I 

112TH CONGRESS 

1ST SESSION H. R. 2866 

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 

SEPTEMBER 8, 2011 

Mr. MANZULLO (for himself, Mr. RYAN of Ohio, Mr. BISHOP of New York, 

Mr. CRITZ, Mr. CROWLEY, Mr. HOLT, Mr. JACKSON of Illinois, Mr. KING

of New York, Mr. LIPINSKI, Mrs. MALONEY, Mr. MICHAUD, and Mr. 

ISRAEL) 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 2011’’. 


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1 SEC. 2. EXPENSING OF MECHANICAL INSULATION PROP2 ERTY. 

3 (a) IN GENERAL.—Part VI of subchapter B of chap4 ter 1 of subtitle A of the Internal Revenue Code of 1986 

5 (relating to itemized deductions for individuals and cor6 porations) is amended by inserting after section 179E the 

7 following new section: 

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

9 ‘‘(a) TREATMENT AS EXPENSES.—In addition to any 

10 other deduction in this subtitle, there shall be allowed as 

11 a deduction an amount equal to the applicable percentage 

12 of the cost of mechanical insulation property placed in 

13 service during the taxable year. 

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

15 subsection (a)— 

16 ‘‘(1) IN GENERAL.—The term ‘applicable per17 centage’ means the lesser of— 

18 ‘‘(A) 30 percent, and 

19 ‘‘(B) the reduction in energy loss (ex20 pressed as a percentage) from the installed me21 chanical insulation property compared to ref22 erence mechanical insulation property which 

23 meets the minimum requirements of ASHRAE 

24 standard 90.1–2007. 

25 ‘‘(2) SPECIAL RULE RELATING TO MAINTE26 NANCE.—In the case of mechanical insulation propVerDate Mar 15 2010 03:34 Sep 09, 2011 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2866.IH H2866

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1 erty placed in service as a replacement for insulation 

2 property— 

3 ‘‘(A) paragraph (1)(B) shall not apply, and 

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

5 treated as an expense for which a deduction is 

6 allowed under section 162 instead of being 

7 treated as depreciable for purposes of the de8 duction provided by section 167. 

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

10 ‘‘(1) MECHANICAL INSULATION PROPERTY.— 

11 The term ‘mechanical insulation property’ means in12 sulation materials, facings, and accessory products— 

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

14 mechanical system which— 

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

16 and 

17 ‘‘(ii) is of a character subject to an al18 lowance for depreciation, and 

19 ‘‘(B) utilized for thermal requirements for 

20 mechanical piping and equipment, hot and cold 

21 applications, and heating, venting and air con22 ditioning applications which can be used in a 

23 variety of facilities. 

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

25 property includes— 


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

2 installation of such property for that incre3 mental portion above the minimums in 

4 ASHRAE standard 90.1–2007 and the total in5 sulation cost for maintenance applications, 

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

7 the old mechanical insulation property, 10 per8 cent of the cost of the new mechanical insula9 tion property (determined without regard to 

10 this subparagraph), and 

11 ‘‘(C) expenditures for labor costs properly 

12 allocable to the preparation, assembly, and in13 stallation of mechanical insulation property. 

14 ‘‘(d) COORDINATION.—Subsection (a) shall not apply 

15 to the cost of mechanical insulation property which is 

16 taken into account under section 179D or which, but for 

17 subsection (b) of section 179D, would be taken into ac18 count under such section. 

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

20 PROPERTY.—In the case of mechanical insulation prop21 erty installed on or in property owned by an entity de22 scribed in paragraph (3) or (4) of section 50(b), the per23 son who is the primary contractor for the installation of 

24 such property shall be treated as the taxpayer that placed 

25 such property in service. 


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

2 energy savings shall be certified under regulations or other 

3 guidance provided by the Secretary, in consultation with 

4 the Secretary of Energy. 

5 ‘‘(g) TERMINATION.—This section shall not apply to 

6 any property placed in service after the end of the 5-year 

7 period beginning on the date of the enactment of this sec8 tion.’’. 

9 (b) DEDUCTION FOR CAPITAL EXPENDITURES.— 

10 Section 263(a)(1) of such Code (relating to capital ex11 penditures) is amended by striking ‘‘or’’ at the end of sub12 paragraph (K), by striking the period at the end of para13 graph (L) and inserting ‘‘, or’’, and by adding at the end 

14 the following new subparagraph: 

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

16 allowed under section 179F.’’. 

17 (c) TECHNICAL AND CLERICAL AMENDMENTS.— 

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

19 amended by striking ‘‘or 179E’’ each place it ap20 pears in the text or heading thereof and inserting 

21 ‘‘179E, or 179F’’. 

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

23 1245(a) of such Code are each amended by inserting 

24 ‘‘179F,’’ after ‘‘179E,’’. 


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1 (3) The table of sections for part VI of sub2 chapter B of chapter 1 of subtitle A of such Code 

3 is amended by inserting after the item relating to 

4 section 179E the following new item: 

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

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

6 this section shall apply to property placed in service after 

7 the date of enactment of this Act. 

Æ 


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