[Federal Register Volume 59, Number 11 (Tuesday, January 18, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-1158]
[[Page Unknown]]
[Federal Register: January 18, 1994]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Community Planning and
Development
24 CFR Part 597
[Docket No. R-94-1702; FR-3580-I-01]
RIN 2506-AB65
Designation of Empowerment Zones and Enterprise Communities
AGENCY: Office of the Assistant Secretary for Community Planning and
Development, HUD.
ACTION: Interim rule.
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SUMMARY: This interim rule implements that portion of subchapter C,
part I (Empowerment Zones, Enterprise Communities and Rural Development
Investment Areas) of title XIII of the Omnibus Budget Reconciliation
Act of 1993 (Pub. L. 103-66, approved August 10, 1993) dealing with the
designation of urban Empowerment Zones and Enterprise Communities. This
rule authorizes the Secretary of Housing and Urban Development (HUD) to
designate not more than six urban Empowerment Zones and not more than
65 urban Enterprise Communities based upon the effectiveness of the
strategic plan submitted by a State or States and local government(s)
nominating an area for designation.
The purpose of this program is to empower American communities and
their residents to create jobs and opportunity, take effective action
to solve difficult and pressing economic, human, community and physical
development challenges of today, and to build for tomorrow as part of a
Federal-State-local and private-sector partnership. Businesses are to
be encouraged to invest in distressed areas, thereby creating jobs, and
comprehensive local strategic plans are to be adopted and implemented,
furthering community development and assisting in the revitalization of
these areas.
DATES: Effective date: February 17, 1994, through January 18, 1995.
Comment due date: February 17, 1994.
ADDRESSES: Interested persons are invited to submit comments regarding
this interim rule to the Office of General Counsel, Rules Docket Clerk,
room 10276, Department of Housing and Urban Development, 451 Seventh
St. SW., Washington, DC 20410-0500. Comments by facsimile (FAX) are not
acceptable. Communications should refer to the above docket number and
title. A copy of each communication submitted will be available for
public inspection and copying during regular business hours at the
above address.
FOR FURTHER INFORMATION CONTACT: Michael T. Savage, Deputy Director,
Office of Economic Development, room 7136, Department of Housing and
Urban Development, 451 Seventh Street SW., Washington, DC 20410,
telephone (202) 708-2290; TDD (202) 708-2565. (These are not toll-free
numbers.)
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The information collection requirements contained in this rule were
submitted to the Office of Management and Budget (OMB) for review under
the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-3520), approved,
and assigned OMB Control Number 2506-0148.
I. Background
The Empowerment Zones program is a key step in rebuilding
communities in America's poverty-stricken inner cities and rural
heartland. It is designed to empower people and communities across the
nation in developing and implementing strategic plans to create job
opportunities and sustainable community development. The program
combines tax benefits with substantial investment of Federal resources
and enhanced coordination among Federal agencies. All communities which
complete the nomination process will be strengthened by it, whether or
not they are selected as Empowerment Zones or Enterprise Communities,
as the Federal Government will work with applicants to overcome
programmatic regulations and statutory impediments to encourage more
effective economic, physical, environmental and community development
activities.
All communities will gain by taking stock of their assets and
problems, by creating a vision of a better future, and by structuring a
plan for achieving it. Local partnerships among community residents,
businesses, financial institutions, service providers, neighborhood
associations and State and local governments can be formed or
strengthened to support a plan for change by going through the
application process. Communities will be afforded an opportunity to
work with these new partners in the creation and implementation of a
community-based strategic plan. Community Development Corporations
nominated by the locality will be considered eligible for designation
to receive tax preferred contributions from donors. Communities with
innovative visions for change will be considered for requested waivers
of Federal program regulations, flexible use of existing program funds,
and cooperation in meeting essential mandates, even if they do not
receive a designation. Communities may apply comprehensive strategic
planning to their entire community anticipating proposed consolidation
of planning requirements for four major formula grant programs
administered by the Office of Community Planning and Development in
HUD.
Enterprise Communities are eligible for new Tax-Exempt Facilities
Bonds for certain private business activities. States with designated
Enterprise Communities will receive approximately $3 million in
Empowerment Zone/Enterprise Community Social Service Block Grant funds
to pass through to each designated area for approved activities
identified in their strategic plans. Enterprise Communities will
receive special consideration in competition for funding under numerous
Federal programs, including the new National Service and proposed
Community Policing initiatives. The Federal Government will focus
special attention on working cooperatively with designated Enterprise
Communities to overcome regulatory impediments, to permit flexible use
of existing Federal funds, and to assist these Communities in meeting
essential mandates.
Empowerment Zones will receive all the benefits provided to
Enterprise Communities and other communities with innovative visions
for change. Empowerment Zones are awarded substantial Empowerment Zone/
Enterprise Community Social Service Block Grant funds, in the amount of
$100 million for each urban Zone. An Employer Wage Credit for Zone
residents is extended to qualified employers engaged in trade or
business, in designated Empowerment Zones. Businesses are afforded an
increased deduction under section 179 of the Internal Revenue Code for
qualified properties.
The urban part of the program will be administered by HUD as a
Federal-State-local partnership, with a minimum of red tape associated
with the application process. Communities must demonstrate the ability
to design and implement an effective strategic plan for real
opportunities for growth and revitalization, that deal with local
problems in a comprehensive way and must demonstrate the capacity to
carry out these plans. Development of an effective plan must also
involve the participation of the community affected by the nomination
of the urban area, and of the private sector, acting in concert with
the nominating entities. The plan should be developed in accordance
with four key principles, which will serve as the basis for the key
selection criteria that will be used to evaluate the plan. These
principles are:
(1) Economic Opportunity, including job creation within the
community and throughout the region, as well as entrepreneurial
initiatives, small business expansion, and training for jobs that offer
upward mobility;
(2) Sustainable Community Development, to advance the creation of
liveable and vibrant communities through comprehensive approaches that
coordinate economic, physical, environmental, community and human
development;
(3) Community-Based Partnerships, involving participation of all
segments of the community, including the political and governmental
leadership, community groups, health and social service groups,
environmental groups, religious organizations, the private and non-
profit sectors, centers of learning and other community institutions;
and
(4) Strategic Vision for Change, which identifies what the
community will become and a strategic map for revitalization. The
vision should build on assets and coordinate a response to community
needs in a comprehensive fashion. It should also set goals and
performance benchmarks for measuring progress and establish a framework
for evaluating and adjusting the revitalization plan.
State and local governments may nominate distressed urban areas for
designation as Empowerment Zones (which will also permit their
consideration for designation as Enterprise Communities), or solely for
designation as Enterprise Communities.
