By Rachel Reilly
On November 16, the Economic Innovation Group (EIG) hosted a webinar to discuss how the Opportunity Zones policy may be shaped by the Biden Administration and future congressional action. Guest speakers Emily Lavery from the Office of Senator Tim Scott (R-SC), Chad Maisel from the Office of Senator Cory Booker (D-NJ), and Michael Novogradac from Novogradac & Company, LLP shared insights on the outlook for enacting legislative measures in the lame duck session and 117th Congress, as well as the proposed reforms included in President-elect Biden’s plan to advance racial equity.
View a recording of the webinar, and EIG’s key takeaways for more information.
EIG’s Catherine Lyons provided a high-level overview of the incoming 117th Congress.
- Control of the Senate will be determined by the results of Georgia’s runoff races in January. Whichever party ultimately secures the Senate will have the majority by a razor thin margin. Democrats will retain control in the House of Representatives, but with fewer seats relative to the 116th Congress.
- If Republicans maintain control of the Senate, Senator Mike Crapo (R-ID) is set to lead the Senate Finance Committee as current Chairman, Senator Chuck Grassley (R-IA), will move to the helm of the Judiciary Committee. Chairman Richard Neal (D-MA) and Ranking Member Kevin Brady (R-TX) will continue to lead the Ways and Means Committee in the House of Representatives.
Emily Lavery and Chad Maisel agreed that while there are many unknowns in Congress, it’s clear that any congressional action on Opportunity Zones will only be accomplished through bipartisan cooperation, as it has been to-date. Both Lavery and Maisel also expressed continued bipartisan support for enacting a reporting framework. Lavery noted that there are a number of bills that may be passed before the end of 2020, for example, a tax extenders bill, continuing resolution, and COVID-19 relief package. These pieces of legislation may provide a vehicle to enact Opportunity Zones measures, but it remains unclear what will ultimately happen.
EIG’s Rachel Reilly underscored that President-elect Biden and Vice President-elect Harris have proposed strengthening Opportunity Zones through reform measures. This proposal is part of the incoming Administration’s plan to advance racial equity, and focuses on three areas:
- Incentivizing Opportunity Funds to partner with non-profit or community-oriented organizations;
- Directing Treasury to review the policy in an effort to better understand if OZ investments have produced community benefits where it’s needed most; and
- Instilling transparency by institutionalizing a reporting and public disclosure framework to understand how investments impact local residents (i.e. poverty status, housing affordability, and job creation).
Michael Novogradac said that reforms could be implemented by the Treasury and the IRS through regulations and guidance, and noted the certification process for Qualified Opportunity Funds and reporting requirements as examples of areas of focus. As Novogradac mentioned, the incoming Treasury Secretary may not have a hard-and-fast opinion about Opportunity Zones reform, but will likely be aligned with the Administration’s priorities of transparency and community benefit.
Closing out the webinar, Reilly reminded attendees that the White House Opportunity and Revitalization Council is scheduled to sunset on January 21, 2021, per the Executive Order that established it. Key staff in participating agencies are preparing transition memos to catalogue current and planned initiatives, amongst other pertinent details that will ensure transfer of information.
Rachel Reilly is the Director of Impact Strategy of Economic Innovation Group.