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Schatz: Senate Passes Largest Climate Action In American History, Historic Victory For United States, Planet

Bill Will Also Lower Health Care Costs, Provide $25 Million For Native Hawaiian Community, Make Tax Code Fairer

WASHINGTON – U.S. Senator Brian Schatz (D-Hawai‘i) today voted to pass the Inflation Reduction Act, the largest climate action ever taken by the United States.

“This is a historic victory for the United States and the planet. We have met the ambition this crisis requires, and passed the biggest climate action in American history,” said Senator Schatz. “By investing in clean energy, clean transportation, and climate-smart manufacturing, we’ll cut emissions 40 percent by the end of the decade. And we’re going to pay for it all by making billion-dollar corporations finally pay their fair share of taxes. We’re also lowering the cost of prescription drugs for seniors and making health care more affordable – all while saving taxpayer dollars.”

Key provisions in the Inflation Reduction Act include:

Investing In Residential Clean Energy

The bill extends and expands key tax credits to give Hawai‘i families the long-term certainty they need to affordably invest in clean energy, including:

  • Extending the residential clean energy credit for 10 years at the full 30 percent rate, which Hawai‘i residents can use for rooftop solar and battery storage purchases
  • Giving Hawai‘i residents access to $9 billion in new rebates for home electrification
  • Reviving the expired energy efficiency home improvement credit and increasing its limit from $500 lifetime to $1,200 annually per taxpayer, which Hawai‘i residents can use for heat pumps, doors and windows, home energy audits, and other efficiency upgrades
  • Reviving the expired tax credit for new energy-efficient homes

Investing In Clean Transportation

The bill enables the widespread adoption of electric vehicles (EVs) for personal and commercial use by:

  • Extending the tax credit for plug-in EVs and other clean vehicles, which can be used for vans, pickup trucks, and SUVs costing $80,000 or less and sedans costing $55,000 or less
  • Creating a new $4,000 credit for the purchase of used EVs, which can be used for previously-owned vehicles costing $25,000 or less and at least two model-years old
  • Creating a new 30 percent investment tax credit for commercial EV fleets
  • Reviving the expired tax credit for businesses to install EV charging infrastructure, and raising the cap on the credit from $30,000 to $100,000 per location

Supporting Utility-Scale Clean Energy

The bill makes key investments that will help Hawai‘i accelerate its transition to 100 percent renewable energy, including:

  • Extending the production tax credit (PTC) for wind and other technologies through 2024 and returning the credit to full value
  • Extending the investment tax credit (ITC) for solar and other technologies through 2024 and returning the credit to full value
  • Creating a new set of technology-neutral tax credits after the PTC and ITC expire, that will only expire when the United States hits emission reduction targets

Reducing Pollution and Supporting Environmental Justice

Hawai‘i will have access to more than $60 billion in federal funding to reduce pollution and support environmental justice, including:

  • $27 billion to help states, local governments, Tribes, and non-profits leverage private investments in projects that combat climate change, focused on low-income and disadvantaged communities
  • $5 billion in grants to implement greenhouse gas reduction plans that make sense for local communities
  • $3 billion in grants to address clean air and climate pollution in disadvantaged communities, building on EPA’s existing environmental justice grant program
  • $3 billion to decarbonize port infrastructure and reduce air pollution in surrounding communities
  • $3 billion for projects to improve safe pedestrian and cyclist access in communities that have been cut off by transportation projects
  • $1 billion to replace dirty medium- and heavy-duty vehicles with clean vehicles
  • $50 million to address air pollution at schools

Cutting Costs For Health Care, Prescription Drugs

An estimated 41,000 Hawai‘i residents will see increased access to health care at reduced costs, with provisions including:

  • Lowering health care costs for nearly 19,000 people in Hawai‘i by extending Affordable Care Act marketplace subsidies
  • Allowing Medicare to directly negotiate prices for certain drugs
  • Capping out-of-pocket insulin costs at $35 per month for more than 10,000 Medicare beneficiaries in Hawai‘i
  • Capping out-of-pocket drug costs at $2,000 per year for nearly 4,000 Hawai‘i seniors
  • Eliminating out-of-pocket costs above a set threshold for more than 5,000 Hawai‘i residents
  • Making more than 1,000 low-income seniors in Hawai‘i eligible for new financial assistance that lowers or eliminates out-of-pocket costs for Medicare prescription drugs
  • Offering free vaccines for more than 22,000 Medicare beneficiaries in Hawai‘i

Creating A Fairer Tax Code

The legislation reforms the tax code and its enforcement to make it fairer, ensuring the most profitable corporations pay their fair share, with provisions including:

  • Imposing a 15 percent minimum tax rate for corporations with more than $1 billion in profits, many of which currently pay close to nothing in taxes
  • Levying a 1 percent tax when publicly traded corporations buy back their stock
  • $80 billion for the Internal Revenue Service to ensure the wealthy pay their fair share, which will raise an estimated $203 billion over 10 years without any new enforcement for families making $400,000 or less
  • $15 million for a task force that will study the cost and feasibility of creating a free direct e-file program

New Funding for the Native Hawaiian Community

  • $25 million to the Native Hawaiian community for climate resilience and adaptation

Supporting Conservation

The legislation advances coastal resilience to mitigate impacts from climate change, along with support for climate-smart agriculture and land-based conservation, including:

  • $19 billion for climate-smart agriculture, like improving soil carbon, reducing greenhouse gas emissions, and supporting organic production
  • $5 billion for healthy, fire-resilient forests, forest conservation, and tree planting
  • $3 billion for the conservation, restoration, and protection of coastal and marine habitats, including coral reef and watershed restoration, along with funding to better understand how climate change will impact these environments in the future
  • $700 million for the Forest Legacy program, with priority for the acquisition of conservation lands that significantly sequester carbon
  • $500 million for conservation, resilience, and restoration of National Parks and other federal lands
  • $500 million to hire personnel for National Parks
  • $200 million for deferred maintenance projects in National Parks
  • $50 million for construction and replacement of Sanctuaries facilities, including $17 million for the Hawaiian Islands Humpback Whale Sanctuary

The bill now heads to the U.S. House of Representatives for consideration.