Sheet metal & Air Conditioning Contractors’ National Association

Issue Briefs

Smart Buildings Act


SMACNA supports the Smart Buildings Act, legislation amending the depreciation recovery period for energy efficient mechanical equipment for HVAC systems to improve environmental quality and reduce building operation expenses while saving energy.


The Smart Buildings Act would amend the Internal Revenue Service Code to reduce the depreciation period for energy efficient mechanical equipment for heating, ventilating and air conditioning (HVAC) to twenty years from the current thirty-nine year depreciation period. With the recent energy price spike and potential shortages on the horizon is one of many efficiency initiatives needed now   Cosponsored by a bipartisan group of members of Congress, this bill is expected to go far in the 111th Congress.

SMACNA has long urged Congress to enact an aggressive federal tax incentives and procurement policy that encourage far greater energy efficiency in both commercial and public buildings. While some policy makers have suggested that an even shorter (10-15 year) HVAC mechanical equipment depreciation period could be combined with a significant tax credit for high efficiency HVAC systems to save even more energy, this legislation would go far in encouraging building owners to retrofit their properties now with higher efficiency, chlorofluorocarbon (CFC) free technology. The Smart Buildings Act would create a valuable incentive to upgrade commercial buildings with readily available high efficiency HVAC technology using 30-40 percent less energy.


  • A 20-year depreciation period would reduce current disparity between tenant depreciation expenses, and tenant demands and building use patterns.
  • Reducing the depreciation cost recovery period would further provide incentives to invest in high-efficiency energy systems for facility lighting, heating and air conditioning.  Such improvements are known to lower building operating costs and improve indoor air quality.
  • The proposed 20-year depreciation period would be far more realistic than the current IRS depreciable life of 39 years for the building mechanical systems.


Awaiting introduction in the 111th Congress.  Representative Bean (D-IL) with bipartisan cosponsors introduced the bill in the 110th Congress. It was referred to the House of Representatives Way and Means Committee. The Smart Buildings Act, would provide 20-year depreciation on HVACR systems or components if they exceed by 10 percent applicable minimum performance standards as found in ASHRAE 90.1, the 2005 Energy Policy Act and National Appliance Energy Conservation Act of 1987. Similar legislation was introduced in the 110th Congress by Senator Pryor (D-AR).


Updated March 2009