Title XIII of the Omnibus Budget Reconciliation Act of 1993
included Empowerment Zones and Enterprise Communities as a new program.
II. Program Description
General
Pursuant to title XIII of the Omnibus Budget Reconciliation Act of
1993, the Secretary of HUD may designate up to six urban Empowerment
Zones and up to 65 urban Enterprise Communities. If six Empowerment
Zones are designated in urban areas, no less than one 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 one shall be a nominated
area which includes areas in two States and which Zone has a population
of 50,000 or less. The Secretary of HUD will designate Empowerment
Zones in urban areas in such a manner that the aggregate population of
all such Zones does not exceed 750,000.
Eligibility
To be eligible for designation as an urban Empowerment Zone or
Enterprise Community the statute prescribes that an area must:
(1) Have a maximum population which is the lesser of:
(a) 200,000, or
(b) The greater of 50,000, or ten percent of the population of the
most populous city located within the nominated area;
(2) Be one of pervasive poverty, unemployment, and general
distress;
(3) Not exceed twenty square miles in total land area;
(4) Demonstrate a poverty rate which is not less than:
(a) 20 percent in each census tract;
(b) 25 percent in 90 percent of the population census tracts within
the nominated area;
(c) 35 percent for at least 50 percent of the population census
tracts within the nominated area;
(5) Have a continuous boundary, or consist of not more than three
noncontiguous parcels;
(6) Be located entirely within the jurisdiction of the unit or
units of general local government making the nomination, and not be
located in more than two contiguous States; and
(7) Not include any portion of a central business district unless
the poverty rate for each population tract containing portions of the
central business district is at least 35 percent for an Empowerment
Zone and 30 percent for an Enterprise Community.
Nomination Process
The law provides that one or more local governments and the
State(s) in which a nominated urban area is located may jointly
nominate the area for designation if:
(1) The area meets the eligibility requirements set forth in these
rules;
(2) The urban area is within the jurisdiction of the local
government(s) and the State(s);
(3) The local government(s) and State(s) provide assurances that
the required strategic plan they adopt will be implemented;
(4) All information furnished by the nominating local government(s)
and State(s) is determined by the Secretary of HUD to be reasonably
accurate;
(5) The local government(s) and State(s) certify that no portion of
a nominated urban area is already in a Federal Empowerment Zone or
Enterprise Community or in an area otherwise nominated for designation;
and
(6) The local government(s) and State(s) certify that they possess
the legal authority to make the nomination.
The nomination must be accompanied by an application for
designation, including a strategic plan, which:
(1) Indicates and briefly describes the specific groups,
organizations and individuals participating in the production of the
plan, and describes the history of these groups organizations in the
community;
(2) Explains how participants were selected and provides evidence
that the participants, taken as a whole, broadly represent the racial,
cultural and economic diversity of the community;
(3) Describes the role of the participants in the creation,
development and future implementation of the plan;
(4) Identifies two or three topics addressed in the plan that
caused the most serious disagreements among participants and describes
how those disagreements were resolved;
(5) Explains how the community participated in choosing the area to
be nominated and why the area was nominated;
(6) Provides evidence that key participants have the capacity to
implement the plan;
(7) Provides a brief explanation of the community's vision for
revitalizing the area;
(8) Explains how the vision fulfills the key principles of creating
economic opportunity, encouraging self-sufficiency and promoting
sustainable community development;
(9) Identifies key needs of the area and the current barriers to
achieving the vision for it, including a description of poverty and
general distress, barriers to economic opportunity and development and
barriers to human development;
(10) Discusses how the vision is related to the assets and needs of
the area and its surroundings;
(11) Describes the ways in which the community's approaches to
economic development, social/human services, transportation, housing,
sustainable community development, public safety, drug abuse
prevention, and educational and environmental concerns will be
addressed in a coordinated fashion; and explains how these linkages
support the community's vision.
The strategic plan must identify how government resources will be
used to support the plan. Specifically, the plan must indicate:
(1) How Social Service Block Grant funds for designated Zones and
Communities, tax benefits for designated Zones and Communities, State
and local resources, existing Federal resources available to the
locality and additional Federal resources believed necessary to
implement the strategic plan will be utilized within the Empowerment
Zone or Enterprise Community;
(2) The level of commitment necessary to ensure that these
resources will be available to the area upon designation; and
(3) The Federal resources being applied for or for which
applications are planned; and
(4) If you wish to be considered for the consolidated planning
option, indicate how the strategic plan will apply to the entire
locality and how the locality will spend CDBG and HOME funds.
The plan must identify private resources committed to its
implementation, including:
(1) Private resources and support, including assistance from
business, non-profit organizations and foundations, which are available
to be leveraged with public resources; and
(2) Assurances that these resources will be made available to the
area upon designation.
The plan must address changes needed in Federal rules and
regulations necessary to implement the plan, including:
(1) Specific paperwork or other Federal program requirements that
need to be altered to permit effective implementation of the strategic
plan; and
(2) Specific regulatory and other impediments to implementing the
strategic plan for which waivers are requested, with appropriate
citations and an indication whether waivers can be accomplished
administratively or require statutory changes.
The plan must demonstrate how State and local governments will
reinvent themselves to help implement the plan, by:
(1) Identifying the changes that will be made in State and local
organizations, processes and procedures, including laws and ordinances,
to facilitate implementation of the plan; and
(2) Explaining how different agencies in State and local
governments will work together in new responsive ways to implement the
strategic plan.
The plan must provide details about the manner in which it will be
implemented, and must indicate what benchmarks will be used to measure
progress, by:
(1) Identifying the specific tasks necessary to implement the plan;
(2) Describing the partnerships that will be established to carry
out the plan;
(3) Explaining how the strategic plan will be regularly revised to
reflect new information and opportunities; and
(4) Identifying the benchmarks and goals that should be used in
evaluating performance in implementing the plan.
III. Justification for Interim Rule
In general, the Department publishes a rule for public comment
before issuing a rule for effect, in accordance with its own
regulations on rulemaking at 24 CFR part 10. However, part 10 provides
for exceptions from that general rule where the Department finds good
cause to omit advance notice and public participation. The good cause
requirement is satisfied when prior public comment is ``impracticable,
unnecessary, or contrary to the public interest'' (24 CFR 10.1). The
Department finds that good cause exists to publish this rule for effect
without first soliciting public comment, in that prior public comment
would be contrary to the public interest. Section 1391(c) of the
legislation requires that designations be made only after 1993 and
before 1996. Given the statutory mandate to make all designations
within a two-year period, the extra time required to publish a proposed
rule for a 60-day comment period before development of a final rule for
effect would be contrary to congressional intent and the purpose of the
legislation. The longer time period would unduly postpone an economic
recovery for those communities and their residents for which this
program is intended. Further, the Department finds that good cause
exists in that prior public comment is unnecessary because the
legislation being implemented by this rule is very prescriptive, with
little room for discretion on the part of the Secretary.
