77210 Federal Register / Vol. 65, No. 237 / Friday, December 8, 2000 / Rules and Regulations

DEPARTMENT OF ENERGY

Office of Energy Efficiency and

Renewable Energy

10 CFR Part 440

(RIN 1904–AB05)

Weatherization Assistance Program for

Low-Income Persons

AGENCY: Office of Energy Efficiency and

Renewable Energy, Department of

Energy.

ACTION: Interim final rule.

SUMMARY: The Department of Energy is

issuing an interim final rule to amend

the regulations for the Weatherization

Assistance Program for Low-Income

Persons to incorporate the regulatory

changes proposed in the notice of

proposed rulemaking published in the

Federal Register on January 26, 2000.

The preamble of this interim final rule

also discusses the new legislative

amendments that Congress recently

enacted which were not a part of the

proposed rulemaking. These statutory

amendments, as well as other clarifying

language from previous rulemakings

will be incorporated into the program

regulations in a final rule to be issued

by the Department early next year. This

interim final rule adds clarifying

language, deletes obsolete language, and

improves the overall operation of the

Program to assist State and local

agencies in administering the Program.

DATES: Effective January 8, 2001.

Written comments are due January 8,

2001.

ADDRESSES: Send written comments

(three copies) to Greg Reamy,

Weatherization Assistance Program

Division, U.S. Department of Energy,

Mail Stop EE–42, 5E–066, 1000

Independence Avenue, SW.,

Washington, DC 20585. Copies of any

comments received will be available for

inspection between the hours of 9:00 am

and 4:00 pm, Monday through Friday,

except Federal holidays at the following

address: DOE Freedom of Information

Reading Room, Department of Energy,

Room 1E–190, Forrestal Building, 1000

Independence Avenue, SW.,

Washington, DC 20585 (202) 586–3142.

FOR FURTHER INFORMATION CONTACT: Greg

Reamy, Weatherization Assistance

Program Division, U.S. Department of

Energy, Mail Stop EE–44, 5E–066, 1000

Independence Avenue, SW.,

Washington, DC 20585, (202) 586–4074.

SUPPLEMENTARY INFORMATION:

I. Introduction

II. Amendments to the Weatherization

Assistance Program

III. Opportunities for Public Comment

IV. Procedural Requirements

V. Other Federal Agencies

VI. The Catalog of Federal Domestic

Assistance

I. Introduction

The Department of Energy (DOE or

Department) amends the program

regulations for the Weatherization

Assistance Program for Low-Income

Persons (WAP or Program). This

Program is authorized by Title III of the

Energy Conservation and Production

Act, as amended (Act), 42 U.S.C. 6561

et seq. The changes are necessitated by

the evolution of the Program since the

last publication of the rule on June 5,

1995 (60 FR 29470). These changes help

States by clarifying sections of the rule,

thereby enhancing the interpretation

and application of the program

requirements. Some of the definitions in

§ 440.3 are clarified and, where needed,

new definitions are added to provide a

clearer and more concise meaning to

States and local agencies who must

interpret these regulations. Other

sections applying to energy audits and

allowable expenditures are clarified to

enhance their meanings; and certain

obsolete items are deleted. Other

regulatory changes in today’s

rulemaking: add new and eliminate

obsolete terms in the Program

definitions; add ‘‘household with a high

energy burden’’ and ‘‘high residential

energy user’’ as new categories for those

receiving priority service; create a

separate cost category for health and

safety expenditures; provide flexibility

on the purchase of vehicles by local

agencies; reduce the eligibility criteria

for certain large multi-family buildings

to 50 percent; establish new minimum

energy audit criteria for the Program;

and revise the date for reweatherization

from 1985 to 1993.

Prior to developing and issuing this

interim final rule, a proposed

rulemaking was issued by DOE on

January 26, 2000 (65 FR 4331) after

consulting with its primary

stakeholders, representatives of both

State and local agencies, to listen to

their concerns about what issues they

wanted DOE to consider. The Program

has evolved from a relatively simple

approach of providing service to lowincome homes with unskilled labor,

installing low-cost/no cost retrofits, to a

program that conducts advanced

diagnostics and installs cost-effective

energy conservation materials. The

increased demand to maintain highlytrained crews has placed added strain

on State and local agencies efforts to

sustain a quality level of service to its

low-income clients. Many of the

changes lessen the administrative

burden and provide flexibility for State

and local agencies to incorporate the

ever-changing technical enhancements

as they become available. These changes

also make State and local agencies

better-suited to attract non-Federal

leveraged resources into their programs.

This interim final rule attempts to

address as many of those concerns as

possible. Many of the concerns that the

stakeholders raised to DOE were not of

a regulatory nature and were addressed

administratively through program

guidance documents.

Other concerns were statutory in

nature and formed the basis of the

legislative initiative proposed to the

Congress. The Department proposed on

September 20, 1999 several statutory

changes developed during discussions

with State and local stakeholders. These

proposed statutory changes were

enacted on November 9, 2000, as part of

the Energy Policy and Conservation Act

Amendments of 2000. These statutory

changes: (1) Eliminate the requirement

in § 440.18 that 40 percent of the funds

used to weatherize a home be spent for

materials; (2) restructure the method in

§ 440.18 by which States compute their

average cost per home by increasing the

average cost per home to $2,500

beginning in 2000; and (3) eliminate the

separate per dwelling unit average in

§ 440.18 for capital intensive

improvements and include capital

intensive costs as a part of the average

costs. The Department will issue a final

rule that will incorporate these changes

into the program regulations early next

year.

DOE plans to include in the preamble

of the final rule clarifying language on

several areas of the program regulations

where no actual changes were made.

This action will provide States and local

agencies the benefit of explanatory

language used in the preambles of

previous rulemakings which are still

applicable today. This is necessary since

many State and local staffs have

changed several times over the years

and much institutional knowledge has

been lost. A comprehensive final rule

will provide Federal, State, and local

agency staff a central document for

program regulatory information. This

will also help in providing uniform

interpretation of the regulations at all

levels of the Program.

II. Amendments to the Weatherization

Assistance Program

Section 440.1 Purpose and Scope

DOE deletes the first sentence in the

Scope and Purpose since this

information is duplicative of what is

Federal Register / Vol. 65, No. 237 / Friday, December 8, 2000 / Rules and Regulations 77211

stated elsewhere in the rule. DOE

amends the Purpose and Scope to add

to the priority categories the terms ‘‘high

residential energy user’’ and ‘‘household

with a high energy burden.’’ By adding

these two categories, States are better

able to prioritize their low-income

clients by targeting those experiencing

high energy costs and burden, thereby

addressing those units with the greatest

potential for energy savings.

Additionally, by including these two

categories, State and local agencies are

better able to coordinate services with

other Federal programs and leveraging

opportunities. The current priority

categories of the elderly, persons with

disabilities, and families with children

remain unchanged. Definitions for these

two terms are discussed in § 440.3.

Section 440.3 Definitions

DOE proposed in the notice of

proposed rulemaking (NOPR) to include

rule language in § 440.21(h)(1) to

encourage States to set the

temperature(s) used to calculate heating

and cooling degree data to more

reasonably reflect their housing stock

and climate, thereby reducing the

overestimation of energy savings for

most measures. By using, and defining

in § 440.3, the term ‘‘balance point

temperature,’’ which is also used to

describe the outside temperatures which

require operation of heating or cooling

equipment to maintain comfort, the

proposed change was interpreted by

some comments to be more substantial

than DOE intended. To clarify the

change described in § 440.21(e)(1) of the

interim final rule, DOE is substituting a

new term and definition for ‘‘base

temperature’’ that replaces the

definition of ‘‘balance point

temperature’’ given in the NOPR.

