On December 31, 2026, three separate federal authorities expire or reset at once, and as of September 16, 2026, Congress has enacted none of the fixes that would move them. The Export-Import Bank's (EXIM) charter lapses unless Congress acts. The 35% Section 48D semiconductor credit closes to any project that has not begun construction. The original Opportunity Zone (OZ) benefit regime hands off to OZ 2.0. Each deadline carries a different consequence, and 15 weeks remain.
Key Takeaways
| 01 | If EXIM's charter lapses on December 31, the Bank cannot approve new transactions. Existing loans, guarantees, and insurance continue to be serviced, as during the 2015 lapse. |
| 02 | Senate bill S. 3772 would extend EXIM for 10 years. A House discussion draft would extend it five years and add nuclear energy to the China and Transformational Exports Program (CTEP). |
| 03 | Section 48D's 35% credit does not apply to property whose construction begins after December 31, 2026. On $2 billion of qualified investment, that is a $700 million credit or none. |
| 04 | Gains deferred under OZ 1.0 are recognized on December 31, 2026. Later investments fall under OZ 2.0, and the 2018 zone designations remain in effect through December 31, 2028. |
| 05 | IRS Notice 2026-40 sets year-end working-capital conditions for original OZs. Businesses generally need a written plan, 10% of planned capital received, and 5% spent by December 31 to keep acquiring qualifying property. |
As of this alert, the Senate's 10-year EXIM reauthorization bill, S. 3772, has sat in the Banking Committee since its February 4, 2026 introduction, and the House discussion draft has not been marked up. No Section 48D extension has been enacted. The House-passed continuing resolution funds the government only through December 11, which we expect to be the lame-duck vehicle for any of these fixes. Treasury's OZ 2.0 nomination window closes September 29, with a 30-day extension available to October 28 and final designations due before January 1, 2027.
The three deadlines share a date and little else. EXIM's is a lapse in legal authority that Congress can cure by amending the statute's sunset date. Section 48D's is a statutory cutoff fixed in law. The OZ date is a scheduled hand-off between two versions of the same program. The Water Resources Development Act (WRDA) 2026, the biennial water bill, is also queued for the same year-end window. Exhibit 1 lists the key dates, and the sections below take each deadline in turn.
Exhibit 1
Critical planning deadlines, as of September 16, 2026
| Date | What happens |
|---|---|
| Dec. 31, 2026 | EXIM's authority to approve new transactions expires; existing obligations continue to be serviced |
| Dec. 31, 2026 | Last day to begin construction (physical work or 5% safe harbor) for the 35% Section 48D credit |
| Dec. 31, 2026 | OZ 1.0 deferred gains recognized; last day for OZ 1.0-regime investments and Notice 2026-40 working-capital plans |
| Jan. 1, 2027 | OZ 2.0 begins: new designations run through Dec. 31, 2036; rolling five-year deferral, 10% step-up (30% rural) |
| Dec. 31, 2028 | The 2018 OZ designations terminate |
Sources: 12 U.S.C. § 635f; 26 U.S.C. § 48D(e); Rev. Proc. 2026-14; IRS Notice 2026-40.
A charter lapse stops new business and leaves existing commitments in place. Congress last reauthorized EXIM on December 20, 2019, extending its charter seven years through December 31, 2026 (P.L. 116-94, Div. I) with a $135 billion exposure cap. EXIM's own charter page confirms that the 2019 extension "extends EXIM's authority to conduct new business through December 31, 2026." If the charter lapses, the Export-Import Bank Act of 1945 permits the Bank to service outstanding obligations and conduct an orderly liquidation, but not to approve new transactions. The charter last lapsed on July 1, 2015, and new approvals froze for five months until the FAST Act restored authority on December 4, 2015. A board-quorum gap then blocked transactions over $10 million until May 2019. The Bank is still moving large deals. It published Federal Register notices for three long-term applications above $100 million in August alone, and signed $280 million in financing for CesiumAstro's Texas facility on September 9.
Both chambers held hearings this spring, but neither has marked up a bill. EXIM President and Chairman John Jovanovic testified at the House Financial Services Committee's March 18, 2026 subcommittee hearing, "Oversight of the Export-Import Bank," asking for a 10-year reauthorization of the Bank and CTEP, restored risk-management practices, and hiring flexibility. He noted that EXIM has returned nearly $10 billion to Treasury and that nearly 90% of its transactions directly benefit small business exporters. He said the Bank's active pipeline exceeds $71 billion and is expected to support more than 45,000 U.S. jobs. The Senate Banking Committee held its own reauthorization hearing on March 26, 2026. Since then, neither committee's calendar has listed EXIM business, and the Bank's summer press releases have focused on new deals and a return to profitability. None has addressed the charter.
