II 

117TH CONGRESS 

2D SESSION S. 4065 

To amend the Internal Revenue Code of 1986 to modify the rules relating 

to qualified opportunity zones, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 7, 2022 

Mr. BOOKER (for himself, Mr. SCOTT of South Carolina, Mr. WARNER, Mr. 

YOUNG, and Mr. VAN HOLLEN) introduced the following bill; which was 

read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to modify 

the rules relating to qualified opportunity zones, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Opportunity Zones 

5 Transparency, Extension, and Improvement Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress makes the following findings: 

8 (1) The 8,764 population census tracts des9 ignated as qualified opportunity zones under section 


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1 1400Z–1 of the Internal Revenue Code of 1986 span 

2 across all 50 States, the District of Columbia, and 

3 5 Territories and overwhelmingly represent commu4 nities that have been economically left behind as the 

5 American economy has surged forward. 

6 (2) The average poverty rate of qualified oppor7 tunity zone residents is 26.4 percent. 

8 (3) Fifty-four percent of the country’s pockets 

9 of concentrated persistent poverty—meaning census 

10 tracts in which at least 40 percent of the population 

11 has lived in poverty since at least 1980—are quali12 fied opportunity zones. 

13 (4) More adults in qualified opportunity zones 

14 lack a high school diploma than have a four-year col15 lege degree. 

16 (5) The Investing in Opportunity Act, which 

17 originally proposed opportunity zones, originally in18 corporated reporting requirements to evaluate the 

19 impact the incentive will have on designated commu20 nities and it is critical that Congress act to reinstate 

21 reporting requirements as soon as possible. 


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1 TITLE I—MODIFICATION OF POP2 ULATION CENSUS TRACTS 

3 DESIGNATED AS QUALIFIED 

4 OPPORTUNITY ZONES 

5 SEC. 101. MODIFICATION OF POPULATION CENSUS TRACTS 

6 DESIGNATED AS QUALIFIED OPPORTUNITY 

7 ZONES. 

8 Section 1400Z–1 of the Internal Revenue Code of 

9 1986 is amended by adding at the end the following new 

10 subsection: 

11 ‘‘(g) DISQUALIFICATION OF CERTAIN POPULATION

12 CENSUS TRACTS.— 

13 ‘‘(1) IN GENERAL.—Except as provided in para14 graph (5), any disqualified census tract shall not be 

15 treated as a qualified opportunity zone for any pe16 riod after the date that is 30 days after the date on 

17 which the Secretary publishes the final list of dis18 qualified census tracts under paragraph (4)(B). 

19 ‘‘(2) REPLACEMENT ZONES.— 

20 ‘‘(A) IN GENERAL.—The chief executive of21 ficer of a State may nominate additional popu22 lation census tracts to replace any population 

23 census tract the designation of which as a 

24 qualified opportunity zone was terminated by 

25 reason of paragraph (1). Except as otherwise 


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1 provided in this paragraph, the rules of sub2 sections (b), (c), (d), and (f) shall apply to any 

3 population census tract nominated under this 

4 paragraph. 

5 ‘‘(B) CONSULTATION.—No population cen6 sus tract nominated under subparagraph (A) 

7 may be designated as a qualified opportunity 

8 zone unless the chief executive officer of the 

9 State certifies in writing to the Secretary that 

10 the chief executive officer has consulted with 

11 the chief executive officer (or the equivalent) of 

12 each local jurisdiction in which the population 

13 census tract is located. 

14 ‘‘(C) SPECIAL RULES.—For purposes of 

15 this subchapter— 

16 ‘‘(i) any population census tract which 

17 is a disqualified census tract (as defined in 

18 paragraph (3) without regard to subpara19 graph (A)(i) thereof) may not be nomi20 nated as a qualified opportunity zone 

21 under this paragraph, 

22 ‘‘(ii) the determination period with re23 spect to a nomination under subparagraph 

24 (A) shall be the 45-day period beginning 

25 on the date on which the Secretary pubVerDate Sep 11 2014 00:37 Apr 12, 2022 Jkt 029200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4065.IS S4065

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1 lishes the final list of disqualified census 

2 tracts under paragraph (4)(B), as ex3 tended under subsection (b)(2), and 

4 ‘‘(iii) the period for which any such 

5 designation is in effect shall be the period 

6 beginning on the date such designation 

7 takes effect and ending on the last day of 

8 the 10th calendar year beginning on or 

9 after the designation date as a qualified 

10 opportunity zone for the population census 

11 tract which it is replacing as such a zone 

12 by reason of the termination under para13 graph (1). 

14 ‘‘(D) REGULATIONS AND GUIDANCE.—The 

15 Secretary shall prescribe such regulations or 

16 other guidance as may be necessary or appro17 priate to carry out the purposes of this para18 graph. 

19 ‘‘(3) DISQUALIFIED CENSUS TRACT.—For pur20 poses of this subsection— 

21 ‘‘(A) IN GENERAL.—The term ‘disqualified 

22 census tract’ means any population census tract 

23 which— 


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1 ‘‘(i) was designated as a qualified op2 portunity zone before the date of the en3 actment of this subsection, and 

4 ‘‘(ii) is described in subparagraph (B) 

5 or (C). 

6 ‘‘(B) HIGH MEDIAN FAMILY INCOME

7 TRACTS.— 

8 ‘‘(i) IN GENERAL.—Except as pro9 vided in clauses (ii) and (iii), a population 

10 census tract is described in this subpara11 graph if the median family income for such 

12 tract exceeds 130 percent of the national 

13 median family income. 

14 ‘‘(ii) EXCEPTION.—Clause (i) shall 

15 not apply if the poverty rate of such popu16 lation census tract (excluding students en17 rolled in an institution of higher education 

18 (as defined in section 101 of the Higher 

19 Education Act of 1965)) is equal to or 

20 greater than 30 percent. 

