Energy Conservation Program: Enforcement of Regional Standards for Central Air Conditioners, 72373-72390 [2015-29435]

Download as PDF Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules ADAMS Accession No./ Federal Register citation Date Document October 7, 2015 .............................. SECY–15–0127, ‘‘Schedule, Resource Estimates, and Impacts for the Power Reactor Decommissioning Rulemaking’’. The NRC may post additional materials to the Federal rulemaking Web site at www.regulations.gov, under Docket NRC–2015–0070. The Federal rulemaking Web site allows you to receive alerts when changes or additions occur in a docket folder. To subscribe: (1) Navigate to the docket folder [NRC– 2015Y–0070]; (2) click the ‘‘Sign up for Email Alerts’’ link; and (3) enter your email address and select how frequently you would like to receive emails (daily, weekly, or monthly). X. Rulemaking Process The NRC does not intend to provide detailed comment responses for information provided in response to this ANPR. The NRC will consider comments on this ANPR in the rule development process. If the NRC develops a regulatory basis sufficient to support a proposed rule, there will be an opportunity for additional public comment when the draft regulatory basis and the proposed rule are published. If supporting guidance is developed for the proposed rule, stakeholders will have an opportunity to provide feedback on the guidance as well. Alternatively, if the regulatory basis does not provide sufficient support for a proposed rule, the NRC will publish a Federal Register notice withdrawing this ANPR and summarizing the public comments received on this ANPR. Dated at Rockville, Maryland, this 6th day of November 2015. For the U.S. Nuclear Regulatory Commission. Frederick D. Brown, Acting Executive Director for Operations. [FR Doc. 2015–29536 Filed 11–18–15; 8:45 am] BILLING CODE 7590–01–P DEPARTMENT OF ENERGY 10 CFR Parts 429 and 430 rmajette on DSK2TPTVN1PROD with PROPOSALS [Docket No. EERE–2011–BT–CE–0077] RIN 1904–AC68 Energy Conservation Program: Enforcement of Regional Standards for Central Air Conditioners Office of Energy Efficiency and Renewable Energy, Department of Energy. AGENCY: VerDate Sep<11>2014 14:08 Nov 18, 2015 Jkt 238001 ACTION: Notice of proposed rulemaking. The U.S. Department of Energy (DOE) is proposing requirements related to the enforcement of regional standards for central air conditioners, as authorized by the Energy Policy and Conservation Act (EPCA) of 1975. DATES: DOE will accept comments, data, and information regarding this notice of proposed rulemaking (NOPR) no later than January 4, 2016. In compliance with the Paperwork Reduction Act, DOE is also seeking comment on a new information collection. See the Paperwork Reduction Act section under Procedural Issues and Regulatory Review, section III.C. Please submit all comments relating to information collection requirements to DOE no later than January 19, 2016. Comments to OMB are most useful if submitted within 45 days of publication. SUMMARY: Any comments submitted must identify the NOPR for Enforcement of Regional Standards for Central Air Conditioners and provide docket number EERE–2011–BT–CE–0077 and/ or regulatory information number (RIN) 1904–AC68. Comments may be submitted using any of the following methods: 1. Federal eRulemaking Portal: www.regulations.gov. Follow the instructions for submitting comments. 2. Email: EnforcementFunCAC-2011CE-0077@EE.Doe.Gov Include the docket number and/or RIN in the subject line of the message. 3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, Mailstop EE–2J, 1000 Independence Avenue SW., Washington, DC 20585–0121. If possible, please submit all items on a CD. It is not necessary to include printed copies. 4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, 950 L’Enfant Plaza SW., Suite 600, Washington, DC 20024. Telephone: (202) 586–2945. If possible, please submit all items on a CD. It is not necessary to include printed copies. Docket: The docket, which includes Federal Register notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials, is available for ADDRESSES: PO 00000 Frm 00016 Fmt 4702 Sfmt 4702 72373 Non-publicly available. review at regulations.gov. All documents in the docket are listed in the regulations.gov index. However, some documents listed in the index, such as those containing information that is exempt from public disclosure, may not be publicly available. The docket Web page can be found at: https://www.regulations.gov/ #!docketDetail;D=EERE-2011-BT-CE0077. For further information on how to submit a comment, review other public comments and the docket, or participate in the public meeting, contact Ms. Brenda Edwards at (202) 586–2945 or by email: Brenda.Edwards@ee.doe.gov. FOR FURTHER INFORMATION CONTACT: Ashley Armstrong, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Program, EE–5B, 1000 Independence Avenue SW., Washington, DC 20585–0121. Telephone: 202–586–6590. Email: Ashley.Armstrong@ee.doe.gov. Laura Barhydt, U.S. Department of Energy, Office of the General Counsel, GC–32, 1000 Independence Avenue SW., Washington, DC 20585–0121. Telephone: (202) 287–5772. Email: Laura.Barhydt@hq.doe.gov. SUPPLEMENTARY INFORMATION: Table of Contents I. Authority and Background A. Authority B. Background II. Discussion A. Regional Standards B. Definitions C. Public Awareness D. Reporting E. Proactive Investigation F. Record Retention and Requests G. Violations and Routine Violations H. Remediation I. Labeling J. Manufacturer Liability K. Additional Prohibited Acts for Distributors, Contractors and Dealers L. Summary Table M. Impact of Regional Enforcement Proposal on National Impacts Analysis III. Procedural Issues and Regulatory Review A. Review Under Executive Order 12866 B. Review Under the Regulatory Flexibility Act C. Review Under the Paperwork Reduction Act of 1995 D. Review Under the National Environmental Policy Act of 1969 E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 E:\FR\FM\19NOP1.SGM 19NOP1 72374 Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under Executive Order 12630 J. Review Under Treasury and General Government Appropriations Act, 2001 K. Review Under Executive Order 13211 L. Review Under Section 32 of the Federal Energy Administration Act of 1974 IV. Public Participation A. Submission of Comments B. Issues on Which DOE Seeks Comment V. Approval of the Office of the Secretary I. Authority and Background rmajette on DSK2TPTVN1PROD with PROPOSALS A. Authority Title III of the Energy Policy and Conservation Act of 1975, as amended (‘‘EPCA’’ or, in context, ‘‘the Act’’) sets forth a variety of provisions designed to improve energy efficiency.1 Part A of Title III (42 U.S.C. 6291–6309) establishes the ‘‘Energy Conservation Program for Consumer Products Other Than Automobiles.’’ These consumer products include central air conditioners, which are the subject of this rule. (42 U.S.C. 6295(d)) Under EPCA, this program consists essentially of four parts: (1) Testing; (2) labeling; (3) Federal energy conservation standards; and (4) certification and enforcement procedures. The Federal Trade Commission (FTC) is primarily responsible for labeling consumer products, and DOE implements the remainder of the program. Pursuant to EPCA, any new or amended energy conservation standards for covered consumer products must be designed to achieve the maximum improvement in energy efficiency that are technologically feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or amended standard must result in significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)) The Energy Independence and Security Act of 2007 (EISA 2007) amended EPCA to require that DOE consider regional standards for certain products if the regional standards can save significantly more energy than a national standard and are economically justified. (42 U.S.C. 6295(o)(6)(A)) Under EPCA, DOE is authorized to establish up to two additional regional standards for central air conditioners and heat pumps. (42 U.S.C. 6295(o)(6)(B)(ii)) DOE must initiate an enforcement rulemaking after DOE issues a final rule that establishes a regional standard. (42 U.S.C. 1 All references to EPCA in this document refer to the statute as amended through the Energy Efficiency Improvement Act of 2015, Public Law 114–11 (Apr. 30, 2015). VerDate Sep<11>2014 14:08 Nov 18, 2015 Jkt 238001 6295(o)(6)(G)(ii)(I)) DOE must also issue a final rule for enforcement after DOE issues a final rule that establishes a regional standard. (42 U.S.C. 6295(o)(6)(G)(ii)(III)) B. Background On June 27, 2011, DOE promulgated a Direct Final Rule (June 2011 DFR) that, among other things, established regional standards for central air conditioners. 76 FR 37408. DOE subsequently published a notice of effective date and compliance date for the June 2011 DFR on October 31, 2011, setting a standards compliance for central air conditioners and heat pumps of January 1, 2015. 76 FR 67037. As required by EPCA, DOE initiated an enforcement rulemaking by publishing a notice of data availability (NODA) in the Federal Register that proposed three approaches to enforcing regional standards for central air conditioners. 76 FR 76328 (December 7, 2011). DOE received numerous comments expressing a wide range of concerns in response to this NODA. Consequently, on June 13, 2014, DOE published a notice of intent to form a working group to negotiate regulations for the enforcement of regional standards for central air conditioners and requested nominations from parties interested in serving as members of the Working Group. 79 FR 33870. On July 16, 2014, the Department published a notice of membership announcing the eighteen nominations that were selected to serve as members of the Working Group, in addition to two members from Appliance Standards and Rulemaking Federal Advisory Committee (ASRAC), and one DOE representative.2 79 FR 41456. The members of the Working Group were selected by ASRAC to ensure a broad and balanced array of stakeholder interests and expertise, and included efficiency advocates, manufacturers, utility representatives, contractors, and distributors. Id. As required, the Working Group submitted a final report to ASRAC on October 24, 2014, summarizing the group’s recommendations for DOE’s rule for enforcement of regional standards for central air conditioners. Working Group Recommendations, No. 70.3 The recommendations included a statement that the nongovernmental participants 2 The list of members is published in Table II.1. notation in this form provides a reference for information that is in the docket for this rulemaking (Docket No. EERE–2011–BT–CE–0077), which is maintained at www.regulations.gov. This notation indicates that the statement preceding the reference is from document number 70 in the docket. 