Category Archives: General

Treasury awards $204.1M in CDFI Funds to Low Income Native American Communities

Earlier this week, the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) announced and awarded 397 Community Development Financial Institutions (CDFIs) $204.1 million in awards.

The awards, through the fiscal year (FY) 2020 round of the Community Development Financial Institutions Program (CDFI Program) and the Native American CDFI Assistance Program (NACA Program), will enable CDFIs to increase lending and investment activity in low-income and economically distressed communities across the nation.

“I am proud to announce the fiscal year 2020 CDFI Program and NACA Program Award Recipients,” said CDFI Fund Director Jodie Harris. “These organizations are providing vital economic development and financial services to neighborhoods, businesses, and families. I am especially proud that we have 91 new organizations receiving awards this year, expanding the opportunity of this program to even more communities across the country.”

The CDFI Program invests in and builds the capacity of CDFIs to serve low-income people and communities lacking adequate access to affordable financial products and services.

For the FY 2020 CDFI Program round, the CDFI Fund awarded $142.8 million in Base-Financial Assistance and Technical Assistance awards to 357 organizations in 45 states, the District of Columbia, and Puerto Rico. In addition to the Base-Financial Assistance awards, the CDFI Fund will also provide the following supplemental Financial Assistance awards:

• $22 million to 13 CDFIs through the Healthy Food Financing Initiative-Financial Assistance (HFFI-FA) awards, a supplemental program designed to encourage investments in businesses that provide healthy food options for communities;

• $4 million to 17 CDFIs through the Disability Funds-Financial Assistance (DF-FA) awards, a supplemental program designed to help CDFIs finance projects and services that will assist individuals with disabilities; and

• $18.5 million to 106 CDFIs through the Persistent Poverty Counties-Financial Assistance (PPC-FA) awards, which is a supplemental program designed to encourage investments in Persistent Poverty Counties nationwide.

The NACA Program facilitates the creation and advancement of Native CDFIs, which are Certified CDFIs that must predominantly serve Native American, Alaska Native, and/or Native Hawaiian communities. A diversity of institutions in various stages of development are supported by the NACA Program, including: organizations in the early planning stages of CDFI formation; tribal entities working to certify an existing lending program; and established Native CDFIs in need of further capacity building assistance.

Per Treasury’s press release, the CDFI Fund awarded $15.2 million in FY 2020 NACA Program Base-Financial Assistance and Technical Assistance awards to 40 organizations in 18 states. In addition, the CDFI Fund awarded $1.6 million in NACA Program PPC-FA awards to 11 Native CDFIs.

Duane Morris has an active Opportunity Zone Team to help CDCs and other organizations and individuals plan, respond to, and invest in Opportunity Zones and low income areas throughout the USA, including the US Virgin Islands and Puerto Rico. We have closed over 45 OZ deals since their inception and are actively working on over 54 OZ projects for owner/developers, investors and business owners.  We would be happy to discussion your proposed project with you.  Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.

If you have any questions about this post, please contact Brad A. Molotsky, Scott Gluck, Lee Potter, Keli Isaacson Whitlock, AK Kastrinakis, Art Momjian or the attorney in the firm with whom you are regularly in contact.

 

Bill to require the SBA to train Field Representatives regarding Opportunity Zones and OZ Benefits introduced in the House

Reps. Dan Bishop, R-N.C., and William Timmons, R-S.C., introduced the Increasing Opportunities for Small Businesses Act of 2020 (H.R. 8120).

According to Novogradac, the Bill would require the Small Business Administration (SBA) to train representatives on the opportunity zones (OZ) incentive. Trained field representatives would serve as a point of contact for OZ questions and resources, educate elected leaders within their areas and hold an annual seminar in each state to educate managers of qualified opportunity funds, qualified opportunity zone businesses, state and local government officials and other interested persons on how to benefit from OZ investments.

The director of each SBA regional office would be required to submit an annual report on the success of trained field representatives, including any problems and best practices.

Continued positive steps by the House and the White House on directing various federal agencies to prioritize resource allocations and program dollars to help low income areas in various OZs throughout the US, Puerto Rico and the Virgin Islands.

Duane Morris has an active Opportunity Zone Team to help organizations and individuals plan, respond to, and invest in Opportunity Zones throughout the USA, including the US Virgin Islands and Puerto Rico. We have closed over 45 OZ deals since their inception and are actively working on over 54 OZ projects for owner/developers, investors and business owners.  We would be happy to discussion your proposed project with you.  Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.

