[Congressional Record Volume 171, Number 122 (Wednesday, July 16, 2025)]
[Extensions of Remarks]
[Page E678]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      CLARIFYING CHANGES TO H.R. 1

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                           HON. DUSTY JOHNSON

                           of south carolina

                    in the house of representatives

                        Wednesday, July 16, 2025

  Mr. JOHNSON of South Dakota. Mr. Speaker, I rise to clarify the 
changes to depreciation rules in the One Big Beautiful Bill Act as they 
pertain to energy property installed by the geothermnal heating and 
cooling industry. Section 70509 of the One Big Beautiful Bill Act will 
exclude certain energy property from qualifying as ``5-year property'' 
under section 168(e)(3)(B) of the tax code. It is my understanding that 
after this change, geothermal heat pump systems (i.e., energy equipment 
of the type described in section 48(a)(3)(A)(vii) of the tax code) will 
qualify as ``7-year property.'' This is because geothermal heat pump 
systems do not have a class life, and it is my understanding that they 
are not considered residential rental or nonresidential property for 
purposes of the tax code. Accordingly, such systems are 7-year property 
(which is one of the asset classes eligible for bonus depreciation).

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