35890 Federal Register / Vol. 61, No. 131 / Monday, July 8, 1996 / Rules and Regulations

DEPARTMENT OF ENERGY

Office of Energy Efficiency and

Renewable Energy

10 CFR Parts 420 and 450

[Docket No. EE–RM–96–402]

RIN 1904–AA81

State Energy Conservation Program

AGENCY: Office of Energy Efficiency and

Renewable Energy.

ACTION: Interim final rule with

opportunity to comment.

SUMMARY: The Department of Energy

(Department or DOE) amends the

regulations for the State Energy

Conservation Program to provide for the

consolidation of two formula grant

programs—the State Energy

Conservation Program (SECP) and the

Institutional Conservation Program

(ICP). DOE removes prescriptive energy

audit procedures that are no longer

needed and conflict with the President’s

regulatory reform program. DOE is also

incorporating in this rule provisions for

competitively awarded financial

assistance for a number of State-oriented

special project activities.

DATES: This rule is effective July 8,

1996. Written comments [six copies

and, if possible, a computer disk] on the

interim final rule must be received by

DOE no later than August 7, 1996, to

ensure their consideration.

The incorporation by reference of

certain publications listed in the

regulation is approved by the Director of

the Federal Register as of July 8, 1996.

ADDRESSES: All written comments (six

copies) are to be submitted to: Thomas

P. Stapp, U.S. Department of Energy,

Office of Building Technology, State

and Community Programs, EE–44,

Docket Number EE–RM–96–402, 1000

Independence Avenue, S.W.,

Washington, DC, 20585, (202) 586–2096.

Copies of the comments, as well as

other parts of the record, will be

available for inspection between the

hours of 9:00 a.m. and 4:00 p.m.,

Monday through Friday except Federal

holidays at the following address: DOE

Freedom of Information Reading Room,

United States Department of Energy,

Room 1E–190, Forrestal Building, 1000

Independence Avenue, S.W.,

Washington, DC 20585, (202) 586–6020.

Copies of the material to be

incorporated by reference are available

from:

The American Society of Heating,

Refrigerating and Air-Conditioning

Engineers (ASHRAE), 1791 Tullie

Circle, N.E., Atlanta, Georgia 30329,

(404) 636–8400;

The Illuminating Engineering Society

of North America (IESNA), 345 East

47th Street, New York, New York 10017,

(212) 705–7913; and

The Council of American Building

Officials (CABO), 5203 Leesburg Pike,

Suite 708, Falls Church, Virginia 22041,

(703) 931–4533.

For more information concerning

public participation in this rulemaking

proceeding, see section IV,

‘‘Opportunity for Public Comment.’’

FOR FURTHER INFORMATION CONTACT:

Thomas P. Stapp, Office of Building

Technology, State and Community

Programs, Department of Energy, Mail

Stop 5G–063, EE–44, Forrestal Building,

1000 Independence Avenue, S.W.,

Washington, DC 20585, (202) 586–2096.

SUPPLEMENTARY INFORMATION:

I. Introduction and Description of the

Program

II. Rationale for Interim Final Rulemaking

III. The Revisions to the Rule

IV. Opportunity for Public Comment

V. Review Under Executive Order 12612

VI. Review Under Executive Order 12866

VII. Review Under Executive Order 12988

VIII. Unfunded Mandate Review

IX. Review Under the Regulatory Flexibility

Act

X. Review Under the Paperwork Reduction

Act

XI. Review Under the National

Environmental Policy Act

XII. Review Under the Small Business

Regulatory Enforcement Fairness Act of

1996

XIII. The Catalog of Federal Domestic

Assistance

I. Introduction and Description of the

Program

The conference report accompanying

the Balanced Budget Down Payment Act

II of 1996, Public Law 104–134, (H.R.

Conf. Rept. No. 537, 104th Cong., 2d

Sess. (1996)), provided the Department

with the opportunity to consolidate two

of its formula grant programs consistent

with recommendations made in an

earlier conference report (H.R. Conf.

Rept. No. 402, 104th Cong., 1st Sess. 60

(1995)), which accompanied the Interior

and Related Agencies Appropriations

Bill, 1996 (H.R. 1977, 104th Cong., 1st

Sess. (1995)). Congress, in that earlier

report, recommended such a

consolidation to provide a more flexible

program to be operated by the States.

The Department is hereby following that

recommendation by consolidating the

State Energy Conservation Program (42

U.S.C. 6321 et seq.) and the Institutional

Conservation Program (42 U.S.C. 6371 et

seq.) under the name ‘‘State Energy

Program (SEP)’’. These two components

will constitute the formula grants part of

SEP. In the other part of SEP, DOE is

providing for financial assistance for a

number of State-oriented competitively

awarded special project activities.

The State Energy Program Formula

Grants

The approach used to apply for and

implement the activities formerly

funded under ICP regulations (10 CFR

part 455) will be different under SEP.

The process for applying for the types

of activities formerly funded under

SECP will essentially stay the same, and

will become the standard approach.

DOE encourages all States to consider

including ICP-type activities in their

SEP State Plans in 1996 and future

years, as appropriate. Following are

brief explanations of how the

component programs under the formula

grants will work in the SEP context.

The State Energy Conservation Program

This program provides grants to States

for a wide range of energy-related

projects, and such projects will continue

to be eligible for funding under SEP,

using the same application process, and

following the same programmatic

requirements. This rulemaking is based

on the SECP rule and makes only a few

revisions to the SECP process, as

discussed further in this document.

The Institutional Conservation Program

This program provides grants both to

schools and hospitals for a variety of

energy conservation measures and

technical audits of buildings, and to

States to administer the program and,

since 1993, to provide specialized

assistance to institutions. States wishing

to continue to undertake such activities

under SEP will apply to do so under the

rule published today. Grants will no

longer be issued by DOE to individual

schools and hospitals; the activities

would now be covered under one or

more of the program activities under the

SEP grant to the State, and the State

would then provide the funding to the

institutions using the financial

mechanisms specified in its approved

State Plan. The State would also specify

the requirements it will place on its

schools and hospitals applicants. The

regulations covering ICP (10 CFR Part

455) will not apply to grants issued

under SEP but States are free to adopt

any of the requirements in those

regulations to cover ICP-type activities

under SEP. ICP-type activities also

continue to be eligible for funding under

the various Petroleum Violation Escrow

(PVE) settlements.

For fiscal year 1996 Congress

consolidated the funding for ICP and

SECP. DOE believes that having these

two programs consolidated into the

State Energy Program Formula Grants
Federal Register / Vol. 61, No. 131 / Monday, July 8, 1996 / Rules and Regulations 35891

part of SEP will make it easier for States

to apply for grants and more efficient for

both DOE and the States to manage the

grants. It should also simplify the

process for the ultimate recipients of

assistance, such as schools and

hospitals, which will now be able to

receive assistance directly from their

States, rather than from DOE.

Special Projects Financial Assistance

Financial assistance for the special

projects now being provided for in this

rulemaking covers a range of Stateoriented activities to be offered as

options in years when funding is

available. States will be invited to apply

for any of a range of potential activities

announced for the fiscal year concerned.

The announcement will be made in

special project notices of funding

availability published in the Federal

Register, and in detailed program

guidance/solicitation documents.

Activities may include, but may not

be limited to, new State-oriented

programs based on existing DOE

initiatives such as Motor Challenge,

Climate Wise, Clean Cities, Rebuild

America, and the Federal Energy

Management Program, as well as

programs for updating State and local

government building energy codes.

DOE would then make its selection of

projects based on the results of the

technical evaluations and on each

State’s expressed interests/priorities,

DOE’s priorities, the amount of funding

requested, geographical diversity, the

responsiveness of the applications to the

purposes, requirements and program

policy selection factors specified in the

special projects guidance/solicitation,

and the total funds available for each

type of project.

Providing for these projects to be

undertaken as part of SEP will result in

a more efficient vehicle for funding

these more specialized activities, some

of which may be new initiatives, and

some of which were formerly funded

separately. The rationale for covering

these projects in a separate part of the

rule, and for using a different approach

for the application process, is that

appropriations for these projects are

from a variety of sources different from

the source for the formula grants, and

the funding must, therefore, be

separately tracked. Projects approved for

funding will be handled as

amendment(s) to the SEP grant.

Energy Audit Procedures and List of

Measures

Consistent with section 365(e) of the

Energy Policy and Conservation Act

(EPCA or the Act), 42 U.S.C. 6325(e), in

the late 1970’s DOE issued prescriptive

regulations, codified at 10 CFR part 450,

containing a list of energy conservation

measures and detailed energy audit

procedures. The list of measures is no

longer needed because the programs

that utilized them have not been funded

for more than 10 years. Prescriptive

energy audit procedures are no longer

needed for SEP because States are

familiar with developing such

procedures in light of their particular

facts and circumstances. In lieu of

prescriptive regulations, DOE will be

providing informally energy audit

guidance for States to consider and

apply as they deem appropriate. This

approach is consistent with the

President’s regulatory reform program

which emphasizes removal of

unnecessary categorical requirements in

State grant programs.

II. Rationale for Interim Final

Rulemaking

In ordinary circumstances, DOE

provides an opportunity for public

comment prior to making significant

final changes in the rules for financial

assistance programs. Similarly, DOE

ordinarily provides for an effective date

30 days or more following the date of

publication so that affected entities have

an opportunity to learn of changes and

prepare to comply. However, the

unusual and extended delay in the

enactment of the 1996 appropriation for

the State energy conservation grants

subject to today’s interim rule

necessitates that DOE make expedited

regulatory changes in order to facilitate

early completion of necessary pre-award

DOE activities and State plan

amendments in light of the decrease in

Federal funds for FY 1996. If the

appropriation had been enacted on or

about October 1, 1995 (the beginning of

FY 1996) rather than April 25, 1996,

then there would have been enough

time for DOE to conduct a normal notice

and comment rulemaking, to issue

annual grant guidance on applying for

funds to the States, and to review State

plans and award grants. There would

also have been ample time for States to

develop and submit their plans

reflecting a significant downsizing of

their programs and for their employees

to begin making appropriate personal

plans where necessary.

