Opportunity Zones Transparency, Extension, and Improvement Act
Bill: S.4065 | Sponsor: Sen. Booker, Cory A. (D-NJ)
Policy area: Taxation

Summary:
Opportunity Zones Transparency, Extension, and Improvement Act
This bill revises rules and reinstates reporting requirements relating to qualified opportunity zones (economically distressed communities where new investments, under specified conditions, may be eligible for preferential tax treatment).
Specifically, the bill terminates the designation of zones that are disqualified due to median family income exceeding 130% of national median family income and permits states to identify and expand terminations of such zones.
The bill also reinstates reporting requirements for qualified opportunity zones and imposes penalties for noncompliance with such requirements, extends the opportunity zones temporary deferral period for qualifying capital gain through 2028, and establishes a State and Community Dynamism Fund to support public and private investment in qualified opportunity zones.

To amend the Internal Revenue Code of 1986 to modify the rules relating 
        to qualified opportunity zones, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Opportunity Zones Transparency, 
Extension, and Improvement Act''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) The 8,764 population census tracts designated as 
        qualified opportunity zones under section 1400Z-1 of the 
        Internal Revenue Code of 1986 span across all 50 States, the 
        District of Columbia, and 5 Territories and overwhelmingly 
        represent communities that have been economically left behind 
        as the American economy has surged forward.
            (2) The average poverty rate of qualified opportunity zone 
        residents is 26.4 percent.
            (3) Fifty-four percent of the country's pockets of 
        concentrated persistent poverty--meaning census tracts in which 
        at least 40 percent of the population has lived in poverty 
        since at least 1980--are qualified opportunity zones.
            (4) More adults in qualified opportunity zones lack a high 
        school diploma than have a four-year college degree.
            (5) The Investing in Opportunity Act, which originally 
        proposed opportunity zones, originally incorporated reporting 
        requirements to evaluate the impact the incentive will have on 
        designated communities and it is critical that Congress act to 
        reinstate reporting requirements as soon as possible.

    TITLE I--MODIFICATION OF POPULATION CENSUS TRACTS DESIGNATED AS 
                      QUALIFIED OPPORTUNITY ZONES

SEC. 101. MODIFICATION OF POPULATION CENSUS TRACTS DESIGNATED AS 
              QUALIFIED OPPORTUNITY ZONES.

