HB 202-RESIDENTIAL SPRINKLER SYSTEMS  9:16:40 AM CO-CHAIR HERRON announced that the final order of business would be HOUSE BILL NO. 202, "An Act relating to state and municipal building code requirements for fire sprinkler systems in certain residential buildings." 9:16:52 AM CO-CHAIR MUNOZ moved to adopt CSHB 202, Version 26-LS0776/R, Cook, 3/9/10, as the working document. There being no objection, Version R was before the committee. 9:17:39 AM ROB EARL, Staff, Representative Bob Herron, Alaska State Legislature, speaking on behalf of the sponsor, Representative Herron, informed the committee that proposed Version R is the same version as the companion legislation in the Senate Labor and Commerce Standing Committee. Mr. Earl explained that the original legislation specified that municipalities couldn't, for any reason, mandate sprinklers in any single- or double-family residences. Version R, however, requires municipalities go through a public process prior to mandating sprinklers in single- and double-family residences. Also, Version R allows the mandate to specify such a requirement in a certain type of neighborhood or construction. He further explained that Version R requires that prior to a municipality mandating sprinkler systems in new construction of residential buildings with one- or two-family dwellings, the municipality must: perform a cost- benefit analysis; publish a summary of the ordinance and the cost-benefit analysis and notice the time and place of each scheduled public hearing at least 30 days prior to the first public hearing; and hold three public hearings within a 60-day period. 9:19:54 AM REPRESENTATIVE GARDNER inquired as to how the requirements of HB 202 compare to existing processes. She inquired as to why only fire sprinkler systems are being targeted. CO-CHAIR HERRON explained that Version R merely extends the discussion that will happen in the community, and some would say it's a more transparent process. MR. EARL added that there is a lengthy building code adoption process. With regard to why have a mandate just for fire sprinklers, Mr. Earl pointed out that it could be an expensive process that would add to the price of homes. Therefore, the sponsor feels it's important to spotlight the code regarding sprinklers and provide more public review. Although the code adoption process does go through an extensive public review, the sprinkler mandate would be included with all the other codes and thus this legislation would make it more transparent. 9:23:09 AM DAVID SQUIRES, Fire Marshall, City of Seward, began by specifying that his concerns are related to the language on page 1, lines 7-14 and page 2, lines 1-5. He highlighted that the state already has a process for adopting building, fire, and residential codes. He then reminded the committee that these codes are at the municipal level and the state doesn't enforce or enact these codes. This legislation proposes to require the municipality to enact an ordinance if they want to have sprinklers in their area. He directed attention to the language on page 1, line 8, and pointed out that sprinkler systems have been utilized in lieu of other requirements, such as water systems. He then informed the committee that DEC doesn't allow private wells within 1,000 feet of a municipal well. If the municipality doesn't extend that water system, the residential homeowner has to do so. The aforementioned is a higher expense than a sprinkler system would be. MR. SQUIRES related that the sprinkler system requirement has been used to reduce construction costs in the City of Seward, where municipal water systems aren't available. The aforementioned hasn't impacted the rest of the community, he said. He explained that without the ordinance, the tax base of the rest of the community will be impacted because of the need to purchase additional tankers to haul water to residences. Furthermore, another building will have to be constructed/acquired in order to house the additional equipment. Thereby, HB 202 would increase the cost of residential construction in the City of Seward and would increase the tax rate to everyone living in the area. He noted that the committee packet should include a letter from the manager and mayor of the City of Seward, both of whom also oppose HB 202. He highlighted that the letter relates the view that HB 202 is an infraction on the City of Seward's rights as a home rule city and doesn't listen to the residents of Seward. 