GLOVERSVILLE — The Common Council is seeking to make use of a provision included in the Tax Cuts and Jobs Act as a means to bolster development in the city.
The Common Council unanimously passed a resolution during the Feb. 27 council meeting to submit a request to Gov. Andrew Cuomo seeking to designate six census tracts in the city as Opportunity Zones.
The designation comes as part of a provision in the Tax Cuts and Jobs Act of 2017 encouraging long-term investment in low-income urban and rural communities nationwide.
The provision allows governors or chief executive officers to designate up to 25 percent of the total number of low-income census tracts in their state as Opportunity Zones. The designation encourages investors to re-invest their unrealized capital gains into Opportunity Funds for use in the area.
Investors benefit from a deferred federal tax payment to the unrealized capital gains that are placed in the Opportunity Funds.
Locally, Mayor Dayton King and the Common Council are petitioning Cuomo to consider the six eligible census tracts in the city identified in the 2010 census for nomination under the Opportunity Zones program.
The Common Council drafted a letter for submittal to Cuomo seeking the designation for the tracts that encompass almost the entire city. The approved resolution stated the Common Council’s opinion that the program would have a positive impact on future development and investment in the city, although details regarding how funds may be spent have not yet been released.
William Luecht Jr., Manager for the Office of Legislative and External Affairs at the Community Development Financial Institutions Fund, said via email Monday that the Internal Revenue Service has authority over implementation of the Opportunity Zones program and related Opportunity Funds, as they constitute tax benefits.
According to Luecht, the IRS is currently drafting guidance on how the Opportunity Zones benefit should be administered, including the certification of qualified funds and eligible investments in the designated zones.
CDFI Fund is working with the IRS during the nomination process to verify that the nominated Opportunity Zones meet the statutory criteria.
Governors and chief executive officers must send nominations of eligible tracts for the Opportunity Zones program to the treasury department by March 21, or a notice seeking a single 30 day extension.
The Secretary of the Treasury must make a determination on whether to grant the Opportunity Zones designation to the nominated tracts within 30 days of receipt.