DOE adds a definition for ‘‘electric

base-load measures’’ to describe energy

use outside of the traditional

weatherization approach to heating and

cooling and building envelope

measures. As the Program evolves over

the next several years into a whole

house approach, DOE believes that

electric base-load measures, which

account for more than half the energy

used in a typical household, are

important when considering total

residential energy use. Limited lighting

measures are currently permitted in the

Program and in the near future DOE

may consider including other electric

base-load measures such as the

replacement of certain appliances. Most

of the comments supported this change.

DOE adds the term ‘‘high residential

energy user’’ which means a lowincome household whose residential

energy expenditures exceed the median

level of residential expenditures for all

low-income households in the State.

The definition for this category permits

State and local agencies to better

coordinate their activities and resources

with many utility programs. Most of the

comments supported this change.

DOE also adds the term ‘‘household

with a high energy burden’’ which

means a low-income household whose

residential energy burden (residential

expenditures divided by the annual

income of that household) exceeds the

median level of energy burden for all

low-income households in the State.

The definition for this category gives

States and local agencies greater

flexibility in determining priority

service for those households that may

not have traditional priority individuals

such as the elderly, persons with

disabilities, or families with children,

but are experiencing a particular

hardship due to their high energy

costs.Most of the comments supported

this change.

DOE substitutes the term ‘‘persons

with disabilities’’ for the term

‘‘handicapped’’ to reflect the current

accepted reference. The definition

remains unchanged.

DOE considered both State and local

agency concerns over the definition of

‘‘low-income’’ and the difficulties in

effectively administering, coordinating,

and leveraging between various Federal

low-income programs using different

definitions. However, in a review of the

Act and the legislative history of the

Program, DOE chose not to amend the

existing definition. The comments were

generally supportive, but stated that

DOE should consider raising the

eligibility criteria to be more compatible

with other Federal programs. The DOE

Weatherization Assistance Program was

established to serve the neediest

Americans. To expand the eligibility

requirements to facilitate coordination

with other Federal programs either

through increasing eligibility to 80

percent of the poverty level, permitting

census tracking of neighborhoods, or

allowing area average median income

levels would change the scope and

purpose of the Program. More

importantly, expanding the eligibility

criteria would substantially increase the

number of households eligible for

assistance which already stands at over

29 million. DOE has addressed this

issue in detail in the annual program

grant guidance.

Section 440.14 State Plans

DOE reorganizes and revises § 440.14

to eliminate unnecessary and

duplicative information. The comments

stated that some of these requirements

are no longer needed and should be

eliminated to reduce paperwork and

time in the production of the annual

State plan. In reorganizing this section,

DOE grouped items together relating to

the public hearing. Items specific to the

development of the State plan are also

placed together. The information for the

production schedule is now projected

annually instead of quarterly and

includes the number of previously

weatherized homes expected to be

weatherized.

DOE eliminates § 440.14(b)(2), (6), (7),

and (b)(8)(iii). The comments agreed

with DOE that this information

requirement resulted in the States

providing little more than meaningless

estimates to DOE. States will continue

to report to DOE the number of persons

served in each of these groups.

DOE retains the requirement for

information on the number of dwelling

units expected to be weatherized for

each area, but eliminates the expected

number of previously weatherized units

for each area. States have no idea how

many previously weatherized homes

can be expected to be weatherized for

each area of the State.

Section 440.14(c)(6)(xi) retains from

proposed § 440.14(b)(6)(xi) the

requirement that States identify and

describe the type of audit that meets the

criteria outlined in § 440.21 and that

DOE has approved. However, the

reference to Project Retro-Tech or

another DOE-approved audit is

eliminated in this section as well as in

§ 440.21.

Section 440.15 Subgrantees

DOE amends § 440.15(a)(3)(iv) to

eliminate the reference to ‘‘JTPA’’ and

replace it with ‘‘other Federal or State

training programs.’’ The JTPA Federal

program was repealed effective July 1,

2000 pursuant to Pub. L. 105–220. The

comments supported this change.

Section 440.16 Minimum Program

Requirements

DOE adds clarifying language to

§ 440.16(b) to allow States to include

‘‘high residential energy user’’ and

‘‘household with a high energy burden’’

as priority groups among those receiving

weatherization services. The use of the

two new priority categories is not

mandatory. Comments received were

generally favorable to this change. Most

comments stated that by adding these

two categories, DOE has provided State

and local agencies with expanded

flexibility to choose the categories for

priority which best serve their

respective programs.

DOE amends § 440.16(d) to eliminate

the reference to ‘‘JTPA’’ and replace it

77212 Federal Register / Vol. 65, No. 237 / Friday, December 8, 2000 / Rules and Regulations

with ‘‘other Federal or State training

programs.’’ The JTPA Federal program

was repealed effective July 1, 2000

pursuant to Pub. L. 105–220. States

should describe any ‘‘other Federal or

State training program’’ they will be

using in their annual State plans as

sources of labor. The comments

supported this change.

Section 440.17 Policy Advisory

Council

DOE received numerous comments

expressing concern that DOE was

proposing to eliminate the Policy

Advisory Council (PAC). Many argued

that the PAC performs very well in the

States and provides a unique insight on

many poverty issues, including

weatherization. They stated that a Statebody would not offer the same

independent oversight and that the lowincome would lose an important voice

for the local agency in managing poverty

programs. In proposing this flexibility to

the State, DOE did not mean to imply

that the State had the authority to

replace without due cause any PAC.

Rather, the State must show cause to

DOE that the existing PAC is either nonexistent or is not functioning as outlined

in § 440.17. DOE is aware that in most

instances, the PAC does work as it was

intended. DOE also would give

preference to any legitimate PAC that is

replaced for cause by a State council or

commission and then later

reconstituted. DOE agrees with the

comments that the traditional role

played by the PAC should be protected

by the regulations. However, DOE and

the States are also concerned that in

some States, the PAC does not function

as intended and is, in some instances,

simply non-existent.

Therefore, DOE amends § 440.17(a) to

include the language ‘‘or a State

commission or council’’ which meets

the criteria in § 440.17 and is approved

by DOE. Many State agencies which

operate the DOE Weatherization

Assistance Program have existing

commissions or councils which review

and approve policies and plans for

many other Federal programs. States

which opt to utilize an existing

commission or council have to certify to

DOE, as a part of the annual application,

that the council or commission is an

independent reviewer of activities for

the Program, and that the State will

address this issue as a part of the public

hearing held on the State Plan.

Therefore, any person(s) employed in

any State Weatherization Program can

also be a member of an existing

commission or council but will have to

abstain in reviewing and approving the

activities associated with the DOE

Weatherization Assistance Program.

Section 440.18 Allowable

Expenditures

DOE deletes from § 440.18(b) and

(b)(2)(i) references to (c)(15), the cost of

eliminating health and safety hazards

from the amount of funds used to

determine the average cost per home.