Although the magnitude of the

funding reduction has been apparent for

some time, DOE had to delay regulatory

revisions until an appropriation act

became law. It is now so late in FY

1996, which ends on September 30,

1996, that significant delay in changing

existing rules could pressure the States

into making hasty and ill-considered

changes to their programs that would be

highly disruptive. DOE has extensively

and informally consulted with the

States on the content of today’s rule and

has reason to believe that it will prove

broadly acceptable. In any event,

adjustments, if warranted, will be made

in the notice of final rulemaking that

responds to comments on today’s notice

and will apply to funds for FY 1997 and

thereafter. Simultaneous with

publication of this rule, DOE is sending

a copy of this notice to each State so

that they will be aware of the revised

regulations in time to comply. On the

basis of the foregoing, DOE has decided

to waive prior notice and opportunity

for public comment because issuance of

a notice of proposed rulemaking is

impracticable and contrary to the public

interest. For the same reasons, DOE is

making today’s interim final rule

effective immediately.

III. The Revisions to the Rule

List of Subparts and Sections

To provide for the different

approaches for the State Energy Program

Formula Grants and the special projects

financial assistance, DOE has divided

the rule into three subparts. Subpart A

covers the general provisions for all

financial assistance under the program,

subpart B covers the Formula Grant

procedures, and subpart C covers the

implementation of special projects

financial assistance.

With the exceptions of § 420.1,

§ 420.2, § 420.3 (formerly § 420.13),

§ 420.4 (formerly § 420.10), and § 420.5

(formerly § 420.11), now in subpart A,

the sections now found under subpart B

comprised the entire former rule. Those

sections have been rearranged and in

some cases revised to improve the

organization of the rule and to

accommodate the new subpart format.

The new arrangement (with former

section numbers noted, if there has been

a change) is as follows:

Subpart A—General Provisions for State

Energy Program Financial Assistance

420.1 Purpose and scope. (same)

420.2 Definitions. (same)

420.3 Administration of financial

assistance. (formerly § 420.13)

420.4 Technical assistance. (formerly

§ 420.10)

420.5 Reports. (formerly § 420.11)

420.6 Reference sources. (new)

Subpart B—State Energy Program Formula

Grant Procedures

420.10 Purpose. (new)

420.11 Allocations among the States.

(formerly part of § 420.3)

420.12 State matching contribution.

(formerly part of § 420.3)

420.13 Annual State applications and State

plans. (formerly § 420.4)
35892 Federal Register / Vol. 61, No. 131 / Monday, July 8, 1996 / Rules and Regulations

420.14 Review and approval of annual State

applications and State plans. (formerly

§ 420.5)

420.15 Minimum criteria for required

program activities for plans. (formerly

§ 420.6)

420.16 Extensions for compliance with

required program activities. (formerly

§ 420.8)

420.17 Optional elements of State Energy

Program plans. (formerly § 420.7)

420.18 Expenditure prohibitions and

limitations. (formerly § 420.12)

420.19 Administrative review. (formerly

§ 420.9)

Throughout the rule cross-references

have been revised to reflect the new

section numbers. Subpart C has been

added to the rule to provide for

financial assistance for the new special

projects. This subpart, with its

respective sections, is as follows:

Subpart C—Implementation of Special

Projects Financial Assistance

420.30 Purpose and scope.

420.31 Notice of availability.

420.32 Program guidance/solicitation.

420.33 Application requirements.

420.34 Matching contributions or cost

sharing.

420.35 Application evaluation.

420.36 Evaluation criteria.

420.37 Selection.

Subpart A—General Provisions for State

Energy Program Financial Assistance

Section 420.1 Purpose and scope

This section has been substantially

reduced by eliminating the first

sentence of paragraph (a) and all of

paragraph (b) and moving paragraph (c)

to new § 420.13. The second sentence of

paragraph (a) is all that remains,

modified to add the reduction of

dependence on imported oil as a

purpose of the program and to refer to

the new State Energy Program name.

The deleted wording from paragraphs

(a) and (b) was essentially redundant.

Former paragraph (c) more

appropriately belongs under the section

on State applications.

Section 420.2 Definitions

A definition for ‘‘alternative

transportation fuel’’ has been added to

reflect the program’s renewed emphasis

on reducing dependence on imported

oil. The text of the definition is based

on the definition of alternative

transportation fuel in section 301 of the

Energy Policy Act of 1992 (Pub. L. 102–

486).

The definition for ‘‘ASHRAE 90–75’’

has been deleted because it is now

obsolete.

The definition of ‘‘ASHRAE/IESNA

90.1–1989’’ has been revised to add

‘‘NA’’ after ‘‘IES’’, to add ‘‘as amended,’’

to add the Illuminating Engineering

Society of North America as copublisher, and to reference addenda to

be used as part of this standard and to

cite the authority for incorporation by

reference.

The definition of ‘‘Assistant

Secretary’’ has been revised to reflect

the new name of the organization,

Energy Efficiency and Renewable

Energy.

The definition of ‘‘Btu’’ has been

deleted because it is more completely

defined under ‘‘British thermal unit.’’

The definition for ‘‘building’’ has

been revised to include the exempted

buildings formerly included under the

definition of ‘‘exempted building’’

which has been deleted.

The definition of ‘‘CABO MEC–89’’

has been deleted because it is out of

date; Model Energy Code, 1993 is the

version of this standard that should now

be used.

The definition for ‘‘Deputy Assistant

Secretary’’ has been revised to reflect a

reorganization within DOE whereby the

Deputy Assistant Secretary for Building

Technology, State and Community

Programs has assumed responsibility for

SEP.

A definition for ‘‘Director, State and

Community Programs’’ has been added

to provide for this position which has

responsibility for DOE’s formula grants

to States.

The definition of ‘‘energy audit’’ has

been revised primarily to delete the

reference to 10 CFR part 450 which has

been removed for reasons discussed

above, under Energy Audit Procedures

and list of measures.

A definition for ‘‘energy conservation

measure’’ has been added, to provide for

this type of activity which may be more

important under SEP now that ICP is

included in the program. This definition

is based on the one in Section 366 of the

Act, 42 U.S.C. 6326 (4). As a conforming

change, this term has been substituted

for the term ‘‘energy conservation

building retrofit’’ wherever that term

appeared in the existing rule.

The definition for ‘‘exempted

building’’ has been deleted, with types

of buildings formerly listed under that

definition moved to the definition of

‘‘building.’’

The definition for ‘‘Governor’’ has

been revised to conform to the

definition of ‘‘State.’’

The definition for ‘‘HUD minimum

property standards’’ has been deleted

because it is out of date. The Model

Energy Code, 1993 should now be used

instead.

The definition for ‘‘industrial plant’’

is being revised to ‘‘industrial facility’’

because that is the term now used in the

rule.

The definition for ‘‘major building

type’’ is being deleted because the term

is no longer used in the rule.

A definition for ‘‘Model Energy Code,

1993’’ has been added. This standard

replaces the former ‘‘CABO MEC–89,’’

which has been deleted, as previously

discussed.

The definition for ‘‘National energy

conservation program’’ is being deleted

because it is no longer used in the rule.

The definition for ‘‘petroleum

violation escrow funds’’ has been

revised to clarify that the matching

requirements referred to are only found

in § 420.12 (formerly § 420.3(e)),

whereas under § 420.18(b) (formerly

§ 420.12(b)), there are cost limitations.

The definition of ‘‘plan’’ has been

revised to refer to the new State Energy

Program.

The definition for ‘‘program measure’’

has been revised to replace the word

‘‘measure’’ with the word ‘‘activity.’’

The term ‘‘program activity’’ now covers

what were formerly referred to as

‘‘program measures’’ in some parts of

the rule and ‘‘programs’’ in other parts

of the rule.

Under the definition of ‘‘public

building,’’ a new subparagraph(e) has

been added to include public and

private non-profit schools and hospitals,

reflecting the consolidation of ICP into

SEP.

The definition of ‘‘renewable-resource

energy measure’’ has been revised to be

a definition of ‘‘renewable energy

measure’’ and to provide a more

detailed description of such measures.

This definition is based on the one in

section 366 of the Act, 42 U.S.C.

6326(6). In addition, the reference to

subpart D (covering Energy Measures) of

10 CFR part 450, is being deleted, for

reasons discussed earlier under Energy

Audit Procedures and list of measures.

The definition of ‘‘State economic

product’’ has been deleted because the

term is no longer used in the rule.

The definition of ‘‘Support Office

Director’’ has been revised to reflect the

new title ‘‘Regional Support Office

Director.’’ The new title, and the new

Regional Support Office name, are now

used throughout the rule wherever the

former names appeared.

Section 420.3 Administration of

Financial Assistance

Former paragraph (a) (now paragraph

(a)(1)) of this section has been revised to

provide the current references for the

requirement for intergovernmental

review and coordination, now found in

Executive Order 12372 and its
Federal Register / Vol. 61, No. 131 / Monday, July 8, 1996 / Rules and Regulations 35893

implementing regulations at 10 CFR part

1005.

Paragraphs (b) and (c) of this section

were formerly found under § 420.3 as

paragraphs (c) and (e), respectively.

Paragraph (b) has been revised to

specify that budget periods (for both

formula grants and special projects)

shall be consistent with 10 CFR part

600.

Paragraph (c) has been revised to add

the necessity for subawards to be

consistent with this part and 10 CFR

part 600.

Section 420.4 Technical Assistance

This section was formerly § 420.10.

Section 420.5 Reports

This section was formerly § 420.11. It

now covers all SEP financial assistance

under both subpart B and subpart C.

The requirement for an annual energy

savings report has been deleted because

of the marginal need for this particular

type of report at this time.

Section 420.6 Reference Standards

This is a new section providing

information about the incorporation by

reference of two standards, ASHRAE/

IESNA 90.1–1989 and The Model

Energy Code, 1993, which are referred

to in § 420.2 and § 420.15.

Subpart B—State Energy Program

Formula Grant Procedures

Section 420.10 Purpose

This is a new section to introduce the

purpose of subpart B, which is to set

forth the procedures that apply to the

State Energy Program Formula Grants.

Section 420.11 Allocation of Funds

Among the States

This section has been adapted from

paragraphs (a) and (b) of former § 420.3.

Paragraph (a) remains the same.

