Opportunity Zones Improvement, Transparency, and Extension Act
This bill revises rules and reinstates reporting requirements relating to qualified opportunity zones (economically distressed communities where new investments, under specified conditions, may be eligible for preferential tax treatment).
Specifically, the bill terminates the designation of zones that are disqualified due to median family income exceeding 130% of national median family income and permits states to identify and expand terminations of such zones.
The bill also reinstates reporting requirements for qualified opportunity zones and imposes penalties for noncompliance with such requirements, extends the opportunity zones temporary deferral period for qualifying capital gain through 2028, and establishes a State and Community Dynamism Fund to support public and private investment in qualified opportunity zones.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7467 Introduced in House (IH)]
<DOC>
117th CONGRESS
2d Session
H. R. 7467
To amend the Internal Revenue Code of 1986 to modify the rules relating
to qualified opportunity zones, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 7, 2022
Mr. Kind (for himself, Mr. Kelly of Pennsylvania, Mr. Kildee, Ms.
Sewell, and Mrs. Walorski) introduced the following bill; which was
referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to modify the rules relating
to qualified opportunity zones, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Opportunity Zones Improvement,
Transparency, and Extension Act''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) The 8,764 population census tracts designated as
qualified opportunity zones under section 1400Z-1 of the
Internal Revenue Code of 1986 span across all 50 States, the
District of Columbia, and 5 Territories and overwhelmingly
represent communities that have been economically left behind
as the American economy has surged forward.
(2) The average poverty rate of qualified opportunity zone
residents is 26.4 percent.
(3) Fifty-four percent of the country's pockets of
concentrated persistent poverty--meaning census tracts in which
at least 40 percent of the population has lived in poverty
since at least 1980--are qualified opportunity zones.
(4) More adults in qualified opportunity zones lack a high
school diploma than have a four-year college degree.
(5) The Investing in Opportunity Act, which originally
proposed opportunity zones, originally incorporated reporting
requirements to evaluate the impact the incentive will have on
designated communities and it is critical that Congress act to
reinstate reporting requirements as soon as possible.
TITLE I--MODIFICATION OF POPULATION CENSUS TRACTS DESIGNATED AS
QUALIFIED OPPORTUNITY ZONES
SEC. 101. MODIFICATION OF POPULATION CENSUS TRACTS DESIGNATED AS
QUALIFIED OPPORTUNITY ZONES.
Section 1400Z-1 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new subsection:
``(g) Disqualification of Certain Population Census Tracts.--
``(1) In general.--Except as provided in paragraph (5), any
disqualified census tract shall not be treated as a qualified
opportunity zone for any period after the date that is 30 days
after the date on which the Secretary publishes the final list
of disqualified census tracts under paragraph (4)(B).
``(2) Replacement zones.--
``(A) In general.--The chief executive officer of a
State may nominate additional population census tracts
to replace any population census tract the designation
of which as a qualified opportunity zone was terminated
by reason of paragraph (1). Except as otherwise
provided in this paragraph, the rules of subsections
(b), (c), (d), and (f) shall apply to any population
census tract nominated under this paragraph.
``(B) Consultation.--No population census tract
nominated under subparagraph (A) may be designated as a
qualified opportunity zone unless the chief executive
officer of the State certifies in writing to the
Secretary that the chief executive officer has
consulted with the chief executive officer (or the
equivalent) of each local jurisdiction in which the
population census tract is located.
``(C) Special rules.--For purposes of this
subchapter--
``(i) any population census tract which is
a disqualified census tract (as defined in
paragraph (3) without regard to subparagraph
(A)(i) thereof) may not be nominated as a
qualified opportunity zone under this
paragraph,
``(ii) the determination period with
respect to a nomination under subparagraph (A)
shall be the 45-day period beginning on the
date on which the Secretary publishes the final
list of disqualified census tracts under
paragraph (4)(B), as extended under subsection
(b)(2), and
``(iii) the period for which any such
designation is in effect shall be the period
beginning on the date such designation takes
effect and ending on the last day of the 10th
calendar year beginning on or after the
designation date as a qualified opportunity
zone for the population census tract which it
is replacing as such a zone by reason of the
termination under paragraph (1).
``(D) Regulations and guidance.--The Secretary
shall prescribe such regulations or other guidance as
may be necessary or appropriate to carry out the
purposes of this paragraph.
