Work on additional rules around qualified Opportunity Zone funds is likely to extend into December, with the goal of providing greater regulatory clarity to encourage further investment, Sen. Tim Scott, R-S.C., said Monday at the SIFMA Annual Meeting in Washington, D.C.
Scott said the use of the reconciliation process to pass the 2017 tax overhaul didn’t allow for the inclusion of reporting requirements and certain other provisions in the original Opportunity Zones legislation. He’s now working with other lawmakers including Sen. Cory Booker, D-N.J., on a bipartisan measure to establish reporting mandates for Opportunity Zone investors.
Meanwhile, the proposal of an IRS reporting form that would gather information about Opportunity Zone funds is a “step in the right direction” as lawmakers aim for stronger insight into “exactly how well the funds are performing,” Scott said.
Sen. Ron Wyden, D-Ore., has introduced a bill aimed at increasing transparency in Opportunity Zone investments, with one provision calling for annual reporting by funds and investors. Lawmakers including Wyden also have requested a Government Accountability Office review of the program.
The latest figures show “$60 billion descending on more than 8,700 distressed communities” through the Opportunity Zones program, Scott said. He acknowledged concerns about the potential for gentrification, but cited statistics that property values in Opportunity Zones have risen about 20% and that about 60% of residents of the zones own their property. Scott also cited wage growth of as much as 8% in Opportunity Zones, compared with 3% nationwide.
The program “allows for a more even spread of investors’ resources” as about 40% to 50% of venture capital investments have typically gone to New York City, Boston and Silicon Valley, Scott said.