26 U.S.C. § 1391 — Designation procedure

**(a) In general** From among the areas nominated for designation under this section, the appropriate Secretaries may designate empowerment zones and enterprise communities. **(b) Number of designations** (1) **Enterprise communities** — The appropriate Secretaries may designate in the aggregate 95 nominated areas as enterprise communities under this section, subject to the availability of eligible nominated areas. Of that number, not more than 65 may be designated in urban areas and not more than 30 may be designated in rural areas. (2) **Empowerment zones** — The appropriate Secretaries may designate in the aggregate 11 nominated areas as empowerment zones under this section, subject to the availability of eligible nominated areas. Of that number, not more than 8 may be designated in urban areas and not more than 3 may be designated in rural areas. If 8 empowerment zones are designated in urban areas, no less than 1 shall be designated in an urban area the most populous city of which has a population of 500,000 or less and no less than 1 shall be a nominated area which includes areas in 2 States and which has a population of 50,000 or less. The Secretary of Housing and Urban Development shall designate empowerment zones located in urban areas in such a manner that the aggregate population of all such zones does not exceed 1,000,000. **(c) Period designations may be made** A designation may be made under subsection (a) only after 1993 and before 1996. **(d) Period for which designation is in effect** (1) **In general** — Any designation under this section shall remain in effect during the period beginning on the date of the designation and ending on the earliest of— (A) (i) in the case of an empowerment zone, December 31, 2025, or (ii) in the case of an enterprise community, the close of the 10th calendar year beginning on or after such date of designation, (B) the termination date designated by the State and local governments as provided for in their nomination, or (C) the date the appropriate Secretary revokes the designation. (2) **Revocation of designation** — The appropriate Secretary may revoke the designation under this section of an area if such Secretary determines that the local government or the State in which it is located— (A) has modified the boundaries of the area, or (B) is not complying substantially with, or fails to make progress in achieving the benchmarks set forth in, the strategic plan under subsection (f)(2). **(e) Limitations on designations** No area may be designated under this section unless— (1) the area is nominated by 1 or more local governments and the State or States in which it is located for designation under this section, (2) such State or States and the local governments have the authority— (A) to nominate the area for designation under this section, and (B) to provide the assurances described in paragraph (3), (3) such State or States and the local governments provide written assurances satisfactory to the appropriate Secretary that the strategic plan described in the application under subsection (f)(2) for such area will be implemented, (4) the appropriate Secretary determines that any information furnished is reasonably accurate, and (5) such State or States and local governments certify that no portion of the area nominated is already included in an empowerment zone or in an enterprise community or in an area otherwise nominated to be designated under this section. **(f) Application** No area may be designated under this section unless the application for such designation— (1) demonstrates that the nominated area satisfies the eligibility criteria described in section 1392, (2) includes a strategic plan for accomplishing the purposes of this subchapter that— (A) describes the coordinated economic, human, community, and physical development plan and related activities proposed for the nominated area, (B) describes the process by which the affected community is a full partner in the process of developing and implementing the plan and the extent to which local institutions and organizations have contributed to the planning process, (C) identifies the amount of State, local, and private resources that will be available in the nominated area and the private/public partnerships to be used, which may include participation by, and cooperation with, universities, medical centers, and other private and public entities, (D) identifies the funding requested under any Federal program in support of the proposed economic, human, community, and physical development and related activities, (E) identifies baselines, methods, and benchmarks for measuring the success of carrying out the strategic plan, including the extent to which poor persons and families will be empowered to become economically self-sufficient, and (F) does not include any action to assist any establishment in relocating from one area outside the nominated area to the nominated area, except that assistance for the expansion of an existing business entity through the establishment of a new branch, affiliate, or subsidiary is permitted if— (i) the establishment of the new branch, affiliate, or subsidiary will not result in a decrease in employment in the area of original location or in any other area where the existing business entity conducts