(a) Designations.—Not later than 90 days after the date of the enactment of this section, and annually thereafter, each Commission shall make the following designations:

(1) Distressed counties.—The Commission shall designate as distressed counties those counties in its region that are the most severely and persistently economically distressed and underdeveloped and have high rates of poverty, unemployment, or outmigration.

(2) Transitional counties.—The Commission shall designate as transitional counties those counties in its region that are economically distressed and underdeveloped or have recently suffered high rates of poverty, unemployment, or outmigration.

(3) Attainment counties.—The Commission shall designate as attainment counties, those counties in its region that are not designated as distressed or transitional counties under this subsection.

(4) Isolated areas of distress.—The Commission shall designate as isolated areas of distress, areas located in counties designated as attainment counties under paragraph (3) that have high rates of poverty, unemployment, or outmigration.

(b) Allocation.—A Commission shall allocate at least 50 percent of the appropriations made available to the Commission to carry out this subtitle for programs and projects designed to serve the needs of distressed counties and isolated areas of distress in the region.

(c) Attainment Counties.—

(1) In general.—Except as provided in paragraph (2), funds may not be provided under this subtitle for a project located in a county designated as an attainment county under subsection (a).

(2) Exceptions.—

(A) Administrative expenses of local development districts.—The funding prohibition under paragraph (1) shall not apply to grants to fund the administrative expenses of local development districts under section 15505.

(B) Multicounty and other projects.—A Commission may waive the application of the funding prohibition under paragraph (1) with respect to—

(i) a multicounty project that includes participation by an attainment county; and

(ii) any other type of project, if a Commission determines that the project could bring significant benefits to areas of the region outside an attainment county.

(3) Isolated areas of distress.—For a designation of an isolated area of distress to be effective, the designation shall be supported—

(A) by the most recent Federal data available; or

(B) if no recent Federal data are available, by the most recent data available through the government of the State in which the isolated area of distress is located.