I 
116TH CONGRESS 
1ST SESSION H. R. 5042 
To amend the Internal Revenue Code of 1986 to reform rules related to 
qualified opportunity zones. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 12, 2019 
Mr. CLYBURN (for himself, Ms. ADAMS, and Mr. CLAY) 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 reform 
rules related to qualified opportunity zones. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Opportunity Zone Re-
form Act’’. 
SEC. 2. MODIFICATION OF TRACTS QUALIFIED TO BE DES-
IGNATED 
AS 
QUALIFIED 
OPPORTUNITY 
ZONES. 
(a) 
DISQUALIFICATION
OF
CERTAIN
CENSUS 
TRACTS.— 
VerDate Sep 11 2014 
03:38 Nov 22, 2019
Jkt 099200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H5042.IH
H5042
pamtmann on DSKBC07HB2PROD with BILLS
(1) CENSUS TRACTS WITH HIGH MEDIAN FAM-
ILY INCOME.—Paragraph (1) of section 1400Z–1(c) 
of the Internal Revenue Code of 1986 is amended to 
read as follows: 
‘‘(1) LOW-INCOME COMMUNITIES.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the term ‘low-income com-
munity’ has the same meaning as when used in 
section 45D(e). 
‘‘(B) EXCEPTION.— 
‘‘(i) IN
GENERAL.—Such term shall 
not include any census tract if the median 
family income for such tract exceeds 120 
percent of the national median family in-
come (as determined based the most recent 
data published by the Bureau of the Cen-
sus on the date of the enactment of the 
Opportunity Zone Reform Act). 
‘‘(ii) SPECIAL RULE.—Clause (i) shall 
not apply to any census tract if— 
‘‘(I) the poverty rate for such 
tract is at least 20 percent, and 
‘‘(II) less than 10 percent of the 
population of such tract is enrolled in 
an institution of higher education (as 
VerDate Sep 11 2014 
03:38 Nov 22, 2019
Jkt 099200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H5042.IH
H5042
pamtmann on DSKBC07HB2PROD with BILLS
defined in section 101 of the Higher 
Education Act of 1965).’’. 
(2) CONTIGUOUS
CENSUS
TRACTS.—Section 
1400Z–1 of such Code is amended by striking sub-
section (e) and redesignating subsection (f) as sub-
section (e). 
(b) TREATMENT
OF
PREVIOUSLY
DESIGNATED 
TRACTS.—Section 1400Z–1 of such Code, as amended by 
subsection (a)(2), is amended by adding at the end the 
following: 
‘‘(f) TREATMENT OF CERTAIN CENSUS TRACTS.— 
‘‘(1) IN GENERAL.—Except as provided in sec-
tion 1400Z–2(d)(2)(D), any census tract (other than 
a census tract in Puerto Rico) which is not a low- 
income community and which was designated as a 
qualified opportunity zone before the date of the en-
actment of the Opportunity Zone Reform Act shall 
not be treated as a qualified opportunity zone on or 
after such date of enactment. 
‘‘(2) REPLACEMENT ZONES.— 
‘‘(A) IN
GENERAL.—A State may des-
ignate a low-income community as a qualified 
opportunity zone to replace a census tract the 
status of which as a qualified opportunity zone 
was terminated by reason of paragraph (1). 
VerDate Sep 11 2014 
03:38 Nov 22, 2019
Jkt 099200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H5042.IH
H5042
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(B) SPECIAL
RULES.—For purposes of 
this subchapter— 
‘‘(i) the determination period with re-
spect to a designation under subparagraph 
(A) shall be the 90-day period beginning 
on the date of the enactment of such Act, 
as extended under subsection (b)(2), and 
‘‘(ii) the period for which any such 
designation is in effect shall be the period 
beginning with the date such designation 
takes effect and ending with the last day 
of the 10th calendar year beginning on or 
after the designation date as a qualified 
opportunity zone for the census tract 
which it is replacing as such a zone by rea-
son of the termination under clause (i).’’. 
(c) TREATMENT OF EXISTING INVESTMENTS.—Sec-
tion 1400Z–2(d)(2)(D) of such Code is amended by add-
ing at the end the following new clause: 
‘‘(iv) SPECIAL
RULE
FOR
INVEST-
MENTS IN CERTAIN CENSUS TRACTS.— 
‘‘(I) IN GENERAL.—For purposes 
of applying this paragraph, the use of 
property in a qualified census tract 
shall be treated as use of property in 
VerDate Sep 11 2014 
03:38 Nov 22, 2019
Jkt 099200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H5042.IH
H5042
pamtmann on DSKBC07HB2PROD with BILLS
a qualified opportunity zone if the 
original use of such property occurred 
before November 6, 2019, or in the 
case of property acquired before such 
date, the property was substantially 
improved before the close of the 30- 
month period beginning with the 
month of the acquisition. 
