The Qualified Opportunity Zone (QOZ) program has attracted a lot of congressional attention in recent months, including several legislative proposals. How should current or potential future investors in QOZs view these proposals? In this article, we will discuss some of the recent developments and the possible ramifications.
Senator Wyden introduced legislation in November of 2019 that is meant to provide more transparency, stricter rules, and eliminate 200 Opportunity Zones that are not considered low-income.
Senator Wyden’s legislation has four main components:
Senator Tim Scott was part of the initial OZ proposal through his Investing In Opportunity Act, which was first introduced more than four years ago. Similar to Senator Wyden, Senator Scott wants more stringent OZ reporting. Thorough reporting was supposed to be part of the OZ program initially but never made it into the regulations.
Senator Scott is part of a group of senators who are introducing an expanded bill called the IMPACT Act. It is meant to analyze investments in OZs through more thorough reporting. As listed on the senator’s website, the IMPACT Act will:
Senator Scott’s bill has support from The Opportunity Funds Association, The National Association of Counties, and The National League of Cities.
It remains to be seen which, if any, of these proposals will gain enough traction to become law and how that would affect ongoing investments in QOZs. There are a lot of risks associated with investing in QOZs, and this is another one that investors need to consider.
This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions.