Why are Opportunity Zones more important now than ever before, and what legislative changes are being considered to improve the impact of the policy initiative?
Emily Lavery is a legislative analyst for Senator Tim Scott (R-SC), one of the original co-sponsors of the Opportunity Zones legislation.
Click the play button below to listen to my conversation with Emily.
- In the midst of the COVID-19 pandemic and ensuing economic crisis, why Opportunity Zones are more important now than ever before.
- History of Opportunity Zone legislative passage.
- A look into how the Opportunity Zone marketplace is faring during the COVID-19 pandemic.
- Potential legislative changes to Opportunity Zone reporting, and when it might get introduced into Congress.
- A summary of Senator Scott’s 10-point letter to Treasury and how it resulted in several deadline relief measures for Opportunity Zone funds and investors.
- The potential for Opportunity Zones to be a key component in the push for supply chain re-domestication and manufacturing onshoring.
- The need for extending the December 31, 2026 capital gain recognition deadline.
- How a potential change in the Presidency may affect the Opportunity Zone incentive.
Featured on This Episode
- Emily Lavery on LinkedIn
- Senator Tim Scott (R-SC)
- Shay Hawkins interview on the Opportunity Zones Podcast
- Investing in Opportunity Act
- Can Opportunity Zones Recover from the COVID-19 Crisis?
- IMPACT Act
- Byrd Rule
- IRS Form 8996 for Qualified Opportunity Funds
- IRS Form 8997 for Qualified Opportunity Fund Investors
- May 4 letter to Treasury from Senator Tim Scott
- MADE in America Act
- EIG Opportunity Zone Stakeholder Survey
- Joe Biden Racial Economic Equity Plan
About the Opportunity Zones Podcast
Hosted by OpportunityDb.com founder Jimmy Atkinson, the Opportunity Zones Podcast features guest interviews from fund managers, advisors, policymakers, tax professionals, and other foremost experts in opportunity zones.
Jimmy: Welcome to the Opportunity Zones Podcast. I’m your host, Jimmy Atkinson. Senator Tim Scott of South Carolina was one of the original co-sponsors of the opportunity zones legislation and still remains a key supporter and champion of the initiative.
Today, I’m pleased to have as my guest, Senator Scott’s legislative assistant, Emily Lavery. Emily is one of the foremost opportunity zone policy experts in the country. And she joins us today from Washington, DC. Emily, thank you for joining and welcome.
Emily: Thanks so much for having me on. I appreciate the kind invitation and the opportunity to chat a little bit further.
Jimmy: Yeah, absolutely. Emily, it’s great having you on the show today. I’ve actually attempted to get someone from Senator Scott’s office on the podcast for quite some time because obviously he was, as I mentioned, a minute ago, quite influential in making the opportunity zones legislation a reality.
I know that the Senator and his office and you have been very busy with justice reform these past several weeks here, and we were just chatting a few minutes ago before we hit record, about the fact that Congress is currently on recess where it seems like you’re still as busy as ever. Is there’s some truth to that?
Emily: That is absolutely correct. I think 2020 is certainly in no mood to be slowing down. So, we’ll see what shakes loose over the next few weeks. But it’s been a very interesting August, to say the least, and we’re only halfway in.
Jimmy: Yeah. Interesting August and an interesting year, of course.
Jimmy: Emily, in the midst of the COVID-19 pandemic and the ensuing economic crisis that we’re finding ourselves in now, why are opportunity zones now more important than ever before?
Emily: Yeah. Absolutely. So, we know that our low-income communities are often the first hit and the last to recover in times of recession. The data following the 2008 financial crisis made that extremely clear in particular with respect to opportunity zones. So, if we look at just the census tracts that are now designated as opportunity zones in the 2006 to 2010 and 2014 to 2018 periods, which again are very much so the recovery period and the time where we saw the American economy not only recover but begin to take off, in particular with respect to 2017.
So, even as median family income increased by 17% at the national level between those time periods, incomes actually declined for the median family in 27% of opportunity zones. Beyond that poverty rates increased in more than half of designated census tracts between those same time periods. And at the same time, median family income declined in half of the tracts, even after adjusting for inflation, altogether about 3,500 opportunity zones census tracts or 45%. Registered population declined between the same period 2006 to 2010 and 2014 to 2018. This is the total shedding of about 1.4 million residents.
