Us Congress 2025-2026 Regular Session

Us Congress House Bill HB2292 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	I
2	2	119THCONGRESS
3	3	1
4	4	STSESSION H. R. 2292
5	5	To amend the Internal Revenue Code of 1986 to establish special rules
6	6	for capital gains invested in brownfield and superfund sites.
7	7	IN THE HOUSE OF REPRESENTATIVES
8	8	MARCH24, 2025
9	9	Mr. E
10	10	DWARDS(for himself and Ms. CROCKETT) introduced the following bill;
11	11	which was referred to the Committee on Ways and Means
12	12	A BILL
13	13	To amend the Internal Revenue Code of 1986 to establish
14	14	special rules for capital gains invested in brownfield and
15	15	superfund sites.
16	16	Be it enacted by the Senate and House of Representa-1
17	17	tives of the United States of America in Congress assembled, 2
18	18	SECTION 1. SHORT TITLE. 3
19	19	This Act may be cited as the ‘‘Economic Opportunity 4
20	20	for Distressed Communities Act’’. 5
21	21	VerDate Sep 11 2014 18:47 Apr 07, 2025 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2292.IH H2292
22	22	ssavage on LAPJG3WLY3PROD with BILLS 2
23	23	•HR 2292 IH
24	24	SEC. 2. ESTABLISHMENT OF SPECIAL RULES FOR CAPITAL 1
25	25	GAINS INVESTED IN DISTRESSED OPPOR-2
26	26	TUNITY ZONES. 3
27	27	(a) I
28	28	NGENERAL.—Subchapter Z of chapter 1 of the 4
29	29	Internal Revenue Code of 1986 is amended by adding at 5
30	30	the end the following new section: 6
31	31	‘‘SEC. 1400Z–3. SPECIAL RULES FOR CAPITAL GAINS IN-7
32	32	VESTED IN DISTRESSED OPPORTUNITY 8
33	33	ZONES. 9
34	34	‘‘(a) I
35	35	NGENERAL.— 10
36	36	‘‘(1) T
37	37	REATMENT OF GAINS .—In the case of 11
38	38	capital gains from the sale to, or exchange with, an 12
39	39	unrelated person of any property held by the tax-13
40	40	payer, at the election of the taxpayer— 14
41	41	‘‘(A) gross income for the taxable year 15
42	42	shall not include so much of such gain as does 16
43	43	not exceed the aggregate amount invested by 17
44	44	the taxpayer in a qualified distressed oppor-18
45	45	tunity fund during the 180-day period begin-19
46	46	ning on the date of such sale or exchange, 20
47	47	‘‘(B) the amount of gain excluded by sub-21
48	48	paragraph (A) shall be included in gross income 22
49	49	as provided by subsection (b), and 23
50	50	‘‘(C) subsection (c) shall apply. 24
51	51	‘‘(2) E
52	52	LECTION.—No election may be made 25
53	53	under paragraph (1)— 26
54	54	VerDate Sep 11 2014 18:47 Apr 07, 2025 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2292.IH H2292
55	55	ssavage on LAPJG3WLY3PROD with BILLS 3
56	56	•HR 2292 IH
57	57	‘‘(A) with respect to a sale or exchange if 1
58	58	an election previously made with respect to such 2
59	59	sale or exchange is in effect, or 3
60	60	‘‘(B) with respect to any sale or exchange 4
61	61	after December 31, 2033. 5
62	62	‘‘(b) D
63	63	EFERRAL OFGAININVESTED INQUALIFIED 6
64	64	D
65	65	ISTRESSEDOPPORTUNITYZONEPROPERTY.— 7
66	66	‘‘(1) Y
67	67	EAR OF INCLUSION.—Gain to which sub-8
68	68	section (a)(1)(B) applies shall be included in income 9
69	69	in the taxable year which includes the earlier of— 10
70	70	‘‘(A) the date on which such investment is 11
71	71	sold or exchanged, or 12
72	72	‘‘(B) December 31, 2033. 13
73	73	‘‘(2) A
74	74	MOUNT INCLUDIBLE.— 14
75	75	‘‘(A) I
76	76	N GENERAL.—The amount of gain 15
77	77	included in gross income under subsection 16
78	78	(a)(1)(A) shall be the excess of— 17
79	79	‘‘(i) the lesser of the amount of gain 18
80	80	excluded under paragraph (1) or the fair 19
81	81	market value of the investment as deter-20
82	82	mined as of the date described in para-21
83	83	graph (1), over 22
84	84	‘‘(ii) the taxpayer’s basis in the in-23
85	85	vestment. 24
86	86	VerDate Sep 11 2014 18:47 Apr 07, 2025 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2292.IH H2292
87	87	ssavage on LAPJG3WLY3PROD with BILLS 4
88	88	•HR 2292 IH
89	89	‘‘(B) DETERMINATION OF BASIS QUALI -1
90	90	FIED DISTRESSED OPPORTUNITY ZONE PROP -2
91	91	ERTY.— 3
92	92	‘‘(i) I
