,i  #aah? ,,congress  #a/ ,session  ,h4 
,r4 #cijf  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,june #g1 #bjbc,mr4   
,f]guson 7= himself1 ,mrs4 ,mill] ( ,we/
 ,virg9ia1 ,mr4 ,fe5/ra1 & ,mr4 ,ku/(f7 
introduc$ ! foll[+ bill2 :i* 0 ref]r$ to
 ! ,committee on ,ways & ,means  ,a     
,,bill  ,to am5d ! ,int]nal ,rev5ue     
,code ( #aihf to e/abli% special rules =
 capital ga9s inve/$ 9 rural opportunity
 zones4  #a4 ,%ort title ,?is ,act may  
be cit$ z ! ,rural ,opportunity ,zone & 
,inve/m5t ,act4  #b4 ,e/abli%m5t (      
special rules = capital ga9s inve/$ 9   
rural opportunity zones  7a7 ,9 g5]al   
,sub*apt] ,z ( *apt] #a ( ! ,int]nal    
,rev5ue ,code ( #aihf is am5d$ by add+  
at ! end ! foll[+ new section3          
#adjj,z-#c4 ,special rules = capital    
ga9s inve/$ 9 rural opportunity zones   
7a7 ,9 g5]al  7#a7 ,treatm5t ( ga9s ,9 !
 case ( capital ga9 f ! sale to1 or     
ex*ange )1 an unrelat$ p]son ( any      
prop]ty held by ! taxpay]1 at ! election
 ( ! taxpay]-- 7,a7 gross income = !    

taxable ye> %all n include s mu* ( su*  
ga9 z does n exce$ ! aggregate am\nt    
inve/$ by ! taxpay] 9 a qualifi$ rural  
opportunity fund dur+ ! #ahj-;day p]iod 
beg9n+ on ! date ( su* sale or ex*ange1 
7,b7 ! am\nt ( ga9 exclud$ by           
subp>agraph 7,a7 %all be includ$ 9 gross
 income z provid$ by subsection 7b71 &  
7,c7 subsection 7c7 %all apply4  7#b7   
,election ,no election may be made "u   
p>agraph 7#a7-- 7,a7 ) respect to a sale
 or ex*ange if an election previ\sly    
made ) respect to su* sale or ex*ange is
 9 effect1 or  7,b7 ) respect to any    
sale or ex*ange aft] ,decemb] #ca1      
#bjcb4  7b7 ,def]ral ( ga9 inve/$ 9     
qualifi$ rural opportunity zone prop]ty 
7#a7 ,ye> ( inclusion ,ga9 to :i*       
subsection 7a77#a77;,b7 applies %all be 
includ$ 9 income 9 ! taxable ye> :i*    
includes ! e>li] (-- 7,a7 ! date on :i* 
su* inve/m5t is sold or ex*ang$1 or     
7,b7 ,decemb] #ca1 #bjcb4  7#b7 ,am\nt  
includible  7,a7 ,9 g5]al ,! am\nt ( ga9
 includ$ 9 gross income "u subsection   

7a77#a77;,a7 %all be ! excess (-- 7i7 ! 
less] ( ! am\nt ( ga9 exclud$ "u        
p>agraph 7#a7 or ! fair m>ket value ( ! 
inve/m5t z det]m9$ z ( ! date describ$ 9
 p>agraph 7#a71 ov]  7ii7 ! taxpay]'s   
basis 9 ! inve/m5t4  7,b7 ,det]m9ation (
 basis qualifi$ rural opportunity zone  
prop]ty  7i7 ,9 g5]al ,except z o!rwise 
provid$ 9 ?is clause or subsection 7c71 
! taxpay]'s basis 9 ! inve/m5t %all be  
z]o4  7ii7 ,increase = ga9 recogniz$ "u 
subsection 7a77#a77;b7 ,! basis 9 !     
inve/m5t %all be increas$ by ! am\nt (  
ga9 recogniz$ by reason ( subsection    
7a77#a77;,b7 ) respect to su* prop]ty4  
7iii7 ,inve/m5ts held = #e ye>s ,9 !    
case ( any inve/m5t held = at lea/ #e   
ye>s1 ! basis ( su* inve/m5t %all be    
increas$ by an am\nt equal to #aj p]c5t 
( ! am\nt ( ga9 def]r$ by reason (      
subsection 7a77#a77;,a74  7iv7          
,inve/m5ts held = #g ye>s ,9 ! case (   
any inve/m5t held by ! taxpay] = at lea/
 #g ye>s1 9 addition to any adju/m5t    
made "u clause 7iii71 ! basis ( su*     

