On April 17, the U.S. Department of the Treasury announced the release of the much anticipated second tranche of Opportunity Zones guidance. The announcement, coming first at the CDFA Federal Policy Conference and later at the White House Opportunity Zones Conference, brings new and essential information on the tax treatment and special issues related to:

• Operating businesses in Opportunity Zones
• Land and land leases
• Original use and building vacancy
• Opportunity Fund assets and investments

This special edition of the Opportunity Zones Update Newsletter includes both in-depth and high-level overviews of the latest guidance, as well other notable articles from the past week discussing relevant Opportunity Zones information.

This report outlines the plan of the White House Opportunity and Revitalization Council (Council) to implement administrative reforms and initiatives that will target, streamline, coordinate, and optimize Federal resources in Opportunity Zones to stimulate economic development, encourage entrepreneurship, expand educational and workforce development opportunities, and promote safe neighborhoods.

On Wednesday, April 17th, Treasury released the latest round of guidance on the Opportunity Zones program. In this article, Opportunity Alabama offers a concise overview of the essential regulatory features included in the second tranche of OZ guidance.

The U.S. Department of Housing and Urban Development has announced a Request for Information (RFI) seeking public input on how the Department can use its existing authorities to maximize the beneficial impact of Opportunity Zones for residents and their communities.

On Wednesday, April 17 over 170 people from across the Nation attended the White House Opportunity Zones Conference with State, Local, Tribal, and Community Leaders. The entire conference was recorded and is available to be viewed online.

Proposed rules on Opportunity Zones left some holes—such as the breadth of data the government has the authority to collect on the funds and how the Internal Revenue Service will handle penalties. Officials have said publicly that there will be three tranches of rules, with the April 17 batch being the second.

Rural areas account for 40 percent of the designated opportunity zones, which offer private companies and investors tax breaks in exchange for investing in certain low-income communities. But some warn that even with the tax incentives, many rural areas still likely won't benefit unless state and local governments intervene to make the investment less risky.

The second round of proposed Opportunity Zones regulations appear to answer many of the questions taxpayers have been asking, and provide some welcome flexibility to investors and businesses that want to take advantage of the opportunity zone incentives. 

The second tranche of Opportunity Zones guidance brings added regulatory clarity for investors, fund managers and others seeking to bring much needed equity capital to operating and real estate businesses in OZs. The 169 pages of proposed regulations also include updates to portions of previously proposed regulations. 

The long-awaited second round of Opportunity Zone-related Proposed Regulations were issued Wednesday, April 17, 2019. The new guidance picks up where the last round left off, in that the Proposed Regulations are investor-friendly and will likely pull previously reluctant investors off the sidelines.

The second tranche of OZ regulations provides guidance to OZ investors on how to comply with the requirement that an OZ business must derive 50 percent of its gross income from the active conduct of business in the qualified Opportunity Zones.

Nearly 15 months after the creation of the Opportunity Zones incentive, industry officials hope the new set of guidelines will finally give local city officials guidance and developers and investors confidence to start investments in the more than 8,700 distressed communities in the U.S.

>>> VIEW THE OPPORTUNITY ZONES RESOURCE CENTER