Opportunity Zone Accountability and Transparency Act

I 116TH CONGRESS 1ST SESSION H. R. 5011 To amend the Internal Revenue Code of 1986 to require reporting by qualified opportunity funds. IN THE HOUSE OF REPRESENTATIVES NOVEMBER 8, 2019 Mr. KIND (for himself, Mr. KELLY of Pennsylvania, and Ms. SEWELL of Ala- bama) 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 reporting by qualified opportunity funds. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Opportunity Zone Ac- 4 countability and Transparency Act’’. 5 SEC. 2. REPORTING REQUIREMENTS FOR QUALIFIED OP- 6 PORTUNITY FUNDS. 7 (a) IN GENERAL.—Subpart A of part III of sub- 8 chapter A of chapter 61 of the Internal Revenue Code of 9 VerDate Sep 11 2014 22:09 Nov 18, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5011.IH H5011 kjohnson on DSK79L0C42 with BILLS 2 •HR 5011 IH 1986 is amended by inserting after section 6039J the fol- 1 lowing new section: 2 ‘‘SEC. 6039K. RETURNS BY QUALIFIED OPPORTUNITY 3 FUNDS. 4 ‘‘(a) IN GENERAL.—Every qualified opportunity fund 5 shall electronically file an annual return which contains 6 the information described in subsection (b). 7 ‘‘(b) INFORMATION REQUIRED.—The information de- 8 scribed in this subsection is as follows: 9 ‘‘(1) FUND INFORMATION.— 10 ‘‘(A) The name, address, and TIN of the 11 qualified opportunity fund. 12 ‘‘(B) The entity classification of the quali- 13 fied opportunity fund, such as whether such 14 fund is a partnership, C corporation, S corpora- 15 tion, or real estate investment trust. 16 ‘‘(C) Certification that the purpose of the 17 qualified opportunity fund is investing in quali- 18 fied opportunity zone property. 19 ‘‘(D) The total assets held by the qualified 20 opportunity fund determined as of each meas- 21 urement date in the reporting period. 22 ‘‘(E) The aggregate amount of each of the 23 following which is held in the qualified oppor- 24 VerDate Sep 11 2014 22:09 Nov 18, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5011.IH H5011 kjohnson on DSK79L0C42 with BILLS 3 •HR 5011 IH tunity fund as of each measurement date in the 1 reporting period: 2 ‘‘(i) Qualified opportunity zone stock. 3 ‘‘(ii) Qualified opportunity zone part- 4 nership interests. 5 ‘‘(iii) Qualified opportunity zone busi- 6 ness property. 7 ‘‘(F) As of each measurement date in the 8 reporting period, the aggregate amount of in- 9 vestments in the qualified opportunity fund 10 which are described in section 1400Z– 11 2(e)(1)(A)(i) and the ratio of such investments 12 to all investments in such fund. 13 ‘‘(2) INFORMATION REGARDING QUALIFIED OP- 14 PORTUNITY ZONE CORPORATIONS AND PARTNER- 15 SHIPS.—With respect to each corporation or part- 16 nership any qualified opportunity zone stock or 17 qualified opportunity zone partnership interest of 18 which is held by the qualified opportunity fund: 19 ‘‘(A) The name, address, and TIN of each 20 such corporation or partnership. 21 ‘‘(B) Certification that such corporation or 22 partnership satisfies each of the requirements 23 of subclauses (I), (II), and (III) of section 24 1400Z–2(d)(2)(B)(i) or clauses (i), (ii), and 25 VerDate Sep 11 2014 03:35 Nov 19, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5011.IH H5011 kjohnson on DSK79L0C42 with BILLS 4 •HR 5011 IH (iii) of section 1400Z–2(d)(2)(C) (as the case 1 may be) with respect to the qualified oppor- 2 tunity fund. 3 ‘‘(C) The total investment by the qualified 4 opportunity fund in such corporation or part- 5 nership determined as of each measurement 6 date in the reporting period. 7 ‘‘(D) The percentage of stock in such cor- 8 poration, or interest in such partnership (as the 9 case may be) which is held by the qualified op- 10 portunity fund (determined separately on the 11 basis of both vote and value) as of each meas- 12 urement date in the reporting period. 13 ‘‘(3) INFORMATION REGARDING QUALIFIED OP- 14 PORTUNITY ZONE BUSINESSES.—With respect to 15 each trade or business carried on by any corporation 16 or partnership referred to in paragraph (2) and each 17 trade or business with respect to which the qualified 18 opportunity fund holds qualified opportunity zone 19 business property (and determined as of each meas- 20 urement date in the reporting period): 21 ‘‘(A) The principal line of business of the 22 trade or business. 23 ‘‘(B) With respect to any real property 24 used in such trade or business— 25 VerDate Sep 11 2014 03:35 Nov 19, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5011.IH H5011 kjohnson on DSK79L0C42 with BILLS 5 •HR 5011 IH ‘‘(i) the address of such real property, 1 ‘‘(ii) whether such real property is 2 owned or leased by such corporation, part- 3 nership, or fund, 4 ‘‘(iii) the square footage of any build- 5 ings which are part of such real property, 6 ‘‘(iv) the number of residential units 7 which are part of such real property, and 8 the number of such units which are rental 9 units, and 10 ‘‘(v) to the extent known by such cor- 11 poration, partnership, or fund, the number 12 of residential rental units that are part of 13 such property which are occupied by indi- 14 viduals whose income is 50 percent or less 15 of area median gross income (within the 16 meaning of section 42(g)(1)(A)). 