The designation, if approved, will speed reconstruction ofcommercial buildings affected by the World Trade Center bombings byreducing the depreciation life of leasehold improvements from 39years to five years. It also offers a laundry list of taxincentives to spur investment in the area. The combination isdesigned to give building owners an incentive to renovate affectedproperties quickly.

The bill also allows for $15 in tax-exempt bonds to financerenovation and construction of Downtown commercial buildings. Inaddition, whereas in most cases the cost of an investment isdeducted over time, development costs within the zone will beeligible for an immediate 30% reduction for tax depreciationpurposes.

The legislation allows small businesses within the zone to takean additional $35,000 annually in business deductions for certaininvestments. In addition, insurance proceeds paid to businessesimpacted by the bombings will not be subject to tax if they areused within the city over the next five years.

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