State and local agencies indicated to

DOE that including the cost of health

and safety into the amount of funds that

can be spent on a home severely

restricts their flexibility to operate

effectively their programs. In providing

for this flexibility, DOE agrees that

excluding these costs from the average

cost per home would afford States and

local agencies the opportunity to fund

advanced technology practices into their

weatherization programs while reducing

their administrative burden.

In the notice of proposed rulemaking,

DOE proposed to create a separate line

item for the cost of purchasing vehicles.

DOE solicited comments on this

proposal as well as an alternative

approach which effectively deferred this

large cost over both the life of the

vehicle and the number of homes served

during that period. DOE has decided to

not create a separate line item because

this distorts the actual cost of

weatherization work done on a home. In

accepting the alternative proposal in

this interim final rule, DOE retains the

cost of purchasing vehicles as a part of

the amount of funds used to determine

the average cost per home currently in

§ 440.18(c)(6).

For some local agencies, purchasing

vehicles under the existing rule often

forced them to seek low cost

weatherization candidate homes in

order to maintain their normal operation

while ignoring potentially higher energy

savings homes. To address the concerns

expressed by State and local agencies

that the cost of these vehicles and

certain types of equipment included in

the average cost per home calculation

placed an undue burden on them, DOE

amends § 440.18(b) by adding paragraph

(3). This paragraph allows State and

local agencies to determine the average

cost per unit by excluding from the

average per unit cost calculations that

portion of the purchase cost of vehicles

and certain types of equipment made

during that particular funding year.

Thus, States may amortize these costs in

their average cost calculations so that

only that fraction of the cost of a new

vehicle or equipment purchase which

was actually ‘‘used’’ during the current

year is included.

For example, if a local agency

purchases a new vehicle for $24,000

with an expected life of the vehicle of

8 years (96 months), then the cost of that

vehicle could be amortized at the rate of

$3,000 per year or $250 per month. This

approach also affects certain types of

equipment purchases having a useful

life of more than one year and a cost of

$5,000 or more as defined by 10 CFR

part 600. It also permits local agencies

to spread these costs out over the useful

life of the vehicle or equipment

purchase, even though the full purchase

price is reported in the year in which it

occurs. DOE will address the specific

reporting requirements for amortized

costs for vehicle and equipment

purchases in program guidance.

The comments generally supported

the proposed extension of the date by

which a dwelling unit can be

reweatherized. Therefore, DOE amends

§ 440.18(e)(2)(iii) by extending the date

by which homes can be reweatherized

from 1985 to 1993. Previously, DOE

extended this date from 1975 to 1985

based on the evolution of the Program.

Between 1975 and 1979, the Program

addressed primarily building envelope

measures. In 1985, the Program

expanded to place more emphasis on

mechanical measures, including furnace

efficiency modifications. Since the last

rulemaking which introduced new

criteria for advanced energy audits,

virtually all States have improved their

energy auditing techniques. DOE

acknowledges this overall program

improvement by the States and is

confident that by extending the date to

1993, those homes weatherized between

1985 and 1993 will provide an even

greater opportunity to achieve increased

energy efficiency. DOE also reminds

States that homes which become

candidates for reweatherization must

have a new energy audit performed and

that audit will take into consideration

any previous weatherization

improvements done on the home.

Section 440.19 Labor

DOE revises § 440.19 by deleting

references to JTPA and replacing it with

‘‘other Federal or State training

programs.’’ The JTPA Federal program

was repealed effective July 1, 2000

pursuant to Pub. L. 105–220.

Section 440.21 Standards and

Techniques for Weatherization

DOE proposed in the NOPR to

rename, reorganize, and revise this

entire section. The significant changes

in response to public comments

incorporated into this interim final rule

further revise, reorganize, and renumber

the paragraphs constituting § 440.21.

The proposed name change more

accurately reflects the subject matter of

Federal Register / Vol. 65, No. 237 / Friday, December 8, 2000 / Rules and Regulations 77213

§ 440.21. The other major changes

eliminate the base audit criteria and

make the waiver audit criteria the

minimum criteria for an energy audit

used in the Program. In its final rule

published on March 4, 1993 (58 FR

12525), DOE provided for a waiver of

the 40-percent material cost requirement

described in § 440.18(a) for those States

that adopted advanced energy audit

procedures. Today, virtually all of the

States have incorporated an approved

waiver audit and received a waiver of

this requirement from DOE. Within the

next year, all States will be using an

approved waiver audit.

In the NOPR published on January 26,

2000 (65 FR 4338), DOE proposed to

make the existing waiver energy audit

requirements the new minimum

standard for all energy audit procedures.

The 40-percent material cost

requirement and the waiver provisions

have become unnecessary and their

suggested elimination from the statute is

discussed later in this rule. States and

local agencies have made great strides in

improving the energy auditing

techniques used in their programs

during this decade. Investments in time

and resources have paid dividends in

the form of greater energy efficiency and

savings on the types of materials and the

installation techniques used in the

Program.

To implement this change, DOE

proposed to delete all references to

Project Retro-Tech audit procedures and

the simplified cost-effectiveness tests

used with Project Retro-Tech. DOE

proposed that all energy audits require

calculation of a savings-to-investment

ratio for weatherization measures, and

assignment of priorities based on the

resulting figures consistent with the lifecycle cost methodology developed by

DOE’s Federal Energy Management

Program and the National Institute of

Standards and Technology (NIST).

While the cost-effectiveness

requirements for the selection of

weatherization measures under the

waiver audit criteria were generally not

made more stringent, they were

described in more detail since they were

to become the minimum criteria.

Of the 71 total comments that DOE

received on the NOPR, 60 contained

comments regarding the proposed

changes to § 440.21. A large number of

comments (46) expressed the belief that

§ 440.21 was overly complicated,

detailed, and prescriptive in contrast to

the simplification afforded by the rest of

the proposed rule changes. These

comments suggested that much of the

text in § 440.21 should be moved to

policy guidance. Further, the comments

suggested that the proposed language

locked the program into terminology

and technology that time and research

may supersede.

Based on these comments, DOE agrees

to simplify § 440.21 by moving many of

the details describing the costeffectiveness requirements for measure

selection from the regulations to policy

guidance. Only a brief, general

description of the cost-effectiveness

requirement remains in the rule text.

In § 440.21(f)(1) of the NOPR, DOE

proposed to address the interaction of

measures by including the phrase

‘‘using generally accepted engineering

methods’’ to remind States to use

reasonable energy-estimating methods

and assumptions to account for the

interaction among weatherization

measures. Since no comments were

received, § 440.21(d)(1) of the interim

final rule includes this change.

In § 440.21(d) of the NOPR, DOE

proposed to include the sentence, ‘‘The

lifetime of materials must not exceed

the remaining useful life of the

dwelling,’’ to acknowledge that the lowincome housing stock served by some

programs is in poor condition. A

weatherization measure may appear to

be cost-effective assuming the energy

cost savings accrue over the entire 20-

year economic life of the material, but

may not be cost-effective if the energy

savings accrue over a shorter period of

time in light of the remaining useful

dwelling life, for example, ten years.

Three comments pointed out the

difficulty in determining accurately the

remaining useful life of a dwelling and

the possible adverse impacts related to

this proposed requirement. In response

to these comments as well as to other

comments, DOE has agreed to remove

from the rule the language containing

this proposed requirement. The

guidance that is eventually issued to

detail the cost-effectiveness

requirements will not mandate that the

remaining useful life of a dwelling be

used in the life-cycle cost calculations.

