TOPEKA – On Tuesday, Governor Jeff Colyer, M.D. announced that the Kansas Department of Commerce is now accepting proposals from communities to designate eligible low-income census tracts as Kansas Opportunity Zones under the new Federal Opportunity Zones program. Opportunity Zones are a new economic development tool enacted by the Tax Cuts and Jobs Act of 2017 designed to encourage long-term investments in low-income urban and rural communities.
“One of the primary focuses of my administration is helping boost urban and rural communities that have been struggling with population decline, lack of jobs, and crumbling infrastructure,” said Gov. Colyer. “The Opportunity Zone program is a great opportunity for those who want to invest in their communities and be a proactive part of the solution.”
Opportunity Zones provide a tax incentive for the re-investment of unrealized capital gains into Opportunity Funds. The purpose of these funds is to invest in economically distressed areas designated by the Governor. The program provides deferral and reduction of capital gains taxes when the gain is invested in a Qualified Opportunity Fund and maintained for at least five years. Additional tax incentives are available for investments held for periods of seven and 10 years.
Based upon the number of low-income communities identified by the Federal Census, the Governor can designate 70 census tracts in Kansas as Opportunity Zones. Census tract eligibility is based upon population and income. Information about census tract eligibility for this program may be found at http://kansascommerce.gov/opportunityzones.
In addition to the federal eligibility criteria, the State will consider several other factors in determining which census tracts will be designated as Kansas Opportunity Zones. These factors include an indication of community interest and support for additional investment, the potential of at least one “ready to go” or otherwise identifiable project, and whether the identified project addresses one of the following target uses: industrial/business development, housing or agriculture. While these factors will be considered during the designation process, eligible communities that do not meet one or more of these criteria may still be considered for Opportunity Zone designation.
“We encourage Kansans to take advantage of this special opportunity to invest in their communities and stimulate economic growth in our state’s rural and economically disadvantaged areas. I am excited to see the impact this will have on our state,” said Robert North, Interim Secretary for the Kansas Department of Commerce.
Communities interested in submitting proposals to be considered as a Kansas Opportunity Zone should submit a letter of interest by March 1, 2018. Letters of interest should be on official local government or economic development organization letterhead and must include:
- The eligible census tract number;
- A statement of community interest and support for additional investment;
- A brief description of the tract and note whether it is predominantly commercial, industrial, residential or a mix;
- A description of any recent development activity, such as business or housing developments or other investments in the area, or any anticipated new developments or investments;
- The proposed targeted use of the area; and
- At least one identified or potential project.
Letters of Interest should be addressed to the Kansas Department of Commerce, Attn: Business Development, 1000 SW Jackson, Suite 100, Topeka, KS 66612. Letters may also be submitted by email to email@example.com.
Kansas has until March 21, 2018 to submit the Opportunity Zone recommendations to the U.S. Department of Treasury.