``(3) Disqualified census tract.--For purposes of this
subsection--
``(A) In general.--The term `disqualified census
tract' means any population census tract which--
``(i) was designated as a qualified
opportunity zone before the date of the
enactment of this subsection, and
``(ii) is described in subparagraph (B) or
(C).
``(B) High median family income tracts.--
``(i) In general.--Except as provided in
clauses (ii) and (iii), a population census
tract is described in this subparagraph if the
median family income for such tract exceeds 130
percent of the national median family income.
``(ii) Exception.--Clause (i) shall not
apply if the poverty rate of such population
census tract (excluding students enrolled in an
institution of higher education (as defined in
section 101 of the Higher Education Act of
1965)) is equal to or greater than 30 percent.
``(iii) Request to retain designation for
certain population census tracts.--Clause (i)
shall not apply if the Secretary, upon a
request of the chief executive officer of the
State made not later than 60 days after the
date the Secretary publishes the list described
in paragraph (4)(A), determines that--
``(I) the designation of such
population census tract was consistent
with the purposes of this subchapter,
or
``(II) the median family income for
the population census tract does not
exceed 130 percent of the national
median family income.
``(C) Election to include additional population
census tracts.--
``(i) In general.--A population census
tract is described in this subparagraph if the
Secretary, upon the request of the chief
executive officer of the State submitted not
later than 60 days after the date the Secretary
publishes the list described in paragraph
(4)(A), determines that the continued
designation of such population census tract as
a qualified opportunity zone is not consistent
with the purposes of this subchapter.
``(ii) Regulations and guidance.--Not later
than 12 months after the date of the enactment
of this subsection, the Secretary shall issue
regulations or guidance with respect to the
criteria to be used for making a determination
by the Secretary under clause (i).
``(4) Identification and publication of disqualified census
tracts.--
``(A) Initial identification.--As soon as
practical, but not later than 12 months after the date
of the enactment of this subsection, the Secretary
shall make public--
``(i) a list of population census tracts
described in paragraph (3)(B) (determined
without regard to clause (iii) thereof), and
``(ii) a list of population census tracts
which are low-income communities and were not
designated as a qualified opportunity zone
before the date of enactment of this
subsection.
``(B) Final list of disqualified census tracts.--
Not later than 105 days after the date the Secretary
publishes the list described in subparagraph (A), the
Secretary shall make public a final list of
disqualified census tracts.
``(5) Rules for qualified preexisting investments.--
``(A) In general.--For purposes of this subchapter,
section 1400Z-2 shall be applied without regard to
paragraph (1) with respect to any qualified preexisting
trade or business.
``(B) Qualified preexisting trade or business.--For
purposes of this paragraph--
``(i) In general.--The term `qualified
preexisting trade or business' means any trade
or business of a qualified opportunity zone
fund or qualified opportunity zone business
which meets the requirements of clauses (ii)
and (iii) of section 1400Z-2(d)(3)(A) and
which--
``(I) before the date of the
enactment of this subsection, filed a
registration statement under the
Securities Act of 1933 (15 U.S.C. 77a
et seq.) or prepared any comparable
offering memorandum or similar
disclosure document provided in
reliance on section 230.506 of title
17, Code of Federal Regulations (or
successor regulations), promulgated
under the Securities Act of 1933, that
discloses the intent of such trade or
business to invest in the disqualified
census tract,
``(II) before the first date on
which the disqualified census tract
appears on any list published under
paragraph (4), has made, or has entered
into to binding agreements to make,
investments in the disqualified census
tract which--
``(aa) aggregate more than
$250,000, and
``(bb) have been designated
in writing for the use in, or
the development of, such trade
or business, or
``(III) is determined by the
Secretary to have relied on the
designation of the disqualified census
tract as a qualified opportunity zone
and to have suffered a loss as a result
of the application of paragraph (1).
``(ii) Trade or business.--The term `trade
or business' includes any activity intended to
qualify as a trade or business within the
meaning of section 162.
``(C) Regulations and guidance.--The Secretary
shall prescribe such regulations or guidance as may be
necessary or appropriate to carry out the purposes of
this paragraph, including guidance to prevent
speculative investment solely for the purpose of
falling within the definition of a qualified
preexisting trade or business.
``(6) Determination of population census tract data.--For
purposes of applying this subsection, in determining whether a
population census tract meets any qualification with respect to
poverty rate or any aspect of median income, such determination
shall be made using the most recent census data that has been
published by the Bureau of the Census as of the date of
enactment of this subsection.''.
