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?

• Individual and business tax credits.
• Direct pay tax credits to tax-exempt entities.
• Residential rebates through the state energy office.
• Competitive and formula grants to states, territories, tribes, and air pollution agencies that will result in new programs or projects.
• Grants to nonprofits to fund financing institutions for climate and clean energy projects.

What is Justice40?

• Justice40 is the Biden-Harris Administration’s commitment to direct at least 40% of the overall benefits from federal investments to disadvantaged communities. Disadvantaged communities will primarily be identified through the Climate and Economic Justice Screening Tool, although other data sources may be considered for some programs. For many IRA funding programs, Justice40 will require community engagement to be part of planning and/or program and project design.

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 White House website on how to use the program and 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.