Texas has submitted 605 census tracts across 105 counties for consideration under the next federal Opportunity Zone program. The Texas Economic Development & Tourism Office sent the nominations to the U.S. Treasury on September 4, giving the proposed sites a path toward federal certification and potential tax benefits for qualifying investment.
Key Takeaways
- Texas nominated 605 census tracts across 105 counties for Opportunity Zone 2.0.
- The Texas Economic Development & Tourism Office submitted the nominations to the U.S. Treasury on September 4.
- The 605 nominations represent 25% of Texas’ 2,420 eligible census tracts.
- Austin-area nominations include the Dog’s Head area between downtown Austin and the airport.
- U.S. Treasury certification is expected by November 28, 2026.
Texas Submits 605 Census Tracts for Opportunity Zones
Texas Opportunity Zones are moving into the federal certification process after the Texas Economic Development & Tourism Office submitted 605 census tracts to the U.S. Treasury on September 4. The nominations cover 105 counties and were selected under the state’s Opportunity Zone 2.0 process.
Opportunity Zone 2.0 is the renewed federal program that will take effect January 1, 2027, and run through December 31, 2036. The program provides federal tax incentives for investors who place eligible capital into qualified Opportunity Zone assets.
Texas was permitted to nominate 25% of its eligible census tracts. The state had 2,420 tracts eligible for consideration, resulting in a maximum nomination of 605 sites.
The September 4 submission does not make the nominated tracts final Opportunity Zones. The U.S. Treasury must certify the proposed designations before the sites receive federal Opportunity Zone status. Official certification is expected by November 28, 2026.
The Austin area is among the regions represented in the nominations. Several sites across the Austin metro were identified for consideration, including the Dog’s Head area between downtown Austin and Austin-Bergstrom International Airport.
Texas’ broader economic development activity has also included major infrastructure commitments, including a recently approved Texas transportation investment plan covering roads, transit, rail, aviation and maritime projects.
State Selection Covers 105 Texas Counties
The 605 nominated tracts are spread across 105 Texas counties. The state used a selection process led by the Texas Economic Development & Tourism Office within the Office of the Governor.
Local economic development organizations and county judges were asked to submit eligible tracts in their communities for consideration. Texas officials identified four criteria for the selection process: federal eligibility, local support, project viability and geographic balance.
Local support was one consideration in selecting sites. Communities were encouraged to identify locations where local incentives, rebates or agreements could support investment activity.
Project viability was another criterion. The state asked communities to prioritize locations where private capital could realistically be deployed within 24 to 48 months and where investment could support goals such as affordable housing commitments, anti-displacement measures and workforce initiatives.
Geographic balance was also included in the state’s criteria. The process called for representation across Texas regions while taking into account opportunities for rural communities and areas affected by a declared disaster during the preceding three years.
The Austin-area nominations provide a specific example of the sites under consideration. Several locations in the metro were included in the federal Opportunity Zone submission, including the Dog’s Head area identified in September 9 reporting.
The statewide nomination process fits within a larger Texas economic development environment that includes efforts to attract and retain business investment. The state was also recognized earlier this year for business growth and economic development based on job-creating investment projects.
Nominated Sites Reach the Federal Program Limit
The 605-site submission reaches the maximum number of Opportunity Zone nominations Texas could make under the new federal rules.
Under Opportunity Zone 2.0, governors can nominate 25% of their state’s eligible census tracts every 10 years. Texas’ 2,420 eligible tracts produced a 605-tract nomination limit.
The current program differs from the original Opportunity Zone framework in several ways. Opportunity Zone 2.0 tightens the eligibility requirements for qualifying tracts and removes the contiguous tract rule that allowed certain neighboring tracts to qualify under the previous program.
The updated framework also includes provisions intended to support rural Opportunity Zones. Rural Qualified Opportunity Funds that maintain at least 90% of their capital in rural Opportunity Zones can qualify for a 30% basis step-up after five years, while the substantial-improvement threshold for rural Opportunity Zones has been reduced to 50% from 100%.
The federal program provides a standard five-year deferral and a 10% basis step-up for investors. It also retains a 10-year tax-free appreciation provision and allows stepped-up fair market value after 30 years without a required exit.
