By Dan Gauthier, Rose Law Group transactional attorney
Many state and local governments across the country are looking for ways to support development and investment in their respective “Opportunity Zones,” which are designated low-income and economically distressed census tracts included in a recent federal tax incentive program aiming to direct investment into these areas.
On Thursday, Governor Larry Hogan of Maryland announced a proposal to spend $56.5 million in connection with several initiatives to attract such investment, such as state tax credits, job training programs, small business loans, and additional incentives for affordable housing.
Governor Hogan says he wants Maryland’s Opportunity Zones to be “the most competitive ones in America.” Hogan and other state and local officials leading the charge on state and local incentives in connection with Opportunity Zones have the right mindset. With more than 8,700 Opportunity Zones across the United States, state and local governments must collaborate directly with private investors to “win” the dollars for development in their respective communities.
The Opportunity Zone program was enacted as part of the 2017 Tax Cuts and Jobs Act and is intended to spur investment in low-income and economically distressed urban and rural areas across the country by offering investors significant tax incentives.
Hogan’s plan calls for proposed legislation for state tax incentives for businesses operating in Opportunity Zones, a grant program for specialized job training, and the creation of a technology infrastructure fund aimed at leveraging more than $500 million in investment over the next ten years. In addition, Hogan will create a task force by executive order, charged with coordinating local government resources to attract maximum investment in Maryland Opportunity Zones.
States and local governments have myriad tools at their disposal to maximize the benefit of the Opportunity Zones program in their communities.