What Local Governments Need to Know about the IRA

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Who in your community can benefit?

• Residents, businesses, local governments, nonprofit and faith-based organizations, and tribes.

How are funds being distributed?

• The IRA distributes funds primarily through tax credits and incentives. These are administered by the U.S. Department of Treasury and the Internal Revenue Service. 
• The Executive Order “Unleashing American Energy” has paused new disbursements for funds from the Greenhouse Gas Reduction Fund (GGRF) and the Energy Efficiency Community Block Grants (EECBG), which has halted new funding for climate and clean energy projects until further notice. 
• Existing grants already awarded may face legal challenges as the Trump administration attempts to recall $20 billion in GGRF funds, although this is being legally challenged at the time this was written. 

What is Justice40?

• Justice40 was the Biden-Harris Administration’s commitment to direct at least 40% of the overall benefits from federal investments to disadvantaged communities.  
• The Trump administration rescinded the Executive Order “Tackling the Climate Crisis at Home and Aboard” which terminated the Justice40 initiative among other Biden environmental justice initiatives. 

What is local government’s role in this?

• Promote available tax credits to individuals and businesses.
• Supplement funding with local resources (e.g., bonus rebates, technical support).
• Apply for available funding for both municipal projects and community programs.
• Walk the talk - implement municipal projects using federal funds and share results with your community.
• Help inform the planning and design of new programs and projects led by the state energy office or other grant recipients by supporting community engagement and sharing data.
• Be a local matchmaker by coordinating community partners to leverage funds as an economic and community development strategy (e.g., workforce training).

Which state agency will receive significant funding?

• Colorado Energy Office
• Minnesota Department of Commerce and Minnesota Pollution Control Agency
• Wisconsin Office of Energy and Innovation

Which funding sources are available to local governments?

• Direct pay tax credits are now available for tax-exempt entities like local governments, including credits for clean energy, commercial clean vehicles, alternative fuel refueling infrastructure, and clean fuel production. Explore the official guidance from the IRS. 
• IRA programs available to local governments total $47 billion; explore available opportunities on EPA's Climate Action Funding Resource Guide or the American Cities Climate Challenge Federal Funding Opportunities for Local Decarbonization.
• New funding sources may become available through your state energy office; be sure to sign up for updates.