SEC. 102. CERTAIN FORMER INDUSTRIAL TRACTS PERMITTED TO BE DESIGNATED
AS OPPORTUNITY ZONES.
Section 1400Z-1 of the Internal Revenue Code of 1986, as amended by
section 101, is amended by adding at the end the following new
subsection:
``(h) Special Rule for Former Industrial Tracts Contiguous to
Designated Opportunity Zones.--
``(1) In general.--For purposes of this chapter, the term
`qualified opportunity zone' means an population census tract
which is described in paragraph (2) and designated as a
qualified opportunity zone under this subsection.
``(2) Population census tract described.--A population
census tract is described in this subparagraph if--
``(A) the tract--
``(i) has a population of zero,
``(ii) was previously used for industrial
purposes and is a brownfield industrial site,
and
``(iii) is contiguous, including by water,
to a population census tract on at least 1 side
that has been designated as a qualified
opportunity zone under this section, or
``(B) the tract was merged, as a result of the 2020
decennial census, into a census tract described in
subparagraph (A)(iii) and met all requirements
described in subparagraph (A).
``(3) Designation.--For purposes of paragraph (1), a
population census tract that is described in paragraph (2) is
designated as a qualified opportunity zone if--
``(A) not later than 30 days after the date of the
enactment of this subsection, the chief executive
officer of the State in which the tract is located--
``(i) nominates the tract for designation
as a qualified opportunity zone, and
``(ii) notifies the Secretary in writing of
such nomination, and
``(B) not later than 30 days after receiving the
notification under subparagraph (A)(ii), the Secretary
certifies such nomination and designates such tract as
a qualified opportunity zone.
``(4) Determination of census tract information.--For
purposes of this subsection, the boundaries and population of a
census tract shall be determined based on United States Census
Bureau data for the 2010 decennial census.
``(5) Number of designations.--Population census tracts
designated as a qualified opportunity zone under this
subsection shall not be taken into account for purposes of
subsection (d).
``(6) Definitions.--For purposes of this subsection--
``(A) Brownfield industrial site.--The term
`brownfield industrial site' means a population census
tract that includes real property the expansion,
redevelopment, or reuse of which may be complicated by
the presence or potential presence of a hazardous
substance or pollutant or contaminant, including real
property covered by a prospective purchaser agreement
or similar agreement entered into by the Environmental
Protection Agency or the appropriate State authority.
``(B) Hazardous substance.--The term `hazardous
substance' means--
``(i) a hazardous substance as defined in
section 101(14) of the Comprehensive
Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9601(14)), or
``(ii) petroleum or a petroleum product.
``(C) Pollutant or contaminant.--The term
`pollutant or contaminant' has the meaning given such
term in section 101(33) of such Act.''.
TITLE II--INFORMATION REPORTING REQUIREMENTS
SEC. 201. INFORMATION REPORTING ON QUALIFIED OPPORTUNITY FUNDS.
(a) In General.--
(1) Filing requirements for funds and investors.--Subpart A
of part III of subchapter A of chapter 61 of the Internal
Revenue Code of 1986 is amended by inserting after section
6039J the following new sections:
``SEC. 6039K. RETURNS WITH RESPECT TO QUALIFIED OPPORTUNITY FUNDS.
``(a) In General.--Every qualified opportunity fund shall file an
annual return (at such time and in such manner as the Secretary may
prescribe) containing the information described in subsection (b).
