I 

118TH CONGRESS 

1ST SESSION H. R. 6104 

To amend the Internal Revenue Code of 1986 to provide a credit for the 

labor costs of installing mechanical insulation property. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 26, 2023 

Ms. SA ́NCHEZ (for herself and Mr. FITZPATRICK) 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 credit for the labor costs of installing 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 2023’’. 

6 SEC. 2. LABOR COSTS OF INSTALLING MECHANICAL INSU7 LATION PROPERTY. 

8 (a) IN GENERAL.—Subpart D of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 


ssavage on DSKBC07HB2PROD with BILLS
2 

•HR 6104 IH

1 1986 is amended by adding at the end the following new 

2 section: 

3 ‘‘SEC. 45BB. LABOR COSTS OF INSTALLING MECHANICAL 

4 INSULATION PROPERTY. 

5 ‘‘(a) IN GENERAL.—For purposes of section 38, the 

6 mechanical insulation labor costs credit determined under 

7 this section for any taxable year is an amount equal to 

8 10 percent of the mechanical insulation labor costs paid 

9 or incurred by the taxpayer during such taxable year. 

10 ‘‘(b) MECHANICAL INSULATION LABOR COSTS.—For 

11 purposes of this section— 

12 ‘‘(1) IN GENERAL.—The term ‘mechanical insu13 lation labor costs’ means the labor cost of installing 

14 mechanical insulation property (including property 

15 assembled offsite) with respect to a mechanical sys16 tem referred to in paragraph (2)(A) which was origi17 nally placed in service not less than 1 year before 

18 the date on which such mechanical insulation prop19 erty is installed. 

20 ‘‘(2) MECHANICAL INSULATION PROPERTY.— 

21 The term ‘mechanical insulation property’ means in22 sulation materials, and facings and accessory prod23 ucts installed in connection to such insulation mate24 rials— 


ssavage on DSKBC07HB2PROD with BILLS
3 

•HR 6104 IH

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

2 mechanical system which— 

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

4 and 

5 ‘‘(ii) is of a character subject to an al6 lowance for depreciation, 

7 ‘‘(B) in a manner that meets or complies 

8 with the minimum requirements of Reference 

9 Standard 90.1 (as defined in section 

10 179D(c)(2)), and 

11 ‘‘(C) the installation of which results in a 

12 reduction in energy loss from such mechanical 

13 system. 

14 ‘‘(c) TERMINATION.—This section shall not apply to 

15 mechanical insulation labor costs paid or incurred after 

16 December 31, 2028.’’. 

17 (b) CREDIT ALLOWED AS PART OF GENERAL BUSI18 NESS CREDIT.—Section 38(b) of such Code is amended 

19 by striking ‘‘plus’’ at the end of paragraph (40), by strik20 ing the period at the end of paragraph (41) and inserting 

21 ‘‘, plus’’, and by adding at the end the following new para22 graph: 

23 ‘‘(42) the mechanical insulation labor costs 

24 credit determined under section 45BB(a).’’. 

25 (c) CONFORMING AMENDMENTS.— 


ssavage on DSKBC07HB2PROD with BILLS
4 

•HR 6104 IH

1 (1) Section 280C of such Code is amended by 

2 adding at the end the following new subsection: 

3 ‘‘(i) MECHANICAL INSULATION LABOR COSTS CRED4 IT.— 

5 ‘‘(1) IN GENERAL.—No deduction shall be al6 lowed for that portion of the mechanical insulation 

7 labor costs (as defined in section 45BB(b)) other8 wise allowable as deduction for the taxable year 

9 which is equal to the amount of the credit deter10 mined for such taxable year under section 45BB(a). 

11 ‘‘(2) SIMILAR RULE WHERE TAXPAYER CAP12 ITALIZES RATHER THAN DEDUCTS EXPENSES.—If— 

13 ‘‘(A) the amount of the credit determined 

14 for the taxable year under section 45BB(a), ex15 ceeds 

16 ‘‘(B) the amount of allowable as a deduc17 tion for such taxable year for mechanical insu18 lation labor costs (determined without regard to 

19 paragraph (1)), 

20 the amount chargeable to capital account for the 

21 taxable year for such costs shall be reduced by the 

22 amount of such excess.’’. 

23 (2) The table of sections for subpart D of part 

24 IV of subchapter A of chapter 1 of such Code is 


ssavage on DSKBC07HB2PROD with BILLS
5 

•HR 6104 IH

1 amended by adding at the end the following new 

2 item: 

‘‘Sec. 45BB. Labor costs of installing mechanical insulation property.’’. 

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

4 this section shall apply to amounts paid or incurred after 

5 December 31, 2023, in taxable years ending after such 

6 date. 

Æ 


ssavage on DSKBC07HB2PROD with BILLS