2009

AN ACT Relating to the energy office; amending RCW 43.140.040, 43.140.050, 39.35.030, 39.35.050, 39.35.060, 39.35C.010, 39.35C.020, 39.35C.030, 39.35C.040, 39.35C.050, 39.35C.060, 39.35C.090, 39.35C.100, 39.35C.110, 39.35C.120, 39.35C.130, 43.41.175, 43.99I.050, 70.94.544, 70.94.960, 70.120.210, 70.120.220, 19.27.190, 19.27A.020, 19.27A.055, 28A.515.320, 43.06.115, 43.19.675, 43.19.680, 43.31.621, 47.06.110, 82.35.020, 82.35.080, and 90.03.247; reenacting and amending RCW 42.17.2401; adding new sections to chapter 43.330 RCW; adding a new section to chapter 43.19 RCW; adding a new section to chapter 47.01 RCW; adding a new section to chapter 38.52 RCW; creating new sections; repealing RCW 43.21F.010, 43.21F.015, 43.21F.025, 43.21F.035, 43.21F.045, 43.21F.055, 43.21F.060, 43.21F.065, 43.21F.090, 70.94.537, 70.94.541, 41.06.081, 39.35C.070, and 39.35C.080; providing an effective date; and declaring an emergency.

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

NEW SECTION. Sec. 1. Responsibilities of state government need to be limited to core services in support of the public safety and welfare. Services of the state energy office are primarily advisory and can be eliminated. Essential regulatory functions can be performed by other state agencies and energy-related information services can be provided through a private nonprofit organization. This simplifies state government yet continues to maintain core services. It is the intent of the legislature that the state continue to receive oil overcharge restitution funds for our citizens and that every effort be made to maximize federal funds available for energy conservation purposes.

NEW SECTION. Sec. 2. The following acts or parts of acts are each repealed:

(1) RCW 43.21F.010 and 1975-'76 2nd ex.s. c 108 s 1;

(2) RCW 43.21F.015 and 1994 c 207 s 3 & 1981 c 295 s 1;

(3) RCW 43.21F.025 and 1994 c 207 s 2, 1987 c 330 s 501, & 1981 c 295 s 2;

(4) RCW 43.21F.035 and 1990 c 12 s 1 & 1981 c 295 s 3;

(5) RCW 43.21F.045 and 1994 c 207 s 4, 1990 c 12 s 2, 1987 c 505 s 29, & 1981 c 295 s 4;

(6) RCW 43.21F.055 and 1981 c 295 s 5;

(7) RCW 43.21F.060 and 1981 c 295 s 6 & 1975-'76 2nd ex.s. c 108 s 6;

(8) RCW 43.21F.065 and 1987 c 330 s 502 & 1981 c 295 s 8; and

(9) RCW 43.21F.090 and 1994 c 207 s 5.

PART I

TRANSFERS TO DEPARTMENT OF COMMUNITY, TRADE, AND

ECONOMIC DEVELOPMENT FOR USE BY PRIVATE NONPROFIT CORPORATION

NEW SECTION. Sec. 101. A new section is added to chapter 43.330 RCW to read as follows:

(1) All powers, duties, and functions of the state energy office relating to the following functions are transferred to the department of community, trade, and economic development:

(a) Providing support for increasing cost-effective energy conservation, including assisting in the removal of impediments to timely implementation;

(b) Providing support for the development of cost-effective energy resources including assisting in the removal of impediments to timely construction;

(c) Establishing and maintaining a central repository in the state for collection of existing data on energy resources, including:

(i) Supply, demand, costs, use technology, projections, and forecasts;

(ii) Comparative costs of alternative energy sources, uses, and applications;

(iii) Inventory data on energy research projects in the state conducted in the public and private sectors, and the results thereof;

(d) Encouraging energy conservation and elimination of wasteful and uneconomic use of energy and materials.

(2) The department may cooperate with other agencies, organizations, and businesses within and without the state of Washington to establish a private nonprofit corporation for purposes of providing the services performed by the department under subsection (1) of this section.

(3) The department may cease providing the services it performs under subsection (1) of this section before June 30, 1996, if a successor organization agrees to assume full responsibility for providing services that are equivalent to the services performed by the department under subsection (1) of this section.

(4) For purposes of this section, "department" means the department of community, trade, and economic development.

(5) For purposes of this section, "successor organization" means a private, nonprofit corporation created specifically to assume responsibility for providing the services assigned to the department under this section. Any such private, nonprofit corporation shall qualify as a tax-exempt, nonprofit corporation under section 501(c) of the federal internal revenue code. If no such corporation exists, that is capable, in the department's opinion, of adequately assuming the department's operations under subsection (1) of this section, then another governmental entity may be the successor organization.

NEW SECTION. Sec. 102. A new section is added to chapter 43.330 RCW to read as follows:

To accomplish the establishment of a successor organization, the department may take all necessary and proper steps, including:

(1) Transfer any equipment, software, data base, other assets, or contracts for services to the successor organization under appropriate terms and conditions, including reasonable compensation deemed appropriate by the department. However, the department shall retain the right to repossess any such property transferred for a period of up to five years, in the event that the successor organization becomes bankrupt, insolvent, or is otherwise unable to provide services that are satisfactory to a majority of users. In the event that the department exercises its right to repossess under this section, any such property returned to the department shall become the property of the state of Washington and shall be administered by the department;

(2) Unless otherwise provided by agreement, assign any duties and responsibilities to the successor organization that are related to the department's responsibilities under subsection (1) of this section and not otherwise assigned by statute;

(3) Provide for personnel services by department employees, or other necessary support services to the successor organization under contract for up to a two-year period after the effective date of a contract between a successor organization and the department for delivery of services. The successor organization shall provide full reimbursement for all costs of services contracted for under this provision; and

(4) Designate one or more persons to serve in the capacity of a member of the board of directors of a successor organization. The state shall not be liable for either the actions of the director in that capacity, nor for the actions of the successor organization.

NEW SECTION. Sec. 103. At the time certain department of community, trade, and economic development services are transferred to the successor corporation pursuant to section 101 of this act:

(1) Any supplies, equipment, or other property, whether tangible or intangible, not transferred to the successor organization shall remain the property of the state of Washington and shall be administered by the department;

(2) Any contracts or other obligations of the department not transferred to the successor organization shall be the obligation of the department.

Sec. 104. RCW 43.140.040 and 1981 c 158 s 4 are each amended to read as follows:

Distribution of funds from the geothermal account of the general fund shall be subject to the following limitations:

(1) Thirty percent to the department of natural resources for geothermal exploration and assessment;

(2) Thirty percent to the ((~~Washington state energy office or its statutory successor~~)) department of community, trade, and economic development for the purpose of encouraging the development of geothermal energy; and

(3) Forty percent to the county of origin for mitigating impacts caused by geothermal energy exploration, assessment, and development.

Sec. 105. RCW 43.140.050 and 1981 c 158 s 5 are each amended to read as follows:

The state treasurer shall be responsible for distribution of funds to the county of origin. Each county's share of rentals and royalties from a lease including lands in more than one county shall be computed on the basis of the ratio that the acreage within each county has to the total acreage in the lease. The ((~~Washington state energy office or its statutory successor~~)) department of community, trade, and economic development shall obtain the necessary information to make the distribution of funds on such a basis.

PART II

TRANSFERS TO DEPARTMENT OF GENERAL ADMINISTRATION

NEW SECTION. Sec. 201. A new section is added to chapter 43.19 RCW to read as follows:

(1) All powers, duties, and functions of the state energy office pertaining to advising public agencies on energy use in public buildings to reduce energy use and costs are transferred to the department of general administration. All references to the director or the state energy office in the Revised Code of Washington shall be construed to mean the director or the department of general administration when referring to the functions transferred in this section.

(2)(a) All reports, documents, surveys, books, records, files, papers, or written material in the possession of the state energy office pertaining to the powers, functions, and duties transferred shall be delivered to the custody of the department of general administration. All cabinets, furniture, office equipment, motor vehicles, and other tangible property employed by the state energy office in carrying out the powers, functions, and duties transferred shall be made available to the department of general administration. All funds, credits, or other assets held in connection with the powers, functions, and duties transferred shall be assigned to the department of general administration.

(b) Any appropriations made to the state energy office for carrying out the powers, functions, and duties transferred shall, on the effective date of this section, be transferred and credited to the department of general administration.

(c) Whenever any question arises as to the transfer of any personnel, funds, books, documents, records, papers, files, equipment, or other tangible property used or held in the exercise of the powers and the performance of the duties and functions transferred, the director of financial management shall make a determination as to the proper allocation and certify the same to the state agencies concerned.

