or

codes that regulate the operations of the

entity.

Several commenters requested revisions to the definition of QREC. One

commenter requested that QREC be

further defined but did not provide specific language to further define the term.

Additionally, a few commenters recommended that the Treasury Department

and the IRS change the “and” at the end

of the list of requirements that a QREC

must satisfy to “or” so that the applicant

only needs to meet one requirement,

inclusive of the general business purpose

622

to serve low-income communities. One

commenter added that this would be

more inclusive for new market entrants.

Another commenter requested that the

criteria for QREC be modified to include

trusts as individuals, and that the requirement that 51 percent of the equity interest

be controlled by an individual be reduced

to 45 percent or, alternatively, at least 25

percent employee owned, and that the

second requirement be expanded to provide that the company must have less than

100 full time employees and less than $30

million in annual gross receipts from the

previous calendar year. The same commenter also suggested that the definition

of a QREC be expanded to include public benefit corporations. One commenter

suggested that Category 1(a) of the QREC

definition, which currently reads as “one

or more individuals,” should be replaced

with “renewable energy cooperative,”

claiming that this keeps the consistency

of the definition with the previous section and requires more rigorous working

agreements.

A few commenters variously commented on employee requirements for

QRECs. Two commenters, also commenting on the gross receipts threshold, suggested that a QREC maintain less than 10

full time employees and less than $30.4

million in annual gross receipts from the

previous calendar year. Another commenter stated that requiring a QREC to

have fewer than ten full-time equivalent

employees is excessively restrictive and

unrealistic. This commenter also stated

that the less than $5 million threshold

for annual gross receipts in the previous

calendar year may be unrealistically low.

One commenter stated that the small size

requirement appears to be arbitrary and

suggested that the Treasury Department

and the IRS use the Small Business

Administration (SBA) small business

size and revenue requirement to promote

small business entrants. Further, another

commenter stated that imposing an additional requirement to employ workers in

certain low-income communities would

be too onerous. Additionally, one commenter stated that it is unclear whether

the requirement to employ low-income

persons would be applicable at the time

of application or through the life of the

project. This commenter requested that

Bulletin No. 2023–35

the Treasury Department and the IRS

clarify that this requirement is applicable

at the time of application, and then consider allowing State or Federally approved

workforce training programs, supported

through the project, as a means of qualification. However, another commenter,

who generally opposed the inclusion of

QRECs as an ASC Ownership Criteria

category, requested that the Treasury

Department and the IRS require such

companies to enter into Community

Workforce Agreements to ensure workers within low-income and disadvantaged

communities beneﬁt from the wealth

building opportunities provided by the

Program. This commenter also provided a

list of the community benefits that should

be incorporated into the commenter’s suggested agreements.

Additionally, one commenter stated

that new market entrants are altogether

barred from meeting this definition.

Overall, the same commenter suggested

as modification adding other consumer

protection measures, minority- or women-owned business enterprise criteria,

individual rather than company-based

experience thresholds, and providing flexibility with regard to size, so as to enable

more local clean energy business growth.

A separate commenter also noted that new

entrant companies, that would otherwise

meet the QREC definition, will not qualify due to the specific experience requirement. Another commenter requested the

Treasury Department and the IRS update

the definition of QREC to include qualified rooftop lessors. This commenter

provided an example of projects installed

by small businesses that otherwise meet

the definition but are counterparties to a

lease provided by a third-party project

developer. This commenter said that many

single-family residential rooftop facilities

use third-party ownership (TPO) models

to meet the requirements of section 48 but

claims that in many States legal title to

such facilities is not possible for entities

meeting the definition of a QREC, which,

by virtue of their small size, do not have

access to a lease fund. One commenter

also noted that many new market entrants

have prior experience as part of other

solar projects that they do not own and

suggested that companies that have been

subcontractors be included for criteria (3)

Bulletin No. 2023–35

and (4), and that the scope be broadened

to be “any solar provider.” A Tribal comment letter also stated that the definition of

a QREC is too limited and does not support newly formed entities that are owned

in part by Tribes. This commenter claims

that, prior to the IRA, Tribes were not able

to create joint ventures to deploy solar or

wind projects.

