Tract Nomination Advocacy Checklist

Alternative: poverty rate test If the MFI test fails, a 20%+ poverty rate may still qualify -- but only if MFI is also at or below 125% of area median. Both conditions must hold.

Check rural designation status Rural tracts (outside cities/towns >50,000) qualify for QROF treatment: 30% basis step-up vs. 10%, and 50% substantial improvement threshold vs. 100%. Confirm whether this tract is rural under OBBBA definition.

Confirm tract is not contiguous-only eligible Contiguous tract carveouts are eliminated in OZ 2.0. The tract must independently qualify as a low-income community.

Assess basis-to-ceiling spread Model current acquisition cost vs. realistic post-development value. The gain-exclusion benefit only pays out on appreciation -- tracts with thin spreads underperform regardless of designation.

Review 30-month substantial improvement feasibility The QOF or QOZB must double (or for rural, increase 50%) the adjusted basis of acquired tangible property within 30 months. Is that physically and financially achievable on this site?

Map overlapping incentives OZ equity stacks best with other programs. Check for: Historic Tax Credits, LIHTC, New Markets Tax Credits, California IIG/AHSC grants, local density bonuses or fee waivers.

Check entitlement and zoning risk California entitlement timelines can exceed the 30-month improvement window. Flag any CEQA exposure, SB 330 protections, or AB 2011 streamlining that applies.

Evaluate infrastructure and transit access GO-Biz and prior OZ 1.0 research both flag transit access, broadband, and basic infrastructure as top predictors of whether a tract actually draws investment post-designation.

Identify local government champion A city council member, county supervisor, or economic development director co-signing the nomination request dramatically increases traction. Local government advocacy is how OZ 1.0 designations were shaped.

Draft a data-backed investment case (1–2 pages) Include: census tract ID, LIC eligibility documentation, MFI or poverty rate data, proposed project or use case, projected job creation, capital stack overview, and complementary incentives.

Attach a community impact narrative GO-Biz responds to stories, not just spreadsheets. Include housing unit counts, workforce development context, or anchor tenant commitments. Governors nominated heavily on community storytelling in OZ 1.0.

Note any prior OZ 1.0 investment activity in or adjacent to the tract Prior investment signals credibility. If the tract is contiguous to an existing OZ 1.0 zone with completed projects, document it -- even though contiguous designation itself is gone, the investment thesis carries.

Coordinate with any QOF sponsor or fund manager in the picture A fund sponsor who can commit to deploying capital into a designated tract is the single strongest advocacy asset. If a developer or founder has a project, that founder should co-author the nomination letter.

Monitor GO-Biz for the draft California tract list (expected early-to-mid July) The state can revise submissions throughout the 90-day window. If your target tract is not on the initial draft, a follow-up push during July-August can still work.

Track Frances Kern Mennone's OZ 2.0 State Designation Tracker Published as a recurring PDF, it monitors all 56 U.S. jurisdictions for nomination progress. Use it to benchmark California's pace against peer states.

Flag the Sept 28 hard deadline for client and sponsor communications Treat Oct 28 as informational only. All materials, follow-up letters, and co-advocacy submissions should be in-hand by September 15.

Prepare a "Plan B" tract list (2–3 alternatives) California must cut ~30% of its OZ 1.0 tracts under the tighter criteria. Have alternative qualifying tracts identified so clients can pivot without losing deal momentum.

Identify clients with 2026 capital gains triggering before Dec 31 The 180-day reinvestment clock can carry into 2027 for some K-1 gains -- an important OZ 2.0 on-ramp. Flag pass-through clients selling assets in H1 2026.

Verify existing OZ 1.0 investments are in qualifying tracts pre-2029 OZ 1.0 tracts remain valid through Dec 31, 2028 even if not re-designated. Existing fund investors don't need to panic -- but they should know their tract's OZ 2.0 status before refinancing or making new capital calls.

Run preliminary QOF suitability check for interested investors Confirm: eligible gain source, 180-day investment window, qualified fund structure, and that the investor can sustain a 10-year hold. Rule out unsuitable candidates early.

Prepare a client-ready OZ 2.0 vs. 1.0 comparison brief Most HNW clients do not yet understand the new benefit structure. A clean one-pager comparing deferral mechanics, basis step-up, rural uplift, and the new 30-year appreciation window positions you as ahead of the market.

Set a calendar reminder for Jan 1, 2027 client review trigger New investments on or after Jan 1, 2027 are governed by OZ 2.0 rules. Clients with deferred gains should have a structured decision point in Q4 2026 / Q1 2027.