Questions Raised About Government Role at ICC
There has been a lot of press lately about federal bailout programs. I don’t think any U.S. citizen would disagree that our economy could certainly use a shot in the arm. But as all of us have the right to ask, I can’t help but wondering to what extent should the government be involved in regulating trade?
The Emergency Economic Stabilization Act of 2008 allocates $700 billion for use by the U.S. Treasury to “bolster the nation’s financial system” by purchasing the assets of distressed financial institutions. As the U.S. Treasury purchases these assets, they will also be given certain rights with regards to the control of them. There are those who would argue that the U.S. Treasury entering into the business of financial institutions at this level interferes with the free market.
Certainly with the housing bubble that so many of us benefitted from in recent years now burst, with the foreclosure rates on single family homes hitting record highs in our country, and with lending institutions reeling from the ramifications of having provided “easy money” to too many for too long, it’s clear that something needs to be done to stabilize the situation. One could argue that the lending institutions were greedy in providing many of the loans they provided in the first place, and that the average tax payer should not have to bail these companies out of the situation they got themselves into because of their own greed. Combined with the concerns that the federal government may now begin participating in the mortgage industry to an extent that it interferes with our capitalistic economy, and the need for some type of action to occur, the question of governmental involvement becomes critical.
The International Code Council uses what it refers to as a “governmental consensus” process to develop its family of International Codes. Although in many ways this process resembles a type of “open, consensus” process that the ICC itself requires for its referenced standards, it differs from that in one critical way. The final decision in what will actually go into the International Codes can only be voted on by ICC governmental member representatives. To qualify for this category of membership, one must be an employee or official of a governmental member and “actively engaged full or part-time in the administration, formulation or enforcement of laws, regulations or ordinances relating to public health, safety and welfare."
The ICC criteria for a governmental member itself is that it be a “government/municipality (including agencies, departments or units) engaged in administration, formulation or enforcement of laws, regulations or ordinances relating to public health, safety and welfare.” The argument for the use of a “governmental consensus” process by the ICC has been that public officials who have no economic interest in the outcome are best suited to determine the content of the International Codes. The concern that has now raised its somewhat nasty head within the ICC process is the whole question of “economic interest.”
There is nothing within the definition of an ICC governmental member representative that states that person is to have no “economic interest” in the outcome of any of the ICC code change proposals. And yet, the assumption has always been that the code officials and fire officials who vote at the ICC final action hearings are exactly that–free from any economical ties to the outcome of any vote, and therefore able to make a decision on any code change proposal free of financial bias.
If one thought about it long enough, it should not come as a surprise that eventually this notion of “no economic interest” might be challenged. Even if one is a full time employee of a government entity that does not necessarily mean one is totally free of any economic interest in the construction industry and goods and services that might be provided to it. As such, it's hard to imagine an individual who truly has no “economic interest” in the construction industry, or in changes to regulations of the construction industry.
Allegations have been made that some ICC governmental representatives who voted during the ICC final action hearings in Minneapolis accepted funds from private industry to attend the hearings and vote in the manner desired by that particular private industry. In some cases, these funds were presented as “scholarships” to cover the travel expenses of the ICC governmental representatives. An appeal against the decision made on two code change proposals (RB64 and RB66) related to the installation of fire protection sprinkler systems in residential construction, has been filed by the National Association of Home Builders. NAHB points to the number of voters present for those two proposals (1,752 and 1,685) in comparison to the 300 voters who remained a few hours later that same day, as an indication that there were parties who had been brought in specifically to vote on that one issue.
There has also been reports that the offering of scholarships to pay travel expenses was not limited to code change proposals related to fire sprinkler systems, but that it extended to the energy code hearings as well.
It should be noted that there is nothing within the ICC procedures that prohibit ICC governmental representatives from accepting funds from entities other than governmental agencies to participate in the ICC code development process. The rules merely requires them to be an employee–full time or part time – of a governmental agency. The problem that is raised by the acceptance of the offered funds by ICC governmental representatives is that it challenges the assumption that they are free of bias, and therefore will make decisions on code change proposals strictly based upon technical merit and the potential to increase the overall life safety of the built environment.
One could argue that the acceptance of these funds by ICC governmental representatives is not appropriate, and perhaps should even be banned. But if one agrees with that argument, one then needs to go further and address the very real question of how the ICC is to prohibit such activity in the future. Is it the intent of the ICC that those who vote on the final action have no economic interest in the outcome of the vote? If one is an employee of a municipality that is struggling now due to the downturn in permit fees, would one truly be free of economic interest when voting on a code change proposal that has the potential to increase the cost of construction in one’s jurisdiction as significantly as requiring sprinkler systems in every residence would? The same question could be asked with regard to code change proposals that would increase the cost of construction by placing more significant limits on the energy efficiency of components of the building.
This gets us back to the original question—“To what extent should the government be involved in regulating trade?” If the argument can be made that these governmental representatives are not free of economic interest, then perhaps an equally valid argument could be made that the ICC should open up their process to all interested parties and not continue to limit their consensus process to “governmental” only.
PROCEDURAL CHANGES AT ICC
With the increased adoption and enforcement of the International Codes across the U.S. has come an increase in participation in the code development process, with a corresponding increase in code change proposals and public comments each code change cycle. This in turn has resulted in the hearings themselves going on for several days. The longer the hearings, the more difficult it is for a jurisdiction to provide travel expenses for their employees to attend the hearings and vote on the code change proposals.
To address this problem, the ICC board of directors formed an ad hoc task force on hearings a few years ago to study the issue and develop recommendations on ways to facilitate the process without compromising its integrity. The task force has studied the issue, held members’ forums at ICC conferences and made recommendations to the ICC board. Two of the more significant recommendations that the board has agreed to accept and act upon are as follows:
- Reduce the redundancy of hearing multiple parts of the same code change by different committees by having all parts heard by the same committee, whenever possible. There is a restriction placed on this with regards to code change proposals for the IRC, by the memorandum of understanding ICC currently has with the NAHB regarding the structure of committee’s making decisions on the provisions of the IRC. All other code change proposals that seek revision of more than one International Code will be assigned to one committee and that one committee will hear all proposal parts related to the proposed code change.
- Restrict floor modifications to editorial ones only, as determined by the code change committee chair. The ruling of the code change committee chair as to whether a proposed modification is editorial or not will not be open to challenge.
Indications are that these procedural changes will be put in place during the 2009 ICC code change hearings.