SECTION 2. BACKGROUND

.01 Empowerment Zones . An empow­ erment zone is an area of high poverty and unemployment located in an urban or rural area that is designated under section 1391(a), as appropriate, by the Secretary of Housing and Urban Development or the Secretary of Agriculture, each Sec­ retary an “appropriate Secretary” under

section 1393(a)(1) of the Code. See sec­ tion 1391(a); see generally section 1393. Qualifying taxpayers and businesses lo­ cated within the boundaries of empow­ erment zones are eligible for Federal in­ come tax incentives to promote economic development in those designated areas. See section 1394 of the Code (regarding tax-exempt enterprise zone facility bonds) and section 1396 of the Code (regarding empowerment zone employment credits).

.02 Empowerment Zone Designation and Extensions .

(1) Initial designation . As originally enacted in 1993, section 1391(d)(1) pro­ vided that the designation of an empow­ erment zone remained in effect during the period beginning on the date of the desig­ nation and ending on the earliest of (i) the close of the 10th calendar year beginning on or after such date of designation (statu­ tory termination date), (ii) the termination date designated by a State or local govern­ ment in its nomination (that is, the desig­ nated termination date), or (iii) the date the appropriate Secretary revokes the des­ ignation. See section 13301(a) of the Om­ nibus Budget Reconciliation Act of 1993 (OBRA of 1993), Public Law 103-66, 107 Stat. 312 (August 10, 1993) (adding sec­ tion 1391(d)(1) to the Code).

(2) Extensions of statutory termina- tion date and automatic extensions of designated termination date. The statu­ tory termination date has been extended multiple times, most recently in 2020 to extend that date to December 31, 2025. See section 118(a) of the Taxpayer Cer­ tainty and Disaster Tax Relief Act of 2020 (TCDTRA of 2020), enacted as part of Title I of Division EE of the Consolidat­ ed Appropriations Act, 2021, Pub. L. No. 116-260, 134 Stat. 1182 (December 27, 2020). After each extension of the stat­ utory termination date and pursuant to specific statutory grants of authority, the Department of the Treasury (Treasury De­ partment) and the Internal Revenue Ser­ vice (IRS) issued guidance automatically treating a designated termination date as extended to the date of the amended stat­ utory termination date, unless the State or local government declined the extension in a written notification to the IRS. See, for example, section 3 of Rev. Proc. 2020

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(that is, December 31, 2025). Therefore, section 1391(d)(1)(B) does not apply and the designation of all empowerment zones will remain in effect until December 31, 2025 (unless terminated at an earlier date by the appropriate Secretary under section 1391(d)(1)(C)). .02 Declination of automatic extension . (1) In general . Pursuant to section 3.02(2) of this revenue procedure, a State or local government may decline the ex­ tension of a designated termination date described in section 3.01 of this revenue procedure.

(2) Form and manner . (a) Deadline for written notification . To make a declination under section 3.02(1) of this revenue procedure, not later than May 25, 2021, the State or local govern­ ment must provide written notification to the IRS that affirmatively declines the De­ cember 31, 2025, designated termination date extension under section 3.01 of this revenue procedure.

(b) Electronic delivery . This written notification must be sent by electronic facsimile to Bruce Chang, CC:ITA:B07, at facsimile number (855) 576-2341.