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Georgia Department of Community Affairs Opportunity Zones

Georgia Department of Community Affairs Opportunity Zones. 2004 Legislative Session – HB984. General Strategy Utilize State’s existing redevelopment statutes in an innovative fashion

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Georgia Department of Community Affairs Opportunity Zones

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  1. Georgia Department of Community AffairsOpportunity Zones

  2. 2004 Legislative Session – HB984 • General Strategy • Utilize State’s existing redevelopment statutes in an innovative fashion • Reward local governments that undertake redevelopment and revitalization with access to maximum State Job Tax Credits’s • Operate state-wide, wherever “pockets of poverty” exist in rural, urban or suburban communities • Support bottom up, locally driven community and economic development initiatives through local collaborative partnerships

  3. HB984 – Applicable Statutes • Enterprise Zone Employment Act – O.C.G.A. 36-88 • Georgia Urban Redevelopment Law – O.C.G.A. 36-61 • Georgia Business Expansion & Support Act – O.C.G.A 48-7-40.1

  4. HB984 – “Opportunity Zones” Max State Job Tax Credits Local Redevelopment Powers Local Enterprise Zone Benefits Focused Geographic Areas – 20% Poverty Banks CRA Programs Non-Profits, Foundations, Etc. Federal CDBG targeted to same areas SBA, FHLB, HUD, USDA, EDA, etc, Federal New Market Tax Credits

  5. Promising Uses for Opportunity Zones • Rural areas with sluggish economies and blighted industrial, commercial and residential areas • Brownfields • Declining commercial corridors • Deteriorating in-town neighborhoods (state EZ allows tax abatement on rehabilitated housing) • Pockets of urban poverty in otherwise affluent counties • Traditional industrial development

  6. HB984 -- Amendments to Enterprise Zone Employment Act (O.C.G.A. 36-88) • Added blighted areas designated under the Urban Redevelopment Law as one of five eligible criteria for designation of a State Enterprise Zone • Poverty • Unemployment • general distress • under-development • blight

  7. HB984 -- Amendments to Enterprise Zone Employment Act (O.C.G.A. 36-88) • Modify poverty criterion to conform with standard federal definition (20% poverty within census tracts/block groups) • Allow local governments greater flexibility in setting local property tax abatements (rates may now be negotiated up to the maximum prescribed in statute)

  8. HB984 – Amendments to Georgia Business Expansion & Support Act (48-7-40.1) • Opportunity Zones are enabled pursuant to “under-developed area” portion of BEST [O.C.G.A 48-7-40.1(c)(4)] • Allows DCA to designate as an “Opportunity Zone”, areas bounded by two or more census block groups with a 20% or greater poverty rate where an Enterprise Zone and Urban Redevelopment Area have also been designated by a local government

  9. HB984 – Amendments to Georgia Business Expansion & Support Act (48-7-40.1) • State designation of an Opportunity Zone would allow • ANY businesses (including retail) within the area to qualify • Lower threshold to 5 jobs to qualify for the state’s maximum job tax credit of $3,500 per job • Allow credit against 100% of income tax liability with balance against payroll withholding payments where insufficient income tax liability exist

  10. HB984 -- Opportunity Zones

  11. HB984 -- Opportunity Zones Enterprise Zone

  12. HB984 -- Opportunity Zones Enterprise Zone

  13. HB984 -- Opportunity Zones Eligible OZ

  14. HB984 -- Opportunity Zones 20% Poverty Brownfield Site Uptown Warehouse District Historic Mill Houses(Low Income) Proposed Residential Infill Downtown

  15. HB984 -- Opportunity Zones 20% Poverty State EZ Brownfield Site Uptown Warehouse District Historic Mill Houses(Low Income) Proposed Residential Infill Downtown

  16. HB984 -- Opportunity Zones 20% Poverty State EZ Redevelopment Area Brownfield Site Uptown Warehouse District Historic Mill Houses(Low Income) Proposed Residential Infill Downtown

  17. Opportunity Zones -- Partners • Partnerships with other public and private entities targeting same areas: • Federal • HUD’s CDBG, HOME, HOPE and others • Treasury’s New Market Tax Credits and CDFI programs • SBA, USDA, FHLB, HHS and others • Private • Bank CRA Programs, Non-Profits, Philanthropic organizations

  18. HB984 – Example of Benefits • Standard Tier Two JTC: • Businesses must create over 10 jobs to qualify for the a job tax credit of $2,500 per job • May take the JTC only up to 50% of their income tax liability only • Credit limited to manufacturing, warehousing and other similar businesses • Manufacturing – 25 jobs retained over 10 Yrs • NPV of Benefit is $106,830

  19. HB984 – Example of Benefits • Enhanced Opportunity Zone JTC • ANY businesses within the area may qualify • Lower threshold to 5 jobs to qualify for the state’s maximum job tax credit of $3,500 per job • Allow credit against 100% of tax liability with balance against payroll withholding payments where no income tax liability exist • 25 jobs retained over 10 Yrs • NPV of Benefit is $324,960

  20. Application, regulation, maps and more available at: • http://www.dca.state.ga.us/economic or contact Stefanie Dye at: 404.679.1738 or sdye@dca.state.ga.us

  21. Questions: Brian Williamson – 404.679.1587 bwilliam@dca.state.ga.us

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