Three areas in Calhoun County and one in Cleburne County qualify for a new federal program that gives investors tax breaks for putting their money into economic development efforts in low-income communities.
“It's just another incentive opportunity, primarily for existing industries,” said Toby Bennington, director of economic development and city planning for Anniston.
The program is part of the Tax Cuts and Jobs Act of 2017, which lowered the tax rates for most Americans, particularly Americans with high incomes. The provision is based on a bill sponsored by senators Tim Scott, a Republican from South Carolina, and Cory Booker, a Democrat from New Jersey.
The program establishes what it calls Opportunity Zones, low-income census tracts chosen by state governors. Gov. Kay Ivey’s Office and the Alabama Department of Economic and Community Affairs chose the 168 tracts that became Alabama’s Opportunity Zones. A total of 629 tracts in Alabama qualified for the program.
The U.S. Treasury Department approved Alabama’s zones April 18. The local areas include McClellan and most of the area surrounding Quintard Avenue from Zinn Park to Hobson City. Jacksonville also has a zone that includes the area west of Alabama 21 from West Coffee Street north to Merrellton Road. Cleburne County’s zone includes Heflin and Edwardsville.
Don Hopper, executive director of the Calhoun County Economic Development Council, said he’s already had potential developers ask if areas like McClellan are in Opportunity Zones.
“It has hit the radar for some companies that are looking,” he said.
Officials hope to spur economic development in the zones by establishing Qualified Opportunity Funds. The funds offer several tax benefits to investors. Particularly, one can defer taxes on unrealized capital gains — on-paper profits from a prior investment — until either he sells off the investment or on December of 2026, whichever comes first.
No one contacted by The Star could say who officials plan to put in charge of the Opportunity Funds for Calhoun and Cleburne counties. Nor did they know how exactly the funds will invest in local economic development projects.
Josh Carples is a public information specialist with ADECA. He said the department expects federal officials to offer more guidance on the funds in the summer.
Bennington said the next step is for state and local officials to publicize the program among potential investors.
“It’s important for us and all economic development entities to make sure the word is out there,” he said.