3A PO 00000 Frm 00017 Fmt 4702 Sfmt 4702 conditionally approved the recommendations contingent upon the issuance of the final guidance (See No. 89 and No. 90 for the draft versions) consistent with the understanding of the Working Group as set forth in these recommendations. Working Group Recommendations, No. 70 at 37. ASRAC subsequently voted to approve these recommendations on December 1, 2014. ASRAC Meeting Transcript, No. 73 at 42–43. In this document, DOE is proposing to adopt the Working Group’s recommendations. Working Group Recommendations, No. 70. After consideration of the comments received in response to the guidance documents, DOE determined that regulatory changes were necessary to implement the approach agreed to by the Working Group. Accordingly, DOE has proposed changes to the unit selection and testing requirements in a parallel test procedure rulemaking (CAC TP SNOPR). 80 FR 69278 (November 9, 2015). DOE reaffirms its commitment to the approach advocated by the Working Group, subject to consideration of comments received in this and the test procedure rulemaking. II. Discussion Between August 13, 2014, and October 24, 2014,4 the Working Group held fourteen full public meetings in Washington, DC, primarily at the DOE headquarters.5 Thirty-seven interested parties, including members of the Working Group, attended the various meetings. Table II.1 lists the entities that attended the Working Group meetings and their affiliation. The Working Group’s recommendations for enforcement of the regional standards for central air conditioners are presented in this proposed rule. A more detailed discussion of the recommendations can be found in the Working Group meeting transcripts.6 4 The Working Group met on August 13, 2014; August 14, 2014; August 26, 2014; August 27, 2014; August 28, 2014; September 3, 2014; September 4, 2014; September 24, 2014; September 25, 2014; October 1, 2014; October 2, 2014; October 15, 2014; October 16, 2014; and October 24, 2014. 5 Due to conflicts at DOE, the August 27th meeting took place at ACEEE’s office in Washington, DC. 6 Docket Folder, Energy Conservation Program: Enforcement of Regional Standards for Residential Furnaces and Central Air Conditioners and Heat Pumps, https://www.regulations.gov/ #!docketDetail;D=EERE-2011-BT-CE-0077 (last visited Aug. 26, 2015). E:\FR\FM\19NOP1.SGM 19NOP1 Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules 72375 TABLE II.1—INTERESTED PARTIES Name Acronym Organization type Working group membership (Y/N) Air Conditioning Contractors of America .............. Air Conditioning, Heating, and Refrigeration Institute. Allied Air Enterprises ............................................. American Council for an Energy-Efficient Economy. American Public Gas Association ......................... California Energy Commission .............................. California Investor Owned Utilities ........................ Carrier Corporation ............................................... Daikin Corporation ................................................ EarthJustice ........................................................... Edison Electric Institute ......................................... Emerson ................................................................ First Co. ................................................................. Goodman Global, Inc. ........................................... Scott Harris* .......................................................... ACCA ............................ AHRI ............................. Contractor Association ......................................... Manufacturer Trade Association .......................... Y Y Allied Air ........................ ACEEE .......................... Manufacturer ........................................................ Energy Efficiency Advocacy Group ...................... Y Y APGA ............................ CEC .............................. CA IOUs ........................ Carrier ........................... Daikin ............................ ....................................... EEI ................................ ....................................... ....................................... Goodman ...................... ....................................... ........................ Y ........................ Y ........................ Y ........................ ........................ ........................ Y Y HARDI ........................... Utility Association ................................................. California State Government Agency ................... Utility Association ................................................. Manufacturer ........................................................ Manufacturer ........................................................ Energy Efficiency Advocacy Group ...................... Utility Association ................................................. Manufacturer ........................................................ Manufacturer ........................................................ Manufacturer ........................................................ Appliance Standards and Rulemaking Federal Advisory Committee (ASRAC). Distributor Trade Association ............................... ....................................... JCI ................................. ....................................... Lennox .......................... ....................................... ....................................... Mortex ........................... NAHB ............................ ....................................... ....................................... NRECA ......................... NRDC ............................ ....................................... NORDYNE .................... PG&E ............................ PHCC ............................ Manufacturer ........................................................ Manufacturer ........................................................ Distributor ............................................................. Manufacturer ........................................................ Utility ..................................................................... Law Firm ............................................................... Manufacturer ........................................................ Trade Association ................................................. Manufacturer ........................................................ Consumer Advocacy Group ................................. Utility Association ................................................. Energy Efficiency Advocacy Group ...................... Government Agency ............................................. Manufacturer ........................................................ Utility ..................................................................... Contractor Association ......................................... Y Y Y ........................ Y ........................ ........................ ........................ ........................ Y ........................ Y ........................ Y Y Y PNNL ............................ Regal-Beloit .................. Rheem .......................... Unico ............................. ....................................... U.S. Government Research Laboratory ............... Manufacturer ........................................................ Manufacturer ........................................................ Manufacturer ........................................................ Utility Association ................................................. ........................ ........................ Y ........................ Y Heating, Air-conditioning and Refrigeration Distributors International. Ingersoll Rand ....................................................... Johnson Controls Inc ............................................ Johnstone Supply .................................................. Lennox International, Inc. ...................................... Lincoln Electric Cooperative ................................. McDermott Will & Emery ....................................... Mortex Products, Inc. ............................................ National Association of Home Builders ................ National Comfort Products .................................... National Consumer Law Center* .......................... National Rural Electric Cooperative Association .. Natural Resources Defense Council ..................... New York State Office of Attorney General .......... NORDYNE Inc. ..................................................... Pacific Gas and Electric Company ....................... Plumbing-Heating-Cooling Contractors—National Association. Pacific Northwest National Laboratory .................. Regal-Beloit Corporation ....................................... Rheem Manufacturing Company .......................... Unico, Inc. ............................................................. Xcel Energy* ......................................................... ........................ * Withdrew from working group. rmajette on DSK2TPTVN1PROD with PROPOSALS A. Regional Standards As discussed in section I.B, DOE adopted regional standards for central air conditioners in its June 2011 DFR. That rule set regional standards for split-system central air conditioners and single-package central air conditioners. 