SECTION 2. BACKGROUND

Notice 2013–29 provides two methods that a taxpayer may use to establish that construction of a qualified facility has begun. A taxpayer may establish the beginning of construction by starting physical work of a significant nature as described in section 4 of the notice (Physical Work Test). Alternatively, a taxpayer may establish the beginning of construction by meeting the safe harbor provided in section 5 of the notice (Safe Harbor). These methods require that a taxpayer make continuous progress towards completion once construction has begun (as set forth in sections 4.06 (Continuous Construction Test) and 5.02 (Continuous Efforts Test) of Notice 2013–29, respectively). Notice 2013–29 provides that a taxpayer may enter into a master contract for purposes of the Physical Work Test in section 4.03(2). Notice 2013–29 does not address the ef

fect of a transfer of a facility after construction has begun.

The Treasury Department and the Internal Revenue Service have received a significant number of questions regarding the application of the Continuous Construction and Continuous Efforts Tests in Notice 2013–29, the applicability of the master contract provision for purposes of the Safe Harbor, and the effect that a transfer of a facility after construction has begun will have on its ability to qualify for the PTC or ITC. In response to these questions, this notice provides a method that will allow taxpayers to be deemed to satisfy both the Continuous Construction and Continuous Efforts Tests. In addition, this notice provides that the master contract provision in Notice 2013–29 also applies for purposes of the Safe Harbor, and that the transfer of a facility after construction has begun will not prevent a facility from qualifying for the PTC or ITC.