Tax Administration: Information Is Not Available to Determine Whether $5 Billion in Liberty Zone Tax Benefits Will Be Realized
Published: 2003-09-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The President pledged a minimum of $20 billion in assistance to New York for response and recovery efforts after the September 11, 2001, terrorist attacks. This includes tax benefits, commonly referred to as the Liberty Zone tax benefits, that the Joint Committee on Taxation (JCT) estimated would reduce federal tax revenues by about $5 billion. The actual amount of benefits realized, however, will depend on the extent to which taxpayers and the city and state of New York take advantage of them. GAO was asked to determine (1) the extent to which the Internal Revenue Service (IRS) is collecting and reporting information about the number of taxpayers using each of the seven Liberty Zone tax benefits and the revenue loss associated with those benefits and (2) if IRS is not collecting and reporting this information, what steps it would need to take and what resources would be needed to do so.
section_title: What GAO Found
paragraphs: For one of the seven Liberty Zone tax benefits, the business employee credit, IRS is collecting but not planning to report some information about use--the number of taxpayers claiming the credit and the amount of credit claimed--nor is it planning to use this information to report the revenue loss associated with that benefit. IRS is not planning to collect or report information about the use of the other six benefits or the revenue loss associated with those benefits. According to IRS officials, the agency followed its usual procedures in determining whether to collect information about benefit use and revenue loss. IRS officials said they would collect and report these data if (1) it would help the agency administer the tax laws or (2) IRS was legislatively mandated to do so. IRS would need to make several changes if it were to collect more information on the use of the benefits and the associated revenue loss, and this information would not be complete or lead to a verifiable measure of the reduction in federal tax revenues due to the benefits. IRS would need to change forms, processing procedures, and computer programming, which would add to taxpayer burden and IRS's workload. IRS officials were unable to estimate the costs involved in accomplishing these actions or the number of staff needed to do so. The officials said that the earliest they could make these changes would be for tax year 2004 returns. As a result, IRS would not have information for two of the years that the benefits were in effect, which is significant because most of the benefits expire by the end of 2006. In addition, if IRS were to collect data on the use of the Liberty Zone benefits, it would be able to make an estimate, but could not produce a verifiable measure, of the revenue loss due to the benefits because, for example, IRS would have to make assumptions about how taxpayers would have behaved in the absence of the benefits.

section_title: Letter
paragraphs: The President pledged a minimum of $20 billion in assistance to New York  for response and recovery efforts after the terrorist attacks of  September 11, 2001. The $20 billion includes about $15 billion of  congressionally appropriated funds, primarily administered by the  Department of Housing and Urban Development, Department of  Transportation, and Federal Emergency Management Agency (FEMA), for  different types of assistance. The remaining assistance came in the form  of tax benefits, which the Joint Committee on Taxation (JCT) estimated  would reduce federal revenues by about $5 billion. These tax benefits are  commonly referred to as the Liberty Zone tax benefits. Because of your  interest in whether the $5 billion in tax benefits will be realized, you asked  us to determine the extent to which the Internal Revenue Service (IRS) is  collecting and reporting information about the number of taxpayers using  each of the seven Liberty Zone tax benefits and the revenue loss  associated with those benefits. In addition, if IRS is not collecting and  reporting this information, you asked us to determine what steps it would  need to take and what resources would be needed to do so.
To address these objectives, we interviewed IRS and city and state of New  York officials and analyzed information they provided, as well as JCT data,  about the use and revenue effects of the Liberty Zone tax benefits. We also  discussed the steps IRS would need to take to collect information on the  use and revenue effects of the benefits and the resources it would need to  do so. For the purposes of this report, we defined use as the number of  taxpayers who claimed each benefit and the amount each claimed.  However, the amount that taxpayers claim on their returns is not the same  as the reduction in tax liabilities due to using the benefits. Because some  of the Liberty Zone tax benefits substitute for less generous deductions or  credits to which taxpayers would otherwise be entitled, the net reduction  in taxpayers’ tax liabilities (and net reduction in federal revenues) can  only be determined by comparing taxpayers’ tax liabilities with the  benefits in place to their tax liabilities when only the alternate deductions  and credits are available. Our scope and methodology are discussed in  greater detail in appendix I.
subsections: section_title: Background
paragraphs: To assist New York in recovering from the September 11, 2001, terrorist  attacks, Congress passed Public Law 107-147, the Job Creation and  Worker Assistance Act of 2002. The act was signed into law on March 9,  2002, and created seven tax benefits that focus on the New York Liberty  Zone. The Liberty Zone tax benefits include treating employees in the Liberty Zone as a targeted group for purposes of  the work opportunity tax credit (WOTC), which IRS refers to as the  business employee credit; a special depreciation allowance; an increase in section 179 expensing; special treatment of leasehold improvement property; an extension of the replacement period for involuntarily converted authority to issue tax-exempt private activity bonds; and authority to issue advance refunding bonds.
