H.R. 2463

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2463 Introduced in House (IH)]

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119th CONGRESS
1st Session
H. R. 2463

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

March 27, 2025

Ms. Sanchez (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 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 2025''.

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. 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 insulation labor 
costs' means the labor cost of installing mechanical insulation 
property (including property assembled offsite) 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,
``(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 Business Credit.--Section 
38(b) of such Code is amended by striking ``plus'' at the end of 
paragraph (40), by striking the period at the end of paragraph (41) and 
inserting ``, plus'', and by adding at the end the following new 
paragraph:
``(42) the mechanical insulation labor costs credit 
determined under section 45BB(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 45BB(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 45BB(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 45BB(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. 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, 2025, in taxable 
years ending after such date.
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