93	93	N GENERAL.—Except as other-4
94	94	wise provided in this clause or subsection 5
95	95	(c), the taxpayer’s basis in the investment 6
96	96	shall be zero. 7
97	97	‘‘(ii) I
98	98	NCREASE FOR GAIN RECOG -8
99	99	NIZED UNDER SUBSECTION (a)(1)(B).— 9
100	100	The basis in the investment shall be in-10
101	101	creased by the amount of gain recognized 11
102	102	by reason of subsection (a)(1)(B) with re-12
103	103	spect to such property. 13
104	104	‘‘(iii) I
105	105	NVESTMENTS HELD FOR 5 14
106	106	YEARS.—In the case of any investment 15
107	107	held for at least 5 years, the basis of such 16
108	108	investment shall be increased by an 17
109	109	amount equal to 10 percent of the amount 18
110	110	of gain deferred by reason of subsection 19
111	111	(a)(1)(A). 20
112	112	‘‘(iv) I
113	113	NVESTMENTS HELD FOR 7 21
114	114	YEARS.—In the case of any investment 22
115	115	held by the taxpayer for at least 7 years, 23
116	116	in addition to any adjustment made under 24
117	117	clause (iii), the basis of such property shall 25
118	118	VerDate Sep 11 2014 18:47 Apr 07, 2025 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2292.IH H2292
119	119	ssavage on LAPJG3WLY3PROD with BILLS 5
120	120	•HR 2292 IH
121	121	be increased by an amount equal to 5 per-1
122	122	cent of the amount of gain deferred by rea-2
123	123	son of subsection (a)(1)(A). 3
124	124	‘‘(c) S
125	125	PECIALRULE FORINVESTMENTSHELD FOR 4
126	126	ATLEAST10 YEARS.—In the case of any investment held 5
127	127	by the taxpayer for at least 10 years and with respect to 6
128	128	which the taxpayer makes an election under this sub-7
129	129	section, the basis of such property shall be equal to the 8
130	130	fair market value of such investment on the date that the 9
131	131	investment is sold or exchanged. 10
132	132	‘‘(d) Q
133	133	UALIFIED DISTRESSED OPPORTUNITY 11
134	134	F
135	135	UND.—For purposes of this section— 12
136	136	‘‘(1) I
137	137	N GENERAL.—The term ‘qualified dis-13
138	138	tressed opportunity fund’ means any investment ve-14
139	139	hicle which is organized as a corporation or a part-15
140	140	nership for the purpose of investing in qualified dis-16
141	141	tressed opportunity zone property (other than an-17
142	142	other qualified distressed opportunity fund) that 18
143	143	holds at least 90 percent of its assets in qualified 19
144	144	distressed opportunity zone property, determined by 20
145	145	the average of the percentage of qualified distressed 21
146	146	opportunity zone property held in the fund as meas-22
147	147	ured— 23
148	148	‘‘(A) on the last day of the first 6-month 24
149	149	period of the taxable year of the fund, and 25
150	150	VerDate Sep 11 2014 18:47 Apr 07, 2025 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2292.IH H2292
151	151	ssavage on LAPJG3WLY3PROD with BILLS 6
152	152	•HR 2292 IH
153	153	‘‘(B) on the last day of the taxable year of 1
154	154	the fund. 2
155	155	‘‘(2) Q
156	156	UALIFIED DISTRESSED OPPORTUNITY 3
157	157	ZONE PROPERTY.— 4
158	158	‘‘(A) I
159	159	N GENERAL.—The term ‘qualified 5
160	160	distressed opportunity zone property’ means 6
161	161	property which is— 7
162	162	‘‘(i) qualified distressed opportunity 8
163	163	zone stock, 9
164	164	‘‘(ii) qualified distressed opportunity 10
165	165	zone partnership interest, or 11
166	166	‘‘(iii) qualified distressed opportunity 12
167	167	zone business property. 13
168	168	‘‘(B) Q
169	169	UALIFIED DISTRESSED OPPOR -14
170	170	TUNITY ZONE STOCK.— 15
171	171	‘‘(i) I
172	172	N GENERAL.—Except as pro-16
173	173	vided in clause (ii), the term ‘qualified dis-17
174	174	tressed opportunity zone stock’ means any 18
175	175	stock in a domestic corporation if— 19
176	176	‘‘(I) such stock is acquired by the 20
177	177	qualified distressed opportunity fund 21
178	178	after December 31, 2025, at its origi-22
179	179	nal issue (directly or through an un-23
180	180	derwriter) from the corporation solely 24
181	181	in exchange for cash, 25
