The Treasury Department and IRS on Thursday released a draft form that is designed to collect information about investments made under the "opportunity zone" provision in President TrumpDonald TrumpNorth Korea conducts potential 6th missile test in a month Kemp leading Perdue in Georgia gubernatorial primary: poll US ranked 27th least corrupt country in the world MORE's tax-cut law.
The release of the form comes amid concerns from lawmakers that the opportunity-zone program doesn't have enough guardrails to ensure that it is actually meeting its intended goal of revitalizing economically distressed areas.
“This is an important step towards a thorough evaluation of the Opportunity Zone tax incentive,” Treasury Secretary Steven MnuchinSteven MnuchinConservatives are outraged that Sarah Bloom Raskin actually believes in capitalism Suspect in Khashoggi murder arrested The Hill's Morning Report - Presented by Facebook - Biden to tackle omicron risks with new travel rules MORE said in a statement. “We want to understand where Opportunity Zone investments are going and strengthening the economy so that investors and communities can learn from the successes of this bipartisan, pro-growth policy.”
Trump's 2017 law created a program called opportunity zones that allows investors in designated economically distressed areas to receive capital gains tax breaks.
The opportunity-zone provision has some bipartisan support, but there have also been concerns that the program does not have enough transparency, and that it will not effectively target investments to where they are most needed.
The New York Times published a story last weekend reporting that Mnuchin instructed Treasury to take an action relating to the opportunity-zone program that benefited former "junk bond king" Michael Milken. The article has raised concerns among Democrats. Treasury and Milken have both pushed back strongly against the Times story.
Policymakers have for months had an interest in boosting reporting requirements about opportunity zones.
When Treasury released proposed regulations on opportunity zones in the spring, the department also released a document requesting comments from stakeholders about how best to measure the economic impact in opportunity zones.
A bipartisan group of lawmakers, including Sens. Tim ScottTimothy (Tim) Eugene ScottClyburn predicts Supreme Court contender J. Michelle Childs would get GOP votes Sen. Tim Scott rakes in nearly million in fourth quarter These Senate seats are up for election in 2022 MORE (R-S.C.) and Cory BookerCory BookerSenate Democrats urge Biden to get beefed-up child tax credit into spending deal Despite Senate setbacks, the fight for voting rights is far from over Small ranchers say Biden letting them get squeezed MORE (D-N.J.), introduced legislation earlier this year to require Treasury to collect data on the impact of the program in underserved communities, and to report that information annually to Congress. It's unclear exactly if or when the bill will get a vote.
Treasury's draft form, which is designed for the 2019 tax year, includes new reporting requirements for funds that make investments in opportunity zones. Under the form, funds would be required to report the employer identification numbers of each business in which the fund has a stock or partnership interest, the census tract in which the business has property, and the value of the investment apportioned to each census tract. Funds would also be required to report information about the value of business property that they own or lease directly.
Treasury said the information it wants funds to report would allow it to track the amount of investments that different census tracts receive over time. Treasury added that policymakers would be able to use the data — along with income and employment numbers — to evaluate the effects of the opportunity zone tax breaks.
Sen. Ron WydenRonald (Ron) Lee WydenSenate Democrats urge Biden to get beefed-up child tax credit into spending deal Overnight Energy & Environment — High court will hear case on water rule Democrats face scaled-back agenda after setbacks MORE (D-Ore.), the top Democrat on the Senate Finance Committee, said in a statement that “requiring taxpayers to prove they’re actually following the rules of the Opportunity Zone program is a positive first step, but it’s one that should have been taken two years ago, instead of prioritizing rules to let the Treasury secretary’s cronies profit at taxpayers’ expense."
"The Opportunity Zone program has been operating without any effort to ensure compliance and that’s inexcusable,” he added.
Booker, who is running for president, said in a statement issued by his Senate office that Treasury took a step toward putting in place transparency measures, but that "in order for the tax incentive to truly fulfill the type of economic development intended from the original legislation, these oversight requirements must be much more comprehensive and the Administration has a long way to go."
Booker and Reps. Emanuel Cleaver (D-Mo.) and Ron KindRonald (Ron) James KindRedistricting reform key to achieving the bipartisanship Americans claim to want Democrats confront rising retirements as difficult year ends Members of Congress not running for reelection in 2022 MORE (D-Wis.) also sent a letter to the Treasury Department inspector general on Thursday, asking for an investigation into allegations of misconduct by senior Treasury officials in implementing the opportunity zones provision.
--Updated at 5:15 p.m.