prop]ty %all be increas$ by an am\nt    
equal to #e p]c5t ( ! am\nt ( ga9 def]r$
 by reason ( subsection 7a77#a77;,a74   
7c7 ,special rule = inve/m5ts held = at 
lea/ #aj ye>s ,9 ! case ( any inve/m5t  
held by ! taxpay] = at lea/ #aj ye>s & )
 respect to :i* ! taxpay] makes an      
election "u ?is subsection1 ! basis (   
su* prop]ty %all be equal to ! fair     
m>ket value ( su* inve/m5t on ! date t !
 inve/m5t is sold or ex*ang$4  7d7      
,qualifi$ rural opportunity fund ,=     
purposes ( ?is section-- 7#a7 ,9 g5]al  
,! t]m qualifi$ rural opportunity fund  
means any inve/m5t vehicle :i* is       
organiz$ z a corporation or a p>tn]%ip =
 ! purpose ( inve/+ 9 qualifi$ rural    
opportunity zone prop]ty 7o!r ?an ano!r 
qualifi$ rural opportunity fund7 t holds
 at lea/ #ij p]c5t ( its assets 9       
qualifi$ rural opportunity zone prop]ty1
 det]m9$ by ! av]age ( ! p]c5tage (     
qualifi$ rural opportunity zone prop]ty 
held 9 ! fund z measur$-- 7,a7 on ! la/ 
day ( ! fir/ #f-mon? p]iod ( ! taxable  

ye> ( ! fund1 &  7,b7 on ! la/ day ( !  
taxable ye> ( ! fund4  7#b7 ,qualifi$   
rural opportunity zone prop]ty  7,a7 ,9 
g5]al ,! t]m qualifi$ rural opportunity 
zone prop]ty means prop]ty :i* is-- 7i7 
qualifi$ rural opportunity zone /ock1   
7ii7 qualifi$ rural opportunity zone    
p>tn]%ip int]e/1 or  7iii7 qualifi$     
rural opportunity zone bus9ess prop]ty4 
7,b7 ,qualifi$ rural opportunity zone   
/ock  7i7 ,9 g5]al ,except z provid$ 9  
clause 7ii71 ! t]m qualifi$ rural       
opportunity zone /ock means any /ock 9 a
 dome/ic corporation if-- 7,i7 su* /ock 
is acquir$ by ! qualifi$ rural          
opportunity fund aft] ,decemb] #ca1     
#bjbc1 at its orig9al issue 7directly or
 ?r\gh an und]writ]7 f ! corporation    
solely 9 ex*ange = ca%1  7,,ii7 z ( ! "t
 su* /ock 0 issu$1 su* corporation 0 a  
qualifi$ rural opportunity zone bus9ess 
7or1 9 ! case ( a new corporation1 su*  
corporation 0 be+ organiz$ = purposes ( 
be+ a qualifi$ rural opportunity zone   
bus9ess71 &  7,,iii7 dur+ sub/antially  

all ( ! qualifi$ rural opportunity      
fund's hold+ p]iod = su* /ock1 su*      
corporation qualifi$ z a qualifi$ rural 
opportunity zone bus9ess4  7ii7         
,r$emptions ,a rule simil> to ! rule (  
section #abjb7;c77#c7 %all apply =      
purposes ( ?is p>agraph4  7,c7 ,qualifi$
 rural opportunity zone p>tn]%ip int]e/ 
,! t]m qualifi$ rural opportunity zone  
p>tn]%ip int]e/ means any capital or    
pr(its int]e/ 9 a dome/ic p>tn]%ip if-- 
7i7 su* int]e/ is acquir$ by ! qualifi$ 
rural opportunity fund aft] ,decemb]    
#ca1 #bjbc1 f ! p>tn]%ip solely 9       
ex*ange = ca%1  7ii7 z ( ! "t su* int]e/
 0 acquir$1 su* p>tn]%ip 0 a qualifi$   
rural opportunity zone bus9ess 7or1 9 ! 
case ( a new p>tn]%ip1 su* p>tn]%ip 0   
be+ organiz$ = purposes ( be+ a qualifi$
 rural opportunity zone bus9ess71 &     
7iii7 dur+ sub/antially all ( ! qualifi$
 rural opportunity fund's hold+ p]iod = 
su* int]e/1 su* p>tn]%ip qualifi$ z a   
qualifi$ rural opportunity zone bus9ess4
  7,d7 ,qualifi$ rural opportunity zone 

