
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC11501]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                CHAPTER 120--ENTERPRISE ZONE DEVELOPMENT
 
Sec. 11501. Designation of enterprise zones


(a) Designation of zones

                   (1) ``Enterprise zone'' defined

        For purposes of this section, the term ``enterprise zone'' means 
    any area that--
            (A) is nominated by one or more local governments and the 
        State or States in which it is located for designation as an 
        enterprise zone (in this section referred to as a ``nominated 
        area''); and
            (B) the Secretary of Housing and Urban Development 
        designates as an enterprise zone, after consultation with--
                (i) the Secretaries of Agriculture, Commerce, Labor, and 
            the Treasury, the Director of the Office of Management and 
            Budget, and the Administrator of the Small Business 
            Administration; and
                (ii) in the case of an area on an Indian reservation, 
            the Secretary of the Interior.

                     (2) Number of designations

        (A) In general

            The Secretary of Housing and Urban Development may designate 
        not more than 100 nominated areas as enterprise zones.

        (B) Minimum designation in rural areas

            Of the areas designated under subparagraph (A), not less 
        than \1/3\ shall be areas that--
                (i) are within a local government jurisdiction or 
            jurisdictions with a population of less than 50,000 (as 
            determined under the most recent census data available);
                (ii) are outside of a metropolitan statistical area (as 
            designated by the Director of the Office of Management and 
            Budget); or
                (iii) that are determined by the Secretary, after 
            consultation with the Secretary of Commerce, to be rural 
            areas.

       (3) Areas designated based solely on degree of poverty

        (A) In general

            Except as provided in subparagraph (B), the Secretary shall 
        designate (i) the nominated areas with the highest average 
        ranking with respect to the criteria set forth in subparagraphs 
        (C) and (D) of subsection (c)(3) of this section, and the 1 
        criterion set forth in subparagraph (E)(i) or (E)(ii) of 
        subsection (c)(3) of this section that gives an area a higher 
        ranking; and (ii) for areas described in paragraph (2)(B), the 
        nominated areas with the highest ranking with respect to the 1 
        criterion set forth in subparagraph (C), (D), (E)(i), or (E)(ii) 
        of subsection (c)(3) of this section that gives an area a higher 
        ranking. For purposes of the preceding sentence, an area shall 
        be ranked within each such criterion on the basis of the amount 
        by which the area exceeds such criterion, with the area that 
        exceeds such criterion by the greatest amount given the highest 
        ranking.

        (B) Exception where inadequate course of action, etc.

            An area shall not be designated under subparagraph (A) if 
        the Secretary determines that the course of action with respect 
        to such area is inadequate.

        (C) Separate application to rural and other areas

            Subparagraph (A) shall be applied separately with respect to 
        areas described in paragraph (2)(B) and to other areas.

                   (4) Limitation on designations

        (A) Publication of regulations

            Before designating any area as an enterprise zone, the 
        Secretary shall prescribe by regulation not later than 4 months 
        following February 5, 1988, after consultation with the 
        officials described in paragraph (1)(B)--
                (i) the procedures for nominating an area under 
            paragraph (1)(A);
                (ii) the parameters relating to the size and population 
            characteristics of an enterprise zone; and
                (iii) the manner in which nominated areas will be 
            evaluated based on the criteria specified in subsection (d) 
            of this section.

        (B) Time limitations

            The Secretary shall designate nominated areas as enterprise 
        zones only during the 24-month period beginning on the 1st day 
        of the 1st month following the month in which the date of the 
        enactment of the Housing and Community Development Act of 1992 
        occurs.

        (C) Procedural rules

            The Secretary shall not make any designation under paragraph 
        (1) unless--
                (i) the local governments and the State in which the 
            nominated area is located have the authority--
                    (I) to nominate such area for designation as an 
                enterprise zone;
                    (II) to make the State and local commitments under 
                subsection (d) of this section; and
                    (III) to provide assurances satisfactory to the 
                Secretary that such commitments will be fulfilled;

                (ii) a nomination therefor is submitted in such a manner 
            and in such form, and contains such information, as the 
            Secretary shall by regulation prescribe;
                (iii) the Secretary determines that any information 
            furnished is reasonably accurate; and
                (iv) the State and local governments certify that no 
            portion of the area nominated is already included in an 
            enterprise zone or in an area otherwise nominated to be an 
            enterprise zone.

           (5) Nomination process for Indian reservations

        In the case of a nominated area on an Indian reservation, the 
    reservation governing body (as determined by the Secretary of the 
    Interior) shall be deemed to be both the State and local governments 
    with respect to such area.