    Section 1400Z-1 of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new subsection:
    ``(g) Disqualification of Certain Population Census Tracts.--
            ``(1) In general.--Except as provided in paragraph (5), any 
        disqualified census tract shall not be treated as a qualified 
        opportunity zone for any period after the date that is 30 days 
        after the date on which the Secretary publishes the final list 
        of disqualified census tracts under paragraph (4)(B).
            ``(2) Replacement zones.--
                    ``(A) In general.--The chief executive officer of a 
                State may nominate additional population census tracts 
                to replace any population census tract the designation 
                of which as a qualified opportunity zone was terminated 
                by reason of paragraph (1). Except as otherwise 
                provided in this paragraph, the rules of subsections 
                (b), (c), (d), and (f) shall apply to any population 
                census tract nominated under this paragraph.
                    ``(B) Consultation.--No population census tract 
                nominated under subparagraph (A) may be designated as a 
                qualified opportunity zone unless the chief executive 
                officer of the State certifies in writing to the 
                Secretary that the chief executive officer has 
                consulted with the chief executive officer (or the 
                equivalent) of each local jurisdiction in which the 
                population census tract is located.
                    ``(C) Special rules.--For purposes of this 
                subchapter--
                            ``(i) any population census tract which is 
                        a disqualified census tract (as defined in 
                        paragraph (3) without regard to subparagraph 
                        (A)(i) thereof) may not be nominated as a 
                        qualified opportunity zone under this 
                        paragraph,
                            ``(ii) the determination period with 
                        respect to a nomination under subparagraph (A) 
                        shall be the 45-day period beginning on the 
                        date on which the Secretary publishes the final 
                        list of disqualified census tracts under 
                        paragraph (4)(B), as extended under subsection 
                        (b)(2), and
                            ``(iii) the period for which any such 
                        designation is in effect shall be the period 
                        beginning on the date such designation takes 
                        effect and ending on the last day of the 10th 
                        calendar year beginning on or after the 
                        designation date as a qualified opportunity 
                        zone for the population census tract which it 
                        is replacing as such a zone by reason of the 
                        termination under paragraph (1).
                    ``(D) Regulations and guidance.--The Secretary 
                shall prescribe such regulations or other guidance as 
                may be necessary or appropriate to carry out the 
                purposes of this paragraph.
            ``(3) Disqualified census tract.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `disqualified census 
                tract' means any population census tract which--
                            ``(i) was designated as a qualified 
                        opportunity zone before the date of the 
                        enactment of this subsection, and
                            ``(ii) is described in subparagraph (B) or 
                        (C).
                    ``(B) High median family income tracts.--
                            ``(i) In general.--Except as provided in 
                        clauses (ii) and (iii), a population census 
                        tract is described in this subparagraph if the 
                        median family income for such tract exceeds 130 
                        percent of the national median family income.
                            ``(ii) Exception.--Clause (i) shall not 
                        apply if the poverty rate of such population 
                        census tract (excluding students enrolled in an 
                        institution of higher education (as defined in 
                        section 101 of the Higher Education Act of 
                        1965)) is equal to or greater than 30 percent.
                            ``(iii) Request to retain designation for 
                        certain population census tracts.--Clause (i) 
                        shall not apply if the Secretary, upon a 
                        request of the chief executive officer of the 
                        State made not later than 60 days after the 
                        date the Secretary publishes the list described 
                        in paragraph (4)(A), determines that--
                                    ``(I) the designation of such 
                                population census tract was consistent 
                                with the purposes of this subchapter, 
                                or
                                    ``(II) the median family income for 
                                the population census tract does not 
                                exceed 130 percent of the national 
                                median family income.
                    ``(C) Election to include additional population 
                census tracts.--
                            ``(i) In general.--A population census 
                        tract is described in this subparagraph if the 
                        Secretary, upon the request of the chief 
                        executive officer of the State submitted not 
                        later than 60 days after the date the Secretary 
                        publishes the list described in paragraph 
                        (4)(A), determines that the continued 
                        designation of such population census tract as 
                        a qualified opportunity zone is not consistent 
                        with the purposes of this subchapter.
                            ``(ii) Regulations and guidance.--Not later 
                        than 12 months after the date of the enactment 
                        of this subsection, the Secretary shall issue 
                        regulations or guidance with respect to the 
                        criteria to be used for making a determination 
                        by the Secretary under clause (i).
            ``(4) Identification and publication of disqualified census 
        tracts.--
                    ``(A) Initial identification.--As soon as 
                practical, but not later than 12 months after the date 
                of the enactment of this subsection, the Secretary 
                shall make public--
                            ``(i) a list of population census tracts 
                        described in paragraph (3)(B) (determined 
                        without regard to clause (iii) thereof), and
                            ``(ii) a list of population census tracts 
                        which are low-income communities and were not 
                        designated as a qualified opportunity zone 
                        before the date of enactment of this 
                        subsection.
                    ``(B) Final list of disqualified census tracts.--
                Not later than 105 days after the date the Secretary 
                publishes the list described in subparagraph (A), the 
                Secretary shall make public a final list of 
                disqualified census tracts.
            ``(5) Rules for qualified preexisting investments.--
                    ``(A) In general.--For purposes of this subchapter, 
                section 1400Z-2 shall be applied without regard to 
                paragraph (1) with respect to any qualified preexisting 
                trade or business.
                    ``(B) Qualified preexisting trade or business.--For 
                purposes of this paragraph--
                            ``(i) In general.--The term `qualified 
                        preexisting trade or business' means any trade 
                        or business of a qualified opportunity zone 
                        fund or qualified opportunity zone business 
                        which meets the requirements of clauses (ii) 
                        and (iii) of section 1400Z-2(d)(3)(A) and 
                        which--
                                    ``(I) before the date of the 
                                enactment of this subsection, filed a 
                                registration statement under the 
                                Securities Act of 1933 (15 U.S.C. 77a 
                                et seq.) or prepared any comparable 
                                offering memorandum or similar 
                                disclosure document provided in 
                                reliance on section 230.506 of title 
                                17, Code of Federal Regulations (or 
                                successor regulations), promulgated 
                                under the Securities Act of 1933, that 
                                discloses the intent of such trade or 
                                business to invest in the disqualified 
                                census tract,
                                    ``(II) before the first date on 
                                which the disqualified census tract 
                                appears on any list published under 
                                paragraph (4), has made, or has entered 
                                into to binding agreements to make, 
                                investments in the disqualified census 
                                tract which--
                                            ``(aa) aggregate more than 
                                        $250,000, and
                                            ``(bb) have been designated 
                                        in writing for the use in, or 
                                        the development of, such trade 
                                        or business, or
                                    ``(III) is determined by the 
                                Secretary to have relied on the 
                                designation of the disqualified census 
                                tract as a qualified opportunity zone 
                                and to have suffered a loss as a result 
                                of the application of paragraph (1).
                            ``(ii) Trade or business.--The term `trade 
                        or business' includes any activity intended to 
                        qualify as a trade or business within the 
                        meaning of section 162.
                    ``(C) Regulations and guidance.--The Secretary 
                shall prescribe such regulations or guidance as may be 
                necessary or appropriate to carry out the purposes of 
                this paragraph, including guidance to prevent 
                speculative investment solely for the purpose of 
                falling within the definition of a qualified 
                preexisting trade or business.
            ``(6) Determination of population census tract data.--For 
        purposes of applying this subsection, in determining whether a 
        population census tract meets any qualification with respect to 
        poverty rate or any aspect of median income, such determination 
        shall be made using the most recent census data that has been 
        published by the Bureau of the Census as of the date of 
        enactment of this subsection.''.