After consideration of all comments

on the definition of QREC, the final regulations adopt some changes and do not

adopt others. The Treasury Department

and the IRS will maintain the inclusion of

QREC in the final regulations. However,

to provide increased flexibility and to

encourage new market participants, the

Treasury Department and the IRS have

modified the QREC definition to allow

for previous participation in a renewable energy project as a service provider

(either as an individual or a company)

to demonstrate a track record for serving

low-income communities. While some

commenters stated that brand new entities

may not meet the criteria for QREC, the

Treasury Department and the IRS developed the QREC criteria to support companies or entrepreneurs with a commitment

and track record of serving low-income

communities that have not been able to

grow their market share. The Treasury

Department and the IRS also increased

the annual gross receipts threshold based

on the comments and additional market

research to allow for flexibility to growing

companies that may still not have significant market-share. After careful assessment of all the proposals provided in the

comments and current market information, the final regulations provide additional flexibility to new market entrants by

modifying the requirements that a QREC

would need to satisfy:

(1) At least 51 percent of the entity’s

equity interests are owned and controlled by (a) one or more individuals, (b) a Community Development

Corporation (as defined in 13 CFR

124.3), (c) an agricultural or horticultural cooperative (as defined in

section 199A(g)(4)(A) of the Code),

(d) an Indian Tribal government (as

defined in section 30D(g)(9)), (e) an

Alaska Native corporation (as defined

in section 3 of the Alaska Native

Claims Settlement Act, 43 U.S.C.

623

1602(m)), or (f) a Native Hawaiian

organization (as defined in 13 CFR

124.3);

(2) Has less than 10 full-time equivalent

employees (as determined under section 4980H(c)(2)(E) and (c)(4) of the

Code) and less than $20 million in

annual gross receipts in the previous

calendar year;

(3) First installed or operated a qualified

solar and or facility as defined in section 48(e)(2)(A) two or more years

prior to the date of application; or

(4) Has provided solar services as a contractor or subcontractor to qualified

solar or wind facilities as defined in

section 48(e)(2)(A) with at least 100

kW of cumulative nameplate capacity

located in one or more Low-Income

Communities as defined in section

48(e)(2)(A)(iii)(I).

The Treasury Department and the IRS

may consider other changes to the definition of a QREC in future guidance based

on updated market information and what is

administratively feasible for the Program.

Another commenter suggested that the

definition of QREC be revised to provide

that the 51 percent ownership requirement

applies as an average over the life of the

project because of tax credit equity partnerships that may change facility ownership for a period of time.

In response to these comments, the

Treasury Department and the IRS have

clarified through additional language in

the final regulations that a partnership

for Federal income tax purposes is eligible for ASC consideration so long as an

entity that meets the Ownership Criteria

has at least a one percent interest (either

directly or indirectly) in each material

item of partnership income, gain, loss,

deduction, and credit of the partnership

that owns the qualified solar or wind facility and is a managing member or general

partner (or similar title) under State law

of the partnership (or directly owns 100

percent of the equity interests in the managing member or general partner) at all

times during the existence of the partnership. Therefore, there is no need to revise

the 51 percent ownership requirement as

it applies as an average over the life of the

project as the commenter suggests. This

also allows more flexibility for all applicants that meet the Ownership Criteria to

August 28, 2023

enter financing arrangements such as tax

equity partnerships.

This commenter also suggested that

the definition of Renewable Energy

Cooperatives be revised to require not

only that each member have an equal

voting right, but also that each member

have rights to profit distributions based on

patronage as defined by the proportion of

either (i) volume of energy or energy credits purchased (kWh), (ii) volume of financial benefits delivered ($), or (iii) volume

of financial payments made ($), and in

which at least 50 percent of the patronage in the qualified project is by cooperative members who are low-income

households. The commenter noted that

the second requested change clarifies that

the Renewable Energy Cooperative as a

whole does not need to be made up solely

of low-income households, but only that

for qualified projects that are seeking the

Low-Income Bonus Credit, over 50 percent of the participating member interests

(and corresponding member benefits)

must accrue to households that qualify as

low-income (as defined in section 48(e)(2)

(C)).

One commenter stated, regarding

Renewable Energy Cooperatives, that it

may be difficult for cooperatives to ensure

income verification of their members,

and suggested adding eligibility pathways, potentially based on geography or

charter documents, that retain an equity

and justice focus while allowing greater

flexibility.