‘‘(II) 
QUALIFIED
CENSUS 
TRACT.—For purposes of this clause, 
the term ‘qualified census tract’ 
means any census tract which is not a 
low-income community and which was 
designated as a qualified opportunity 
zone before the date of the enactment 
of the Opportunity Zone Reform 
Act.’’. 
SEC. 3. MAINTENANCE OF GEOGRAPHIC BOUNDARIES OF 
QUALIFIED OPPORTUNITY ZONES. 
Section 1400Z–1(e) of the Internal Revenue Code of 
1986, as redesignated by section 2(a)(2), is amended by 
adding at the end the following new sentence: ‘‘Such des-
ignation shall apply to the geographic area as in effect 
at the time such tract is designated without regard to 
VerDate Sep 11 2014 
03:38 Nov 22, 2019
Jkt 099200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H5042.IH
H5042
pamtmann on DSKBC07HB2PROD with BILLS
another qualified opportunity fund) that holds 
at least 90 percent of its assets in qualified op-
portunity zone property, determined by the av-
erage 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, and 
‘‘(B) any trade or business of which is a 
qualified opportunity zone business.’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect as if included in 
section 13823 of Public Law 115–97. 
(b) CLARIFICATION OF SUBSTANTIALLY ALL.— 
(1) IN GENERAL.—Section 1400Z–2(d) of the 
Internal Revenue Code of 1986 is amended— 
(A) by striking ‘‘during substantially all’’ 
each 
place 
it 
appears 
in 
paragraphs 
(2)(B)(i)(III), (2)(C)(iii), and (2)(D)(i)(III) 
and inserting ‘‘for not less than 90 percent’’, 
(B) by striking ‘‘substantially all of the 
use’’ in paragraph (2)(D)(i)(III) and inserting 
‘‘not less than 90 percent of the use’’, and 
VerDate Sep 11 2014 
03:38 Nov 22, 2019
Jkt 099200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H5042.IH
H5042
pamtmann on DSKBC07HB2PROD with BILLS
(C) by striking ‘‘in which substantially all’’ 
in paragraph (3)(A)(i) and inserting ‘‘in which 
not less than 90 percent’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect as if included in 
section 13823 of Public Law 115–97. 
(c) CERTAIN PROPERTY EXCLUDED FROM QUALI-
FIED OPPORTUNITY ZONE BUSINESS PROPERTY.— 
(1) IN
GENERAL.—Section 1400Z–2(d)(2)(D) 
of the Internal Revenue Code of 1986 is amended— 
(A) in clause (i), by inserting ‘‘(other than 
self-storage property, parking property, stadium 
property, or disqualified residential rental prop-
erty)’’ after ‘‘tangible property’’, and 
(B) by adding at the end the following new 
clauses: 
‘‘(iv) SELF-STORAGE PROPERTY.—The 
term ‘self-storage property’ means property 
designed and used for the purpose of rent-
ing or leasing individual storage space to 
occupants who are to have access to such 
space for the purpose of storing and re-
moving personal property. 
‘‘(v) PARKING PROPERTY.—The term 
‘parking property’ means any property 90 
VerDate Sep 11 2014 
03:38 Nov 22, 2019
Jkt 099200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H5042.IH
H5042
pamtmann on DSKBC07HB2PROD with BILLS
percent or more of the square footage of 
which is used for parking or for the in-
gress or egress of vehicles. 
‘‘(vi) STADIUM.—The term ‘stadium 
property’ means any facility (or appur-
tenant real property) which, during at 
least 5 days during any calendar year, is 
used as a stadium or arena for professional 
sports exhibitions, games, or training. 
‘‘(vii) 
DISQUALIFIED
RESIDENTIAL 
RENTAL
PROPERTY.—The term ‘disquali-
fied residential rental property’ means any 
residential rental property unless 50 per-
cent or more of the residential units of 
such property are both rent-restricted 
(within the meaning of section 42(g)(2)) 
and occupied by individuals whose income 
is 50 percent or less of area median in-
come.’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect as if included in 
section 13823 of Public Law 115–97. 
