QOZB Operating Agreements in the OZ Crossover: Sponsor-Side Inserts for 2026 and 2027

Updated August 17, 2026 to reflect Notice 2026-40.

The Rural Opportunity Zones piece I posted earlier this year stayed at the fund level and the investor level: gain deferral, the December 31, 2026 inclusion date, the basis step-up, the ten-year exclusion. None of those mechanics live at the QOZ Business. This piece is its companion at the operating tier. It sets out the Sponsor-side inserts for the operating agreement of the entity that actually owns the project, the qualified opportunity zone business (“QOZB”), when that entity will take QOF Member capital in both 2026 (under OZ 1.0) and 2027 (under OZ 2.0, the permanent program enacted by the One Big Beautiful Bill Act, Pub. L. No. 119-21).

The inserts below come from a Sponsor-side form I use for QOZB operating agreements. They are written to favor the Manager and the Sponsor while still protecting the QOF Members enough that the project can take their capital across the crossover. Party names and project details are omitted; the drafting is the point. Each section reproduces the operative language, explains what it does and why, and flags where a knowledgeable QOF Member’s counsel will push back.

A scope note. The QOZB does not defer gain and has no inclusion date, step-up, or exclusion of its own. Those are QOF-level and investor-level attributes. For the QOZB, the 2026-to-2027 crossover matters in a narrow set of ways: the qualified opportunity zone map that applies to each QOF Member’s capital depends on when that capital is contributed; the QOZ Business Property rules (acquisition date, original use, substantial improvement) are tested under the regime applicable to each QOF Member’s contribution; and the information reporting the QOZB furnishes to its QOF Members applies across both regimes. The inserts address those points, not the fund-level mechanics.

Since these inserts were first drafted, the IRS issued Notice 2026-40, its first OZ 2.0 transitional guidance. Where the Notice bears on an insert, I note it below and in the closing checklist. I cover the Notice in full in a separate article.

Vintage: why 2026 versus 2027 matters at the QOZB level

The move that unlocks the rest of the drafting is to define Vintage: a classification, recorded on the books and records of the Company, of each QOF Member capital contribution as either OZ 1.0 capital (contributed on or before December 31, 2026) or OZ 2.0 capital (contributed on or after January 1, 2027). Once Vintage is in the definitions, the agreement can write covenants that toggle by it.

Here is the orientation, reproduced from the form’s preamble. It is not operative text; it is a map.

QOZB issue	Capital received on or before 12/31/2026 (OZ 1.0)	Capital received on or after 1/1/2027 (OZ 2.0)
Applicable QOZ map	OZ 1.0 (TCJA) designations, valid through December 31, 2028.	OZ 2.0 decennial designations effective January 1, 2027. A current OZ 1.0 tract may or may not be redesignated.
QOZ Business Property	Acquisition-date and original-use requirements tested under OZ 1.0 rules.	Tested under OZ 2.0 rules, subject to the Notice 2026-40 transition rule for property acquired after December 31, 2026.
Substantial improvement	100% of basis (standard); 50% for rural property held in connection with a QROF.	Same: 100% standard; 50% for rural property held in connection with a QROF (effective July 4, 2025).
Reporting	QOZB furnishes Section 6039L statements to each QOF Member; Section 6726 penalties apply for the Company’s own failures.	Same reporting and penalty regime applies.

Three QOZB-level consequences follow. First, the project tract has to be a designated qualified opportunity zone under the OZ 1.0 map for any 2026 capital, and under the OZ 2.0 map effective January 1, 2027 for any 2027 capital. A current OZ 1.0 tract may or may not be in the OZ 2.0 list once the decennial designations land, and you will not know until they are certified. Second, QOZ Business Property serving OZ 2.0 capital has to satisfy the OZ 2.0 acquisition-date and original-use rules, subject to the important Notice 2026-40 exception discussed under Insert C. Third, the QOZB’s own Section 6039L reporting obligation to its QOF Members runs across both regimes, so the form has to capture the data either way.

