Bill Overview
Title: Opportunity Zones Transparency, Extension, and Improvement Act
Description: Transparency, Extension, and Improvement Act This bill revises rules and reinstates reporting requirements relating to qualified opportunity zones (economically distressed communities where new investments, under specified conditions, may be eligible for preferential tax treatment). Specifically, the bill terminates the designation of zones that are disqualified due to median family income exceeding 130% of national median family income and permits states to identify and expand terminations of such zones. The bill also reinstates reporting requirements for qualified opportunity zones and imposes penalties for noncompliance with such requirements, extends the opportunity zones temporary deferral period for qualifying capital gain through 2028, and establishes a State and Community Dynamism Fund to support public and private investment in qualified opportunity zones.
Sponsors: Sen. Booker, Cory A. [D-NJ]
Target Audience
Population: Individuals residing, investing, or participating in qualified opportunity zones globally
Estimated Size: 35000000
- Opportunity zones are economically distressed communities, so the primary target population includes residents of these zones.
- Reporting requirements will impact local governments, investors, and businesses involved in these zones.
- The reinstatement of the reporting requirements targets stakeholders at various levels to ensure accountability and transparency.
- Investors who have gains deferred under the opportunity zones program by providing them with more time benefits execution through 2028.
- Terminating zones with a median family income exceeding 130% of the national level ensures the program targets the most distressed areas, thus affecting residents in those zones due for termination.
- The State and Community Dynamism Fund aims to enhance development in opportunity zones, directly impacting economic activity and job creation in those areas.
Reasoning
- The primary impact of the policy will be on people residing in economically distressed areas known as opportunity zones, especially those where public and private investments are intended to increase due to extended tax incentives.
- The termination of zones with a median family income over 130% of the national level ensures focus on the most distressed areas, potentially leading to displacement or reduced support for residents in disqualified zones.
- Many individuals and businesses in these zones will benefit from increased transparency and accountability, potentially leading to better-targeted and effective investments.
- Residents and stakeholders in opportunity zones will experience varying levels of impact based on the success or failure of the new and continued investments facilitated by the policy.
- Investors might be cautious or strategically optimistic depending on how the new reporting requirements and penalties are perceived to affect their operations and returns.
- The policy is intended to channel more resources to truly distressed areas, likely improving communal services and economic activity over time, thus incrementally improving well-being.
Simulated Interviews
Community Organizer (Bronx, NY)
Age: 34 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- This policy seems like a double-edged sword. The increased transparency is crucial, but I fear some areas might lose out due to disqualification.
- I hope the community dynamism fund truly spurs local economic activities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 4 |
| Year 20 | 8 | 4 |
Small Business Owner (Detroit, MI)
Age: 48 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- The extension of the investment deferment is a blessing for small businesses like mine.
- I hope the increased public investment will boost the local economy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 9 | 5 |
| Year 5 | 9 | 5 |
| Year 10 | 9 | 4 |
| Year 20 | 9 | 4 |
Data Analyst (Boise, ID)
Age: 26 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- The compliance burdens could either promote better practices or drive some investors away.
- I'm optimistic about the potential, but cautious about its execution.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Investor (Chicago, IL)
Age: 55 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- The extension is favorable for long-term gains, but compliance might be a challenge.
- I see potential if the investments are strategically planned.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 9 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 10 | 6 |
| Year 10 | 10 | 5 |
| Year 20 | 10 | 4 |
Retired (Dallas, TX)
Age: 62 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 20.0 years
Commonness: 7/20
Statement of Opinion:
- Being disqualified feels like we're being left behind.
- I'm worried this will decrease community support here.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 4 |
| Year 2 | 4 | 4 |
| Year 3 | 3 | 4 |
| Year 5 | 3 | 4 |
| Year 10 | 3 | 3 |
| Year 20 | 3 | 2 |
City Planner (Los Angeles, CA)
Age: 39 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- The focus on transparency is crucial for all parties involved.
- I hope this policy will lead to genuine community improvements.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 5 |
| Year 20 | 9 | 5 |
Nonprofit Worker (New Orleans, LA)
Age: 30 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 15.0 years
Commonness: 9/20
Statement of Opinion:
- It's critical for the policy to prioritize social equity.
- The dynamic fund could be transformative if it reaches those in need effectively.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 9 | 6 |
| Year 5 | 9 | 5 |
| Year 10 | 9 | 4 |
| Year 20 | 9 | 4 |
Teacher (Rural Kentucky)
Age: 40 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- I hope more investment means better educational resources.
- The local economy desperately needs these potential improvements.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Local Government Official (Cleveland, OH)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- Transparency and accountability can either bolster trust or expose challenges.
- This policy has the potential to drive substantial local growth.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 5 |
| Year 5 | 9 | 5 |
| Year 10 | 9 | 4 |
| Year 20 | 9 | 4 |
Consultant (Richmond, VA)
Age: 52 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 11/20
Statement of Opinion:
- The potential for penalties may scare off some smaller investors.
- Strategic investment could still yield benefits with careful planning.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Cost Estimates
Year 1: $250000000 (Low: $200000000, High: $300000000)
Year 2: $250000000 (Low: $200000000, High: $300000000)
Year 3: $250000000 (Low: $200000000, High: $300000000)
Year 5: $250000000 (Low: $200000000, High: $300000000)
Year 10: $250000000 (Low: $200000000, High: $300000000)
Year 100: $250000000 (Low: $200000000, High: $300000000)
Key Considerations
- The balance between short-term costs and long-term economic benefits from more targeted investment is crucial.
- Success depends largely on effective implementation of reporting and compliance measures.
- Potential political and community reactions to the termination of zones may affect policy acceptance and outcomes.