Struggling Georgia communities chosen for new federal program that’s to spur investment
By David Pendered
A large swath of economically challenged Georgia communities got a boost from the Trump administration in the weeks after Georgia lawmakers passed a package of legislation aimed at helping rural areas where folks struggle to make ends meet.
The administration approved all 260 nominations submitted by Gov. Nathan Deal for the new Qualified Opportunities Zone program. The program is a tax incentive package that aims to spur economic development in low-income communities. The areas can be located in either rural or urban areas.
The recipients are generally located south of Georgia’s fall line, which stretches from Augusta to Macon to Columbus. One recipient is located west of metro Atlanta and another region is located north and west of Augusta. The recipients are identified by Census tract numbers.
Deal submitted 260 nominations from a total of 83 counties. These areas met the criteria of being places where poverty rates are greater than 20 percent.
“The areas we nominated for this distinction include both rural and urban communities that experienced a slower economic recovery in the last few years, and these tax incentives represent another step forward in their economic revitalization” Deal said in a statement. “We look forward to working with the Department of the Treasury, the IRS and the private sector to take full advantage of this program and boost economic growth for Georgia’s economically disadvantaged areas.”
The U.S. Treasury Department announced the awards after Georgia’s General Assembly approved five bills that are intended to boost the economies of areas that were bypassed by the nation’s improving economy. The concepts were recommended by the House Rural Development Council.
The council met multiple times last year to devise ways the state can encourage private businesses to create jobs in rural regions. The council’s work continues: The next meeting is set for May 15 and May 16 in Blue Ridge. The published topic is: “Equitable Use & Compensation of Right of Way Usage for Emerging Communications Technologies.”
The Treasury Department included Georgia in the first round of awards, along with 15 other states, the Virgin Islands and American Samoa, according to an April 9 statement released by the U.S. Treasury Department. Since then, five states have been added along with the Marianas Islands, according to a report on kpmg.com.
Christopher Nunn, commissioner of the Department of Community Affairs, lauded the program. It will be administered by DCA, which handles many of the flow-through programs aided to bolster communities.
“This designation will enable some of our state’s struggling communities to attract much-needed private sector investment,” Nunn said in an April 16 statement released by Deal’s office. “By giving an economic ‘shot in the arm’ to these communities, our goal is to boost investment where it’s most urgently needed.”
The program works by allowing investors to defer federal taxes by taking capital gains from other investments and investing in the designated areas.
KPMG provided this description of the program in a report:
“The new U.S. tax law (Pub. L. No. 115-97) generally provides for the temporary deferral of inclusion in gross income on gains reinvested in a qualified opportunity fund and the permanent exclusion of gains from the sale or exchange of an investment held for at least 10 years in a qualified opportunity fund.
- “A qualified opportunity fund is an investment vehicle organized as a corporation or a partnership for the purpose of investing in and holding at least 90% of its assets in qualified opportunity zone property.
- “Qualified opportunity zone property includes any qualified opportunity zone stock, any qualified opportunity zone partnership interests, and any qualified opportunity zone business property.”
The program was established by the Tax Cuts and Jobs Act that Trump signed into law in December.
The program received little attention during the debate over the proposed $1.5 trillion tax cut bill. The detail appears on page 130 of the tax cut legislation, according to a Jan. 29 report by nytimes.com.