So, even as you saw the American economy slowly claw its way back and then again, return to this booming period, opportunity zones remained left behind, so much so that we saw an aggressive shedding of residents over time when the rest of the economy was taking off. So, in short, Senator Scott is extremely grateful and thrilled that we have a tool like this already on the books, and ready to be used as a recovery tool to ensure that low-income communities are not once again left behind, as hopefully, the American economy returns to business as usual.
Again, we’re looking at a V-shaped recovery period and the goal of opportunity zones now and really the opportunity here is that we now have a new chance and opportunity to ensure that low-income communities are not once again left behind.
Jimmy: Yeah. They absolutely were left behind during the previous recovery period of about a decade ago. That was a large part of the reason why opportunity zones, that policy was created in the first place was because while the rest of the nation was booming, and a huge economic recovery, as you mentioned, a lot of these opportunity zone communities did get left behind and did have increased rates of poverty and increased rates of job loss as you mentioned.
Emily, before we go any further, could we actually back up and get your story a little bit more. I’d like to hear a little bit more about you and your background. Can you tell us a little bit about yourself? When did you start working for Senator Scott? And what is your exact role in the Senator’s office?
Emily: Yeah. Absolutely. So, I actually joined Senator Scott’s team in 2015 after I had graduated in 2014, from the University of South Carolina for my undergraduate degree. So I’ve been with Senator Scott for a little over five years now, which has been fantastic. I’ve kind of handled a variety of policy issues over time, but I’ve consistently worked on his tax portfolio. I served under Shay Hawkins of the then tax council during the Tax Cuts and Jobs Act, and of course, the passage of opportunity zones.
And of course, when Shay moved on, I was able to move into his role and now serve as the legislative assistant overseeing Senator Scott’s work on the finance committee with respect to tax and in particular with respect to opportunity zone implementation.
Jimmy: Fantastic, yeah. And Shay is no stranger to the podcast. He was my guest on an episode of the “Opportunity Zones Podcast” back in June of last year, and he’s doing terrific work with his Opportunity Funds Association. Emily, okay, so you’ve been with Senator Scott for a few years now. So, you were there at the outset of the opportunity zones legislation initially being introduced to Congress and then eventually getting passed as part of the tax reform bill at the end of 2017. What was that like? Can you walk us through a little bit of the history of getting the opportunity zones legislation enacted? And what was that like for you?
Emily: Yeah. Absolutely. So, as you know, opportunity zones as a concept was originally introduced through the Investing in Opportunity Act. So, on the Senate side, that was Senators Scott and Booker that were championing it over here. And on the House side, it was Representatives Tiberi and Kind. And so, the bill was first introduced on our side in 2016. And really, I think it had always been a keystone piece of Senator Scott’s opportunity agenda, which he’s been very vocal about over time as being his overarching purpose within the Senate is restoring opportunities for Americans that have been locked out of it for far too long.
So, Senator Scott was one of the four original architects of the Tax Cuts and Jobs Act, which, of course, you know, was our opportunity to reshape the tax code to put Americans first. And again, opportunity zones, I think just fits so beautifully into that narrative and into that bill in a larger scale. This is also one that Senator Scott has been extremely vocal about overtime, and he spoke to the President about this during tax reform, and kind of on the heels leading up to that debate as well. It’s enjoyed a lot of bipartisan support in both the House and the Senate over time, at one point boasting over 95 bipartisan co-sponsors between the two in just its standalone form.
So again, opportunity zones I think really created a fantastic opportunity to ensure tax reform bill really did take a hard look at how we can better assist and restore opportunity for our low-income communities in particular. So, seeing the opportunity zone still included and packed within the Tax Cuts and Jobs Act, I think was such a historic moment for really redefining what the path forward would look like, for low-income communities across the country, especially as the American economy began taking off on the heels of tax reform passage.
And so securing inclusion of opportunity zones within TCJA was a historic and monumental victory, I think for Senator Scott and for the team as well, as well as for the other members that supported it over time. And so that was a really incredible experience for me. But working under Shay at the time, tax reform was definitely a whirlwind experience, to say the least, and something that only happened, I think, once in a lifetime for a whole staffers’ perspective. And so it was a really, really incredible opportunity, I think for me to be learning from and working with some of the best folks, most brilliant minds that the Hill has to offer for us, for a member like Senator Scott, who really prioritizes, again, that agenda of putting low-income communities first. I think that was just a memory for a lifetime for sure.
