AN ACT Relating to energy efficiency and conservation; amending RCW 19.27A.020 and 19.27.040; adding new sections to chapter 19.27A RCW; adding a new section to chapter 19.27 RCW; adding a new section to chapter 4.24 RCW; adding a new section to chapter 80.28 RCW; adding a new section to chapter 82.16 RCW; creating a new section; repealing RCW 19.27A.010, 19.27A.030, and 19.27A.040; providing effective dates; and declaring an emergency.

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

NEW SECTION. Sec. 1. The legislature finds that using energy efficiently in housing is one of the lowest cost ways to meet consumer demand for energy; that using energy efficiently helps protect citizens of the state from negative impacts due to changes in energy supply and cost; that using energy efficiently will help mitigate negative environmental impacts of energy use and resource development; and that using energy efficiently will help stretch our present energy resources into the future. The legislature further finds that the electricity surplus in the Northwest is dwindling as the population increases and the economy expands, and that the region will eventually need new sources of electricity generation.

It is declared policy of the state of Washington that energy be used efficiently. It is the intent of this act to establish residential building standards that bring about the common use of energy efficient building methods, and to assure that such methods remain economically feasible and affordable to purchasers of newly constructed housing.

NEW SECTION. Sec. 2. A new section is added to chapter 19.27A RCW to read as follows:

Except as provided in RCW 19.27A.020(7), the Washington state energy code for residential buildings shall be the maximum and minimum energy code for residential buildings in each city, town, and county and shall be enforced by each city, town, and county no later than July 1, 1991. The Washington state energy code for nonresidential buildings shall be the minimum energy code for nonresidential buildings enforced by each city, town, and county.

Sec. 3. Section 3, chapter 76, Laws of 1979 ex. sess. as amended by section 2, chapter 144, Laws of 1985 and RCW 19.27A.020 are each amended to read as follows:

(1) No later than January 1, 1991, the state building code ((~~advisory~~)) council shall promulgate rules((~~, pursuant to chapter 34.04 RCW, for the purpose of adopting a revised~~)) to be known as the Washington state energy code as part of the state building code. ((~~The revised code shall be designed to achieve reductions in energy consumption relative to buildings constructed to comply with the state energy code, June 30, 1980 edition, as amended.~~))

(2) The council shall follow the legislature's ((~~guidelines~~)) standards set forth in this section to ((~~design a revised~~)) promulgate rules to be known as the Washington state energy code ((~~which requires~~)). The Washington state energy code shall be designed to require new buildings to meet a certain level of energy efficiency, but allow((s)) flexibility in building design ((~~and~~)), 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 ((~~revised~~)) Washington state energy code shall take into account regional climatic conditions ((~~and shall be designed according to the following guidelines~~)). 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) ((~~For new electric resistance heated residential buildings, the code shall be designed~~)) New residential buildings that are space heated with electric resistance heating systems to achieve energy ((~~savings~~)) use equivalent to ((~~savings achieved~~)) that used in typical buildings constructed with:

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

(ii) In zone 1, walls insulated to a level of R-19 ((~~(total assembly)~~)) (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-19 for areas with six thousand or less annual heating degree days and to a level of R-25 for areas with more than six thousand annual heating degree days~~)) R-30 (R value includes insulation only);

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

(vi) Double glazed windows with ((~~tested R~~)) values not ((~~less~~)) more than ((~~1.79 when tested according to the procedures of the American architectural manufacturers association~~)) U-0.4; ((~~and~~

(v) In areas with more than six thousand annual heating degree days a maximum of seventeen percent of the floor area in glazing; in areas with six thousand or less annual heating degree days a maximum of twenty-one percent of the floor area in glazing)) (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) ((~~For~~)) New residential buildings which are space-heated with ((~~other fuels, the code shall be designed~~)) all other forms of space heating to achieve energy ((~~savings~~)) use equivalent to ((~~savings achieved~~)) 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 ((~~(total assembly)~~)) (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;

(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-19 in zone 1 and R-30 in zone 2 (R value includes insulation only);

((~~(iv)~~)) (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 ((~~tested R~~)) values not ((~~less~~)) more than ((~~1.40 when tested according to the procedures of the American architectural manufacturers association~~)) 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

((~~(v) In areas with more than six thousand annual heating degree days a~~)) (viii) In zone 1, the maximum ((~~of seventeen~~)) glazing area shall be twenty-one percent of the floor area ((~~in glazing; in areas with six thousand or less annual heating degree days a maximum of twenty-one percent of the floor area in glazing~~)). 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) For ((~~new nonresidential buildings,~~)) log built homes with space heat other than electric resistance, the building code council shall establish equivalent thermal performance standards consistent with the standards and maximum glazing areas of (b) of this subsection.

