ACR153

Sponsored by:

Assemblywoman VERLINA REYNOLDS-JACKSON

District 15 (Hunterdon and Mercer)

Assemblywoman SHAVONDA E. SUMTER

District 35 (Bergen and Passaic)

Assemblywoman ANGELA V. MCKNIGHT

District 31 (Hudson)

Assemblywoman LINDA S. CARTER

District 22 (Middlesex, Somerset and Union)

Co-Sponsored by:

Assemblyman Holley, Assemblywoman Timberlake, Assemblyman Spearman, Assemblywomen Speight, Jasey and Vainieri Huttle

SYNOPSIS

Urges Congress to enact legislation requiring transparency and promoting social equity in federal opportunity zones.

CURRENT VERSION OF TEXT

As introduced.

A Concurrent Resolution urging Congress to enact legislation to require transparency and promote social equity in federal opportunity zones.

Whereas, The tax benefits established for capital investments in opportunity zones was added to the federal tax code by the federal “Tax Cuts and Jobs Act of 2017,” Pub.L.115-97, to promote economic development and job creation in distressed communities throughout the nation; and

Whereas, Economically distressed communities in New Jersey were nominated for designation as opportunity zones by the Governor and certified by the United States Secretary of the Treasury, and this designation allows new capital gain investments made through opportunity funds to qualify for preferential tax treatment; and

Whereas, Investing in an opportunity zone allows investors and opportunity funds to defer gains, reduce their tax bills, and exclude future gains from taxation; and

Whereas, Opportunity funds work to increase returns on investment, but opportunity zones were also designed to increase the availability of equity capital in designated communities; and

Whereas, In 2008, only seven percent of Americans reported taxable capital gains; and

Whereas, The New York Times has reported that over 200 opportunity funds have been established in the United States, with a goal of raising a total of $57 billion; and

Whereas, The Congressional Joint Committee on Taxation estimates the opportunity zone tax benefits will cost $2 billion in lost federal revenue annually; and

Whereas, State governments face additional tax losses, if, like New Jersey, the states conform their capital gains tax treatment to federal capital gains tax treatment; and

Whereas, Despite potential tax losses, the federal enabling legislation did not require the United States Department of the Treasury to track investments in opportunity funds or investments made by funds in specific projects; and

Whereas, The New York Times has reported that billions of dollars are being invested through opportunity funds in luxury apartment buildings and hotels, student housing, and storage facilities, with few employees to operate them, and many of these projects were already underway before the certification of opportunity zones; and

Whereas, There is a significant concern that opportunity zone funding will go to capital investment projects that lead to gentrification and community displacement; and

Whereas, The Congress can help ensure that investments in opportunity zones have a positive social impact on local communities; now, therefore,

Be It Resolved by the General Assembly of the State of New Jersey (the Senate concurring):

1. The United States Congress is urged to enact legislation that improves transparency, program design, and performance measurements for opportunity funds and investments by those funds in federal opportunity zones. The legislation should require that the United State Department of the Treasury analyze the impact of opportunity fund investments on individual opportunity zones related to race, employment, homeownership, affordable housing, minority-owned businesses, minority entrepreneurship, gentrification, sustainability, and economic development, and to report the findings from that analysis annually to the several states, along with information related to returns on investment, lost federal tax revenue, and deferred federal tax revenue.

2. Duly authenticated copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Clerk of the General Assembly or the Secretary of the Senate to the President of the United States, the United States Department of the Treasury, and every member of the New Jersey Congressional delegation.

STATEMENT

This concurrent resolution urges the United States Congress to enact legislation to improve transparency, program design, and performance measurement for opportunity funds and investments by those funds in federal opportunity zones. The concurrent resolution specifies that the federal legislation should require that the United State Department of the Treasury analyze the impact of opportunity fund investments on individual opportunity zones related to race, employment, homeownership, affordable housing, minority-owned businesses, minority entrepreneurship, gentrification, sustainability, and economic development, and to report the findings annually, along with information related to returns on investment, lost federal tax revenue, and deferred federal tax revenue.