Senator Tim Scott Considers Bill to Modify Opportunity Zones
Last week at the United States Conference of Mayors, Senator Tim Scott (R – S.C.) announced that he was considering a bill to let state and local governments amend the census tracts they chose to designate as part of the Opportunity Zone (OZ) program.
The OZ program was established by Congress as a part of the Tax Cuts and Jobs Act of 2017. The program is designed to encourage long-term private investments in low-income communities through a two-fold strategy: using temporary benefits to bring the investment in, and long-term benefits to keep it there. This not only results in increased savings for those making the investment, but also yields strong job creation and economic growth for these traditionally underserved communities.
Designated OZs themselves are comprised of low-income community census tracts that were designated by governors in every state and approved by the Department of the Treasury in June 2018. A few subsequent additions were approved in late 2018, bringing the total to more than 8,700 designated Opportunity Zone tracts across all states, territories, and the District of Columbia. A list of all of the sites can be found through the Department of Treasury’s website.
Cities across the U.S. have been lobbying for a chance to modify these designations. A bill, if put forward by Senator Scott, could allow a small percentage of the designated tracts to be changed. In the announcement last week, Senator Scott said that he hopes a bill like this would “re-empower governors, with the assistance of mayors” to address some of the criticism of the OZ program. Critics of OZs have pointed to certain tracts where economic demand was already hot and development would likely have occurred even absent the tax incentives. Putting the focus back on underserved areas by shifting certain tract designations may return the program closer to its original intent.