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2014 Legislative Session, House and Senate Members:

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2013 and 2014 Current Hawaii Bills:
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BOMA International – Advocacy Action Center


2014 - On the Home Front

We try to identify and advocate for bills on the national, state and local levels that could have both positive and negative impacts to our industry. So if there is any particular bill you would like to bring to our attention please do so.
  • MINIUM WAGE – In the last two years we saw several bills coming up through both the house and senate that were related to raising the minimum wage with scheduled increases of $1 per year for 3 years with some relying on an initial increase with future increases to match the Consumer Price Index. We felt strongly that any proposal to raise the minimum wage for entry level positions would have an adverse effect in harming the economy and slowing job creation. Unfortunately UPDATE - (SB) SB2609 was passed and it increases the minimum wage from $7.25 to $10.10 over a four year period. Also, the bill increases the state’s tip credit from 25 cents to 50 cents beginning January 1, 2015. On January 1, 2016, the tip credit will rise to 75 cents. Employers with tipped employees can apply the tip credit to reduce the minimum wage as long as employees earn $7 more than the minimum wage when tips are included. http://www.capitol.hawaii.gov/session2014/bills/SB2609_CD1_.htm

  • ELECTRIC CHARGING STATIONS - Also brought to our attention by a BOMA Hawaii member is Senate Bill SB2651_SD1, introduced by Senators Mike Gabbard and Donovan Dela Cruz. This bill would essentially impose fines for owners of Parking facilities with at least one hundred parking spaces available for use by the general public that do not already have at least one parking space exclusively for electric vehicles and equipped with an electric vehicle charging system located anywhere in the parking structure or lot by July 1, 2012.

    According to the current language in the proposed bill SB2651_SD1 enforcement would begin Jan. 1, 2015, and establish fines of:
    • (1) $1,000 for the first violation;
    • (2) $5,000 for the second violation;
    • (3) $10,000 for the third violation; and
    • (4) $20,000 for the fourth violation and any subsequent violations thereafter;
    Owners of parking lots shall be allowed 120 days after any violation to comply without being cited for another violation. UPDATE 7/15/2014 – Report adopted; Passed Second Reading, as amended (SD 1) and referred to JDL.

  • ELEVATOR CODE - in Q2 2014 The Hawaii State Department of Labor and Industrial Relations announced the adoption of new elevator standards that went into effect June 30, 2014. The adoption of the administrative rules brings the applicable code of elevator standards up to 2010 American Society of Mechanical Engineers (ASME) standards for new elevators and the 2011 ASME code for existing elevators installed or altered after 1997. The revised rules also clarify that the applicable code for other elevators is the code in effect at the time of installation. We recommend you contact your Elevator vendor to review and go over these new rules as they will have both an operational and economic impact to your operations. UPDATE – 7/15/2014 PASSED - http://labor.hawaii.gov/hiosh/files/2013/01/El-Rules-Legal-Ad20140408.pdf

2014 - On the National Front

  • TERRORISM INSURANCE - Program will expire at the end of 2014. As we all know Terrorism will remain a threat for the foreseeable future; the federal terrorism insurance program must remain in effect until the re-insurance industry is prepared to accurately underwrite and assume the whole risk when these events occur. Without adequate insurance, it is difficult, if not impossible, to operate or acquire properties, refinance loans, and to sell commercial-backed securities. Mitigating the risk of terrorism is not something the private sector has control over so BOMA is taking an active role in making sure one of three bills passes through both House and senate.

    UPDATE – On July 17, the Senate passed a 7 year extension of TRIA, the federal terrorism risk insurance program, by an overwhelming vote of 93-4. In additional to extending the program, the legislation (S. 2244) also adds two changes to further protect taxpayers. It gradually raises both the insurer co-payment from 15 to 20 percent and the mandatory recoupment threshold from $27.5 billion to $37.5 billion. In June, the Senate Banking Committee approved the legislation by a unanimous vote of 22 to 0. On June 20, the House Financial Services Committee passed its TRIA bill (HR 4871) by a more contentious vote of 32-27 – along party lines. In addition to extending the program, the bill would also add many other changes to the bill, many of which BOMA feels would diminish the program and drive some insurers out of the market, making it more difficult for policyholders to continue to access terrorism risk coverage at reasonable rates and terms. It had been anticipated that the full House would vote on the legislation in late July, but now it appears that final action on this issue will be delayed, quite possibly until after the November elections.

  • LEASEHOLD DEPRECIATION - beginning January 1, 2014, tenant improvements must be depreciated on a 39-year depreciation schedule. Leasehold improvements, also known as tenant improvements, include changes to walls, floors, ceilings, lighting, and plumbing to meet the needs of a new or existing tenant. In the commercial real estate marketplace, with the average lease running from five to ten years, such reconfigurations are commonplace. A 15- year depreciation schedule although still not perfect but still more closely reflects the reality of the marketplace. BOMA International fully supports the 15-year timeline be made permanent, either through comprehensive tax reform or as a stand-alone bill or included with another piece of legislation. UPDATE - This issue is still outstanding into 2015.

  • ROOF DEPRECIATION/ SPRINKLER REPLACEMENT DEPRECIATION - Boma’s Position - BOMA International fully supports tax incentives to promote the installation of new roof systems and sprinkler installation in existing buildings. BOMA also supports a reduced 20 year depreciation schedule (currently 39 years) for the installation of new roof systems and 15 year schedule, (currently 39) for sprinkler installations in existing commercial buildings. In short were working with congressional representatives to support reduced depreciation schedules. As we all know a new roof only has a 20 year life and in Hawaii this is even less. For Sprinklers a 15 year depreciation would add a financial incentive as an encouragement to overcome a cost impediment of new installation, where costs range from $2-3 dollars a square foot in some parts of the country as high as $10 per square foot.

    UPDATE - In the 111th Congress, Rep. James Langevin (D-R.I.) introduced the Fire Sprinkler Incentive Act of 2009 (H.R. 1194) in the House, and Sen. Tom Carper (D-Del.) introduced companion legislation (S. 2947) in the Senate. Legislation that would reduce the depreciation schedule for automated fire sprinklers from 39 years to 5 years was introduced in both chambers. Unfortunately neither bill received significant attention. In the 112th Congress, the Fire Sprinkler Incentive Active has been introduced in both the House and Senate. The bills would allow building owners to choose whether to take a section 179 tax deduction or to depreciate over 15 years newly installed automated sprinkle systems. No action has been taken on either bill thus far.

    BOMA will continue to urge Congress to pass this very important tax incentive.

Building Codes and Voluntary Standards

BOMA International is the only national commercial real estate trade organization with an aggressive codes and standards advocacy program. BOMA's advocacy team is involved in codes and standards development from the moment they're created; not after they're released. For more Info please visit - http://www.boma.org/industry-issues/building-codes/Pages/default.aspx

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