(a)Basis for revocation. The Secretary may revoke the designation of an urban area as an Empowerment Zone if the Secretary determines, on the basis of the periodic progress determination described at § 598.420, that the State(s) or local government(s) in which the urban area is located:
(1) Has modified the boundaries of the area without written approval from HUD;
(2) Has failed to make progress in implementing the strategic plan; or
(3) Has not complied substantially with the strategic plan.
(b)Letter of warning. Before revoking the designation of an urban area and an Empowerment Zone, the Secretary will issue a letter of warning to the nominating State(s) and local government(s), with a copy to all affected Federal agencies of which the Secretary is aware;
(1) Advising that the Secretary has determined that the nominating local government(s) and/or State(s) has:
(i) Modified the boundaries of the area without written approval from HUD; or
(ii) Is not complying substantially with, or has failed to make progress in implementing the strategic plan; and
(2) Requesting a reply from the nominating entities within 90 days of the receipt of this letter of warning.
(c)Notice of revocation. To revoke the designation, the Secretary must issue a final notice of revocation of the designation of the urban area as an Empowerment Zone, after allowing 90 days from the date of receipt of the letter of warning for response, and after making a determination in accordance with paragraph (a) of this section.
(d)Notice to affected Federal agencies. HUD will notify all affected Federal agencies of which it is aware, of its determination to revoke any designation in accordance with this section.
(e)Effect of revocation. Upon revocation of an EZ's designation, the designation and remaining benefits may be awarded to the next highest ranked Round II applicant.
(f)Publication. The final notice of revocation of designation will be published in the Federal Register, and the revocation will be effective on the date of publication.
(Approved by the Office of Management and Budget under Control Number 2506-0148)