[Federal Register Volume 74, Number 97 (Thursday, May 21, 2009)]
[Proposed Rules]
[Pages 23804-23810]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-11890]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 74, No. 97 / Thursday, May 21, 2009 / 
Proposed Rules

[[Page 23804]]


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DEPARTMENT OF ENERGY

10 CFR Part 440

[Docket No. EEWAP0515]
RIN 1904-AB-97


Weatherization Assistance Program for Low-Income Persons

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy.

ACTION: Notice of proposed rulemaking, request for comment.

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SUMMARY: The U.S. Department of Energy (DOE) is proposing to amend the 
eligibility provisions applicable to multi-unit buildings under the 
Weatherization Assistance Program for Low-Income Persons. As proposed, 
if a multi-unit building is under an assisted or public housing program 
and is identified by the U.S. Department of Housing and Urban 
Development (HUD), and included on a list published by DOE, that 
building would meet certain income eligibility requirements, and the 
procedural requirements to protect against rent increases and undue 
enhancement of the weatherized building would be satisfied, under the 
Weatherization Assistance Program without the need for further 
evaluation or verification. If a multi-unit building includes units 
that participate in the Low Income Housing Tax Credit Program, 
identified by HUD, and included on a list published by DOE, that 
building would meet the income eligibility requirements of the 
Weatherization Assistance Program without the need for further 
evaluation or verification. DOE believes that the proposed rule would 
reduce the procedural burdens on evaluating applications from buildings 
that are part of HUD assisted and public housing programs, and the 
Federal low-income housing tax credit programs.

DATES: Public comments on this proposed rule will be accepted until 
June 22, 2009.

ADDRESSES: You may submit comments identified by the RIN number 
specified in the heading of this notice of proposed rulemaking (NOPR), 
by any of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#5106091904151f1e01031134347f353e347f363e27"><span class="__cf_email__" data-cfemail="2176796974656f6e71736144440f454e440f464e57">[email protected]</span></a>. Include the RIN number in 
the subject line of the message.
    <bullet> Postal Mail: Gil Sperling, U.S. Department of Energy, 
Weatherization Assistance Program, Mailstop EE-2K, 1000 Independence 
Avenue, SW., Washington, DC 20585-0121.
    <bullet> Hand Delivery/Courier: Gil Sperling, U.S. Department of 
Energy, Weatherization Assistance Program, Room 6050, 1000 Independence 
Avenue, SW., Washington, DC 20585-0121.
    Instructions: All submissions must include the agency name and 
docket number or Regulatory Information Number (RIN) for this 
rulemaking.

FOR FURTHER INFORMATION CONTACT: Gil Sperling, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, 
Weatherization Assistance Program, EE-2K, Room 6070, 1000 Independence 
Avenue, SW., Washington, DC 20585-0121, (202) 586-1510, e-mail: 
<a href="/cdn-cgi/l/email-protection#9fd8f6f3b1cceffaedf3f6f1f8dffafab1fbf0fab1f8f0e9"><span class="__cf_email__" data-cfemail="99def0f5b7cae9fcebf5f0f7fed9fcfcb7fdf6fcb7fef6ef">[email protected]</span></a>, or Chris Calamita, U.S. Department of Energy, 
Office of the General Counsel, Forrestal Building, GC-72, 1000 
Independence Avenue, SW., Washington, DC 20585, (202) 586-9507, e-mail: 
<a href="/cdn-cgi/l/email-protection#13507b617a60677c637b76613d50727f727e7a6772537b623d777c763d747c65"><span class="__cf_email__" data-cfemail="12517a607b61667d627a77603c51737e737f7b6673527a633c767d773c757d64">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

I. Introduction
II. Eligibility Requirements for Multi-unit Buildings
III. HUD Public and Assisted Housing Programs
IV. Low Income Housing Tax Credit Program
V. Eligibility of Multi-Unit Buildings Identified by HUD
VI. Regulatory Analysis
VII. Approval of the Office of the Secretary

