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<dc:title>113 S2189 IS: Energy Efficiency Tax Incentives Act</dc:title>
<dc:publisher>U.S. Senate</dc:publisher>
<dc:date>2014-04-01</dc:date>
<dc:format>text/xml</dc:format>
<dc:language>EN</dc:language>
<dc:rights>Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.</dc:rights>
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<distribution-code display="yes">II</distribution-code><congress>113th CONGRESS</congress><session>2d Session</session><legis-num>S. 2189</legis-num><current-chamber>IN THE SENATE OF THE UNITED STATES</current-chamber><action><action-date date="20140401">April 1, 2014</action-date><action-desc><sponsor name-id="S308">Mr. Cardin</sponsor> (for himself, <cosponsor name-id="S221">Mrs. Feinstein</cosponsor>, and <cosponsor name-id="S353">Mr. Schatz</cosponsor>) introduced the following bill; which was read twice and referred to the <committee-name committee-id="SSFI00">Committee on Finance</committee-name></action-desc></action><legis-type>A BILL</legis-type><official-title>To amend the Internal Revenue Code of 1986 to improve and extend the deduction for new and existing
			 energy-efficient commercial buildings, and for other purposes.</official-title></form><legis-body><section id="id316B7E20375A4884A34B5B17421B744D" section-type="section-one"><enum>1.</enum><header>Short title; amendment of 1986 Code; table of contents</header><subsection id="id9DB4304DE9B9498B9D40540DCEC9169D"><enum>(a)</enum><header>Short
		title</header><text display-inline="yes-display-inline">This Act may be
		cited as the <quote><short-title>Energy Efficiency Tax Incentives Act</short-title></quote>.</text></subsection><subsection id="idA662BCF74C0D428A80116F536AD2EA8E"><enum>(b)</enum><header>Amendment of
		1986 Code</header><text display-inline="yes-display-inline">Except as otherwise
		expressly provided, whenever in this Act an amendment or repeal is
		expressed in terms of an amendment to, or repeal of, a section or other
		provision, the reference shall be considered to be made to a section or other
		provision of the Internal Revenue Code of 1986.</text></subsection><subsection id="id516BF6321F814A89ACA051A7D0B048F6"><enum>(c)</enum><header>Table of contents</header><text>The table of contents of this Act is as follows:</text><toc><toc-entry idref="id316B7E20375A4884A34B5B17421B744D" level="section">Sec. 1. Short title; amendment of 1986 Code; table of contents.</toc-entry><toc-entry idref="id3B141016C538448C991550CE1247022C" level="title">TITLE I—Commercial Building Modernization</toc-entry><toc-entry idref="idB254A0266F3C4543A55E1B83A9BC43C7" level="section">Sec. 101. Extension and modification of deduction for energy-efficient commercial buildings.</toc-entry><toc-entry idref="IDb60263a8521a4c2ea44afe1d4c5b5949" level="section">Sec. 102. Deduction for retrofits of existing commercial and multifamily buildings.</toc-entry><toc-entry idref="id1D9C99A9FDCC41BF9E2C137ABA6383F6" level="title">TITLE II—Home energy improvements</toc-entry><toc-entry idref="idF2F091B79E8444679F5B2FCDEEBA3DAA" level="section">Sec. 201. Performance based home energy improvements.</toc-entry><toc-entry idref="id8635E4F4574E47B0B2969522B1A4BE50" level="title">TITLE III—Industrial Energy and Water Efficiency</toc-entry><toc-entry idref="id94DC78758C5B4063A2AFBF82790EF22C" level="section">Sec. 301. Modifications in credit for combined heat and power system property.</toc-entry><toc-entry idref="id2421941F20294C159D9C30F6197038D4" level="section">Sec. 302. Investment tax credit for biomass heating property.</toc-entry><toc-entry idref="idDE3D8B96EB424E7F8CC513C0D91E0086" level="section">Sec. 303. Investment tax credit for waste heat to power property.</toc-entry><toc-entry idref="id724711338EFD4DA78DF33975A0535F5F" level="section">Sec. 304. Motor energy efficiency improvement tax credit.</toc-entry><toc-entry idref="idF6BB5C64CB8E4A5D828607A99CC3AAD1" level="section">Sec. 305. Credit for replacement of CFC refrigerant chiller.</toc-entry><toc-entry idref="idB40C20EF18544B5B9F686DCBAFE83210" level="section">Sec. 306. Qualifying efficient industrial process water use project credit.</toc-entry></toc></subsection></section><title id="id3B141016C538448C991550CE1247022C" style="OLC"><enum>I</enum><header>Commercial Building Modernization</header><section id="idB254A0266F3C4543A55E1B83A9BC43C7" section-type="subsequent-section"><enum>101.</enum><header>Extension and
		modification of deduction for energy-efficient commercial buildings</header><subsection id="id36A8111DDAFA457D8E48026346AC3AC9"><enum>(a)</enum><header>Extension</header><paragraph id="id98D26752E3334566B47B0B77B8B2C688"><enum>(1)</enum><header>Through 2016</header><text>Section 179D(h) is amended by striking
		<quote>December 31, 2013</quote> and inserting <quote>December 31, 2016</quote>.</text></paragraph><paragraph id="id56CC84226C684AB7B566A736917CF2C5"><enum>(2)</enum><header>Inclusion of
		multifamily buildings</header><subparagraph id="idF3BBF3A744244ACB875102E70373EDB0"><enum>(A)</enum><header>In
		general</header><text>Subparagraph (B) of section 179D(c)(1) is amended by
		striking <quote>building</quote> and inserting <quote>commercial building or
		multifamily building</quote>.</text></subparagraph><subparagraph id="idB6F9E05C9D6841BCBD687431BA811C99"><enum>(B)</enum><header>Definitions</header><text>Subsection
		(c) of section 179D is amended by adding at the end the following new
		paragraphs:</text><quoted-block display-inline="no-display-inline" id="idF176D365ABCE45278A231B5901CC0AAD" style="OLC"><paragraph id="id4453A5B9A3524B95B45F3CE7AB7DB06B"><enum>(3)</enum><header>Commercial
		  building</header><text>The term <term>commercial building</term> means a
		  building with a primary use or purpose other than as residential
		  housing.</text></paragraph><paragraph id="idF89115E1900B4A2AA53F0FFAA5A4B787"><enum>(4)</enum><header>Multifamily
		  building</header><text>The term <term>multifamily building</term> means a
		  structure of 5 or more dwelling units with a primary use as residential
		  housing, and includes such buildings owned and operated as a condominium,
		  cooperative, or other common interest
		  community.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection><subsection id="idE6AFC7A2F3F54796991E9BAA4BBB69BD"><enum>(b)</enum><header>Increase in
		maximum amount of deduction</header><paragraph id="id521844DAB701453C8C16CAF730E39189"><enum>(1)</enum><header>In
		general</header><text>Subparagraph (A) of section 179D(b)(1) is amended by
		striking <quote>$1.80</quote> and inserting <quote>$3.00</quote>.</text></paragraph><paragraph id="id981E555F4A154469A65369D489DF1579"><enum>(2)</enum><header>Partial
		allowance</header><text>Paragraph (1) of section 179D(d) is amended to read as
		follows:</text><quoted-block display-inline="no-display-inline" id="id66AE0F2E0EB74907A8F999C1148F1435" style="OLC"><paragraph id="idC1572063F3124845A6D670C68477953D"><enum>(1)</enum><header>Partial
		  allowance</header><subparagraph id="id0B8391D934AD47279928B60ABC294EA7"><enum>(A)</enum><header>In
		  general</header><text>Except as provided in subsection (f), if—</text><clause id="id433936E512004793849F6004AA0B2CD2"><enum>(i)</enum><text>the
		  requirement of subsection (c)(1)(D) is not met, but</text></clause><clause id="idD83EA2D90A63413DB2155D64581DD3CF"><enum>(ii)</enum><text>there is a
		  certification in accordance with paragraph (6) that—</text><subclause id="id26EE119826634029BAEF9CFF6C7278B3"><enum>(I)</enum><text>any system
		  referred to in subsection (c)(1)(C) satisfies the energy-savings targets
		  established by the Secretary under subparagraph (B) with respect to such
		  system, or</text></subclause><subclause id="id5CBA10FF2E764E4FB83F717CDE9CD02A"><enum>(II)</enum><text>the systems
		  referred to in subsection (c)(1)(C)(ii) and subsection (c)(1)(C)(iii) together
		  satisfy the energy-savings targets established by the Secretary under
		  subparagraph (B) with respect to such systems,</text></subclause></clause><continuation-text continuation-text-level="subparagraph">then the
		  requirement of subsection (c)(1)(D) shall be treated as met with respect to
		  such system or systems, and the deduction under subsection (a) shall be allowed
		  with respect to energy-efficient commercial building property installed as part
		  of such system and as part of a plan to meet such targets, except that
		  subsection (b) shall be applied to such property described in clause (ii)(I) by
		  substituting <quote>$1.00</quote> for <quote>$3.00</quote> and to such property
		  described in clause (ii)(II) by substituting <quote>$2.20</quote> for
		  <quote>$3.00</quote>.</continuation-text></subparagraph><subparagraph id="idA81D68AE4F5840C8BE503DD55DC5B03E"><enum>(B)</enum><header>Regulations</header><clause id="idD9D9A8B833844785A233279F49EA9451"><enum>(i)</enum><header>In
		  general</header><text>The Secretary, after consultation with the Secretary of
		  Energy, shall promulgate regulations establishing a target for each system
		  described in subsection (c)(1)(C) which, if such targets were met for all such
		  systems, the property would meet the requirements of subsection
		  (c)(1)(D).</text></clause><clause id="id180BE4BEDD9745DD949BB7B80956F191"><enum>(ii)</enum><header>Safe harbor
		  for combined systems</header><text>The Secretary, after consultation with the
		  Secretary of Energy, and not later than 6 months after the date of the
		  enactment of the <short-title>Energy Efficiency Tax Incentives Act</short-title>, shall promulgate regulations regarding
		  combined envelope and mechanical system performance that detail appropriate
		  components, efficiency levels, or other relevant information for the systems
		  referred to in subsection (c)(1)(C)(ii) and subsection (c)(1)(C)(iii) together
		  to be deemed to have achieved two-thirds of the requirements of subsection
		  (c)(1)(D).</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idB8F001F2072546168AE90EDF7F5164A7"><enum>(c)</enum><header>Denial of
		double benefit rules</header><paragraph commented="no" display-inline="no-display-inline" id="idDD467432868D4F79B5C24A07FAE274CF"><enum>(1)</enum><header>In
		general</header><text>Section 179D is amended
		by redesignating subsection (h) as subsection (i) and by inserting after
		subsection (g) the following new subsection:</text><quoted-block display-inline="no-display-inline" id="id470DB3567D154DA195345C865679E109" style="OLC"><subsection commented="no" display-inline="no-display-inline" id="idC11B138E96E3455AA3B43681C79CA42B"><enum>(h)</enum><header>Tax incentives
		  not available</header><text>Energy-efficient measures for which a deduction is
		  allowed under this section shall not be eligible for a deduction under section
		  179F.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idA3E9F918B7CD4BEFA6CC4EC91ADC3CBA"><enum>(2)</enum><header>Low-income
		housing exception to basis reduction</header><text>Subsection (e) of section
		179D is amended by inserting <quote>(other than property placed in service in a
		qualified low-income building (within the meaning of section 42))</quote> after
		<quote>building property</quote>.</text></paragraph></subsection><subsection id="id7A65A5192810480D974B5DD2B91D4174"><enum>(d)</enum><header>Allocation of
		deduction</header><text>Paragraph (4) of section 179D(d) is amended to read as
		follows:</text><quoted-block display-inline="no-display-inline" id="id86B79AD9229A44649CEC046184755621" style="OLC"><paragraph id="idEE095EAE18D845C5818896D81CE8A9B4"><enum>(4)</enum><header>Allocation of
		  deduction</header><subparagraph id="idB293FDBD15BB4073A7DB3BEDD6924689"><enum>(A)</enum><header>In general</header><text>Not later than 180 days after the date of the enactment
		  of this subsection, the Secretary, in consultation with the Secretary of
		  Energy, shall promulgate a regulation to allow the owner of a commercial or
		  multifamily building, including a government, tribal, or non-profit owner, to
		  allocate any deduction allowed under this section, or a portion thereof, to the
		  person primarily responsible for designing the property in lieu of the owner or
			 to a commercial tenant that leases or otherwise occupies space in such
			 building pursuant to a written agreement. Such person shall
		  be treated as the taxpayer for purposes of this section.</text></subparagraph><subparagraph id="id924D059A5BCF40A4BBD319A7DED31BCC"><enum>(B)</enum><header>Form of allocation</header><text>An allocation made under this paragraph shall be in writing and in a form that meets the form of
			 allocation requirements in Notice 2008–40 of the Internal Revenue Service.</text></subparagraph><subparagraph id="idE83AAC93A6C149F0944966A026213D2A"><enum>(C)</enum><header>Provision of allocation</header><text>Not later than 30 days after receipt of a written request from a person eligible to receive an
			 allocation under this paragraph, the owner of a building that makes an
			 allocation under this paragraph shall provide the form of allocation (as
			 described in subparagraph (B)) to such person.</text></subparagraph><subparagraph id="idDF7527B18FD942B6A51E581DE17E54D1"><enum>(D)</enum><header>Allocation from public owner of building</header><text>In the
		  case of a commercial building or multifamily building that is owned by a Federal,
			 State, or local
		  government or a subdivision thereof, Notice 2006–52 of the Internal Revenue
			 Service, as
		  amplified by Notice 2008–40, shall apply to any
		  allocation.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="id23FCA475FF9F4D83AEEA09A56FFD1A36"><enum>(e)</enum><header>Treatment of
		basis in context of allocation</header><text>Subsection (e) of section 179D, as
		amended by subsection (c)(2), is amended by inserting <quote>or so
		allocated</quote> after <quote>so allowed</quote>.</text></subsection><subsection commented="no" display-inline="no-display-inline" id="id8BF11FEFFF794D5EA00BCC35AA930675"><enum>(f)</enum><header>Earnings and
		profits conformity for real estate investment trusts</header><text>Subparagraph
		(B) of section 312(k)(3) is amended—</text><paragraph commented="no" display-inline="no-display-inline" id="idE56051A9E28F415D88A489A7BD86F39A"><enum>(1)</enum><text>by striking
		<quote>.—For purposes of</quote> and inserting “.—</text><quoted-block display-inline="no-display-inline" id="id9BBFC0E787D443BBA28A45130A3DA336" style="OLC"><clause commented="no" display-inline="no-display-inline" id="idE71F3C59593542C2A9E38C81EA6294E2"><enum>(i)</enum><header>In
		  general</header><text>Except as provided in clause (ii), for purposes
		  of</text></clause><after-quoted-block>, and
		  </after-quoted-block></quoted-block></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id0D923BAAEACA42A988E9EE8AC3B70563"><enum>(2)</enum><text>by adding at the
		end the following new clause:</text><quoted-block display-inline="no-display-inline" id="id8595B30462BD4F71BD1DA1D00A842AB5" style="OLC"><clause id="IDe26240e4013c40b5896028aaa9d83e43"><enum>(ii)</enum><header>Earnings and
		  profits conformity for real estate investment trusts</header><subclause id="ID52c7c04d97ab4f20a269bfa176d534bd"><enum>(I)</enum><header>In
		  general</header><text>For purposes of computing the earnings and profits of a
		  real estate investment trust (other than a captive real estate investment
		  trust), the entire amount deductible under section 179D shall be allowed as
		  deductions in the taxable years for which such amounts are claimed under such
		  section.</text></subclause><subclause id="ID414729c8978d4446882e99cf42f4da38"><enum>(II)</enum><header>Captive real
		  estate investment trust</header><text>The term <term>captive real estate
		  investment trust</term> means a real estate investment trust the shares or
		  beneficial interests of which are not regularly traded on an established
		  securities market and more than 50 percent of the voting power or value of the
		  beneficial interests or shares of which are owned or controlled, directly or
		  indirectly, or constructively, by a single entity that is treated as an
		  association taxable as a corporation under this title and is not exempt from
		  taxation pursuant to the provisions of section 501(a).</text></subclause><subclause id="ID50566d637f67488baba75c686935573e"><enum>(III)</enum><header>Rules of
		  application</header><text>For purposes of this clause, the constructive
		  ownership rules of section 318(a), as modified by section 856(d)(5), shall
		  apply in determining the ownership of stock, assets, or net profits of any
		  person, and the following entities are not considered an association taxable as
		  a corporation:</text><item id="ID0693044f875b488cb794b5247333c175"><enum>(aa)</enum><text>Any
		  real estate investment trust other than a captive real estate investment
		  trust.</text></item><item id="ID6a38ed0ff8184ab098cf69204aa63f97"><enum>(bb)</enum><text>Any
		  qualified real estate investment trust subsidiary under section 856, other than
		  a qualified REIT subsidiary of a captive real estate investment trust.</text></item><item id="ID6c75de89c23249c1a97da62b6f6fdaf5"><enum>(cc)</enum><text>Any
		  Listed Australian Property Trust (meaning an Australian unit trust registered
		  as a <term>Managed Investment Scheme</term> under the Australian Corporations
		  Act in which the principal class of units is listed on a recognized stock
		  exchange in Australia and is regularly traded on an established securities
		  market), or an entity organized as a trust, provided that a Listed Australian
		  Property Trust owns or controls, directly or indirectly, 75 percent or more of
		  the voting power or value of the beneficial interests or shares of such
		  trust.</text></item><item id="ID5201921c9a734a68a99dfd414392060d"><enum>(dd)</enum><text>Any
		  corporation, trust, association, or partnership organized outside the laws of
		  the United States and which satisfies the criteria described in subclause
		  (IV).</text></item></subclause><subclause id="id4AB96C394E604968838FFDAF712638AE"><enum>(IV)</enum><header>Criteria</header><text>The
		  criteria described in this subclause are as follows:</text><item id="IDfcf919daf16b4db7bf4825e58203c82b"><enum>(aa)</enum><text>At
		  least 75 percent of the entity's total asset value at the close of its taxable
		  year is represented by real estate assets (as defined in section 856(c)(5)(B)),
		  cash and cash equivalents, and United States Government securities.</text></item><item id="IDbb659db9dcc2441d9edfacaa4d8c64c6"><enum>(bb)</enum><text>The
		  entity is not subject to tax on amounts distributed to its beneficial owners,
		  or is exempt from entity-level taxation.</text></item><item id="ID6cde0f90dc044d4aa65d4a74cf5878cd"><enum>(cc)</enum><text>The
		  entity distributes at least 85 percent of its taxable income (as computed in
		  the jurisdiction in which it is organized) to the holders of its shares or
		  certificates of beneficial interest on an annual basis.</text></item><item id="ID774c791c003f4c3f97da93b8429c7165"><enum>(dd)</enum><text>Not
		  more than 10 percent of the voting power or value in such entity is held
		  directly or indirectly or constructively by a single entity or individual, or
		  the shares or beneficial interests of such entity are regularly traded on an
		  established securities market.</text></item><item id="ID42bd86ea58534552bce7364bd407307a"><enum>(ee)</enum><text>The
		  entity is organized in a country which has a tax treaty with the United
		  States.</text></item></subclause></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="id744E50ECF68A4F82A786748EA256301F"><enum>(g)</enum><header>Rules for lighting systems</header><text>Subsection (f) of section 179D is amended to
		read as follows:</text><quoted-block display-inline="no-display-inline" id="idA766E5D5AC794599B3F7C6B0F9DC0608" style="OLC"><subsection id="id0284F7BB36B0494CBC77BEFFCCF08FFB"><enum>(f)</enum><header>Rules for lighting systems</header><paragraph id="id4480550DF92244C7B996C134C64E9FB6"><enum>(1)</enum><header>In general</header><text>With respect to property that is part of a lighting system, the deduction allowed under subsection
			 (a) shall be equal to—</text><subparagraph id="idC69B3608228D49F58CF749C90E1AA5A8"><enum>(A)</enum><text>for a lighting system that includes installation of a lighting control described in paragraph
			 (2)(A), the applicable amount determined under paragraph (3)(A),</text></subparagraph><subparagraph id="id9F1883FA13C84F60BCCFCA690CDFBC1A"><enum>(B)</enum><text>for a lighting system that includes installation of a lighting control described in paragraph
			 (2)(B), the applicable amount determined under paragraph (3)(B), or</text></subparagraph><subparagraph id="id2EE568DA42F646449CE6BA56DDD4B60F"><enum>(C)</enum><text>for a lighting system that does not include installation of any lighting controls described in
			 subparagraph (A) or (B) of paragraph (2), the applicable amount
			 determined under paragraph (3)(C).</text></subparagraph></paragraph><paragraph id="id8D4AE4876BF5492CBD40C17C8317D2D1"><enum>(2)</enum><header>Energy saving controls</header><subparagraph id="id1142115B11754D7480DDBA03926BFCAC"><enum>(A)</enum><header>Lighting controls in certain spaces</header><text>For purposes of paragraph (1)(A), the lighting controls described in this subparagraph are the
			 following:</text><clause commented="no" id="id61043B24575F4FF8806E5F8AB7F1E728"><enum>(i)</enum><text>Occupancy sensors (as described in paragraph (4)(I))
		  in spaces not greater than 800 square feet.</text></clause><clause commented="no" id="id660F36208D6E48BAA2D8F5896A82EA7F"><enum>(ii)</enum><text>Bi-level
		  controls (as described in paragraph (4)(A)).</text></clause><clause commented="no" id="id130E589AD0DC4871B31D3E16D9006C01"><enum>(iii)</enum><text>Continuous or step dimming controls (as described in subparagraphs (B) and (K) of paragraph (4)).</text></clause><clause commented="no" id="id0E9B6CBC62374DCAA21A3AA40AE09918"><enum>(iv)</enum><text>Daylight dimming where sufficient daylight is
		  available (as described in paragraph (4)(C)).</text></clause><clause commented="no" id="idBF330E34B7AD45ECACE184A93238A033"><enum>(v)</enum><text>A multi-scene controller (as described in paragraph (4)(H)).</text></clause><clause commented="no" id="id2D55EC173F10400BA82B0FB1C4F8BBDE"><enum>(vi)</enum><text>Time scheduling controls (as described in paragraph (4)(L)), provided that such controls are not
			 required by Standard 90.1-2010.</text></clause><clause commented="no" id="id7F04220F6B6045E9B93B1955DDD318DA"><enum>(vii)</enum><text>Such other lighting controls as the Secretary, in consultation with the Secretary of Energy,
			 determines appropriate.</text></clause></subparagraph><subparagraph commented="no" id="id723D33F60F224C318F07C1F0B3180167"><enum>(B)</enum><header>Other control types</header><text>For purposes of paragraph (1)(B), the lighting controls described in this subparagraph are the
			 following:</text><clause commented="no" id="idF74735A4E38E483A88F2277B2DFD63CD"><enum>(i)</enum><text>Occupancy sensors (as described in paragraph (4)(I)) in spaces greater	than 800 square feet.</text></clause><clause commented="no" id="id7B88163EDC774C7F887D36E6495DF8A4"><enum>(ii)</enum><text>Demand responsive controls (as described in paragraph (4)(D)).</text></clause><clause commented="no" id="id680DBB5AD6EE4E8F840C494F96598FB8"><enum>(iii)</enum><text>Lumen maintenance controls (as described in paragraph (4)(F)) where solid state lighting is used.</text></clause><clause commented="no" id="id9DE2E715F91F42579438858C63051647"><enum>(iv)</enum><text>Such other lighting controls as the Secretary, in consultation with the Secretary of Energy,
			 determines appropriate.</text></clause></subparagraph></paragraph><paragraph commented="no" id="id52EA3D5D5CC04D7CB9F2ACAE8EF0B6BA"><enum>(3)</enum><header>Applicable amount</header><subparagraph commented="no" id="idE866044675EA4E5AB597AD11C6DD14A9"><enum>(A)</enum><header>Lighting controls in certain spaces</header><text>For purposes of paragraph (1)(A), the applicable amount shall be determined in accordance with the
			 following table:</text><table align-to-level="section" blank-lines-before="1" colsep="1" frame="all" line-rules="all-gen" rowsep="1" rule-weights="4.4.4.4.4.0" table-template-name="Tax (No Calculation) 1 text, 1 num (9 chars) and extra long heads" table-type="Leaderwork"><tgroup cols="2" rowsep="1"><colspec coldef="txt" colname="column1" colwidth="275pts" min-data-value="55"></colspec><colspec align="justify" coldef="fig" colname="column2" colwidth="50pts" min-data-value="9"></colspec><thead><row><entry align="left" colname="column1" morerows="0" namest="column1"><bold>If the percentage of reduction in lighting power density is not less than:</bold></entry><entry align="justify" colname="column2" morerows="0" namest="column2"><bold>The amount of the deduction per square foot is:</bold></entry></row></thead><tbody><row><entry align="left" colname="column1" stub-definition="txt-ldr">15 percent</entry><entry align="right" colname="column2">$0.30</entry></row><row><entry align="left" colname="column1" stub-definition="txt-ldr">20 percent</entry><entry align="right" colname="column2">$0.44</entry></row><row><entry align="left" colname="column1" stub-definition="txt-ldr">25 percent</entry><entry align="right" colname="column2">$0.58</entry></row><row><entry align="left" colname="column1" stub-definition="txt-ldr">30 percent</entry><entry align="right" colname="column2">$0.72</entry></row><row><entry align="left" colname="column1" stub-definition="txt-ldr">35 percent</entry><entry align="right" colname="column2">$0.86</entry></row><row><entry align="left" colname="column1" stub-definition="txt-ldr">40 percent</entry><entry align="right" colname="column2">$1.00.</entry></row></tbody></tgroup></table></subparagraph><subparagraph id="id30CB611CD04E4DA7A5FE7391798157A6"><enum>(B)</enum><header>Lighting controls in larger spaces and where solid lighting is used</header><text>For purposes of paragraph (1)(B), the applicable amount shall be determined in accordance with the
			 following table:</text><table align-to-level="section" blank-lines-before="1" colsep="1" frame="all" line-rules="all-gen" rowsep="1" rule-weights="4.4.4.4.4.0" table-template-name="Tax (No Calculation) 1 text, 1 num (9 chars) and extra long heads" table-type="Leaderwork"><tgroup cols="2" rowsep="1"><colspec coldef="txt" colname="column1" colwidth="275pts" min-data-value="55"></colspec><colspec align="justify" coldef="fig" colname="column2" colwidth="50pts" min-data-value="9"></colspec><thead><row><entry align="left" colname="column1" morerows="0" namest="column1"><bold>If the percentage of reduction in lighting power density is not less than:</bold></entry><entry align="justify" colname="column2" morerows="0" namest="column2"><bold>The amount of the deduction per square foot is:</bold></entry></row></thead><tbody><row><entry align="left" colname="column1" stub-definition="txt-ldr">20 percent</entry><entry align="right" colname="column2">$0.30</entry></row><row><entry align="left" colname="column1" stub-definition="txt-ldr">25 percent</entry><entry align="right" colname="column2">$0.44</entry></row><row><entry align="left" colname="column1" stub-definition="txt-ldr">30 percent</entry><entry align="right" colname="column2">$0.58</entry></row><row><entry align="left" colname="column1" stub-definition="txt-ldr">35 percent</entry><entry align="right" colname="column2">$0.72</entry></row><row><entry align="left" colname="column1" stub-definition="txt-ldr">40 percent</entry><entry align="right" colname="column2">$0.86</entry></row><row><entry align="left" colname="column1" stub-definition="txt-ldr">45 percent</entry><entry align="right" colname="column2">$1.00.</entry></row></tbody></tgroup></table></subparagraph><subparagraph id="idB38660A1D18044B081999F3FB84F4479"><enum>(C)</enum><header>No qualified lighting controls</header><text>For purposes of paragraph (1)(C), the applicable amount shall be determined in accordance with the
			 following table:</text><table align-to-level="section" blank-lines-before="1" colsep="1" frame="all" line-rules="all-gen" rowsep="1" rule-weights="4.4.4.4.4.0" table-template-name="Tax (No Calculation) 1 text, 1 num (9 chars) and extra long heads" table-type="Leaderwork"><tgroup cols="2" rowsep="1"><colspec coldef="txt" colname="column1" colwidth="275pts" min-data-value="55"></colspec><colspec align="justify" coldef="fig" colname="column2" colwidth="50pts" min-data-value="9"></colspec><thead><row><entry align="left" colname="column1" morerows="0" namest="column1"><bold>If the percentage of reduction in lighting power density is not less than:</bold></entry><entry align="justify" colname="column2" morerows="0" namest="column2"><bold>The amount of the deduction per square foot is:</bold></entry></row></thead><tbody><row><entry align="left" colname="column1" stub-definition="txt-ldr">25 percent</entry><entry align="right" colname="column2">$0.30</entry></row><row><entry align="left" colname="column1" stub-definition="txt-ldr">30 percent</entry><entry align="right" colname="column2">$0.44</entry></row><row><entry align="left" colname="column1" stub-definition="txt-ldr">35 percent</entry><entry align="right" colname="column2">$0.58</entry></row><row><entry align="left" colname="column1" stub-definition="txt-ldr">40 percent</entry><entry align="right" colname="column2">$0.72</entry></row><row><entry align="left" colname="column1" stub-definition="txt-ldr">45 percent</entry><entry align="right" colname="column2">$0.86</entry></row><row><entry align="left" colname="column1" stub-definition="txt-ldr">50 percent</entry><entry align="right" colname="column2">$1.00.</entry></row></tbody></tgroup></table></subparagraph></paragraph><paragraph id="id7B54927A45F540058287F0DC486BE0B0"><enum>(4)</enum><header>Definitions</header><text>For purposes of this subsection:</text><subparagraph id="id25D6BDBC433C4A9EAF2A2645CBF48D8B"><enum>(A)</enum><header>Bi-level control</header><clause id="idACE36420E1084FDDB23608A279355DA4"><enum>(i)</enum><header>In general</header><text>Subject to clause (ii), the term <term>bi-level control</term> means a lighting control strategy that provides for 2 different levels of lighting.</text></clause><clause id="id4DD2F4EEC35342CC8C8C2A47851CE7BE"><enum>(ii)</enum><header>Full-off setting</header><text>For purposes of clause (i), a bi-level control shall also provide for a full-off setting.</text></clause></subparagraph><subparagraph id="idD924FB715A51494EAA45424F8475A311"><enum>(B)</enum><header>Continuous dimming</header><text>The term <term>continuous dimming</term> means a lighting control strategy that adjusts the light output of a lighting system between
			 minimum and maximum light output in a manner that is not perceptible.</text></subparagraph><subparagraph id="idA3B2ECE1E41F40E5BC1C5FD8F1537115"><enum>(C)</enum><header>Daylight dimming; sufficient daylight</header><clause id="idD1093AC1DD8244AD8E38C11DE4FC5333"><enum>(i)</enum><header>Daylight dimming</header><text>The term <term>daylight dimming</term> means any device that—</text><subclause id="id5588AEE2A2034837BCB9A5A9E9C0F28C"><enum>(I)</enum><text>adjusts electric lighting power in response to the amount of daylight that is present in an area,
			 and</text></subclause><subclause id="idF4DE3E69391849E9A3C1A0C742CC032D"><enum>(II)</enum><text>provides for separate control of the lamps for general lighting in the daylight area by not less
			 than 1 multi-level photocontrol, including continuous dimming devices,
			 that satisfies the following requirements:</text><item id="idE6AD6A23BD704867A33B76889870B016"><enum>(aa)</enum><text>The light sensor for the multi-level photocontrol is remote from where calibration adjustments are
			 made.</text></item><item id="id6C71956DD64548F5A11D2B04D6BB8D22"><enum>(bb)</enum><text>The calibration adjustments are readily accessible.</text></item><item id="id09BD03F608F54225A1B461DBA7BBD13B"><enum>(cc)</enum><text>The multi-level photocontrol reduces electric lighting power in response to the amount of daylight
			 with—</text><subitem id="idCDBF8180FA694F03A95AA9C562F5752D"><enum>(AA)</enum><text>not less than 1 control step that is between 50 percent and 70 percent of design lighting power,
			 and</text></subitem><subitem id="id1FDDDE0EE01C4E59BF2C46B30B5167EA"><enum>(BB)</enum><text>not less than 1 control step that is not less than 35 percent of design lighting power.</text></subitem></item></subclause></clause><clause commented="no" id="id17922F4B5EE644799E925660C53FAD2A"><enum>(ii)</enum><header>Sufficient
		  daylight</header><subclause commented="no" id="id13B1F3E20B7642F9A314160C9ABB1B37"><enum>(I)</enum><header>In
		  general</header><text>The term  <term>sufficient daylight</term> means—</text><item commented="no" id="id5CCD4CA601604DDD83441549BB3312D6"><enum>(aa)</enum><text>in the case of
		  toplighted areas, when the total daylight area under skylights plus the total
		  daylight area under rooftop monitors in an enclosed space is greater than 900
		  square feet (as defined in Standard 90.1-2010), and</text></item><item commented="no" id="id066219A730CE41F0AF0CF77B25018D65"><enum>(bb)</enum><text>in the case of
		  sidelighted areas, when the combined primary sidelight area in an enclosed
		  space is not less than 250 square feet (as defined in Standard
		  90.1-2010).</text></item></subclause><subclause commented="no" id="idC95A36EA5F114F71A3C145737E2318B3"><enum>(II)</enum><header>Exceptions</header><text>Sufficient
		  daylight shall be deemed to not be available if—</text><item commented="no" id="id38F910A7E1C84CBC972095E84CBF38CB"><enum>(aa)</enum><text>in the case of
		  areas described in subclause (I)(aa)—</text><subitem commented="no" id="idD23A17DF925B4AA5B38AD5CA37049593"><enum>(AA)</enum><text>for daylighted
		  areas under skylights, it is documented that existing adjacent structures or
		  natural objects block direct beam sunlight for more than 1500 daytime hours
		  (after 8 a.m. and before 4 p.m., local time) per year,</text></subitem><subitem commented="no" id="id9415CDE710DF485BA3E08276853747CB"><enum>(BB)</enum><text>for daylighted
		  areas, the skylight effective aperture is less than 0.006, or</text></subitem><subitem commented="no" id="id4714AD42410F455F9178256997523406"><enum>(CC)</enum><text>for buildings in
		  climate zone 8, as defined under Standard 90.1-2010,	the daylight areas total
			 less than 1500
		  square feet in an enclosed space, and</text></subitem></item><item commented="no" id="id580A22AF37F44F62A0A0DF34C2FE4C70"><enum>(bb)</enum><text>in the case of
		  primary sidelighted areas described in subclause (I)(bb)—</text><subitem commented="no" id="id2A5292BA5A294E83B084A948074AF3F3"><enum>(AA)</enum><text>the top of the
		  existing adjacent structures are at least
		  twice as high above the windows as the distance from the window, or</text></subitem><subitem commented="no" id="idB1C4F34ACDCA4C2EAA4134E4161BD623"><enum>(BB)</enum><text>the sidelighting
		  effective aperture is less than 0.1.</text></subitem></item></subclause></clause><clause commented="no" id="idF988E82278424170A37821097D3A25F7"><enum>(iii)</enum><header>Daylight, sidelighting, and other related terms</header><text>The terms <term>daylight area</term>, <term>daylight area under skylights</term>, <term>daylight area under rooftop monitors</term>, <term>daylighted area</term>, <term>enclosed space</term>, <term>primary sidelighted areas</term>, <term>sidelighting effective aperture</term>, and <term>skylight effective aperture</term> have the same meaning given such terms under Standard 90.1-2010.</text></clause></subparagraph><subparagraph commented="no" id="id028BAFC13A464B37978DF751336A2647"><enum>(D)</enum><header>Demand Responsive Control</header><clause commented="no" id="idF23622ECEB03417CA1510834BBB9B28C"><enum>(i)</enum><header>In general</header><text>The term <term>demand responsive control</term> means a control device that receives and automatically responds to a demand response signal and—</text><subclause commented="no" id="id5302529BEA174967B17518D6F044026A"><enum>(I)</enum><text>in the case of space-conditioning systems, conducts a centralized demand shed for non-critical
			 zones during a demand response period and that has the capability to, on a
			 signal from a centralized contract or software point within an Energy
			 Management Control System—</text><item commented="no" id="idF4F335FCE94E44A8A169280B0E5E0798"><enum>(aa)</enum><text>remotely increase the operating cooling temperature set points in such zones by not less than 4
			 degrees,</text></item><item commented="no" id="idAD8633A94E764B419F76079C84025738"><enum>(bb)</enum><text>remotely decrease the operating heating temperature set points in such zones by not less than 4
			 degrees,</text></item><item commented="no" id="id59BF8B9347474BB3A0C46D5C8A3C8E80"><enum>(cc)</enum><text>remotely reset temperatures in such zones to originating operating levels, and</text></item><item commented="no" id="id2B9A5E59BC66417AB43E473586F55E0E"><enum>(dd)</enum><text>provide an adjustable rate of change for any temperature adjustment and reset, and</text></item></subclause><subclause commented="no" id="id6F1DF22844B648B783E490C393410600"><enum>(II)</enum><text>in the case of lighting power, has the capability to reduce lighting power by not less than 30
			 percent during a demand response period.</text></subclause></clause><clause commented="no" id="idC967404697394AA8B0C6AD19E3B12252"><enum>(ii)</enum><header>Demand response period</header><text>The term <term>demand response period</term> means a period in which short-term adjustments in electricity usage are made by end-use customers
			 from normal electricity
			 consumption patterns, including adjustments in response to—</text><subclause commented="no" id="id438E09FC502343AA8D3AE1B066668C26"><enum>(I)</enum><text>the price of electricity, and</text></subclause><subclause commented="no" id="id0955D927E1DD4199BED7C0EA0D856B7C"><enum>(II)</enum><text>participation in programs or services that are designed to modify electricity usage in response to
			 wholesale market prices for electricity or when reliability of the
			 electrical system is in jeopardy.</text></subclause></clause><clause commented="no" id="id371A859C671745C19DFC0657FF34A267"><enum>(iii)</enum><header>Demand response signal</header><text>The term <term>demand response signal</term> means a signal sent to an end-use customer by a local utility, independent system operator, or
			 designated curtailment service provider or aggregator that—</text><subclause commented="no" id="id8839C0B58F2C40E68E06A950A23E4512"><enum>(I)</enum><text>indicates an adjustment in the price of electricity, or</text></subclause><subclause commented="no" id="id0576012823F842C385A5ED7FD0A4DFA0"><enum>(II)</enum><text>is a request to modify electricity consumption.</text></subclause></clause></subparagraph><subparagraph commented="no" id="id2BFBCAFCFEE64650ADEC81DB3A55A455"><enum>(E)</enum><header>Lamp</header><text>The term <term>lamp</term> means an artificial light source that produces optical radiation (including ultraviolet and
			 infrared radiation).</text></subparagraph><subparagraph commented="no" id="id2FED9C69D3F14E70AFAB6D607618B6DF"><enum>(F)</enum><header>Lumen maintenance control</header><text>The term <term>lumen maintenance control</term> means a lighting control strategy that maintains constant light output by adjusting lamp power to
			 compensate for age and cleanliness of luminaires.</text></subparagraph><subparagraph commented="no" id="id5CA83F06BB7D495E945AE2BC3DA68B9D"><enum>(G)</enum><header>Luminaire</header><text>The term <term>luminaire</term> means a complete lighting unit for the production, control, and distribution of light that
			 consists  of—</text><clause commented="no" id="id0F936FAB293C4F759B7A82FFED47E859"><enum>(i)</enum><text>not less than 1 lamp, and</text></clause><clause commented="no" id="id0DB27064228147C0A31D99F0DA8531C8"><enum>(ii)</enum><text>any of the following items:</text><subclause commented="no" id="id4642EA523BC943C2B5EDB7CB12AF23E4"><enum>(I)</enum><text>Optical control devices designed to distribute light.</text></subclause><subclause commented="no" id="idF095E034B8FC49D881BA762A88A782C9"><enum>(II)</enum><text>Sockets or mountings for the positioning, protection, and operation of the lamps.</text></subclause><subclause commented="no" id="id39B896A6FC9B4EFBAD46E5345466B066"><enum>(III)</enum><text>Mechanical components for support or attachment.</text></subclause><subclause commented="no" id="idEC9CCC712DBB4DAB9A662E34B8AA1ECD"><enum>(IV)</enum><text>Electrical and electronic components for operation and control of the lamps.</text></subclause></clause></subparagraph><subparagraph commented="no" id="id4458B2BC492847D8951F6B3AF1DC901C"><enum>(H)</enum><header>Multi-scene control</header><text>The term <term>multi-scene control</term> means a lighting control device or system that allows for—</text><clause commented="no" id="id5847609EDEC34ECD95D5787FF16AA474"><enum>(i)</enum><text>not less than 2 predetermined lighting settings,</text></clause><clause commented="no" id="id72C892F9976A453BAB6CECA4E9EEF473"><enum>(ii)</enum><text>a setting that turns off all luminaires in an area, and</text></clause><clause commented="no" id="id369CF6721516410CAC5AA4121B20A985"><enum>(iii)</enum><text>a recall of the settings described in clauses (i) and (ii) for any luminaires or groups of
			 luminaires to adjust to multiple activities within the area.</text></clause></subparagraph><subparagraph id="id4BFC8613D172413F8EF2DDFCA94E6EB6"><enum>(I)</enum><header>Occupancy sensor</header><text>The term <term>occupancy sensor</term> means a control device that—</text><clause id="id6909A7366C104E01896E4DFFA13C3685"><enum>(i)</enum><text>detects the presence or absence of individuals within an area and regulates lighting, equipment, or
			 appliances according to a required sequence of operation,</text></clause><clause id="id23D0D5CDDD6F467BAE4FA59D33E2533E"><enum>(ii)</enum><text>shuts off lighting when an area is unoccupied,</text></clause><clause id="id73E83C33E82641259FD9E228C4C1313F"><enum>(iii)</enum><text>except in areas designated as emergency egress and using less than 0.2 watts per square foot of
			 floor area, provides for manual shut-off of all luminaires regardless of
			 the status of the sensor and allows for—</text><subclause id="idC3F161475B43484A81C38FC462F4E2C0"><enum>(I)</enum><text>independent control in each area enclosed by ceiling-height partitions,</text></subclause><subclause id="idD36FCB99D3DD40ED817522C22735DCBA"><enum>(II)</enum><text>controls that are readily accessible, and</text></subclause><subclause id="idBEBC4F5CFC2545618C9CDC70D674A8B2"><enum>(III)</enum><text>operation by a manual switch that is located in the same area as the lighting that is subject to
			 the control device.</text></subclause></clause></subparagraph><subparagraph commented="no" id="idC8A21D6B67B449309071672B23EC64A4"><enum>(J)</enum><header>Standard 90.1-2010</header><text>The term <term>Standard 90.1-2010</term> means Standard 90.1-2010 of the American Society of
			 Heating,
		  Refrigerating, and Air Conditioning Engineers and the Illuminating Engineering
			 Society of North America.</text></subparagraph><subparagraph commented="no" id="id9CA4DB6A21A6417E8BDF32B3C140AE63"><enum>(K)</enum><header>Step dimming</header><text>The term <term>step dimming</term> means a lighting control strategy that adjusts the light output of a lighting system by 1 or more
			 predetermined amounts of greater than 1 percent of full output in a manner
			 that may be perceptible.</text></subparagraph><subparagraph commented="no" id="idD96BF783BBEB4FCE8B7E3802A7B13202"><enum>(L)</enum><header>Time scheduling control</header><text>The term <term>time scheduling control</term> means a control strategy that automatically controls lighting, equipment, or systems based on a
			 particular time of day or other daily event (including sunrise and
			 sunset).</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection commented="no" display-inline="no-display-inline" id="idF19A49AA848649BC82BFAFD0A9CB538A"><enum>(h)</enum><header>Updated
		standards</header><paragraph commented="no" display-inline="no-display-inline" id="id5DBD7C360D7144F791A37BAB4B6E9FCB"><enum>(1)</enum><header>Initial
		update</header><subparagraph commented="no" display-inline="no-display-inline" id="id2F6740B9A8DD442AB7BF452115F0717C"><enum>(A)</enum><header>In
		general</header><text>Section 179D(c) is amended by striking
		<quote>90.1-2001</quote> each place it appears and
		inserting <quote>90.1-2004</quote>.</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id9F3C0F8089F54244A10C896151845A48"><enum>(B)</enum><header>Conforming
		amendment</header><text>Paragraph (2) of section 179D(c) is amended by striking
		<quote>(as in effect on April 2, 2003)</quote>.</text></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id5E237D8AE3654933B4420976DDDF1CAB"><enum>(2)</enum><header>Second
		update</header><subparagraph commented="no" display-inline="no-display-inline" id="id52757B2E00F2430E8DC5103FD8D63BD9"><enum>(A)</enum><header>In
		general</header><text>Section 179D is amended by striking
		<quote>90.1-2004</quote> each place it appears in subsections (c) and (f) and
		inserting <quote>90.1-2007</quote>.</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id4B66153BC89743FE90391DADB0A655B3"><enum>(B)</enum><header>Effective
		date</header><text>The amendments made by subparagraph (A) shall apply to
		property placed in service after December 31, 2014.</text></subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id4C057AE7EA604F2FBD65F8521D39AF16"><enum>(i)</enum><header>Treatment of
		lighting systems</header><text>Section 179D(c)(1) is amended by striking
		<quote>interior</quote> each place it appears.</text></subsection><subsection commented="no" id="idE3D384B3CA104B74BFC17CDE15AC23A5"><enum>(j)</enum><header>Reporting program</header><text>Section 179D, as amended by subsection (c)(1),
		is amended by redesignating subsection (i) as subsection (j) and by inserting after
		subsection (h) the following new subsection:</text><quoted-block display-inline="no-display-inline" id="id3CA3F2363A264318A339A406B072E842" style="OLC"><subsection commented="no" id="idC3E9FC4B880E4FAA985E114C9CCEB090"><enum>(i)</enum><header>Reporting program</header><text>For purposes of the report required under
		  section 179F(l), the Secretary, in consultation with the Secretary of Energy,
		  shall—</text><paragraph commented="no" id="id2B640DE8DBD64E059259766774F1001C"><enum>(1)</enum><text>develop a program to collect a statistically valid sample of energy consumption data from
		  taxpayers that received full deductions under
		  this
		  section, regardless of whether such taxpayers allocated all or a portion of such
			 deduction, and</text></paragraph><paragraph commented="no" id="idDAD07459277E4BA1971E7972AC2F554E"><enum>(2)</enum><text>include such data in the report, with such redactions as deemed necessary to protect the personally
			 identifiable information of such taxpayers.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection commented="no" id="idE77E77E17B61475A9EE76B50B139B26E"><enum>(k)</enum><header>Special rule
		for partnerships and S corporations</header><text>Section 179D, as amended by
		subsection (j), is amended by redesignating subsection (j) as subsection (k) and by
			 inserting after
		subsection (i) the following new subsection:</text><quoted-block display-inline="no-display-inline" id="id2458B44A43D94AAFA420BC25A122CE1F" style="OLC"><subsection commented="no" id="idF82E7E6FAAD041219AF11EAC893E9524"><enum>(j)</enum><header>Special rule
		  for partnerships and S corporations</header><text>In the case of a partnership
		  or S corporation, this section shall be applied at the partner or shareholder
		  level, subject to such reporting requirements as are determined appropriate by
		  the
		  Secretary.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection commented="no" display-inline="no-display-inline" id="id8DA7192A822E41BABBF8DF7B07F3C4C2"><enum>(l)</enum><header>Effective
		date</header><text>Except as otherwise provided, the amendments made by this
		section shall apply to property placed in service in taxable years beginning
		after the date of the enactment of this Act.</text></subsection></section><section id="IDb60263a8521a4c2ea44afe1d4c5b5949"><enum>102.</enum><header>Deduction for
		retrofits of existing commercial and multifamily buildings</header><subsection id="idDC3F8B89084942AF9E6E4E5ED9B70396"><enum>(a)</enum><header>In
		general</header><text>Part VI of subchapter B of chapter 1 of the Internal
		Revenue Code of 1986 is amended by inserting after section 179E the following
		new section:</text><quoted-block display-inline="no-display-inline" id="idAB7A09439B9F4D96AD7735C8381CFEA1" style="OLC"><section id="idBFC7E1FE432D4376993C990893D9463E"><enum>179F.</enum><header>Deduction for
		  retrofits of existing commercial and multifamily buildings</header><subsection id="ID2dc7938320954e49958ea31d14447967"><enum>(a)</enum><header>Allowance of
		  deduction</header><paragraph id="id78A6F7726E9A4B9483DBDE404DDA6F90"><enum>(1)</enum><header>In
		  general</header><text>With respect to each certified retrofit plan, there shall
		  be allowed as a deduction an amount equal to the lesser of—</text><subparagraph id="idF3E2901CFF074A4E8FE605442E69C344"><enum>(A)</enum><text>the sum
		  of—</text><clause id="id60633165D59B4808AA0B937072BB5947"><enum>(i)</enum><text>the
		  design deduction, and</text></clause><clause id="id67E0213D127E46FEBB386600944CA672"><enum>(ii)</enum><text>the
		  realized deduction, or</text></clause></subparagraph><subparagraph id="ID38717efc36e64322b76a8055bc463e7f"><enum>(B)</enum><text>the
		  total cost to develop and implement such certified retrofit plan.</text></subparagraph></paragraph><paragraph id="id4CC7F9D680E048A6ADA9D74EDCCB4CF4"><enum>(2)</enum><header>Exception</header><text>For
		  purposes of the amount described in paragraph (1)(B), if such amount is taken
		  as a design deduction, no realized deduction shall be allowed.</text></paragraph></subsection><subsection id="ID3b640347c2ac489ebd31b3f4c5c61ea4"><enum>(b)</enum><header>Deduction
		  amounts</header><text>For purposes of this section—</text><paragraph id="ID9e343c0f141e4ef7a3a755562403a663"><enum>(1)</enum><header>Design
		  deduction</header><text>A design deduction shall be—</text><subparagraph id="ID9d2de5c2288047fab9df4c37d94b7272"><enum>(A)</enum><text>based on
		  projected source energy savings as calculated in accordance with subsection
		  (c)(3)(B),</text></subparagraph><subparagraph id="IDd315189dbe6e4bf49b3a1f22425bd105"><enum>(B)</enum><text>correlated to the
		  percent of source energy savings set forth in the general scale in paragraph
		  (3)(A) that a certified retrofit plan is projected to achieve when
		  energy-efficient measures are placed in service, and</text></subparagraph><subparagraph id="IDafc3928dc56a42a9bf619086d085511d"><enum>(C)</enum><text>equal to 60
		  percent of the amount allowed under the general scale.</text></subparagraph></paragraph><paragraph id="IDce0fe8a7aca047faa0303f8790cd4154"><enum>(2)</enum><header>Realized
		  deduction</header><subparagraph id="ID6ff0dfea3d3044dca41c80a01bad355b"><enum>(A)</enum><header>In
		  general</header><text>A realized deduction shall be—</text><clause id="ID987535c3666b44d29e7b4c2d64bfd8af"><enum>(i)</enum><text>based
		  on realized source energy savings as calculated in accordance with subsection
		  (c)(3)(C),</text></clause><clause id="ID895bbc77f608445985e09622dbefea21"><enum>(ii)</enum><text>correlated to
		  the percent of source energy savings set forth in the general scale in
		  paragraph (3)(A) as realized by a certified retrofit plan, and</text></clause><clause id="IDd7feaa6b2f384c2988b304d56d26ff33"><enum>(iii)</enum><text>equal to 40
		  percent of the amount allowed under the general scale.</text></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID026fcdf69b5e4d7ba75697236bbfe31d"><enum>(B)</enum><header>Adjustment of
		  source energy savings</header><text>The percent of source energy savings for
		  purposes of any realized deduction may vary from such savings projected when
		  energy-efficient measures were placed in service for purposes of a design
		  deduction under paragraph (1).</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id4B76A59668D14A13B5FF34E8B8639860"><enum>(C)</enum><header>No recapture of
		  design deduction</header><text>Notwithstanding the regulations prescribed under
		  subsection (f), no recapture of a design deduction shall be required where the
		  owner of the commercial or multifamily building—</text><clause commented="no" display-inline="no-display-inline" id="id75AD211B3645430A96FF6C7A5AE0821B"><enum>(i)</enum><text>claims or
		  allocates a design deduction when energy-efficient measures are placed into
		  service pursuant to the terms and conditions of a certified retrofit plan,
		  and</text></clause><clause commented="no" display-inline="no-display-inline" id="idC7283AC0CA004C93B0DDCA261D63AAC6"><enum>(ii)</enum><text>is not eligible
		  for or does not subsequently claim or allocate a realized deduction.</text></clause></subparagraph></paragraph><paragraph id="IDdf4c26ede32047cc8f2141dce499e78e"><enum>(3)</enum><header>General
		  scale</header><subparagraph id="id5299A88F63CB4E489AB647FDDEB73F6D"><enum>(A)</enum><header>In
		  general</header><text>The scale for deductions allowed under this section shall
		  be—</text><clause id="ID73f885d486b94d649b9c4fd750617d35"><enum>(i)</enum><text>$1.00
		  per square foot of retrofit floor area for 20 to 24 percent source energy
		  savings,</text></clause><clause id="ID1cf0cf3e1ade42f2b59451627a5c77fd"><enum>(ii)</enum><text>$1.50 per square
		  foot of retrofit floor area for 25 to 29 percent source energy savings,</text></clause><clause id="IDaba8d17b324740f78c6bd1b0640a1b35"><enum>(iii)</enum><text>$2.00 per
