WSR 26-12-068

PROPOSED RULES

DEPARTMENT OF

LABOR AND INDUSTRIES

(Board of Boiler Rules)

[Order 25-27—Filed June 2, 2026, 10:00 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 25-21-130.

Title of Rule and Other Identifying Information: Board of boiler rules (board); chapter 296-104 WAC, Board of boiler rules—Substantive.

Hearing Location(s): On July 7, 2026, at 9:30 a.m., at the Department of Labor and Industries (L&I), 7273 Linderson Way S.W., Tumwater, WA 98501; or join via Zoom at https://lni-wa-gov.zoom.us/j/84876317499?pwd=gDbfRVi9k9rfPu168TXVg8fJIjgGOS.1, Passcode hearing#2!; or join by phone (audio only) 253-215-8782, Meeting ID 848 7631 7499, Passcode 8580358767. The in-person and virtual/telephonic hearing starts at 9:30 a.m. and will continue until all oral comments are received.

Date of Intended Adoption: September 1, 2026.

Submit Written Comments to: Alicia Curry, L&I, Customer Service, Compliance, and Public Safety Division, P.O. Box 44400, Olympia, WA 98504-4400, email CSCPSRules@Lni.wa.gov, fax 360-704-1980, beginning June 3, 2026, at 8:00 a.m., by July 7, 2026, at 5:00 p.m.

Assistance for Persons with Disabilities: Contact Alicia Curry, phone 360-902-6244, fax 360-704-1980, email Alicia.Curry@Lni.wa.gov, by June 19, 2026.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The board and L&I are considering amendments to the boiler rules under chapter 296-104 WAC. The board reviews the rules on a regular basis to ensure consistency with national boiler and unfired pressure vessel safety standards and industry practice. Proposed amendments to this chapter are as follows:

WAC 296-104-450 Operation—What are the requirements for operation of boilers? Adds new requirements for operation, maintenance, and recordkeeping for certain size boilers with a delayed effective date of April 2, 2027.

WAC 296-104-020 Administration—What are the filing requirements for boilers and unfired pressure vessels before their installation/reinstallation? Removes the word "hot" to make "water heater" the common terminology used throughout the chapter.

WAC 296-104-320 Installation—Where should the discharge from safety pressure relief devices, blow offs and drains be directed? Removes the word "hot" to make "water heater" the common terminology throughout the chapter.

WAC 296-104-700 What are the inspection fees—Examination fees—Certificate fees—Expenses? Increases fees by the fiscal growth factor rate of 6.51 percent for fiscal year 2027 to cover operating expenses for the boiler program.

Reasons Supporting Proposal: This rule making is needed to ensure that Washington's rules are up-to-date, clear and consistent with national standards and industry practice to maintain public safety, and fees support the boiler program's operating expenses. According to RCW 70.79.330 and 70.79.350, a fee schedule for inspections is to be set by the board and the fees are to be used to administer the boiler program.

Statutory Authority for Adoption: Chapter 70.79 RCW, Boilers and unfired pressure vessels.

Statute Being Implemented: Chapter 70.79 RCW, Boilers and unfired pressure vessels.

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

Name of Proponent: L&I, governmental.

Name of Agency Personnel Responsible for Drafting: Mike Carlson, Program Manager, Tumwater, Washington, 360-902-5270; Implementation and Enforcement: Jennifer Williams, Assistant Director, Tumwater, Washington, 360-701-9504.

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

A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Alicia Curry, L&I, Customer Service, Compliance, and Public Safety Division, P.O. Box 44400, Olympia, WA 98504-4400, phone 360-902-6244, fax 360-704-1980, email CSCPSRules@Lni.wa.gov.

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

Is exempt under RCW 19.85.025(3) as the rules only correct typographical errors, make address or name changes, or clarify language of a rule without changing its effect; and rules set or adjust fees under the authority of RCW 19.02.075 or that set or adjust fees or rates pursuant to legislative standards, including fees set or adjusted under the authority of RCW 19.80.045.

