§1393 — Title 26 Internal Revenue Code | U.S. Code

§1393 Definitions and Special Rules

Title 26 › Subtitle Subtitle A— Income Taxes › Chapter 1— NORMAL TAXES AND SURTAXES › Subchapter U— Designation and Treatment of Empowerment Zones, Enterprise Communities, and Rural Development Investment Areas › Part I— DESIGNATION › § 1393

Last updated Apr 6, 2026|Official source

Summary

These are the ground rules for empowerment zones and enterprise communities, areas that get special tax benefits. The Secretary of Housing and Urban Development oversees urban areas, and the Secretary of Agriculture oversees rural ones. A rural area is one outside a metropolitan statistical area or one the Agriculture Department designates as rural. An area becomes a zone after local governments and the state nominate it for designation. A state-chartered economic development corporation's nomination counts too. No zone may include land within an Indian reservation, and population and poverty rates are measured using the most recent decennial census data.

Title 26, §1393

Internal Revenue Code — Source: USLM XML via OLRC

(a)For purposes of this subchapter—

(1)The term “appropriate Secretary” means—

(A)the Secretary of Housing and Urban Development in the case of any nominated area which is located in an urban area, and

(B)the Secretary of Agriculture in the case of any nominated area which is located in a rural area.

(2)The term “rural area” means any area which is—

(A)outside of a metropolitan statistical area (within the meaning of section 143(k)(2)(B)), or

(B)determined by the Secretary of Agriculture, after consultation with the Secretary of Commerce, to be a rural area.

(3)The term “urban area” means an area which is not a rural area.

(4)(A)No empowerment zone or enterprise community may include any area within an Indian reservation.

(B)The term “Indian reservation” has the meaning given such term by section 168(j)(6).

(5)The term “local government” means—

(A)any county, city, town, township, parish, village, or other general purpose political subdivision of a State, and

(B)any combination of political subdivisions described in subparagraph (A) recognized by the appropriate Secretary.

(6)The term “nominated area” means an area which is nominated by 1 or more local governments and the State or States in which it is located for designation under section 1391.

(7)If more than 1 State or local government seeks to nominate an area under this part, any reference to, or requirement of, this subchapter shall apply to all such governments.

(8)An area shall be treated as nominated by a State and a local government if it is nominated by an economic development corporation chartered by the State.

(9)Population and poverty rate shall be determined by the most recent decennial census data available.

(b)For purposes of this title, the terms “empowerment zone” and “enterprise community” mean areas designated as such under section 1391.

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 1393, added Pub. L. 95–600, title VI, § 601(a), Nov. 6, 1978, 92 Stat. 2894; amended Pub. L. 96–595, § 3(a)(5), (6), (8), Dec. 24, 1980, 94 Stat. 3465, related to taxation of general stock ownership corporation taxable income to shareholders, prior to repeal by Pub. L. 99–514, title XIII, § 1303(a), Oct. 22, 1986, 100 Stat. 2658.