182	182	VerDate Sep 11 2014 18:47 Apr 07, 2025 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2292.IH H2292
183	183	ssavage on LAPJG3WLY3PROD with BILLS 7
184	184	•HR 2292 IH
185	185	‘‘(II) as of the time such stock 1
186	186	was issued, such corporation was a 2
187	187	qualified distressed opportunity zone 3
188	188	business (or, in the case of a new cor-4
189	189	poration, such corporation was being 5
190	190	organized for purposes of being a 6
191	191	qualified distressed opportunity zone 7
192	192	business), and 8
193	193	‘‘(III) during substantially all of 9
194	194	the qualified distressed opportunity 10
195	195	fund’s holding period for such stock, 11
196	196	such corporation qualified as a quali-12
197	197	fied distressed opportunity zone busi-13
198	198	ness. 14
199	199	‘‘(ii) R
200	200	EDEMPTIONS.—A rule similar 15
201	201	to the rule of section 1202(c)(3) shall 16
202	202	apply for purposes of this paragraph. 17
203	203	‘‘(C) Q
204	204	UALIFIED DISTRESSED OPPOR -18
205	205	TUNITY ZONE PARTNERSHIP INTEREST .—The 19
206	206	term ‘qualified distressed opportunity zone 20
207	207	partnership interest’ means any capital or prof-21
208	208	its interest in a domestic partnership if— 22
209	209	‘‘(i) such interest is acquired by the 23
210	210	qualified distressed opportunity fund after 24
211	211	VerDate Sep 11 2014 18:47 Apr 07, 2025 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2292.IH H2292
212	212	ssavage on LAPJG3WLY3PROD with BILLS 8
213	213	•HR 2292 IH
214	214	December 31, 2025, from the partnership 1
215	215	solely in exchange for cash, 2
216	216	‘‘(ii) as of the time such interest was 3
217	217	acquired, such partnership was a qualified 4
218	218	distressed opportunity zone business (or, in 5
219	219	the case of a new partnership, such part-6
220	220	nership was being organized for purposes 7
221	221	of being a qualified distressed opportunity 8
222	222	zone business), and 9
223	223	‘‘(iii) during substantially all of the 10
224	224	qualified distressed opportunity fund’s 11
225	225	holding period for such interest, such part-12
226	226	nership qualified as a qualified distressed 13
227	227	opportunity zone business. 14
228	228	‘‘(D) Q
229	229	UALIFIED DISTRESSED OPPOR -15
230	230	TUNITY ZONE BUSINESS PROPERTY .— 16
231	231	‘‘(i) I
232	232	N GENERAL.—The term ‘quali-17
233	233	fied distressed opportunity zone business 18
234	234	property’ means tangible property used in 19
235	235	a trade or business of the qualified dis-20
236	236	tressed opportunity fund if— 21
237	237	‘‘(I) such property was acquired 22
238	238	by the qualified distressed opportunity 23
239	239	fund by purchase (as defined in sec-24
240	240	VerDate Sep 11 2014 18:47 Apr 07, 2025 Jkt 059200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2292.IH H2292
241	241	ssavage on LAPJG3WLY3PROD with BILLS 9
242	242	•HR 2292 IH
243	243	tion 179(d)(2)) after December 31, 1
244	244	2025, 2
245	245	‘‘(II) the original use of such 3
246	246	property in the qualified distressed 4
247	247	opportunity zone commences with the 5
248	248	qualified distressed opportunity fund 6
249	249	or the qualified distressed opportunity 7
250	250	fund substantially improves the prop-8
251	251	erty, and 9
252	252	‘‘(III) during substantially all of 10
253	253	the qualified distressed opportunity 11
254	254	fund’s holding period for such prop-12
255	255	erty, substantially all of the use of 13
256	256	such property was in a qualified dis-14
257	257	tressed opportunity zone. 15
258	258	‘‘(ii) S
259	259	UBSTANTIAL IMPROVEMENT .— 16
260	260	For purposes of subparagraph (A)(ii), 17
261	261	property shall be treated as substantially 18
262	262	improved by the qualified distressed oppor-19
263	263	tunity fund only if, during any 30-month 20
264	264	period beginning after the date of acquisi-21
265	265	tion of such property, additions to basis 22
266	266	with respect to such property in the hands 23
267	267	of the qualified distressed opportunity fund 24
268	268	exceed an amount equal to the adjusted 25