10 CFR 430.32(c). A split-system central air conditioner is a type of air conditioner that has one or more of its major assemblies separated from the others. Typically, the air conditioner has a condensing unit (‘‘outdoor unit’’) that is separate from the evaporator coil and/or blower (‘‘indoor unit’’). Accordingly, a split-system condensing unit is often sold separately from the indoor unit and may be matched with several different models of indoor units and/or blowers. For this reason, a condensing unit could achieve a 14 VerDate Sep<11>2014 14:08 Nov 18, 2015 Jkt 238001 SEER or above if it is paired with certain indoor units and/or blowers and could perform below 14 SEER when paired with other indoor units and/or blowers. The Working Group suggested the regional standards required clarification because a particular condensing unit may have a range of efficiency ratings when paired with various indoor evaporator coils and/or blowers. The Working Group provided the following four recommendations to clarify the regional standards: that (1) the least efficient rated combination for a specified model of condensing unit must be 14 SEER for models installed in the Southeast and Southwest regions; (2) the least efficient rated combination for a specified model of condensing unit must meet the minimum EER for models installed in the Southwest region; (3) any condensing unit model that has a PO 00000 Frm 00018 Fmt 4702 Sfmt 4702 certified combination that is below the regional standard(s) cannot be installed in that region; and (4) a condensing unit model certified below a regional standard by the original equipment manufacturer cannot be installed in a region subject to a regional standard(s) even with an independent coil manufacturer’s indoor coil or air handler combination that may have a certified rating meeting the applicable regional standard(s). Working Group Recommendations, No. 70 at 4. DOE is proposing to adopt these recommendations as part of this NOPR and requests comment on these recommendations. DOE notes that the test procedure supplemental notice of proposed rulemaking (CAC TP SNOPR) proposes multiple regulatory changes necessary to implement these recommendations. See the CAC TP E:\FR\FM\19NOP1.SGM 19NOP1 72376 Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules rmajette on DSK2TPTVN1PROD with PROPOSALS SNOPR for those detailed proposals. 80 FR 69278. In addition, DOE has proposed two alternatives to implement the clarification with respect to the standards. In this rulemaking, DOE proposes to specify that any condensing unit model that has a certified combination with a rating below 14 SEER cannot be installed in the Southeast and Southwest United States. To clarify responsibility with respect to split-system air conditioners, this rulemaking proposes that a condensing unit model certified below 14 SEER by the outdoor unit manufacturer cannot be installed in those regions even if an independent coil manufacturer certifies an indoor coil or air handler combination with that outdoor unit with a rating at or above 14 SEER. In contrast, in the test procedure rulemaking, DOE proposes to specify that the least efficient combination of each basic model must comply with the regional standard, but provides additional parameters regarding what combinations are permitted to be certified. See, e.g., 80 FR 69278 at 69290. The approach taken in this rulemaking relies less on some of the other regulatory changes that are necessary to implement the policies the Working Group advocated with respect to the guidance documents; the approach taken in the test procedure rulemaking would require the additional regulatory changes with respect to unit selection and testing. DOE requests comment on the two approaches, whether interested parties consider one approach to be easier to understand, and what the pros or cons may be of the two alternatives. B. Definitions EPCA prohibits manufacturers from selling to ‘‘distributors, contractors, or dealers that routinely violate the regional standards.’’ (42 U.S.C. 6302(a)(6)) EPCA defines a distributor as a person (other than a manufacturer or retailer) to whom a consumer appliance product is delivered or sold for purposes of distribution in commerce. (42 U.S.C. 6291(14)) Because neither EPCA nor existing DOE regulations define the terms ‘‘contractor’’ and ‘‘dealer,’’ the Working Group recommended the following definitions to further clarify the prohibited act: Contractor means a person 7 (other than the manufacturer or distributor) 7 DOE defines ‘‘person’’ as ‘‘any individual, corporation, company, association, firm, partnership, society, trust, joint venture or joint stock company, the government, and any agency of the United States or any State or political subdivision thereof.’’ (10 CFR 430.2) VerDate Sep<11>2014 14:08 Nov 18, 2015 Jkt 238001 who sells to and/or installs for an end user a central air conditioner subject to regional standards. Dealer means a type of contractor, generally with a relationship with one or more specific manufacturers. The Working Group further requested DOE make clear that in the context of the definition of ‘‘contractor,’’ the term ‘‘end user’’ means the entity that purchases or selects for purchase the central air conditioner. Some examples of typical ‘‘end users’’ are homeowners, building owners, building managers, and property developers. Additionally, the Working Group recommended that DOE define the term ‘‘installation’’ as: Installation of a central air conditioner means the connection of the refrigerant lines and/or electrical systems to make the central air conditioner operational. In this NOPR, DOE proposes to adopt the Working Group’s recommended definitions for these three terms and requests comments on these definitions. DOE also proposes to codify the definition of ‘‘distributor.’’ The Working Group requested that DOE make explicit in this proposed rule that, depending upon their particular conduct, parties conducting internet sales may be considered a contractor or distributor under the proposed definitions. Specifically, internet sellers that sell to contractors or dealers meet the definition of a ‘‘distributor,’’ while internet sellers that sell directly to home owners would qualify as ‘‘contractors.’’ Further, retailers who sell central air conditioners directly to homeowners would also fit within the definition of a ‘‘contractor.’’ While not specifically discussed by the Working Group, it is also of note that some internet sellers will be considered manufacturers if they are the importers of the product they are selling via the internet. Pursuant to EPCA, the term ‘‘manufacturer’’ includes importers. (42 U.S.C. 6291(10), (12)) Those parties that import products subject to regional standards are expected to meet the regulatory obligations of manufacturers. In their discussion of definitions, members of the Working Group also raised the point that some manufacturers distribute their own product. DOE clarified that, consistent with EPCA’s definitions of ‘‘manufacturer’’ and ‘‘distributor,’’ if a manufacturer distributes its own product, then the company (the manufacturer-owned or ‘‘factory owned’’ distributor) is considered to be a manufacturer rather than a distributor. PO 00000 Frm 00019 Fmt 4702 Sfmt 4702 Since DOE received the recommendations of the Working Group from ASRAC, DOE has received questions about the applicability of the regional standards to private labelers. The Working Group did not address this issue. The statutory prohibited acts treat manufacturers and private labelers in the same way. (42 U.S.C. 6302(a)(6) (making it unlawful for ‘‘any manufacturer or private labeler to knowingly sell a product to a distributor, contractor, or dealer with knowledge that the entity routinely violates any regional standard applicable to the product.’’)) DOE notes that, although private labelers are liable for distribution in commerce of noncompliant products generally, DOE does not require private labelers to submit certification reports unless the private labeler is also the importer. Therefore, DOE believes that it may not be necessary for exactly the same requirements to apply to private labelers. Consequently, DOE is proposing that the same requirements apply to private labelers as discussed in more detail throughout this notice. However, DOE requests comment on whether these proposed requirements should be the same or whether different requirements should apply. DOE may adopt the same requirements as proposed today or some variation for private labelers in the final rule as a result of comments received. C. Public Awareness The Working Group discussed the importance of public education to a successful enforcement program for central air conditioner regional standards. The Working Group recommended DOE establish a Web page with information on regional standards for central air conditioners that could be referenced by manufacturers, distributors, contractors, and other interested parties. As recommended, DOE established a Web page about enforcement of regional standards which can be found at https://www.energy.gov/gc/enforcement. The Working Group also opined on the need to deliver a consistent message to central air conditioner consumers and contractors about the regional standards. The Working Group recommended that DOE provide public educational materials that manufacturers and distributors could provide their customers. Accordingly, DOE is posting links from its Web page for regional standards to two different documents: (1) A printable trifold tailored to provide information to consumers and (2) and a printable flier to educate E:\FR\FM\19NOP1.SGM 19NOP1 Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules rmajette on DSK2TPTVN1PROD with PROPOSALS contractors and answer common questions. Beyond creating a regional standards Web page, the Working Group recommended DOE conduct a public presentation (accessible via internet as well as in-person) on regional standards for central air conditioner standards and the enforcement of such standards to educate stakeholders and the public on these regulations. The Department will issue a Notice of Public Meeting announcing its presentation on regional standards after the issuance of a final rule and will post the slides from the presentation to this docket and on the regional standards Web page. The Working Group also recommended that all information sources—the Web page, trifold, flier, and presentation—should include information, including email links, on how to report suspected violations of the regional standards for central air conditioners. Finally, the Working Group recommended that central air conditioner manufacturers provide training about regional standards to distributors and contractors/dealers. Distributors and contractors also agreed to conduct their own training on regional standards. The Working Group did not establish specific guidelines for the training. D. Reporting The Working Group discussed methods for facilitating the reporting of suspected regional standards violations and recommended that the Department provide multiple pathways for the public to report such information. Specifically, the Working Group recommended that DOE accept complaints regarding central