9:27:23 AM PAUL MICHELSOHN, Homebuilder, Anchorage Homebuilders Association, Alaska State Homebuilders Association, National Association of Homebuilders, informed the committee that he has served on the following code related organizations: the International Code Council (ICC), the Fire and Life Safety Committee, and the International Residential Code (IRC) Building and Energy Committee. He related that he currently sits and has sat on the Building Board for the Municipality of Anchorage, which deciphers and approves codes in the Municipality of Anchorage (MOA), for 17 years and has been chairman three times. He further related that he sits on the NHBCCS Committee, which is an oversight and review committee that watches how codes are introduced and challenges codes at the ICC level. He noted that he has sat on the aforementioned committee for about 14 years. Mr. Michelsohn pointed out that in the MOA there is a process, albeit a flawed process or one that's not exercised. In Anchorage, the 2009 edition of the IRC is being worked on. The aforementioned addition is the code that included the fire sprinkler requirement in the body of the code rather than the appendix of the code. The process in Anchorage is one in which the building official, an appointed official, elects a committee to review the codes and makes suggestions regarding amendments, deletions, and additions to the building official. The building official, referred to as an authority of jurisdiction (AOJ), has the final say. Mr. Michelsohn noted that the AOJ doesn't necessarily have to be a building official. From the AOJ, the [code] goes to the building board in Anchorage for review. He noted that in the many years he has served, he didn't recall the code ever failing at that level. The code is then forwarded to the city attorney at which point the code is publicized once for a meeting of the assembly. At the six MOA Assembly meetings on the code, he related that he has never seen a public individual testify. The system doesn't have the public input necessary for this [proposed fire sprinkler] code. Therefore, this legislation has been introduced, he opined, because the [proposed fire sprinkler] code is the single most [significant] code change ever introduced that will have a monetary impact on the consumer. Mr. Michelsohn highlighted that the legislation says that "this requirement is only necessary if a jurisdiction mandates all new construction". If a jurisdiction believes it's necessary to protect a historic building or region, the jurisdiction can negotiate with the builder regarding the possibility of utilizing a sprinkler system. He opined that this battle has been going on for many years. The builders of the state want to be more proactive and thus are requesting the legislature's support for HB 202. 9:32:44 AM REPRESENTATIVE GARDNER asked if some jurisdictions have already passed codes requiring all new buildings have sprinkler systems, or is the desire to preemptively address jurisdictions of the possibility that jurisdictions might pass such codes. MR. MICHELSOHN answered that no Alaska jurisdictions have adopted the code [requiring all new buildings have sprinkler systems], although Anchorage is reviewing the 2009 code that includes the fire sprinkler requirement. He related that the building official and fire marshall of Ketchikan tried to slip in this mandatory fire sprinkler requirement for all buildings, and it remains up for question whether they will try to introduce the aforementioned requirement. In further response to Representative Gardner, Mr. Michelsohn explained that the IRC code book addresses one- and two-family dwellings while triplexes and above are addressed by the International Building Code. He further explained that all jurisdictions that adopt the ICC edition of the IRC are faced with amending or adopting the code in its entirety. He related that several jurisdictions and states have banned [the proposed mandatory fire sprinkler system requirement]. 9:36:41 AM CO-CHAIR HERRON announced his intent to move HB 202 from committee next week. 9:36:53 AM CO-CHAIR MUNOZ, drawing from her experience on the Juneau Assembly, related her understanding that IBC changes come up regularly and are reviewed by local individuals every three years. The changes, she related, are complex and in many cases have substantial financial impacts. 9:37:52 AM REPRESENTATIVE CISSNA asked if Mr. Michelsohn is familiar with studies that show the effectiveness of sprinkler systems and the level of benefit they provide. MR. MICHELSOHN informed the committee that the National Association of Homebuilders disagrees with the statistics that have been presented [regarding the effectiveness of sprinkler systems] as they don't believe they're as accurate as they've been portrayed. In response to Representative Keller, Mr. Michelsohn said that he would make himself available at the next hearing on HB 202. He noted that he isn't paid to testify. 9:39:53 AM JEFF TUCKER, President, Alaska Fire Chiefs Association, related the Alaska Fire Chiefs Association's opposition to CSHB 202, Version R. He told the committee that there has already been testimony in opposition on the companion legislation, CSSB 129, from the cities of Kenai, Juneau, Ketchikan, Kodiak, Seward, Sitka and the Fairbanks North Star and Mat-Su Boroughs as well as resolutions from the Alaska Municipal League and the Kodiak Island Borough supporting the ability of Alaska communities to adopt code and ordinances at a local level. Mr. Tucker emphasized that the state doesn't place these extraordinary burdens required by Version R on communities for any other ordinance adoption process. Therefore, he questioned why the state feels such is necessary when a community is trying to determine how best to provide life safety services to its residents. He opined that there are already robust procedures in place