I 

108TH CONGRESS 

2D SESSION H. R. 3953

To amend the Internal Revenue Code of 1986 to provide a shorter recovery 

period for the depreciation of certain systems installed in nonresidential 

buildings. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 11, 2004

Mr. HOEKSTRA (for himself, Mr. CAMP, Mr. MANZULLO, and Mrs. JONES of 

Ohio) 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 provide 

a shorter recovery period for the depreciation of certain 

systems installed in nonresidential 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 ‘‘Cool and Efficient 

5 Buildings Act’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds the following: 

8 (1) The current 39 year depreciation period for 

9 commercial and industrial heating, ventilation, air 
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1 conditioning and refrigeration (HVACR) systems 

2 does not accurately reflect the life span of these sys3 tems. 

4 (2) The upkeep and energy costs required for 

5 HVACR systems which are between 15 and 20 years 

6 old in nonresidential buildings are not cost-effective 

7 but these same businesses find it difficult to make 

8 the high-cost investment in new energy systems. 

9 (3) A reduced depreciation period for HVACR 

10 systems would be a clear incentive to keep systems 

11 up-to-date and help increase businesses’ bottom line 

12 while decreasing the Nation’s energy consumption. 

13 (4) Reducing the depreciation period for 

14 HVACR systems would also provide an incentive for 

15 replacing the estimated 35,000 large tonnage chillers 

16 in use as of January 1, 2004, that still use 

17 chlorofluorocarbon (CFC) refrigerants which were 

18 banned from production in the United States due to 

19 concerns about depletion of the ozone layer. 

20 (5) The Environmental Protection Agency re21 cently concluded in a report that a ‘‘new, energy-ef22 ficient chiller can easily pay for itself in electricity 

23 savings, improved reliability, and lower maintenance 

24 costs in five years’’. 
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1 (6) Recent technological advancements that 

2 have increased the ability of businesses to conserve 

3 energy include co-generation and combined heat and 

4 power systems which are recognized as highly effi5 cient systems for large buildings. 

6 (7) One example of the remarkable increase in 

7 energy efficiency due to technological advances is the 

8 great progress the air conditioning industry has 

9 made. For unitary products, average efficiencies in10 creased by 50 percent between 1976 and 1995. 

11 (8) Buildings in the United States use more 

12 than 30,000,000,000,000,000 Btu of energy per 

13 year. 1,000,000,000,000,000 Btu of energy is 

14 enough power to run all the residential refrigerators 

15 in the United States for one year. Without energy16 conservation technologies energy use could reach 

17 40,000,000,000,000,000 Btu by 2020. 

18 SEC. 3. RECOVERY PERIOD FOR DEPRECIATION OF CER19 TAIN SYSTEMS INSTALLED IN NONRESIDEN20 TIAL BUILDINGS. 

21 (a) 15-YEAR RECOVERY PERIOD.—Subparagraph 

22 (E) of section 168(e)(3) of the Internal Revenue Code of 

23 1986 (relating to 15-year property) is amended by striking 

24 ‘‘and’’ at the end of clause (ii), by striking the period at 
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1 the end of clause (iii) and inserting ‘‘, and’’, and by adding 

2 at the end the following new clause: 

3 ‘‘(iv) any property which is part of a 

4 heating, ventilation, air conditioning, or re5 frigeration system and which is installed 

6 on or in a building which is nonresidential 

7 real property.’’. 

8 (b) REQUIREMENT TO USE STRAIGHT LINE METH9 OD.—Paragraph (3) of section 168(b) of such Code (relat10 ing to property to which straight line method applies) is 

11 amended by adding at the end the following new subpara12 graph: 

13 ‘‘(G) Property described in subsection 

14 (e)(3)(E)(iv).’’. 

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

16 section 168(g)(3)(B) of such Code is amended by inserting 

17 after the item relating to subparagraph (E)(iii) the fol18 lowing new item:

‘‘(E)(iv) ..................................................................................................... 15’’.

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

20 this section shall apply to property placed in service after 

21 the date of the enactment of this Act.

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