[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.
* * * * *
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