Summary
The 2025 Reconciliation Act, also known as the One Big Beautiful Bill Act (OBBBA), calls on governors to act in summer 2026 by nominating one-quarter of their low-income census tracts for Opportunity Zone (OZ) status. OZ designations guide tens of billions of dollars in private sector investment each year. The zone designation process therefore gives governors a rare opportunity to shape the landscape of investment in their states — and channel that investment towards the low-income communities that need it most.
This guide is intended to help governors and their staff, as well as the mayors and local officials they will consult, make the most informed OZ designations possible. The guide will:
- Explain what Opportunity Zones are and how they work
- Summarize the national zone designation process and timeline
- Establish a framework for selecting zones with purpose, including:
- How to set up a good selection process
- How to identify good census tracts for OZ status
Experience from OZ 1.0 underscores that OZ designation alone does not generate investment. Only well-chosen zones paired with development-ready policies will attract capital and deliver impact at scale.
This guide is organized around eight principles that define successful OZ designation strategies:
- Get a head start
- Set a statewide economic vision
- Designate a lead coordinating entity within state government
- Engage local partners strategically
- Balance economic need and investment potential
- Combine both quantitative and qualitative insights
- Embrace purposeful transparency
- Align OZ nominations with supportive policy tools
