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 insu-
lation property. 
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 ‘‘Mechanical Insulation 
Installation Incentive Act of 2023’’. 
SEC. 2. LABOR COSTS OF INSTALLING MECHANICAL INSU-
LATION PROPERTY. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
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1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 45BB. LABOR COSTS OF INSTALLING MECHANICAL 
INSULATION PROPERTY. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
mechanical insulation labor costs credit determined under 
this section for any taxable year is an amount equal to 
10 percent of the mechanical insulation labor costs paid 
or incurred by the taxpayer during such taxable year. 
‘‘(b) MECHANICAL INSULATION LABOR COSTS.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘mechanical insu-
lation labor costs’ means the labor cost of installing 
mechanical insulation property (including property 
assembled offsite) with respect to a mechanical sys-
tem referred to in paragraph (2)(A) which was origi-
nally placed in service not less than 1 year before 
the date on which such mechanical insulation prop-
erty is installed. 
‘‘(2) MECHANICAL
INSULATION
PROPERTY.— 
The term ‘mechanical insulation property’ means in-
sulation materials, and facings and accessory prod-
ucts installed in connection to such insulation mate-
rials— 
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‘‘(A) placed in service in connection with a 
mechanical system which— 
‘‘(i) is located in the United States, 
and 
‘‘(ii) is of a character subject to an al-
lowance for depreciation, 
‘‘(B) in a manner that meets or complies 
with the minimum requirements of Reference 
Standard 
90.1 
(as 
defined 
in 
section 
179D(c)(2)), and 
‘‘(C) the installation of which results in a 
reduction in energy loss from such mechanical 
system. 
‘‘(c) TERMINATION.—This section shall not apply to 
mechanical insulation labor costs paid or incurred after 
December 31, 2028.’’. 
(b) CREDIT ALLOWED AS PART OF GENERAL BUSI-
NESS CREDIT.—Section 38(b) of such Code is amended 
by striking ‘‘plus’’ at the end of paragraph (40), by strik-
ing the period at the end of paragraph (41) and inserting 
‘‘, plus’’, and by adding at the end the following new para-
graph: 
‘‘(42) the mechanical insulation labor costs 
credit determined under section 45BB(a).’’. 
(c) CONFORMING AMENDMENTS.— 
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(1) Section 280C of such Code is amended by 
adding at the end the following new subsection: 
‘‘(i) MECHANICAL INSULATION LABOR COSTS CRED-
IT.— 
‘‘(1) IN GENERAL.—No deduction shall be al-
lowed for that portion of the mechanical insulation 
labor costs (as defined in section 45BB(b)) other-
wise allowable as deduction for the taxable year 
which is equal to the amount of the credit deter-
mined for such taxable year under section 45BB(a). 
‘‘(2) SIMILAR
RULE
WHERE
TAXPAYER
CAP-
ITALIZES RATHER THAN DEDUCTS EXPENSES.—If— 
‘‘(A) the amount of the credit determined 
for the taxable year under section 45BB(a), ex-
ceeds 
‘‘(B) the amount of allowable as a deduc-
tion for such taxable year for mechanical insu-
lation labor costs (determined without regard to 
paragraph (1)), 
the amount chargeable to capital account for the 
taxable year for such costs shall be reduced by the 
amount of such excess.’’. 
(2) The table of sections for subpart D of part 
IV of subchapter A of chapter 1 of such Code is 
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amended by adding at the end the following new 
item: 
‘‘Sec. 45BB. Labor costs of installing mechanical insulation property.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred after 
December 31, 2023, in taxable years ending after such 
date. 
Æ 
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