However, States will be encouraged in

the guidance to consider remaining use

dwelling life when selecting the most

appropriate measures in light of the

legislative requirement to measure the

rate of return of the total conservation

investment. Determining when the

remaining useful life of a dwelling may

impact the cost-effectiveness

calculations of weatherization measures

and estimating the remaining useful life

of such dwellings should be left to the

discretion of the local agency.

Ten comments questioned the impact

of specifying the use of FEMP life-cycle

costing analysis methods to determine

measure cost-effectiveness. The

comments expressed concern about

what would happen if FEMP did not

establish standards for every material or

measure that may be cost-effective in

low-income households. DOE specified

the FEMP annual supplement as a

convenient source for the discount rate

and, if used, the fuel cost escalation

rates used to calculate savings-toinvestment ratios since the existing rule

language did not give States an easy-touse information source. The FEMP

Handbook and annual supplement

discuss life-cycle costing of any and all

energy conservation investments and do

not address material standards.

However, in simplifying § 440.21 and

moving many of the cost-effectiveness

details to policy guidance, references to

FEMP have been removed from the rule.

Annually, DOE will either distribute the

FEMP annual supplement to each State,

or inform the States when the

supplement is published and how it

may be obtained.

In § 440.21(h) of the NOPR, DOE

proposed changes to the energy audit

requirements that do not pertain to lifecycle costing methods. DOE proposed in

paragraph (h)(1) of the NOPR to

substitute the phrase ‘‘climatic data’’ for

the existing ‘‘number of heating or

cooling degree days’’ to acknowledge

that other types of weather data besides

heating and cooling degree days can be

used in the estimation of fuel cost

savings. Since no comments were

received, this change is included in

§ 440.21(e)(1) of the interim final rule.

DOE proposed in § 440.21(h)(1) of the

NOPR to include rule language to

encourage States to set the balance point

temperature(s) used in conjunction with

heating and cooling degree data to more

reasonably reflect the outside

temperatures which require operation of

heating or cooling equipment to

maintain comfort. Three comments

questioned how balance point

temperatures would realistically be

incorporated into the program, and

noted that many currently approved

audits did not estimate balance points

as NEAT does. The use of the term

‘‘balance point temperature’’ instead of

the more appropriate ‘‘base

temperature’’ made the proposed change

appear more substantial than DOE

intended.

Heating degree days are computed by

subtracting the average daily

temperature from a base temperature,

which has traditionally been 65°F. The

traditional heating degree day base

temperature assumes that the furnace

needs to run at outside temperatures

less than 65°F. In reality, the furnace is

typically not needed until the outside

temperature drops below around 60°F

due to the heat generated by lights,

77214 Federal Register / Vol. 65, No. 237 / Friday, December 8, 2000 / Rules and Regulations

appliances, and people. Because of the

thermal mass of a dwelling and other

reasons, air conditioning is not usually

required until outside temperatures

exceed the traditional cooling degree

day base temperature (65°F) by about 5

to 10°F.

Encouraging States to use degree day

data calculated at base temperature(s)

that more reasonably reflect their

housing stock and climate would not

only reduce the overestimation of

energy savings for most measures, but

would also more accurately model their

true cost-effectiveness. While ideally the

base temperature(s) used would be the

building’s balance point, DOE

recognizes the prohibitive analytical

burden this would impose. Instead,

States are encouraged to select

appropriate heating and cooling degree

day base temperatures based on the

validation of their energy estimating

software or other reasonable basis. DOE

has substituted the term ‘‘base

temperature’’ (and definition in § 440.3)

for proposed ‘‘balance point

temperature’’ in § 440.21(e)(1) of the

interim final rule and reworded this

paragraph to more accurately reflect the

intended change.

The State Energy Efficiency Programs

Improvement Act of 1990, which

amended 42 U.S.C. 6861 et seq., stated

that energy audit procedures should

‘‘establish priorities for selection of

weatherization measures based on their

cost and contribution to energy

efficiency.’’ DOE interprets this

language, in part, to mean that advanced

energy audit procedures should

consider energy efficiency as well as

total energy savings. For example,

replacing an existing space heater being

used to heat a single room, with a more

energy efficient central furnace, capable

of heating the whole house, would

probably increase energy use even as it

improved energy efficiency. The

occupants would also be better able to

use the entire dwelling unit. Unless

undertaken for health and safety

reasons, this measure must be cost

justified by the audit. Addressing energy

efficiency in this case would require a

cost justification that compares the

energy usage of the central unit to the

energy usage of heating the entire home

with space heaters.

The existing rule language addressing

this issue states that energy audit

procedures must ‘‘consider the rate of

energy use,’’ which does not clearly

describe the need to look at both energy

efficiency and total energy savings. To

more directly address situations similar

to the space heater example, DOE

proposed instead to include the phrase

‘‘and energy requirements.’’ This

proposed change combined the

requirement to determine the existing

energy use with the need to determine

existing energy requirements from

actual energy bills or by generally

accepted engineering calculations. As in

the space heater example, the energy

requirements of a dwelling unit may

exceed its existing energy use.

The one comment addressing this

proposed change agreed with the need

to consider both energy efficiency and

total energy savings. However, the

comment expressed concern about

encouraging the conversion of zone, or

room, heating systems to whole-house

systems. DOE realizes that these types of

situations must be considered on a caseby-case basis, but believes that the

proposed change clarifies the original

intent of the legislation. Therefore, DOE

has included this change in

§ 440.21(e)(2) of the interim final rule.

Proposed § 440.21(h)(7) included

language to remind States that DOE

would have to approve an energy audit

for each major dwelling type covered by

the State’s weatherization program in

light of the different energy audit

requirements of single-family dwellings,

multi-family buildings, and mobile

homes. One comment expressed

concern about this requirement for

programs that only weatherize a few

mobile homes or multifamily buildings

each year. The comment stated that the

requirement should only apply if mobile

homes or multifamily buildings

represented over five percent of the

units weatherized by the State each

year. Based on this comment, DOE has

included in § 440.21(e)(7) of the interim

final rule revised language which states,

‘‘that represents a significant portion of

the State’s weatherization program.’’

Future guidance will define

‘‘significant’’ at an appropriate level to

be determined.

Proposed § 440.21(i) included

language that clarified the type of

information DOE currently requires to

approve State priority lists for similar

dwelling units. When States submit to

DOE their request for priority list

approval, they often do not provide

sufficient detail. For example, an

adequate description of the types of

dwelling units (e.g., 1-story ranch, 11⁄2-

story Cape Cod) covered by the priority

list(s) often is missing. The methodology

used to select the representative sample

of dwellings used to develop the

priority list often is not explained, nor

are the circumstances that will require

a site-specific audit in lieu of the

priority list adequately described. The

increased energy savings resulting from

advanced energy audit procedures could

be compromised by priority lists that are

not based on truly typical housing stock

or used without comprehensive

guidelines that tell an auditor when

atypical circumstances require a sitespecific audit.

