A staffer for Sen. Tim Scott (R-S.C.), one of the creators of the 2017 tax law’s opportunity zone tax breaks, has left the senator’s office to launch a trade group that will represent investors taking advantage of the tax incentives.
Shafron “Shay” Hawkins, who confirmed his departure to Bloomberg Tax, founded the Opportunity Funds Association, a Section 501(c)(6) trade association, with Surya Gunasekara, a lobbyist and former chief of tax and tax counsel to former Rep. Jim Renacci (R-Ohio). The association will lobby on policy surrounding opportunity zones at the federal, state, and local levels, according to its website.
The group will be a sort of “Chamber of Commerce for opportunity funds,” said Hawkins, who also worked for Renacci, and before that at a boutique financial advisory firm then known as GroupArgent LLC, now called Results International LLP. His last official day working for Scott was April 26, according to a spokesperson for the senator.
He added that the association will be supported financially by a membership of the so-called opportunity funds, which can defer and even reduce tax on profits from stocks and other investments by using the money to finance projects in 8,764 census tracts designated for the tax breaks under tax code Sections 1400Z-1 and 1400Z-2.
Robust reporting requirements for opportunity zones were initially included in tax overhaul legislation, but were stripped in the efforts to pass the bill. Scott and Sen. Cory Booker (D-N.J.), the other author of the legislation creating the tax breaks, are planning to introduce a bill that would require Treasury to report to Congress on the progress of investments in the zones and the funds’ investments.
The association will release a website allowing opportunity funds to publicize information on their investments, such as the number of jobs they’ve created, according to a May 8 news release from the group.
“Whether the reporting bill is signed into law or not, our members will comply with the reporting bill, and then maybe go beyond that,” Hawkins said.
The Economic Innovation Group helped develop the incentive and now lobbies on the issue. John Lettieri, president and CEO, praised the creation of the Opportunity Funds Association in the news release, along with Scott.
Hawkins was an integral part in the opportunity zones initiative, Scott said.
“Because of his expertise and guidance, more than 31 million Americans may now have a chance to reach their fullest potential and attain the American Dream,” Scott said.
The group’s website’s domain, zonefunds.org, was created in Arizona in November 2018, according to the domain name search site whois.net. Raj Shah, a former White House deputy press secretary who’s serving as the group’s spokesperson, told Bloomberg Tax in an email that the domain was created around that time, and not by the association’s key backer, an Arizona-based private equity firm.
The private equity firm, Virtua Partners, which has set up an opportunity fund and specializes in real estate, confirmed that it is supporting the group.
Virtua’s executive vice president for public policy, Oliver Schwab, is listed as one of the association’s three board members. Schwab briefly lobbied Congress and the executive office of the president on “opportunity zone fund deployment” for an entity called Sounding Partners LLC at the end of 2018, according to disclosure forms. He is a former chief of staff for Rep. David Schweikert (R-Ariz.).
Hawkins said he won’t register to lobby for the group. Gunasekara, counsel at the Capitol Hill Consulting Group, has lobbied Congress on tax issues for Waste Management Inc., the National Propane Gas Association, Oracle Corp., and the renewable energy company Ameresco Inc. as recently as the first quarter of 2019, disclosure forms show.
The group’s senior legislative adviser, Chris McCannell, as a senior government affairs consultant at Gray Robinson, lobbied Congress on tax issues for the Manufactured Housing Institute, Capital One Financial Corp., and the Angel Capital Association, and angel investor group, in the first three months of this year, according to lobbying disclosure forms.
Loren Ponds, a member of the law firm Miller & Chevalier and former House Ways and Means committee tax counsel, will advise the group on legal matters, according to the site.