California Attorney General Rob Bonta has joined 16 other attorneys general in filing an amicus brief in the U.S. District Court for the District of Columbia. The brief opposes Internal Revenue Service (IRS) Notice 2025-42, which limits eligibility for certain tax credits for wind and solar projects by narrowing the criteria for when construction is considered to have begun.
Attorney General Bonta stated, “At a time when the demand for energy is increasing, we should be ramping up clean energy projects, not slowing them down. The Trump Administration’s policy represents a step backward that will decrease the supply of clean energy — and clean energy jobs — and increase costs for consumers. It’s bad tax policy, and it’s illegal, plain and simple. I urge the court to vacate this unlawful action, which harms communities and ratepayers across the country.”
The coalition argues that IRS Notice 2025-42 will reduce clean energy development and raise electricity costs at a time when national electricity demand is rising due to growth in data centers, cloud services, and artificial intelligence technologies. The Inflation Reduction Act of 2022 established tax credits intended to support zero-emission electricity facilities. These credits were projected to save consumers between $16 billion and $34 billion annually by 2035 while also reducing air pollutants by 20% and greenhouse gas emissions by up to 400 million tons compared to scenarios without such credits.
In July 2025, new legislation known as the One Big Beautiful Bill Act began phasing out these tax credits for wind and solar facilities placed into service after December 31, 2027—except those starting construction before July 4, 2026. Following this law, IRS Notice 2025-42 changed prior guidelines so that incurring at least five percent of project costs before July 4, 2026 would no longer guarantee eligibility for the credit. This change could lead developers to abandon projects or face higher construction costs that would ultimately be passed on to ratepayers.
A coalition of non-governmental organizations, industry groups, and public entities filed a complaint against the IRS in December 2026 alleging violations of the Administrative Procedure Act.
The amicus brief from Attorney General Bonta’s group asserts that Notice 2025-42 decreases long-term clean energy supply; increases electricity costs; damages prior investments; undermines reliable access to affordable energy; threatens environmental protection efforts; and lacks reasonable justification from the IRS.
Attorney General Bonta has previously taken legal action against federal policies affecting clean energy funding—including litigation over a $1.2 billion hydrogen program—and opposed other federal actions hindering renewable development.
Bonta joins attorneys general from Oregon, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Mexico, New Jersey, Rhode Island, Washington state and the District of Columbia in this effort.
Rob Bonta leads California’s chief law enforcement office (official website), which operates statewide (official website) as part of California’s executive branch (official website). The office promotes transparency through tools like OpenJustice (official website) while advancing civil rights policies—including consumer protection and environmental justice initiatives (official website).
