I
107TH CONGRESS
1ST SESSION
H. R. 2981
To amend the Internal Revenue Code of 1986 to establish a 2-year recovery
period for depreciation of computers and other technological equipment,
a 24-month useful life for depreciation of computer software, and a
7-year useful life for depreciation of certain auction-acquired tele-
communications licenses.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 2, 2001
Mr. UPTON (for himself, Mr. GREEN of Texas, Mr. BURR of North Carolina,
Mr. GILLMOR, Mr. TAUZIN, Mr. STEARNS, Mr. GREENWOOD, Mr. BAR-
TON of Texas, Ms. HARMAN, Mr. CAMP, Mr. ARMEY, Mr. RAMSTAD, Mr.
BASS, Mr. BILIRAKIS, Mr. LAHOOD, Mr. RADANOVICH, Mr. SMITH of
New Jersey, Mr. SESSIONS, Mr. PORTMAN, Mr. BOEHNER, Mr.
WHITFIELD, Mr. HOEKSTRA, Mr. OSE, Mr. BOEHLERT, Mr. BOUCHER,
Mr. GOODLATTE, Mrs. KELLY, Ms. PRYCE of Ohio, Mr. DREIER, Ms.
DUNN of Washington, Mr. FOLEY, Mr. TOM DAVIS of Virginia, Mrs.
BONO, Mr. DELAY, Mr. WATTS of Oklahoma, and Mr. SHIMKUS) intro-
duced the following bill; which was referred to the Committee on Ways
and Means
A BILL
To amend the Internal Revenue Code of 1986 to establish
a 2-year recovery period for depreciation of computers
and other technological equipment, a 24-month useful
life for depreciation of computer software, and a 7-year
useful life for depreciation of certain auction-acquired
telecommunications licenses.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. 2-YEAR APPLICABLE RECOVERY PERIOD FOR
DEPRECIATION OF COMPUTERS AND OTHER
TECHNOLOGICAL EQUIPMENT.
(a) 2-YEAR APPLICABLE RECOVERY PERIOD
FOR
QUALIFIED TECHNOLOGICAL EQUIPMENT.—
(1) IN
GENERAL.—Paragraph (1) of section
168(c) of the Internal Revenue Code of 1986 (relat-
ing to applicable recovery period) is amended by in-
serting before the first item in the table the fol-
lowing new item:
‘‘Qualified technological equipment ......................................
2 years’’.
(2) 
CONFORMING
AMENDMENT.—Section
168(e)(3)(B) of such Code (relating to 5-year prop-
erty) is amended by striking clause (iv).
(b) 2-YEAR RECOVERY PERIOD UNDER ALTER-
NATIVE DEPRECIATION SYSTEM FOR TAX-EXEMPT USE
PROPERTY, ETC.—Subparagraph (C) of section 168(g)(3)
of such Code (relating to alternative depreciation system
for certain property) is amended by striking ‘‘5 years’’ and
inserting ‘‘2 years’’.
(c) DEFINITION
OF QUALIFIED TECHNOLOGICAL
EQUIPMENT.—
(1) IN GENERAL.—Subparagraph (A) of section
168(i)(2) of such Code is amended by striking
‘‘and’’ at the end of clause (ii), by striking the pe-
riod at the end of clause (iii) and inserting a comma,
and by adding at the end the following:
‘‘(iv) any wireless telecommunications
equipment,
‘‘(v) any advanced services equipment,
and
‘‘(vi) any network or network system
equipment.
(2) WIRELESS
TELECOMMUNICATIONS
EQUIP-
MENT, ETC.—Paragraph (2) of section 168(i) of
such Code is amended by adding at the end the fol-
lowing:
‘‘(D) 
WIRELESS
TELECOMMUNICATIONS
EQUIPMENT.—The term ‘wireless telecommuni-
cations equipment’ means all equipment (other
than towers, buildings, and T–1 lines (cabling))
used in the transmission, reception, coordina-
tion, or switching of wireless telecommuni-
cations service. For this purpose, ‘wireless tele-
communications service’ includes any commer-
cial mobile radio service as defined in title 47
of the Code of Federal Regulations.
‘‘(E) ADVANCED SERVICES EQUIPMENT.—
The term ‘advanced services equipment’ means
equipment, excluding cabling, used in the provi-
sion of Internet or electronic communications
access services or support, or which supports
access to electronic media and data and associ-
ated communications support, provided that
such services or support constitute or directly
contribute to the provision of advanced tele-
communications capability as that term is de-
fined in section 706(c)(1) of the Telecommuni-
cations Act of 1996.
‘‘(F) NETWORK
OR
NETWORK
SYSTEM
EQUIPMENT.—The term ‘network or network
system equipment’ means any information tech-
nology equipment, including computer servers,
hubs, bridges, switches, and routers, which are
interconnected so as to enable computers and
peripherals to communicate with each other ei-
ther individually or as a single unit.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to property placed in service after
the date of the enactment of this Act.
SEC. 2. 24-MONTH USEFUL LIFE FOR DEPRECIATION OF
COMPUTER SOFTWARE.
(a) IN GENERAL.—Subparagraph (A) of section
167(f)(1) of the Internal Revenue Code of 1986 (relating
to computer software) is amended by striking ‘‘36
months’’ and inserting ‘‘24 months’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to property placed in service after
the date of the enactment of this Act.
SEC. 3. 7-YEAR USEFUL LIFE FOR DEPRECIATION OF CER-
TAIN 
AUCTION-ACQUIRED 
TELECOMMUNI-
CATIONS LICENSES.
(a) 7-YEAR USEFUL LIFE.—Section 167 of the Inter-
nal Revenue Code of 1986 (relating to depreciation) is
amended by redesignating subsection (h) as subsection (i)
and by inserting after subsection (g) the following new
subsection:
‘‘(h) TREATMENT OF CERTAIN AUCTION-ACQUIRED
TELECOMMUNICATIONS LICENSES EXCLUDED FROM SEC-
TION 197.—
‘‘(1) IN GENERAL.—If a depreciation deduction
is allowable under subsection (a) with respect to an
auction-acquired telecommunications license, such
deduction shall be computed by using the straight
line method and a useful life of 7 years.
‘‘(2) 
AUCTION-ACQUIRED
TELECOMMUNI-
CATIONS LICENSE.—For purposes of this subsection,
the term ‘auction-acquired telecommunications li-
cense’ means any license granted through a competi-
tive bidding system under section 309(j) of the Com-
munications Act of 1934 (47 U.S.C. 309(j)).
(b) EXCLUSION FROM SECTION 197.—Subparagraph
(D) of section 197(d)(1) of such Code (defining section
197 intangible) is amended by inserting before the comma
the following: ‘‘(other than an auction-acquired tele-
communications license (as defined in section 167(h)) with
respect to which a depreciation deduction is allowable
under section 167(a))’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to property placed in service after
the date of the enactment of this Act.
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