business operations, and (ii) there is no reason to believe that the new branch, affiliate, or subsidiary is being established with the intention of closing down the operations of the existing business entity in the area of its original location or in any other area where the existing business entity conducts business operation, and (3) includes such other information as may be required by the appropriate Secretary. **(g) Additional designations permitted** (1) **In general** — In addition to the areas designated under subsection (a), the appropriate Secretaries may designate in the aggregate an additional 20 nominated areas as empowerment zones under this section, subject to the availability of eligible nominated areas. Of that number, not more than 15 may be designated in urban areas and not more than 5 may be designated in rural areas. (2) **Period designations may be made and take effect** — A designation may be made under this subsection after the date of the enactment of this subsection and before January 1, 1999. (3) **Modifications to eligibility criteria, etc.** (A) *Poverty rate requirement* (i) *In general* — A nominated area shall be eligible for designation under this subsection only if the poverty rate for each population census tract within the nominated area is not less than 20 percent and the poverty rate for at least 90 percent of the population census tracts within the nominated area is not less than 25 percent. (ii) *Treatment of census tracts with small populations* — A population census tract with a population of less than 2,000 shall be treated as having a poverty rate of not less than 25 percent if— (I) more than 75 percent of such tract is zoned for commercial or industrial use, and (II) such tract is contiguous to 1 or more other population census tracts which have a poverty rate of not less than 25 percent (determined without regard to this clause). (iii) *Exception for developable sites* — Clause (i) shall not apply to up to 3 noncontiguous parcels in a nominated area which may be developed for commercial or industrial purposes. The aggregate area of noncontiguous parcels to which the preceding sentence applies with respect to any nominated area shall not exceed 2,000 acres. (iv) *Certain provisions not to apply* — Section 1392(a)(4) (and so much of paragraphs (1) and (2) of section 1392(b) as relate to section 1392(a)(4)) shall not apply to an area nominated for designation under this subsection. (v) *Special rule for rural empowerment zone* — The Secretary of Agriculture may designate not more than 1 empowerment zone in a rural area without regard to clause (i) if such area satisfies emigration criteria specified by the Secretary of Agriculture. (B) *Size limitation* (i) *In general* — The parcels described in subparagraph (A)(iii) shall not be taken into account in determining whether the requirement of subparagraph (A) or (B) of section 1392(a)(3) is met. (ii) *Special rule for rural areas* — If a population census tract (or equivalent division under section 1392(b)(4)) in a rural area exceeds 1,000 square miles or includes a substantial amount of land owned by the Federal, State, or local government, the nominated area may exclude such excess square mileage or governmentally owned land and the exclusion of that area will not be treated as violating the continuous boundary requirement of section 1392(a)(3)(B). (C) *Aggregate population limitation* — The aggregate population limitation under the last sentence of subsection (b)(2) shall not apply to a designation under paragraph (1). (D) *Previously designated enterprise communities may be included* — Subsection (e)(5) shall not apply to any enterprise community designated under subsection (a) that is also nominated for designation under this subsection. (E) *Indian reservations may be nominated* (i) *In general* — Section 1393(a)(4) shall not apply to an area nominated for designation under this subsection. (ii) *Special rule* — An area in an Indian reservation shall be treated as nominated by a State and a local government if it is nominated by the reservation governing body (as determined by the Secretary of the Interior). **(h) Additional designations permitted** (1) **In general** — In addition to the areas designated under subsections (a) and (g), the appropriate Secretaries may designate in the aggregate an additional 9 nominated areas as empowerment zones under this section, subject to the availability of eligible nominated areas. Of that number, not more than seven may be designated in urban areas and not more than 2 may be designated in rural areas. (2) **Period designations may be made and take effect** — A designation may be made under this subsection after the date of the enactment of this subsection and before January 1, 2002. (3) **Modifications to eligibility criteria, etc.** — The rules of subsection (g)(3) shall apply to designations under this subsection. (4) **Empowerment zones which become renewal communities** — The number of areas which may be designated as empowerment zones under this subsection shall be increased by 1 for each area which ceases to be an empowerment zone by reason of section 1400E(e).11 See References in Text note below. Each additional area designated by reason of the preceding sentence shall have the same urban or rural character as the area it is replacing.