I 

111TH CONGRESS 

1ST SESSION H. R. 4296 

To amend the Internal Revenue Code of 1986 to provide a tax incentive 

for the installation and maintenance of mechanical insulation property. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 11, 2009 

Mrs. HALVORSON 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 provide 

a tax incentive for the installation and maintenance of 

mechanical insulation property. 

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 ‘‘Mechanical Insulation 

5 Installation Incentive Act of 2009’’. 

6 SEC. 2. EXPENSING OF MECHANICAL INSULATION PROP7 ERTY. 

8 (a) IN GENERAL.—Part VI of subchapter B of chap9 ter 1 of subtitle A of the Internal Revenue Code of 1986 

10 (relating to itemized deductions for individuals and corVerDate Nov 24 2008 05:41 Dec 12, 2009 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4296.IH H4296

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1 porations) is amended by inserting after section 179E the 

2 following new section: 

3 ‘‘SEC. 179F. MECHANICAL INSULATION PROPERTY. 

4 ‘‘(a) TREATMENT AS EXPENSES.—There shall be al5 lowed as a deduction an amount equal to the applicable 

6 percentage of the cost of mechanical insulation property 

7 placed in service during the taxable year. 

8 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 

9 subsection (a)— 

10 ‘‘(1) IN GENERAL.—The term ‘applicable per11 centage’ means the lesser of— 

12 ‘‘(A) 30 percent, and 

13 ‘‘(B) the excess (if any) of— 

14 ‘‘(i) the energy savings (expressed as 

15 a percentage) obtained by placing such me16 chanical insulation property in service in 

17 connection with a mechanical system, over 

18 ‘‘(ii) the energy savings (expressed as 

19 a percentage) such property is required to 

20 meet by Standard 90.1–2007, developed 

21 and published by the American Society of 

22 Heating, Refrigerating and Air-Condi23 tioning Engineers. 

24 ‘‘(2) SPECIAL RULE RELATING TO MAINTE25 NANCE.—In the case of mechanical insulation propVerDate Nov 24 2008 05:41 Dec 12, 2009 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4296.IH H4296

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1 erty placed in service as a replacement for insulation 

2 property— 

3 ‘‘(A) paragraph (1)(B) shall be applied 

4 without regard to clause (ii) thereof, and 

5 ‘‘(B) the cost of such property shall be 

6 treated as an expense for which a deduction is 

7 allowed under section 162 instead of being 

8 treated as depreciable for purposes of the de9 duction provided by section 167. 

10 ‘‘(c) DEFINITIONS.—For purposes of this section— 

11 ‘‘(1) MECHANICAL INSULATION PROPERTY.— 

12 The term ‘mechanical insulation property’ means in13 sulation materials, facings, and accessory products— 

14 ‘‘(A) placed in service in connection with a 

15 mechanical system which— 

16 ‘‘(i) is located in the United States, 

17 and 

18 ‘‘(ii) is of a character subject to an al19 lowance for depreciation, and 

20 ‘‘(B) utilized for thermal, acoustical, and 

21 personnel safety requirements for mechanical 

22 piping and equipment, hot and cold applica23 tions, and heating, venting and air conditioning 

24 applications which can be used in a variety of 

25 facilities. 


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1 ‘‘(2) COST.—The cost of mechanical insulation 

2 property includes— 

3 ‘‘(A) the amounts paid or incurred for the 

4 installation of such property, 

5 ‘‘(B) in the case of removal and disposal of 

6 the old mechanical insulation property, 10 per7 cent of the cost of the new mechanical insula8 tion property (determined without regard to 

9 this subparagraph), and 

10 ‘‘(C) expenditures for labor costs properly 

11 allocable to the preparation, assembly, and in12 stallation of mechanical insulation property. 

13 ‘‘(d) COORDINATION.— 

14 ‘‘(1) SECTION 179D.—Subsection (a) shall not 

15 apply to the cost of mechanical insulation property 

16 which is taken into account under section 179D or 

17 which, but for subsection (b) of section 179D, would 

18 be taken into account under such section. 

19 ‘‘(2) OTHER DEDUCTIONS AND CREDITS.— 

20 ‘‘(A) IN GENERAL.—The amount of any 

21 other deduction or credit allowable under this 

22 chapter for any cost of mechanical insulation 

23 property which is taken into account under sub24 section (a) shall be reduced by the amount of 

25 such cost so taken into account. 


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1 ‘‘(B) EXCEPTION FOR CERTAIN COSTS.— 

2 Subparagraph (A) shall not apply to any 

3 amount properly attributable to maintenance. 

4 ‘‘(e) ALLOCATION OF DEDUCTION FOR TAX-EXEMPT

5 PROPERTY.—In the case of mechanical insulation prop6 erty installed on or in property owned by an entity de7 scribed in paragraph (3) or (4) of section 50(b), the per8 son who is the primary contractor for the installation of 

9 such property shall be treated as the taxpayer that placed 

10 such property in service. 

11 ‘‘(f) CERTIFICATION.—For purposes of this section, 

12 energy savings shall be certified under regulations or other 

13 guidance provided by the Secretary, in consultation with 

14 the Secretary of Energy.’’. 

15 (b) DEDUCTION FOR CAPITAL EXPENDITURES.— 

16 Section 263(a)(1) of such Code (relating to capital ex17 penditures) is amended by striking ‘‘or’’ at the end of sub18 paragraph (K), by striking the period at the end of para19 graph (L) and inserting ‘‘, or’’, and by adding at the end 

20 the following new subparagraph: 

21 ‘‘(M) expenditures for which a deduction is 

22 allowed under section 179F.’’. 

23 (c) TECHNICAL AND CLERICAL AMENDMENTS.— 

24 (1) Section 312(k)(3)(B) of such Code is 

25 amended by striking ‘‘or 179E’’ each place it apVerDate Nov 24 2008 05:41 Dec 12, 2009 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4296.IH H4296

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1 pears in the text or heading thereof and inserting 

2 ‘‘179E, or 179F’’. 

3 (2) Paragraphs (2)(C) and (3)(C) of section 

4 1245(a) of such Code are each amended by inserting 

5 ‘‘179F,’’ after ‘‘179E,’’. 

6 (3) The table of sections for part VI of sub7 chapter B of chapter 1 of subtitle A of such Code 

8 is amended by inserting after the item relating to 

9 section 179E the following new item: 

‘‘Sec. 179F. Mechanical insulation property.’’. 

10 (d) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to property placed in service after 

12 the date of enactment of this Act. 

Æ 


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