Jimmy: Good, definitely a milestone moment for Senator Scott’s office, I’m sure. I want to shift back to COVID-19. Now, you and I were on a panel, actually, earlier this month, talking about COVID-19 and opportunity zones and how opportunity zones can respond to the crisis. How are opportunity zones faring right now at this moment, August 2020, during the COVID-19 crisis? What are you seeing? What are you hearing?
Emily: Yeah. So, absolutely. I think you and I have discussed this a little bit before, earlier, as you mentioned, but there’s no question that COVID-19 has had a horrific impact on virtually all sectors of the American economy and the American workplace as well as the global economy and really has rejiggered the path that we were on. Just six or seven months ago, we saw the most holistic and robust economy that I think this country has ever seen. And eight months later, here we are.
So, of course, it’s been a difficult time, I think, for virtually all industries and all sectors, as we sort of grappled with the economic impacts and realities of the COVID-19 pandemic. Fortunately, we continue to hear really incredible stories. Without reporting legislation on the books, it is very difficult to have that kind of all-encompassing data ready. But even more recently, the Economic Innovation Group’s national opportunity zones survey found that, despite the fluctuations caused by the pandemic, most respondents said that investors remain actively engaged in the opportunity zones marketplace and are still actively looking for new opportunities to place capital.
Thanks to the work of Mike Novogradac and his team, in just the 2 years since the zones were originally designated, they’re tracking more than $70 billion in planned investments and more than $10 billion in equity raised and again, that’s just from 1 site tracking roughly 600 public funds. So it’s a narrow but very real window into the marketplace and it’s so useful, particularly during this time. Again, opportunity zones are continuing to lead the way for community revitalization, affordable workforce, housing development, and job creation.
Again, we’re in a very fortunate position and that we do get to hear about all of the great anecdotal evidence and stories coming in all the time. More recently a startup in Erie, Pennsylvania just saw a $1.2 million investment. In Michigan City, Indiana opportunity zones capital is being used to reinvent a dilapidated historic building that has sat vacant since the ’70s.
In Minnesota, OZ capital is going towards new clinic providing health care services to our nation’s veterans.
In Delaware, Second Chances Farm, the state’s first vertical hydroponic farm secured a $1.5 million investment. In Arizona Launchpad, which is a co-working company that also focuses on removing barriers and providing education and mentorship to accelerate startup success will be opening its first location in Mesa. Their new space will lease about 20,000 square feet, providing about 67 new individual offices, which is incredible.
And even more recently, in Nebraska, another fund has entered into a $14 million partnership with the city to transform an old greenery into a hub with new housing, retail and a business accelerator. Businessman Gordon Whitten said that his goal with the accelerator is to create 10 new businesses with 100 new jobs in the next 2 years alone. He also said that without the opportunity zone designation, he would not have thought to invest in the area.
So again, we’re seeing new investment choices being made because of the incentive itself and driving capital and delivering opportunities and job creation and positive community amenities and growth because of the incentive, which I think is really incredible and again, not something that’s necessarily always reported on.
Jimmy: No, I agree with that. One of the criticisms of the program is that a lot of the capital is flowing into opportunity zones like it normally would have otherwise. And I think there is a certain amount of that taking place, the investments receiving capital that would have received it with or without the incentive. But as you point out, there are plenty of projects out there, anecdotal evidence, at least, to suggest that there are a fair amount of projects that are receiving capital because of the opportunity zone incentive, or at least in large part due to the opportunity zone incentive.
So, it’s important to highlight those, and I’m really glad you bring all of those case studies up, those all sound like fantastic projects. You mentioned earlier that part of the problem that we’re having is there is no reporting requirement and the reporting is kind of slow to come from IRS. IRS has not actually issued any reporting yet. I think we’re gonna get our first report from them next summer, I believe. And I know that the Council of Economic Advisers at the White House is working on some opportunity zones reporting at this very moment. Novogradac, as you pointed out, has highlighted several hundred funds that have investment capacity exceeding $70 billion, $10 billion has actually been raised so far to date, or at least as of their last update, which was a few months ago, I believe.