I. Introduction

    Sections 411-418 of the Energy Conservation and Production Act 
(Act) established the Weatherization Assistance Program for Low-Income 
Persons (Weatherization Assistance Program). (42 U.S.C. 6861 et seq.) 
The Weatherization Assistance Program reduces energy costs for low-
income persons, families, and households by increasing the energy 
efficiency of their homes, while promoting their health and safety. DOE 
works in partnership with State- and local-level agencies to implement 
the Weatherization Assistance Program. DOE's Project Management Center 
awards grants to State-level agencies, which then contract with 
subgrantees (e.g., local agencies). The subgrantees then provide 
weatherization services to eligible low-income families.
    In establishing the Weatherization Assistance Program, Congress 
found that ``a fast, cost-effective, and environmentally sound way to 
prevent future energy shortages in the United States while reducing the 
Nation's dependence on imported energy supplies is to encourage and 
facilitate, through major programs, the implementation of energy 
conservation and renewable-resource energy measures with respect to 
dwelling units.'' (42 U.S.C. 6861(a)(1)) Congress also recognized that 
many dwellings owned or occupied by low-income persons are energy 
inefficient and that low-income persons can least afford to make the 
modifications necessary to improve the energy efficiency of such 
dwellings. (42 U.S.C. 6861(a)(2)(A) and (B)) Additionally, Congress 
directed that States, through Community Action Agencies and units of 
general purpose local government, should be encouraged, with Federal 
financial and technical assistance, to develop and support coordinated 
weatherization programs designed to alleviate the adverse effects of 
energy costs on low-income persons, to supplement other Federal 
programs serving such low-income persons, and to increase energy 
efficiency. (42 U.S.C. 6861(a)(4))
    Congress, therefore, stated that the purpose of the Weatherization 
Assistance Program is to develop and implement an assistance program to 
increase the energy efficiency of dwellings owned or occupied by low-
income persons, reduce their total residential energy expenditures, and 
improve their health and safety, especially low-income persons who are 
particularly vulnerable such as the elderly, the handicapped, and 
children. (42 U.S.C. 6861(b))
    The Weatherization Assistance Program statute recognizes that 
single-family dwelling units are potentially high energy consuming 
dwelling units,

[[Page 23805]]

and grantees should consider appropriate prioritization for such units. 
(42 U.S.C. 6864(b)(2)) The statute also recognizes that in some 
instances, weatherization efforts under the program may be appropriate 
for buildings in which there are multiple rental units. (42 U.S.C. 
6863(b)(5))

 II. Eligibility Requirements for Multi-Unit Buildings

    In establishing the Weatherization Assistance Program, Congress 
recognized that additional considerations are necessary when evaluating 
the eligibility of multi-unit buildings, as opposed to single family 
dwellings. In any case in which a person requesting weatherization 
assistance from a subgrantee for a dwelling that consists of a rental 
unit or rental units, the State, in implementing its weatherization 
program, must ensure that--
    <bullet> The benefits of weatherization assistance in connection 
with such rental units, including units where the tenants pay for their 
energy through their rent, will accrue primarily to the low-income 
tenants residing in such units;
    <bullet> For a reasonable period of time after weatherization work 
has been completed on a dwelling containing a unit occupied by an 
eligible household, the tenants in that unit (including households 
paying for their energy through their rent) will not be subjected to 
rent increases unless those increases are demonstrably related to 
matters other than the weatherization work performed;
    <bullet> The enforcement of the rent increase provision is provided 
through procedures established by the State by which tenants may file 
complaints and owners, in response to such complaints, shall 
demonstrate that the rent increase concerned is related to matters 
other than the weatherization work performed; and
    <bullet> No undue or excessive enhancement will occur to the value 
of such dwelling units.

(42 U.S.C. 6863(b)(5))

    DOE provided additional direction regarding the eligibility of 
multi-unit buildings in the Weatherization Assistance Program 
regulations. Under the DOE regulations a subgrantee may weatherize a 
building containing rental dwelling units using financial assistance 
for dwelling units eligible for weatherization assistance, where:
    <bullet> The subgrantee has obtained the written permission of the 
owner or his agent;
    <bullet> Not less than 66 percent (50 percent for duplexes and 
four-unit buildings, and certain eligible types of large multi-family 
buildings) of the dwelling units in the building:
    [cir] Are eligible dwelling units, or
    [cir] Will become eligible dwelling units within 180 days under a 
Federal, State, or local government program for rehabilitating the 
building or making similar improvements to the building; and
    <bullet> The grantee has established procedures for dwellings which 
consist of a rental unit or rental units to ensure that:
    [cir] The benefits of weatherization assistance in connection with 
such rental units, including units where the tenants pay for their 
energy through their rent, will accrue primarily to the low-income 
tenants residing in such units;
    [cir] For a reasonable period of time after weatherization work has 
been completed on a dwelling containing a unit occupied by an eligible 
household, the tenants in that unit (including households paying for 
their energy through their rent) will not be subjected to rent 
increases unless those increases are demonstrably related to matters 
other than the weatherization work performed;
    [cir] The enforcement of the rent increase provision is provided 
through procedures established by the State by which tenants may file 
complaints, and owners, in response to such complaints, shall 
demonstrate that the rent increase concerned is related to matters 
other than the weatherization work performed; and
    [cir] No undue or excessive enhancement shall occur to the value of 
the dwelling units.

