HR-3687 : Still Just a Bill

H.R. 3687, a bill introduced by Mr. Kelly of Pennsylvania, aims to renew and enhance opportunity zones by amending the Internal Revenue Code of 1986. The bill proposes several key changes:

• Modifies the Definition of Low-Income Communities: It adjusts the criteria for identifying low-income communities to ensure they accurately reflect economic need.
• Establishes a New Round of Qualified Opportunity Zone Designations: This allows for the designation of new opportunity zones, with a focus on including rural areas. These new designations would be effective from January 1, 2027, to December 31, 2033.
• Modifies Opportunity Zone Investment Incentives: The bill introduces consolidated basis increases for investments made after 2026 and provides special rules for investments in qualified rural opportunity funds. It also includes a limited treatment for ordinary income and offers a special rule for improving existing structures, including data centers, in rural areas.
• Implements Information Reporting Requirements: It mandates detailed information reporting on qualified opportunity funds and qualified rural opportunity funds, including filing requirements for funds and investors, as well as penalties for non-compliance.
• Requires Secretary Reporting of Data: The Secretary of the Treasury is required to report data on opportunity zone and rural opportunity zone tax incentives to assess their impact, including metrics like job creation, poverty reduction, and new business starts.

In summary, H.R. 3687 seeks to refine and extend the opportunity zones program, with a particular emphasis on supporting investments in rural areas and ensuring transparency and accountability through enhanced reporting requirements.