There is a structuring point worth stating at the outset, because it is what these inserts assume. A QOZB does not need a QOF above it to exist. A sponsor can stand up the QOZB in 2026 on developer or GP capital, adopt a working capital plan, reach the funding and spend thresholds, and only then begin taking QOF capital in 2027. Notice 2026-40 protects exactly that sequence for an old-zone project, as described under Insert C and Insert D. The “Designation Fixed at Investment” rule in Insert B is the structural protection against an OZ 1.0 designation expiring under a QOF Member’s feet after the contribution is made.

Insert A: Definitions

These belong in the definitions section in alphabetical order, conforming lettering. If the host agreement already defines QOZ Business, QOZ Business Property, QOZ, QOF, the working capital safe harbor, or NQFP, reconcile rather than duplicate.

“QOF Member” means a Member that is, or that is wholly owned by, a qualified opportunity fund within the meaning of Section 1400Z-2(d) of the Code (under OZ 1.0 or OZ 2.0, as applicable) and that holds its Interest as a qualified opportunity zone partnership interest.

“OZ 1.0” means the qualified opportunity zone provisions of Sections 1400Z-1 and 1400Z-2 of the Code, and the Regulations and other guidance, as applicable to a QOF Member’s capital contribution made on or before December 31, 2026.

“OZ 2.0” means the qualified opportunity zone provisions of Sections 1400Z-1 and 1400Z-2 of the Code as amended by the OBBBA, and the Regulations and other guidance (including Notice 2025-50 and Rev. Proc. 2026-14), as applicable to a QOF Member’s capital contribution made on or after January 1, 2027.

“Vintage” means, with respect to each capital contribution by a QOF Member, its classification by the Manager as OZ 1.0 capital (contributed on or before December 31, 2026) or OZ 2.0 capital (contributed on or after January 1, 2027), as recorded on the books and records of the Company.

“Applicable QOZ Designation” means, with respect to a QOF Member’s capital contribution, the qualified opportunity zone designation in effect under the map applicable to that contribution’s Vintage: the OZ 1.0 designations for OZ 1.0 capital, and the OZ 2.0 designations effective January 1, 2027 for OZ 2.0 capital.

Two drafting choices are doing real work. The QOF Member definition reaches a member that is a QOF or that is wholly owned by a QOF. That one-level look-through avoids forcing every QOF to invest the QOZB capital directly and accommodates the structuring most fund sponsors actually use. The Vintage definition delegates the classification to the Manager, with the books and records of the Company as the conclusive record. That delegation matters every time a QOF Member argues, years later, that its capital should have been treated as a different Vintage to reach a better outcome.

The rest of the form’s definitions, including QOZ Business, QOZ Business Property, Substantial Improvement, Inclusion Event, Transition Guidance, and, where applicable, QROF and Rural Area, track the statutory definitions and are not reproduced here. Conform them to the host agreement on insertion.

Insert B: Continuous Qualification and Location by Vintage

This is the core crossover covenant at the QOZB level. It goes in the manager’s duties or company-purpose covenants.

(a) Continuous Qualification. The Manager shall operate the Company so that the Company is, and continuously remains, a QOZ Business. Without limitation, the Company shall satisfy the requirement that at least seventy percent (70%) of its tangible property is QOZ Business Property, that at least fifty percent (50%) of its total gross income is derived from the active conduct of a trade or business in a qualified opportunity zone, that a substantial portion of its intangible property is used in the active conduct of that trade or business, and that less than five percent (5%) of the average unadjusted basis of its property is nonqualified financial property (Section 1397C(e) of the Code), and the Company shall not engage in any business described in Section 144(c)(6)(B) of the Code (a private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, racetrack or other gambling facility, or a store the principal business of which is the sale of alcoholic beverages for off-premises consumption).