		  square foot of retrofit floor area for 30 to 34 percent source energy
		  savings,</text></clause><clause id="IDc14fe9a84a224276802706dd47463a20"><enum>(iv)</enum><text>$2.50 per square
		  foot of retrofit floor area for 35 to 39 percent source energy savings,</text></clause><clause id="ID0eff3c3c691d4e86977e1f454e9ef868"><enum>(v)</enum><text>$3.00
		  per square foot of retrofit floor area for 40 to 44 percent source energy
		  savings,</text></clause><clause id="IDf33c8438b06849eaa1813fc24c978b9e"><enum>(vi)</enum><text>$3.50 per square
		  foot of retrofit floor area for 45 to 49 percent source energy savings,
		  and</text></clause><clause id="ID1a8a6baed7304525bc85971f204c6a1d"><enum>(vii)</enum><text>$4.00 per
		  square foot of retrofit floor area for 50 percent or more source energy
		  savings.</text></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDb005b1405612407fbc6d6e44ebb7b074"><enum>(B)</enum><header>Historic
		  buildings</header><clause commented="no" display-inline="no-display-inline" id="id8C41DABE57D14097943AAE81419517B0"><enum>(i)</enum><header>In
		  general</header><text>With respect to energy-efficient measures placed in
		  service as part of a certified retrofit plan in a commercial building or
		  multifamily building on or eligible for the National Register of Historic
		  Places, the respective dollar amounts set forth in the general scale under
		  subparagraph (A) shall—</text><subclause commented="no" display-inline="no-display-inline" id="id0452AED4FE7048909791D4B5C3C3F118"><enum>(I)</enum><text>each be increased
		  by 20 percent, for the purposes of calculating any applicable design deduction
		  and realized deduction, and</text></subclause><subclause commented="no" display-inline="no-display-inline" id="id0D1647A7911A476F9BA86330F4258872"><enum>(II)</enum><text>not exceed the total cost to develop and implement such certified retrofit
		  plan.</text></subclause></clause><clause commented="no" display-inline="no-display-inline" id="idE3CDF0BADC1B4475A863ACFA197804D9"><enum>(ii)</enum><header>Exception</header><text>If
		  the amount described in clause (i)(II) is taken as a design deduction, then no
		  realized deduction shall be allowed.</text></clause></subparagraph></paragraph></subsection><subsection id="IDfd906505c6ff44858bc92a7621b616f6"><enum>(c)</enum><header>Calculation of
		  energy savings</header><paragraph id="IDb0c4d4d234d84e7d814c8d001ea2a6d9"><enum>(1)</enum><header>In
		  general</header><text>For purposes of the design deduction and the realized
		  deduction, source energy savings shall be calculated with reference to a
		  baseline of the annual source energy consumption of the commercial or
		  multifamily building before energy-efficient measures were placed in
		  service.</text></paragraph><paragraph id="ID41b9c38eeaa145aab73a828659c1b770"><enum>(2)</enum><header>Baseline
		  benchmark</header><text>The baseline under paragraph (1) shall be determined
		  using a building energy performance benchmarking tool designated by the
		  Administrator of the Environmental Protection Agency, and based upon 1 year of
		  source energy consumption data prior to the date upon which the
		  energy-efficient measures are placed in service.</text></paragraph><paragraph id="IDebc22a46c021474f8b9e3b8d1532f329"><enum>(3)</enum><header>Design and
		  realized source energy savings</header><subparagraph id="id9F0A027C0B4242F38CD513F84DB5A284"><enum>(A)</enum><header>In
		  general</header><text>In certifying a retrofit plan as a certified retrofit
		  plan, a licensed engineer or architect shall calculate source energy savings by
		  utilizing the baseline benchmark defined in paragraph (2) and determining
		  percent improvements from such baseline.</text></subparagraph><subparagraph id="ID72d4599efa8641fba3f837ec77d06dcc"><enum>(B)</enum><header>Design
		  deduction</header><text>For purposes of claiming a design deduction, the
		  regulations issued under subsection (f)(1) shall prescribe the standards and
		  process for a licensed engineer or architect to calculate and certify source
		  energy savings projected from the design of a certified retrofit plan as of the
		  date energy-efficient measures are placed in service.</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID47e32db6f40a4ef9b9b6e0e53474f11d"><enum>(C)</enum><header>Realized
		  deduction</header><text>For purposes of claiming a realized deduction, a
		  licensed engineer or architect shall calculate and certify source energy
		  savings realized by a certified retrofit plan 2 years after a design deduction
		  is allowed by utilizing energy consumption data after energy-efficient measures
		  are placed in service, and adjusting for climate, building occupancy hours,
		  density, or other factors deemed appropriate in the benchmarking tool
		  designated under paragraph (2).</text></subparagraph></paragraph></subsection><subsection id="IDaa8264a4a29c4afca33b85d9eb7b8ed8"><enum>(d)</enum><header>Certified
		  retrofit plan and other definitions</header><text>For purposes of this
		  section—</text><paragraph id="IDfddd61f46c2b4839b44c2ccfed7796a1"><enum>(1)</enum><header>Certified
		  retrofit plan</header><text>The term <term>certified retrofit plan</term> means
		  a plan that—</text><subparagraph id="IDa13d18cd149f49c2bb0fae79dafdf3e9"><enum>(A)</enum><text>is designed to
		  reduce the annual source energy costs of a commercial building, or a
		  multifamily building, through the installation of energy-efficient
		  measures,</text></subparagraph><subparagraph id="IDef3e63a14d524f72ac0274c9d62e917e"><enum>(B)</enum><text>is certified
		  under penalty of perjury by a licensed engineer or architect, who is not a
		  direct employee of the owner of the commercial building or multifamily building
		  that is the subject of the plan, and is licensed in the State in which such
		  building is located,</text></subparagraph><subparagraph id="ID0a0396b1252245c5a968a969a5d81dba"><enum>(C)</enum><text>describes the
		  square footage of retrofit floor area covered by such a plan,</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDb24fb1c65e474b0384d5852999c42d25"><enum>(D)</enum><text>specifies that it
		  is designed to achieve a final source energy usage intensity after
		  energy-efficient measures are placed in service in a commercial building or a
		  multifamily building that does not exceed on a square foot basis the average
		  level of energy usage intensity of other similar buildings, as described in
			 paragraph (2),</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id6F8F18FF7D4049C189B0CB74E7C3A142"><enum>(E)</enum><text>requires that
		  after the energy-efficient measures are placed in service, the commercial
		  building or multifamily building meets the applicable State and local
		  building code requirements for the area in which such building is
		  located,</text></subparagraph><subparagraph id="ID007b2ee0cfc74800850721dd3d8d3378"><enum>(F)</enum><text>satisfies the
		  regulations prescribed under subsection (f), and</text></subparagraph><subparagraph id="ID73fb3df040534967a5c2a0017a00ca06"><enum>(G)</enum><text>is submitted to
		  the Secretary of Energy after energy-efficient measures are placed in service,
		  for the purpose of informing the report to Congress required by subsection
		  (l).</text></subparagraph></paragraph><paragraph id="IDa2dc99da710a460b8a32cfc4cb86e7f6"><enum>(2)</enum><header>Average level of energy usage intensity</header><subparagraph id="id22BAB7A7B95B47C1905CDF8AB0FFF5A2"><enum>(A)</enum><header>In general</header><text>The maximum average level of energy usage intensity under paragraph (1)(D) shall not exceed 300,000
			 British thermal units per square foot.</text></subparagraph><subparagraph id="idB838261548AC458487631D94239773E4"><enum>(B)</enum><header>Regulations</header><clause id="idB1E28AD6375E43339D4A71941EB53737"><enum>(i)</enum><header>In general</header><text>The Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall
			 develop distinct standards for categories and subcategories of buildings
			 with respect to maximum average level of energy usage intensity based on
			 the best available information used by the ENERGY STAR program.</text></clause><clause id="idEEADDBD56EC24542BCAA8B8A3BD480EA"><enum>(ii)</enum><header>Review</header><text>The standards developed pursuant to  clause (i) shall be reviewed and updated by the Secretary,  in
			 consultation with the Administrator of the Environmental Protection
			 Agency, not later than every 3 years.</text></clause></subparagraph></paragraph><paragraph id="idE90281E18BCA434BB2FE0E7D63EC018C"><enum>(3)</enum><header>Commercial
		  building</header><subparagraph id="id4A5E541774F64396B1A45B3BAF5924EE"><enum>(A)</enum><header>In
		  general</header><text>The term <term>commercial building</term> means a
		  building located in the United States—</text><clause id="id45119C8ED9424CC7B9B18A1D4716E434"><enum>(i)</enum><text>that
		  is in existence and occupied on the date of the enactment of this
		  section,</text></clause><clause id="id8A115D82A18747C69F97F9784D877D9F"><enum>(ii)</enum><text>for
		  which a certificate of occupancy has been issued at least 10 years before
		  energy efficiency measures are placed in service, and</text></clause><clause id="idAA82061EE7584FA8B83CCE87C8AE5A61"><enum>(iii)</enum><text>with a primary
		  use or purpose other than as residential housing.</text></clause></subparagraph><subparagraph id="id52E84650BCD542288117D634E9238DCD"><enum>(B)</enum><header>Shopping
		  centers</header><text>In the case of a retail shopping center, the term
		  <term>commercial building</term> shall include an area within such building
		  that is—</text><clause id="id33B46B7030114DC3A277A0EE1D1798D2"><enum>(i)</enum><text>50,000 square
		  feet or larger that is covered by a separate utility grade meter to record
		  energy consumption in such area, and</text></clause><clause id="idBE3D4D63E9784C21B2B1365F3C9CCFC1"><enum>(ii)</enum><text>under the
		  day-to-day management and operation of—</text><subclause id="id41323A21EBD744479BA455053AB4446F"><enum>(I)</enum><text>the owner of such
		  building as common space areas, or</text></subclause><subclause id="idFFADAC7668C74A1DB788E9BA2E627992"><enum>(II)</enum><text>a
		  retail tenant, lessee, or other occupant.</text></subclause></clause></subparagraph></paragraph><paragraph id="IDf0ae88d9de6c42a8be30c43cee024b10"><enum>(4)</enum><header>Energy-efficient
		  measures</header><text>The term <term>energy-efficient measures</term> means a
		  measure, or combination of measures, placed in service through a certified
		  retrofit plan—</text><subparagraph id="ID9f2f25fdb04f444f86e8d8293b61ed2b"><enum>(A)</enum><text>on or in a
		  commercial building or multifamily building,</text></subparagraph><subparagraph id="IDc0ce3e2b232b4f139d0b9ccdd8c432dd"><enum>(B)</enum><text>as part
		  of—</text><clause id="ID4ae2195ec436491992355923debe29a3"><enum>(i)</enum><text>the
		  lighting systems,</text></clause><clause id="IDe25dbc8218d84f0daaff28492968ce99"><enum>(ii)</enum><text>the
		  heating, cooling, ventilation, refrigeration, or hot water systems,</text></clause><clause id="ID0962703a3e5f48c99fad94e7ebb2849b"><enum>(iii)</enum><text>building transportation systems, such as elevators and escalators,</text></clause><clause id="id4E6D88E44A3A4DA3B1604EBC351C9392"><enum>(iv)</enum><text>the
		  building envelope, which may include an energy-efficient cool roof,</text></clause><clause id="ID51779008b0d94bb6be23f862e7475c9f"><enum>(v)</enum><text>a
		  continuous commissioning contract under the supervision of a licensed engineer
		  or architect, or</text></clause><clause id="IDf5430c353cf94788b54ab6b1bde323e2"><enum>(vi)</enum><text>building
		  operations or monitoring systems, including utility-grade meters and submeters,
		  and</text></clause></subparagraph><subparagraph id="IDb69d1f050e814dd4ac99ebd2acf6468a"><enum>(C)</enum><text>including
		  equipment, materials, and systems within subparagraph (B) with respect to which
		  depreciation (or amortization in lieu of depreciation) is allowed.</text></subparagraph></paragraph><paragraph id="IDf8123b36951c4d9ca70826a7626edae2"><enum>(5)</enum><header>Energy
		  savings</header><text>The term <term>energy savings</term> means source energy
		  usage intensity reduced on a per square foot basis through design and
		  implementation of a certified retrofit plan.</text></paragraph><paragraph id="ID1022038b9d5a47e39aa117b9b61b720e"><enum>(6)</enum><header>Multifamily
		  building</header><text>The term <term>multifamily building</term>—</text><subparagraph id="id3FF89F3AE26C4FAC82D3F7E70C188C18"><enum>(A)</enum><text>means—</text><clause id="id3F92C92B05AE4953A6256BF461CFE327"><enum>(i)</enum><text>a
		  structure of 5 or more dwelling units located in the United States—</text><subclause id="id276EB3E9A61C421E9370146DFDD6FB88"><enum>(I)</enum><text>that is in
		  existence and occupied on the date of the enactment of this section,</text></subclause><subclause id="id04FD851F8FC34C1B925B47B742EDD23A"><enum>(II)</enum><text>for which a
		  certificate of occupancy has been issued at least 10 years before energy
		  efficiency measures are placed in service, and</text></subclause><subclause id="id757708BEE6174F1F98D9BB77046BFC28"><enum>(III)</enum><text>with a primary
		  use as residential housing, and</text></subclause></clause></subparagraph><subparagraph id="idA072BEC488234922B1D5763960B45F18"><enum>(B)</enum><text>includes such
		  buildings owned and operated as a condominium, cooperative, or other common
		  interest community.</text></subparagraph></paragraph><paragraph id="ID36bb0257bd2e4b9583e479d21791ff61"><enum>(7)</enum><header>Source
		  energy</header><text>The term <term>source energy</term> means the total amount
		  of raw fuel that is required to operate a commercial building or multifamily
		  building, and accounts for losses that are incurred in the generation, storage,
		  transport, and delivery of fuel to such a building.</text></paragraph></subsection><subsection id="IDd8f427dabba140fe88a7678cc1599688"><enum>(e)</enum><header>Timing of
		  claiming deductions</header><text>Deductions allowed under this section may be
		  claimed as follows:</text><paragraph id="ID788b63b0d480473487b0aaed5b4f12c5"><enum>(1)</enum><header>Design
		  deduction</header><text>In the case of a design deduction, in the taxable year
		  that energy efficiency measures are placed in service.</text></paragraph><paragraph id="ID4fc3eb4af967476280f2985ba80e76a0"><enum>(2)</enum><header>Realized
		  deduction</header><text>In the case of a realized deduction, in the second
		  taxable year following the taxable year described in paragraph (1).</text></paragraph></subsection><subsection id="ID30a98f6e288a437a98ce4f17de20fd80"><enum>(f)</enum><header>Regulations</header><paragraph id="ID57e9da63606e48d99632e73815ead5e3"><enum>(1)</enum><header>In
		  general</header><text>Not later than 180 days after the date of the enactment
		  of this section, and after notice and opportunity for public comment, the
		  Secretary, in consultation with the Secretary of Energy and the Administrator
		  of the Environmental Protection Agency, shall prescribe regulations—</text><subparagraph id="ID99dadb832a494e6cb4555f21c92030d2"><enum>(A)</enum><text>for the manner
		  and method for a licensed engineer or architect to certify retrofit plans,
		  model projected energy savings, and calculate realized energy savings,
		  and</text></subparagraph><subparagraph id="ID48c1d72991964c058ab1bd4f3baf4323"><enum>(B)</enum><text>notwithstanding
		  subsection (b)(2)(C), to provide, as appropriate, for a recapture of the
		  deductions allowed under this section if a retrofit plan is not fully
		  implemented, or a retrofit plan and energy savings are not certified or
		  verified in accordance with regulations prescribed under this
		  subsection.</text></subparagraph></paragraph><paragraph id="id649C37F0DC5B4083BD802CCBD91DC523"><enum>(2)</enum><header>Reliance on
		  established protocols, etc</header><text>To the maximum extent practicable and
		  available, such regulations shall rely upon established protocols and documents
		  used in the ENERGY STAR program, and industry best practices and existing
		  guidelines, such as the Building Energy Modeling Guidelines of the Commercial
		  Energy Services Network (COMNET).</text></paragraph><paragraph id="ID17674614c2324a9597cf7aaa086a9b85"><enum>(3)</enum><header>Allowance of
		  deductions pending issuance of regulations</header><text>Pending issuance of
		  the regulations under paragraph (1), the owner of a commercial building or a
		  multifamily building shall be allowed to claim or allocate a deduction allowed
		  under this section.</text></paragraph></subsection><subsection id="ID4aace56dbed445d7a3b4a675618185c5"><enum>(g)</enum><header>Notice to
		  owner</header><text>Each certification of a retrofit plan and calculation of
		  energy savings required under this section shall include an explanation to the
		  owner of a commercial building or a multifamily building regarding the
		  energy-efficient measures placed in service and their projected and realized
		  annual energy costs.</text></subsection><subsection id="IDaee6fd6b8879489d9447e6e8c9b71810"><enum>(h)</enum><header>Allocation of
		  deduction</header><paragraph id="id0BAD209FA1AE4C1587EEC1964B720667"><enum>(1)</enum><header>In general</header><text>Not later than 180 days after the date of the enactment
		  of this section, the Secretary, in consultation with the Secretary of Energy,
		  shall promulgate a regulation to allow the owner of a commercial building or a
		  multifamily building, including a government, tribal, or non-profit owner, to
		  allocate any deduction allowed under this section, or a portion thereof, to the
		  person primarily responsible for funding, financing, designing, leasing,
		  operating, or placing in service energy-efficient measures. Such person shall
