[Federal Register Volume 64, Number 163 (Tuesday, August 24, 1999)]
[Rules and Regulations]
[Pages 46111-46114]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-21896]



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 Rules and Regulations
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  Federal Register / Vol. 64, No. 163 / Tuesday, August 24, 1999 / 
Rules and Regulations  

[[Page 46111]]


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DEPARTMENT OF ENERGY

Office of Energy Efficiency and Renewable Energy

10 CFR Part 420

[Docket No. EE-RM-96-402]
RIN 1904-AB01


State Energy Program

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy (DOE).

ACTION: Interim final rule and opportunity for public comment.

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SUMMARY: Today the Department of Energy (DOE or Department) is 
publishing an interim final rule revising the regulations for its State 
Energy Program. This rule provides for the possibility of certain 
activities being funded under the Special Projects part of the program 
that are not permitted under the formula grant part of the program. The 
rule also provides for the specification of any Special Projects 
funding limitations by the sector specific program offices providing 
the Special Projects funding, and clarifies the applicability of 
Subpart B to the formula grant part of the program and of Subpart C to 
the Special Projects part of the program.

DATES: This rule becomes effective August 24, 1999. Written comments on 
the interim final rule must be received by DOE no later than September 
23, 1999, to ensure consideration.

ADDRESSES: Written comments (six copies and, if possible, a computer 
disk) 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, SW, 
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 a.m. and 4 p.m., 
Monday through Friday except Federal holidays, at the following 
address: DOE Freedom of Information Reading Room, Department of Energy, 
Room 1E-190, Forrestal Building, 1000 Independence Avenue, SW, 
Washington, DC 20585, (202) 586-3142.
    For 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 5E-080, EE-44, Forrestal Building, 1000 Independence Avenue, SW, 
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. Review Under the Paperwork Reduction Act
IX. Review Under the National Environmental Policy Act
X. Review Under the Small Business Regulatory Enforcement Fairness 
Act of 1996
XI. Review Under the Unfunded Mandate Reform Act of 1995
XII. Review Under the Regulatory Flexibility Act
XIII. The Catalog of Federal Domestic Assistance

I. Introduction and Description of the Program

    On July 8, 1996, the Department published in the Federal Register 
an interim final rule consolidating the State Energy Conservation 
Program (SECP) and the Institutional Conservation Program (ICP) under 
the name ``State Energy Program'' (SEP or program). 61 FR 35890. On May 
14, 1997, the Department published in the Federal Register a final rule 
for the program, incorporating revisions to the interim final rule 
resulting from comments received. 62 FR 26726. The program provides 
formula grants to States for a wide variety of energy efficiency and 
renewable energy initiatives, and, in years when funding is available, 
may also offer financial assistance for a number of State-oriented 
competitively awarded Special Projects activities with funding 
contributed by the Office of Energy Efficiency and Renewable Energy's 
sector specific program offices. Special Projects have been funded in 
every fiscal year since SEP was established in 1996. DOE expects the 
Special Projects part of SEP to continue in future years.
    Among the goals of the SEP Special Projects activities are to 
assist States to: accelerate deployment of energy efficiency and 
renewable energy technologies; facilitate the acceptance of emerging 
and under utilized energy efficiency and renewable energy technologies; 
and increase the responsiveness of Federally funded technology 
development efforts to private sector needs.
    When the SEP rule was revised in 1996 to provide for the 
incorporation of the Special Projects activities, DOE envisioned that 
States would receive the funding by means of amendments to their SEP 
formula grants. While the Special Projects requirements are primarily 
covered under subpart C of the rule, the expenditure prohibitions and 
limitations specified under Sec. 420.18 of subpart B continued to be 
worded so that the section was deemed to apply to both the formula 
grants and the Special Projects amendments to those grants. For the 
first two years of Special Projects (fiscal years 1996 and 1997), when 
Special Projects funding was provided via the State SEP grant, that was 
necessary.
    However, starting in fiscal year 1998, Special Projects funding has 
been provided to States by means of individual grants for each project, 
separate from the SEP formula grants. DOE therefore believes that the 
application of the formula grant expenditure prohibitions and 
limitations to the Special Projects is no longer necessary, and it 
reduces their potential flexibility. Interest has been expressed in 
using Special Projects funding for end-use sector specific 
infrastructure improvements and research and development projects, both 
of which are precluded or limited under Sec. 420.18. DOE believes the 
Special Projects should no longer be limited by Sec. 420.18 so that the 
Special Projects funding approach will be of maximum

[[Page 46112]]

benefit to the end-use sectors providing the funding.
    Therefore, Special Projects funding will henceforth be required to 
meet only the limitations and prohibitions that apply to all Federal 
financial assistance under 10 CFR part 600 and any that may apply to 
the particular sources of funding used by the respective end-use 
sectors, as specified under the annual Special Projects solicitation/
guidance. To dissociate the Special Projects from the prohibitions 
under 420.18, DOE is revising the wording of that section so that it 
applies only to subpart B of the rule, covering the SEP formula grants. 
DOE is making similar technical revisions to other sections of the rule 
to achieve consistency in the applicability of the various subparts of 
the rule.
    In addition, technical revisions are being made to change the 
designations of Regional Support Offices to Regional Offices, and 
Regional Support Office Directors to Regional Office Directors to 
conform to the official changes made in these designations as of April 
25, 1999.

