Oversight Subcommittee Presses Treasury Secretary for Additional Information on Opportunity Zone Program
Washington, D.C. (Dec. 16, 2020)—Today, Rep. Raja Krishnamoorthi, the Chairman of the Subcommittee on Economic and Consumer Policy, and Subcommittee Member Rashida Tlaib sent a letter to Treasury Secretary Steven Mnuchin requesting documents in the Subcommittee’s investigation into the Opportunity Zone (OZ) program and additional information regarding reported investments into OZ communities that should shed light on the effects the program has on those local economies.
“We are concerned that Treasury’s decision not to collect robust transaction-level data has prevented any reliable assessment of the effectiveness of the OZ program,” wrote the Members. “Congress designed the OZ program ‘to spur economic development and job creation in distressed communities.’ To ensure congressional intent is achieved, we must scrutinize whether OZs have led to equitable economic development. We do not have access to the data to answer that question fully.”
On June 24, 2020, the Subcommittee sent a letter to Secretary Mnuchin asking for information about Treasury’s oversight of the OZ selection process and possible abuses in the designation as Qualified OZs of certain census tracts in Detroit, Los Angeles, and Oklahoma City which appeared unqualified for the program. The designations also raised questions about whether Treasury’s designations were made to benefit individuals or entities with a personal or political connection to President Trump.
A recent Government Accountability Office report found that “there are insufficient data available to evaluate OZ performance” and recommended that “[a]dditional data collection and reporting on OZ are necessary to evaluate outcomes. The little data that is available, such as investment amounts reported for particular Opportunity Zones, has not been released to the public.
Treasury’s lack of transparency has made it difficult to assess how effective the OZ program has been in revitalizing distressed communities and how it compares to other place-based programs like the New Markets Tax Credit.
Researchers at the Urban Institute were able to conduct a qualitative assessment of a sample of OZ tracts after conducting in-depth interviews with project sponsors, fund managers, investors, wealth managers, developers, philanthropies, public and nonprofit agencies, state OZ program offices, and city-level OZ coordinators. Their findings do not support the White House’s fabrications, released by the White House’s Council of Economic Advisors, about how it has implemented and overseen the program.
“The lack of reporting and the resulting misrepresentations of the program are of the utmost concern to the residents of OZs and the taxpayers who are subsidizing these programs,” added the Members. “Low-income communities and the struggling individuals living and working in them may not be getting the support Congress intended, because the OZ program does not have the guardrails to ensure that the program is actually working for them.”
The Subcommittee requested all documents and information by December 30, 2021.
Click here to read today’s letter to Secretary Mnuchin.