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USA - The Inflation Reduction Act: Provisions And Incentives For Local Governments

President Joe Biden signed the Inflation Reduction Act of 2022 (IRA) into law on Aug. 16, 2022 - the result of many months of negotiations among Democrats to advance some of President Biden's highest policy priorities.

Highlights

  • President Joe Biden signed the Inflation Reduction Act of 2022 (IRA) into law on Aug. 16, 2022 - the result of many months of negotiations among Democrats to advance some of President Biden's highest policy priorities.
  • The IRA will reduce the deficit and makes major investments in healthcare, domestic energy production and manufacturing and climate change.
  • This Holland & Knight alert breaks down some of the provisions and incentives that will benefit local governments across the nation.

President Joe Biden signed the Inflation Reduction Act of 2022 (IRA) into law on Aug. 16, 2022, following its passage along party lines in the U.S. Senate and House of Representatives. The comprehensive legislation is the result of many months of negotiations among Democrats to advance some of President Biden's highest policy priorities.

The IRA will reduce the deficit and make major investments in healthcare, domestic energy production and manufacturing, and climate change. This Holland & Knight alert breaks down some of the IRA provisions and incentives that will benefit local governments across the nation, with a comparison to similar programs offered by the Infrastructure Investment and Jobs Act (IIJA).

Funding Opportunities

U.S. Forest Service (USFS)

  1. State and Private Forestry Conservation Programs ($2.2 billion)
  2. The IRA will provide $700 million for the Forest Legacy Program (FLP) to provide grants to states to acquire land and interests in land.
  3. The IRA will provide $1.5 billion for the Urban and Community Forestry Assistance Program, funding multiyear grants to state agencies, local governments, tribes or nonprofits for tree planting.

U.S. Environmental Protection Agency (EPA)

  1. Greenhouse Gas Reduction Fund ($27 billion)
  2. The IRA will provide $27 billion to establish a new Greenhouse Gas Reduction (GHG) Fund to invest in nonprofit, state and local financing institutions designed to rapidly deploy low- and zero-emission technologies by leveraging investment from the private sector. Projects funded under this program must reduce air pollution by reduction or avoidance of GHGs.
  3. The IRA requires that least 40 percent of benefits go to low-income and disadvantaged communities to deploy or benefit from zero-emission technologies, including distributed technologies on residential rooftops. Direct investments are prioritized for projects that would otherwise lack access to financing and that can ensure continued operability by monetizing repayments and revenues for other financial assistance.
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