Legislation Introduced to Measure O-Zone Impacts

While a great deal has been written about Opportunity Zone benefits for investors and developers, the real question is whether such investments will match the intent of the program. Mainly, economic revitalization, an increase in jobs and a reduction in poverty.

To help answer this issue, Senators Tim Scott (R-SC), Cory Booker (D-NJ), Todd Young (R-IN) and Maggie Hassan (D-NH) are working on legislation requiring investors to provide data to the U.S. Department of Treasury that would measure the social impact of the O-Zones.

If the legislation passes, Opportunity Zone investors would be required to provide:

The number of Qualified Opportunity Funds (QOFs) held, and the amount of assets in the funds
The composition of QOF investments by asset class
The impacts and outcomes, including job creation, new-business starts, poverty reduction and other necessary metrics

Investors would also need to submit

The total investment amount and the date on which it was made
The type of investment (new business, expansion of existing business or real property)
The location of the business or property
The economic sectors in which a business operates, and the approximate number of full-time employees
In the case of real estate, the total square footage and/or number of residential units

Public reporting of the data from QOFs would begin one year after potential changes to the bill are enacted. While Mary Burke Baker with K&L Gates indicated that the odds of enacting the legislation might be remote as the U.S. heads into an election year, it would be a good idea for fund managers and investors to speak up and talk to their elected officials about how specific reporting requirements can/should be implemented.

“By the time Congress does come around to reviewing and voting on this proposal, the time to raise your hand will have long passed,” Baker said.

For comments, questions or concerns, please contact Amy Sorter