(b) Location by Vintage. With respect to each QOF Member’s capital contribution, the Manager shall ensure that the project and the Company’s QOZ Business Property are located in a census tract that is a designated qualified opportunity zone under the Applicable QOZ Designation for that contribution’s Vintage. Accordingly, property serving OZ 1.0 capital must be located in a tract designated under the OZ 1.0 map, and property serving OZ 2.0 capital must be located in a tract designated under the OZ 2.0 map effective January 1, 2027.

(c) Designation Fixed at Investment. A census tract that is a qualified opportunity zone at the time a QOF Member’s capital contribution is made shall continue to be treated as a qualified opportunity zone with respect to that contribution, notwithstanding any later expiration, lapse, redesignation or non-redesignation of the tract, to the fullest extent permitted by the Code, the Regulations and other guidance. The Manager may rely on this principle in operating across Vintages.

Subsection (a) is conventional QOZB qualification language: the 70% tangible property test, the 50% active business income test, the small nonqualified-financial-property allowance, and the sin-business exclusion. Subsection (b) is the heart of the crossover at this tier. During the 2027 and 2028 overlap, the OZ 1.0 map and the OZ 2.0 map are both in effect, and a project tract may qualify under one but not the other. Confirming the tract under both maps, for the capital each is intended to support, is the diligence this covenant assumes.

Subsection (c) is the protection a Sponsor most wants in writing. The OZ 1.0 designations expire December 31, 2028. If the OZ 2.0 list does not include the tract, the agreement should still record the parties’ understanding that a tract designated when the OZ 1.0 capital was contributed remains a QOZ with respect to that contribution. Notice 2026-40 now backs this covenant with actual guidance rather than a purely contractual stand-in. Sections 5.02(2) and 5.02(3) of the Notice treat an expired zone as a QOZ through December 31, 2047 for the substantial-use element of the QOZ Business Property definition and for the 50%-gross-income test, for property and businesses that qualified before expiration or under the Notice’s transition rules. Citing those safe harbors alongside subsection (c) strengthens the Sponsor’s position. A QOF Member’s counsel may still negotiate the exact formulation, but some version of fixed-at-investment language, now supported by the Notice, belongs in the agreement.

Insert C: QOZ Business Property by Vintage

Same covenant cluster as Insert B.

(a) Qualifying Property by Vintage. The Company’s tangible property will satisfy the requirements of QOZ Business Property under the rules applicable to each QOF Member’s Vintage, including the acquisition-date and original-use requirements as they apply under OZ 1.0 and under OZ 2.0.

(b) Substantial Improvement. To the extent property is not original-use property, the Company shall substantially improve that property by making additions to basis exceeding one hundred percent (100%) of the adjusted basis of the property at the beginning of the applicable thirty (30) month period. [Rural alternative, if applicable: for property located in a Rural Area and held in connection with a QROF, the threshold is fifty percent (50%), effective for substantial-improvement determinations on or after July 4, 2025.]

The acquisition-date and original-use references differ between regimes. The OBBBA generally resets the acquisition-date reference for property tied to post-2026 investments, because a previously designated (old) zone has no “applicable start date” under amended § 1400Z-1(e)(2).

Notice 2026-40 then supplies a critical exception, and this is the point at which the pre-Notice drafting was incomplete. It is not the case that property serving 2027 capital in an old zone must always independently satisfy a fresh OZ 2.0 acquisition date. Under Notice 2026-40 § 5.01(2)(b), property acquired after December 31, 2026 for use in a previously designated zone may satisfy the acquisition requirement of § 1400Z-2(d)(2)(D)(i)(I) if the QOZB adopted a working capital plan on or before December 31, 2026, received at least 10% of the plan’s estimated working capital and spent (or entered a binding agreement to spend) at least 5% of it by that date, and the acquisitions are substantially consistent with the plan. Section 5.01(2)(c) extends the same treatment to QOZ stock and partnership interests acquired after December 31, 2026 under the plan, treating them as acquired after the applicable date. The Notice’s Example 5 works this through for a fund acquiring additional stock in December 2027 into a tract that was never redesignated. In short, an old-zone project can carry 2027 capital and property under a qualifying pre-2026 plan, and the covenant should be read together with that transition rule rather than as an absolute requirement of a new 2027 designation.

