With consideration of the requirements of regional and city development as well as referring to the suggestions raised by persons or organizations, the central authority may, jointly with related departments and local municipal or county (city) governments, select lands within specific areas, prepare the feasibility study reports, and report to the Executive Yuan for approval to allocate as new town special districts.
The principles for selecting new town special areas and the contents of feasibility study report shall be prescribed by the central authority.

After the feasibility study report (drawing) is approved, the central authority shall give 30-day announcement, and upon expiration of the announcement period, shall immediately set out to or designate the municipal or county (city) authority to perform layout and design of the new town, and make the special district plan of the new town as the reference for development of new towns.
During the above-mentioned announcement public period, public hearing shall be held. Where more than half of the private land owners, who possess more than half of the private lands in the specific zone, bring forward objection, the central competent authority shall perform mediation and arbitration, modify or abolish the feasibility study report with consideration of the reasons of objection and the conclusion of public hearing, and submit the report again for review, and then deal with the case according to the result of review.
Where the lands of preserved area within the planned zone for new town are not developed within 20 years, the authority shall cooperate with the new town development to carry out purchase or requisition, or permit other persons or organization to develop the lands.