‘‘(ii) meets the certification require-
ments of subparagraph (E), and 
‘‘(iii) is placed in service after the 
date of the enactment of this paragraph. 
‘‘(E) CERTIFICATION
REQUIREMENTS.— 
The requirements of this subparagraph are met 
if, with respect to a building, the building is 
certified in accordance with section 179D(d)(6) 
as being constructed, reconstructed, or retro-
fitted, as the case may be, under a plan de-
signed to reduce energy and power consumption 
of the building by 40 percent or more in com-
parison to— 
‘‘(i) in the case a retrofits made to an 
existing building, the baseline annual en-
ergy and power consumption of the build-
ing, or 
‘‘(ii) in any other case, a reference 
building which meets the minimum re-
quirements of Standard 90.1–2004 using 
methods of calculation under section 
179D(d)(2). 
‘‘(F) BASELINE
ANNUAL
ENERGY
AND 
POWER
CONSUMPTION.—The baseline annual 
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energy and power consumption of any building 
shall be determined by using— 
‘‘(i) a building energy performance 
benchmarking tool designated for purposes 
of this paragraph by the Administrator of 
the Environmental Protection Agency, 
which is based upon energy and power con-
sumption data during the 1-year period 
ending on the date on which retrofits 
under the plan are placed in service, or 
‘‘(ii) such other methods of calculation 
as certified by the Secretary in accordance 
with 179D(d)(3). 
‘‘(G) STANDARD
90.1–2004.—The term 
‘Standard 90.1–2004’ means Standard 90.1– 
2004 of the American Society of Heating, Re-
frigerating, and Air Conditioning Engineers and 
the Illuminating Engineering Society of North 
America (as in effect on July 30, 2012). 
‘‘(H) RELATED
PERSONS.—For purposes 
of subparagraph (D), a person is related to an-
other person if— 
‘‘(i) the persons are members of an 
affiliated group (as defined in section 
1504), or 
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‘‘(ii) the persons have a relationship 
described in subsection (b) of section 267; 
except that, for purposes of this clause, the 
phrase ‘80 percent or more’ shall be sub-
stituted for the phrase ‘more than 50 per-
cent’ each place it appears in such sub-
section and rules similar to the rules of 
subsections (c) and (e) (other than para-
graphs (4) and (5) thereof) shall apply. 
‘‘(I) DENIAL
OF
DOUBLE
BENEFIT.—If 
this section applies to a building by reason of 
subsection (e)(3)(G), the deduction under sec-
tion 179D shall not be allowed.’’. 
(b) 20-YEAR RECOVERY PERIOD FOR ENERGY EFFI-
CIENT RESIDENTIAL RENTAL PROPERTY.— 
(1) IN GENERAL.—Subparagraph (F) of section 
168(e)(3) of such Code (relating to 20-year prop-
erty) 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 
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‘‘(ii) any qualified energy efficient res-
idential rental property.’’. 
(2) QUALIFIED ENERGY EFFICIENT RESIDEN-
TIAL RENTAL PROPERTY DEFINED.—Subsection (i) 
of section 168 of such Code, as amended by sub-
section (a), is amended by adding at the end the fol-
lowing: 
‘‘(21) QUALIFIED ENERGY EFFICIENT RESIDEN-
TIAL RENTAL PROPERTY.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
energy efficient nonresidential real property’ 
means a building which is residential rental 
property which is described in subparagraph 
(B), (C), or (D). 
‘‘(B) NEW
OR
RECONSTRUCTED
BUILD-
ING.—A building is described in this subpara-
graph if— 
‘‘(i) the certification requirements of 
subparagraph (E) with respect to the 
building are met, 
‘‘(ii) the original use of which com-
mences with the taxpayer, and 
‘‘(iii) the building is placed in service 
after the date of the enactment of this 
paragraph. 
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‘‘(C) IMPROVEMENTS TO EXISTING BUILD-
ING.—A building is described in this subpara-
graph if, only after improvements are made to 
the building— 
‘‘(i) the certification requirements of 
subparagraph (E) with respect to the 
building are met, 
‘‘(ii) the original use of the improved 
building commences with the taxpayer, 
‘‘(iii) the improved building is placed 
in service after the date of the enactment 
of this paragraph, and 
‘‘(iv) the taxpayer elects to the appli-
cation of this paragraph with respect to 
the building. 
‘‘(D) BUILDINGS
ACQUIRED
BY
PUR-
CHASE.—A building is described in this sub-
paragraph if the building— 
‘‘(i) is acquired by purchase from an 
unrelated person, 
‘‘(ii) meets the certification require-
ments of subparagraph (E), and 
‘‘(iii) is placed in service after the 
date of the enactment of this paragraph. 
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