DOE has revised the process

(specified under § 420.11(b)) by which

grant funds are allocated to the States,

to accommodate the inclusion of ICP

funds which were formerly allocated to

States using a formula different from

that used for SECP. The only common

element in the two formulas was the

population of each State. The other two

elements in the ICP formula were

regional costs of energy and the sum of

a State’s heating and cooling degree

days. The other two elements in the

SECP formula were a provision for

dividing a portion of the funds equally

among all the States, and the State’s

estimated energy savings from SECP

efforts undertaken in calendar year

1980.

The revised process involves an

allocation for each State consisting of: a

base allocation calculated on the

program’s $25.5 million available

funding for fiscal year 1996 and divided

in the same ratio as each State received

in fiscal year 1995 in combined funding

from appropriations for ICP and SECP,

together with a provision that any

available funding beyond $25.5 million

be allocated based on a new formula.

This revised process serves several

purposes: (1) it will reflect and

incorporate in the base allocation the

historical funding of the two distinct

major component programs in SEP that

formerly used different funding

formulas; (2) it will provide for an

equitable adjustment in program

funding levels; and (3) it will help

maintain the organizational capacity of

the States to manage the programs.

Base Allocation

To achieve this, DOE is hereby

replacing the former SECP formula with

the two-step process discussed above.

The base allocation reflects elements

from the ICP and SECP formulas in such

a way that each State will receive, in

fiscal year 1996, a base allocation in the

same ratio (based on each State’s 1995

allocations from 1995 appropriated

funds) as it would have received if ICP

and SECP were operated as separate

programs. This base allocation, which

applies to the first $25.5 million of

funds available, will remain the same in

future years, or be adjusted downward

if available funds are less than $25.5

million. Table 1, listing the base

allocation by State using the $25.5

million total, is added after

§ 420.11(b)(1). Funds available above

$25.5 million will be allocated based on

the new formula described below.

Formula Allocation

Funding available for SEP beyond the

base $25.5 million ICP/SECP

consolidated funds will be allocated

using the new formula based on the

following factors: 331⁄3 percent divided

among the States equally; 331⁄3 percent

divided on the basis of the population

of the participating States; and 331⁄3

percent divided on the basis of the

energy consumption of the participating

States.

The formula for the entire annual

allocation is expressed mathematically

as (PA)=(BA)+(FA), where (PA) is the

total program allocation, (BA) is the

base allocation, and (FA) is the formula

allocation.

Paragraphs (c) and (e) are now found

under new § 420.3, as already discussed

under that section.

Paragraph (d) is now found under

new § 420.12.

Section 420.12 State Matching

Contribution

This section was formerly paragraph

(d) of former § 420.3. It has been given

a new title, and revised to replace the

term ‘‘cost sharing’’ with ‘‘match’’ or

‘‘matching’’ because the Act uses the

term ‘‘match’’ in the sense of a percent

of the State’s Federal allocation,

whereas, in this context, a ‘‘cost share’’

would be a percent of the total project

cost. To receive financial assistance,

each State must contribute a match of

no less than 20 percent of the Federal

financial assistance allocated to the

State. Cash and in-kind contributions

may continue to be used to meet this

requirement. The sentence in this

paragraph requiring that the State’s

match be identified in the State’s

application has been moved to § 420.13

where it becomes new § 420.13(b)(4)(ii).

Section 420.13 Annual State

Application and State Plans

This section was formerly § 420.4.

The title of this section has been

changed to add State plans which must

be included with SEP grant

applications.

A new paragraph (b)(1) has been

added to provide for the submission of

an application face page on Standard

Form 424.

Former paragraph (b)(1) has been

redesignated (b)(2).

Paragraph (b)(3) has been added to

this section (it was formerly § 420.1(c)).

Since this paragraph refers to a

requirement for State plans, DOE felt it

was more appropriate to include it in

the section covering applications and

plans.

Former paragraph (b)(2) has been

redesignated (b)(4) to provide for the

addition of new paragraphs (b)(1) and

(b)(3) and has been revised to add a new

(b)(4)(ii) requiring that States include

their matching contribution in their

applications, as already discussed under

§ 420.12.

Former subparagraphs (b)(2)(ii),

(b)(2)(iii), and (b)(2)(iv) have been

redesignated (b)(4)(iii), (b)(4)(iv), and

(b)(4)(v), respectively, to allow for new

(b)(4)(ii).

Former paragraph (b)(3) has been

redesignated (b)(5) to provide for the

addition of new paragraphs (b)(1) and

(b)(3).

Paragraph (b)(6) (formerly paragraph

(b)(4)) of this section, which required

States to specify that activities funded

under SECP would supplement and not

supplant activities funded under ICP or

the Weatherization Assistance Program

(Weatherization), has been revised by

deleting the reference to ICP. Activities
35894 Federal Register / Vol. 61, No. 131 / Monday, July 8, 1996 / Rules and Regulations

formerly funded under ICP are now

being funded under SEP, so

supplantation is not an issue.

To continue the renumbering of

paragraphs necessitated by the addition

of paragraphs (b)(1) and (b)(3), former

(b)(5) has been renumbered (b)(7); a new

paragraph (b)(8) has been added

covering State assurances; and former

(b)(6) has been renumbered (b)(9).

Former paragraph (b)(7) has been

deleted because it does not relate to the

contents of an application.

The wording of a number of

paragraphs in this section has been

simplified to make the format

consistent.

Section 420.14 Review and Approval

of Annual State Applications and State

Plans

This section was formerly § 420.5

Section 420.15 Minimum Criteria for

Required Program Measures for Plans

This section was formerly § 420.6.

Paragraphs (a)(3) and (d)(3) have been

revised to refer to ASHRAE/IESNA

90.1–1989 as amended, which is the

current citation, as previously discussed

under § 420.2, Definitions. Paragraph

(d)(4) has been revised to refer to Model

Energy Code, 1993 as amended, which

is the current citation, as previously

discussed under § 420.2, Definitions.

The new standards are based upon the

requirements of Title III of the Energy

Conservation and Production Act, 42

U.S.C. 6831 et seq.

A new paragraph (e)(3) has been

added to provide for left turns from oneway streets onto one-way streets at

traffic lights (right turns for the Virgin

Islands), where appropriate, as required

by section 362(c)(5) of EPCA, 42 U.S.C.

6322(c)(5).

Former paragraph (e)(3) has been

eliminated. This paragraph provided for

a delay in implementing the

requirement under paragraph (e)(2) until

June 27, 1979. That provision is no

longer necessary.

Section 420.16 Extensions for

Compliance With Required Program

Activities

This section was formerly § 420.8.

Section 420.17 Optional Elements of

State Energy Program Plans

This section was formerly § 420.7.

Paragraph (a)(3)(ii) has been revised to

add wording at the end to make clear

that public and private non-profit

schools and hospitals, and local

government buildings, which were

formerly covered by ICP, are eligible

buildings under SEP. It is important to

note that local government buildings,

which were eligible only for technical

audits under ICP, are also eligible for

energy conservation measures under

SEP.

New paragraphs (a)(10), (a)(11),(a)(12)

and (a)(13) are being added to provide

for four new examples of optional

elements of State plans which were

added to EPCA by section 141(b) of the

Energy Policy Act of 1992, Pub. L. 102–

486 (EPACT). Those new elements are:

program activities to provide training to

building designers and contractors to

promote energy efficiency ((a)(10));

program activities for the development

of building retrofit standards ((a)(11));

support for feasibility studies to

facilitate access to capital and credit for

energy efficiency projects ((a)(12)); and

program activities to facilitate the

voluntary use of renewable energy

technologies in Federal agency

programs ((a)(13)).

Former paragraph (a)(10) has been

renumbered (a)(14).

Section 420.18 Expenditure

Prohibitions and Limitations

This section was formerly § 420.12.

This section has been renamed

because the former name, ‘‘Prohibited

expenditures,’’ did not reflect the fact

that a number of the paragraphs under

this section cover expenditures that are,

under certain circumstances, allowable.

Paragraph (e) has been revised to

change the limitation of 33 percent of a

State’s allocation to 50 percent, and to

clarify that, up to that limit, funds may

be used for the purchase and

installation of energy conservation

measures and renewable energy

measures, to allow States more

flexibility in this regard. With ICP-typed

activities now a component of the

consolidated SEP, and with energy

conservation measures and renewable

energy measures the primary purpose of

ICP, DOE does not want to limit States

to 33 percent for such expenditures, and

believes a 50 percent limit is now

appropriate because approximately 50

percent of the appropriated funds for FY

1996 are attributable to ICP.

Paragraph (e)(4), which required that

funds under this program be used to

supplement, but not supplant, ICP or

Weatherization funds, has been revised

to delete the reference to ICP. The

reasons were previously discussed

under § 420.13.

Former subparagraphs (e)(6)(i) and

(e)(6)(iv) have been deleted because they

are no longer necessary, and former

subparagraphs (e)(6)(ii) and (e)(6)(iii)

have been redesignated new

subparagraphs (e)(6)(i) and (e)(6)(ii),

respectively.

Former paragraph (e)(7) has been

deleted because the same limitation is

covered in paragraph (d).

Section 420.19 Administrative Review

This section was formerly § 420.9. It

covers decisions made under § 420.14

and does not apply to financial

assistance for the special projects in

subpart C.

Subpart C—Implementation of Special

Projects Financial Assistance

This subpart is being added to specify

how DOE will implement financial

assistance for these special projects

activities under SEP.

Section 420.30 Purpose

This section is being added to provide

the purpose of subpart C.

Section 420.31 Notice of Availability

This section is being added to specify

the process DOE will use for

announcing the availability of funds for

special projects financial assistance.

Section 420.32 Program Guidance/

Solicitation

This section is being added to provide

for the program guidance/solicitation,

which will contain the relevant

information necessary for States to

apply for funding under this subpart.

Section 420.33 Application

Requirements

This section is being added to provide

general information about applying for

financial assistance for these special

projects. More detailed application

requirements will be provided by DOE

in the program guidance/solicitation

document.

Section 420.34 Matching Contributions

or Cost Sharing

This section is being added to address

the possibility of a match or cost share

requirement for some, or all, special

projects financial assistance, to be

specified in the program guidance/

solicitation.

Section 420.35 Application Evaluation

This section is being added to provide

for the technical evaluations of

applications for financial assistance

pursuant to this subpart.

Section 420.36 Evaluation Criteria

This section is being added to provide

for the evaluation criteria to be applied

to applications for financial assistance

pursuant to this subpart.

