Mechanical Insulation Installation Incentive Act of 2019

I 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. SA´NCHEZ (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 insu- lation property. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Mechanical Insulation 4 Installation Incentive Act of 2019’’. 5 SEC. 2. LABOR COSTS OF INSTALLING MECHANICAL INSU- 6 LATION PROPERTY. 7 (a) IN GENERAL.—Subpart D of part IV of sub- 8 chapter A of chapter 1 of the Internal Revenue Code of 9 VerDate Sep 11 2014 21:06 Nov 27, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5166.IH H5166 kjohnson on DSK79L0C42 with BILLS 2 •HR 5166 IH 1986 is amended by adding at the end the following new 1 section: 2 ‘‘SEC. 45T. LABOR COSTS OF INSTALLING MECHANICAL IN- 3 SULATION PROPERTY. 4 ‘‘(a) IN GENERAL.—For purposes of section 38, the 5 mechanical insulation labor costs credit determined under 6 this section for any taxable year is an amount equal to 7 10 percent of the mechanical insulation labor costs paid 8 or incurred by the taxpayer during such taxable year. 9 ‘‘(b) MECHANICAL INSULATION LABOR COSTS.—For 10 purposes of this section— 11 ‘‘(1) IN GENERAL.—The term ‘mechanical insu- 12 lation labor costs’ means the labor cost of installing 13 mechanical insulation property with respect to a me- 14 chanical system referred to in paragraph (2)(A) 15 which was originally placed in service not less than 16 1 year before the date on which such mechanical in- 17 sulation property is installed. 18 ‘‘(2) MECHANICAL INSULATION PROPERTY.— 19 The term ‘mechanical insulation property’ means in- 20 sulation materials, and facings and accessory prod- 21 ucts installed in connection to such insulation mate- 22 rials— 23 ‘‘(A) placed in service in connection with a 24 mechanical system which— 25 VerDate Sep 11 2014 21:06 Nov 27, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5166.IH H5166 kjohnson on DSK79L0C42 with BILLS 3 •HR 5166 IH ‘‘(i) is located in the United States, 1 and 2 ‘‘(ii) is of a character subject to an al- 3 lowance for depreciation, and 4 ‘‘(B) which result in a reduction in energy 5 loss from the mechanical system which is great- 6 er than the expected reduction from the instal- 7 lation of insulation materials which meet the 8 minimum requirements of Reference Standard 9 90.1 (as defined in section 179D(c)(2)). 10 ‘‘(c) TERMINATION.—This section shall not apply to 11 mechanical insulation labor costs paid or incurred after 12 December 31, 2024.’’. 13 (b) CREDIT ALLOWED AS PART OF GENERAL BUSI- 14 NESS CREDIT.—Section 38(b) of such Code is amended 15 by striking ‘‘plus’’ at the end of paragraph (31), by strik- 16 ing the period at the end of paragraph (32) and inserting 17 ‘‘, plus’’, and by adding at the end the following new para- 18 graph: 19 ‘‘(33) the mechanical insulation labor costs 20 credit determined under section 45T(a).’’. 21 (c) CONFORMING AMENDMENTS.— 22 (1) Section 280C of such Code is amended by 23 adding at the end the following new subsection: 24 VerDate Sep 11 2014 21:06 Nov 27, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5166.IH H5166 kjohnson on DSK79L0C42 with BILLS 4 •HR 5166 IH ‘‘(i) MECHANICAL INSULATION LABOR COSTS CRED- 1 IT.— 2 ‘‘(1) IN GENERAL.—No deduction shall be al- 3 lowed for that portion of the mechanical insulation 4 labor costs (as defined in section 45T(b)) otherwise 5 allowable as deduction for the taxable year which is 6 equal to the amount of the credit determined for 7 such taxable year under section 45T(a). 8 ‘‘(2) SIMILAR RULE WHERE TAXPAYER CAP- 9 ITALIZES RATHER THAN DEDUCTS EXPENSES.—If— 10 ‘‘(A) the amount of the credit determined 11 for the taxable year under section 45T(a), ex- 12 ceeds 13 ‘‘(B) the amount of allowable as a deduc- 14 tion for such taxable year for mechanical insu- 15 lation labor costs (determined without regard to 16 paragraph (1)), 17 the amount chargeable to capital account for the 18 taxable year for such costs shall be reduced by the 19 amount of such excess.’’. 20 (2) The table of sections for subpart D of part 21 IV of subchapter A of chapter 1 of such Code is 22 amended by adding at the end the following new 23 item: 24 ‘‘Sec. 45T. Labor costs of installing mechanical insulation property.’’. VerDate Sep 11 2014 21:06 Nov 27, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6211 E:\BILLS\H5166.IH H5166 kjohnson on DSK79L0C42 with BILLS 5 •HR 5166 IH (d) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to amounts paid or incurred after 2 December 31, 2019, in taxable years ending after such 3 date. 4 Æ VerDate Sep 11 2014 21:06 Nov 27, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H5166.IH H5166 kjohnson on DSK79L0C42 with BILLS