§11501 Designation of Enterprise Zones

Summary

The Secretary of Housing and Urban Development may pick up to 100 areas nominated by local governments and the State to be called enterprise zones. Before choosing, HUD must talk with 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. If the area is on an Indian reservation, HUD must also consult the Secretary of the Interior. At least one‑third of the chosen areas must be either in places with local governments under 50,000 people, or outside a metropolitan statistical area, or otherwise judged rural. HUD had to write rules about how to nominate areas, size and population limits, and how to judge nominations within 4 months after February 5, 1988, and can only make designations during the 24‑month period that starts on the first day of the first month after the month the Housing and Community Development Act of 1992 was enacted. Local and State governments must have the power to nominate and keep promises, turn in the required forms and accurate information, and certify that the area is not already in another enterprise zone. For a reservation, the tribal governing body counts as both State and local. An area can only be chosen if it is inside one local government’s jurisdiction, has continuous boundaries, and meets population minimums: at least 4,000 people if any part is inside a metropolitan area with 50,000 or more people, or at least 1,000 people otherwise, or is entirely on an Indian reservation. The State and local governments must certify that the area has widespread poverty, unemployment, and distress, and HUD must accept that evidence. The area must meet tests such as an unemployment rate at least 1.5 times the national rate, census tract poverty of at least 20 percent, and at least one of these: 70 percent of households below 80 percent of local median income, or a 20 percent or larger population drop between 1970 and 1980. HUD will rank nominations by how much they exceed these criteria and choose the top ones (with separate ranking rules for rural/small areas). State and local governments must sign a written plan to reduce burdens on employers or workers that includes at least four types of actions (for example, cutting taxes or fees, improving public services, cutting paperwork, local job and training commitments, giving preference to minority‑owned contractors, or transferring surplus land to neighborhood groups). HUD can revoke a designation after a hearing if governments do not substantially follow their commitments. A designation lasts until the earlier of the end of the 24th calendar year after designation, a termination date the State and local governments set, or HUD’s revocation.