,i #aaith ,,congress #ast ,session ,h4 ,r4 #cfhg ,,in ,,the ,,house ,,of ,,representatives ,june #c1 #bjbe,mr4 ,kelly of ,pennsylvania introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to renew and enhance opportunity zones1 and for other purposes4 #a4 ,renewal and enhancement of opportunity zones 7a7 ,modification of low-,income community definition ,section #adjj,z-#a7;c77#a7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking communities4--,the term and inserting the following3 communities4-- 7,a7 ,in general ,the term 1 and 7#b7 by adding at the end the following3 7,b7 ,modifications ,for purposes of subparagraph 7,a71 section #de;,d7e77#a7 shall be applied in subparagraph 7,b7 thereof1 by substituting #gj percent for #hj percent each place it appears4 7,c7 ,certain census tracts disallowed ,the term low-income community shall not include any population census tract if-- 7i7 in the case of a tract not located within a metropolitan area1 the median family income for such tract is at least #abe percent of statewide median family income1 or 7ii7 in the case of a tract located within a metropolitan area1 the median family income for such tract is at least #abe percent of the metropolitan area median family income4 4 7b7 ,new round of qualified opportunity zone designations 7#a7 ,in general ,section #adjj,z-#a of such ,code is amended by adding at the end the following new subsection3 7g7 ,new round of qualified opportunity zone designations 7#a7 ,in general ,in addition to designations under subsection 7b71 and under rules similar to the rules of such subsection1 the ,secretary shall designate tracts nominated by the chief executive officers of ,states for purposes of this section4 7#b7 ,number of designations2 proportion of rural areas designated 7,a7 ,in general ,of the low-income communities within a ,state1 the ,secretary may designate under this subsection not more than #be percent as qualified opportunity zones1 of which at least the lesser of the following shall be qualified opportunity zones which are comprised entirely of a rural area3 7i7 ,the applicable percentage of the total number of qualified opportunity zone designations which may be made within the ,state under this subsection4 7ii7 ,all low-income communities within the ,state which are comprised entirely of a rural area4 7,b7 ,applicable percentage ,for purposes of this paragraph1 the applicable percentage shall be1 for any calendar year during which a designation is made1 the greater of-- 7i7 #cc percent1 or 7ii7 the percentage of the ,united ,states population living within a rural area for the preceding calendar year4 7#c7 ,rural area ,whether a low-income community is comprised entirely of a rural area shall be determined by the ,secretary in consultation with the ,secretary of ,agriculture4 ,for purposes of this subsection1 the term rural area has the meaning given such term by section #cdc7;a77#ac77;,a7 of the ,consolidated ,farm and ,rural ,development ,act4 7#d7 ,period for which designation is in effect ,a designation as a qualified opportunity zone under this subsection shall remain in effect for the period beginning on ,january #a1 #bjbg1 and ending on ,december #ca1 #bjcc4 7#e7 ,contiguous tracts not eligible ,subsection 7e7 shall not apply to designations made under this subsection4 4 7#b7 ,election with respect to new round of zones ,section #adjj,z-#b7;a77#b77;,b7 of such ,code is amended by striking ,december #ca1 #bjbf and inserting ,december #ca1 #bjcc4 7#c7 ,year of inclusion ,section #adjj,z-#b7;b77#a77;,b7 of such ,code is amended to read as follows3 7,b7 7i7 ,december #ca1 #bjbf1 in the case of an amount invested before ,january #a1 #bjbg1 and 7ii7 ,december #ca1 #bjcc1 in the case of an amount invested after ,december #ca1 #bjbf1 and before ,january #a1 #bjcd4 4 7#d7 ,winding down initial zone designations ,section #adjj,z-#a7;f7 of such ,code is amended-- 7,a7 by striking and ending and all that follows and inserting the following3 and ending on ,december #ca1 #bjbf41 and 7,b7 by striking ,a designation and inserting ,except as provided in subsection 7g77#d71 a designation4 7c7 ,modification of opportunity zone investment incentives 7#a7 ,consolidated basis increases2 rural zone basis increase ,section #adjj,z-#b7;b77#b77;,b7 of such ,code is amended by adding at the end the following new clauses3 7v7 ,consolidated basis increase for investments after #bjbf ,in the case of investments made after ,december #ca1 #bjbf-- 7,i7 clauses 7iii7 and 7iv7 shall not apply1 and 7,,ii7 for any such investment held by the taxpayer for at least #e years1 the basis of such adjustment shall be increased by an amount equal to #aj percent of the amount of gain deferred by reason of subsection 7a77#a77;,a74 7vi7 ,special rule for rural opportunity funds ,clause 7v7 shall be applied by substituting #cj percent for #aj percent in the case of an investment in a qualified rural opportunity fund4 7vii7 ,qualified rural opportunity fund ,for purposes of clause 7vi71 a qualified rural