air conditioners regional standards from both an email address and call-in number. As requested, the Department will accept reports of suspected violations of the regional central air conditioner standards that are received via the email address: EnergyEfficiency Enforcement@hq.doe.gov or phone number: 202–287–6997. DOE committed to look into all credible complaints, meaning DOE will follow up on all complaints that provide a reasonable amount of information to the Department. The Working Group emphasized, and DOE affirmed, that the complainant will have confidentiality to the maximum extent authorized by law. E. Proactive Investigation In addition to responding to reports of noncompliance with the regional standards, the Working Group recommended that the Department VerDate Sep<11>2014 14:08 Nov 18, 2015 Jkt 238001 consider conducting proactive investigations. Specifically, the Working Group recommended that, if funding is available, DOE consider conducting a survey of homes in any region of the United States to determine if a central air conditioner not in compliance with the regional standards has been installed. DOE, as a member of the Working Group, agreed to consider proactive investigations if funding for such investigations is available. F. Record Retention and Requests To ensure that the Department is able to obtain sufficient information to establish a noncompliant installation and the relevant parties, the Working Group recommended that manufacturers, dealers, and contractors retain records detailing specific information about central air conditioner sales and installations. The Working Group recommended the following records retention scheme. Beginning 30 days after the issuance of a final rule, a manufacturer must retain: • For split-system central air conditioner condensing units: the model number, serial number, date of manufacture, date of sale, and party to whom the unit was sold (including person’s name, full address, and phone number); • For split-system central air conditioner indoor coils or air handlers (not including uncased coils sold as replacement parts): the model number, date of manufacture, date of sale, and party to whom the unit was sold (including person’s name, full address, and phone number); and • For single-package central air conditioners: the model number, serial number, date of manufacture, date of sale, and party to whom the unit was sold (including person’s name, full address, and phone number). Beginning November 30, 2015, a distributor must retain: • For split-system central air conditioner condensing units: the manufacturer, model number, serial number, date the unit was purchased from the manufacturer, party from whom the unit was purchased (including person’s name, full address, and phone number), date unit was sold to a dealer or contractor, party to whom the unit was sold (including person’s name, full address, and phone number), and, if delivered to the purchaser, the delivery address; and • For single-package central air conditioners: the manufacturer, model number, serial number, date the unit was purchased from the manufacturer, party from whom the unit was PO 00000 Frm 00020 Fmt 4702 Sfmt 4702 72377 purchased (including person’s name, full address, and phone number), date unit was sold to dealer or contractor, party to whom the unit was sold (including person’s name, full address, and phone number), and, if delivered to the purchaser, the delivery address. For all installations in the Southeast and Southwest, beginning 30 days after issuance of a final rule in this rulemaking, contractors must retain: • For split-system central air conditioner condensing units: the manufacturer name, model number, serial number, location of installation (including street address, city, state, and zip code), date of installation, and party from whom the unit was purchased (including person’s name, full address, and phone number); • For split-system central air conditioner indoor coils or air handlers (not including uncased coils sold as replacement parts): the manufacturer name, model number, location of installation (including street address, city, state, and zip code), date of installation, and party from whom the unit was purchased (including person’s name, full address, and phone number); and • For single-package central air conditioners: the manufacturer name, model number, serial number, location of installation (including street address, city, state, and zip code), date of installation, and party from whom the unit was purchased (including person’s name, full address, and phone number). See 2013–BT–NOC–0005, No. 30 at 14– 16. The Working Group recommended that contractors retain records for 48 months after the date of installation, distributors retain records for 54 months after the date of sale, and manufacturers retain records for 60 months after the date of sale. The Working Group explicitly noted that retaining records allows each entity to archive records as long as they are not deleted or disposed of. The Working Group also clarified that the records retention requirements neither mandate that contractors, distributors, or manufacturers create new forms for the purpose of tracking central air conditioners nor require records to be electronic. See 2013–BT– NOC–0005, No. 30 at 17–18. DOE proposes to adopt these record retention requirements as with a few minor modifications and requests comment on these requirements. DOE proposes two modifications to the recommendations of the Working Group. First, due to the delay issuing this notice of proposed rulemaking, DOE proposes that distributors be E:\FR\FM\19NOP1.SGM 19NOP1 rmajette on DSK2TPTVN1PROD with PROPOSALS 72378 Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules required to retain records as of July 1, 2016. Second, after extensive discussion, the working group recommended that DOE refer to ‘‘indoor coils or air handlers’’ with respect to the record retention requirements for splitsystem air conditioners. DOE proposes, instead, to use the term ‘‘indoor unit’’ to reflect the term proposed in DOE’s recent CAC TP SNOPR. See 80 FR 69278 at 69284. At the time of the negotiation, DOE had no regulatory term that embodied the concept the Working Group sought to describe. If ‘‘indoor unit’’ is adopted in the test procedure final rule, then its use in the context of this rulemaking would conform to the concept the Working Group described while ensuring consistency within the DOE regulations. Although not discussed by the Working Group, DOE recognizes that some internet sellers may perform the role of contractor or distributor, depending on who is purchasing the product. DOE proposes that those entities will have to keep records consistent with the requirements of the transaction, for the length of time required for that transaction. To limit the potential of burden associated with producing records at the request of the Department, the Working Group recommended that DOE must have a reasonable belief a violation occurred before requesting records. DOE will determine if it has reasonable belief by assessing a variety of factors, such as: • Whether it has an address of a suspected noncompliant installation or attempted installation; • Whether it has identifying information for an installed unit; • Whether it has physical evidence (e.g., a picture of a noncompliant condensing unit and its nameplate, copy of EnergyGuide label, copy of completed work order or invoice, bill of sale for equipment, copy of bid for installation, distributor prepared price book); • Whether there have been repeat complaints about the party; or • Whether the complainant has a history of filing complaints of violations that have been substantiated by the Department through investigation. Once DOE determines it has a reasonable belief, then it may request records from relevant manufacturers, distributors, and contractors. Records must be produced within 30 days of a request by the Department. However, DOE may, at its discretion, grant additional time for production of records if the affected entity makes a good faith effort to produce records within 30 days. To receive this extra time, the entity, after working to gather the records within the 30 days, must VerDate Sep<11>2014 14:08 Nov 18, 2015 Jkt 238001 provide DOE all the records gathered and a written explanation for the need for additional time including the requested date for completing the records request. DOE proposes to adopt the Working Group’s recommendations for records requests. The Department requests comment on the threshold for records requests and the proposed timeframe for responding to such requests. G. Violations and Routine Violations As mentioned above, it is unlawful for any manufacturer to knowingly sell to a distributor, contractor, or dealer with knowledge that the entity routinely violates any regional standard applicable to the product. (42 U.S.C. 6302(a)(6), 10 CFR 430.102(a)(10)) To clarify this prohibited act, the Working Group discussed what activities would constitute a violation by a distributor, contractor or dealer. For a distributor, the Working Group agreed that it would be a violation to knowingly sell a product to a contractor or dealer with knowledge that the entity will sell and/ or install the product in violation of any regional standard applicable to the product. Additionally, it would be a violation for a distributor to knowingly sell a product to a contractor or dealer with knowledge that the entity routinely violates any regional standard applicable to the product. For contractors, the Working Group agreed it would be a violation to knowingly sell to and/or install for an end user a central air conditioner subject to regional standards with knowledge that such product would be installed in violation of any regional standard applicable to the product. To further clarify what constituted an installation of a central air conditioner in violation of an applicable regional standard, the Working Group agreed that: (1) A person cannot install a complete central air conditioner system—meaning the condensing unit and evaporator coil and/or blower—unless it has been certified as a complete system that meets the applicable standard. A previously discontinued combination may be installed as long as the combination was previously validly certified to the Department as compliant with the applicable regional standard and the combination was not discontinued because it was found to be noncompliant with the applicable