An explanation of each benefit, an example of how it can be used, and the  period each benefit is in effect are included in appendix II.
Under the Congressional Budget Act of 1974 as amended, JCT provides  estimates of the revenue consequences of tax legislation. In March 2002,  JCT estimated that the New York Liberty Zone tax benefits would reduce  federal revenues by $5.029 billion over the period 2002 through 2012.
section_title: IRS Generally Not Planning to Collect or Report Information about the Use of Liberty Zone Tax Benefits or Reductions in Taxpayers’ Tax Liabilities
paragraphs: For one of the seven Liberty Zone tax benefits, the business employee  credit, IRS is collecting but not planning to report some information about  use—the number of taxpayers claiming the credit and the amount of credit  claimed—nor is it planning to use this information to report on how the  benefit has reduced taxpayers’ tax liabilities. IRS is not planning to collect  or report information about the use of the other six benefits or how using  these benefits has reduced taxpayers’ tax liabilities.
IRS collects information on how many taxpayers use the business  employee credit and the amount of the credit claimed on Form 8884 (New  York Liberty Zone Business Employee Credit). Submission processing  officials in the Small Business/Self-Employed (SB/SE) Division began  entering information from this form into IRS’s computer system in January  2003. Some taxpayers claiming the business employee credit may have  their returns processed by the Wage and Investment (W&I) Division,  which is not planning to enter information from the form into the  computer system. However, IRS officials said that the bulk of the  taxpayers who would claim this credit would submit their returns to the  SB/SE Division.
IRS can collect information on the use of the business employee credit  because it developed a new form to administer this credit. Although the  business employee credit was included in the WOTC provisions, IRS  officials said they needed to track business employee credits separately  because the business employee credit can be used to offset any alternative  minimum taxes owed but the general WOTC provisions cannot. IRS  currently cannot collect information on the remaining six Liberty Zone  benefits because it is using existing forms to administer them, and  taxpayers do not report these six benefits as separate items on their  returns. For example, taxpayers add the amount of depreciation they are  allowed under the Liberty Zone special depreciation allowance benefit to  other depreciation expenses and report their total depreciation expenses  on their returns. Since taxpayers do not report their use of six of the seven  benefits separately on their returns, IRS cannot report on how extensively  these six benefits were used.
IRS officials said that although they are collecting information on the  amount of business employee credits claimed by taxpayers, they are not  planning on reporting information on the extent to which the benefit  reduced taxpayers’ tax liabilities. For the other six benefits, IRS officials  said that without information about use, they cannot collect or report on  the extent to which the benefits reduced taxpayers’ tax liabilities.
According to IRS officials, the agency followed its usual procedures in  determining the type of information to collect about the Liberty Zone tax  benefits. They added that IRS would collect and report information that  would help it to administer the tax laws or if it was legislatively mandated  to collect or report information. IRS officials said they do not need  information about the use of the Liberty Zone tax benefits or the resulting  reductions in taxpayers’ tax liabilities in order to administer the tax laws.  For example, IRS officials said that they do not need information on each  specific benefit claimed to properly target their enforcement efforts.  Instead, they target their enforcement efforts based on taxpayers claiming  various credits, deductions, and so forth that fall outside of expected  amounts. In addition, IRS officials noted that the agency has not been  legislatively mandated to collect or report information on the benefits.
section_title: Several Changes Needed If IRS Were to Collect and Report More Information about the Liberty Zone Tax Benefits and Estimate Revenue Losses
paragraphs: IRS would need to make several changes if it were to collect more  information on taxpayers’ use of the benefits and their effect on reducing  taxpayers’ tax liabilities. IRS would need to change forms used to collect  information from taxpayers, change how it processes information from tax  returns, and revise computer programming, which would add to taxpayer  burden and IRS’s workload. Even if it were to make these changes, IRS  would not have information for two of the years the benefits were  available. Also, although the additional information would enable IRS to  make an estimate of the revenue loss due to the benefits, it would not be  able to produce a verifiable measure of the loss. To produce the estimate,  IRS would have to make assumptions about how taxpayers would have  behaved in the absence of the benefits.