If you have any questions about this post, please contact Brad A. Molotsky, Scott Gluck, Lee Potter, Keli Isaacson Whitlock, AK Kastrinakis, Art Momjian or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe.

Federal GSA prioritizes Opportunity Zones for Owned and Leased Assets – Wow!

On Tuesday, August 25, 2020, the General Services Administration (“GSA”) announced that it will increase its investment in opportunity zones with owned and leased federal buildings, following an executive order that President Donald Trump signed Monday.

The order directed the GSA to prioritize opportunity zones and other distressed communities in federal agency moves to help bring new economic activity to the neighborhoods and to save taxpayer money by occupying more affordable real estate.

“We are excited to now officially include qualified Opportunity Zones in the list of priorities we formally assess when selecting sites,” GSA Administrator Emily Murphy said in a release. “Yesterday’s Executive Order is consistent with GSA’s long term role in spurring economic development within the communities where our buildings are located.”

The GSA owns or leases 376.9 Million Square feet in 9,600 buildings in over 2,200 communities. As the GSA is the largest owner and user of space in the US by far, this is a very significant development in OZ world.

The opportunity zone program was passed into law in 2018 as a way to incentivize investors to place their equity investments into underserved communities. According to BisNow, beyond using the government’s real estate footprint, the Trump administration has sought to support the opportunity zone program through other methods. The Department of Education last week launched a grant program to help institutions of higher education recover from the coronavirus crisis, and it gives priority to applicants who expand educational access to students in opportunity zones.

Duane Morris has an active Opportunity Zone Team to help organizations and individuals plan, respond to, and invest in Opportunity Zones throughout the USA, including the US Virgin Islands and Puerto Rico. We have closed over 45 OZ deals since their inception and are actively working on over 54 OZ projects for owner/developers, investors and business owners.  We would be happy to discussion your proposed project with you.  Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.

If you have any questions about this post, please contact Brad A. Molotsky, Scott Gluck, Lee Potter, AK Kastrinakis, Art Momjian or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe.

Whopper of a New Markets Tax Credit (NMTC) Allocation from US Treasury ($3.5B) – these funds can be matched with OZ Funds

The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) announced $3,548,485,000 in New Markets Tax Credits that are intended to spur investment and economic growth in low-income urban and rural communities nationwide.

A total of 76 Community Development Entities (CDEs) were awarded tax credit allocations, made through the calendar year (CY) 2019 round of the New Markets Tax Credit Program (NMTC Program).

“Today’s action demonstrates the Administration’s commitment to promoting economic growth and jobs in distressed communities, and to ensuring that every American can get back to work as quickly as possible,” said Treasury Secretary Steven T. Mnuchin.

”For almost 20 years, the New Markets Tax Credit has attracted private capital into businesses and communities as they recover from significant shocks to our economy,” said CDFI Fund Director Jodie Harris. “Projects that spur job creation, enable access to technology infrastructure and develop community facilities like federal qualified health centers, are examples of how New Markets Tax Credit investments are especially critical for low-income communities across the country.”

The 76 CDEs receiving awards were selected from a pool of 206 applicants that requested an aggregate total of $14.7 billion in tax credit allocation authority. The award recipients are headquartered in 30 different states and the District of Columbia. One-fifth (20%) of the investments will be made in rural communities. It is estimated that these award recipients will make more than $706 million in New Markets Tax Credit investments in non-metropolitan counties.

Yesterday’s announcement brings the total amount awarded through the NMTC Program to $61 billion. Historically, NMTC Program awards have generated $8 of private investment for every $1 invested by the federal government.

Through the end of fiscal year 2018, the most recent data available, NMTC Program award recipients deployed nearly $52.5 billion in investments in low-income communities and businesses; with impacts such as the creation or retention of more than 836,000 jobs, and the construction or rehabilitation of more than 218.3 million square feet of commercial real estate.

As we have discussed here before, NMTC funds CAN be matched with Opportunity Zone equity as OZ deals can stack with other tax programs to really drive a return for OZ projects.  Worthy of consideration. 

If you have any questions about this blog post or other NMTC or OZ questions, do not hesitate to reach out, we are happy to discuss at your convenience.  Be well and stay safe. 

IRS issues new Opportunity Zone Guidance and Provides Additional Time and Flexibility

Thanks to the urging of Senator Tim Scott (R-SC), the IRS issued revised guidance in Notice 2020-39 and provided some additional flexibility for Opportunity Zone investors and Qualified Opportunity Zone Funds.