SEC. 102. CERTAIN FORMER INDUSTRIAL TRACTS PERMITTED TO BE DESIGNATED 
              AS OPPORTUNITY ZONES.

    Section 1400Z-1 of the Internal Revenue Code of 1986, as amended by 
section 101, is amended by adding at the end the following new 
subsection:
    ``(h) Special Rule for Former Industrial Tracts Contiguous to 
Designated Opportunity Zones.--
            ``(1) In general.--For purposes of this chapter, the term 
        `qualified opportunity zone' means an population census tract 
        which is described in paragraph (2) and designated as a 
        qualified opportunity zone under this subsection.
            ``(2) Population census tract described.--A population 
        census tract is described in this subparagraph if--
                    ``(A) the tract--
                            ``(i) has a population of zero,
                            ``(ii) was previously used for industrial 
                        purposes and is a brownfield industrial site, 
                        and
                            ``(iii) is contiguous, including by water, 
                        to a population census tract on at least 1 side 
                        that has been designated as a qualified 
                        opportunity zone under this section, or
                    ``(B) the tract was merged, as a result of the 2020 
                decennial census, into a census tract described in 
                subparagraph (A)(iii) and met all requirements 
                described in subparagraph (A).
            ``(3) Designation.--For purposes of paragraph (1), a 
        population census tract that is described in paragraph (2) is 
        designated as a qualified opportunity zone if--
                    ``(A) not later than 30 days after the date of the 
                enactment of this subsection, the chief executive 
                officer of the State in which the tract is located--
                            ``(i) nominates the tract for designation 
                        as a qualified opportunity zone, and
                            ``(ii) notifies the Secretary in writing of 
                        such nomination, and
                    ``(B) not later than 30 days after receiving the 
                notification under subparagraph (A)(ii), the Secretary 
                certifies such nomination and designates such tract as 
                a qualified opportunity zone.
            ``(4) Determination of census tract information.--For 
        purposes of this subsection, the boundaries and population of a 
        census tract shall be determined based on United States Census 
        Bureau data for the 2010 decennial census.
            ``(5) Number of designations.--Population census tracts 
        designated as a qualified opportunity zone under this 
        subsection shall not be taken into account for purposes of 
        subsection (d).
            ``(6) Definitions.--For purposes of this subsection--
                    ``(A) Brownfield industrial site.--The term 
                `brownfield industrial site' means a population census 
                tract that includes real property the expansion, 
                redevelopment, or reuse of which may be complicated by 
                the presence or potential presence of a hazardous 
                substance or pollutant or contaminant, including real 
                property covered by a prospective purchaser agreement 
                or similar agreement entered into by the Environmental 
                Protection Agency or the appropriate State authority.
                    ``(B) Hazardous substance.--The term `hazardous 
                substance' means--
                            ``(i) a hazardous substance as defined in 
                        section 101(14) of the Comprehensive 
                        Environmental Response, Compensation, and 
                        Liability Act of 1980 (42 U.S.C. 9601(14)), or
                            ``(ii) petroleum or a petroleum product.
                    ``(C) Pollutant or contaminant.--The term 
                `pollutant or contaminant' has the meaning given such 
                term in section 101(33) of such Act.''.

              TITLE II--INFORMATION REPORTING REQUIREMENTS

SEC. 201. INFORMATION REPORTING ON QUALIFIED OPPORTUNITY FUNDS.

    (a) In General.--
            (1) Filing requirements for funds and investors.--Subpart A 
        of part III of subchapter A of chapter 61 of the Internal 
        Revenue Code of 1986 is amended by inserting after section 
        6039J the following new sections:

``SEC. 6039K. RETURNS WITH RESPECT TO QUALIFIED OPPORTUNITY FUNDS.

