9 Census Blocks in Monterey County were included in the 879 tracts nominated by Governor Brown for inclusion as Federal Opportunity Zones (8 in North County/Peninsula and 1 in South County). Track #14102 on the south/southeast edge of the City of Marina (northern edge of the former Fort Ord) is among them. Downtown Seaside has 2 large tracts, and the City of Salinas has 5.
These blocks, now included in the Department of Treasury designated Qualified Opportunity Zones under Internal Revenue Code (IRC) Section 1400Z-1(b)(1)(B).
While the nuances of the Federal tax policy on this item are still being finalized we expect these zones to provide new investment to catalyze long desired infrastructure and urban development. We’ll maintain regular updates to this post and see the following sites for additional information:
The U.S. Department of the Treasury has certified California’s nominated eligible census tracts and has designated all 879 nominated tracts as Qualified Opportunity Zones under Internal Revenue Code (IRC) Section 1400Z-1(b)(1)(B).
Opportunity Zones in California
(Reposted from Department of Finance) The federal tax bill passed at the end of December 2017 allows the Governor to designate certain census tracts as Opportunity Zones. Investments made by individuals through special funds in these zones would be allowed to defer or eliminate federal taxes on capital gains. The Governor can designate up to 25 percent of census tracts that either have poverty rates of at least 20 percent or median family incomes of no more than 80 percent of statewide or metropolitan area family income. There are 3,516 census tracts in 54 California counties that would qualify under one or both of the mandatory criteria, allowing the Governor to designate up to 879 tracts. As census tracts are designed to capture geographic areas of around 4,000 people, more than 3 million Californians would potentially be located in one of these areas.
Preliminary Recommended Tracts
In early March, the Administration put a preliminary recommendation of tracts out for public comment. It included 798 tracts using the following criteria:
- Focus on Poverty. Select only those tracts that meet the federal poverty criteria to focus efforts on those poorest areas of the state. In addition, within each county, focus on the poorest areas (top 30 percent of eligible tracts).
- Areas with Business Activity. Designating tracts with at least 30 business establishments helps distinguish primarily residential tracts from those that are zoned to encourage more business investment.
- Geographic Diversity. Include the tracts necessary for each county to have at least two designations.
Over the course of nearly two weeks of a public comment period, Finance received robust public comment:
- 2,684 comments regarding 1,518 individual census tracts, and
- Comments from a total of 221 individuals, cities, counties, legislators, and organizations.
Recommended Final Designation
Designate a total of 879 census tracts.
- Adjust for High Median Incomes. Limit selection to only those tracts that have a median income below $100,000. This eliminates a number of university campuses that were initially captured due to low student incomes but received a number of comments about not being appropriate for the program.
- Follow Local Guidance When Possible. Accept recommendations of local cities and counties to swap preliminary designations for alternative tracts. The comment instructions made it clear these comments would receive top priority and defers to local control and decision making.
- Remove Tracts when Critiqued. Remove the 183 tracts that received negative comments.
- Focus on Overlap with Existing Programs. The selected tracts are heavily consistent with the designation of the Legislature and Governor for disadvantaged communities for Cap and Trade purposes. Of the chosen tracts, 96 percent overlap with AB 1550 designations and 64 percent have SB 535 designations.
- Add Tracts When Requested. Designate those tracts that were specifically requested to the extent feasible within the overall cap.
- Geographic Distribution. Using the above criteria and the ability to designate contiguous tracts, the designations include 57 of the state’s 58 counties.