"Reauthorizing and strengthening EXIM will ensure the next generation of global industry is built with American workers, American technology, and American leadership."
John Jovanovic, President and Chairman, Export-Import Bank of the United States, before the House Financial Services Committee
Source: EXIM, March 19, 2026. Photo: official portrait, Export-Import Bank of the United States.
The Senate bill and the House draft both reauthorize EXIM but differ on length and on nuclear energy. S. 3772, the Export-Import Bank Reauthorization Act of 2026, introduced by Sen. Kevin Cramer (R-N.D.) with Sen. Mark Warner (D-Va.) as cosponsor, strikes "2026" and inserts "2036" in Section 7 of the 1945 Act and in the CTEP sunset, and moves the exposure-cap date in Section 6(a)(2) from 2027 to 2037. Its sponsors call it the longest reauthorization of the Bank in history. The House discussion draft released for the March 18 hearing inserts "2031" in the same three places and adds the words "and nuclear" after "renewable" in Section 2(l)(1)(B)(vi), bringing nuclear energy exports inside CTEP. A five-year versus ten-year split is the kind of difference a year-end package resolves in conference, but only if leadership attaches EXIM to a vehicle that moves. The House-passed continuing resolution, H.R. 6500, expires December 11, which we expect to make the December funding bill the likely carrier. Exhibit 2 compares the two vehicles.
Exhibit 2
EXIM reauthorization vehicles compared, as of September 16, 2026
| Provision | S. 3772 (Senate) | House discussion draft |
|---|---|---|
| Charter sunset (12 U.S.C. § 635f) | Dec. 31, 2036 | Dec. 31, 2031 |
| Exposure cap applicability (§ 635e(a)(2)) | Through 2037 | Through 2031 |
| CTEP sunset (§ 635(l)(3)(C)) | Dec. 31, 2036 | Dec. 31, 2031 |
| Nuclear energy in CTEP | Not addressed | Added |
| Status (Sept. 16, 2026) | Referred to Banking, Feb. 4, 2026 | Hearing only, Mar. 18, 2026 |
Sources: S. 3772 (introduced text); House Financial Services discussion draft (Mar. 18, 2026).
Semiconductor and equipment projects must begin construction by December 31 to preserve the 35% credit. The One Big Beautiful Bill Act (OBBBA) raised the Section 48D Advanced Manufacturing Investment Credit from 25% to 35% for property placed in service after December 31, 2025, but left the statutory termination untouched: under Section 48D(e), "the credit allowed under this section shall not apply to property the construction of which begins after December 31, 2026." Treasury's final regulations (89 Fed. Reg. 84732, October 23, 2024) allow a start under either the physical work test (foundation excavation, concrete pours, or equipment fabrication under a binding written contract) or the 5% cost safe harbor. A project that validly starts in 2026 can place property in service up to 10 calendar years later under the continuity safe harbor. The credit is 35% of qualified investment, so $2 billion of qualified investment in a facility that begins construction in December 2026 earns a $700 million credit, and the same facility starting in January 2027 earns none.
Industry pressed for an extension this year, and nothing has been enacted. The Semiconductor Industry Association (SIA) organized a multi-association letter to Congress this spring urging lawmakers to "extend and expand" the credit. SIA's investment tracker now counts more than $825 billion across 160-plus projects in 30 states. No extension bill has moved in either tax-writing committee, and a search of the Federal Register turns up no 2026 Treasury guidance touching Section 48D. Exhibit 3 summarizes the current rule.
Exhibit 3
Section 48D at a glance, current law as of September 16, 2026
| Feature | Rule |
|---|---|
| Credit rate | 35% of qualified investment (property placed in service after Dec. 31, 2025) |
| Termination | No credit for property whose construction begins after Dec. 31, 2026 (§ 48D(e)) |
| Begin-construction tests | Physical work of a significant nature, or 5% cost safe harbor |
| Continuity safe harbor | Placed in service within 10 calendar years of the start year |
| Extension status | None enacted as of Sept. 16, 2026 |
Sources: 26 U.S.C. § 48D; Treas. Reg. § 1.48D-5; 89 Fed. Reg. 84732.
Three things end on December 31, 2026. First, gains deferred into Qualified Opportunity Funds (QOFs) under the original 2017 statute are recognized on that date: investors include the deferred gain in income in the taxable year that includes the earlier of an inclusion event or December 31, 2026, and owe the tax with their 2026 returns regardless of whether they sell. Second, it is the last day to invest eligible gains under the OZ 1.0 rules within the standard 180-day window. The 10-year gain exclusion still applies to those investments. Third, under IRS Notice 2026-40 (June 18, 2026), a business in an originally designated zone can generally treat tangible property acquired after 2026 as qualifying only if, by December 31, 2026, it has adopted a written working-capital plan, received at least 10% of the total estimated working capital designated under that plan, and expended at least 5% of it. The plan must carry a written schedule consistent with an ordinary start-up and spend the assets within 31 months of receipt. The only other route is property acquired to replace or modernize existing tangible business property in the ordinary course of the business. Property acquired to expand a business does not qualify.
