Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Martinez/Dow
LAST UPDATED
ORIGINAL DATE 02/03/2025
SHORT TITLE Construction Cost Studies
BILL
NUMBER House Bill 168
ANALYST Lobaugh
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
$0.0 to $80.0 $0.0 to $80.0 $0.0 to $80.0 $0.0 to $240.0 Recurring General Fund
Total $0.0 to $80.0 $0.0 to $80.0 $0.0 to $80.0 $0.0 to $240.0 Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Sources of Information
LFC Files
Agency Analysis Received From
Regulation and Licensing Department (RLD)
SUMMARY
Synopsis of House Bill 168
The Construction Industries Division (CID) of the Regulation and Licensing Department (RLD)
adopts building codes and minimum standards for the state’s construction industry as
recommended by its trade bureaus and approved by the construction industries commission (a
nine-member commission of construction industry stakeholders appointed by the governor). CID
has four trade bureaus (the general construction bureau, the electrical bureau, the mechanical
bureau, and the liquefied petroleum gas bureau) that recommend the minimum standards for their
respective jurisdictions.
House Bill 168 (HB168) would require the trade bureaus to produce a cost study estimating the
change to the cost of commercial and residential construction resulting from any recommended:
Changes to a minimum standard,
Changes to a specification, or
Adoption of a new rule anticipated to affect the cost of commercial or residential
construction.
HB168 would also require the construction industries commission to produce a cost study for
any rule anticipated to affect the cost of commercial or residential construction for which a trade
bureau has not already produced a cost study and then submit the study to CID.
House Bill 168 – Page 2
The effective date of this bill is June 20, 2025.
FISCAL IMPLICATIONS
HB168 does not include an appropriation. RLD would need to allocate resources from its
operating budget to cover any costs of HB168. RLD reverted $1.2 million in unspent funds to the
general fund at the end of FY24 and $1.1 million at the end of FY23.
RLD reports that the department would need to hire an economist to analyze the fiscal impact of
any changes to construction standards, specifications, or rules. RLD anticipates it would cost
between $5,000 to $20 thousand for each cost study, depending on the complexity of the
building code or rule changes. The annual expenses for cost studies could vary each year
depending on how many code adoptions or rule changes are recommended by the trade bureaus.
Based on the past three years, RLD anticipates that no more than four code adoptions will occur
during any given year. Consequently, the annual cost of implementing HB168 could range from
$0.0 (if no building code changes are recommended) to $80 thousand (if four building code
changes are adopted).
RLD notes that it collects written public comments from industry stakeholders before any
proposed changes to building codes are adopted. RLD reports that industry stakeholders
carefully evaluate the financial implications of adopting new codes and that CID considers this
stakeholder feedback. RLD also reports that the CID often weighs costs against benefits when
considering new building codes. Current stakeholder cost-benefit analyses and CID review of
written public comment may reduce the need to hire external economists when producing cost
studies of building code changes.
SIGNIFICANT ISSUES
CID trade bureaus review proposed rule changes and building code adoptions through technical
advisory committees made up of experts in the trades. After consensus is reached, the proposed
rule or code changes are presented at a public hearing following the State Rules Act. As part of
the process, CID notifies all its licensees with a registered email address about the proposed rule
changes or building code adoptions.
PERFORMANCE ISSUES
RLD notes that “mandating cost analyses could lead to a more complex and lengthy process.”
RLD reports this could delay the adoption of necessary codes, particularly in urgent situations
like public safety improvements and keeping with current Insurance Service Office rating
requirements.
CSL/hj/SR