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Climate

Lawmakers Seek Promotion of Clean-Energy Credits to Marginalized Groups

Tim Shaw  

Tim Shaw  

President Joe Biden’s administration should enlist the Treasury Department in raising awareness in disadvantage communities of credits for clean-energy production and the purchase of electric vehicles under the White House’s broad climate initiative, a group of congressional lawmakers said.

Following enactment of the Inflation Reduction Act (PL 117-169), which introduces and modifies tax credits to incentivize clean-energy products and projects, a total of 60 members from the Senate and the House of Representatives wrote a letter dated September 6 to three environment and budget officials in the administration with recommendations for improving its so-called Justice40 initiative.

“To fully realize the vision of a coordinated, cross-agency perspective that delivers benefits in covered areas regardless of where funding is housed, we encourage you to continue to identify covered programs across all agencies, departments, and other federal institutions,” the letter said.

Justice40 was established when Biden announced in an executive order signed in his first week in office that the federal government would commit to ensuring that 40% of benefits from certain investments reach underserved areas of the U.S. The types of investments under Justice40 include those addressing climate change, clean energy, environmental infrastructure, access to affordable housing, and work force development.

In July 2021 the Office of Management and Budget issued  interim implementation guidance for Justice40 clarifying that the initiative covered federal programs that invest in an area under the initiative’s purview. Investments can come in various forms, such as financial assistance, direct payments to individuals, or covering staffing costs and the acquisition of goods and services for government use.

list of covered programs was released on August 18, two days after Biden signed the Inflation Reduction Act into law. Currently, there are no covered programs that encompass any tax regimes, and the Treasury Department has yet to be brought into the discussion, the lawmakers wrote.

They said Treasury should be included “with a focus on providing technical assistance to governments and local organizations to advance the use of” applicable tax benefits that can be claimed by residents of targeted communities. Not only should the department be involved, the group also asked that Treasury be in charge of overseeing programs through the lenses of race, income, and geographic location.

As the initiative expands across agencies, the lawmakers said, the OMB should create a central information hub to make updates to the list transparent and publicly accessible. Funding announcements, application materials, print publications, dissemination procedures, and community feedback would be found in one place and administered by this hub, the letter writers recommended.

The letter stressed that the administration should strive to direct more than 40% of investment benefits to marginalized communities. “To maximize benefits and correct for chronic underinvestment, we strongly recommend that implementation guidance clarify that the Initiative’s 40% target is a funding floor, not a ceiling,” the lawmakers wrote.

 

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