WSR 23-09-067

PROPOSED RULES

DEPARTMENT OF ECOLOGY

[Order 22-07—Filed April 19, 2023, 8:23 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 22-21-041.

Title of Rule and Other Identifying Information: Chapter 173-50 WAC, Accreditation of environmental laboratories. For more information on this rule making, visit https://ecology.wa.gov/Regulations-Permits/Laws-rules-rulemaking/Rulemaking/WAC-173-50.

Hearing Location(s): On May 25, 2023, at 9 a.m. - 12 p.m., webinar. Presentation and question and answer session followed by the hearing. We are holding this hearing via webinar. This is an online meeting that you can attend from any computer using internet access. Register here https://waecy-wa-gov.zoom.us/meeting/register/tZYocOmurDojHtEDkyIcpuhpCfIiVJuqpOPF. Once registered, for audio call United States Toll number 1-253-215-8782. Enter the meeting ID of 825 7062 1945, and enter passcode 174911; and on May 31, 2023, at 1 p.m. - 4 p.m., webinar. Presentation and question and answer session followed by the hearing. We are holding this hearing via webinar. This is an online meeting that you can attend from any computer using internet access. Register here https://waecy-wa-gov.zoom.us/meeting/register/tZUvcuGorj8iE92rKsKlGMePhXKdBw34pJVO. Once registered, for audio call United States Toll number 1-253-215-8782. Enter the meeting ID of 812 5800 4899, and enter passcode 174911.

Date of Intended Adoption: August 28, 2023.

Submit Written Comments to: Ryan Zboralski, P.O. Box 488, Manchester, WA 98353-0488, email ryan.zboralski@ecy.wa.gov, by June 7, 2023.

Assistance for Persons with Disabilities: Contact the department of ecology's (ecology) ADA Coordinator, phone 360-407-6831, TTY 877-833-6341, email ecyadacoordinator@ecy.wa.gov, by May 22, 2023.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The proposed rule amendments would achieve the following goals:

Amend wording in existing sections and add new sections to increase clarity and to incorporate existing best practices, quality control, and rules for participation in the lab accreditation program, including:

Amend the fee structure to meet current ecology laboratory accreditation unit (LAU) implementation costs and address the need to increase fees to cover future cost increases.

Clarification of existing rule language and updating references.

Reasons Supporting Proposal: Ecology's LAU provides accreditation services and support to environmental labs across the state. These labs provide data that are necessary to support decisions made by regulatory bodies tasked with the protection of the people and resources within Washington state. The data produced by these labs require a high level of precision and accuracy, which in turn requires a rigorous accreditation process by ecology's LAU. Additionally, the emergence of contaminants of concern, such as 6-PPD Quinone, have added to the complexity of laboratory analysis and the accreditation process. The process required to accredit labs is a large part of the important work that ecology does to ensure that the data that these labs produce are accurate and defensible.

Statutory Authority for Adoption: Chapter 43.21A.230 Certification of environmental laboratories authorized—Fees—Use of certified laboratories by persons submitting data or results to department.

Statute Being Implemented: Not applicable.

Rule is not necessitated by federal law, federal or state court decision.

Agency comments or recommendations, if any, as to statutory language, implementation, enforcement, and fiscal matters: Not applicable.

Name of Proponent: Ecology, governmental.

Name of Agency Personnel Responsible for Drafting and Implementation: Ryan Zboralski, Manchester, 360-764-9364; Enforcement: Rebecca Wood, Manchester, 360-742-7022.

A school district fiscal impact statement is not required under RCW 28A.305.135.

A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Ryan Zboralski, P.O. Box 488, Manchester, WA 98353-0488, phone 360-764-9364, email ryan.zboralski@ecy.wa.gov.