(3) All employees of the state energy office engaged in performing the powers, functions, and duties transferred are transferred to the jurisdiction of the department of general administration. All employees classified under chapter 41.06 RCW, the state civil service law, are assigned to the department of general administration to perform their usual duties upon the same terms as formerly, without any loss of rights, subject to any action that may be appropriate thereafter in accordance with the laws and rules governing state civil service.

(4) All rules and all pending business before the state energy office pertaining to the powers, functions, and duties transferred shall be continued and acted upon by the department of general administration. All existing contracts and obligations shall remain in full force and shall be performed by the department of general administration.

(5) The transfer of the powers, duties, functions, and personnel of the state energy office shall not affect the validity of any act performed before the effective date of this section.

(6) If apportionments of budgeted funds are required because of the transfers directed by this section, the director of financial management shall certify the apportionments to the agencies affected, the state auditor, and the state treasurer. Each of these shall make the appropriate transfer and adjustments in funds and appropriation accounts and equipment records in accordance with the certification.

(7) Nothing contained in this section may be construed to alter any existing collective bargaining unit or the provisions of any existing collective bargaining agreement until the agreement has expired or until the bargaining unit has been modified by action of the personnel board as provided by law.

Sec. 202. RCW 39.35.030 and 1994 c 242 s 1 are each amended to read as follows:

For the purposes of this chapter the following words and phrases shall have the following meanings unless the context clearly requires otherwise:

(1) "Public agency" means every state office, officer, board, commission, committee, bureau, department, and all political subdivisions of the state.

(2) ((~~"Office" means the Washington state energy office.~~)) "Department" means the state department of general administration.

(3) "Major facility" means any publicly owned or leased building having twenty-five thousand square feet or more of usable floor space.

(4) "Initial cost" means the moneys required for the capital construction or renovation of a major facility.

(5) "Renovation" means additions, alterations, or repairs within any twelve-month period which exceed fifty percent of the value of a major facility and which will affect any energy system.

(6) "Economic life" means the projected or anticipated useful life of a major facility as expressed by a term of years.

(7) "Life-cycle cost" means the initial cost and cost of operation of a major facility over its economic life. This shall be calculated as the initial cost plus the operation, maintenance, and energy costs over its economic life, reflecting anticipated increases in these costs discounted to present value at the current rate for borrowing public funds, as determined by the office of financial management. The energy cost projections used shall be those provided by the ((~~state energy office~~)) department. The ((~~office~~)) department shall update these projections at least every two years.

(8) "Life-cycle cost analysis" includes, but is not limited to, the following elements:

(a) The coordination and positioning of a major facility on its physical site;

(b) The amount and type of fenestration employed in a major facility;

(d) The variable occupancy and operating conditions of a major facility; and

(e) An energy-consumption analysis of a major facility.

(9) "Energy systems" means all utilities, including, but not limited to, heating, air-conditioning, ventilating, lighting, and the supplying of domestic hot water.

(10) "Energy-consumption analysis" means the evaluation of all energy systems and components by demand and type of energy including the internal energy load imposed on a major facility by its occupants, equipment, and components, and the external energy load imposed on a major facility by the climatic conditions of its location. An energy-consumption analysis of the operation of energy systems of a major facility shall include, but not be limited to, the following elements:

(a) The comparison of three or more system alternatives, at least one of which shall include renewable energy systems;

(b) The simulation of each system over the entire range of operation of such facility for a year's operating period; and

(c) The evaluation of the energy consumption of component equipment in each system considering the operation of such components at other than full or rated outputs.

The energy-consumption analysis shall be prepared by a professional engineer or licensed architect who may use computers or such other methods as are capable of producing predictable results.

(11) "Renewable energy systems" means methods of facility design and construction and types of equipment for the utilization of renewable energy sources including, but not limited to, active or passive solar space heating or cooling, domestic solar water heating, windmills, waste heat, biomass and/or refuse-derived fuels, photovoltaic devices, and geothermal energy.

(12) (("Cogeneration" means the sequential generation of two or more forms of energy from a common fuel or energy source. Where these forms are electricity and thermal energy, then the operating and efficiency standards established by 18 C.F.R. Sec. 292.205 and the definitions established by 18 C.F.R. 292.202 (c) through (m) as of July 28, 1991, shall apply.

~~(13)~~)) "Selected buildings" means educational, office, residential care, and correctional facilities that are designed to comply with the design standards analyzed and recommended by the ((~~office~~)) department.

((~~(14)~~)) (13) "Design standards" means the heating, air-conditioning, ventilating, and renewable resource systems identified, analyzed, and recommended by the ((~~office~~)) department as providing an efficient energy system or systems based on the economic life of the selected buildings.

Sec. 203. RCW 39.35.050 and 1994 c 242 s 3 are each amended to read as follows:

The ((~~office~~)) department, in consultation with affected public agencies, shall develop and issue guidelines for administering this chapter. The purpose of the guidelines is to define a procedure and method for performance of life-cycle cost analysis to promote the selection of low-life-cycle cost alternatives. At a minimum, the guidelines must contain provisions that:

(1) Address energy considerations during the planning phase of the project;

(2) Identify energy components and system alternatives including renewable energy systems ((~~and cogeneration applications~~)) prior to commencing the energy consumption analysis;

(3) Identify simplified methods to assure the lowest life-cycle cost alternatives for selected buildings with between twenty-five thousand and one hundred thousand square feet of usable floor area;

(4) Establish times during the design process for preparation, review, and approval or disapproval of the life-cycle cost analysis;

(5) Specify the assumptions to be used for escalation and inflation rates, equipment service lives, economic building lives, and maintenance costs;

(6) Determine life-cycle cost analysis format and submittal requirements to meet the provisions of chapter 201, Laws of 1991;

(7) Provide for review and approval of life-cycle cost analysis.

Sec. 204. RCW 39.35.060 and 1991 c 201 s 16 are each amended to read as follows:

The ((~~energy office~~)) department may impose fees upon affected public agencies for the review of life-cycle cost analyses. The fees shall be deposited in the energy efficiency services account established in RCW 39.35C.110. The purpose of the fees is to recover the costs by the ((~~office~~)) department for review of the analyses. The ((~~office~~)) department shall set fees at a level necessary to recover all of its costs related to increasing the energy efficiency of state-supported new construction. The fees shall not exceed one-tenth of one percent of the total cost of any project or exceed two thousand dollars for any project unless mutually agreed to. The ((~~office~~)) department shall provide detailed calculation ensuring that the energy savings resulting from its review of life-cycle cost analysis justify the costs of performing that review.

Sec. 205. RCW 39.35C.010 and 1991 c 201 s 2 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) (("Cogeneration" means the sequential generation of two or more forms of energy from a common fuel or energy source. If these forms are electricity and thermal energy, then the operating and efficiency standards established by 18 C.F.R. Sec. 292.205 and the definitions established by 18 C.F.R. Sec. 292.202 (c) through (m) apply.

~~(2)~~)) "Conservation" means reduced energy consumption or energy cost, or increased efficiency in the use of energy, and activities, measures, or equipment designed to achieve such results, but does not include thermal or electric energy production from cogeneration.

((~~(3)~~)) (2) "Cost-effective" means that the present value to a state agency or school district of the energy reasonably expected to be saved or produced by a facility, activity, measure, or piece of equipment over its useful life, including any compensation received from a utility or the Bonneville power administration, is greater than the net present value of the costs of implementing, maintaining, and operating such facility, activity, measure, or piece of equipment over its useful life, when discounted at the cost of public borrowing.

((~~(4)~~)) (3) "Energy" means ((~~energy as defined in RCW 43.21F.025(1)~~)) petroleum or other liquid fuels; natural or synthetic fuel gas; solid carbonaceous fuels; fissionable nuclear material; electricity; solar radiation; geothermal resources; hydropower; organic waste products; wind; tidal activity; any other substance or process used to produce heat, light, or motion; or the savings from nongeneration technologies, including conservation or improved efficiency in the usage of any of the sources described in this subsection.

((~~(5)~~)) (4) "Energy efficiency project" means a conservation or cogeneration project.

((~~(6)~~)) (5) "Energy efficiency services" means assistance furnished by the ((~~energy office~~)) department to state agencies and school districts in identifying, evaluating, and implementing energy efficiency projects.

((~~(7) "Energy office" means the Washington state energy office.~~

~~(8)~~)) (6) "Department" means the state department of general administration.

(7) "Performance-based contracting" means contracts for which payment is conditional on achieving contractually specified energy savings.

((~~(9)~~)) (8) "Public facility" means a building or structure, or a group of buildings or structures at a single site, owned by a state agency or school district.

((~~(10)~~)) (9) "State agency" means every state office or department, whether elective or appointive, state institutions of higher education, and all boards, commissions, or divisions of state government, however designated.