Section 420.37 Selection

This section is being added to provide

for program policy factors which may be
Federal Register / Vol. 61, No. 131 / Monday, July 8, 1996 / Rules and Regulations 35895

applied in selecting special projects for

funding under this subpart.

IV. Opportunity for Public Comment

Written Comment Procedures

Interested persons are invited to

participate in this rulemaking by

submitting data, views or arguments

with respect to the matters set forth in

this notice.

Comments (6 copies and, if possible,

a computer disk) should be identified

on the outside of the envelope, and on

the documents themselves, with the

designation: ‘‘State Energy Program,

Interim Final Rule, Docket Number EE–

RM–96–402.’’ In the event any person

wishing to submit a written comment

cannot provide six copies, alternative

arrangements can be made in advance

by calling (202) 586–2096.

Any person submitting information

which that person believes to be

confidential, and which may be exempt

by law from public disclosure, should

submit one complete copy, as well as

two copies from which the information

claimed to be confidential has been

deleted. DOE shall make a

determination of any such claim as set

forth in 10 CFR 1004.11 (53 FR 15661,

May 3, 1988).

V. Review Under Executive Order

12612

Executive Order 12612, 52 FR 41685

(October 30, 1987) requires that

regulations, legislation and any other

policy action be reviewed for any

substantial direct effects on States, on

the relationship between the National

Government and the States, or on the

distribution of power among various

levels of government. If there are

sufficient substantial direct effects, the

Executive Order requires preparation of

a federalism assessment to be used in

decisions by senior policy-makers in

promulgating or implementing the

regulation.

Today’s regulatory amendments will

not have a substantial direct effect on

the traditional rights and prerogatives of

States in relationship to the Federal

Government. Preparation of a federalism

assessment is therefore unnecessary.

VI. Review Under Executive Order

12866

Today’s regulatory action has been

determined not to be a significant

regulatory action under Executive Order

12866, Regulatory Planning and Review,

October 4, 1993. Accordingly, this

action was not subject to review under

the Executive Order by the Office of

Information and Regulatory Affairs

(OIRA).

VII. Review Under Executive Order

12988

Section 3 of Executive Order 12988,

61 FR 4729 (February 7, 1996), instructs

each agency to adhere to certain

requirements in promulgating new

regulations. These requirements, set

forth in Section 3(a) and (b), include

eliminating drafting errors and needless

ambiguity, drafting the regulations to

minimize litigation, providing clear and

certain legal standards for affected legal

conduct, and promoting simplification

and burden reduction. Agencies are also

instructed to make every reasonable

effort to ensure that the regulation

describes any administrative proceeding

to be available prior to judicial review

and any provisions for the exhaustion of

administrative remedies. The

Department has determined that today’s

regulatory action meets the

requirements of Section 3 (a) and (b) of

Executive Order 12988.

VIII. Unfunded Mandate Review

The Unfunded Mandates Reform Act

of 1995 (Pub. L. 104–4) places a variety

of review and consultative obligations

on Federal agencies proposing

regulatory actions for Federal

intergovernmental mandates. Today’s

rule does not involve such a mandate

because the Unfunded Mandates Reform

Act excludes from the definition of

‘‘Federal intergovernmental mandate’’

provisions in a regulation that would

impose conditions incident to a

financial assistance program (not

involving an entitlement) or a duty

arising from participation in a voluntary

Federal program 2 U.S.C. 658(5). This

program is a standard non-entitlement

financial assistance program and States

are not obligated to participate in it.

IX. Review Under the Regulatory

Flexibility Act

There is no need to prepare a final

regulatory flexibility analysis of today’s

interim final regulations under the

Regulatory Flexibility Act, 5 U.S.C. 601

et seq., because they are not subject to

a legal requirement for a general notice

of proposed rulemaking.

X. Review Under the Paperwork

Reduction Act

No new information collection or

recordkeeping requirements are

imposed on the public by today’s rules.

XI. Review Under the National

Environmental Policy Act

A programmatic environmental

assessment has been prepared covering

the grant program under the interim

final regulations published today which

was sent to the States for comment on

March 27, 1996. No comments were

received by the end of the 14-day

comment period. This programmatic

environmental assessment resulted in a

finding of no significant impact

(FONSI). A FONSI was issued on June

7, 1996. The documents relating to this

programmatic environmental

assessment are available in the DOE

Freedom of Information Reading Room,

United States Department of Energy,

Room 1E–190, Forrestal Building, 1000

Independence Avenue, SW.,

Washington, DC 20585, (202) 586–6020.

XII. Congressional Notification

The final regulations published today

are subject to the Congressional

notification requirements of the Small

Business Regulatory Enforcement

Fairness Act of 1996 (Act), 5 U.S.C. 801.

OMB has determined that the final

regulations do not constitute a ‘‘major

rule’’ under the Act, 5 U.S.C. 804. DOE

will report to Congress on the

promulgation of the final regulations

prior to the effective date set forth at the

beginning of this notice.

XIII. The Catalog of Federal Domestic

Assistance

The Catalog of Federal Domestic

Assistance number for the State Energy

Program is 81.041.

List of Subjects

10 CFR Part 420

Energy conservation, Grant

programs—energy, Reporting and

recordkeeping requirements, Technical

assistance, Incorporation by reference.

10 CFR Part 450

Buildings, Business and Industry,

Energy conservation, Housing,

Reporting and recordkeeping

requirements.

Issued in Washington, DC, on June 26,

1996.

Christine A. Ervin,

Assistant Secretary, Energy Efficiency and

Renewable Energy.

For the reasons set forth in the

preamble, Chapter II of Title 10, Code of

Federal Regulations is amended as

follows:

1. Part 420 is revised to read as

follows:

PART 420—STATE ENERGY

PROGRAM

Subpart A—General Provisions for State

Energy Program Financial Assistance

Sec.

420.1 Purpose and scope.

420.2 Definitions.

420.3 Administration of financial

assistance.
35896 Federal Register / Vol. 61, No. 131 / Monday, July 8, 1996 / Rules and Regulations

420.4 Technical assistance.

420.5 Reports.

420.6 Reference standards.

Subpart B—Formula Grant Procedures

420.10 Purpose.

420.11 Allocation of funds among the

States.

420.12 State matching contribution.

420.13 Annual State applications and State

plans.

420.14 Review and approval of annual State

applications and State plans.

420.15 Minimum criteria for required

program activities for plans.

420.16 Extensions for compliance with

required program activities.

420.17 Optional elements of State Energy

Program plans.

420.18 Expenditure prohibitions and

limitations.

420.19 Administrative review.

Subpart C—Implementation of Special

Projects Financial Assistance

420.30 Purpose and scope.

420.31 Notice of availability.

420.32 Program guidance/solicitation.

420.33 Application requirements.

420.34 Matching contributions or costsharing.

420.35 Application evaluation.

420.36 Evaluation criteria.

420.37 Selection.

Authority: Title III, part D, as amended, of

the Energy Policy and Conservation Act (42

U.S.C. 6321 et seq.); Department of Energy

Organization Act (42 U.S.C. 7101 et seq.)

Subpart A—General Provisions for

State Energy Program Financial

Assistance

§ 420.1 Purpose and scope.

It is the purpose of this part to

promote the conservation of energy, to

reduce the rate of growth of energy

demand, and to reduce dependence on

imported oil through the development

and implementation of a comprehensive

State Energy Program and the provision

of Federal financial and technical

assistance to States in support of such

program.

§ 420.2 Definitions.

As used in this part:

Act means title III, part D, as

amended, of the Energy Policy and

Conservation Act, 42 U.S.C. 6321 et seq.

Alternative transportation fuel means

methanol, denatured ethanol, and other

alcohols; mixtures containing 85

percent or more by volume of methanol,

denatured ethanol, and other alcohols

with gasoline or other fuels; natural gas;

liquified petroleum gas; hydrogen; coalderived liquid fuels; fuels (other than

alcohol) derived from biological

materials (including neat biodiesel); and

electricity (including electricity from

solar energy).

ASHRAE/IESNA 90.1–1989, as

amended means the building design

standard published in December 1989

by the American Society of Heating,

Refrigerating and Air-Conditioning

Engineers, and the Illuminating

Engineering Society of North America

titled ‘‘Energy Efficient Design of New

Buildings Except Low-Rise Residential

Buildings,’’ with Addenda 90.1b–1992;

Addenda 90.1d–1992; Addenda 90.1e–

1992; Addenda 90.1g–1993; and

Addenda 90.1i–1993, which is

incorporated by reference in accordance

with 5 U.S.C. 552(a) and 1 CFR part 51.

The availability of this incorporation by

reference is given in § 420.6(b).

Assistant Secretary means the

Assistant Secretary for Energy Efficiency

and Renewable Energy or any official to

whom the Assistant Secretary’s

functions may be redelegated by the

Secretary.

British thermal unit (Btu) means the

quantity of heat necessary to raise the

temperature of one pound of water one

degree Fahrenheit at 39.2 degrees

Fahrenheit and at one atmosphere of

pressure.

Building means any structure which

includes provision for a heating or

cooling system, or both, or for a hot

water system, except for the following:

(1) Any building whose peak design

rate of energy usage for all purposes is

less than one watt (3.4 Btu’s per hour)

per square foot of floor area for all

purposes;

(2) Any building with neither a

heating nor cooling system;

(3) Any mobile home; or

(4) Any building owned or leased in

whole or in part by the United States.

Carpool means the sharing of a ride by

two or more people in an automobile.

Carpool matching and promotion

campaign means a campaign to

coordinate riders with drivers to form

carpools and/or vanpools.

Commercial building means any

building other than a residential

building, including any building

constructed for industrial or public

purposes.

Commercially available means

available for purchase by the general

public or target audience in the State.

Deputy Assistant Secretary means the

Deputy Assistant Secretary for Building

Technology, State and Community

Programs or any official to whom the

Deputy Assistant Secretary’s functions

may be redelegated by the Assistant

Secretary.

Director, Office of State and

Community Programs means the official

responsible for DOE’s formula grant

programs to States, or any official to

whom the Director’s functions may be

redelegated by the Assistant Secretary.

DOE means the Department of Energy.