Scope of exemption for rule proposal:

Is partially exempt:

Explanation of partial exemptions:

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

Executive Summary: The board at L&I proposes amendments to chapter 296-104 WAC that introduce three provisions with probable compliance costs: A fireside inspection requirement for hot water heating boilers treated with glycol or corrosion inhibitor (WAC 296-104-100(4)), maintenance and operational requirements for boilers not currently meeting manufacturer specifications (WAC 296-104-450 (2)-(3)), and recordkeeping requirements for power boilers ≥500,000 BTU/hr and hydronic boilers ≥2,500,000 BTU/hr (WAC 296-104-450(4)).

Approximately 12,170 fired boilers owned by 3,476 private-sector entities are subject to one or more provisions. Total annualized compliance costs range from $1.88 million to $4.72 million, with a central estimate of $3.27 million. The maintenance requirement accounts for 97 percent of total costs and applies only to the estimated 10 percent of boiler owners not currently in compliance with manufacturer maintenance specifications. The central per-firm cost for noncompliant owners is $9,076; compliant owners face a combined fireside and recordkeeping cost of approximately $126 per year. Of the approximately 348 noncompliant entities bearing the significant cost burden, an estimated 290 to 325 are small businesses; the remaining approximately 3,128 regulated small businesses face only fireside inspection and recordkeeping costs ($126/firm central), which fall below the minor cost threshold for all sectors.

The rule is estimated to displace approximately 21.73 jobs statewide at the central estimate (range: 12.42-31.38), representing 0.16 percent of the 13,560-worker affected workforce.

L&I tested the maintenance cost against the one-percent-of-average-annual-payroll proxy threshold outlined in the Regulatory Fairness Act (RFA) for eight North American Industry Classification System (NAICS) groupings representing the affected industries. Five of eight groupings — Water/Sewage (2213), Bakeries (3118), Fabricated Metal (3329), Lessors of Real Estate (5311), and Drycleaning/Laundry (8123) — exceed the threshold at the central estimate. Under the high-cost scenario, Traveler Accommodation (7211) also exceeds, bringing the count to six of eight. The remaining groupings — Food Manufacturing excluding Bakeries (3114-3117/3119) and Pulp/Paper/Paperboard Mills (3221) — fall well below their thresholds.

Across the affected sectors, small businesses represent 84.5 percent to 93.5 percent of all firms. L&I concludes the rule has a disproportionate impact on small businesses: The cost-per-employee ratio is approximately 20:1 (small vs. large), inherent to the structure of equipment-based regulation where per-unit costs are uniform while the capacity to absorb them scales with firm size. L&I adopted performance standards, simplified recordkeeping, and consolidated compliance requirements to reduce this impact. A small business exemption was not adopted because the human-error causation of 83 percent of documented boiler incidents does not vary by firm size.

The benefits of the rule, conservatively estimated at approximately $2.18 million annually through prevention of fatalities, injuries, and property damage incidents, substantially accrue to the employees and customers of affected businesses, including the workers of small businesses themselves.

1.1 Background: L&I, board of boiler rules, proposes amendments to chapter 296-104 WAC governing the safety of boilers, unfired pressure vessels, and water heaters in Washington state. The board is authorized under chapter 70.79 RCW to promulgate rules for the safe installation, repair, use, and operation of boilers. The rule regulates equipment rather than an industry; any business that owns or operates a regulated boiler under chapter 70.79 RCW is subject to these requirements.

The proposed amendments apply to a subset of the total regulated inventory. Based on L&I boiler program registration data, approximately 12,170 fired boilers are subject to one or more provisions of this rule making; comprising 1,360 power boilers, 510 low-pressure steam boilers, and 10,300 low-pressure hydronic (hot water) boilers; owned by approximately 3,476 private-sector entities distributed across 21 industry categories. In addition, approximately 958 hot water heating boilers treated with glycol or corrosion inhibitor are subject to the new fireside inspection requirement. The full regulated inventory of boilers, unfired pressure vessels, and water heaters registered with L&I exceeds 116,000 units statewide; the cost-bearing provisions analyzed in this SBEIS apply to the fired boiler subpopulation described above.

This SBEIS is prepared pursuant to RCW 19.85.040 and RFA (chapter 19.85 RCW). It applies to the rule provisions with probable cost impact on private-sector businesses. Provisions expected to impose no net new cost are noted but not analyzed in detail.

