TITLE
Recommendation that the City Council support: 1) HR 1742 and S 582 "Fire Sprinkler Incentive Act of 2007" as part of its federal legislative agenda, and that a letter of support be sent to the House Committee Chair on Ways and Means, Charles Rangel; the California Congressional Delegation; and the Senate Committee Chair on Finance, Max Baucus; and 2) state legislation to provide additional tax incentives for the installation of automatic fire sprinklers, and that a letter of support be sent to Assembly and Senate members representing the City of Long Beach.
DISCUSSION
As the City of Long Beach continues to discuss the need and importance of requiring the installation of fire sprinklers as the front-line fire suppression measure to protect lives and property in our community, we are faced with the concerns of the financial burdens many property owners will face with the costs of retrofitting and installing sprinkler systems in older structures.
Obviously, the major hurdle to be overcome to achieve the next step of fire safety is that of economics, or specifically the direct cost of installing automatic fire sprinkler systems.
Failure to upgrade fire suppression has additional financial burdens as evidenced by the indirect costs of a fire that the community has to endure, such as increased workers' compensation for fire fighter injuries, lost revenue for destroyed businesses, increased litigation costs imposed on government and others, increased fire insurance premiums, indirect loss of revenue from a decline in tourism when the fire occurs in a tourist driven economy; the list of indirect costs of fire is very long.
During discussions at the Council's Standing Committee on Public Safety, I requested that the City Manager explore any type of financial incentives that might be available to property owners; our Committee was told there were none.
The current state and federal tax codes currently act as deterrents to this type of investment. What is needed is a significant tax incentive for the retrofit of fire sprinklers in existing buildings.
At the federal level, legislation has been introduced in both the House and Senate to shorten the "depreciation period" of this investment from 39 years (27.5 years in some instances) to five years. This will allow property owners to recoup their investment in a much shorter period of time.
These bills: HR 1742 and S 582 are both titled; "Fire Sprinkler Incentive Act of 2007."
To my knowledge, there are no bills at the state level on this matter.
Attached is a copy of a report on this proposed legislation written in 2005. This tax incentive will be an economic stimulus as well as serve to protect our vital community infrastructure from any future tragedies that may occur.
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
COUNCILWOMAN GERRIE SCHIPSKE