February 28th of the year prior to the proposed effective 
date of the zone. 
‘‘(c) DEFICIENCIES DEADLINE.—The Secretary shall 
inform the nominator of any procedural noncompliance by 
the nominator with the application procedures or of any 
needed information that may be missing from the applica-
tion by issuing a deficiency notice no later than April 30th 
of the year that the application was submitted. 
‘‘(d) CURING DEADLINE.—The nominator shall cure 
any deficiencies set forth in the Secretary’s deficiency no-
tice by May 31st of the year in which the deficiency notice 
was issued. Failure to timely cure said deficiencies shall 
constitute the withdraw of the nomination application. 
‘‘(e) DESIGNATION DEADLINE.—The Secretary shall 
make a determination with respect to any nomination ap-
plication no later than September 30th of the year in 
which the application was received. If the Secretary finds 
that a nominated zone meets the National Enterprise 
Zone eligibility criteria set forth in section 1400N, then 
the Secretary shall designate said zone as a National En-
terprise Zone no later than September 30th of the year
that the application was submitted. If the Secretary finds 
that a nominated zone does not meet the National Enter-
prise Zone eligibility criteria set forth in section 1400N 
or that the application does not contain sufficient informa-
tion to determine whether a nominated zone meets the Na-
tional Enterprise Zone eligibility criteria set forth in sec-
tion 1400N, then the Secretary shall decline to designate 
said zone as a National Enterprise Zone and shall, not 
later than October 31st of the year the application was 
submitted, provide to the nominator a rejection notice set-
ting forth with particularly the reasons why the applica-
tion was rejected. 
‘‘(f) NO PREJUDICE WITH RESPECT TO PREVIOUSLY 
NOMINATED ZONES.—Whether a zone or a substantially 
similar zone has been nominated in previous years shall 
not be regarded by the Secretary as relevant when evalu-
ating whether to designate a nominated zone as a National 
Enterprise Zone. 
‘‘(g) APPLICATION CONTENTS.—The application sub-
mitted by the nominator shall contain—
‘‘(1) an enumeration of all of the census tracts 
to be included in the zone; 
‘‘(2) census data for each tract as to median 
household income in that tract; 
‘‘(3) census data for each tract as to the pov-
erty rate in that tract; 
‘‘(4) the state, territorial or District of Colum-
bia law that conforms to the requirements of section 
1400N; and
‘‘(5) such other information as the Secretary 
may require. 
‘‘(h) EFFECTIVE DATE OF ZONE DESIGNATION.—
The effective date of the designation of any zone as a Na-
tional Enterprise Zone pursuant to this section shall be 
January 1 of the year following its designation. The des-
ignation shall continue indefinitely. However, the zone 
shall be subject to annual eligibility reviews after it has 
been effective five years. 
‘‘(i) ANNUAL ELIGIBILITY REVIEW.—Between Janu-
ary 1 and April 30 of the sixth year of a National Enter-
prise Zone’s initial effective date and each year thereafter, 
the Secretary shall undertake a review of each National 
Enterprise Zone designation whereby the Secretary shall 
determine whether the zone continues to meet the Na-
tional Enterprise Zone Eligibility Criteria established by 
section 1400N. If this review determines that a National 
Enterprise Zone no longer meets the National Enterprise 
Zone Eligibility Criteria established by section 1400N, 
then the Secretary shall revoke the designation effective 
the end of the calendar year. No later than June 30 after 
said determination, the Secretary shall issue a notice to 
the nominator and to all taxpayers making National En-
terprise Zone elections with respect to said zone in the 
taxpayer’s previous taxable year that the designation will
be revoked at the end of the calendar year for said Na-
tional Enterprise Zone. The Secretary shall publish the 
annual eligibility review results for all National Enterprise 
Zones no later than June 30 of each year. 
‘‘SEC. 1400N. NATIONAL ENTERPRISE ZONE ELIGIBILITY 
CRITERIA. 
‘‘(a) NATIONAL ENTERPRISE ZONE ELIGIBILITY 
CRITERIA.—A National Enterprise Zone must—
‘‘(1) be composed of contiguous census tracts 
(none of which may be part of an existing National 
Enterprise Zone); 
‘‘(2) have greater than 10,000 residents; 
‘‘(3) have a poverty rate two times the national 
poverty rate; 
‘‘(4) have a median household income less than 
60 percent of the national median household income; 
‘‘(5) have an unemployment rate 2.5 times the 
national average unemployment rate; and 
‘‘(6) be located entirely within a state, territory 
or the District of Columbia that the Secretary cer-
tifies has enacted conforming laws within the mean-
ing of subsection (e). 
‘‘(b) SPECIAL RULE FOR SMALL INCORPORATED CIT-
IES OR SMALL COUNTIES.—Paragraph (2) of subsection 
(a) shall not apply to a zone if the zone comprises an en-
tire incorporated city or an entire county provided that 
said incorporated city or county existed on the date of en-
actment of this subchapter. 
‘‘(c) NO OVERLAP WITH EXISTING ZONES OF DIF-
FERENT TYPE.—No part of a National Enterprise Zone 
may also be a part of an Empowerment Zone, Enterprise 
Community, or Rural Development Investment Area (Sub-
chapter U zones), District of Columbia Enterprise Zone 
(subchapter W zones). However, the nominator of a pro-
posed National Enterprise Zone may indicate in his appli-
cation that the some or all of an existing subchapter U 
or subchapter W zone shall lose that designation upon its 
designation as all or part of a National Enterprise Zone. 
Said existing subchapter U or subchapter W zone shall 
lose said designation upon its designation as all or part 
of a National Enterprise Zone in a manner prescribed by 
the Secretary. 
‘‘(d) DATA.—No later than November 30th of each 
year, the Secretary shall designate which data as of which 
date shall be used by nominators to perform the calcula-
tions required in subsection (a) in applications made the 
following year. 
‘‘(e) CONFORMING LAWS.—A state, territory or the 
District of Columbia shall be deemed to have enacted con-
forming laws if it is in substantial compliance with—
‘‘(1) the No Child Left Behind Act of 2001 
(Public Law 107–110), and 
‘‘(2) its tax laws provide for either—
‘‘(A) a substantially similar income tax 
base with respect to business income arising 
from the conduct of an active trade or business 
within a National Enterprise Zone as that pro-
vided for Federal income tax purposes and tax 
rates no higher than that imposed on businesses 
without a National Enterprise Zone, or 
‘‘(B) the imposition of no income tax with 
respect to business income arising from the con-
duct of an active trade or business within a Na-
tional Enterprise Zone. 
‘‘SEC. 1400O. EFFECT OF NATIONAL ENTERPRISE ZONE 
DESIGNATION 
ON 
INDIVIDUALS, 
ESTATES 
AND TRUSTS. 
‘‘(a) INDIVIDUAL ALTERNATIVE NATIONAL ENTER-
PRISE ZONE TAX.—If for any taxable year, any individual 
taxpayer who is resident in a National Enterprise Zone
for the entire taxable year has any National Enterprise 
Zone taxable income, then, in lieu of any tax imposed by 
section 1 or section 55, said individual taxpayer may elect, 
in a form prescribed by the Secretary, to pay a tax which 
shall consist of the sum of—