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Q: SECTION 1. SHORT TITLE.

This Act may be cited as the ''Mechanical Insulation Installation
Incentive Act of 2009''.

SEC. 2. EXPENSING OF MECHANICAL INSULATION PROPERTY.

(a) In General.--Part VI of subchapter B of chapter 1 of subtitle A
of the Internal Revenue Code of 1986 (relating to itemized deductions
for individuals and corporations) is amended by inserting after section
179E the following new section:

''SEC. 179F. MECHANICAL INSULATION PROPERTY.

''(a) Treatment as Expenses.--There shall be allowed 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 percentage' 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 mechanical
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-Conditioning Engineers.
''(2) Special rule relating to maintenance.--In the case of
mechanical insulation property 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 deduction provided by section 167.
''(c) Definitions.--For purposes of this section--
''(1) Mechanical insulation property.--The term 'mechanical
insulation property' means insulation 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
allowance for depreciation, and
''(B) utilized for thermal, acoustical, and
personnel safety requirements for mechanical piping and
equipment, hot and cold applications, and heating,
venting and air conditioning applications which can be
used in a variety of facilities.
''(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 percent of the
cost of the new mechanical insulation property
(determined without regard to this subparagraph), and
''(C) expenditures for labor costs properly
allocable to the preparation, assembly, and
installation 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 subsection (a) shall be
reduced by the amount of such cost so taken into
account.
''(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 property installed on or in property owned by
an entity described in paragraph (3) or (4) of section 50(b), the
person 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 expenditures) is amended by striking ''or''
at the end of subparagraph (K), by striking the period at the end of
paragraph (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 appears 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 subchapter 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.
A:
Mechanical Insulation Installation Incentive Act of 2009 - Amends the Internal Revenue Code to allow a tax deduction for a specified percentage of the cost, including labor costs, of installing and maintaining mechanical insulation property. Defines "mechanical insulation property" as insulation materials, facings, and accessory products placed in service in connection with a mechanical system which is utilized for thermal, acoustical, and personnel safety requirements for mechanical piping and equipment, hot and cold applications, and heating, venting and air conditioning applications which can be used in a variety of facilities.