[Federal Register Volume 84, Number 170 (Tuesday, September 3, 2019)]
[Notices]
[Pages 45946-45949]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-18947]


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DEPARTMENT OF COMMERCE

Economic Development Administration


Review of DOC Policy in Opportunity Zones

AGENCY: U.S. Department of Commerce.

ACTION: Request for information.

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SUMMARY: Consistent with Executive Order 13853, ``Establishing the 
White House Opportunity and Revitalization Council,'' (``The Council'') 
(``Executive Order 13853'' or ``the Order'') this document informs the 
public that the U.S. Department of Commerce (``DOC'' or ``the 
Department'') intends to maximize the beneficial impact of investment 
in Opportunity Zones. In accordance with the implementation guidance 
issued by the Council, the Department has been charged with leading the 
Economic Development subcommittee (``work stream'') on Opportunity 
Zones. To inform that work, DOC is reviewing economic development 
programs policies, practices, planned actions, regulations, and 
guidance across the entire Federal Government and within its own 
programs. Through this notice, DOC seeks input and recommendations from 
the public to help spur economic development in qualified Opportunity 
Zones and other distressed areas across the country.

DATES: Written comments on this request for information (``RFI'') must 
be submitted by October 18, 2019.

ADDRESSES: All submissions must refer to the title above.

[[Page 45947]]

    Comments may be submitted through any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments. All comments received 
are a part of the public record and will generally be posted for public 
viewing on www.regulations.gov without change. All personal identifying 
information (e.g., name, address, etc.), confidential business 
information, or otherwise sensitive information submitted voluntarily 
by the sender will be publicly accessible. DOC will accept anonymous 
comments (enter ``N/A'' in the required fields if you wish to remain 
anonymous).
     Email: [email protected]. Include ``Comments on RFI'' in 
the subject line of the message.
     Mail: Office of the Chief Counsel, Economic Development 
Administration, U.S. Department of Commerce, 1401 Constitution Avenue 
NW, Suite 72023, Washington, DC 20230. Please indicate ``Comments on 
DOC's Request for Information on Opportunity Zones'' on the envelope.

FOR FURTHER INFORMATION CONTACT: Mara Quintero Campbell, Senior 
Advisor, Office of Regional Affairs, Economic Development 
Administration, U.S. Department of Commerce, 1401 Constitution Avenue 
NW, Suite 72023, Washington, DC 20230; telephone: (202) 482-5479.

SUPPLEMENTARY INFORMATION:

I. Background on Opportunity Zones and the White House Opportunity and 
Revitalization Council

    The 2017 Tax Cuts and Jobs Act (Pub. L. 115-97) created new tax 
incentives to encourage the investment of private capital in projects 
and activities intended to catalyze economic development and job 
creation in low-income communities nationwide designated by governors 
as ``Opportunity Zones.'' Opportunity Zones are low income census 
tracts nominated by governors and certified by the U.S. Department of 
the Treasury. The Opportunity Zone designation encourages investment in 
these certified census tracts by granting investors extensive Federal 
tax advantages for using their capital gains to finance new projects 
and enterprises (or substantially improve existing projects and 
enterprises) located within qualified Opportunity Zones. For more 
information on the Opportunity Zones tax incentives, please see IRS 
guidance found at: https://www.irs.gov/newsroom/opportunity-zones-frequently-asked-questions.
    There are more than 8,700 Census tracts designated by a Governor or 
other chief administrative official as Opportunity Zones across all 50 
States, the District of Columbia, and five U.S. territories. The 
following are relevant data and characteristics of the Opportunity 
Zones and those who reside within Opportunity Zones:
     Nearly 35 million Americans live in communities designated 
as Opportunity Zones.
     More than one-in-five of all Opportunity Zones have a 
poverty rate over 40 percent, compared to just over one-in-eight ``low-
income communities'' (LICs) and one-in-20 Census tracts nationwide.
     71 percent of Opportunity Zones meet the U.S. Treasury 
Department's definition of ``severely distressed.'' \1\
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    \1\ ``Severely distressed'' generally means a poverty rate of 30 
percent or a median family income no greater than 60 percent of the 
area benchmark. See The State of Socioeconomic Need and Community 
Change in Opportunity Zones, Economic Innovation Group (Dec. 2018). 
https://eig.org/opportunityzones/communitychange.
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     Life expectancy is on average three years shorter for 
Opportunity Zone residents than it is nationally.
     Approximately 22 percent of Opportunity Zone adult 
residents have not attained a high school diploma, compared to 13 
percent nationally.