    ``(a) In General.--Every qualified opportunity fund shall file an 
annual return (at such time and in such manner as the Secretary may 
prescribe) containing the information described in subsection (b).
    ``(b) Information From Qualified Opportunity Funds.--The 
information described in this subsection is--
            ``(1) the name, address, and taxpayer identification number 
        of the qualified opportunity fund,
            ``(2) whether the qualified opportunity fund is organized 
        as a corporation or a partnership,
            ``(3) the value of the total assets held by the qualified 
        opportunity fund as of each date described in section 1400Z-
        2(d)(1),
            ``(4) the value of all qualified opportunity zone property 
        held by the qualified opportunity fund on each such date,
            ``(5) with respect to each investment held by the qualified 
        opportunity fund in qualified opportunity zone stock or a 
        qualified opportunity zone partnership interest--
                    ``(A) the name, address, and taxpayer 
                identification number of the corporation in which such 
                stock is held or the partnership in which such interest 
                is held, as the case may be,
                    ``(B) each North American Industry Classification 
                Code that applies to the trades or businesses conducted 
                by such corporation or partnership,
                    ``(C) the population census tracts in which the 
                qualified opportunity zone business property of such 
                corporation or partnership is located,
                    ``(D) the amount of the investment in such stock or 
                partnership interest as of each date described in 
                section 1400Z-2(d)(1),
                    ``(E) the value of tangible property held by such 
                corporation or partnership on each such date which is 
                owned by such corporation or partnership,
                    ``(F) the value of tangible property held by such 
                corporation or partnership on each such date which is 
                leased by such corporation or partnership,
                    ``(G) the approximate number of residential units 
                (if any) for any real property held by such corporation 
                or partnership, and
                    ``(H) the approximate average monthly number of 
                full-time equivalent employees of such corporation or 
                partnership for the year (within numerical ranges 
                identified by the Secretary) or such other indication 
                of the employment impact of such corporation or 
                partnership as determined appropriate by the Secretary,
            ``(6) with respect to the items of qualified opportunity 
        zone business property held by the qualified opportunity fund--
                    ``(A) the North American Industry Classification 
                Code that applies to the trades or businesses in which 
                such property is held,
                    ``(B) the population census tract in which the 
                property is located,
                    ``(C) whether the property is owned or leased,
                    ``(D) the aggregate value of the items of qualified 
                opportunity zone property held by the qualified 
                opportunity fund as of each date described in section 
                1400Z-2(d)(1), and
                    ``(E) in the case of real property, number of 
                residential units (if any),
            ``(7) the approximate average monthly number of full-time 
        equivalent employees for the year of the trades or businesses 
        of the qualified opportunity fund in which qualified 
        opportunity zone business property is held (within numerical 
        ranges identified by the Secretary) or such other indication of 
        the employment impact of such trades or businesses as 
        determined appropriate by the Secretary,
            ``(8) with respect to each person who disposed of an 
        investment in the qualified opportunity fund during the year--
                    ``(A) the name and taxpayer identification number 
                of such person,
                    ``(B) the date or dates on which the investment 
                disposed was acquired, and
                    ``(C) the date or dates on which any such 
                investment was disposed and the amount of the 
                investment disposed, and
            ``(9) such other information as the Secretary may require.
    ``(c) Statement Required To Be Furnished to Investors.--Every 
person required to make a return under subsection (a) shall furnish to 
each person whose name is required to be set forth in such return by 
reason of subsection (b)(9) a written statement showing--
            ``(1) the name, address and phone number of the information 
        contact of the person required to make such return, and
            ``(2) the information required to be shown on such return 
        by reason of subsection (b)(9) with respect to such person.
    ``(d) Definitions.--For purposes of this section--
            ``(1) In general.--Any term used in this section which is 
        also used in subchapter Z of chapter 1 shall have the meaning 
        given such term under such subchapter.
            ``(2) Full-time equivalent employees.--The term `full-time 
        equivalent employees' means, with respect to any month, the sum 
        of--
                    ``(A) the number of full-time employees (as defined 
                in section 4980H(c)(4)) for the month, plus
                    ``(B) the number of employees determined (under 
                rules similar to the rules of section 4980H(c)(2)(E)) 
                by dividing the aggregate number of hours of service of 
                employees who are not full-time employees for the month 
                by 120.

``SEC. 6039L. INFORMATION ON PERSONS INVESTING IN QUALIFIED OPPORTUNITY 
              FUNDS.

    ``(a) In General.--Every taxpayer who makes an investment in a 
qualified opportunity fund shall provide an annual statement (at such 
time and in such manner as the Secretary may prescribe) containing the 
information described in subsection (b) with respect to each such 
investment.
    ``(b) Information From Investors.--The information described in 
this subsection is--
            ``(1) the name, address, and taxpayer identification number 
        of the taxpayer,
            ``(2) the name and taxpayer identification number of the 
        qualified opportunity fund in which the investment was made,
            ``(3) a description of such investment,
            ``(4) the date such investment was made,
            ``(5) the amount of short-term and long-term capital gains 
        for which an election was made under section 1400Z-2(a)(1) for 
        such investment,
            ``(6) in the case of any disposition of any investment in a 
        qualified opportunity fund during the taxable year--
                    ``(A) a description of the investment disposed,
                    ``(B) the date of the disposition, and
                    ``(C) the amount of any previously deferred short-
                term and long-term capital gain included in income as a 
                result of such disposition, and
            ``(7) such other information as the Secretary may require.
    ``(c) Definitions.--Any term used in this section which is also 
used in subchapter Z of chapter 1 shall have the meaning given such 
term under such subchapter.

``SEC. 6039M. INFORMATION REQUIRED FROM CERTAIN QUALIFIED OPPORTUNITY 
              ZONE BUSINESSES.