Based on these comments, the Treasury

Department and the IRS have modified the

definition of Qualified Renewable Energy

Cooperative in the final regulations to

account for different energy cooperative

models where profits could be distributed

to members based on volume of energy,

volume of financial benefits delivered, or

volume of financial payments made. The

modified language states that a Qualified

Renewable Energy Cooperative is an

entity that develops qualified solar and/or

wind facilities and is either (1) a consumer

or purchasing cooperative controlled by

its members with each member having an

equal voting right and with each member

having rights to profit distributions based

on patronage as defined by the proportion

of either (i) volume of energy or energy

credits purchased (kWh), (ii) volume of

financial benefits delivered ($), or (iii)

volume of financial payments made ($),

and in which at least 50 percent of the

patronage in the qualified project is by

cooperative members who are low-income households (as defined in section

48(e)(2)(C)) or (2) a worker cooperative

controlled by its worker-members with

each member having an equal voting right.

One commenter expressed that qualified tax-exempt entity should not include

all section 501(c)(3) entities without additional guardrails. This commenter further suggests that if QRECs are required

to submit documentation of “general

business purpose,” then section 501(c)

(3) organizations applying as a qualified

tax-exempt entity should be required to

provide minimal documentation showing

relevant charitable purposes. This commenter additionally requested clarification about the manner of application for

tax-exempt entities in Puerto Rico and

other territories. Similarly, one commenter

noted that many large corporations have

section 501(c)(3) organizations that could

deploy renewable energy projects without tax credits but will be eligible under

the definition in the Proposed Rules. This

commenter proposed adding to the definition the following requirements: annual

gross receipts of no more than $30.4 million (consistent with recommendations for

QRECs); prior experience owning, operating, or consulting on a renewable energy

project; and an organizational mission

statement and/or values that show alignment with the Program.

One commenter requested more clarity

on how Tribal enterprises, as well as Tribal

governments, political sub-divisions,

and agencies or instrumentalities thereof

under the qualified tax-exempt entity definition and Tribally owned QRECs can satisfy the Ownership Criteria.

The Treasury Department and the IRS

have not adopted any changes in the final

regulations regarding qualified tax-exempt

entities. The addition of guardrails such as

requiring a particular business or charitable

purpose is infeasible. All tax-exempt organizations that qualify for ASC will need to

demonstrate a charitable purpose through

their tax-exempt designation. The Treasury

Department and the IRS anticipate that

a wide variety of qualified tax-exempt

entities may participate in the Program

that may include community-based organizations, educational institutions of all

sizes, and State and local governments,

among others. Accordingly, there is no

one business or charitable purpose for

qualified tax-exempt entities that would

apply to the range of entities that support

meeting the stated goals of the Program.

The Treasury Department and the IRS

may consider changes in future guidance

based on updated market information and

what is administratively feasible for the

Program. The Treasury Department and

the IRS are also providing clarity through

modifications in the definition of Tribal

enterprise, and the circumstances in which

Tribal governments, political sub-divisions, and agencies or instrumentalities

thereof would meet the criteria of the qualified tax-exempt entity definition and other

Ownership Criteria based on a variety of

comments provided by Tribes.

B. Geographic criteria

The Proposed Rules provided that the

Geographic Criteria category is based on

where the facility will be placed in service. To meet the Geographic Criteria, a

facility would need to be located in a PPC7

or in a census tract that is designated in the

CEJST as disadvantaged based on whether

the tract is either (a) greater than or equal

to the 90th percentile for energy burden

and is greater than or equal to the 65th percentile for low income, or (b) greater than

or equal to the 90th percentile for PM2.5

exposure and is greater than or equal to

the 65th percentile for low income.8 The

https://www.ers.usda.gov/data-products/poverty-area-measures/

https://screeningtool.geoplatform.gov/en/#3/33.47/-97.5. The CEJST website provides further detail on the terms used in identifying census tracts for the Energy category. ‘‘Energy cost’’

is defined as ‘‘Average household annual energy cost in dollars divided by the average household income.’’ PM2.5 is defined as ‘‘Fine inhalable particles with 2.5 or smaller micrometer

diameters. The percentile is the weight of the particles per cubic meter.’’ ‘‘Low income’’ is defined as ‘‘Percent of a census tract’s population in households where household income is at or

below 200% of the Federal poverty level, not including students enrolled in higher education.’’ See Methodology & data—Climate & Economic Justice Screening Tool (geoplatform.gov.)

August 28, 2023

624

Bulletin No. 2023–35

Proposed Rules provided that applicants

who meet the Geographic Criter

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.