Comment from Zebrowski, Jenna

I am submitting this public comment on my own behalf regarding the forthcoming proposed regulations regarding Prohibited Foreign Entities (PFEs). This is to support entities under Section 6417(d)(1)(A) (“Elective Pay entities”) that are eligible to claim elective payment of certain credits. This includes the Clean Electricity Investment Tax Credit (ITC) under Section 48E and the Clean Electricity Production Tax Credit (PTC) under Section 45Y. Being able to claim these credits under the Elective Pay categorization is a net positive across the board. Results include reduction of costs of electricity and the projects, high-quality local jobs, and tax-exempt entities investing directly in clean energy projects, which add much-needed capacity and resilience to the electric grid. Therefore, these proposed regulations cannot be permitted to create barriers to allowing these entities to continue to access these credits. The One Big Beautiful Bill Act (OBBBA) did not repeal Section 6417, but instead it preserved the mechanism for state, local, and tribal governments, their agencies, and Section 501(c)(3) tax-exempt organizations to deploy clean energy. IRS and the Department of the Treasury must implement reasonable, workable PFE rules to comply with the intent of the OBBBA. If the rules are overly broad, then tax-exempt entities that are unable to keep up with the administrative burden of tracker requirements will be unable to use these credits. Under Section 7701(a)(51)(D), a taxpayer is classified as a Foreign Influenced Entity (FIE) if 15% or more of its aggregate debt "has been issued... to" one or more Specified Foreign Entities (SFEs). The legislative history clarifies Congress's narrow intent: an earlier Senate Finance Committee draft (June 16, 2025) used the term "held," whereas the final enacted text intentionally switched to "issued... to." This deliberate language demonstrates that the test must look strictly at the original issuance of the debt. There is no requirement for an entity to track downstream secondary market transactions. In the municipal debt context, tracking secondary market bondholders in real-time is functionally impossible. Forcing an Elective Pay entity to monitor compliance dynamics on a continuous basis would make compliance impossible. Therefore, the PFE regulations should explicitly state that an entity must only evaluate the original issuance of the debt to determine if the threshold has been met. Section 7701(a)(51)(D)(i)(II) triggers a violation if a payment is made to an SFE under an arrangement giving the SFE "effective control" over a qualified facility or EST. An overly broad definition of "effective control" distorts the goal of preventing illicit foreign influence over clean domestic energy generation. Forthcoming PFE regulations must clearly specify the narrow scope of agreements conferring "effective control," and definitively exclude normal commercial protections like warranties and standard liabilities. Taxpayers, acting in good faith, must be permitted to rely on SFE status certifications provided by their counterparties in order to make sure the statutory effectiveness occurs. The forthcoming safe harbor tables must maintain the approach established in Notice 2026-15, requiring entities to look no further than the MPC level when evaluating whether a product was manufactured by a PFE. Standard "supplier certifications" are difficult to obtain because intermediate suppliers don’t have access to a manufacturer's compliance profile. The regulations should permit taxpayers to rely on alternative, reliable documentation to establish a manufacturer's non-PFE status, if acting in good faith. Notice 2026-15 via the 2023-2025 Safe Harbor Tables left eligible technologies like geothermal and nuclear without a clear pathway to calculate their Material Assistance Cost Ratio (MACR). The forthcoming PFE regulations must publish dedicated safe harbor tables and explicit calculation guidance for all eligible ITC and PTC technologies. Elective Pay entities are frequently local governments or small non-profits, not sophisticated corporate taxpayers with internal compliance departments. Treasury and the IRS should create an online portal acting as a clearinghouse where clean energy manufacturers and suppliers can voluntarily upload documentation certifications regarding their PFE compliance status. I strongly urge the IRS and Treasury to prioritize clarity, bright-line boundaries, and workable safe harbors in the forthcoming proposed regulations to enforce the intent of the OBBBA.