21 ‘‘(iii) REQUEST TO RETAIN DESIGNA22 TION FOR CERTAIN POPULATION CENSUS

23 TRACTS.—Clause (i) shall not apply if the 

24 Secretary, upon a request of the chief exec25 utive officer of the State made not later 


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1 than 60 days after the date the Secretary 

2 publishes the list described in paragraph 

3 (4)(A), determines that— 

4 ‘‘(I) the designation of such pop5 ulation census tract was consistent 

6 with the purposes of this subchapter, 

7 or 

8 ‘‘(II) the median family income 

9 for the population census tract does 

10 not exceed 130 percent of the national 

11 median family income. 

12 ‘‘(C) ELECTION TO INCLUDE ADDITIONAL

13 POPULATION CENSUS TRACTS.— 

14 ‘‘(i) IN GENERAL.—A population cen15 sus tract is described in this subparagraph 

16 if the Secretary, upon the request of the 

17 chief executive officer of the State sub18 mitted not later than 60 days after the 

19 date the Secretary publishes the list de20 scribed in paragraph (4)(A), determines 

21 that the continued designation of such pop22 ulation census tract as a qualified oppor23 tunity zone is not consistent with the pur24 poses of this subchapter. 


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1 ‘‘(ii) REGULATIONS AND GUIDANCE.— 

2 Not later than 12 months after the date of 

3 the enactment of this subsection, the Sec4 retary shall issue regulations or guidance 

5 with respect to the criteria to be used for 

6 making a determination by the Secretary 

7 under clause (i). 

8 ‘‘(4) IDENTIFICATION AND PUBLICATION OF

9 DISQUALIFIED CENSUS TRACTS.— 

10 ‘‘(A) INITIAL IDENTIFICATION.—As soon 

11 as practical, but not later than 12 months after 

12 the date of the enactment of this subsection, 

13 the Secretary shall make public— 

14 ‘‘(i) a list of population census tracts 

15 described in paragraph (3)(B) (determined 

16 without regard to clause (iii) thereof), and 

17 ‘‘(ii) a list of population census tracts 

18 which are low-income communities and 

19 were not designated as a qualified oppor20 tunity zone before the date of enactment of 

21 this subsection. 

22 ‘‘(B) FINAL LIST OF DISQUALIFIED CEN23 SUS TRACTS.—Not later than 105 days after 

24 the date the Secretary publishes the list de25 scribed in subparagraph (A), the Secretary shall 


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1 make public a final list of disqualified census 

2 tracts. 

3 ‘‘(5) RULES FOR QUALIFIED PREEXISTING IN4 VESTMENTS.— 

5 ‘‘(A) IN GENERAL.—For purposes of this 

6 subchapter, section 1400Z–2 shall be applied 

7 without regard to paragraph (1) with respect to 

8 any qualified preexisting trade or business. 

9 ‘‘(B) QUALIFIED PREEXISTING TRADE OR

10 BUSINESS.—For purposes of this paragraph— 

11 ‘‘(i) IN GENERAL.—The term ‘quali12 fied preexisting trade or business’ means 

13 any trade or business of a qualified oppor14 tunity zone fund or qualified opportunity 

15 zone business which meets the require16 ments of clauses (ii) and (iii) of section 

17 1400Z–2(d)(3)(A) and which— 

18 ‘‘(I) before the date of the enact19 ment of this subsection, filed a reg20 istration statement under the Securi21 ties Act of 1933 (15 U.S.C. 77a et 

22 seq.) or prepared any comparable of23 fering memorandum or similar disclo24 sure document provided in reliance on 

25 section 230.506 of title 17, Code of 


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1 Federal Regulations (or successor reg2 ulations), promulgated under the Se3 curities Act of 1933, that discloses the 

4 intent of such trade or business to in5 vest in the disqualified census tract, 

6 ‘‘(II) before the first date on 

7 which the disqualified census tract ap8 pears on any list published under 

9 paragraph (4), has made, or has en10 tered into to binding agreements to 

11 make, investments in the disqualified 

12 census tract which— 

13 ‘‘(aa) aggregate more than 

14 $250,000, and 

15 ‘‘(bb) have been designated 

16 in writing for the use in, or the 

17 development of, such trade or 

18 business, or 

19 ‘‘(III) is determined by the Sec20 retary to have relied on the designa21 tion of the disqualified census tract as 

22 a qualified opportunity zone and to 

23 have suffered a loss as a result of the 

24 application of paragraph (1). 


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1 ‘‘(ii) TRADE OR BUSINESS.—The term 

2 ‘trade or business’ includes any activity in3 tended to qualify as a trade or business 

4 within the meaning of section 162. 

5 ‘‘(C) REGULATIONS AND GUIDANCE.—The 

6 Secretary shall prescribe such regulations or 

7 guidance as may be necessary or appropriate to 

8 carry out the purposes of this paragraph, in9 cluding guidance to prevent speculative invest10 ment solely for the purpose of falling within the 

11 definition of a qualified preexisting trade or 

12 business. 

13 ‘‘(6) DETERMINATION OF POPULATION CENSUS

14 TRACT DATA.—For purposes of applying this sub15 section, in determining whether a population census 

16 tract meets any qualification with respect to poverty 

17 rate or any aspect of median income, such deter18 mination shall be made using the most recent census 

19 data that has been published by the Bureau of the 

20 Census as of the date of enactment of this sub21 section.’’. 


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1 SEC. 102. CERTAIN FORMER INDUSTRIAL TRACTS PER2 MITTED TO BE DESIGNATED AS OPPOR3 TUNITY ZONES. 