((~~(11)~~)) (10) "State facility" means a building or structure, or a group of buildings or structures at a single site, owned by a state agency.

((~~(12)~~)) (11) "Utility" means privately or publicly owned electric and gas utilities, electric cooperatives and mutuals, whether located within or without Washington state.

((~~(13)~~)) (12) "Local utility" means the utility or utilities in whose service territory a public facility is located.

Sec. 206. RCW 39.35C.020 and 1991 c 201 s 3 are each amended to read as follows:

(1) Each state agency and school district shall implement cost-effective conservation improvements and maintain efficient operation of its facilities in order to minimize energy consumption and related environmental impacts and reduce operating costs.

(2) The ((~~energy office~~)) department shall assist state agencies and school districts in identifying, evaluating, and implementing cost-effective conservation projects at their facilities. The assistance shall include the following:

(a) Notifying state agencies and school districts of their responsibilities under this chapter;

(b) Apprising state agencies and school districts of opportunities to develop and finance such projects;

(d) Reviewing verification procedures for energy savings; and

(e) Assisting in the structuring and arranging of financing for cost-effective conservation projects.

(3) Conservation projects implemented under this chapter shall have appropriate levels of monitoring to verify the performance and measure the energy savings over the life of the project. The ((~~energy office~~)) department shall solicit involvement in program planning and implementation from utilities and other energy conservation suppliers, especially those that have demonstrated experience in performance-based energy programs.

(4) The ((~~energy office~~)) department shall comply with the requirements of chapter 39.80 RCW when contracting for architectural or engineering services.

(5) The ((~~energy office~~)) department shall recover any costs and expenses it incurs in providing assistance pursuant to this section, including reimbursement from third parties participating in conservation projects. The ((~~energy office~~)) department shall enter into a written agreement with the state agency or school district for the recovery of costs.

Sec. 207. RCW 39.35C.030 and 1991 c 201 s 4 are each amended to read as follows:

(1) The ((~~energy office~~)) department shall consult with the local utilities to develop priorities for energy conservation projects pursuant to this chapter, cooperate where possible with existing utility programs, and consult with the local utilities prior to implementing projects in their service territory.

(2) A local utility shall be offered the initial opportunity to participate in the development of conservation projects in the following manner:

(a) Before initiating projects in a local utility service territory, the ((~~energy office~~)) department shall notify the local utility in writing, on an annual basis, of public facilities in the local utility's service territory at which the ((~~energy office~~)) department anticipates cost-effective conservation projects will be developed.

(b) Within sixty days of receipt of this notification, the local utility may express interest in these projects by submitting to the ((~~energy office~~)) department a written description of the role the local utility is willing to perform in developing and acquiring the conservation at these facilities. This role may include any local utility conservation programs which would be available to the public facility, any competitive bidding or solicitation process which the local utility will be undertaking in accordance with the rules of the utilities and transportation commission or the public utility district, municipal utility, cooperative, or mutual governing body for which the public facility would be eligible, or any other role the local utility may be willing to perform.

(c) Upon receipt of the written description from the local utility, the ((~~energy office~~)) department shall, through discussions with the local utility, and with involvement from state agencies and school districts responsible for the public facilities, develop a plan for coordinated delivery of conservation services and financing or make a determination of whether to participate in the local utility's competitive bidding or solicitation process. The plan shall identify the local utility in roles that the local utility is willing to perform and that are consistent with the provisions of RCW 39.35C.040(2) (d) and (e).

Sec. 208. RCW 39.35C.040 and 1991 c 201 s 5 are each amended to read as follows:

(1) It is the intent of this chapter that the state, state agencies, and school districts are compensated fairly for the energy savings provided to utilities and be allowed to participate on an equal basis in any utility conservation program, bidding, or solicitation process. State agencies and school districts shall not receive preferential treatment. For the purposes of this section, any type of compensation from a utility or the Bonneville power administration intended to achieve reductions or efficiencies in energy use which are cost-effective to the utility or the Bonneville power administration shall be regarded as a sale of energy savings. Such compensation may include credits to the energy bill, low or no interest loans, rebates, or payment per unit of energy saved. The ((~~energy office~~)) department shall, in coordination with utilities, the Bonneville power administration, state agencies, and school districts, facilitate the sale of energy savings at public facilities including participation in any competitive bidding or solicitation which has been agreed to by the state agency or school district. Energy savings may only be sold to local utilities or, under conditions specified in this section, to the Bonneville power administration. The ((~~energy office~~)) department shall not attempt to sell energy savings occurring in one utility service territory to a different utility. Nothing in this chapter mandates that utilities purchase the energy savings.

(2) To ensure an equitable allocation of benefits to the state, state agencies, and school districts, the following conditions shall apply to transactions between utilities or the Bonneville power administration and state agencies or school districts for sales of energy savings:

(a) A transaction shall be approved by both the ((~~energy office~~)) department and the state agency or school district.

(b) The ((~~energy office~~)) department and the state agency or school district shall work together throughout the planning and negotiation process for such transactions unless the ((~~energy office~~)) department determines that its participation will not further the purposes of this section.

(c) Before making a decision under (d) of this subsection, the ((~~energy office~~)) department shall review the proposed transaction for its technical and economic feasibility, the adequacy and reasonableness of procedures proposed for verification of project or program performance, the degree of certainty of benefits to the state, state agency, or school district, the degree of risk assumed by the state or school district, the benefits offered to the state, state agency, or school district and such other factors as the ((~~energy office~~)) department determines to be prudent.

(d) The ((~~energy office~~)) department shall approve a transaction unless it finds, pursuant to the review in (c) of this subsection, that the transaction would not result in an equitable allocation of costs and benefits to the state, state agency, or school district, in which case the transaction shall be disapproved.

(e) In addition to the requirements of (c) and (d) of this subsection, in areas in which the Bonneville power administration has a program for the purchase of energy savings at public facilities, the ((~~energy office~~)) department shall approve the transaction unless the local utility cannot offer a benefit substantially equivalent to that offered by the Bonneville power administration, in which case the transaction shall be disapproved. In determining whether the local utility can offer a substantially equivalent benefit, the ((~~energy office~~)) department shall consider the net present value of the payment for energy savings; any goods, services, or financial assistance provided by the local utility; and any risks borne by the local utility. Any direct negative financial impact on a nongrowing, local utility shall be considered.

(3) Any party to a potential transaction may, within thirty days of any decision to disapprove a transaction made pursuant to subsection (2) (c), (d), or (e) of this section, request an independent reviewer who is mutually agreeable to all parties to the transaction to review the decision. The parties shall within thirty days of selection submit to the independent reviewer documentation supporting their positions. The independent reviewer shall render advice regarding the validity of the disapproval within an additional thirty days.

Sec. 209. RCW 39.35C.050 and 1991 c 201 s 6 are each amended to read as follows:

In addition to any other authorities conferred by law:

(1) The ((~~energy office~~)) department, with the consent of the state agency or school district responsible for a facility, a state or regional university acting independently, and any other state agency acting through the department ((~~of general administration~~)) or as otherwise authorized by law, may:

(a) Develop and finance conservation at public facilities in accordance with express provisions of this chapter;

(b) Contract for energy services, including performance-based contracts; and

(c) Contract to sell energy savings from a conservation project at public facilities to local utilities or the Bonneville power administration.

(2) A state or regional university acting independently, and any other state agency acting through the department ((~~of general administration~~)) or as otherwise authorized by law, may undertake procurements for third-party development of conservation at its facilities.

(3) A school district may:

(a) Develop and finance conservation at school district facilities;

(b) Contract for energy services, including performance-based contracts at school district facilities; and

(c) Contract to sell energy savings from energy conservation projects at school district facilities to local utilities or the Bonneville power administration directly or to local utilities or the Bonneville power administration through third parties.

(4) In exercising the authority granted by subsections (1), (2), and (3) of this section, a school district or state agency must comply with the provisions of RCW 39.35C.040.

Sec. 210. RCW 39.35C.060 and 1991 c 201 s 7 are each amended to read as follows:

(1) The ((~~energy office~~)) department, in accordance with RCW 43.21F.060(2) may use appropriated moneys to make loans to school districts to provide all or part of the financing for conservation projects. The ((~~energy office~~)) department shall determine the eligibility of such projects for conservation loans and the terms of such loans. If loans are from moneys appropriated from bond proceeds, the repayments of the loans shall be sufficient to pay, when due, the principal and interest on the bonds and shall be paid to the energy efficiency construction account established in RCW 39.35C.100. To the extent that a school district applies the proceeds of such loans to a modernization or new construction project, such proceeds shall be considered a portion of the school district's share of the costs of such project.