Energy audit means a determination

of the energy consumption

characteristics of a building which:

(1) Identifies the type, size, energy use

level and the major energy using

systems of such building or buildings;

(2) Determines appropriate energy

conservation maintenance and operating

procedures; and

(3) Indicates the need and the

estimated cost and energy cost savings,

if any, associated with the acquisition

and installation of energy conservation

measures.

Energy conservation measure means

an installation which modifies any

building, building system, energy

consuming device associated with the

building or industrial facility the

construction of which was completed

prior to May 1, 1989, if such measure

has been determined by means of an

energy audit to be likely to maintain or

improve the efficiency of energy use and

to reduce energy costs in an amount

sufficient to enable a person to recover

the total cost of purchasing and

installing such measure within the

lesser of—

(1) The useful life of the modification

involved; or

(2) 15 years after the purchase and

installation of such measure.

Environmental residual means any

pollutant or pollution causing factor

which results from any activity.

Exterior envelope physical

characteristics means the physical

nature of those elements of a building

which enclose conditioned spaces

through which thermal energy may be

transferred to or from the exterior.

Governor means the chief executive

officer of a State, the District of

Columbia, Puerto Rico, or any territory

or possession of the United States, or a

person duly designated in writing by the

Governor to act upon his or her behalf.

Grantee means the State or other

entity named in the notice of grant

award as the recipient.

HVAC means heating, ventilating and

air-conditioning.

IBR means incorporation by reference.

Industrial facility means any fixed

equipment or facility which is used in

connection with, or as part of, any

process or system for industrial

production or output.

Institution of higher education has the

same meaning as such term is defined

in section 1201(a) of the Higher

Education Act of 1965 (20 U.S.C.

1141(a)).

Metropolitan Planning Organization

means that organization required by the
Federal Register / Vol. 61, No. 131 / Monday, July 8, 1996 / Rules and Regulations 35897

Department of Transportation, and

designated by the Governor as being

responsible for coordination within the

State, to carry out transportation

planning provisions in a Standard

Metropolitan Statistical Area.

Model Energy Code, 1993, including

Errata, means the model building code

published by the Council of American

Building Officials, which is

incorporated by reference in accordance

with 5 U.S.C. 552(a) and 1 CFR part 51.

The availability of this incorporation by

reference is given in § 420.6(b).

Park-and-ride lot means a parking

facility generally located at or near the

trip origin of carpools, vanpools and/or

mass transit.

Petroleum violation escrow funds. For

purposes both of exempting petroleum

violation escrow funds from the

matching requirements of § 420.12 and

of applying the limitations specified

under § 420.18(b), this term means any

funds distributed to the States by the

Department of Energy or any court and

identified as Alleged Crude Oil

Violation funds, together with any

interest earned thereon by the States,

but excludes any funds designated as

‘‘excess funds’’ under section 3003(d) of

the Petroleum Overcharge Distribution

and Restitution Act, subtitle A of title III

of the Omnibus Budget Reconciliation

Act of 1986, Public Law 99–509, and the

funds distributed under the ‘‘Warner

Amendment,’’ section 155 of Public Law

97–377.

Plan means a State Energy Program

plan including required program

activities in accordance with § 420.15

and otherwise meeting the applicable

provisions of this part.

Political subdivision means a unit of

government within a State, including a

county, municipality, city, town,

township, parish, village, local public

authority, school district, special

district, council of governments, or any

other regional or intrastate

governmental entity or instrumentality

of a local government exclusive of

institutions of higher learning and

hospitals.

Preferential traffic control means any

one of a variety of traffic control

techniques used to give carpools,

vanpools and public transportation

vehicles priority treatment over single

occupant vehicles other than bicycles

and other two-wheeled motorized

vehicles.

Program activity means one or more

State actions, in a particular area,

designed to promote energy efficiency,

renewable energy and alternative

transportation fuel.

Public building means any building

which is open to the public during

normal business hours, including:

(1) Any building which provides

facilities or shelter for public assembly,

or which is used for educational office

or institutional purposes;

(2) Any inn, hotel, motel, sports

arena, supermarket, transportation

terminal, retail store, restaurant, or other

commercial establishment which

provides services or retail merchandise;

(3) Any general office space and any

portion of an industrial facility used

primarily as office space;

(4) Any building owned by a State or

political subdivision thereof, including

libraries, museums, schools, hospitals,

auditoriums, sport arenas, and

university buildings; and

(5) Any public or private non-profit

school or hospital.

Public transportation means any

scheduled or nonscheduled

transportation service for public use.

Regional Support Office Director

means the director of a DOE Regional

Support Office with responsibility for

grants administration or any official to

whom that function may be redelegated.

Renewable energy means a nondepletable source of energy.

Renewable energy measure means a

measure which modifies any building or

industrial facility if such measure has

been determined by means of an energy

audit to—

(1) Involve changing, in whole or in

part, the fuel or source of the energy

used to meet the requirements of such

building or facility from a depletable

source of energy to a non-depletable

source of energy; and

(2) Be likely to reduce energy costs (as

calculated on the basis of energy cost

assumptions provided by DOE) in an

amount sufficient to enable a person to

recover the total cost of purchasing and

installing such measure (without regard

to any tax benefit or Federal financial

assistance applicable thereto) within the

lesser of—

(i) The useful life of the modification

involved; or

(ii) 25 years after the purchase and

installation of such measure.

Residential building means any

building which is constructed for

residential occupancy.

Secretary mean the Secretary of DOE.

SEP means the State Energy Program

under this part.

Small business means a private firm

that does not exceed the numerical size

standard promulgated by the Small

Business Administration under section

3(a) of the Small Business Act (15 U.S.C.

632) for the Standard Industrial

Classification (SIC) codes designated by

the Secretary of Energy.

Start-up business means a small

business which has been in existence

for 5 years or less.

State means a State, the District of

Columbia, Puerto Rico, or any territory

or possession of the United States.

State or local government building

means any building owned and

primarily occupied by offices or

agencies of a State; and any building of

a unit of local government or a public

care institution which could be covered

by part H, title III, of the Energy Policy

and Conservation Act, 42 U.S.C. 6372–

6372i.

Transit level of service means

characteristics of transit service

provided which indicate its quantity,

geographic area of coverage, frequency

and quality (comfort, travel, time, fare

and image).

Urban area traffic restriction means a

setting aside of certain portions of an

urban area as restricted zones where

varying degrees of limitation are placed

on general traffic usage and/or parking.

Vanpool means a group of riders

using a vehicle, with a seating capacity

of not less than eight individuals and

not more than fifteen individuals, for

transportation to and from their

residence or other designated locations

and their place of employment,

provided the vehicle is driven by one of

the pool members.

Variable working schedule means a

flexible working schedule to facilitate

carpool, vanpool and/or public

transportation usage.

§ 420.3 Administration of financial

assistance.

(a) Financial assistance under this

part shall comply with applicable laws

and regulations including, but without

limitation, the requirements of:

(1) Executive Order 12372,

Intergovernmental Review of Federal

Programs, as implemented by 10 CFR

part 1005.

(2) DOE Financial Assistance Rules

(10 CFR part 600); and

(3) Other procedures which DOE may

from time to time prescribe for the

administration of financial assistance

under this part.

(b) The budget period(s) covered by

the financial assistance provided to a

State according to § 420.11(b) or

§ 420.33 shall be consistent with 10 CFR

part 600.

(c) Subawards are authorized under

this part and are subject to the

requirements of this part and 10 CFR

part 600.

§ 420.4 Technical assistance.

At the request of the Governor of any

State to DOE and subject to the
35898 Federal Register / Vol. 61, No. 131 / Monday, July 8, 1996 / Rules and Regulations

availability of personnel and funds,

DOE will provide information and

technical assistance to the State in

connection with effectuating the

purposes of this part.

§ 420.5 Reports.

(a) Each State receiving financial

assistance under this part shall submit

to the cognizant Regional Support Office

Director a quarterly program

performance report and a quarterly

financial status report.

(b) Reports under this section shall

contain such information as the

Secretary may prescribe in order to

monitor effectively the implementation

of a State’s activities under this part.

(c) The reports shall be submitted

within 30 days following the end of

each calendar year quarter.

§ 420.6 Reference standards.

(a) The following standards which are

not otherwise set forth in this part are

incorporated by reference and made a

part of this part. The following

standards have been approved for

incorporation by reference by the

Director of the Federal Register in

accordance with 5 U.S.C. 552(a) and 1

CFR part 51. A notice of any change in

these materials will be published in the

Federal Register. The standards

incorporated by reference are available

for inspection at the Office of the

Federal Register, 800 North Capitol

Street, N.W., suite 700, Washington,

D.C.

(b) The following standards are

incorporated by reference in this part:

(1) The American Society of Heating,

Refrigerating and Air-Conditioning

Engineers (ASHRAE), 1791 Tullie

Circle, N.E., Atlanta, Georgia 30329,

(404) 636–8400/The Illuminating

Engineering Society of North America

(IESNA), 345 East 47th Street, New

York, New York 10017, (212) 705–7913:

(i) ASHRAE/IESNA 90.1–1989, entitled

‘‘Energy Efficient Design of New

Buildings Except Low-Rise Residential

Buildings,’’ with Addenda 90.1b-1992;

Addenda 90.1d-1992; Addenda 90.1e1992; Addenda 90.1g-1993; and

Addenda 90.1i-1993, IBR approved for

§ 420.2 and § 420.15.

(2) The Council of American Building

Officials (CABO), 5203 Leesburg Pike,

Suite 708, Falls Church, Virginia 22041,

(703) 931–4533: (i) The Model Energy

Code, 1993, including Errata, IBR

approved for § 420.2 and § 420.15.

Subpart B—Formula Grant Procedures

§ 420.10 Purpose.

This subpart specifies the procedures

that apply to the Formula Grant part of

the State Energy Program, which allows

States to apply for financial assistance

to undertake a wide range of required

and optional energy-related activities

provided for under § 420.15 and

§ 420.17. Funding for these activities is

allocated to the States based on funds

available for any fiscal year, as

described under § 420.11.

§ 420.11 Allocation of funds among the

States.

(a) The cognizant Regional Support

Office Director shall provide financial

assistance to each State having an

approved annual application from funds

available for any fiscal year to develop,

modify, or implement a plan.

