; and (ii) the Secretary determines that such a designation is appropriate. (c) Refusal To grant status The Secretary may refuse to designate an eligible entity as an Economic Freedom Zone if the Secretary determines that any requirement under this Act, including any requirement under subsection (a)(2), has not been satisfied. 202. Application and duration of designation (a) Application The Secretary shall develop procedures to enable an eligible entity to submit to the Secretary an application for designation as an Economic Freedom Zone under this title. (b) Duration The designation by the Secretary of an eligible entity as a Economic Freedom Zone shall be for a period of 10 years. III Federal tax incentives 301. Tax incentives related to Economic Freedom Zones (a) In general Chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subchapter: Z Economic Freedom Zones Part I—Tax incentives Part II—Definitions I Tax incentives Sec. 1400V–1. Economic Freedom Zone individual flat tax. Sec. 1400V–2. Economic Freedom Zone corporate flat tax. Sec. 1400V–3. Zero percent capital gains rate. Sec. 1400V–4. Reduced payroll taxes. Sec. 1400V–5. Increase in expensing under section 179. 1400V–1. Economic Freedom Zone individual flat tax (a) In general In the case of any individual whose principal residence (within the meaning of section 121) is located in an Economic Freedom Zone for the taxable year, in lieu of the tax imposed by section 1, there shall be imposed a tax equal to 5 percent of the taxable income of such taxpayer. For purposes of this title, the tax imposed by the preceding sentence shall be treated as a tax imposed by section 1. (b) Joint returns In the case of a joint return under section 6013, subsection (a) shall apply so long as either spouse has a principal residence (within the meaning of section 121) in an Economic Freedom Zone for the taxable year. (c) Alternative minimum tax not To apply The tax imposed by section 55 shall not apply to any taxpayer to whom