[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2994 Introduced in Senate (IS)]
<DOC>
116th CONGRESS
1st Session
S. 2994
To amend the Internal Revenue Code of 1986 to require information
reporting with respect to the qualified opportunity zone tax incentives
enacted by the 2017 tax reform legislation, to require public reports
related to such tax incentives, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 5, 2019
Mr. Scott of South Carolina (for himself, Mr. Grassley, Mr. Young, Mr.
Gardner, Ms. Ernst, Mr. Cassidy, Mr. Rubio, and Mrs. Capito) introduced
the following bill; which was read twice and referred to the Committee
on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to require information
reporting with respect to the qualified opportunity zone tax incentives
enacted by the 2017 tax reform legislation, to require public reports
related to such tax incentives, 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 ``Improving and Reinstating the
Monitoring, Prevention, Accountability, Certification, and Transparency
Provisions of Opportunity Zones'' or the ``IMPACT Act''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) The 8,764 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 28.9 percent.
(3) Seventy-one percent of qualified opportunity zones meet
the Treasury Department's definition of ``severely
distressed''.
(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.
SEC. 3. 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 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 fund as of
each date described in section 1400Z-2(d)(1),
``(4) the value of all qualified opportunity zone property
held by the fund on each such date,
``(5) with respect to each investment held by the 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 census tracts in which the qualified
opportunity zone 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 property held by such
corporation or partnership on each such date which is
owned by such corporation or partnership,
``(F) the value of 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) whether the approximate average monthly
number of full-time equivalent employees of such
corporation or partnership for the year is--
``(i) equal to or less than 25,
``(ii) greater than 25 and equal to or less
than 50,
``(iii) greater than 50 and equal to or
less than 75,
``(iv) greater than 75 and equal to or less
than 100,
``(v) greater than 100 and equal to or less
than 500,
``(vi) greater than 500 or equal to or less
than 1,000, or
``(vii) greater than 1,000,
``(6) with respect to each item of qualified opportunity
zone business property held by the fund--
``(A) the North American Industry Classification
Code that applies to the trades or businesses in which
such property is held,
``(B) the census tract in which the property is
located,
``(C) whether the property is owned or leased,
``(D) the value of the property 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) whether the average monthly number of full-time
equivalent employees of the qualified opportunity fund for the
year is--
``(A) equal to or less than 25,
``(B) greater than 25 and equal to or less than 50,
``(C) greater than 50 and equal to or less than 75,
``(D) greater than 75 and equal to or less than
100,
``(E) greater than 100 and equal to or less than
500,
``(F) greater than 500 or equal to or less than
1,000, or
``(G) greater than 1,000,
``(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) 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 such investment
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.''.
(2) Penalties.--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 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 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 funds.--In the case of any person 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) 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 2020, each of the dollar amounts
in paragraphs (1) and (2) 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 2019' for `calendar year
2016' in subparagraph (A)(ii) thereof.
``(B) Rounding.--
``(i) In general.--If the dollar amount in
paragraph (1), 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) (other than the
amount to which clause (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 2020, 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 2019' 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)).''.
(3) 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.''.
(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.''.
(4) 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 the following information:
(A) The number of qualified opportunity funds.
(B) The aggregate amount of assets held in
qualified opportunity funds.
(C) The aggregate 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 census tracts designated as
qualified opportunity zones that have received
qualified opportunity fund investments.
(E) For each census tract designated as a qualified
opportunity zone, whether the average monthly number of
full-time equivalent employees of qualified opportunity
zone businesses for the preceding 12-month period is--
(i) equal to or less than 25;
(ii) greater than 25 and equal to or less
than 50;
(iii) greater than 50 and equal to or less
than 75;
(iv) greater than 75 and equal to or less
than 100;
(v) greater than 100 and equal to or less
than 500;
(vi) greater than 500 or equal to or less
than 1,000; or
(vii) greater than 1,000.
(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 census tract, the aggregate
approximate number of residential units for investments
made by qualified opportunity funds in real property.
(H) The aggregate amount of investments made by
qualified opportunity funds in each 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 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 each census tract
designated as a qualified opportunity
zone, a comparison (based on aggregate
information) of the factors listed in
clause (ii) 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 each census tract
designated as a qualified opportunity
zone, a comparison (based on aggregate
information) of the factors listed in
clause (ii) for the most recent 5-year
period for which data is available
between such census tract and any
census tract that was a low-income
community eligible to be designated as
a qualified opportunity zone but was
not so designated.
(ii) Factors listed.--The factors listed in
this paragraph are the following:
(I) The unemployment rate.
(II) The number of persons working
in the census tract, including the
percentage of such persons who were not
residents in the census tract in the
preceding year.
(III) Individual, family, and
household poverty rates.
(IV) Median family income of
residents of the census tract.
(V) Demographic information on
residents of the census tract,
including age, income, education, race,
and employment.
(VI) The average percentage of
income of residents of the census tract
spent on rent annually.
(VII) The number of residences in
the census tract.
(VIII) The average value of
residential property in the census
tract.
(IX) The number of affordable
housing units in the census tract.
(X) The number and percentage of
residents in the census tract that were
not employed for the preceding year.
(XI) The number of new business
starts in the census tract.
(XII) The distribution of employees
in the census tract by North American
Industry Classification Code.
(4) Protection of identifiable return information.--In
making reports required under this subsection, the Secretary
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.
(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.
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