Emily, what do you think needs to happen with regards to reporting? Do you think there needs to be a legislative change or do you think… Are you happy with what IRS and Treasury may provide on a yearly basis or if you had a magic wand and could bring about any sort of reporting change that you could, what would you do? What do you think needs to happen?
Emily: Well, I think if I had a magic wand, me personally, I would certainly secure passage of Senator Scott’s bipartisan IMPACT Act, which not only reinstates reporting requirements but really bolsters them to a level that I think really outshoots even the original reporting requirements that were always baked into the legislation. So that’s one thing I do like to remind folks of when I can and where possible is that the Investing in Opportunity Act always included reporting requirements. Those were stripped out during tax reforms, due to the reality that we were operating under specific Senate rules, including the bird rule, and unfortunately, they were struck under those rules.
So again, the legislation has always taken recording into consideration, right? The reality is, is that we want to understand and be able to measure and provide data points to the actual impact on the communities, that the incentive is designed to benefit. And so, the reporting legislation Senator Scott introduced last fall, early December, the IMPACT Act really goes extremely far in terms of including a broad scope of granular data to really understand the impact of the zones over time, as well as the comparison between low-income census tracts that were eligible to be designated, but were not designated.
So again, in terms of just the breadth and scope of what I think would be a fantastic reporting answer, I very much so lean towards the IMPACT Act. But that being said, we were also extremely pleased last fall to see IRS and Treasury set up to produce new and improved reporting forms for funds and investors alike. And they really went as far as they could within their existing abilities and authorities to ensure that we have as much data on the books as possible with respect to opportunity zone investments and investors alike.
So, I was thrilled to see that action. I know Senator Scott was extremely excited to see that action. And that really helped, I think, put us on a better path forward if you talk about long term data collection. And so the IMPACT Act actually also takes that into account. And in terms of bolstering reporting requirements, it also walks in some of the massive leap forward that Treasury and IRS made so that we would have consistent data points over time. So that was fantastic to see.
And then more broadly, we know that there’s a lot of bipartisan report…support, rather, for reinstating reporting requirements. And Vice President Biden in his op-ed recently indicated support for opportunity zones more broadly, but specifically reporting requirements. The U.S. Conference of Mayors also recently passed a resolution showing bipartisan support for opportunity zones, and reporting requirements as well. So again, it’s very much so a concept that I think both sides can agree on, and hopefully, we can move something soon to get that rolling.
Jimmy: Do you think any legislation changes may take place before the election this year, or are we looking into 2021 for any new reporting legislation to come to fruition in your opinion?
Emily: I mean, we’re gonna certainly continue pushing to get that bill passed into law as soon as possible. I think a lot of us thought that we would already have had another tax title having moved before the August recess. Of course, negotiations broke down and so that’s difficult because, of course, we need to have a vehicle to attach something like that to.
And so, as we’re talking about sort of the pseudo crystal ball, we typically have an end of year package that has a tax title that we can attach items to. But of course, we’re still sort of waiting in the rafters to see what’s gonna happen so that we can deliver face or relief to the American people with respect to recovery efforts for the pandemic. So, again, it’s difficult to see what we’re gonna be able to achieve before the election. But we’re gonna continue pushing to get this thing done.
Jimmy: Good. Earlier this year, Senator Scott along with 8 other senators authored a letter to the Treasury Department making 10 specific requests of the Treasury Department regarding opportunity zones. Could you tell us a little bit more about that letter and some of the most important points in it and what has resulted from that letter so far?
Emily: Yeah. Absolutely. Senator Scott knows that we simply do not have the luxury of ignoring the new reality that this pandemic has created within the American economy. For this reason, he wrote a letter to Treasury and IRS on May 4th requesting critical relief to ensure that entrepreneurs, community organizations, and the taxpayers working to use the opportunity zones’ incentives for good are not wrongfully punished for the delays that COVID-19 has caused.