4 Section 1400Z–1 of the Internal Revenue Code of 

5 1986, as amended by section 101, is amended by adding 

6 at the end the following new subsection: 

7 ‘‘(h) SPECIAL RULE FOR FORMER INDUSTRIAL

8 TRACTS CONTIGUOUS TO DESIGNATED OPPORTUNITY

9 ZONES.— 

10 ‘‘(1) IN GENERAL.—For purposes of this chap11 ter, the term ‘qualified opportunity zone’ means an 

12 population census tract which is described in para13 graph (2) and designated as a qualified opportunity 

14 zone under this subsection. 

15 ‘‘(2) POPULATION CENSUS TRACT DE16 SCRIBED.—A population census tract is described in 

17 this subparagraph if— 

18 ‘‘(A) the tract— 

19 ‘‘(i) has a population of zero, 

20 ‘‘(ii) was previously used for industrial 

21 purposes and is a brownfield industrial 

22 site, and 

23 ‘‘(iii) is contiguous, including by 

24 water, to a population census tract on at 

25 least 1 side that has been designated as a 


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1 qualified opportunity zone under this sec2 tion, or 

3 ‘‘(B) the tract was merged, as a result of 

4 the 2020 decennial census, into a census tract 

5 described in subparagraph (A)(iii) and met all 

6 requirements described in subparagraph (A). 

7 ‘‘(3) DESIGNATION.—For purposes of para8 graph (1), a population census tract that is de9 scribed in paragraph (2) is designated as a qualified 

10 opportunity zone if— 

11 ‘‘(A) not later than 30 days after the date 

12 of the enactment of this subsection, the chief 

13 executive officer of the State in which the tract 

14 is located— 

15 ‘‘(i) nominates the tract for designa16 tion as a qualified opportunity zone, and 

17 ‘‘(ii) notifies the Secretary in writing 

18 of such nomination, and 

19 ‘‘(B) not later than 30 days after receiving 

20 the notification under subparagraph (A)(ii), the 

21 Secretary certifies such nomination and des22 ignates such tract as a qualified opportunity 

23 zone. 

24 ‘‘(4) DETERMINATION OF CENSUS TRACT IN25 FORMATION.—For purposes of this subsection, the 


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1 boundaries and population of a census tract shall be 

2 determined based on United States Census Bureau 

3 data for the 2010 decennial census. 

4 ‘‘(5) NUMBER OF DESIGNATIONS.—Population 

5 census tracts designated as a qualified opportunity 

6 zone under this subsection shall not be taken into 

7 account for purposes of subsection (d). 

8 ‘‘(6) DEFINITIONS.—For purposes of this sub9 section— 

10 ‘‘(A) BROWNFIELD INDUSTRIAL SITE.— 

11 The term ‘brownfield industrial site’ means a 

12 population census tract that includes real prop13 erty the expansion, redevelopment, or reuse of 

14 which may be complicated by the presence or 

15 potential presence of a hazardous substance or 

16 pollutant or contaminant, including real prop17 erty covered by a prospective purchaser agree18 ment or similar agreement entered into by the 

19 Environmental Protection Agency or the appro20 priate State authority. 

21 ‘‘(B) HAZARDOUS SUBSTANCE.—The term 

22 ‘hazardous substance’ means— 

23 ‘‘(i) a hazardous substance as defined 

24 in section 101(14) of the Comprehensive 

25 Environmental Response, Compensation, 


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1 and Liability Act of 1980 (42 U.S.C. 

2 9601(14)), or 

3 ‘‘(ii) petroleum or a petroleum prod4 uct. 

5 ‘‘(C) POLLUTANT OR CONTAMINANT.—The 

6 term ‘pollutant or contaminant’ has the mean7 ing given such term in section 101(33) of such 

8 Act.’’. 

9 TITLE II—INFORMATION 

10 REPORTING REQUIREMENTS 

11 SEC. 201. INFORMATION REPORTING ON QUALIFIED OP12 PORTUNITY FUNDS. 

13 (a) IN GENERAL.— 

14 (1) FILING REQUIREMENTS FOR FUNDS AND

15 INVESTORS.—Subpart A of part III of subchapter A 

16 of chapter 61 of the Internal Revenue Code of 1986 

17 is amended by inserting after section 6039J the fol18 lowing new sections: 

19 ‘‘SEC. 6039K. RETURNS WITH RESPECT TO QUALIFIED OP20 PORTUNITY FUNDS. 

21 ‘‘(a) IN GENERAL.—Every qualified opportunity fund 

22 shall file an annual return (at such time and in such man23 ner as the Secretary may prescribe) containing the infor24 mation described in subsection (b). 


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1 ‘‘(b) INFORMATION FROM QUALIFIED OPPORTUNITY

2 FUNDS.—The information described in this subsection 

3 is— 

4 ‘‘(1) the name, address, and taxpayer identifica5 tion number of the qualified opportunity fund, 

6 ‘‘(2) whether the qualified opportunity fund is 

7 organized as a corporation or a partnership, 

8 ‘‘(3) the value of the total assets held by the 

9 qualified opportunity fund as of each date described 

10 in section 1400Z–2(d)(1), 

11 ‘‘(4) the value of all qualified opportunity zone 

12 property held by the qualified opportunity fund on 

13 each such date, 

14 ‘‘(5) with respect to each investment held by 

15 the qualified opportunity fund in qualified oppor16 tunity zone stock or a qualified opportunity zone 

17 partnership interest— 

18 ‘‘(A) the name, address, and taxpayer 

19 identification number of the corporation in 

20 which such stock is held or the partnership in 

21 which such interest is held, as the case may be, 

22 ‘‘(B) each North American Industry Clas23 sification Code that applies to the trades or 

24 businesses conducted by such corporation or 

25 partnership, 


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1 ‘‘(C) the population census tracts in which 

2 the qualified opportunity zone business property 

3 of such corporation or partnership is located, 

4 ‘‘(D) the amount of the investment in such 

5 stock or partnership interest as of each date de6 scribed in section 1400Z–2(d)(1), 