10 CFR 440.22(b). An eligible dwelling unit is one that is occupied by 
a family unit (1) whose income is at or below 200 percent of the 
poverty level, (2) which contains a member who has received cash 
assistance payments under certain Social Security programs, or 
applicable State or local laws at any time during the 12-month period 
preceding the determination of eligibility under the Weatherization 
Assistance Program, or (3) if the State elects, is eligible for 
assistance under the Low-Income Home Energy Assistance Act, provided 
that such basis is at least 200 percent of the poverty level. 10 CFR 
440.22(a); See also, 42 U.S.C. 6862(7).

    DOE recognizes that determining the eligibility of multi-unit 
buildings may present difficulties to subgrantees in evaluating the 
income eligibility of tenants meeting the 200 percent of poverty 
requirement, and that this difficulty can be overcome where HUD already 
has procedures in place for determining such income eligibility. In 
particular, it may be difficult for a subgrantee to verify the income 
of the families dwelling in each unit, and that in any event, such 
income verification likely would be duplicative of income 
certifications that are already on file with HUD. For some multi-unit 
buildings, the eligibility requirements could mean that a subgrantee 
must confirm the income of a hundred families or more for a single 
building. In addition to the income verification required by the 
subgrantee, weatherization of a multi-unit building requires that the 
applicable grantee has established procedures for ensuring that the 
benefits of the weatherization work accrue primarily to the low-income 
tenants, the rent will not increase for a reasonable period of time, 
and no undue or excessive enhancement occurs to the value of the 
dwelling units.

III. HUD Public and Assisted Housing Programs

    HUD's Qualified Assisted Housing \1\ programs generally serve the 
population for which the Weatherization Assistance Program was 
established to serve. This assisted and public housing portfolio 
includes properties that are privately owned, but receive some form of 
HUD assistance subject to affordability and income requirements. Income 
targets for HUD programs are set in relationship to a percentage of 
area median income--generally, 30 to 80 percent of area median income. 
A review of data from HUD programs indicates that a large majority of 
residents in HUD assisted and public housing would meet the income 
eligibility requirements of the Weatherization Assistance Program. HUD 
data show that nationally close to 100 percent of residents in these 
properties meet the 200 percent income requirement, far exceeding the 
66% threshold required under DOE's regulation. 10 CFR 440.22(b)(2).
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    \1\ For the purposes of this proposed rule, ``Qualified Assisted 
Housing'' includes public housing projects, and assisted housing 
projects that receive project-based Section 8 assistance, under the 
U.S. Housing Act of 1937, as amended (42 U.S.C. 1437 et seq.) 
(except projects also benefitting from assistance under Section 
221(d)(3) and (d)(5), and 236 of the National Housing Act (12 U.S.C. 
17151(d)(3) and (d)(5), and 12 U.S.C. 1715z-1, respectively)), 
Supportive Housing for the Elderly projects receiving HUD assistance 
under section 202 of the Housing Act of 1959 (12 U.S.C. 17012), or 
Supportive Housing for Persons with Disabilities under section 811 
of the Cranston-Gonzales National Affordable Housing Act, as amended 
(42 U.S.C. 8013).
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    Moreover, the income verification process applicable to the HUD 
programs is rigorous. Under these HUD programs, HUD assisted housing 
owners or public

[[Page 23806]]

housing authorities must determine each participating family's income 
before the family is permitted to move into the assisted housing, and 
at least annually thereafter. HUD developed and has implemented a 
sophisticated system of third-party income verifications, originally 
designated as the Upfront Income Verification (UIV) system, now known 
as the Enterprise Income Verification (EIV) system. The EIV system, a 
central repository and source for income and benefit data, is securely 
accessible over the internet, for use by public housing authorities and 
owners or their agents to improve the accuracy of rent and income 
determinations. HUD monitors compliance with tenant eligibility 
requirements on an annual basis through management and occupancy 
reviews in addition to the submission of tenant data to HUD payment 
systems. Tenant eligibility certifications are required in order for 
subsidy payments to be authorized. A building owner must verify each 
family's income, assets, expenses, and deductions three times: (1) 
Prior to move-in, (2) as part of the annual recertification process, 
and (3) as a result of changes in income allowances, or family 
characteristics reported between annual re-certifications.