The Opportunity and Revitalization Council

    Executive Order 13853 created the Council with the U.S. Housing and 
Urban Development (``HUD'') Secretary (or the Secretary's designee) as 
the Chair. Other members of the Council include: Assistant to the 
President for Domestic Policy (Vice-Chair); Secretary of the Treasury; 
Attorney General; Secretary of the Interior; Secretary of Agriculture; 
Secretary of Commerce; Secretary of Labor; Secretary of Health and 
Human Services; Secretary of Transportation; Secretary of Energy; 
Secretary of Education; Administrator of the Environmental Protection 
Agency; Director of the Office of Management and Budget; Administrator 
of the Small Business Administration; Assistant to the President for 
Economic Policy; Chairman of the Council of Economic Advisers; Chairman 
of the Council on Environmental Quality; and the heads of such other 
agencies, offices, or independent regulatory agencies as the Chair may 
designate or invite.
    Executive Order 13853 directs the Council to:
    (a) Assess the actions each Federal agency can take under existing 
authorities to prioritize or focus Federal investments and programs on 
urban and economically distressed communities, including qualified 
Opportunity Zones;
    (b) Assess the actions each agency can take under existing 
authorities to minimize all regulatory and administrative costs and 
burdens that discourage public and private investment in urban and 
economically distressed communities, including qualified Opportunity 
Zones;
    (c) Regularly consult with officials from State, local, and tribal 
governments and individuals from the private sector to solicit feedback 
on how best to stimulate the economic development of urban and 
economically distressed areas, including qualified Opportunity Zones;
    (d) Coordinate Federal interagency efforts to help ensure that 
private and public stakeholders--such as investors; business owners; 
institutions of higher education (including Historically Black Colleges 
and Universities, as defined by 50 U.S.C. 3224(g)(2), and tribally 
controlled colleges and universities, as defined by 25 U.S.C. 
1801(a)(4)); K-12 education providers; early care and education 
providers; human services agencies; State, local, and tribal leaders; 
public housing agencies; non-profit organizations; and economic 
development organizations--can successfully develop strategies for 
economic growth and revitalization;
    (e) Recommend policies that would: (i) Reduce and streamline 
regulatory and administrative burdens, including burdens on applicants 
applying for multiple Federal assistance awards; (ii) Help community-
based applicants, including recipients of investments from qualified 
opportunity funds, identify and apply for relevant Federal resources; 
and (iii) Make it easier for recipients to receive and manage multiple 
types of public and private investments, including by aligning certain 
program requirements;
    (f) Evaluate the following: (i) Whether and how agencies can 
prioritize support for urban and economically distressed areas, 
including qualified Opportunity Zones, in their grants, financing, and 
other assistance; (ii) Appropriate methods for Federal cooperation with 
and support for States, localities, and tribes that are innovatively 
and strategically facilitating economic growth and inclusion in urban 
and economically distressed communities, including qualified 
Opportunity Zones, consistent with preserving State, local, and tribal 
control; (iii) Whether and how to develop an integrated web-based tool 
through which entrepreneurs, investors, and other stakeholders can see 
the full range of applicable Federal financing programs and incentives

[[Page 45948]]

available to projects located in urban and economically distressed 
areas, including qualified Opportunity Zones; (iv) Whether and how to 
consider urban and economically distressed areas, including qualified 
Opportunity Zones, as possible locations for Federal buildings, through 
consultation with the General Services Administration; (v) Whether and 
how Federal technical assistance, planning, financing tools, and 
implementation strategies can be coordinated across agencies to assist 
communities in addressing economic problems, engaging in comprehensive 
planning, and advancing regional collaboration; and (vi) What data, 
metrics, and methodologies can be used to measure the effectiveness of 
public and private investments in urban and economically distressed 
communities, including qualified Opportunity Zones.

