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Booker Statement on Treasury Department Opportunity Zone Guidelines

Booker wrote to Treasury earlier this month detailing need for more robust safeguards

October 31, 2019
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WASHINGTON, D.C. – U.S. Senator Cory Booker (D-NJ) today released the following statement on Opportunity Zone guidelines released by the U.S. Department of Treasury earlier today. The Opportunity Zone program creates a tax incentive for individuals who reinvest unrealized capital gains into high-impact, long-term projects in high-poverty communities across the country. It is based upon bipartisan legislation authored by U.S. Senators Cory Booker (D-NJ) and Tim Scott (R-SC). Governors of each state are responsible for determining which census tracts qualify as “Opportunity Zones” in their states. Last year, New Jersey Governor Phil Murphy designated 169 census tracts across the state that are eligible for the tax incentive.

 

“While the Treasury Department took one step towards putting in place important transparency measures for Opportunity Zones today, in order for the tax incentive to truly fulfill the type of economic development intended from the original legislation, these oversight requirements must be much more comprehensive and the Administration has a long way to go. For starters, this information needs to be public, not available only to the Treasury Department. Additionally, there needs to be transaction-level reporting so that we can properly evaluate the impact of the program and ensure that investments are being effectively allocated to low-income communities. The Opportunity Zone incentive has the potential to unleash much-needed economic boosts to distressed communities across the country – communities that are too often overlooked by investors – but without robust guardrails in place, it has the potential to be undermined or abused by unscrupulous actors who aren’t committed to the intent of the legislation to help rural and urban communities across the country.

 

In the coming weeks, Booker plans to continue to weigh in with Treasury on the development and implementation of robust reporting requirements that will provide much needed information on how this incentive is being used.

 

Booker and Scott originally introduced the Investing in Opportunity Act in April 2016. A provision based on the bill was wrapped into the 2017 GOP tax bill, however, critical reporting requirements that were included in Booker and Scott’s original bill were removed from the final measure that became law in December 2017.

 

Booker has repeatedly and aggressively pushed the Treasury Department to restore these safeguards, including authoring a bipartisan bill that would restore the removed safeguards with Senators Scott, Maggie Hassan (D-NH), and Todd Young (R-IL) earlier this year. Booker also wrote to the Treasury earlier this month and in January urging it to adopt stronger reporting requirements for investors using the tax incentive.

 

Specifically, Booker has asked the Treasury Department to make collect and make public the following information:

 

  1. The number of qualified opportunity funds (QOFs);
  2. The number of assets held in qualified opportunity funds;
  3. The composition of qualified opportunity fund investments by asset class;
  4. The percentage of qualified opportunity zones that have received qualified opportunity fund investments;
  5. The impacts and outcomes of zone indicators, including job creation, poverty reduction, new business starts, and other metrics.

 

He has also asked the Treasury Department to collect the following investment-level data from qualified opportunity funds:

  1. The total amount of investment and date of investment;
  2. Type of investment: whether it is an existing business, new business or real property, and location of business or property;
  3. Type of activity being supported by investment (single-family or multifamily residential property, commercial property, or what qualifying economic sector);
  4. The approximate number of full-time employees at the time the investment was made;
  5. Square footage and number of residential units, in the case of real property investments.