(b) DOE shall allocate financial

assistance to develop, implement or

modify plans among the States from

funds available for any fiscal year, as

follows:

(1) If the available funds equal $25.5

million, such funds shall be allocated to

the States according to Table 1 of this

section.

(2) The base allocation for each State

is listed in Table 1.

TABLE 1.—BASE ALLOCATION BY

STATE

State/Territory

Alabama ................................ $381,000

Alaska ................................... 180,000

Arizona .................................. 344,000

Arkansas ............................... 307,000

California ............................... 1,602,000

Colorado ............................... 399,000

Connecticut ........................... 397,000

Delaware ............................... 164,000

District of Columbia .............. 158,000

Florida ................................... 831,000

Georgia ................................. 534,000

Hawaii ................................... 170,000

Idaho ..................................... 190,000

Illinois .................................... 1,150,000

Indiana .................................. 631,000

Iowa ...................................... 373,000

Kansas .................................. 327,000

Kentucky ............................... 411,000

Louisiana ............................... 446,000

Maine .................................... 231,000

Maryland ............................... 486,000

Massachusetts ...................... 617,000

Michigan ................................ 973,000

Minnesota ............................. 584,000

Mississippi ............................. 279,000

Missouri ................................. 518,000

Montana ................................ 182,000

Nebraska ............................... 246,000

Nevada .................................. 196,000

New Hampshire .................... 216,000

New Jersey ........................... 783,000

New Mexico .......................... 219,000

New York .............................. 1,633,000

North Carolina ....................... 564,000

North Dakota ......................... 172,000

Ohio ...................................... 1,073,000

Oklahoma .............................. 352,000

Oregon .................................. 325,000

TABLE 1.—BASE ALLOCATION BY

STATE—Continued

State/Territory

Pennsylvania ......................... 1,090,000

Rhode Island ......................... 199,000

South Carolina ...................... 340,000

South Dakota ........................ 168,000

Tennessee ............................ 476,000

Texas .................................... 1,322,000

Utah ...................................... 242,000

Vermont ................................ 172,000

Virginia .................................. 571,000

Washington ........................... 438,000

West Virginia ......................... 286,000

Wisconsin .............................. 604,000

Wyoming ............................... 155,000

American Samoa .................. 115,000

Guam .................................... 120,000

Northern Marianas ................ 114,000

Puerto Rico ........................... 322,000

U.S. Virgin Islands ................ 122,000

Total ........................... 25,500,000

(3) If the available funds for any fiscal

year are less than $25.5 million, then

the base allocation for each State shall

be reduced proportionally.

(4) If the available funds exceed $25.5

million, $25.5 million shall be allocated

as specified in Table 1 and any in excess

of $25.5 million shall be allocated as

follows:

(i) One-third of the available funds is

divided among the States equally;

(ii) One-third of the available funds is

divided on the basis of the population

of the participating States as contained

in the most recent reliable census data

available from the Bureau of the Census,

Department of Commerce, for all

participating States at the time DOE

needs to compute State formula shares;

and

(iii) One-third of the available funds

is divided on the basis of the energy

consumption of the participating States

as contained in the most recent State

Energy Data Report available from

DOE’s Energy Information

Administration.

(c) The budget period covered by the

financial assistance provided to a State

according to § 420.11(b) shall be

consistent with 10 CFR part 600.

§ 420.12 State matching contribution.

(a) Each State shall provide cash, in

kind contributions, or both for SEP

activities in an amount totalling not less

than 20 percent of the financial

assistance allocated to the State under

§ 420.11(b).

(b) Cash and in-kind contributions

used to meet this State matching

requirement are subject to the

limitations on expenditures described in

§ 420.18(a), but are not subject to the 20

percent limitation in § 420.18(b).
Federal Register / Vol. 61, No. 131 / Monday, July 8, 1996 / Rules and Regulations 35899

(c) Nothing in this section shall be

read to require a match for petroleum

violation escrow funds used under this

part.

§ 420.13 Annual State applications and

State plans.

(a) To be eligible for financial

assistance under subpart B of this part,

a State shall submit to the cognizant

Regional Support Office Director an

original and two copies of the annual

application executed by the Governor.

The date for submission of the annual

State application shall be set by DOE.

(b) An application shall include:

(1) A face sheet containing basic

identifying information, on Standard

Form (SF) 424;

(2) A description of the energy

efficiency, renewable energy, and

alternative transportation fuel goals to

be achieved, including wherever

practicable:

(i) An estimate of the energy to be

saved by implementation of the State

plan;

(ii) Why the goals were selected;

(iii) How the attainment of the goals

will be measured by the State; and

(iv) How the program activities

included in the State plan represent a

strategy to achieve these goals;

(3) With respect to financial

assistance under subpart B of this part,

a goal, consisting of an improvement of

10 percent or more in the efficiency of

use of energy in the State concerned in

the calendar year 2000, as compared to

the calendar year 1990, and may contain

interim goals;

(4) For the budget period for which

financial assistance will be provided:

(i) A total program budget with

supporting justification, broken out by

object category and by source of

funding;

(ii) The source and amount of State

matching contribution;

(iii) A narrative statement detailing

the nature of amendments and of new

program activities;

(iv) For each program activity, a

budget and listing of milestones; and

(v) An explanation of how the

minimum criteria for required program

activities prescribed in § 420.15 shall be

satisfied;

(5) A detailed description of the

increase or decrease in environmental

residuals expected from implementation

of a plan defined insofar as possible

through the use of information to be

provided by DOE and an indication of

how these environmental factors were

considered in the selection of program

activities.

(6) For program activities involving

purchase or installation of materials or

equipment for weatherization of lowincome housing, an explanation of how

these activities would supplement and

not supplant the existing DOE program

under 10 CFR part 440.

(7) A reasonable assurance to DOE

that it has established policies and

procedures designed to assure that

Federal financial assistance under

subpart B of this part will be used to

supplement, and not to supplant, State

and local funds, and to the extent

practicable, to increase the amount of

such funds that otherwise would be

available, in the absence of such Federal

financial assistance, for those activities

set forth in the State Energy Program

plan approved pursuant to this part;

(8) An assurance that the State shall

comply with all applicable statutes and

regulations in effect with respect to the

periods for which it receives grant

funding; and

(9) For informational purposes only,

and not subject to DOE review, an

energy emergency plan for an energy

supply disruption, as designed by the

State consistent with applicable Federal

and State law including an

implementation strategy or strategies

(including regional coordination) for

dealing with energy emergencies.

(c) The Governor may request an

extension of the annual submission date

by submitting a written request to the

cognizant Regional Support Office

Director not less than 15 days prior to

the annual submission date. The

extension shall be granted only if, in the

cognizant Regional Support Office

Director’s judgment, acceptable and

substantial justification is shown, and

the extension would further objectives

of the Act.

§ 420.14 Review and approval of annual

State applications and State plans.

(a) After receipt of an application for

financial assistance under subpart B of

this part, or application for approval of

an amendment to a State plan, the

cognizant Regional Support Office

Director may request the State to submit

within a reasonable period of time any

revisions necessary to make the

application complete and to bring the

application into compliance with the

requirements of this part. The cognizant

Regional Support Office Director shall

attempt to resolve any dispute over the

application informally and to seek

voluntary compliance. If a State fails to

submit timely appropriate revisions to

complete an application and/or bring it

into compliance, the cognizant Regional

Support Office Director may reject the

application in a written decision,

including a statement of reasons, which

shall be subject to administrative review

under § 420.19 of this part.

(b) On or before 60 days from the date

that a timely filed application is

complete, the cognizant Regional

Support Office Director shall—

(1) Approve the application in whole

or in part to the extent that—

(i) The application conforms to the

requirements of this part;

(ii) The proposed program activities

are consistent with a State’s

achievement of its energy conservation

goals in accordance with § 420.13; and

(iii) The provisions of the application

regarding program activities satisfy the

minimum requirements prescribed by

§ 420.15 and § 420.17 as applicable;

(2) Approve the application in whole

or in part subject to special conditions

designed to ensure compliance with the

requirements of this part; or

(3) Disapprove the application if it

does not conform to the requirements of

this part.

§ 420.15 Minimum criteria for required

program activities for plans.

A plan shall satisfy all of the

following minimum criteria for required

program activities.

(a) Mandatory lighting efficiency

standards for public buildings shall:

(1) Be implemented throughout the

State, except that the standards shall be

adopted by the State as a model code for

those local governments of the State for

which the State’s constitution reserves

the exclusive authority to adopt and

implement building standards within

their jurisdictions;

(2) Apply to all public buildings

above a certain size, as determined by

the State;

(3) For new public buildings, be no

less stringent than the provisions of

ASHRAE/IESNA 90.1–1989, and should

be updated by enactment of, or support

for the enactment into local codes or

standards, which, at a minimum, are

comparable to provisions of ASHRAE/

IESNA 90.1–1989 which is incorporated

by reference in accordance with 5 U.S.C.

552 (a) and 1 CFR part 51. The

availability of this incorporation by

reference is given in § 420.6; and

(4) For existing public buildings,

contain the elements deemed

appropriate by the State.

(b) Program activities to promote the

availability and use of carpools,

vanpools, and public transportation

shall:

(1) Have at least one of the following

actions under implementation in at least

one urbanized area with a population of

50,000 or more within the State or in the

largest urbanized area within the State

if that State does not have an urbanized
35900 Federal Register / Vol. 61, No. 131 / Monday, July 8, 1996 / Rules and Regulations

area with a population of 50,000 or

more:

(i) A carpool/vanpool matching and

promotion campaign;

(ii) Park-and-ride lots;

(iii) Preferential traffic control for

carpoolers and public transportation

patrons;

(iv) Preferential parking for carpools

and vanpools;

(v) Variable working schedules;

(vi) Improvement in transit level of

service for public transportation;

(vii) Exemption of carpools and

vanpools from regulated carrier status;

(viii) Parking taxes, parking fee

regulations or surcharge on parking

costs;

(ix) Full-cost parking fees for State

and/or local government employees;

(x) Urban area traffic restrictions;

(xi) Geographical or time restrictions

on automobile use; or

(xii) Area or facility tolls; and

(2) Be coordinated with the relevant

Metropolitan Planning Organization,

unless no Metropolitan Planning

Organization exists in the urbanized

area, and not be inconsistent with any

applicable Federal requirements.

