HOW IT WORKS

WPTCs are modeled after proven federal tax credit programs that mobilize private capital into public-benefit projects — making verified treatment outcomes the basis for private investment.

Here's how the credit works across a full multi-phase treatment sequence:

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

01
Project Sponsors
Treat the Land
An eligible sponsor — state agency, tribe, NGO, utility, or collaborative — submits a multi-phase treatment plan. The Third-Party Administrator pre-authorizes a credit allocation tied to verified completion.
02
Independent Verifiers
Confirm Completion
After each phase, an accredited third-party verifier confirms the work meets standardized measurement and reporting protocols. Results are recorded in a national registry. Credits are not issued until verification is complete.
03
The IRS
Issues a Tax Credit
Upon verified completion of each phase, the IRS (or relevant state tax authority) issues a transferable tax credit worth a percentage of eligible project costs. Each tranche (a single phase's share of the credit) is issued independently, with payment flowing through the tax system rather than annual appropriations.
04
A Syndicator
Markets the Credits
Syndicators bundle credits from multiple projects and sell them to large taxpayers like utilities, insurers, and corporations. This aggregation lowers transaction costs and matches the timing of credit sales to project needs, enabling investment at scale.
05
Proceeds Flow Back
Into The Project
Once a verified tranche is sold, proceeds return to the sponsor or its financing partners. Depending on the project, those proceeds may reimburse a sponsor that funded the work, repay bridge or philanthropic capital, or help support the next treatment phase. The result is a financing pathway for the full sequence.
Established precedent
WPTCs build on the design logic of existing federal tax credit programs that have mobilized private capital into affordable housing (LIHTC), carbon capture (45Q), and low-income community investment (NMTC). Modeled scenarios suggest each dollar of federal tax expenditure can catalyze approximately $3.50 of total treatment investment — a level of leverage not achievable through direct appropriations.
LIHTC model A long-standing federal program that attracts private investment into affordable housing by offering predictable, tradable tax credits. 45Q verification A federal tax credit that pays only after carbon is captured and verified, demonstrating how outcomes can be monetized through the tax system. NMTC intermediary A federal tax credit that channels private capital into low-income communities through certified intermediaries that aggregate projects and standardize credit instruments for investors. Transferable credits Tax credits that can be sold to other taxpayers, allowing projects without tax liability to access private capital upfront. Fraud-only recapture Credits are not clawed back for performance variability — only in cases of fraud or misrepresentation — reducing investor risk. MRV registry Measurement, reporting, and verification standards, combined with a public registry, ensure that treatment completion is independently verified and transparently recorded.

For full structural detail — tranche mechanics, MRV standards, and unit economics — see the policy brief.

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