[Congressional Record Volume 151, Number 100 (Thursday, July 21, 2005)]
[Senate]
[Page S8667]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. THOMAS (for himself and Mrs. Lincoln):
  S. 1441. A bill to amend the Internal Revenue Code of 1986 to include 
wireless telecommunications equipment in the definition of qualified 
technological equipment for purposes of determining the depreciation 
treatment of such equipment; to the Committee on Finance.
  Mr. THOMAS. Mr. President, today I rise to introduce a bill that 
would clarify the class life of cell site equipment used by wireless 
telecommunications companies.
  Wireless telecommunications, like many other high-tech industries, 
uses computer-based technology to facilitate the digitization of voice, 
video and data services over its networks. The wireless industry was in 
its infancy in 1986 when the Internal Revenue Code's rules regarding 
depreciation were last revised, so the sophisticated equipment used 
today was not even contemplated. For the past 20 years, the Internal 
Revenue Service--and taxpayers--have had to try to shoehorn modern 
equipment into outdated wireline telephony definitions in order to 
determine the appropriate depreciation period. Even the Treasury 
Department, in its July 2000 ``Report to the Congress on Depreciation 
Recovery Periods and Methods,'' admits that this is inappropriate.
  The result of this methodology is that the IRS has taken the position 
that wireless cell site equipment should be depreciated similarly to 
wooden telephone poles and wires rather than other, computerized 
equipment that it more closely resembles. Consequently, this equipment 
is depreciated over 20 years rather than 5. In other words, the 
misclassification significantly increases the cost of capital 
investment in the Nation's wireless network.
  Given the rapid technological change and advances in the wireless 
industry, this bill would classify wireless telecommunications 
equipment as ``qualified technological equipment.'' This is the proper 
classification because the major components of wireless cell sites are, 
in fact, computers or peripheral equipment controlled by computers.
  Consumer demand for wireless services grew almost 700 percent over 
the last decade, and rapid growth in this area continues. The industry 
also makes significant contributions to the economy directly employing 
226,340 workers and making hundreds of billions of dollars in capital 
investments. Clarifying the depreciation treatment of cell site 
equipment means even greater wireless investment, increased wireless 
employment, and improved benefits to America's wireless consumers.
  Wireless technology has brought tremendous advances to rural America, 
and this bill would ensure that rural consumers continue to have timely 
access to the latest technology available. I thank my colleague from 
Arkansas, Mrs. Lincoln, for joining me in recognizing the problem and 
introducing this legislation.
  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. 1441

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

     SECTION 1. WIRELESS TELECOMMUNICATIONS EQUIPMENT.

       (a) In General.--Subparagraph (A) of section 168(i)(2) of 
     the Internal Revenue Code of 1986 (defining qualified 
     technological equipment) 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 inserting after 
     clause (iii) the following new clause:
       ``(iv) any wireless telecommunications equipment.''.
       (b) Wireless Telecommunications Equipment.--Section 
     168(i)(2) of the Internal Revenue Code of 1986 is amended by 
     inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) Wireless telecommunications equipment.--For purposes 
     of this paragraph, the term `wireless telecommunications 
     equipment' means all equipment used in the transmission, 
     reception, coordination, or switching of wireless 
     telecommunications service, other than cell towers, 
     buildings, and T-1 lines or other cabling connecting cell 
     sites to mobile switching centers. For this purpose, 
     `wireless telecommunications service' includes any commercial 
     mobile radio service as defined in title 47 of the Code of 
     Federal Regulations.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service on or after the 
     date of the enactment of this Act.
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