The 2017 Tax Cuts and Jobs Act is two years old this week. A key element of the bipartisan bill is the Opportunity Zones initiative. Since January 2018, EDA has invested $346 million in 239 projects in or near Opportunity Zones.
An Opportunity Zone is an economically-distressed community where private investments, under certain conditions, may be eligible for capital gain tax incentives.
Opportunity Zones were created under the 2017 Tax Cuts and Jobs Act, signed into law by President Donald J. Trump on December 22, 2017, to stimulate economic development and job creation, by incentivizing long- term investments in low-income neighborhoods.
There are more than 8,760 designated Qualified Opportunity Zones (PDF) located in all 50 States, the District of Columbia, and five United States territories. Investors can defer tax on any prior gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged or until December 31, 2026.
EDA AND OPPORTUNITY ZONES
The Economic Development Administration (EDA) provides strategic investments through competitive grants that foster job creation and attract private investment to support development in economically distressed areas of the United States.
EDA is encouraging our economic development partners to think of Opportunity Zone investment as a new arrow in their quiver to not only enhance ROI for business interests, but also to encourage the public/private partnerships needed to drive private investment to distressed areas. Steps EDA has taken to prioritize Opportunity Zones, include:
In FY18, EDA issued a Notice of Funding Opportunity that made Opportunity Zones eligible for funding from EDA, through its special needs category, even if the area would not meet EDA’s economic distress criteria.
In June 2019, EDA added Opportunity Zones as one of its five Investment Priorities to help significantly increase the number of catalytic Opportunity Zone-related projects we can fund.
As part of the White House Opportunity and Revitalization Council (WHORC), Assistant Secretary Fleming is providing overviews of EDA’s role in the initiative at Opportunity Zone roundtables that are bringing together local elected officials, business leaders, community groups, and others across the country.