when municipalities adopt building codes. These procedures involve community members, building officials, contractors, fire officials, homeowners, architects, engineers, and others who can best determine the needs of the local community. He referred to a document entitled "Municipal Code Adoption Processes", which took the comparison between CSSB 129, proposed in the Senate Labor and Commerce Standing Committee, and added the minimum ordinance adoption requirements per AS 29.25.020. The comparison illustrates the importance local communities place on the code adoption process and the extra steps that are already in place for the appointment of standing committees, multiple public hearings, and a review process that may last from several months to over two years prior to code adoption. Mr. Tucker opined that the aforementioned process already provides a transparent process that allows involvement from members of the community. Additionally, he opined that there is no state need met by requiring local communities to add requirements and expense to their existing process. "No other ordinance adoption process has a requirement mandated by the state to do a cost benefit analysis," he highlighted. Although the cost of a residential sprinkler system, which has been estimated to be $3,000, has been cited as the reason HB 202 is necessary, he pointed out that in Alaska there are already many tax credits and other incentives to help offset the costs for the installation of residential sprinklers. In fact, under AS 29.45.030 2 percent of the assessed value of the structure is exempt from taxation if the structure contains a fire protection system. Therefore, for a $250,000 home, $5,000 of the value of the home is exempt from taxation for as long as the property owners own the home. He then informed the committee that on January 27, 2010, Kevin Temple, owner of Interior Appraisals, gave a presentation to the Interior Alaska Homebuilders Association regarding appraisers. The presentation spoke about the credit appraisers were giving to residential sprinkler systems in Alaska. In fact, he related that he recently performed an appraisal of an approximately 1,400 square foot home with a residential fire sprinkler system for which he gave a $3,000 credit. Mr. Tucker then related the following from the Alaska Division of Insurance: "The three largest insurers in the State of Alaska: State Farm, AllState, and USAA, all gave credit for residential sprinklers ranging from 8 to 10 percent for full coverage systems and State Farm and USAA gave from 5 to 8 percent for a partial system." In conclusion, Mr. Tucker opined: If the sponsors of this legislation are truly interested in achieving their stated goal of protecting the homeowners from the cost of installation of residential fire sprinklers, we should be here discussing legislation on how we could do more to place incentives in place and offset even further the cost involved in the installation of residential sprinklers. The proponents of this legislation stated it is needed to protect the interest of homeowners; we feel it is the local communities who are best able to determine the needs of residents not the state. Local communities have working code adoption processes that have served them and their residents well for many, many years. CSHB 202 does not improve the local code adoption process, it only places unfunded and unnecessary requirements on local communities. Again, the Alaska Fire Chiefs Association stands opposed to the adoption of CSHB 202. 9:45:56 AM CO-CHAIR HERRON inquired as to why Anchorage isn't one of the communities in opposition to this legislation. MR. TUCKER clarified that when fire chiefs from the various communities speak they are speaking on behalf of the community in which they serve. The City of Anchorage has decided that there is no opposition to this legislation, which is a decision the local community can make. The aforementioned makes the already stated point that a local community can best determine its needs, particularly in terms of the IRC. He reiterated that the state shouldn't mandate [fire sprinkler systems]. 9:47:34 AM DAVID OWENS, Inspector, Owens Inspection, informed the committee that he has been a building inspector for 27 years. He then stated his support for HB 202 as he doesn't believe it's unreasonable to allow the public more input. He related his understanding that the current state regulation for municipalities is five-day notice and one hearing, which some local jurisdictions follow. He then turned to the 2008 version of the National Electrical Code, which was done over a holiday period with short public notice and one public hearing. The aforementioned caused a lot of his clients to call him regarding their concerns about the process. In conclusion, Mr. Owens stated his support of allowing public notice and analysis of the costs of such a significant change [as mandating fire sprinkler systems in one- and two-family dwellings]. 