As you mentioned, Senator Scott was joined by eight other members, that included Senators Young, Roberts, Cassidy, Daines, Lankford, Ben, Blackburn and McSally. And actually, a similar bipartisan letter was sent on the House side shortly thereafter. But specifically, the letter outlined 10 requests for opportunity zones released during the pandemic. Some of them more significant asks included extending the 180-day investment period by 3 months starting on the date of the national disaster declaration and throughout the rest of 2020, preventing funds from failing the 90% asset tests until at least July 15th, and making clear that testing dates after July 15th and before January 1st would be given particular consideration for funds that failed due to delays caused by the pandemic.
The third sort of top line request was ensuring that the 24-month extension for the use of working capital by opportunity zone businesses is applied due to the COVID-19 pandemic. And similarly ensuring that the 12-month extension available for funds to reinvest proceeds, rather, is also applied due to the pandemic. And again, the final regulations had that sort of baked in but we just wanted to ensure that COVID absolutely applies and that those extensions should be granted.
Another major request was Senator Scott’s request to extend the 30-month substantial improvement timeline by 12 months. And then some additional requests baked into the letter were items like making sure that opportunity zone businesses are not punished for things like following telework orders or similarly using intangible property outside of zones per telework orders or for delays in construction due to the pandemic.
So, I’m thrilled to be able to say that IRS and Treasury took quick action and delivered meaningful relief just five weeks later, which is unprecedented and I think really applaud for the turnaround time. The new guidance extend certain 180-day investment windows until the end of the year give folks more time to meet substantial improvement timelines, gives funds more time to invest, and ensures funds, businesses, and projects are not held liable for circumstances beyond their control by allowing for a reasonable cause exception to the 90% asset test throughout the end of the year.
So, I’m happy to go into the weeds a little bit more if you’d like. But again, while the future of the pandemic remains uncertain and more guidance and flexibility could be necessary down the road, I think one thing remains certainly clear, which is that we absolutely need to get reporting and timing extensions done as soon as possible. And I think that the action the IRS and Treasury took to deliver meaningful relief this quickly amidst the pandemic and when requests were absolutely swirling with additional needs and asks from Treasury and IRS, this was a huge and pivotal moment, I think in terms of the future of opportunity zones for 2020 at the very least.
Jimmy: Agreed. Yeah. A lot of great points brought up by Senator Scott and his letter to Treasury. I don’t want to get too much into the weeds at the moment here, but I will be sure to post a link to the letter on the show notes page for today’s episode. And our listeners can find those show notes by heading over to opportunitydb.com/podcast. But yeah, Emily, like you said a lot of great points in that letter. And I was very pleased as you were, I’m sure to see Treasury respond and implement so many of them and so quickly because it provided a lot of much-needed relief to the opportunity zone marketplace.
Emily, I want to talk to you about the need for manufacturing re-onshoring or supply chain redomestication. There’s been a call for that to happen in the wake of the COVID-19 pandemic so we’re not as reliant, our manufacturing isn’t as reliant on foreign entities so we can bring more of our manufacturing back here into the United States. Do you think that opportunity zones can be a key component in that effort to re-onshore our manufacturing? Can you talk about that a little bit?
Emily: Absolutely. I think you’re absolutely correct. There’s been a very robust conversation underway at the national level about the need to onshore and secure our supply chains. For that reason, actually, Senator Scott a few months ago introduced a discussion draft bill called the Made in America Act, which was also introduced in the House side by Representative Carter, which would look at creating a new federal tax incentives for companies to onshore into opportunity zones specifically for the production of PPE and qualified pharmaceuticals.
So again, we did put out sort of our draft bill text to solicit feedback from stakeholders in industry and just begin the process of really kind of moving the ball forward in terms of that conversation at a national level because again, I think, you could not have been more on the money with your point that the need to really shore up domestic supply chains has been so obviously been called into question by the pandemic. And so, I think you’re seeing a lot of members really wanting to step up and take a hard look at the issue and understand what the options are and what we can do. And again, I think opportunity zones should absolutely be a part of that conversation as we’re talking about onshoring. It’s a great opportunity to ensure that, once again, our low-income communities are not overlooked as areas that are ripe for investment.
Jimmy: So, if we need to produce more PPE in this nation, within our borders, why not put one of those manufacturing facilities within an opportunity zone? Is that the point behind what…
Jimmy: …you’re talking about here? Yeah. And so, what kind of conversations have been going, and how might that actually look in practice? What would be the key incentive for bringing our manufacturing back into this country?