Three comments disapproved of the

perceived increased DOE scrutiny of

priority lists. While DOE encourages the

site-specific energy audit of every

dwelling weatherized, it realizes that

this is often not possible considering the

constraints on field staff imposed by

funding limitations and production

pressures. The comments suggested that

time spent conducting an energy audit

might be better spent on increasingly

sophisticated diagnostic testing to

ensure that the dwelling is adequately

ventilated, combustion appliances are

operating safely and efficiently, and that

the combustion appliances vent

properly. DOE agrees that priority lists

are valuable tools in reducing energy

costs in the greatest possible number of

low-income households. Yet, DOE is

responsible for ensuring the technical

soundness of priority lists in light of the

substantial Federal investment. For this

reason, DOE has retained in § 440.21(h)

of the interim final rule the existing

documentation requirements for the

approval of priority lists.

One comment pointed out that

proposed § 440.21(j), which requires

every State to document the

performance of the same presumptively

cost-effective general heat waste (GHW)

reduction materials, needlessly

duplicates effort. The comment further

noted that this documentation often

comes from publications authored by

DOE. The comment suggested that DOE

issue an initial list of approved GHW

materials as policy guidance. DOE

agrees with this comment and has

revised that paragraph, which is now

§ 440.21(g), and will issue guidance

specifying approved GHW materials.

States may request approval for GHW

materials not listed in DOE policy

guidance by providing the required

documentation.

Existing regulations require priority

lists to be revalidated every five years.

To make the revalidation of priority lists

more straightforward, DOE proposed in

§ 440.21(k) and (l) to require States to

submit to DOE for approval every five

years their complete energy audit

procedures including priority lists and

lists of general heat waste reduction

materials. To revalidate their priority

lists, States would have to re-run their

energy audit on a subset of the similar

dwellings that the priority list covers.

Prior to the issuance of the NOPR, States

have logically argued that their housing

stock and typical housing types do not

change significantly over a five-year

Federal Register / Vol. 65, No. 237 / Friday, December 8, 2000 / Rules and Regulations 77215

period. However, technologies, material

and energy costs, and auditing tools do

change. DOE encourages the continual

improvement of audit tools as

evidenced by new versions of NEAT

over the years. The best and most

current audit software should be used in

developing priority lists. Additionally,

since the latest version of a State’s audit

software may not have specific DOE

approval, it makes sense for the DOE

approval process to update the energy

audit and priority lists every five years.

One comment supported the proposed

change to include energy audit

procedures in the priority list

revalidation requirement. Five

comments disagreed with the proposed

change as well as the existing

requirement to revalidate priority lists

every five years. The comments against

the proposed change argue that

revalidation of priority lists should be

based on factors that measure costeffectiveness, such as fuel and material

costs. While DOE does not wish to

impose unnecessary documentation

requirements on States, the Department

is responsible for ensuring that only

cost-effective weatherization measures

be installed with DOE funds.

One comment argued that DOEapproved energy audits should stay

approved until they no longer comply

with the requirements. Since States

constantly change and improve their

energy audit practices and protocols,

DOE believes it is prudent to conduct

periodic technical assessments of States’

entire energy auditing procedures. DOE

looks at not just the energy audit

software but how the State uses the

software. DOE energy audit approval

process reviews all of the procedures

States use to select and install

weatherization measures, as well as

health and safety practices affecting

clients and field crews.

Thirty-nine (39) comments stated that

the process by which DOE reviews

energy audits, including garnering State

and expert input, should be described in

the rule, as well as the process by which

the Department will update the

guidance. The comments also wanted

DOE to include in the rule its plan for

assuring uniform consideration by its

regional offices and processes for

appeals should a proposed audit be

turned down. While existing guidance

and review practices effectively address

many of these concerns, DOE will

revisit its energy audit approval process

and will seek State and expert input.

However, DOE believes that policy

guidance is the most appropriate place

to describe processes for reviewing

energy audits and updating guidance

since such processes are likely to

change over time.

Although § 440.21(h) of the interim

final rule retains the general five-year

revalidation requirement, DOE has

revised the proposed rule language to

indicate that the policy guidance (issued

after seeking State and expert input)

will specify the information that States

must submit and the circumstances that

reduce or increase documentation

requirements. The documentation

required to revalidate priority lists will

likely be substantially reduced in cases

where the factors affecting the costeffectiveness of weatherization

measures on the priority lists (e.g.,

housing stock, costs, energy estimating

algorithms) have not changed

significantly since original DOE

approval.

Twenty-one (21) comments addressed

the proposed § 440.21(k) requirement

for States to submit to DOE for approval

each new version of non-NEAT/MHEA

energy audit software released

subsequent to State-specific DOE

approval. The comments were

concerned that the requirement might

stifle the adoption of evolutionary

software improvements and would

increase the reporting burden on States.

As indicated in § 440.21(h) of the

interim final rule, DOE agrees with

these comments and will include in

policy guidance (to be issued after

seeking State and expert input) the

reduced reporting requirements

regarding new releases of energy audit

software.

Thirty-nine comments suggested that

the policy guidance should also address

the manner in which new technologies

will be addressed and incorporated into

the program. These comments also

asked how additional benefits other

than energy efficiency, such as climate

change benefits, will be added to the

program. The Millennium

Implementation Planning Committee

has assembled a panel of stakeholders

that is currently developing a new

system to identify, assess, and

incorporate advanced technology into

the program in a more open and

expedient manner. The non-energy

benefits of the Weatherization

Assistance Program are often included

in overall program evaluations and

program justification discussions.

Perhaps the program can use these nonenergy benefits to its advantage in future

emissions trading systems. However,

DOE believes more information on this

issue needs to be explored before

making a final decision.

One comment requested that the

cleaning and tuning of air conditioners

be added to Appendix A. The comment

explained that an air conditioner clean

and tune typically involves cleaning the

cooling coil and straightening the fins.

Under the heading ‘‘Heating and

Cooling System Repairs and Tune-Ups/

Efficiency Improvements,’’ cleaning

heat exchangers of heating systems is

listed. DOE considers the lack of a

specific listing for cleaning cooling coils

an oversight that will be resolved when

Appendix A is updated in the near

future.

In the preamble of the proposed rule,

DOE indicated the possibility of

proposing in the future a requirement

for States to include overhead charges

(such as costs for off-site supervisory

personnel, tools, vehicles, etc.) in the

savings-to-investment ratio calculations

for individual weatherization measures.

In that discussion, DOE stated that such

costs are a significant fraction of the

total costs of weatherizing individual

homes and should, therefore, be

considered in the assessment of the

relative costs and benefits of measures.

DOE received five comments on this

suggestion. Four of the comments were

interested in accounting for overhead

costs but believed that these costs

should perhaps be a part of an overall

State evaluation of the Program instead

of impacting measure selection on a

home-by-home basis. DOE will continue

to urge States to consider such overhead

costs in the measure cost-effectiveness

calculations. However, in developing

any future proposal to require the

inclusion of overhead costs, DOE

intends to study this issue further with

the stakeholders.

Section 440.22 Eligible Dwelling Units

DOE amends § 440.22(b)(2) to add

certain eligible types of large multifamily buildings to the list of dwellings

that are exempt from the requirement

that at least 66 percent of the units are

to be occupied by income-eligible

households. In these large multi-family

buildings, as few as 50 percent of the

units would have to be certified as

eligible before weatherization. This

exception applys only to those large

multi-family buildings where an

investment of DOE funds would result

in significant energy-efficiency

improvement because of the upgrades to

equipment, energy systems, common

space, or the building shell. By

providing this flexibility, local agencies

are better-suited to select the most costeffective investments and enhance their

partnership efforts in attracting

leveraged funds and/or landlord

contributions. While most comments

were supportive, several comments did

suggest that this flexibility should be

extended to cover all multi-family

77216 Federal Register / Vol. 65, No. 237 / Friday, December 8, 2000 / Rules and Regulations

buildings. In the proposed rule, DOE

made it clear that this flexibility will be

targeted to only these certain types of

buildings because of the large

investment involved and the potential

for greater energy savings.

