U.S. representative Jim Hagedorn of Minnesota’s first district is proposing an expansion of opportunity zones. The proposal would increase the percentage of low-income opportunity zones in each state from 25% to 30%. Rep. Hagedorn’s proposal would reopen the enrollment period for 90 days to allow each state to designate additional census tracts as opportunity zones.
Governors were permitted to designate up to 25% of their states’ low income communities as opportunity zones during the initial rollout of the program. Currently, opportunity zones cover about 25% of the country’s low income census tracts according to the Economic Innovation Group.
The legislation proposed by Rep. Hagedorn is estimated to create an additional 950 opportunity zones across the country. Currently there are 8,764 opportunity zones, including tracts in American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.
The bill, which is co-sponsored by Troy Balderson (Ohio), Ashley Hinson (Iowa), and Jeff Duncan (South Carolina), would also extend the tax deferral date from December 31st, 2026 to December 31st, 2029. Currently, investors who use capital gains proceeds to invest in qualified opportunity zone projects are able to defer the recognition of related taxes until the end of 2026.
“Opportunity zones have been a key to spurring workforce development, job creation, and economic growth in communities,” said Congressman Hagedorn. “My legislation is aimed at promoting investment and development in places like North Mankato. Expanding opportunity zones will give countless Americans the chance to succeed and move our nation’s economy forward when we need it the most.”
Hagedorn’s district includes Mankato in Blue Earth County. There are currently two opportunity zones in that county.