The key take aways are as follows:

1. EXTENSION OF 180-DAY INVESTMENT PERIOD: Under the OZ regulations, an individual who realizes a gain, is required to invest that gain into a QOF within 180-days of realizing the gain (or such other date as outlined in the regulations). The new relief provides for the 180-day investment period to be automatically extended until December 31st, 2020 if it would have originally expired after April 1st, 2020 and before December 31st, 2020. Example: If any individual realized a gain on 12/15/2019, their investment period would have expired in May, 2020. That date is now automatically extended to December 31st, 2020.

2. EXTENSION OF 90% TEST FOR QOF: Under the OZ regulations, a QOF in required to invested 90% of its assets into qualifying opportunity zone property within 6 months and at the end of the taxable year (i.e., December 31st for a calendar year QOF). If the 90% test is not met, then the QOF is subject to penalties on a portion of the funds in the QOF. The new relief provides that if either the first 6 month testing date or the final year end testing date occurred between April 1st, 2020 and December 31st, 2020, then the failure to satisfy the 90% test is deemed to be due to reasonable cause and, as such, no penalties will be levied.

3. EXTENSION OF 30 MONTH SUBSTANTIAL IMPROVEMENT TEST: Under the final OZ regulations, one of the way tangible property qualifies as qualified opportunity zone business property is to meet the “substantially improved” test within 30 months of acquisition. The new relief provides for a tolling of the 30-month period beginning April 1st, 2020 and ending December 31st, 2020. In other words, properties that are acquired during or that have previously been acquired within an opportunity zone after 1-1-18 and which are under construction will be provided with an additional 9 months to satisfy the substantial improvement test.

The Notice also discusses the 12 month reinvestment requirement upon a sale and the up to 24 months of additional time under a “working capital plan” for properties located within federal declared disaster areas (note, all 50 states and Puerto Rico, the US Virgin Islands and Guam have been declared federal disaster areas in connection with COVID-19).

If you have any questions or thoughts, please do not hesitate to reach out via email or text to my cell.  Best regards and be well. 

A copy of the IRS Notice can be found here – IRS Notice 20-39

Over and out from the Land of OZ.  -Brad

From the Land of OZ – 24 pages of clarifying OZ regulations from Treasury

Good morning/afternoon friends and hope you and yours are doing well and staying healthy in these trying times.

A potential ray of sunshine – which is still being reviewed. Yesterday, without a lot of fanfare or warning for that matter, the Treasury Department issued 24 pages of clarifying regulations to the Opportunity Zone Program.

Unfortunately, rather than state what the impact of the changes were intending to do, the release replaces this word with that word and this time period with that time period. Our team is working on the import of the language changes and will have an explanatory Alert put together in the coming days but wanted folks to be aware in case they want to read it for themselves in the interim.

For you industrious types (I know who you are :)) – https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-07013.pdf.

Happy to discuss any questions or concerns on this or other topics or just to catch up and see that you are doing ok, just email at bamolotsky@duanemorris.com.

Stay safe. Be vigilant.

Philadelphia Issues “Stay at Home” Order – The Intersection Of the City Order with the PA Order and Defining Essential and Life Supporting Businesses

As you have likely been following, New York and New Jersey have issued similar but slightly different Stay at Home orders over the weekend. Pennsylvania has also issued a “non-life supporting” business physical locations shut down effective as of Friday, March 20, 2020, which list of what constitutes a “life-sustaining” business has been modified twice since the initial announcement so please be sure you are checking for the latest list. If you would like one, do not hesitate to email us and we would be happy to provide you one.

As of March 22, 2020, the City of Philadelphia has declared by Executive Order, a similar Stay at Home Order. Key elements of the Order are noted below or feel free to read the actual text at: https://www.phila.gov/documents/eo-and-explanation-of-prohibition-on-non-essential-businesses/.

1. Prohibition on Operation of Non-Essential Businesses/Activities in Philadelphia

A. Prohibition: People and entities are not permitted to operate a non-essential place of business. This prohibition does not apply to virtual or remote operations (e.g., work from home).

B. Essential Businesses ARE permitted to operate during the term of the Order BUT are required to be observe the Social Distancing Rules stated within the Order.

1. “Essential Businesses” include all Life-Sustaining Businesses in the specific industry groups identified by the Governor of Pennsylvania, specifically those permitted in Natural Resources and Mining; Construction; Manufacturing; Trade, Transportation, & Utilities; Information; Financial Activities; Professional and Business Services; Education and Health Services; Leisure and Hospitality; and Other Services (Except Public Administration) (hereinafter, the “Governor’s Order”).