The Department is interested, however, in the public reaction to
the rule, and invites the public to comment. Since section 7(o) of the
Department of Housing and Urban Development Act provides that no rule
promulgated by the Department may become effective until 30 days after
publication, and since section 1391(c) of the authorizing legislation
requires that designations be made within a two-year period, the
Department is limiting the comment period to 30 days to permit adequate
time for review of public comments and development of a final rule.
The Department has adopted a policy of setting a date for
expiration of an interim rule unless a final rule is published before
that date. This ``sunset'' provision appears in Sec. 597.1(c) of the
rule, and provides that the rule will expire on a date 12 months from
publication unless a final rule is published before that date.
IV. Notice
HUD is simultaneously publishing in today's Federal Register a
Notice Inviting Applications that contains complete information on
obtaining and submitting applications for nominating areas as
Empowerment Zones and Enterprise Communities.
V. Other Matters
Paperwork Reduction Act
The information collection requirements contained in this rule were
submitted to the Office of Management and Budget (OMB) for review under
the provisions of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-
3520), were approved, and assigned OMB Control Number 2506-0148. The
following provisions of the rule have been determined by the Department
to contain collection of information requirements:
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No. of
No. of responses Total
Reference in rule respondents per annual Hours per Total
respondent responses response hours
----------------------------------------------------------------------------------------------------------------
Sec. 597.200....................................... 300 1 300 50 15,000
Sec. 597.400....................................... 71 1 71 16 1,136
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Total annual burden.......................... 16,136
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National Environmental Policy Act
A Finding of No Significant Impact with respect to the environment
has been made in accordance with HUD regulations in 24 CFR part 50,
which implement section 102(c) of the National Environmental Policy Act
of 1969, 42 U.S.C. 4332. The Finding of No Significant Impact is
available for public inspection and copying during regular business
hours in the Office of the Rules Docket Clerk, room 10278, 451 Seventh
Street SW., Washington, DC 20410.
Executive Order 12866, Regulatory Planning and Review
This rule was reviewed and approved by the Office of Management and
Review as a significant rule, as that term is defined in Executive
Order 12866, which was signed by the President on September 30, 1993.
Any changes to the rule as a result of that review are contained in the
public file of the rule in the office of the Department's Rules Docket
Clerk.
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed this rule before publication and by
approving it certifies that the rule will not have a significant
economic impact on a substantial number of small entities within the
intent and purpose of that Act. The Act is intended to encourage
Federal agencies to utilize innovative administrative procedures in
dealing with individuals, small businesses, small organizations, and
small governmental bodies that would otherwise be unnecessarily
adversely affected by Federal regulations. To the extent that this rule
affects those entities, its purpose is to reduce any disproportionate
burden by providing for the waiver of regulations and by affording
other incentives directed toward a positive economic impact. Therefore,
no regulatory flexibility analysis under the Act is necessary.
Executive Order 12611, Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12611, Federalism, has determined that, although the
policies contained in this rule may have a substantial direct effect on
States or their political subdivisions that are designated as
Empowerment Zones or Enterprise Communities, this effect is intended by
the legislation authorizing the program. The purpose of the rule is to
provide a cooperative atmosphere between the Federal government and
States and local governments, and to reduce any regulatory burden
imposed by the Federal government that impedes the ability of States
and local governments to solve pressing economic, social, and physical
problems in their communities.
Executive Order 12606, The Family
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that the provisions of this
rule will not have a significant impact on family formation,
maintenance or well being, except to the extent that the program
authorized by the rule will empower communities and their residents to
take effective action to solve difficult and pressing economic, human,
community and physical development challenges that have a negative
impact on families. Any such impact is beneficial and merits no further
review under the Order.
Semiannual Agenda
This rule was not listed in the Department's semiannual agenda of
regulations published on October 25, 1993 (58 FR 56402) under Executive
Order 12291 and the Regulatory Flexibility Act at 49 FR 15960. A
summary of the rule, however, was listed on a supplemental agenda,
submitted to the applicable House and Senate Committees after
publication of the October 25, 1993 agenda.
List of Subjects in 24 CFR Part 597
Community development, Empowerment zones, Enterprise communities,
Economic development, Housing, Indians, Intergovernmental relations,
Reporting and recordkeeping requirements, Urban renewal.
In accordance with the reasons set out in the preamble, chapter V
of title 24 of the Code of Federal Regulations is amended by adding
part 597 to read as follows:
PART 597--URBAN EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES
Subpart A--General Provisions
Sec.
597.1 Applicability and scope.
597.2 Objective and purpose.
597.3 Definitions.
597.4 Secretarial review and designation.
597.5 Waivers.
Subpart B--Area Requirements
597.100 Eligibility requirements and data usage.
597.101 Data utilized for eligibility determinations.
597.102 Tests of pervasive poverty, unemployment and general
distress.
597.103 Poverty rate.
Subpart C--Nomination Procedure
597.200 Nominations by State and local governments.
597.201 Evaluating the strategic plan.
597.202 Submission of nominations for designation.
Subpart D--Designation Process
597.300 HUD action and review of nominations for designation.
597.301 Selection factors for designation of nominated urban areas.
597.302 Number of Empowerment Zones and Enterprise Communities
designated.
Subpart E--Post-Designation Requirements
597.400 Reporting.
597.401 Periodic performance reviews.
597.402 Validation of designation.
597.403 Revocation of designation.
Subpart F--Special Rules
597.500 Indian reservations.
597.501 Governments.
597.502 Nominations by economic development corporations or the
District of Columbia.
597.503 Use of census data.
Authority: 26 U.S.C. 1391; 42 U.S.C. 3535(d).
Subpart A--General Provisions
Sec. 597.1 Applicability and scope.
(a) This part establishes policies and procedures applicable to
urban Empowerment Zones and Enterprise Communities, authorized under
subchapter U of the Internal Revenue Code of 1986, as amended, relating
to the designation and treatment of Empowerment Zones, Enterprise
Communities and Rural Development Investment Areas.