269	269	VerDate Sep 11 2014 18:47 Apr 07, 2025 Jkt 059200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2292.IH H2292
270	270	ssavage on LAPJG3WLY3PROD with BILLS 10
271	271	•HR 2292 IH
272	272	basis of such property at the beginning of 1
273	273	such 30-month period in the hands of the 2
274	274	qualified distressed opportunity fund. 3
275	275	‘‘(iii) R
276	276	ELATED PARTY .—For pur-4
277	277	poses of subparagraph (A)(i), the related 5
278	278	person rule of section 179(d)(2) shall be 6
279	279	applied pursuant to subsection (e)(2) in 7
280	280	lieu of the application of such rule in sec-8
281	281	tion 179(d)(2)(A). 9
282	282	‘‘(3) Q
283	283	UALIFIED DISTRESSED OPPORTUNITY 10
284	284	ZONE BUSINESS.— 11
285	285	‘‘(A) I
286	286	N GENERAL.—The term ‘qualified 12
287	287	distressed opportunity zone business’ means a 13
288	288	trade or business— 14
289	289	‘‘(i) in which substantially all of the 15
290	290	tangible property owned or leased by the 16
291	291	taxpayer is qualified distressed opportunity 17
292	292	zone business property (determined by sub-18
293	293	stituting ‘qualified distressed opportunity 19
294	294	zone business’ for ‘qualified distressed op-20
295	295	portunity fund’ each place it appears in 21
296	296	subparagraph (D)), 22
297	297	‘‘(ii) which satisfies the requirements 23
298	298	of paragraphs (2), (4), and (8) of section 24
299	299	1397C(b), and 25
300	300	VerDate Sep 11 2014 18:47 Apr 07, 2025 Jkt 059200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2292.IH H2292
301	301	ssavage on LAPJG3WLY3PROD with BILLS 11
302	302	•HR 2292 IH
303	303	‘‘(iii) which is not described in section 1
304	304	144(c)(6)(B). 2
305	305	‘‘(B) S
306	306	PECIAL RULE.—For purposes of 3
307	307	subparagraph (A), tangible property that ceases 4
308	308	to be a qualified distressed opportunity zone 5
309	309	business property shall continue to be treated 6
310	310	as a qualified distressed opportunity zone busi-7
311	311	ness property for the lesser of— 8
312	312	‘‘(i) 5 years after the date on which 9
313	313	such tangible property ceases to be so 10
314	314	qualified, or 11
315	315	‘‘(ii) the date on which such tangible 12
316	316	property is no longer held by the qualified 13
317	317	distressed opportunity zone business. 14
318	318	‘‘(4) Q
319	319	UALIFIED DISTRESSED OPPORTUNITY 15
320	320	ZONE.—The term ‘qualified distressed opportunity 16
321	321	zone’ means— 17
322	322	‘‘(A) a brownfield site (as defined in sec-18
323	323	tion 101(39) of the Comprehensive Environ-19
324	324	mental Response, Compensation, and Liability 20
325	325	Act of 1980), or 21
326	326	‘‘(B) a facility that is included on the Na-22
327	327	tional Priorities List developed by the President 23
328	328	in accordance with section 105(a)(8)(B) of the 24
329	329	VerDate Sep 11 2014 18:47 Apr 07, 2025 Jkt 059200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2292.IH H2292
330	330	ssavage on LAPJG3WLY3PROD with BILLS 12
331	331	•HR 2292 IH
332	332	Comprehensive Environmental Response, Com-1
333	333	pensation, and Liability Act of 1980. 2
334	334	‘‘(e) A
335	335	PPLICABLERULES.— 3
336	336	‘‘(1) T
337	337	REATMENT OF INVESTMENTS WITH 4
338	338	MIXED FUNDS.—In the case of any investment in a 5
339	339	qualified distressed opportunity fund only a portion 6
340	340	of which consists of investments of gain to which an 7
341	341	election under subsection (a) is in effect— 8
342	342	‘‘(A) such investment shall be treated as 2 9
343	343	separate investments, consisting of— 10
344	344	‘‘(i) one investment that only includes 11
345	345	amounts to which the election under sub-12
346	346	section (a) applies, and 13
347	347	‘‘(ii) a separate investment consisting 14
348	348	of other amounts, and 15
349	349	‘‘(B) subsections (a), (b), and (c) shall 16
350	350	only apply to the investment described in sub-17
351	351	paragraph (A)(i). 18
352	352	‘‘(2) R
353	353	ELATED PERSONS.—For purposes of this 19
