Fire Sprinkler Incentive Act
On February 14, 2007 Senator Gordon Smith (OR) introduced the Fire Sprinkler Incentive Act of 2007 (S. 582). Senators John Rockefeller (WV), Jack Reed (RI) and Lamar Alexander (TN) are all original co-sponsors of the bill. On March 28, 2007, Congressman Jim Langevin (RI-2) and Congressman Eric Cantor (VA-7) were joined by 22 members of the House of Representatives in introducing the House version of the bill, H.R. 1742.
CFSI’s National Advisory Committee passed a unanimous resolution in support of a tax incentive for the retrofit of fire sprinklers at the fall meeting of 2002. Legislation to achieve this objective was first introduced in April of 2003.
The Fire Sprinkler Incentive Act creates tax incentives for property owners to retrofit buildings with automatic fire sprinkler systems. The legislation would reduce the tax depreciation time on nonresidential real property from 39 years to only 5 for those that install sprinklers. Benefits of this legislation also include lower local fire department costs, increased loan activity, reduced insurance claims and premium costs, and increased retrofitting and installation jobs.
During the 108th Congress, the Joint Committee on Taxation estimated the legislation would cost approximately $878 million over 5 years and up to $2.355 billion over ten years. Near the end of the 109th Congress, the committee conducted a similar study, using data provided by the American Fire Sprinkler Association, the National Fire Sprinkler Association, and other supporters of the legislation. The revenue estimate now predicts the cost to the federal government will be $348 million over 5 years and $884 million over 10 years, a significant decrease from earlier estimates.
The total cost of fire in United States is estimated by the U.S. Fire Administration to be approximately $165 billion a year – nearly 1% of the gross domestic product. Taking this into account, as well as the lives that could be saved, the cost of this legislation is minimal.
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