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 Unfortunately, the Act repealed tax-exemption for advance refunding bonds issued after December 31, 2017.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
Participation in Site Selection’s Governor’s Cup is an important opportunity to showcase your communities and how you’ve made an impact by nominating the economic development project wins.read more
The Ohio Economic Development Association is sponsoring a complimentary webinar on bringing equity and diversity to neighborhoods on July 26, 2021, 3 to 4:30pm. Sponsored in collaboration with the International Economic Development Council and the Brookings Institute, the Community-rooted Economic Inclusion Strategic Action Playbook argues that now is the time for community, city, and regional leaders to advance bold place-based solutions that foster long-overdue investment and opportunity within disinvested communities—and to do so in a way that benefits existing residents and small businesses within these communities.read more
While this May has been cold, transportation funding opportunities are starting to heat up. The month of May brings with it funding opportunities for Ohio’s Transportation Improvement Districts (TIDs). Ohio has 51 TIDs covering large areas of the state. These intergovernmental agencies are designed to foster planning and cooperation among different counties and local governments to plan for regional transportation priorities. TIDs have local, state and federal transportation funding sources upon which they can access.read more