I 

113TH CONGRESS 

1ST SESSION H. R. 2598 

To amend the Internal Revenue Code of 1986 to reduce the depreciation 

recovery periods for energy efficient commercial buildings, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 28, 2013 

Mr. LANGEVIN (for himself, Mr. BLUMENAUER, and Mr. WELCH) 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 reduce 

the depreciation recovery periods for energy efficient 

commercial buildings, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Building Efficiently 

5 Act of 2013’’. 

6 SEC. 2. SHORTER DEPRECIATION RECOVERY PERIODS FOR 

7 ENERGY EFFICIENT BUILDINGS. 

8 (a) 25-YEAR RECOVERY PERIOD FOR ENERGY EFFI9 CIENT NONRESIDENTIAL REAL PROPERTY.— 


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1 (1) IN GENERAL.—Section 168(e)(3) of the In2 ternal Revenue Code of 1986 is amended by insert3 ing after subparagraph (F) the following new sub4 paragraph: 

5 ‘‘(G) 25-YEAR PROPERTY.—The term ‘25- 

6 year property’ means any qualified energy effi7 cient nonresidential real property.’’. 

8 (2) QUALIFIED ENERGY EFFICIENT NONRESI9 DENTIAL REAL PROPERTY DEFINED.—Subsection (i) 

10 of section 168 of such Code is amended by adding 

11 at the end the following: 

12 ‘‘(20) QUALIFIED ENERGY EFFICIENT NONRESI13 DENTIAL REAL PROPERTY.— 

14 ‘‘(A) IN GENERAL.—The term ‘qualified 

15 energy efficient nonresidential real property’ 

16 means a building which is nonresidential real 

17 property which is described in subparagraph 

18 (B), (C), or (D). 

19 ‘‘(B) NEW OR RECONSTRUCTED BUILD20 ING.—A building is described in this subpara21 graph if— 

22 ‘‘(i) the certification requirements of 

23 subparagraph (E) with respect to the 

24 building are met, 


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1 ‘‘(ii) the original use of the building 

2 commences with the taxpayer, and 

3 ‘‘(iii) the building is placed in service 

4 after the date of the enactment of this 

5 paragraph. 

6 ‘‘(C) IMPROVEMENTS TO EXISTING BUILD7 ING.—A building is described in this subpara8 graph if, only after improvements are made to 

9 the building— 

10 ‘‘(i) the certification requirements of 

11 subparagraph (E) with respect to the 

12 building are met, 

13 ‘‘(ii) the original use of the improved 

14 building commences with the taxpayer, 

15 ‘‘(iii) the improved building is placed 

16 in service after the date of the enactment 

17 of this paragraph, and 

18 ‘‘(iv) the taxpayer elects to the appli19 cation of this paragraph with respect to 

20 the building. 

21 ‘‘(D) BUILDINGS ACQUIRED BY PUR22 CHASE.—A building is described in this sub23 paragraph if the building— 

24 ‘‘(i) is acquired by purchase from an 

25 unrelated person, 


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1 ‘‘(ii) meets the certification require2 ments of subparagraph (E), and 

3 ‘‘(iii) is placed in service after the 

4 date of the enactment of this paragraph. 

5 ‘‘(E) CERTIFICATION REQUIREMENTS.— 

6 The requirements of this subparagraph are met 

7 if, with respect to a building, the building is 

8 certified in accordance with section 179D(d)(6) 

9 as being constructed, reconstructed, or retro10 fitted, as the case may be, under a plan de11 signed to reduce energy and power consumption 

12 of the building by 40 percent or more in com13 parison to— 

14 ‘‘(i) in the case a retrofits made to an 

15 existing building, the baseline annual en16 ergy and power consumption of the build17 ing, or 

18 ‘‘(ii) in any other case, a reference 

19 building which meets the minimum re20 quirements of Standard 90.1–2004 using 

21 methods of calculation under section 

22 179D(d)(2). 

23 ‘‘(F) BASELINE ANNUAL ENERGY AND

24 POWER CONSUMPTION.—The baseline annual 


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1 energy and power consumption of any building 

2 shall be determined by using— 

3 ‘‘(i) a building energy performance 

4 benchmarking tool designated for purposes 

5 of this paragraph by the Administrator of 

6 the Environmental Protection Agency, 

7 which is based upon energy and power con8 sumption data during the 1-year period 

9 ending on the date on which retrofits 

10 under the plan are placed in service, or 

11 ‘‘(ii) such other methods of calculation 

12 as certified by the Secretary in accordance 

13 with 179D(d)(3). 

