Executive Order Increases Support for Opportunity Zones
Qualified Opportunity Zone Alert
Date: December 18, 2018
On December 12, President Trump signed an Executive Order creating a council of 13 federal agencies charged with developing policies and programs to support investment in Opportunity Zones.
While the mandate to the new White House Opportunity and Revitalization Council is not limited to Opportunity Zones, the Executive Order clearly is motivated by a desire to facilitate investments in Opportunity Zones. On the other hand, it is not yet known whether any programs developed by the inter-agency council will be applied to all Opportunity Zones or distressed areas, or will apply more selectively.
The order includes time periods (of up to one year) for the issuance of recommended changes to support the development of these distressed areas. An observation is that some investors might delay their investment decisions to better understand what additional benefits will be available from this initiative. We are not suggesting that anyone should delay a project, but simply note this implication.
Potential federal support, in addition to the tax benefits of the Opportunity Zone program, could include funding for infrastructure and crime reduction. In addition, the Executive Order directs the council to recommend policies that would streamline application processes and align certain program requirements to facilitate use of multiple programs to fund a project. Investors should keep in mind, however, that statutory and/or regulatory actions may be needed to adjust terms and conditions of existing programs. Once desired adjustments are identified, such changes would take months to enact. These timelines could clash with the deadlines already in place under the Opportunity Zone program.
We will continue to monitor these developments. If you’re not already on our mailing list, please sign up to receive future client alerts: Subscribe.
FOR MORE INFORMATION
For more information, including a list of our Qualified Opportunity Zones team members, please visit the Qualified Opportunity Zones page on our website.
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