A performance-based tax credit that finances
wildfire prevention phase by phase

HOW IT WORKS

WPTCs draw on established federal tax-credit markets to pair committed credit value with private capital. The key is timing: credit value can be reserved before treatment, while the credit itself is earned only after independently verified completion.

In the v1.3 portfolio models, net WPTC proceeds finance roughly 18% of gross treatment costs — supplemental capital within a broader funding stack.

Here's how the mechanism works, phase by phase:

01
Project Sponsors
Plan the Work
An eligible sponsor — state agency, tribe, NGO, utility, or collaborative — develops a multi-phase treatment plan. The Third-Party Administrator approves the plan for program eligibility.
02
Credit Value
Is Reserved
An approved phase can receive a credit reservation worth up to 30% of estimated eligible cost. The reservation remains binding while the project meets program milestones, giving sponsors committed value they can finance against before work is complete.
03
Sponsors Treat
the Land
Crews complete the approved phase — such as mechanical fuel reduction or prescribed fire — using the project's broader capital stack.
04
Work Is Verified
and Credit Is Earned
An accredited independent verifier confirms completion to program standards, and the administrator certifies actual eligible cost. The credit equals 30% of actual eligible cost, up to the reserved amount. Restricted grants can reduce the credit to prevent overfunding; repayable financing does not.
05
The Credit
Can Be Sold
Issued credits are transferable. Sponsors can use the credit to settle pre-completion financing or sell it to a taxpayer; syndicators can aggregate credits for institutional buyers. Sale proceeds repay financing or return cash for continued treatment.
Established precedent
WPTCs combine design features already used in established federal tax-credit markets — allocation and carryover commitments from LIHTC, intermediary aggregation from NMTC, performance-based verification from 45Q, and direct transferability under §6418. LIHTC alone has financed 3.9 million affordable homes since 1986 — evidence that federal tax credits can move private capital into public-benefit projects at national scale.
LIHTC allocation & syndication The Low-Income Housing Tax Credit uses state allocation, carryover commitments, and syndication structures to bring institutional equity into qualifying affordable-housing projects. NMTC intermediary model The New Markets Tax Credit uses certified intermediaries to aggregate projects and channel institutional capital into qualifying community investments. 45Q verification The 45Q credit ties tax benefits to qualifying carbon capture and verification, providing a federal precedent for performance-based credit issuance. §6418 transferability Section 6418 allows eligible federal tax credits to be transferred to unrelated taxpayers for cash, creating a direct pathway from tax-credit value to project capital.

For full structural detail — tranche mechanics, MRV standards, and unit economics — see the Policy Blueprint

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