(2) State agencies may use financing contracts under chapter 39.94 RCW to provide all or part of the funding for conservation projects. The ((~~energy office~~)) department shall determine the eligibility of such projects for financing contracts. The repayments of the financing contracts shall be sufficient to pay, when due, the principal and interest on the contracts.

Sec. 211. RCW 39.35C.090 and 1991 c 201 s 10 are each amended to read as follows:

In addition to any other authorities conferred by law:

(1) The ((~~energy office~~)) department, with the consent of the state agency responsible for a facility, a state or regional university acting independently, and any other state agency acting through the department ((~~of general administration~~)) or as otherwise authorized by law, may:

(a) Contract to sell electric energy generated at state facilities to a utility; and

(b) Contract to sell thermal energy produced at state facilities to a utility.

(2) A state or regional university acting independently, and any other state agency acting through the department ((~~of general administration~~)) or as otherwise authorized by law, may:

(a) Acquire, install, permit, construct, own, operate, and maintain cogeneration and facility heating and cooling measures or equipment, or both, at its facilities;

(b) Lease state property for the installation and operation of cogeneration and facility heating and cooling equipment at its facilities;

(d) Contract to purchase or otherwise acquire fuel or other energy sources needed to operate cogeneration plants at its facilities; and

(e) Undertake procurements for third-party development of cogeneration projects at its facilities, with successful bidders to be selected based on the responsible bid, including nonprice elements listed in RCW 43.19.1911, that offers the greatest net achievable benefits to the state and its agencies.

(3) After July 28, 1991, a state agency shall consult with the ((~~energy office~~)) department prior to exercising any authority granted by this section.

(4) In exercising the authority granted by subsections (1) and (2) of this section, a state agency must comply with the provisions of RCW 39.35C.080.

Sec. 212. RCW 39.35C.100 and 1991 c 201 s 11 are each amended to read as follows:

(1) The energy efficiency construction account is hereby created in the state treasury. Moneys in the account may be spent only after appropriation and only for the following purposes:

(a) Construction of energy efficiency projects, including project evaluation and verification of benefits, project design, project development, project construction, and project administration.

(b) Payment of principal and interest and other costs required under bond covenant on bonds issued for the purpose of (a) of this subsection.

(2) Sources for this account may include:

(a) General obligation and revenue bond proceeds appropriated by the legislature;

(b) Loan repayments under RCW 39.35C.060 sufficient to pay principal and interest obligations; and

(3) The ((~~energy office~~)) department shall establish criteria for approving energy efficiency projects to be financed from moneys disbursed from this account. The criteria shall include cost‑effectiveness, reliability of energy systems, and environmental costs or benefits. The ((~~energy office~~)) department shall ensure that the criteria are applied with professional standards for engineering and review.

Sec. 213. RCW 39.35C.110 and 1991 c 201 s 12 are each amended to read as follows:

(1) The energy efficiency services account is created in the state treasury. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only (a) for the ((~~energy office~~)) department to provide energy efficiency services to state agencies and school districts including review of life-cycle cost analyses and (b) for transfer by the legislature to the state general fund.

(2) All receipts from the following sources shall be deposited into the account:

(a) Project fees charged under this section and RCW 39.35C.020, 39.35C.070, and 39.35.060;

(b) After payment of any principal and interest obligations, moneys from repayments of loans under RCW 39.35C.060;

(c) Revenue from sales of energy generated or saved at public facilities under this chapter, except those retained by state agencies and school districts under RCW 39.35C.120; and

(d) Payments by utilities and federal power marketing agencies under this chapter, except those retained by state agencies and school districts under RCW 39.35C.120.

(3) The ((~~energy office~~)) department may accept moneys and make deposits to the account from federal, state, or local government agencies.

(4) Within one hundred eighty days after July 28, 1991, the ((~~energy office~~)) department shall adopt rules establishing criteria and procedures for setting a fee schedule, establishing working capital requirements, and receiving deposits for this account.

Sec. 214. RCW 39.35C.120 and 1991 c 201 s 13 are each amended to read as follows:

(1) Potential benefits from energy efficiency projects at public facilities include savings in the form of reduced energy costs; revenues from lease payments, sales of energy or energy savings, or other sources; avoided capital costs; site enhancements; and additional operating and maintenance resources.

(2) To encourage these projects at state facilities, and notwithstanding any other provision of law, the following benefits from energy efficiency projects completed after July 28, 1991, shall be apportioned as specified:

(a) As to conservation, state agencies may retain all net savings in the form of reduced energy costs, and one-half of all net revenues from any transaction with a utility, the Bonneville power administration, or other entity. The net savings shall be retained by the local administrative body responsible for the public facility; and

(b) ((As to cogeneration projects, state agencies may retain one-half of all net savings in the form of reduced energy costs and twenty percent of all net revenues generated by the project from any source except that state institutions of higher education may retain one-half of all net revenues generated by the project; and

~~(c)~~)) The remaining net revenues from conservation projects((~~, and remaining net savings and revenues from cogeneration projects,~~)) shall be remitted to the state for the disposition and uses specified in subsection (4) of this section.

(3) Each state agency's share of net savings from ((~~cogeneration~~)) projects and of all net revenues shall be credited to a special local account created under RCW 28A.300.210, the use of which shall be limited, in priority order, to ongoing operation, maintenance, and improvements of energy systems and energy efficiency measures, to other ongoing and deferred maintenance, and to other infrastructure improvements at the facility that was the site of the energy efficiency project.

(4) The state's share of net savings from ((~~cogeneration~~)) projects and of all net revenues, and any portion of the state agency's share which exceeds its needs for the purposes specified in subsection (3) of this section, shall be deposited in the energy efficiency services account established by RCW 39.35C.110.

(5) The use by state agencies of net savings and net revenues from energy efficiency projects shall be in addition to, and shall not supplant or replace, funding from traditional sources for their normal operations and maintenance or capital budgets. It is the intent of this subsection to ensure that such institutions receive the full benefit intended by this section, and that such effect will not be diminished by budget adjustments inconsistent with this intent.

(6) Energy efficiency projects in school districts, funded in whole or in part with state assistance provided under chapter 28A.525 RCW, or with the financing mechanisms authorized by this chapter, shall be subject to the provisions of this section governing the apportionment and use of savings and revenues from energy efficiency projects.

(7) For purposes of this section, "net" savings and revenues shall mean savings and revenues remaining after payment of project capital costs, including debt service, and other payments and reserves as required by a bond resolution or loan agreement under this chapter, and payment of project operating and maintenance expenses. The ((~~energy office~~)) department shall develop guidelines and procedures for determining net savings and net revenues for energy efficiency projects at public facilities by April 1, 1992.

(8) The ((~~energy office~~)) department shall report annually until the year 2006 to the director of the office of financial management and the chairs of the senate ways and means committee and the appropriate house of representatives fiscal committees a full and complete financial accounting for energy efficiency projects undertaken pursuant to chapter 201, Laws of 1991, including but not limited to a description of the project, its location and sponsoring agency or school district, date of completion or, if not completed, status of construction, the amount of investment in and expenditures on the project, the amount of revenues received from the project and estimated savings, if any, during the past year, estimated revenues, expenditures, and investments for the ensuing five years, the useful life originally estimated for the project, and the useful life of the project estimated to remain as of the date of the report, and the amount of savings and revenues from energy conservation and cogeneration retained by individual state agencies.

Sec. 215. RCW 39.35C.130 and 1991 c 201 s 17 are each amended to read as follows:

The ((~~energy office~~)) department may adopt rules to implement RCW 39.35C.020 through 39.35C.040, 39.35C.070, 39.35C.080, 39.35C.120, and 39.35.050.

Sec. 216. RCW 43.41.175 and 1986 c 325 s 4 are each amended to read as follows:

The ((~~state energy office~~)) department of general administration shall provide the office of financial management with energy consumption data necessary to implement RCW 43.41.170. Facilities or the agencies responsible for them shall report accurate monthly energy consumption and cost figures for all fuels to the ((~~state energy office~~)) department of general administration quarterly, including any changes in total space served or facility operations.

Sec. 217. RCW 43.99I.050 and 1991 sp.s. c 31 s 5 are each amended to read as follows:

In addition to any other charges authorized by law and to assist in the reimbursement of principal and interest payments on bonds issued for the purposes of RCW 43.99I.020 (3) and (4), the director of the ((~~energy office~~)) department of general administration shall cause to be accumulated in the energy efficiency construction account, from project revenues, loan repayments, and other moneys legally available for such purposes, amounts adequate to make payments of principal of and interest coming due on general obligation bonds issued for the purposes of RCW 43.99I.020 (3) and (4). As needed during each fiscal year, the director shall cause amounts so accumulated to be deposited into the general fund of the state treasury. If the director is unable to accumulate and transfer the full amount necessary for such payments of principal of and interest coming due on the bonds, any shortfall shall be credited to an account receivable from the ((~~energy office~~)) department of general administration to the state treasury.

