Highlights of NDC Unpacking Investing in Opportunity Act Webinar

From Vita Nuova Member Sarah Kackar – 1/23/18

Key speaker – Shay Hawkins – assistant to Ohio Senator Scott – Committee on Finance

Lead policy advisor on tax and trade issues:

  •  Investing in Opportunity Act – Sen Tim Scott and Sen Cory Booker – 14 bipartisan senatorsbipartisan support in House as well – Rep Pat Teaberry and Rep Ron Kind – 81 bipartisan house cosponsors
  •  Economic Innovation Group – think tank key to drafting Act – should be involved going forward; very good website with sample investment deferments and key info www.Eig.org

Opportunity Zone – areas in low income community and adjacent areas where investors can defer paying capital gains taxes if those gains are invested in opportunity zones in exclusive portfolios:

  • Provide as much flexibility to investors as possible to maximize capital into distressed communities
  • Bill authors wanted to build in federalist and local control perspective so treasury isn’t as influential over specific situations and zone designations
  • Like “race to the top” for States
  • Attract new array of investors; create interest in how to revitalize areas
  • Interactive map of eligible communities from which governor chooses his/her list – eig.org/opportunityzones

Opportunity funds must hold 90% of assets in qualified opportunity assets:

  • Opportunity funds are vehicles for investors to use for their investments in the zones
  • Treasury can regulate funds and provides compliance and tracking for gains
  • Treasury now setting up process to allow them to determine and certify a fund’s investments

Governors were given 90 days from enactment of Bill to designate opportunity zones (March 21) – can ID up to 25% of eligible low income census tracts as opportunity zones –

  • Same designation of low income as used in NMTC
  • Allows individuals making equity investments to invest in businesses and development within zone and defer paying capital gains tax
  • Allow investment 5 years, hold 10% basis from original gain, 7 years, 5% basis from original gain
  • As an example, $ 1 mil of stock which turns into $2 mil over time would generate 200K of taxes which could be deferred if that $200K gain is invested in opportunity zones
    • Would pay capital gains rate at time of deferment, not when you settle up bill

Check with governor’s office in terms of designation – look for communities that could be zones and lobby governor’s office

  • Work now with potential investors who have to create opportunity fund
  • This must happen while awaiting the development of the rules still under development


  • Opportunity zone provision not replacement of new market tax credit – operate alongside as complementary kind of capital
    • NMTC – debt
    • Opportunity – equity

Opportunity Act part of broader actions by Senator Scott

  • Leap Act – tax credits to those providing apprenticeship programs
  • Skills Act – job training
  • Choice Act – school choice