The Honorable
David
J.
Kautter
Acting Commissioner of
the
Internal Revenue
Service and
Assistant Secretary of the Treasury for Tax Policy
U.S. Department of the Treasury
1500 Pennsylvania Ave
nue,
NW
Washington, DC
20220
June 18
, 2018
Dear Acting Commissioner Kautter:
We write as a broad coalition of stakeholders regarding implementation of Opportunity Zones, a
provision in the Tax Cuts and Jobs Act
providing tax
benefits for certain private
investments in
America’s
low

income
communities
.
Opportunity Zones have the potential to become the most impactful
federal
incentive
for
equity
capital
investment in
low

income communities
ever enacted
.
This
incentive
is designed to tap the
country’s vast unrealized corporate and individua
l capital gains holdings, encouraging investors
to
redeploy
their
earnings
to finance
new
and expanded
business activity in low

income areas
nationwide. Congress envisioned a broad array of investors, fun
ds
, and use cases in the design of
the Opportunity Z
ones provision
and intended it to find application in a
wide variety of urban,
suburban, and rural communities. Timely implementation by the U.S. Department of Treasury
and the Internal Revenue Service will be
crucial
to achieving the outcomes Congress int
ended.
In particular, it is essential that forthcoming
administrative
rules and guidance preserve and
enhance the key characteristics of the Opportunity Zones
design
. These include:

Flexibility:
Low

income communities have a wide ran
ge of financing
needs
. The
flexibility of the Opportunity Zones incentive provides the potential to support a variety
mutually reinforcing activities within a single community as well as across a broad
spectrum of communities.

Scalability:
There is no
statutory
cap on
t
he amount of
capital
that can flow to
Opportunity Zones in any given year
. As such, Opportunity Zones have the potential to
help fuel economic
renewal in distressed communities on a
n unprecedented scale
.

Simplicity:
Complexity has often been the Achilles
heel of
policies
aimed at unlocking
private capital in low

income areas. Complexity adds cost, time, and risk to business
transactions, biasing programs towards
a narrower set of
stakeholders and more risk

averse outcomes
,
often
precluding the very types of business investments that are most
likely to have transformative benefits for communities.
To realize Congressional intent and preserve
these key characteristics in practice
will
require
regulatory clarity and simplicity.
Con
gress gave Treasury broad authority to craft rules and
guidance
to ensure
the benefit works in practice as intended. We urge you to use the full extent
Opportunity Zones Coalition
June 18,
2018
2
of that authority in establishing a
guidance
timeline and framework that will be attractive to
investors
and
beneficial
for communities.
Attached are a number of technical comments and recommendations we believe will be useful in
accomplishing the objectives noted above.
These materials incorporate input from dozens of
experienced stakeholders from a divers
e set of backgrounds united in a common desire to see
Opportunity Zones
succeed in boosting economic opportunity throughout the country. While by
no means exhaustive in scope, we focused
these
comments on implementation issues we believe
to be among the mo
st fundamentally important to
both
the
early creation of an Opportunity Fund
ecosystem
and the
long

term success of Opportunity Zones
communities
.
We appreciate your leadership and look forward to working with you
throughout the
implementation process
.
Sincerely,
Access Ventures
Advantage Capital
Alliant Strategic Impact Housing Funds
Arctaris Impact Fund
Balch & Bingham, LLP
California Forward
Calvert Impact Capital
Capalino + Company
Capital Impact Partners
Chicago Community Loan Fund
CohnReznick
LLP
Community Development Bankers Association
Community Development Venture Capital Alliance
Community Reinvestment Fund, USA
Detroit Opportunity Fund
Economic Innovation Group
EJF Capital
Fund for Our Economic Future
Greenberg Traurig, LLP
High Ridge Venture
Partners
International Franchise Association
Key Bank
Kirkland & Ellis
LLP
Launch NY
,
Inc
.
Launch Tennessee
Local Initiatives Support Corporation (LISC)