The District has designated at least five neighborhoods that it hopes will benefit from federal tax and other breaks if Congress passes pending legislation to aid a select group of economically distressed areas.

These neighborhoods, which for years have been losing businesses, are: the New York Avenue and H Street corridors, 14th Street and Howard Gateway area, the Southeast-Southwest planning area and the far Northeast/Marshall Heights planning area, according to Lawrence P. Schumake, executive director of D.C.'s Office of Business and Economic Development.

Schumake testified yesterday before the District Housing and Economic Development Committee on prospects for the city's plans to develop an urban enterprise zone along the lines of legislation introduced by Reps. Jack Kemp (R-N.Y.) and Robert Garcia (D-N.Y.). The purpose of the legislation is to attract development to blighted areas in cities by offering business tax breaks and waivers from certain regulatory requirements. The District's legislation is intended to be used with or without the federal legislation.

The District legislation would create zoneless areas in which building, tax and other government regulations would be suspended to entice firms to locate there and to create jobs. If designated, the enterprise zones would be adjacent to Maryland so the city might benefit from suburban economic development.

A representative of Garcia's office said that while the federal bill emphasizes tax breaks, the District's legislation incorrectly stresses relief from regulation.

"The D.C. bill is a good one, but it is mistaken in local deregulation," said Paul Bardack, general counsel in Garcia's office.

Bardack said he doesn't expect any more hearings on the federal legislation this year, but in January action on the bill should "hit the ground full speed."

Schumake said the city's legislation is too broad and should be tailored to suit particular neighborhoods.