These comments focus on the issue of violations and penalties. The New York City Benchmarking Law (Article 309, Chapter 3, Title 28, New York City Administrative Code) establishes failure to benchmark as a 'lesser violation' under the Construction Codes. The proposed rule sets out the penalty and a challenge process for such violation.

As currently drafted, the violation and penalty section (l) states "Failure to benchmark may result in a penalty of $500. Continued failure to benchmark may result in additional violations on a quarterly basis and an additional penalty of $500 per violation." This language should be amended.

First, as written, the word "may" creates uncertainty about whether a $500 penalty will be imposed on both first violators and chronic violators of benchmarking requirements. The word "may" must be replaced with the term "shall" to eliminate any uncertainty.

Second, language should be added to section (l) to stipulate that knowing submission of false or misleading information in an annual New York City Benchmarking Compliance Report shall result in a penalty of $5,000. Deliberate filing of false or misleading information to the government is a grave matter and should be punished accordingly.

Third, the rules should specify that the violation and penalty provisions shall go into effect in 2012, the second year of reporting requirements. My rationale for this proposal is rooted in the value of benchmarking as a tool for public awareness and education. Given the law's first-of-its kind status, mandatory use of the EPA Portfolio Manager software — created for non-mandatory benchmarking assessments — can create confusion, particularly in regard to calculating and reporting on 'space use attributes' in multi-family housing. Getting this right could entail a steep learning curve for many.

Since the goal of the benchmarking law is assembling a detailed and comprehensive picture of energy and water use in New York City, its achievement will be advanced by a year to learn how to do things right without fear of penalty. By the second year of reporting, property owners and their in-house staff or hired consultants should be expected to fully comply with all reporting requirement and violators should incur stipulated penalties.

Finally, with the data submitted in the 2011 cycle, the City will be in possession of a unique real world research opportunity. The regulatory language should stipulate that the City shall undertake an in-depth analysis of 10% of the total number of submitted Benchmarking Compliance Reports. This analysis will assess the accuracy and completeness of these Reports and, if appropriate, recommend changes to the Portfolio Manager's software or filing instructions for the purpose of optimizing benchmarking data obtained in future filing cycles. The City should share this analysis with the EPA and stakeholders and final recommendations ought to be made public six months prior to the 2012 filing deadline. Then, if any productive City rule changes are identified, a rule making process can be completed three months prior to the 2012 Benchmarking Compliance Reports filing deadline. Here's the greatest payoff for getting good data — as the Benchmarking law database grows larger, it will become a reliable resource for behavioral and market transformations.

Economics and behavioral sciences professor Richard H. Thaler succinctly summarized the rationale for this recommendation:

"Governments have learned a cheap new way to improve peoples' lives... Take data that you and I have already paid a government agency to collect and post it online... Then wait a few months. Voila! The private sector gets busy, creating Web site and smartphone apps that reformat the information in ways that are helpful to consumer, workers and companies." — New York Times, March 13, 2011

Thank you for the opportunity to comment on these draft rules.

NB: On March 21, at the close of the publlc comment period on these proposed rules, this notice was posted on the City's website:

"Benchmarking Due Date: The Office of Long Term Planning and Sustainability has every expectation that, for at least three months after May 1, 2011, no penalty will be assessed due to failure to comply with the benchmarking requirements of Local Law 84."