2. Governor’s List – In determining whether a business is a Life-Sustaining Business, businesses should first refer to the Governor’s Order and the list of Life-Sustaining Businesses noted above. That list has been updated by the Commonwealth to conform with guidance on Essential Critical Infrastructure issued by the Department of Homeland Security, Cybersecurity and Infrastructure Security Agency. The City’s Order should be interpreted to be consistent with the Governor’s Order.

3. Philadelphia Specific – The City of Philadelphia also provided “Philadelphia-specific” definitions and examples of Life-Sustaining Businesses, which are defined as Essential Businesses and Activities below, in appropriate coordination with the Commonwealth. The City’s Order may impose additional public health and safety restrictions above and beyond the Governor’s Order.

A. Essential Retail Businesses and Activities, includes the following:

“Grocery Stores,” including supermarkets, farmers’ markets, convenience stores, and mini-markets; these stores are supposed to discourage non-shopping activity (leisure or idling) and manage store occupancy to allow for social distancing.

“Food Services,” or restaurants limited to providing delivery service or pre- ordering online or via phone (strictly prohibited are walk-in ordering, dine-in service, and mobile food vendors, such as food trucks).

“Automotive Parts, Accessories, and Tire Stores,” including auto-repair shops but not any affiliated car dealerships.

“Gasoline Stations,” including their convenience stores.

“Building Material and Supplies Dealers,” including hardware stores, but NOT lawn and garden stores.

“Electronic Shopping and Mail-Order Houses,” means establishments primarily engaged in retailing all types of merchandise using non-store means, such as catalogs, toll free telephone numbers, or electronic media.

“Other General Merchandise Stores,” except department stores, includes:

1. Hardware stores supplying life-sustaining electrical, plumbing, heating, automotive parts, and other life-sustaining materials.

2. Pharmacies, drug stores, and retailers of prescription or nonprescription drugs, medicines, and essential healthcare products.

“Personal Household Goods Repair and Maintenance,” includes:

1. Emergency or urgent household repairs (HVAC, plumbing, electrical, utilities, life-sustaining household appliances, telecommunications equipment) and repair and maintenance necessary to maintaining the safety, sanitation, and essential operation of home residences;

2. Bicycle or motorcycle repair shops; and

3. Stores primarily engaged in repairing cell phones.

“Home Healthcare Services,” includes in-home or home-based care for seniors, adults, or children (not to be confused with child daycare facilities).

“Postal Service” and “Couriers and Messengers,” includes post offices, local messengers and local delivery, shipping and freight services, package delivery companies that deliver packages to residential buildings and offices, and companies that otherwise provide intercity, local, and/or international delivery of parcels and documents (including express delivery services).

“Dry-cleaning and Laundry Services,” includes laundromats.

Consumer banks and credit unions using drive-through, ATM, and limited lobby services, which are permissible “Financial Activities”.

“Veterinary hospitals and services, and pet stores (which are “Other Miscellaneous Stores”).

“Rooming and Boarding Houses” includes hotels:

1. “Clothing Stores” that only or primarily sell essential uniforms and apparel for medical/healthcare professionals and public safety workers (police officers and firefighters);

2. “Automotive Equipment Rental and Leasing,” includes establishments primarily engaged in renting or leasing passenger cars and trucks; and

3. “Services to Buildings and Dwellings,” includes establishments primarily engaged in exterminating and controlling birds, mosquitoes, rodents, termites, and other insects and pests

B. Essential Infrastructure and Industrial Businesses and Activities:
“Construction” for:

1. All medical, pharmaceutical, and healthcare facilities (including non- emergency construction);

2. All emergency projects or other projects deemed essential by the City of Philadelphia, while appropriately balancing public safety, to ensure the continued delivery of critical infrastructure services and functions by the City (“City Essential Infrastructure Projects”); and

3. Emergency repairs for “Residential Building Construction,” “Nonresidential Building Construction,” “Utility Subsystem Construction” (related buildings and structures for utilities, i.e., water, sewer, petroleum, gas, power, and communication, and all structures that are integral parts of utility systems); “Highway, Street, and Bridge Construction,”

4. “Other Heavy and Civil Engineering Construction,” “Foundation, Structure, and Building Exterior Contractors,” Building Equipment Contractors,” “Building Finishing Contractors,” and “Other Specialty Trade Contractors”

“Transit and Ground Passenger Transportation,” which includes urban transit systems, taxi and limousine services, interurban and rural bus transportation, other transit and group passenger transportation (except Charter Bus Industry), and rideshare services (see Governor’s Order for other categories).