``(b) Information From Qualified Opportunity Funds.--The
information described in this subsection is--
``(1) the name, address, and taxpayer identification number
of the qualified opportunity fund,
``(2) whether the qualified opportunity fund is organized
as a corporation or a partnership,
``(3) the value of the total assets held by the qualified
opportunity fund as of each date described in section 1400Z-
2(d)(1),
``(4) the value of all qualified opportunity zone property
held by the qualified opportunity fund on each such date,
``(5) with respect to each investment held by the qualified
opportunity fund in qualified opportunity zone stock or a
qualified opportunity zone partnership interest--
``(A) the name, address, and taxpayer
identification number of the corporation in which such
stock is held or the partnership in which such interest
is held, as the case may be,
``(B) each North American Industry Classification
Code that applies to the trades or businesses conducted
by such corporation or partnership,
``(C) the population census tracts in which the
qualified opportunity zone business property of such
corporation or partnership is located,
``(D) the amount of the investment in such stock or
partnership interest as of each date described in
section 1400Z-2(d)(1),
``(E) the value of tangible property held by such
corporation or partnership on each such date which is
owned by such corporation or partnership,
``(F) the value of tangible property held by such
corporation or partnership on each such date which is
leased by such corporation or partnership,
``(G) the approximate number of residential units
(if any) for any real property held by such corporation
or partnership, and
``(H) the approximate average monthly number of
full-time equivalent employees of such corporation or
partnership for the year (within numerical ranges
identified by the Secretary) or such other indication
of the employment impact of such corporation or
partnership as determined appropriate by the Secretary,
``(6) with respect to the items of qualified opportunity
zone business property held by the qualified opportunity fund--
``(A) the North American Industry Classification
Code that applies to the trades or businesses in which
such property is held,
``(B) the population census tract in which the
property is located,
``(C) whether the property is owned or leased,
``(D) the aggregate value of the items of qualified
opportunity zone property held by the qualified
opportunity fund as of each date described in section
1400Z-2(d)(1), and
``(E) in the case of real property, number of
residential units (if any),
``(7) the approximate average monthly number of full-time
equivalent employees for the year of the trades or businesses
of the qualified opportunity fund in which qualified
opportunity zone business property is held (within numerical
ranges identified by the Secretary) or such other indication of
the employment impact of such trades or businesses as
determined appropriate by the Secretary,
``(8) with respect to each person who disposed of an
investment in the qualified opportunity fund during the year--
``(A) the name and taxpayer identification number
of such person,
``(B) the date or dates on which the investment
disposed was acquired, and
``(C) the date or dates on which any such
investment was disposed and the amount of the
investment disposed, and
``(9) such other information as the Secretary may require.
``(c) Statement Required To Be Furnished to Investors.--Every
person required to make a return under subsection (a) shall furnish to
each person whose name is required to be set forth in such return by
reason of subsection (b)(9) a written statement showing--
``(1) the name, address and phone number of the information
contact of the person required to make such return, and
``(2) the information required to be shown on such return
by reason of subsection (b)(9) with respect to such person.
``(d) Definitions.--For purposes of this section--
``(1) In general.--Any term used in this section which is
also used in subchapter Z of chapter 1 shall have the meaning
given such term under such subchapter.
``(2) Full-time equivalent employees.--The term `full-time
equivalent employees' means, with respect to any month, the sum
of--
``(A) the number of full-time employees (as defined
in section 4980H(c)(4)) for the month, plus
``(B) the number of employees determined (under
rules similar to the rules of section 4980H(c)(2)(E))
by dividing the aggregate number of hours of service of
employees who are not full-time employees for the month
by 120.
``SEC. 6039L. INFORMATION ON PERSONS INVESTING IN QUALIFIED OPPORTUNITY
FUNDS.
``(a) In General.--Every taxpayer who makes an investment in a
qualified opportunity fund shall provide an annual statement (at such
time and in such manner as the Secretary may prescribe) containing the
information described in subsection (b) with respect to each such
investment.
``(b) Information From Investors.--The information described in
this subsection is--
``(1) the name, address, and taxpayer identification number
of the taxpayer,
``(2) the name and taxpayer identification number of the
qualified opportunity fund in which the investment was made,
``(3) a description of such investment,
``(4) the date such investment was made,
``(5) the amount of short-term and long-term capital gains
for which an election was made under section 1400Z-2(a)(1) for
such investment,
``(6) in the case of any disposition of any investment in a
qualified opportunity fund during the taxable year--
``(A) a description of the investment disposed,
``(B) the date of the disposition, and
``(C) the amount of any previously deferred short-
term and long-term capital gain included in income as a
result of such disposition, and
``(7) such other information as the Secretary may require.
``(c) Definitions.--Any term used in this section which is also
used in subchapter Z of chapter 1 shall have the meaning given such
term under such subchapter.
``SEC. 6039M. INFORMATION REQUIRED FROM CERTAIN QUALIFIED OPPORTUNITY
ZONE BUSINESSES.
``(a) In General.--Every applicable qualified opportunity zone
business shall furnish to the qualified opportunity fund described in
subsection (b) a written statement in such manner and setting forth
such information as the Secretary may by regulations prescribe for
purposes of enabling such qualified opportunity fund to meet the
requirements of section 6039(b)(5).
