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

I 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. OPPORTUNITY ZONE FAIRNESS AND INCLU- 3 SION. 4 (a) IN GENERAL.—Section 1400Z–2(d) of the Inter- 5 nal Revenue Code of 1986 is amended by adding at the 6 end the following new paragraph: 7 ‘‘(4) OPPORTUNITY FUND FAIRNESS AND IN- 8 CLUSION.— 9 VerDate Sep 11 2014 03:27 Nov 16, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4999.IH H4999 kjohnson on DSK79L0C42 with BILLS 2 •HR 4999 IH ‘‘(A) IN GENERAL.—A fund shall not be 1 treated as a qualified opportunity fund for pur- 2 poses of this section unless such fund— 3 ‘‘(i) meets the investment advisory 4 board requirements of subparagraph (B), 5 ‘‘(ii) meets the investment diversity 6 requirements of subparagraph (C), 7 ‘‘(iii) meets the affordable housing in- 8 vestment requirements of subparagraph 9 (D), and 10 ‘‘(iv) with respect to each investment 11 in an opportunity zone, assesses, and pre- 12 pares a written report detailing, how such 13 investment will affect different racial and 14 ethnic groups within the zone and submits 15 such report to the Committee on Ways and 16 Means of the House of Representatives, 17 the Committee on Finance of the Senate, 18 and the Joint Committee on Taxation. 19 ‘‘(B) INVESTMENT ADVISORY BOARD.— 20 The requirements of this subparagraph shall 21 not be treated as met with respect to any fund 22 unless such fund has, for each qualified oppor- 23 tunity zone within which the fund invests in 24 VerDate Sep 11 2014 03:27 Nov 16, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4999.IH H4999 kjohnson on DSK79L0C42 with BILLS 3 •HR 4999 IH qualified opportunity zone property, an invest- 1 ment advisory board which— 2 ‘‘(i) is appointed by the local govern- 3 ment of the jurisdiction within which the 4 zone to which such advisory board relates 5 is located, and 6 ‘‘(ii) advises the fund in directing in- 7 vestments in the zone for the benefit of the 8 zone. 9 ‘‘(C) INVESTMENT DIVERSITY REQUIRE- 10 MENTS.—The requirements of this subpara- 11 graph shall not be treated as met with respect 12 to any fund unless— 13 ‘‘(i) at least 30 percent of the fund’s 14 qualified opportunity zone property is 15 qualified opportunity zone property with 16 respect to an opportunity zone within a 17 county, or local jurisdiction, the population 18 of which is 200,000 or less, 19 ‘‘(ii) at least 50 percent of the fund’s 20 qualified opportunity zone property con- 21 sists of interests in partnerships, and stock 22 of corporations, which are— 23 ‘‘(I) small business concerns 24 owned and controlled by women (with- 25 VerDate Sep 11 2014 03:27 Nov 16, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4999.IH H4999 kjohnson on DSK79L0C42 with BILLS 4 •HR 4999 IH in the meaning of section 3(n) of the 1 Small Business Act (15 U.S.C. 2 632(n)), or 3 ‘‘(II) small business concerns 4 owned and controlled by socially and 5 economically disadvantaged individ- 6 uals under section 8(d)(3)(C) of such 7 Act (15 U.S.C. 637(d)(3)(C)), and 8 ‘‘(iii) at least 40 percent of the fund’s 9 qualified opportunity zone property con- 10 sists of— 11 ‘‘(I) stock in corporations, inter- 12 ests in a partnerships, or other prop- 13 erty, the value of each of which does 14 not exceed $20 million, and 15 ‘‘(II) stock in corporations, or in- 16 terests in partnerships, the price-earn- 17 ings ratio of each of which is under 5. 18 ‘‘(D) AFFORDABLE HOUSING INVESTMENT 19 REQUIREMENTS.—The requirements of this 20 subparagraph shall not be treated as met with 21 respect to any fund unless in the case of any 22 investment in qualified opportunity zone prop- 23 erty which consists of a residential property 24 project, at least 20 percent of the units in the 25 VerDate Sep 11 2014 03:27 Nov 16, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4999.IH H4999 kjohnson on DSK79L0C42 with BILLS 5 •HR 4999 IH project are occupied by individuals whose in- 1 come is— 2 ‘‘(i) not more than 30 percent of area 3 median gross income, or 4 ‘‘(ii) not more than 200 percent of the 5 poverty line (as defined in section 673 of 6 the Community Services Block Grant Act 7 (42 U.S.C. 9902)) for a family of the size 8 involved. 9 ‘‘(E) INVESTMENT MEASUREMENT.—For 10 purposes of this paragraph, percentages of 11 qualified opportunity zone property held by a 12 qualified opportunity fund shall be determined 13 under rules similar to the rules of paragraph 14 (1). 15 ‘‘(F) FAILURE TO MEET REQUIREMENT.— 16 In the case of a qualified opportunity fund 17 which fails to meet any of the requirements of 18 this paragraph, subsection (b) shall be applied 19 by substituting the date of such failure for ‘De- 20 cember 31, 2026’ in paragraph (1)(B) there- 21 of.’’. 22 VerDate Sep 11 2014 03:27 Nov 16, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4999.IH H4999 kjohnson on DSK79L0C42 with BILLS 6 •HR 4999 IH (b) EFFECTIVE DATE.—The amendment made by 1 this section shall take effect on the date of the enactment 2 of this Act. 3 Æ VerDate Sep 11 2014 03:27 Nov 16, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H4999.IH H4999 kjohnson on DSK79L0C42 with BILLS