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 quali-
fied improvement property, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Energy Efficient 
Qualified Improvement Property Act of 2021’’ or the ‘‘E– 
QUIP Act’’. 
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SEC. 2. DEPRECIATION OF ENERGY EFFICIENT QUALIFIED 
IMPROVEMENT PROPERTY. 
(a) 10-YEAR PROPERTY.—Section 168(e)(3)(D) of 
the Internal Revenue Code of 1986 is amended by striking 
‘‘and’’ at the end of clause (iii), by striking the period 
at the end of clause (iv) and inserting ‘‘, and’’, and by 
adding at the end the following new clause: 
‘‘(vi) energy efficient qualified im-
provement property.’’. 
(b) STRAIGHT LINE METHOD.—Section 168(b)(3) of 
such Code is amended by adding at the end the following 
new subparagraph: 
‘‘(H) Energy efficient qualified improve-
ment property described in subsection (e)(7).’’. 
(c) ENERGY EFFICIENT QUALIFIED IMPROVEMENT 
PROPERTY DEFINED.—Section 168(e) of such Code is 
amended by adding at the end the following new para-
graph: 
‘‘(7) ENERGY EFFICIENT QUALIFIED IMPROVE-
MENT PROPERTY.— 
‘‘(A) IN GENERAL.—The term ‘energy effi-
cient qualified improvement property’ means 
any improvement— 
‘‘(i) to a building which is nonresiden-
tial real property, or multifamily residen-
tial rental property, first placed in service 
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more than 10 years before the date of the 
enactment of this subparagraph, 
‘‘(ii) which is installed as part of— 
‘‘(I) the lighting system, 
‘‘(II) the heating, cooling, ven-
tilation, or hot water systems, or 
‘‘(III) the building envelope, 
‘‘(iii) which meets the performance re-
quirements of subparagraph (B), 
‘‘(iv) which, in the case of an improve-
ment described in subclause (I) or (II) of 
clause (ii)— 
‘‘(I) is audited, commissioned, or 
managed by a professional with a cre-
dential that is recognized by the De-
partment of Energy through its Bet-
ter Buildings Workforce Guidelines, 
or such other credential programs 
identified by the Secretary of Energy 
(following an opportunity for, and 
consideration of, public input), and 
‘‘(II) is subject to an ongoing op-
erations and maintenance plan under 
such certification during the applica-
ble recovery period, 
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‘‘(v) which, in the case of an improve-
ment described in clause (ii)(III), the de-
sign and installation has been completed, 
observed, or approved by an individual 
qualified by industry-recognized profes-
sional credential programs in building en-
velope quality assurance, as identified by 
the Secretary of Energy (following an op-
portunity for, and consideration of, public 
input), 
‘‘(vi) which is placed in service before 
January 1, 2026, and 
‘‘(vii) with respect to which the tax-
payer elects the application of this sub-
paragraph. 
‘‘(B) PERFORMANCE REQUIREMENTS.—An 
improvement meets the performance require-
ments of this subparagraph if— 
‘‘(i) in the case of lighting, it meets 
the lighting power allowances, densities, 
and control specifications in the prescrip-
tive option of the International Green Con-
struction Code (2018), 
‘‘(ii) in the case of a unitary air- 
cooled air conditioner, it meets or exceeds 
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Consortium for Energy Efficiency Tier 2, 
as in effect on January 1, 2019, 
‘‘(iii) in the case of a unitary water- 
cooled and evaporatively cooled air condi-
tioner, it meets or exceeds Consortium for 
Energy Efficiency Tier 1, as in effect on 
January 1, 2019, 
‘‘(iv) in the case of a unitary heat 
pump— 
‘‘(I) with a capacity of less than 
65,000 Btu per hour, it meets or ex-
ceeds Consortium for Energy Effi-
ciency Tier 2, as in effect on January 
1, 2019, or 
‘‘(II) with a capacity of 65,000 
Btu per hour or greater, it meets or 
exceeds Consortium of Energy Effi-
ciency Tier 1, as in effect on January 
1, 2019, 
‘‘(v) in the case of a variable refrig-
erant flow multisplit air conditioner or 
variable refrigerant flow multisplit heat 
pump— 
‘‘(I) with a capacity of less than 
65,000 Btu per hour, it meets or ex-
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ceeds Consortium for Energy Effi-
ciency Tier 2, as in effect on January 
12, 2016, or 
‘‘(II) with a capacity of 65,000 
Btu per hour or greater, it meets or 
exceeds Consortium of Energy Effi-
ciency Tier 1, as in effect on January 
12, 2016, 
‘‘(vi) in the case of a boiler, it meets 
or exceeds Consortium for Energy Effi-
ciency Tier 1, as in effect on September 1, 
2015, 
‘‘(vii) in the case of a hot water heat-
er— 
‘‘(I) that is gas-fired, it meets or 
exceeds Consortium of Energy Effi-
ciency Tier 1, as in effect on June 5, 
2012, or 
‘‘(II) that runs on electricity, it 
has a Coefficient of Performance of 3 
or more, 
‘‘(viii) in the case of a water-cooled 
centrifugal chiller package, it meets the 
prescriptive option of the International 
Green Construction Code (2018), 
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ment without manual operation of a 
switch, using technology such as motion or 
occupancy detection, infrared, ultrasonic, 
microwave, audio-based, image-processing, 
temperature, humidity, time-scheduling, bi- 
level, or demand-response, and 
‘‘(xiv) in the case of a variable speed 
or frequency drive, it is a drive— 
‘‘(I) added to adjust the speed 
and torque of an operational motor 
that powers pump, fan, exhaust, ven-
tilation, air-handling, or compressor 
equipment, and 
‘‘(II) controlled automatically by 
a building automation system, process 
control system, or local controller 
driven by differential pressure flow, 
temperature or another variable sig-
nal. 
‘‘(C) UPDATING OF PERFORMANCE STAND-
ARDS.—The most recent version of each per-
formance standard described in subparagraph 
(B) shall be affirmed by the Secretary (after 
consultation with the Secretary of Energy) and 
shall apply with respect to any property for 
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purposes of this paragraph not later than the 
date that is 2 years before the date that the im-
provement to such property begins.’’. 
(d) ALTERNATIVE
DEPRECIATION
SYSTEM.—The 
table in section 168(g)(3)(B) of such Code is amended by 
inserting after the item relating to subparagraph (D)(v) 
the following new item: 
‘‘(D)(vi) ........................................................................................
10’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
December 31, 2020. 
SEC. 3. REPORT RELATING TO DEPRECIATION OF ENERGY 
EFFICIENT QUALIFIED IMPROVEMENT PROP-
ERTY. 
(a) IN GENERAL.—Not later than 30 days after the 
date that is 3 years after the date of the enactment of 
this Act, the Secretary of the Treasury, in consultation 
with the Secretary of Energy, shall submit to Congress 
a report on energy efficient qualified improvement prop-
erty (as defined in section 168(e)(7) of the Internal Rev-
enue Code of 1986). 
(b) CONTENTS.—Such report shall include the fol-
lowing: 
(1) The number of times over such 3-year pe-
riod energy efficient qualified improvement property 
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was placed in service and treated as 10-year prop-
erty under section 168(e)(3)(D) of such Code. 
(2) A summary of the types of such energy effi-
cient qualified improvement property placed in serv-
ice during such period. 
(3) An estimate of the energy use savings, and 
reduction in greenhouse gas emissions, attributable 
to such property. 
(4) An estimate of the number of jobs created 
which are attributable to the enactment of the En-
ergy Efficient Qualified Improvement Property Act 
of 2020. 
(5) Any recommendations for updated efficiency 
requirements for energy efficient qualified improve-
ment property or rules for the depreciation thereof. 
Æ 
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