(b) This part contains provisions relating to area requirements,
the nomination process for urban Empowerment Zones and urban Enterprise
Communities, and the designation and administration of these Zones and
Communities by HUD. Provisions dealing with the nomination and
designation of rural Empowerment Zones and Enterprise Communities will
be promulgated by the Department of Agriculture. HUD and the Department
of Agriculture will consult in all cases in which nominated areas
possess both urban and rural characteristics, and will utilize a
flexible approach in determining the appropriate designation.
(c) Expiration of rule. Part 597 will expire on January 18, 1995.
Sec. 597.2 Objective and purpose.
The purpose of this part is to provide for the establishment of
Empowerment Zones and Enterprise Communities in urban areas, to
stimulate the creation of new jobs, particularly for the disadvantaged
and long-term unemployed, and to promote revitalization of economically
distressed areas.
Sec. 597.3 Definitions.
Designation means the process by which the Secretary designates
urban areas as Empowerment Zones or Enterprise Communities eligible for
tax incentives and credits established by Subchapter U of the Internal
Revenue Code of 1986, as amended (26 U.S.C. 1391 et seq.) and for
special consideration for programs of Federal assistance.
Empowerment Zone means an urban area so designated by the Secretary
pursuant to this part. Up to six such Zones may be designated,
provided, that if the Secretary designates the maximum number of zones,
not less than one shall be in a nominated urban area the most populous
city of which has a population of 500,000 or less; and no less than one
shall be a nominated urban area which includes areas in two States and
which has an area population of 50,000 or less.
Enterprise Community means an urban area so designated by the
Secretary pursuant to this part. Not more than 65 such communities may
be so designated.
HUD means the Department of Housing and Urban Development.
Local government means any county, city, town, township, parish,
village, or other general purpose political subdivision of a State, and
any combination of these political subdivisions which is recognized by
the Secretary.
Nominated area means an area nominated by one or more local
governments and the State or States in which it is located for
designation pursuant to this part.
Population census tract means a census tract, or, if census tracts
are not defined for the area, a block numbering area.
Poverty means the number of persons listed as being in poverty in
the 1990 Decennial Census.
Revocation of designation means the process by which the Secretary
may revoke the designation of an urban area as an Empowerment Zone or
Enterprise Community pursuant to Sec. 597.403 of this part.
Secretary means the Secretary of Housing and Urban Development.
State means any State of the United States.
Strategic plan means a strategy developed and agreed to by the
nominating local government(s) and State(s), which have provided
certifications of their authority to adopt such a strategy in their
application for nomination, in consultation and cooperation with the
residents of the nominated are, pursuant to the provisions of
Sec. 597.200(c) of this part. The plan must include written commitments
from the local government(s) and State(s) that they will adhere to that
strategy.
Urban area means:
(1) Any area that lies inside a Metropolitan Area (MA), as
designated by the Office of Management and Budget; or
(2) Any area outside an MA if the nominating local government has a
population of 20,000 or more, or documents the urban character of the
area.
Sec. 597.4 Secretarial review and designation.
(a) Designation. The Secretary will review applications for the
designation of nominated urban areas to determine the effectiveness of
the strategic plans submitted by nominating State and local
government(s) in accordance with Sec. 597.200(c) of this part. The
Secretary will designate up to six urban Empowerment Zones and up to 65
urban Enterprise Communities.
(b) Period of designation. The designation of an urban area as an
Empowerment Zone or Enterprise Community shall remain in full effect
during the period beginning on the date of designation and ending on
the earliest of:
(1) The close of the tenth calendar year beginning on or after the
date of designation;
(2) The termination date designated by the State and local
governments in their application for nomination; or
(3) The date the Secretary modifies or revokes the designation, in
accordance with Sec. 597.402 or Sec. 597.403 of this part.
Sec. 597.5 Waivers.
The Secretary of HUD may waive for good cause any provision of this
part not required by statute, where it is determined that application
of the requirement would produce a result adverse to the purpose and
objectives of this part.
Subpart B--Area Requirements
Sec. 597.100 Eligibility requirements and data usage.
A nominated urban area may be eligible for designation pursuant to
this part only if the area:
(a) Has a maximum population which is the lesser of:
(1) 200,000, or
(2) The greater of 50,000 or ten percent of the population of the
most populous city located within the nominated area;
(b) Is one of pervasive poverty, unemployment and general distress,
as described in Sec. 597.102 of this part;
(c) Does not exceed twenty square miles in total land area;
(d) Has a continuous boundary, or consists of not more than three
noncontiguous parcels;
(e) Is located entirely within the jurisdiction of the unit or
units of general local government making the nomination, and is located
in no more than two contiguous States; and
(f) Does not include any portion of a central business district, as
this term is used in the most recent Census of Retail Trade, unless the
poverty rate for each population census tract in the district is not
less than 35 percent for an Empowerment Zone and 30 percent for an
Enterprise Community.
Sec. 597.101 Data utilized for eligibility determinations.
(a) Source of data. The data to be employed in determining
eligibility pursuant to the criteria set forth at Sec. 597.102 shall be
based upon the 1990 Decennial Census, and from information published by
the Bureau of the Census and the Bureau of Labor Statistics. The data
shall be comparable as to point or period of time and methodology
employed. Specific information on appropriate data to be submitted will
be provided in the application.
(b) Use of statistics on boundaries. The boundary of an urban area
nominated for designation as an Empowerment Zone or Enterprise
Community must coincide with the boundaries of census tracts, or, where
tracts are not defined, with block numbering areas.
Sec. 597.102 Tests of pervasive poverty, unemployment and general
distress.
(a) Pervasive poverty. Pervasive poverty shall be demonstrated by
the nominating entities by providing evidence that:
(1) Poverty is widespread throughout the nominated area; or
(2) Poverty has become entrenched or intractable over time (through
comparison of 1980 and 1990 census data or other relevant evidence); or
(3) That no portion of the nominated area contains any component
areas of an affluent character.
(b) Unemployment. Unemployment shall be demonstrated by:
(1) Data indicating that the weighted average rate of unemployment
for the nominated area is not less than the national average rate of
unemployment; or
(2) Evidence of especially severe economic conditions, such as
military base or plant closings or other conditions which have brought
about significant job dislocation within the nominated area.
(c) General distress. General distress shall be evidenced by
describing adverse conditions within the nominated urban area other
than those of pervasive poverty and unemployment. A high incidence of
crime, narcotics use, homelessness, abandoned housing, and deteriorated
infrastructure or substantial population decline, are examples of
appropriate indicators of general distress.
Sec. 597.103 Poverty rate.
(a) General. The poverty rate shall be established in accordance
with the following criteria:
(1) In each census tract within a nominated urban area, the poverty
rate shall be not less than 20 percent;
(2) For at least 90 percent of the population census tracts within
the nominated urban area, the poverty rate shall not be less than 25
percent; and
(3) For at least 50 percent of the population census tracts within
the nominated urban area, the poverty rate shall be not less than 35
percent.
