[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1232 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 1232

  To amend the Internal Revenue Code of 1986 to shorten the recovery 
            period for the depreciation of certain property.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 12, 2003

  Mr. Dreier introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to shorten the recovery 
            period for the depreciation of certain property.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Technology Investment Incentive Act 
of 2003''.

SEC. 2. EXPENSING OF SOFTWARE AND QUALIFIED TECHNOLOGICAL EQUIPMENT.

    (a) In General.--Part VI of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
179A the following new section:

``SEC. 179B. EXPENSING OF SOFTWARE AND QUALIFIED TECHNOLOGICAL 
              EQUIPMENT.

    ``(a) Treatment as Expenses.--A taxpayer may elect to treat the 
cost of any section 179B property as an expense which is not chargeable 
to capital account. Any cost so treated shall be allowed as a deduction 
for the taxable year in which the section 179B property is placed in 
service.
    ``(b) Section 179B Property.--For purposes of this section--
            ``(1) In general.--The term `section 179B property' means 
        property--
                    ``(A)(i) which is qualified technological equipment 
                (as defined in section 168(i)(2)) to which section 168 
                applies, or
                    ``(ii) which is qualified computer software to 
                which section 167 applies,
                    ``(B) which is section 1245 property (as defined in 
                section 1245(a)(3)),
                    ``(C) which is acquired by purchase (as defined in 
                section 179(b)(2)) after the date of the enactment of 
                this section and before September 11, 2004, for use in 
                the active conduct of a trade or business, and
                    ``(D) which is placed in service on or before 
                September 11, 2004.
            ``(2) Qualified computer software.--The term `qualified 
        computer software' means computer software (as defined in 
        section 197(e)(3)(B)) which is described in section 
        197(e)(3)(A)(i).
    ``(c) Property Used Outside the United States Not Qualified.--No 
deduction shall be allowed under subsection (a) with respect to 
property which is used predominantly outside the United States or with 
respect to the portion of the cost of any property taken into account 
under section 179.
    ``(d) Basis Reduction.--
            ``(1) In general.--For purposes of this title, the basis of 
        any property shall be reduced by the amount of the deduction 
        with respect to such property which is allowed by subsection 
        (a).
            ``(2) Ordinary income recapture.--For purposes of section 
        1245, the amount of the deduction allowable under subsection 
        (a) with respect to any property that is of a character subject 
        to the allowance for depreciation shall be treated as a 
        deduction allowed for depreciation under section 167.''.
    (b) Conforming Amendments.--
            (1) Section 263(a)(1) of such Code is amended by striking 
        ``or'' at the end of subparagraph (G), by striking the period 
        at the end of subparagraph (H) and inserting ``, or'', and by 
        inserting after subparagraph (H) the following new 
        subparagraph:
                    ``(I) expenditures for which a deduction is allowed 
                under section 179B.''.
            (2) Section 312(k)(3)(B) of such Code is amended by 
        striking ``or 179A'' each place it appears in the heading and 
        text and inserting ``, 179A, or 179B''.
            (3) Section 1016(a) of such Code is amended by striking 
        ``and'' at the end of paragraph (29), by striking the period at 
        the end of paragraph (30) and inserting ``, and'', and by 
        inserting after paragraph (30) the following new paragraph:
            ``(31) to the extent provided in section 179B(d)(1),''.
            (4) Section 1245(a) of such Code is amended by inserting 
        ``179B,'' after ``179A,'' both places it appears in paragraphs 
        (2)(C) and (3)(C).
            (5) The table of contents for subpart B of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 179A the following new item:

                              ``Sec. 179B. Expensing of software and 
                                        qualified technological 
                                        equipment.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

SEC. 3. 3-YEAR DEPRECIATION OF WIRELESS TELECOMMUNICATIONS EQUIPMENT, 
              ADVANCED SERVICES EQUIPMENT, NETWORK OR NETWORK SYSTEM 
              EQUIPMENT, AND RESEARCH EXPENSES FOR SOFTWARE 
              DEVELOPMENT.

    (a) In General.--Subsection (e) of section 168 of the Internal 
Revenue Code of 1986 (relating to classification of property) is 
amended by adding after paragraph (5) the following new paragraph:
            ``(6) Certain property treated as 3-year property.--
                    ``(A) In general.--The term `3-year property' 
                includes property--
                            ``(i) described in subparagraph (B), (C), 
                        or (D),
                            ``(ii) acquired by purchase (as defined in 
                        section 179(b)(2)) after the date of the 
                        enactment of this paragraph and on or before 
                        September 11, 2004, and
                            ``(iii) placed in service on or before 
                        September 11, 2004.
                    ``(B) Wireless telecommunications equipment.--
                Property is described in this subparagraph if such 
                property is equipment used in the transmission, 
                reception, coordination, or switching of wireless 
                telecommunications service.
                    ``(C) Advanced services equipment.--Property is 
                described in this subparagraph if such property is 
                equipment (excluding cabling) used in the provision of 
                Internet or electronic communications access services 
                or support, or which supports access to electronic 
                media and data and associated communications support, 
                provided that such services or support, constitute or 
                directly contribute to the provisions of advanced 
                telecommunications capability.
                    ``(D) Network or network system equipment.--
                Property is described in this subparagraph if such 
                property is information technology equipment, including 
                computer servers, hubs, bridges, switches and routers, 
                which are interconnected so as to enable computers and 
                peripherals to communicate with each other either 
                individually or as a single unit.
                    ``(E) Treatment under alternative system.--Property 
                treated as 3-year property by this paragraph shall be 
                treated as having a class life of 3 years for purposes 
                of subsection (g).''
    (b) Research Expenses for Software Development.--Subsection (b) of 
section 174 of such Code is amended by adding at the end the following 
new paragraph:
            ``(3) Expenditures for software development.--Paragraph (1) 
        shall be applied by substituting `36 months' for `60 months' in 
        the case of expenditures for software development which are 
        made after the date of the enactment of this paragraph and 
        before September 11, 2004.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.
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