The tax provisions apply to qualifying investments rather than automatically providing benefits to every business or property located inside a nominated tract.
The Opportunity Zone nominations are separate from other state economic development mechanisms. Texas has also pursued infrastructure spending that affects commercial activity, including transportation projects intended to improve connections among communities and economic centers.
Eligible Texas Tracts Form the Basis for Selection
Texas began the nomination process with 2,420 census tracts that met the federal eligibility requirements. The state then selected 605 of those tracts for submission to the U.S. Treasury.
The eligibility rules under Opportunity Zone 2.0 include income and poverty requirements. A tract can qualify if its median family income is below 70% of the applicable state or metropolitan median family income, or if its poverty rate is at least 20% and its median family income is no more than 125% of the applicable state or metropolitan median family income.
The updated rules also removed the contiguous tract provision. Under the earlier program, certain adjacent tracts could qualify based on their relationship to an eligible tract. That allowance is not part of Opportunity Zone 2.0.
The Austin nominations illustrate the range of locations being considered under the new framework. One nominated area is the Dog’s Head, a large tract of land shaped by the Colorado River between downtown Austin and the airport. The area is among the Austin-area sites identified for the federal program.
The Austin-area nominations also include locations that could intersect with the region’s existing development infrastructure. Texas’ infrastructure spending has included transportation and connectivity projects, while state infrastructure investments and business growth have been tied to transportation, digital infrastructure and commercial activity.
The nominations therefore include specific development areas alongside eligible census tracts across the state. Final status remains dependent on federal certification.
Federal Certification Remains the Next Step
The U.S. Treasury is responsible for certifying the Texas nominations under Opportunity Zone 2.0. The federal designation process began July 1, 2026, and official certification is expected by November 28.
Until certification occurs, the 605 locations remain nominated tracts rather than finalized Opportunity Zones. The state has completed its portion of the nomination process by submitting the selected sites to the federal government.
Opportunity Zone 2.0 designations are scheduled to take effect for 10 years beginning January 1, 2027. Existing Opportunity Zone 1.0 designations remain eligible through December 31, 2028, creating a two-year overlap between the two programs.
The original Texas Opportunity Zone program involved a different set of designations. In 2018, Gov. Greg Abbott nominated 628 census tracts across 145 Texas counties under Opportunity Zone 1.0. Those designations were selected from the state’s eligible tracts under the rules then in effect.
The new nomination process has a smaller maximum number of sites and different eligibility requirements. Texas officials submitted the 605 Opportunity Zone 2.0 nominations on September 4 after gathering eligible tracts from local communities and applying the state’s selection criteria.
For the Austin region, the federal review will determine whether nominated locations such as the Dog’s Head receive the new designation. Across the state, the same certification process applies to the 605 nominated census tracts.
Frequently Asked Questions
How many Texas sites were nominated for Opportunity Zones?
Texas nominated 605 census tracts across 105 counties for Opportunity Zone 2.0. The 605 sites represent 25% of the state’s 2,420 eligible census tracts.
Which Texas areas are included in the Opportunity Zone nominations?
The nominations cover 105 Texas counties. Austin-area sites are among those nominated, including the Dog’s Head area between downtown Austin and Austin-Bergstrom International Airport.
What is Opportunity Zone 2.0?
Opportunity Zone 2.0 is the renewed federal program taking effect January 1, 2027. It provides tax incentives for qualifying investments in designated areas and includes revised eligibility rules and additional provisions for rural zones.
When did Texas submit its Opportunity Zone nominations?
The Texas Economic Development & Tourism Office submitted the nominated tracts to the U.S. Treasury on September 4, 2026. Federal certification is expected by November 28, 2026.
Do the nominated sites still require federal approval?
Yes. The 605 sites must receive U.S. Treasury certification before they become Opportunity Zone 2.0 designations. The new designations are scheduled to take effect January 1, 2027.
Disclaimer: This article is for general informational and educational purposes only and does not constitute financial, tax, legal, or investment advice. Opportunity Zone programs and related tax benefits have specific eligibility requirements, rules, and limitations that may change over time. Individuals and businesses considering Opportunity Zone investments should consult with qualified tax professionals, financial advisors, or legal counsel regarding their specific circumstances.