opportunity fund means a qualified opportunity fund that holds at least #ij percent of its assets in qualified opportunity zone property which-- 7,i7 is qualified opportunity zone business property substantially all of the use of which1 during substantially all of the fund's holding period for such property1 was in a qualified opportunity zone comprised entirely of a rural area1 or 7,,ii7 is qualified opportunity zone stock1 or a qualified opportunity zone partnership interest1 in a qualified opportunity zone business in which substantially all of the tangible property owned or leased is qualified opportunity zone business property described in subsection 7d77#c77;,a77i7 and substantially all the use of which is in a qualified opportunity zone comprised entirely of a rural area4 ,for purposes of the preceding sentence1 property held in the fund shall be measured under rules similar to the rules of subsection 7d77#a74 4 7#b7 ,limited treatment of ordinary income ,section #adjj,z-#b7;a7 of such ,code is amended by adding at the end the following new paragraph3 7#c7 ,special rule for ordinary income ,in the case of any ordinary income of the taxpayer for the taxable year-- 7,a7 the taxpayer may elect the application of paragraph 7#a7 with respect to so much of ordinary income as does not exceed #aj1jjj 7reduced by the amount of any income with respect to which an election pursuant to this paragraph has previously been made71 and 7,b7 subsection 7b77#b77;,b7 shall not apply to the investment with respect to such election4 4 7#c7 ,special rule for improvement of existing structures in rural areas1 including for data centers ,section #adjj,z-#b7;d77#b77;,d77ii7 of such ,code is amended by inserting 7#ej percent of such adjusted basis in the case of property in a qualified opportunity zone comprised entirely of a rural area7 after the adjusted basis of such property4 7d7 ,information reporting on qualified opportunity funds and qualified rural opportunity funds 7#a7 ,filing requirements for funds and investors ,subpart ,a of part ,,iii of subchapter ,a of chapter #fa of such ,code is amended by inserting after section #fjci;,j the following new sections3 #fjci,k4 ,returns with respect to qualified opportunity funds and qualified rural opportunity funds 7a7 ,in general ,every qualified opportunity fund shall file an annual return 7at such time and in such manner as the ,secretary may prescribe7 containing the information described in subsection 7b74 7b7 ,information from qualified opportunity funds ,the information described in this subsection is-- 7#a7 the name1 address1 and taxpayer identification number of the qualified opportunity fund1 7#b7 whether the qualified opportunity fund is organized as a corporation or a partnership1 7#c7 the value of the total assets held by the qualified opportunity fund as of each date described in section #adjj,z-#b7;d77#a71 7#d7 the value of all qualified opportunity zone property held by the qualified opportunity fund on each such date1 7#e7 with respect to each investment held by the qualified opportunity fund in qualified opportunity zone stock or a qualified opportunity zone partnership interest-- 7,a7 the name1 address1 and taxpayer identification number of the corporation in which such stock is held or the partnership in which such interest is held1 as the case may be1 7,b7 each ,north ,american ,industry ,classification ,system 7,,naics7 code that applies to the trades or businesses conducted by such corporation or partnership1 7,c7 the population census tracts in which the qualified opportunity zone business property of such corporation or partnership is located1 7,d7 the amount of the investment in such stock or partnership interest as of each date described in section #adjj,z-#b7;d77#a71 7,e7 the value of tangible property held by such corporation or partnership on each such date which is owned by such corporation or partnership1 7,f7 the value of tangible property held by such corporation or partnership on each such date which is leased by such corporation or partnership1 7,g7 the approximate number of residential units 7if any7 for any real property held by such corporation or partnership1 and 7,h7 the approximate average monthly number of full-time equivalent employees of such corporation or partnership for the year 7within numerical ranges identified by the ,secretary7 or such other indication of the employment impact of such corporation or partnership as determined appropriate by the ,secretary1 7#f7 with respect to the items of qualified opportunity zone business property held by the qualified opportunity fund-- 7,a7 the ,north ,american ,industry ,classification ,system 7,,naics7 code that applies to the trades or businesses in which such property is held1 7,b7 the population census tract in which the property is located1 7,c7 whether the property is owned or leased1 7,d7 the aggregate value of the items of qualified opportunity zone property held by the qualified opportunity fund as of each date described in section #adjj,z-#b7;d77#a71 and 7,e7 in the case of real property1 number of residential units 7if any71 7#g7 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 7within numerical ranges identified by the ,secretary7 or such other indication of the employment impact of such trades or businesses as determined appropriate by the ,secretary1 7#h7 with respect to each person who disposed of an investment in the qualified opportunity fund during the year-- 7,a7 the name and taxpayer identification number of such person1 7,b7 the date or dates on which the investment disposed was acquired1 and 7,c7 the date or dates on which any such investment was disposed and the amount of the investment disposed1 and 7#i7 such other information as the ,secretary may require4 7c7 ,statement required ,to be furnished to investors ,every person required to make a return under subsection 7a7 shall furnish to each person whose name is required to be set forth in such return by reason of subsection 7b77#h7 a written statement showing-- 7#a7 the name1 address and phone number of the information contact of the person required to make such return1 and 7#b7 the information required to be shown on such return by reason of subsection 7b77#h7 with respect to the person whose name is required to be so set forth4 7d7 ,definitions ,for purposes of this section-- 7#a7 ,in general ,any term used in this section which is also used in subchapter ,z of chapter #a shall have the meaning given such term under such subchapter4 7#b7 ,full-time equivalent employees ,the term full-time equivalent employees means1 with respect to any month1 the sum of-- 7,a7 the number of full-time employees 7as defined in section #dihj;,h7c77#d77 for the month1 plus 7,b7 the number of employees determined 7under rules similar to the rules of section #dihj;,h7c77#b77;,e77 by dividing the aggregate number of hours of service of employees who are not full-time employees for the month by #abj4 7e7 ,application to qualified rural opportunity funds ,every qualified rural opportunity fund 7as defined in section #adjj,z-#b7;b77#b77;,b77vii77 shall file the annual return required under subsection 7a71 and the statements required under subsection 7c71 applied-- 7#a7 by substituting qualified rural opportunity for qualified opportunity each place it appears1 7#b7 by substituting section #adjj,z-#b7;b77#b77;,b77vii7 for section #adjj,z-#b7;d77#a7 each place it appears1 and 7#c7 by treating any reference 7after the application of paragraph 7#a77 to qualified rural opportunity zone stock1 a qualified rural opportunity zone partnership interest1 a qualified rural opportunity zone business1 or qualified opportunity zone business property as stock1 an interest1 a business1 or property1 respectively1 described in 7,i7 or 7,,ii71 as the case may be1 of section #adjj,z-#b7;b77#b77;,b77vii74 #fjci,l4 ,information required from qualified opportunity zone businesses and qualified rural opportunity zone businesses 7a7 ,in general ,every applicable qualified opportunity zone business shall furnish to the qualified opportunity fund described in subsection 7b7 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 #fjci,k7b77#e74 7b7 ,applicable qualified opportunity zone business ,for purposes of subsection 7a71 the term applicable qualified opportunity zone business means any qualified opportunity zone business-- 7#a7 which is a trade or business of a qualified opportunity fund1 7#b7 in which a qualified opportunity fund holds qualified opportunity zone stock1 or 7#c7 in which a qualified opportunity fund holds a qualified opportunity zone partnership interest4 7c7 ,other terms ,any term used in this section which is also used in subchapter ,z of chapter #a shall have the meaning given such term under such subchapter4 7d7 ,application to qualified rural opportunity businesses ,every applicable qualified rural opportunity zone business 7as defined in subsection 7b7 determined after application of the substitutions described in this sentence7 shall furnish the written statement required under subsection 7a71 applied-- 7#a7 by substituting qualified rural opportunity for qualified opportunity each place it appears1 and 7#b7 by treating any reference 7after the application of paragraph 7#a77 to qualified rural opportunity zone stock1 a qualified rural opportunity zone partnership interest1 or a qualified rural opportunity zone business as stock1 an interest1 or a business1 respectively1 described in 7,i7 or 7,,ii71 as the case may be1 of section #adjj,z-#b7;b77#b77;,b77vii74 4 7#b7 ,penalties 7,a7 ,in general ,part ,,ii of subchapter ,b of chapter #fh of such ,code is amended by inserting after section #fgbe the following new section3 #fgbf4 ,failure to comply with information reporting requirements relating to qualified opportunity funds and qualified rural opportunity funds 7a7 ,in general ,in the case of any person required to file a return under section #fjci,k fails to file a complete and correct return under such section in the time and in the manner prescribed