1.2 History of This Rule Making: The board commenced the process of these proposed rules on August 20, 2025. Representatives from insurance companies, owner/user organizations, the city of Seattle, and a chemical company participated in the development of the rules by attending the board meetings. In addition, L&I sent notices of this rule making to key stakeholders directly, as well as subscribers of the boiler, plumbers, and L&I's rules update email lists via GovDelivery on October 21, 2025, and November 3 and 5, 2025. Information was also posted on L&I's website. There are no federal or other state entities regulating the same activities; therefore, no coordination with them was necessary.

1.3 Rule Provisions With Probable Cost Impact: Three provisions are expected to impose new compliance costs on affected businesses:

1.4 Affected Industries: The board regulates equipment, boilers and unfired pressure vessels, rather than industries. Any private-sector business that owns or operates regulated equipment is subject to oversight under chapter 70.79 RCW. Based on L&I boiler program registration data, approximately 3,476 distinct private-sector owner entities are registered across 21 industry categories. The five largest private-sector owner categories by entity count are Education (private institutions, 537 entities), Real Estate (517), Manufacturing (398), Commercial Office (378), and Healthcare (302). Together these five categories account for approximately 61 percent of all registered private-sector owner entities.

For purposes of this SBEIS, the industries most likely to include businesses bearing compliance costs from the provisions above are identified using a combination of boiler program operational knowledge and NAICS. The eight NAICS groupings representing private-sector boiler owners directly subject to the cost-bearing provisions are listed in Table 1.

1.5 Estimated Number of Affected Businesses: 1.5.1 Total Firms in Affected NAICS Codes: Table 2 presents the total number of firms in Washington state for each affected NAICS code, drawn from the United States (U.S.) Census Bureau Statistics of U.S. Businesses (SUSB), 2022 annual data, Washington state (Federal Information Processing System 53). These figures represent the universe of employer businesses in each sector, not all will own regulated boilers. The boiler program's registry of approximately 3,476 private-sector owner entities is the authoritative count of directly regulated businesses; SUSB firm counts provide the broader industry context.

1.5.2 Small Business Classification: To determine the number of small businesses affected by this rule, the analysis draws on the SUSB dataset at the state level. Under chapter 19.85 RCW, a "small business" is defined as any business entity, including a sole proprietorship, corporation, partnership, or other legal entity, that is independently owned and operated, and employs 50 or fewer full-time employees.

The SUSB reports establishment counts by employee size band. The available bands are: Fewer than 5 employees; 5-9; 10-19; 20-99; 100-499; and 500 or more. This structure presents a classification constraint: The 20-99 band straddles the chapter 19.85 RCW threshold of 50 employees and cannot be subdivided using this data source alone. Businesses within that band may fall either above or below the statutory threshold, but the data does not permit further disaggregation.

To address this limitation transparently, two bounding estimates are calculated for each applicable NAICS code:

The true small business share for each NAICS code lies somewhere within this range. For most industries examined, the floor-to-ceiling range is narrow, typically two to 10 percentage points, which limits analytical uncertainty. Regardless of where the true share falls within the range, the central finding is consistent: The substantial majority of affected firms qualify as small businesses under chapter 19.85 RCW.

Across the eight NAICS groupings, the confirmed small business floor is 84.5 percent and the ceiling is 93.5 percent of total firms in these sectors. Excluding NAICS 3221, where data suppression prevents a clean small-business count, the remaining seven groupings show a floor of 84.7 percent and a ceiling of 93.7 percent. The boiler program's directly regulated universe of approximately 3,476 private-sector owner entities is substantially smaller than total SUSB firm counts; the small-business proportions in Table 2 are applied to this registry population to estimate the number of small regulated businesses.

2.1 Summary of New Requirements: The proposed rule adds the following requirements for regulated boiler owners:

2.2 Professional Services Required: Most affected businesses will not require outside professional services to comply with this rule. Operator designation, maintenance logs, and recordkeeping can be performed by existing staff with no specialized outside expertise. Professional services may be engaged in the following circumstances outlined in the table below.

No legal, accounting, or engineering consultants are anticipated to be required solely for compliance with this rule.

