Senior officials at the Treasury Department are considering issuing a third round of guidance addressing production tax credits for renewable energy projects in an effort to squash cold feet among the investor community, according to a report from Bloomberg BNA.

The IRS has issued two Notices in the last year, Notice 2013-29 and Notice 2013-60, both of which attempt to clarify the eligibility requirements under Tax Code Section 45 for renewable electricity and under Tax Code Section 48 for the energy investment tax credit. Despite, these efforts, however, Christopher Kelley, Attorney-Advisor in the Treasury Office’s Tax Legislative Council, told BNA that the IRS continues to hear feedback that the investor community is not comfortable proceeding with transactions without further elaboration on the material in the notices.

The original Notice 2013-29 issued in April of 2013, was intended to clarify when construction on a project begins and mirrored a similar requirement in the Troubled Asset Relief Program in 2008 (the “1603 Program”) which allowed projects to either show (i) physical work of a significant nature had begun and a continuous program of construction had been maintained, or (ii) an applicant has paid or incurred 5% or more of the total cost of the specified energy project before the deadline (the “Safe Harbor”). Notice 2013-29 imposed the continuous work requirement even on projects meeting the Safe Harbor Requirement. This tweak was not well received and caused a chill in the investor community who felt they could not rely on the Safe Harbor as a bright line rule.

Notice 2013-60 issued in September 2013 was meant to smooth the waters and reverted to a rule requiring either the physical work commencing and continuing requirement or the Safe Harbor requirement.

Notice 2013-60, also allows for the transfer of facilities after the commencement of construction and prior to the time they are actually placed in service without an impact on the ability to qualify for the tax credits, which deviated from the 1603 Program, which involved a number of limits on transfers of facilities.

Kelley said despite the IRS’ efforts to reassure investors through Notice 2013-60, “cold feet” still remain. Therefore, the potential guidance would further address (1) the “physical work test” and (ii) the rules for transfers of facilities after commencement of construction. He noted that because the previous two notices address “begun construction” issues, the IRS is reluctant to “issue serial guidance on the same issue” but is willing to take whatever steps are necessary to ensure deals are not stalled due to lack of clarity.