This rule proposal, or portions of the proposal, is exempt from requirements of the Regulatory Fairness Act because the proposal:

Is exempt under RCW 19.85.025(3) as the rules relate only to internal governmental operations that are not subject to violation by a nongovernment party; rules are adopting or incorporating by reference without material change federal statutes or regulations, Washington state statutes, rules of other Washington state agencies, shoreline master programs other than those programs governing shorelines of statewide significance, or, as referenced by Washington state law, national consensus codes that generally establish industry standards, if the material adopted or incorporated regulates the same subject matter and conduct as the adopting or incorporating rule; rules only correct typographical errors, make address or name changes, or clarify language of a rule without changing its effect; and rule content is explicitly and specifically dictated by statute.

Scope of exemption for rule proposal:

Is partially exempt:

Explanation of partial exemptions: We analyzed the impacts of the proposed rule amendments relative to the existing rule, within the context of all existing requirements (federal and state laws and rules). This context for comparison is called the baseline and reflects the most likely regulatory circumstances that entities would face if the proposed rule was not adopted.

2.2 Baseline: The baseline for our analyses generally consists of existing rules and laws and their requirements. This is what allows us to make a consistent comparison between the state of the world with and without the proposed rule amendments.

For this rule making, the baseline includes:

2.3 Proposed rule amendments: 2.3.1 Definitions: Baseline: The baseline rule and law include multiple definitions to support implementation.

Proposed: The proposed rule amendments would add definitions or update existing ones. These changes would clarify definitions based on implementation experience and update or add them to reflect current versions of documents or to support proposed new requirements.

2.3.2 Responsibilities of environmental laboratories: Baseline: The baseline law and rule set requirements for laboratories when they apply for initial accreditation, including requirements for:

Proposed: The proposed rule amendments would add or amend the following requirements for initial accreditation:

2.3.3 Quality control practices: Baseline: The baseline rule does not include explicit requirements for QC practices.

Proposed: The proposed rule amendments would add the following requirements for quality control practices.

2.3.4 Data and record traceability: Baseline: The baseline rule does not include explicit requirements for data and record traceability.

Proposed: The proposed rule amendments would add the following requirements for data and record traceability. Laboratories must:

2.3.5 Proficiency testing: Baseline: The baseline law and rule include requirements for PT, including, but not limited to:

Proposed: The proposed rule amendments would add one PT sample per parameter per year for microbiology parameters.

2.3.6 Audits: Baseline: Under the baseline, all audits are on site. We note that this has been limited by LAU funding and resources, resulting in audits of only laboratories accredited for drinking water analyses undergoing audits every three years (per EPA requirement).

Proposed: Under the proposed rule amendments, audits would not automatically all be on site. Ecology would continue to audit laboratories accredited for drinking water analyses on site but would otherwise perform on-site audits only when necessary (laboratory does not have appropriate resources for remote audit; remote audit may not capture applicable concerns; etc.).

Audits would occur at least every three years at all laboratories directly accredited by ecology (i.e., not accredited by ecology through third-party recognition), and any requested documentation, including at least SOPs and analytical data, would need to be submitted at least two weeks before the audit.

2.3.7 Interim accreditation: Baseline: The baseline law and rule include requirements for interim accreditation, including submission of:

Proposed: The proposed rule amendments would add submission of applicable SOPs as a requirement for interim accreditation.

2.3.8 Maintaining accreditation status: Baseline: The baseline law and rule include requirements for maintaining accreditation status, including:

Proposed: The proposed rule amendments would:

2.3.9 Revoking or suspending accreditation: Baseline: The baseline law and rule include requirements for revoking or suspending accreditation, including:

Proposed: The proposed rule amendments would add violation of federal law to the baseline list of reasons for suspension or revocation.

2.3.10 Fee structure: Baseline: The baseline law and rule include the fee structure and specific fees associated with laboratory accreditation. These fees and structure were developed during the last amendments made to this rule, in 2010, to reflect the program costs at that time. They include minimum ($300) and maximum (variable by parameter) fees.

Proposed: The proposed rule amendments would:

2.3.11 Changes with no material impact: Baseline: The baseline rule includes wording that ecology identified, over a decade of implementing the program since the last rule revision (2010), as needing clarification to facilitate efficient compliance.

Proposed: The proposed rule amendments would make changes to wording and structures in the rule, that would not affect rule requirements. These include, but are not limited to clarification that:

The proposed rule does impose more-than-minor costs on businesses.

