Oct 01 2020
“I introduced the Hurricane Laura Recovery Opportunity Zones Act to incentivize rebuilding and development projects in southwest and central Louisiana communities.”
WASHINGTON – Sen. John Kennedy (R-La.) today introduced the Hurricane Laura Recovery Opportunity Zones Act to increase investment in communities hit hard by the category four storm.
“A month after Hurricane Laura struck, Louisianians are already rebuilding their homes and businesses. I introduced the Hurricane Laura Recovery Opportunity Zones Act to incentivize rebuilding and development projects in southwest and central Louisiana communities,” said Kennedy.
The Hurricane Laura Recovery Opportunity Zone Act would incentivize building and development projects in low-income areas impacted by the storm by allowing investors to defer and potentially reduce capital gains taxes on assets sold after Aug. 28, 2020. Hurricane Laura Recovery Opportunity Funds would be the vehicle for investing in eligible low-income areas, which will spur economic development in areas devastated by the hurricane.
Hurricane Laura Recovery Opportunity Zones are low-income census tracts in major disaster areas designated to receive individual assistance as a result of the Hurricane Laura federal disaster declaration. These Hurricane Laura Recovery Opportunity Zones allow investors to temporarily defer and partially exclude taxes on previously earned capital gains.
Investors who reinvest those capital gains in Hurricane Laura Recovery Opportunity Funds would not be taxed on those gains until they sell their investments or until the end of 2030. Gains from investments in Hurricane Laura Recovery Opportunity Funds that are held for at least 10 years are excluded from tax.
This legislation also includes a sense of the Congress that capital gains rates should not be changed.
The bill text is available here.
The Tax Cuts and Jobs Act (TCJA) authorized Opportunity Zones across the country in 2017, and now the new Hurricane Laura Recovery Opportunity Zones Act will build on that program to provide the same favorable tax treatment for investors interested in helping communities recover from the storm.
On Aug. 28, 2020, President Donald Trump granted a major disaster declaration for the state of Louisiana, triggering the release of federal funds to help people and communities recover from Hurricane Laura, which occurred Aug. 22 to Aug. 27, 2020.