Opportunity Zones Approved for Nomination to Governor’s Office

On Monday July 20th the City Council adopted a resolution to recommend that the Governor nominate five eligible census tracts in Southeast San Rafael as federal Opportunity Zones (OZs). Congress created the initial OZ program under the Federal Tax Cuts and Jobs Act of 2017 to encourage investment in economically distressed communities. The program offers preferential federal tax treatment for capital gains invested in economic development projects located within designated low-income census tracts. Eligible investments may include new real estate construction, rehabilitation of vacant or underutilized properties, equity investments in operating businesses, and infrastructure or energy-related projects, among others.

The OZ program was scheduled to sunset December 31, 2026, however, the "One Big Beautiful Bill Act" of 2025 made the OZ program permanent (OZ 2.0). Under OZ 2.0, the U.S. Department of the Treasury will certify which census tracts qualify as OZs for the next ten years based on nominations made by governors according to the following timeline:

OZ 2.0 Census Tract Designation Timeline

• April 2026: The IRS released the official list of census tracts eligible for OZ 2.0 designation.
• June 15, 2026: Application window opened for local jurisdictions to submit recommendations to the Governor.
• July 20, 2026: Application window closes for local jurisdictions to submit recommendations to the Governor.
• August 1, 2026: Public comment period opens.
• September 30, 2026: Deadline for Governors to nominate up to 25% of their eligible low-income census tracts for OZ status certification by the U.S. Department of the Treasury.
• November 2026: The U.S. Department of the Treasury certifies nominations.
• January 1, 2027: The new OZ map goes into effect for 10 years.