Kretz, Kristiansen agree with governor on new building energy code delay

Lawmakers repeatedly asked State Building Code Council to back off job-killing new regulations

After a nearly two-year debate over new and costly building energy codes, in a June 8 letter the governor finally sided with House Republican legislators and asked the State Building Code Council (SBCC) to delay the new building energy regulations. On June 11, the SBCC enacted an emergency rule to suspend the new building code regulations and revisit the issue at a future date. Emergency rules stay in effect for 120 days, but can be renewed.

Reps. Joel Kretz and Dan Kristiansen serve on the Joint Administrative Rules Review Committee (JARRC). Both lawmakers worked with JARRC's chairman to ask the SBCC to provide a cost analysis of the new regulations. When the council refused to provide adequate numbers of job losses and costs to home buyers for the new building energy codes, the lawmakers cried foul.

“The construction industry, which has been a cornerstone of our state's economic boom over the past decade, is on life support right now,” said Kretz, deputy leader for the Washington House Republicans. “This state's leadership has been content with destroying permanent private-sector jobs to create so-called 'green jobs' that are often temporary and subsidized by the government. The imaginary 'green-jobs' industry seems to me to be more about growing government than creating an environment where small, privately-owned businesses can thrive. The bigger the government, the more taxpayer money it consumes.”

“One of the leading home builders in the state has estimated the new code changes could add as much as $24,000 to a new 1,200 square-foot single-story home. This puts the price of ownership out of reach for many who could have had an opportunity to buy a home. When people aren't buying homes, builders aren't building them, and that means fewer jobs and a longer period for our state to recover from this recession,” added Kristiansen, R-Snohomish.

Last fall, Kristiansen and Kretz argued the Legislature set implementation parameters when it passed and the governor signed Senate Bill 5854 in 2009. The law incrementally increases energy efficiency codes for buildings, beginning in 2013, with the goal of a 70 percent reduction in building energy consumption by 2031. In direct conflict with the law, the governor directed the SBCC to move the timeline up to require a 30 percent reduction in energy consumption for buildings by 2010.

This, the lawmakers contend, is what has sparked a heated controversy over the impact of the new regulations on job creation and retention in the construction and housing industries. Additionally, SBCC's small business impact statement noted “the number of jobs created or lost as a result of compliance with the proposed rule is unknown.”

However, the state Office of Financial Management (OFM) identified negative impacts of the new regulations in a Nov. 20 e-mail to the SBCC and the governor's office. In part, the OFM analysis reads: “For a large 148,000 sq/ft commercial project (a recent Costco development) with an estimated cost of $25-$35 million dollars, these code changes could increase the cost of the project by $500-$700 thousand dollars.” It also pointed out: “The up-front cost of new homes under this proposed code will certainly increase because of higher energy-related components.”

“The governor is finally taking notice of the potential impacts these new codes will have. We've been saying all along that these new regulations come at the worst possible time for builders and consumers seeking to purchase a new home. The construction industry has lost tens of thousands of jobs since 2007 and we've found through our own research that more than 15,000 employers could be affected by these new rules,” said Kristiansen, a former small-business owner in the construction industry. “Certainly home energy efficiency is a laudable goal, but at what price? The governor's July 2010 deadline was much too aggressive. Everyone in the building industry who I've talked with said it would be impossible for them to meet the new code requirements in such a short amount of time. I'm glad the governor is backing off of her original deadline and finally acknowledging the fact that implementing these regulations now could send our state into a deeper recession.”

Kretz, who serves as vice-chair of JARRC, worked with the chairman of the committee on two motions last fall to address questions about the impact on the construction industry and the jobs it creates. The unanimously adopted resolutions required the SBCC “to include a more rigorous and detailed analysis of the comprehensive impact of the proposed 100 or more changes on small businesses,” including an estimate of how many jobs would be lost or created. The second required a more detailed cost-benefit analysis of the proposed code changes.

“The motions got to the heart of the matter – will these costly regulations hurt or help our economic recovery? After reading the governor's letter to the SBCC, it appears she finally publicly acknowledges the costly regulations will hurt our state's economic recovery and job creation,” said Kretz, R-Wauconda. “Those of us fighting to keep housing affordable and help the construction industry recover and grow much-needed jobs are pleased the governor finally saw the forest through the trees and asked the SBCC to delay the implementation of job-killing new building codes.”

“Economic recovery in Washington is teetering on our leaders making the right kind of decisions. We won't get there with tax increases, higher regulations and shifting more costs onto consumers. In every decision related to our state's economy, we need to ask, 'Will this provide opportunity, not smother it? Will this foster productivity, not stifle it?' I'm glad the governor is waking up to the reality of what these regulations will mean for our economy. We're ready to work with her to ensure the best decisions are made to keep costs down and ensure people have jobs,” concluded Kristiansen.

Click here to read Gov. Gregoire's letter requesting code implementation delay

Bobbi Cussins, Public Information Officer to Rep. Kretz: (360) 786-7252
John Sattgast, Senior Information Officer to Rep. Kristiansen: (360) 786-7257

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Washington State House Republican Communications
houserepublicans.wa.gov