H.R.3687 - To amend the Internal Revenue Code of 1986 to renew and enhance opportunity zones, and for other purposes. (119th Congress)
Summary
H.R.3687 aims to renew and enhance opportunity zones by modifying the definition of low-income communities, creating a new round of qualified opportunity zone designations, and modifying investment incentives. The bill also introduces new information reporting requirements for qualified opportunity funds and qualified rural opportunity funds. These changes are intended to stimulate economic development in distressed communities, particularly rural areas, through tax incentives and increased transparency.
Expected Effects
The bill's passage would likely lead to a new wave of investments in designated opportunity zones, especially in rural areas due to the specific incentives provided. Enhanced reporting requirements would increase transparency and accountability of opportunity funds. The extension of the program until 2033 provides a longer timeframe for investors to benefit from the tax incentives.
Potential Benefits
- Increased investment in low-income and rural communities.
- Job creation and economic growth in distressed areas.
- Enhanced transparency and accountability of opportunity funds.
- Incentives for improving existing structures, including data centers, in rural areas.
- Potential for poverty reduction and new business starts in opportunity zones.
Potential Disadvantages
- Potential for displacement of existing residents due to increased property values.
- Risk of investments not directly benefiting the intended communities.
- Complexity of reporting requirements may deter some investors.
- Limited treatment of ordinary income may not significantly incentivize certain types of investments.
- The focus on specific geographic areas may lead to uneven development and neglect of other distressed communities.
Constitutional Alignment
The bill aligns with the Constitution's mandate to "promote the general Welfare" (Preamble) by attempting to stimulate economic growth in distressed areas. Congress has the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States (Article I, Section 8, Clause 1). The bill uses tax incentives to achieve these goals, which falls under Congress's enumerated powers.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).