26 U.S.C. § 1392 — Eligibility criteria

(a) General eligibility. A nominated area may be designated under section 1391 only if it meets all of these requirements: (1) Population. An urban area may have no more than the lesser of 200,000 people or the greater of 50,000 people and 10 percent of the population of its most populous city. A rural area may have no more than 30,000 people. (2) Distress. The area must have widespread poverty, unemployment, and general distress. (3) Size and location. An urban area may not exceed 20 square miles; a rural area may not exceed 1,000 square miles. Its boundary must be continuous, except that a rural area spanning more than one State may have no more than three separate parcels. An urban area must be entirely within no more than two bordering States; a rural area must be entirely within no more than three bordering States. It may not include part of a central business district unless every census tract there has a poverty rate of at least 35 percent, or 30 percent for an enterprise community. (4) Poverty. Every census tract in the area must have a poverty rate of at least 20 percent. At least 90 percent of the tracts must have a rate of at least 25 percent, and at least half must have a rate of at least 35 percent. (b) Poverty-rate rules. (1) A tract with no population counts as meeting the 20- and 25-percent tests, but has a zero rate for the 35-percent test. A tract with fewer than 2,000 people counts as meeting the 20- and 25-percent tests if more than 75 percent of it is zoned commercial or industrial. (2) For an enterprise community, the appropriate Secretary may, when needed for this subchapter, lower one threshold by 5 percentage points for no more than 10 percent of the tracts, or five tracts if fewer. The threshold may be the 20-, 25-, or 35-percent threshold. If the 35-percent threshold is chosen, it may instead be lowered by 10 points for three tracts. (3) Every noncontiguous parcel must separately meet the poverty tests, subject to paragraphs (1) and (2). (4) For an area without population census tracts, use the equivalent county divisions defined by the Census Bureau for poverty areas. (c) Selection factors. From eligible areas, the appropriate Secretary designates empowerment zones and enterprise communities based on the effectiveness of the strategic plan and assurances required by section 1391, and on criteria the Secretary specifies. (d) Alaska and Hawaii. An area in Alaska or Hawaii is treated as meeting paragraphs (2), (3), and (4) of subsection (a) if at least 20 percent of the families in every census tract or block group have income no more than half the statewide median family income.