I 
108TH CONGRESS 
1ST SESSION H. R. 1234
To amend the Internal Revenue Code of 1986 to encourage investment in 
high productivity property, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 12, 2003
Mr. ENGLISH (for himself and Mr. NEAL of Massachusetts) introduced the 
following bill; which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to encourage 
investment in high productivity property, and for other 
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘High Productivity and 
Economic Growth Act of 2003’’. 
SEC. 2. ADOPTION OF THE HIGH PRODUCTIVITY INVEST-
MENT DEDUCTION. 
(a) IN GENERAL.—Part VI of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
itemized deductions for individuals and corporations) is
amended by inserting after section 168 the following new 
section: 
‘‘SEC. 168A. HIGH PRODUCTIVITY INVESTMENT DEDUC-
TION. 
‘‘(a) TREATMENT AS EXPENSES.—A taxpayer may 
elect to treat the cost of any high productivity property 
as an expense not chargeable to capital account. Any cost 
so treated shall be allowed as a deduction in the taxable 
year in which the high productivity property is placed in 
service. 
‘‘(b) DEFINITION OF HIGH PRODUCTIVITY PROP-
ERTY.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (3), the term ‘high productivity property’ 
means any—
‘‘(A) computer, 
‘‘(B) computer related peripheral equip-
ment, 
‘‘(C) computer based machinery, 
‘‘(D) electronic diagnostic equipment, 
‘‘(E) electronic control equipment, 
‘‘(F) other electronic, electromechanical, 
laser or computer based equipment, 
‘‘(G) computer software,
‘‘(H) equipment used in the manufacture 
of semiconductors, 
‘‘(I) high technology medical equipment, 
‘‘(J) advanced technology communications 
equipment, 
‘‘(K) optical fiber and photonics equip-
ment, 
‘‘(L) advanced environmental products, 
‘‘(M) advanced life science products, or 
‘‘(N) new high productivity assets. 
‘‘(2) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) COMPUTER.—The term ‘computer’ 
means a programmable electronically activated 
device which—
‘‘(i) is capable of accepting informa-
tion, applying prescribed processes to the 
information, and supplying the results of 
those processes, and 
‘‘(ii) consists of a central processing 
unit containing extensive storage, logic, 
arithmetic and control capabilities. 
‘‘(B) COMPUTER
RELATED
PERIPHERAL 
EQUIPMENT.—The term ‘computer related pe-
ripheral equipment’ means any auxiliary ma-
dures shall require the Secretary to provide 
a determination within 90 days of receipt 
of a properly completed request for a pub-
lic ruling. 
‘‘(3) EXCLUDED PROPERTY.—The term ‘high 
productivity property’ shall not include—
‘‘(A) an entire car, locomotive, aircraft, 
ship or other vehicle solely because the vehicle 
is controlled in whole or part by a computer or 
other electronic equipment, 
‘‘(B) any equipment of a kind used pri-
marily for entertainment or amusement of the 
user, and 
‘‘(C) typewriters, calculators, copiers, du-
plication equipment, and other similar equip-
ment. 
‘‘(c) ELECTION.—An election under this section for 
any taxable year shall—
‘‘(1) be made on an asset by asset basis, and 
‘‘(2) be made on the taxpayer’s return of the 
tax imposed by this chapter for the taxable year. 
‘‘(d) SPECIAL RULES.—
‘‘(1) COST.—For purposes of this section, the 
cost of property does not include so much of the 
basis of such property as is determined by reference
to the basis of other property held at any time by 
the person acquiring such property. 
‘‘(2) ANTICHURNING RULES.—
‘‘(A) IN GENERAL.—This section shall not 
apply to any property acquired by the taxpayer 
after December 31, 2002, if—
‘‘(i) the property was owned or used 
at any time during the period beginning on 
January 1, 2002, and ending on December 
31, 2002, by the taxpayer or a related per-
son, 
‘‘(ii) the property was owned or used 
at any time during the period described in 
clause (i), and, as part of the transaction, 
the user of the property does not change, 
‘‘(iii) the taxpayer leases such prop-
erty to a person (or a person related to 
such person) who owned or used such 
property at any time during the period de-
scribed in clause (i), or 
‘‘(iv) the property is acquired in a 
transaction as part of which the user of 
such property does not change and the 
property was acquired from a person to 
which clause (ii) or clause (iii) applies.