bus9ess prop]ty  7i7 ,9 g5]al ,! t]m    
qualifi$ rural opportunity zone bus9ess 
prop]ty means tangible prop]ty us$ 9 a  
trade or bus9ess ( ! qualifi$ rural     
opportunity fund if-- 7,i7 su* prop]ty 0
 acquir$ by ! qualifi$ rural opportunity
 fund by pur*ase 7z def9$ 9 section     
#agi7;d77#b77 aft] ,decemb] #ca1 #bjbc1 
7,,ii7 ! orig9al use ( su* prop]ty 9 !  
qualifi$ rural opportunity zone comm5ces
 ) ! qualifi$ rural opportunity fund or 
! qualifi$ rural opportunity fund       
sub/antially improves ! prop]ty1 &      
7,,iii7 dur+ sub/antially all ( !       
qualifi$ rural opportunity fund's hold+ 
p]iod = su* prop]ty1 sub/antially all ( 
! use ( su* prop]ty 0 9 a qualifi$ rural
 opportunity zone4  7ii7 ,sub/antial    
improvem5t ,= purposes ( subp>agraph    
7,a77ii71 prop]ty %all be treat$ z      
sub/antially improv$ by ! qualifi$ rural
 opportunity fund only if1 dur+ any     
#cj-mon? p]iod beg9n+ aft] ! date (     
acquisition ( su* prop]ty1 additions to 
basis ) respect to su* prop]ty 9 ! h&s (

 ! qualifi$ rural opportunity fund exce$
 an am\nt equal to ! adju/$ basis ( su* 
prop]ty at ! beg9n+ ( su* #cj-mon? p]iod
 9 ! h&s ( ! qualifi$ rural opportunity 
fund4  7iii7 ,relat$ p>ty ,= purposes ( 
subp>agraph 7,a77i71 ! relat$ p]son rule
 ( section #agi7;d77#b7 %all be appli$  
pursuant to subsection 7e77#b7 9 lieu ( 
! application ( su* rule 9 section      
#agi7;d77#b77;,a74  7#c7 ,qualifi$ rural
 opportunity zone bus9ess  7,a7 ,9 g5]al
 ,! t]m qualifi$ rural opportunity zone 
bus9ess means a trade or bus9ess-- 7i7 9
 :i* sub/antially all ( ! tangible      
prop]ty own$ or leas$ by ! taxpay] is   
qualifi$ rural opportunity zone bus9ess 
prop]ty 7det]m9$ by sub/itut+ qualifi$  
rural opportunity zone bus9ess =        
qualifi$ rural opportunity fund ea*     
place x appe>s 9 p>agraph 7#b77;,d771   
7ii7 :i* satisfies ! requirem5ts (      
p>agraphs 7#b71 7#d71 & 7#h7 ( section  
#acig;,c7b71 &  7iii7 :i* is n describ$ 
9 section #add7;c77#f77;,b74  7,b7      
,special rule ,= purposes ( subp>agraph 

7,a71 tangible prop]ty t ceases to be a 
qualifi$ rural opportunity zone bus9ess 
prop]ty %all cont9ue to be treat$ z a   
qualifi$ rural opportunity zone bus9ess 
prop]ty = ! less] (-- 7i7 #e ye>s aft] !
 date on :i* su* tangible prop]ty ceases
 to be s qualifi$1 or  7ii7 ! date on   
:i* su* tangible prop]ty is no long]    
held by ! qualifi$ rural opportunity    
zone bus9ess4  7#d7 ,qualifi$ rural     
opportunity zone  7,a7 ,9 g5]al ,! t]m  
qualifi$ rural opportunity zone means   
any population c5sus tract :i*-- 7i7 is 
locat$ 9 a rural c\nty1 &  7ii7 is 9    
p]si/5t pov]ty 7z det]m9$ by ! ,bureau (
 ! ,c5sus z ( ! date ( ! enactm5t ( ?is 
,act74  7,b7 ,rural c\nty ,! t]m rural  
c\nty means any c\nty if m ?an #ej p]c5t
 ( ! c5sus blocks :i* comprise su* c\nty
 are rural blocks 7z det]m9$ by !       
,bureau ( ! ,c5sus z ( ! date ( !       
enactm5t ( ?is ,act74 ,a rule simil> to 
section #adc7k77#b77;,d7 %all apply =   
purposes ( ! prec$+ s5t5ce4  7e7        
,applicable rules  7#a7 ,treatm5t (     

