DATE: March 6, 2018
TO: Board of Supervisors
SUBMITTED BY: Steve E. White, Director
Department of Public Works and Planning
SUBJECT: Opportunity Zones Program
RECOMMENDED ACTION(S):
TITLE
Authorize the Chairman to execute letter to Governor Edmund G. Brown Jr. identifying low-income community census tracts recommended for selection as Opportunity Zones, in accordance with H.R. 1, the Tax Cuts and Jobs Act of 2017.
REPORT
The Tax Cuts and Jobs Act of 2017 authorized the establishment of Opportunity Zones in low-income areas of the state to attract private investment capital. Approval of the recommended action will identify and recommend eligible low-income census tracts to the Governor for nomination to the U.S. Treasury for designation as Opportunity Zones. The recommended census tracts encompass the Malaga, Calwa, and Golden State Industrial Corridor areas.
ALTERNATIVE ACTION(S):
Your Board may choose to revise the recommended census tracts.
FISCAL IMPACT:
There is no fiscal impact associated with the recommended actions.
DISCUSSION:
The Tax Cuts and Jobs Act of 2017 (Public Law No. 115-97) authorized the Opportunity Zones Program on December 22, 2017. This program allows Governors of every U.S. State and territory to nominate up to 25% of their low income/high poverty census tracts to be designated as Opportunity Zones. The Governor's deadline to nominate census tracts to the U.S. Treasury is March 21, 2018, 90 days after enactment. The law authorizes the designation of opportunity zones in low-income communities and provides various tax incentives for investments in the zones. Further, it allows taxpayers to temporarily defer the recognition of capital gains that are invested in the zones. Investments in opportunity zones or opportunity funds that are held for at least five years are eligible for capital gains tax reductions or exemptions, depending on how long the investment is held. The goal is to drive long-term capital to distressed co...
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