``(b) Applicable Qualified Opportunity Zone Business.--For purposes
of subsection (a), the term `applicable qualified opportunity zone
business' means any qualified opportunity zone business (as defined in
section 1400Z-2(d)(3))--
``(1) which is a trade or business of a qualified
opportunity fund,
``(2) in which a qualified opportunity fund holds qualified
opportunity zone stock, or
``(3) in which a qualified opportunity fund holds a
qualified opportunity zone partnership interest.
``(c) Other Terms.--Any term used in this section which is also
used in subchapter Z of chapter 1 shall have the meaning given such
term under such subchapter.''.
(2) Penalties.--
(A) In general.--Part II of subchapter B of chapter
68 of the Internal Revenue Code of 1986 is amended by
inserting after section 6725 the following new section:
``SEC. 6726. FAILURE TO COMPLY WITH INFORMATION REPORTING REQUIREMENTS
RELATING TO QUALIFIED OPPORTUNITY FUNDS.
``(a) Information Returns by Qualified Opportunity Funds.--
``(1) In general.--In the case of any person required to
file a return under section 6039K fails to file a complete and
correct return under such section in the time and in the manner
prescribed therefor, such person shall pay a penalty of $500
for each day during which such failure continues.
``(2) Limitation.--
``(A) In general.--The maximum penalty under this
subsection on failures with respect to any 1 return
shall not exceed $10,000.
``(B) Large qualified opportunity funds.--In the
case of any failure described in paragraph (1) with
respect to a fund the gross assets of which (determined
on the last day of the taxable year) are in excess of
$10,000,000, subparagraph (A) shall be applied by
substituting `$50,000' for `$10,000'.
``(3) Penalty in cases of intentional disregard.--If a
failure described in paragraph (1) is due to intentional
disregard, then--
``(A) paragraph (1) shall be applied by
substituting `$2,500' for `$500',
``(B) paragraph (2)(A) shall be applied by
substituting `$50,000' for `$10,000', and
``(C) paragraph (2)(B) shall be applied by
substituting `$250,000' for `$50,000'.
``(4) Inflation adjustment.--
``(A) In general.--In the case of any failure
relating to a return required to be filed in a calendar
year beginning after 2023, each of the dollar amounts
in paragraphs (1), (2), and (3) shall be increased by
an amount equal to such dollar amount multiplied by the
cost-of-living adjustment determined under section
1(f)(3) for the calendar year determined by
substituting `calendar year 2022' for `calendar year
2016' in subparagraph (A)(ii) thereof.
``(B) Rounding.--
``(i) In general.--If the $500 dollar
amount in paragraphs (1) and (3)(A) or the
$2,500 amount in paragraph (3)(A), after being
increased under subparagraph (A), is not a
multiple of $10, such dollar amount shall be
rounded to the next lowest multiple of $10.
``(ii) Asset threshold.--If the $10,000,000
dollar amount in paragraph (2)(B), after being
increased under subparagraph (A), is not a
multiple of $10,000, such dollar amount shall
be rounded to the next lowest multiple of
$10,000.
``(iii) Other dollar amounts.--If any
dollar amount in paragraph (2) or (3) (other
than any amount to which clause (i) or (ii)
applies), after being increased under
subparagraph (A), is not a multiple of $1,000,
such dollar amount shall be rounded to the next
lowest multiple of $1,000.
``(b) Statements by Investors.--
``(1) In general.--If--
``(A) any person is required to file a statement
under section 6039L for any period, and
``(B) fails--
``(i) to file such statement on or before
the required filing date, or
``(ii) fails to include all of the
information required to be shown on the
statement or includes incorrect information,
such person shall pay a penalty of $5,000.
``(2) Reduction where correction in specified period.--If
any failure described in paragraph (1)(B) is corrected on or
before the day 60 days after the required filing date, the
penalty imposed by paragraph (1) shall be $500 in lieu of the
amount determined under such paragraph.
``(3) De minimis errors.--If--
``(A) there are one or more such failures described
in paragraph (1)(B)(ii) relating to an incorrect dollar
amount, and
``(B) no single amount in error differs from the
correct amount by more than $100,
then no correction shall be required, and, for purposes of this
section, such statement shall be treated as having been filed
with all correct required information.
