Weekly Legislative Update
 Week of November 5, 2018 
Congressional Outlook

The House and Senate are both in recess until November 13. On Tuesday, voters will head to the polls to elect all 435 members of the U.S. House of Representatives, 35 U.S. Senators, 36 Governors, 6,073 state legislative seats, 155 statewide ballot measures in 37 states, and thousands of county and municipal races. The first polls open in the Eastern Standard Time (EST) zone at 6am in Connecticut, Indiana, Kentucky, New Jersey, New York, and Virginia, with the last polls closing in Alaska at midnight EST.
On Monday, President Trump will travel to attend political rallies in Cleveland, Ohio at 3pm EST with Republican gubernatorial candidate Mike DeWine and Senate GOP candidate Rep. Jim Renacci (R-OH); Fort Wayne, Indiana at 6:30pm EST with Senate GOP candidate Mike Braun and Rep. Jim Banks (R-IN); and Cape Girardeau, Missouri at 9pm CST with Senate GOP candidate Josh Hawley, Rep. Jason Smith (R-MO), and special guests Sean Hannity, Rush Limbaugh, and Lee Greenwood.
Week in Review

Opportunity Zone Proposed Rulemaking Published in Federal Register
On October 29, the Internal Revenue Service's (IRS) proposed rulemaking for "Investing in Qualified Opportunity Funds," was formally published in the Federal Register. The Opportunity Zones (OZs) were created as part of the 2017 Tax Cuts and Jobs Act and is aimed at spurring investment in economically disposed areas. Trump Administration officials say the goal of the program is to create businesses and jobs in low-income areas and lift residents out of poverty.  Currently, 8,700 opportunity zones have been set up in all 50 states. Here is a list and a map of the designated opportunity zones, as of June 2018.
Under the program, businesses may defer taxes on capital gains by investing those gains into Qualified Opportunity Funds. Those funds must hold at least 90 percent of its assets in qualified Opportunity Zone property. Under the rules, the investments are open to individuals, corporations, partnerships and real estate investment trusts. Participants can take their profits from unrelated investments and plow them into an opportunity zone fund, avoiding paying taxes on those gains until the end of 2026. Depending on how many years they hold the investment, they can reduce their eventual tax bill by up to 15 percent. Investments within the zones held for 10 years or more are entirely free of capital gains taxes. While the guidelines are generous to investors, buried in the rules is a clause that could deter venture capitalists -- and investment in businesses that could stimulate those downtrodden neighborhoods. One of the rules requires that businesses generate at least half their gross income within the distressed community, or OZ, in which they operate. That's fine for, say, an apartment building or a grocery store, but problematic for a business hoping to manufacture a product to be sold widely, or provide services online.
The deadline to submit public comments to the rulemaking is Friday, December 28, 2018. Additionally, the IRS will hold a public hearing on the proposed rule in Washington, DC at 10am on Thursday, January 10, 2019. The IRS is also planning to release a second batch of regulations by the end of the year addressing the ongoing operations of opportunity zone funds. Read more.
Trump Signs Five Bills Into Law
On October 31 and November 3, President Trump signed the following five bills into law:
  • Public Law 115-273, the "Study of Underrepresented Classes Chasing Engineering and Science Success (SUCCESS) Act of 2018," which extends the authority of the Department of Commerce's United States Patent and Trademark Office to set patent and trademark fees for eight years and requires a report on patents issued to certain groups;
  • Public Law 115-274, the "United States Parole Commission Extension Act of 2018," which extends the authority of the United States Parole Commission for an additional two years, until November 1, 2020;
  • Public Law 115-275, which authorizes the National Emergency Medical Services Memorial Foundation to establish a commemorative work with regard to emergency medical services in the District of Columbia and its environs;
  • Public Law 115-276, the "9/11 Heroes Medal of Valor Act of 2017," which expands eligibility to receive the 9/11 Heroes Medal of Valor to public safety officers who participated in the response to the terrorist attacks of September 11, 2001 and died as a result of a related health condition; and
  • Public Law 115-277, which renames the Stop Trading on Congressional Knowledge Act of 2012 in honor of Representative Louise McIntosh Slaughter.