		  be treated as the taxpayer for purposes of this section and shall include a
		  building tenant, financier, architect, professional engineer, licensed
		  contractor, energy services company, or other building professional.</text></paragraph><paragraph id="idA53C4CC108054F72AA05A9A7C2396D86"><enum>(2)</enum><header>Form of allocation</header><text>An allocation made under this paragraph shall be in writing and in a form that meets the form of
			 allocation requirements in Notice 2008–40 of the Internal Revenue Service.</text></paragraph><paragraph id="idEED0766EDCB845A3886FDF7FFB454457"><enum>(3)</enum><header>Provision of allocation</header><text>Not later than 30 days after receipt of a written request from a person eligible to receive an
			 allocation under this paragraph, the owner of a building that makes an
			 allocation under this paragraph shall provide the form of allocation (as
			 described in paragraph (2)) to such person.</text></paragraph><paragraph id="id7D586887DAE2466B83E5C804A9278FA3"><enum>(4)</enum><header>Allocation from public owner of building</header><text>In the
		  case of a commercial building or a multifamily building that is owned by a
		  Federal, State, or local government or a subdivision thereof, Notice 2006–52 of
			 the Internal Revenue Service, as amplified by Notice 2008–40, shall apply
			 to any
		  allocation.</text></paragraph></subsection><subsection id="ID679458738f334f7db72cd774774629af"><enum>(i)</enum><header>Basis
		  reduction</header><text>For purposes of this subtitle, if a deduction is
		  allowed under this section with respect to any energy-efficient measures placed
		  in service under a certified retrofit plan other than in a qualified low-income
		  building (within the meaning of section 42), the basis of such measures shall
		  be reduced by the amount of the deduction so allowed or so allocated.</text></subsection><subsection commented="no" id="idD8E9315DDA2B47D6AECA15CECD5B371B"><enum>(j)</enum><header>Special Rule for Partnerships and S
		  Corporations</header><text>In the case of a partnership or S corporation, this
		  section shall be applied at the partner or shareholder level, subject to such
		  reporting requirements as are determined appropriate by the Secretary.</text></subsection><subsection id="IDc38c010ac804494dbda2019cec1d1f26"><enum>(k)</enum><header>Tax incentives
		  not available</header><paragraph id="id9AB68823C44A4B69B8AA58395FB1511B"><enum>(1)</enum><header>Energy
		  efficient commercial buildings deduction</header><text>Energy-efficient
		  measures for which a deduction is allowed under this section shall not be
		  eligible for a deduction under section 179D.</text></paragraph><paragraph id="id1D64B3647FC04333B738B9141E818590"><enum>(2)</enum><header>New energy
		  efficient home credit</header><text>No deduction shall be allowed under this
		  section with respect to any building or dwelling unit with respect to which a
		  credit under section 45L was allowed.</text></paragraph></subsection><subsection id="ID94e22aded0704629a8c26b3447695275"><enum>(l)</enum><header>Report to
		  Congress</header><paragraph id="id8C694D628176430AB0D5E9FB1D4B7B4A"><enum>(1)</enum><header>In general</header><text>Biennially, beginning with the first year after the
		  enactment of this section, the Secretary, in conjunction with the Secretary  of
			 Energy, shall submit a report to
		  Congress that—</text><subparagraph id="idAE3FC1CDDBC84C16B25C6404E0213D35"><enum>(A)</enum><text>explains the energy saved, the energy-efficient measures
		  implemented, the realization of energy savings projected, and records the amounts
			 and
		  types of deductions allowed under this section,</text></subparagraph><subparagraph id="idD61BD41C61404B16A45D8FD54A3359A2"><enum>(B)</enum><text>explains the energy saved, the energy efficient measures implemented, and records the amount of
			 deductions
			 allowed under section 179D, based on the data collected pursuant to
			 subsection (i) of such section,</text></subparagraph><subparagraph id="idD6DE299F9E6A4EAE973BAEC83F364797"><enum>(C)</enum><text>determines the number of jobs created as a result of the deduction allowed under this section,</text></subparagraph><subparagraph id="idD645670D2C584829A191A11AA172F8FB"><enum>(D)</enum><text>determines how the use of any deduction allowed under this section may be improved, based on the
			 information provided to the Secretary of Energy,</text></subparagraph><subparagraph id="id577BBF3575D04CDF98801DB76E952C38"><enum>(E)</enum><text>provides aggregated data with respect to the information described in subparagraphs (A) through
			 (D), and</text></subparagraph><subparagraph id="idE2DA750E2E4140A296EA6D540260E4B3"><enum>(F)</enum><text>provides statutory recommendations to Congress that would reduce energy consumption in new and
			 existing commercial buildings located in the United States, including
			 recommendations on providing energy-efficient tax incentives for
			 subsections of buildings that operate with specific utility-grade
			 metering.</text></subparagraph></paragraph><paragraph id="id954E7FE64F844DE1B8ABA0F43A0485F9"><enum>(2)</enum><header>Protection of taxpayer information</header><text>The Secretary
		  and the Secretary of Energy shall share information on deductions allowed
		  under this section and related reports submitted, as requested by each agency
		  to fulfill its obligations under this section, with such redactions as deemed
		  necessary to protect the personally identifiable financial information of a
		  taxpayer.</text></paragraph><paragraph id="id31B7489C49E744CAB2764CA1FFB75118"><enum>(3)</enum><header>Incorporation into Department of Energy programs</header><text>The Secretary of Energy shall, to
		  the maximum extent practicable, incorporate conclusions of the report under this
			 subsection into
		  current Department of Energy building performance and energy efficiency
		  data collection and other reporting programs.</text></paragraph></subsection><subsection id="id528D8B445D134CA78A5A0958D38C0EC6"><enum>(m)</enum><header>Termination</header><text>This section shall not apply to any property placed in service after December 31, 2016.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection commented="no" display-inline="no-display-inline" id="idDB4C168B4C1149FF8D0E4D70D01D6225"><enum>(b)</enum><header>Effect on
		depreciation on earnings and profits</header><text>Subparagraph (B) of section
		312(k)(3), as amended by this title, is amended—</text><paragraph commented="no" display-inline="no-display-inline" id="id2D280FAE7AA545F9BD2D9DC80A1B179C"><enum>(1)</enum><text>by striking
		<quote>or 179E</quote> both places it appears in clause (i) and inserting
		<quote>179E, or 179F</quote>,</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id22AE7A6851D2461799FEF5A0E473FED6"><enum>(2)</enum><text>by striking
		<quote><header-in-text level="subparagraph" style="OLC">or
		179E</header-in-text></quote> in the heading and inserting
		<quote><header-in-text level="subparagraph" style="OLC">179E, or
		179F</header-in-text></quote>, and</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id905F98E843034CA7AADCC0AC01514830"><enum>(3)</enum><text>by inserting
		<quote>or 179F</quote> after <quote>section 179D</quote> in clause (ii)(I).</text></paragraph></subsection><subsection id="idF44FCE80BBAD40D6A4DAAAEC36303C52"><enum>(c)</enum><header>Conforming
		amendment</header><text>The table of sections for part VI of subchapter B of chapter 1 is amended by
		inserting after the item relating to section 179E the following new
		item:</text><quoted-block id="idabb2c7b0-453d-4b93-8477-7340387a9972" style="OLC"><toc><toc-entry idref="idBFC7E1FE432D4376993C990893D9463E" level="section">Sec. 179F. Deduction for retrofits of existing commercial and
		  multifamily
		  buildings.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="idCA7A0873355C498E841CC1125CF617A3"><enum>(d)</enum><header>Effective
		date</header><text>Except as otherwise provided, the amendments made by this
		section shall apply to property placed in service in taxable years beginning
		after the date of the enactment of this Act.</text></subsection></section></title><title id="id1D9C99A9FDCC41BF9E2C137ABA6383F6"><enum>II</enum><header>Home energy improvements</header><section commented="no" display-inline="no-display-inline" id="idF2F091B79E8444679F5B2FCDEEBA3DAA"><enum>201.</enum><header>Performance
			 based home energy improvements</header><subsection commented="no" display-inline="no-display-inline" id="id66D81BE55B504DCE9389DB8490DB33CD"><enum>(a)</enum><header>In
			 general</header><text>Subpart A of part IV of subchapter A of chapter 1 is
			 amended by adding at the end the following new section:</text><quoted-block display-inline="no-display-inline" id="id031F2FD3CEA54FA5B3F4E73C9C920799" style="OLC"><section id="IDa18b5fe1fefe4d32a3687440012dbbc9"><enum>25E.</enum><header>Performance
				based energy improvements</header><subsection id="IDfdafbcca52054a69b3bac5484e43d5d5"><enum>(a)</enum><header>In
				general</header><text>In the case of an individual, there shall be allowed as a
				credit against the tax imposed by this chapter for the taxable year
			 for a
				qualified whole home energy efficiency retrofit an amount
			 determined under
				subsection (b).</text></subsection><subsection id="ID0c773f30f3b140c6aba9e0d1a0f8a95f"><enum>(b)</enum><header>Amount
				determined</header><paragraph id="ID61e5ff5732804cba990e854f17668bce"><enum>(1)</enum><header>In
				general</header><text>Subject to paragraph (4), the amount determined under
				this subsection is equal to—</text><subparagraph id="id340517B2BB3E4707ABE4468775DC90CD"><enum>(A)</enum><text>the base amount
				under paragraph (2), increased by</text></subparagraph><subparagraph id="idD00B7ACAC2CB44BEACB4DC86B4CB753A"><enum>(B)</enum><text>the amount
				determined under paragraph (3).</text></subparagraph></paragraph><paragraph id="ID51ff4944bdbf4511bc40da1ba90ecb34"><enum>(2)</enum><header>Base
				amount</header><text>For purposes of paragraph (1)(A), the base amount is
				$2,000, but only if the energy use for the residence is reduced by
			 at least 20
				percent below the baseline energy use for such residence as
			 calculated
				according to paragraph (5).</text></paragraph><paragraph id="IDe8e420aee1514333b3fc075ad900008c"><enum>(3)</enum><header>Increase
				amount</header><text>For purposes of paragraph (1)(B), the amount determined
				under this paragraph is $500 for each additional 5 percentage point
			 reduction
				in energy use.</text></paragraph><paragraph id="ID8727646efd634884ba43ecbdd21ea168"><enum>(4)</enum><header>Limitation</header><text>In
				no event shall the amount determined under this subsection exceed
			 the lesser
				of—</text><subparagraph id="ID95f91faa927e49aab5abec077f140f26"><enum>(A)</enum><text>$5,000 with
				respect to any residence, or</text></subparagraph><subparagraph id="IDf51b759403df409cb2c6b86fc7ac66df"><enum>(B)</enum><text>30 percent of the
				qualified home energy efficiency expenditures paid or incurred by
			 the taxpayer
				under subsection (c) with respect to such residence.</text></subparagraph></paragraph><paragraph id="id1EC209668C7F4893A6C6591CB8EFDA36"><enum>(5)</enum><header>Determination
				of energy use reduction</header><text>For purposes of this subsection—</text><subparagraph id="id89D83EE735604BE095A1623EDBE92C2D"><enum>(A)</enum><header>In
				general</header><text>The reduction in energy use for any residence shall be
				determined by modeling the annual predicted percentage reduction in
			 total
				energy costs for heating, cooling, hot water, and permanent
			 lighting. It shall
				be modeled using computer modeling software approved under
			 subsection (d)(2)
				and a baseline energy use calculated according to subsection
			 (d)(1)(C).</text></subparagraph><subparagraph commented="no" id="ID11a46b1f67c6434b84d654b02194d2e4"><enum>(B)</enum><header>Energy
				costs</header><text>For purposes of subparagraph (A), the energy cost per unit
				of fuel for each fuel type shall be determined by dividing the
			 total actual
				energy bill for the residence for that fuel type for the most
			 recent available
				12-month period by the total energy units of that fuel type used
			 over the same
				period.</text></subparagraph></paragraph></subsection><subsection id="ID57c1161b2831439891014193458d46ae"><enum>(c)</enum><header>Qualified home
				energy efficiency expenditures</header><text>For purposes of this section, the
				term <term>qualified home energy efficiency expenditures</term>—</text><paragraph id="ID5c1e7409b08c475a8108755981f501e6"><enum>(1)</enum><text>means any amount
				paid or incurred by the taxpayer during the taxable year for a
			 qualified whole
				home energy efficiency retrofit, including the cost of diagnostic
			 procedures,
				labor, and modeling,</text></paragraph><paragraph id="ID257ea3adf2aa4c488c4f9dddf2289729"><enum>(2)</enum><text>includes only
				measures that have an average estimated life of 5 years or more as
			 determined
				by the Secretary, after consultation with the Secretary of Energy,
			 and</text></paragraph><paragraph id="ID434da826fb2d412cb144a5aa15372a73"><enum>(3)</enum><text>does not include
				any amount which is paid or incurred in connection with any
			 expansion of the
				building envelope of the residence.</text></paragraph></subsection><subsection id="ID8b8d9c9447af4f79b0eefffadf5d047f"><enum>(d)</enum><header>Qualified whole
				home energy efficiency retrofit</header><text>For purposes of this
				section—</text><paragraph id="IDad38b3a1b71342a982608d7c48511b01"><enum>(1)</enum><header>In
				general</header><text>The term <term>qualified whole home energy efficiency
				retrofit</term> means the implementation of measures placed in service during
				the taxable year intended to reduce the energy use of the principal
			 residence
				of the taxpayer which is located in the United States. A qualified
			 whole home
				energy efficiency retrofit shall—</text><subparagraph id="ID6bee4b86a35c4c8ca420097d51209f76"><enum>(A)</enum><text>subject to paragraph (4), be designed,
				implemented, and installed by a contractor which is—</text><clause id="IDd5e0179b54ab4954a6352615aa8f6423"><enum>(i)</enum><text>accredited by the
				Building Performance Institute (hereafter in this section referred
			 to as
				<quote>BPI</quote>) or a preexisting BPI accreditation-based State
				certification program with enhancements to achieve State energy
			 policy,</text></clause><clause id="IDcbfdb526f5994f2c9ea063646fe8aa79"><enum>(ii)</enum><text>a Residential
				Energy Services Network (hereafter in this section referred to as
				<quote>RESNET</quote>) accredited Energy Smart Home Performance Team, or</text></clause><clause id="IDf43d96b3281c421582214cfeff48ad5e"><enum>(iii)</enum><text>accredited by
				an equivalent certification program approved by the Secretary,
			 after
				consultation with the Secretary of Energy, for this purpose,</text></clause></subparagraph><subparagraph id="ID9b99412001124fd4982c5e0a0645771e"><enum>(B)</enum><text>install a set of
				measures modeled to achieve a reduction in energy use of at least
			 20 percent
				below the baseline energy use established in subparagraph (C),
			 using computer
				modeling software approved under paragraph (2),</text></subparagraph><subparagraph id="IDe07c18a28cad4469bc74487518938aea"><enum>(C)</enum><text>establish the
				baseline energy use by calibrating the model using sections 3 and 4
			 and Annex D
				of BPI Standard BPI–2400–S–2011: Standardized Qualification of
			 Whole House
				Energy Savings Estimates, or an equivalent standard approved by the
			 Secretary,
				after consultation with Secretary of Energy, for this purpose,</text></subparagraph><subparagraph id="ID5bba8c941483474dacb77eabb13842aa"><enum>(D)</enum><text>document the
				measures implemented in the residence through photographs taken
			 before and
				after the retrofit, including photographs of its visible energy
			 systems and
				envelope as relevant, and</text></subparagraph><subparagraph id="IDd9f6b5ac9fb14414805d0d100be91998"><enum>(E)</enum><text>implement a
				test-out procedure, following guidelines of the applicable
			 certification
				program specified under clause (i) or (ii) of subparagraph (A), or
			 equivalent
				guidelines approved by the Secretary, after consultation with the
			 Secretary of
				Energy, for this purpose, to ensure—</text><clause id="IDa1f9c1058cda4517934245d34b0f5426"><enum>(i)</enum><text>the safe
				operation of all systems post retrofit, and</text></clause><clause id="IDfee183c6aba546cd8e947ab0090c358a"><enum>(ii)</enum><text>that all
				improvements are included in, and have been installed according to,
			 standards
				of the applicable certification program specified under clause (i)
			 or (ii) of
				subparagraph (A), or equivalent standards approved by the
			 Secretary, after
				consultation with the Secretary of Energy, for this purpose.</text></clause><continuation-text continuation-text-level="subparagraph">For
				purposes of subparagraph (A)(iii), an organization or State may
			 submit an
				equivalent certification program for approval by the Secretary, in
			 consultation
				with the Secretary of Energy. The Secretary shall approve or deny
			 such
				submission not later than 180 days after receipt, and, if the
			 Secretary fails
				to respond in that time period, the submitted equivalent
			 certification program
				shall be considered approved.</continuation-text></subparagraph></paragraph><paragraph id="ID0193d6e216d848789d894869598f3dd6"><enum>(2)</enum><header>Approved
				modeling software</header><text>For purposes of paragraph (1)(B), the
				contractor (or, if applicable, the person described in paragraph
			 (4))  shall use modeling software certified by RESNET as
			 following the
				software verification test suites in section 4.2.1 of RESNET
			 Publication No.
