[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3953 Introduced in House (IH)]






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 Representatives 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 systems.
            (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 recently concluded 
        in a report that a ``new, energy-efficient 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 efficient 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 increased 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 CERTAIN SYSTEMS INSTALLED 
              IN NONRESIDENTIAL 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 
                        refrigeration system and which is installed on 
                        or in a building which is nonresidential real 
                        property.''.
    (b) Requirement to Use Straight Line Method.--Paragraph (3) of 
section 168(b) of such Code (relating to property to which straight 
line method applies) is amended by adding at the end the following new 
subparagraph:
                    ``(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 following 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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