Opportunity Zones News Briefs – June 2019

Monday, June 3, 2019

The U.S. Treasury Department April 17 released the second tranche of proposed opportunity zones (OZ) guidance concerning qualified opportunity funds. The second tranche of OZ guidance brings added regulatory clarity for investors, fund managers and others seeking to bring equity capital to operating and real estate businesses in OZs. The 169 pages of proposed regulations include updates to portions of previously proposed regulations. More information about the proposed regulations is available on the Notes from Novogradac blog.

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The White House Opportunity and Revitalization Council published April 18 its implementation plan on administrative reforms and initiatives to target, streamline, coordinate and optimize federal resources in economically distressed communities, including OZs. The council, which is chaired by U.S. Department of Housing and Urban Development (HUD) Secretary Ben Carson, identified more than 160 federal programs where OZs could be targeted through grant preference points, loan qualifications, reduced fees and eligibility criteria modifications. The council has completed action on more than 50 programs. HUD announced that the council would develop an opportunityzones.gov website and will conduct listening tours sessions in OZs and other distressed communities.

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Nebraska Gov. Pete Ricketts signed legislation April 24 giving priority to OZs in receiving funds from the state Affordable Housing Trust Fund (HTF) and other programs. L.B. 87 adds OZs to state enterprise zones as eligible to receive priority in funding from HTF allocations, the Site and Building Development Fund, the Job Training Cash Fund and the Business Innovation Act.

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Virginia Gov. Ralph Northam in mid-April announced a partnership with Virginia Community Capital (VCC) to create an online marketplace to match investors with OZ communities and to a $50 million credit facility program. LOCUS Impact Investing will lead the VCC effort, which is in partnership with the Virginia Department of Housing and Community Development and the Virginia Housing Development Authority (VHDA). The partnership is funded with a $1 million grant from VHDA, which will also provide the $50 million credit facility program to help OZ investors acquire property in OZs.

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Legislation introduced March 29 in the Louisiana House of Representatives would add buildings in OZs to the list of properties eligible to participate in the state’s restoration tax abatement program, which allows property owners to pay property taxes for five years based on the value of their property for the year before its improvement. H.B. 549 would be effective July 1. The bill was assigned to the Ways and Means Committee.

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