7 ‘‘(E) the value of tangible property held by 

8 such corporation or partnership on each such 

9 date which is owned by such corporation or 

10 partnership, 

11 ‘‘(F) the value of tangible property held by 

12 such corporation or partnership on each such 

13 date which is leased by such corporation or 

14 partnership, 

15 ‘‘(G) the approximate number of residen16 tial units (if any) for any real property held by 

17 such corporation or partnership, and 

18 ‘‘(H) the approximate average monthly 

19 number of full-time equivalent employees of 

20 such corporation or partnership for the year 

21 (within numerical ranges identified by the Sec22 retary) or such other indication of the employ23 ment impact of such corporation or partnership 

24 as determined appropriate by the Secretary, 


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1 ‘‘(6) with respect to the items of qualified op2 portunity zone business property held by the quali3 fied opportunity fund— 

4 ‘‘(A) the North American Industry Classi5 fication Code that applies to the trades or busi6 nesses in which such property is held, 

7 ‘‘(B) the population census tract in which 

8 the property is located, 

9 ‘‘(C) whether the property is owned or 

10 leased, 

11 ‘‘(D) the aggregate value of the items of 

12 qualified opportunity zone property held by the 

13 qualified opportunity fund as of each date de14 scribed in section 1400Z–2(d)(1), and 

15 ‘‘(E) in the case of real property, number 

16 of residential units (if any), 

17 ‘‘(7) the approximate average monthly number 

18 of full-time equivalent employees for the year of the 

19 trades or businesses of the qualified opportunity 

20 fund in which qualified opportunity zone business 

21 property is held (within numerical ranges identified 

22 by the Secretary) or such other indication of the em23 ployment impact of such trades or businesses as de24 termined appropriate by the Secretary, 


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1 ‘‘(8) with respect to each person who disposed 

2 of an investment in the qualified opportunity fund 

3 during the year— 

4 ‘‘(A) the name and taxpayer identification 

5 number of such person, 

6 ‘‘(B) the date or dates on which the invest7 ment disposed was acquired, and 

8 ‘‘(C) the date or dates on which any such 

9 investment was disposed and the amount of the 

10 investment disposed, and 

11 ‘‘(9) such other information as the Secretary 

12 may require. 

13 ‘‘(c) STATEMENT REQUIRED TO BE FURNISHED TO

14 INVESTORS.—Every person required to make a return 

15 under subsection (a) shall furnish to each person whose 

16 name is required to be set forth in such return by reason 

17 of subsection (b)(9) a written statement showing— 

18 ‘‘(1) the name, address and phone number of 

19 the information contact of the person required to 

20 make such return, and 

21 ‘‘(2) the information required to be shown on 

22 such return by reason of subsection (b)(9) with re23 spect to such person. 

24 ‘‘(d) DEFINITIONS.—For purposes of this section— 


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1 ‘‘(1) IN GENERAL.—Any term used in this sec2 tion which is also used in subchapter Z of chapter 

3 1 shall have the meaning given such term under 

4 such subchapter. 

5 ‘‘(2) FULL-TIME EQUIVALENT EMPLOYEES.— 

6 The term ‘full-time equivalent employees’ means, 

7 with respect to any month, the sum of— 

8 ‘‘(A) the number of full-time employees (as 

9 defined in section 4980H(c)(4)) for the month, 

10 plus 

11 ‘‘(B) the number of employees determined 

12 (under rules similar to the rules of section 

13 4980H(c)(2)(E)) by dividing the aggregate 

14 number of hours of service of employees who 

15 are not full-time employees for the month by 

16 120. 

17 ‘‘SEC. 6039L. INFORMATION ON PERSONS INVESTING IN 

18 QUALIFIED OPPORTUNITY FUNDS. 

19 ‘‘(a) IN GENERAL.—Every taxpayer who makes an 

20 investment in a qualified opportunity fund shall provide 

21 an annual statement (at such time and in such manner 

22 as the Secretary may prescribe) containing the informa23 tion described in subsection (b) with respect to each such 

24 investment. 


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1 ‘‘(b) INFORMATION FROM INVESTORS.—The infor2 mation described in this subsection is— 

3 ‘‘(1) the name, address, and taxpayer identifica4 tion number of the taxpayer, 

5 ‘‘(2) the name and taxpayer identification num6 ber of the qualified opportunity fund in which the 

7 investment was made, 

8 ‘‘(3) a description of such investment, 

9 ‘‘(4) the date such investment was made, 

10 ‘‘(5) the amount of short-term and long-term 

11 capital gains for which an election was made under 

12 section 1400Z–2(a)(1) for such investment, 

13 ‘‘(6) in the case of any disposition of any in14 vestment in a qualified opportunity fund during the 

15 taxable year— 

16 ‘‘(A) a description of the investment dis17 posed, 

18 ‘‘(B) the date of the disposition, and 

19 ‘‘(C) the amount of any previously deferred 

20 short-term and long-term capital gain included 

21 in income as a result of such disposition, and 

22 ‘‘(7) such other information as the Secretary 

23 may require. 


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1 ‘‘(c) DEFINITIONS.—Any term used in this section 

2 which is also used in subchapter Z of chapter 1 shall have 

3 the meaning given such term under such subchapter. 

4 ‘‘SEC. 6039M. INFORMATION REQUIRED FROM CERTAIN 

5 QUALIFIED OPPORTUNITY ZONE BUSI6 NESSES. 

7 ‘‘(a) IN GENERAL.—Every applicable qualified oppor8 tunity zone business shall furnish to the qualified oppor9 tunity fund described in subsection (b) a written state10 ment in such manner and setting forth such information 

11 as the Secretary may by regulations prescribe for purposes 

12 of enabling such qualified opportunity fund to meet the 

13 requirements of section 6039(b)(5). 

