U.S. Sens. John Thune (R-S.D.) and Tim Scott (R-S.C.), both members of the tax-writing Senate Finance Committee, today applauded President Donald Trump for issuing an executive order directing federal agencies to coordinate available resources through a new White House Opportunity and Revitalization Council to maximize the benefits for economically distressed areas, including the new Opportunity Zone communities, and provide regulatory relief where appropriate. Thune and Scott, in a letter to the president earlier this year, encouraged the administration to do whatever it could to help boost Opportunity Zones around the country.
Opportunity Zones, which were created as part of the Tax Cuts and Jobs Act and championed by Scott, are distressed communities that have been identified by governors and approved by the U.S. Department of the Treasury. Once designated, these new Opportunity Zones are able to attract qualifying private investment to unlock unrealized potential and strengthen local communities throughout the United States.
“The Tax Cuts and Jobs Act contains a number of benefits for the American people, including lower rates, a simpler tax code, and additional provisions that allow them to keep more of their hard-earned money,” said Thune. “The creation of Opportunity Zones, which thanks to Sen. Scott’s hard work and determination, is yet another way taxpayers and the communities in which they live can be better served. I’m thankful the administration took this important step that will help ensure this program works as effectively and efficiently as possible.”
“I am very excited the White House has taken this important step to provide more support to some of our nation’s most distressed communities,” said Scott. “The Opportunity Zone initiative will help rebuild and strengthen neighborhoods in every state, be it through direct job creation, supporting local entrepreneurs with increased capital, helping provide quality affordable housing, increasing rural broadband capabilities, or any other number of ideas. I want to thank Senator Thune for joining me in asking the White House to take this important step.”
As a result of the Tax Cuts and Jobs Act, a taxpayer is now able to temporarily defer his or her tax liability on capital gains that are generated from the sale of an asset, provided the proceeds are reinvested in a qualified opportunity fund. It also allows for the permanent exclusion of capital gains from the sale or exchange of an investment in the qualified opportunity fund held by the taxpayer for at least 10 years. The designation of an Opportunity Zone which is based on census tracts, of which there are several in South Dakota and South Carolina, remains in effect for 10 years.
The newly signed executive order creates a new White House Opportunity and Revitalization Council that will be tasked with ensuring the president’s goal of strengthening Opportunity Zones is appropriately executed. The council, which will be led by U.S. Department of Housing and Urban Development Secretary Ben Carson, will be comprised of senior administration officials from agencies throughout the federal government.
According to the White House, “The Council will engage with all levels of government on ways to better use taxpayer dollars to revitalize low-income communities … improve revitalization efforts by streamlining, coordinating, and targeting existing Federal programs to economically distressed areas, including Opportunity Zones … consider legislative proposals and undertake regulatory reform to remove barriers to revitalization efforts … [and] present the President with a number of reports identifying and recommending ways to encourage investment in economically distressed communities.”
Full text of the request, which was sent on April 26, 2018, can be found below.
President Donald Trump
The White House
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20005
Dear Mr. President:
As you know, the Tax Cuts and Jobs Act included an important piece of legislation, the Investing in Opportunity Act, which authorizes an anti-poverty and economic development tool, Opportunity Zones.
Opportunity Zones are a new way for states and local communities to encourage private sector investment in distressed communities. Under this program, states proposed specific census tracts for Opportunity Zone designation. These tracts are then evaluated and designated by the Treasury Department. Once designated, these communities will be able to attract private investment to unlock their unrealized potential through established Opportunity Funds. This week, the Treasury Department began the process of designating Opportunity Zones across the country.
As the Treasury works to set this program in motion, we write today to encourage you to issue an executive order directing other federal agencies to optimize existing resources for these designated Opportunity Zones. Additionally, federal agencies should be directed, to the extent practicable, to cut unnecessary regulatory red-tape that may stall investment or the deployment of other resources. By directing assistance that is already available to these areas and cutting government red-tape, Opportunity Zone communities can get the support they need to encourage economic investment, create jobs, and ultimately grow their communities.
Workers, communities, and the economy are all beginning to see the benefits of the Tax Cuts and Jobs Act. Leveraging existing federal resources through an Executive Order in order to maximize enormous potential of Opportunity Zones for states and communities is a commonsense step that will only serve to help further your bold economic agenda.