Title: Mechanical Insulation Installation Incentive Act of 2019
Policy area: Taxation

Summary:
Mechanical Insulation Installation Incentive Act of 2019
This bill allows a tax credit for 10% of the labor costs of installing mechanical insulation property.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5166 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 5166

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

                           November 19, 2019

 Ms. Sanchez (for herself, Mr. Suozzi, Mr. Danny K. Davis of Illinois, 
  Ms. DelBene, Mr. Panetta, Mr. Brendan F. Boyle of Pennsylvania, Ms. 
  Moore, and Mr. Blumenauer) 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.

    Be it enacted by the Senate and House of Representatives 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 2019''.

SEC. 2. LABOR COSTS OF INSTALLING MECHANICAL INSULATION PROPERTY.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 45T. 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 insulation labor 
        costs' means the labor cost of installing mechanical insulation 
        property with respect to a mechanical system referred to in 
        paragraph (2)(A) which was originally placed in service not 
        less than 1 year before the date on which such mechanical 
        insulation property is installed.
            ``(2) Mechanical insulation property.--The term `mechanical 
        insulation property' means insulation materials, and facings 
        and accessory products installed in connection to such 
        insulation materials--
                    ``(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 
                        allowance for depreciation, and
                    ``(B) which result in a reduction in energy loss 
                from the mechanical system which is greater than the 
                expected reduction from the installation of insulation 
                materials which meet the minimum requirements of 
                Reference Standard 90.1 (as defined in section 
                179D(c)(2)).
    ``(c) Termination.--This section shall not apply to mechanical 
insulation labor costs paid or incurred after December 31, 2024.''.
    (b) Credit Allowed as Part of General Business Credit.--Section 
38(b) of such Code is amended by striking ``plus'' at the end of 
paragraph (31), by striking the period at the end of paragraph (32) and 
inserting ``, plus'', and by adding at the end the following new 
paragraph:
            ``(33) the mechanical insulation labor costs credit 
        determined under section 45T(a).''.
    (c) Conforming Amendments.--
            (1) Section 280C of such Code is amended by adding at the 
        end the following new subsection:
    ``(i) Mechanical Insulation Labor Costs Credit.--
            ``(1) In general.--No deduction shall be allowed for that 
        portion of the mechanical insulation labor costs (as defined in 
        section 45T(b)) otherwise allowable as deduction for the 
        taxable year which is equal to the amount of the credit 
        determined for such taxable year under section 45T(a).
            ``(2) Similar rule where taxpayer capitalizes rather than 
        deducts expenses.--If--
                    ``(A) the amount of the credit determined for the 
                taxable year under section 45T(a), exceeds
                    ``(B) the amount of allowable as a deduction for 
                such taxable year for mechanical insulation 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 amended by adding at 
        the end the following new item:

``Sec. 45T. 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, 2019, in taxable 
years ending after such date.
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