Following is the letter from JARRC for their finding on the proposed rule. See also WSR 10-01-065 for JARRC's notice of objection to the proposed Washington State Energy Code changes.

     If you have questions or need additional information, please contact council staff at (360) 725-2966 or via e-mail at sbcc@cted.wa.gov.

Peter D. DeVries

Chair

PO Box 40600

Olympia, WA 98504-0600

December 9, 2009

The Honorable Peter DeVries, Council Chair

Mr. Jon Napier, Council Vice-Chair

Washington State Building Code Council

128 - 10th Avenue Southwest

Olympia, Washington 98504-2525

Dear Chair DeVries and Vice-Chair Napier:

The Joint Administrative Rules Review Committee (Committee) respectfully acknowledges the significant work performed by the many agencies and stakeholders in an effort to achieve greater energy efficiencies, including the State Building Code Council (Council) and the Council's Technical Advisory Groups.

As you know, the Committee expressed concerns regarding the sufficiency of the economic impact analysis performed in regards to the Council's 2009 proposed changes to the State Energy Code (Chapter 51-11 of the Washington Administrative Code). The purpose of this letter is to advise you of the outcome of the Committee's December 2 meeting, at which the Committee considered the adequacy of the Council's response to the Committee's request for additional economic impact and cost-benefit analyses.

As you are aware, by way of letter dated October 14, the Committee requested that the Council amend the Small Business Economic Impact Statement (SBEIS) to comply with all requirements of the Regulatory Fairness Act, Chapter 19.85 RCW, and to support it with a detailed and rigorous costs analysis of the cumulative impact of all the changes. The Committee specifically requested that the Council provide an estimate of how many jobs will be lost or created as a result of compliance with all the proposed rules, as required by RCW 19.85.040 (2)(d), and that the Council solicit industry and supplier sources in reaching it cost estimates. In addition, the Committee exercised it statutory authority to direct the Council to perform a cost-benefit analysis pursuant to RCW 34.05.328. Finally, the Committee asked that this additional analysis be provided to the Committee prior to adoption of the rules by the Council.

While the Committee is appreciative of the analysis and information provided to the Committee in response to its request, the Committee unanimously found on December 2 that the Council's response was inadequate and failed to comply with all requirements of the law. Support for these findings include the following facts: the SBEIS was not amended to reflect specific consideration of the cumulative impacts of all the proposed changes, nor was any analysis performed to estimate job loss or creation (as specifically required by statute) or to provide the requested cost-benefit analysis. The Committee feels the Council and the Legislature need this information to fully evaluate the value, impacts, and consequences of the proposed codes, with due diligence to their respective fiduciary responsibilities, to create the best informed public policy.

Based on the Committee's findings at the December 2 hearing, the Committee unanimously agreed to take several actions, including recommending suspension of adoption and implementation of the rules; causing a statement to be published in the State Register and Washington Administrative Code; and introducing legislation in the 2010 legislative session that would delay implementation of these proposed changes until the Legislature has received the analysis we requested and had an opportunity to determine whether the additional analysis is sufficient. (See attached, copy of adopted motion).

The Committee is aware that the Council's standard practice is to consider updates to the Energy Code every three years. However, it seems that the 2009 proposed changes are unusually comprehensive and complex. While the Committee believes that this work is extremely important, and that the Council has worked diligently,, the Committee believes the Council did not fully develop and consider the economic impact and cost-benefits of these significant changes to our Energy Code.

Respectfully,

Bob Hasegawa

Chair

Joel Kretz

Vice-Chair

cc:     Mr. Tim Nogler, Managing Director, SBCC

     Ms. Sandra Adix, SBCC AAG

     Representative Ormsby

     Representative Dammeier

     Senator Tom

     Senator Holmquist

     Representative Kelley

     Representative Kristiansen

     Senator McCaslin

     Senator Kastama

     Senator Fraser

     Representative Crouse

     Representative Hudgins

     Senator Keiser

     Representative McCoy

     Senator Rockefeller

     Representative Rolfes

     Senator Kilmer

     Speaker Chopp

     Majority Leader Brown

     Mr. Keith Phillips

     Ms. Diane Smith

     Attachment: JARRC Energy Code motion adopted Dec. 2, 2009

     Reviser's note: The typographical errors in the above material occurred in the copy filed by the Joint Administrative Rules Review Committee and appear in the Register pursuant to the requirements of RCW 34.08.040.

(Vice-Chair): I move that the Joint Administrative Rules Review Committee find that the State Building Code Council's adoption of proposed changes and amendments to the State Energy Code, Chapter 51-11 of the Washington Administrative Code, on November 20, 2009 was not done in accordance with all applicable provisions of law and that the Council failed to adequately respond to this Committee's October 14, 2009 request for additional information because:

     1.     The Council failed to amend the small business economic impact statement and provide the amended impact statement to this Committee prior to adoption of the rules in order to comply with all the requirements of RCW 19.85.030, and it failed to include in the amended impact statement an estimate of the number of jobs that will be created or lost and to support the amended statement with a detailed and rigorous cost analysis of the cumulative impact of all the changes; and

     2.     The Council failed to submit to this Committee a cost-benefit analysis prepared pursuant to RCW 34.05.328 and to provide the analysis to this Committee prior to adoption of the rules.

Based on these findings, and pursuant to RCW 34.05.640, the Committee shall take the following actions:

     •     Recommend that the Governor suspend adoption and implementation of the changes to the State Energy Code that were adopted by the Council on November 20, 2009;

     •     Provide the Committee's objections to the Governor, the Office of the Code Reviser, the appropriate standing committees of the Legislature, and the Council;

     •     Direct the Code Reviser to publish the Committee's objections in the State Register and Washington Administrative Code; and

     •     Direct Committee staff to draft legislation that would suspend the implementation of the State Building Code Council's 2009 proposed changes and amendments to Chapter 51-11 of the Washington Administrative Code (the State Energy Code) until the Legislature has been provided with the additional economic impact and cost-benefit analysis information, as requested by the Committee in its October 14, 2009 letter to the Council, and has been given an opportunity to determine whether the additional information is sufficient to make an informed decision.

(Chair): It has been moved that the Committee find that the State Building Code Council's adoption of proposed changes and amendments to the State Energy Code on November 20, 2009 was not done in accordance with all applicable provisions of law, that the Council failed to adequately respond to this Committee's request for additional information, and that the Committee recommend suspension of the rules, provide appropriate entities with notice of our objections, cause the Code Reviser to publish our objections, and direct staff to draft legislation.

Motion passed, 5-0-2.

Roll Call:

Voting yea:     Representatives Hasegawa, Kretz, Kelley, and Kristiansen; Senator McCaslin

Voting nay:     None.

Absent:          None.

Excused:          Senators Fraser and Kastama.

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