(c) Mandatory standards and policies

affecting the procurement practices of

the State and its political subdivisions

to improve energy efficiency shall—

(1) With respect to all State

procurement and with respect to

procurement of political subdivisions to

the extent determined feasible by the

State, be under implementation; and

(2) Contain the elements deemed

appropriate by the State to improve

energy efficiency through the

procurement practices of the State and

its political subdivisions.

(d) Mandatory thermal efficiency

standards for new and renovated

buildings shall—

(1) Be implemented throughout the

State, with respect to all buildings other

than exempted buildings, except that

the standards shall be adopted by the

State as a model code for those local

governments of the State for which the

State’s constitution reserves the

exclusive authority to adopt and

implement building standards within

their jurisdictions;

(2) Take into account the exterior

envelope physical characteristics,

HVAC system selection and

configuration, HVAC equipment

performance and service water heating

design and equipment selection;

(3) For all new commercial and

multifamily high-rise buildings, be no

less stringent than provisions of sections

7–12 of ASHRAE/IESNA 90.1–1989, and

should be updated by enactment of, or

support for the enactment into local

codes or standards, which, at a

minimum, are comparable to provisions

of ASHRAE/IESNA 90.1–1989; and

(4) For all new single-family and

multifamily low-rise residential

buildings, be no less stringent than the

Model Energy Code, 1993, and should

be updated by enactment of, or support

for the enactment into local codes or

standards, which, at a minimum, are

comparable to the Model Energy Code,

1993, which is incorporated by

reference in accordance with 5 U.S.C.

552(a) and 1 CFR part 51. The

availability of this incorporation by

reference is given in § 420.6;

(5) For renovated buildings:

(i) Apply to those buildings

determined by the State to be renovated

buildings; and

(ii) Contain the elements deemed

appropriate by the State regarding

thermal efficiency standards for

renovated buildings.

(e) A traffic law or regulation which

permits the operator of a motor vehicle

to make a turn at a red light after

stopping shall:

(1) Be in a State’s motor vehicle code

and under implementation throughout

all political subdivisions of the State;

(2) Permit the operator of a motor

vehicle to make a right turn (left turn

with respect to the Virgin Islands) at a

red traffic light after stopping except

where specifically prohibited by a traffic

sign for reasons of safety or except

where generally prohibited in an urban

enclave for reasons of safety; and

(3) Permit the operator of a motor

vehicle to make a left turn from a oneway street to a one-way street (right turn

with respect to the Virgin Islands) at a

red traffic light after stopping except

where specifically prohibited by a traffic

sign for reasons of safety or except

where generally prohibited in an urban

enclave for reasons of safety.

(f) Procedures must exist for ensuring

effective coordination among various

local, State, and Federal energy

efficiency, renewable energy and

alternative transportation fuel programs

within the State, including any program

administered within the Office of

Building Technology, State and

Community Programs of the Department

of Energy and the Low Income Home

Energy Assistance Program

administered by the Department of

Health and Human Services.

§ 420.16 Extensions for compliance with

required program activities.

An extension of time by which a

required program activity must be ready

for implementation may be granted if

DOE determines that the extension is

justified. A written request for an

extension, with accompanying

justification and an action plan

acceptable to DOE for achieving

compliance in the shortest reasonable

time, shall be made to the cognizant

Regional Support Office Director. Any

extension shall be only for the shortest

reasonable time that DOE determines

necessary to achieve compliance. The

action plan shall contain a schedule for

full compliance and shall identify and

make the most reasonable commitment

possible to provision of the resources

necessary for achieving the scheduled

compliance.

§ 420.17 Optional elements of State

Energy Program plans.

(a) Other appropriate activities or

programs may be included in the State

plan. These activities may include, but

are not limited to, the following:

(1) Program activities of public

education to promote energy efficiency,

renewable energy, and alternative

transportation fuels;

(2) Program activities to increase

transportation energy efficiency,

including programs to accelerate the use

of alternative transportation fuels for

government vehicles, fleet vehicles,

taxis, mass transit, and privately owned

vehicles;

(3) Program activities for financing

energy conservation measures and

renewable energy measures—

(i) Which may include loan programs

and performance contracting programs

for leveraging of additional public and

private sector funds and program

activities which allow rebates, grants, or

other incentives for the purchase of

energy conservation measures and

renewable energy measures; or

(ii) In addition to or in lieu of program

activities described in paragraph (a)(3)(i)

of this section, which may be used in

connection with public or nonprofit

buildings owned and operated by a

State, a political subdivision of a State

or an agency or instrumentality of a

State, or an organization exempt from

taxation under section 501(c)(3) of the

Internal Revenue Code of 1986

including public and private non-profit

schools and hospitals, and local

government buildings;

(4) Program activities for encouraging

and for carrying out energy audits with

respect to buildings and industrial

facilities (including industrial

processes) within the State;

(5) Program activities to promote the

adoption of integrated energy plans

which provide for:

(i) Periodic evaluation of a State’s

energy needs, available energy resources

(including greater energy efficiency),

and energy costs; and
Federal Register / Vol. 61, No. 131 / Monday, July 8, 1996 / Rules and Regulations 35901

(ii) Utilization of adequate and

reliable energy supplies, including

greater energy efficiency, that meet

applicable safety, environmental, and

policy requirements at the lowest cost;

(6) Program activities to promote

energy efficiency in residential housing,

such as:

(i) Program activities for development

and promotion of energy efficiency

rating systems for newly constructed

housing and existing housing so that

consumers can compare the energy

efficiency of different housing; and

(ii) Program activities for the adoption

of incentives for builders, utilities, and

mortgage lenders to build, service, or

finance energy efficient housing;

(7) Program activities to identify

unfair or deceptive acts or practices

which relate to the implementation of

energy conservation measures and

renewable energy measures and to

educate consumers concerning such acts

or practices;

(8) Program activities to modify

patterns of energy consumption so as to

reduce peak demands for energy and

improve the efficiency of energy supply

systems, including electricity supply

systems;

(9) Program activities to promote

energy efficiency as an integral

component of economic development

planning conducted by State, local, or

other governmental entities or by energy

utilities;

(10) Program activities (enlisting

appropriate trade and professional

organizations in the development and

financing of such programs) to provide

training and education (including, if

appropriate, training workshops,

practice manuals, and testing for each

area of energy efficiency technology) to

building designers and contractors

involved in building design and

construction or in the sale, installation,

and maintenance of energy systems and

equipment to promote building energy

efficiency;

(11) Program activities for the

development of building retrofit

standards and regulations, including

retrofit ordinances enforced at the time

of the sale of a building;

(12) Program activities to provide

support for prefeasibility and feasibility

studies for projects that utilize

renewable energy and energy efficiency

resource technologies in order to

facilitate access to capital and credit for

such projects;

(13) Program activities to facilitate

and encourage the voluntary use of

renewable energy technologies for

eligible participants in Federal agency

programs, including the Rural

Electrification Administration and the

Farmers Home Administration; and

(14) In accordance with paragraph (b)

of this section, program activities to

implement the Energy Technology

Commercialization Services Program.

(b) This section prescribes

requirements for establishing State-level

Energy Technology Commercialization

Services Program as an optional element

of State plans.

(1) The program activities to

implement the functions of the Energy

Technology Commercialization Services

Program shall:

(i) Aid small and start-up businesses

in discovering useful and practical

information relating to manufacturing

and commercial production techniques

and costs associated with new energy

technologies;

(ii) Encourage the application of such

information in order to solve energy

technology product development and

manufacturing problems;

(iii) Establish an Energy Technology

Commercialization Services Program

affiliated with an existing entity in each

State;

(iv) Coordinate engineers and

manufacturers to aid small and start-up

businesses in solving specific technical

problems and improving the cost

effectiveness of methods for

manufacturing new energy technologies;

(v) Assist small and start-up

businesses in preparing the technical

portions of proposals seeking financial

assistance for new energy technology

commercialization; and

(vi) Facilitate contract research

between university faculty and students

and small start-up businesses, in order

to improve energy technology product

development and independent quality

control testing.

(2) Each State Energy Technology

Commercialization Services Program

shall develop and maintain a data base

of engineering and scientific experts in

energy technologies and product

commercialization interested in

participating in the service. Such data

base shall, at a minimum, include

faculty of institutions of higher

education, retired manufacturing

experts, and National Laboratory

personnel.

(3) The services provided by the

Energy Technology Commercialization

Services Program established under this

part shall be available to any small or

start-up business. Such service

programs shall charge fees which are

affordable to a party eligible for

assistance, which shall be determined

by examining factors, including the

following: the costs of the services

received; the need of the recipient for

the services; and the ability of the

recipient to pay for the services.

§ 420.18 Expenditure prohibitions and

limitations.

(a) No financial assistance provided to

a State under this part shall be used:

(1) For construction, such as

construction of mass transit systems and

exclusive bus lanes, or for construction

or repair of buildings or structures;

(2) To purchase land, a building or

structure or any interest therein;

(3) To subsidize fares for public

transportation;

(4) To subsidize utility rate

demonstrations or State tax credits for

energy conservation measures or

renewable energy measures; or

(5) To conduct, or purchase

equipment to conduct, research,

development or demonstration of energy

efficiency or renewable energy

techniques and technologies not

commercially available.

(b) No more than 20 percent of the

financial assistance awarded to the State

for this program shall be used to

purchase office supplies, library

materials, or other equipment whose

purchase is not otherwise prohibited by

this section. Nothing in this paragraph

shall be read to apply this 20 percent

limitation to petroleum violation escrow

funds used under this part.

(c) Demonstrations of commercially

available energy efficiency or renewable

energy techniques and technologies are

permitted, and are not subject to the

prohibitions of § 420.18(a)(1), or to the

limitation on equipment purchases of

§ 420.18(b).

(d) A State may use regular or

revolving loan mechanisms to fund SEP

services which are consistent with this

part and which are included in the

State’s approved SEP plan. The State

may use loan repayments and any

interest on the loan funds only for

activities which are consistent with this

part and which are included in the

State’s approved SEP plan.