14 ‘‘(b) APPLICABLE QUALIFIED OPPORTUNITY ZONE

15 BUSINESS.—For purposes of subsection (a), the term ‘ap16 plicable qualified opportunity zone business’ means any 

17 qualified opportunity zone business (as defined in section 

18 1400Z–2(d)(3))— 

19 ‘‘(1) which is a trade or business of a qualified 

20 opportunity fund, 

21 ‘‘(2) in which a qualified opportunity fund holds 

22 qualified opportunity zone stock, or 

23 ‘‘(3) in which a qualified opportunity fund holds 

24 a qualified opportunity zone partnership interest. 


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1 ‘‘(c) OTHER TERMS.—Any term used in this section 

2 which is also used in subchapter Z of chapter 1 shall have 

3 the meaning given such term under such subchapter.’’. 

4 (2) PENALTIES.— 

5 (A) IN GENERAL.—Part II of subchapter 

6 B of chapter 68 of the Internal Revenue Code 

7 of 1986 is amended by inserting after section 

8 6725 the following new section: 

9 ‘‘SEC. 6726. FAILURE TO COMPLY WITH INFORMATION RE10 PORTING REQUIREMENTS RELATING TO 

11 QUALIFIED OPPORTUNITY FUNDS. 

12 ‘‘(a) INFORMATION RETURNS BY QUALIFIED OPPOR13 TUNITY FUNDS.— 

14 ‘‘(1) IN GENERAL.—In the case of any person 

15 required to file a return under section 6039K fails 

16 to file a complete and correct return under such sec17 tion in the time and in the manner prescribed there18 for, such person shall pay a penalty of $500 for each 

19 day during which such failure continues. 

20 ‘‘(2) LIMITATION.— 

21 ‘‘(A) IN GENERAL.—The maximum penalty 

22 under this subsection on failures with respect to 

23 any 1 return shall not exceed $10,000. 

24 ‘‘(B) LARGE QUALIFIED OPPORTUNITY

25 FUNDS.—In the case of any failure described in 


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1 paragraph (1) with respect to a fund the gross 

2 assets of which (determined on the last day of 

3 the taxable year) are in excess of $10,000,000, 

4 subparagraph (A) shall be applied by sub5 stituting ‘$50,000’ for ‘$10,000’. 

6 ‘‘(3) PENALTY IN CASES OF INTENTIONAL DIS7 REGARD.—If a failure described in paragraph (1) is 

8 due to intentional disregard, then— 

9 ‘‘(A) paragraph (1) shall be applied by 

10 substituting ‘$2,500’ for ‘$500’, 

11 ‘‘(B) paragraph (2)(A) shall be applied by 

12 substituting ‘$50,000’ for ‘$10,000’, and 

13 ‘‘(C) paragraph (2)(B) shall be applied by 

14 substituting ‘$250,000’ for ‘$50,000’. 

15 ‘‘(4) INFLATION ADJUSTMENT.— 

16 ‘‘(A) IN GENERAL.—In the case of any 

17 failure relating to a return required to be filed 

18 in a calendar year beginning after 2023, each 

19 of the dollar amounts in paragraphs (1), (2), 

20 and (3) shall be increased by an amount equal 

21 to such dollar amount multiplied by the cost-of22 living adjustment determined under section 

23 1(f)(3) for the calendar year determined by 

24 substituting ‘calendar year 2022’ for ‘calendar 

25 year 2016’ in subparagraph (A)(ii) thereof. 


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1 ‘‘(B) ROUNDING.— 

2 ‘‘(i) IN GENERAL.—If the $500 dollar 

3 amount in paragraphs (1) and (3)(A) or 

4 the $2,500 amount in paragraph (3)(A), 

5 after being increased under subparagraph 

6 (A), is not a multiple of $10, such dollar 

7 amount shall be rounded to the next lowest 

8 multiple of $10. 

9 ‘‘(ii) ASSET THRESHOLD.—If the 

10 $10,000,000 dollar amount in paragraph 

11 (2)(B), after being increased under sub12 paragraph (A), is not a multiple of 

13 $10,000, such dollar amount shall be 

14 rounded to the next lowest multiple of 

15 $10,000. 

16 ‘‘(iii) OTHER DOLLAR AMOUNTS.—If 

17 any dollar amount in paragraph (2) or (3) 

18 (other than any amount to which clause (i) 

19 or (ii) applies), after being increased under 

20 subparagraph (A), is not a multiple of 

21 $1,000, such dollar amount shall be round22 ed to the next lowest multiple of $1,000. 

23 ‘‘(b) STATEMENTS BY INVESTORS.— 

24 ‘‘(1) IN GENERAL.—If— 


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1 ‘‘(A) any person is required to file a state2 ment under section 6039L for any period, and 

3 ‘‘(B) fails— 

4 ‘‘(i) to file such statement on or be5 fore the required filing date, or 

6 ‘‘(ii) fails to include all of the infor7 mation required to be shown on the state8 ment or includes incorrect information, 

9 such person shall pay a penalty of $5,000. 

10 ‘‘(2) REDUCTION WHERE CORRECTION IN SPEC11 IFIED PERIOD.—If any failure described in para12 graph (1)(B) is corrected on or before the day 60 

13 days after the required filing date, the penalty im14 posed by paragraph (1) shall be $500 in lieu of the 

15 amount determined under such paragraph. 

16 ‘‘(3) DE MINIMIS ERRORS.—If— 

17 ‘‘(A) there are one or more such failures 

18 described in paragraph (1)(B)(ii) relating to an 

19 incorrect dollar amount, and 

20 ‘‘(B) no single amount in error differs 

21 from the correct amount by more than $100, 

22 then no correction shall be required, and, for pur23 poses of this section, such statement shall be treated 

24 as having been filed with all correct required infor25 mation. 