Small Business Economic Impact Statement (SBEIS)

This SBEIS presents the:

A small business is defined by the Regulatory Fairness Act (RFA), chapter 19.85 RCW, as having 50 or fewer employees. Estimated costs are determined as compared to the existing regulatory environment; the regulations in the absence of the rule. The SBEIS only considers costs to "businesses in an industry" in Washington state. This means that impacts, for this document, are not evaluated for government agencies.

The existing regulatory environment is called the "baseline" in this document. It includes only existing laws and rules at federal and state levels.

This information is excerpted from ecology's complete set of regulatory analyses for this rule making. For complete discussion of the likely costs, benefits, minimum compliance burden, and relative burden on small businesses, see the associated regulatory analyses document (Ecology publication no. 23-03-010, April 2023) We have retained section numbers here for easy cross-reference.

COMPLIANCE REQUIREMENTS OF THE PROPOSED RULE, INCLUDING PROFESSIONAL SERVICES: 2.3.1 Definitions: Definitions do not, in and of themselves, create regulatory requirements; definitions support requirements set elsewhere in the rule. Where definitions contribute to the impacts of rule requirements, the overall impacts of those requirements are discussed in the sections below.

We note also that the proposed rule amendments would update the date of the relevant procedural manual. As this manual is a living document that stays up-to-date with good practice and appropriate processes, maintenance of the external reference allows for timely updates to practices that do not necessitate repeated time-consuming rule-making processes.

We expect the proposed rule amendments to result in costs of additional time to submit SOPs, as well as benefits of verified SOP documentation. They would also result in reduced costs associated with audits if they are remote rather than on-site.

2.3.3 Quality control practices: We expect these proposed amendments (new requirements) to result in labor costs associated with the additional time and effort necessary to perform these tasks or perform existing tasks using the required procedures. We expect them to result in benefits of ensuring a baseline of data quality across all laboratories accredited by ecology, as they reflect both best practice and consistency with methods used, as well as consistency with other regulatory contexts.

2.3.4 Data and record traceability: We expect these proposed amendments (new requirements) to result in labor costs associated with the additional time and effort necessary to perform these tasks or perform existing tasks using the required procedures. We expect them to result in benefits of high-quality records that survive legal scrutiny, as could potentially be involved in noncompliance, penalties, lawsuits, and other regulatory or legal contexts that could be faced by the laboratory or its customers. This includes a shift from exclusive use of automated data loggers in lieu of manual checking, to reduce uncaught temperature errors for incubators, as there is a narrow range of acceptable temperatures to which the loggers are not sufficiently sensitive.

2.3.5 Proficiency testing: We expect these proposed rule amendments to result in costs of additional PT analysis, as well as benefits of microbiology parameter PT consistent with chemistry parameter PT number and frequency under the baseline. The latter would result in increased confidence in the quality and reliability of microbiology analyses to be consistent with chemistry analyses.

2.3.6 Audits: We expect these proposed rule amendments to result in additional time costs associated with the time and effort (at nondrinking water labs) necessary to undergo audits at least every three years, mitigated by benefits (avoided costs) of those audits not necessarily being on site. We also expect minor timing costs associated with when documentation is submitted to ecology, and benefits of adequate preparation for audits and resulting audit effectiveness.

2.3.7 Interim accreditation: We expect these proposed rule amendments to result in costs of additional time to submit SOPs in cases of interim accreditations, as well as benefits of verified SOP documentation in those cases.

2.3.8 Maintaining accreditation status: We expect these proposed rule amendments to result in timing costs associated with notification of planned moves, and benefits of adequate time to complete necessary accreditation review without creating a gap in accreditation.

2.3.9 Revoking or suspending accreditation: We do not expect this proposed rule amendment to result in significant costs or benefits, as it is in line with violation of state law as a reason for suspension or revocation.

2.3.10 Fee structure: We expect these proposed rule amendments to result in costs of increased fees, as well as benefits of full funding of the LAU and the services it provides.

