SEC and NASAA Issue Statement on Opportunity Zones Investments

WASHINGTON–July 16, 2019–The U.S. Securities and Exchange Commission (SEC), along with the North American Securities Administrators Association, issued a statement today explaining the application of state and federal securities laws to opportunity zones (OZ) funds, along with guidance to main street investors to participate. The guidance indicates that investors can invest in a manner compliant with securities laws, but that Main Street investors, particularly those living in an OZ, face a more complex path. SEC Chairman Jay Clayton also issued a statement explaining the guidance and seeking feedback on how to increase access to private security offerings for Main Street investors while maintaining protections.

Indiana Senator Young Introduces Yes In My Backyard Act to Encourage Communities to Cut Regulations and Increase Housing Supply

WASHINGTON – Today, U.S. Senator Todd Young (R-Ind.) introduced the Yes In My Backyard (YIMBY) Act to shed light on discriminatory land use policies, encourage localities cut burdensome regulations, and bring a new level of transparency to the community development process. Instead of adopting inclusive land use policies that allow citizens of all income levels, backgrounds, and identities to live, work, and flourish in their city or town, some communities are building paper walls of regulations around themselves that negatively affect and sometimes discriminate against low- and middle-income Americans. The YIMBY Act would require Community Development Block Grant (CDBG) recipients to go on the record with why they are not adopting specific pro-affordability and anti-discriminatory housing policies. 

“Burdensome and discriminatory local zoning and land use policies drive up housing costs in communities across America,” said Senator Young. “These policies exacerbate the housing affordability crisis and stifle the ability of Americans to move to areas of opportunity. My legislation will require cities, towns, and rural areas across America to face this reality under a new level of transparency and encourage them to cut these harmful regulations.”

The Yes In My Backyard (YIMBY) Act works to provide more transparency for citizens, lawmakers, academics, and others to understand and in some cases, critique, a community’s rationale for not adopting anti-discriminatory housing policies. The bill does not encroach on states’ rights because it does not tell localities what policies to implement, it simply requires them to detail their rationale for choosing not to cut harmful land use regulations. The country is dealing with a housing affordability crisis and it’s about time that localities do their part to make housing more affordable for everyone.

ALABAMA GOVERNOR SIGNS STATE INCENTIVE FOR OZ INVESTMENTS

Alabama Gov. Kay Ivey signed a bill on June 5, 2019 giving state taxpayers a capital gains tax reduction for opportunity zones (OZ) investments, conforming the Alabama tax code to the Internal Revenue Code on OZs. H.B. 540 also allows the state’s Department of Economic and Community Affairs to reach agreements with qualified opportunity funds (QOFs) to offer impact investment tax credits to investors in case the projects undertaken by the QOF don’t produce expected returns by the fifth year, with the provision that “extraordinary returns” are allocated back to the state. There is a $50 million annual cap on the credits.

Minnesota Enacts Law Conforming to Federal Tax Code

Minnesota is the latest to state that has passed a bill that conforms their Internal Revenue Code (IRC) to match the provisions of the federal opportunity zones (OZ) incentive. There are still six states who are considered “Nonconforming” states (California, Arizona, Mississippi, North Carolina, Pennsylvania and Massachusetts)

California Senate Passes Bill to Expedite Environmental Reviews for OZ Developments

The California State Senate last week passed S.B. 25, a bill that would streamline environmental review and approval for developments, including those funded by qualified opportunity funds. The Senate advanced the legislation to the Assembly on a vote of 28-6, with four senators not voting.

Alabama Bill to Add State Incentive for OZ Investment Goes to Governor

Alabama legislation to give state taxpayers a capital gains tax reduction for certain opportunity zones (OZ) investments passed the state Senate and House of Representatives this week and is on the desk of Gov. Kay Ivey. H.B. 540 would allow a state capital gains tax reduction if the gains are invested in a qualified opportunity fund (QOF) that has at least 75 percent of its qualified OZ property in the state. The bill also includes a provision to allow the Alabama Department of Economic and Community Affairs to enter into agreements with QOFs to offer impact investment tax credits to investors in case the projects undertaken by the QOF don’t produce returns by the fifth year that were expected in the project agreement. There is a statewide cap of $50 million for credits, with a requirement that “extraordinary returns” are allocated back to the state