(b) Special rules relating to the determination of poverty rate.
(1) Census tracts with no population. Census tracts with no population
shall be treated as having a poverty rate which meets the standards of
paragraphs (a)(1) and (2) of this section, but shall be treated as
having a zero poverty rate for purposes of applying paragraph (a)(3) of
this section.
(2) Census tracts with populations of less than 2,000. A population
census tract which has a population of less than 2,000 shall be treated
as having a poverty rate which meets the requirements of paragraphs
(a)(1) and (a)(2) of this section if more than 75 percent of the tract
is zoned for commercial or industrial use.
(3) Adjustment of poverty rates for Enterprise Communities. Where
necessary to carry out the purposes of this part, the Secretary may
reduce by 5 percentage points one of the following thresholds for not
more than 10 percent of the census tracts, or, if fewer, five
population tracts in the nominated urban area:
(i) The 20 percent threshold in paragraph (a)(1) of this section;
(ii) The 25 percent threshold in paragraph (a)(2) of this section;
and
(iii) The 35 percent threshold in paragraph (a)(3) of this section;
Provided that, the Secretary may in the alternative reduce the 35
percent threshold by 10 percentage points for three population census
tracts.
(4) Rounding up of percentages. In making the calculations required
by this section, the Secretary shall round all fractional percentages
of one-half percent or more up to the next highest whole percentage
figure.
(c) Noncontiguous areas. A nominated urban area may not contain a
noncontiguous parcel unless such parcel separately meets the criteria
set forth at paragraphs (a) (1), (2), and (3) of this section.
(d) Areas not within census tracts. In the case of an area which
does not have population census tracts, the block numbering area shall
be used.
Subpart C--Nomination Procedure
Sec. 597.200 Nominations by State and local governments.
(a) Nomination criteria. One or more local governments and the
State or States in which an urban area is located may nominate such
area for designation as an Empowerment Zone and/or as an Enterprise
Community, if:
(1) The urban area meets the requirements for eligibility set forth
in Secs. 597.100 and 597.103 of this part;
(2) The urban area is within the jurisdiction of a State or States
and local government(s) that have the authority to nominate the urban
area for designation and that provide written assurances satisfactory
to the Secretary that the strategic plan described in paragraph (c) of
this section will be implemented;
(3) All information furnished by the nominating State(s) and local
government(s) is determined by the Secretary to be reasonably accurate;
and
(4) The State(s) and local government(s) certify that no portion of
the area nominated is already included in an Empowerment Zone or
Enterprise Community or in an area otherwise nominated to be designated
under this section.
(b) Nomination for designation. No urban area may be considered for
designation pursuant to subpart D of this part unless the nomination
for designation:
(1) Demonstrates that the nominated urban area satisfies the
eligibility criteria set forth at Sec. 597.100;
(2) Includes a strategic plan, as described in paragraph (c) of
this section; and
(3) Includes such other information as may be required by HUD in
the application or in a Notice Inviting Applications, to be published
in the Federal Register.
(c) Strategic plan. Each application for designation must be
accompanied by a strategic plan, which must be developed in accordance
with four key principles, which will also be utilized to evaluate the
plan. These principles are:
(1) Economic opportunity, including job creation within the
community and throughout the region, as well as entrepreneurial
initiatives, small business expansion and training for jobs that offer
upward mobility;
(2) Sustainable Community Development, to advance the creation of
liveable and vibrant communities through comprehensive approaches that
coordinate economic, physical, community and human development;
(3) Community-Based Partnerships, involving the participation of
all segments of the community, including the political and governmental
leadership, community groups, health and social service groups,
environmental groups, religious organizations, the private and non-
profit sectors, centers of learning and other community institutions;
and
(4) Strategic vision for change, which identifies what the
community will become and a strategic map for revitalization. The
vision should build on assets and coordinate a response to community
needs in a comprehensive fashion. It should also set goals and
performance benchmarks for measuring progress and establish a framework
for evaluating and adjusting the revitalization plan.
(d) Elements of strategic plan. The strategic plan should:
(1) Indicate and briefly describe the specific groups,
organizations, and individuals participating in the production of the
plan and describe the history of these groups in the community;
(2) Explain how participants were selected and provide evidence
that the participants, taken as a whole, broadly represent the racial,
cultural and economic diversity of the community;
(3) Describe the role of the participants in the creation,
development and future implementation of the plan;
(4) Identify two or three topics addressed in the plan that caused
the most serious disagreements among participants and describe how
those disagreements were resolved;
(5) Explain how the community participated in choosing the area to
be nominated and why the area was nominated;
(6) Provide evidence that key participants have the capacity to
implement the plan;
(7) Provide a brief explanation of the community's vision for
revitalizing the area;
(8) Explain how the vision creates economic opportunity, encourages
self-sufficiency and promotes sustainable community development;
(9) Identify key needs of the area and the current barriers to
achieving the vision for it, including a description of poverty and
general distress, barriers to economic opportunity and development and
barriers to human development;
(10) Discuss how the vision is related to the assets and needs of
the area and its surroundings;
(11) Describe the ways in which the community's approaches to
economic development, social/human services, transportation, housing,
sustainable community development, public safety, drug abuse
prevention, and educational and environmental concerns will be
addressed in a coordinated fashion; and explain how these linkages
support the community's vision;
(12) Indicate how Social Services Block Grant funds for designated
Empowerment Zones and Enterprise Communities will be utilized.
(i) In doing so, the Strategic Plan shall provide the following
information:
(A) A commitment by the applicant, as well as by the state
government(s) that the EZ/EC SSBG funds will be used to supplement, not
replace, other federal or non-Federal funds for service or activities
eligible under the SSBG program;
(B) A description of the entities that will administer the SSBG
funds;
(C) A certification by such entities that they will provide
periodic reports on the use of the SSBG funds; and
(D) A detailed description of the activities to be financed with
the EZ/EC SSBG funds and how such funds will be allocated.