PART III

TRANSFERS TO THE DEPARTMENT OF TRANSPORTATION

NEW SECTION. Sec. 301. A new section is added to chapter 47.01 RCW to read as follows:

(1) All powers, duties, and functions of the state energy office pertaining to programs providing technical assistance for energy efficient transportation are transferred to the department of transportation. All references to the director or the state energy office in the Revised Code of Washington shall be construed to mean the secretary or the department of transportation when referring to the functions transferred in this section.

(2)(a) All reports, documents, surveys, books, records, files, papers, or written material in the possession of the state energy office pertaining to the powers, functions, and duties transferred shall be delivered to the custody of the department of transportation. All cabinets, furniture, office equipment, motor vehicles, and other tangible property employed by the state energy office in carrying out the powers, functions, and duties transferred shall be made available to the department of transportation. All funds, credits, or other assets held in connection with the powers, functions, and duties transferred shall be assigned to the department of transportation.

(3) All employees of the state energy office engaged in performing the powers, functions, and duties transferred are transferred to the jurisdiction of the department of transportation. All employees classified under chapter 41.06 RCW, the state civil service law, are assigned to the department of transportation to perform their usual duties upon the same terms as formerly, without any loss of rights, subject to any action that may be appropriate thereafter in accordance with the laws and rules governing state civil service.

(4) All rules and all pending business before the state energy office pertaining to the powers, functions, and duties transferred shall be continued and acted upon by the department of transportation. All existing contracts and obligations shall remain in full force and shall be performed by the department of transportation.

(5) The transfer of the powers, duties, functions, and personnel of the state energy office shall not affect the validity of any act performed before the effective date of this section.

Sec. 302. RCW 70.94.544 and 1991 c 202 s 17 are each amended to read as follows:

A portion of the funds made available for the purposes of this chapter shall be used to ((fund the commute trip reduction task force in carrying out the responsibilities of RCW 70.94.541, and the interagency technical assistance team, including the activities authorized under RCW 70.94.541(2), and to)) assist counties, cities, and towns implementing commute trip reduction plans. Funds shall be provided to the counties in proportion to the number of major employers and major worksites in each county. The counties shall provide funds to cities and towns within the county which are implementing commute trip reduction plans in proportion to the number of major employers and major worksites within the city or town.

Sec. 303. RCW 70.94.960 and 1991 c 199 s 218 are each amended to read as follows:

The department may disburse matching grants from funds provided by the legislature from the air pollution control account, created in RCW 70.94.015, to units of local government to partially offset the additional cost of purchasing "clean fuel" and/or operating "clean-fuel vehicles" provided that such vehicles are used for public transit. Publicly owned school buses are considered public transit for the purposes of this section. The department may also disburse grants to vocational-technical institutes for the purpose of establishing programs to certify clean-fuel vehicle mechanics. The department may also distribute grants to the ((~~state energy office~~)) department of transportation for the purpose of furthering the establishment of clean fuel refueling infrastructure.

Sec. 304. RCW 70.120.210 and 1991 c 199 s 212 are each amended to read as follows:

By July 1, 1992, the department shall develop, in cooperation with the departments of general administration and transportation, ((~~and the state energy office,~~)) aggressive clean-fuel performance and clean-fuel vehicle emissions specifications including clean-fuel vehicle conversion equipment. To the extent possible, such specifications shall be equivalent for all fuel types. In developing such specifications the department shall consider the requirements of the clean air act and the findings of the environmental protection agency, other states, the American petroleum institute, the gas research institute, and the motor vehicles manufacturers association.

Sec. 305. RCW 70.120.220 and 1991 c 199 s 215 are each amended to read as follows:

The department, in cooperation with the departments of general administration and transportation((,)) and the utilities and transportation commission((~~, and the state energy office,~~)) shall biennially prepare a report to the legislature starting July 1, 1992, on:

(1) Progress of clean fuel and clean-fuel vehicle programs in reducing automotive emissions;

(2) Recommendations for enhancing clean-fuel distribution systems;

(3) Efforts of the state, units of local government, and the private sector to evaluate and utilize "clean fuel" or "clean-fuel vehicles"; and

(4) Recommendations for changes in the existing program to make it more effective and, if warranted, for expansion of the program.

NEW SECTION. Sec. 306. The following acts or parts of acts are each repealed:

(1) RCW 70.94.537 and 1991 c 202 s 15; and

(2) RCW 70.94.541 and 1991 c 202 s 16.

PART IV

TRANSFERS TO THE MILITARY DEPARTMENT

NEW SECTION. Sec. 401. A new section is added to chapter 38.52 RCW to read as follows:

(1) All powers, duties, and functions of the state energy office pertaining to state coordination and regulation of energy emergencies are transferred to the military department. All references to the director or the state energy office in the Revised Code of Washington shall be construed to mean the adjutant general or the military department when referring to the functions transferred in this section.

(2)(a) All reports, documents, surveys, books, records, files, papers, or written material in the possession of the state energy office pertaining to the powers, functions, and duties transferred shall be delivered to the custody of the military department. All cabinets, furniture, office equipment, motor vehicles, and other tangible property employed by the state energy office in carrying out the powers, functions, and duties transferred shall be made available to the military department. All funds, credits, or other assets held in connection with the powers, functions, and duties transferred shall be assigned to the military department.

(3) All employees of the state energy office engaged in performing the powers, functions, and duties transferred are transferred to the jurisdiction of the military department. All employees classified under chapter 41.06 RCW, the state civil service law, are assigned to the military department to perform their usual duties upon the same terms as formerly, without any loss of rights, subject to any action that may be appropriate thereafter in accordance with the laws and rules governing state civil service.

(4) All rules and all pending business before the state energy office pertaining to the powers, functions, and duties transferred shall be continued and acted upon by the military department. All existing contracts and obligations shall remain in full force and shall be performed by the military department.

(5) The transfer of the powers, duties, functions, and personnel of the state energy office shall not affect the validity of any act performed before the effective date of this section.

PART V

TECHNICAL CORRECTIONS

Sec. 501. RCW 19.27.190 and 1990 c 2 s 7 are each amended to read as follows:

(1)(a) Not later than January 1, 1991, the state building code council((~~, in consultation with the state energy office,~~)) shall establish interim requirements for the maintenance of indoor air quality in newly constructed residential buildings. In establishing the interim requirements, the council shall take into consideration differences in heating fuels and heating system types. These requirements shall be in effect July 1, 1991, through June 30, 1993.

(b) The interim requirements for new electrically space heated residential buildings shall include ventilation standards which provide for mechanical ventilation in areas of the residence where water vapor or cooking odors are produced. The ventilation shall be exhausted to the outside of the structure. The ventilation standards shall further provide for the capacity to supply outside air to each bedroom and the main living area through dedicated supply air inlet locations in walls, or in an equivalent manner. At least one exhaust fan in the home shall be controlled by a dehumidistat or clock timer to ensure that sufficient whole house ventilation is regularly provided as needed.

(c)(i) For new single family residences with electric space heating systems, zero lot line homes, each unit in a duplex, and each attached housing unit in a planned unit development, the ventilation standards shall include fifty cubic feet per minute of effective installed ventilation capacity in each bathroom and one hundred cubic feet per minute of effective installed ventilation capacity in each kitchen.

(ii) For other new residential units with electric space heating systems the ventilation standards may be satisfied by the installation of two exhaust fans with a combined effective installed ventilation capacity of two hundred cubic feet per minute.

(iii) Effective installed ventilation capacity means the capability to deliver the specified ventilation rates for the actual design of the ventilation system. Natural ventilation and infiltration shall not be considered acceptable substitutes for mechanical ventilation.

(d) For new residential buildings that are space heated with other than electric space heating systems, the interim standards shall be designed to result in indoor air quality equivalent to that achieved with the interim ventilation standards for electric space heated homes.

(e) The interim requirements for all newly constructed residential buildings shall include standards for indoor air quality pollutant source control, including the following requirements: All structural panel components of the residence shall comply with appropriate standards for the emission of formaldehyde; the back-drafting of combustion by-products from combustion appliances shall be minimized through the use of dampers, vents, outside combustion air sources, or other appropriate technologies; and, in areas of the state where monitored data indicate action is necessary to inhibit indoor radon gas concentrations from exceeding appropriate health standards, entry of radon gas into homes shall be minimized through appropriate foundation construction measures.

