HOUSE OF REPRESENTATIVES

H.B. NO.

1822

TWENTY-NINTH LEGISLATURE, 2018

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to condominiums.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The tragic fire that occurred on July 14, 2017, at the Marco Polo high-rise in Honolulu, resulting in four deaths and the damage or destruction of approximately two hundred units in the building, brought to light the consequences that can occur when a residential high-rise building lacks an automatic fire sprinkler system.  The loss of life, as well as property damage estimates exceeding $100,000,000, has fueled the debate on the need to require the retrofitting of older residential buildings with automatic fire sprinkler systems.

     While automatic fire sprinkler systems have a proven record of significantly reducing loss of life, injury, and property damage caused by fires, these systems have only been required to be installed in apartment and condominium buildings in Honolulu since 1975.  Residential high-rise buildings constructed prior to 1975, including the Marco Polo, are exempt from this requirement.  Although the retrofitting of all high-rise hotels in Honolulu constructed prior to 1975 with automatic fire sprinkler systems was required in 1983 and extended to commercial high-rise buildings eight years later in 2001, attempts over the years to mandate similar requirements for residential high-rise buildings built prior to 1975 have failed.  Currently, over three hundred high-rise buildings on Oahu do not have automatic fire sprinkler systems.

     One of the biggest obstacles to the installation of automatic fire sprinkler systems in older residential high-rise buildings is the cost of installing these systems.  In 2005, a city community task force trying to find ways to make the installation of automatic fire sprinklers more palatable for apartment and condominium owners determined that the cost for installing such systems ranged from $4,305 per unit to over $13,473 per unit depending on varying factors.  More recent estimates of costs associated with retrofitting these older buildings with automatic fire sprinkler systems have suggested that the per unit cost estimates of 2005 have doubled.  Offsetting the costs of installing these systems in older buildings is a key component of any attempts to mandate their installation.

     While the legislature finds that retrofitting older residential buildings with automatic fire sprinkler systems is in the best interest of fire safety, the legislature also understands the impacts the costs of installing such a system will have on individual apartment and condominium owners, particularly those on fixed incomes.  The provision of low interest loans to assist homeowners will help to alleviate some of these concerns.

     The purpose of this Act is to create an automatic fire sprinkler revolving fund to provide low-interest loans for installation costs associated with the installation of automatic fire sprinkler systems in apartments and condominiums, built before 1975, including common areas.

     SECTION 2.  Chapter 514B, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§514B-    Automatic fire sprinkler system revolving fund.  (a)  There is established in the state treasury the automatic fire sprinkler system revolving fund.  The revolving fund shall be administered by the department of budget and finance.  This section shall be deemed to satisfy the requirements of section 37-52.4.

     (b)  The automatic fire sprinkler system revolving fund shall consist of the following sources of revenues:

     (1)  Moneys received by the department of budget and finance from the repayment of loan principal and simple interest, and fees, for the purpose of financing the cost of installing fire sprinklers in residential high-rise buildings constructed before 1975;

     (2)  Appropriations from the legislature to the fund;

     (3)  Federal grants and subsidies to the State;

     (4)  Interest and investment earnings;

     (5)  Private investor contributions; and

     (6)  Voluntary contributions.

     (c)  The department of budget and finance shall expend revenues in the fund to:

     (1)  Provide loans charged at the simple interest of       per cent to unit owners and associations for costs, including water meter costs and permitting fees, of installing an automatic fire sprinkler system in individual units or common elements; and

     (2)  Pay costs associated with the implementation, administration, and coordination of the fund.

     (d)  The department of budget and finance shall adopt rules in accordance with chapter 91 for the purposes of this section."

     SECTION 3.  There is appropriated out of the general revenues of the State of Hawaii the sum of $         or so much thereof as may be necessary for fiscal year 2018-2019 to be deposited into the automatic fire sprinkler system revolving fund.

     SECTION 4.  There is appropriated out of the automatic fire sprinkler system revolving fund the sum of $         or so much thereof as may be necessary for fiscal year 2018-2019 for the provision of low-interest loans for installation costs associated with the installation of automatic fire sprinkler systems in high-rise residential buildings, built before 1975, including common areas; provided that no loans shall be authorized until January 1, 2019.

     The sum appropriated shall be expended by the department of budget and finance for the purposes of this Act.

     SECTION 5.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect on July 1, 2018.

 

INTRODUCED BY:

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Report Title:

Automatic Fire Sprinkler Systems; Revolving Fund; Low Interest Loans; Condominiums; Apartments

 

Description:

Establishes the automatic fire sprinkler system revolving fund to provide low interest loans for the installation of automatic fire sprinkler systems in condominiums or apartments; provided that no loans shall be authorized until January 1, 2019.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.