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1 ‘‘(4) PENALTY IN CASES OF INTENTIONAL DIS2 REGARD.—If one or more failures described in para3 graph (1)(B) are due to intentional disregard of the 

4 filing requirement (or the correct information report5 ing requirement), then, with respect to each such 

6 failure— 

7 ‘‘(A) paragraphs (2) and (3) shall not 

8 apply, and 

9 ‘‘(B) the amount of the penalty determined 

10 under paragraph (1) shall be $25,000. 

11 ‘‘(5) INFLATION ADJUSTMENT.— 

12 ‘‘(A) IN GENERAL.—In the case of any 

13 failure relating to a statement required to be 

14 filed in a calendar year beginning after 2023, 

15 each of the dollar amounts in paragraphs (1), 

16 (2), and (4) shall be increased by an amount 

17 equal to such dollar amount multiplied by the 

18 cost-of-living adjustment determined under sec19 tion 1(f)(3) for the calendar year determined by 

20 substituting ‘calendar year 2022’ for ‘calendar 

21 year 2016’ in subparagraph (A)(ii) thereof. 

22 ‘‘(B) ROUNDING.—The amount of any in23 crease under subparagraph (A) shall be round24 ed to the nearest multiple of $100 ($10 in the 


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1 case of any increase in the amount under para2 graph (2)).’’. 

3 (B) INFORMATION REQUIRED TO BE SENT

4 TO OTHER TAXPAYERS.—Section 6724(d)(2) of 

5 such Code is amended— 

6 (i) by striking ‘‘or’’ at the end of sub7 paragraph (II), 

8 (ii) by striking the period at the end 

9 of the first subparagraph (JJ) (relating to 

10 section 6226) and inserting a comma, 

11 (iii) by redesignating the second sub12 paragraph (JJ) (relating to section 6050Y) 

13 as subparagraph (KK), 

14 (iv) by striking the period at the end 

15 of subparagraph (KK) (as redesignated by 

16 clause (iii)) and inserting a comma, and 

17 (v) by inserting after subparagraph 

18 (KK) (as so redesignated) the following 

19 new subparagraphs: 

20 ‘‘(LL) section 6039K(c) (relating to dis21 position of qualified opportunity fund invest22 ments), or 

23 ‘‘(MM) section 6039M (relating to infor24 mation required from certain qualified oppor25 tunity zone businesses).’’. 


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1 (3) ELECTRONIC FILING.—Section 6011(e) of 

2 such Code is amended by adding at the end the fol3 lowing new paragraph: 

4 ‘‘(8) QUALIFIED OPPORTUNITY FUNDS.—Not5 withstanding paragraphs (1) and (2), any return 

6 filed by a qualified opportunity fund shall be filed on 

7 magnetic media or other machine-readable form.’’. 

8 (4) CLERICAL AMENDMENTS.— 

9 (A) The table of sections for subpart A of 

10 part III of subchapter A of chapter 61 of such 

11 Code is amended by inserting after the item re12 lating 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.’’. 

13 (B) The table of sections for part II of 

14 subchapter B of chapter 68 of such Code is 

15 amended by inserting after the item relating to 

16 section 6725 the following new item: 

‘‘Sec. 6726. Failure to comply with information reporting requirements relating 

to qualified opportunity funds.’’. 

17 (5) EFFECTIVE DATE.—The amendments made 

18 by this subsection shall apply to taxable years begin19 ning after the date of the enactment of this Act. 

20 (b) REPORTING OF DATA ON OPPORTUNITY ZONE

21 TAX INCENTIVES.— 


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1 (1) IN GENERAL.—As soon as practical after 

2 the date of the enactment of this Act, and annually 

3 thereafter, the Secretary of the Treasury, or the 

4 Secretary’s delegate (referred to in this section as 

5 the ‘‘Secretary’’), in consultation with the Director 

6 of the Bureau of the Census and such other agencies 

7 as the Secretary determines appropriate, shall make 

8 publicly available a report on qualified opportunity 

9 funds. 

10 (2) INFORMATION INCLUDED.—The report re11 quired under paragraph (1) shall include, to the ex12 tent available, the following information: 

13 (A) The number of qualified opportunity 

14 funds. 

15 (B) The aggregate dollar amount of assets 

16 held in qualified opportunity funds. 

17 (C) The aggregate dollar amount of invest18 ments made by qualified opportunity funds in 

19 qualified opportunity fund property across each 

20 industry class under the North American Indus21 try Classification Code. 

22 (D) The percentage of population census 

23 tracts designated as qualified opportunity zones 

24 that have received qualified opportunity fund 

25 investments. 


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1 (E) For each population census tract des2 ignated as a qualified opportunity zone, the ap3 proximate average monthly number of full-time 

4 equivalent employees of the qualified oppor5 tunity zone businesses in such qualified oppor6 tunity zone for the preceding 12-month period 

7 (within numerical ranges identified by the Sec8 retary) or such other indication of the employ9 ment impact of such qualified opportunity fund 

10 businesses as determined appropriate by the 

11 Secretary. 

12 (F) The percentage of the total amount of 

13 investments made by qualified opportunity 

14 funds in— 

15 (i) qualified opportunity zone property 

16 which is real property; and 

17 (ii) other qualified opportunity zone 

18 property. 

19 (G) For each population census tract, the 

20 aggregate approximate number of residential 

21 units resulting from investments made by quali22 fied opportunity funds in real property. 

23 (H) The aggregate dollar amount of in24 vestments made by qualified opportunity funds 

25 in each population census tract. 


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1 (3) ADDITIONAL INFORMATION.— 

2 (A) IN GENERAL.—Beginning with the re3 port submitted under paragraph (1) for the 6th 

4 year after the date of the enactment of this Act, 

5 the Secretary shall include in such report the 

6 impacts and outcomes of a designation of a 

7 population census tract as a qualified oppor8 tunity zone as measured by economic indicators, 

9 such as job creation, poverty reduction, new 

10 business starts, and other metrics as deter11 mined by the Secretary. 

