the onsite preparation, assembly, or original installation 
of the property. 
‘‘(c) ENERGY EFFICIENT COMMERCIAL BUILDING 
PROPERTY.—For purposes of subsection (b)— 
‘‘(1) IN GENERAL.—The term ‘energy efficient 
commercial building property’ means any property 
which reduces total annual energy and power costs 
with respect to the lighting, heating, cooling, ventila-
tion, and hot water supply systems of the building 
by 50 percent or more in comparison to a reference 
building which meets the requirements of Standard 
90.1–1999 of the American Society of Heating, Re-
frigerating, and Air Conditioning Engineers and the 
Illuminating Engineering Society of North America 
using methods of calculation under paragraph (2) 
and certified by qualified professionals as provided 
under subsection (f). 
‘‘(2) METHODS
OF
CALCULATION.—The Sec-
retary, in consultation with the Secretary of Energy, 
shall promulgate regulations which describe in detail 
methods for calculating and verifying energy and 
power consumption and cost, taking into consider-
ation the provisions of the 1998 California Nonresi-
dential ACM Manual. These procedures shall meet 
the following requirements:
‘‘(A) In calculating tradeoffs and energy 
performance, the regulations shall prescribe the 
costs per unit of energy and power, such as kil-
owatt hour, kilowatt, gallon of fuel oil, and 
cubic foot or Btu of natural gas, which may be 
dependent on time of usage. 
‘‘(B) The calculational methodology shall 
require that compliance be demonstrated for a 
whole building. If some systems of the building, 
such as lighting, are designed later than other 
systems of the building, the method shall pro-
vide that either— 
‘‘(i) the expenses taken into account 
under subsection (a) shall not occur until 
the date designs for all energy-using sys-
tems of the building are completed, 
‘‘(ii) the energy performance of all 
systems and components not yet designed 
shall be assumed to comply minimally with 
the requirements of such Standard 90.1– 
1999, or 
‘‘(iii) the expenses taken into account 
under subsection (a) shall be a fraction of 
such expenses based on the performance of
less than all energy-using systems in ac-
cordance with subparagraph (C). 
‘‘(C) The expenditures in connection with 
the design of subsystems in the building, such 
as the envelope, the heating, ventilation, air 
conditioning and water heating system, and the 
lighting system shall be allocated to the appro-
priate building subsystem based on system-spe-
cific energy cost savings targets in regulations 
promulgated by the Secretary of Energy which 
are equivalent, using the calculation method-
ology, to the whole building requirement of 50 
percent savings. 
‘‘(D) The calculational methods under this 
subparagraph need not comply fully with sec-
tion 11 of such Standard 90.1–1999. 
‘‘(E) The calculational methods shall be 
fuel neutral, such that the same energy effi-
ciency features shall qualify a building for the 
deduction under this subsection regardless of 
whether the heating source is a gas or oil fur-
nace or an electric heat pump. 
‘‘(F) The calculational methods shall pro-
vide appropriate calculated energy savings for 
design methods and technologies not otherwise
credited in either such Standard 90.1–1999 or 
in the 1998 California Nonresidential ACM 
Manual, including the following: 
‘‘(i) Natural ventilation. 
‘‘(ii) Evaporative cooling. 
‘‘(iii) Automatic lighting controls such 
as occupancy sensors, photocells, and time-
clocks. 
‘‘(iv) Daylighting. 
‘‘(v) Designs utilizing semi-condi-
tioned spaces that maintain adequate com-
fort conditions without air conditioning or 
without heating. 
‘‘(vi) Improved fan system efficiency, 
including reductions in static pressure. 
‘‘(vii) Advanced unloading mecha-
nisms for mechanical cooling, such as mul-
tiple or variable speed compressors. 
‘‘(viii) The calculational methods may 
take into account the extent of commis-
sioning in the building, and allow the tax-
payer to take into account measured per-
formance that exceeds typical performance. 
‘‘(3) COMPUTER SOFTWARE.—
‘‘(A) IN GENERAL.—Any calculation under 
this subsection shall be prepared by qualified 
computer software. 
‘‘(B) QUALIFIED COMPUTER SOFTWARE.— 
For purposes of this paragraph, the term 
‘qualified computer software’ means software— 
‘‘(i) for which the software designer 
has certified that the software meets all 
procedures and detailed methods for calcu-
lating 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 summarizes the energy efficiency 
features of the building and its projected 
annual energy costs. 
‘‘(d) ALLOCATION
OF
DEDUCTION
FOR
PUBLIC 
PROPERTY.—In the case of energy efficient commercial 
building property installed on or in public property, the 
Secretary shall promulgate a regulation to allow the allo-
cation of the deduction to the person primarily responsible