IV. Low Income Housing Tax Credit Program

    The Low Income Housing Tax Credit (LIHTC) Program was created by 
the Tax Reform Act of 1986 (Pub. L. 99-514), as an alternate method of 
funding housing for low- and moderate-income households, and has been 
in operation since 1987. The LIHTC Program is an indirect Federal 
subsidy used to finance the development of affordable rental housing 
for low-income households. To be eligible for consideration under the 
LIHTC Program, a proposed project must:
    <bullet> Be a residential rental property.
    <bullet> Commit to one of two possible low-income occupancy 
threshold requirements.
    <bullet> Restrict rents, including utility charges, in low-income 
units.
    <bullet> Operate under the rent and income restrictions for 30 
years or longer, pursuant to written agreements with the agency issuing 
the tax credits.

Property owners participating in the LIHTC Program are directed to 
utilize the same income verification process set forth in HUD Handbook 
4350.3 REV1, IRS Code Section 42, and IRS Handbook 8823 (Chapter 5), 
and incorrect eligibility determinations may adversely affect the 
utilization of the tax credits.
    After the initial determination of eligibility, owners, or their 
agents, are required to recertify each low-income household at least 
annually, within 120 days of the anniversary date of the occupancy. The 
allocating agency, typically a state housing finance agency, is 
responsible for monitoring compliance with the provisions during the 
affordability period and must report the results of monitoring to the 
Internal Revenue Service. The allocating agency is required to perform 
an on-site inspection and a review of 20 percent of tenant files at 
least every three years. The LIHTC Program requires a minimum 
affordability period of 30 years (i.e., a 15-year compliance period and 
subsequent 15-year extended use period).

V. Eligibility of Multi-Unit Buildings Identified by HUD

    As indicated previously in this notice, the requirement to 
demonstrate the income eligibility of each family living in a multi-
unit building can create a procedural burden for subgrantees when 
evaluating a request for assistance under the Weatherization Assistance 
Program. Demonstration of the income eligibility of at least 66 percent 
of the units of a multi-unit building (50 percent for duplexes and four 
unit buildings) helps ensure that the benefits of weatherizing a multi-
unit building are realized by low-income tenants, but the necessary 
income verification may hinder an eligibility determination for such 
buildings.
    In an evaluation of its data, including data generated through the 
LIHTC Program, HUD has identified buildings that participate in the 
Qualified Assisted Housing and LIHTC Programs that, upon preliminary 
review by DOE, would meet the income eligibility requirements for 
multi-unit buildings under the Weatherization Assistance Program, i.e., 
at least 66 percent of the dwelling units are occupied by family units 
whose income is at or below 200 percent of the poverty level. 10 CFR 
440.22(b)(2). Moreover, DOE has determined preliminarily that the 
procedural requirements under the Weatherization Assistance Program to 
protect against rent increases and undue enhancement of the weatherized 
building would be satisfied for buildings that are in the Qualified 
Assisted Housing programs identified by HUD.

A. Income Eligibility of Multi-Family Buildings

    As discussed previously, the income of the families occupying units 
in buildings under the Qualified Assisted Housing and LIHTC Programs is 
subject to HUD's rigorous verification processes, discussed previously. 
Given the nature of the data collected by HUD and the income 
verification procedures employed under these housing programs, DOE 
proposes that buildings identified by HUD as having not less than 66 
percent (50 percent for duplexes and four-unit buildings) of dwelling 
units occupied by family units whose income is at or below 200 percent 
of the poverty level would meet the minimum income eligibility 
requirements for multi-unit buildings under the Weatherization 
Assistance Program.
    DOE requests comments on its proposal that income data collected by 
HUD under the Qualified Assisted Housing and LIHTC programs would be 
sufficient for the purpose of demonstrating the income requirements of 
multi-unit buildings under the Weatherization Assistance Program.

B. Limitations on Rent Increases

    Under the Weatherization Assistance Program, a grantee must 
establish procedures that ensure that for a reasonable period of time 
after weatherization work has been completed on a dwelling containing a 
unit occupied by a low-income tenant, the tenant in that unit will not 
be subjected to rent increases unless those increases are demonstrated 
to be related to matters other than the weatherization work performed. 
10 CFR 440.22(b)(3)(ii). The enforcement of this provision is provided 
through procedures established by the State by which tenants may file 
complaints, and owners in response to such complaints must demonstrate 
that the rent increase concerned is related to matters other than the 
weatherization. 10 CFR 440.22(b)(3)(iii).
    Under the Qualified Assisted Housing programs, tenant rents are 
capped at thirty percent (30 percent) of their income, so tenants would 
not be subject to rent increases as a result of the weatherization or 
otherwise. Although the LIHTC Program provides for rent control, it is 
DOE's understanding that the program does not have comparable uniform 
restrictions as under the Qualified Assisted Housing programs.
    DOE proposes that the restrictions on rent for units in buildings 
participating in the Qualified Assisted Housing Programs would provide 
the assurance required under the Weatherization Assistance Program that 
for a reasonable period of time after weatherization work is completed 
on a dwelling occupied by a low-income family unit, rent will not 
increase.
    DOE requests comments on whether the Qualified Assisted Housing 
Program sufficiently protects low-income tenants