The Rural alternative in subsection (b) is the same 50% threshold covered in the Rural OZ piece, placed here at the QOZB level where it operates. Keep it if the project is in a Rural Area held in connection with a QROF; strike the QROF and rural references otherwise.

Insert D: Working Capital Safe Harbor Across Vintages

(a) The Manager shall administer the working capital safe harbor under Treas. Reg. Section 1.1400Z2(d)-1(d)(3)(v), including the sequential-infusion rules permitting an aggregate period of up to sixty-two (62) months, so as to accommodate capital contributions of more than one Vintage, and may maintain separate or supplemental working capital plans as the Manager determines advisable. [Attach the working capital plan(s) as an exhibit.]

The thirty-one-month working capital safe harbor was always tight, and the sequential-infusion rules extending it to an aggregate sixty-two months are what make a multi-Vintage QOZB workable. The drafting move that matters is the explicit acknowledgment that the Manager may maintain separate or supplemental working capital plans for capital of different Vintages. A single composite plan can work, but most projects will benefit from at least two, one tied to the 2026 deployment and a successor tied to the 2027 deployment.

Notice 2026-40 raises the stakes on this insert. For an old-zone project relying on the transition rule to deploy post-2026 capital, the working capital plan is now load-bearing rather than administrative. The plan must be adopted on or before December 31, 2026, and the QOZB must have received at least 10% of the plan’s estimated working capital and spent (or committed under a binding agreement to spend) at least 5% by that date. Notice 2026-40 § 5.01(2). The plan should therefore be a mandatory exhibit, not a bracketed afterthought, and the funding and spend milestones should be diligenced against the calendar. A working capital plan that fits in one paragraph rarely survives a Form 8996 audit.

Insert E: Reporting to QOF Members (Section 6039L) and Penalty Allocation (Section 6726)

This is QOZB-to-QOF reporting, the QOZB’s own obligation, distinct from anything the QOF Members report to Treasury.

(a) Statements to QOF Members. For each taxable year for which reporting is required under the Code, the Regulations and other guidance, the Manager shall cause the Company to prepare and furnish to each QOF Member the written statements required by Section 6039L of the Code (including the Company’s applicable trade or business code, the value of its tangible and intangible property, the approximate number of residential units of any real property, and the number of full-time equivalent employees or an indication of employment impact), so as to permit each QOF Member to satisfy its reporting under Section 6039K of the Code. The Manager shall maintain records reasonably supporting such statements and shall cooperate with each QOF Member in connection with the QOF Member’s reporting.

(b) Allocation of Penalties. Any penalty imposed on the Company under Section 6726 of the Code arising from the Manager’s failure to comply with this Insert shall be borne solely by the Manager and shall not be a Company expense. Any penalty, tax, interest or loss of benefit arising from a QOF Member’s own failure, or from information that a QOF Member failed to provide on a timely and accurate basis, shall be borne by that QOF Member, which shall indemnify the Company and the Manager against any resulting Company-level penalty.

Subsection (a) tracks the Section 6039L reporting obligation that the OBBBA placed on QOZBs to feed information up to their QOF Members for the QOF Members’ own Section 6039K reporting. As a practical matter, enumerate the categories of information in the covenant itself rather than referring only to “the information required by Section 6039L.” The required categories will be fleshed out by the Treasury information-reporting regulations announced on April 8, 2026. Conform the list once the regulations issue, but capture the contemplated categories now.

Subsection (b) is the consequential one. The Manager bears Company-level Section 6726 penalties arising from its own failures, with no pass-through to the Company, which is correct for a Sponsor-leaning form. The companion is an indemnity from a QOF Member whose own failure, or whose failure to provide accurate data on time, produces a Company-level penalty. Both belong in. Without the indemnity, the Company is exposed for the QOF Members’ housekeeping; without the Manager carve-out, the Manager benefits at the Company’s expense for its own missteps.

