OEDA Member Alert: Update on Federal Economic Development Matters

Feb 13, 2018 | Advocacy

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  Unfortunately, the Act repealed tax-exemption for advance refunding bonds issued after December 31, 2017.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

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On April 24, 2019, the community celebrated the groundbreaking for a new paint facility that will improve efficiency and preserve the quality of The World’s Best Truck.  The project represents $140 million in capital investment and will bring 100 new, great paying jobs to Ross County upon its completion in 2021.  The Kenworth Chillicothe plant, which opened in 1974, currently employs more than 2300 people.  In addition to the new paint facility, a $30 million robotic cab assembly system will be installed this summer.

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In March 2019, I joined the JobsOhio team and determined my first priority was to meet with our local economic development partners across the great state of Ohio. My goal was to understand your experiences with us, learn where we exceeded your expectations, and hear your ideas on ways to improve our partnership. Economic development has always been a team effort, so I wanted to engage the team, and indeed you engaged with us!

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