[[Page 23807]]

from rent increases so as to satisfy the requirement that grantees 
under the Weatherization Assistance Program establish procedures to 
protect low-income tenants against rent increases resulting from the 
weatherization. Additionally, DOE requests comments on its 
understanding that the LIHTC Program does not offer sufficiently 
uniform protections regarding rent increases so as to permit DOE to 
determine that buildings under the LIHTC Program would meet the rent 
control requirement of the Weatherization Assistance Program.

C. No Undue or Excess Enhancement

    Weatherization of a building containing rental units requires that 
the applicable grantee ensure that no undue or excessive enhancement 
would occur to the value of the dwelling unit. 10 CFR 440.22(b)(3)(iv). 
The expenditures allowed under the Weatherization Assistance Program 
help focus enhancements on those that provide weatherization benefits. 
For example, repairs to a dwelling unit must be necessary to make the 
installation of weatherization materials effective. 10 CFR 
440.18(b)(9). Moreover, for buildings that are in the Qualified 
Assisted Housing Programs, HUD controls the capital improvements that 
may be made. DOE proposes that the existing limits on permissible work 
under the Weatherization Assistance Program and the HUD control of 
improvements under the Qualified Assisted Housing programs would 
provide the necessary assurances that no undue or excessive enhancement 
will occur as a result of the weatherization of the buildings 
identified by HUD.
    DOE requests comment on whether HUD control of improvements to 
buildings under the Qualified Assisted Housing programs would ensure 
that no undue or excessive enhancement would occur as a result of 
weatherization. DOE also requests information on whether similar 
controls may be present under the LIHTC Program to a degree sufficient 
to allow DOE to make a similar finding for the LIHTC Program.

D. Eligibility of Buildings in the HUD Programs

    Based on the preceding discussion, DOE tentatively has determined 
that buildings subject to the Qualified Assisted Housing programs and 
that are identified by HUD would meet the income eligibility, rent 
control, and no undue or excessive enhancement requirements of the 
Weatherization Assistance Program for determining eligibility of multi-
unit buildings. DOE has also tentatively determined that buildings 
subject to the LIHTC Program and that are identified by HUD would meet 
the income eligibility requirement of the Weatherization Assistance 
Program for determining eligibility of multi-unit buildings. If today's 
proposed rule were made final, DOE would post annually a list of such 
buildings provided by HUD. The list would be available on the 
Weatherization Program Web site, http://www.eere.energy.gov/wip, and 
would be included in future funding opportunity announcements and 
program guidance. In evaluating the eligibility of a multi-unit 
building, inclusion on the most recent published list of Qualified 
Assisted Housing program buildings would demonstrate that a building 
meets the income, rent control, and no undue or excessive enhancement 
requirements established at 10 CFR 440.22(b)(2) and (3)(ii) and (iv). 
Inclusion on the most recent published list of LIHTC Program buildings 
would demonstrate that a building meets the income requirement 
established at 10 CFR 440.22(b)(2).
    Today's proposed rule is intended to reduce the review and 
verification that a subgrantee must undertake when evaluating the 
eligibility of the identified buildings. DOE does not intend that 
today's proposal would make buildings eligible under the Weatherization 
Assistance Program that previously were not eligible. The purpose of 
today's proposed rule is to reduce the burden on States and subgrantees 
when evaluating applicability requirements for which HUD has already 
collected and verified the necessary data. In the event that a 
subgrantee is presented with a request for weatherization assistance of 
a multi-unit building, the subgrantee, under the proposed rule, would 
be able to reference the DOE published list of buildings identified by 
HUD. If the building which is the subject of a request were on the most 
recent list, the subgrantee would not need to undertake an independent 
verification of the income of the building tenants. In the case of 
buildings on the Qualified Assisted Housing Program list, the 
procedures required by the relevant grantee to ensure protection from 
rent increases, and ensure that no undue or excessive enhancement shall 
occur, would be met.
    DOE recognizes that if made final, today's proposal would not 
address the requirement that, for multi-unit buildings, a grantee must 
ensure that the benefits of weatherizing a building that consists of 
rental units, including rental units where the tenant pays for energy 
through rent, accrue primarily to the low-income tenants. (42 U.S.C. 
6863(b)(5)(A); 10 CFR 440.22(b)(3)(i)) Given the variability with how 
utility savings could be realized by tenants in the Qualified Assisted 
Housing and LIHTC Programs, a request for weatherization of a multi-
unit building on the list provided by HUD would need to demonstrate 
that the benefits of the weatherization work accrue primarily to the 
low-income tenants.
    Generally, compliance with the requirement for the benefits of 
weatherization to accrue to the low-income tenants can be demonstrated 
by reduced utilities costs for the tenant that result from the 
weatherization work. Under the Qualified Assisted Housing programs and 
the LIHTC Program tenants may not directly pay for all or part of their 
utility bills. In instances in which tenants of a building do not 
directly pay utility costs and have capped rents, the property owner 
needs to demonstrate that benefits accrue primarily to the tenant of 
the weatherized units other than the benefit of reduced utility bills.
    DOE requests comment on how to ensure compliance with the 
requirement that benefits of weatherization accrue primarily to low-
income tenants, including information on procedures that may be used by 
States and subgrantees to determine that the accrual provision is 
satisfied in the context of buildings in the Qualified Assisted Housing 
programs and LIHTC Program.
    Additionally, today's proposed rule would not alleviate the need 
for a subgrantee to obtain the written permission of the owner or the 
owner's agent or confirm that a dwelling unit is not designated for 
acquisition or clearance by Federal, State, or local program within 12 
months from the date of the weatherization. 10 CFR 440.22(b)(1) and 
440.18(e)(1), respectively. The proposed rule would not eliminate the 
ability of States to require financial participation from building 
owners (10 CFR 440.22(d)), or other requirements of DOE's rules. 
Moreover, the proposed rule would not impact the prioritization that 
States and subgrantees rely on in evaluating requests for 
weatherization work.
    Despite the remaining issues that would still need to be addressed 
when weatherizing a multi-unit building, if finalized, DOE believes 
that today's proposal would be an important step in facilitating the 
weatherization of buildings that participate in the Qualified Assisted 
Housing and LIHTC Programs.

