(March 17, 2017) – On Wednesday, March 15th, Congressman David Reichert (WA-8) and Congressman John Larson (CT-1) introduced H.R. 1550, the Volunteer Responder Incentive Protection Act, in the House.  The legislation would exempt from federal income tax any property tax benefit, and up to $600 per year of any other type of benefit, that a state or local unit of government provides to volunteer emergency responders as a recruitment or retention incentive.  The Senate Finance Committee unanimously approved similar legislation during the 114th Congress, but it failed to advance through both chambers before the end of the legislative session.  

Without the services of volunteer fire service personnel, many communities could not provide emergency services protection, while others would need to raise taxes to pay salaries and benefits for full or part-time staff.  To bolster recruitment and retention, many volunteer fire departments now provide a number of incentives, including non-monetary gifts, reductions in property taxes or other fees, per-call payments, stipends, and retirement benefits. Volunteer benefits are typically small, but demonstrate community support.

As volunteer incentives have become more prevalent, the Internal Revenue Service has made ensuring that benefits are properly reported and taxed a priority.  Complying with IRS reporting requirements can often be burdensome for some volunteer fire departments, many of which are located in small communities that may not employ full-time administrative staff.  The Volunteer Incentive Protection Act would allow local agencies to provide nominal benefits without having to worry about being audited by the IRS. It would also enhance the incentive value of the benefits by allowing volunteer firefighters  to keep the entire amount.

H.R. 1550 has been referred to the House Committee on Ways and Means.  

(March 17, 2017) – On Thursday, March 9th, Senator Susan Collins (ME) and Senator Tom Carper (DE) introduced S. 602, the Fire Sprinkler Incentive Act. Congressman Tom Reed (NY-23) and Congressman Jim Langevin (RI-2) introduced identical legislation, H.R. 1481, in the House. The bill creates a tax incentive for building owners to retrofit properties with automatic fire sprinkler systems.

First introduced following the deadly Station Nightclub fire in West Warwick, RI in 2003, the legislation creates a tax incentive for property owners to retrofit existing buildings with automatic sprinkler systems.  Specifically, the bill would amend the Internal Revenue Code to include automated fire sprinkler system retrofits as a section 179 property.  This would allow small and medium-sized businesses to deduct the cost of retrofitting a building with an automatic sprinkler system.  Additionally, the bill would classify automated fire sprinkler system retrofits in high-rise buildings as a 15-year property for purposes of depreciation.  Currently, the depreciation schedule for a fire sprinkler retrofit is 39-years in a commercial building and 27 ½- years in a residential building.  

According to the National Fire Protection Association (NFPA), in 2015, there were 1,345,500 fires reported in the United States, leading to 3,280 civilian fire deaths, 15,700 civilian injuries, and $14.3 billion in property damage.  Studies by NFPA have concluded that buildings outfitted with sprinklers reduce the death rate per fire by at least 57% and decrease the property damage by up to 68%.

S. 602 was referred to the Senate Finance Committee.  H.R. 1481 has been referred to the House Committee on Ways and Means.