354	354	section, persons are related to each other if such 20
355	355	persons are described in section 267(b) or 707(b)(1), 21
356	356	determined by substituting ‘20 percent’ for ‘50 per-22
357	357	cent’ each place it occurs in such sections. 23
358	358	‘‘(3) D
359	359	ECEDENTS.—In the case of a decedent, 24
360	360	amounts recognized under this section shall, if not 25
361	361	VerDate Sep 11 2014 18:47 Apr 07, 2025 Jkt 059200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2292.IH H2292
362	362	ssavage on LAPJG3WLY3PROD with BILLS 13
363	363	•HR 2292 IH
364	364	properly includible in the gross income of the dece-1
365	365	dent, be included in gross income as provided by sec-2
366	366	tion 691. 3
367	367	‘‘(4) R
368	368	EGULATIONS.—The Secretary shall pre-4
369	369	scribe such regulations as may be necessary or ap-5
370	370	propriate to carry out the purposes of this section, 6
371	371	including— 7
372	372	‘‘(A) rules for the certification of qualified 8
373	373	distressed opportunity funds for the purposes of 9
374	374	this section, 10
375	375	‘‘(B) rules to ensure a qualified distressed 11
376	376	opportunity fund has a reasonable period of 12
377	377	time to reinvest the return of capital from in-13
378	378	vestments in qualified distressed opportunity 14
379	379	zone stock and qualified distressed opportunity 15
380	380	zone partnership interests, and to reinvest pro-16
381	381	ceeds received from the sale or disposition of 17
382	382	qualified distressed opportunity zone property, 18
383	383	and 19
384	384	‘‘(C) rules to prevent abuse. 20
385	385	‘‘(f) F
386	386	AILURE OFQUALIFIEDDISTRESSEDOPPOR-21
387	387	TUNITYFUNDTOMAINTAININVESTMENTSTANDARD.— 22
388	388	‘‘(1) I
389	389	N GENERAL.—If a qualified distressed op-23
390	390	portunity fund fails to meet the 90-percent require-24
391	391	ment of subsection (d)(1), the qualified distressed 25
392	392	VerDate Sep 11 2014 18:47 Apr 07, 2025 Jkt 059200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H2292.IH H2292
393	393	ssavage on LAPJG3WLY3PROD with BILLS 14
394	394	•HR 2292 IH
395	395	opportunity fund shall pay a penalty for each month 1
396	396	it fails to meet the requirement in an amount equal 2
397	397	to the product of— 3
398	398	‘‘(A) the excess of— 4
399	399	‘‘(i) the amount equal to 90 percent of 5
400	400	its aggregate assets, over 6
401	401	‘‘(ii) the aggregate amount of quali-7
402	402	fied distressed opportunity zone property 8
403	403	held by the fund, multiplied by 9
404	404	‘‘(B) the underpayment rate established 10
405	405	under section 6621(a)(2) for such month. 11
406	406	‘‘(2) S
407	407	PECIAL RULE FOR PARTNERSHIPS .—In 12
408	408	the case that the qualified distressed opportunity 13
409	409	fund is a partnership, the penalty imposed by para-14
410	410	graph (1) shall be taken int account proportionately 15
411	411	as part of the distributive share of each partner of 16
412	412	the partnership. 17
413	413	‘‘(3) R
414	414	EASONABLE CAUSE EXCEPTION .—No 18
415	415	penalty shall be imposed under this subsection with 19
416	416	respect to any failure if it is shown that such failure 20
417	417	is due to reasonable cause.’’. 21
418	418	(b) C
419	419	LERICALAMENDMENT.—The table of sections 22
420	420	for subchapter Z of chapter 1 is amended by adding at 23
421	421	the end the following new item: 24
422	422	‘‘Sec. 1400Z–3. Special rules for capital gains invested in distressed oppor-
423	423	tunity zones.’’.
424	424	VerDate Sep 11 2014 18:47 Apr 07, 2025 Jkt 059200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6211 E:\BILLS\H2292.IH H2292
425	425	ssavage on LAPJG3WLY3PROD with BILLS 15
426	426	•HR 2292 IH
427	427	(c) EFFECTIVEDATE.—The amendments made by 1
428	428	this section shall apply to amounts invested after the date 2
429	429	of the enactment of this Act. 3
430	430	Æ
431	431	VerDate Sep 11 2014 18:47 Apr 07, 2025 Jkt 059200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6301 E:\BILLS\H2292.IH H2292
432	432	ssavage on LAPJG3WLY3PROD with BILLS