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 1999 Special Projects process is now 
underway, and DOE would like to maximize the range of projects being 
considered for funding by removing the formula grant prohibitions and 
limitations from the Special Projects at this time. Removing these 
special prohibitions and limitations will provide immediate flexibility 
and will reduce burdens on State governments consistent with 
government-wide uniform administrative requirements applicable to 
grants to States under 10 CFR part 600. There is no reason to 
anticipate State objections would be forthcoming if DOE were to propose 
removal for public comment. Moreover, it is unlikely that any member of 
the public could persuasively object to this regulatory change. 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

Part 420 (throughout)

    The designations of Regional Support Office and Regional Support 
Office Director are changed to Regional Office and Regional Office 
Director, respectively, throughout the rule to conform to the official 
redesignations made effective on April 25, 1999.

Section 420.12  State Matching Contribution

    To clarify that this section applies only to the SEP formula 
grants, the wording of paragraph (c) is changed so that the reference 
to ``this part'' becomes ``this subpart.'' Whereas ``this part'' refers 
to the entire 10 CFR part 420, ``this subpart,'' in this context, 
refers only to subpart B of 10 CFR part 420, covering the SEP formula 
grants. Cost sharing requirements for Special Projects grants are 
covered under subpart C.

Section 420.13  Annual State Applications and Amendments to State Plans

    To make the wording consistent with changes being made elsewhere in 
the rule, the wording of paragraphs (a), (b)(3) and (b)(7) is changed 
so that the references to ``subpart B of this part'' become ``this 
subpart.'' To clarify that this section applies only to the SEP formula 
grants, the wording of paragraph (b)(7) is changed so that the 
reference to ``this part'' becomes ``this subpart,'' as further 
explained under 420.12 above. The applications referred to under 420.13 
are for the SEP formula grants. Applications for Special Projects 
grants are covered under subpart C.

Section 420.14  Review and Approval of Annual State Applications and 
Amendments to State Plans

    To make the wording consistent with changes being made elsewhere in 
the rule, the wording of paragraph (a) is changed so that the reference 
to ``subpart B of this part'' becomes ``this subpart.'' To clarify that 
this section applies only to the SEP formula grants, the wording of 
paragraphs (a), (b)(1)(i), (b)(2), and (b)(3) is changed so that the 
references to ``this part'' become ``subparts A and B of this part.'' 
Whereas ``this part'' refers to the entire 10 CFR part 420, the 
applications and State plans covered under 420.14 need only meet the 
requirements of subparts A and B. Subpart C covers applications for 
Special Projects.

Section 420.17  Optional Elements of State Energy Program Plans

    To clarify that the services referenced under paragraph (b)(3) of 
this section are established under the SEP formula grants, the wording 
of that paragraph is changed so that the reference to ``this part'' 
becomes ``this subpart,'' referring to subpart B covering the formula 
grants.

Section 420.18  Expenditure Prohibitions and Limitations

    To restrict the prohibitions and limitations specified under this 
section to the formula grants part of SEP, the wording of paragraph (a) 
is changed so that the reference to ``this part'' becomes ``this 
subpart'' as further explained under the revision to 420.12 above. 
Expenditure limitations that might apply to Special Projects grants are 
covered under new Sec. 420.38 under Subpart C. In addition, the 
references in paragraphs (b), (d) and (e) to ``this part'' are changed 
to ``this subpart'' to clarify that the activities referred to are 
those undertaken pursuant to the SEP formula grants covered by subpart 
B. To clarify that the activities referred to under paragraphs (e)(3), 
(e)(5) and (f) are those introduced under paragraph (e), the wording of 
those paragraphs is changed so that the references to ``this 
paragraph'' become ``paragraph (e) of this section.''

Section 420.19  Administrative Review

    To clarify that the administrative review referred to under this 
section applies only to the formula grants, wording is added to 
paragraph (e) specifying that it refers to applications for financial 
assistance ``under this subpart.'' Paragraph (i) is changed so that 
reference to ``this part'' becomes ``this subpart'' to make clear that 
the State plans referred to are those for the SEP formula grants 
covered under subpart B.

