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‘‘(iii) the building envelope, and 
‘‘(D) which is certified in accordance with 
subsection (d)(6) as being installed as part of a 
plan designed to reduce the total annual energy 
and power costs with respect to the interior 
lighting systems, heating, cooling, ventilation, 
and hot water systems of the building by 50 per-
cent or more in comparison to a reference build-
ing which meets the minimum requirements of 
Standard 90.1–2001 using methods of calcula-
tion under subsection (d)(2). 
‘‘(2) STANDARD 90.1–2001.—The term ‘Standard 
90.1–2001’ means Standard 90.1–2001 of the Amer-
ican Society of Heating, Refrigerating, and Air Con-
ditioning Engineers and the Illuminating Engineer-
ing Society of North America (as in effect on April 
2, 2003). 
‘‘(d) SPECIAL RULES.— 
‘‘(1) PARTIAL ALLOWANCE.— 
‘‘(A) IN GENERAL.—Except as provided in 
subsection (f), if— 
‘‘(i) the requirement of subsection 
(c)(1)(D) is not met, but 
‘‘(ii) there is a certification in accord-
ance with paragraph (6) that any system
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referred to in subsection (c)(1)(C) satisfies 
the energy-savings targets established by the 
Secretary under subparagraph (B) with re-
spect to such system, 
then the requirement of subsection (c)(1)(D) shall 
be treated as met with respect to such system, 
and the deduction under subsection (a) shall be 
allowed with respect to energy efficient commer-
cial building property installed as part of such 
system and as part of a plan to meet such tar-
gets, except that subsection (b) shall be applied 
to such property by substituting ‘$.75’ for 
‘$2.25’. 
‘‘(B) REGULATIONS.—The Secretary, after 
consultation with the Secretary of Energy, shall 
establish a target for each system described in 
subsection (c)(1)(C) which, if such targets were 
met for all such systems, the building would meet 
the requirements of subsection (c)(1)(D). 
‘‘(2) METHODS
OF
CALCULATION.—The Sec-
retary, after consultation with the Secretary of En-
ergy, shall promulgate regulations which describe in 
detail methods for calculating and verifying energy 
and power consumption and cost, based on the provi-
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sions of the 2005 California Nonresidential Alter-
native Calculation Method Approval Manual. 
‘‘(3) COMPUTER SOFTWARE.— 
‘‘(A) IN GENERAL.—Any calculation under 
paragraph (2) shall be prepared by qualified 
computer software. 
‘‘(B) QUALIFIED COMPUTER SOFTWARE.— 
For purposes of this paragraph, the term ‘quali-
fied computer software’ means software— 
‘‘(i) for which the software designer has 
certified that the software meets all proce-
dures and detailed methods for calculating 
energy and power consumption and costs as 
required by the Secretary, 
‘‘(ii) which provides such forms as re-
quired to be filed by the Secretary in con-
nection with energy efficiency of property 
and the deduction allowed under this sec-
tion, and 
‘‘(iii) which provides a notice form 
which documents the energy efficiency fea-
tures of the building and its projected an-
nual energy costs. 
‘‘(4) ALLOCATION
OF
DEDUCTION
FOR
PUBLIC 
PROPERTY.—In the case of energy efficient commer-
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cial building property installed on or in property 
owned by a Federal, State, or local government or a 
political subdivision thereof, the Secretary shall pro-
mulgate a regulation to allow the allocation of the de-
duction to the person primarily responsible for de-
signing the property in lieu of the owner of such 
property. Such person shall be treated as the taxpayer 
for purposes of this section. 
‘‘(5) NOTICE TO OWNER.—Each certification re-
quired under this section shall include an explanation 
to the building owner regarding the energy efficiency 
features of the building and its projected annual en-
ergy costs as provided in the notice under paragraph 
(3)(B)(iii). 
‘‘(6) CERTIFICATION.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
prescribe the manner and method for the making 
of certifications under this section. 
‘‘(B) PROCEDURES.—The Secretary shall 
include as part of the certification process proce-
dures for inspection and testing by qualified in-
dividuals described in subparagraph (C) to en-
sure compliance of buildings with energy-savings 
plans and targets. Such procedures shall be com-
parable, given the difference between commercial
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and residential buildings, to the requirements in 
the Mortgage Industry National Accreditation 
Procedures for Home Energy Rating Systems. 
‘‘(C) QUALIFIED INDIVIDUALS.—Individuals 
qualified to determine compliance shall be only 
those individuals who are recognized by an orga-
nization certified by the Secretary for such pur-
poses. 
‘‘(e) BASIS REDUCTION.—For purposes of this subtitle, 
if a deduction is allowed under this section with respect 
to any energy efficient commercial building property, the 
basis of such property shall be reduced by the amount of 
the deduction so allowed. 
‘‘(f) INTERIM RULES FOR LIGHTING SYSTEMS.—Until 
such time as the Secretary issues final regulations under 
subsection (d)(1)(B) with respect to property which is part 
of a lighting system— 
‘‘(1) IN GENERAL.—The lighting system target 
under subsection (d)(1)(A)(ii) shall be a reduction in 
lighting power density of 25 percent (50 percent in 
the case of a warehouse) of the minimum require-
ments in Table 9.3.1.1 or Table 9.3.1.2 (not including 
additional interior lighting power allowances) of 
Standard 90.1–2001.