(b) Period for which designation is in effect

                           (1) In general

        Any designation of an area as an enterprise zone shall remain in 
    effect during the period beginning on the date of the designation 
    and ending on the earliest of--
            (A) December 31 of the 24th calendar year following the 
        calendar year in which such date occurs;
            (B) the termination date designated by the State and local 
        governments as provided for in their nomination pursuant to 
        subsection (a)(4)(C)(ii) of this section; or
            (C) the date the Secretary revokes such designation under 
        paragraph (2).

                    (2) Revocation of designation

        The Secretary, after consultation with the officials described 
    in subsection (a)(1)(B) of this section and a hearing on the record 
    involving officials of the State or local government involved, may 
    revoke the designation of an area if the Secretary determines that 
    the local government or the State in which it is located is not 
    complying substantially with the State and local commitments 
    pursuant to subsection (d) of this section.

(c) Area and eligibility requirements

                           (1) In general

        The Secretary may make a designation of any nominated area under 
    subsection (a)(1) of this section only if it meets the requirements 
    of paragraphs (2) and (3).

                        (2) Area requirements

        A nominated area meets the requirements of this paragraph if--
            (A) the area is within the jurisdiction of the local 
        government;
            (B) the boundary of the area is continuous; and
            (C) the area--
                (i) has a population, as determined by the most recent 
            census data available, of not less than--
                    (I) 4,000 if any portion of such area (other than a 
                rural area described in subsection (a)(2)(B)(i) of this 
                section) is located within a metropolitan statistical 
                area (as designated by the Director of the Office of 
                Management and Budget) with a population of 50,000 or 
                more; or
                    (II) 1,000 in any other case; or

                (ii) is entirely within an Indian reservation (as 
            determined by the Secretary of the Interior).

                    (3) Eligibility requirements

        For purposes of paragraph (1), a nominated area meets the 
    requirements of this paragraph if the State and local governments in 
    which it is located certify and the Secretary, after such review of 
    supporting data as he deems appropriate, accepts such certification, 
    that--
            (A) the area is one of pervasive poverty, unemployment, and 
        general distress;
            (B) the area is located wholly within the jurisdiction of a 
        local government that is eligible for Federal assistance under 
        section 5318 of this title, as in effect on October 28, 1992;
            (C) the unemployment rate, as determined by the appropriate 
        available data, was not less than 1.5 times the national 
        unemployment rate for that period;
            (D) the poverty rate (as determined by the most recent 
        census data available) for each populous census tract (or where 
        not tracted, the equivalent county division as defined by the 
        Bureau of the Census for the purpose of defining poverty areas) 
        within the area was not less than 20 percent for the period to 
        which such data relate; and
            (E) the area meets at least one of the following criteria:
                (i) Not less than 70 percent of the households living in 
            the area have incomes below 80 percent of the median income 
            of households of the local government (determined in the 
            same manner as under section 5318 of this title).
                (ii) The population of the area decreased by 20 percent 
            or more between 1970 and 1980 (as determined from the most 
            recent census available).

            (4) Eligibility requirements for rural areas

        For purposes of paragraph (1), a nominated area that is a rural 
    area described in subsection (a)(2)(B) of this section meets the 
    requirements of paragraph (3) if the State and local governments in 
    which it is located certify and the Secretary, after such review of 
    supporting data as he deems appropriate, accepts such certification, 
    that the area meets--
            (A) the criteria set forth in subparagraphs (A) and (B) of 
        paragraph (3); and
            (B) not less than one of the criteria set forth in the other 
        subparagraphs of paragraph (3).

(d) Required State and local commitments

                           (1) In general

        No nominated area shall be designated as an enterprise zone 
    unless the local government and the State in which it is located 
    agree in writing that, during any period during which the area is an 
    enterprise zone, such governments will follow a specified course of 
    action designated to reduce the various burdens borne by employers 
    or employees in such area. A course of action shall not be treated 
    as meeting the requirements of this paragraph unless the course of 
    action include provisions described in not less than 4 of the 
    subparagraphs of paragraph (2).

                        (2) Course of action

        The course of action under paragraph (1) may be implemented by 
    both such governments and private nongovernmental entities, may be 
    funded from proceeds of any program administered by the Secretary of 
    Housing and Urban Development or of any program administered by the 
    Secretary of Agriculture under title V of the Housing Act of 1949 
    [42 U.S.C. 1471 et seq.], and may include, but is not limited to--
            (A) a reduction of tax rates or fees applying within the 
        enterprise zone;
            (B) an increase in the level of public services, or in the 
        efficiency of the delivery of public services, within the 
        enterprise zone;
            (C) actions to reduce, remove, simplify, or streamline 
        paperwork requirements within the enterprise zone;
            (D) involvement in the program by public authorities or 
        private entities, organizations, neighborhood associations, and 
        community groups, particularly those within the nominated area, 
        including a written commitment to provide jobs and job training 
        for, and technical, financial, or other assistance to, 
        employers, employees, and residents of the nominated area;
            (E) the giving of special preference to contractors owned 
        and operated by members of any minority; and
            (F) the gift (or sale at below fair market value) of surplus 
        land in the enterprise zone to neighborhood organizations 
        agreeing to operate a business on the land.

