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. 
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 2009’’. 
SEC. 2. EXPENSING OF MECHANICAL INSULATION PROP-
ERTY. 
(a) IN GENERAL.—Part VI of subchapter B of chap-
ter 1 of subtitle A of the Internal Revenue Code of 1986 
(relating to itemized deductions for individuals and cor-
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porations) is amended by inserting after section 179E the 
following new section: 
‘‘SEC. 179F. MECHANICAL INSULATION PROPERTY. 
‘‘(a) TREATMENT AS EXPENSES.—There shall be al-
lowed as a deduction an amount equal to the applicable 
percentage of the cost of mechanical insulation property 
placed in service during the taxable year. 
‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 
subsection (a)— 
‘‘(1) IN GENERAL.—The term ‘applicable per-
centage’ means the lesser of— 
‘‘(A) 30 percent, and 
‘‘(B) the excess (if any) of— 
‘‘(i) the energy savings (expressed as 
a percentage) obtained by placing such me-
chanical insulation property in service in 
connection with a mechanical system, over 
‘‘(ii) the energy savings (expressed as 
a percentage) such property is required to 
meet by Standard 90.1–2007, developed 
and published by the American Society of 
Heating, Refrigerating and Air-Condi-
tioning Engineers. 
‘‘(2) SPECIAL
RULE
RELATING
TO
MAINTE-
NANCE.—In the case of mechanical insulation prop-
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erty placed in service as a replacement for insulation 
property— 
‘‘(A) paragraph (1)(B) shall be applied 
without regard to clause (ii) thereof, and 
‘‘(B) the cost of such property shall be 
treated as an expense for which a deduction is 
allowed under section 162 instead of being 
treated as depreciable for purposes of the de-
duction provided by section 167. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) MECHANICAL
INSULATION
PROPERTY.— 
The term ‘mechanical insulation property’ means in-
sulation materials, facings, and accessory products— 
‘‘(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, and 
‘‘(B) utilized for thermal, acoustical, and 
personnel safety requirements for mechanical 
piping and equipment, hot and cold applica-
tions, and heating, venting and air conditioning 
applications which can be used in a variety of 
facilities. 
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‘‘(2) COST.—The cost of mechanical insulation 
property includes— 
‘‘(A) the amounts paid or incurred for the 
installation of such property, 
‘‘(B) in the case of removal and disposal of 
the old mechanical insulation property, 10 per-
cent of the cost of the new mechanical insula-
tion property (determined without regard to 
this subparagraph), and 
‘‘(C) expenditures for labor costs properly 
allocable to the preparation, assembly, and in-
stallation of mechanical insulation property. 
‘‘(d) COORDINATION.— 
‘‘(1) SECTION 179D.—Subsection (a) shall not 
apply to the cost of mechanical insulation property 
which is taken into account under section 179D or 
which, but for subsection (b) of section 179D, would 
be taken into account under such section. 
‘‘(2) OTHER DEDUCTIONS AND CREDITS.— 
‘‘(A) IN GENERAL.—The amount of any 
other deduction or credit allowable under this 
chapter for any cost of mechanical insulation 
property which is taken into account under sub-
section (a) shall be reduced by the amount of 
such cost so taken into account. 
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‘‘(B) EXCEPTION FOR CERTAIN COSTS.— 
Subparagraph (A) shall not apply to any 
amount properly attributable to maintenance. 
‘‘(e) ALLOCATION OF DEDUCTION FOR TAX-EXEMPT 
PROPERTY.—In the case of mechanical insulation prop-
erty installed on or in property owned by an entity de-
scribed in paragraph (3) or (4) of section 50(b), the per-
son who is the primary contractor for the installation of 
such property shall be treated as the taxpayer that placed 
such property in service. 
‘‘(f) CERTIFICATION.—For purposes of this section, 
energy savings shall be certified under regulations or other 
guidance provided by the Secretary, in consultation with 
the Secretary of Energy.’’. 
(b) DEDUCTION
FOR CAPITAL EXPENDITURES.— 
Section 263(a)(1) of such Code (relating to capital ex-
penditures) is amended by striking ‘‘or’’ at the end of sub-
paragraph (K), by striking the period at the end of para-
graph (L) and inserting ‘‘, or’’, and by adding at the end 
the following new subparagraph: 
‘‘(M) expenditures for which a deduction is 
allowed under section 179F.’’. 
(c) TECHNICAL AND CLERICAL AMENDMENTS.— 
(1) Section 312(k)(3)(B) of such Code is 
amended by striking ‘‘or 179E’’ each place it ap-
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pears in the text or heading thereof and inserting 
‘‘179E, or 179F’’. 
(2) Paragraphs (2)(C) and (3)(C) of section 
1245(a) of such Code are each amended by inserting 
‘‘179F,’’ after ‘‘179E,’’. 
(3) The table of sections for part VI of sub-
chapter B of chapter 1 of subtitle A of such Code 
is amended by inserting after the item relating to 
section 179E the following new item: 
‘‘Sec. 179F. Mechanical insulation property.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
the date of enactment of this Act. 
Æ 
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