III. Opportunities for Public Comment

A. Participation in Rulemaking

The Department encourages public

participation in this rulemaking. The

Department has established a period of

30 days following publication of this

interim final rule for persons to

comment. You may review all public

comments and other docket material in

the DOE Freedom of Information

Reading Room at the address shown at

the beginning of this notice of the

interim final rule.

B. Written Comment Procedures

Interested persons and organizations

are invited to participate in this

rulemaking by submitting data, views,

or comments with respect to the interim

final rule. Please provide three copies of

your comments to the address indicated

in the ADDRESSES section of this interim

final rule. DOE will consider all timelysubmitted comments and other relevant

information before this rule becomes

effective.

IV. Procedural Requirements

A. Review Under Executive Order 12866

Today’s interim final rule has been

determined not to be ‘‘a significant

regulatory action’’ under Executive

Order 12866, ‘‘Regulatory Planning and

Review,’’ 58 FR 51735 (October 4, 1993).

Accordingly, this action was not subject

to review under that Executive Order by

the Office of Information and Regulatory

Affairs of the Office of Management and

Budget (OMB).

B. Review Under the Regulatory

Flexibility Act

The Regulatory Flexibility Act, 5

U.S.C. 601 et seq., requires preparation

of an initial regulatory flexibility

analysis for any rule that by law must

be proposed for public comment, unless

the agency certifies that the rule, if

promulgated, will not have a significant

economic impact on a substantial

number of small entities. DOE

published a notice of proposed

rulemaking to amend 10 CFR part 440

to give State and local agencies

additional flexibility in addressing the

weatherization needs of low-income

citizens and to make other changes

designed to streamline and update

DOE’s Weatherization Assistance

Program. The proposed rule was

developed following extensive

consultation with State and local

stakeholders and after reviewing

comments received. DOE said that the

proposed rule would have not any

adverse economic impact on any small

governments, organizations or

businesses. Accordingly, DOE certified

that the proposed rule, as promulgated,

will not have a significant economic

impact on a substantial number of small

entities. DOE did not receive any

comments of this certification, and the

addition of mandated cost sharing

requirements does not warrant

reconsideration of the certification.

C. Review Under the Paperwork

Reduction Act

No new collection of information is

imposed by this interim final rule.

Accordingly, no clearance by the Office

of Management and Budget is required

under the Paperwork Reduction Act (44

U.S.C. 3501 et seq.).

D. Review Under the National

Environmental Policy Act

DOE has concluded that promulgation

of this interim final rule falls into a class

of actions that would not individually

or cumulatively have a significant

impact on the human environment, as

determined by DOE regulations

implementing the National

Environmental Policy Act of 1969, (42

U.S.C. 4321 et seq.) Specifically, this

interim final rule is covered under the

Categorical Exclusion in paragraph A5

to subpart D, 10 CFR part 1021, which

covers rulemakings that interpret or

amend an existing regulation without

changing the environmental effect of the

regulation. Accordingly, neither an

environmental assessment nor an

environmental impact statement is

required.

E. Review Under Executive Order 13132

Executive Order 13132 (64 FR 43255,

August 10, 1999) imposes certain

requirements on agencies formulating

and implementing policies or

regulations that preempt State law or

that have federalism implications.

Agencies are required to examine the

constitutional and statutory authority

supporting any action that would limit

the policymaking discretion of the

States and carefully assess the necessity

for such actions. DOE has examined

today’s interim final rule and has

determined that it does not preempt

State law and does not have a

substantial direct effect on the States, on

the relationship between the national

government and the States, or on the

distribution of power and

responsibilities among the various

levels of government. No further action

is required by Executive Order 13132.

F. Review Under Executive Order 12988

With respect to the review of existing

regulations and the promulgation of

new regulations, section 3(a) of

Executive Order 12988, ‘‘Civil Justice

Reform,’’ 61 FR 4729 (February 7, 1996),

imposes on Federal agencies the general

duty to adhere to the following

requirements: (1) Eliminate drafting

errors and ambiguity; (2) write

regulations to minimize litigation; and

(3) provide a clear legal standard for

affected conduct rather than a general

standard and promote simplification

and burden reduction. Section 3(b) of

Executive Order 12988 specifically

requires that Executive agencies make

every reasonable effort to ensure that the

regulation: (1) Clearly specifies the

preemptive effect, if any; (2) clearly

specifies any effect on existing Federal

law or regulation; (3) provides a clear

legal standard for affected conduct

while promoting simplification and

burden reduction; (4) specifies the

retroactive effect, if any; (5) adequately

defines key terms; and (6) addresses

other important issues affecting clarity

and general draftsmanship under any

guidelines issued by the Attorney

General. Section 3(c) of Executive Order

12988 requires Executive agencies to

review regulations in light of applicable

standards in section 3(a) and section

3(b) to determine whether they are met

or it is unreasonable to meet one or

more of them. DOE has completed the

required review and determined that, to

the extent permitted by law, this interim

final rule meets the relevant standards

of Executive Order 12988.

G. Review Under the Unfunded

Mandates Reform Act

Title II of the Unfunded Mandates

Reform Act of 1995 (Pub. L. No. 104–4)

requires each Federal agency to prepare

a written assessment of the effects of

any Federal mandate in a proposed or

final rule that may result in the

expenditure by State, local, and tribal

governments, in the aggregate, or by the

private sector, of $100 million in any

one year. The Act also requires a

Federal agency to develop an effective

process to permit timely input by

elected officers of State, local, and tribal

governments on a proposed ‘‘significant

intergovernmental mandate,’’ and it

requires an agency to develop a plan for

giving notice and opportunity for timely

input to potentially affected small

governments before establishing any

requirement that might significantly or

uniquely affect small governments. The

interim final rule published today does

Federal Register / Vol. 65, No. 237 / Friday, December 8, 2000 / Rules and Regulations 77217

not contain any Federal mandate, so

these requirements do not apply.

H. Review under the Treasury and

General Government Appropriations

Act

Section 654 of the Treasury and

General Government Appropriations

Act, 1999 (Pub. L. No. 105–277) requires

Federal agencies to issue a Family

Policymaking Assessment for any rule

or policy that may affect family wellbeing. Today’s interim final rule will

not have any impact on the autonomy

or integrity of the family as an

institution. Accordingly, DOE has

concluded that it is not necessary to

prepare a Family Policymaking

Assessment.

I. Review Under Small Business

Regulatory Enforcement Fairness Act of

1996

As required by 5 U.S.C. 801, DOE will

report to Congress on the promulgation

of the rule prior to its effective date. The

report will state that it has been

determined that the rule is not a ‘‘major

rule’’ as defined by 5 U.S.C. 804(3).

V. Other Federal Agencies

DOE provided draft copies of the

interim final rule to the Department of

Health and Human Services’ LowIncome Home Energy Assistance

Program and the Department of

Agriculture’s Farmers Home

Administration. We have received no

comments. DOE also provided a draft

copy to the Administrator of the

Environmental Protection Agency,

pursuant to § 7 of the Federal Energy

Administration Act, as amended, 15

U.S.C. 766. The Administrator has made

no comments.