‘‘(B) 
APPLICABLE
COST
RECOVERY 
RULES.—Section 168 shall apply to any prop-
erty to which this section does not apply by rea-
son of this paragraph. 
‘‘(C) SPECIAL
RULES.—For purposes of 
this paragraph—
‘‘(i) property shall not be treated as 
owned before it is placed in service, and 
‘‘(ii) whether the user of a property 
changes will be determined in accordance 
with regulations prescribed by the Sec-
retary. 
‘‘(3) RECAPTURE
IN
CERTAIN
CASES.—The 
Secretary shall, by regulations, provide for the re-
capturing the benefit under any deduction allowable 
under subsection (a) with respect to any property 
which is not used predominantly in a trade or busi-
ness at any time. 
‘‘(4) ALTERNATIVE DEPRECIATION SYSTEM AP-
PLIES.—The election under subsection (a) may not 
be made with respect to property which at any time
during the taxable year in which such property is 
placed in service is—
‘‘(A) described in paragraph (1) of section 
168A(g), or
‘‘(B) ‘listed property’ ‘not predominantly 
used in a qualified business use’ as such terms 
apply for purposes of paragraph (1) of 
280F(b).’’. 
(b) CONFORMING AMENDMENT.—The table of sec-
tions for part VI of subchapter B of chapter 1 of such 
Code is amended by adding after section 168 the following 
new item:
‘‘Sec. 168A. High productivity investment deduction.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
December 31, 2002, with respect to taxable years begin-
ning after such date. 
SEC. 3. 30 PERCENT EXPENSING FOR CERTAIN PROPERTY 
ACQUIRED AFTER SEPTEMBER 10, 2001, MADE 
PERMANENT. 
(a) REPEAL OF LIMITATIONS.—
(1) 
ACQUISITION
LIMITATION.—Section 
168(k)(2) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘, and before September 11, 
2004’’ each place it appears in subparagraphs 
(A)(iii) and (D)(i). 
(2) PLACED
IN
SERVICE
LIMITATION.—Sub-
paragraph (A) of section 168(k)(2) of such Code is 
amended by inserting ‘‘and’’ at the end of clause
(ii), by striking ‘‘, and’’ at the end of clause (iii) and 
inserting a period, and by striking clause (iv). 
(3) BASIS
LIMITATION
FOR
CERTAIN
PROP-
ERTY.—Subparagraph (B) of section 168(k)(2) of 
such Code is amended by striking clause (ii) and re-
designating clause (iii) as clause (ii). 
(b) SYNDICATIONS.—Subparagraph (D) of section 
168(k)(2) of such Code (relating to special rules) is 
amended by adding at the end the following: 
‘‘(iii) SYNDICATIONS.—For purposes 
of subparagraph (A)(ii), if property—
‘‘(I) is treated as originally 
placed in service after September 10, 
2001, either directly or by a lessor of 
such property or pursuant to subpara-
graph (D)(ii), and 
‘‘(II) is sold within 6 months 
after such property is so placed in 
service, 
such property shall be treated as originally 
placed in service not earlier than the date 
of such sale.’’. 
(c) CONFORMING AMENDMENT.—The heading of 
subsection (k) of section 168 of such Code is amended by 
striking ‘‘, AND BEFORE SEPTEMBER 11, 2004’’.
(d) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to property placed in service after De-
cember 31, 2002, in taxable years beginning after 
such date. 
(2) SUBSECTION (b).—The amendment made 
by subsection (b) shall take effect as if included in 
the amendments made by section 101 of the Job 
Creation and Worker Assistance Act of 2002. 
SEC. 4. DEPRECIATION RULES NOT MODIFIED FOR PUR-
POSES OF ALTERNATIVE MINIMUM TAX. 
(a) DETERMINATION OF ALTERNATIVE TAXABLE IN-
COME.—Paragraph (1) of section 56(a) of the Internal 
Revenue Code of 1986 (relating to depreciation) is amend-
ed by adding at the end the following new subparagraph: 
‘‘(E) 
TERMINATION.—This 
paragraph 
shall not apply to property placed in service 
after December 31, 2002, in taxable years be-
ginning after such date.’’. 
(b) DETERMINATION OF ADJUSTED CURRENT EARN-
INGS.—Subparagraph (A) of section 56(g)(4) of such 
Code (relating to depreciation) is amended by adding at 
the end the following new clause: