I 

117TH CONGRESS 

1ST SESSION H. R. 2346 

To amend the Internal Revenue Code of 1986 to allow 10-year straight 

line depreciation for energy efficient qualified improvement property, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 1, 2021 

Mr. SCHNEIDER (for himself and Mr. RICE of South Carolina) introduced the 

following bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to allow 10- 

year straight line depreciation for energy efficient qualified improvement property, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Energy Efficient 

5 Qualified Improvement Property Act of 2021’’ or the ‘‘E– 

6 QUIP Act’’. 


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1 SEC. 2. DEPRECIATION OF ENERGY EFFICIENT QUALIFIED 

2 IMPROVEMENT PROPERTY. 

3 (a) 10-YEAR PROPERTY.—Section 168(e)(3)(D) of 

4 the Internal Revenue Code of 1986 is amended by striking 

5 ‘‘and’’ at the end of clause (iii), by striking the period 

6 at the end of clause (iv) and inserting ‘‘, and’’, and by 

7 adding at the end the following new clause: 

8 ‘‘(vi) energy efficient qualified im9 provement property.’’. 

10 (b) STRAIGHT LINE METHOD.—Section 168(b)(3) of 

11 such Code is amended by adding at the end the following 

12 new subparagraph: 

13 ‘‘(H) Energy efficient qualified improve14 ment property described in subsection (e)(7).’’. 

15 (c) ENERGY EFFICIENT QUALIFIED IMPROVEMENT

16 PROPERTY DEFINED.—Section 168(e) of such Code is 

17 amended by adding at the end the following new para18 graph: 

19 ‘‘(7) ENERGY EFFICIENT QUALIFIED IMPROVE20 MENT PROPERTY.— 

21 ‘‘(A) IN GENERAL.—The term ‘energy effi22 cient qualified improvement property’ means 

23 any improvement— 

24 ‘‘(i) to a building which is nonresiden25 tial real property, or multifamily residen26 tial rental property, first placed in service 


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1 more than 10 years before the date of the 

2 enactment of this subparagraph, 

3 ‘‘(ii) which is installed as part of— 

4 ‘‘(I) the lighting system, 

5 ‘‘(II) the heating, cooling, ven6 tilation, or hot water systems, or 

7 ‘‘(III) the building envelope, 

8 ‘‘(iii) which meets the performance re9 quirements of subparagraph (B), 

10 ‘‘(iv) which, in the case of an improve11 ment described in subclause (I) or (II) of 

12 clause (ii)— 

13 ‘‘(I) is audited, commissioned, or 

14 managed by a professional with a cre15 dential that is recognized by the De16 partment of Energy through its Bet17 ter Buildings Workforce Guidelines, 

18 or such other credential programs 

19 identified by the Secretary of Energy 

20 (following an opportunity for, and 

21 consideration of, public input), and 

22 ‘‘(II) is subject to an ongoing op23 erations and maintenance plan under 

24 such certification during the applica25 ble recovery period, 


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1 ‘‘(v) which, in the case of an improve2 ment described in clause (ii)(III), the de3 sign and installation has been completed, 

4 observed, or approved by an individual 

5 qualified by industry-recognized profes6 sional credential programs in building en7 velope quality assurance, as identified by 

8 the Secretary of Energy (following an op9 portunity for, and consideration of, public 

10 input), 

11 ‘‘(vi) which is placed in service before 

12 January 1, 2026, and 

13 ‘‘(vii) with respect to which the tax14 payer elects the application of this sub15 paragraph. 

16 ‘‘(B) PERFORMANCE REQUIREMENTS.—An 

17 improvement meets the performance require18 ments of this subparagraph if— 

19 ‘‘(i) in the case of lighting, it meets 

20 the lighting power allowances, densities, 

21 and control specifications in the prescrip22 tive option of the International Green Con23 struction Code (2018), 

24 ‘‘(ii) in the case of a unitary air25 cooled air conditioner, it meets or exceeds 


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1 Consortium for Energy Efficiency Tier 2, 

2 as in effect on January 1, 2019, 

3 ‘‘(iii) in the case of a unitary water4 cooled and evaporatively cooled air condi5 tioner, it meets or exceeds Consortium for 

6 Energy Efficiency Tier 1, as in effect on 

7 January 1, 2019, 

8 ‘‘(iv) in the case of a unitary heat 

9 pump— 

10 ‘‘(I) with a capacity of less than 

11 65,000 Btu per hour, it meets or ex12 ceeds Consortium for Energy Effi13 ciency Tier 2, as in effect on January 

14 1, 2019, or 

15 ‘‘(II) with a capacity of 65,000 

16 Btu per hour or greater, it meets or 

17 exceeds Consortium of Energy Effi18 ciency Tier 1, as in effect on January 

19 1, 2019, 

20 ‘‘(v) in the case of a variable refrig21 erant flow multisplit air conditioner or 

22 variable refrigerant flow multisplit heat 

23 pump— 

24 ‘‘(I) with a capacity of less than 

25 65,000 Btu per hour, it meets or exVerDate Sep 11 2014 04:48 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2346.IH H2346

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1 ceeds Consortium for Energy Effi2 ciency Tier 2, as in effect on January 

3 12, 2016, or 

4 ‘‘(II) with a capacity of 65,000 

5 Btu per hour or greater, it meets or 

6 exceeds Consortium of Energy Effi7 ciency Tier 1, as in effect on January 

8 12, 2016, 

9 ‘‘(vi) in the case of a boiler, it meets 

10 or exceeds Consortium for Energy Effi11 ciency Tier 1, as in effect on September 1, 

12 2015, 

13 ‘‘(vii) in the case of a hot water heat14 er— 

15 ‘‘(I) that is gas-fired, it meets or 

16 exceeds Consortium of Energy Effi17 ciency Tier 1, as in effect on June 5, 

18 2012, or 

19 ‘‘(II) that runs on electricity, it 

20 has a Coefficient of Performance of 3 

21 or more, 

22 ‘‘(viii) in the case of a water-cooled 

23 centrifugal chiller package, it meets the 

24 prescriptive option of the International 

25 Green Construction Code (2018), 


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1 ‘‘(ix) in the case of insulation for 

2 heating and cooling supply and return 

3 ducts, it meets the prescriptive option for 

4 duct insulation of the International Green 

5 Construction Code (2018) and its applica6 ble Normative Appendix, 

7 ‘‘(x) in the case of roofing, walls, and 

8 associated insulation, it meets the prescrip9 tive option for building envelope opaque 

10 elements of the International Green Con11 struction Code (2018) and its applicable 

12 Normative Appendix, 

13 ‘‘(xi) in the case of piping insulation, 

14 it meets the prescriptive option for piping 

15 insulation of ANSI/ASHRAE/IES Stand16 ard 90.1–2019, 

17 ‘‘(xii) in the case of windows, doors, 

18 and skylights, they meet the prescriptive 

19 option for building envelope fenestration 

20 and skylights of the International Green 

21 Construction Code (2018) and its applica22 ble Informative Appendix, 

23 ‘‘(xiii) in the case of sensors and con24 trols, it is a device that automatically con25 trols the operation of other qualified equipVerDate Sep 11 2014 04:48 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2346.IH H2346

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1 ment without manual operation of a 

2 switch, using technology such as motion or 

3 occupancy detection, infrared, ultrasonic, 

4 microwave, audio-based, image-processing, 

5 temperature, humidity, time-scheduling, bi6 level, or demand-response, and 

7 ‘‘(xiv) in the case of a variable speed 

8 or frequency drive, it is a drive— 

9 ‘‘(I) added to adjust the speed 

10 and torque of an operational motor 

11 that powers pump, fan, exhaust, ven12 tilation, air-handling, or compressor 

13 equipment, and 

14 ‘‘(II) controlled automatically by 

15 a building automation system, process 

16 control system, or local controller 

17 driven by differential pressure flow, 

18 temperature or another variable sig19 nal. 

20 ‘‘(C) UPDATING OF PERFORMANCE STAND21 ARDS.—The most recent version of each per22 formance standard described in subparagraph 

23 (B) shall be affirmed by the Secretary (after 

24 consultation with the Secretary of Energy) and 

25 shall apply with respect to any property for 


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1 purposes of this paragraph not later than the 

2 date that is 2 years before the date that the im3 provement to such property begins.’’. 

4 (d) ALTERNATIVE DEPRECIATION SYSTEM.—The 

5 table in section 168(g)(3)(B) of such Code is amended by 

6 inserting after the item relating to subparagraph (D)(v) 

7 the following new item: 

‘‘(D)(vi) ........................................................................................ 10’’. 

8 (e) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to property placed in service after 

10 December 31, 2020. 

11 SEC. 3. REPORT RELATING TO DEPRECIATION OF ENERGY 

12 EFFICIENT QUALIFIED IMPROVEMENT PROP13 ERTY. 

14 (a) IN GENERAL.—Not later than 30 days after the 

15 date that is 3 years after the date of the enactment of 

16 this Act, the Secretary of the Treasury, in consultation 

17 with the Secretary of Energy, shall submit to Congress 

18 a report on energy efficient qualified improvement prop19 erty (as defined in section 168(e)(7) of the Internal Rev20 enue Code of 1986). 

21 (b) CONTENTS.—Such report shall include the fol22 lowing: 

23 (1) The number of times over such 3-year pe24 riod energy efficient qualified improvement property 


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1 was placed in service and treated as 10-year prop2 erty under section 168(e)(3)(D) of such Code. 

3 (2) A summary of the types of such energy effi4 cient qualified improvement property placed in serv5 ice during such period. 

6 (3) An estimate of the energy use savings, and 

7 reduction in greenhouse gas emissions, attributable 

8 to such property. 

9 (4) An estimate of the number of jobs created 

10 which are attributable to the enactment of the En11 ergy Efficient Qualified Improvement Property Act 

12 of 2020. 

13 (5) Any recommendations for updated efficiency 

14 requirements for energy efficient qualified improve15 ment property or rules for the depreciation thereof. 

Æ 


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