OEDA Member Alert: Update on Federal Economic Development Matters
Several year-end changes occurred to federal programs that may be of interest to OEDA members.
The Federal Tax Cuts and Jobs Act passed in late December preserved the main provisions of Private Activity Bonds (PABs), Historic Preservation Tax Credits (HPTC) and New Markets Tax Credits. Unfortunately, the Act repealed tax-exemption for advance refunding bonds issued after December 31, 2017.
The same law created a new tool aimed at helping areas of the country that have not yet experienced economic recovery, the “Opportunity Zones” investment program. For states to participate in the program, their governors must first designate specific distressed areas of their states that will be classified as “opportunity zones”. Investors who have capital gains from a sale or exchange of a prior investment may then defer paying taxes on those gains for up to 9 years, if they invest the gains within 180 days in an “Opportunity Fund” which will then invest in an approved opportunity zone.
The Act uses the same definition of a “Low-Income Community” that is used by the new markets tax credit program as the basis for defining an Opportunity Zone, and up to 25 percent of a state’s low-income community population census tracts may be designated as qualified Opportunity Zones. Potentially-qualifying areas of Ohio can be found at: https://www.development.ohio.gov/bs/bs_censustracts.htm
Opportunity Funds will be organized by various entities and must be certified by the U.S. Department of the Treasury pursuant to rules still being developed. They will be required to hold at least 90 percent of their assets in qualified opportunity zone businesses and/or business properties.
This new program was apparently the work of bipartisan efforts lead by Senators Tim Scott (R-S.C.) and Cory Booker (D-N.J.), and Representatives Pat Tiberi (R-Ohio) and Ron Kind (D-Wis.).
The Council of Development Finance Agencies (CDFA) will host a webinar on the topic this Thursday, February 15 at 1:00 pm EST. For more information, go to: https://www.cdfa.net/cdfa/cdfaweb.nsf/0/528221E09B0D21FA88258225006FE04B
Brownfields stakeholders are excited for the newly established Brownfields Remediation Fund through the state budget passed earlier this year. An investment of $350 million will provide Ohio’s cities with grant dollars to remediate brownfields in their communities. In addition, the budget included a new Building Demolition and Site Revitalization Program, which will provide $150 million for commercial and residential demolition and site revitalization.read more
The Mid-Ohio Regional Planning Commission (MORPC) is seeking public comments on the 2021 draft update to the Columbus Region’s Comprehensive Economic Development Strategy (CEDS).read more
TIFFIN, OHIO – On behalf of the City of Tiffin, the Tiffin-Seneca Economic Partnership is announcing the start of the 2021 Dream Big Tiffin cycle. Citizens and organizations can submit ideas and full project proposals for community development projects online at www.dreambigtiffin.com starting on Friday, Sept. 3, through Friday, Oct. 15, 2021.read more