Title: To amend the Internal Revenue Code of 1986 to require fairness and diversity in opportunity zone investment.
Policy area: Taxation

Summary:
This bill amends the Internal Revenue Code, with respect to opportunity zones, to require a qualified opportunity fund to have an investment advisory board and meet certain investment diversity and affordable housing investment requirements. The fund must also report to the congressional tax committees on how investments in opportunity zones will affect different racial and ethnic groups within the zones.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4999 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 4999

  To amend the Internal Revenue Code of 1986 to require fairness and 
               diversity in opportunity zone investment.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 8, 2019

   Mr. Johnson of Georgia (for himself and Mr. Rush) 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 require fairness and 
               diversity in opportunity zone investment.

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

SECTION 1. OPPORTUNITY ZONE FAIRNESS AND INCLUSION.

    (a) In General.--Section 1400Z-2(d) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new paragraph:
            ``(4) Opportunity fund fairness and inclusion.--
                    ``(A) In general.--A fund shall not be treated as a 
                qualified opportunity fund for purposes of this section 
                unless such fund--
                            ``(i) meets the investment advisory board 
                        requirements of subparagraph (B),
                            ``(ii) meets the investment diversity 
                        requirements of subparagraph (C),
                            ``(iii) meets the affordable housing 
                        investment requirements of subparagraph (D), 
                        and
                            ``(iv) with respect to each investment in 
                        an opportunity zone, assesses, and prepares a 
                        written report detailing, how such investment 
                        will affect different racial and ethnic groups 
                        within the zone and submits such report to the 
                        Committee on Ways and Means of the House of 
                        Representatives, the Committee on Finance of 
                        the Senate, and the Joint Committee on 
                        Taxation.
                    ``(B) Investment advisory board.--The requirements 
                of this subparagraph shall not be treated as met with 
                respect to any fund unless such fund has, for each 
                qualified opportunity zone within which the fund 
                invests in qualified opportunity zone property, an 
                investment advisory board which--
                            ``(i) is appointed by the local government 
                        of the jurisdiction within which the zone to 
                        which such advisory board relates is located, 
                        and
                            ``(ii) advises the fund in directing 
                        investments in the zone for the benefit of the 
                        zone.
                    ``(C) Investment diversity requirements.--The 
                requirements of this subparagraph shall not be treated 
                as met with respect to any fund unless--
                            ``(i) at least 30 percent of the fund's 
                        qualified opportunity zone property is 
                        qualified opportunity zone property with 
                        respect to an opportunity zone within a county, 
                        or local jurisdiction, the population of which 
                        is 200,000 or less,
                            ``(ii) at least 50 percent of the fund's 
                        qualified opportunity zone property consists of 
                        interests in partnerships, and stock of 
                        corporations, which are--
                                    ``(I) small business concerns owned 
                                and controlled by women (within the 
                                meaning of section 3(n) of the Small 
                                Business Act (15 U.S.C. 632(n)), or
                                    ``(II) small business concerns 
                                owned and controlled by socially and 
                                economically disadvantaged individuals 
                                under section 8(d)(3)(C) of such Act 
                                (15 U.S.C. 637(d)(3)(C)), and
                            ``(iii) at least 40 percent of the fund's 
                        qualified opportunity zone property consists 
                        of--
                                    ``(I) stock in corporations, 
                                interests in a partnerships, or other 
                                property, the value of each of which 
                                does not exceed $20 million, and
                                    ``(II) stock in corporations, or 
                                interests in partnerships, the price-
                                earnings ratio of each of which is 
                                under 5.
                    ``(D) Affordable housing investment requirements.--
                The requirements of this subparagraph shall not be 
                treated as met with respect to any fund unless in the 
                case of any investment in qualified opportunity zone 
                property which consists of a residential property 
                project, at least 20 percent of the units in the 
                project are occupied by individuals whose income is--
                            ``(i) not more than 30 percent of area 
                        median gross income, or
                            ``(ii) not more than 200 percent of the 
                        poverty line (as defined in section 673 of the 
                        Community Services Block Grant Act (42 U.S.C. 
                        9902)) for a family of the size involved.
                    ``(E) Investment measurement.--For purposes of this 
                paragraph, percentages of qualified opportunity zone 
                property held by a qualified opportunity fund shall be 
                determined under rules similar to the rules of 
                paragraph (1).
                    ``(F) Failure to meet requirement.--In the case of 
                a qualified opportunity fund which fails to meet any of 
                the requirements of this paragraph, subsection (b) 
                shall be applied by substituting the date of such 
                failure for `December 31, 2026' in paragraph (1)(B) 
                thereof.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.
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