14 ‘‘(G) STANDARD 90.1–2004.—The term 

15 ‘Standard 90.1–2004’ means Standard 90.1– 

16 2004 of the American Society of Heating, Re17 frigerating, and Air Conditioning Engineers and 

18 the Illuminating Engineering Society of North 

19 America (as in effect on July 30, 2012). 

20 ‘‘(H) RELATED PERSONS.—For purposes 

21 of subparagraph (D), a person is related to an22 other person if— 

23 ‘‘(i) the persons are members of an 

24 affiliated group (as defined in section 

25 1504), or 


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1 ‘‘(ii) the persons have a relationship 

2 described in subsection (b) of section 267; 

3 except that, for purposes of this clause, the 

4 phrase ‘80 percent or more’ shall be sub5 stituted for the phrase ‘more than 50 per6 cent’ each place it appears in such sub7 section and rules similar to the rules of 

8 subsections (c) and (e) (other than para9 graphs (4) and (5) thereof) shall apply. 

10 ‘‘(I) DENIAL OF DOUBLE BENEFIT.—If 

11 this section applies to a building by reason of 

12 subsection (e)(3)(G), the deduction under sec13 tion 179D shall not be allowed.’’. 

14 (b) 20-YEAR RECOVERY PERIOD FOR ENERGY EFFI15 CIENT RESIDENTIAL RENTAL PROPERTY.— 

16 (1) IN GENERAL.—Subparagraph (F) of section 

17 168(e)(3) of such Code (relating to 20-year prop18 erty) is amended to read as follows: 

19 ‘‘(F) 20-YEAR PROPERTY.—The term ‘20- 

20 year property’ means— 

21 ‘‘(i) initial clearing and grading land 

22 improvements with respect to any electric 

23 utility transmission and distribution plant, 

24 and 


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1 ‘‘(ii) any qualified energy efficient res2 idential rental property.’’. 

3 (2) QUALIFIED ENERGY EFFICIENT RESIDEN4 TIAL RENTAL PROPERTY DEFINED.—Subsection (i) 

5 of section 168 of such Code, as amended by sub6 section (a), is amended by adding at the end the fol7 lowing: 

8 ‘‘(21) QUALIFIED ENERGY EFFICIENT RESIDEN9 TIAL RENTAL PROPERTY.— 

10 ‘‘(A) IN GENERAL.—The term ‘qualified 

11 energy efficient nonresidential real property’ 

12 means a building which is residential rental 

13 property which is described in subparagraph 

14 (B), (C), or (D). 

15 ‘‘(B) NEW OR RECONSTRUCTED BUILD16 ING.—A building is described in this subpara17 graph if— 

18 ‘‘(i) the certification requirements of 

19 subparagraph (E) with respect to the 

20 building are met, 

21 ‘‘(ii) the original use of which com22 mences with the taxpayer, and 

23 ‘‘(iii) the building is placed in service 

24 after the date of the enactment of this 

25 paragraph. 


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1 ‘‘(C) IMPROVEMENTS TO EXISTING BUILD2 ING.—A building is described in this subpara3 graph if, only after improvements are made to 

4 the building— 

5 ‘‘(i) the certification requirements of 

6 subparagraph (E) with respect to the 

7 building are met, 

8 ‘‘(ii) the original use of the improved 

9 building commences with the taxpayer, 

10 ‘‘(iii) the improved building is placed 

11 in service after the date of the enactment 

12 of this paragraph, and 

13 ‘‘(iv) the taxpayer elects to the appli14 cation of this paragraph with respect to 

15 the building. 

16 ‘‘(D) BUILDINGS ACQUIRED BY PUR17 CHASE.—A building is described in this sub18 paragraph if the building— 

19 ‘‘(i) is acquired by purchase from an 

20 unrelated person, 

21 ‘‘(ii) meets the certification require22 ments of subparagraph (E), and 

23 ‘‘(iii) is placed in service after the 

24 date of the enactment of this paragraph. 