Insert F: Protective Covenants for QOF Members

These run for the benefit of the QOF Members without importing fund-level mechanics into the Company’s own obligations. They live in the manager’s duties.

(a) The Manager shall not cause the Company to take any action that the Manager knows would (i) cause a QOF Member, or its investor(s), to recognize previously deferred gain as an Inclusion Event, or (ii) cause a QOF Member’s Interest to cease to be a qualified opportunity zone partnership interest, in either case without the prior written consent of the affected QOF Member.

(b) The Manager shall use commercially reasonable efforts to maintain the Company’s qualification as a QOZ Business during substantially all of the holding period of each QOF Member’s qualifying investment, and shall reasonably cooperate with each QOF Member’s opportunity zone compliance.

The “knows” qualifier in subsection (a) is intentional. The Manager covenants not to take actions it knows will trigger an inclusion event for a QOF Member or knock out a QOF Member’s qualifying-investment status. A blanket no-fault covenant would expose the Manager to claims based on changes in law, on facts unknown to the Manager, or on QOF-Member-specific issues. The “commercially reasonable efforts” formulation in subsection (b) is similarly load-bearing. It is the right standard at the QOZB level for a qualification covenant that depends on facts the Manager can manage, such as the 70/50/5 tests and the working capital plans, but does not extend to QOF-level investor compliance the Manager cannot police. A counterparty’s counsel may try to drop “knows” and “commercially reasonable efforts” in favor of strict-liability formulations. The Manager runs the project; it does not underwrite the tax position of each QOF Member’s individual investors.

Insert G: Manager Authority and Consent Carve-Outs

This is the operational autonomy provision. Subsection (a) goes in the Manager’s enumerated powers; subsection (b) in any consent or major-decision provision.

(a) Opportunity Zone Authority. Acting in the name of and on behalf of the Company, take all actions the Manager determines necessary or advisable to cause the Company to qualify and remain a QOZ Business across both OZ 1.0 and OZ 2.0, including designating and tracking Vintages; timing and sequencing the acceptance of capital contributions across 2026 and 2027; administering the working capital safe harbor; preparing and furnishing statements under Section 6039L of the Code; conforming the Company to any Transition Guidance; and forming, capitalizing or admitting one or more Subsidiaries or holding vehicles to hold or segregate property by Vintage.

(b) Not Subject to Consent. Notwithstanding any provision requiring the consent or approval of any Member or consent group, none of the following requires such consent: (i) the acceptance, designation, timing or Vintage classification of any capital contribution; (ii) any action described in subsection (a) above; or (iii) any tax election or designation that applies uniformly to all QOF Members of a given Vintage, except to the extent it would adversely and disproportionately affect a particular Member relative to other Members of the same Vintage.

Two carve-outs are doing the work. Subsection (a) enumerates the Manager’s QOZ-specific powers so that a careful QOF Member’s counsel cannot later argue that forming a Vintage-segregating Subsidiary, for example, is outside the Manager’s powers. Subsection (b) then lifts those actions out of any consent or major-decision matrix the host agreement layers on the Manager. Vintage classification, capital-contribution timing, working-capital administration, and Section 6039L reporting are not events that should require a QOF Member’s sign-off. The proviso, that an action which adversely and disproportionately affects a particular Member relative to other Members of the same Vintage is subject to the consent regime, preserves the QOF Members’ protection against intra-Vintage discrimination without re-importing day-to-day operational consent rights. If the host agreement has a robust Major Decisions clause, this insert will draw the most pushback.

Insert H: No Premature Disposition

(a) The Manager shall not sell the project, sell or substantially reduce the Company’s QOZ Business Property, or take any action that would cause the Company to cease to be a QOZ Business, in each case before the end of the holding period applicable under Section 1400Z-2(c) of the Code to each then-outstanding QOF Member’s qualifying investment, without the prior written consent of each affected QOF Member; provided that the Manager may proceed if each affected QOF Member consents in writing, or if the Manager reasonably determines, after consultation with the Company’s tax advisors, that the action will not impair the intended opportunity zone treatment of the affected QOF Members.

