To amend the Internal Revenue Code of 1986 to establish a 2-year recovery period for depreciation of computers and peripheral equipment used in manufacturing.

May 17, 2001

Mr. COLLINS (for himself, Mr. CARDIN, Mr. UDALL of Colorado, Mr. SAM JOHNSON of Texas, Mr. BLUNT, Mr. RAMSTAD, Mr. HORN, Mr. SHOWS, and Mr. MILLER of Florida) introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to establish a 2-year recovery period for depreciation of computers and peripheral equipment used in manufacturing.

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

SECTION 1. SHORT TITLE.

This Act may be cited as the `Computer Equipment Common Sense Depreciation Act'.

SEC. 2. 2-YEAR APPLICABLE RECOVERY PERIOD FOR DEPRECIATION OF COMPUTERS AND PERIPHERAL EQUIPMENT USED IN MANUFACTURING.

(a) 2-YEAR APPLICABLE RECOVERY PERIOD-

(1) IN GENERAL- Paragraph (1) of section 168(c) of the Internal Revenue Code of 1986 (relating to applicable recovery period) is amended by inserting before the first item in the table the following new item:

`Computers or peripheral equipment used in manufacturing

--2 years'.

(2) CONFORMING AMENDMENT- Clause (iv) of section 168(e)(3)(B) of such Code (relating to 5-year property) is amended by inserting `(except computers or peripheral equipment used in manufacturing)' before the comma.

(b) 2-YEAR RECOVERY PERIOD UNDER ALTERNATIVE 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 to read as follows:

`(C) QUALIFIED TECHNOLOGICAL EQUIPMENT-

`(i) IN GENERAL- Except as provided in clause (ii), in the case of any qualified technological equipment, the recovery period used for purposes of paragraph (2) shall be 5 years.

`(ii) COMPUTERS OR PERIPHERAL EQUIPMENT USED IN MANUFACTURING- In the case of any computer or peripheral equipment used in manufacturing, the recovery period used for purposes of paragraph (2) shall be 2 years.'

(c) EFFECTIVE DATE- The amendments made by this section shall apply to property placed in service after December 31, 2001.

END