“Air, Rail, Water, Truck Transportation,” and affiliated “Support Activities,” which includes delivery and distribution services, and Philadelphia ports and port- related functions (see Governor’s Order for other categories).

“Waste Management and Remediation Services,” which includes trash collection and essential sanitation or cleaning of public right of ways (e.g., sidewalks and streets) (see Governor’s Order for other categories).

“Broadcasting,” which includes radio and television broadcasting, and cable and other subscription programing (see Governor’s Order for other categories).

“Publishing industries,” which includes newspapers, periodicals, books, magazines, and directory publishers (see Governor’s Order for other categories).

“Telecommunications” (except telecommunications resellers), which includes wireless telecommunications carriers (see Governor’s Order for other categories).

“Manufacturing,” which includes all manufacturing of: food and beverages; medical supplies and equipment; HVAC equipment; plastics, rubber, cement/concrete, iron, steel, ferroalloy, and aluminum; semiconductor, electrical electro-medical, navigational, control instrument components and products (see Governor’s Order for other categories).

“Pharmaceutical and Medicine Manufacturing” is defined to include all essential activities and support activities related to ensuring the availability of in-vivo diagnostic substances and pharmaceutical preparations intended for internal and external consumption in dose forms, such as ampoules, tablets, capsules, vials, ointments, powders, solutions, and suspensions, as well as biological products, such as vaccines, toxoids, blood fractions, and culture media of plant or animal origin.

“Wholesale Trade,” which includes all wholesale trade of: food, groceries, and related products; pharmaceutical medical, healthcare, and wellness products; medical supplies and equipment; life-sustaining public health products; and all permissible Retail Trade products under the Governor’s Order (see Governor’s Order for other categories).

“Professional Businesses and Services,” which includes “Scientific Research and Development Services,” e.g., all essential research and development and support activity relating to Pharmaceutical and Medicine Manufacturing and biotechnology activity (see Governor’s Order for other categories).

C. Essential Healthcare and Social Services Businesses and Activities include:

1. All medical or healthcare related services and support services, including “Hospitals”; “Nursing and Residential Care Facilities”; “Ambulatory Health Care Services” (offices of physicians, dentists, and other health practitioners); urgent care facilities; and mental and behavioral health providers.

2. “Social Assistance” includes businesses that provide essential food, shelter, and critical social services for economically disadvantaged or otherwise needy individuals are not prohibited from providing essential food, shelter, and services; and residential facilities and shelters for seniors, adults, and children.

D. Essential Governmental Functions includes all services needed to ensure the continuing operation of the government agencies and provide for the health, safety and welfare of the public, including City Essential Infrastructure Projects.

E. Essential Educational Functions include:

1. Elementary and secondary schools maintaining preparation and distribution of meals for children (with essential staff only);

2. Colleges and universities supporting residence halls where students are required to be reside (with essential staff only)

Additional Essential Businesses may be determined by the Department of Public Health, consistent with the Governor’s Order, and will be identified at phila.gov/COVID-19.

2. Prohibition on Operation of Office-Based Businesses. The Order specifically states that:

A. No office-based or co-working space business or organization, other than an Essential Business, may operate the business generally with personnel located in such office.

B. Businesses required to suspend physical operations may only have essential on-site personnel to maintain critical functions, such as security, processing of essential operations (e.g., payroll and benefits for employees; maintaining remote technology infrastructure; and facilitating “Facilities Support Services” permitted by the Governor’s Order, which are services such as janitorial, maintenance, trash disposal, guard and security, mail routing, and reception).

C. US Businesses are also permitted to maintain essential on-site personnel to ensure compliance with federal, state and local regulatory requirements, and for the safety and security of essential government services.

Note: All businesses are required to be follow social distancing and COVID-19 mitigation guidance provided by the Center for Disease Control, the Pennsylvania Department of Health, and the Philadelphia Department of Public Health.

3. Other Non-Essential Businesses and Activities:

A. Businesses that are not listed as Essential Businesses or Life-Sustaining by the Commonwealth are non-essential businesses. For the avoidance of doubt, the Order confirms that non-essential retail businesses that are NOT permitted to operate include, among other things, movie theaters, clothing-only stores, fitness clubs (yoga, barre, and spin facilities), personal care salons (hair salons, barbershops, and nail salons), arts and music venues, tour operators, social clubs, night clubs, bars, electronics and appliance stores, amusement facilities, food trucks, ice cream trucks, car dealerships, florists, office supply stores, stationery stores, book stores, furniture stores, gift stores, event halls, and shopping malls.

B. Child daycare facilities are non-essential businesses, unless they obtain a waiver to operate from the Commonwealth of Pennsylvania or the City of Philadelphia.

C. “Legal Services,” specifically the practice of law, is governed by the rules established by the Supreme Court of Pennsylvania and/or the Administrative Office of Pennsylvania Courts. Restricted access to law offices and facilities by legal professionals, staff, and clients is permitted to the degree necessary to allow attorneys to participate in court functions deemed essential by a president judge per the Supreme Court’s order of March 18, 2020 or orders of the courts of the United States, so long as social distancing and other mitigation measures are employed for the protection of lawyers, staff, and clients. Pursuant to the Governor’s Order, all other business are required to conducted remotely; necessary retrieval of files or other materials should be accomplished expeditiously.

D. Operators of non-life sustaining, non-emergency construction in Philadelphia have been given until 5:00 p.m. on March 27, 2020, to make construction sites safe and secure. Contractors are directed to take proper measures to protect adjacent properties, remove or fasten items that are or could become loose, secure sites against trespass, and complete work necessary to protect and ensure the structural integrity of buildings under construction. Occupied residential properties are required to be left in safe and habitable condition.

E. No storefront businesses may open or operate their storefronts unless they are Essential Businesses.

4. Social Distancing Rules

A. Any business operating under and during the term of the Order are required to be adhere to Social Distancing Rules, which include making efforts to maintain at least six (6) feet of space between individuals; frequently washing hands with soap and running water for at least twenty (20) seconds and/or using hand sanitizer, refraining from shaking hands; covering coughs or sneezes with a sleeve or elbow (not hands); and regularly cleaning frequently touched surfaces, such as desks, tables, countertops, computers, phones, and door handles.

B. Businesses permitted to perform emergency household maintenance and repair services under the Order are required to be: require the customer to clean and sanitize the work are prior to arrival; sanitize the work area themselves before and after completing the work; ask that occupants keep a personal distance of 10-feet at a minimum during work; and allow in the residence only the number of workers necessary to complete the emergency maintenance or repair.

5. Gatherings of Individuals:

All public and private gatherings of any number of people occurring outside a single household or living unit are prohibited, except for the limited purposes permitted by this Emergency Order. This portion of the Order does not apply to activities related to Essential Businesses and Activities or Essential Personal Activities, which are required to be observe the requirements of the Order.

6. Stay at Home Order

A. All Philadelphia residents are required to remain home or at their place of residence unless they are engaged in Essential Personal Activities, which include:

1. obtaining essential goods or services from Essential Businesses, such as obtaining pre-ordered takeout food or beverages from restaurants, acquiring groceries, obtaining medical prescriptions or supplies, or any other products from Essential Businesses for themselves, family, household members, and pets;

2. seeking any form of medical attention, including through Essential Healthcare and Social Services Businesses and Activities, or seeking assistance from law enforcement or emergency services for themselves, family, household members, and pets;

3. caring for family members, friends, or a pet in another household, including delivering essential goods or obtaining emergency services and attention;

4. reporting to or performing their essential jobs related to Essential Businesses and Activities, Essential Minimum Operations, Essential Government Functions, or any other working activities permitted in the Order;

5. walking, running, cycling, operating a wheelchair, or engaging in outdoor activities with immediate family members, caretakers, household members, or romantic partners while following Social Distancing Rules with other individuals, which includes staying six feet apart;

6. leaving the home for an educational, religious, or political reason;

7. leaving because of a reasonable fear for health or safety;

8. leaving at the direction of law enforcement or other government agency; and

9. engaging in any other activities or performing tasks essential to health and safety, or to the health and safety of themselves, family, household members, or pets

7. Exemptions from the Governor’s Order

A. In extenuating circumstances, special exemptions to the Governor’s Order will be granted by the Commonwealth. Businesses seeking a waiver should comply with the Governor’s Order and suspend in-person, physical operations until a waiver is approved and provided.

B. Businesses performing Essential Governmental Functions, including essential Construction for the City of Philadelphia need not obtain an exemption from the Commonwealth.

We will continue to track local and national information and report as new news becomes available through our COVID taskforce web-page which can be found at: https://www.duanemorris.com/practices/coronavirus_covid_19.html.