Economic Development Subcommittee

    On April 17, 2019, the Council published an Implementation Plan, 
outlining a detailed work plan describing how the Council will 
accomplish the goals specified in the Order. The Implementation Plan 
established five work streams: Economic Development, Entrepreneurship, 
Safe Neighborhoods, Workforce Development, and Measurement.
    DOC was selected by the Council to lead the Economic Development 
work stream and is supported by: HUD, Department of Agriculture, 
Treasury Department, Department of Transportation, Department of Health 
and Human Services, Council on Environmental Quality, and the Small 
Business Administration. The primary objective of the Economic 
Development work stream is to leverage Federal grants and loans in a 
more integrated way to develop dilapidated properties and provide basic 
infrastructure and financial tools to attract private investment.

II. Department of Commerce Economic Development Programs

    DOC promotes job creation and economic growth by ensuring fair and 
reciprocal trade, providing the data necessary to support commerce and 
constitutional democracy, and fostering innovation by setting standards 
and conducting foundational research and development. The Department, 
through the Economic Development Administration (``EDA''), provides 
grant investments in infrastructure construction, planning, technical 
assistance, entrepreneurship and innovation programs, revolving loan 
funds, and other capacity building investments that are designed to 
leverage existing regional assets to support the implementation of 
economic development strategies. These strategies facilitate the 
creation of new businesses and industries, and the growth of existing 
businesses and industries. EDA programs that are used to help regions 
and communities catalyze investment, innovation and job creation in 
distressed areas include:
    (1) Public Works: Empowers distressed communities to revitalize, 
expand, and upgrade their physical infrastructure to attract new 
industry, encourage business expansion, diversify local economies, and 
generate or retain long-term, private sector jobs and investment.
    (2) Economic Adjustment Assistance: Assists state and local 
interests in designing and implementing strategies to adjust or bring 
about change to an economy. (The program focuses on areas that have 
experienced or are under threat of serious structural damage to the 
underlying economic base. Under Economic Adjustment, EDA also 
administers its Revolving Loan Fund Program, which supplies small 
businesses and entrepreneurs with the gap financing needed to start or 
expand their business.)
    (3) Regional Innovation Strategies: Supports innovation and 
entrepreneurship capacity-building activities by creating and expanding 
cluster-focused proof-of-concept and commercialization programs and 
early-stage seed capital funds through the i6 Challenge and the Seed 
Fund Support Grant competition, respectively.
    A full description of EDA's grant programs, including programs that 
support planning and technical assistance, can be found at https://www.eda.gov/programs/eda-programs/.
    The Department, through EDA, also serves as the lead integrator of 
the Federal Government's economic development resources. The Economic 
Development Integration (``EDI'') business practice is designed to 
facilitate improved coordination and streamlining of Federal technical 
assistance, strategic planning, financing tools and other project 
design and implementation resources. The practice enhances local and 
regional capacity for the comprehensive collaboration and strategic 
planning that are necessary to successfully address economic issues, 
including the effective integration of resources from multiple Federal 
agencies, which will be important to the Opportunity Zone work stream 
on Economic Development. More information on the EDI business practice 
can be found at https://eda.gov/edi.
    The Department's Minority Business Development Administration 
(``MBDA'') promotes the growth of minority-owned businesses through the 
mobilization and advancement of public and private sector programs, 
policy, and research. A full description of MBDA's programs, including 
information on its grants and loan programs, can be found at https://www.mbda.gov/page/grants-and-loans.
    In addition to EDA and MBDA, the Department supports economic 
development through many of its other Bureaus and Agencies. For 
example, the U.S. Census Bureau and the Bureau of Economic Analysis 
provide statistical data and tools to help encourage private and public 
investment throughout the country. The International Trade 
Administration, through SelectUSA, provides tailored reports to foreign 
investors interested in specific geographic areas including Opportunity 
Zones. Finally, the National Institute of Standards and Technology 
through its Hollings Manufacturing Extension Partnership (``MEP'') 
supports public-private partnerships that work with manufacturers to 
develop new products and customers, expand and diversify markets, adopt 
new technology, and enhance value within supply chains. Additional 
information about these various DOC bureaus and offices is available 
online at https://www.commerce.gov/.

