Governor Wants Narrow Rules For California Opportunity Zones

California Gov. Gavin Newsom’s proposed twist on federal opportunity zone tax breaks would cap investments from qualified funds and limit investments to affordable housing and green energy projects.

Newsom wants California to conform narrowly to the opportunity zone program created in the 2017 federal tax law that allows investors to defer or reduce tax on gains from investments in the zones. The Democrat released details of the proposal late May 20 and is asking lawmakers to include it in the budget plan they are hammering out in the next few weeks.

The investment caps and limited scope of eligible projects, ...