H.R. 7229 – Renewing Investment in American Workers and Supply Chains Act

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Updated February 8, 2026 at 10:17 AM UTC

The bill changes the tax treatment of nonresidential real property and residential rental property by altering how they are depreciated. It creates a 20‑year recovery period for these assets, removes them from bonus depreciation, and adds a new “neutral cost recovery” deduction that adjusts with inflation. The changes affect owners of such property, including individuals, corporations, and pass‑through entities like REITs and partnerships.

Key Provisions

Defines “20‑year property” to include nonresidential real property, residential rental property, and utility land‑improvement work, establishing a 20‑year depreciation schedule.
Excludes nonresidential real property and residential rental property from eligibility for bonus depreciation.
Deletes the existing depreciation table rows for these property types to reflect the new recovery period.
Adds a neutral cost recovery deduction that multiplies the regular depreciation amount by a ratio based on the GDP deflator and a 3% annual factor, without changing the property’s basis or recapture rules.
Specifies that the additional deduction does not affect adjusted basis and does not count as depreciation for sections dealing with recapture, and defines “pass‑through entity” for this purpose.
Applies the new 20‑year recovery period to property placed in service after enactment and the neutral cost recovery rules to taxable years ending after enactment.

Legislative Activity

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2 earlier actions

HouseFloor Latest Action

ASSUMING FIRST SPONSORSHIP - Mr. Hern asked unanimous consent that he may hereafter be considered to be the first sponsor of H.R. 7229, as bill originally introduced by Representative Walorski of Indiana, for the purposes of adding cosponsors and requesting re-printings pursuant to clause 7 of rule XII. Agreed to without objection.

November 14, 2022 • 7:17 PM

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HouseIntro Referral

Introduced in House

March 24, 2022

HouseIntro Referral

Referred to the House Committee on Ways and Means.

Ways and Means Committee

March 24, 2022

HouseFloor

ASSUMING FIRST SPONSORSHIP - Mr. Hern asked unanimous consent that he may hereafter be considered to be the first sponsor of H.R. 7229, as bill originally introduced by Representative Walorski of Indiana, for the purposes of adding cosponsors and requesting re-printings pursuant to clause 7 of rule XII. Agreed to without objection.

November 14, 2022 • 7:17 PM

Floor Debate

1 member

What members said about H.R. 7229 on the floor

1 Republican

Rep. Kevin HernR-OK-1 · Nov 14, 2022

Mr. Speaker, I ask unanimous consent that I may hereafter be considered to be the first sponsor of H.R. 7229, a bill originally introduced by Representative Walorski of Indiana, for the purpose of…

Bill Text

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Introduced in HouseIssued March 24, 2022

I

117th CONGRESS

2d Session

H. R. 7229

IN THE HOUSE OF REPRESENTATIVES

March 24, 2022

Mrs. Walorski (for herself, Mr. Banks, Mr. Smith of Nebraska, Mrs. Miller of West Virginia, Mr. Crawford, Mr. Cawthorn, Mr. Baird, Ms. Mace, Ms. Van Duyne, Mr. Reschenthaler, and Mr. Perry) 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 modify the depreciation of nonresidential real property and residential rental property.

1.

Short title

This Act may be cited as the Renewing Investment in American Workers and Supply Chains Act.

2.

Modification of depreciation of nonresidential real property and residential rental property

(a)

20-Year recovery period

(1)

In general

Section 168(e)(3)(F) of the Internal Revenue Code of 1986 is amended to read as follows:

(F)

20-year property

The term 20-year property means—

(i)

initial clearing and grading land improvements with respect to any electric utility transmission and distribution plant,

(ii)

any nonresidential real property, and

(iii)

any residential rental property.

.

(2)

Bonus depreciation not applicable

Section 168(k)(2)(A)(i)(I) of such Code is amended by inserting (other than nonresidential real property and residential rental property) before the comma at the end.

(3)

Conforming amendment

The table contained in section 168(c) of such Code is amended—

(A)

by striking the row relating to residential rental property, and

(B)

by striking the row relating to nonresidential real property.

(b)

Adjustment of deduction To provide neutral cost recovery

Section 168 of such Code is amended by adding at the end the following new subsection:

(n)

Neutral cost recovery for nonresidential real property and residential rental property

(1)

In general

The deduction otherwise provided under section 167(a) with respect to nonresidential real property and residential rental property for any taxable year shall be equal to the product of such amount (determined without regard to this subsection) multiplied by the applicable neutral cost recovery ratio with respect to such property for such taxable year.

(2)

Neutral cost recovery ratio

For purposes of paragraph (1), the term applicable neutral cost recovery ratio means, with respect to any property for any taxable year, the product (not less than 1 and rounded to the nearest 0.001) of—

(A)

the quotient of—

(i)

the gross domestic product deflator (as determined by the Bureau of Economic Analysis) for the calendar quarter ending in such taxable year which corresponds to the calendar quarter during which such property was placed in service by the taxpayer, divided by

(ii)

the gross domestic product deflator (as determined by the Bureau of Economic Analysis) for the calendar quarter during which such property was placed in service by the taxpayer, multiplied by

(B)

1.03 to the nth power, where n is the number of full years in the period beginning on the 1st day of the calendar quarter during which such property was placed in service by the taxpayer and ending on the day before the beginning of the corresponding calendar quarter ending during such taxable year.

(3)

Application to property placed in service before date of enactment

In the case of nonresidential real property or residential rental property which is placed in service before the date of enactment of this subsection, subparagraphs (A)(i), (A)(ii), and (B) of paragraph (2) shall each be applied by substituting calendar quarter which includes the date of enactment of this subsection for calendar quarter during which such property was placed in service by the taxpayer.

(4)

Additional deduction not to affect basis or recapture

(A)

In general

The additional amount determined under this section by reason of this subsection shall not be taken into account in determining the adjusted basis of any applicable property or of any interest in a pass-thru entity which holds such property and shall not be treated as a deduction for depreciation for purposes of sections 1245 and 1250.

(B)

Pass-thru entity defined

For purposes of subparagraph (A), the term pass-thru entity means—

(i)

a regulated investment company,

(ii)

a real estate investment trust,

(iii)

an S corporation,

(iv)

a partnership,

(v)

an estate or trust, and

(vi)

a common trust fund.

.

(c)

Effective dates

(1)

20-year recovery period

The amendments made by subsection (a) shall apply to property placed in service after the date of the enactment of this Act, in taxable years ending after such date.

(2)

Neutral cost recovery

The amendments made by subsection (b) shall apply to taxable years ending after the date of the enactment of this Act.