Section 420.33  Application Requirements

    To clarify that the applications referred to under this section are 
for SEP Special Projects grants, the wording of paragraph (d) is 
changed so that the reference to ``this part'' becomes ``this 
subpart'', referring to subpart C which covers Special Projects grants.

Section 420.35  Application Evaluation

    To clarify that the information in Special Projects applications 
must meet the requirements under subpart C of the rule, the wording in 
paragraph (a) is changed so that the reference to ``this part'' becomes 
``this subpart.''

[[Page 46113]]

New Section 420.38  Special Projects Expenditure Prohibitions and 
Limitations

    This section is being added to provide that expenditure 
prohibitions and limitations for Special Projects will be any general 
prohibitions and limitations under 10 CFR part 600 together with any 
specific prohibitions and limitations that may be required by the 
respective end-use sectors providing Special Projects funding, as 
specified each year by category in the Special Projects solicitation/
guidance.

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,'' 58 FR 51735 (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. Review Under the Paperwork Reduction Act

    No new information collection or record keeping requirements are 
imposed on the public by today's rules.

IX. 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) 586-3142.

X. Review Under the Small Business Regulatory Enforcement Fairness 
Act of 1996

    The interim 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. DOE 
will report to Congress on the promulgation of the interim final 
regulations prior to the effective date set forth at the beginning of 
this notice.

XI. Review Under the Unfunded Mandates Reform Act of 1995

    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.

XII. 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.

XIII. The Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance number for the State 
Energy Program is 81.041. The Catalog of Federal Domestic Assistance 
number for the State Energy Program Special Projects is 81.119.

List of Subjects in 10 CFR Part 420

    Energy conservation, Grant programs--energy, Reporting and 
recordkeeping requirements, Technical Assistance, Incorporation by 
reference.

    Issued in Washington, DC, on July 20, 1999.
Dan W. Reicher,
Assistant Secretary, Energy Efficiency and Renewable Energy.
    For the reasons set forth in the preamble, Chapter II of Title 10, 
Code of

[[Page 46114]]

Federal Regulations is amended as follows:

PART 420--[AMENDED]

    1. The authority citation for part 420 continues to read as 
follows:

    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.)

PART 420--[AMENDED]

    2. In part 420, revise all references to ``Regional Support 
Office'' to read ``Regional Office.''
    3. In part 420, revise all references to ``Regional Support Office 
Director'' to read ``Regional Office Director.''


Secs. 420.12, 420.13, 420.17, 420.18, 420.19, 420.33, and 
420.35  [Amended]

    4. In subpart B, revise all references to ``this part'' to read 
``this subpart'' in the following sections:
    a. Sec. 420.12(c).
    b. Sec. 420.13(b)(7) (second occurrence).
    c. Sec. 420.17(b)(3).
    d. Sec. 420.18(a).
    e. Sec. 420.18(b).
    f. Sec. 420.18(d) (two occurrences).
    g. Sec. 420.18(e).
    h. Sec. 420.19(i).
    5. In subpart C, revise the references to ``this part'' to read 
``this subpart'' in the following sections:
    a. Sec. 420.33(d).
    b. Sec. 420.35(a).


Secs. 420.13, 420.14  [Amended]

    6. Revise all references to ``subpart B of this part'' to read 
``this subpart'' in the following sections:.
    a. Sec. 420.13(a).
    b. Sec. 420.13(b)(3).
    c. Sec. 420.13(b)(7).
    d. Sec. 420.14(a).


Sec. 420.14  [Amended]

    7. In section 420.14, revise all references to ``this part'' to 
read ``subparts A and B of this part'' in the following sections:
    a. Sec. 420.14(a).
    b. Sec. 420.14(b)(l)(i).
    c. Sec. 420.14(b)(2).
    d. Sec. 420.14(b)(3).


Sec. 420.18  [Amended]

    8. In section 420.18, revise the words ``this paragraph'' to read 
``paragraph (e) of this section'' in the following sections:
    a. Sec. 420.18(e)(3).
    b. Sec. 420.18(e)(5).
    c. Sec. 420.18(f).


Sec. 420.19  [Amended]

    9. In 420.19, add the words ``under this subpart'' after the words 
``financial assistance'' in the following paragraph:
    Sec. 420.19(e).
    10. A new section 420.38 is added under subpart C, to read as 
follows:


Sec. 420.38  Special projects expenditure prohibitions and limitations.

    (a) Expenditures under the special projects are subject to 10 CFR 
part 600 and to any prohibitions and limitations required by the DOE 
programs that are providing the special projects funding.
    (b) DOE must state any expenditure prohibitions or limitations 
specific to a particular category of special projects in the annual SEP 
special projects solicitation/guidance.

[FR Doc. 99-21896 Filed 8-23-99; 8:45 am]
BILLING CODE 6450-01-P