Buried within the controversial Republican-backed tax bill that passed into law late last year is a new Federal program intended to encourage new reinvestment in low-income communities.
The Opportunity Zones Program allows the Governor of each state, with approval from the United States Department of the Treasury, to designate up to 25 percent of eligible census tracts as "Opportunity Zones." Eligible census tracts within metropolitan areas are defined as those in which the median income does not exceed 80 percent of the greater statewide median family income or the metropolitan area family income.
Per a motion by Los Angeles County Supervisor Mark Ridley-Thomas, the program "creates a mechanism that enables private investors with capital gains tax liabilities to receive competitive tax breaks for investing in Treasury Department-approved Opportunity Funds for at least ten years." Thomas' motion goes on to describe the program as "a unique opportunity to drive new investment and create new jobs in low-income urban and rural communities that have not benefited from the economic resurgence that has taken place since the end of the Great Recession."
Should the motion be adopted by the full Board of Supervisors at its February 20 meeting, various County departments will be instructed to work with Governor Jerry Brown's Office of Business and Economic Development to provide input into designated unincorporated tracts in Los Angeles County for Opportunity Zone designation. Governor Brown has until March 21 to select the census tracts or to request a single 30-day extension.