(ii) The EZ/EC SSBG funds may be used to achieve or maintain the
following goals, through undertaking one of the below specified program
options:
(A) The goal of economic self-support to prevent, reduce or
eliminate dependencies, through one of the following program options:
(1) Funding community and economic development services focused on
disadvantaged adults and youths, including skills training,
transportation services and job, housing business and financial
management counseling;
(2) Supporting programs that promote home ownership, education or
other routes to economic independence for low-income families, youth
and other individuals;
(3) Assisting in the provision of emergency and transitional
shelter for disadvantaged families, youths and other individuals;
(B) The goal of self-sufficiency, including reduction or prevention
of dependencies, through one of the following program options:
(1) Providing assistance to non-profit organizations and/or
community and junior colleges that provide disadvantaged individuals
with opportunities for short-term training courses in entrepreneurial,
self employment and other skills that promote individual self-
sufficiency, and the interest of the community;
(2) Funding programs to provide training and employment for
disadvantaged adults and youths in construction, rehabilitation or
improvement of affordable housing, public infrastructure and community
facilities; and
(C) The goal of prevention or amelioration of the neglect, abuse or
exploitation of children and/or adults unable to protect themselves; or
the goal of preservation or rehabilitation of families, through one of
the following program options:
(1) Providing support for residential or non-residential drug and
alcohol prevention and treatment programs that offer comprehensive
services for pregnant women, mothers and their children;
(2) Establishing programs that provide activities after school
hours, including keeping school buildings open during evenings and
weekends for mentor and study programs.
(iii) If the EZ/EC/SSBG funds are to be used for program options
not included in paragraph (b) of this section, the strategic plan must
indicate how the proposed activities meet the goals set forth in
paragraph (b) of this section and the reasons the approved programs
options were not pursued.
(iv) To the extent that the EZ/EC/SSBG funds are used for the
program options include in paragraph (b) of this section, they may be
used for the following activities, in addition to those activities
permitted by Section 2005 of the Social Security Act:
(A) To purchase or improve land or facilities;
(B) To make cash payments to individuals for subsistence or room
and board;
(C) To make wage payments to individuals as a social service;
(D) To make cash payments for medical care; and
(E) To provide social services to institutionalized persons.
(v) The State must obligate the EZ/EC/SSBG funds in accordance with
the Strategic Plan within 2 years from the date of designation of the
Empowerment Zone or Enterprise community.
(13) Indicate how tax benefits for designated Zones and
Communities, State and local resources, existing Federal resources
available to the locality and additional Federal resources believed
necessary to implement the strategic plan will be utilized within the
Empowerment Zone or Enterprise Community;
(14) Indicate a level of commitment necessary to ensure that these
resources will be available to the area upon designation;
(15) Identify the Federal resources applied for or for which
applications are planned; if a strategic plan indicates how Community
Development Block Grant (CDBG), HOME, Emergency Shelter Grant, and
Housing Opportunities for People with AIDS (HOPWA) funds will be
expended (for the entire locality including the nominated area), the
strategic plan will be considered by the Office of Community Planning
and Development at HUD toward satisfying the consolidated planning
requirements that will soon be issued for these programs.
(16) Identify private resources and support, including assistance
from business, non-profit organizations and foundations, which are
available to be leveraged with public resources; and provide assurances
that these resources will be made available to the area upon
designation;
(17) Identify changes necessary to Federal rules and regulations
necessary to implement the plan, including specific paperwork or other
Federal program requirements that must be altered to permit effective
implementation of the strategic plan; and
(18) Identify specific regulatory and other impediments to
implementing the strategic plan for which waivers are requested, with
appropriate citations and an indication whether waivers can be
accomplished administratively or require statutory changes.
(19) Demonstrate how State and local governments will reinvent
themselves to help implement the plan, by identifying changes that will
be made in State and local organizations, processes and procedures,
including laws and ordinances;
(20) Explain how different agencies in State and local governments
will work together in new responsive ways to implement the strategic
plan;
(21) Identify the specific tasks and timetable necessary to
implement the plan;
(22) Describe the partnerships that will be established to carry
out the plan;
(23) Explain how the plan will be regularly revised to reflect new
information and opportunities; and
(24) Identify benchmarks and goals that should be used in
evaluating performance in implementing the plan.
(e) Prohibition against business relocation. The strategic plan may
not include any action to assist any establishment in relocating from
one area outside the nominated urban area to the nominated urban 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:
(1) The establishment of a 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
(2) 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 operations.
(f) Implementation of strategic plan. The strategic plan may be
implemented by the local government(s) and/or by the State(s)
nominating an urban area for designation and/or by nongovernmental
entities identified in the strategic plan. Activities included in the
plan may be funded from any source, Federal, State, local, or private,
which provides assistance in the nominated area.
(g) Activities included in strategic plan. A strategic plan may
include, but is not limited to, activities which address:
(1) Economic problems, through measures designed to create job
training and employment opportunities; support for business startup or
expansion; or development of community institutions;
(2) Human concerns, through the provision of social services, such
as rehabilitation and treatment programs or the provision of training,
education, or other services within the affected area;
(3) Community needs, such as the expansion of housing stock and
homeownership opportunities, efforts to reduce homelessness, efforts to
promote fair housing and equal opportunity, efforts to reduce and
prevent crime and improve security in the area; and
(4) Physical improvements, such as the provision or improvement of
recreational areas, transportation or other public services within the
affected area, and improvements to the infrastructure and environmental
protection
Sec. 597.201 Evaluating the strategic plan.
The strategic plan will be evaluated for effectiveness as part of
the designation process for nominated urban areas described in
Sec. 597.301 of this part. On the basis of this evaluation, HUD may
negotiate reasonable modifications of the strategic plan or of the
boundaries of a nominated urban area or the period for which such
designation shall remain in full effect. The effectiveness of the
strategic plan will be determined in accordance with the four key
principles set forth in Sec. 597.200(c) of this part. HUD will review
each plan submitted in terms of the four equally weighted key
principles, and of such other elements of these key principles as are
appropriate to address the opportunities and problems of each nominated
area which may include:
(a) Economic opportunity. (1) The extent to which businesses, jobs,
and entrepreneurship increase within the Zone or Community;
(2) The extent to which residents will achieve a real economic
stake in the Zone or Community;
(3) The extent to which residents will be employed in the process
of implementing the plan and in all phases of economic and community
development;
(4) The extent to which residents will be linked with employers and
jobs throughout the entire region or metropolitan area, and the way in
which residents will receive training, assistance, and family support
to become economically self-sufficient;
(5) The extent to which economic revitalization in the Zone or
Community interrelates with the broader regional or metropolitan
economies; and
(6) The extent to which lending and investment opportunities will
increase within the Zone or Community through the establishment of
mechanisms to encourage community investment and to create new economic
growth.
(b) Sustainable community development. (1) Consolidated planning.