If you have questions or concerns, please do not hesitate to email any of our COVID task force members and we will find the applicable person on our team who can assist you. bamolotsky@duanemorris.com; dcanderson@duanemorris.com; jsegal@duanemorris.com; or slcaffrey@duanemorris.com.

Be safe.

NJ – Closure order issued for Non-Essential Businesses effective March 21, 2020 at 9:00 PM

NJ just announced Executive Order No. 107 on Saturday, March 21, 2020, which becomes effective at 9:00 p.m. tonight. This Order contains new standards for businesses which supersede previous announcements.

Gathering: Gatherings of individuals, such as parties, celebrations, or other social events, are cancelled unless explicitly authorized by Executive Order 107. CDC guidance defines a gathering to include conferences, large meetings, parties, festivals, parades, concerts, sporting events, weddings, and other types of assemblies.

Non-Essential Retail businesses: Non-essential retail businesses must close storefront and/or brick-and-mortar premises operations while Executive Order 107 is in effect. All recreational and entertainment businesses must close to the public, including: Casinos; Racetracks; Gyms and fitness centers; Entertainment centers such as movie theaters, performing arts centers, concert venues, and nightclubs; Indoor portions of retail shopping malls; and Places of public amusement. Business may continue any on-line operations.

Personal-Care businesses: Personal-care businesses that by their very nature result in noncompliance with social distancing must be closed to the public and remain closed as long as this Order remains in effect. This includes: Barbershops; Hair salons; Spas; Nail and eyelash salons; Tattoo parlors; Massage parlors; Tanning salons; and Public and private social clubs.

Bars and Restaurants: Bars and restaurants in New Jersey must be closed for on-premise service and may provide take-out and delivery service only. Drive-throughs, take-out, delivery offered by restaurants, and other delivery services can continue to operate.
Exempt Businesses: Certain essential businesses and facilities are considered exempt from these closures and may remain open:

Essential retail businesses that are exempt from the mandate to cease storefront operations include:

Grocery stores, farmer’s markets and farms that sell directly to customers, and other food stores, including retailers that offer a varied assortment of foods comparable to what exists as a grocery store;

Pharmacies and medical marijuana dispensaries; Medical supply stores;

Gas stations; Convenience stores;

Ancillary stores within healthcare facilities;

Hardware and home improvement stores;

Vehicle rental locations;

Banks and other financial institutions with retail functions; Laundromats and dry-cleaning services;

Stores that principally sell supplies for children under five years;

Pet stores and veterinary service locations;

Car dealerships, but only for auto maintenance and repair, and auto mechanics;

Printing and office supply shops; Mail and delivery stores; and Liquor stores.

All businesses or non-profits must accommodate their workforce for telework or work from home arrangements wherever practicable. To the extent they have employees who need to be on site, they should operate with the minimal number of on-site employees as possible to ensure critical operations can continue. Examples of such employees include cashiers or store clerks, construction workers, utility workers, repair workers, warehouse workers, lab researchers, IT maintenance workers, janitorial and custodial staff, and certain administrative staff.

Manufacturing, industrial, logistics, ports, heavy construction, shipping, food production, food delivery, and other commercial operations may continue operating, but as explained above, they should limit staff on site to the minimal number to ensure that essential operations can continue.

Medical facilities may continue to operate. Medical facilities include any facility where a sick or injured person is given care or treatment, such as: doctor’s offices, hospitals, dentist offices, long-term care facilities, and other medical offices.

Employees reporting to work are permitted to travel to and from their place of business. Businesses are encouraged to give each employee a letter indicating that the employee works in an industry permitted to continue operations.

Governor Murphy also signed Executive Order No. 108, which invalidates any county or municipal restriction that in any way will or might conflict with any of the provisions of Executive Order No. 107. This is effective at 9 p.m. on Saturday, March 21 as well. The only exceptions are two categories over which municipalities or counties may impose any additional restrictions: 1) online marketplaces for arranging or offering lodging and 2) municipal or county parks.

If you believe that your retail business or operations are unique and should be included as “essential,” you may submit it to the State Director of Emergency Management, who is the Superintendent of State Police. The Director has the discretion to make additions, amendments, clarifications, exceptions, and exclusions to these lists.

We will continue to track local and national information and report as new news becomes available through our COVID taskforce. If you care to look directly, go to www.covid19.nj.gov.

If you have questions or concerns, please do not hesitate to email any of our COVID task force members and we will find the applicable person on our team who can assist you. bamolotsky@duanemorris.com; ppjosephson@duanemorris.com; dcanderson@duanemorris.com; jsegal@duanemorris.com; or slcaffrey@duanemorris.com.