(d) TREATMENT OF LEASED PROPERTY.— 
(1) 
IN
GENERAL.—Section 
1400Z– 
2(d)(2)(D)(i)(I) of the Internal Revenue Code of 
VerDate Sep 11 2014 
03:38 Nov 22, 2019
Jkt 099200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H5042.IH
H5042
pamtmann on DSKBC07HB2PROD with BILLS
1986 is amended by inserting ‘‘or under a lease 
(other than a lease from a related person) entered 
into after December 31, 2017,’’ after ‘‘December 31, 
2017,’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall take effect as if included in 
section 13823 of Public Law 115–97. 
(e) CORRECTION RELATING TO ORIGINAL USE OF 
QUALIFIED OPPORTUNITY ZONE BUSINESS PROPERTY.— 
(1) 
IN
GENERAL.—Section 
1400Z– 
2(d)(2)(D)(i)(II) of the Internal Revenue Code of 
1986 is amended by striking ‘‘in the qualified oppor-
tunity zone’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall take effect as if included in 
section 13823 of Public Law 115–97. 
(f) MODIFICATION OF DETERMINATION OF SUBSTAN-
TIAL IMPROVEMENT OF QUALIFIED OPPORTUNITY ZONE 
BUSINESS PROPERTY.— 
(1) 
IN
GENERAL.—Section 
1400Z– 
2(d)(2)(D)(ii) of the Internal Revenue Code of 1986 
is amended by inserting ‘‘(including land)’’ after 
‘‘adjusted basis of such property’’. 
VerDate Sep 11 2014 
03:38 Nov 22, 2019
Jkt 099200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H5042.IH
H5042
pamtmann on DSKBC07HB2PROD with BILLS
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall take effect as if included in 
section 13823 of Public Law 115–97. 
SEC. 6. PUBLIC LIST OF QUALIFIED OPPORTUNITY FUNDS. 
The Secretary of the Treasury (or the Secretary’s 
delegate) shall maintain and make publicly available on 
the internet and at the offices of the Internal Revenue 
Service— 
(1) a list of investment vehicles that are cer-
tified as qualified opportunity funds (as defined in 
section 1400Z–2(d)(1) of the Internal Revenue Code 
of 1986) pursuant to the rules established under 
section 1400Z–2(e)(4)(A) of such Code, and 
(2) the name, address, and the uniform re-
source locator (URL) for the website for such fund. 
SEC. 7. GAO REPORT. 
(a) IN GENERAL.—Not later than each applicable 
date, the Comptroller General of the United States shall 
submit to Congress a report on the effectiveness of the 
provisions of subchapter Z of chapter 1 of the Internal 
Revenue Code of 1986 in achieving the policies of such 
provisions. 
(b) MATTERS INCLUDED.—The reports submitted 
under subsection (a) shall include an analysis of— 
VerDate Sep 11 2014 
03:38 Nov 22, 2019
Jkt 099200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H5042.IH
H5042
pamtmann on DSKBC07HB2PROD with BILLS
(1) the distribution of investments of qualified 
opportunity funds among qualified opportunity 
zones, 
(2) the distribution of such investments across 
different industries or investment purposes, 
(3) the impact of the designation of an area as 
a qualified opportunity zone on— 
(A) economic indicators, including employ-
ment, new business start-ups, and poverty re-
duction, 
(B) housing costs, and 
(C) income distribution among residents of 
such zones, 
(4) the economic benefits provided by such des-
ignations compared to economic costs, and 
(5) to the extent practicable, the impact of the 
provisions of such subchapter Z on low-income com-
munities that have not been designated as qualified 
opportunity zones. 
(c) DEFINITIONS.— 
(1) APPLICABLE DATE.—The term ‘‘applicable 
date’’ means— 
(A) the date that is 5 years after the date 
of the enactment of this Act, and 
VerDate Sep 11 2014 
03:38 Nov 22, 2019
Jkt 099200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H5042.IH
H5042
pamtmann on DSKBC07HB2PROD with BILLS
(B) the date that is 10 years after the date 
of the enactment of this Act. 
(2) OTHER TERMS.—Any term used in this sec-
tion 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. 
Æ 
VerDate Sep 11 2014 
03:38 Nov 22, 2019
Jkt 099200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6301
E:\BILLS\H5042.IH
H5042
pamtmann on DSKBC07HB2PROD with BILLS