                   (3) Recognition of past efforts

        In evaluating courses of action agreed to by any State or local 
    government, the Secretary shall take into account the past efforts 
    of such State or local government in reducing the various burdens 
    borne by employers and employees in the area involved.

       (4) Prohibition of assistance for business relocations

        (A) In general

            The course of action implemented under paragraph (1) may not 
        include any action to assist--
                (i) any establishment relocating from one area to 
            another area; or
                (ii) any subcontractor whose purpose is to divest, or 
            whose economic success is dependent upon divesting, any 
            other contractor or subcontractor of any contract 
            customarily performed by such other contractor or 
            subcontractor.

        (B) Exception

            The limitations established in subparagraph (A) shall not be 
        construed to prohibit assistance for the expansion of an 
        existing business entity through the establishment of a new 
        branch, affiliate, or subsidiary if the Secretary--
                (i) finds that the establishment of the new branch, 
            affiliate, or subsidiary will not result in an increase in 
            unemployment in the area of original location or in any 
            other area where the existing business entity conducts 
            business operations; and
                (ii) has 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.

(e) Definitions

    For purposes of this section:

                           (1) Government

        If more than one government seeks to nominate an area as an 
    enterprise zone, any reference to, or requirement of, this section 
    shall apply to all such governments.

                        (2) Local government

        The term ``local government'' means--
            (A) any county, city, town, township, parish, village, or 
        other general purpose political subdivision of a State;
            (B) any combination of political subdivisions described in 
        subparagraph (A) recognized by the Secretary; and
            (C) the District of Columbia.

                            (3) Secretary

        The term ``Secretary'' means the Secretary of Housing and Urban 
    Development.

                              (4) State

        The term ``State'' includes Puerto Rico, the Virgin Islands, 
    Guam, American Samoa, the Northern Mariana Islands, and any other 
    possession of the United States.

(Pub. L. 100-242, title VII, Sec. 701, Feb. 5, 1988, 101 Stat. 1957; 
Pub. L. 100-628, title X, Sec. 1090(a), (b), Nov. 7, 1988, 102 Stat. 
3283; Pub. L. 102-550, title VIII, Sec. 834(a), Oct. 28, 1992, 106 Stat. 
3855.)

                       References in Text

    The date of the enactment of the Housing and Community Development 
Act of 1992, referred to in subsec. (a)(4)(B), is the date of enactment 
of Pub. L. 102-550, which was approved Oct. 28, 1992.
    The Housing Act of 1949, referred to in subsec. (d)(2), is act July 
15, 1949, ch. 338, 63 Stat. 413, as amended. Title V of the Housing Act 
of 1949 is classified generally to subchapter III (Sec. 1471 et seq.) of 
chapter 8A of this title. For complete classification of this Act to the 
Code, see Short Title note set out under section 1441 of this title and 
Tables.


                               Amendments

    1992--Subsec. (a)(4)(B). Pub. L. 102-550, Sec. 834(a)(1), 
substituted ``the date of the enactment of the Housing and Community 
Development Act of 1992 occurs'' for ``the effective date of the 
regulations described in subparagraph (A) occurs''.
    Subsec. (c)(3)(B). Pub. L. 102-550, Sec. 834(a)(2), substituted 
``October 28, 1992'' for ``February 5, 1988''.
    1988--Subsec. (a)(2)(B). Pub. L. 100-628, Sec. 1090(b), substituted 
``under subparagraph (A)'' for ``under clause (i)'' in introductory 
provisions.
    Subsec. (a)(3)(A). Pub. L. 100-628, Sec. 1090(a), amended first 
sentence generally. Prior to amendment, first sentence read as follows: 
``Except as provided in subparagraph (B), the Secretary shall designate 
the nominated areas with the highest average ranking with respect to the 
criteria set forth in subparagraphs (C), (D), and (E) of subsection 
(c)(3) of this section.''


                               Regulations

    Section 1090(c) of Pub. L. 100-628 provided that: ``Not later than 
30 days after the date of the enactment of this Act [Nov. 7, 1988], the 
Secretary of Housing and Urban Development shall revise the regulations 
issued by the Secretary to carry out title VII of the Housing and 
Community Development Act of 1987 (42 U.S.C. 11501 et seq.) by issuing a 
final regulation, effective upon the date of publication, that carries 
out the amendments made by this section [amending this section].''

                  Section Referred to in Other Sections

    This section is referred to in sections 3532, 11503, 11504 of this 
title.