This protects the QOF Members’ qualifying investments without making the Company own the ten-year clock. The holding period is a QOF-Member-by-QOF-Member determination, because a 2026 OZ 1.0 contribution and a 2027 OZ 2.0 contribution have different qualifying-investment clocks. The covenant runs against each affected QOF Member, not against the Company in the abstract, which is the right framing. The “Manager reasonably determines, after consultation with tax advisors, that the action will not impair” alternative is the escape valve. Without it, the covenant becomes a hostage to any Sponsor wanting to refinance or recapitalize before every clock has run. With it, the Manager has a process, meaning counsel review and a documented determination, that a court will respect.

Insert I: Transfer Restrictions to Protect QOZ Business Status

(a) No Member may Transfer all or any part of its Interest, and the Manager shall not permit any Transfer, if the Manager determines that the Transfer would (i) cause the Company to cease to qualify as a QOZ Business, or (ii) cause a QOF Member’s Interest to cease to be a qualified opportunity zone partnership interest or trigger an Inclusion Event for a QOF Member or its investor(s) without that party’s written acknowledgment. The Manager may condition consent on an opinion of counsel or other evidence reasonably satisfactory to the Manager that the Transfer will not have such an effect.

This sits in the transfer-restrictions article of the host agreement. The two harms it addresses are different and worth keeping separate. A Transfer that endangers the Company’s QOZB status as a whole, most often by tipping the 70/50/5 tests or introducing a member that dilutes the QOZB attributes, is a different problem from a Transfer that knocks out a particular QOF Member’s qualifying-investment status. Drafting both into the covenant gives the Manager authority to block either. The “opinion of counsel or other evidence” condition is the operational tool. On any Transfer of size, the Manager will want a representation chain from the transferring Member and an opinion from the transferee’s counsel on both QOZB-level and QOF-Member-level effects.

Insert J: No Guarantee of Fund-Level Benefits

This goes in the miscellaneous, representations, or acknowledgments section. It keeps the Company’s undertaking at the QOZB level and disclaims responsibility for fund-level and investor-level outcomes.

(a) Scope of Undertaking. The Company’s undertaking is limited to using commercially reasonable efforts to operate as a QOZ Business as set out in this Agreement. Neither the Company, the Manager, the Sponsor nor any of their respective Affiliates makes any representation, warranty or guarantee as to any QOF Member’s status as a qualified opportunity fund, the qualification of any QOF Member’s investment, or the availability or continuation of any deferral, basis step-up, gain exclusion or other opportunity zone benefit, all of which arise at the fund level and the investor level and depend on facts specific to each QOF Member and its investor(s) and on the Code, the Regulations and other guidance as they may change, including any Transition Guidance.

(b) Reliance on Own Advisors. Each Member acknowledges that it has had the opportunity to consult its own tax, legal and financial advisors regarding the opportunity zone aspects of an investment in the Company, including the differences between OZ 1.0 capital and OZ 2.0 capital described in this Agreement, and that it has not relied on the Company, the Manager or the Sponsor for such advice. No development in the law or in the qualification of any QOF Member shall give rise to any claim against the Company, the Manager or the Sponsor.

(c) No Reduction of Discretion. Nothing in this Agreement obligates the Manager to operate the Company, time any contribution, or make or refrain from any election in a manner that maximizes the opportunity zone benefit of any particular Member or Vintage, and the Manager may act in what it determines to be the best interest of the Company as a whole.