				06–001 or certified by an alternative organization as following an
			 equivalent
				standard, as approved by the Secretary, after consultation with the
			 Secretary
				of Energy, for this purpose.</text></paragraph><paragraph id="ID193b14422b5e4664bea3e84c2ab809c4"><enum>(3)</enum><header>Documentation</header><text>The
				Secretary, after consultation with the Secretary of Energy, shall
			 prescribe
				regulations directing what specific documentation is required to be
			 retained or
				submitted by the taxpayer in order to claim the credit under this
			 section,
				which shall include, in addition to the photographs under paragraph
			 (1)(D), a
				form approved by the Secretary that is completed and signed by the
			 qualified
				whole home energy efficiency retrofit contractor under penalties of
			 perjury.
				Such form shall include—</text><subparagraph id="IDf31291215bca4b9cbc0cf03fa398df44"><enum>(A)</enum><text>a statement that
				the contractor (or, if applicable, the person described in
			 paragraph (4)) followed the specified procedures for establishing
			 baseline
				energy use and estimating reduction in energy use,</text></subparagraph><subparagraph id="ID23a5aa5da6884dd6b69ae0d8ac0a186d"><enum>(B)</enum><text>the name of the
				software used for calculating the baseline energy use and reduction
			 in energy
				use, the percentage reduction in projected energy savings achieved,
			 and a
				statement that such software was certified for this program by the
			 Secretary,
				after consultation with the Secretary of Energy,</text></subparagraph><subparagraph id="IDdfebdf7756114c899b18201a4b15b7e2"><enum>(C)</enum><text>a statement that
				the contractor (or, if applicable, the person described in
			 paragraph (4)) will retain the details of the calculations and
			 underlying
				energy bills for 5 years and will make such details available for
			 inspection by
				the Secretary or the Secretary of Energy, if so requested,</text></subparagraph><subparagraph id="IDae7df57cb19d46309d7560f7c201ec64"><enum>(D)</enum><text>a list of
				measures installed and a statement that all measures included in
			 the reduction
				in energy use estimate are included in, and installed according to,
			 standards
				of the applicable certification program specified under clause (i)
			 or (ii) of
				subparagraph (A), or equivalent standards approved by the
			 Secretary, after
				consultation with the Secretary of Energy,</text></subparagraph><subparagraph id="IDcbadb2618c884eb3bc3ba45496fb2209"><enum>(E)</enum><text>a statement that
				the contractor (or, if applicable, the person described in
			 paragraph (4)) meets the requirements of paragraph (1)(A), and</text></subparagraph><subparagraph id="ID035d5b623097442c9865f6788ff03841"><enum>(F)</enum><text>documentation of
				the total cost of the project in order to comply with the
			 limitation under
				subsection (b)(4)(B).</text></subparagraph></paragraph><paragraph id="id49A5DBB1908F40929565123C605753F0"><enum>(4)</enum><header>Certified home energy rater</header><text>For purposes of paragraph (1)(A), a contractor shall be deemed to have satisfied the accreditation
			 requirement under such paragraph if the contractor enters into a contract
			 with a person that satisfies such accreditation requirement for purposes
			 of modeling the energy use reduction described in paragraph (1)(B).</text></paragraph></subsection><subsection id="IDc6a3bb09d8884ee29a1d0945de9c0010"><enum>(e)</enum><header>Additional
				rules</header><text>For purposes of this section—</text><paragraph id="ID7df4e68e33574be48724eee755962a10"><enum>(1)</enum><header>No double
				benefit</header><subparagraph id="ID3f9098e4d11847dfb7885422589e632a"><enum>(A)</enum><header>In
				general</header><text>With respect to any residence, no credit shall be allowed
				under this section for any taxable year in which the taxpayer
			 claims a credit
				under section 25C.</text></subparagraph><subparagraph id="IDb09d6b6b6e7442459a1ba761b2ef8679"><enum>(B)</enum><header>Renewable
				energy systems and appliances</header><text>In the case of a renewable energy
				system or appliance that qualifies for another credit under this
			 chapter, the
				resulting reduction in energy use shall not be taken into account
			 in
				determining the percentage energy use reductions under subsection
			 (b).</text></subparagraph><subparagraph id="ID66cf6a19647348939e53d88c5e93e997"><enum>(C)</enum><header>No double
				benefit for certain expenditures</header><text>The term <term>qualified home
				energy efficiency expenditures</term> shall not include any expenditure for
				which a deduction or credit is claimed by the taxpayer under this
			 chapter for
				the taxable year or with respect to which the taxpayer receives any
			 Federal
				energy efficiency rebate.</text></subparagraph></paragraph><paragraph id="IDfdd3bab5731d4b66b14a6c503228ae0b"><enum>(2)</enum><header>Principal
				residence</header><text>The term <term>principal residence</term> has the same
				meaning as when used in section 121.</text></paragraph><paragraph id="ID1923c5ad03cd48fe82deaf08e284070c"><enum>(3)</enum><header>Special
				rules</header><text>Rules similar to the rules under paragraphs (4), (5), (6),
				(7), and (8) of section 25D(e) and section 25C(e)(2) shall apply,
			 as determined
				by the Secretary, after consultation with the Secretary of Energy.</text></paragraph><paragraph id="IDe49f2e0b873c49218b094ba2b19e249f"><enum>(4)</enum><header>Basis
				adjustments</header><text>For purposes of this subtitle, if a credit is allowed
				under this section with respect to any expenditure with respect to
			 any
				property, the increase in the basis of such property which would
			 (but for this
				paragraph) result from such expenditure shall be reduced by the
			 amount of the
				credit so allowed.</text></paragraph><paragraph id="IDfd7c56674aae4cd89f69e1652c21b102"><enum>(5)</enum><header>Election not to
				claim credit</header><text>No credit shall be determined under subsection (a)
				for the taxable year if the taxpayer elects not to have subsection
			 (a) apply to
				such taxable year.</text></paragraph><paragraph id="ID60d025821e68445fb39e3c014f8b7993"><enum>(6)</enum><header>Multiple year
				retrofits</header><text>If the taxpayer has claimed a credit under this section
				in a previous taxable year, the baseline energy use for the
			 calculation of
				reduced energy use must be established after the previous retrofit
			 has been
				placed in service.</text></paragraph></subsection><subsection id="ID63d52d308ff741398c3b36781b13b97e"><enum>(f)</enum><header>Termination</header><text>This
				section shall not apply with respect to any costs paid or incurred
			 after
				December 31, 2016.</text></subsection><subsection id="ID41ecd06d3e2e4dc2b7f38803f2f06d5f"><enum>(g)</enum><header>Secretary
				review</header><text>The Secretary, after consultation with the Secretary of
				Energy, shall establish a review process for the retrofits
			 performed, including
				an estimate of the usage of the credit and a statistically valid
			 analysis of
				the average actual energy use reductions, utilizing utility bill
			 data collected
				on a voluntary basis, and report to Congress not later than June
			 30, 2014, any
				findings and recommendations for—</text><paragraph id="id470B8DC8271D48698C53122CF6C7A823"><enum>(1)</enum><text>improvements to
				the effectiveness of the credit under this section, and</text></paragraph><paragraph id="id0D374FC101B94281B20A949578D1074F"><enum>(2)</enum><text>expansion of the
				credit under this section to rental
				units.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="IDac997512db034d158adcff0fda577b16"><enum>(b)</enum><header>Conforming
			 amendments</header><paragraph id="ID3b4e7f8076ff4429acf1beb79454d835"><enum>(1)</enum><text>Section 1016(a)
			 is amended—</text><subparagraph id="ID1f35ed44c55c43358553dfd175b639e2"><enum>(A)</enum><text>by striking
			 <quote>and</quote> at the end of paragraph (36),</text></subparagraph><subparagraph id="IDe5d6e56a29c14b259dced88c4f47887f"><enum>(B)</enum><text>by striking the
			 period at the end of paragraph (37) and inserting <quote>, and</quote>,
			 and</text></subparagraph><subparagraph id="IDba2ba7e1c6094988b6fc27ac2dc3f665"><enum>(C)</enum><text>by adding at the
			 end the following new paragraph:</text><quoted-block display-inline="no-display-inline" id="idB455FD31672F4F33A8AEE9AA217757AF" style="OLC"><paragraph id="idD5B762E5F1D745028471824DABBDB100"><enum>(38)</enum><text>to the extent
				provided in section 25E(e)(4), in the case of amounts with respect
			 to which a
				credit has been allowed under section
				25E.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="IDb22b6f15251549e0bf6cc0637e3e0aaa"><enum>(2)</enum><text>Section 6501(m)
			 is amended by inserting <quote>25E(e)(5),</quote> after
			 <quote>section</quote>.</text></paragraph><paragraph id="IDec73b5e26b4f4c86b4609a7d74397b35"><enum>(3)</enum><text>The table of
			 sections for subpart A of part IV of subchapter A chapter 1 is amended by
			 inserting after the item relating to section 25D the following new item:</text><quoted-block display-inline="no-display-inline" id="id55285CF17DB348998620DA8F943839C2" style="OLC"><toc><toc-entry bold="off" level="section">Sec. 25E. Performance based
				energy
				improvements.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="IDfbaf6d42b20c4f29abc2b00d6de9ecb3"><enum>(c)</enum><header>Effective
			 date</header><text>The amendments made by this section shall apply to amounts
			 paid or incurred for a qualified whole home energy efficiency retrofit
			 placed
			 in service after December 31, 2013.</text></subsection></section></title><title id="id8635E4F4574E47B0B2969522B1A4BE50"><enum>III</enum><header>Industrial Energy
		and Water Efficiency</header><section id="id94DC78758C5B4063A2AFBF82790EF22C"><enum>301.</enum><header>Modifications in
			 credit for combined heat and power system property</header><subsection id="id078E1F2199764401B4F4E5C7A73CE713"><enum>(a)</enum><header>Modification of
			 certain capacity limitations</header><text>Section 48(c)(3)(B) is
			 amended—</text><paragraph id="id0C94B2C22BBB4D7E98C1B2668A426DA5"><enum>(1)</enum><text>by striking
			 <quote>15 megawatts</quote> in clause (ii) and inserting <quote>25
			 megawatts</quote>,</text></paragraph><paragraph id="id8301D60920F744D4B9416E1B0EE4245F"><enum>(2)</enum><text>by striking
			 <quote>20,000 horsepower</quote> in clause (ii) and inserting <quote>34,000
			 horsepower</quote>, and</text></paragraph><paragraph id="id7E01EDDC842D4EF28FEBE7952D775129"><enum>(3)</enum><text>by striking
			 clause (iii).</text></paragraph></subsection><subsection id="id6067AA12011C494782E846645B0F428D"><enum>(b)</enum><header>Increase in credit percentage for systems with greater efficiency</header><text>Subparagraph (A) of section 48(a)(2) is amended—</text><paragraph id="idF1D316505D094CB3A6BB6F89A5934002"><enum>(1)</enum><text>by striking <quote>and</quote> at the end of subclause (III) of clause (i),</text></paragraph><paragraph id="id115786D953AC42D2BB96FB18E0A0EFB7"><enum>(2)</enum><text>by adding at the end of clause (i) the following new subclause:</text><quoted-block act-name="" id="idEE2F9B0F1106411BB9D8C1CC498149AB" style="OLC"><subclause id="id1268D78B6B01412DBA6373CCD8670E95"><enum>(V)</enum><text>combined heat and power system property the energy efficiency percentage of which (as defined in
			 subsection (c)(3)(C)(i)) is equal to or greater than 85 percent,</text></subclause><after-quoted-block>,</after-quoted-block></quoted-block></paragraph><paragraph id="idF1CA3713DC5D433FA4A167AA1511B0BD"><enum>(3)</enum><text>by redesignating clause (ii) as clause (iii),</text></paragraph><paragraph id="idE1B405CBB49D4B5886F956D2138326D7"><enum>(4)</enum><text>by striking <quote>clause (i)</quote> in clause (iii), as so redesignated, and inserting <quote>clause (i) or (ii)</quote>, and</text></paragraph><paragraph id="id10C28BF0C8774818978A2060199706D2"><enum>(5)</enum><text>by inserting after clause (i) the following new clause:</text><quoted-block act-name="" id="id0D00CD1365EB44BE80B48B54EB4AD077" style="OLC"><clause id="id2FD7F7E02641408D89354DB88A942307"><enum>(ii)</enum><text>20 percent in the case of combined heat and power system property the energy percentage of which
			 (as defined in subsection
			 (c)(3)(C)(i)) is equal to or greater than 75 percent and less than 85
			 percent, and</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="id84FE6AA111C645A6803B2449C558E2D0"><enum>(c)</enum><header>Extension</header><text>Clause (iv) of section 48(c)(3)(A) is amended by striking <quote>January 1, 2017</quote> and inserting <quote>January 1, 2019</quote>.</text></subsection><subsection commented="no" display-inline="no-display-inline" id="idFF6BBC1ACAD54C81A732FDF0C4CB3AF2"><enum>(d)</enum><header>Effective
			 date</header><text>The amendments made by this section shall apply to periods
			 after the date of the enactment of this Act, under rules similar to the
			 rules
			 of <external-xref legal-doc="usc" parsable-cite="usc/26/48">section 48(m)</external-xref> of the Internal Revenue Code of 1986 (as in effect on the
			 day
			 before the date of the enactment of the Revenue Reconciliation Act of
			 1990).</text></subsection></section><section id="id2421941F20294C159D9C30F6197038D4" section-type="subsequent-section"><enum>302.</enum><header>Investment tax credit
			 for biomass heating property</header><subsection id="id9721BF0EEED64848B425013BA8F883A0"><enum>(a)</enum><header>In
			 general</header><text display-inline="yes-display-inline">Subparagraph (A) of
			 section 48(a)(3) is amended by striking <quote>or</quote> at the end of clause
			 (vi), by inserting <quote>or</quote> at the end of clause (vii), and by
			 inserting after clause (vii) the following new clause:</text><quoted-block display-inline="no-display-inline" id="idD3F681549EF0495F9ED9E894BBF07AF3" style="OLC"><clause id="id56888F9366AE4CE690C39F94CA43F7C8"><enum>(viii)</enum><text display-inline="yes-display-inline">open-loop biomass (within the meaning of
				section 45(c)(3)) heating property, including boilers or furnaces
			 which operate
				at output efficiencies of not less than 65 percent (measured by the
			 higher
				heating value of the fuel) and which provide thermal energy in the
			 form of
				heat, hot water, or steam for space heating, air conditioning,
			 domestic hot
				water, or industrial process heat, but only with respect to periods
			 ending
				before January 1,
				2016,</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="id5DCE11CE0A2C4050AC9807A55B4B3279"><enum>(b)</enum><header>30-Percent and
			 15-Percent credits</header><paragraph id="id4C810E2947184A359AF4A8BF25F1609E"><enum>(1)</enum><header>In
			 general</header><text>Subparagraph (A) of section 48(a)(2), as amended by this title, is amended—</text><subparagraph id="id962241D7259F4AE1BA1E322D0A4ED2A1"><enum>(A)</enum><text>by redesignating
			 clause (iii) as clause (iv),</text></subparagraph><subparagraph id="id017E9129192D43FD9B76ADC52A22654E"><enum>(B)</enum><text>by striking <quote>and</quote> at the end of clause (ii),</text></subparagraph><subparagraph id="id934E6E09A01D4C0CA2BD5CA2C87D593D"><enum>(C)</enum><text>by striking <quote>clause (i) or (ii)</quote> in clause (iv), as so redesignated, and inserting <quote>clause (i), (ii), or (iii)</quote>, and</text></subparagraph><subparagraph id="id77530BC2E2B948CF8D2FAF74F359AE57"><enum>(D)</enum><text>by inserting
			 after clause (ii) the following new clause:</text><quoted-block act-name="" id="id57E29D57EBBA4EEC9123CB069476E995" style="OLC"><clause id="id89478DE146FB4C9D9BE88A409289EE08"><enum>(iii)</enum><text>15 percent in the case of energy property described
				in paragraph (3)(A)(viii) to which clause (i)(VI) does not apply,
