article: 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.
summary: Technology Investment Incentive Act of 2003 - Amends the Internal Revenue Code to: (1) permit the expensing of certain technological equipment and computer software; and (2) include, for recovery purposes, as three-year property certain wireless telecommunications equipment, advanced services equipment, network or network system equipment, and research expenses for software development.