Emily: Again. Yeah. Absolutely. So, the Made Act would actually create a new federal tax incentive sort of outside of the opportunity zones program. But like a lot of bills that we’ve seen introduced over the last two years uses opportunity zones as the geographic requirement. So, it’s obviously a bit outside of the scope of the original incentive itself and creates a new incentive in this space. So, again, that’s one option that we’re looking at.
Of course, Senator Graham has championed another provision that similarly looks at onshoring and creating incentives in that space in particular with respect to the production of PPE. So, again, we’ve put our discussion draft out there to really kind of begin this process and put sort of a stake in the sand if you will, as one option to look at as we’re discussing the path forward on really creating and ensuring that the rules we have on the books and our tax code is prioritizing our domestic supply chains as again, I think this pandemic has made all too clear that we have not done a great job of doing so over the past few years.
Jimmy: One of the things that is brought up frequently in regards to getting relief for extending opportunity zones, is potentially extending the 2026 year-end deadline for recognition of capital gains. What are your thoughts on extending that deadline or that sunsetting period? And do you have thoughts about possibly reaching across the aisle involving Senator Cory Booker and his team? What type of efforts are you going to get that deadline extended?
Emily: Yeah. Absolutely. So, the reality is our community organizations, entrepreneurs, small businesses and developers need more time to plan and harness the potential of this incentive. 2020 has hit us all particularly hard and we at the federal level, need to be doing absolutely everything we can to ensure an equitable recovery for all Americans. Of course, opportunity zones were designed to help ensure that our low-income communities are not once again left behind as the economy surges forward or in today’s climate returns to business as usual during the expected V-shaped recovery period.
In short, providing a two-year time extension would of course, first and foremost, restore the seven-year benefit, a huge benefit under the bill, provides folks more time to cope with the recession and uncertainty brought about by this pandemic and give communities more time to plan and take advantage of the brand new tool. Again, extending the deadline is something Senator Scott has been vocal about since last year and there’s also a lot of support for such a fix.
A survey conducted by the Economic Innovation Group, EIG, in late May actually showed that 64% of respondents feel that an extension of the 2026 deadline would make the incentive a more effective tool for the recovery period. More recently, in June, the U.S. Conference of Mayors passed a resolution at their annual meeting in support of opportunity zones. The resolution specifically covered a number of benefits that the zones have brought about. Beyond community-centric projects now come, for example, how opportunity zones have fostered greater interaction between mayors, economic development professionals, community stakeholders, and investors with unique insights into the distinctive needs of disadvantaged communities.
But with respect to your question, the resolution also specifically stated that reinstating recording requirements and extending the deadlines are critical to the success and durability of the incentive. So again, we’ll continue working to see how we can get this done as soon as possible. It would be great in my opinion to see this accomplished, along with a final passage of the IMPACT Act, which of course would reinstate reporting requirements as well as bolster reporting requirements that are currently on the books.
But the legislative landscape for the rest of the year does remain quite uncertain. But again, we’re seeing more and more support on both sides of the aisle at the grassroots level, at the very least for such an extension. So, we’ll see what we can get done this year. But it’s absolutely, I think, at this point a top need for the incentive.
Jimmy: Yeah. So Emily, just for our listeners who may be new to opportunity zones will not be aware of what we’re talking about that 2026 year-end deadline is the last date in which capital gains can be recognized and rolled over into opportunity zones to receive all the benefits, that end date is December 31, 2026. Capital gain that’s recognized beyond that date is not eligible to receive any of the tax benefits associated with opportunity zones. So that’s the extension that Emily and I have been discussing here for the past couple of minutes.
Emily, I’m turning to you again now, on the extension, what do you think an extension would actually look like practically? Are we talking about extending it one year or two years or five years or more? What would you like to go for there?
Emily: Well, I think we certainly need to see a two-year extension, obviously, just with respect to reviving that seven year benefit, of course. And again, I think that that would be really helpful in terms of giving communities and small businesses and entrepreneurs more time to plan and take advantage of the zones in their backyard, or of the zone that they are already currently existing within. Of course, we’re starting to see more and more examples of startups receiving investments, small businesses receiving investments, which is incredible.