2.3.11 Changes with no material impact: We do not expect these proposed rule amendments to result in costs or benefits beyond clarity.

COSTS OF COMPLIANCE:EQUIPMENT, PROFESSIONAL SERVICES: Compliance with the proposed rule, compared to the baseline, is not likely to impose additional costs of equipment or professional services.

COSTS OF COMPLIANCE: SUPPLIES: 3.2.5 Proficiency testing: We expect this proposed rule amendment to result in costs of additional PT analyses.

We assumed laboratories with microbiology parameters would need to perform between one and five additional PT analyses per year. Based on ecology accreditation records, there are currently 255 such labs. We surveyed product catalogs at PT sample providers that meet existing PT requirements, identifying an average cost per microbiology PT sample of $105. This resulted in total annual costs of $27,000 to $134,000 across all impacted labs.

COSTS OF COMPLIANCE: LABOR: 3.2.2 Responsibilities of environmental laboratories: We expect the proposed rule amendments to result in costs of additional time to submit SOPs. They would also result in reduced costs associated with audits if they are remote rather than on site.

We assumed it would take two to four hours of laboratory management or QA officer time to complete the additional work required under these amendments. At an hourly wage of $41.90, at the 467 existing accredited labs, this would be $39,000 to $78,000.

Ecology reflects streams of costs over time as 20-year present values. A present value converts future costs to current values accounting for inflation as well as the opportunity cost of having funds later rather than now. Over 20 years, the present value equivalent of the annual costs above is $0.7 to $1.4 million.

3.2.3 Quality control practices: We expect these proposed amendments to result in labor costs associated with the additional time and effort necessary to perform these tasks or perform existing tasks using the required procedures.

We assumed it would take 40 to 120 hours of laboratory management or QA officer time to complete the additional work required under these amendments, if a lab does not already follow these procedures. At an hourly wage of $41.90, if this cost was incurred at all 467 existing accredited labs, this would be $0.8 million to $2.3 million. We expect that many labs already follow the proposed quality control procedures, and so would not incur these additional costs, but we could not make a confident assumption about the percentage of labs for which this is the case. Given this uncertainty, we have taken a conservative approach (potentially overestimating costs), and identified that total annual costs would likely be less than this range.

3.2.4 Data and record traceability: We expect these proposed amendments to result in labor costs associated with the additional time and effort necessary to perform these tasks or perform existing tasks using the required procedures. This includes a shift from exclusive use of automated data loggers in lieu of manual checking.

We assumed it would take four to eight hours of laboratory analyst or technician time to complete the additional overall practice work required under these amendments. At an hourly wage of $32.17, we assumed that 10 percent of the laboratories would need to improve these practices resulting in costs of $5,000 to $11,000. This is based on the acknowledgment and corresponding assumption that 90 percent of laboratories already follow the proposed data and record traceability procedures, and so would not incur additional costs.

In place of an automatic data logger, we assumed it would take 50 to 100 hours of laboratory analyst or technician time to complete additional work under these amendments. At an hourly wage of $32.17, we assumed that 10 percent of the laboratories would need to improve these practices resulting in costs of $67,000 to $135,000. This is based on the understanding and corresponding assumption that most laboratories do not suffer issues with data quality due to use of automatic data loggers, and so would not incur additional costs. This element of the proposed rule intends to improve the quality of records and traceability at the relatively few labs for whom data loggers cause issues.

3.2.6 Audits: We expect these proposed rule amendments to result in additional time costs associated with the time and effort (at nondrinking water labs) necessary to undergo audits at least every three years, mitigated by benefits (avoided costs) of those audits not necessarily being on site. We also expect minor timing costs associated with when documentation is submitted to ecology.

To reflect a shift to remote audits, we assumed the following levels of effort:

We assumed that one-third of laboratories accredited only for nondrinking water parameters (one-third: 114 labs) would be audited each year. These laboratories would incur the costs of remote audits, with associated staff wages of:

The total estimated costs associated with these rule amendments was $166,000 to $1.1 million (including overhead costs), of which $73,000 to $0.5 million would be costs incurred by ecology (funded by fees), and $40,000 to $0.5 million would be costs incurred directly by labs.