Be safe.

Philadelphia – Construction and the Intersection with Governor Wolf’s Shut Down of Physical Locations of “Non-Life Sustaining” Businesses Announcement

Good afternoon and hope you and your loved ones are doing well under the circumstances.

As you likely know, and as we blogged about late last week and updated this morning, Governor Wolf of PA has issued a closure order for “non-life sustaining” businesses. There is a list on line of the life sustaining businesses. All “non-life sustaining” businesses were required to close their physical locations as of Thursday at 8 PM. This Order was modified this morning, March 21 with a few changes to the list of businesses that qualify as “life sustaining” and a change to the process of requesting a waiver. Please see our earlier post.

In response to Governor Wolf’s order, which includes construction in “non-life supporting” business column and which has shut down construction sites in Pennsylvania, the Philadelphia Department of Licenses and Inspections offered the following guidance.

1. Construction work must stop by Friday, March 27, 2020 at 5 p.m.

The additional time is provided in the interest of public safety and protection against unnecessary property damage.

Construction sites must be made safe and secure by March 27 at 5 p.m.

Contractors are directed to take proper measures to protect adjacent properties, remove or fasten items that are or could become loose, secure sites against trespass, and complete work necessary to protect and ensure the structural integrity of buildings under construction.

Occupied residential properties must be left in safe and habitable condition.

2. Routine maintenance and repair of existing buildings is exempted from the order and may continue.

3. Emergency systems repair and replacement are also exempted and may continue. The work must be performed by a license contractor and with permits as required by the Philadelphia Administrative Code.

Examples include:
Roof repair
Plumbing leaks
Hot water heater replacement
Fire safety systems repair

Contractors are required to obtain permits within 3 days of the emergency repair or replacement. At this time new permit applications are required to be filed using L&I’s eCLIPSE system.

https://www.phila.gov/2020-03-20-li-issues-guidance-on-construction-work-in-light-of-governors-march-19th-order.

Additional information will be provided as it becomes available.  Stay safe.

Please do not hesitate to email our COVID team if we can be of assistance or if you have any questions – slcaffrey@duanemorris.com; bamolotsky@duanemorris.com; jsegal@duanemorris.com; dcanderson@duanemorris.com

From the Land of OZ – Timing for Filing Forms 8996 and 8997 and the 180 day investment period – Spring Forward!

Good morning/afternoon friends. As we draw close to March 15th, a magic day for partnerships and S corps. for required tax filings, if you have invested in a QOF or a QOZB, I wanted to politely reach out and remind you all of something your accountant is likely to have already covered but, just in case:

1. Individuals – have 180 days from their gain event to put as much or as little capital gains as they want into a QOF. The individual needs to file a Form 8997 for his/her individual OZ investments. This form is available on line at www.irs.gov and is due with your individual return in April.

2. Partners in Partnerships; Shareholders in S Corps. – as you likely know, the final regulations issued in December 2019 allow partners and shareholders to invest capital gains 180 days from when the return for the relevant entity is due. This due date, WITHOUT EXTENSION, is March 15th. 180 days from March 15th takes one to September 11th. Thus, if you are a shareholder in an S corp or a partner in a partnership that had 2019 gain that is distributed to you in your individual capacity, you have until September 11, 2020 (this year) to place your gain into an QOF and still qualify. That is for you in your individual capacity friends.

The entity that is the QOF (the qualified Opportunity Zone Fund) is required to file form 8996 with its tax return to tell the IRS it wants to be treated as a QOF. If the QOF files an extension, this form would be due with the extension. Note, the September date for the individual is NOT extended regarding the timing for their investments into a QOF and the individual is required to make a decisions 180 days from when the return was originally due (i.e., March 15th).

3. QOZBs – as discussed, if relevant to you, QOZBs do NOT need to file any forms with the IRS. That said, they still need to meet the 70% test, the 50% test and 5% tests in order for the QOF that has invested in them to qualify; so their paperwork is very very relevant, they just don’t need to file anything with the IRS. Please note that the QOZB’s information will still be needed for the QOF to file its form 8996 as there are specific questions about the QOZB contained in the QOF’s filing paperwork.

I know, clear as mud! Just note, I did not make up the rules just trying to keep friends and clients from running afoul of them. If you have any questions or concerns, please reach out via email. I am traveling with my family (yes, I know, wash my hands) the rest of this week through Monday but will have access to email, just please be patient as out with my family. Best regards.

Over and out from the Land of OZ. -Brad