inve/m5ts ) mix$ funds ,9 ! case ( any  
inve/m5t 9 a qualifi$ rural opportunity 
fund only a portion ( :i* consi/s (     
inve/m5ts ( ga9 to :i* an election "u   
subsection 7a7 is 9 effect-- 7,a7 su*   
inve/m5t %all be treat$ z #b sep>ate    
inve/m5ts1 consi/+ (-- 7i7 "o inve/m5t t
 only includes am\nts to :i* ! election 
"u subsection 7a7 applies1 &  7ii7 a    
sep>ate inve/m5t consi/+ ( o!r am\nts1 &
  7,b7 subsections 7a71 7b71 & 7c7 %all 
only apply to ! inve/m5t describ$ 9     
subp>agraph 7,a77i74  7#b7 ,relat$      
p]sons ,= purposes ( ?is section1 p]sons
 are relat$ to ea* o!r if su* p]sons are
 describ$ 9 section #bfg7;b7 or         
#gjg7;b77#a71 det]m9$ by sub/itut+ #bj  
p]c5t = #ej p]c5t ea* place x occurs 9  
su* sections4  7#c7 ,dec$5ts ,9 ! case (
 a dec$5t1 am\nts recogniz$ "u ?is      
section %all1 if n prop]ly includible 9 
! gross income ( ! dec$5t1 be includible
 9 gross income z provid$ by section    
#fia4  7#d7 ,regulations ,! ,secret>y   
%all prescribe su* regulations z may be 

necess>y or appropriate to c>ry out !   
purposes ( ?is section1 includ+-- 7,a7  
rules = ! c]tification ( qualifi$ rural 
opportunity funds = ! purposes ( ?is    
section1  7,b7 rules to ensure a        
qualifi$ rural opportunity fund has a   
reasonable p]iod ( "t to re9ve/ ! return
 ( capital f inve/m5ts 9 qualifi$ rural 
opportunity zone /ock & qualifi$ rural  
opportunity zone p>tn]%ip int]e/s1 & to 
re9ve/ proce$s receiv$ f ! sale or      
disposition ( qualifi$ rural opportunity
 zone prop]ty1 &  7,c7 rules to prev5t  
abuse4  7f7 ,failure ( qualifi$ rural   
opportunity fund ,to ma9ta9 inve/m5t    
/&>d  7#a7 ,9 g5]al ,if a qualifi$ rural
 opportunity fund fails to meet !       
#ij-p]c5t requirem5t ( subsection       
7d77#a71 ! qualifi$ rural opportunity   
fund %all pay a p5alty = ea* mon? x     
fails to meet ! requirem5t 9 an am\nt   
equal to ! product (-- 7,a7 ! excess (--
 7i7 ! am\nt equal to #ij p]c5t ( its   
aggregate assets1 ov]  7ii7 ! aggregate 
am\nt ( qualifi$ rural opportunity zone 

prop]ty held by ! fund1 multipli$ by    
7,b7 ! und]paym5t rate e/abli%$ "u      
section #ffba7;a77#b7 = su* mon?4  7#b7 
,special rule = p>tn]%ips ,9 ! case t ! 
qualifi$ rural opportunity fund is a    
p>tn]%ip1 ! p5alty impos$ by p>agraph   
7#a7 %all be tak5 into acc\nt           
proportionately z "p ( ! di/ributive %>e
 ( ea* p>tn] ( ! p>tn]%ip4  7#c7        
,reasonable cause exception ,no p5alty  
%all be impos$ "u ?is subsection )      
respect to any failure if x is %[n t su*
 failure is due to reasonable cause4  4 
7b7 ,cl]ical am5dm5t ,! table ( sections
 = sub*apt] ,z ( *apt] #a ( su* ,code is
 am5d$ by add+ at ! end ! foll[+ new    
item3  ,sec4 #adjj,z-#c4 ,special rules 
= capital ga9s inve/$ 9 rural           
opportunity zones4  4  7c7 ,effective   
date ,! am5dm5ts made by ?is section    
%all apply to am\nts inve/$ aft] ! date 
( ! enactm5t ( ?is section4