September 9, 2022 | Blair Hancock
On Tuesday, August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (IRA), a sweeping policy package focused on tax reform, climate change, and health care. This reconciliation package, which morphed from multiple iterations of the Build Back Better framework, was the culmination of months-long efforts from the Biden Administration and Congressional Democrats. Its passage fulfills one of President Biden’s campaign promises. Seeking to reduce 40 percent of greenhouse gas emissions by 2030, the IRA invests $369 billion in programs that directly impact local governments and Florida in particular.
The IRA includes several provisions enabling local governments to receive direct financial support from federal agencies, including:
CLIMATE ACTION PLANNING:
- The Greenhouse Gas Reduction Fund, administered by the U.S. Environmental Protection Agency (EPA), will provide $27 billion in funding for projects to combat climate change and reduce greenhouse gas emissions at the local level. Both municipalities and states will be eligible for this funding, with $30 million designated for administrative costs. These funds are scheduled to be made available within 180 days and will remain available until September 30, 2024.
- Climate Pollution Reduction Grants make $5 billion available through the EPA to support the development and implementation of plans to reduce greenhouse gas pollution. At least one grant must be delivered to each state. The funding for planning will remain available until September 30, 2031, and the funding for implementation projects will remain available until September 30, 2026.
- Assistance for Latest and Zero Building Energy Code Adoption: a $330 million Department of Energy program to help local governments adopt codes that meet the 2021 International Energy Conservation Code for residential properties or the ANSI/ASHRAE/IES Standard 90.1-2019 for commercial properties. In order to be eligible, a local government must have building code authority. Funding will be available until September 30, 2029.
- The Low Emissions Electricity Program through the EPA will administer a $600 million grant program for municipalities to cover incremental costs associated with replacing non-zero-emissions heavy duty vehicles with zero-emissions heavy duty vehicles. The EPA will develop a program for issuing the grants and rebates within 180 days. The funding will remain available until September 30, 2031.
- The Neighborhood Access and Equity Grant Program to support transportation projects and planning to protect against flooding, extreme heat, and more. Funded through the Federal Highway Administration (FHWA), the program appropriates $1.893 billion for use in any community, with an additional $1.262 billion set aside for economically disadvantaged communities, and an additional $50 million appropriated for technical assistance. A cost-sharing provision caps the federal grant at 80 percent of the cost of a project, unless the project is located in a disadvantaged or underserved community. The funding is set to remain available until September 30, 2026.
- Environmental Review Implementation Funds: Also through the FHWA, this $100 million appropriation will fund local governments, among other eligible entities, to facilitate and build capacity for environmental review of surface transportation projects that require federal approval. Much like the previously mentioned program, a cost sharing provision caps the federal share at 80 percent of cost of activities. The funding is set to remain available through September 30, 2026.
- The Alternative Fuel and Low-Emission Aviation Technology Program: $290 million from the Department of Transportation will permit local governments to use this funding for projects to produce, transport, blend, or store sustainable aviation fuels and for other projects relating to low-emission aviation technologies. This funding will remain available through September 30, 2026.
- Grants to Reduce Air Pollution at Ports: $2.25 billion for a competitive grant and rebate program for local governments to purchase or install zero-emissions port technology at ports. The IRA also allocates $750 million in rebates for port decarbonization activities in ports in nonattainment areas. This grant program will be available through the EPA and grantees can use these funds to plan for, purchase, or install zero-emission port equipment and technology, or to develop qualified climate action plans.
- The Environmental Justice Block Grant, a newly created block grant program that will make $3 billion available through the Environmental Protection Agency for
- Pollution air monitoring, prevention, and remediation and investments in low- and zero-emission and resilient technologies and related infrastructure, and workforce development that help reduce greenhouse gas emissions and other air pollutants
- Mitigating climate and health risks from urban heat islands, extreme heat, wood heater emission, and wildfire events
- Climate resiliency and adaptation
- Reducing indoor toxins and air pollution
- Facilitating engagement of disadvantaged communities in state and federal advisory groups, workshops, rulemakings, and other public processes
The funding will remain available until September 30, 2026.
- Investing in Coastal Communities and Climate Resilience: A $2.6 billion program available through the National Oceanic and Atmospheric Administration will fund “the conservation, restoration, and protection of coastal and marine habitats, resources, Pacific salmon and other marine fisheries, to enable coastal communities to prepare for extreme storms and other changing climate conditions, and for projects that support natural resources that sustain coastal and marine resource dependent communities.” The funding is set to remain available through September 30, 2026.
- State and Private Forestry Conservation Programs: Through the Urban and Community Forestry Assistance Program within the Department of Agriculture, $1.5 billion will be available to local governments to support tree planting activities. The funding is set to remain available through September 30, 2031.
- Grants to Facilitate the Siting of Interstate Electricity Transmission Lines: the Department of Energy will administer $760 million in grants for local governments to facilitate the siting of interstate electricity transmission lines. Eligible local governments must have the authority to make a final determination regarding the siting, permitting, or regulatory status of a high-voltage interstate or offshore electric transmission line. This funding will remain available through September 30, 2029.
These grants are estimated to save the average new homeowner in Florida 11.7 percent on their utility bills.
The IRA includes several consumer tax credits and grants for residential electrification upgrades. One such consumer tax credit covers 30 percent of the cost to install solar panels. This credit is expected to spur 1.1 million additional Florida households to install rooftop solar panels. The IRA appropriates an additional $4.3 billion to the Home Owner Managing Energy Savings (HOMES) rebate program, which the U.S. Energy Policy & Conservation Act stipulates must be administered by state energy offices. Under the HOMES program, households and residential building owners can receive rebates to subsidize the costs of energy efficiency upgrades.
Furthermore, the IRA mandates state energy offices to administer a $4.275 billion electrification rebate program under which individuals and households can receive rebates for a variety of home electrical system upgrades. These grants, created to help state and local governments adopt the latest building energy codes, are expected to save the average new homeowner in Florida 11.7 percent on their utility bills—$225 annually.
The IRA allows states and municipalities, along with tax-exempt organizations such as municipal utilities and rural cooperatives, to receive many of the IRA’s clean energy tax credits as direct payments. Direct pay, which is available for production, investment, and other tax credits, enables municipally owned utilities to invest in clean energy generation.
Overall, the IRA will invest $62.7 billion in large-scale clean power generation and storage in Florida by 2030. This funding will be realized as tax credits to create jobs across solar, wind, storage, and other clean energy industries.
Contact GrayRobinson Government Affairs Advisor Blair Hancock or a member of the Government Affairs and Lobbying Section.