Legislation introduced by U.S. Rep. Pat Tiberi (R-OH) on Wednesday would establish new incentives for investments that revitalize economically distressed communities.
The Investing in Opportunity Act would establish a temporary capital gains tax deferral for investing in economically distressed communities. It would also encourage investors to pool resources into Opportunity Funds used to make investments in these communities.
“In Ohio, where some communities are growing better than others, we can do more to make sure that success isn’t determined by your zip-code,” Tiberi said. “We know the one-size-fits-all approach of big government programs hasn’t resulted in sustained economic growth in struggling areas despite steep costs to taxpayers. That is why with the Investing in Opportunity Act we are advancing a new, innovative solution to help boost private investment and opportunities in areas that need revitalization the most to thrive.”
U.S. Rep. Ron Kind (D-WI) and Tiberi introduced a House version of the bipartisan bill. U.S. Sens. Tim Scott (R-SC) and Cory Booker (D-NJ) introduced a Senate version.
“The Unites States is filled with the world’s brightest innovators and an unmatched entrepreneurial spirit,” the lawmakers said in a joint statement. “However, millions of Americans live in communities facing the crisis of closing business, lack of access to capital, and absent entrepreneurship. The Investing in Opportunity Act is a new approach to connecting struggling communities with the private investment they need to thrive. By empowering investors around the country to pool their resources in Opportunity Funds, we can dramatically expand access to the capital and expertise needed to start and grow businesses, hire workers, and restore economic opportunity in struggling communities.”
The legislation would designate geographically targeted low-income areas as
“Opportunity Zones” in an effort to concentrate capital, and it would provide incentives for investors to make long-term investments in these areas.
Fifty million Americans currently live in economically distressed communities, and Opportunity Funds would serve as a source of funding for new businesses, development of blighted properties, investments in local infrastructure, construction of financing facilities and other activity that would improve economic ecosystems, according to research by the Economic Innovation Group.