Of the inserts here, this is the one I would push hardest to keep in front of a Sponsor reviewing the agreement. The deal is between the Company and its Members, and the Company’s obligation is to be a QOZB. The QOF Member’s tax outcome depends on the QOF Member’s facts, on its investors’ facts, on Treasury guidance still being written, and on what the QOF Member itself does. None of that should be the Manager’s risk. Subsection (c), the no-maximization principle, is the under-noticed piece. Without it, an aggressive QOF Member can argue that any Manager decision that did not maximize that Member’s OZ benefit was, by that fact alone, a breach. With it, the Manager has authority to make a best-interest-of-the-Company judgment that an OZ-leaning Member cannot weaponize after the fact.

Closing diligence checklist

Before using any of these inserts on a specific project:

• Census tract. Confirm the project tract is a designated qualified opportunity zone under the OZ 1.0 map for any 2026 capital, and under the OZ 2.0 designations effective January 1, 2027 for any 2027 capital, using the eligible-tract list published with Rev. Proc. 2026-14 and the designations once certified.
• QOZ Business Property by Vintage. Confirm that property intended to support OZ 2.0 capital either satisfies the OZ 2.0 acquisition-date and original-use or substantial-improvement requirements, or qualifies under the Notice 2026-40 § 5.01(2) transition rule for an old-zone project operating on a pre-2026 working capital plan.
• Working capital. Confirm the plan or plans cover infusions of more than one Vintage and stay within the 31-month and aggregate 62-month limits. For an old-zone project relying on the Notice 2026-40 transition rule, confirm the plan was adopted by December 31, 2026, with at least 10% received and 5% spent or committed by that date.
• Reporting systems. Confirm the Company can capture the data needed for the Section 6039L statements to its QOF Members for each year reporting is required.
• Transition guidance. Account for Notice 2026-40, and monitor the proposed information-reporting regulations announced April 8, 2026; conform under the Insert G authority once issued.
• Rural status. If the project is in a Rural Area held in connection with a QROF, retain the rural provisions and the 50% substantial-improvement threshold; otherwise delete the QROF and rural references.
• Conform to host agreement. Conform all cross-references, defined terms, numbering, and the consent carve-out in Insert G to the structure of the agreement into which these inserts are placed.

These are drafting aids. Confirm current law and guidance before use.

Citations

Statutes

• 26 U.S.C. § 1400Z-1 (designation of qualified opportunity zones; “applicable start date” at § 1400Z-1(e)(2)).
• 26 U.S.C. § 1400Z-2 (QOZ definitions; QOZ Business Property acquisition, original-use, and substantial-use requirements at (d)(2)(D); QOZB definition at (d)(3); holding period at (c)).
• 26 U.S.C. § 1397C(b), (e) (QOZB gross-income, active-use, and nonqualified-financial-property tests incorporated by § 1400Z-2(d)(3)).
• 26 U.S.C. § 144(c)(6)(B) (excluded “sin” businesses).
• 26 U.S.C. §§ 6039K, 6039L, 6726 (OZ information reporting by QOFs and QOZBs, and associated penalties, added by the OBBBA).
• One Big Beautiful Bill Act, Pub. L. No. 119-21, § 70421, 139 Stat. 72 (July 4, 2025).

Administrative Authority

• Treas. Reg. § 1.1400Z2(d)-1(d)(3)(v), (vi) (working capital safe harbor, including the sequential-infusion and start-up business rules).
• Notice 2026-40, 2026-28 I.R.B. (July 6, 2026) (OZ transitional guidance; § 5.01(2)(b) and (c) transition rules for property and equity acquired after December 31, 2026 under a qualifying pre-2026 working capital plan; Example 5 at § 5.01(4)(v); §§ 5.02(2)-(3) safe harbors treating an expired zone as a QOZ through December 31, 2047).
• Notice 2025-50 (issued Sept. 30, 2025) (50% rural substantial improvement threshold; 3,309 rural tracts).
• Rev. Proc. 2026-14, 2026-20 I.R.B. 910 (state procedures for nominating tracts for designation effective January 1, 2027).

Secondary Authority

• U.S. Department of the Treasury, announcement of forthcoming OZ information-reporting regulations (Apr. 8, 2026).