[[Page 23808]]

VI. Regulatory Analysis

A. Review Under Executive Order 12866

    Today's proposed rule has been determined to be an economically 
significant regulatory action under section 3(f)(1) of Executive Order 
12866, ``Regulatory Planning and Review,'' 58 FR 51735 (October 4, 
1993). Accordingly, this action was subject to review under that 
Executive Order by the Office of Information and Regulatory Affairs of 
the Office of Management and Budget (OMB).
    The American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5; 
Recovery Act) provided $5 billion for the Weatherization Assistance 
Program. Funding for grants under the Weatherization Assistance Program 
at a level greater than $100 million makes this rulemaking economically 
significant under the Executive Order.
    The weatherization grants provided under this program constitute 
transfer payments. In this case, the payments are from the Government 
to grantees (e.g., States, units of general purpose of local 
government, and community action agencies), and the payments do not 
represent a change in the total resources available to society. The 
grants do generate impacts such as weatherization benefits, however, 
which are discussed qualitatively in this proposed rule.\2\ See OMB 
Circular A-4, at 14, 38 and 46. If today's proposal is finalized prior 
to expenditure of the Recovery Act funds by grantees and subgrantees 
under the Weatherization Assistance Program, today's proposal could 
impact the process used by grantees and subgrantees to evaluate 
applications from multi-unit buildings that are part of HUD's Qualified 
Assisted Housing and LIHTC Programs for the purpose of distributing 
funds provided under the Recovery Act. Such changes in the process for 
application evaluation have the potential to cause a change in the 
distribution of Recovery Act funding, which may constitute a transfer 
between different non-Federal entities. Such impacts would also be a 
consideration when categorizing this rulemaking under EO 12866.
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    \2\ It is important to note that rules that transfer Federal 
dollars often have opportunity costs or benefits in addition to the 
budgetary dollars spent because they can affect incentives, and thus 
lead to changes in the way people behave (e.g., in their investment 
decisions). For example, OMB Circular A-94 suggests that transfers 
that result from increased taxes may be associated with a marginal 
excess burden (deadweight loss) of 25 cents per dollar of Federal 
revenue collected (p. 12).
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B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires the 
preparation of an initial regulatory flexibility analysis for any rule 
that by law must be proposed for public comment, unless the agency 
certifies that the rule, if promulgated, will not have a significant 
economic impact on a substantial number of small entities. As required 
by Executive Order 13272, ``Proper Consideration of Small Entities in 
Agency Rulemaking,'' (67 FR 53461; August 16, 2002), DOE published 
procedures and policies on February 19, 2003, to ensure that the 
potential impacts of its rules on small entities are properly 
considered during the rulemaking process (68 FR 7990). DOE has made its 
procedures and policies available on the Office of General Counsel's 
Web site: http://www.gc.doe.gov. If finalized, today's action would 
revise the eligibility requirements that apply to the administration of 
the Weatherization Assistance Program grants by grantees and 
subgrantees. Because the matter of today's action relates to grants, it 
is not subject to the notice and comment provisions of the 
Administrative Procedure Act. 5 U.S.C. 553(a)(2). Therefore, the 
analytical requirements of the Regulatory Flexibility Act do not apply. 
Although DOE is requesting comment, today's proposed rule on the 
eligibility of multi-unit buildings under the Weatherization Assistance 
Program is not subject to any legal requirement to publish a general 
notice of proposed rulemaking.