``(4) Penalty in cases of intentional disregard.--If one or
more failures described in paragraph (1)(B) are due to
intentional disregard of the filing requirement (or the correct
information reporting requirement), then, with respect to each
such failure--
``(A) paragraphs (2) and (3) shall not apply, and
``(B) the amount of the penalty determined under
paragraph (1) shall be $25,000.
``(5) Inflation adjustment.--
``(A) In general.--In the case of any failure
relating to a statement required to be filed in a
calendar year beginning after 2023, each of the dollar
amounts in paragraphs (1), (2), and (4) shall be
increased by an amount equal to such dollar amount
multiplied by the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year determined
by substituting `calendar year 2022' for `calendar year
2016' in subparagraph (A)(ii) thereof.
``(B) Rounding.--The amount of any increase under
subparagraph (A) shall be rounded to the nearest
multiple of $100 ($10 in the case of any increase in
the amount under paragraph (2)).''.
(B) Information required to be sent to other
taxpayers.--Section 6724(d)(2) of such Code is
amended--
(i) by striking ``or'' at the end of
subparagraph (II),
(ii) by striking the period at the end of
the first subparagraph (JJ) (relating to
section 6226) and inserting a comma,
(iii) by redesignating the second
subparagraph (JJ) (relating to section 6050Y)
as subparagraph (KK),
(iv) by striking the period at the end of
subparagraph (KK) (as redesignated by clause
(iii)) and inserting a comma, and
(v) by inserting after subparagraph (KK)
(as so redesignated) the following new
subparagraphs:
``(LL) section 6039K(c) (relating to disposition of
qualified opportunity fund investments), or
``(MM) section 6039M (relating to information
required from certain qualified opportunity zone
businesses).''.
(3) Electronic filing.--Section 6011(e) of such Code is
amended by adding at the end the following new paragraph:
``(8) Qualified opportunity funds.--Notwithstanding
paragraphs (1) and (2), any return filed by a qualified
opportunity fund shall be filed on magnetic media or other
machine-readable form.''.
(4) Clerical amendments.--
(A) The table of sections for subpart A of part III
of subchapter A of chapter 61 of such Code is amended
by inserting after the item relating to section 6039J
the following new items:
``Sec. 6039K. Returns with respect to qualified opportunity funds.
``Sec. 6039L. Information on persons investing in qualified opportunity
funds.
``Sec. 6039M. Information required from certain qualified opportunity
zone businesses.''.
(B) The table of sections for part II of subchapter
B of chapter 68 of such Code is amended by inserting
after the item relating to section 6725 the following
new item:
``Sec. 6726. Failure to comply with information reporting requirements
relating to qualified opportunity funds.''.
(5) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after the date of the
enactment of this Act.
(b) Reporting of Data on Opportunity Zone Tax Incentives.--
(1) In general.--As soon as practical after the date of the
enactment of this Act, and annually thereafter, the Secretary
of the Treasury, or the Secretary's delegate (referred to in
this section as the ``Secretary''), in consultation with the
Director of the Bureau of the Census and such other agencies as
the Secretary determines appropriate, shall make publicly
available a report on qualified opportunity funds.
(2) Information included.--The report required under
paragraph (1) shall include, to the extent available, the
following information:
(A) The number of qualified opportunity funds.
(B) The aggregate dollar amount of assets held in
qualified opportunity funds.
(C) The aggregate dollar amount of investments made
by qualified opportunity funds in qualified opportunity
fund property across each industry class under the
North American Industry Classification Code.
(D) The percentage of population census tracts
designated as qualified opportunity zones that have
received qualified opportunity fund investments.
(E) For each population census tract designated as
a qualified opportunity zone, the approximate average
monthly number of full-time equivalent employees of the
qualified opportunity zone businesses in such qualified
opportunity zone for the preceding 12-month period
(within numerical ranges identified by the Secretary)
or such other indication of the employment impact of
such qualified opportunity fund businesses as
determined appropriate by the Secretary.
(F) The percentage of the total amount of
investments made by qualified opportunity funds in--
(i) qualified opportunity zone property
which is real property; and
(ii) other qualified opportunity zone
property.
(G) For each population census tract, the aggregate
approximate number of residential units resulting from
investments made by qualified opportunity funds in real
property.
(H) The aggregate dollar amount of investments made
by qualified opportunity funds in each population
census tract.
(3) Additional information.--
(A) In general.--Beginning with the report
submitted under paragraph (1) for the 6th year after
the date of the enactment of this Act, the Secretary
shall include in such report the impacts and outcomes
of a designation of a population census tract as a
qualified opportunity zone as measured by economic
indicators, such as job creation, poverty reduction,
new business starts, and other metrics as determined by
the Secretary.