subsections: section_title: Several Changes Needed If IRS Were to Report on Use of Benefits and Reduction in Taxpayers’ Tax Liabilities
paragraphs: For six of seven of the Liberty Zone tax benefits, IRS would need to revise  forms, tax return processing procedures, and computer programming if it  were to collect and report information about the number of taxpayers  claiming the benefit and the amount they claimed. It would also need to  take most of these steps to report on the use of the seventh benefit—the  business employee credit. According to IRS officials, they would need to  make staff available to revise forms, review returns for completeness and  accuracy, transcribe the additional data, and write the necessary computer  programs for entering and extracting data. They would also need to  allocate computer resources to process the additional information  collected and prepare reports on the use of the benefits. For example, for  the special depreciation allowance benefit, IRS would need to revise
Form 4562 (Depreciation and Amortization) so that taxpayers reported the  amount of depreciation they claimed specifically due to this benefit, tax return processing procedures so that processing staff reviewed Form  4562 for completeness and accuracy and transcribed information about  the special depreciation allowance, and computer programming so that information about the special depreciation  allowance could be entered into IRS’s information systems and extracted  in order to prepare reports about the use of the benefit.
For the seventh benefit—the business employee credit—taxpayers already  separately report the amount of the credit they are claiming, and IRS is  already reviewing these forms for accuracy and completeness,  transcribing data from them, and entering this information into the  agency’s computer system for those returns that are processed by the  SB/SE Division. However, computer programming would need to be  changed to extract information to prepare reports about benefit use. For  any returns processed by the W&I Division, IRS would also need to revise  W&I processing procedures and computer programming.
Since IRS currently does not have any plans to make these changes,  officials were unable to estimate the costs involved in accomplishing these  actions or the number of staff needed to do so. However, IRS officials  estimated they added one full-time equivalent (FTE) primarily to review  the Form 8884s for completeness and accuracy and for data  transcription—part of the process to collect information about the use of  the business employee credit.
If IRS collected information about the use of the benefits, IRS could then  develop some information on the reduction in taxpayers’ tax liabilities due  to the benefits. For example, IRS could determine how much lower each  taxpayers’ tax liability is due to the use of the tax benefits, assuming that  taxpayer behavior would be the same whether the benefits existed or not.  Table 1 is an example of such a computation for claiming the Liberty Zone  Section 179 expensing benefit. In this example, a taxpayer with $100,000 in  income bought $40,000 worth of office equipment in 2002 and placed this  equipment in service in the Liberty Zone in 2002. After applying the Liberty  Zone section 179 expensing benefit, taxable income would be $60,000.  Since the equipment has been completely expensed, the taxpayer cannot  claim any further deductions for this equipment. To recalculate the  taxpayer’s taxable income as if the special Liberty Zone expensing benefit  did not exist, IRS could assume that the taxpayer would make the same  investment, even without the Liberty Zone tax benefit, and still claim the  $24,000 section 179 deduction available to all taxpayers in 2002 and any  other available deductions, such as the special depreciation allowance. In  our example, the special depreciation allowance would be worth $4,800,  and the amount otherwise available as a depreciation deduction (regular  depreciation) would be worth $1,600, which would reduce the taxpayer’s  taxable income to $69,600. The total reduction in taxable income would be  $9,600.
Once all the adjustments to taxable income were made, IRS would then  need to apply the appropriate marginal tax rate to arrive at the taxpayer’s  recalculated tax liability.
section_title: IRS Could Produce Estimates but Not a Verifiable Measure of the Revenue Loss
paragraphs: If IRS were to begin collecting information on the number of taxpayers  using the Liberty Zone tax benefits and the amounts they claimed, the  information would not be complete. In addition, although the information  would enable IRS to make an estimate of the revenue loss due to the  benefits, the information would not result in a verifiable measure of the  loss. To produce the estimate, IRS would have to make assumptions about  how taxpayers would have behaved in the absence of the benefits.
IRS said the earliest it would be able to collect information on the number  of taxpayers using the benefits and the amounts each claimed would be  for tax year 2004 returns, which IRS would not process until calendar year  2005. As a result, IRS would not have information for two of the years that  the benefits were in effect, which is significant because most of the  benefits expire by the end of 2006. IRS could not reconstruct information  on tax liability for those 2 years because returns already filed would not  indicate whether taxpayers used the Liberty Zone benefits and would not  show the amount claimed through benefit use. Although IRS could ask for  information about past benefit use since taxpayers are instructed to keep  tax records for 3 years, this would require taxpayers to provide additional  information and increase taxpayer burden. Also, it would be difficult for  IRS to use current year information to estimate the amount claimed  through benefit use retroactively because the pattern of using the benefits  could have changed over time.