therefor1 such person shall pay a penalty of #ejj for each day during which such failure continues4 7b7 ,limitation 7#a7 ,in general ,the maximum penalty under this section on failures with respect to any #a return shall not exceed #aj1jjj4 7#b7 ,large qualified opportunity funds ,in the case of any failure described in subsection 7a7 with respect to a fund the gross assets of which 7determined on the last day of the taxable year7 are in excess of #aj1jjj1jjj1 paragraph 7#a7 shall be applied by substituting #ej1jjj for #aj1jjj4 7c7 ,penalty in cases of intentional disregard ,if a failure described in subsection 7a7 is due to intentional disregard1 then-- 7#a7 subsection 7a7 shall be applied by substituting #b1ejj for #ejj1 7#b7 subsection 7b77#a7 shall be applied by substituting #ej1jjj for #aj1jjj1 and 7#c7 subsection 7b77#b7 shall be applied by substituting #bej1jjj for #ej1jjj4 7d7 ,inflation adjustment 7#a7 ,in general ,in the case of any failure relating to a return required to be filed in a calendar year beginning after #bjbe1 each of the dollar amounts in subsections 7a71 7b71 and 7c7 shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year determined by substituting calendar year #bjbd for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7#b7 ,rounding 7,a7 ,in general ,if the #ejj dollar amount in subsection 7a7 and 7c77#a7 or the #b1ejj amount in subsection 7c77#a71 after being increased under paragraph 7#a71 is not a multiple of #aj1 such dollar amount shall be rounded to the next lowest multiple of #aj4 7,b7 ,asset threshold ,if the #aj1jjj1jjj dollar amount in subsection 7b77#b71 after being increased under paragraph 7#a71 is not a multiple of #aj1jjj1 such dollar amount shall be rounded to the next lowest multiple of #aj1jjj4 7,c7 ,other dollar amounts ,if any dollar amount in subsection 7b7 or 7c7 7other than any amount to which subparagraph 7,a7 or 7,b7 applies71 after being increased under paragraph 7#a71 is not a multiple of #a1jjj1 such dollar amount shall be rounded to the next lowest multiple of #a1jjj4 4 7,b7 ,information required to be sent to other taxpayers ,section #fgbd7;d77#b7 of such ,code is amended-- 7i7 by striking or at the end of subparagraph 7,,kk71 7ii7 by striking the period at the end of the subparagraph 7,,ll7 and inserting a comma1 and 7iii7 by inserting after subparagraph 7,,ll7 the following new subparagraphs3 7,,mm7 section #fjci,k7c7 7relating to disposition of qualified opportunity fund investments71 or 7,,nn7 section #fjci,l 7relating to information required from certain qualified opportunity zone businesses and qualified rural opportunity zone businesses74 4 7#c7 ,electronic filing ,section #fjaa7;e7 of such ,code is amended by adding at the end the following new paragraph3 7#h7 ,qualified opportunity funds and qualified rural opportunity funds ,notwithstanding paragraphs 7#a7 and 7#b71 any return filed by a qualified opportunity fund or qualified rural opportunity fund shall be filed on magnetic media or other machine-readable form4 4 7#d7 ,clerical amendments 7,a7 ,the table of sections for subpart ,a of part ,,iii of subchapter ,a of chapter #fa of such ,code is amended by inserting after the item relating to section #fjci;,j the following new items3 ,sec4 #fjci,k4 ,returns with respect to qualified opportunity funds and qualified rural opportunity funds4 ,sec4 #fjci,l4 ,information required from qualified opportunity zone businesses and qualified rural opportunity zone businesses4 4 7,b7 ,the table of sections for part ,,ii of subchapter ,b of chapter #fh of such ,code is amended by inserting after the item relating to section #fgbe the following new item3 ,sec4 #fgbf4 ,failure to comply with information reporting requirements relating to qualified opportunity funds and qualified rural opportunity funds4 4 7#e7 ,effective date ,the amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this ,act4 7e7 ,secretary reporting of data on opportunity zone and rural opportunity zone tax incentives 7#a7 ,in general ,as soon as practical after the date of the enactment of this ,act1 and annually thereafter1 the ,secretary of the ,treasury1 or the ,secretary's delegate 7referred to in this section as the ,secretary71 in consultation with the ,director of the ,bureau of the ,census and such other agencies as the ,secretary determines appropriate1 shall make publicly available a report on qualified opportunity funds4 7#b7 ,information included ,the report required under paragraph 7#a7 shall include1 to the extent available1 the following information3 7,a7 ,the number of qualified opportunity funds4 7,b7 ,the aggregate dollar amount of assets held in qualified opportunity funds4 7,c7 ,the aggregate dollar amount of investments made by qualified opportunity funds in qualified opportunity fund property1 stated separately for each ,north ,american ,industry ,classification ,system 7,,naics7 code4 7,d7 ,the percentage of population census tracts designated as qualified opportunity zones that have received qualified opportunity