III. Purpose of This Request for Information

    The Opportunity Zone tax incentive is a historic and powerful new 
tool meant to help bring private capital into underserved communities. 
However, as stated in the Implementation Plan, to create the conditions 
for long-term sustainable economic growth, economically distressed 
communities cannot rely on private capital and tax incentives alone. 
Many of these communities are also in need of public sector investment 
and technical assistance to ensure they develop the foundations and 
investment conditions necessary to support a thriving private sector. 
However, too often communities that attempt to access these catalytic 
Federal resources encounter a labyrinth of distinct rules and 
regulations, multiple application and review processes, and a myriad of 
burdensome and duplicative administrative requirements.
    Therefore, the Department seeks public input on how the Federal 
Government can better align its various economic development programs 
and resources so as to encourage and facilitate beneficial investments 
in urban and economically distressed

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communities, including in qualified Opportunity Zones. The Department 
requests information from and the perspectives of multiple stakeholders 
who support economic development in Opportunity Zones, including State, 
local and tribal officials, institutions of higher education, 
nonprofits, philanthropic organizations and other impact investors, 
economic development and other experts in relevant disciplines, and 
affected stakeholders in the private sector.

IV. Specific Information Requested

    To assist in Department's approach to Opportunity Zones, DOC 
invites ideas and information on the following questions:
    1. How can the Federal Government target and streamline 
infrastructure programs in qualified Opportunity Zones and other 
economically distressed communities to create long-term sustainable 
economic growth?
    a. For example, what actions could DOC agencies and bureaus (EDA, 
MBDA, etc.) take under existing authorities to focus Federal 
investments and programs on distressed communities and regions that 
include qualified Opportunity Zones?
    2. How can public and/or private sector recipients leverage Federal 
grants and loans in a more integrated way?
    a. For example, what policies could the Federal Government 
implement that would make it easier for recipients to receive and 
manage multiple types of public and private investments, such as 
through streamlining application procedures and/or aligning program 
requirements?
    b. What types of information or tools (including web-based) would 
be helpful for entrepreneurs, investors, and other stakeholders to 
facilitate understanding of applicable Federal programs and resources 
to support investments in Opportunity Zones?
    3. How can coordination between Federal, state, and local capital 
investment be improved to maximize economic development to the benefit 
of qualified Opportunity Zones?
    a. For example, what policies, technical assistance, or tools could 
the Federal Government provide communities to attract private 
investment and spur economic development?
    b. What additional resources or policy changes might communities 
need to successfully compete for private investment in rural 
Opportunity Zones?
    4. How can the Federal Government provide increased statutory and/
or administrative flexibility in existing Federal programs in qualified 
Opportunity Zones to increase economic development outcomes?
    a. For example, how can Federal requirements or guidance for 
regional economic development planning foster improved coordination of 
resources for infrastructure, workforce development, housing, and 
safety in qualified Opportunity Zones and surrounding areas?
    5. What data would be useful for the Federal Government to collect 
to evaluate the economic development impact of program investments that 
are designed to assist distressed communities in qualified Opportunity 
Zones?
    a. What data would be useful for the government to collect to 
determine that increased investment has provided inclusive 
opportunities for businesses and residents of distressed areas, 
including in qualified Opportunity Zones?
    b. What data would be useful in determining that increased private 
investment in qualified Opportunities Zones increased regional 
competitiveness, innovation and resilience?

V. How will this information be used?

    The Department aims to use the information received to help inform 
policies and procedures related to Federal economic development 
programs. In particular, the Department seeks to use information 
received to identify administrative flexibilities and propose 
legislative changes to improve coordination and streamlining of Federal 
economic programs to spur private investment in qualified Opportunity 
Zones and other economically distressed areas.
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    Dated: August 26, 2019.
John Fleming,
Assistant Secretary of Commerce for Economic Development.
[FR Doc. 2019-18947 Filed 8-30-19; 8:45 am]
 BILLING CODE 3510-24-P