I 
112TH CONGRESS 
2D SESSION 
H. R. 6705 
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 
DECEMBER 21, 2012 
Mr. LANGEVIN (for himself 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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Building Efficiently 
Act of 2012’’. 
SEC. 2. SHORTER DEPRECIATION RECOVERY PERIODS FOR 
ENERGY EFFICIENT BUILDINGS. 
(a) 25-YEAR RECOVERY PERIOD FOR ENERGY EFFI-
CIENT NONRESIDENTIAL REAL PROPERTY.— 
VerDate Mar 15 2010 
02:19 Dec 29, 2012
Jkt 029200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H6705.IH
H6705
jbell on DSK7SPTVN1PROD with
(1) IN GENERAL.—Section 168(e)(3) of the In-
ternal Revenue Code of 1986 is amended by insert-
ing after subparagraph (F) the following new sub-
paragraph: 
‘‘(G) 25-YEAR PROPERTY.—The term ‘25- 
year property’ means any qualified energy effi-
cient nonresidential real property.’’. 
(2) QUALIFIED ENERGY EFFICIENT NONRESI-
DENTIAL REAL PROPERTY DEFINED.—Subsection (i) 
of section 168 of such Code is amended by adding 
at the end the following: 
‘‘(20) QUALIFIED ENERGY EFFICIENT NONRESI-
DENTIAL REAL PROPERTY.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
energy efficient nonresidential real property’ 
means a building which is nonresidential real 
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, 
VerDate Mar 15 2010 
02:19 Dec 29, 2012
Jkt 029200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H6705.IH
H6705
jbell on DSK7SPTVN1PROD with
‘‘(ii) the original use of the building 
commences with the taxpayer, and 
‘‘(iii) the building is placed in service 
after the date of the enactment of this 
paragraph. 
‘‘(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, 
VerDate Mar 15 2010 
02:19 Dec 29, 2012
Jkt 029200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H6705.IH
H6705
jbell on DSK7SPTVN1PROD with
‘‘(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 modi-
fied, as the case may be, under a plan designed 
to reduce the total annual energy and power 
costs of the building by 40 percent or more in 
comparison to a reference building which meets 
the minimum requirements of Standard 90.1– 
2004 using methods of calculation under sec-
tion 179D(d)(2). 
‘‘(F) 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). 
‘‘(G) RELATED
PERSONS.—For purposes 
of subparagraph (D), a person is related to an-
other person if— 
VerDate Mar 15 2010 
02:19 Dec 29, 2012
Jkt 029200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H6705.IH
H6705
jbell on DSK7SPTVN1PROD with
‘‘(i) the persons are members of an 
affiliated group (as defined in section 
1504), or 
‘‘(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. 
‘‘(H) 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 
VerDate Mar 15 2010 
02:19 Dec 29, 2012
Jkt 029200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H6705.IH
H6705
jbell on DSK7SPTVN1PROD with
utility transmission and distribution plant, 
and 
‘‘(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 
VerDate Mar 15 2010 
02:19 Dec 29, 2012
Jkt 029200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H6705.IH
H6705
jbell on DSK7SPTVN1PROD with
‘‘(iii) the building is placed in service 
after the date of the enactment of this 
paragraph. 
‘‘(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 
VerDate Mar 15 2010 
02:19 Dec 29, 2012
Jkt 029200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H6705.IH
H6705
jbell on DSK7SPTVN1PROD with
‘‘(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 modi-
fied, as the case may be, under a plan designed 
to reduce the total annual energy and power 
costs of the building by 40 percent or more in 
comparison to a reference building which meets 
the minimum requirements of the International 
Energy Conservation Code 2004 using methods 
of calculation under section 179D(d)(2). 
‘‘(F) 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 
‘‘(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-
VerDate Mar 15 2010 
02:19 Dec 29, 2012
Jkt 029200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H6705.IH
H6705
jbell on DSK7SPTVN1PROD with
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. 
‘‘(G) DENIAL
OF
DOUBLE
BENEFIT.—If 
this section applies to a building by reason of 
subsection (e)(3)(F)(ii), the deduction under 
section 179D shall not be allowed.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) The table contained in section 168(c) of 
such Code is amended by inserting after the item re-
lating to 20-year property the following new item: 
‘‘25-year property ........................................................................ 25 years’’. 
(2) The table contained in section 467(e)(3)(A) 
of such Code is amended— 
(A) by inserting ‘‘which is not 25-year 
property’’ after ‘‘nonresidential real property’’, 
and 
(B) by inserting after the item relating to 
residential rental property and nonresidential 
real property the following new item: 
‘‘25-year property ........................................................................ 19 years.’’. 
(3) Clauses (iv), (v), and (ix) of section 
168(e)(3)(E) of such Code are each amended by in-
serting ‘‘(not described in subparagraph (G))’’ after 
‘‘property’’. 
VerDate Mar 15 2010 
02:19 Dec 29, 2012
Jkt 029200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H6705.IH
H6705
jbell on DSK7SPTVN1PROD with
(d) REQUIREMENT TO USE STRAIGHT LINE METH-
OD.—Paragraph (3) of section 168(b) of such Code (relat-
ing to property to which straight line method applies) is 
amended by redesignating subparagraphs (F), (G), (H), 
and (I) as subparagraphs (G), (H), (I), and (J), respec-
tively, and by inserting after subparagraph (E) the fol-
lowing new subparagraph: 
‘‘(F) Property described in subsection 
(e)(3)(F)(ii) or subsection (e)(3)(G).’’. 
(e) 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) ................................................................................................
(F)(ii) ...............................................................................................
(G) ....................................................................................................
25’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
December 31, 2012. 
Æ 
VerDate Mar 15 2010 
02:19 Dec 29, 2012
Jkt 029200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6301
E:\BILLS\H6705.IH
H6705
jbell on DSK7SPTVN1PROD with