(a) Number of zone projects--port of entry entitlement. (1) Provided that the other requirements of this subpart are met:
(i) Each port of entry is entitled to at least one zone project;
(ii) If a port of entry is located in more than one state, each of the states in which the port of entry is located is entitled to a zone project; and
(iii) If a port of entry is defined to include more than one city separated by a navigable waterway, each of the cities is entitled to a zone project.
(2) Zone projects in addition to those approved under the entitlement provision of paragraph (a)(1) of this section may be authorized by the Board if it determines that existing project(s) will not adequately serve the public interest (convenience of commerce).

(b) Location of zones and subzones--port of entry adjacency requirements. (1) The Act provides that the Board may approve ``zones in or adjacent to ports of entry'' (19 U.S.C. 81b). (2) The ``adjacency'' requirement is satisfied if:
(i) A general-purpose zone is located within 60 statute miles or 90 minutes' driving time from the outer limits of a port of entry;
(ii) A subzone meets the following requirements relating to Customs supervision:
(A) Proper Customs oversight can be accomplished with physical and electronic means; and
(B) All electronically produced records are maintained in a format compatible with the requirements of the U.S. Customs Service for the duration of the record period; and
(C) The grantee/operator agrees to present merchandise for examination at a Customs site selected by Customs when requested, and further agrees to present all necessary documents directly to the Customs oversight office.