And again, having only the final regulations come out, what, eight months ago now, it’s really incredible, the level of uptake that we’ve seen for this infant incentive so quickly. And of course, we saw final rules with respect to investments into active businesses come out a little bit later of course so, I don’t think it’s any surprise that that would take a little bit more time. But again, we’re really thrilled to see the level of uptake that we’re seeing in that arena and more time would only, again, I think serve to benefit the incentives overall, as well as the communities and the entrepreneurs and small businesses that it’s designed to benefit
Jimmy: Good. We are in election year, as we’ve discussed a couple of times now. We’re less than three months away from election day. If Biden would win the White House, and we see a potential change in presidential administration, how do you anticipate that that might affect opportunity zones? What do you think might happen?
Emily: Yeah. Absolutely. So, I don’t think that there’s any question that the Trump administration has been a huge supporter of the incentives from day one, standing up the White House Opportunity and Revitalization Council, putting out new and expanded quoting forms, the litany of actions taken at the agency level to provide priority for opportunity zones have been extensive and incredibly beneficial to the incentive, as well as its implementation more broadly.
So, again, I don’t think that we could be more grateful for the work of the Trump administration and really ensuring that the incentive has what it needs to ensure that the communities that was designed to benefit again are able to do so and really greasing the wheels from that process. So that’s been fantastic.
In terms of the outcome of the 2020 elections, if we were to see a situation where we did have a transfer of administration into a Biden administration, which obviously we now know, would be a Biden-Harris administration, of course, I think that naturally brings up some questions about items included within tax reform or items like opportunity zones.
That being said, we were thrilled to see Biden showing some support for opportunity zones in his recent op-ed, which has been fantastic. And of course, more broadly, the incentive has always enjoyed bipartisan support, especially I think what’s been really amazing is seeing the emergence of that support, really growing and bolstering at the grassroots level with respect to the recent work of the U.S. Conference of Mayors.
So, again, we fully expect to continue seeing bipartisan support and it’s been really great to see Biden really kind of taking a magnifying glass and shining some light on his potential support for opportunity zones and specific support for restoring recording requirements. So, again, that was a good moment for us. And we continue to see bipartisan partnerships within Congress doing work with respect to introducing bills that touch on opportunity zones, that in many ways expand opportunity zones. So, I’m hopeful that we’ll continue seeing that kind of support.
Jimmy: And I’m hopeful as well. I think everybody was a little bit nervous for a while, not sure what might happen if the Democrats were to take office come January of 2021, and especially when Bernie Sanders was leading the race for some time. But yeah, it was nice to see Biden early this month, put out that piece on his initiatives, and he has a section on his website now that discusses opportunity zones. It looks like he is fully in favor of opportunity zones.
He may want to reform them and put his own stamp on them but I think even if you were to take power in the White House, I don’t think opportunity zones are going anywhere anytime soon. So, I’d just like to remind our listeners and I get some people who are nervous about that possibility, they think the Dems will take power and strike down opportunity zones, I don’t think that’s anything to worry about, at this point, not from anything I can see anyway.
Emily: That’s what we’re hoping.
Jimmy: Very good. Well, Emily, it’s been a pleasure speaking with you today and getting your perspective on opportunity zones from Capitol Hill. Before we go, can you tell our listeners where they can go to learn more about you and Senator Tim Scott?
Emily: Yeah. Absolutely. So, Senator Scott’s website is always a really great place to start out. It has a litany of information not only about opportunity zones but of course, about the IMPACT Act and more recently the regulations that we put out within our press space on the website. So that’s always a great place to start to just stay in the loop with all of the work Senator Scott is doing in this space. And of course, just keeping a close read on what we’re planning to tackle next.
Jimmy: Fantastic. And for our listeners out there today, I will have show notes for today’s episode on the Opportunity Zones Database website. You can find those show notes at opportunitydb.com/podcast. And there you’ll find links to all of the resources that Emily and I discussed on today’s show. I’ll be sure to link to Senator Tim Scott’s website, his 10-point letter to Treasury, the IMPACT Act, and also the Made in America Act. Emily, again really appreciate the time you took out of your day to speak with me and our listeners. Much appreciated. Thank you.
Emily: Yeah. Absolutely. Thank you so much for having me on.
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