9:49:45 AM ERIC MOHRMANN, Fire Chief, Capital City Fire & Rescue, City & Borough of Juneau, began by emphasizing that the City & Borough of Juneau already has a robust code adoption process. The committee that is designated to review the codes every three years is comprised of private individuals: a civil, mechanical, and electrical engineer, an architect, and a contractor. This committee meets with the building official and the fire official. In over two-and-a-half years of publicized public meetings the code is reviewed line-by-line and recommendations are developed. The local jurisdictions, which are deferred, are allowed to modify the code provisions so long as they are at least as stringent as those adopted by the State Fire Marshall's Office. The code provisions can exceed the specifications of the State Fire Marshall, which is why they're deferred. Over the two-and-a-half year process, public input is taken in each meeting and the minutes are made public. The compiled recommendations are taken to the Public Works and Facilities Committee (PWFC) of the Assembly. The aforementioned committee, which is comprised of elected assembly members, listens to the recommendations and discusses them in detail. These meetings, he noted, are also publicized and open for public testimony and the minutes are available to the public. After several meetings with the PWFC, their work goes to the assembly for a minimum of two readings. The first meeting is an introductory meeting during which all the information is made available to the public. The second meeting that occurs 30 days later is a meeting that allows public testimony on the information or discussion on particular matters. At this point, the assembly can vote on the matter or send it back to the committee. The aforementioned process is followed by the City & Borough of Juneau as well as other similar jurisdictions. Therefore, he said he was surprised to hear the earlier testimony characterizing the Anchorage process as flawed. If that's the case, Anchorage should fix it, he opined. Juneau's process, he opined, works very well. Mr. Mohrmann related that Juneau considers code provisions, fire and building code provisions, which far exceed the cost of installation of residential sprinkler systems. However, none of those code provisions are scrutinized or made to stand up to a cost benefit analysis or the three public meetings. He noted that Juneau already exceeds the three public meetings, which is also the case with most jurisdictions. Mr. Mohrmann said that he's not sure what a cost benefit analysis is as it isn't specified in the legislation. He then turned to the issue regarding whether this [proposed code] would apply to all residents or to selected residents. He questioned whether selectively applying the code is even legal. In conclusion, Mr. Mohrmann related that the City & Borough of Juneau feels that its existing process is very rigorous and additional burdens aren't necessary to address this topic. 9:55:03 AM CO-CHAIR HERRON announced that the committee will likely address concerns about the cost benefit analysis next week. Therefore, he charged Mr. Mohrmann to provide any recommendations he saw fit. He then inquired as to why Mr. Mohrmann would be opposed to lengthening the public process if that benefits residents. MR. MOHRMANN clarified that he isn't opposed to a full and open public hearing process. He further clarified that the open public hearings the City & Borough of Juneau holds as a deferred jurisdiction far exceed what's specified in the legislation. 9:56:15 AM REPRESENTATIVE MILLETT asked if Mr. Mohrmann could provide the list of questions he stated in his testimony. MR. MOHRMANN agreed to do so. 9:57:30 AM JESS HALL, Homebuilder, told the committee that he has been a homebuilder for 35 years and has spent much time talking with customers regarding costs and safety features. He then recalled building a home for a young couple in the Mat-Su Valley. Originally, he built the couple a small starter home, but after having kids he built them a larger home. After discussing with the couple, of which the husband was a firefighter, what features they desired in the home, the couple said they wanted to install a sprinkler system. However, the couple decided not to install the sprinkler system but rather do other upgrades. Later the bid for the sprinkler system came in at $6,000-$8,000. Mr. Hall said due to all other code requirements he would tend to agree with this firefighter who didn't feel the need to install sprinklers in his home. However, he pointed out that outside of Palmer, there is no building code and thus residents can build whatever and not meet the safety codes. He reviewed a recent change for safety that didn't add that much cost to the homeowner and contrasted that to the costly mandate of fire sprinklers that may also require the installation of pressure tanks because the home uses a well. He opined that the people who build homes need to decide if they want fire sprinklers. Furthermore, there are other systems, such as misters, that are lower cost than fire sprinkler systems. In conclusion, Mr. Hall opined that HB 202 makes sense. 10:02:40 AM CO-CHAIR HERRON announced that Representative Keller is considering an amendment to the cost benefit analysis provision of HB 202. He reiterated his intent to move HB 202 from committee next week.