3.1 Per-Boiler and Total Annual Costs: Probable compliance cost estimates are drawn directly from the accompanying cost-benefit analysis (CBA), chapter 2. All costs reflect incremental new costs attributable to the proposed rule; costs already incurred under existing requirements or standard industry practice are excluded. The fully-loaded labor rate of $60.18/hr is applied throughout, consistent with OMB Circular A-4 (2023) guidance.4

3.2 Per-Business Costs: For purposes of the disproportionate impact analysis, per-business compliance costs depend on the number of boilers a business owns. Based on boiler program registry data, the average private-sector owner entity holds approximately 3.50 boilers. Applying this ratio to the per-boiler costs above:

Based on average of 3.50 boilers per private-sector owner entity (boiler program registry data: 12,170 regulated fired boilers ÷ 3,476 private-sector owner entities). The "combined noncompliant owner" row represents the predominant cost scenario; the "compliant owner" row reflects the marginal cost for businesses already meeting maintenance standards.

3.3 Revenue and Sales Impact: RCW 19.85.040(1) requires consideration of whether compliance with the rule will cause businesses to lose sales or revenue based on received input. No input was received from stakeholders regarding the impact to sales or revenue. However, L&I has considered this factor and concludes that the proposed amendments are not expected to cause measurable loss of sales or revenue for the affected businesses, for three reasons.

First, the rule regulates safety practices at the equipment level. It does not restrict any business activity, reduce output capacity, or limit the goods or services that affected businesses can produce or sell. Second, the dominant per-business cost driver applies only to the approximately 10 percent of owners currently not in compliance with manufacturer maintenance specifications. This cost is reasonably expected to be absorbed through operating margin or passed through via small adjustments in tenant rent, service pricing, or production overhead, rather than through reduced output. Third, no affected NAICS industry sells a product whose primary input is regulated under this rule; the rule does not alter the cost of any traded goods or service by more than a fraction of a percent of its revenue base.

L&I therefore estimates the probable revenue impact of the rule to be de minimis across all affected industries.

The proposed rule imposes compliance costs, primarily labor time for maintenance and recordkeeping, but does not restrict the sale of goods or services, limit operating hours, reduce permitted production capacity, or otherwise constrain business output. Accordingly, L&I does not anticipate that compliance with the proposed rule will cause businesses to lose sales or revenue.

The compliance costs estimated in Section 3.1 represent an increase in operating expenses. For most affected businesses, the central per-firm annual cost ($9,203 for noncompliant owners; $126 for compliant owners) is a small fraction of annual revenues. L&I has not identified any mechanism by which these costs would reduce customer demand, restrict output, or otherwise affect the top line of affected businesses.

3.4 Employment Impact: RCW 19.85.040 (2)(d) requires an estimate of the number of jobs that will be created or lost as a result of compliance with the rule. To quantify the employment impact, L&I applies Bureau of Economic Analysis (BEA) RIMS II Type II total employment multipliers, which estimate the number of jobs sustained or displaced per $1 million in final demand in the Washington state regional economy. The compliance costs estimated in Part 3 represent a reallocation of business expenditure toward regulatory compliance activities; the RIMS II framework translates this cost burden into an equivalent job-displacement estimate.

Table 5 presents the estimated jobs displaced by each cost-bearing provision. The central estimate is approximately 21.73 jobs displaced statewide, driven almost entirely by the maintenance and operational requirements (WAC 296-104-450 (2)-(3)), which account for approximately 21.00 of the 21.73 displaced jobs. The fireside inspection and recordkeeping provisions contribute fewer than one job combined. The range across low and high scenarios is 12.42 to 31.38 jobs.

These figures represent jobs displaced economy-wide by the reallocation of business spending toward compliance costs, not direct layoffs. The RIMS II Type II multiplier captures direct, indirect, and induced effects across the Washington economy; displaced activity is not confined to any single sector. For context, the central estimate of 21.73 jobs displaced is equivalent to 0.16 percent of the 13,560 workers in the occupations most directly connected to this rule: Stationary engineers, boiler operators, pipefitters, and related trades (ESD occupational employment and wage statistics 2024-2025). This reference population is used to characterize the scale of displacement relative to the most affected portion of the labor market, not to imply that all displacement falls within these occupations. Partially offsetting this displacement, the maintenance and inspection requirements may modestly increase demand for licensed boiler service technicians and inspectors, though the magnitude of this secondary effect is not quantified in the RIMS II framework. Net employment impact: Approximately 22 jobs displaced at the central estimate.

