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Part 2: Uncovering Public Sector Grant Funds in the Inflation Reduction Act

State and local governments can benefit from funding available in the Inflation Reduction Act of 2022. Read on for details about opportunities to consider.
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State and local governments can benefit from approximately $37 billion in grant funds available for state and local governments through the Inflation Reduction Act of 2022 (IRA). In Part 1 of this series, we provided a high-level overview of these grant funds. In Part 2, we take a closer look at these opportunities and how they can be used to improve communities.

Below, we provide a breakdown of the information available at the time of this article’s publication. Many of the programs are still in the planning stages or have yet to publish preliminary or final rules for the funding. The funding available to the public sector is intended to improve air quality and greenhouse gas (GHG) reduction, energy efficiency, climate resiliency, and clean transportation. Many of these programs also contribute to community workforce development.

Information about each program is broken down by the agency tasked with administering the funds. In the interest of simplifying the article, the information below characterizes the funding type as “grants.” However, it should be noted that when considering the full scope of available programs related to climate, there are certain funding opportunities in the form of cooperative agreements.

U.S. Environmental Protection Agency (EPA)

GHG Air Pollution Plans & Implementation Grants ($5 billion) – Competitive grants for the planning and/or implementation of initiatives to reduce GHGs in low-income and disadvantaged communities.

  • Grant proposals need to estimate GHG reduction overall and for low-income/disadvantaged communities
  • $250 million for developing plans to reduce GHGs (at least one planning grant is to be awarded in each state)
  • $4.75 billion for implementing GHG reduction plans
  • Planning grants are available until 2031; implementation grants are to be awarded by 2026
  • Announcement about funds expected in spring 2023

GHG Reduction Fund ($27 billion) – Competitive grants to establish or expand financial institutions that support GHG reduction and zero-emission projects. A majority of funds are devoted to helping low-income and disadvantaged communities.

  • $7 billion for states, municipalities, tribal governments, and nonprofit financial institutions to make grants and loans for zero-emissions technologies in low-income and disadvantaged communities
  • $20 billion for nonprofit financial organizations to provide loans and grants to GHG and air pollution reduction programs
  • $15 billion to provide financial and technical assistance to low-income and disadvantaged communities; remaining $12 billion also could flow to these communities
  • Announcement about funds expected in the first quarter of 2023

Environmental & Climate Justice Block Grants ($3 billion) – Competitive three-year grants to government agencies that partner with community-based organizations (CBOs) to develop and implement community-led projects to address disproportionate environmental and public health harms related to pollution and climate change.

  • Activities must benefit “disadvantaged communities” as defined by the EPA administrator
  • Programs may include air pollution reduction initiatives, investments in climate resilience, reducing health risks from climate impacts, GHG emissions reduction, improving indoor air quality, and engaging disadvantaged communities

Air Pollution Monitoring & Screening ($280 million) – Grants to install and maintain air quality monitoring equipment.

  • $118 million for fenceline (or perimeter) monitoring, i.e., detecting pollutants, at the property line of manufacturing sites
  • $50 million for multipollutant monitoring stations
  • $15 million for reducing pollution from wood heaters
  • $3 million for air quality sensors in low-income or disadvantaged communities

Grants to Reduce Air Pollution at Ports ($3 billion) – Competitive grants and rebates to reduce air pollution and GHGs from port operations.

  • Funding for planning, purchasing, and installing zero-emission equipment at ports or developing port climate action plans
  • $750 million for activities with ports where air quality does not meet Clean Air Act standards

Environmental Product Declarations Assistance ($250 million) – Grants for businesses for developing and verifying “environmental product declarations” of construction materials (indicating the life cycle environmental impacts) and to states, tribes, local governments, and nongovernmental organizations (NGOs) that support these businesses.

  • EPA to establish a program to support the standardization and use of environmental product declarations for construction materials, including the embodied energy and GHG emissions of the material
  • Grants and technical assistance to businesses that manufacture these products and to public and nongovernmental entities that support the use of environmental product declarations

Clean Heavy-Duty Vehicles ($1 billion) – Grants and rebates for the incremental cost of purchasing zero-emission heavy-duty vehicles and installing the infrastructure to charge/fuel the vehicles.

  • Funding for the incremental cost of zero-emission vehicle purchases
  • Funding can support workforce development and training for the maintenance, charging, fueling, and operation of zero-emission vehicles
  • Eligible uses also include up to 100% of the cost of acquiring, installing, maintaining, and operating fueling/charging infrastructure
  • $400 million for areas where air quality does not meet Clean Air Act standards
  • Notice expected in the first quarter of 2023

Funding to Address Air Pollution at Schools ($37.5 million) – Grants to air pollution control agencies to monitor and reduce GHG emission and other air pollution at schools in low-income and disadvantaged communities.

  • $12.5 million to provide technical assistance to these schools to address environmental issues, develop school environmental quality plans, and identify and mitigate ongoing air pollution hazards

U.S. Department of Transportation

Neighborhood Access & Equity Grant Program ($3 billion) – Competitive grants to reconnect communities that have been divided by existing transportation infrastructure barriers, reduce impacts of transportation facilities or construction projects on disadvantaged or underserved communities, and support equitable transportation planning and community engagement activities.

  • Funding to improve safety, affordability, and/or access and may include complete streets, natural infrastructure, capping transportation facilities, or noise barriers
  • Cost share is 80%, but for projects in disadvantaged or underserved communities cost share may reach 100%
  • $50 million for technical assistance and grants to local governments for capacity building
  • $1.3 billion for economically disadvantaged communities

U.S. Department of Energy (DOE)

Assistance for Latest & Zero Building Energy Code Adoption ($1 billion) – Grants to help states and local governments (that have the authority to do so) adopt, implement, and support compliance with new and high-performance residential and commercial building codes.