In addition to not being complete, the data that IRS could collect on the  number of taxpayers using the Liberty Zone benefits and the amounts each  claimed would not be sufficient for actually measuring how much revenue  those benefits cost the federal government. The reduction in revenues due  to the Liberty Zone tax benefits is equal to the difference between the  amount of revenue that the federal government would collect with the  benefits in place and the amount it would collect in the absence of those  benefits. There are two reasons why revenues would be different with and  without the benefits. First, the rules for computing tax liabilities are  different in the two cases (as shown in table 1). Second, the behavior of  many taxpayers is likely to be different in the two cases. In fact, a primary  purpose of the tax benefits is to influence taxpayer behavior. For example,  in the case of the Liberty Zone section 179 benefit, some taxpayers who  claim this benefit would have made different investment decisions if that  particular benefit were not available. In our simplified example shown in  table 1, this difference in behavior might be that the taxpayer invested less  than $40,000 in office equipment—perhaps even nothing—because the  Liberty Zone benefit did not exist. As a consequence, the taxpayer’s  taxable income would have been different than the $69,600 shown in table  1. Given that IRS cannot know what taxpayers would have done in the  absence of the benefits, the best it could do is estimate revenue losses  based on assumptions about that alternative behavior.
section_title: Agency Comments
paragraphs: The Commissioner of Internal Revenue was provided a draft of this report  for his review and comment. The IRS Director of Tax Administration  Coordination agreed with the contents of the report.
As agreed with your offices, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 7 days from its  date. At that time, we will send copies to the Chairman and Ranking  Minority Member of the Senate Committee on Finance; the Chairman of  the House Committee on Ways and Means and the Chairman and Ranking  Minority Member of its Subcommittee on Oversight; the Secretary of the  Treasury; the Commissioner of Internal Revenue; the Director of the Office  of Management and Budget; and other interested parties. We will make  copies available to others on request. In addition, the report will be  available at no charge on the GAO Web site at http://www.gao.gov.
This report was prepared under the direction of Jonda Van Pelt, Assistant  Director. If you have any questions regarding this report, please contact  her at (415) 904-2186 or vanpeltj@gao.gov or me at (202) 512-9110 or  brostekm@gao.gov. Key contributors to this report were Evan Gilman,  Edward Nannenhorn, Lynne Schoenauer, Shellee Soliday, Anne Stevens,  and James Wozny.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our first objective was to determine the extent to which the Internal  Revenue Service (IRS) is collecting and reporting information about the  use and value of the seven Liberty Zone tax benefits. We defined use as the  number of taxpayers who claimed each benefit and the amount each  claimed. In analyzing value, we examined what information IRS could  provide about reductions in taxpayers’ tax liabilities when they used the  Liberty Zone tax benefits, and then examined whether this information  could be used to measure the actual reduction in federal tax revenues. To  address the first objective, we interviewed IRS officials from Legal  Counsel, the Wage and Investment (W&I) Division’s and the Small  Business/Self-Employed (SB/SE) Division’s submission processing groups,  Statistics of Income (SOI), Forms and Publications, and the Tax Exempt  Government Entities (TEGE) Division to determine if they were collecting  and reporting any information about the use of the Liberty Zone tax  benefits and how the benefits reduced taxpayers’ tax liabilities. We  analyzed the documents they provided about collecting and reporting on  the use of the benefits and the reduction in taxpayers’ tax liabilities. We  also analyzed the data the Joint Committee on Taxation (JCT) provided  about its estimate of the reduction in federal tax revenues. Finally, we  interviewed New York city and state officials to determine if they were  collecting and reporting information on the benefits.
Our second objective was to determine what steps IRS would need to take  and the resources it would need to collect and report information on the  use and value of the Liberty Zone tax benefits if it is not already doing so.  We used the same definition of use and value as we used for the first  objective. To address the second objective, we interviewed IRS officials  from Legal Counsel, the W&I Division’s and the SB/SE Division’s  submission processing groups, SOI, Forms and Publications, and the  TEGE Division to determine what steps they would need to take and the  resources they would need to collect and report information on the use of  the Liberty Zone tax benefits and the reduction in taxpayers’ tax liabilities  if they used the benefits. We also analyzed IRS documents related to the  steps that would need to be taken to collect and report on the use of the  benefits and on the reduction in taxpayers’ tax liabilities.