    ``(a) In General.--Every applicable qualified opportunity zone 
business shall furnish to the qualified opportunity fund described in 
subsection (b) a written statement in such manner and setting forth 
such information as the Secretary may by regulations prescribe for 
purposes of enabling such qualified opportunity fund to meet the 
requirements of section 6039(b)(5).
    ``(b) Applicable Qualified Opportunity Zone Business.--For purposes 
of subsection (a), the term `applicable qualified opportunity zone 
business' means any qualified opportunity zone business (as defined in 
section 1400Z-2(d)(3))--
            ``(1) which is a trade or business of a qualified 
        opportunity fund,
            ``(2) in which a qualified opportunity fund holds qualified 
        opportunity zone stock, or
            ``(3) in which a qualified opportunity fund holds a 
        qualified opportunity zone partnership interest.
    ``(c) Other Terms.--Any term used in this section which is also 
used in subchapter Z of chapter 1 shall have the meaning given such 
term under such subchapter.''.
            (2) Penalties.--
                    (A) In general.--Part II of subchapter B of chapter 
                68 of the Internal Revenue Code of 1986 is amended by 
                inserting after section 6725 the following new section:

``SEC. 6726. FAILURE TO COMPLY WITH INFORMATION REPORTING REQUIREMENTS 
              RELATING TO QUALIFIED OPPORTUNITY FUNDS.

    ``(a) Information Returns by Qualified Opportunity Funds.--
            ``(1) In general.--In the case of any person required to 
        file a return under section 6039K fails to file a complete and 
        correct return under such section in the time and in the manner 
        prescribed therefor, such person shall pay a penalty of $500 
        for each day during which such failure continues.
            ``(2) Limitation.--
                    ``(A) In general.--The maximum penalty under this 
                subsection on failures with respect to any 1 return 
                shall not exceed $10,000.
                    ``(B) Large qualified opportunity funds.--In the 
                case of any failure described in paragraph (1) with 
                respect to a fund the gross assets of which (determined 
                on the last day of the taxable year) are in excess of 
                $10,000,000, subparagraph (A) shall be applied by 
                substituting `$50,000' for `$10,000'.
            ``(3) Penalty in cases of intentional disregard.--If a 
        failure described in paragraph (1) is due to intentional 
        disregard, then--
                    ``(A) paragraph (1) shall be applied by 
                substituting `$2,500' for `$500',
                    ``(B) paragraph (2)(A) shall be applied by 
                substituting `$50,000' for `$10,000', and
                    ``(C) paragraph (2)(B) shall be applied by 
                substituting `$250,000' for `$50,000'.
            ``(4) Inflation adjustment.--
                    ``(A) In general.--In the case of any failure 
                relating to a return required to be filed in a calendar 
                year beginning after 2023, each of the dollar amounts 
                in paragraphs (1), (2), and (3) shall be increased by 
                an amount equal to such dollar amount multiplied by the 
                cost-of-living adjustment determined under section 
                1(f)(3) for the calendar year determined by 
                substituting `calendar year 2022' for `calendar year 
                2016' in subparagraph (A)(ii) thereof.
                    ``(B) Rounding.--
                            ``(i) In general.--If the $500 dollar 
                        amount in paragraphs (1) and (3)(A) or the 
                        $2,500 amount in paragraph (3)(A), after being 
                        increased under subparagraph (A), is not a 
                        multiple of $10, such dollar amount shall be 
                        rounded to the next lowest multiple of $10.
                            ``(ii) Asset threshold.--If the $10,000,000 
                        dollar amount in paragraph (2)(B), after being 
                        increased under subparagraph (A), is not a 
                        multiple of $10,000, such dollar amount shall 
                        be rounded to the next lowest multiple of 
                        $10,000.
                            ``(iii) Other dollar amounts.--If any 
                        dollar amount in paragraph (2) or (3) (other 
                        than any amount to which clause (i) or (ii) 
                        applies), after being increased under 
                        subparagraph (A), is not a multiple of $1,000, 
                        such dollar amount shall be rounded to the next 
                        lowest multiple of $1,000.
    ``(b) Statements by Investors.--
            ``(1) In general.--If--
                    ``(A) any person is required to file a statement 
                under section 6039L for any period, and
                    ``(B) fails--
                            ``(i) to file such statement on or before 
                        the required filing date, or
                            ``(ii) fails to include all of the 
                        information required to be shown on the 
                        statement or includes incorrect information,
        such person shall pay a penalty of $5,000.
            ``(2) Reduction where correction in specified period.--If 
        any failure described in paragraph (1)(B) is corrected on or 
        before the day 60 days after the required filing date, the 
        penalty imposed by paragraph (1) shall be $500 in lieu of the 
        amount determined under such paragraph.
            ``(3) De minimis errors.--If--
                    ``(A) there are one or more such failures described 
                in paragraph (1)(B)(ii) relating to an incorrect dollar 
                amount, and
                    ``(B) no single amount in error differs from the 
                correct amount by more than $100,
        then no correction shall be required, and, for purposes of this 
        section, such statement shall be treated as having been filed 
        with all correct required information.
            ``(4) Penalty in cases of intentional disregard.--If one or 
        more failures described in paragraph (1)(B) are due to 
        intentional disregard of the filing requirement (or the correct 
        information reporting requirement), then, with respect to each 
        such failure--
                    ``(A) paragraphs (2) and (3) shall not apply, and
                    ``(B) the amount of the penalty determined under 
                paragraph (1) shall be $25,000.
            ``(5) Inflation adjustment.--
                    ``(A) In general.--In the case of any failure 
                relating to a statement required to be filed in a 
                calendar year beginning after 2023, each of the dollar 
                amounts in paragraphs (1), (2), and (4) shall be 
                increased by an amount equal to such dollar amount 
                multiplied by the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year determined 
                by substituting `calendar year 2022' for `calendar year 
                2016' in subparagraph (A)(ii) thereof.
                    ``(B) Rounding.--The amount of any increase under 
                subparagraph (A) shall be rounded to the nearest 
                multiple of $100 ($10 in the case of any increase in 
                the amount under paragraph (2)).''.
                    (B) Information required to be sent to other 
                taxpayers.--Section 6724(d)(2) of such Code is 
                amended--
                            (i) by striking ``or'' at the end of 
                        subparagraph (II),
                            (ii) by striking the period at the end of 
                        the first subparagraph (JJ) (relating to 
                        section 6226) and inserting a comma,
                            (iii) by redesignating the second 
                        subparagraph (JJ) (relating to section 6050Y) 
                        as subparagraph (KK),
                            (iv) by striking the period at the end of 
                        subparagraph (KK) (as redesignated by clause 
                        (iii)) and inserting a comma, and
                            (v) by inserting after subparagraph (KK) 
                        (as so redesignated) the following new 
                        subparagraphs:
                    ``(LL) section 6039K(c) (relating to disposition of 
                qualified opportunity fund investments), or
                    ``(MM) section 6039M (relating to information 
                required from certain qualified opportunity zone 
                businesses).''.
            (3) Electronic filing.--Section 6011(e) of such Code is 
        amended by adding at the end the following new paragraph:
            ``(8) Qualified opportunity funds.--Notwithstanding 
        paragraphs (1) and (2), any return filed by a qualified 
        opportunity fund shall be filed on magnetic media or other 
        machine-readable form.''.
            (4) Clerical amendments.--
                    (A) The table of sections for subpart A of part III 
                of subchapter A of chapter 61 of such Code is amended 
                by inserting after the item relating to section 6039J 
                the following new items:

``Sec. 6039K. Returns with respect to qualified opportunity funds.
``Sec. 6039L. Information on persons investing in qualified opportunity 
                            funds.
``Sec. 6039M. Information required from certain qualified opportunity 
                            zone businesses.''.
                    (B) The table of sections for part II of subchapter 
                B of chapter 68 of such Code is amended by inserting 
                after the item relating to section 6725 the following 
                new item:

``Sec. 6726. Failure to comply with information reporting requirements 
                            relating to qualified opportunity funds.''.
            (5) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.
    (b) Reporting of Data on Opportunity Zone Tax Incentives.--
            (1) In general.--As soon as practical after the date of the 
        enactment of this Act, and annually thereafter, the Secretary 
        of the Treasury, or the Secretary's delegate (referred to in 
        this section as the ``Secretary''), in consultation with the 
        Director of the Bureau of the Census and such other agencies as 
        the Secretary determines appropriate, shall make publicly 
        available a report on qualified opportunity funds.
            (2) Information included.--The report required under 
        paragraph (1) shall include, to the extent available, the 
        following information:
                    (A) The number of qualified opportunity funds.
                    (B) The aggregate dollar amount of assets held in 
                qualified opportunity funds.
                    (C) The aggregate dollar amount of investments made 
                by qualified opportunity funds in qualified opportunity 
                fund property across each industry class under the 
                North American Industry Classification Code.
                    (D) The percentage of population census tracts 
                designated as qualified opportunity zones that have 
                received qualified opportunity fund investments.
                    (E) For each population census tract designated as 
                a qualified opportunity zone, the approximate average 
                monthly number of full-time equivalent employees of the 
                qualified opportunity zone businesses in such qualified 
                opportunity zone for the preceding 12-month period 
                (within numerical ranges identified by the Secretary) 
                or such other indication of the employment impact of 
                such qualified opportunity fund businesses as 
                determined appropriate by the Secretary.
                    (F) The percentage of the total amount of 
                investments made by qualified opportunity funds in--
                            (i) qualified opportunity zone property 
                        which is real property; and
                            (ii) other qualified opportunity zone 
                        property.
                    (G) For each population census tract, the aggregate 
                approximate number of residential units resulting from 
                investments made by qualified opportunity funds in real 
                property.
                    (H) The aggregate dollar amount of investments made 
                by qualified opportunity funds in each population 
                census tract.
            (3) Additional information.--
                    (A) In general.--Beginning with the report 
                submitted under paragraph (1) for the 6th year after 
                the date of the enactment of this Act, the Secretary 
                shall include in such report the impacts and outcomes 
                of a designation of a population census tract as a 
                qualified opportunity zone as measured by economic 
                indicators, such as job creation, poverty reduction, 
                new business starts, and other metrics as determined by 
                the Secretary.
                    (B) Semi-decennial information.--
                            (i) In general.--In the case of any report 
                        submitted under paragraph (1) in the 6th year 
                        or the 11th year after the date of the 
                        enactment of this Act, the Secretary shall 
                        include the following information:
                                    (I) For population census tracts 
                                designated as a qualified opportunity 
                                zone, a comparison (based on aggregate 
                                information) of the factors listed in 
                                clause (iii) between the 5-year period 
                                ending on the date of the enactment of 
                                Public Law 115-97 and the most recent 
                                5-year period for which data is 
                                available.
                                    (II) For population census tracts 
                                designated as a qualified opportunity 
                                zone, a comparison (based on aggregate 
                                information) of the factors listed in 
                                clause (iii) for the most recent 5-year 
                                period for which data is available 
                                between such population census tracts 
                                and a similar population census tracts 
                                that were not designated as a qualified 
                                opportunity zone.
                            (ii) Control groups.--For purposes of 
                        clause (i), the Secretary may combine 
                        population census tracts into such groups as 
                        the Secretary determines appropriate for 
                        purposes of making comparisons.
                            (iii) Factors listed.--The factors listed 
                        in this paragraph are the following:
                                    (I) The unemployment rate.
