Sponsors
The bill extends Empowerment Zone tax benefits and likely local investment to D.C. residents and businesses while trading off increased federal revenue costs and geographically concentrated advantages that could reduce support for other communities.
Residents (including low-income individuals) and small businesses in the District of Columbia would gain access to federal Empowerment Zone tax incentives and credits, increasing after‑tax income and funding available for local business growth.
Local government and the D.C. community could attract increased investment and job-creation incentives tied to those federal tax benefits, supporting urban revitalization and economic activity in the designated area.
The bill preserves the statutory limit on the number of Empowerment Zone designations by excluding the D.C. deemed designation from the numerical cap, avoiding direct displacement of other designated areas under the cap.
Federal taxpayers could face higher federal revenue losses because the new D.C. deemed designation will generate additional tax credits and incentives.
Businesses and residents located outside the D.C. deemed zone would not receive these new tax benefits, concentrating advantages geographically and potentially widening regional disparities.
In practice, IRS attention and administrative resources could shift toward implementing the D.C. deemed area, reducing support or priority for other jurisdictions that seek Empowerment Zone-related assistance.
Based on analysis of 2 sections of legislative text.
Treats the largest eligible area of the District of Columbia as an empowerment zone and excludes that deemed designation from the limit on empowerment zone slots.
Treats the largest area of the District of Columbia that meets Internal Revenue Code eligibility as an empowerment zone and says that this deemed designation does not count against the statutory limit on the number of empowerment zone designations. The change applies for periods beginning after December 31, 2025, and will make certain tax and economic-development incentives available to businesses and residents in the newly deemed area without reducing the number of available designations nationwide.
Introduced December 9, 2025 by Eleanor Holmes Norton · Last progress December 9, 2025