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(3) If the available funds for any fiscal year are less than $25.5 million, then the base allocation for each State shall be reduced proportionally.

(4) If the available funds exceed $25.5 million, $25.5 million shall be allocated as specified in Table 1 and any in excess of $25.5 million shall be allocated as follows:

(i) One-third of the available funds is divided among the States equally;

(ii) One-third of the available funds is divided on the basis of the population of the participating States as contained in the most recent reliable census data available from the Bureau of the Census, Department of Commerce, for all participating States at the time DOE needs to compute State formula shares; and

(iii) One-third of the available funds is divided on the basis of the energy consumption of the participating States as contained in the most recent State Energy Data Report available from DOE's Energy Information Administration.

(c) The budget period covered by the financial assistance provided to a State according to §420.11(b) shall be consistent with 10 CFR part 600.

§ 420.12   State matching contribution.

(a) Each State shall provide cash, in kind contributions, or both for SEP activities in an amount totaling not less than 20 percent of the financial assistance allocated to the State under §420.11(b).

(b) Cash and in-kind contributions used to meet this State matching requirement are subject to the limitations on expenditures described in §420.18(a), but are not subject to the 20 percent limitation in §420.18(b).

(c) Nothing in this section shall be read to require a match for petroleum violation escrow funds used under this subpart.

[61 FR 35895, July 8, 1996, as amended at 64 FR 46114, Aug. 24, 1999]

§ 420.13   Annual State applications and amendments to State plans.

(a) To be eligible for financial assistance under this subpart, a State shall submit to the cognizant Regional Office Director an original and two copies of the annual application executed by the Governor, including an amended State plan or any amendments to the State plan needed to reflect changes in the activities the State is planning to undertake for the fiscal year concerned. 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 this subpart, 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 State plan amendments and of new program activities.

(iv) For each program activity, a budget and listing of milestones; and

(v) An explanation of how the minimum criteria for required program activities prescribed in §420.15 have been implemented and are being maintained.

(5) If any of the activities being undertaken by the State in its plan have environmental impacts, 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) If a State is undertaking 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 this subpart 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 subpart;

(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 Office Director not less than 15 days prior to the annual submission date. The extension shall be granted only if, in the cognizant Regional Office Director's judgment, acceptable and substantial justification is shown, and the extension would further objectives of the Act.

[61 FR 35895, July 8, 1996, as amended at 62 FR 26727, May 14, 1997; 64 FR 46114, Aug. 24, 1999]

§ 420.14   Review and approval of annual State applications and amendments to State plans.

(a) After receipt of an application for financial assistance under this subpart and for approval of an amendment, if any, to a State plan, the cognizant Regional 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 subparts A and B of this part. The cognizant Regional 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 or to bring it into compliance, the cognizant Regional Office Director may reject the application in a written decision, including a statement of reasons, which shall be subject to administrative review under §420.19 of subparts A and B of this part.

(b) On or before 60 days from the date that a timely filed application is complete, the cognizant Regional Office Director shall—

(1) Approve the application in whole or in part to the extent that—

(i) The application conforms to the requirements of subparts A and B of this part;

(ii) The proposed program activities are consistent with a State's achievement of its energy conservation goals in accordance with §420.13; and

(iii) The provisions of the application regarding program activities satisfy the minimum requirements prescribed by §420.15 and §420.17 as applicable;

(2) Approve the application in whole or in part subject to special conditions designed to ensure compliance with the requirements of subparts A and B of this part; or

(3) Disapprove the application if it does not conform to the requirements of subparts A and B of this part.

[61 FR 35895, July 8, 1996, as amended at 62 FR 26727, May 14, 1997; 64 FR 46114, Aug. 24, 1999]

§ 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 (except for public buildings owned or leased by the United States), above a certain size, as determined by the State;

(3) For new public buildings, be no less stringent than the provisions of ASHRAE/IESNA 90.1–1989, and should be updated by enactment of, or support for the enactment into local codes or standards, which, at a minimum, are comparable to provisions of ASHRAE/IESNA 90.1–1989 which is incorporated by reference in accordance with 5 U.S.C. 552 (a) and 1 CFR part 51. The availability of this incorporation by reference is given in §420.6; and

(4) For existing public buildings, contain the elements deemed appropriate by the State.

