AHC/WI: The Black Belt Act is real

For those unfamiliar, the Black Belt Act is from Kaiserreich, the HOI IV mod. If you play as Pelley's Commonwealth of America, there is a event called the 'Black Belt Act' in which on the surface, African American majority communities in the South are turned into reserved spaces with independent public services and administered by African Americans under government supervision, similar to the Bureau of Indian Affairs. However, the downside of this is that in exchange, the African-Americans have to give up their American citizenship.


So, I know this might sound implausible, but what would need to happen for legislation, even remotely resembling this fictional legislation, to exist in the United States of the early 20th Century, (post-slavery, but before the Civil Rights Movement) and what would happen as a result of this legislation?
 
I'm pretty sure its unconstitutional for the federal government to just create new states out of existing ones by fiat, this would do away with any pretense of legality or constitutionality that an autocrat would need to consolidate and maintain power in the US.

This just sounds like an excuse to deprive its inhabitants of suffrage, infrastructure, education, and whatever minimal welfare state existed back then, it would be a like giant apartheid Bantustan. Black nationalists may be willing to cooperate with Pelley if they get their de jure independent entity, but it would raise significant legal questions once the rest of the US reverts back to democracy.

This is an interesting case of horseshoe theory, the Communist Party USA actually supported a similar autonomous entity in the Black Belt that would've functioned like an SSR within a broader communist US. Similar issues to the problems raised by the fall of the USSR would appear if this Act occurred.

From When the Soviet Union Tried to Woo Black America:
And that was just the start. A 1930 resolution called for the creation of a “separate Negro state” in the South, part of a long-term strategy to foment a workers’ rebellion in the northern U.S. that would combine forces with Black America in a sort of Communist pincher movement to produce a Soviet state inside North America. The Soviets were motivated “not by the desire to improve the status of the Negro in our society,” according to one declassified FBI document, “but to exploit legitimate Negro grievances for the furtherance of communist aims.”

The biggest hurdle to getting the act off the ground would be the question of where to draw the entity's borders. It's possible to look at a map of Eurasia and draw a shape around an area that includes most Estonians or Slovaks, but this North American entity would be a region like Bosnia-Herzegovina with no clear borders.

Mixed areas on either side would either try to join the Black Belt entity or counter-secede from the new black belt, this would either require massive population transfers or set up ethnic conflicts similar to Kosovo and Northern Ireland. This would also amount to a reversal of the Great Migration. Before 1910 about 90% of African Americans lived in the South, but this fell to just over 50% by 1970 as people migrated to cities in the Northeast, Midwest, and West Coast for economic reasons.
Percentage_of_African_American_population_living_in_the_American_South-2.png
 
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