[Congressional Record Volume 144, Number 75 (Thursday, June 11, 1998)]
[Senate]
[Pages S6183-S6186]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. MACK (for himself and Mr. Grams):
       S. 2162. A bill to amend the Internal Revenue Code of 1986 
     to more accurately codify the depreciable life of printed 
     wiring board and printed wiring assembly equipment; to the 
     Committee on Finance.


                 printed circuit investment act of 1998

 Mr. MACK. Mr. President, today Senator Grams and I introduce 
the Printed Circuit Investment Act of 1998. This bill would allow 
manufacturers of printed wiring boards and assemblies, known as the 
electronic interconnection industry, to depreciate their production 
equipment in 3 years rather than the 5 year period under current law.
  As we approach the 21st Century, our Nation's Tax Code should not 
stand in the way of technological progress. Printed wiring boards and 
assemblies are literally central to our economy, as they are the nerve 
centers of nearly every electronic device from camcorders and 
televisions to medical devices, computers and defense systems. But the 
Tax Code places U.S. manufacturers at a disadvantage relative to their 
Asian competitors, because of different depreciation treatment. This 
disadvantage is particularly difficult for U.S. firms to bear, as the 
interconnection industry consists overwhelmingly of small firms that 
cannot easily absorb the costs inflicted by an irrationally-long 
depreciation schedule.

[[Page S6186]]

  As technology continues to advance at light speed, the exhilaration 
of competition in a dynamic market is dampened by the effects of a Tax 
Code that has not kept pace with these changes. Obsolete 
interconnection manufacturing equipment is kept on the books long after 
this equipment has gone out the door. Companies with the competitive 
fire to enter such a rapidly-evolving industry must constantly invest 
in new state-of-the-art equipment, replacing obsolete equipment every 
18 to 36 months just to remain competitive. U.S. investments in new 
printed wiring board and assembly manufacturing equipment have nearly 
tripled since 1991--growing from $847 million to an estimated $2.4 
billion.
  But this investment is taxed at an artificially-high rate, because 
deductions for the cost of the equipment are spread over a period that 
is several years longer than justified. The industry is at the mercy of 
tax laws passed in the 1980s, which were based on 1970s-era electronics 
technology. It is no wonder that the market share of U.S. 
interconnection companies has been cut in half over this period. Our 
Tax Code should not continue to undermine the competitiveness of 
American businesses. The opportunity is before us to correct the tax 
laws that dictate how rapidly board manufacturers and electronics 
assemblers can depreciate equipment needed to fabricate and assemble 
circuit boards.
  The Printed Circuit Investment Act of 1998 will provide modest tax 
relief to the electronics interconnection industry and the 250,000 
Americans, residing in every state of the Union, whose jobs rely on the 
success of this industry. This industry should get fair and accurate 
tax treatment.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2162

       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 ``Printed Circuit Investment 
     Act of 1998''.

     SEC. 2. 3-YEAR DEPRECIBLE LIFE FOR PRINTED WIRING BOARD AND 
                   PRINTED WIRING ASSEMBLY EQUIPMENT.

       (a) In General.--Subparagraph (A) of section 168(e)(3) of 
     the Internal Revenue Code of 1986 (relating to classification 
     of property) is amended by striking ``and'' at the end of 
     clause (ii), by striking the period at the end of clause 
     (iii) and inserting ``, and'', and by adding at the end the 
     following new clause:
       ``(iv) any printed wiring board or printed wiring assembly 
     equipment.''
       (b) 3-Year Class Life.--Subparagraph (B) of section 
     168(g)(3) of such Code is amended by inserting after the item 
     relating to subparagraph (A)(iii) the following new item:

  ``(A)(iv)....................................................3''.    

       (c) Effective Date.--The amendments made by this section 
     shall apply to equipment placed in service after the date of 
     the enactment of this Act.
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