C. Review Under the National Environmental Policy Act of 1969

    DOE has determined that, if finalized, today's action is covered 
under the Categorical Exclusion found in DOE's National Environmental 
Policy Act regulations at paragraph A.6. of Appendix A to subpart D, 10 
CFR part 1021. That Categorical Exclusion applies to rulemakings that 
are strictly procedural, such as rulemaking establishing the 
administration of grants. Today's proposal would amend the eligibility 
provisions for multi-unit buildings under the Weatherization Assistance 
Program. The regulations would not have direct environmental impacts. 
Accordingly, DOE has not prepared an environmental assessment or an 
environmental impact statement.

D. Review Under Executive Order 13132, ``Federalism''

    Executive Order 13132, 64 FR 43255 (August 4, 1999), imposes 
certain requirements on agencies formulating and implementing policies 
or regulations that pre-empt State law or that have federalism 
implications. Agencies are required to examine the constitutional and 
statutory authority supporting any action that would limit the 
policymaking discretion of the States and carefully assess the 
necessity for such actions. DOE has examined today's proposed rule and 
has determined that if finalized, it would not pre-empt State law and 
would not have a substantial direct effect on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government. No further action is required by Executive Order 13132.

E. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
Civil Justice Reform, 61 FR 4729 (February 7, 1996), imposes on 
Executive agencies the general duty to adhere to the following 
requirements: (1) Eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for affected conduct rather than a general standard and 
promote simplification and burden reduction. The review required by 
sections 3(a) and 3(b) of Executive Order 12988 specifically requires 
that Executive agencies make every reasonable effort to ensure that the 
regulation: (1) Clearly specifies the pre-emptive effect, if any; (2) 
clearly specifies any effect on existing Federal law or regulation; (3) 
provides a clear legal standard for affected conduct while promoting 
simplification and burden reduction; (4) specifies the retroactive 
effect, if any; (5) adequately defines key terms; and (6) addresses 
other important issues affecting clarity and general draftsmanship 
under any guidelines issued by the Attorney General. Section 3(c) of 
Executive Order 12988 requires Executive agencies to review regulations 
in light of applicable standards in sections 3(a) and 3(b) to determine 
whether they are met or it is unreasonable to meet one or more of them.
    DOE has completed the required review and determined that, to the 
extent permitted by law, today's action meets the relevant standards of 
Executive Order 12988.

F. Review Under the Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) generally

[[Page 23809]]

requires Federal agencies to examine closely the impacts of regulatory 
actions on State, local, and tribal governments. Subsection 101(5) of 
Title I of that law defines a Federal intergovernmental mandate to 
include any regulation that would impose upon State, local, or tribal 
governments an enforceable duty, except a condition of Federal 
assistance or a duty arising from participating in a voluntary Federal 
program. Title II of that law requires each Federal agency to assess 
the effects of Federal regulatory actions on State, local, and tribal 
governments, in the aggregate, or to the private sector, other than to 
the extent such actions merely incorporate requirements specifically 
set forth in a statute. Section 202 of that title requires a Federal 
agency to perform a detailed assessment of the anticipated costs and 
benefits of any rule that includes a Federal mandate which may result 
in costs to State, local, or tribal governments, or to the private 
sector, of $100 million or more. Section 204 of that title requires 
each agency that proposes a rule containing a significant Federal 
intergovernmental mandate to develop an effective process for obtaining 
meaningful and timely input from elected officers of State, local, and 
tribal governments.
    If made final, today's proposed rule would not impose a Federal 
mandate on State, local or tribal governments, and it would not result 
in the expenditure by State, local, and tribal governments in the 
aggregate, or by the private sector, of $100 million or more in any one 
year. Accordingly, no assessment or analysis is required under the 
Unfunded Mandates Reform Act of 1995.