Part 4: Minor Cost Threshold Determination: Under RCW 19.85.020(2), a cost is "minor" if it is less than one percent of annual payroll or the greater of either 0.3 percent of annual revenue or $100. Where revenue data is not available at the NAICS level, L&I uses one percent of average annual payroll per firm as a proxy, consistent with SBEIS guidance. Average annual payroll per firm is derived from Washington state ESD QCEW 2024 annual averages and L&I boiler program registry data.

The maintenance requirement (WAC 296-104-450 (2)-(3)) is the primary cost driver at $9,076/firm central (based on 3.50 boilers per entity). This is the cost tested against the threshold. Fireside inspection ($56/firm central) and recordkeeping ($70/firm central) remain well below any reasonable threshold for all NAICS codes.

Five of the eight NAICS groupings, 2213, 3118, 3329, 5311, and 8123, show central per-firm maintenance costs exceeding the one-percent-of-payroll proxy threshold. Under the high-cost scenario ($13,045), NAICS 7211 (Traveler Accommodation) also exceeds its threshold, bringing the count to six of eight. The remaining two groupings, 3114-3117/3119 (Food Manufacturing, excluding Bakeries) and 3221 (Pulp, Paper and Paperboard Mills), fall well below their thresholds at both central and high estimates due to their substantially higher average payrolls per firm. For the five sectors where the central threshold is exceeded, the rule does not impose a "minor cost" under the statutory definition, and the disproportionate impact analysis in part 5 applies. For all eight groupings, the fireside inspection ($56/firm central) and recordkeeping ($70/firm central) costs are well below any reasonable threshold definition.

Part 5: Disproportionate Impact on Small Businesses: RCW 19.85.040(1) requires a determination of whether the rule will have a disproportionate impact on small businesses. Because the proposed rule imposes the same per-boiler requirements regardless of the size of the owning business, per-boiler costs are identical for small and large businesses. Disproportionate impact arises from the ratio of compliance cost to business scale, not from differential requirements.

The per-employee compliance cost ratio of approximately 20:1 (small vs. large business) reflects the scale difference between a small firm operating fewer boilers (for instance 1-2) boilers and a large firm operating substantially more boilers (example 10-20+) against a proportionally larger workforce. This finding is consistent across all NAICS codes in this analysis.

L&I concludes that the rule does have a disproportionate impact on small businesses within the inferred meaning from RCW 19.85.040, based on the cost-per-employee and cost-as-percentage-of-payroll differentials shown above. However, this impact is inherent to the structure of equipment regulation, per-unit costs are uniform while the capacity to absorb them scales with firm size, and cannot be further mitigated without reducing the safety standard which, given the documented human-error causation of boiler incidents, would weaken the impact of the rule.

5.1 Small Business Share of Affected Population: Applying the SUSB 2022 Washington small business shares from Table 2 to the boiler program's registry population of approximately 3,476 private-sector owner entities:

Of the approximately 348 noncompliant entities bearing the $9,076 central maintenance cost, the only provision exceeding the minor cost threshold, an estimated 290 to 325 are small businesses, applying the 84.5-93.5 percent small business share to the noncompliant population. These are the firms for which the rule imposes more-than-minor costs under RCW 19.85.020(2), and to which the disproportionate impact finding in this part applies. The remaining approximately 3,128 compliant small businesses face only fireside inspection and recordkeeping costs ($126/firm central), which fall below the minor cost threshold for all sectors.

Part 6: Small Business Involvement in Rule Development: RCW 19.85.040 (2)(b) requires a description of how the agency will involve small businesses in the development of the rule. L&I engaged stakeholders, including entities that own and operate regulated boilers, throughout the rule-making process through the following methods:

Part 7: Steps Taken to Reduce Impact on Small Businesses: L&I considered the following mitigation measures under RCW 19.85.030(2) in developing the proposed rule (outlined in Table 8).