The extent to which the plan is part of a larger strategic community
development plan for the nominating locality and is consistent with
broader regional development strategies;
(2) Public safety. The extent to which strategies such as community
policing will be used to guarantee the basic safety and security of
persons and property within the Zone or Community;
(3) Amenities and design. The extent to which the plan considers
issues of design and amenities that will foster a sustainable
community, such as open spaces, recreational areas, cultural
institutions, transportation, energy, land and water uses, waste
management, environmental protection, and the quality of life in the
community;
(4) Sustainable development. The extent to which economic
development will be achieved in a manner that protects public health
and the environment;
(5) Supporting families. The extent to which the strengths of
families will be supported so that parents can succeed at work, provide
nurture in the home, and contribute to the life of the community;
(6) Youth development. The extent to which the development of
children, youth, and young adults into economically productive and
socially responsible adults will be promoted, and the extent to which
young people will be provided with the opportunity to take
responsibility for learning the skills, discipline, attitude, and
initiative to make work rewarding;
(7) Education goals. The extent to which schools, religious
institutions, non-profit organizations, for-profit enterprises, local
governments and families will work cooperatively to provide all
individuals with the fundamental skills and knowledge they need to
become active participants and contributors to their community, and to
succeed in an increasingly competitive global economy;
(8) Affordable housing. The extent to which a housing component,
providing for adequate safe housing and ensuring that all residents
will have equal access to that housing is contained in the strategic
plan;
(9) Drug abuse. The extent to which the plan addresses levels of
drug abuse and drug related activity through the expansion of drug
treatment services, drug law enforcement initiatives and community
based drug abuse education programs.
(10) Equal opportunity. The extent to which the plan offers an
opportunity for diverse residents to participate in the rewards and
responsibilities of work and service. The extent to which the plan
ensures that no business within a nominated Zone or Community will
directly or through contractual or other arrangements subject a person
to discrimination on the basis of race, color, national origin, gender
or disability in its employment practices, including recruitment,
recruitment advertising, employment, layoff, termination, upgrading,
demotion, transfer, rates of pay or other forms of compensation, or use
of facilities.
(c) Community-based partnerships. (1) Community partners. The
extent to which residents of the nominated area have participated in
the development of the strategic plan and their commitment to
implementing it, and the extent to which community-based organizations
in the nominated area have participated in the development of the plan
and their record of success measured by their achievements and support
for undertakings within the nominated area; and the extent to which the
plan integrates the local educational, social, civic, environmental and
health organizations and reflects the prominent place that these
institutions play in the life of a revitalized community.
(2) Private and non-profit organizations as partners. The extent to
which partnership arrangements include commitments from private and
non-profit organizations, including corporations, utilities, banks and
other financial institutions, and educational institutions supporting
implementation of the strategic plan;
(3) State and local government partners. The extent to which State
and local governments are committed to providing support to implement
the strategic plan, including their commitment to ``reinventing'' their
roles and coordinating programs to implement the strategic plan; and
(4) Permanent implementation and evaluation structure. The extent
to which a responsible and accountable implementation structure or
process has been created to ensure that the plan is successfully
carried out and that improvements are made throughout the period of the
Zone or Community's designation and the extent to which the partners
agree to be bound by their commitments.
(d) Strategic vision for change. (1) Goals and Coordinated
strategy. The extent to which the strategic plan reflects a projection
for the community's revitalization which links economic, human,
physical, community development and other activities in a mutually
reinforcing, synergistic way to achieve ultimate goals;
(2) Creativity and innovation. The extent to which the activities
proposed in the plan are creative, innovative and promising and will
promote the civic spirit necessary to revitalize the nominated area;
(3) Building on assets. The extent to which the vision for
revitalization realistically addresses the needs of the nominated area
in a way that takes advantage of its assets.
(4) Benchmarks and learning. The extent to which the plan includes
performance benchmarks for measuring progress in its implementation,
including an on-going process for adjustments, corrections and building
on what works.
Sec. 597.202 Submission of nominations for designation.
(a) General. A nomination for designation as an Empowerment Zone
and/or Enterprise Community must be submitted for each urban area for
which such designation is requested. The nomination shall be submitted
in a form to be prescribed by HUD in the application and in the Notice
Inviting Applications published in the Federal Register, and must
contain complete and accurate information.
(b) Certifications. Certifications must be submitted by the
State(s) and local government(s) requesting designation stating that:
(1) The nominated urban area satisfies the boundary tests of
Sec. 597.100(d) of this part;
(2) The nominated urban area is one of pervasive poverty,
unemployment and general distress, as prescribed by Sec. 597.102 of
this part;
(3) The nominated urban area satisfies the poverty rate tests set
forth in Sec. 597.103 of this part;
(4) The nominated urban area contains no portion of an area that is
either already designated as an Empowerment Zone and/or Enterprise
Community, or is otherwise included in any other area nominated for
designation as an Empowerment Zone and/or Enterprise Community;
(5) Each nominating governmental entity has the authority to:
(i) Nominate the urban area for designation as an Empowerment Zone
and/or Enterprise Community;
(ii) Make the State and local commitments required by
Sec. 597.200(d) of this part; and
(iii) Provide written assurances satisfactory to the Secretary that
these commitments will be met.
(6) Provide assurances that the amounts provided to the State for
the area under section 2007 of title XX of the Social Security Act will
not be used to supplant Federal or non-Federal funds for services and
activities which promote the purposes of section 2007;
(7) Provide that the nominating governments or corporations agree
to make available all information requested by HUD to aid in the
evaluation of progress in implementing the strategic plan and reporting
on the use of Empowerment Zone/Enterprise Community Social Service
Block Grant funds; and
(8) Provide assurances that the nominating State(s) agrees to
distribute the Empowerment Zone/Enterprise Community Social Service
Block Grant funds in accordance with the strategic plan submitted for
the designated Zone or Community.
(c) Maps and area description. Maps and a general description of
the nominated urban area shall accompany the nomination request.
Subpart D--Designation Process
Sec. 597.300 HUD action and review of nominations for designation.
(a) Establishment of submission procedures. HUD will establish a
time period and procedures for the submission of nominations for
designation as Empowerment Zones or Enterprise Communities, including
submission deadlines and addresses, in a Notice Inviting Applications,
to be published in the Federal Register.
(b) Acceptance for processing. (1) HUD will accept for processing
those nominations for designation as Empowerment Zones or Enterprise
Communities which HUD determines have met the criteria required by this
part. HUD will notify the State(s) and local government(s) whether or
not the nomination has been accepted for processing. The criteria for
acceptance for processing are as follows:
(2) The nomination for designation as an Empowerment Zone or
Enterprise Community must be received by HUD on or before the time on
the date established by the Notice Inviting Applications published in
the Federal Register. The nomination for designation as an Empowerment
Zone or Enterprise Community must be complete and must be accompanied
by a strategic plan, as required by Sec. 597.200(c) of this part, and
the certifications required by Sec. 597.202(b) of this part.