12 (B) SEMI-DECENNIAL INFORMATION.— 

13 (i) IN GENERAL.—In the case of any 

14 report submitted under paragraph (1) in 

15 the 6th year or the 11th year after the 

16 date of the enactment of this Act, the Sec17 retary shall include the following informa18 tion: 

19 (I) For population census tracts 

20 designated as a qualified opportunity 

21 zone, a comparison (based on aggre22 gate information) of the factors listed 

23 in clause (iii) between the 5-year pe24 riod ending on the date of the enact25 ment of Public Law 115–97 and the 


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1 most recent 5-year period for which 

2 data is available. 

3 (II) For population census tracts 

4 designated as a qualified opportunity 

5 zone, a comparison (based on aggre6 gate information) of the factors listed 

7 in clause (iii) for the most recent 5- 

8 year period for which data is available 

9 between such population census tracts 

10 and a similar population census tracts 

11 that were not designated as a quali12 fied opportunity zone. 

13 (ii) CONTROL GROUPS.—For purposes 

14 of clause (i), the Secretary may combine 

15 population census tracts into such groups 

16 as the Secretary determines appropriate 

17 for purposes of making comparisons. 

18 (iii) FACTORS LISTED.—The factors 

19 listed in this paragraph are the following: 

20 (I) The unemployment rate. 

21 (II) The number of persons 

22 working in the population census 

23 tract, including the percentage of such 

24 persons who were not residents in the 


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1 population census tract in the pre2 ceding year. 

3 (III) Individual, family, and 

4 household poverty rates. 

5 (IV) Median family income of 

6 residents of the population census 

7 tract. 

8 (V) Demographic information on 

9 residents of the population census 

10 tract, including age, income, edu11 cation, race, and employment. 

12 (VI) The average percentage of 

13 income of residents of the population 

14 census tract spent on rent annually. 

15 (VII) The number of residences 

16 in the population census tract. 

17 (VIII) The rate of home owner18 ship in the population census tract. 

19 (IX) The average value of resi20 dential property in the population cen21 sus tract. 

22 (X) The number of affordable 

23 housing units in the population census 

24 tract. 


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1 (XI) The number and percentage 

2 of residents in the population census 

3 tract that were not employed for the 

4 preceding year. 

5 (XII) The number of new busi6 ness starts in the population census 

7 tract. 

8 (XIII) The distribution of em9 ployees in the population census tract 

10 by North American Industry Classi11 fication Code. 

12 (4) PROTECTION OF IDENTIFIABLE RETURN IN13 FORMATION.—In making reports required under this 

14 subsection, the Secretary— 

15 (A) shall establish appropriate procedures 

16 to ensure that any amounts reported do not dis17 close taxpayer return information that can be 

18 associated with any particular taxpayer or com19 petitive or proprietary information, and 

20 (B) if necessary to protect taxpayer return 

21 information, may combine information required 

22 with respect to individual population census 

23 tracts into larger geographic areas. 

24 (5) DEFINITIONS.—Any term used in this sub25 section which is also used in subchapter Z of chapter 


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1 1 of the Internal Revenue Code of 1986 shall have 

2 the meaning given such term under such subchapter. 

3 TITLE III—MODIFICATION OF 

4 RULES FOR INVESTMENTS IN 

5 QUALIFIED OPPORTUNITY 

6 FUNDS 

7 SEC. 301. EXTENSION OF DEFERRAL PERIOD. 

8 (a) IN GENERAL.—Subparagraph (B) of section 

9 1400Z–2(b)(1) of the Internal Revenue Code of 1986 is 

10 amended by striking ‘‘December 31, 2026’’ and inserting 

11 ‘‘December 31, 2028’’. 

12 (b) MODIFICATION OF BASIS RULE.—Clause (iv) of 

13 section 1400Z–2(b)(2)(B) of such Code is amended by 

14 striking ‘‘7’’ each place it appears in the text and in the 

15 heading and inserting ‘‘6’’. 

16 (c) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to amounts invested after Decem18 ber 22, 2017. 

19 SEC. 302. MODIFICATION OF DEFINITION OF QUALIFIED 

20 OPPORTUNITY FUND. 

21 (a) IN GENERAL.—Section 1400Z–2(d)(1) of the In22 ternal Revenue Code of 1986 is amended to read as fol23 lows: 

24 ‘‘(1) IN GENERAL.—The term ‘qualified oppor25 tunity fund’ means— 


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1 ‘‘(A) any qualified feeder fund, or 

2 ‘‘(B) any other investment vehicle if— 

3 ‘‘(i) such investment vehicle is orga4 nized as a corporation or a partnership for 

5 the purpose of investing in qualified oppor6 tunity zone property (other than another 

7 qualified opportunity fund), and 

8 ‘‘(ii) such investment vehicle holds at 

9 least 90 percent of its assets in qualified 

10 opportunity zone property, determined by 

11 the average of the percentage of qualified 

12 opportunity zone property held in the fund 

13 as measured— 

14 ‘‘(I) on the last day of the first 

15 6-month period of the taxable year of 

16 the fund, and 

17 ‘‘(II) on the last day of the tax18 able year of the fund.’’. 

19 (b) QUALIFIED FEEDER FUND.—Section 1400Z– 

20 2(d) of such Code is amended by adding at the end the 

21 following new paragraph: 

22 ‘‘(4) QUALIFIED FEEDER FUND.—The term 

23 ‘qualified feeder fund’ means any investment vehicle 

24 that invests in a qualified opportunity fund if— 


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1 ‘‘(A) such investment vehicle is organized 

2 as a domestic partnership for the purpose of in3 vesting in one more corporations or partner4 ships described in paragraph (1)(B), 

5 ‘‘(B) all investments made in the invest6 ment vehicle are made in cash, and 

7 ‘‘(C) not less than 95 percent of the assets 

8 of which are equity investments in corporations 

9 or partnerships described in paragraph 

10 (1)(B).’’. 