(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 glazing are the tested values for thermal transmittance due to conduction resulting from either the American architectural manufacturers' association (AAMA) 1503.1 test procedure or the American society for testing materials (ASTM) C236 or C976 test procedures. Testing shall be conducted under established winter horizontal heat flow test conditions using the fifteen miles per hour wind speed perpendicular to the exterior surface of the glazing as specified under AAMA 1503.1 and product sample sizes specified under AAMA 1503.1. The AAMA 1503.1 testing must be conducted by an AAMA certified testing laboratory. The ASTM C236 or C976 testing U-values include any tested values resulting from a future revised AAMA 1503.1 test procedure. Sealed insulation glass, where used, shall conform to ASTM E-774-81 level A or better. The state building code council shall maintain a list of the tested U-values for glazing products available in the state.

(6) The minimum state energy code for new nonresidential buildings shall be ((~~designed to achieve a ten percent reduction in energy consumption relative to buildings constructed to comply with~~)) the Washington state energy code, ((~~June 30, 1980~~)) 1986 edition, as amended.

(((2) In developing the revised code, the council shall consider possible health and respiratory problems caused by insulating buildings so tightly that the rate of air exchange is significantly retarded, thereby concentrating toxic pollutants at unhealthy high levels.

(3) The council shall publish the revision as proposed rules pursuant to chapter 34.04 RCW and provide for the rules to become effective January 1, 1986. All cities, towns, and counties shall enforce the revised state energy code not later than April 1, 1986.))

(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 the effective date of this section. Such cities, towns, or counties may not subsequently amend their energy code for residential structures to exceed the requirements adopted prior to the effective date of this section.

(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) 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 section 4 of this act, the amendments to this section by this 1990 act 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 the effective date of this section. This subsection shall expire June 30, 1995.

NEW SECTION. Sec. 4. A new section is added to chapter 19.27A RCW to read as follows:

(1) Electric utilities shall make payments to the owner at the time of construction of a newly constructed residential building with electric resistance space heat built in compliance with the requirements of the Washington state energy code adopted pursuant to RCW 19.27A.020 or a residential energy code in effect pursuant to RCW 19.27A.020(7). All or a portion of the funds for payments may be accepted from federal agencies or other sources. Payments are required for residential buildings on which construction has begun on or after July 1, 1991, and prior to July 1, 1995. Payments in an amount equal to a fixed sum of at least nine hundred dollars per single family residence are required for such buildings so constructed which are single family residences having two thousand square feet or less of finished floor area. Payments in an amount equal to a fixed sum of at least three hundred ninety dollars per multifamily residential unit, are required for such buildings so constructed which are multifamily residential units. For purposes of this section, a zero lot line home and each unit in a duplex and each attached housing unit in a planned unit development shall each be considered a single family residence.

(2) Electric utilities which provide electrical service in jurisdictions in which the local government has adopted an energy code not preempted by RCW 19.27A.020(7)(b) shall make payments as provided in subsection (1) of this section for residential buildings on which construction has begun on or after the effective date of this section and prior to July 1, 1991.

(3) Nothing in this section shall prohibit an electric utility from providing incentives in excess of the payments required by this section or from providing additional incentives for energy efficiency measures in excess of those required under RCW 19.27A.020.

(4) This section is null and void if any electric utility providing electric service to its 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 if such electric utility is unable to obtain from the agency at least fifty percent of the funds to make the payments required by this section. This subsection shall expire June 30, 1995.

(5) The utilities and transportation commission shall provide an appropriate regulatory mechanism which allows a utility regulated by the commission to recover expenses incurred by the utility in making payments under this section.

(6) Subsections (1) through (3) of this section shall expire July 1, 1996.

NEW SECTION. Sec. 5. A new section is added to chapter 19.27A RCW to read as follows:

The state building code council shall maintain the state energy code for residential structures in a status which is consistent with the state's interest as set forth in section 1 of this act. In maintaining the Washington state energy code for residential structures, beginning in 1996 the council shall review the Washington state energy code every three years. After January 1, 1996, by rule adopted pursuant to chapter 34.05 RCW, the council may amend any provisions of the Washington state energy code to increase the energy efficiency of newly constructed residential buildings. Decisions to amend the Washington state energy code for residential structures shall be made prior to December 1 of any year and shall not take effect before the end of the regular legislative session in the next year.

