Ernst Builds on Effort to Drive Investment, Economic Growth in Distressed Communities in Iowa

WASHINGTON – U.S. Senator Joni Ernst (R-IA), one of the leaders in first launching Opportunity Zones—a landmark program designed to promote investment and help spur economic growth in low-income areas—is introducing legislation with Senators Tim Scott (R-SC) and Chuck Grassley (R-IA) to enhance their impact by better tracking their success. The bill institutes a variety of reporting requirements to better determine the impact of the 62 Opportunity Zones in Iowa and the more than 8,700 across the country.

“Opportunity Zones are a promising tool for driving investment in distressed communities,” said Senator Joni Ernst. “This important legislation will ensure that we can effectively measure its success in communities across Iowa.”

“Opportunity Zones provide thousands of low-income communities, both urban and rural, across the country with the potential to transform the future for generations to come,” Senator Tim Scott said. “The IMPACT Act’s reporting requirements will help show communities and investors that the initiative is working, as well as help root out any fraud or abuse. This is an important piece of the puzzle to help the more than 31 million Americans living in Opportunity Zones experience a brighter future.”

“Opportunity Zones have the potential to transform some of the most economically underdeveloped parts of the country and lift millions of Americans out of poverty. Everyone deserves a shot at the American Dream. This legislation will help make sure the federal government has the information it needs to track the success of Opportunity Zones,” said Senate Finance Committee Chairman Chuck Grassley.

Background

Opportunity Zones were created as a part of the 2017 Tax Cuts and Jobs Act. In May 2018, Governor Kim Reynolds announced the designation of 62 Opportunity Zones in Iowa, and, later that summer, in July 2018, Senator Scott, one of the architects of the program, joined Senator Ernst in Des Moines to tour some of the newly designated Opportunity Zones in the state and hold discussions with local leaders and stakeholders about ways to make them successful.

Senator Ernst and Senator Scott tour the Phenix School Apartments in Des Moines in 2018 in one of Iowa’s Opportunity Zones.

The IMPACT Act—or Improving and Reinstating the Monitoring, Prevention, Accountability, Certification, and Transparency Provisions of Opportunity Zones Act—seeks to provide for the most robust and granular analysis over time on the targeted impacts of investments in Opportunity Zones (OZ). With more than $63 billion already in anticipated investments, it is critical that this analysis is in place. The requirements do this while protecting taxpayer privacy laws and preserving the ability of communities to utilize a wide-variety of possible investments without overburdening entrepreneurs and local governments with mountains of unnecessary paperwork.

Cosponsors include Senators Grassley, Scott, Marco Rubio (R-FL), Shelley Moore Capito (R-WV), Todd Young (R-IN), Bill Cassidy (R-LA), and Cory Gardner (R-CO).

Specifically, the IMPACT Act:

• Codifies requirements for Qualified Opportunity Funds to report information on the value of total assets held by the fund and the location and value of Opportunity Zone property held by the fund, among other things.
• Codifies requirements for investors to report critical information on Opportunity Zone investments.
• Adds penalties for both individuals and funds that fail to accurately and appropriately file the required returns or statements, and for any individual who attempts to take advantage of the OZ incentive for fraudulent purposes.
• Requires that U.S. Department of Treasury make public as soon as practicable and annually thereafter timely, comprehensive information tracking Qualified Opportunity Funds and their corresponding investments into zones.
• Requires the most comprehensive community impact report on Opportunity Zones, which will provide granular data on the real impacts we’re seeing in OZ’s over time.
• Works to provide a holistic understanding of the real impacts to zone residents as well as the benefits and potential of the Opportunity Zones.
• Ensures the protection of private taxpayer information currently safeguarded under federal law, thereby protecting competitive and proprietary information critical to the marketplace.

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