P.O. Box 1088
Austin, Texas 78767
PH: 512-974-7819 FAX: 512-974-7825
Rebecca Giello, Interim Director
Rebecca.giello@austintexas.gov

June 15, 2018

Internal Revenue Service
Via email: CC.ITA.Section.1400@irscounsel.treas.gov
PO Box 7604
Ben Franklin Station
Washington DC 20044
Attention: Mr. Scott Dinwiddie, Associate Chief Counsel
RE: Opportunity Funds and Opportunity Zone Investments
Dear Mr. Dinwiddie:
The City of Austin appreciates the opportunity to submit comments as your office prepares guidance and
regulations regarding the certification of Qualified Opportunity Funds and eligible investments in Qualified
Opportunity Zones.
The City of Austin and our regional partners in the public and private sector have a robust and successful
economic development program. Austin and central Texas boast one of the nation’s most diverse and vibrant
economies. Austin and several of our neighbors regularly top lists of the nation’s fastest growing cities. However,
that growth and economic opportunity have not been distributed evenly across Austin and our region. Growth
has also created its own set of challenges, most notably housing affordability and reduced mobility. These
challenges disproportionately impact low- and moderate-income people – the very people Opportunity Zones
are meant to help.
The City of Austin hopes that the Opportunity Zone designations will provide our economic development team
with an additional tool that helps us continue to attract new employers, address regional disparities, and tackle
the affordable housing and transportation challenges that come with our strong economy. However, the city
fears that the statutory language that created the Opportunity Zone Program (26 USC 1400Z) falls short of what
is needed to ensure the success of Austin’s Opportunity Zones.
The City believes that in order for Opportunity Zones to be effective, the statute should have included language
that required Opportunity Funds to actively consult and work with local government officials, local economic
development officials, the public, communities in the targeted Census tracts, and other local stakeholders as they
make Opportunity Fund investments. As it stands, the City fears that these local stakeholders will not necessarily
have an opportunity to work with Opportunity Fund investors, fail to meet local needs and priorities and could
possibly exacerbate existing problems or impose hardship on the communities the legislation is intended to help.
Therefore, it is with these concerns that the City urges you, to the extent that you are able under the regulatory
direction provided by the statute, to craft guidance and regulations that require Opportunity Funds to actively
consult and work with local government officials, local economic development officials, the public, communities
in the targeted Census tracts, and other local stakeholders as they make Opportunity Fund investments.

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June 15, 2018
Internal Revenue Service

RE: Opportunity Funds and Opportunity Zone Investments

Furthermore, as the statute provides you with clear regulatory direction regarding rules to prevent abuse of the
Opportunity Zones Program, the City urges you to issue clear and strong guidance and regulations to prevent
abuse. Most notably, the statute clearly prohibits the Opportunity Zone tax benefits for income related to:
“any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, racetrack or
other facility used for gambling, or any store the principal business of which is the sale of alcoholic beverages for
consumption off premises.”
Given clear congressional intent that Opportunity Zones should not be used to subsidize businesses that engage
in the activities specifically outlined in the statutory language cited above because they impose negative impacts
or externalities on the communities they are intended to help, the City urges you to interpret this statutory
language broadly in a manner that discourages the Opportunity Zone Program from subsidizing any nuisance
business or making investments that have negative impacts or impose negative externalities on the
neighborhoods and the people the program is intended to help. The City also urges you to craft strong guidance,
regulations, and penalties for clear and outright abuse of the Opportunity Zone Program to benefit the businesses
engaged in the activities specifically outlined in the statutory language cited above.
Please know that the City provides these comments in the spirit of cooperation as we appreciate that you are
tasked with crafting guidance and regulations for a program that has little to no legislative history to guide you.
We hope that our concerns can help provide you with some guidance so that Opportunity Zones live up to their
potential of becoming an integral part of local and regional economic development toolkits. We welcome the
opportunity for further engagement and stand ready to provide you with additional input or information that can
help perfect this program.
Thank you for the opportunity to submit these comments and for your attention to our concerns.
Sincerely,

Rebecca Giello, Interim Director
Economic Development Department

xc: Brie L. Franco, Intergovernmental Relations Officer
Christine Maguire, Redevelopment Division Manager – EDD
Ida Musgrove, Deputy Intergovernmental Relations Officer