[Federal Register Volume 63, Number 115 (Tuesday, June 16, 1998)]
[Proposed Rules]
[Pages 32958-32960]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-15849]



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Part III





Department of Housing and Urban Development





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24 CFR Part 200



HUD Minimum Property Standard--Adoption of the 1995 Model Energy Code; 
Proposed Rule

  Federal Register / Vol. 63, No. 115 / Tuesday, June 16, 1998 / 
Proposed Rules  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 200

[Docket No. FR-4272-P-01]
RIN 2502-AH03


HUD Minimum Property Standard--Adoption of the 1995 Model Energy 
Code

AGENCY: Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner, HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would amend the Minimum Property Standards 
(MPS) in 24 CFR part 200, subpart S, by referencing the latest edition 
of the Model Energy Code (MEC): the 1995 edition. The 1992 MEC edition 
presently cited in the MPS regulations and incorporated in Handbook, 
4910.1 would be replaced. These proposed changes are necessary to keep 
the MPS current and to help protect the Department's insurance fund. In 
addition, the proposed changes are consistent with legislation and OMB 
Circular A-119, which require Federal agencies to use national 
voluntary consensus standards, when practical, in lieu of developing an 
agency standard. In order to determine the appropriateness of these 
proposed changes, HUD asked Pacific Northwest National Laboratory 
(PNNL) to perform a detailed analysis of the 1995 MEC. PNNL determined 
that the use of the 1995 MEC will achieve a significant increase in 
energy savings, and that it is technologically feasible, and 
economically justified.

DATES: Comment due date: August 17, 1998.

ADDRESSES: Interested persons are invited to submit comments regarding 
this rule to the Rules Docket Clerk, Office of the General Counsel, 
Room 10276, Department of Housing & Urban Development, 451 Seventh 
Street, S.W., Washington, D.C. 20410-8000. Communications should refer 
to the above docket number and title. A copy of each communication 
submitted will be available for public inspection and copying between 
7:30 a.m. and 5:30 p.m. weekdays at the above address. FAXED comments 
will not be accepted.

FOR FURTHER INFORMATION CONTACT: David R. Williamson, Director, Office 
of Consumer and Regulatory Affairs, Department of Housing and Urban 
Development, 451 Seventh Street S.W., Room 9156, Washington, D.C. 
20410-8000; telephone: voice, (202) 708-6423; TTY, (202) 708-4594 
(these are not toll free numbers.)

SUPPLEMENTARY INFORMATION:

Background

    The National Housing Act, 12 U.S.C. 1702 et seq., authorizes the 
Secretary of Housing and Urban Development (Secretary) to prescribe 
standards for determining the acceptability of one- and two-family 
residential structures, multifamily residential structures, and care-
type facilities (nursing home, intermediate care facility, combined 
nursing home and intermediate care facility, board and care home, 
hospital or group practice facility). (See e.g., 12 U.S.C. 1715l(f).) 
Some general statutory guidelines govern the nature of these standards. 
For example, the standards are ``to establish the acceptability of * * 
* property for mortgage insurance * * *.'' (12 U.S.C. 1715l(f)). In 
addition, the standards must be consistent with the declared national 
housing policy of realizing ``the goal of a decent and suitable living 
environment for every American family * * *.'' (42 U.S.C. 1441). The 
Minimum Property Standards (MPS) requirements in 24 CFR part 200, 
subpart S, are also published in HUD Handbook 4910.1, as provided in 
Sec. 200.929(b)(2) of the MPS. Any changes made in the MPS by this rule 
will, accordingly, be reflected in the referenced handbook.
    The current MPS are consistent with the National Technology 
Transfer and Advancement Act of 1995 (Pub. L. 104-113, 110 Stat. 783, 
approved March 7, 1996) and OMB Circular A-119. This statute and 
circular establish a Federal policy that, whenever feasible, model 
codes and standards developed by private organizations should be 
adopted by the U.S. Government when their use will eliminate the 
necessity for separate Federal agency standards covering the same 
technical issues.
    Section 526(a) of the National Housing Act requires the Secretary 
to ``promote the use of energy saving techniques through the minimum 
property standards'' and assure that the MPS are ``at least as 
effective in performance as the energy performance requirements 
incorporated in the minimum property standards that were in effect 
under this subsection on September 30, 1982.''
    This requirement was supported and extended in section 101 of the 
Energy Policy Act of 1992 (Pub. L. 102-486, Oct. 24, 1992), which 
amended section 109 of the Cranston-Gonzalez National Affordable 
Housing Act (42 U.S.C. 12709). This provision covers public and 
assisted housing, and single family and multifamily residential housing 
(other than manufactured housing) subject to mortgages insured under 
the National Housing Act. HUD implemented the requirement of Section 
101 by amending the Minimum Property Standards (MPS) for Housing (See 
24 CFR 200.925; 24 CFR 200.926e) to reference the provisions of the 
1992 Model Energy Code (MEC). (See FR Vol. 58, No. 218, November 15, 
1993)
    Also under section 109 of the Cranston-Gonzalez National 
Affordability Housing Act, ``If the requirements of 1992 Model Energy 
Code or, in the case of multifamily high rises, ASHRAE [American 
Society of Heating, Refrigerating and Air Conditioning Engineers] 
Standard 90.1-1989, are revised at any time, the Secretaries (of HUD 
and Agriculture) shall, not later than 1 year after such revision, 
amend the standards established under subsection (a) to meet or exceed 
the requirements of such revised code or standard unless the 
Secretaries determine that compliance with such revised code or 
standard would not result in a significant increase in energy 
efficiency or would not be technologically feasible or economically 
justified.'' This proposed rule has been prepared as expeditiously as 
possible following receipt of the PNNL analysis.
    The Model Energy Code 1995 establishes minimum requirements for 
energy-related features of new buildings and additions to existing 
buildings. It covers low-rise buildings, three stories or less, as well 
as one- and two-family buildings. It also includes high-rise buildings, 
four stories or more, and applies to any additions to existing 
buildings. Since the Minimum Property Standards only apply to new 
structures and do not include additions, sections of the MEC that deal 
with additions were deleted from adoption by the MPS. Further, the MEC 
sections dealing with mixed occupancy and change of occupancy are 
deleted from adoption by the MPS because the MPS apply only to 
multifamily buildings, caretype occupancy, and one- and two-family 
dwellings.
    The MEC is applicable to all types of residential and non-
residential buildings. It is not applicable to historic structures 
(specifically designated as historically significant by the State or 
local governing body, or listed in the National Register of Historic 
Places, or which have been determined to be eligible for listing). Nor 
does it apply to manufactured homes regulated by the Federal 
Manufactured Home Construction and Safety Standards. HUD has other 
energy standards for manufactured housing.

