Torres Leads California Colleagues in Urging Treasury Department to Ensure the Inland Empire Can Fully Benefit from Inflation Reduction Act’s Clean Energy Provisions
Washington, D.C. — Congresswoman Norma J. Torres (CA-35) – a senior member of the House Appropriations Committee – led her Inland Empire colleagues in sending a letter today to the U.S. Department of Treasury regarding the implementation of the Inflation Reduction Act, our nation’s largest investment ever to tackle climate change. The lawmakers urged the agency to ensure the Inland Empire can fully leverage the clean energy benefits of the Inflation Reduction Act and its Energy Community Tax Credit Bonus, which offers an additional tax credit for renewable energy projects in areas formerly reliant on the fossil fuel industry. The letter comes as the Treasury Department finalizes its guidelines for this bonus credit amid concerns the Inland Empire may be ineligible, hampering its transition to clean energy. Congresswoman Torres’ letter was signed by other members of the Inland Empire Congressional delegation, including Representatives Pete Aguilar (CA-33), Raul Ruiz (CA-25), and Mark Takano (CA-39).
“The Inflation Reduction Act was a monumental step forward for historically over-polluted communities like the Inland Empire. With this landmark law, we’re unlocking our nation’s clean energy potential and building an economy that works for our families. In order for regions like the Inland Empire, among the fastest growing in the nation, to fully embrace the clean energy transition, we urge the Treasury Department to follow Congressional intent and implement the law. Communities historically overburdened with pollution need and deserve full access and eligibility for initiatives like the Energy Community Tax Credit Bonus,” said Congresswoman Torres.
The full text of the letter can be found here and below:
Dear Deputy Assistant Secretary Hanlon:
Thank you for your tireless work in implementing crucial clean energy tax provisions included in the historic Inflation Reduction Act (IRA) (Public Law 117-169). As members of the California delegation deeply committed to environmental progress and finding forward thinking solutions, we write today to urge you to implement the IRA’s energy communities bonus credit in a way that prioritizes environmental communities that have been disproportionately impacted like those in the Inland Empire.
The Inflation Reduction Act included a number of tax credits to encourage production and help communities transition to clean energy so that we are cutting down on pollution, lowering energy costs for Inland Empire families, and meeting environmental goals of cutting greenhouse gas emissions in at least half by 2030. On April 23, 2023, the Internal Revenue Service announced Notice 2023-29, which issued draft guidance on eligibility requirements for energy communities for the bonus credit program under the IRA. However, we are concerned with the draft guidance that may exclude substantial portions of California and prevent consideration of renewable energy projects in the Inland Empire – a community that has long suffered from pollution and environmental injustice.
The IRA’s energy communities bonus credit aims to transition historically fossil fuel-dependent communities to embrace solar, wind, storage, and other renewable technologies. Beyond the standard Investment Tax Credit, this bonus credit offers an additional 10 percent for renewable energy projects in areas formerly reliant on the fossil fuel industry. Congressional intent is clear—to prioritize these communities, which have suffered from pollution and unemployment linked to the fossil fuel industry, for renewable energy development and the associated job opportunities.
The determination of an energy community is determined by census tracts and industry classifications. Unfortunately, IRS draft guidance excludes two classifications (NAICS codes) related to natural gas distribution and oil and gas pipelines. As a result, even though these communities have endured the negative impacts of the fossil fuel industry, they would not be eligible to receive the bonus credit designed to facilitate their transition to clean energy. This omission disproportionately affects communities in the Inland Empire, and we urge you to consider correcting it in future guidance, allowing these communities to fully embrace the clean energy transition.
We sincerely appreciate your tireless efforts to advance the IRA's critical policies. It is our hope that the guidance on energy communities can be revised to ensure communities can fully leverage the opportunities presented by the clean energy revolution.
Thank you for your attention and dedication to this crucial matter.
Sincerely,