(e) A State may use funds under this

part for the purchase and installation of

equipment and materials for energy

conservation measures and renewable

energy measures subject to the following

terms and conditions:

(1) Such use must be included in the

State’s approved plan and, if funded by

petroleum violation escrow funds, must

be consistent with any judicial or

administrative terms and conditions

imposed upon State use of such funds;

(2) A State may use for these purposes

no more than 50 percent of all funds

allocated by the State to SEP in a given

year, regardless of source, except that

this limitation shall not include regular
35902 Federal Register / Vol. 61, No. 131 / Monday, July 8, 1996 / Rules and Regulations

and revolving loan programs funded

with petroleum violation escrow funds,

and is subject to waiver by DOE for good

cause. Loan documents shall ensure

repayment of principal and interest

within a reasonable period of time, and

shall not include provisions of loan

forgiveness.

(3) Subject to the restrictions of this

part, State and local government

buildings, as defined in § 420.2, are

eligible for energy conservation

measures and renewable energy

measures under this section;

(4) Funds must be used to supplement

and no funds may be used to supplant

weatherization activities under the

Weatherization Assistance Program for

Low-Income Persons, under 10 CFR part

440;

(5) Subject to paragraph (e)(6) of this

section, a State may use a variety of

financial incentives to fund purchases

and installation of materials and

equipment under this paragraph

including, but not limited to, regular

loans, revolving loans, loan buy-downs,

performance contracting, rebates, and

grants.

(6) The following mechanisms are not

allowed for funding the purchase and

installation of materials and equipment

under this paragraph:

(i) Rebates for more than 50 percent

of the total cost of purchasing and

installing materials and equipment

(States shall set appropriate restrictions

and limits to insure the most efficient

use of rebates); and

(ii) Loan guarantees.

§ 420.19 Administrative review.

(a) A State shall have 20 days from the

date of receipt of a decision under

§ 420.14 to file a notice requesting

administrative review in accordance

with paragraph (b) of this section. If an

applicant does not timely file such a

notice, the decision under § 420.14 shall

become final for DOE.

(b) A notice requesting administrative

review shall be filed with the cognizant

Regional Support Office Director and

shall be accompanied by a written

statement containing supporting

arguments. If the cognizant Regional

Support Office Director has disapproved

an entire application for financial

assistance, the State may request a

public hearing.

(c) A notice or any other document

shall be deemed filed under this section

upon receipt.

(d) On or before 15 days from receipt

of a notice requesting administrative

review which is timely filed, the

cognizant Regional Support Office

Director shall forward to the Deputy

Assistant Secretary, the notice

requesting administrative review, the

decision under § 420.14 as to which

administrative review is sought, a draft

recommended final decision for

concurrence, and any other relevant

material.

(e) If the State requests a public

hearing on the disapproval of an entire

application for financial assistance, the

Deputy Assistant Secretary, within 15

days, shall give actual notice to the State

and Federal Register notice of the date,

place, time, and procedures which shall

apply to the public hearing. Any public

hearing under this section shall be

informal and legislative in nature.

(f) On or before 45 days from receipt

of documents under paragraph (d) of

this section or the conclusion of the

public hearing, whichever is later, the

Deputy Assistant Secretary shall concur

in, concur in as modified, or issue a

substitute for the recommended

decision of the cognizant Regional

Support Office Director.

(g) On or before 15 days from the date

of receipt of the determination under

paragraph (f) of this section, the

Governor may file an application for

discretionary review by the Assistant

Secretary. On or before 15 days from

filing, the Assistant Secretary shall send

a notice to the Governor stating whether

the Deputy Assistant Secretary’s

determination will be reviewed. If the

Assistant Secretary grants a review, a

decision shall be issued no later than 60

days from the date review is granted.

The Assistant Secretary may not issue a

notice or decision under this paragraph

without the concurrence of the DOE

Office of General Counsel.

(h) A decision under paragraph (f) of

this section shall be final for DOE if

there is no review under paragraph (g)

of this section. If there is review under

paragraph (g) of this section, the

decision thereunder shall be final for

DOE and no appeal shall lie elsewhere

in DOE.

(i) Prior to the effective date of the

termination or suspension of a grant

award for failure to implement an

approved State plan in compliance with

the requirements of this part, a grantee

shall have the right to written notice of

the basis for the enforcement action and

of the opportunity for public hearing

before the DOE Financial Assistance

Appeals Board notwithstanding any

provisions to the contrary of 10 CFR

600.22, 600.24, 600.25, and 600.243. To

obtain a public hearing, the grantee

must request an evidentiary hearing,

with prior Federal Register notice, in

the election letter submitted under Rule

2 of 10 CFR 1024.4 and the request shall

be granted notwithstanding any

provisions to the contrary of Rule 2.

Subpart C—Implementation of Special

Projects Financial Assistance

§ 420.30 Purpose and scope.

(a) This subpart sets forth DOE’s

policies and procedures for

implementing special projects financial

assistance under this part.

(b) For years in which such funding

is available, States may apply for

financial assistance to undertake a

variety of State-oriented energy-related

special projects activities in addition to

the funds provided under the regular

SEP grants.

(c) The types of funded activities may

vary from year to year, and from State

to State, depending upon funds

available for each type of activity and

DOE and State priorities.

(d) A number of end-use sector

programs in the Office of Energy

Efficiency and Renewable Energy

participate in the funding of these

activities, and the projects must meet

the requirements of those programs.

(e) The purposes of the special project

activities are:

(1) To utilize States to accelerate

deployment of energy efficiency,

renewable energy, and alternative

transportation fuel technologies;

(2) To facilitate the commercialization

of emerging and underutilized energy

efficiency and renewable energy

technologies; and

(3) To increase the responsiveness of

Federally funded technology

development efforts to the needs of the

marketplace.

§ 420.31 Notice of availability.

(a) If in any fiscal year DOE has funds

available for special projects, DOE shall

publish in the Federal Register one or

more notice(s) of availability of SEP

special projects financial assistance.

(b) Each notice of availability shall

cite this part and shall include:

(1) Brief descriptions of the activities

for which funding is available;

(2) The amount of money DOE has

available or estimates it will have

available for award for each type of

activity, and the total amount available;

(3) The program official to contact for

additional information, application

forms, and the program guidance/

solicitation document; and

(4) The dates when:

(i) The program guidance/solicitation

will be available; and

(ii) The applications for financial

assistance must be received by DOE.

§ 420.32 Program guidance/solicitation.

After the publication of the notice of

availability in the Federal Register, DOE

shall, upon request, provide States
Federal Register / Vol. 61, No. 131 / Monday, July 8, 1996 / Rules and Regulations 35903

interested in applying for one or more

project(s) under the special projects

financial assistance with a detailed

program guidance/solicitation that will

include:

(a) The control number of the

program;

(b) The expected duration of DOE

support or period of performance;

(c) An application form or the format

to be used, location for application

submission, and number of copies

required;

(d) The name of the DOE program

office contact from whom to seek

additional information;

(e) Detailed descriptions of each type

of program activity for which financial

assistance is being offered;

(f) The amount of money available for

award, together with any limitations as

to maximum or minimum amounts

expected to be awarded;

(g) Deadlines for submitting

applications;

(h) Evaluation criteria that DOE will

apply in the selection and ranking

process for applications for each

program activity;

(i) The evaluation process to be

applied to each type of program activity;

(j) A listing of program policy factors

if any that DOE may use in the final

selection process, in addition to the

results of the evaluations, including:

(1) The importance and relevance of

the proposed applications to SEP and

the participating programs in the Office

of Energy Efficiency and Renewable

Energy; and

(2) Geographical diversity;

(k) Reporting requirements;

(l) References to:

(1) Statutory authority for the

program;

(2) Applicable rules; and

(3) Other terms and conditions

applicable to awards made under the

program guidance/solicitation; and

(m) A statement that DOE reserves the

right to fund in whole or in part, any,

all, or none of the applications

submitted.

§ 420.33 Application requirements.

(a) Consistent with § 420.32 of this

part, DOE shall set forth general and

special project activity-specific

requirements for applications for special

projects financial assistance in the

program guidance/solicitation.

(b) In addition to any other

requirements, all applications shall

provide:

(1) A detailed description of the

proposed project, including the

objectives of the project in relationship

to DOE’s program and the State’s plan

for carrying it out;

(2) A detailed budget for the entire

proposed period of support, with

written justification sufficient to

evaluate the itemized list of costs

provided on the entire project; and

(3) An implementation schedule for

carrying out the project.

(c) DOE may, subsequent to receipt of

an application, request additional

budgetary information from a State

when necessary for clarification or to

make informed preaward

determinations.

(d) DOE may return an application

which does not include all information

and documentation required by this

part, 10 CFR part 600, or the program

guidance/solicitation, when the nature

of the omission precludes review of the

application.

§ 420.34 Matching contributions or costsharing.

DOE may require (as set forth in the

program guidance/solicitation) States to

provide either:

(a) A matching contribution of at least

a specified percentage of the Federal

financial assistance award; or

(b) A specified share of the total cost

of the project for which financial

assistance is provided.

§ 420.35 Application evaluation.

(a) DOE staff at the cognizant Regional

Support Office shall perform an initial

review of all applications to ensure that

the State has provided the information

required by this part, 10 CFR part 600,

and the program guidance/solicitation.

(b) DOE shall group, and technically

evaluate according to program activity,

all applications determined to be

complete and satisfactory.

(c) DOE shall select evaluators on the

basis of their professional qualifications

and expertise relating to the particular

program activity being evaluated.

(1) DOE anticipates that evaluators

will primarily be DOE employees; but

(2) If DOE uses non-DOE evaluators,

DOE shall require them to comply with

all applicable DOE rules or directives

concerning the use of outside

evaluators.

§ 420.36 Evaluation criteria.

The evaluation criteria, including

program activity-specific criteria, will

be set forth in the program guidance/

solicitation document.

§ 420.37 Selection.

(a) DOE may make selection of

applications for award based on:

(1) The findings of the technical

evaluations;

(2) The priorities of DOE, SEP, and

the participating program offices;

(3) The availability of funds for the

various special project activities; and

(4) Any program policy factors set

forth in the program guidance/

solicitation.

(b) The Director, Office of State and

Community Programs makes the final

selections of projects to be awarded

financial assistance.

PART 450—[REMOVED]

2. Under the authority of 42 U.S.C.

7101 et seq. Part 450 is removed.

[FR Doc. 96–17067 Filed 7–5–96; 8:45 am]

BILLING CODE 6450–01–P