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    The MEC emphasizes flexibility to suit local needs and conditions 
by offering a number of means for achieving compliance. MEC compliance 
can be demonstrated based on using the building envelope specifications 
for insulation/windows (thermal transmittance). Compliance can also be 
demonstrated with the building envelope which has an overall thermal 
transmittance equal to or better than specified in the MEC. The MEC 
allows compliance to be demonstrated by showing the estimated energy 
use of a residence is less than or equal to the energy use resulting 
from a building which meets the explicit requirements of the MEC. In 
addition, the MEC allows compliance of residences whose estimated 
energy costs are less than or equal to the energy costs resulting from 
the same house if it was built to the MEC specifications.
    To assure that the 1995 MEC standards meet legislative 
requirements, HUD contracted with Pacific Northwest National Laboratory 
(PNNL), a Department of Energy national laboratory, to review and 
analyze the technical aspects of these standards. Their report, 
entitled ``Assessment of the 1995 Model Energy Code for Adoption'' 
March 1997, analyzed this matter and has determined that there is a 
significant increase in energy savings, that it is technologically 
feasible, and economically justified. PNNL performed a detailed cost/
benefit analysis in accordance with established analytical methods. 
Their analysis added the discounted cost and benefits of an energy 
investment which are based on existing and forecasted economic 
parameters. Some of these parameters include: interest rates, loan 
term, inflation rate, alternative investments, loan fees and state 
taxes. Present and projected escalation fuel costs are also used.
    This report concluded that the present value of estimated savings 
to each new home buyer is approximately $700, for an additional up-
front cost of approximately $300. This is based on a national average 
of single family and multifamily homes. In addition, the report 
detailed the specific differences between the 1992 MEC and the 1995 
MEC.
    ASHRAE 90.1, which is mentioned in section 109 of the Cranston-
Gonzalez National Affordability Housing Act and adopted by reference in 
the 1995 MEC, was also analyzed in this report. Public and HUD-assisted 
multifamily high-rise housing (buildings four stories or more) are 
required to comply with ASHRAE Standard 90.1-1989 (ASHRAEa). It 
incorporated a number of addenda adding new requirements or modifying 
existing ones. This codified version of Standard 90.1 endorsed in 1993, 
which included addenda, did not increase the requirements, or costs, 
from the 1992 MEC. Rather, it made the enforcement of the code easier 
for building officials.
    In order to simplify compliance with the MEC, HUD has made 
available two computer software programs, MECcheck and COMcheck, which 
can be used to demonstrate compliance with the requirements. These 
materials were developed by the U.S. Department of Energy to simplify 
compliance with building energy codes.
    Copies of the MPS are available for public inspection during 
regular business hours in the Office of the Rules Docket Clerk, Office 
of the General Counsel, Room 10276, at the Department of Housing and 
Urban Development, Washington, DC 20410-8000. Also, copies of the PNNL 
report, ``Assessment of the 1995 Model Energy Code for Adoption'' March 
1997, are available from HUD USER, P.O. Box 6091, Rockville, MD 20849. 
MECcheck is also available from HUD USER.