Note that by making audits no longer necessarily on site, the proposed rule amendments could reduce costs associated with audits by $9,000 to $110,000 per year if all labs were remotely audited, compared to what the above costs would be if all audits remained on-site. (See Section 4.2.6 for discussion.)

3.2.7 Interim accreditation: We expect these proposed rule amendments to result in costs of additional time to submit SOPs in cases of interim accreditations. As these costs would be incurred as part of proposed amendments to regular accreditation, they are already reflected in the cost estimate discussed in Section 3.2.2.

3.2.8 Maintaining accreditation status: We expect these proposed rule amendments to result in timing costs associated with notification of planned moves. We note, however, these would not be significant additional costs, as compared to the baseline, but rather opportunity costs of expenditures at different times. The table below illustrates the opportunity costs associated with spending one dollar at various delayed times.

COSTS OF COMPLIANCE: ADMINISTRATIVE COSTS: Where applicable, ecology estimates administrative costs (overhead) as part of the cost of labor and professional services, above.

COSTS OF COMPLIANCE: OTHER: 3.2.10 Fee structure: We expect these proposed rule amendments to result in costs of increased fees.

The tables below summarize baseline and proposed fees and fee structure, including elimination of maximum fees.

During the development of the proposed rule, we estimated the difference in fees at 15 representative types of laboratories, reflecting variable laboratory size, degree of direct versus third-party accreditation, and customer type. This difference was based on a set of fees per parameter and added parameters to an existing method and methods that were on average 33 percent higher than proposed FY 2024 fees and 13 percent lower than proposed FY 2025 fees.

Baseline fees reflected FY 2022 estimated accreditation renewal costs or actual 2022 renewal invoices. The table below summarizes the descriptive statistics for the percentage increase in fees (estimated proposed fee minus baseline fee, as a proportion of baseline fee) under the proposed rule, for a representative laboratory. These estimates also accounted for fees charged on a method basis versus a parameter basis.

Total laboratory accreditation fee revenues for FY 2022 were $881,464. Using the average increase in estimated fees, and this baseline total fee value, the proposed rule would result in an average increase in total fees charged (across all laboratories) of $1.2 million in FY 2024 and $1.8 million in FY 2025. Considering the overall range of percentage increases estimated, the overall range of fee increases could be between $0.8 million and $3.4 million.

Fees beginning in FY 2026 would be based on the previous year's fees and the state's fiscal growth factor, as determined by the Washington state economic and revenue forecast council (ERFC). The average nominal fiscal growth factor in the ERFC's 2021 economic forecast was 5.88 percent. We applied this fiscal growth factor to the estimated range of fee increases in FY 2025 and in subsequent years. The 20-year present value of fee increases under the proposed rule is a median of $100.6 million.

We note that our estimation methodology holds the current number of labs, methods, and parameters constant for each year in the future. We were not able to confidently forecast future growth in laboratories, methods, or parameters, so holding this value constant was necessary to be able to estimate the costs of the proposed amendments to fees. While the endpoints of ranges reflect estimates based on implicit assumptions that all laboratories experience fee increases of the same percentage size as the smallest laboratories or the largest laboratories, this range also allows us to capture potential variance in laboratories and their accreditation attributes.

If there is an overall growth within or across the accredited laboratories beyond these assumptions and range, it is possible that total fee collections will ultimately fail to meet the funding needs of LAU workload. This is because fees are set in rule, and they would not be able to adapt in response to expanding needs and workload. This means the costs (fees charged) estimated above would not change over time, but LAU workload would increase nonetheless, potentially resulting once again in accreditation backlogs or other service limitations.

COMPARISON OF COMPLIANCE COST FOR SMALL VERSUS LARGE BUSINESSES: We calculated the estimated per-business costs to comply with the proposed rule amendments, based on the costs estimated in Chapter 3 of this document. In this section, we estimate compliance costs per employee.