  • Funding support for codes that meet or exceed recent model standards and specifically the 2021 International Energy Conservation Code for residences or the American Society of Heating, Refrigerating and Air-Conditioning Engineers 90.1-2019 standard for commercial building construction
  • No state cost share requirement, unlike past federal funding to support state/local building code adoption
  • State energy offices must submit plans to DOE to support new building codes

Transmission Facility Siting Program ($760 million) – Grants for siting authorities to fund activities related to covered transmission projects, such as studies and analysis of impacts of the transmission projects, examining alternative siting corridors, improvements to approval processes, and participation in regulatory proceedings or negotiations.

  • Covered transmission projects include a high-voltage interstate or offshore electricity transmission line that is expected to be constructed and operated:
    • At a minimum of 275 kilovolts of either alternating-current or direct-current electric energy; or
    • Offshore and at a minimum of 200 kilovolts of either alternating-current or direct-current electric energy by an entity
  • DOE also can award grants to siting authorities or other state and local governments for economic development for those communities that would be impacted by the covered transmission project
  • Cost share is 50%

Home Energy Efficiency Contractor Training ($200 million) – Grants to states to reduce the costs of training and provide testing and certification of contractors to carry out energy efficiency and electrification improvements.

  • Eligible programs can include preparing contractors to install improvements that are eligible for rebates under the HOMES (Home Owner Managing Energy Savings) and high-efficiency electric home programs
  • States may use these funds to partner with nonprofit organizations to develop inclusive programs for contractor education and training

Forest Service – U.S. Department of Agriculture

Urban & Community Forestry Assistance Program ($1.5 billion) – Competitive grants for tree planting projects that prioritize underserved populations and areas.

  • Funding can be used to plan for, create, or manage trees, forests, and green spaces in and near cities and towns
  • IRA funding is five times more than other recent funding levels
  • Secretary of Agriculture has the discretion to waive cost share requirements that have typically applied to these grants in the past
  • The Forest Service adopted an Urban and Community Forestry Action Plan and goals to invest in communities disproportionately affected by environmental injustice and seeks to make grant awards directly to CBOs
  • Annual grant solicitation expected in spring 2023 (this program may be a part of it)

Grants for Non-Federal Foresters ($550 million) – Grants through the Forest Service mostly under the Cooperative Forestry Assistance Act of 1978 to help sustain healthy and resilient working forests.

  • $150 million for underserved forest landowners to carry out climate mitigation or forest resilience practices
  • $150 million to support the participation of underserved forest landowners in emerging private markets
  • $100 million to support forest landowners with less than 2,500 acres of forest land in emerging private markets
  • $50 million to owners of private forest land for implementation of forestry practices on private forest land
  • $100 million for the Wood Innovations Grant Program, which aims to expand the use of wood products, strengthen emerging wood markets, and support active management to boost forest health and resilience
  • Federal share of costs cannot exceed 80%

National Oceanic & Atmospheric Administration (NOAA)

Investing in Coastal Communities & Climate Resilience ($2.6 billion) – Competitive grants and direct investments will support coastal community preparation for extreme weather; restore and protect coastal and marine resources; and support natural resources that sustain coastal- and marine-dependent communities.

  • NOAA has discretion to allocate funding among grants, direct expenditures, and technical assistance
  • Similar Infrastructure Investment and Jobs Act-funded grant opportunities included a dedicated funding round for underserved communities, and NOAA may designate portions of the new IRA funding for previously underinvested communities

U.S. Department of the Interior

Funding for Drought Mitigation ($4 billion) – Funds for water conservation in eligible states to mitigate the impacts of drought, with an emphasis on the Colorado River Basin and other basins experiencing similar levels of long-term drought.

  • Grants can fund:
    • Compensation for a temporary or multiyear voluntary reduction in diversion of water or consumptive water use
    • Voluntary system conservation projects that reduce use or demand for water supplies or benefit the environment in the Lower or Upper Basin of the Colorado River 
    • Ecosystem and habitat restoration projects to address issues caused by drought
  • Eligible states include Arizona, California, Colorado, Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah, Washington, and Wyoming.

Additional Opportunities

Some additional funding opportunities to watch for include:

  • State and Private Forestry Conservation Program – The IRA will provide $700 million for the Forest Legacy Program (FLP) to provide grants to states to acquire land and interests in land.
  • Reclamation Domestic Water Supply Projects – This program offers $550 million for grants and financial assistance for disadvantaged communities to supply domestic water to “communities or households that do not have reliable access to domestic water supplies.” While not specified yet, these funds will likely be made available to local governments and other entities that supply drinking water. These will be available through the U.S. Bureau of Reclamation.
  • Local Technical Assistance for Infrastructure and Transportation Projects – The IRA appropriates $50 million in funding to the Federal Highway Administration (FHWA) to provide guidance, technical assistance, and other tools for effective and efficient transportation and infrastructure project delivery at the local level. FHWA may use the funds to make grants to local governments to build capacity to the extent that it allows the entity to ultimately deliver improved surface transportation at the local level.

Forvis Mazars Can Help

Staying informed about available grants and having a plan in place can help state and local governments be ready to apply for funds as soon as they are available, potentially increasing their chances of award. Our Grants Management practice at Forvis Mazars has extensive experience with grants and helping clients navigate the grant life cycle. If you have questions or need assistance, please reach out to a professional at Forvis Mazars or submit the Contact Us form below.

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