[Code of Federal Regulations]
[Title 24, Volume 3]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR597.200]

[Page 297-301]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
  CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND 
        DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 597_URBAN EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES: ROUND 
ONE DESIGNATIONS--Table of Contents
 
                     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 Sec. Sec. 597.100 and 597.103;
    (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

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    (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 all Social Services Block Grant funds for 
designated Empowerment Zones and Enterprise Communities (EZ/EC SSBG 
funds) 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 nominating 
State-chartered economic development corporation or State government(s) 
and local governments, that the EZ/EC SSBG funds will be used to 
supplement, not replace, other Federal or non-Federal funds available 
for financing for services or activities which can be used to achieve or 
maintain the goals outlined in paragraph (d)(12) of this section;
    (B) A description of the entities that will administer the EZ/EC 
SSBG funds;
    (C) A certification by such entities that they will provide periodic 
reports on the use of the EZ/EC SSBG funds; and
    (D) A detailed description of all the activities to be financed with 
the EZ/EC SSBG funds and how all such funds will be allocated.
    (ii) The EZ/EC SSBG funds must be used to achieve or maintain the 
following goals. The goals may be achieved by undertaking one or more of 
the following program options:
    (A) The goal of economic self-support to prevent, reduce or 
eliminate dependencies, through one or more 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, youths, 
and other individuals;

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    (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 or more of the following program options:
    (1) Providing assistance to non-profit organizations and/or 
community and junior colleges that provide disadvantaged adults and 
youths with opportunities for short-term training courses in 
entrepreneurial and self employment skills and other training that 
promotes 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 remedying the neglect, abuse or 
exploitation of children and/or adults unable to protect their own 
interest; and the goal of preservation, rehabilitation, or reuniting of 
families, through one or more 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, and 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) Designated Empowerment Zone and Enterprise Communities may 
work to achieve or maintain the goals outlined in paragraphs 
(d)(12)(ii)(A) and (B) of this section by using EZ/EC SSBG funds to 
capitalize revolving or micro-enterprise loan funds which benefit low-
income residents of the designated Empowerment Zones and Enterprise 
Communities. Similarly, the Zones and Communities may work to achieve or 
maintain the goals outlined in paragraphs (d)(12)(ii)(A) and (B) of this 
section by using the EZ/EC SSBG funds to create jobs and promote 
economic opportunity for low-income families and individuals through 
matching grants, loans, or investments in community development 
financial institutions.
    (iv) If the EZ/EC SSBG funds are to be used for program options not 
included in paragraph (d)(12)(ii) of this section, the strategic plan 
must indicate how the proposed activities meet the goals set forth in 
paragraph (d)(12)(ii) of this section and the reasons the approved 
program options were not pursued.
    (v) To the extent that the EZ/EC SSBG funds are to be used for the 
program options included in paragraph (d)(12)(ii) 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 (42 
U.S.C. 1379d):
    (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.
    (vi) The State must obligate the EZ/EC SSBG funds in accordance with 
the strategic plan within 2 years from the date of payment to the State, 
or remit the unobligated funds to the Secretary of Health and Human 
Services (HHS).
    (vii) The strategic plan must indicate how all the EZ/EC SSBG funds 
will be invested and used for the period of designation of the 
Empowerment Zone or Enterprise Community.
    (viii) The strategic plan must provide for periodic reporting of 
information by the State in which the Empowerment Zone or Enterprise 
Community is located.
    (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;

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    (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 start-up 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

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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.