We performed our work from April 2003 through August 2003 in  accordance with generally accepted government auditing standards.
section_title: Appendix II: Summary of the Liberty Zone Tax Benefits
paragraphs: The work opportunity tax credit (WOTC) was expanded to  include a new targeted group for employees who perform  substantially all their services for a business in the Liberty  Zone or for a business that relocated from the Liberty Zone  June 1, 2002, to October 31,  2002 and 2003  elsewhere within New York City due to the physical  destruction or damage of their workplaces by the  September 11, 2001, terrorist attacks.
The New York Liberty Zone business employee credit  allows eligible businesses with an average of 200 or fewer  employees to take a maximum credit of 40 percent of the  first $6,000 in wages paid or incurred for work performed by each qualified employee during calendar years 2002 and  2003. Unlike the other targeted groups under WOTC, the  credit for the new group is available for wages paid to both new hires and existing employees.
2002, and receives $3,000  in wages a month. The  company can claim a credit  for 40 percent of the first  $6,000 in wages paid  ($2,400).
The special depreciation allowance provides an additional  deduction for eligible properties. Eligible Liberty Zone  properties include new tangible property (e.g., new office  equipment), used tangible property (e.g., used office  equipment), and residential rental property (e.g., an  apartment complex) and nonresidential real property (e.g.,  an office building) if it rehabilitates real property damaged or  replaces real property destroyed or condemned as a result  of the September 11, 2001, terrorist attacks.
On December 1, 2002, a  real estate development firm  purchases an office building  in the New York Liberty  Zone that costs $10 million  and places it in service on  June 1, 2003. The building  replaces real property  damaged as a result of the  September 11, 2001,  terrorist attacks. Under the  provision, the taxpayer is  allowed an additional first- year depreciation deduction  of 30 percent ($3 million).
For property inside the Liberty Zone, the special  depreciation allowance allows taxpayers to deduct 30  percent of the adjusted basis of qualified property acquired  by purchase after September 10, 2001, and placed in  service on or before December 31, 2006 (December 31,  2009, in the case of nonresidential real property and  residential rental property). For property outside the Liberty  Zone, a special depreciation allowance is available for  taxpayers but only with regard to qualified property—such  as new tangible property and non-Liberty Zone leasehold  improvement property—that is acquired after  September 10, 2001, and before September 11, 2004, and  is placed in service on or before December 31, 2004.  However, recent legislation (the Jobs and Growth Tax  Relief Reconciliation Act of 2003, Pub. L. No. 108-27) has  increased the deduction to 50 percent for qualified property  both within and outside the Liberty Zone that is acquired  after May 5, 2003, and placed in service on or before  December 31, 2004.
Taxpayers with a sufficiently small investment in qualified  section 179 business property in the Liberty Zone can elect  to deduct rather than capitalize the amount of their  investment and are eligible for an increased amount over  other taxpayers. For qualified Liberty Zone property placed  in service during 2001 and 2002, under section 179  taxpayers could deduct up to $59,000 ($24,000 under the  general provision plus an additional $35,000) of the cost.  The investment limit (phase-out range) in the property was  $200,000. For qualified Liberty Zone property placed in  service after 2002 and before 2007, taxpayers could deduct  $60,000 ($25,000 under the general provision plus the  additional $35,000) of the cost.
In 2002, a taxpayer  purchases and places in  service in his or her Liberty  Zone business several  qualified items of equipment  costing a total of $260,000.  Because 50 percent of the  cost of the property  ($130,000) is less than  $200,000, the investment  limit, the section 179  deduction of $59,000 is not  reduced, and the taxpayer  can deduct this amount.
However, recent legislation (Pub. L. No. 108-27) has further  increased the maximum deduction for qualified Liberty Zone  property placed in service after 2002 and before 2006 to  $135,000 and has increased the investment limit to  $400,000. For 2006, the maximum section 179 deduction  allowed for qualified Liberty Zone property returns to  $60,000 and the investment limit is $200,000. To calculate  the available expensing treatment deduction amount for  qualified Liberty Zone property, every dollar for which 50  percent of the cost of the property exceeds the investment  limit is subtracted from the maximum deduction allowed.