			 and</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="id611C8F2D916343E7AD2C7DDF323D1C33"><enum>(2)</enum><header>Increased
			 credit for greater efficiency</header><text display-inline="yes-display-inline">Clause (i) of section 48(a)(2)(A), as amended by this title, is
			 amended by striking <quote>and</quote> at the end of subclause (IV), by striking the comma at the end of subclause (V) and inserting <quote>, and</quote>, and by
			 inserting after subclause (V) the following new subclause:</text><quoted-block display-inline="no-display-inline" id="id9E4DB8723ED248A9956B0B908879E5DF" style="OLC"><subclause id="id5BA48E2A8E1E46008F2F26D57449BF18"><enum>(VI)</enum><text display-inline="yes-display-inline">energy property described in paragraph
				(3)(A)(viii) which operates at an output efficiency of not less
			 than 80 percent
				(measured by the higher heating value of the
				fuel),</text></subclause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idAFD833B8E4924B1A81A6965CD980C66C"><enum>(c)</enum><header>Effective
			 date</header><text display-inline="yes-display-inline">The amendments made by
			 this section shall apply to periods after the date of the enactment of
			 this
			 Act, in taxable years ending after such date, under rules similar to the
			 rules
			 of <external-xref legal-doc="usc" parsable-cite="usc/26/48">section 48(m)</external-xref> of the Internal Revenue Code of 1986 (as in effect on the
			 day
			 before the date of the enactment of the Revenue Reconciliation Act of
			 1990).</text></subsection></section><section commented="no" display-inline="no-display-inline" id="idDE3D8B96EB424E7F8CC513C0D91E0086"><enum>303.</enum><header>Investment tax credit for waste heat to power property</header><subsection commented="no" display-inline="no-display-inline" id="id79EB890C886449A9A54EC62FC4EC8059"><enum>(a)</enum><header>In general</header><text>Subparagraph (A) of section 48(a)(3), as amended by this title, is amended by striking <quote>or</quote> at the end of clause (vii), by striking the comma at the end of clause (viii) and inserting <quote>, or</quote>, and by inserting after clause (viii) the following new clause:</text><quoted-block act-name="" id="id53321EB00E544E0EB850C7F42477C5E6" style="OLC"><clause id="id424E7EDB110F42AB9CC91BAEE3F9EDEC"><enum>(ix)</enum><text>waste heat to power property,</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection commented="no" display-inline="no-display-inline" id="idD770C6CB90F0484E8776675A63F7B425"><enum>(b)</enum><header>30-Percent credit</header><text>Clause (i) of section 48(a)(2)(A), as amended by this title, is amended by striking <quote>and</quote> at the end of subclause (V), by striking the comma at the end of subclause (VI) and inserting <quote>, and</quote>, and by inserting after subclause (VI) the following new subclause:</text><quoted-block act-name="" id="idFCDB32F0E5294B05BE1B3CE695B554C1" style="OLC"><subclause id="idDB4FC95AFDD1423098D7AD71076986B3"><enum>(VII)</enum><text>waste heat to power property,</text></subclause><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection commented="no" display-inline="no-display-inline" id="id052A6F42817A487E9190BA03A19B242D"><enum>(c)</enum><header>Waste heat To power property</header><text>Subsection (c) of section 48 is amended by adding at the end the following new paragraph:</text><quoted-block display-inline="no-display-inline" id="id0cb566ce79ca4c129ee1d0b0cd0747c1" style="OLC"><paragraph id="id93ff16145e6c448faa8f25b7a28be649"><enum>(5)</enum><header>Waste heat to power property</header><subparagraph id="id73e07ea2073d48ab8bfc25a57ee46f93"><enum>(A)</enum><header>In general</header><text>The term <term>waste heat to power property</term> means property—</text><clause id="id67B6354467084AB98A3CD0DBFD1ABB6F"><enum>(i)</enum><text>comprising a system which generates electricity through the recovery of a qualified waste heat
			 resource, and</text></clause><clause id="id0704B861AED2401C8B95CFF3FC65B6FD"><enum>(ii)</enum><text>which is placed in service before January 1, 2019.</text></clause></subparagraph><subparagraph id="id70204ae5769848f6a1fb6b708aeae96a"><enum>(B)</enum><header>Qualified waste heat resource</header><text>The term <term>qualified waste heat resource</term> means—</text><clause id="id188d4c94b85143d0aaa5ec1f116b612c"><enum>(i)</enum><text>exhaust heat or flared gas from an industrial process,</text></clause><clause id="id03a09a5f96b445feaca582fa53abbf94"><enum>(ii)</enum><text>waste gas or industrial tail gas that would otherwise be flared, incinerated, or vented,</text></clause><clause id="id908ed4fb169c42318191eae29acdd8c1"><enum>(iii)</enum><text>a pressure drop in any gas for an industrial or commercial process, or</text></clause><clause id="id82483a486cde4d57a35c3e1cbd1ae457"><enum>(iv)</enum><text>such other forms of waste heat resources as the Secretary may determine.</text></clause></subparagraph><subparagraph id="id94c2e976b55e4e0fb5c49f563185eb68"><enum>(C)</enum><header>Exception</header><text>The term <term>qualified waste heat resource</term> does not include any heat resource from a process whose primary purpose is the generation of
			 electricity utilizing a fossil fuel or the production of oil, natural gas,
			 or other fossil fuels.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection commented="no" display-inline="no-display-inline" id="idDD268BB883864B828F1927AB2E774737"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section shall apply to periods after the date of the enactment of this
			 Act, in taxable years ending after such date, under rules similar to the
			 rules of <external-xref legal-doc="usc" parsable-cite="usc/26/48">section 48(m)</external-xref> of the Internal Revenue Code of 1986 (as in effect
			 on the day before the date of the enactment of the Revenue Reconciliation
			 Act of 1990).</text></subsection></section><section id="id724711338EFD4DA78DF33975A0535F5F"><enum>304.</enum><header>Motor energy
			 efficiency improvement tax credit</header><subsection id="id4F5A2C9E7A144E479A6A4ABE22DDDC5B"><enum>(a)</enum><header>In
			 general</header><text>Subpart D of part IV of subchapter A of chapter 1 is
			 amended by adding at the end the following new section:</text><quoted-block display-inline="no-display-inline" id="idF9807E16C4B542DCB22986DCBA7540FF" style="OLC"><section id="id5BDA2F37819747E2AD14178C1267E037"><enum>45S.</enum><header>Motor energy
				efficiency improvement tax credit</header><subsection id="idAFDA9B1684E74C26A05395E0448C7AB0"><enum>(a)</enum><header>In
				general</header><text>For purposes of section 38, the motor energy efficiency
				improvement tax credit determined under this section for the
			 taxable year is an
				amount equal to $120 multiplied by the motor horsepower of an
			 appliance,
				machine, or equipment—</text><paragraph id="idC2A984889E6644F4B705F6F5C9F4E1E0"><enum>(1)</enum><text>manufactured in
				such taxable year by a manufacturer which incorporates an advanced
			 motor and
				drive system into a newly designed appliance, machine, or equipment
			 or into a
				redesigned appliance, machine, or equipment which did not
			 previously make use
				of the advanced motor and drive system, or</text></paragraph><paragraph id="idFA9B9AC5E3954D04B85FC12F4B45BB1C"><enum>(2)</enum><text>placed back into
				service in such taxable year by an end user which upgrades an
			 existing
				appliance, machine, or equipment with an advanced motor and drive
				system.</text></paragraph><continuation-text continuation-text-level="subsection">For any
				advanced motor and drive system with a total horsepower of less
			 than 10, such
				motor energy efficiency improvement tax credit is an amount which
			 bears the
				same ratio to $120 as such total horsepower bears to 1 horsepower.</continuation-text></subsection><subsection id="id51623C170FF64A799D69CD47DE611B6E"><enum>(b)</enum><header>Advanced motor
				and drive system</header><text>For purposes of this section, the term
				<term>advanced motor and drive system</term> means a motor and any required
				associated electronic control which—</text><paragraph id="id2637758938E14E7183DFD76F566D3372"><enum>(1)</enum><text>offers variable
				or multiple speed operation, and</text></paragraph><paragraph id="id99F2D09C55434FF7A3FB2C813F41D81D"><enum>(2)</enum><text>uses permanent
				magnet technology, electronically commutated motor technology,
			 switched
				reluctance motor technology, synchronous reluctance, or such other
			 motor and
				drive systems technologies as determined by the Secretary of
			 Energy.</text></paragraph></subsection><subsection id="idC07C9ED2D29545828880939EF1018434"><enum>(c)</enum><header>Aggregate per
				taxpayer limitation</header><paragraph id="id0387642773A549BBA9C8D634B8CC1FFF"><enum>(1)</enum><header>In
				general</header><text>The amount of the credit determined under this section
				for any taxpayer for any taxable year shall not exceed the excess
			 (if any) of
				$2,000,000 over the aggregate credits allowed under this section
			 with respect
				to such taxpayer for all prior taxable years.</text></paragraph><paragraph id="idF9049CD2D88B476794568C1903A9BDF2"><enum>(2)</enum><header>Aggregation
				rules</header><text>For purposes of this section, all persons treated as a
				single employer under subsections (a) and (b) of section 52 shall
			 be treated as
				1 taxpayer.</text></paragraph></subsection><subsection display-inline="no-display-inline" id="HC1297D4794424ACA807E80D25AC586E1"><enum>(d)</enum><header>Special
				rules</header><paragraph id="H76F5143C17AC430981A0149FF92608C6"><enum>(1)</enum><header>Basis
				reduction</header><text>For purposes of this subtitle, the basis of any
				property for which a credit is allowable under subsection (a) shall
			 be reduced
				by the amount of such credit so allowed.</text></paragraph><paragraph id="H1021195E6E0241C8BE0DBF428038145C"><enum>(2)</enum><header>No double
				benefit</header><text>No other credit shall be allowable under this chapter for
				property with respect to which a credit is allowed under this
			 section.</text></paragraph><paragraph id="H8FF3F6460CE14C4AAB74D0881A1D7308"><enum>(3)</enum><header>Property used
				outside United States not qualified</header><text>No credit shall be allowable
				under subsection (a) with respect to any property referred to in
			 section
				50(b)(1).</text></paragraph></subsection><subsection id="idAB4F439963304C6791189B37E37A1EA2"><enum>(e)</enum><header>Application</header><text>This
				section shall not apply to property manufactured or placed back
			 into service
				before the date which is 6 months after the date of the enactment
			 of this
				section or after December 31,
				2016.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="id5F00F12CB32B4ED9A7CD1B9ACE981A9F"><enum>(b)</enum><header>Conforming
			 amendments</header><paragraph id="idFE121E4BCC0A43568A178954FC944C4E"><enum>(1)</enum><text>Section 38(b) is
			 amended by striking <quote>plus</quote> at the end of paragraph (35), by
			 striking the period at the end of paragraph (36) and inserting <quote>,
			 plus</quote>, and by adding at the end the following new paragraph:</text><quoted-block display-inline="no-display-inline" id="idCDA5AD93AC4E4B7AB5BC7BF42A3C0280" style="OLC"><paragraph id="id926A56C48EEA4FCBA4B7ADA56A36C510"><enum>(37)</enum><text>the motor energy
				efficiency improvement tax credit determined under section
				45S.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph id="id02699FDCADF645C981CA4BC4B6E4D039"><enum>(2)</enum><text>Section 1016(a)
			 is amended by striking <quote>and</quote> at the end of paragraph (36), by
			 striking the period at the end of paragraph (37) and inserting <quote>,
			 and</quote>, and by adding at the end the following new paragraph:</text><quoted-block display-inline="no-display-inline" id="id4BEF2004594941D5945CA3886DAE3B1D" style="OLC"><paragraph id="idD390AFFDF99644828E801B0B454FD625"><enum>(38)</enum><text>to the extent
				provided in section
				45S(d)(1).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph id="idF4925B55C5B74CEE9517C5528A08C37E"><enum>(3)</enum><text>The table of
			 sections for subpart D of part IV of subchapter A of chapter 1 is amended
			 by
			 adding at the end the following new item:</text><quoted-block display-inline="no-display-inline" id="idECCAAD7C8A564C2A8F23EAEC0E33166E" style="OLC"><toc><toc-entry bold="off" level="section">Sec. 45S. Motor energy
				efficiency improvement tax
				credit.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id340E10807B284EF094AF8137A690A9CB"><enum>(c)</enum><header>Effective
			 date</header><text>The amendments made by this section shall apply to property
			 manufactured or placed back into service after the date which is 6 months
			 after
			 the date of the enactment of this Act.</text></subsection></section><section id="idF6BB5C64CB8E4A5D828607A99CC3AAD1"><enum>305.</enum><header>Credit for
			 replacement of CFC refrigerant chiller</header><subsection id="IDcb57899529f340a3b5ed0da354f4e339"><enum>(a)</enum><header>In
			 general</header><text>Subpart D of part IV of subchapter A of chapter 1, as
			 amended by this title, is amended by adding at the end the following new
			 section:</text><quoted-block display-inline="no-display-inline" id="id6B1B2A9683F241728BF3CFA16BF490B4" style="OLC"><section id="id8D30D50992EB401B93908E012B1F9A12"><enum>45T.</enum><header>CFC chiller
				replacement credit</header><subsection id="IDf0f6a4c20473426da7c32c79f74bb520"><enum>(a)</enum><header>In
				general</header><text>For purposes of section 38, the CFC chiller replacement
				credit determined under this section for the taxable year is an
			 amount equal
				to—</text><paragraph id="ID569eebaf4f8e4686b74f4fc8e6bf3677"><enum>(1)</enum><text>$150 multiplied
				by the tonnage rating of a CFC chiller replaced with a new
			 efficient chiller
				that is placed in service by the taxpayer during the taxable year,
			 plus</text></paragraph><paragraph id="IDb037cdb57ebd441aab270a94b64a3883"><enum>(2)</enum><text>if all chilled
				water distribution pumps connected to the new efficient chiller
			 include
				variable frequency drives, $100 multiplied by any tonnage
			 downsizing.</text></paragraph></subsection><subsection id="IDea75cf90576b4b60b36763e562122152"><enum>(b)</enum><header>CFC
				chiller</header><text>For purposes of this section, the term <term>CFC
				chiller</term> includes property which—</text><paragraph id="ID8139198ef845410893e6a17b6d973878"><enum>(1)</enum><text>was installed
				after 1980 and before 1993,</text></paragraph><paragraph id="ID9df6c69f9235451199083dead71ffbcf"><enum>(2)</enum><text>utilizes
				chlorofluorocarbon refrigerant, and</text></paragraph><paragraph id="ID6107f479520e4bc2b2f915036299701d"><enum>(3)</enum><text>until replaced by
				a new efficient chiller, has remained in operation and utilized for
			 cooling a
				commercial building.</text></paragraph></subsection><subsection id="ID41f62dd41a56460d84c86d88f43b0650"><enum>(c)</enum><header>New efficient
				chiller</header><text>For purposes of this section, the term <term>new
				efficient chiller</term> includes a water-cooled chiller which is certified to
				meet efficiency standards effective on January 1, 2015, as defined
			 in table
				6.8 in Standard 90.1-2013 of the American Society
			 of Heating,
				Refrigerating, and Air Conditioning Engineers.</text></subsection><subsection id="ID4fca5b65c01041e390193f70924a1f24"><enum>(d)</enum><header>Tonnage
				downsizing</header><text>For purposes of this section, the term <term>tonnage
				downsizing</term> means the amount by which the tonnage rating of the CFC
				chiller exceeds the tonnage rating of the new efficient chiller.</text></subsection><subsection id="ID83bba7794da9486a90c43b1948df901b"><enum>(e)</enum><header>Energy
				audit</header><text>As a condition of receiving a tax credit under this