L&I adopted the performance standard, simplified recordkeeping, and consolidated compliance approaches. Exemption for small businesses was not adopted because the safety basis for the rule applies regardless of firm size.

Part 8: Summary Determination: L&I analyzed the economic impact of the proposed rule to small businesses. Table 9 presents a summary of its determinations from the analysis in Parts 1-6.

L&I determines that the rule's disproportionate impact on small businesses is an inherent consequence of equipment-based regulation and cannot be further reduced without compromising the safety objective that the board has determined is required under chapter 70.79 RCW. The benefits of the rule, conservatively estimated at approximately $2.18 million annually, primarily through prevention of fatalities, injuries, and property damage incidents, substantially accrue to workers and the public served by regulated businesses, including the employees of small businesses themselves.

A.1 SUSB 2022 Washington State Data: Small business firm counts in Table 2 are drawn directly from the U.S. Census Bureau SUSB, 2022 Annual Data by Establishment Industry, Washington State (FIPS state code 53), retrieved from the combined U.S. and state detailed employment size file (us_state_naics_detailedsizes_2022.txt). All twelve underlying NAICS code entries (individual four-digit codes, prior to consolidation into the eight groupings presented in Table 2) passed integrity checks (ENTRSIZE 37 (<500) + ENTRSIZE 36 (500+) = ENTRSIZE 01 (Total) for each code).

The state-level SUSB file reports size classes at a coarser resolution than the national file. The relevant bands are: <5 employees (ENTRSIZE 02), 5-9 (03), 10-19 (26), <20 aggregate (33), 20-99 (34), 100-499 (35), <500 aggregate (37), and 500+ (36). The 20-99 band straddles the chapter 19.85 RCW threshold; no further disaggregation is available from this source. The floor/ceiling approach in Table 2 is the appropriate response to this data limitation.

A.2 ESD QCEW 2024 Annual Averages: Average annual payroll per firm figures used in the minor cost threshold test (Table 6) are derived from Washington state ESD QCEW, 2024 annual averages (revised), statewide six-digit NAICS file aggregated to the four-digit level. Total sector payroll (sum of component six-digit codes) is divided by average firm count (sum of component six-digit codes) to produce the average payroll per firm. Where individual six-digit codes are suppressed due to disclosure avoidance, the aggregation covers nonsuppressed codes only; the number of suppressed codes is noted in the worksheet. This is a sector-level average and does not distinguish small from large firms within each NAICS grouping. Industry-level employment, payroll, and firm data in Table 1 are derived by the same aggregation method. Firms represent QCEW average annual reporting units (establishments); employment is average annual employment; total payroll is reported in thousands of dollars ($000s). Average Firm Size = Employment ÷ Firms. Note that QCEW counts establishments (physical locations) while SUSB counts enterprises (legal entities); these figures are not directly comparable across tables.

A.3 Boiler Program Registry: The count of approximately 3,476 private-sector owner entities is drawn from L&I boiler program registration data as reported in the CBA (chapter 1). This registry covers all regulated equipment owners and is the authoritative source for the directly regulated business population. SUSB firm counts in Table 2 represent the broader industry universe and are used to derive the small business proportions applied to the registry population.

A.4 Cost Figures: All per-boiler and total annual cost figures in part 3 are drawn directly from the accompanying CBA (April 2026), Table 8. Per-business figures in Table 4 apply a 3.50 boilers-per-entity multiplier derived from boiler program registry data (12,170 regulated fired boilers ÷ 3,476 private-sector owner entities = 3.50). The maintenance cost applies only to the estimated 10 percent of owners (approximately 1,217 boilers; approximately 348 entities) not currently in compliance with manufacturer specifications.

The public may obtain a copy of the SBEIS or the detailed cost calculations by contacting Alicia Curry, L&I, Customer Service, Compliance, and Public Safety Division, P.O. Box 44400, Olympia, WA 98504-4400, phone 360-902-6244, fax 360-704-1980, email CSCPSRules@Lni.wa.gov.

June 2, 2026

Stephanie Gross, Chair

Board of Boiler Rules

RDS-6827.4