NEW SECTION. Sec. 6. A new section is added to chapter 19.27A RCW to read as follows:

There is hereby created in the state treasury the energy code training account. The Washington state energy office 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 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.

NEW SECTION. Sec. 7. A new section is added to chapter 19.27 RCW 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.

NEW SECTION. Sec. 8. A new section is added to chapter 4.24 RCW to read as follows:

It is a defense in a civil action brought for damages for injury caused by indoor air pollutants in a residential structure on which construction was begun on or after July 1, 1991, that the builder or design professional complied in good faith, without negligence or misconduct, with:

(1) Building product safety standards, including labeling;

(2) Restrictions on the use of building materials known or believed to contain substances that contribute to indoor air pollution; and

(3) The ventilation requirements adopted under section 7 of this act.

NEW SECTION. Sec. 9. A new section is added to chapter 80.28 RCW to read as follows:

(1) The commission shall adopt a policy allowing an incentive rate of return on investment (a) for payments made under section 4 of this act and (b) for programs that improve the efficiency of energy end use if priority is given to senior citizens and low-income citizens in the course of carrying out such programs. The incentive rate of return on investments set forth in this subsection is established by adding an increment of two percent to the rate of return on common equity permitted on the company's other investments.

(2) The commission shall consider and may adopt a policy allowing an incentive rate of return on investment in additional programs to improve the efficiency of energy end use or other incentive policies to encourage utility investment in such programs.

(3) The commission shall consider and may adopt other policies to protect a company from a reduction of short-term earnings that may be a direct result of utility programs to increase the efficiency of energy use. These policies may include allowing a periodic rate adjustment for investments in end use efficiency or allowing changes in price structure designed to produce additional new revenue.

(4) The commission may adopt a policy allowing the recovery of a utility's expenses incurred under section 6 of this act.

NEW SECTION. Sec. 10. A new section is added to chapter 82.16 RCW to read as follows:

(1) In computing tax under this chapter there shall be deducted from the gross income:

(a) Payments made under section 4 of this act; and

(b) Those amounts expended on additional programs that improve the efficiency of energy end use if priority is given to senior citizens and low-income citizens in the course of carrying out such programs. (2) The department, after consultation with the utilities and transportation commission in the case of investor-owned utilities and the governing bodies of locally regulated utilities, shall determine the eligibility of individual programs for deductions under this section.

(3) Until July 1, 1992, utilities may deduct from the amount of tax paid under this chapter fifty percent of the payments made under section 6 of this act, excluding any federal funds that are passed through to a utility for the purpose of retraining local code officials.

(4) This section shall expire January 1, 1996.

Sec. 11. Section 4, chapter 96, Laws of 1974 ex. sess. as last amended by section 8, chapter 360, Laws of 1985 and RCW 19.27.040 are each amended to read as follows:

The governing body of each county or city is authorized to amend the state building code as it applies within the jurisdiction of the county or city. The minimum performance standards of the codes and the objectives enumerated in RCW 19.27.020 shall not be diminished by any county or city amendments. ((~~Amendments to RCW 19.27A.010 shall not result in structures that exceed the overall structural heat loss characteristics that would have resulted from conforming to RCW 19.27A.010.~~))

Nothing in this chapter shall authorize any modifications of the requirements of chapter 70.92 RCW.

NEW SECTION. Sec. 12. The following acts or parts of acts are each repealed:

(1) Section 3, chapter 96, Laws of 1974 ex. sess., section 8, chapter 110, Laws of 1975 1st ex. sess., section 11, chapter 14, Laws of 1977 ex. sess., section 1, chapter 76, Laws of 1979 ex. sess., section 1, chapter 8, Laws of 1980, section 1, chapter 101, Laws of 1984, section 1, chapter 144, Laws of 1985 and RCW 19.27A.010;

(2) Section 3, chapter 144, Laws of 1985, section 1, chapter 204, Laws of 1988 and RCW 19.27A.030; and

(3) Section 4, chapter 144, Laws of 1985, section 2, chapter 204, Laws of 1988 and RCW 19.27A.040.

NEW SECTION. Sec. 13. 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.

NEW SECTION. Sec. 14. Sections 1 through 4, 6, 7, 9, and 10 of this act are 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 March 1, 1990. Sections 11 and 12 of this act shall take effect January 1, 1991. Section 8 of this act shall take effect July 1, 1991.