The zones themselves do not end on December 31, 2026. Per Rev. Proc. 2026-14, tracts designated under Rev. Proc. 2018-16 stay designated through December 31, 2028. That covers the 8,764 original designations (Puerto Rico's end December 31, 2027). Meanwhile, OZ 2.0 arrives January 1, 2027. Treasury opened the state nomination window on July 1, 2026 for a 90-day determination period that runs through September 29, with a single 30-day extension available to October 28. The Secretary then has up to 30 days per submission, extendable to December 28, 2026, to certify designations. Per IR-2026-45, governors chose from 25,332 eligible low-income tracts, 8,334 of them wholly rural, and the new designations run through December 31, 2036, with fresh rounds every 10 years. Post-2026 investments earn a rolling five-year deferral and a 10% basis step-up, 30% for qualified rural opportunity funds.
The IRS has proposed OZ 2.0 reporting and certification rules. On September 11, 2026, the IRS published proposed regulations implementing new information-reporting sections 6039K and 6039L, added by the OBBBA: annual QOF returns, investor statements on disposition, qualified opportunity zone business (QOZB) statements to the funds that hold them, penalties for failures to file, and updated self-certification, revocation, and voluntary decertification procedures. Comments are due October 16, 2026, and a telephonic hearing is set for November 5. Exhibit 4 summarizes what ends and what continues on December 31.
Exhibit 4
What ends and what continues, December 31, 2026
| Item | Ends Dec. 31, 2026? | Detail |
|---|---|---|
| OZ 1.0 gain deferral | Yes | Deferred gain recognized on 2026 returns, whether or not sold |
| OZ 1.0 new investments | Yes | Last day for eligible-gain investments under original rules; 10-year exclusion preserved |
| Working-capital plan window | Yes | Notice 2026-40: plan adopted, 10% received, 5% expended by year-end |
| 2018 zone designations | No | Remain in effect through Dec. 31, 2028 (Rev. Proc. 2026-14) |
| OZ 2.0 designations | Begin Jan. 1, 2027 | Run through Dec. 31, 2036; five-year rolling deferral, 10% or 30% step-up |
Sources: IRS Notice 2026-40; Rev. Proc. 2026-14; IR-2026-45.
WRDA 2026 has cleared House committee and awaits floor action. The House Transportation and Infrastructure Committee released its WRDA 2026 text on June 26, 2026, introduced it as H.R. 9497 on June 29, and approved it unanimously on July 14, authorizing 133 new feasibility studies and 14 construction-ready projects. The committee filed its report (H. Rept. 119-795) on September 3, 2026, and the bill now awaits floor time. The Senate Environment and Public Works Committee began with a February 25, 2026 hearing with Assistant Secretary Adam Telle and Chief of Engineers Lt. Gen. William Graham, and has not yet reported a companion. Congress has enacted a WRDA every two years since 2014. Exhibit 5 collects the remaining dates.
Exhibit 5
Year-end deadlines and related dates, as of September 16, 2026
| Date | Milestone |
|---|---|
| Sept. 29, 2026 | OZ 2.0 state nomination period closes (extendable to Oct. 28) |
| Oct. 16, 2026 | Comments due on IRS proposed OZ reporting and certification regulations |
| Nov. 5, 2026 | IRS telephonic hearing on the proposed OZ regulations |
| Dec. 11, 2026 | Continuing resolution (H.R. 6500) expires; expected vehicle for EXIM, 48D, and WRDA |
| Dec. 28, 2026 | Outside date for Treasury to certify OZ 2.0 designations |
| Dec. 31, 2026 | EXIM charter lapses absent action; 48D begin-construction cutoff; OZ 1.0 gain recognition and plan deadline |
| Jan. 1, 2027 | OZ 2.0 designations and rules take effect |
| Dec. 31, 2028 | 2018 OZ designations terminate |
Sources: See References below.
This alert is for exporters with deals in EXIM's queue, semiconductor and equipment sponsors that have not yet begun construction, and investors and businesses holding OZ 1.0 positions. All three authorities reset on December 31, 2026, and we expect the December 11 expiration of the continuing resolution to be the vehicle for any fix Congress does pass. If you want a read on fit before December 31, reach out to our team.
© Copyright 2026 TC Policy Group, LLC (d/b/a Crawford Partners). The views expressed herein are those of the author(s) and not necessarily the views of Crawford Partners, its management, its subsidiaries, its affiliates, or its other professionals. Crawford Partners is not a law firm and cannot provide legal advice.