				section, an energy audit shall be performed on the building prior
			 to
				installation of the new efficient chiller, identifying
			 cost-effective
				energy-saving measures, particularly measures that could contribute
			 to chiller
				downsizing. The audit shall satisfy criteria that shall be issued
			 by the
				Secretary of Energy.</text></subsection><subsection id="ID14bbe80d3ac5460980cf881f8a476d05"><enum>(f)</enum><header>Property used
				by tax-Exempt entity</header><text>In the case of a CFC chiller replaced by a
				new efficient chiller the use of which is described in paragraph
			 (3) or (4) of
				section 50(b), the person who sold such new efficient chiller to
			 the entity
				shall be treated as the taxpayer that placed in service the new
			 efficient
				chiller that replaced the CFC chiller, but only if such person
			 clearly
				discloses to such entity in a document the amount of any credit
			 allowable under
				subsection (a) and the person certifies to the Secretary that the
			 person
				reduced the price the entity paid for such new efficient chiller by
			 the entire
				amount of such credit.</text></subsection><subsection id="idFBE2306CF53A4F7F8BE1F09CAFCF5761"><enum>(g)</enum><header>Termination</header><text>This
				section shall not apply to replacements made after December 31,
				2017.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="IDde02fd50800841c3b3f36cabdb6cbf23"><enum>(b)</enum><header>Conforming
			 amendments</header><paragraph id="IDc60bf04c15bc4f1d837788a3802a3285"><enum>(1)</enum><text>Section 38(b), as
			 amended by this title, is amended by striking <quote>plus</quote> at the end of
			 paragraph (36), by striking the period at the end of paragraph (37) and
			 inserting <quote>, plus</quote>, and by adding at the end the following new
			 paragraph:</text><quoted-block display-inline="no-display-inline" id="id2DC72BA06D0B40CEB6E0FB68880F689F" style="OLC"><paragraph id="ID6c2916f109f7488eaff4aa4db1380aea"><enum>(38)</enum><text>the CFC chiller
				replacement credit determined under section
				45T.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph id="ID72d30b38e2f94989b4190e90c4e05561"><enum>(2)</enum><text>The table of
			 sections for subpart D of part IV of subchapter A of chapter 1, as amended
			 by
			 this title, is amended by adding at the end the following new item:</text><quoted-block display-inline="no-display-inline" id="idE51E4723BA824D16AD0F4558E65F7D30" style="OLC"><toc><toc-entry bold="off" level="section">Sec. 45T. CFC chiller
				replacement
				credit.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="IDca5cf07776134da89c49979c1d6ec970"><enum>(c)</enum><header>Effective
			 date</header><text>The amendments made by this section shall apply to
			 replacements made after the date of the enactment of this Act.</text></subsection></section><section id="idB40C20EF18544B5B9F686DCBAFE83210"><enum>306.</enum><header>Qualifying
			 efficient industrial process water use project credit</header><subsection id="H02D706410A51490085D41E997D58E9A8"><enum>(a)</enum><header>In
			 general</header><text>Section 46 is amended by inserting a comma at the end of paragraph (4), by striking <quote>and</quote> at
			 the end of paragraph (5), by striking the period at the end of paragraph
			 (6) and inserting <quote>, and</quote>,
			 and by adding at the end the following new paragraph:</text><quoted-block display-inline="no-display-inline" id="HDDB66E35A0434E88882F97039AF737F7" style="OLC"><paragraph id="H8A372EE12B6948DB898EDC6CE9AA8CD4"><enum>(7)</enum><text>the qualifying
				efficient industrial process water use project
				credit.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="H8CE758AE8E784544ADF4BF97EBE339E5"><enum>(b)</enum><header>Amount of
			 credit</header><text>Subpart E of part IV of subchapter A of chapter 1 is
			 amended by inserting after section 48D the following new section:</text><quoted-block display-inline="no-display-inline" id="H769B7EEBA7B14471BB9579B13FFCC48E" style="OLC"><section id="H13598BA99F7C4DE2B2D30BF73ED52C1C"><enum>48E.</enum><header>Qualifying
				efficient industrial process water use project credit</header><subsection id="H8759DB7CC5634006B3D67931093ADE33"><enum>(a)</enum><header>In
				general</header><paragraph id="idD468EFA95BB74038B5BFFD838B71D2C3"><enum>(1)</enum><header>Allowance of
				credit</header><text>For purposes of section 46, the qualifying efficient
				industrial process water use project credit for any taxable year is
			 an amount
				equal to the applicable percentage of the qualified investment for
			 such taxable
				year with respect to any qualifying efficient industrial process
			 water use
				project of the taxpayer.</text></paragraph><paragraph id="idF56CAE9393314F0390175E0BDC77EA4B"><enum>(2)</enum><header>Applicable
				percentage</header><text>For purposes of subsection (a)—</text><subparagraph id="id11AAF2DA6F5547F4AA98A856E322D40E"><enum>(A)</enum><header>In
				general</header><text>The applicable percentage is—</text><clause id="idF71A5DE3A98C486DB074FFE8EFB5E360"><enum>(i)</enum><text>10 percent in the
				case of a qualifying efficient industrial process water use project
			 which
				achieves a 25 percent or greater (but less than 50 percent)
			 reduction in water
				use for industrial purposes,</text></clause><clause id="id4723611FDC4B4EE79B61704E73F3ABE1"><enum>(ii)</enum><text>20 percent in
				the case of a qualifying efficient industrial process water use
			 project which
				achieves a 50 percent or greater (but less than 75 percent)
			 reduction in water
				use for industrial purposes, and</text></clause><clause id="idC8C082C307D5495382040A6AED7C8FD0"><enum>(iii)</enum><text>30 percent in
				the case of a qualifying efficient industrial process water use
			 project which
				achieves a 75 percent or greater reduction in water use for
			 industrial
				purposes.</text></clause></subparagraph><subparagraph id="idD25C47DDA2594B36B50442281F3A6953"><enum>(B)</enum><header>Water
				use</header><text>For purposes of subparagraph (A)—</text><clause id="id5F02FB0C7BF7440F8CC5685595725A46"><enum>(i)</enum><header>Measurement of
				reduction in water use</header><subclause id="idAF02B488CEA24399A47D99961093391C"><enum>(I)</enum><header>In
				general</header><text>The taxpayer shall elect one of the methods specified in
				clause (ii) for measuring the reduction in water use achieved by a
			 qualifying
				efficient industrial process water use project.</text></subclause><subclause id="idEA747955935D49E9BD29B857ACC6505F"><enum>(II)</enum><header>Irrevocable
				election</header><text>An election under subclause (I), once made with respect
				to a qualifying efficient industrial process water use project,
			 shall apply to
				the taxable year for which made and all subsequent taxable years,
			 and may not
				be revoked.</text></subclause><subclause id="id5A325651D48D400FAF0BBC65BFE82E42"><enum>(III)</enum><header>Projected
				savings</header><text>The credit under subsection (a) may be claimed on the
				basis of a reduction in water use which is projected, by a
			 registered
				professional engineer who is not a related person (within the
			 meaning of
				section 144(a)(3)(A)) to the taxpayer or the installer of eligible
			 property, to
				be achieved by a qualifying efficient industrial process water use
			 project.
				Such projection, if used as a basis for determining the credit
			 under subsection
				(a), shall be included with the return of tax.</text></subclause></clause><clause id="id22FD72AA703D4957ACD98BE319B054B1"><enum>(ii)</enum><header>Methods
				specified</header><text>The methods specified in this clause are—</text><subclause id="id68B972806AF4407ABB020FA43DC7565F"><enum>(I)</enum><text>a measurement of
				the percentage reduction in water use per unit of product
			 manufactured by the
				taxpayer, and</text></subclause><subclause id="idD716D831CF03478ABD0F38FE4E0AF345"><enum>(II)</enum><text>a measurement of
				the percentage reduction in water use per pound of product
			 manufactured by the
				taxpayer.</text></subclause></clause></subparagraph></paragraph></subsection><subsection id="id2085497D4DD446B8A054909C401A412D"><enum>(b)</enum><header>Qualified
				investment</header><paragraph id="H4AB83D162CA04D39AAA16C46E530B8BA"><enum>(1)</enum><header>In
				general</header><text>For purposes of subsection (a), the qualified investment
				for any taxable year is the basis of eligible property placed in
			 service by the
				taxpayer during such taxable year which is part of a qualifying
			 efficient
				industrial process water use project.</text></paragraph><paragraph id="idDACA8A65665A4026B81350A8CAA31847"><enum>(2)</enum><header>Exceptions</header><text>Such
				term shall not include any portion of the basis related to—</text><subparagraph id="id8F4CAD408D2445DC8D7FAF7274AB8950"><enum>(A)</enum><text>permitting,</text></subparagraph><subparagraph id="idF0C059B01AD34B579FDA58E92C674753"><enum>(B)</enum><text>land acquisition,
				or</text></subparagraph><subparagraph id="idC83B89908B0F4B848E576DEE2EF5AD18"><enum>(C)</enum><text>infrastructure
				not directly associated with the implementation of the technology
			 or process
				improvements of the qualifying efficient industrial process water
			 use
				project.</text></subparagraph></paragraph><paragraph id="HDB21CBE4660448A3BCB6476CD303D3A6"><enum>(3)</enum><header>Certain
				qualified progress expenditures rules made applicable</header><text>Rules
				similar to the rules of subsections (c)(4) and (d) of section 46
			 (as in effect
				on the day before the enactment of the Revenue Reconciliation Act
			 of 1990)
				shall apply for purposes of this section.</text></paragraph><paragraph commented="no" id="id967048A9D92140CBAF8699552BFB9FF8"><enum>(4)</enum><header>Special rule
				for subsidized energy financing</header><text>Rules similar to the rules of
				section 48(a)(4) (without regard to subparagraph (D) thereof) shall
			 apply for
				purposes of this section.</text></paragraph><paragraph id="HD33BA662BBC94BFCA827D0DD547C133A"><enum>(5)</enum><header>Limitation</header><text>The
				amount which is treated for all taxable years with respect to any
			 qualifying
				efficient industrial process water use project with respect to any
			 site shall
				not exceed $10,000,000.</text></paragraph></subsection><subsection id="HBB3001EAF3BB455884C5FEA658050DC4"><enum>(c)</enum><header>Definitions</header><text>For
				purposes of this section—</text><paragraph id="H16747B7E18C84CE39194B6B725B09BB1"><enum>(1)</enum><header>Qualifying
				efficient industrial process water use project</header><subparagraph id="id0B2E78715CCD44508E458DF62A4CFC10"><enum>(A)</enum><header>In
				general</header><text>The term <term>qualifying efficient industrial process
				water use project</term> means, with respect to any site, a project which
				retrofits or expands an existing facility to implement technology
			 or process
				improvements which are designed to reduce water use for systems
			 that use any
				form of water in the production of goods in the manufacturing
			 sector (as
				defined in North American Industrial Classification System codes
			 31, 32, and
				33), including any system that uses water for heating, cooling, or
			 energy
				production for the production of goods in the trade or business of
				manufacturing (other than extraction of fossil fuels). Such term
			 shall not include a project which alters an existing
				facility to change the type of goods produced by such facility.</text></subparagraph><subparagraph id="idF38D88B4B35C43878E192FEF749FFFCB"><enum>(B)</enum><header>Systems</header><text>For
				purposes of subparagraph (A), the term <term>system</term> does not include any
				system which does not encompass 1 or more complete processes.</text></subparagraph></paragraph><paragraph id="HC2671FE68FF642449BC785676AF529C0"><enum>(2)</enum><header>Eligible
				property</header><text>The term <term>eligible property</term> means any
				property—</text><subparagraph id="id224A9E78A3B84194A49BA5E458070317"><enum>(A)</enum><text>which is part of
				a qualifying efficient industrial process water use project and
			 which is
				necessary for the reduction in water use described in paragraph
			 (1),</text></subparagraph><subparagraph id="id92B6F08EAF754E32B6430F4E8371BB5D"><enum>(B)</enum><clause commented="no" display-inline="yes-display-inline" id="id5B5064814E21468680614688E57A155C"><enum>(i)</enum><text>the construction,
				reconstruction, or erection of which is completed by the taxpayer,
			 or</text></clause><clause id="id55B18AB95B3D4E5C8B960010DC8C9AD7" indent="up1"><enum>(ii)</enum><text>which is acquired by the taxpayer
				if the original use of such property commences with the taxpayer,
			 and</text></clause></subparagraph><subparagraph id="idCD5770E72401483F9C7C4A6222BCAA28"><enum>(C)</enum><text>with respect to
				which depreciation (or amortization in lieu of depreciation) is
				allowable.</text></subparagraph></paragraph><paragraph commented="no" id="idDBD426E9AF284A81B6866FF30F7523A2"><enum>(3)</enum><header>Water
				use</header><subparagraph commented="no" id="idAD7B9258A4024B8E9D1282FE456CF4C0"><enum>(A)</enum><header>In
				general</header><text>The term <term>water use</term> means all water taken for
				use at the site directly from ground and surface water sources
			 together with
				any water supplied to the site by a regulated water system.</text></subparagraph><subparagraph commented="no" id="idC3B5D7A06D3C42C6ACC95D351B3B0808"><enum>(B)</enum><header>Regulated water
				system</header><text>The term <term>regulated water system</term> means a
				system that supplies water that has been treated to potable
			 standards.</text></subparagraph></paragraph></subsection><subsection id="idC72A3762CF764DE4A2FC73BBAB93C606"><enum>(d)</enum><header>Termination</header><text>This
				section shall not apply to periods after December 31, 2017, under
			 rules similar
				to the rules of section 48(m) (as in effect on the day before the
			 date of the
				enactment of the Revenue Reconciliation Act of
				1990).</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="H1E6CF1EFB2114D82925750035D565302"><enum>(c)</enum><header>Conforming
			 amendments</header><paragraph id="H3EAB63AC478D4D4BB548787D5359B7F3"><enum>(1)</enum><text>Section
			 49(a)(1)(C) is amended by striking <quote>and</quote> at the end of clause
			 (v), by striking the period at the end of clause (vi) and inserting <quote>,
			 and</quote>, and by adding at the end the following new clause:</text><quoted-block display-inline="no-display-inline" id="H472A0D757AF04EEAA4FED11FD4BA1531" style="OLC"><clause id="H057D7C605EDC417887C1A67F96A635F0"><enum>(vii)</enum><text>the basis of any
				property which is part of a qualifying efficient industrial use
			 water project
				under section
				48E.</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph id="HD825BA5866F447E0B4E5ACD282318640"><enum>(2)</enum><text>The table of
			 sections for subpart E of part IV of subchapter A of chapter 1 is amended
			 by
			 inserting after the item relating to section 48D the following new item:</text><quoted-block id="id91b65e1c-b9c0-4871-bd46-67615b234a52" style="OLC"><toc><toc-entry idref="H13598BA99F7C4DE2B2D30BF73ED52C1C" level="section">Sec. 48E. Qualifying efficient industrial process water use
				project
				credit.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="HDDE6DD6D040F47BC9BB25338353E736E"><enum>(d)</enum><header>Effective
			 date</header><text>The amendments made by this section shall apply to periods
			 after the date of the enactment of this Act, under rules similar to the
			 rules of section 48(m)
			 of the
			 Internal Revenue Code of 1986 (as in effect on the day before the date of
			 the
			 enactment of the Revenue Reconciliation Act of 1990).</text></subsection></section></title></legis-body></bill>


