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Treats the largest possible portion of the District of Columbia that meets federal eligibility rules as an "empowerment zone" for tax purposes, and says that this special treatment does not count against the statutory limit on the number of empowerment zones. The rule applies to tax periods beginning after December 31, 2025. In practice, this makes federal empowerment-zone tax incentives available to qualifying areas in D.C. without using one of the limited national designations.
The bill extends Empowerment Zone tax incentives to qualifying D.C. neighborhoods to spur private investment and jobs, but does so at the cost of federal revenue, potential competitive shifts for non‑D.C. businesses, and with benefits delayed until after 2025.
Residents and businesses in the District of Columbia would gain access to Empowerment Zone tax incentives (e.g., tax-exempt bond financing, employment tax credits), increasing after-tax resources for qualifying areas.
Businesses and workers in designated D.C. neighborhoods would be more likely to attract private investment and create jobs because zone benefits make projects and hiring more financially attractive.
The District government and D.C. communities benefit from the designation being counted above the statutory cap, so D.C. gets zone status without reducing slots for other jurisdictions.
Taxpayers nationwide could face higher federal revenue loss from extending Empowerment Zone benefits to D.C., putting pressure on budgets or requiring offsetting measures.
Businesses outside the District may face a relative competitive disadvantage if investment and incentive-driven activity shift toward newly designated D.C. areas.
Residents and businesses in D.C. will not see tax benefits until tax periods after December 31, 2025, delaying intended economic relief and development momentum.
Introduced December 9, 2025 by Eleanor Holmes Norton · Last progress December 9, 2025