State Energy Conservation Program

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

[[Page 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 State-oriented 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 Sec. 420.1, Sec. 420.2, Sec. 420.3 (formerly

Sec. 420.13), Sec. 420.4 (formerly Sec. 420.10), and Sec. 420.5

(formerly Sec. 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

Sec. 420.13)

420.4 Technical assistance. (formerly Sec. 420.10)

420.5 Reports. (formerly Sec. 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 Sec. 420.3)

420.12 State matching contribution. (formerly part of Sec. 420.3)

420.13 Annual State applications and State plans. (formerly

Sec. 420.4)

[[Page 35892]]

420.14 Review and approval of annual State applications and State

plans. (formerly Sec. 420.5)

420.15 Minimum criteria for required program activities for plans.

(formerly Sec. 420.6)

420.16 Extensions for compliance with required program activities.

(formerly Sec. 420.8)

420.17 Optional elements of State Energy Program plans. (formerly

Sec. 420.7)

420.18 Expenditure prohibitions and limitations. (formerly

Sec. 420.12)

420.19 Administrative review. (formerly Sec. 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 Sec. 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 co- publisher, 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 Sec. 420.12 (formerly Sec. 420.3(e)), whereas under

Sec. 420.18(b) (formerly Sec. 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

[[Page 35893]]

implementing regulations at 10 CFR part 1005.

Paragraphs (b) and (c) of this section were formerly found under

Sec. 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 Sec. 420.10.

Section 420.5 Reports

This section was formerly Sec. 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 Sec. 420.2 and Sec. 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

Sec. 420.3. Paragraph (a) remains the same.

DOE has revised the process (specified under Sec. 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 Sec. 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: 33\1/3\ percent divided among the States equally;

33\1/3\ percent divided on the basis of the population of the

participating States; and 33\1/3\ 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 Sec. 420.3, as

already discussed under that section.

Paragraph (d) is now found under new Sec. 420.12.

Section 420.12 State Matching Contribution

This section was formerly paragraph (d) of former Sec. 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 Sec. 420.13 where it becomes new

Sec. 420.13(b)(4)(ii).

Section 420.13 Annual State Application and State Plans

This section was formerly Sec. 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

Sec. 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

Sec. 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

[[Page 35894]]

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 Sec. 420.5

Section 420.15 Minimum Criteria for Required Program Measures for

Plans

This section was formerly Sec. 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 Sec. 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 Sec. 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 one-way 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 Sec. 420.8.

Section 420.17 Optional Elements of State Energy Program Plans

This section was formerly Sec. 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 Sec. 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 Sec. 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 Sec. 420.9. It covers decisions made

under Sec. 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

[[Page 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.

[[Page 35896]]

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 cost-sharing.

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

Sec. 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.

Sec. 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; coal-derived

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 Sec. 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

[[Page 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 Sec. 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

Sec. 420.12 and of applying the limitations specified under

Sec. 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 Sec. 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 non-depletable 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.

Sec. 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 Sec. 420.11(b) or Sec. 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.

Sec. 420.4 Technical assistance.

At the request of the Governor of any State to DOE and subject to

the

[[Page 35898]]

availability of personnel and funds, DOE will provide information and

technical assistance to the State in connection with effectuating the

purposes of this part.

Sec. 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.

Sec. 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 90.1e-1992; Addenda

90.1g-1993; and Addenda 90.1i-1993, IBR approved for Sec. 420.2 and

Sec. 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

Sec. 420.2 and Sec. 420.15.

Subpart B--Formula Grant Procedures

Sec. 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 Sec. 420.15 and

Sec. 420.17. Funding for these activities is allocated to the States

based on funds available for any fiscal year, as described under

Sec. 420.11.

Sec. 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

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 Sec. 420.11(b) shall be consistent with 10 CFR

part 600.

Sec. 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 Sec. 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

Sec. 420.18(a), but are not subject to the 20 percent limitation in

Sec. 420.18(b).

[[Page 35899]]

(c) Nothing in this section shall be read to require a match for

petroleum violation escrow funds used under this part.

Sec. 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 Sec. 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 low-income 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.

Sec. 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 Sec. 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

Sec. 420.13; and

(iii) The provisions of the application regarding program

activities satisfy the minimum requirements prescribed by Sec. 420.15

and Sec. 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.

Sec. 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 Sec. 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

[[Page 35900]]

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 Sec. 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 one-way 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.

Sec. 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.

Sec. 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

[[Page 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.

Sec. 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 Sec. 420.18(a)(1), or to the limitation

on equipment purchases of Sec. 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

[[Page 35902]]

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 Sec. 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.

Sec. 420.19 Administrative review.

(a) A State shall have 20 days from the date of receipt of a

decision under Sec. 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

Sec. 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 Sec. 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

Sec. 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.

Sec. 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.

Sec. 420.32 Program guidance/solicitation.

After the publication of the notice of availability in the Federal

Register, DOE shall, upon request, provide States

[[Page 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.

Sec. 420.33 Application requirements.

(a) Consistent with Sec. 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.

Sec. 420.34 Matching contributions or cost-sharing.

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.

Sec. 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.

Sec. 420.36 Evaluation criteria.

The evaluation criteria, including program activity-specific

criteria, will be set forth in the program guidance/solicitation

document.

Sec. 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