II 110th CONGRESS 1st Session S. 1407 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.

Short title

This Act may be cited as the Smart Buildings Act.

2.

Recovery period for depreciation of certain systems installed in nonresidential and residential rental buildings

(a)

20-year recovery period

Subparagraph (F) of section 168(e)(3) of the Internal Revenue Code of 1986 (relating to 20-year property) is amended to read as follows: (F)

20-year property

The term 20-year property means— (i)initial clearing and grading land improvements with respect to any electric utility transmission and distribution plant, and (ii)any property— (I)which is part of a heating, ventilation, air conditioning, or refrigeration system, or which replaces 1 or more components of such a system but only if such system or such replacement component exceeds by at least 10 percent the applicable minimum performance standard for such system or component under the National Appliance Energy Conservation Act of 1987, the Energy Policy Act of 2005, or the American Society of Heating, Refrigerating and Air-Conditioning Engineers Standard 90.1, (II)which is installed on or in a building which is nonresidential real property or residential rental property, (III)the original use of which commences with the taxpayer (the owner or lessor in the case of residential rental property), and (IV)which is placed in service before January 1, 2012. . (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 redesignating subparagraphs (F), (G), and (H) as subparagraphs (G), (H), and (I), respectively, and by inserting after subparagraph (E) the following new subparagraph: (F)Property described in subsection (e)(3)(F)(ii). . (c)

Alternative system

The table contained in section 168(g)(3)(B) of such Code is amended by striking the item relating to subparagraph (F) and inserting the following new items: (F)(i)25(F)(ii)25 . (d)

Effective date

The amendments made by this section shall apply to property placed in service after December 31, 2007.