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