The average affected small business likely to be covered by the proposed rule amendments employs approximately 11 people. The largest 10 percent of affected businesses employ an average of 205,249 people at their highest ownership level. Based on cost estimates in Chapter 3, we estimated the following compliance costs per employee.

We conclude that the proposed rule amendments are likely to have disproportionate impacts on small businesses. Therefore, ecology is required to consider legal and feasible options to reduce this burden, as discussed in Section 7.4.

CONSIDERATION OF LOST SALES OR REVENUE: Businesses that would incur costs could experience reduced sales or revenues if the proposed rule amendments significantly affect the prices of the goods they sell. The degree to which this could happen is strongly related to each business's production and pricing model (whether additional lump-sum costs would significantly affect marginal costs), as well as the specific attributes of the markets in which they sell goods, including the degree of influence each firm has on market prices, as well as the relative responsiveness of market demand to price changes.

We used the REMI E3+ model for Washington state to estimate the impact of the proposed rule amendments on directly affected markets, accounting for dynamic adjustments throughout the economy. The model accounts for: Interindustry impacts; price, wage, and population changes; and dynamic adjustment of all economic variables over time.

The proposed rule amendment would primarily charge fees to businesses in the "Management, scientific, and technical consulting services" industry. The results of REMI E3+ model show that the rule amendments would impact a variety of businesses (see 7.6, below) and that they would cost an estimated $3-37 million annually in output across all industries in the state. In 2023, Washington is estimated to have an output of $1.06 trillion and $1.53 trillion in 2043. Below are the industries that would have the highest estimated impact on their output. We note that the sector that captures laboratories, "Management, Scientific, and Technical Consulting Services," would see the value of their output affected by less than one-tenth of one percent.

MITIGATION OF DISPROPORTIONATE IMPACT: RFA states that: "Based upon the extent of disproportionate impact on small business identified in the statement prepared under RCW 19.85.040, the agency shall, where legal and feasible in meeting the stated objectives of the statutes upon which the rule is based, reduce the costs imposed by the rule on small businesses. The agency must consider, without limitation, each of the following methods of reducing the impact of the proposed rule on small businesses:

a) Reducing, modifying, or eliminating substantive regulatory requirements;

b) Simplifying, reducing, or eliminating recordkeeping and reporting requirements;

c) Reducing the frequency of inspections;

d) Delaying compliance timetables;

e) Reducing or modifying fine schedules for noncompliance; or

f) Any other mitigation techniques including those suggested by small businesses or small business advocates."

We considered all of the above options, the goals and objectives of the authorizing statutes (see Chapter 6), and the scope of this rule making. We limited compliance cost-reduction methods to those that:

Modifying regulatory requirements, changing reporting requirements, reducing the frequency of inspections, or delaying compliance timetables would not meet statutory objectives or are not feasible and within the scope of this rule making.

While the scope and authorization for this rule limited ecology's options in reducing the disproportion of compliance cost burden, we note that the cost estimation (see Chapter 3) is based in part on a range of representative labs. This range is based on a sample of the overall laboratory population, and may overestimate the relative numbers or types of analytes (and thus, fees) for very small, independent labs. Some small laboratories are currently accredited for as few as one analyte, as necessary for their internal work, and this would naturally reduce their costs per employee even further than the costs estimated for a representative small laboratory in the table above.

SMALL BUSINESS AND LOCAL GOVERNMENT CONSULTATION: We involved small businesses and local governments in the development of the proposed rule amendments, using:

NAICS CODES OF INDUSTRIES IMPACTED BY THE PROPOSED RULE: The proposed rule amendments likely impact the following industries, with associated North American Industry Classification System (NAICS) codes. NAICS definitions and industry hierarchies are discussed at https://www.census.gov/cgi-bin/sssd/naics/naicsrch?chart=2017.

