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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.

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About this Author

Stephanie Few, Womble Dickinson Law Firm, Charleston, Corporate Attorney
Partner

Investigate South Carolina’s largest economic development deals of the past 20 years, and chances are Stephanie Few played a role in making them happen. One of the biggest assets she brings to clients is her familiarity with local and state decision-makers throughout the Southeast, and particularly in South Carolina, where Stephanie had previously served as the City of Charleston’s Director of Economic Development. When the New York Times profiled Charleston’s economic development boom in 2017, Stephanie was one of the local leaders the Times turned to for insight.

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Michael Cashin, Womble Dickinson Law Firm, Winston Salem, Tax Law Attorney
Partner

Clients call on Mike for his depth of experience in complex tax matters. For more than a decade, he has focused on tax planning and structuring for both publicly and privately held entities. He has advised clients with respect to cross-border tax issues, structuring of mergers, acquisitions and dispositions, securities disclosures, corporate and partnership formation and restructuring, bankruptcy and insolvency, private equity and venture capital transactions, and tax exempt organization formation and compliance.

As a part of his transactional practice, Mike often advises clients with respect to issues involving executive compensation planning, including non-qualified deferred compensation arrangements, severance plans, split-dollar life insurance arrangements and Internal Revenue Code Section 409A compliance.

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