(B) Semi-decennial information.--
(i) In general.--In the case of any report
submitted under paragraph (1) in the 6th year
or the 11th year after the date of the
enactment of this Act, the Secretary shall
include the following information:
(I) For population census tracts
designated as a qualified opportunity
zone, a comparison (based on aggregate
information) of the factors listed in
clause (iii) between the 5-year period
ending on the date of the enactment of
Public Law 115-97 and the most recent
5-year period for which data is
available.
(II) For population census tracts
designated as a qualified opportunity
zone, a comparison (based on aggregate
information) of the factors listed in
clause (iii) for the most recent 5-year
period for which data is available
between such population census tracts
and a similar population census tracts
that were not designated as a qualified
opportunity zone.
(ii) Control groups.--For purposes of
clause (i), the Secretary may combine
population census tracts into such groups as
the Secretary determines appropriate for
purposes of making comparisons.
(iii) Factors listed.--The factors listed
in this paragraph are the following:
(I) The unemployment rate.
(II) The number of persons working
in the population census tract,
including the percentage of such
persons who were not residents in the
population census tract in the
preceding year.
(III) Individual, family, and
household poverty rates.
(IV) Median family income of
residents of the population census
tract.
(V) Demographic information on
residents of the population census
tract, including age, income,
education, race, and employment.
(VI) The average percentage of
income of residents of the population
census tract spent on rent annually.
(VII) The number of residences in
the population census tract.
(VIII) The rate of home ownership
in the population census tract.
(IX) The average value of
residential property in the population
census tract.
(X) The number of affordable
housing units in the population census
tract.
(XI) The number and percentage of
residents in the population census
tract that were not employed for the
preceding year.
(XII) The number of new business
starts in the population census tract.
(XIII) The distribution of
employees in the population census
tract by North American Industry
Classification Code.
(4) Protection of identifiable return information.--In
making reports required under this subsection, the Secretary--
(A) shall establish appropriate procedures to
ensure that any amounts reported do not disclose
taxpayer return information that can be associated with
any particular taxpayer or competitive or proprietary
information, and
(B) if necessary to protect taxpayer return
information, may combine information required with
respect to individual population census tracts into
larger geographic areas.
(5) Definitions.--Any term used in this subsection which is
also used in subchapter Z of chapter 1 of the Internal Revenue
Code of 1986 shall have the meaning given such term under such
subchapter.
TITLE III--MODIFICATION OF RULES FOR INVESTMENTS IN QUALIFIED
OPPORTUNITY FUNDS
SEC. 301. EXTENSION OF DEFERRAL PERIOD.
(a) In General.--Subparagraph (B) of section 1400Z-2(b)(1) of the
Internal Revenue Code of 1986 is amended by striking ``December 31,
2026'' and inserting ``December 31, 2028''.
(b) Modification of Basis Rule.--Clause (iv) of section 1400Z-
2(b)(2)(B) of such Code is amended by striking ``7'' each place it
appears in the text and in the heading and inserting ``6''.
(c) Effective Date.--The amendments made by this section shall
apply to amounts invested after December 22, 2017.
SEC. 302. MODIFICATION OF DEFINITION OF QUALIFIED OPPORTUNITY FUND.
(a) In General.--Section 1400Z-2(d)(1) of the Internal Revenue Code
of 1986 is amended to read as follows:
``(1) In general.--The term `qualified opportunity fund'
means--
``(A) any qualified feeder fund, or
``(B) any other investment vehicle if--
``(i) such investment vehicle is organized
as a corporation or a partnership for the
purpose of investing in qualified opportunity
zone property (other than another qualified
opportunity fund), and
``(ii) such investment vehicle holds at
least 90 percent of its assets in qualified
opportunity zone property, determined by the
average of the percentage of qualified
opportunity zone property held in the fund as
measured--
``(I) on the last day of the first
6-month period of the taxable year of
the fund, and
``(II) on the last day of the
taxable year of the fund.''.
