Reframing Economic Development Strategy: Implications of the One Big Beautiful Bill Act

July 29th, 2025

Introduction: A Structural Shift for Economic Development

The enactment of the One Big Beautiful Bill Act (OBBBA) on July 4th, 2025, represents a significant policy transformation with far-reaching implications for economic development, corporate strategy, and public-private partnerships.

With $4.5 trillion in tax reform, more than $1 trillion in spending reductions, and structural changes across energy, infrastructure, and social programs, the OBBBA realigns the incentives that guide capital formation, location strategy, and federal engagement.

At Alpen Associates, we’ve reviewed the legislation with the developer and state and local communities in mind. Our conclusion: the OBBBA is a clear pivot in federal economic development posture, favoring production and private capital over redistribution and federal programmatic investment— with a few notable exceptions. For proactive regions and sectors, it presents a strategic opportunity while for others it marks the need for rapid adaptation.

The following is our take on what it means, where it leads, and how states like Utah can thrive in this new chapter of American economic development.

The Investment Thesis

The OBBBA reestablishes capital formation as the federal government’s primary economic lever, especially for domestic production and innovation.

Key provisions include:

  • Permanent full expensing of capital equipment and qualified Research & Development (R&D) expenditures

  • Enhanced export-related tax treatment (e.g., Foreign Direct Intangible Income (FDII) and Global Intangible Low-Taxed Income (GILTI))

  • Immediate depreciation for qualified real estate and industrial property

These measures substantially improve the business case for capital-intensive industries and particularly advanced manufacturing, aerospace, logistics, and life sciences. Regions with available sites, aligned workforce strategies, and industry-ready infrastructure will benefit most.

At the same time, the federal pullback from clean energy subsidies, workforce grants, and social program supports introduces new exposure for communities reliant on federally funded development pipelines.

A Renewed Role for Place-Based Incentives

A notable exception to the bill’s general rollback of federal programming is its permanent extension and enhancement of Opportunity Zones (OZs) and New Markets Tax Credits (NMTCs). Once considered temporary tools, these mechanisms are now institutionalized as long-term pillars of federal development finance. With the right investment thesis, OZs can anchor transformational place-based strategies across infrastructure, workforce housing, and innovation corridors. This presents a timely opening for underserved regions such as rural communities and secondary metros to leverage these tools alongside infrastructure, housing, and industry-focused initiatives.

Winners and Losers

Beneficiaries:

  • Capital-intensive sectors (manufacturing, aerospace, defense, logistics)

  • States with strong federal procurement ties

  • Border and national security-aligned regions

  • Growth-oriented and business-friendly states (e.g., TX, FL, UT, TN)

Who’s At Risk:

  • Clean energy clusters dependent on federal incentives

  • High-tax states (CA, NY, IL, NJ, MA)

  • Medicaid-reliant healthcare systems

  • Workforce programs lacking state-level reinvestment

To Be Determined:

  • Tribal and rural areas with technical capacity may benefit

  • Coastal innovation hubs could rebound with private capital alignment

  • Mixed-tax states will need clarity on their policies

Poised to Lead, Pressed to Act: Utah’s Path Forward Under the OBBBA

Utah is well-suited to capitalize on the OBBBA’s framework. Its size, pro-business policies, and strong economic fundamentals provide the ability to respond quickly and the capacity to lead nationally in sectors favored by the legislation (i.e., aerospace and defense, tech, manufacturing and life science). It has inherent advantages in its workforce (young, highly educated, growing population), but must continue promoting engagement of underserved segments to take advantage of industrial growth opportunity given its lean unemployment figure (3.2% vs national average of 4.1%).

Additionally, Utah’s growing needs around housing supply, energy security, and water resiliency are increasingly falling to the state to address under the bill. While the expansion of Low-Income Housing Tax Credits (LIHTC) and the permanence of Opportunity Zones support housing development, cuts to federal grants require Utah to fill funding gaps. In energy, the state is well-positioned to benefit from incentives favoring capital-intensive investments like advanced nuclear and grid reliability. However, reduced federal support for clean energy and water programs places added pressure on Utah to lead with coordinated, locally driven solutions.

Utah’s investments in proactive asset development (e.g., The Point of the Mountain State Land Authority (The Point), The Utah Inland Port Authority (UIPA), Utah City, and the Military Installations and Development Authority (MIDA)) position it to benefit from major investment opportunities. In addition, the state’s promotion and industry development (i.e., 47G aerospace & defense, BioUtah, and BioHive) have matured the Beehive State’s economic ecosystem and created a cohesion within these clusters that make the state more attractive for investment opportunities.

Priorities for Developers, Cities, and States

To align with the OBBBA and attract capital investment, stakeholders should:

  1. Accelerate Site Readiness for industrial and logistics users

  2. Prioritize Defense and Deep Tech as anchor industries

  3. Invest in Workforce Development systems at the sector level

  4. Bridge the Energy Gap through Nuclear with private and regional initiatives

Conclusion

The One Big Beautiful Bill Act reorients the map of American economic development. It prioritizes capital over consumption, production over redistribution, and procurement over grants.

Success in this new era will belong to communities and coalitions that:

  • Align strategy across public and private domains

  • Attract and deploy capital with a strategic lens

  • Act with urgency and precision

Alpen Associates helps communities and companies turn major economic opportunities into tangible outcomes. If your community, organization, or investment strategy is adjusting to the implications of OBBBA, we are here to support the path forward.

-Alpen Associates