located to it under subsection (b)(3) within the time 
prescribed by the Governor of the State of New York 
and the Mayor of the City of New York, New York, 
then such amount shall after such time be treated 
for purposes of subsection (b)(3) in the same man-
ner as if it had never been allocated. 
‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) CREDIT PERIOD.—The term ‘credit period’ 
means the 15-year period beginning on January 1, 
2007. 
‘‘(2) NEW
YORK
LIBERTY
ZONE
GOVERN-
MENTAL UNIT.—The term ‘New York Liberty Zone 
governmental unit’ means— 
‘‘(A) the State of New York, 
‘‘(B) the City of New York, New York, and 
‘‘(C) any agency or instrumentality of such 
State or City. 
‘‘(3) TREATMENT OF FUNDS.—Any expenditure 
for a qualifying project taken into account for pur-
poses of the credit under this section shall be consid-
ered State and local funds for the purpose of any 
Federal program. 
‘‘(4) TREATMENT
OF
CREDIT
AMOUNTS
FOR 
PURPOSES OF WITHHOLDING TAXES.—For purposes 
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of this title, a New York Liberty Zone governmental 
unit shall be treated as having paid to the Secretary, 
on the day on which wages are paid to employees, 
an amount equal to the amount of the credit allowed 
to such entity under subsection (a) with respect to 
such wages, but only if such governmental unit de-
ducts and withholds wages for such payroll period 
under section 3401 (relating to wage withholding). 
‘‘(e) REPORTING.—The Governor of the State of New 
York and the Mayor of the City of New York, New York, 
shall jointly submit to the Secretary an annual report— 
‘‘(1) which certifies— 
‘‘(A) the qualifying project expenditure 
amount for the calendar year, and 
‘‘(B) the amount allocated to each New 
York Liberty Zone governmental unit under 
subsection (b)(3) for the calendar year, and 
‘‘(2) includes such other information as the 
Secretary may require to carry out this section. 
‘‘(f) GUIDANCE.—The Secretary may prescribe such 
guidance as may be necessary or appropriate to ensure 
compliance with the purposes of this section. 
‘‘(g) TERMINATION.—No credit shall be allowed 
under subsection (a) for any calender year after 2026.’’. 
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(b) TERMINATION OF CERTAIN NEW YORK LIBERTY 
ZONE BENEFITS.— 
(1) SPECIAL
ALLOWANCE
AND
EXPENSING.— 
Section 1400K(b)(2)(A)(v), as redesignated by sub-
section (a), is amended by striking ‘‘the termination 
date’’ and inserting ‘‘the date of the enactment of 
the Estate Tax and Extension of Tax Relief Act of 
2006 or the termination date if pursuant to a bind-
ing contract in effect on such enactment date’’. 
(2) LEASEHOLD.—Section 1400K(c)(2)(B), as 
so redesignated, is amended by striking ‘‘before Jan-
uary 1, 2007’’ and inserting ‘‘on or before the date 
of the enactment of the Estate Tax and Extension 
of Tax Relief Act of 2006 or before January 1, 
2007, if pursuant to a binding contract in effect on 
such enactment date’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 38(c)(3)(B) is amended by striking 
‘‘section 
1400L(a)’’ 
and 
inserting 
‘‘section 
1400K(a)’’. 
(2) Section 168(k)(2)(D)(ii) is amended by 
striking 
‘‘section 
1400L(c)(2)’’ 
and 
inserting 
‘‘1400K(c)(2)’’. 
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