Taxpayers outside of the Liberty Zone may also expense  qualified property under section 179. However, the  maximum deduction for non-Liberty Zone property is  $35,000 less than the maximum deduction allowed for  Liberty Zone property. The investment limits for Liberty  Zone and non-Liberty Zone property are similar. However,  in contrast, in calculating the available expensing treatment  deduction amount for non-Liberty Zone properties, every  dollar invested in the property that exceeds the investment  limit is subtracted from the maximum deduction allowed.
Qualified Liberty Zone leasehold improvement property can  be depreciated over a 5-year period using the straight-line  method of depreciation. The term “qualified Liberty Zone  leasehold property” means property as defined in section  168(k)(3) and may include items such as additional walls  and plumbing and electrical improvements made to an  interior portion of a building that is nonresidential real  property. Qualified Liberty Zone leasehold improvements  must be placed in service in a nonresidential building that is  cost of the property.  located in the Liberty Zone after September 10, 2001, and  on or before December 31, 2006. The class life for qualified New York Liberty Zone leasehold improvement property is 9  years for purposes of the alternative depreciation system.
Taxpayers can also depreciate leasehold improvements  outside of the Liberty Zone. These taxpayers can  depreciate an addition or improvement to leased  nonresidential real property using the straight-line method  of depreciation over 39 years. Qualified leasehold  improvement properties outside the Liberty Zone can qualify  for both the 39-year depreciation deduction and the special  depreciation allowance. However, leasehold improvements  inside the Liberty Zone do not qualify for the special  depreciation allowance.
A taxpayer may elect not to recognize gain with respect to  property that is involuntarily converted if the taxpayer  acquires qualified replacement property within an applicable  Zone business, but it was  period. The replacement period for property that was destroyed in the  involuntarily converted in the Liberty Zone as a result of the  September 11, 2001,  September 11, 2001, terrorist attacks is 5 years after the  end of the taxable year in which a gain is realized provided  that substantially all of the use of the replacement property  is in New York City. The involuntarily converted Liberty  Zone property can be replaced with any tangible property  held for productive use in a trade or business because  taxpayers in presidentially declared disaster areas such as  the Liberty Zone can use any tangible, productive use  property to replace property that was involuntarily  converted.
Outside of the Liberty Zone, the replacement period for  involuntarily converted property is 2 years (3 years if the  converted property is real property held for the productive  use in a trade or business or for investment), and the  converted property must be replaced with replacement  property that is similar in service or use. terrorist attacks. Several  years ago, the taxpayer paid  $50,000 for the truck and,  over time, depreciated the  basis in the truck to  $30,000. If the insurance  company paid $35,000 in  reimbursement for the truck  and the taxpayer used the  $35,000 to purchase  replacement property of any  type that is held for  productive use in a trade or  business within 5 years after  the close of the tax year of  payment by the insurance  company, the taxpayer  would not recognize a gain.
An aggregate of $8 billion of tax-exempt private activity  bonds, called qualified New York Liberty bonds, are  authorized to finance the acquisition, construction,  reconstruction, and renovation of certain property that is  primarily located in the Liberty Zone. Qualified New York  Liberty bonds must finance nonresidential real property,  residential rental property, or public utility property and must  also satisfy certain other requirements. The Mayor of New  York City and the Governor of New York State may each  designate up to $4 billion in qualified New York Liberty  bonds.
The Mayor of New York City  Effective for bonds  designates $120 million of  qualified New York Liberty  bonds to finance the  construction of an office  building in the Liberty Zone.  Assistance Act of  issued after March 9,  2002 (the date of  enactment of the Job  Creation and Worker  2002), and on or before  December 31, 2004  Advance  refunding bonds	 be issued to pay principal, interest, or redemption price on  State designates $70 million  refunding bonds issued  An aggregate of $9 billion of advance refunding bonds may  The Governor of New York  Effective for advance  certain prior issues of bonds issued for facilities located in  New York City (and certain water facilities located outside of  to refinance bonds that  New York City). Under this benefit, certain qualified bonds,  which were outstanding on September 11, 2001, and had  exhausted existing advance refunding authority before  September 12, 2001, are eligible for one additional advance  refunding. The Mayor of New York City and the Governor of  New York State may each designate up to $4.5 billion in  advance refunding bonds. of advance refunding bonds  after March 9, 2002,  financed the construction of  December 31, 2004  hospital facilities in New  York City.
The Liberty Zone tax benefits were enacted as part of the Job Creation and Worker Assistance Act of  2002, Pub. L. No. 107-147.