SECTION 3. RECOGNITION

OF GREATER DELAYS FOR CONSTRUCTION OF PROJECTS OFFSHORE AND ON FEDERAL LAND

.01 Overview . The Treasury Department and the IRS are aware of certain qualified facilities and energy property that are being constructed Offshore or on Federal Land (each as defined in section 4.02 of this notice). Based on comments received from Congress and project stakeholders, the Treasury Department and the IRS have determined that such projects ordinarily are subject to significantly greater delays than projects not constructed Offshore or on Federal Land, and therefore are at a significantly higher risk of failing the Continuity Safe Harbor.

.02 Description of typical project de- lays . The ordinary-course delays for the qualified facility and energy property projects described in section 3.01 of this notice result from various complicating factors, including (i) the applicability of significantly more stringent permitting requirements, (ii) lengthier engineering and construction timelines due to, for example, the difficulty of installing equipment Offshore, (iii) heightened environmental regulation (including, for example, the environmental analysis process carried out by the Director of the Bureau of Land Management), and (iv) the need to construct new transmission lines to connect these projects to the electrical grid system of the United States (Grid). In addition, such delays ordinarily are outside the control of the project developers and can result in project completion times of up to twice as long as those experienced by qualified facility and energy property projects that are not constructed Offshore or on Federal Land.

.03 Additional certainty to investors provided by this notice . The Treasury Department and the IRS are providing this relief to complement previous relief provided through the list of excusable disruptions under section 4.02(2) of Notice 2016-31 and section 6.03 of Notice 201859, which potentially would cover the complicating factors described in section

3.02 of this notice (and therefore would disregard them, and the delays resulting therefrom, for purposes of determining whether a taxpayer satisfied the Continuous Construction Test or Continuous Efforts Test with regard to a qualified facility or energy property).