Incorporation by Reference

    These standards have been approved by the Director of the Federal 
Register for incorporation by reference in accordance with 5 U.S.C. 
552(a) and 1 CFR 51. Copies of the standards may be obtained from the 
Council of American Building Officials, 5203 Leesburg Pike, Suite 708, 
Falls Church, VA 22041.

Findings and Certifications

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 establishes 
requirements for Federal agencies to assess the effects of their 
regulatory actions on State, local, and tribal governments and the 
private sector. This rule does not impose any federal mandates on any 
State, local, or tribal governments or the private sector within the 
meaning of the Unfunded Mandates Reform Act of 1995.

Environmental Impact

    A Finding of No Significant Impact with respect to the environment 
has been made in accordance with HUD regulations in 24 CFR Part 50, 
which implement Section 102(2)(C) of the National Environmental Policy 
Act of 1969, 42 U.S.C. 4332. The Finding of No Significant Impact is 
available for public inspection and copying between 7:30 a.m. and 5:30 
p.m. weekdays in the Office of the Rules Docket Clerk, Room 10276, 451 
Seventh Street, SW, Washington, D.C. 20410.

Impact on Small Entities

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)) has reviewed and approved this rule, and in so doing 
certifies that this rule is not anticipated to have a significant 
economic impact on a substantial number of small entities. The rule is 
not anticipated to have any adverse or disproportionate economic impact 
on small businesses. The rule only proposes to adopt model energy 
standards that are already nationally recognized throughout the 
affected industry. Notwithstanding this determination, HUD specifically 
invites comments regarding alternatives to this rule that would meet 
HUD's objectives as described in this preamble.

Federalism Impact

    The General Counsel has determined, as the Designated Official for 
HUD under Section 6(a) of Executive Order 12612, Federalism, that this 
rule does not have federalism implications concerning the division of 
local, State, and federal responsibilities. The rule only proposes to 
adopt standards that are already nationally recognized throughout the 
affected industry.

List of Subjects for 24 CFR Part 200

    Administrative practice and procedure, Claims, Equal employment 
opportunity, Fair housing, Home improvement, Housing standards, 
Incorporation by reference, Lead poisoning, Loan programs--housing and 
community development, Minimum property standards, Mortgage insurance, 
Organization and functions (Government agencies), Penalties, Reporting 
and recordkeeping requirements, Social Security, Unemployment 
compensation, Wages.

    Accordingly, 24 CFR part 200 would be amended as follows:
    1. The authority citation for part 200 continues to read as 
follows:
    Authority: 12 U.S.C. 1701-1715z-18; 42 U.S.C. 3535(d).

Subpart S  [Amended]

    2. All references in part 200, subpart S, to ``the CABO Model 
Energy Code, 1992'' are replaced with ``the CABO Model Energy Code, 
1995''.
    3. Section 200.926d is amended by revising paragraph (e) to read as 
follows:


Sec. 200.926d  Construction requirements.

* * * * *
    (e) Energy efficiency. All buildings shall be constructed in 
compliance with the requirements of:
    (i) The CABO Model Energy Code (MEC), 1995 Edition, except Sections

[[Page 32960]]

101.4.3 (or as otherwise provided in this paragraph), 101.4.4, 104 and 
105;
    (ii) Section 101.4.3.2, Historic buildings;
    (iii) The MEC Appendix; and
    (iv) HUD UM 100, HUD Building Product Standards and Certification 
Program for Solar Water Heating Systems.
    (v) ASHRAE/IES 90.1-1989, including addenda, as referenced in the 
MEC, applies to all multifamily high-rise buildings. All buildings 
which comply with ASHRAE/IES 90.1-1989, Energy Efficiency Design of New 
Buildings Except Low-Rise Residential Buildings, will use ASHRAE 
Standard 62-1989 or its equivalent for specific ventilation 
requirements.


Sec. 200.929  [Amended]

    4. Section 200.929(b)(2) is amended by substituting the date 
``1994'' for the date ``1993'' in the first sentence.


Appendix A  [Amended]

    5. The introductory paragraph to Appendix A to 24 CFR part 200 is 
revised to change in two places the address for obtaining MPS and for 
public inspection of the MPS to ``HUD Manufactured Housing and 
Standards Division, Office of Consumer and Regulatory Affairs, Room 
9156, to 451 7th Street, SW, Washington, DC 20410''. In the standards 
referenced in the paragraph under Council of American Building 
Officials: the reference to ``CABO Model Energy Code--1992 Edition'' is 
replaced with ``CABO Model Energy Code--1995 Edition''.

    Dated: April 27, 1998.
Art Agnos,
Acting General Deputy, Assistant Secretary for Housing-Deputy Federal 
Housing Commissioner.
[FR Doc. 98-15849 Filed 6-15-98; 8:45 am]
BILLING CODE 4210-27-P