VI. The Catalog of Federal Domestic

Assistance

The Catalog of Federal Domestic

Assistance number for the

Weatherization Assistance Program for

Low-Income Persons is 81.042.

List of Subjects in 10 CFR Part 440

Administrative practice and

procedure, Aged, Energy conservation,

Grant programs-Energy, Grant programsHousing and community development,

Housing standards, Indians, Individuals

with disabilities, Reporting and

recordkeeping requirements,

Weatherization.

Issued in Washington, DC, on November

29, 2000.

Dan W. Reicher,

Assistant Secretary, Energy Efficiency and

Renewable Energy.

For the reasons set forth in the

preamble, DOE amends part 440 of title

10, Code of Federal Regulations, as set

forth below.

PART 440—WEATHERIZATION

ASSISTANCE PROGRAM FOR LOWINCOME PERSONS

1. The authority citation for part 440

is revised to read as follows:

Authority: 42 U.S.C. 6861 et seq.; 42 U.S.C.

7101 et seq.

2. Section 440.1 is revised to read as

follows:

§ 440.1 Purpose and scope.

This part implements a

weatherization assistance program to

increase the energy efficiency of

dwellings owned or occupied by lowincome persons, reduce their total

residential expenditures, and improve

their health and safety, especially lowincome persons who are particularly

vulnerable such as the elderly, persons

with disabilities, families with children,

high residential energy users, and

households with high energy burden.

3. In § 440.3:

a. Remove the definition for ‘‘JTPA’’;

b. Revise the words in the definitions

for ‘‘Handicapped Person’’ to read

‘‘Persons with disabilities’’ and place it

in alphabetical order; and

c. Add the following definitions in

alphabetical order to read as follows:

§ 440.3 Definitions.

* * * * *

Base temperature means the

temperature used to compute heating

and cooling degree days. The average

daily outdoor temperature is subtracted

from the base temperature to compute

heating degree days, and the base

temperature is subtracted from the

average daily outdoor temperature to

compute cooling degree days.

* * * * *

Electric base-load measures means

measures which address the energy

efficiency and energy usage of lighting

and appliances.

* * * * *

High residential energy user means a

low-income household whose

residential energy expenditures exceed

the median level of residential

expenditures for all low-income

households in the State.

Household with a high energy burden

means a low-income household whose

residential energy burden (residential

expenditures divided by the annual

income of that household) exceeds the

median level of energy burden for all

low-income households in the State.

* * * * *

Non-Federal leveraged resources

means those benefits identified by State

or local agencies to supplement the

Federal grant activities and that are

made available to or used in

conjunction with the DOE

Weatherization Assistance Program for

the purposes of the Act for use in

eligible low-income dwelling units.

* * * * *

4. Section 440.14 is revised to read as

follows:

§ 440.14 State plans.

(a) Before submitting to DOE an

application, a State must provide at

least 10 days notice of a hearing to

inform prospective subgrantees, and

must conduct one or more public

hearings to receive comments on a

proposed State plan. The notice for the

hearing must specify that copies of the

plan are available and state how the

public may obtain them. The State must

prepare a transcript of the hearings and

accept written submission of views and

data for the record.

(b) The proposed State plan must:

(1) Identify and describe proposed

weatherization projects, including a

statement of proposed subgrantees and

the amount of funding each will receive;

(2) Address the other items contained

in paragraph (c) of this section; and

(3) Be made available throughout the

State prior to the hearing.

(c) After the hearing, the State must

prepare a final State plan that identifies

and describes:

(1) The production schedule for the

State indicating projected expenditures

and the number of dwelling units,

including previously weatherized units

which are expected to be weatherized

annually during the program year;

(2) The climatic conditions within the

State;

(3) The type of weatherization work to

be done;

(4) An estimate of the amount of

energy to be conserved;

(5) Each area to be served by a

weatherization project within the State,

and must include for each area:

(i) The tentative allocation;

(ii) The number of dwelling units

expected to be weatherized during the

program year; and

(iii) Sources of labor.

(6) How the State plan is to be

implemented, including:

(i) An analysis of the existence and

effectiveness of any weatherization

project being carried out by a

subgrantee;

(ii) An explanation of the method

used to select each area served by a

weatherization project;

(iii) The extent to which priority will

be given to the weatherization of singleVerDate 11<MAY>2000 17:58 Dec 07, 2000 Jkt 194001 PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 E:\FR\FM\08DER4.SGM pfrm11 PsN: 08DER4
77218 Federal Register / Vol. 65, No. 237 / Friday, December 8, 2000 / Rules and Regulations

family or other high energy-consuming

dwelling units;

(iv) The amount of non-Federal

resources to be applied to the program;

(v) The amount of Federal resources,

other than DOE weatherization grant

funds, to be applied to the program;

(vi) The amount of weatherization

grant funds allocated to the State under

this part;

(vii) The expected average cost per

dwelling to be weatherized, taking into

account the total number of dwellings to

be weatherized and the total amount of

funds, Federal and non-Federal,

expected to be applied to the program;

(viii) The average amount of the DOE

funds specified in § 440.18(c)(1) through

(9) to be applied to any dwelling unit;

(ix) The average amount of DOE funds

applied to any dwelling unit for

weatherization materials as specified in

§ 440.18(c)(1);

(x) The procedures used by the State

for providing additional administrative

funds to qualified subgrantees as

specified in § 440.18(d);

(xi) Procedures for determining the

most cost-effective measures in a

dwelling unit;

(xii) The definition of ‘‘low-income’’

which the State has chosen for

determining eligibility for use statewide

in accordance with § 440.22(a);

(xiii) The definition of ‘‘children’’

which the State has chosen consistent

with § 440.3; and

(xiv) The amount of Federal funds

and how they will be used to increase

the amount of weatherization assistance

that the State obtains from non-Federal

sources, including private sources, and

the expected leveraging effect to be

accomplished.

5. Section 440.15 is amended by

revising paragraph (a)(3)(iv) to read as

follows:

§ 440.15 Subgrantees.

(a) * * *

(3) * * *

(iv) The ability of the subgrantee to

secure volunteers, training participants,

public service employment workers,

and other Federal or State training

programs.

* * * * *

6. Section 440.16 is amended by

revising paragraphs (b) and (d) to read

as follows:

§ 440.16 Minimum program requirements.

* * * * *

(b) Priority is given to identifying and

providing weatherization assistance to:

(1) Elderly persons;

(2) Persons with disabilities;

(3) Families with children;

(4) High residential energy users; and

(5) Households with a high energy

burden.

* * * * *

(d) To the maximum extent

practicable, the grantee will secure the

services of volunteers when such

personnel are generally available,

training participants and public service

employment workers, other Federal or

State training program workers, to work

under the supervision of qualified

supervisors and foremen;

* * * * *

7. In § 440.17 paragraph (a)

introductory text is revised and

paragraphs (b) and (c) are added to read

as follows:

§ 440.17 Policy advisory council.

(a) Prior to the expenditure of any

grant funds, a State policy advisory

council, or a State commission or

council which serves the same functions

as a State policy advisory council, must

be established by a State or by the

Regional Office Director if a State does

not participate in the Program which:

* * * * *

(b) Any person employed in any State

Weatherization Program may also be a

member of an existing commission or

council, but must abstain from

reviewing and approving activities

associated with the DOE Weatherization

Assistance Program.