(b) Program activities to promote the availability and use of carpools, vanpools, and public transportation shall:

(1) Have at least one of the following actions under implementation in at least one urbanized area with a population of 50,000 or more within the State or in the largest urbanized area within the State if that State does not have an urbanized 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 buildings owned or leased by the United States, buildings 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 space for all purposes, or manufactured homes), 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 law reserves the exclusive authority to adopt and implement building standards within their jurisdictions;

(2) Take into account the exterior envelope physical characteristics, HVAC system selection and configuration, HVAC equipment performance and service water heating design and equipment selection;

(3) For all new commercial and multifamily high-rise buildings, be no less stringent than provisions of sections 7–12 of ASHRAE/IESNA 90.1–1989, and should be updated by enactment of, or support for the enactment into local codes or standards, which, at a minimum, are comparable to provisions of ASHRAE/IESNA 90.1–1989; and

(4) For all new single-family and multifamily low-rise residential buildings, be no less stringent than the Model Energy Code, 1993, and should be updated by enactment of, or support for the enactment into local codes or standards, which, at a minimum, are comparable to the Model Energy Code, 1993, which is incorporated by reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. The availability of this incorporation by reference is given in §420.6;

(5) For renovated buildings:

(i) Apply to those buildings determined by the State to be renovated buildings; and

(ii) Contain the elements deemed appropriate by the State regarding thermal efficiency standards for renovated buildings.

(e) A traffic law or regulation which permits the operator of a motor vehicle to make a turn at a red light after stopping shall:

(1) Be in a State's motor vehicle code and under implementation throughout all political subdivisions of the State;

(2) Permit the operator of a motor vehicle to make a right turn (left turn with respect to the Virgin Islands) at a red traffic light after stopping except where specifically prohibited by a traffic sign for reasons of safety or except where generally prohibited in an urban enclave for reasons of safety; and

(3) Permit the operator of a motor vehicle to make a left turn from a 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.

[61 FR 35895, July 8, 1996, as amended at 62 FR 26727, May 14, 1997]

§ 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 Office Director. Any extension shall be only for the shortest reasonable time that DOE determines necessary to achieve compliance. The action plan shall contain a schedule for full compliance and shall identify and make the most reasonable commitment possible to provision of the resources necessary for achieving the scheduled compliance.

§ 420.17   Optional elements of State Energy Program plans.

(a) Other appropriate activities or programs may be included in the State plan. These activities may include, but are not limited to, the following:

(1) Program activities of public education to promote energy efficiency, renewable energy, and alternative transportation fuels;

(2) Program activities to increase transportation energy efficiency, including programs to accelerate the use of alternative transportation fuels for government vehicles, fleet vehicles, taxis, mass transit, and privately owned vehicles;

(3) Program activities for financing energy efficiency 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 efficiency 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

(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 efficiency 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 subpart 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.

[61 FR 35895, July 8, 1996, as amended at 62 FR 26727, May 14, 1997; 64 FR 46114, Aug. 24, 1999]

§ 420.18   Expenditure prohibitions and limitations.

(a) No financial assistance provided to a State under this subpart 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 subpart.

(c) Demonstrations of commercially available energy efficiency or renewable energy techniques and technologies are permitted, and are not subject to the prohibitions of §420.18(a)(1), or to the limitation on equipment purchases of §420.18(b).

(d) A State may use regular or revolving loan mechanisms to fund SEP services which are consistent with this subpart 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 subpart and which are included in the State's approved SEP plan.

(e) A State may use funds under this subpart for the purchase and installation of equipment and materials for energy efficiency measures and renewable energy measures, including reasonable design costs, 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 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) Buildings owned or leased by the United States are not eligible for energy efficiency measures or renewable energy measures under paragraph (e) of 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 (f) of this section, a State may use a variety of financial incentives to fund purchases and installation of materials and equipment under paragraph (e) of this section including, but not limited to, regular loans, revolving loans, loan buy-downs, performance contracting, rebates and grants.

(f) The following mechanisms are not allowed for funding the purchase and installation of materials and equipment under paragraph (e) of this section:

(1) 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

(2) Loan guarantees.

[61 FR 35895, July 8, 1996, as amended at 62 FR 26727, May 14, 1997; 64 FR 46114, Aug. 24, 1999]

§ 420.19   Administrative review.

(a) A State shall have 20 days from the date of receipt of a decision under §420.14 to file a notice requesting administrative review in accordance with paragraph (b) of this section. If an applicant does not timely file such a notice, the decision under §420.14 shall become final for DOE.

(b) A notice requesting administrative review shall be filed with the cognizant Regional Office Director and shall be accompanied by a written statement containing supporting arguments. If the cognizant Regional 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 Office Director shall forward to the Deputy Assistant Secretary, the notice requesting administrative review, the decision under §420.14 as to which administrative review is sought, a draft recommended final decision for concurrence, and any other relevant material.

(e) If the State requests a public hearing on the disapproval of an entire application for financial assistance under this subpart, 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 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 subpart, 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.

[61 FR 35895, July 8, 1996, as amended at 64 FR 46114, Aug. 24, 1999]

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