How were Opportunity Zones determined in Montana?
As of December 22, 2017, state governors had 90 days to designate state Opportunity Zones. A maximum of 25 percent of state low-income census tracts could be designated as Opportunity Zones. If a given state had less than 100 low-income census tracts, it may still designate 25 state Opportunity Zones. Montana designations were limited to 25, and no indications were given by the U.S. Treasury that this process would allow for additional or future nominations.
Governor Steve Bullock directed the Montana Department of Commerce (MDOC) to research and develop criteria to help guide Opportunity Zone designations. Eligible jurisdictions utilized the Opportunity Zone Proposal application to nominate tracts. Eligible applicants were cities, towns, counties, tribal governments, CRDCs, or lead economic development organizations with an eligible Census tract within their boundary.
After collecting application responses from eligible applicants, an interdisciplinary review committee made nomination recommendations to the governor based on the potential for development, demonstrated need and the existing plans presented in each application. Designated Census tracts demonstrating the highest degree of probability for development currently or within the 10-year designation period were be given favorable preference. Preference was considered for communities participating in the Montana Main Street Program or that had previous or expected capacity for housing and small business development.
Applicants were asked to clearly identify how the selected Census tracts leveraged other resources, utilized existing economic development areas such as current Targeted Economic Development Districts, Tax Increment Financing Districts, Urban Renewal Districts or enhanced other local planned or existing development. The Governor made final recommendations and submitted the nominated tracts to the U.S. Department of the Treasury in April 2018.
The market-oriented approach of Opportunity Zone designations is limited by the private investment interest within a designated community and does not guarantee economic development. Capitalizing upon an Opportunity Zone designation will depend partially on the area’s existing and future ability to foster private economic growth in their community. The benefits of this market approach will be realized most by communities with the potential for growth. Though it is important to direct investment into areas that are best situated to cultivate economic growth, it is also necessary to realize the potential this program has to help areas in need of economic revitalization.
Additional information can be found on the IRS website: https://www.irs.gov/newsroom/opportunity-zones-frequently-asked-questions