II 

110TH CONGRESS 

1ST SESSION S. 1407 

To amend the Internal Revenue Code of 1986 to temporarily provide a 

shorter recovery period for the depreciation of certain systems installed 

in nonresidential and residential rental buildings. 

IN THE SENATE OF THE UNITED STATES 

MAY 16, 2007 

Mr. PRYOR (for himself and Mr. CRAPO) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to temporarily 

provide a shorter recovery period for the depreciation 

of certain systems installed in nonresidential and residential rental buildings. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Smart Buildings Act’’. 


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1 SEC. 2. RECOVERY PERIOD FOR DEPRECIATION OF CER2 TAIN SYSTEMS INSTALLED IN NONRESIDEN3 TIAL AND RESIDENTIAL RENTAL BUILDINGS. 

4 (a) 20-YEAR RECOVERY PERIOD.—Subparagraph 

5 (F) of section 168(e)(3) of the Internal Revenue Code of 

6 1986 (relating to 20-year property) is amended to read 

7 as follows: 

8 ‘‘(F) 20-YEAR PROPERTY.—The term ‘20- 

9 year property’ means— 

10 ‘‘(i) initial clearing and grading land 

11 improvements with respect to any electric 

12 utility transmission and distribution plant, 

13 and 

14 ‘‘(ii) any property— 

15 ‘‘(I) which is part of a heating, 

16 ventilation, air conditioning, or refrig17 eration system, or which replaces 1 or 

18 more components of such a system 

19 but only if such system or such re20 placement component exceeds by at 

21 least 10 percent the applicable min22 imum performance standard for such 

23 system or component under the Na24 tional Appliance Energy Conservation 

25 Act of 1987, the Energy Policy Act of 

26 2005, or the American Society of 


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1 Heating, Refrigerating and Air-Condi2 tioning Engineers Standard 90.1, 

3 ‘‘(II) which is installed on or in 

4 a building which is nonresidential real 

5 property or residential rental prop6 erty, 

7 ‘‘(III) the original use of which 

8 commences with the taxpayer (the 

9 owner or lessor in the case of residen10 tial rental property), and 

11 ‘‘(IV) which is placed in service 

12 before January 1, 2012.’’. 

13 (b) REQUIREMENT TO USE STRAIGHT LINE METH14 OD.—Paragraph (3) of section 168(b) of such Code (relat15 ing to property to which straight line method applies) is 

16 amended by redesignating subparagraphs (F), (G), and 

17 (H) as subparagraphs (G), (H), and (I), respectively, and 

18 by inserting after subparagraph (E) the following new 

19 subparagraph: 

20 ‘‘(F) Property described in subsection 

21 (e)(3)(F)(ii).’’. 

22 (c) ALTERNATIVE SYSTEM.—The table contained in 

23 section 168(g)(3)(B) of such Code is amended by striking 

24 the item relating to subparagraph (F) and inserting the 

25 following new items: 


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‘‘(F)(i) ............................................................................................. 25 

(F)(ii) .............................................................................................. 25’’. 

1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to property placed in service after 

3 December 31, 2007. 

Æ 


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