n-13-38.pdf

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Empowerment Zone Designation Extension

Notice 2013-38

I. PURPOSE

This notice explains how a State or local government amends the nomination of
an empowerment zone to provide for a new termination date of December 31, 2013, as
provided for by § 1391 of the Internal Revenue Code, as amended by § 753(c) of the
Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010,
Pub. L. No. 111-312, 124 Stat. 3296 (December 17, 2010) (TRUIRJCA), and § 327(c) of
the American Taxpayer Relief Act of 2012, Pub. L. 112-240, 126 Stat. 2313 (January 2,
2013) (ATRA).
II. BACKGROUND
In 1993, § 1391 was enacted to allow a State or local government (“entity”) to
nominate an area or areas in its jurisdiction for designation as an empowerment zone.
Subsequently, the Secretary of Housing and Urban Development, in the case of any
nominated area that is located in an urban area, and the Secretary of Agriculture, in the
case of any nominated area that is located in a rural area, have designated which
nominated areas are empowerment zones. The entities generally provided in their
nomination that the designation would remain in effect for 10 years. This 10-year period
in the nomination typically ended on December 31, 2009 (the original expiration date),
but in some cases, it expired before December 31, 2009. In the latter cases, § 112 of

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the Community Renewal Tax Relief Act of 2000, Pub. L. No. 106-554, 114 Stat. 2763A-
587 (December 21, 2000), amended § 1391(d)(1) to extend the designation of those
empowerment zones through December 31, 2009, regardless of the period provided in
the nomination. Accordingly, the nomination for all empowerment zones originally had a
termination date of December 31, 2009.
Prior to the enactment of TRUIRJCA and ATRA, § 1391(d)(1) provided that any
designation of an empowerment zone ends on the earliest of (A) December 31, 2009,
(B) the termination date designated by the State and local governments as provided for
in their nomination, or (C) the date the appropriate Secretary revokes the designation.
Section 1393(a)(1) defines the term “appropriate Secretary” as meaning the Secretary
of Housing and Urban Development in the case of any nominated area that is located in
an urban area, and the Secretary of Agriculture in the case of any nominated area that
is located in a rural area.
Section 753(a) of TRUIRJCA amended § 1391(d)(1) to allow a two-year
extension of the period for which the designation of an empowerment zone is in effect.
As amended by § 753(a) of TRUIRJCA, § 1391(d)(1) provided that any designation of
an empowerment zone ends on the earliest of (A) December 31, 2011, (B) the
termination date designated by the State and local governments as provided for in their
nomination, or (C) the date the appropriate Secretary revokes the designation. Section
753(c) of TRUIRJCA provided that where the nomination of an empowerment zone
included a termination date of December 31, 2009, § 1391(d)(1)(B) shall not apply with
respect to such designation if, after the date of the enactment of TRUIRJCA, the entity

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that made such nomination amends the nomination, in such manner as the Secretary of
the Treasury may provide, to provide for a new termination date. The amendments
made by § 753 of TRUIRJCA apply to periods after December 31, 2009.
Section 327(a) of ATRA further amended § 1391(d)(1) to allow an additional
extension of two years of the period for which the designation of an empowerment zone
is in effect. As amended by § 327(a) of ATRA, § 1391(d)(1) provides that any
designation of an empowerment zone ends on the earliest of (A) December 31, 2013,
(B) the termination date designated by the State and local governments as provided for
in their nomination, or (C) the date the appropriate Secretary revokes the designation.
Section 327(c) of ATRA provides that where a nomination of an empowerment zone
included a termination date of December 31, 2011, § 1391(d)(1)(B) shall not apply with
respect to such designation if, after the date of the enactment of ATRA, the entity that
made such nomination amends the nomination, in such manner as the Secretary of the
Treasury may provide, to provide for a new termination date. The amendments made
by § 327 of ATRA apply to periods after December 31, 2011.
Thus, under TRUIRJCA and ATRA, to have an empowerment zone designation
remain in effect through December 31, 2013, the entity that made the nomination of the
empowerment zone must amend the nomination to provide for a new termination date
of December 31, 2013, as provided in this guidance.
III. AMENDMENT OF A NOMINATION TO EXTEND EMPOWERMENT ZONE
DESIGNATION THROUGH DECEMBER 31, 2013
Any nomination for an empowerment zone that was in effect on December 31,

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2009, is deemed to be amended to provide for a new termination date of December 31,
2013, unless the nominating entity sends written notification to the Internal Revenue
Service by July 29, 2013. The written notification must affirmatively decline extension of
the empowerment zone nomination through December 31, 2013. If the United States
mail is used, the notification should be sent to the following address:
Internal Revenue Service
Attn: Winston Douglas, CC:ITA:7, Room 4136
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044

If a private delivery service is used, the notification should be sent to the following
address:
Internal Revenue Service
Attn: Winston Douglas, CC:ITA:7, Room 4136
1111 Constitution Ave., NW
Washington, DC 20224

If the entity that nominated an empowerment zone does not send written
notification, the nomination of that empowerment zone will be deemed extended from
December 31, 2009, through December 31, 2013. Accordingly, § 1391(d)(1)(B) does
not apply and, pursuant to § 1391(d)(1)(A)(i), the designation of that empowerment
zone ends on December 31, 2013.
IV. DRAFTING INFORMATION
The principal author of this notice is Winston H. Douglas of the Office of
Associate Chief Counsel (Income Tax & Accounting). For further information regarding
this notice contact Mr. Douglas on (202) 622-4930 (not a toll-free call).