Opportunity Zones
Adopted at the 87th Annual Meeting in 2019
WHEREAS, Governors nominated eligible Census tracts to become Opportunity Zones and Treasury Secretary Steven Mnuchin certified those nominations by the delegation of authority to the Internal Revenue Service; and
WHEREAS, the Treasury Department certified 8,761 Census tracts in communities in all 50 states, the District of Columbia, and five U.S. territories as qualified Opportunity Zones; and
WHEREAS, any investor can defer tax on previous capital gains by holding a long-term investment in a Qualified Opportunity Fund, which is set up as either a partnership or corporation that invests in eligible properties located within an Opportunity Zone; and
WHEREAS, the Treasury Department published an initial set of proposed regulations and guidance on how the Qualified Opportunity Zone (QOZ) tax benefits will be administered, including the certification of Qualified Opportunity Funds (QOFs) and eligible investments; and
WHEREAS, Treasury and IRS published a second set of proposed regulations pertaining to gains that may be deferred as a result of a taxpayer's investment in a QOF, special rules for an investment in a QOF held by a taxpayer for at least 10 years, and updates to portions of previously proposed regulations to address any previously unresolved issues, including the "substantially all" threshold; and
WHEREAS, mayors will play a prominent role in marketing Opportunity Zones, attracting private investment from QOFs, and directing these new resources to planned projects in local communities; and
WHEREAS, cities must ensure that local permitting and zoning decisions are well-suited to attract these new investments and may choose to provide additional federal and non-federal incentives for investors; and
WHEREAS, the Administration should issue additional regulations establishing long-term reporting requirements governing investments that will ensure transparency, accountability, and appropriate disclosures; and
WHEREAS, there are concerns that QOFs may not maximize the full potential to advance socioeconomic outcomes for residents of Opportunity Zones in the absence of a federal regulatory mandate; and
WHEREAS, Mayors and other elected officials should establish local standards to ensure that residents of these Opportunity Zones are not subject to the threat of displacement and can realize the community benefits of these investments; and
WHEREAS, impact investors can help Mayors to address the unmet needs and systemic challenges of a community, prioritizing projects that result in the creation of affordable housing, jobs, small businesses, retail, and other assets,
NOW, THEREFORE, BE IT RESOLVED, The U.S. Conference of Mayors commends Congress for including provisions establishing Opportunity Zones in the Tax Cuts and Jobs Act of 2017 and the Administration for its efforts implementing these provisions of the tax code; and
BE IT FURTHER RESOLVED, that mayors support the bipartisan bill introduced by U.S. Senators Cory Booker (D-NJ), Tim Scott (R-SC), Maggie Hassan (D-NH), and Todd Young (R-IN) that restore and strengthen reporting requirements for the Treasury Department to collect data on the number of opportunity funds created and the impact the funds are having on underserved communities, which were included in the original Investing in Opportunity Act, but removed from the final measure that passed Congress in 2017; and
BE IT FURTHER RESOLVED, that we urge the Treasury Department to issue new regulations that establish transparent long-term reporting requirements, promulgate standards that will ensure qualified investments benefit the residents of these communities, and establish a strong commitment to education, workforce development, equity, and inclusion; and
BE IT FURTHER RESOLVED, that The U.S. Conference of Mayors looks forward to working with the Administration, private sector, and philanthropic community to utilize this new tool to attract new investments in low-income communities designated as Opportunity Zones in cities nationwide.