NAICS Code Description

1119 Other Crop Farming

1151 Support Activities for Crop Production

2211 Electric Power Generation, Transmission, and Distribution

2213 Water, Sewage, and Other Systems

2382 Building Equipment Contractors

2383 Building Finishing Contractors

2389 Other Specialty Trade Contractors

3114 Fruit and Vegetable Preserving and Specialty Food Manufacturing

3116 Animal Slaughtering and Processing

3219 Other Wood Product Manufacturing

3221 Pulp, Paper, and Paperboard Mills

3222 Converted Paper Product Manufacturing

3241 Petroleum and Coal Products Manufacturing

3251 Basic Chemical Manufacturing

3252 Resin, Synthetic Rubber, and Artificial and Synthetic Fibers and Filaments Manufacturing

3272 Glass and Glass Product Manufacturing

3313 Alumina and Aluminum Production and Processing

3314 Nonferrous Metal (except Aluminum) Production and Processing

3328 Coating, Engraving, Heat Treating, and Allied Activities

3331 Agriculture, Construction, and Mining Machinery Manufacturing

3364 Aerospace Product and Parts Manufacturing

4245 Farm Product Raw Material Merchant Wholesalers

4452 Specialty Food Retailers

4571 Gasoline Stations

5413 Architectural, Engineering, and Related Services

5416 Management, Scientific, and Technical Consulting Services

5417 Scientific Research and Development Services

5419 Other Professional, Scientific, and Technical Services

5617 Services to Buildings and Dwellings

5622 Waste Treatment and Disposal

5629 Remediation and Other Waste Management Services

6215 Medical and Diagnostic Laboratories

8133 Social Advocacy Organizations

IMPACT ON JOBS: We used the REMI E3+ model for Washington state to estimate the impact of the proposed rule amendments on jobs in the state, accounting for dynamic adjustments throughout the economy.

The proposed rule amendments would result in transfers of money within and between industries, as compared to the baseline. The modeled impacts on employment are the result of multiple small increases and decreases in employment, prices, and other economic variables across all industries in the state.

Employment modeling results of the REMI E3+ show a minor impact on jobs in the affected industries. All industries in the state would experience an estimated total initial job loss of 14 full-time employees (FTEs), increasing to a job loss of 45 FTEs by 2043. The industry with the highest jobs impact is construction, with an estimated initial job loss of two FTEs. Construction is an industry highly sensitive to changes in economic activity in the state.

Direct cost estimates (inputs into the model) are based on the low end of the total cost ranges estimated in Chapter 3. We made this assumption based on the acknowledgment that most labs are already performing many, if not all, of the proposed requirements for quality control and data quality.

In terms of NAICS codes and sectors defined in the REMI model, laboratories are captured in the "Management, Scientific, and Technical Consulting Services" sector. The REMI model indicates that, in the aggregate, this sector would experience an equivalent loss of less than one FTE total across all laboratories, increasing to a loss of two to three FTEs in 2027, and this loss would likely be permanent. To test the sensitivity of this result to our low-cost assumption, we also ran the model using high-cost inputs that reflect much broader or universal incurrence of the costs of additional quality control and data quality activities than is likely based on current lab practices and interpretations of the baseline rule. This resulted in the laboratory sector losing between two and 15 FTEs annually through 2043.

We also heard from small laboratories that they were concerned about their ability to do additional work, pay more fees, or incur additional costs, in light of difficulties meeting their own workload and staffing needs. We note that our cost estimation (see Chapter 3) is based in part on a range of representative labs, and on conservative assumptions that likely overestimate costs. This means our estimates are likely to overestimate costs to many small laboratories, especially for small, independent laboratories. Some small laboratories are currently accredited for as few as one analyte, as necessary for their internal work, and this would naturally reduce their costs and any needs to hire additional staff or pay more in wages.

These attributes of small labs, likely incurring lower costs but having more difficulty adjusting to them, work against one another to determine ultimate impacts of the proposed rule amendments. We note, however, that the employment impacts estimated in this section are therefore more likely to happen at small laboratories that have the most difficulty adjusting their overall business model and staffing.

A copy of the statement may be obtained by contacting Ryan Zboralski, P.O. Box 488, Manchester, WA 98353-0488, phone 360-764-9364, email ryan.zboralski@ecy.wa.gov.

April 19, 2023

Heather R. Bartlett

Deputy Director

OTS-4306.5