On Tuesday, September 22nd, Congressmen Tom Reed (NY-23) and James Langevin (RI-2) introduced H.R. 3591, the Fire Sprinkler Incentive Act. Senators Susan Collins (ME) and Thomas Carper (DE) introduced identical legislation, S. 2068, in the Senate on the same day.
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 up to $125,000 of the cost of retrofitting a building with an automatic sprinkler systems. 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 2014, there were 1,298,000 fires reported in the United States, leading to 3,275 civilian fire deaths, 15,775 civilian injuries, and $11.6 billion in property damage. When you include the indirect cost of fire, such as lost economic activity, the cost is closer to $108 billion annually. 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%.
H.R. 3591 has been referred to the House Committee on Ways and Means. S. 2068 was referred to the Senate Finance Committee. CFSI will continue to provide updates as the bills move through the legislative process.
