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.
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 ‘‘Cool and Efficient 
Buildings Act’’. 
SEC. 2. FINDINGS. 
The Congress finds the following: 
(1) The current 39 year depreciation period for 
commercial and industrial heating, ventilation, air
conditioning and refrigeration (HVACR) systems 
does not accurately reflect the life span of these sys-
tems. 
(2) The upkeep and energy costs required for 
HVACR systems which are between 15 and 20 years 
old in nonresidential buildings are not cost-effective 
but these same businesses find it difficult to make 
the high-cost investment in new energy systems. 
(3) A reduced depreciation period for HVACR 
systems would be a clear incentive to keep systems 
up-to-date and help increase businesses’ bottom line 
while decreasing the Nation’s energy consumption. 
(4) Reducing the depreciation period for 
HVACR systems would also provide an incentive for 
replacing the estimated 35,000 large tonnage chillers 
in use as of January 1, 2004, that still use 
chlorofluorocarbon (CFC) refrigerants which were 
banned from production in the United States due to 
concerns about depletion of the ozone layer. 
(5) The Environmental Protection Agency re-
cently concluded in a report that a ‘‘new, energy-ef-
ficient chiller can easily pay for itself in electricity 
savings, improved reliability, and lower maintenance 
costs in five years’’.
(6) Recent technological advancements that 
have increased the ability of businesses to conserve 
energy include co-generation and combined heat and 
power systems which are recognized as highly effi-
cient systems for large buildings. 
(7) One example of the remarkable increase in 
energy efficiency due to technological advances is the 
great progress the air conditioning industry has 
made. For unitary products, average efficiencies in-
creased by 50 percent between 1976 and 1995. 
(8) Buildings in the United States use more 
than 30,000,000,000,000,000 Btu of energy per 
year. 1,000,000,000,000,000 Btu of energy is 
enough power to run all the residential refrigerators 
in the United States for one year. Without energy-
conservation technologies energy use could reach 
40,000,000,000,000,000 Btu by 2020. 
SEC. 3. RECOVERY PERIOD FOR DEPRECIATION OF CER-
TAIN SYSTEMS INSTALLED IN NONRESIDEN-
TIAL BUILDINGS. 
(a) 15-YEAR
RECOVERY
PERIOD.—Subparagraph 
(E) of section 168(e)(3) of the Internal Revenue Code of 
1986 (relating to 15-year property) is amended by striking 
‘‘and’’ at the end of clause (ii), by striking the period at
the end of clause (iii) and inserting ‘‘, and’’, and by adding 
at the end the following new clause: 
‘‘(iv) any property which is part of a 
heating, ventilation, air conditioning, or re-
frigeration system and which is installed 
on or in a building which is nonresidential 
real property.’’. 
(b) REQUIREMENT TO USE STRAIGHT LINE METH-
OD.—Paragraph (3) of section 168(b) of such Code (relat-
ing to property to which straight line method applies) is 
amended by adding at the end the following new subpara-
graph: 
‘‘(G) Property described in subsection 
(e)(3)(E)(iv).’’. 
(c) ALTERNATIVE SYSTEM.—The table contained in 
section 168(g)(3)(B) of such Code is amended by inserting 
after the item relating to subparagraph (E)(iii) the fol-
lowing new item:
‘‘(E)(iv) .....................................................................................................
15’’.
(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.
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