17 ‘‘(C) With respect to any property held by 18 such corporation, partnership or fund, and used 19 in such trade or business, the qualified oppor- 20 tunity zone in which such property is primarily 21 used and the aggregate value of the investment 22 in such property used in such zone, separately 23 stated with respect to each of the following cat- 24 egories of property (and separately stated with 25 VerDate Sep 11 2014 22:09 Nov 18, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5011.IH H5011 kjohnson on DSK79L0C42 with BILLS 6 •HR 5011 IH respect to each such category on the basis of 1 whether such property is owned or leased): 2 ‘‘(i) Real property (including improve- 3 ments to real property). 4 ‘‘(ii) Improvements to real property. 5 ‘‘(iii) Tangible personal property. 6 ‘‘(iv) Intangible property (excluding 7 leases of real or tangible personal prop- 8 erty). 9 ‘‘(v) Any other property. 10 ‘‘(D) The number of employees (stated in 11 full-time equivalents) employed in such trade or 12 business. 13 ‘‘(4) OTHER INFORMATION.—Such other infor- 14 mation as the Secretary may reasonably require. 15 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur- 16 poses of this section— 17 ‘‘(1) IN GENERAL.—Any term used in this sec- 18 tion which is also used in subchapter Z of chapter 19 1 shall have the meaning given such term in such 20 subchapter. 21 ‘‘(2) MEASUREMENT DATE.—The term ‘meas- 22 urement date’ means— 23 ‘‘(A) the date referred to in subparagraph 24 (A) of section 1400Z–2(d)(1), and 25 VerDate Sep 11 2014 22:09 Nov 18, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5011.IH H5011 kjohnson on DSK79L0C42 with BILLS 7 •HR 5011 IH ‘‘(B) the date referred to in subparagraph 1 (B) of such section. 2 ‘‘(3) REPORTING PERIOD.—The term ‘reporting 3 period’ means the taxable year for which the report 4 under this section is made. 5 ‘‘(d) REGULATIONS.—The Secretary shall prescribe 6 such regulations as may be necessary to carry out the pur- 7 poses of this section, including the time and manner of 8 filing the return required under subsection (a). 9 ‘‘(e) PUBLIC AVAILABILITY OF RETURNS.—Annual 10 returns filed under this section shall be made available by 11 the Secretary to the public as soon as practicable in a ma- 12 chine readable format. Prior to making any return avail- 13 able to the public under this subsection, the Secretary 14 shall redact any individual’s TIN which appears in such 15 return.’’. 16 (b) PENALTY FOR FAILURE TO FILE COMPLETE AND 17 CORRECT RETURN.—Section 6652 of such Code is amend- 18 ed by adding at the end the following new subsection: 19 ‘‘(q) FAILURE OF QUALIFIED OPPORTUNITY FUND 20 TO FILE CORRECT INFORMATION RETURN.—In the case 21 of a qualified opportunity fund’s failure to file a complete 22 and correct return under section 6039K at the time and 23 in the manner prescribed therefor, unless it is shown that 24 such failure is due to reasonable cause and not to willful 25 VerDate Sep 11 2014 22:09 Nov 18, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5011.IH H5011 kjohnson on DSK79L0C42 with BILLS 8 •HR 5011 IH neglect, there shall be paid (upon notice and demand by 1 the Secretary and in the same manner as tax) by such 2 fund $500 for each day during which such failure con- 3 tinues. The maximum penalty under this subsection on 4 failures with respect to any 1 return shall not exceed 5 $200,000.’’. 6 (c) COLLECTION AND AVAILABILITY OF STATISTICAL 7 INFORMATION.—The Secretary of the Treasury, or the 8 Secretary’s designee shall— 9 (1) collect and compile statistical information 10 with respect to each qualified opportunity zone, in- 11 cluding the number of qualified opportunity funds 12 that have made an investment in each qualified op- 13 portunity zone, the aggregate amount of investment 14 in each zone by qualified opportunity funds, and 15 such other metrics concerning job creation, poverty 16 reduction, and community and economic develop- 17 ment that the Secretary considers appropriate, and 18 (2) make such information available to the pub- 19 lic on an annual basis. 20 (d) EFFECTIVE DATE.—The amendments made by 21 this section shall apply to reports for taxable years ending 22 after the date of the enactment of this Act. 23 Æ VerDate Sep 11 2014 22:09 Nov 18, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\H5011.IH H5011 kjohnson on DSK79L0C42 with BILLS