(c) States which opt to utilize an

existing commission or council must

certify to DOE, as a part of the annual

application, of the council’s or

commission’s independence in

reviewing and approving activities

associated with the DOE Weatherization

Assistance Program.

8. Section 440.18 is amended by:

a. Revising paragraph (a);

b. Removing the phrase ‘‘and (c)(15)’’

in the introductory text to paragraph (b)

and in paragraph (b)(2)(i);

c. Adding paragraph (b)(3);

d. Revising paragraph (c)(6); and

e. Revising ‘‘September 30, 1985’’ to

read ‘‘September 30, 1993’’ in paragraph

(e)(2)(iii).

The revisions and addition read as

follows:

§ 440.18 Allowable expenditures.

(a) States must spend an average of at

least 40 percent of the funds provided

them for weatherization materials, labor

and related matters listed in paragraphs

(c)(1) through (9) of this section. DOE

may approve a State’s application to

waive the 40 percent requirement under

§ 440.21.

* * * * *

(b) * * *

(3) For the purposes of determining

the average cost per dwelling limitation,

costs for the purchase of vehicles or

other certain types of equipment as

defined in 10 CFR part 600 may be

amortized over the useful life of the

vehicle or equipment.

* * * * *

(c) * * *

(6) The cost of purchasing vehicles,

except that any purchase of vehicles

must be referred to DOE for prior

approval in every instance.

* * * * *

9. Section 440.19 is revised to read as

follows:

§ 440.19 Labor.

Payments for labor costs under

§ 440.18(c)(2) must consist of:

(a) Payments permitted by the

Department of Labor to supplement

wages paid to training participants,

public service employment workers, or

other Federal or State training programs;

and

(b) Payments to employ labor or to

engage a contractor (particularly a

nonprofit organization or a business

owned by disadvantaged individuals

which performs weatherization

services), provided a grantee has

determined an adequate number of

volunteers, training participants, public

service employment workers, or other

Federal or State training programs are

not available to weatherize dwelling

units for a subgrantee under the

supervision of qualified supervisors.

10. Section 440.21 is revised to read

as follows:

§ 440.21 Weatherization materials

standards and energy audit procedures.

(a) Paragraph (b) of this section

describes the required standards for

weatherization materials. Paragraphs (c)

and (d) of this section describe the costeffectiveness tests that weatherization

materials must pass before they may be

installed in an eligible dwelling unit.

Paragraph (e) of this section lists the

other energy audit requirements that do

not pertain to cost-effectiveness tests of

weatherization materials. Paragraphs (f)

and (g) of this section describe the use

of priority lists and presumptively costeffective general heat waste reduction

materials as part of a State’s energy

audit procedures. Paragraph (h) of this

section explains that a State’s energy

audit procedures and priority lists must

be re-approved by DOE every 5 years.

(b) Only weatherization materials

which are listed in Appendix A to this

part and which meet or exceed

standards prescribed in Appendix A to

this part may be purchased with funds

Federal Register / Vol. 65, No. 237 / Friday, December 8, 2000 / Rules and Regulations 77219

provided under this part. However, DOE

may approve an unlisted material upon

application from any State.

(c) Except for materials to eliminate

health and safety hazards allowable

under § 440.18(c)(15), each individual

weatherization material and package of

weatherization materials installed in an

eligible dwelling unit must be costeffective. These materials must result in

energy cost savings over the lifetime of

the measure(s), discounted to present

value, that equal or exceed the cost of

materials, installation, and on-site

supervisory personnel as defined by the

Department. States have the option of

requiring additional related costs to be

included in the determination of costeffectiveness. The cost of incidental

repairs must be included in the cost of

the package of measures installed in a

dwelling.

(d) The energy audit procedures must

assign priorities among individual

weatherization materials in descending

order of their cost-effectiveness

according to paragraph (c) of this

section after:

(1) Adjusting for interaction between

architectural and mechanical

weatherization materials by using

generally accepted engineering methods

to decrease the estimated fuel cost

savings for a lower priority

weatherization material in light of fuel

cost savings for a related higher priority

weatherization material; and

(2) Eliminating any weatherization

materials that are no longer costeffective, as adjusted under paragraph

(d)(1) of this section.

(e) The energy audit procedures also

must—

(1) Compute the cost of fuel saved per

year by taking into account the climatic

data of the area where the dwelling unit

is located, where the base temperature

that determines the number of heating

or cooling degree days (if used)

reasonably approximates conditions

when operation of heating and cooling

equipment is required to maintain

comfort, and must otherwise use

reasonable energy estimating methods

and assumptions;

(2) Determine existing energy use and

energy requirements of the dwelling

unit from actual energy bills or by

generally accepted engineering

calculations;

(3) Address significant heating and

cooling needs;

(4) Make provision for the use of

advanced diagnostic and assessment

techniques which DOE has determined

are consistent with sound engineering

practices;

(5) Identify health and safety hazards

to be abated with DOE funds in

compliance with the State’s DOEapproved health and safety procedures

under § 440.16(h);

(6) Treat the dwelling unit as a whole

system by examining its heating and

cooling system, its air exchange system,

and its occupants’ living habits and

needs, and making necessary

adjustments to the priority of

weatherization materials with adequate

documentation of the reasons for such

an adjustment; and

(7) Be specifically approved by DOE

for use on each major dwelling type that

represents a significant portion of the

State’s weatherization program in light

of the varying energy audit requirements

of different dwelling types including

single-family dwellings, multi-family

buildings, and mobile homes.

(f) For similar dwelling units without

unusual energy-consuming

characteristics, energy audits may be

accomplished by using a priority list

developed by conducting, in

compliance with paragraphs (b) through

(e) of this section, site-specific energy

audits of a representative subset of these

dwelling units. For DOE approval,

States must describe how the priority

list was developed, how the subset of

similar homes was determined, and

circumstances that will require sitespecific audits rather than the use of the

priority lists. States also must provide

the input data and list of weatherization

measures recommended by the energy

audit software or manual methods for

several dwelling units from the subset of

similar units.

(g) States may use, as a part of an

energy audit, general heat waste

reduction weatherization materials that

DOE has determined to be generally

cost-effective. States may request

approval to use general heat waste

materials not listed in DOE policy

guidance by providing documentation

of their cost-effectiveness and a

description of the circumstances under

which such materials will be used.

(h) States must resubmit their energy

audit procedures (and priority lists, if

applicable, under certain conditions) to

DOE for approval every five years.

States must also resubmit to DOE, for

approval every five years, their list of

general heat waste materials in addition

to those approved by DOE in policy

guidance, if applicable. Policy guidance

will describe the information States

must submit to DOE and the

circumstances that reduce or increase

documentation requirements.

11. Section 440.22 is amended by

revising paragraph (b)(2) introductory

text to read as follows:

§ 440.22 Eligible dwelling units.

* * * * *

(b) * * *

(2) Not less than 66 percent (50

percent for duplexes and four-unit

buildings, and certain eligible types of

large multi-family buildings) of the

dwelling units in the building:

* * * * *

[FR Doc. 00–31158 Filed 12–7–00; 8:45 am]

BILLING CODE 6450–01–P