(2) No later than January 1, 1993, the state building code council((~~, in consultation with the state energy office,~~)) shall establish final requirements for the maintenance of indoor air quality in newly constructed residences to be in effect beginning July 1, 1993. For new electrically space heated residential buildings, these requirements shall maintain indoor air quality equivalent to that provided by the mechanical ventilation and indoor air pollutant source control requirements included in the February 7, 1989, Bonneville power administration record of decision for the environmental impact statement on new energy efficient homes programs (DOE/EIS-0127F) built with electric space heating. In residential units other than single family, zero lot line, duplexes, and attached housing units in planned unit developments, ventilation requirements may be satisfied by the installation of two exhaust fans with a combined effective installed ventilation capacity of two hundred cubic feet per minute. For new residential buildings that are space heated with other than electric space heating systems, the standards shall be designed to result in indoor air quality equivalent to that achieved with the ventilation and source control standards for electric space heated homes. In establishing the final requirements, the council shall take into consideration differences in heating fuels and heating system types.

Sec. 502. RCW 19.27A.020 and 1994 c 226 s 1 are each amended to read as follows:

(1) No later than January 1, 1991, the state building code council shall promulgate rules to be known as the Washington state energy code as part of the state building code.

(2) The council shall follow the legislature's standards set forth in this section to promulgate rules to be known as the Washington state energy code. The Washington state energy code shall be designed to require new buildings to meet a certain level of energy efficiency, but allow flexibility in building design, construction, and heating equipment efficiencies within that framework. The Washington state energy code shall be designed to allow space heating equipment efficiency to offset or substitute for building envelope thermal performance.

(3) The Washington state energy code shall take into account regional climatic conditions. Climate zone 1 shall include all counties not included in climate zone 2. Climate zone 2 includes: Adams, Chelan, Douglas, Ferry, Grant, Kittitas, Lincoln, Okanogan, Pend Oreille, Spokane, Stevens, and Whitman counties.

(4) The Washington state energy code for residential buildings shall require:

(a) New residential buildings that are space heated with electric resistance heating systems to achieve energy use equivalent to that used in typical buildings constructed with:

(i) Ceilings insulated to a level of R‑38. The code shall contain an exception which permits single rafter or joist vaulted ceilings insulated to a level of R‑30 (R value includes insulation only);

(ii) In zone 1, walls insulated to a level of R‑19 (R value includes insulation only), or constructed with two by four members, R‑13 insulation batts, R‑3.2 insulated sheathing, and other normal assembly components; in zone 2 walls insulated to a level of R‑24 (R value includes insulation only), or constructed with two by six members, R‑22 insulation batts, R‑3.2 insulated sheathing, and other normal construction assembly components; for the purpose of determining equivalent thermal performance, the wall U-value shall be 0.058 in zone 1 and 0.044 in zone 2;

(iii) Below grade walls, insulated on the interior side, to a level of R‑19 or, if insulated on the exterior side, to a level of R‑10 in zone 1 and R‑12 in zone 2 (R value includes insulation only);

(iv) Floors over unheated spaces insulated to a level of R‑30 (R value includes insulation only);

(v) Slab on grade floors insulated to a level of R‑10 at the perimeter;

(vi) Double glazed windows with values not more than U‑0.4;

(vii) In zone 1 the glazing area may be up to twenty-one percent of floor area and in zone 2 the glazing area may be up to seventeen percent of floor area where consideration of the thermal resistance values for other building components and solar heat gains through the glazing result in thermal performance equivalent to that achieved with thermal resistance values for other components determined in accordance with the equivalent thermal performance criteria of (a) of this subsection and glazing area equal to fifteen percent of the floor area. Throughout the state for the purposes of determining equivalent thermal performance, the maximum glazing area shall be fifteen percent of the floor area; and

(viii) Exterior doors insulated to a level of R‑5; or an exterior wood door with a thermal resistance value of less than R‑5 and values for other components determined in accordance with the equivalent thermal performance criteria of (a) of this subsection.

(b) New residential buildings which are space-heated with all other forms of space heating to achieve energy use equivalent to that used in typical buildings constructed with:

(i) Ceilings insulated to a level of R‑30 in zone 1 and R‑38 in zone 2 the code shall contain an exception which permits single rafter or joist vaulted ceilings insulated to a level of R‑30 (R value includes insulation only);

(ii) Walls insulated to a level of R‑19 (R value includes insulation only), or constructed with two by four members, R‑13 insulation batts, R‑3.2 insulated sheathing, and other normal assembly components;

(iv) Floors over unheated spaces insulated to a level of R‑19 in zone 1 and R‑30 in zone 2 (R value includes insulation only);

(v) Slab on grade floors insulated to a level of R‑10 at the perimeter;

(vi) Heat pumps with a minimum heating season performance factor (HSPF) of 6.8 or with all other energy sources with a minimum annual fuel utilization efficiency (AFUE) of seventy-eight percent;

(vii) Double glazed windows with values not more than U‑0.65 in zone 1 and U‑0.60 in zone 2. The state building code council((~~, in consultation with the state energy office,~~)) shall review these U-values, and, if economically justified for consumers, shall amend the Washington state energy code to improve the U-values by December 1, 1993. The amendment shall not take effect until July 1, 1994; and

(viii) In zone 1, the maximum glazing area shall be twenty-one percent of the floor area. In zone 2 the maximum glazing area shall be seventeen percent of the floor area. Throughout the state for the purposes of determining equivalent thermal performance, the maximum glazing area shall be fifteen percent of the floor area.

(c) The requirements of (b)(ii) of this subsection do not apply to residences with log or solid timber walls with a minimum average thickness of three and one-half inches and with space heat other than electric resistance.

(d) The state building code council may approve an energy code for pilot projects of residential construction that use innovative energy efficiency technologies intended to result in savings that are greater than those realized in the levels specified in this section.

(5) U-values for glazing shall be determined using the area weighted average of all glazing in the building. U-values for vertical glazing shall be determined, certified, and labeled in accordance with the appropriate national fenestration rating council (NFRC) standard, as determined and adopted by the state building code council. Certification of U-values shall be conducted by a certified, independent agency licensed by the NFRC. The state building code council may develop and adopt alternative methods of determining, certifying, and labeling U-values for vertical glazing that may be used by fenestration manufacturers if determined to be appropriate by the council. The state building code council shall review and consider the adoption of the NFRC standards for determining, certifying, and labeling U-values for doors and skylights when developed and published by the NFRC. The state building code council may develop and adopt appropriate alternative methods for determining, certifying, and labeling U-values for doors and skylights. U-values for doors and skylights determined, certified, and labeled in accordance with the appropriate NFRC standard shall be acceptable for compliance with the state energy code. Sealed insulation glass, where used, shall conform to, or be in the process of being tested for, ASTM E‑774‑81 class A or better.

(6) The minimum state energy code for new nonresidential buildings shall be the Washington state energy code, 1986 edition, as amended.

(7)(a) Except as provided in (b) of this subsection, the Washington state energy code for residential structures shall preempt the residential energy code of each city, town, and county in the state of Washington.

(b) The state energy code for residential structures does not preempt a city, town, or county's energy code for residential structures which exceeds the requirements of the state energy code and which was adopted by the city, town, or county prior to March 1, 1990. Such cities, towns, or counties may not subsequently amend their energy code for residential structures to exceed the requirements adopted prior to March 1, 1990.

(8) ((The state building code council shall consult with the state energy office as provided in RCW 34.05.310 prior to publication of proposed rules. The state energy office shall review the proposed rules for consistency with the guidelines adopted in subsection (4) of this section. The director of the state energy office shall recommend to the state building code council any changes necessary to conform the proposed rules to the requirements of this section.

~~(9)~~)) The state building code council shall conduct a study of county and city enforcement of energy codes in the state. In conducting the study, the council shall conduct public hearings at designated council meetings to seek input from interested individuals and organizations, and to the extent possible, hold these meetings in conjunction with adopting rules under this section. The study shall include recommendations as to how code enforcement may be improved. The findings of the study shall be submitted in a report to the legislature no later than January 1, 1991.

((~~(10)~~)) (9) If any electric utility providing electric service to customers in the state of Washington purchases at least one percent of its firm energy load from a federal agency, pursuant to section 5.(b)(1) of the Pacific Northwest electric power planning and conservation act (P.L. 96‑501), and such utility is unable to obtain from that agency at least fifty percent of the funds for payments required by RCW 19.27A.035, the amendments to this section by chapter 2, Laws of 1990 shall be null and void, and the 1986 state energy code shall be in effect, except that a city, town, or county may enforce a local energy code with more stringent energy requirements adopted prior to March 1, 1990. This subsection shall expire June 30, 1995.