(c) Evaluation of nominations. In the process of reviewing each
nomination accepted for processing, HUD may undertake a site visit(s)
to any nominated area to aid in the process of evaluation.
(d) Modification of the strategic plan, boundaries of nominated
urban areas, and/or period during which designation is in effect.
Subject to the limitations imposed by Sec. 597.100 of this part, HUD
may negotiate reasonable modifications of the strategic plan, the
proposed boundaries of a nominated urban area, or the term for which a
designation is to remain in full effect, to ensure maximum efficiency
and fairness in the provision of assistance to such areas.
(e) Publication of designations. Announcements of those nominated
urban areas designated as Empowerment Zones or Enterprise Communities
will be made by publication of a Notice in the Federal Register.
Sec. 597.301 Selection factors for designation of nominated urban
areas.
(a) Selection factors. In choosing among nominated urban areas
eligible for designation, the Secretary shall consider:
(1) The effectiveness of the strategic plan in accordance with the
key principles and evaluative criteria set out in Sec. 597.201.
(2) The effectiveness of the assurances made pursuant to
Sec. 597.200(a)(2) that the strategic plan will be implemented.
(3) The extent to which an application proposes activities that are
creative and innovative in comparison to other applications.
(4) Such other factors established by HUD. Such factors include,
but are not limited to, the degree of need demonstrated by the
nominated area for assistance under this part. If other factors are
established by HUD, a Federal Register Notice will be published
identifying such factors, along with an extension of the application
due date if necessary.
(b) Geographic diversity. HUD, in its discretion, may choose to
select for designation a lower rated approvable application over a
higher rated application in order to increase the level of geographic
diversity of designations approved under this part.
Sec. 597.302 Number of Empowerment Zones and Enterprise Communities
designated.
(a) Empowerment Zones. HUD will designate up to six of the
nominated urban areas as Empowerment Zones, provided: That if six such
zones are so designated, no less than one 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 one shall be a nominated urban area which
includes areas in two States and which has a population of 50,000 or
less.
(b) Enterprise Communities. HUD will designate up to 65 of the
nominated urban areas not designated Empowerment Zones under paragraph
(a) of this section as Enterprise Communities.
Subpart E--Post-Designation Requirements
Sec. 597.400 Reporting.
HUD will require periodic reports for the Empowerment Zones and
Enterprise Communities designated pursuant to this part. These reports
will identify the community, local government and State actions which
have been taken in accordance with the strategic plan. In addition to
these reports, such other information relating to designated
Empowerment Zones and Enterprise Communities as HUD shall request from
time to time, including information documenting nondiscrimination in
hiring and employment by businesses within the designated Empowerment
Zone or Enterprise Community, shall be submitted promptly.
Sec. 597.401 Periodic performance reviews.
HUD will regularly evaluate the progress of the strategic plan in
each designated Empowerment Zone and Enterprise Community on the basis
of performance reviews to be conducted on site and other information
submitted. HUD will also commission evaluations of the Empowerment Zone
program as a whole by an impartial third party, at such intervals as
HUD may establish.
Sec. 597.402 Validation of designation.
(a) Reevaluation of designations. On the basis of the performance
reviews described in Sec. 597.401, and subject to the provisions
relating to the revocation of designation appearing at Sec. 597.403,
HUD will make findings on the continuing eligibility for and the
validity of the designation of any Empowerment Zone or Enterprise
Community. Determinations of whether any designated Empowerment Zone or
Enterprise Community remains in good standing shall be promptly
communicated to all Federal agencies providing assistance or
administering programs under which assistance can be made available in
such Zone or Community.
(b) Modification of designation. Based on an urban area's success
in carrying out its strategic plan, and subject to the provisions
relating to revocation of designation appearing at Sec. 597.403 of this
part and the requirements as to the number, maximum population and
other characteristics of urban Empowerment Zones set forth in
Sec. 597.3 of this part, the Secretary may modify designations by
reclassifying urban Empowerment Zones as Enterprise Communities or
Enterprise Communities as Empowerment Zones.
Sec. 597.403 Revocation of designation.
(a) Basis for revocation. The Secretary may revoke the designation
of an urban area as an Empowerment Zone or Enterprise Community if the
Secretary determines, on the basis of the periodic performance review
described at Sec. 597.401 of this part, that the State(s) or local
government(s) in which the urban area is located:
(1) Has modified the boundaries of the area;
(2) Has failed to make progress in achieving the benchmarks set
forth in the strategic plan; or
(3) Has not complied substantially with the strategic plan.
(b) Letter of warning. Before revoking the designation of an urban
area as an Empowerment Zone or Enterprise Community, the Secretary will
issue a letter of warning to the nominating State(s) and local
government(s):
(1) Advising that the Secretary has determined that the nominating
local government(s) and/or State(s) has:
(i) Modified the boundaries of the area; or
(ii) Is not complying substantially with, or has failed to make
progress in achieving the benchmarks set forth in the strategic plan
prepared pursuant to Sec. 597.200(c) of this part; and
(2) Requesting a reply from all involved parties within 90 days of
the receipt of this letter of warning.
(c) Notice of revocation. After allowing 90 days from the date of
receipt of the letter of warning for response, and after making a
determination pursuant to paragraph (a) of this section, the Secretary
may issue a final notice of revocation of the designation of the urban
area as an Empowerment Zone or Enterprise Community.
(d) Notice to affected Federal agencies. HUD will notify all
affected Federal agencies providing assistance in an urban Empowerment
Zone or Enterprise Community of its determination to revoke any
designation pursuant to this section or to modify a designation
pursuant to Sec. 597.402(b) of this part.
Subpart F--Special Rules
Sec. 597.500 Indian reservations.
No urban Empowerment Zone or Enterprise Community may include any
area within an Indian reservation.
Sec. 597.501 Governments.
If more than one State or local government seeks to nominate an
urban area under this part, any reference to or requirement of this
part shall apply to all such governments.
Sec. 597.502 Nominations by economic development corporations or the
District of Columbia.
Any urban area nominated by an Economic Development Corporation
chartered by the State in which it is located or by the District of
Columbia shall be treated as nominated by a State and local government.
Sec. 597.503 Use of census data.
Population and poverty rate data shall be determined by the most
recent decennial census data available.
Dated: January 12, 1994.
Andrew Cuomo,
Assistant Secretary for Community Planning and Development.
[FR Doc. 94-1158 Filed 1-14-94; 8:45 am]
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