Opportunity Zones Enhancement Act of 2023

I 118TH CONGRESS 1ST SESSION H. R. 4055 To amend the Internal Revenue Code of 1986 to exclude interest on loans by depository institutions to qualified opportunity zone businesses from gross income, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 13, 2023 Mr. BARR 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 exclude interest on loans by depository institutions to qualified opportunity zone businesses from gross income, and for other purposes. 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 Zones En- 4 hancement Act of 2023’’. 5 VerDate Sep 11 2014 03:45 Jul 14, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4055.IH H4055 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 4055 IH SEC. 2. EXCLUSION FOR INTEREST ON LOANS TO QUALI- 1 FIED OPPORTUNITY ZONE BUSINESSES. 2 (a) IN GENERAL.—Part III of subchapter B of chap- 3 ter 1 of the Internal Revenue Code of 1986 is amended 4 by inserting after section 139I the following new section: 5 ‘‘SEC. 139J. INTEREST ON LOANS TO QUALIFIED OPPOR- 6 TUNITY ZONE BUSINESSES. 7 ‘‘(a) EXCLUSION.—Gross income shall not include an 8 amount equal to so much of the interest received by a de- 9 pository institution on any loan to a qualified borrower 10 as does not exceed the lesser of— 11 ‘‘(1) the taxpayer’s retained earnings attrib- 12 utable to the taxable year, or 13 ‘‘(2) $5,000,000. 14 ‘‘(b) DEPOSITORY INSTITUTION.—For purposes of 15 this section, the term ‘depository institution’ has the 16 meaning given such term in section 3 of the Federal De- 17 posit Insurance Act. 18 ‘‘(c) QUALIFIED BORROWER.—For purposes of this 19 section, the term ‘qualified borrower’ means a borrower 20 that at the time of origination of the loan is a qualified 21 opportunity zone business (as defined in section 1400Z– 22 2(d)). 23 ‘‘(d) RETAINED EARNINGS.—For purposes of this 24 section, the term ‘retained earnings’ means the excess of 25 the taxpayer’s earnings and profits (within the meaning 26 VerDate Sep 11 2014 03:45 Jul 14, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4055.IH H4055 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 4055 IH of section 316(a)(2)) for the taxable year over the divi- 1 dends paid by the taxpayer during such taxable year. 2 ‘‘(e) INFLATION ADJUSTMENT.— 3 ‘‘(1) IN GENERAL.—In the case of any taxable 4 year beginning after 2023, the dollar amounts in 5 subsections (a)(2) and (e) shall be increased by an 6 amount equal to— 7 ‘‘(A) such dollar amount, multiplied by 8 ‘‘(B) the cost-of-living adjustment deter- 9 mined under section 1(f)(3) for the calendar 10 year in which the taxable year begins, deter- 11 mined by substituting ‘calendar year 2022’ for 12 ‘calendar year 2016’ in subparagraph (A)(ii). 13 ‘‘(2) ROUNDING.—Any amount under para- 14 graph (1) shall be rounded to the nearest multiple 15 of $1,000,000. 16 ‘‘(f) CONTROLLED GROUP.— 17 ‘‘(1) IN GENERAL.—In the case of a depository 18 institution which is a member of a controlled group 19 which includes one or more other depository institu- 20 tions, such institutions shall for purposes of applying 21 the dollar amounts in subsections (a) and (b) be 22 treated as one depository institution. 23 ‘‘(2) DEFINITION.—For purposes of this sub- 24 section, the term ‘controlled group’ means any group 25 VerDate Sep 11 2014 03:45 Jul 14, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4055.IH H4055 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 4055 IH treated as a single employer under subsection (b), 1 (c), (m), or (o) of section 414. 2 ‘‘(g) REGULATIONS.—The Secretary shall prescribe 3 such regulations as may be necessary or appropriate to 4 carry out the purposes of this section. 5 ‘‘(h) COORDINATION WITH SECTION 265.—Loans 6 from a depository institution to a qualified borrower shall 7 be treated as obligations described in section 265(a)(2) the 8 interest on which is wholly exempt from the taxes imposed 9 by this subtitle.’’. 10 (b) CLERICAL AMENDMENT.—The table of sections 11 for such part III is amended by inserting after the item 12 relating to section 139I the following new item: 13 ‘‘Sec. 139J. Interest on loans to qualified opportunity zone businesses.’’. (c) EFFECTIVE DATE.—The amendments made by 14 this section shall apply to taxable years beginning after 15 the date of the enactment of this Act. 16 Æ VerDate Sep 11 2014 03:45 Jul 14, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H4055.IH H4055 pbinns on DSKJLVW7X2PROD with $$_JOB