ried to the succeeding calendar year and added to 
the allocation of such governmental unit for such 
succeeding calendar year. No amount may be carried 
under the preceding sentence to a calendar year 
after 2026. 
‘‘(2) REALLOCATION.—If a New York Liberty 
Zone governmental unit does not use an amount al-
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 
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.’’. 
(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)’’. 
(3) The table of sections for part I of sub-
chapter Y of chapter 1 is amended by striking 
‘‘1400L’’ and inserting ‘‘1400K’’. 
(d) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to periods beginning after December 31, 
2006. 
(2) SUBSECTION (b).—The amendments made 
by subsection (b) shall take effect as if included in 
section 301 of the Job Creation and Worker Assist-
ance Act of 2002. 
SEC. 221. EXTENSION OF BONUS DEPRECIATION FOR CER-
TAIN QUALIFIED GULF OPPORTUNITY ZONE 
PROPERTY. 
(a) IN GENERAL.—Subsection (d) of section 1400N 
is amended by adding at the end the following new para-
graph: 
‘‘(6) EXTENSION FOR CERTAIN PROPERTY.—
‘‘(A) IN
GENERAL.—In the case of any 
specified Gulf Opportunity Zone extension prop-
erty, paragraph (2)(A) shall be applied without 
regard to clause (v) thereof. 
‘‘(B) SPECIFIED GULF OPPORTUNITY ZONE 
EXTENSION PROPERTY.—For purposes of this 
paragraph, the term ‘specified Gulf Opportunity 
Zone extension property’ means property—
‘‘(i) substantially all of the use of 
which is in one or more specified portions 
of the GO Zone, and 
‘‘(ii) which is—
‘‘(I) nonresidential real property 
or residential rental property which is 
placed in service by the taxpayer on or 
before December 31, 2009, or 
‘‘(II) in the case of a taxpayer 
who places a building described in 
subclause (I) in service on or before 
December 31, 2009, property de-
scribed in section 168(k)(2)(A)(i) if 
substantially all of the use of such 
property is in such building and such 
property is placed in service by the
taxpayer not later than 90 days after 
such building is placed in service. 
‘‘(C) SPECIFIED
PORTIONS
OF
THE
GO 
ZONE.—For purposes of this paragraph, the 
term ‘specified portions of the GO Zone’ means 
those portions of the GO Zone which are in any 
county or parish which is identified by the Sec-
retary as being a county or parish in which hur-
ricanes occurring during 2005 damaged (in the 
aggregate) more than 40 percent of the housing 
units in such county or parish which were occu-
pied (determined according to the 2000 Cen-
sus).’’. 
(b) EXTENSION NOT APPLICABLE TO INCREASED 
SECTION 179 EXPENSING.—Paragraph (2) of section 
1400N(e) is amended by inserting ‘‘without regard to sub-
section (d)(6)’’ after ‘‘subsection (d)(2)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect as if included in section 101 
of the Gulf Opportunity Zone Act of 2005. 
SEC. 222. AUTHORITY FOR UNDERCOVER OPERATIONS. 
Paragraph (6) of section 7608(c) (relating to applica-
tion of section) is amended by striking ‘‘2007’’ both places 
it appears and inserting ‘‘2008’’.