11 (c) EFFECTIVE DATE.—The amendments made by 

12 this section shall take effect on the date of the enactment 

13 of this Act. 

14 TITLE IV—STATE AND 

15 COMMUNITY DYNAMISM FUND 

16 SEC. 401. STATE AND COMMUNITY DYNAMISM FUND. 

17 (a) ESTABLISHMENT.—There is established a State 

18 and Community Dynamism Fund to support public and 

19 private investment, including capital for qualified oppor20 tunity zones designated under section 1400Z–1(a) of the 

21 Internal Revenue Code of 1986, and existing small busi22 ness and community economic development programs and 

23 incentives, to underserved businesses and communities. 

24 (b) ALLOCATION.— 


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1 (1) IN GENERAL.—Funds appropriated to the 

2 State and Community Dynamism Fund shall be allo3 cated to States. 

4 (2) FORMULA.— 

5 (A) IN GENERAL.—The Secretary of the 

6 Treasury shall determine the allocation by allo7 cating Federal funds among the States based 

8 on the proportion of prime working age adults 

9 in each State bears to the total of prime work10 ing age adults for all the States. 

11 (B) MINIMUM ALLOCATION.—The Sec12 retary shall adjust the allocations under sub13 paragraph (A) for each State to the extent nec14 essary to ensure that no State receives less than 

15 0.9 percent of the Federal funds. 

16 (3) REQUIREMENT.—To receive an allocation 

17 under paragraph (2), a State shall certify that the 

18 State will use funds to— 

19 (A) build capacity in high-poverty, under20 banked, rural, and otherwise underserved com21 munities; 

22 (B) advance investment in minority-, 

23 women, and veteran-owned businesses; 

24 (C) address workforce development in stra25 tegic sectors of the State’s economy; and 


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1 (D) align priorities to support affordably 

2 priced housing. 

3 (4) SUBALLOCATION.—A State may spend 

4 funds allocated under this subsection directly or sub5 allocate the funds to other entities, including units 

6 of general local government and nonprofits. 

7 (5) ELIGIBLE USES.—Funds allocated under 

8 this subsection shall be used for any eligible use in 

9 a low-income community, as defined in section 

10 45D(e) of the Internal Revenue Code of 1986, in11 cluding for— 

12 (A) operating support and community ca13 pacity building, with priority to given to oper14 ating support and community capacity building 

15 in qualified opportunity zones, including— 

16 (i) personnel to support activities, in17 cluding coordination, education, and in18 vestment; 

19 (ii) community-level capacity building, 

20 training, and strategic planning; 

21 (iii) outreach, technical assistance, 

22 and professional services to underserved 

23 businesses and underserved opportunity 

24 zone fund managers; 

25 (B) high-impact projects, including— 


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1 (i) predevelopment costs associated 

2 with individual Qualified Opportunity Zone 

3 projects; and 

4 (ii) risk mitigation for qualified oppor5 tunity zone funds; and 

6 (C) administrative costs, not to exceed 3 

7 percent of the funds allocated. 

8 (6) ELIGIBLE PROJECTS.—Funds used for 

9 high-impact project activities, as described in para10 graph (5)(B), shall only be used for— 

11 (A) business with less than 200 employees; 

12 (B) projects that provide community goods 

13 or services, including health care, social serv14 ices, healthy food access, education, broadband, 

15 and culture; or 

16 (C) affordable housing with at least 50 

17 percent of the units that are affordable to fami18 lies making less than 80 percent of area median 

19 family income. 

20 (7) PRIORITIZATION.—A State that receives 

21 funds under this section must prioritize activities 

22 that— 

23 (A) promote investment in projects that 

24 substantially support minorities, as defined in 

25 section 1204(c) of the Financial Institutions 


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1 Reform, Recovery, and Enforcement Act of 

2 1989 (12 U.S.C. 1811 note), or other targeted 

3 populations, as defined in section 103 of the 

4 Riegle Community Development and Regulatory 

5 Improvement Act of 1994 (12 U.S.C. 4702); 

6 and 

7 (B) have demonstrated meaningful engage8 ment with community stakeholders. 

9 (c) AUTHORIZATION OF APPROPRIATIONS.—There is 

10 authorized to be appropriated $1,000,000,000 to carry out 

11 this section. 

12 (d) GAO AUDIT.—The Comptroller General of the 

13 United States shall perform an annual audit of the Fund 

14 and submit to the appropriate committees of Congress a 

15 report containing the results of the audit. 

16 (e) ANNUAL REPORT.—Not later than March 31 of 

17 each year, each State receiving funds under this title shall 

18 submit to the Secretary a report on the performance of 

19 the State and participating entities in the State that in20 cludes— 

21 (1) an accounting of the expenditure of funds 

22 received by the State, including on administrative or 

23 indirect costs; 

24 (2) information on the number and characteris25 tics of participants served under this title; and 


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1 (3) a summary describing the training, capac2 ity-building, and technical assistance offered by the 

3 State and participating entities. 

4 (f) DEFINITIONS.—In this section: 

5 (1) PRIME WORKING AGE ADULTS NOT EM6 PLOYED.—The term ‘‘prime working age adults not 

7 employed’’ means, with respect to a State, the share 

8 of the adult population aged 25 to 54 that was not 

9 employed for the most recent year for which data is 

10 available. 

11 (2) STATE.—The term ‘‘State’’ includes the 

12 District of Columbia, any territory or possession of 

13 the United States, and any Indian Tribe. 

Æ 


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