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1 ‘‘(E) CERTIFICATION REQUIREMENTS.— 

2 The requirements of this subparagraph are met 

3 if, with respect to a building, the building is 

4 certified in accordance with section 45L(d) as 

5 being constructed, reconstructed, or retrofitted, 

6 as the case may be, under a plan designed to 

7 reduce energy and power consumption of the 

8 building by 40 percent or more in comparison 

9 to— 

10 ‘‘(i) in the case a retrofits made to an 

11 existing building, the baseline annual en12 ergy and power consumption of the build13 ing, or 

14 ‘‘(ii) in any other case, a reference 

15 building which meets the minimum re16 quirements of the International Energy 

17 Conservation Code 2004 using methods of 

18 calculation under section 45L(d). 

19 ‘‘(F) BASELINE ANNUAL ENERGY AND

20 POWER CONSUMPTION.—The baseline annual 

21 energy and power consumption of any building 

22 shall be determined by using— 

23 ‘‘(i) a building energy performance 

24 benchmarking tool designated for purposes 

25 of this paragraph by the Administrator of 


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1 the Environmental Protection Agency, 

2 which is based upon energy and power con3 sumption data during the 1-year period 

4 ending on the date on which retrofits 

5 under the plan are placed in service, or 

6 ‘‘(ii) such other methods of calculation 

7 as certified by the Secretary in accordance 

8 with 45L(d). 

9 ‘‘(G) RELATED PERSONS.—For purposes 

10 of subparagraph (D), a person is related to an11 other person if— 

12 ‘‘(i) the persons are members of an 

13 affiliated group (as defined in section 

14 1504), or 

15 ‘‘(ii) the persons have a relationship 

16 described in subsection (b) of section 267; 

17 except that, for purposes of this clause, the 

18 phrase ‘80 percent or more’ shall be sub19 stituted for the phrase ‘more than 50 per20 cent’ each place it appears in such sub21 section and rules similar to the rules of 

22 subsections (c) and (e) (other than para23 graphs (4) and (5) thereof) shall apply. 

24 ‘‘(H) DENIAL OF DOUBLE BENEFIT.—If 

25 this section applies to a building by reason of 


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1 subsection (e)(3)(F)(ii), the deduction under 

2 section 179D shall not be allowed.’’. 

3 (c) CONFORMING AMENDMENTS.— 

4 (1) The table contained in section 168(c) of 

5 such Code is amended by inserting after the item re6 lating to 20-year property the following new item: 

‘‘25-year property ........................................................................ 25 years’’. 

7 (2) The table contained in section 467(e)(3)(A) 

8 of such Code is amended— 

9 (A) by inserting ‘‘which is not 25-year 

10 property’’ after ‘‘nonresidential real property’’, 

11 and 

12 (B) by inserting after the item relating to 

13 residential rental property and nonresidential 

14 real property the following new item: 

‘‘25-year property ........................................................................ 19 years.’’. 

15 (3) Clauses (iv), (v), and (ix) of section 

16 168(e)(3)(E) of such Code are each amended by in17 serting ‘‘(not described in subparagraph (G))’’ after 

18 ‘‘property’’. 

19 (d) REQUIREMENT TO USE STRAIGHT LINE METH20 OD.—Paragraph (3) of section 168(b) of such Code (relat21 ing to property to which straight line method applies) is 

22 amended by redesignating subparagraphs (F), (G), (H), 

23 and (I) as subparagraphs (G), (H), (I), and (J), respecVerDate Mar 15 2010 01:57 Jul 04, 2013 Jkt 029200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2598.IH H2598

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1 tively, and by inserting after subparagraph (E) the fol2 lowing new subparagraph: 

3 ‘‘(F) Property described in subsection 

4 (e)(3)(F)(ii) or subsection (e)(3)(G).’’. 

5 (e) ALTERNATIVE SYSTEM.—The table contained in 

6 section 168(g)(3)(B) of such Code is amended by striking 

7 the item relating to subparagraph (F) and inserting the 

8 following new items: 

‘‘(F)(i) ................................................................................................ 25

(F)(ii) ............................................................................................... 20

(G) .................................................................................................... 25’’. 

9 (f) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to property placed in service after 

11 December 31, 2012. 

Æ 


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