DESIGNATION OF NEW EMPOWERMENT ZONES.

SEC. 952. DESIGNATION OF NEW EMPOWERMENT ZONES. (a) In General.—Section 1391 (relating to designation procedure for empowerment zones and enterprise communities) is amended by adding at the end the following new subsection: “(g) Additional Designations Permitted.— “(1) In general.—In addition to the areas designated under subsection (a), the appropriate Secretaries may designate in the aggregate an additional 20 nominated areas as empowerment zones under this section, subject to the availability of eligible nominated areas. Of that number, not more than 15 may be designated in urban areas and not more than 5 may be designated in rural areas. “(2) Period designations may be made and take effect.—A designation may be made under this subsection after the date of the enactment of this subsection and before January 1, 1999. “(3) Modifications to eligibility criteria, etc.— “(A) Poverty rate requirement.— “(i) In general.—A nominated area shall be eligible for designation under this subsection only if the poverty rate for each population census tract within the nominated area is not less than 20 percent and the poverty rate for at least 90 percent of the population census tracts within the nominated area is not less than 25 percent. “(ii) Treatment of census tracts with small populations.—A population census tract with a population of less than 2,000 shall be treated as having a poverty rate of not less than 25 percent if— “(I) more than 75 percent of such tract is zoned for commercial or industrial use, and “(II) such tract is contiguous to 1 or more other population census tracts which have a poverty rate of not less than 25 percent (determined without regard to this clause). “(iii) Exception for developable sites.—Clause (i) shall not apply to up to 3 noncontiguous parcels in a nominated area which may be developed for commercial or industrial purposes. The aggregate area of noncontiguous parcels to which the preceding sentence applies with respect to any nominated area shall not exceed 2,000 acres. “(iv) Certain provisions not to apply.—Section 1392(a)(4) (and so much of paragraphs (1) and (2) of section 1392(b) as relate to section 1392(a)(4)) shall not apply to an area nominated for designation under this subsection. “(v) Special rule for rural empowerment zone.—The Secretary of Agriculture may designate not more than 1 empowerment zone in a rural area without regard to clause (i) if such area satisfies emigration criteria specified by the Secretary of Agriculture. “(B) Size limitation.— “(i) In general.—The parcels described in subparagraph (A)(iii) shall not be taken into account 111 STAT. 887in determining whether the requirement of subparagraph (A) or (B) of section 1392(a)(3) is met. “(ii) Special rule for rural areas.—If a population census tract (or equivalent division under section 1392(b)(4)) in a rural area exceeds 1,000 square miles or includes a substantial amount of land owned by the Federal, State, or local government, the nominated area may exclude such excess square mileage or governmentally owned land and the exclusion of that area will not be treated as violating the continuous boundary requirement of section 1392(a)(3)(B). “(C) Aggregate population limitation.—The aggregate population limitation under the last sentence of subsection (b)(2) shall not apply to a designation under paragraph (1)(B). “(D) Previously designated enterprise communities may be included.—Subsection (e)(5) shall not apply to any enterprise community designated under subsection (a) that is also nominated for designation under this subsection. “(E) Indian reservations may be nominated.— “(i) In general.—Section 1393(a)(4) shall not apply to an area nominated for designation under this subsection. “(ii) Special rule.—An area in an Indian reservation shall be treated as nominated by a State and a local government if it is nominated by the reservation governing body (as determined by the Secretary of Interior)”. (b) Employment Credit Not To Apply to New Empowerment Zones.—Section 1396 (relating to empowerment zone employment credit) is amended by adding at the end the following new subsection: “(e) Credit Not To Apply to Empowerment Zones Designated Under Section 1391(g).—This section shall be applied without regard to any empowerment zone designated under section 1391(g).”. (c) Increased Expensing Under Section 179 Not To Apply in Developable Sites.—Section 1397A (relating to increase in expensing under section 179) is amended by adding at the end the following new subsection: “(c) Limitation.—For purposes of this section, qualified zone property shall not include any property substantially all of the use of which is in any parcel described in section 1391(g)(3)(A)(iii).”. (d) Conforming Amendments.— (1) Subsections (e) and (f) of section 1391 are each amended by striking “subsection (a)” and inserting “this section”. (2) Section 1391(c) is amended by striking “this section” and inserting “subsection (a)”.