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V O L . X X I V N O. X X V I N OV E M B E R 1 2 , 2 0 1 8 20 L AW F O C U S Sorting out the nuances of the new program is part of what attorneys advising investors and developers do. "I wasn't surprised at all by the [Portland] designation," says Eimicke. "ere's a lot of development here, but there's potential for a lot more." It's not only about development property, but developing business, adds Rob Ravenelle, head of the federal income tax practice at Pierce Atwood. "People don't necessarily under- stand how it works until you explain it," says Ravenelle. But, he adds, "It's not overly complicated," and that makes it appealing to investors. Eimicke says he's already working with a couple of Opportunity Zone projects, and both attorneys are field- ing frequent questions. "Nobody wants to be left behind," Eimicke says. "ey want to understand how it helps them and their projects." Only limited by geography Developer Mattson says one of the "great things" about the program is that it's a tax benefit, not a tax credit, like most other programs. "No one's writing a check," he says. He predicts the program will have more economic impact than Commu- nity Development Block grants, the venerable federal Housing and Urban Development program that has been pumping money into low-income areas in need of development since 1974. One of the intriguing things about the program, and what makes it differ- ent from government-funded and tax credit programs, Mattson says, is that it's for individual projects and fueled by capital investment. He says that over the past few years, huge capital gains have built up, and investors are looking for places to funnel the money. Eimicke, of Pierce Atwood, says, "What separates this from those Toll-free 1-866-HAMMOND www.hammondlumber.com We offer you a great price backed with 70 years of experience, 26 convenient loca ons and the ability to bundle home hea ng fuel and electricity. Get the energy savings and value you deserve. Bundle and Save with CN Brown Energy! We're proud of our Electricity Department. When you bundle electricity with your hea ng fuel you'll save 5¢ per gallon on your hea ng fuels. C O N TA C T T H E O F F I C E N E A R E S T TO YO U : cnbrownenergy.com » C O N T I N U E D F RO M P R E V I O U S PA G E OPPORTUNITY ZONES: The who, what, where and why T he Opportunity Zone program, approved in in May as part of December's federal tax overhaul, was devised as a way to funnel investment capital into areas that are ripe for rehabilitation. Proposed rules from the U.S. Treasury Department were released Oct. 19 and are expected to be finalized by the end of the year. What is it? The Opportunity Zone Program is a tax benefit, not a credit — there's no upfront government money. Capital gains from selling a property or asset can be formed into an Opportunity Zone fund within six months of the gain. Tax benefits are realized the longer the property is held. How does the money part work? At least 90% of a fund, which is set up for the specific zone, must be rolled into development of a property or business in the zone. Gains must be invested within six months of when they're realized, and taxes on prior gains invested into an Opportunity Zone fund are deferred until 2026. The tax is forgiven fully if the investor holds the property for 10 years. If the property is held for five years, taxes exclude 10% of the property; if it's held for seven years, 15% is excluded. Money that goes back into the fund must be used for that project, or to develop other projects within the same zone. How much money are we talking about? The U.S. Treasury estimates $100 billion will be invested into Opportunity Zones. What are the zones? There are 32 zones in Maine, ranging from Portland's waterfront and part of downtown, to a huge swath of the west side of Augusta, to a large portion of Washington County. All of the state's urban areas are represented, including parts of Lewiston-Auburn, Bangor, Brunswick, South Portland and Westbrook, as well as many smaller communities. A full map and list can be found at www.maine. gov/decd. In the U.S., zones have been designated in 8,761 communities. S O U R C E S : maine.gov/decd; home.treasury.gov; media reports Maine's 32 Opportunity Zones are spread throughout the state.

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