fund investments4 7,e7 ,for each population census tract designated as a qualified opportunity zone1 the approximate average monthly number of full-time equivalent employees of the qualified opportunity zone businesses in such qualified opportunity zone for the preceding #ab-month period 7within numerical ranges identified by the ,secretary7 or such other indication of the employment impact of such qualified opportunity fund businesses as determined appropriate by the ,secretary4 7,f7 ,the percentage of the total amount of investments made by qualified opportunity funds in-- 7i7 qualified opportunity zone property which is real property2 and 7ii7 other qualified opportunity zone property4 7,g7 ,for each population census tract1 the aggregate approximate number of residential units resulting from investments made by qualified opportunity funds in real property4 7,h7 ,the aggregate dollar amount of investments made by qualified opportunity funds in each population census tract4 7#c7 ,additional information 7,a7 ,in general ,beginning with the report submitted under paragraph 7#a7 for the #fth year after the date of the enactment of this ,act1 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 indicators1 such as job creation1 poverty reduction1 new business starts1 and other metrics as determined by the ,secretary4 7,b7 ,semi-decennial information 7i7 ,in general ,in the case of any report submitted under paragraph 7#a7 in the #fth year or the #aath year after the date of the enactment of this ,act1 the ,secretary shall include the following information3 7,i7 ,for population census tracts designated as a qualified opportunity zone1 a comparison 7based on aggregate information7 of the factors listed in clause 7iii7 between the #e-year period ending on the date of the enactment of ,public ,law #aae-ig and the most recent #e-year period for which data is available4 7,,ii7 ,for population census tracts designated as a qualified opportunity zone1 a comparison 7based on aggregate information7 of the factors listed in clause 7iii7 for the most recent #e-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 zone4 7ii7 ,control groups ,for purposes of clause 7i71 the ,secretary may combine population census tracts into such groups as the ,secretary determines appropriate for purposes of making comparisons4 7iii7 ,factors listed ,the factors listed in this clause are the following3 7,i7 ,the unemployment rate4 7,,ii7 ,the number of persons working in the population census tract1 including the percentage of such persons who were not residents in the population census tract in the preceding year4 7,,iii7 ,individual1 family1 and household poverty rates4 7,,iv7 ,median family income of residents of the population census tract4 7,v7 ,demographic information on residents of the population census tract1 including age1 income1 education1 race1 and employment4 7,,vi7 ,the average percentage of income of residents of the population census tract spent on rent annually4 7,,vii7 ,the number of residences in the population census tract4 7,,viii7 ,the rate of home ownership in the population census tract4 7,,ix7 ,the average value of residential property in the population census tract4 7,x7 ,the number of affordable housing units in the population census tract4 7,,xi7 ,the number and percentage of residents in the population census tract that were not employed for the preceding year4 7,,xii7 ,the number of new business starts in the population census tract4 7,,xiii7 ,the distribution of employees in the population census tract by ,north ,american ,industry ,classification ,system 7,,naics7 code4 7#d7 ,protection of identifiable return information ,in making reports required under this subsection1 the ,secretary-- 7,a7 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 information1 and 7,b7 if necessary to protect taxpayer return information1 may combine information required with respect to individual population census tracts into larger geographic areas4 7#e7 ,definitions ,any term used in this subsection which is also used in subchapter ,z of chapter #a of the ,internal ,revenue ,code of #aihf shall have the meaning given such term under such subchapter4 7#f7 ,reports on qualified rural opportunity funds ,the ,secretary shall make publicly available1 with respect to qualified rural opportunity funds1 separate reports as required under this subsection1 applied-- 7,a7 by substituting qualified rural opportunity for qualified opportunity each place it appears1 7,b7 by substituting a reference to this ,act for ,public ,law #aae-ig1 and 7,c7 by treating any reference 7after the application of subparagraph 7,a77 to qualified rural opportunity zone stock1 qualified rural opportunity zone partnership interest1 qualified rural opportunity zone business1 or qualified opportunity zone business property as stock1 interest1 business1 or property1 respectively1 described in subclause 7,i7 or 7,,ii71 as the case may be1 of section #adjj,z-#b7;b77#b77;,b77vii7 of the ,internal ,revenue ,code of #aihf4