G. Review Under the Treasury and General Government Appropriations Act 
of 1999

    Section 654 of the Treasury and General Government Appropriations 
Act of 1999 (Pub. L. 105-277) requires Federal agencies to issue a 
Family Policymaking Assessment for any rule that may affect family 
well-being. If made final, today's proposed rule would not have any 
impact on the autonomy or integrity of the family as an institution. 
Accordingly, DOE has concluded that it is not necessary to prepare a 
Family Policymaking Assessment.

H. Review Under the Treasury and General Government Appropriations Act 
of 2001

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516, note) provides for agencies to review most 
disseminations of information to the public under guidelines 
established by each agency pursuant to general guidelines issued by 
OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002), 
and DOE's guidelines were published at 67 FR 62446 (October 7, 2002). 
DOE has reviewed today's rule under the OMB and DOE guidelines and has 
concluded that it is consistent with applicable policies in those 
guidelines.

I. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 
(May 22, 2001), requires Federal agencies to prepare and submit to the 
OMB a Statement of Energy Effects for any proposed significant energy 
action. A ``significant energy action'' is defined as any action by an 
agency that promulgated or is expected to lead to promulgation of a 
final rule, and that: (1) Is a significant regulatory action under 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy, or (3) is designated by the Administrator of the Office of 
Information and Regulatory Affairs (OIRA) as a significant energy 
action. For any proposed significant energy action, the agency must 
give a detailed statement of any adverse effects on energy supply, 
distribution, or use, should the proposal be implemented, and of 
reasonable alternatives to the action and their expected benefits on 
energy supply, distribution, and use.
    Today's regulatory action, if finalized, would not have a 
significant adverse effect on the supply, distribution, or use of 
energy and is therefore not a significant energy action. Accordingly, 
DOE has not prepared a Statement of Energy Effects.

J. Review Under Executive Order 13175

    Executive Order 13175. ``Consultation and Coordination with Indian 
Tribal Governments'' (65 FR 67249; November 9, 2000), requires DOE to 
develop an accountable process to ensure ``meaningful and timely input 
by tribal officials in the development of regulatory policies that have 
tribal implications.'' ``Policies that have tribal implications'' 
refers to regulations that have ``substantial direct effects on one or 
more Indian tribes, on the relationship between the Federal Government 
and Indian tribes, or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes.'' Today's regulatory 
action is not a policy that has ``tribal implications'' under Executive 
Order 13175. Today's regulatory action amends the eligibility 
provisions applicable to multi-unit buildings under the Weatherization 
Assistance Program. DOE has reviewed today's action under Executive 
Order 13175 and has determined that it is consistent with applicable 
policies of that Executive Order.

VI. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of today's notice 
of proposed rulemaking.

List of Subjects in 10 CFR Part 440

    Administrative practice and procedure, Aged, Energy conservation, 
Grant programs--energy, Grant programs--housing and community 
development, Housing standards, Indians, Individuals with disabilities, 
Reporting and recordkeeping requirements, Weatherization.

    Issued in Washington, DC, on May 15, 2009.
Steven G. Chalk,
Principal Deputy Assistant Secretary, Energy Efficiency and Renewable 
Energy.
    For the reasons set forth in the preamble, DOE proposes to amend 
part 440 of chapter II of title 10, Code of Federal Regulations to read 
as follows:

PART 440--WEATHERIZATION ASSISTANCE PROGRAM FOR LOW-INCOME PERSONS

    1. The authority citation for part 440 continues to read as 
follows:

    Authority: 42 U.S.C. 6861 et seq.; 42 U.S.C. 7101 et seq.


Sec.  440.22  Eligible dwelling units.

    2. Section 440.22 is amended by adding paragraph (b)(4) to read as 
follows:
* * * * *
    (b) * * *
    (4)(i) A building containing rental dwelling units meets the 
requirements of paragraph (b)(2) and paragraphs (b)(3)(ii) and 
(b)(3)(iv), of this section if it is included on the most recent list 
posted by DOE of Qualified Assisted Housing and Public Housing 
buildings identified by the U.S. Department of Housing and Urban 
Development as meeting those requirements.
    (ii) A building containing rental dwelling units meets the 
requirement of paragraph (b)(2) of this section if it is included on 
the most recent list posted by DOE of Low Income Housing Tax Credit 
buildings identified by the U.S. Department of Housing and Urban

[[Page 23810]]

Development as meeting that requirement.
* * * * *
[FR Doc. E9-11890 Filed 5-20-09; 8:45 am]
BILLING CODE 6450-01-P


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