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131 STAT. 2188 PUBLIC LAW 115–97—DEC. 22, 2017 in section 267(b) or 707(b)(1), determined by substituting ‘20 percent’ for ‘50 percent’ each place it occurs in such sections. ‘‘(3) DECEDENTS.—In the case of a decedent, amounts recog- nized under this section shall, if not properly includible in the gross income of the decedent, be includible in gross income as provided by section 691. ‘‘(4) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including— ‘‘(A) rules for the certification of qualified opportunity funds for the purposes of this section, ‘‘(B) rules to ensure a qualified opportunity fund has a reasonable period of time to reinvest the return of capital from investments in qualified opportunity zone stock and qualified opportunity zone partnership interests, and to reinvest proceeds received from the sale or disposition of qualified opportunity zone property, and ‘‘(C) rules to prevent abuse. ‘‘(f) FAILURE OF QUALIFIED OPPORTUNITY FUND TO MAINTAIN INVESTMENT STANDARD.— ‘‘(1) IN GENERAL.—If a qualified opportunity fund fails to meet the 90-percent requirement of subsection (c)(1), the quali- fied opportunity fund shall pay a penalty for each month it fails to meet the requirement in an amount equal to the product of— ‘‘(A) the excess of— ‘‘(i) the amount equal to 90 percent of its aggregate assets, over ‘‘(ii) the aggregate amount of qualified opportunity zone property held by the fund, multiplied by ‘‘(B) the underpayment rate established under section 6621(a)(2) for such month. ‘‘(2) SPECIAL RULE FOR PARTNERSHIPS.—In the case that the qualified opportunity fund is a partnership, the penalty imposed by paragraph (1) shall be taken into account propor- tionately as part of the distributive share of each partner of the partnership. ‘‘(3) REASONABLE CAUSE EXCEPTION.—No penalty shall be imposed under this subsection with respect to any failure if it is shown that such failure is due to reasonable cause.’’. (b) BASIS ADJUSTMENTS.—Section 1016(a) is amended by striking ‘‘and’’ at the end of paragraph (36), by striking the period at the end of paragraph (37) and inserting ‘‘, and’’, and by inserting after paragraph (37) the following: ‘‘(38) to the extent provided in subsections (b)(2) and (c) of section 1400Z–2.’’. (c) CLERICAL AMENDMENT.—The table of subchapters for chapter 1 is amended by adding at the end the following new item: ‘‘SUBCHAPTER Z. OPPORTUNITY ZONES’’. (d) EFFECTIVE DATE.—The amendments made by this section shall take effect on the date of the enactment of this Act. 26 USC 1016 note. 26 USC prec. 1. VerDate Sep 11 2014 10:09 Oct 18, 2018 Jkt 079139 PO 00097 Frm 00136 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL097.115 PUBL097 dkrause on DSKBC28HB2PROD with PUBLAWS