(b) Qualified Feeder Fund.--Section 1400Z-2(d) of such Code is
amended by adding at the end the following new paragraph:
``(4) Qualified feeder fund.--The term `qualified feeder
fund' means any investment vehicle that invests in a qualified
opportunity fund if--
``(A) such investment vehicle is organized as a
domestic partnership for the purpose of investing in
one more corporations or partnerships described in
paragraph (1)(B),
``(B) all investments made in the investment
vehicle are made in cash, and
``(C) not less than 95 percent of the assets of
which are equity investments in corporations or
partnerships described in paragraph (1)(B).''.
(c) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
TITLE IV--STATE AND COMMUNITY DYNAMISM FUND
SEC. 401. STATE AND COMMUNITY DYNAMISM FUND.
(a) Establishment.--There is established a State and Community
Dynamism Fund to support public and private investment, including
capital for qualified opportunity zones designated under section 1400Z-
1(a) of the Internal Revenue Code of 1986, and existing small business
and community economic development programs and incentives, to
underserved businesses and communities.
(b) Allocation.--
(1) In general.--Funds appropriated to the State and
Community Dynamism Fund shall be allocated to States.
(2) Formula.--
(A) In general.--The Secretary of the Treasury
shall determine the allocation by allocating Federal
funds among the States based on the proportion of prime
working age adults in each State bears to the total of
prime working age adults for all the States.
(B) Minimum allocation.--The Secretary shall adjust
the allocations under subparagraph (A) for each State
to the extent necessary to ensure that no State
receives less than 0.9 percent of the Federal funds.
(3) Requirement.--To receive an allocation under paragraph
(2), a State shall certify that the State will use funds to--
(A) build capacity in high-poverty, underbanked,
rural, and otherwise underserved communities;
(B) advance investment in minority-, women, and
veteran-owned businesses;
(C) address workforce development in strategic
sectors of the State's economy; and
(D) align priorities to support affordably priced
housing.
(4) Suballocation.--A State may spend funds allocated under
this subsection directly or suballocate the funds to other
entities, including units of general local government and
nonprofits.
(5) Eligible uses.--Funds allocated under this subsection
shall be used for any eligible use in a low-income community,
as defined in section 45D(e) of the Internal Revenue Code of
1986, including for--
(A) operating support and community capacity
building, with priority to given to operating support
and community capacity building in qualified
opportunity zones, including--
(i) personnel to support activities,
including coordination, education, and
investment;
(ii) community-level capacity building,
training, and strategic planning;
(iii) outreach, technical assistance, and
professional services to underserved businesses
and underserved opportunity zone fund managers;
(B) high-impact projects, including--
(i) predevelopment costs associated with
individual Qualified Opportunity Zone projects;
and
(ii) risk mitigation for qualified
opportunity zone funds; and
(C) administrative costs, not to exceed 3 percent
of the funds allocated.
(6) Eligible projects.--Funds used for high-impact project
activities, as described in paragraph (5)(B), shall only be
used for--
(A) business with less than 200 employees;
(B) projects that provide community goods or
services, including health care, social services,
healthy food access, education, broadband, and culture;
or
(C) affordable housing with at least 50 percent of
the units that are affordable to families making less
than 80 percent of area median family income.
(7) Prioritization.--A State that receives funds under this
section must prioritize activities that--
(A) promote investment in projects that
substantially support minorities, as defined in section
1204(c) of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 (12 U.S.C. 1811 note), or
other targeted populations, as defined in section 103
of the Riegle Community Development and Regulatory
Improvement Act of 1994 (12 U.S.C. 4702); and
(B) have demonstrated meaningful engagement with
community stakeholders.
(c) Authorization of Appropriations.--There is authorized to be
appropriated $1,000,000,000 to carry out this section.
(d) GAO Audit.--The Comptroller General of the United States shall
perform an annual audit of the Fund and submit to the appropriate
committees of Congress a report containing the results of the audit.
(e) Annual Report.--Not later than March 31 of each year, each
State receiving funds under this title shall submit to the Secretary a
report on the performance of the State and participating entities in
the State that includes--
(1) an accounting of the expenditure of funds received by
the State, including on administrative or indirect costs;
(2) information on the number and characteristics of
participants served under this title; and
(3) a summary describing the training, capacity-building,
and technical assistance offered by the State and participating
entities.
(f) Definitions.--In this section:
(1) Prime working age adults not employed.--The term
``prime working age adults not employed'' means, with respect
to a State, the share of the adult population aged 25 to 54
that was not employed for the most recent year for which data
is available.
(2) State.--The term ``State'' includes the District of
Columbia, any territory or possession of the United States, and
any Indian Tribe.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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