Sec. 503. RCW 19.27A.055 and 1990 c 2 s 6 are each amended to read as follows:

There is hereby created in the state treasury the energy code training account. The ((~~Washington state energy office~~)) department of community, trade, and economic development shall administer expenditures from this account for the purpose of providing training for the inspection and training for the enforcement by local governments of the Washington state energy code in effect pursuant to RCW 19.27A.020. The revenues into this account shall derive from assessments by the ((~~state energy office~~)) department of community, trade, and economic development on all investor-owned and publicly owned gas and electric utilities in the state of Washington in proportion to the number of housing starts served by a utility in 1989, based on an amount of one hundred fifty dollars per energy code inspection or enforcement official that is within the service area of the utility. Assessments may be made between January 1, 1991, and July 1, 1991. Federal funds available to qualifying utilities for code inspection retraining shall be used before obtaining funds from utilities under this section. Additional funds may be deposited in the account from federal agencies or other sources. All or a portion of the funds for the cost of local government inspection and enforcement may be accepted from federal agencies or other sources.

Sec. 504. RCW 28A.515.320 and 1991 sp.s. c 13 s 58 are each amended to read as follows:

The common school construction fund is to be used exclusively for the purpose of financing the construction of facilities for the common schools. The sources of said fund shall be: (1) Those proceeds derived from sale or appropriation of timber and other crops from school and state land other than those granted for specific purposes; (2) the interest accruing on the permanent common school fund less the allocations to the state treasurer's service ((~~account [fund]~~)) fund pursuant to RCW 43.08.190 and the state investment board expense account pursuant to RCW 43.33A.160 together with all rentals and other revenue derived therefrom and from land and other property devoted to the permanent common school fund; (3) all moneys received by the state from the United States under the provisions of section 191, Title 30, United States Code, Annotated, and under section 810, chapter 12, Title 16, (Conservation), United States Code, Annotated, except moneys received before June 30, 2001, and when thirty megawatts of geothermal power is certified as commercially available by the receiving utilities ((~~and the state energy office~~)), eighty percent of such moneys, under the Geothermal Steam Act of 1970 pursuant to RCW 43.140.030; and (4) such other sources as the legislature may direct. That portion of the common school construction fund derived from interest on the permanent common school fund may be used to retire such bonds as may be authorized by law for the purpose of financing the construction of facilities for the common schools.

The interest accruing on the permanent common school fund less the allocations to the state treasurer's service ((~~account [fund]~~)) fund pursuant to RCW 43.08.190 and the state investment board expense account pursuant to RCW 43.33A.160 together with all rentals and other revenues accruing thereto pursuant to subsection (2) of this section prior to July 1, 1967, shall be exclusively applied to the current use of the common schools.

To the extent that the moneys in the common school construction fund are in excess of the amount necessary to allow fulfillment of the purpose of said fund, the excess shall be available for deposit to the credit of the permanent common school fund or available for the current use of the common schools, as the legislature may direct. Any money from the common school construction fund which is made available for the current use of the common schools shall be restored to the fund by appropriation, including interest income foregone, before the end of the next fiscal biennium following such use.

Sec. 505. RCW 42.17.2401 and 1993 sp.s. c 2 s 18, 1993 c 492 s 488, and 1993 c 281 s 43 are each reenacted and amended to read as follows:

For the purposes of RCW 42.17.240, the term "executive state officer" includes:

(1) The chief administrative law judge, the director of agriculture, the administrator of the office of marine safety, the administrator of the Washington basic health plan, the director of the department of services for the blind, the director of the state system of community and technical colleges, the director of community, trade, and economic development, the secretary of corrections, the director of ecology, the commissioner of employment security, the chairman of the energy facility site evaluation council, ((~~the director of the energy office,~~)) the secretary of the state finance committee, the director of financial management, the director of fish and wildlife, the executive secretary of the forest practices appeals board, the director of the gambling commission, the director of general administration, the secretary of health, the administrator of the Washington state health care authority, the executive secretary of the health care facilities authority, the executive secretary of the higher education facilities authority, the executive secretary of the horse racing commission, the executive secretary of the human rights commission, the executive secretary of the indeterminate sentence review board, the director of the department of information services, the director of the interagency committee for outdoor recreation, the executive director of the state investment board, the director of labor and industries, the director of licensing, the director of the lottery commission, the director of the office of minority and women's business enterprises, the director of parks and recreation, the director of personnel, the executive director of the public disclosure commission, the director of retirement systems, the director of revenue, the secretary of social and health services, the chief of the Washington state patrol, the executive secretary of the board of tax appeals, ((~~the director of trade and economic development,~~)) the secretary of transportation, the secretary of the utilities and transportation commission, the director of veterans affairs, the president of each of the regional and state universities and the president of The Evergreen State College, each district and each campus president of each state community college;

(2) Each professional staff member of the office of the governor;

(3) Each professional staff member of the legislature; and

(4) Central Washington University board of trustees, board of trustees of each community college, each member of the state board for community and technical colleges, state convention and trade center board of directors, committee for deferred compensation, Eastern Washington University board of trustees, Washington economic development finance authority, The Evergreen State College board of trustees, forest practices appeals board, forest practices board, gambling commission, Washington health care facilities authority, each member of the Washington health services commission, higher education coordinating board, higher education facilities authority, horse racing commission, state housing finance commission, human rights commission, indeterminate sentence review board, board of industrial insurance appeals, information services board, interagency committee for outdoor recreation, state investment board, liquor control board, lottery commission, marine oversight board, ((~~oil and gas conservation committee,~~)) Pacific Northwest electric power and conservation planning council, parks and recreation commission, personnel appeals board, board of pilotage commissioners, pollution control hearings board, public disclosure commission, public pension commission, shorelines hearing board, public employees' benefits board, board of tax appeals, transportation commission, University of Washington board of regents, utilities and transportation commission, Washington state maritime commission, Washington personnel resources board, Washington public power supply system executive board, Washington State University board of regents, Western Washington University board of trustees, and fish and wildlife commission.

Sec. 506. RCW 43.06.115 and 1993 c 421 s 2 are each amended to read as follows:

(1) The governor may, by executive order, after consultation with or notification of the executive-legislative committee on economic development created by chapter . . . (Senate Bill No. 5300), Laws of 1993, declare a community to be a "military impacted area." A "military impacted area" means a community or communities, as identified in the executive order, that experience serious social and economic hardships because of a change in defense spending by the federal government in that community or communities.

(2) If the governor executes an order under subsection (1) of this section, the governor shall establish a response team to coordinate state efforts to assist the military impacted community. The response team may include, but not be limited to, one member from each of the following agencies: (a) The department of community, trade, and economic development; (b) ((~~the department of trade and economic development; (c)~~)) the department of social and health services; ((~~(d)~~)) (c) the employment security department; ((~~(e)~~)) (d) the state board for community and technical colleges; ((~~(f)~~)) (e) the higher education coordinating board; ((~~(g)~~)) and (f) the department of transportation((~~; and (h) the Washington energy office~~)). The governor may appoint a response team coordinator. The governor shall seek to actively involve the impacted community or communities in planning and implementing a response to the crisis. The governor may seek input or assistance from the community diversification advisory committee, and the governor may establish task forces in the community or communities to assist in the coordination and delivery of services to the local community. The state and community response shall consider economic development, human service, and training needs of the community or communities impacted.

(3) The governor shall report at the beginning of the next legislative session to the legislature and the executive-legislative committee on economic development created by chapter . . . (Senate Bill No. 5300), Laws of 1993, as to the designation of a military impacted area. The report shall include recommendations regarding whether a military impacted area should become eligible for (a) funding provided by the community economic revitalization board, public facilities construction loan revolving account, Washington state development loan fund, basic health plan, the public works assistance account, department of community, trade, and economic development, employment security department, and department of transportation; (b) training for dislocated defense workers; or (c) services for dislocated defense workers.

Sec. 507. RCW 43.19.675 and 1982 c 48 s 2 are each amended to read as follows:

The director of general administration((~~, in cooperation with the director of the state energy office,~~)) shall conduct, by contract or other arrangement, an energy audit for each state-owned facility. All energy audits shall be coordinated with and complement other governmental energy audit programs. The energy audit for each state-owned facility located on the capitol campus shall be completed no later than July 1, 1981, and the results and findings of each energy audit shall be compiled and transmitted to the governor and the legislature no later than October 1, 1981. For every other state-owned facility, the energy consumption surveys shall be completed no later than October 1, 1982, and the walk-through surveys shall be completed no later than July 1, 1983.

Sec. 508. RCW 43.19.680 and 1986 c 325 s 2 are each amended to read as follows:

(1) Upon completion of each walk-through survey required by RCW 43.19.675, the director of general administration or the agency responsible for the facility if other than the department of general administration shall implement energy conservation maintenance and operation procedures that may be identified for any state-owned facility. These procedures shall be implemented as soon as possible but not later than twelve months after the walk-through survey.