                                    (II) The number of persons working 
                                in the population census tract, 
                                including the percentage of such 
                                persons who were not residents in the 
                                population census tract in the 
                                preceding year.
                                    (III) Individual, family, and 
                                household poverty rates.
                                    (IV) Median family income of 
                                residents of the population census 
                                tract.
                                    (V) Demographic information on 
                                residents of the population census 
                                tract, including age, income, 
                                education, race, and employment.
                                    (VI) The average percentage of 
                                income of residents of the population 
                                census tract spent on rent annually.
                                    (VII) The number of residences in 
                                the population census tract.
                                    (VIII) The rate of home ownership 
                                in the population census tract.
                                    (IX) The average value of 
                                residential property in the population 
                                census tract.
                                    (X) The number of affordable 
                                housing units in the population census 
                                tract.
                                    (XI) The number and percentage of 
                                residents in the population census 
                                tract that were not employed for the 
                                preceding year.
                                    (XII) The number of new business 
                                starts in the population census tract.
                                    (XIII) The distribution of 
                                employees in the population census 
                                tract by North American Industry 
                                Classification Code.
            (4) Protection of identifiable return information.--In 
        making reports required under this subsection, the Secretary--
                    (A) shall establish appropriate procedures to 
                ensure that any amounts reported do not disclose 
                taxpayer return information that can be associated with 
                any particular taxpayer or competitive or proprietary 
                information, and
                    (B) if necessary to protect taxpayer return 
                information, may combine information required with 
                respect to individual population census tracts into 
                larger geographic areas.
            (5) Definitions.--Any term used in this subsection which is 
        also used in subchapter Z of chapter 1 of the Internal Revenue 
        Code of 1986 shall have the meaning given such term under such 
        subchapter.

     TITLE III--MODIFICATION OF RULES FOR INVESTMENTS IN QUALIFIED 
                           OPPORTUNITY FUNDS

SEC. 301. EXTENSION OF DEFERRAL PERIOD.

    (a) In General.--Subparagraph (B) of section 1400Z-2(b)(1) of the 
Internal Revenue Code of 1986 is amended by striking ``December 31, 
2026'' and inserting ``December 31, 2028''.
    (b) Modification of Basis Rule.--Clause (iv) of section 1400Z-
2(b)(2)(B) of such Code is amended by striking ``7'' each place it 
appears in the text and in the heading and inserting ``6''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts invested after December 22, 2017.

SEC. 302. MODIFICATION OF DEFINITION OF QUALIFIED OPPORTUNITY FUND.

    (a) In General.--Section 1400Z-2(d)(1) of the Internal Revenue Code 
of 1986 is amended to read as follows:
            ``(1) In general.--The term `qualified opportunity fund' 
        means--
                    ``(A) any qualified feeder fund, or
                    ``(B) any other investment vehicle if--
                            ``(i) such investment vehicle is organized 
                        as a corporation or a partnership for the 
                        purpose of investing in qualified opportunity 
                        zone property (other than another qualified 
                        opportunity fund), and
                            ``(ii) such investment vehicle holds at 
                        least 90 percent of its assets in qualified 
                        opportunity zone property, determined by the 
                        average of the percentage of qualified 
                        opportunity zone property held in the fund as 
                        measured--
                                    ``(I) on the last day of the first 
                                6-month period of the taxable year of 
                                the fund, and
                                    ``(II) on the last day of the 
                                taxable year of the fund.''.
    (b) Qualified Feeder Fund.--Section 1400Z-2(d) of such Code is 
amended by adding at the end the following new paragraph:
            ``(4) Qualified feeder fund.--The term `qualified feeder 
        fund' means any investment vehicle that invests in a qualified 
        opportunity fund if--
                    ``(A) such investment vehicle is organized as a 
                domestic partnership for the purpose of investing in 
                one more corporations or partnerships described in 
                paragraph (1)(B),
                    ``(B) all investments made in the investment 
                vehicle are made in cash, and
                    ``(C) not less than 95 percent of the assets of 
                which are equity investments in corporations or 
                partnerships described in paragraph (1)(B).''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

              TITLE IV--STATE AND COMMUNITY DYNAMISM FUND

SEC. 401. STATE AND COMMUNITY DYNAMISM FUND.

    (a) Establishment.--There is established a State and Community 
Dynamism Fund to support public and private investment, including 
capital for qualified opportunity zones designated under section 1400Z-
1(a) of the Internal Revenue Code of 1986, and existing small business 
and community economic development programs and incentives, to 
underserved businesses and communities.
    (b) Allocation.--
            (1) In general.--Funds appropriated to the State and 
        Community Dynamism Fund shall be allocated to States.
            (2) Formula.--
                    (A) In general.--The Secretary of the Treasury 
                shall determine the allocation by allocating Federal 
                funds among the States based on the proportion of prime 
                working age adults in each State bears to the total of 
                prime working age adults for all the States.
                    (B) Minimum allocation.--The Secretary shall adjust 
                the allocations under subparagraph (A) for each State 
                to the extent necessary to ensure that no State 
                receives less than 0.9 percent of the Federal funds.
            (3) Requirement.--To receive an allocation under paragraph 
        (2), a State shall certify that the State will use funds to--
                    (A) build capacity in high-poverty, underbanked, 
                rural, and otherwise underserved communities;
                    (B) advance investment in minority-, women, and 
                veteran-owned businesses;
                    (C) address workforce development in strategic 
                sectors of the State's economy; and
                    (D) align priorities to support affordably priced 
                housing.
            (4) Suballocation.--A State may spend funds allocated under 
        this subsection directly or suballocate the funds to other 
        entities, including units of general local government and 
        nonprofits.
            (5) Eligible uses.--Funds allocated under this subsection 
        shall be used for any eligible use in a low-income community, 
        as defined in section 45D(e) of the Internal Revenue Code of 
        1986, including for--
                    (A) operating support and community capacity 
                building, with priority to given to operating support 
                and community capacity building in qualified 
                opportunity zones, including--
                            (i) personnel to support activities, 
                        including coordination, education, and 
                        investment;
                            (ii) community-level capacity building, 
                        training, and strategic planning;
                            (iii) outreach, technical assistance, and 
                        professional services to underserved businesses 
                        and underserved opportunity zone fund managers;
                    (B) high-impact projects, including--
                            (i) predevelopment costs associated with 
                        individual Qualified Opportunity Zone projects; 
                        and
                            (ii) risk mitigation for qualified 
                        opportunity zone funds; and
                    (C) administrative costs, not to exceed 3 percent 
                of the funds allocated.
            (6) Eligible projects.--Funds used for high-impact project 
        activities, as described in paragraph (5)(B), shall only be 
        used for--
                    (A) business with less than 200 employees;
                    (B) projects that provide community goods or 
                services, including health care, social services, 
                healthy food access, education, broadband, and culture; 
                or
                    (C) affordable housing with at least 50 percent of 
                the units that are affordable to families making less 
                than 80 percent of area median family income.
            (7) Prioritization.--A State that receives funds under this 
        section must prioritize activities that--
                    (A) promote investment in projects that 
                substantially support minorities, as defined in section 
                1204(c) of the Financial Institutions Reform, Recovery, 
                and Enforcement Act of 1989 (12 U.S.C. 1811 note), or 
                other targeted populations, as defined in section 103 
                of the Riegle Community Development and Regulatory 
                Improvement Act of 1994 (12 U.S.C. 4702); and
                    (B) have demonstrated meaningful engagement with 
                community stakeholders.
    (c) Authorization of Appropriations.--There is authorized to be 
appropriated $1,000,000,000 to carry out this section.
    (d) GAO Audit.--The Comptroller General of the United States shall 
perform an annual audit of the Fund and submit to the appropriate 
committees of Congress a report containing the results of the audit.
    (e) Annual Report.--Not later than March 31 of each year, each 
State receiving funds under this title shall submit to the Secretary a 
report on the performance of the State and participating entities in 
the State that includes--
            (1) an accounting of the expenditure of funds received by 
        the State, including on administrative or indirect costs;
            (2) information on the number and characteristics of 
        participants served under this title; and
            (3) a summary describing the training, capacity-building, 
        and technical assistance offered by the State and participating 
        entities.
    (f) Definitions.--In this section:
            (1) Prime working age adults not employed.--The term 
        ``prime working age adults not employed'' means, with respect 
        to a State, the share of the adult population aged 25 to 54 
        that was not employed for the most recent year for which data 
        is available.
            (2) State.--The term ``State'' includes the District of 
        Columbia, any territory or possession of the United States, and 
        any Indian Tribe.
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