(2) By December 31, 1981, for the capitol campus the director of general administration((~~, in cooperation with the director of the state energy office,~~)) shall prepare and transmit to the governor and the legislature an implementation plan.

(3) By December 31, 1983, for all other state-owned facilities, the director of general administration ((~~in cooperation with the director of the state energy office~~)) shall prepare and transmit to the governor and the legislature the results of the energy consumption and walk-through surveys and a schedule for the conduct of technical assistance studies. This submission shall contain the energy conservation measures planned for installation during the ensuing biennium. Priority considerations for scheduling technical assistance studies shall include but not be limited to a facility's energy efficiency, responsible agency participation, comparative cost and type of fuels, possibility of outside funding, logistical considerations such as possible need to vacate the facility for installation of energy conservation measures, coordination with other planned facility modifications, and the total cost of a facility modification, including other work which would have to be done as a result of installing energy conservation measures. Energy conservation measure acquisitions and installations shall be scheduled to be twenty-five percent complete by June 30, 1985, or at the end of the capital budget biennium which includes that date, whichever is later, fifty-five percent complete by June 30, 1989, or at the end of the capital budget biennium which includes that date, whichever is later, eighty-five percent complete by June 30, 1993, or at the end of the capital budget biennium which includes that date, whichever is later, and fully complete by June 30, 1995, or at the end of the capital budget biennium which includes that date, whichever is later. Each state agency shall implement energy conservation measures with a payback period of twenty-four months or less that have a positive cash flow in the same biennium.

For each biennium until all measures are installed, the director of general administration shall report to the governor and legislature installation progress, measures planned for installation during the ensuing biennium, and changes, if any, to the technical assistance study schedule. This report shall be submitted by December 31, 1984, or at the end of the following year whichever immediately precedes the capital budget adoption, and every two years thereafter until all measures are installed.

(4) The director of general administration shall adopt rules to facilitate private investment in energy conservation measures for state-owned buildings consistent with state law.

Sec. 509. RCW 43.31.621 and 1994 c 264 s 18 are each amended to read as follows:

(1) There is established the agency timber task force. The task force shall be chaired by the timber recovery coordinator. It shall be the responsibility of the coordinator that all directives of chapter 314, Laws of 1991 are carried out expeditiously by the agencies represented in the task force. The task force shall consist of the directors, or representatives of the directors, of the following agencies: The department of community, trade, and economic development, employment security department, department of social and health services, state board for community and technical colleges, state work force training and education coordinating board, or its replacement entity, department of natural resources, department of transportation, ((~~state energy office,~~)) department of fish and wildlife, University of Washington center for international trade in forest products, and department of ecology. The task force may consult and enlist the assistance of the following: The higher education coordinating board, University of Washington college of forest resources, Washington State University school of forestry, Northwest policy center, state superintendent of public instruction, the Evergreen partnership, Washington association of counties, and rural development council.

(2) This section shall expire June 30, 1995.

Sec. 510. RCW 47.06.110 and 1993 c 446 s 11 are each amended to read as follows:

The state-interest component of the state-wide multimodal transportation plan shall include a state public transportation plan that:

(1) Articulates the state vision of an interest in public transportation and provides quantifiable objectives, including benefits indicators;

(2) Identifies the goals for public transit and the roles of federal, state, regional, and local entities in achieving those goals;

(3) Recommends mechanisms for coordinating state, regional, and local planning for public transportation;

(4) Recommends mechanisms for coordinating public transportation with other transportation services and modes;

(5) Recommends criteria, consistent with the goals identified in subsection (2) of this section and with RCW 82.44.180 (2) and (3), for existing federal authorizations administered by the department to transit agencies; and

(6) Recommends a state-wide public transportation facilities and equipment management system as required by federal law.

In developing the state public transportation plan, the department shall involve local jurisdictions, public and private providers of transportation services, nonmotorized interests, and state agencies with an interest in public transportation, including but not limited to the departments of community, trade, and economic development, social and health services, and ecology, ((~~the state energy office,~~)) the office of the superintendent of public instruction, the office of the governor, and the office of financial management.

The department shall submit an initial report to the legislative transportation committee by December 1, 1993, and shall provide annual reports summarizing the plan's progress each year thereafter.

Sec. 511. RCW 82.35.020 and 1979 ex.s. c 191 s 2 are each amended to read as follows:

As used in this chapter, the following terms have the meanings indicated unless the context clearly requires otherwise.

(1) "Cogeneration" means the sequential generation of electrical or mechanical power and useful heat from the same primary energy source or fuel.

(2) "Cogeneration facility" means any machinery, equipment, structure, process, or property, or any part thereof, installed or acquired for the primary purpose of cogeneration by a person or corporation other than an electric utility.

(3) "Certificate" means a cogeneration tax credit certificate granted by the department.

(4) "Cost" means only the cost of a cogeneration facility which is in addition to the cost that the applicant otherwise would incur to meet the applicant's demands for useful heat. "Cost" does not include expenditures which are offset by cost savings, including but not limited to savings resulting from early retirement of existing equipment.

(5) "Department" means the department of revenue.

(6) "Electric utility" means any person, corporation, or governmental subdivision authorized and operating under the Constitution and laws of the state of Washington which is primarily engaged in the generation or sale of electric energy.

((~~(7) "Office" means the state energy office.~~))

Sec. 512. RCW 82.35.080 and 1979 ex.s. c 191 s 8 are each amended to read as follows:

(1) Except as provided in subsection (2) of this section, the department shall revoke any certificate issued under this chapter if it finds that any of the following have occurred with respect to the certificate:

(a) The certificate was obtained by fraud or deliberate misrepresentation;

(b) The certificate was obtained through the use of inaccurate data but without any intention to commit fraud or misrepresentation;

(c) The facility was constructed or operated in violation of any provision of this chapter or provision imposed by the department as a condition of certification; or

(d) The cogeneration facility is no longer capable of being operated for the primary purpose of cogeneration.

(2) If the department finds that there are few inaccuracies under subsection (1)(b) of this section and that cumulatively they are insignificant in terms of the cost or operation of the facility or that the inaccurate data is not attributable to carelessness or negligence and its inclusion was reasonable under the circumstances, then the department may provide for the continuance of the certificate and whatever modification it considers in the public interest.

(3) Any person, firm, corporation, or organization that obtains a certificate revoked under this section shall be liable for the total amount of money saved by claiming the credits and exemptions provided under this chapter and RCW 84.36.485. The total amount of the credits shall be collected as delinquent business and occupation taxes, and the total of the exemptions shall be collected and distributed as delinquent property taxes. Interest shall accrue on the amounts of the credits and exemptions from the date the taxes were otherwise due.

((~~(4) The office shall provide technical assistance to the department in carrying out its responsibilities under this section.~~))

Sec. 513. RCW 90.03.247 and 1994 c 264 s 82 are each amended to read as follows:

Whenever an application for a permit to make beneficial use of public waters is approved relating to a stream or other water body for which minimum flows or levels have been adopted and are in effect at the time of approval, the permit shall be conditioned to protect the levels or flows. No agency may establish minimum flows and levels or similar water flow or level restrictions for any stream or lake of the state other than the department of ecology whose authority to establish is exclusive, as provided in chapter 90.03 RCW and RCW 90.22.010 and 90.54.040. The provisions of other statutes, including but not limited to RCW 75.20.100 and chapter 43.21C RCW, may not be interpreted in a manner that is inconsistent with this section. In establishing such minimum flows, levels, or similar restrictions, the department shall, during all stages of development by the department of ecology of minimum flow proposals, consult with, and carefully consider the recommendations of, the department of fish and wildlife, ((~~the state energy office,~~)) the department of agriculture, and representatives of the affected Indian tribes. Nothing herein shall preclude the department of fish and wildlife((~~, the energy office,~~)) or the department of agriculture from presenting its views on minimum flow needs at any public hearing or to any person or agency, and the department of fish and wildlife((~~, the energy office,~~)) and the department of agriculture are each empowered to participate in proceedings of the federal energy regulatory commission and other agencies to present its views on minimum flow needs.

NEW SECTION. Sec. 514. RCW 41.06.081 and 1981 c 295 s 10 are each repealed.

PART VI

ELIMINATION OF COGENERATION PROJECTS

NEW SECTION. Sec. 601. The following acts or parts of acts are each repealed:

(1) RCW 39.35C.070 and 1991 c 201 s 8; and

(2) RCW 39.35C.080 and 1991 c 201 s 9.

PART VII

MISCELLANEOUS

NEW SECTION. Sec. 701. Part headings used in this act do not constitute any part of the law.

NEW SECTION. Sec. 702. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect July 1, 1995.

NEW SECTION. Sec. 703. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.