standard(s); (2) a person cannot install a replacement condensing unit unless it is certified as part of a combination that meets the applicable standard; and PO 00000 Frm 00021 Fmt 4702 Sfmt 4702 (3) a person cannot install a condensing unit that has a certified combination with a rating that is less than the applicable regional standard. To determine if a violation occurred, the Department will conduct an investigation into the alleged misconduct. In a typical investigation, DOE may discuss the installation in question with the end user or the homeowner and other relevant parties, including the alleged violator. DOE may also request records from the dealer, contractor, distributor, and/or manufacturer if the Department has reasonable belief a violation occurred. The Working Group recommended that if no violation is found, the Department should issue a case closed letter to the party being investigated. If DOE finds that a contractor or dealer completed a noncompliant installation in one residence or an equivalent setting (e.g., one store), but the violator remediated that violation by installing a compliant unit before DOE concluded its investigation, then DOE will issue a case closed letter to the party being investigated, as long as that person has no history of prior violations. The purpose of this practice would be to incentivize parties who, on one occasion, mistakenly install one noncompliant unit to replace the product and thereby not suffer any public stigma. However, if the noncompliant installation is not remediated and a violation is found, DOE will issue a public ‘‘Notice of Violation.’’ The party found to be in violation can remediate the single violation and it will not count towards the finding of ‘‘routine violator’’ unless the party is found, in the course of a subsequent investigation, to have committed another violation. For more on remediation of a single violation, see section II.H. In determining whether a party ‘‘routinely violates’’ a regional standard, the Working Group recommended that DOE consider the following factors: • Number of violations (in both current and past investigations); • Length of time over which the violations were committed; • Ratio of compliant to noncompliant installations or sales; • Percentage of employees committing violations; • Evidence of effort or intent to commit violations; • Evidence of training or education provided on regional standards; and • Subsequent remedial actions. The Working Group also agreed that DOE should consider whether the routine violation was limited to a specific contractor or distribution E:\FR\FM\19NOP1.SGM 19NOP1 Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules rmajette on DSK2TPTVN1PROD with PROPOSALS location. DOE would rely on the same factors considered in determining whether a routine violation occurred. The Working Group recommended that DOE issue a ‘‘Notice of Finding of Routine Violator’’ if the Department determines that a violator routinely violated a regional standard. This notice would identify the party found to be a routine violator and explain the scope of the violation. Additionally, if DOE, in its discretion, finds that the routine violation was limited to a specific location, DOE may in the Notice of Finding of Routine Violation state that the prohibition on manufacturer sales is limited to a particular contractor or distribution location This notice would be both posted to the Department’s enforcement Web site and would be emailed to those signed up for email updates.8 If DOE makes a finding of routine violation, the violator has the right to file an administrative appeal of the finding. Any appeal of a Notice of Finding of Routine Violation would be required to be filed within 30 days of the issuance of the notice. The appeal would be reviewed by DOE’s Office of Hearings and Appeals. The appeal must present information rebutting the finding of routine violation. The appeal will be decided within 45 days of filing of the appeal. The violator may also file a Notice of Intent to Appeal with the DOE Office of Hearings and Appeals. If this notice of intent is filed within three business days of the Notice of Finding of Routine Violation, then manufacturers may continue to sell products to the routine violator during the pendency of the appeal. See section II.J for more details on sales during the pendency of an appeal. DOE proposes to adopt the Working Group’s recommendations pertaining to violations and routine violations and requests comment on these proposals. H. Remediation As previously mentioned, the Working Group recommended that violators may be given the opportunity to remediate. The sole method of remediation would be the replacement of noncompliant unit with compliant units. If a violator is unable to replace all noncompliant units, then the Department may, in its discretion, consider the remediation complete if the violator satisfactorily demonstrates to the Department that it attempted to replace all noncompliant units. In practice, the violator would have to show that they replaced almost all of the 8 DOE’s enforcement Web site is: https:// energy.gov/gc/enforcement. VerDate Sep<11>2014 14:08 Nov 18, 2015 Jkt 238001 noncompliant units and document significant, yet refused, efforts to complete the replacement of the remaining noncompliant units. The Department would also scrutinize those ‘‘failed’’ attempts at replacement to ensure that there was indeed a good faith effort to complete remediation of the noncompliant unit. The replacement of noncompliant units with compliant units would be at the cost of the violator. The violator would not be allowed to use warranty or other replacement claims to recoup the cost of the replacement from the manufacturer. To ensure that warranties or other replacement claims are not used, the violator must provide DOE with the serial numbers for the new and old units. The Department will then provide these numbers to the manufacturer(s) and distributor(s) to verify that warranties and other replacement claims were not wrongfully used. If the violator successfully remediates, then DOE will issue a public ‘‘Notice of Remediation.’’ The Working Group recommended that routine violators should also be entitled to remediation. As manufacturers are prohibited from selling to routine violators, remediation would be coordinated through the Department. If the routine violator wants to remediate then it must contact the DOE Office of the General Counsel, Office of Enforcement, via the DOE point of contact listed in the Notice of Finding of Routine Violation. The routine violator must inform DOE of the distributor or manufacturer from whom it wishes to purchase compliant replacement units. Within three business days of the routine violator’s request to remediate, the Department will contact the necessary distributor(s) or manufacturer(s) and authorize sale for purposes of remediation. DOE will also provide the manufacturer(s) or distributor(s) with an official letter authorizing the sale for purposes of remediation for the seller’s records. The routine violator must provide documentation of the installation of the compliant units to DOE once the remediation is completed. DOE will also follow up with the routine violator within 30 days of the date of the official letter authorizing the sale for purposes of remediation to determine the status of the remediation. If a routine violator successfully remediates, then DOE will issue a Notice indicating the entity is no longer a routine violator no more than 30 days after DOE received documentation demonstrating the remediation is completed. DOE proposes to adopt the Working Group’s recommendation on PO 00000 Frm 00022 Fmt 4702 Sfmt 4702 72379 remediation and requests comment on this proposal. I. Labeling The Working Group recommended, with DOE abstaining, that the FTC initiate a rulemaking to adopt a simplified label for equipment rated below the regional standards and a separate simplified label for equipment rated at or above the regional standards. The Working Group found that the simplified labels, as drafted by AHRI (a manufacturer trade association), provide better alignment with the Working Group’s proposed regional enforcement plan. The simplified labels are posted in the docket for this rulemaking. See Example Voluntary Marking, No. 91, for sample label provided by a manufacturer during the negotiation. The Working Group also recommended, and manufacturers agreed, to add a label to the central air conditioner condensing unit to indicate where the unit can legally be installed. The label would be near to, or part of, the nameplate and ruggedized to withstand elements. For units that do not meet the EER standards applicable to the Southwest region, the label would state, ‘‘Install Prohibited in Southwest.’’ For units that cannot be sold in the Southeast or Southwest because their SEER value is below the minimum required in those regions, the label would state, ‘‘Install Prohibited in Southwest and Southeast.’’ As a result, a contractor should never install for an end user in a region a unit that bears the label indicating that installation is prohibited in that region. The manufacturers agreed they would start using the label scheme by March 1, 2015. Additionally, AHRI stated it would require all manufacturers participating in the AHRI certification program to apply these labels to splitsystem and single package central air conditioners with rated combinations below the minimum standard(s) required in each region as of March 1, 2015. J. Manufacturer Liability In accordance with the Department’s regulations on prohibited acts, manufacturers may be fined for ‘‘knowingly sell[ing] a product to a distributor, contractor, or dealer with knowledge that the entity routinely violates any regional standard applicable to the product.’’ (42 U.S.C. 6302, 10 CFR 429.102(a)(10)) The Working Group had significant discussions on the scope of the term ‘‘product’’ as it relates to this prohibited act. The Department explained that it interprets the term ‘‘product’’ to include E:\FR\FM\19NOP1.SGM 19NOP1 72380 Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules rmajette on DSK2TPTVN1PROD with PROPOSALS all classes of central air conditioners and heat pumps found within 10 CFR 430.32(c). Ultimately, the Working Group could not come to consensus on whether the scope of any prohibition on sales could be limited to split-system air conditioners and single-package air conditioners instead of the Department’s interpretation.9 EPCA defines a ‘‘central air conditioner’’ as a ‘‘product . . . which . . . is a heat pump or a cooling only unit’’ and refers to all central air conditioners as one ‘‘product.’’ (42 U.S.C. 6291(21)) Therefore, to be consistent with EPCA, DOE interprets the term ‘‘product’’ to be inclusive of all central air conditioner and heat pump product classes listed in 10 CFR 430.32(c), meaning that manufacturers may be subject to civil penalties for sales to a routine violator of any unit within the central air conditioning product classes. If a manufacturer sells a central air conditioner (including heat pumps) to a routine violator after a Notice of Finding of Routine Violation has been issued, then the manufacturer would be liable for civil penalties. The maximum fine a manufacturer is subject to is $200 per unit sold to a routine violator.10 (10 CFR 429.120) The Working Group recommended that DOE provide manufacturers with 3 business days from the issuance of a Notice of Finding of Routine Violation to stop all sales of central air conditioners and heat pumps to the routine violator. During this time, manufacturers would not be liable for sales to a routine violator. DOE noted that, consistent with its penalty guidance,11 it would consider the manufacturer’s efforts to stop any sales in determining whether (or to what extent) to assess any civil penalties for sales to a routine violator after that three day window. If the routine violator is appealing the finding, the Working Group recommended that manufacturers be allowed to continue to sell central air 9 For more details regarding this discussion, see the public meeting transcript for October 24, 2014, No. 88. 10 As discussed in section II.B, a manufacturerowned distributor is considered to be a manufacturer and thus is liable for all noncompliant sales. 11 The DOE civil penalty guidance is available at https://energy.gov/gc/enforcement under ‘‘Enforcement Guidance.’’ VerDate Sep<11>2014 14:08 Nov 18, 2015 Jkt 238001 conditioners and heat pumps to the routine violator during the pendency of the appeal. In order to provide parties notice that a routine violator is appealing the determination, the routine violator must file a Notice of Intent to Appeal with the Office of Hearings and Appeals within three business days after the issuance of the Notice of Finding of Routine Violator. If the finding is ultimately upheld, then the manufacturers could face civil penalties for sale of any products rated below the regional standards to the routine violator. The Working Group also recommended that DOE provide an incentive for manufacturers to report routine violators. The Working Group recommended that if a manufacturer has knowledge of a routine violator, then the manufacturer can be held liable for all sales made after the date such knowledge is obtained by the manufacturer. However, if the manufacturer reports such knowledge to DOE within 15 days of receipt of the knowledge, then the Department will not hold the manufacturer liable for sales to the suspected routine violator made prior to notifying DOE. On a separate note, nothing in this rulemaking impacts DOE’s ability to determine that a manufacturer has manufactured and distributed a noncompliant central air conditioner in accordance with the existing procedures at 10 CFR 429.104–429.114. Furthermore, those processes apply to DOE’s determination of a manufacturer’s manufacture and distribution of a central air conditioner that fails to meet a regional standard. With respect to liability, if DOE determines that a model of condensing unit fails to meet the applicable regional standard(s) when tested in a combination certified by the same manufacturer (i.e., one entity manufactures both the indoor coil and the condensing unit), the condensing unit manufacturer will be responsible for this model’s noncompliance. If DOE determines that a basic model fails to meet regional standards when tested in a combination certified by a manufacturer other than the outdoor unit manufacturer (e.g., an independent coil manufacturer (ICM)), the certifying manufacturer will be responsible for this combination’s noncompliance. The responsible manufacturer will be liable for distribution in commerce of PO 00000 Frm 00023 Fmt 4702 Sfmt 4702 noncompliant units. The responsible manufacturer can minimize liability by demonstrating on a unit-by-unit basis that the noncompliant combination was installed in a region where it would meet the standards. For example, if a 14 SEER split-system air conditioner was tested by the Department and determined to be 13.5 SEER, then the manufacturer may minimize its liability by proving only a portion of sales for this combination was installed in the Southeast and Southwest. Manufacturers represented during the course of the negotiations that the bulk of sales are of minimally compliant units and so they expect most of the products that comply with the Southeast and Southwest regional standards would be sold in those regions. Given this, DOE will presume all units of a model rated as compliant with a regional standard but determined to be noncompliant with that standard were in fact installed illegally. Manufacturers can rebut this presumption by providing evidence that a portion of the units were instead installed in a location where they would have met the applicable energy conservation standards. DOE proposes to adopt these clarifications of manufacturer liability as recommended by the Working Group and requests comment on this proposal. K. Additional Prohibited Acts for Distributors, Contractors and Dealers The Working Group had significant discussions on whether to include additional prohibited acts and ultimately could not come to consensus on whether to include additional prohibited acts.12 L. Summary Table The Working Group developed a summary table for inclusion in this document. This summary table helps explain the responsibilities for the various parties impacted by this rulemaking and does not include any proposed requirements not previously described in today’s NOPR. DOE has further added columns depicting the roles and responsibilities of those making sales through the internet to this chart. 12 For details on the discussions regarding additional prohibited acts see the public meeting transcript for October 16, 2014. No. 87 pp. 3–87. E:\FR\FM\19NOP1.SGM 19NOP1 72381 Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules TABLE II–2—CENTRAL AIR CONDITIONER REGIONAL ENFORCEMENT SUMMARY TABLE Manufacturer Subject to civil penalties based upon committing a prohibited act. Can be labeled a routine violator. Considered a manufacturer under definition. Can remediate to get off routine violator list. Right to appeal finding of Routine Violation. Record retention Record retention start date. Importer Manufacturer owned distributor Independent distributor Contractors or dealer Internet sellers to contractors or dealers Internet sellers to end users Yes .................. Yes .................. Yes .................. No .................... No .................... No .................... No. No .................... No .................... No .................... Yes .................. Yes .................. Yes .................. Yes. Yes .................. Yes .................. Yes .................. No .................... No .................... No .................... No. N/A .................. N/A .................. N/A .................. Yes .................. Yes .................. Yes .................. Yes. N/A .................. N/A .................. N/A .................. Yes .................. Yes .................. Yes .................. Yes. 60 months ....... 30 days after Final Rule. 60 months ....... 30 days after Final Rule. 60 months ....... 30 days after Final Rule. 54 months ....... Nov. 30, 2015 (DOE proposes July 1, 2016). 48 months ....... 30 days after Final Rule. 54 months ....... Nov. 30, 2015 (DOE proposes July 1, 2016). 48 months. 30 days after Final Rule. M. Impact of Regional Enforcement Proposal on National Impacts Analysis In the June 2011 DFR, DOE considered the economic impacts of amending the standards for central air conditioners and heat pumps. Included in the economic analyses was National Impacts Analysis (NIA) which estimated the energy savings and the net present value (NPV) of those energy savings that consumers would receive from the new energy efficiency standards of central air conditioners (CAC) and heat pumps (HP). This NPV was the estimated total value of future operating-cost savings during the analysis period (2015–2045), minus the estimated increased product costs (including installation), discounted to 2011. However, DOE did not account for the financial burden on distributors and installers related to record retention requirements necessary to demonstrate compliance with the regional standards in the June 2011 DFR. From the enforcement plan proposed in this rulemaking, DOE estimated that manufacturers, distributors, and contractors face some financial burden primarily related to the proposed record retention requirements. DOE assumed that the proposed records retention requirements would cause manufacturers, distributors, and contractors additional labor costs from collecting and filing such records. These labor costs would be an annual burden to the market participants. At the Working Group public meetings, distributors stated that the proposed records retention requirements would cause distributors to update their enterprise resource planning (ERP) systems to track the necessary information. DOE considered this update to the EPR systems an initial conversion cost. The cost of retaining records on each market participant is summarized in Table II–3. TABLE II–3—COST OF PROPOSED RECORDS RETENTION DUE TO REGIONAL STANDARDS ENFORCEMENT FOR CENTRAL AIR CONDITIONER AND HEAT PUMP MARKET PARTICIPANTS Manufacturers rmajette on DSK2TPTVN1PROD with PROPOSALS Estimated Total Annual Burden Hours ............................................................................ Estimated Total Annual Cost ........................................................................................... Estimated Initial Conversion Cost ................................................................................... In this NOPR, DOE re-evaluated the NIA to include the cost of the proposed record retention requirements to manufacturer, distributors, and contractors. DOE conservatively estimated the consumer benefits by assuming that the annual cost from the proposed record retention requirements would be passed on to consumers and thus decreasing the NPV. However, DOE assumed that distributors would VerDate Sep<11>2014 14:08 Nov 18, 2015 Jkt 238001 574,167 $4,162,708 ............................ entirely bear the initial up-front cost of updating their ERP systems, causing no impact to the NPV for that portion of the impacts. The updated NPV results are summarized in Table II–4. The impact of including the proposed record retention requirement costs on the NPV is estimated to reduce the benefit by $0.30 billion at a 3% discount rate and $0.16 billion at a 7% discount rate. The costs of the record retention PO 00000 Frm 00024 Fmt 4702 Sfmt 4702 Distributors 287,083 $2,081,354 $46,340,000 Contractors 359,949 $2,609,631 ............................ requirements are estimated to have no impact on national energy savings. Because the record retention requirement costs have only a small impact on NPV, ranging from a minimum of 2-percent at a discount rate of 3% and a maximum of 4-percent at a discount rate of 7%, and no impact on national energy savings, DOE’s economic justification of the energy conservation standards chosen and E:\FR\FM\19NOP1.SGM 19NOP1 72382 Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules published in the 2011 DFR would be unaffected by the quantification and inclusion of enforcement plan costs. Consequently, DOE is reaffirming the 2011 DFR energy conservation standards based on this analysis. TABLE II–4—NATIONAL IMPACTS ANALYSIS RESULTS WITH COSTS FROM PROPOSED REGIONAL ENFORCEMENT PLAN FOR CENTRAL AIR CONDITIONERS AND HEAT PUMPS National impacts estimated from 2011 DFR for the chosen energy conversation standards with enforcement plan costs National impacts estimated from 2011 DFR for the chosen energy conservation standards National Energy Savings (quads) ........................................................... NPV of Consumer Benefits at 3% discount rate (2009$ billion) ............ NPV of Consumer Benefits at 7% discount rate (2009$ billion) ............ DOE requests comment on its assumptions for the financial burden from the proposed record retention requirements and the resulting impact on NPV at the amended standard level. III. Procedural Issues and Regulatory Review A. Review Under Executive Order 12866 The Office of Management and Budget (OMB) has determined that today’s regulatory action is not a ‘‘significant regulatory action’’ under section 3(f) of Executive Order 12866, ‘‘Regulatory Planning and Review,’’ 58 FR 51735 (Oct. 4, 1993). Accordingly, this action was not subject to review under the Executive Order by the Office of Information and Regulatory Affairs (OIRA) in the OMB. B. Review Under the Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires preparation of an initial regulatory flexibility analysis (IFRA) for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. As required by Executive Order 13272, ‘‘Proper Consideration of Small Entities in Agency Rulemaking,’’ 67 FR 53461 (Aug. 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the DOE 3.20 to 4.22 ................................... 14.73 to 17.55 ............................... 3.93 to 4.21 ................................... rulemaking process. 68 FR 7990. DOE has made its procedures and policies available on the Office of the General Counsel’s Web site: https://energy.gov/ gc/office-general-counsel. DOE reviewed the proposed requirements under the provisions of the Regulatory Flexibility Act and the procedures and policies published on February 19, 2003. As discussed in more detail below, DOE found that the entities impacted by the proposals in this NOPR (central air conditioning manufacturers, distributors, and contractors) could potentially experience a financial burden associated with these new requirements. Additionally, the majority of central air conditioning contractors and distributors are small business as defined by the Small Business Administration (SBA). DOE determined that it could not certify that the proposed rule, if promulgated, would not have a significant effect on a substantial number of small entities. Therefore, DOE has prepared an IRFA for this rulemaking. The IRFA describes potential impacts on small businesses associated with the proposed requirements. DOE has transmitted a copy of this IRFA to the Chief Counsel for Advocacy of the Small Business Administration for review. 1. Description and Estimated Number of Small Entities Regulated 3.20 to 4.22. 14.43 to 17.25. 3.77 to 4.05. contractors of central air conditioning products that define those entities classified as ‘‘small businesses.’’ DOE used SBA’s size standards to determine whether any small businesses would be impacted by this NOPR. 65 FR 30836, 30849 (May 15, 2000), as amended at 65 FR 53533, 53545 (Sept. 5, 2000) and codified at 13 CFR part 121. The size standards are listed by North American Industry Classification System (NAICS) code and industry description, and are available at https://www.sba.gov/sites/ default/files/files/Size_Standards_ Table.pdf. The size standards and NAICS codes relevant to this rulemaking are listed in Table III–1. To estimate the number of companies that could be small business manufacturers, distributors, and contractors of equipment covered by this rulemaking, DOE conducted a market survey using available public information. DOE’s research involved examining industry trade association Web sites, public databases, and individual company Web sites. DOE also solicited information from industry representatives such as AHRI, HARDI, ACCA, and PHCC. DOE screened out companies that do not offer products covered by this rulemaking or are not impacted by this rulemaking, do not meet the definition of a ‘‘small business,’’ or are foreign owned and operated. The SBA has set a size threshold for manufacturers, distributors, and rmajette on DSK2TPTVN1PROD with PROPOSALS TABLE III–1—SMALL BUSINESS CLASSIFICATION SUMMARY TABLE Impacted entity NAICS Code Contractors 13 .................................................. Distributors ...................................................... Manufacturers ................................................. VerDate Sep<11>2014 14:08 Nov 18, 2015 Jkt 238001 PO 00000 238220 423730 333415 Frm 00025 Total number of impacted businesses NAICS Definition of small business $15 million or less in revenue ........................ 100 or less employees ................................... 750 or less employees ................................... Fmt 4702 Sfmt 4702 E:\FR\FM\19NOP1.SGM 19NOP1 14 22,207 15 2,317 29 Total number of small businesses 21,763 2,000 12 Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules rmajette on DSK2TPTVN1PROD with PROPOSALS 2. Description and Estimate of Regional CAC Requirements As discussed in the preamble of this proposed rule, the Working Group recommended an enforcement plan for central air conditioners that would include public awareness efforts, records retention requirements, and voluntary efforts like remediation and labeling. The Working Group also made explicit the terms ‘‘violation’’ and ‘‘routine violator.’’ While most of the proposals in this rulemaking will not have an impact on manufacturers, distributors, and contractors that adhere to the central air conditioner regional standards, the records retention requirements may result in some financial burden. The Working Group worked to negotiate records retention requirements that would have limited financial burden on the impacted parties— manufacturers, distributors, and contractors. The Working Group made a few general provisions regarding the records retention requirements to help mitigate some of the financial burden. The Working Group tried to reduce the impact of the records retention requirements by staggering the length of time for which records must be maintained. Manufacturers, the entities understood to have the most resources and sophistication, would have to retain records for the longest time period (60 months); distributors would have to retain records for less time (54 months); and contractors would have to retain records for the least amount of time (48 months). Additionally, in the case that records are requested, the Working Group recommended that the party from whom the records were requested should have an extended period of 30 days to produce such records. The Working Group also explicitly recommended that manufacturers, distributors, and contractors should not have to create new forms to retain such records, and that the records would not have to be retained electronically. DOE expects central air conditioning manufacturers to be the least burdened entity of all the affected entities by the record retention requirements proposed in this document. Manufacturers have 13 The number of impacted contractors and small contractors is based on the number of contractors installing in the Southwest and Southeast regions. 14 Chapter 18: Regional Standards Impacts on Market Participants. Technical Support Document: Energy Efficiency Program for Consumer Products: Residential Central Air Conditioners, Heat Pumps, and Furnaces. https://www.regulations.gov/# !documentDetail;D=EERE-2011-BT-STD-0011-0012. 15 ‘‘Statistics of U.S. Businesses: 2008: NAICS 423730—HVAC equip. merchant wholesalers United States.’’ U.S. Census Bureau. https://www. census.gov/epcd/susb/2008/us/us423730.htm. VerDate Sep<11>2014 14:08 Nov 18, 2015 Jkt 238001 the fewest record retention requirements. Many of the record retention requirements being proposed in this rulemaking expand on DOE’s existing certification requirements and thus should only slightly increase the recordkeeping burden. DOE does not expect manufacturers to incur any capital expenditures as a result of the proposals since the rulemaking does not impose any product-specific requirements that would require changes to existing plants, facilities, product specifications, or test procedures. Rather, this proposed rule imposes record retention requirements, which may have a slight impact on labor costs. DOE included certification and enforcement requirements associated with the regional standards for central air conditioners in the June 27, 2011 energy conservation standards final rule for central air conditioners and heat pumps.16 Based on comments at the Working Group meetings, DOE expects the record retention requirements to cause distributors the most financial burden. Distributors track equipment and sales in ERP systems and are expected to incorporate the proposed recordkeeping requirements into their ERP systems. HARDI expected that 40% of distributors currently retain the proposed records and will not need to update their ERP systems. HARDI expected 50% of distributors would need to make some changes to their ERP systems and 10% of distributors would need to make major changes to their ERP system. HARDI expected that small distributors are more likely to require major changes to their ERP systems because typically small distributors have older and more inflexible systems. HARDI estimated that changes to ERP systems to accommodate the record retention proposals may cost $20,000 to $100,000 depending on the type of change needed to the system. According to HARDI, the entire central air conditioner distribution industry would incur an initial conversion cost of around $46,340,000 to modify the ERP systems. To help alleviate some of the financial burden, the Working Group recommended that DOE not require distributors to retain records for sales of central air conditioner indoor coils or air handlers, which were identified as difficult components to track for the distributors. Additionally, the Working 16 Chapter 12: Manufacturer Impact Analysis. Technical Support Document: Energy Efficiency Program for Consumer Products: Residential Central Air Conditioners, Heat Pumps, and Furnaces. https://www.regulations.gov/ #!documentDetail;D=EERE-2011-BT-STD-00110012. PO 00000 Frm 00026 Fmt 4702 Sfmt 4702 72383 Group recommended that distributors should not have to start retaining records until November 30, 2015, at the earliest, which DOE is proposing in this NOPR to delay until July 1, 2016. Finally, as previously stated, DOE is not proposing to require records to be retained in electronic form and is not mandating that distributors make changes in their ERP systems to retain the information proposed in this document. DOE believes central air conditioning contractors will experience a minimal recordkeeping burden. DOE is proposing to limit the records retention requirements on contractors to installations in the Southeast and Southwest. For all central air conditioner installations in those regions, contractors would have to keep a record of installation location, date of installation, and purchaser. Contractors would have to keep records specific to the type of units (outdoor condensing unit, indoor coil or air handler, or single-package air conditioner) installed as well. A contractor trade association remarked at the public meetings that most contractors already retain such records and the record retention requirements would have limited financial impacts. (ACCA, Public Meeting Transcript, No. 77 at 12–13) DOE estimates that any additional expense caused by the records requirements proposed in this rulemaking would be related to the time required to file these records. DOE estimates that contractors may spend an additional 10 minutes per installation to comply with the proposed records retention requirements. 3. Duplication, Overlap, and Conflict With Other Rules and Regulations DOE is not aware of any rules or regulations that duplicate, overlap, or conflict with the proposed rule being considered today. 4. Significant Alternatives to the Rule DOE could mitigate the potential impacts on small manufacturers, distributors, or contractors by reducing or eliminating the proposed types of information to be maintained. However, these requirements were negotiated as an acceptable compromise among the participants in the Working Group. While there may be some financial burden, the Working Group unanimously agreed to the record retention requirements for manufacturers, distributors, and contractors. Furthermore, DOE believes that the record retention requirements are the least burdensome requirements possible to provide DOE sufficient E:\FR\FM\19NOP1.SGM 19NOP1 72384 Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules information to determine whether manufacturers, distributors and contractors are complying with regulatory requirements. Thus, DOE rejected the alternative of reducing or eliminating the record retention requirements and is proposing these record retention requirements for the aforementioned parties. DOE continues to seek input from businesses that would be affected by this rulemaking and will consider comments received in the development of any final rule. C. Review Under the Paperwork Reduction Act of 1995 rmajette on DSK2TPTVN1PROD with PROPOSALS 1. Description of the Requirements In this document, DOE proposed record retention requirements for central air conditioner manufacturers, distributors, and contractors. DOE is requesting approval for a new information collection associated with these requirements. These requirements were developed as part of a negotiated rulemaking effort for regional central air conditioner enforcement. These requirements are described in detail in section II.F. 2. Information Collection Request Title: Enforcement of Regional Standards. 3. Type of Request: New. 4. Purpose: Generally, DOE is proposing that manufacturers retain records of the model number and serial number for all split system and singlepackage air conditioners, when these units were manufactured, when these units were sold, and to whom the units were sold. DOE proposed that manufacturers would retain these records for 60 months. DOE proposed that distributors would retain the manufacturer, model number and serial number for all their split system outdoor condensing units and single-package units. In addition, distributors must keep track of when and from whom each of these types of units was purchased, and when and to whom each of these units was sold. Distributors would retain these records for 54 months. Contractors must retain records of all split system and single-package air conditioner installations in the Southeast and Southwest region. These records would be required to include what was installed (e.g. manufacturer and model number), date of sale, and the party to whom the unit was sold. Contractors would retain these records for 48 months. This proposed rule primarily requires central air conditioner manufacturers, distributors, and contractors to retain records for CAC installations. If DOE has a ‘‘reasonable belief’’ that an VerDate Sep<11>2014 14:08 Nov 18, 2015 Jkt 238001 installation in violation of regional standards occurred, then it may request records specific to an ongoing investigation from the relevant manufacturer(s), distributor(s), and/or contractor(s). The Working Group recommended that DOE determine if it has a ‘‘reasonable belief’’ of a CAC violation based on the factors described in section II.F. Once DOE establishes reasonable belief and requests records from the relevant parties, then the entity from whom DOE requested records has 30 days to produce those records. The party from whom DOE requested records may ask for additional time with a written explanation of the circumstances. The following are DOE estimates of the total annual recordkeeping burden imposed on manufacturers, distributors, and contractors of central air conditioners. These estimates take into account the time necessary collect, organized and store the record required by this notice of proposed rulemaking. Manufacturers Estimated Number of Impacted Manufacturers: 29. Estimated Time per Record: 10 minutes. Estimated Total Annual Burden Hours: 574,167 hours. Estimated Total Annual Cost to the Manufacturers: $4,162,708. Distributors Estimated Number of Impacted Distributors: 2,317. Estimated Time per Record: 5 minutes. Estimated Total Annual Burden Hours: 287,083 hours. Estimated Total Annual Cost to the Distributors: $2,081,354. Contractors Estimated Number of Impacted Contractors: 22,207. Estimated Time per Record: 10 minutes per installation. Estimated Total Annual Burden Hours: 359,949 hours. Estimated Total Annual Cost to the Contractors: $2,609,631. 5. Annual Estimated Number of Respondents: 24,553. 6. Annual Estimated Number of Total Responses: 24,553. 7. Annual Estimated Number of Burden Hours: 1,221,199. 8. Annual Estimated Reporting and Recordkeeping Cost Burden: $8,853,693. D. Review Under the National Environmental Policy Act of 1969 DOE has determined that this proposed rule falls into a class of PO 00000 Frm 00027 Fmt 4702 Sfmt 4702 actions that are categorically excluded from review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and DOE’s implementing regulations at 10 CFR part 1021. Specifically, this proposed rule would adopt changes to the manner in which regional standards for central air conditioners are enforced, which would not affect the amount, quality or distribution of energy usage, and, therefore, would not result in any environmental impacts. Thus, this rulemaking is covered by Categorical Exclusion A6 under 10 CFR part 1021, subpart D. Accordingly, neither an environmental assessment nor an environmental impact statement is required. E. Review Under Executive Order 13132 Executive Order 13132, ‘‘Federalism,’’ 64 FR 43255 (August 4, 1999) imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have Federalism implications. The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive Order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have Federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. DOE has examined this proposed rule and has determined that it would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. EPCA governs and prescribes Federal preemption of State regulations as to energy conservation for the products that are the subject of today’s proposed rule. States can petition DOE for exemption from such preemption to the extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297(d)) No further action is required by Executive Order 13132. F. Review Under Executive Order 12988 Regarding the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, ‘‘Civil Justice Reform,’’ 61 FR 4729 (Feb. 7, 1996), imposes on Federal agencies the general E:\FR\FM\19NOP1.SGM 19NOP1 Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules rmajette on DSK2TPTVN1PROD with PROPOSALS duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; (3) provide a clear legal standard for affected conduct rather than a general standard; and (4) promote simplification and burden reduction. Section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in sections 3(a) and 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, the proposed rule meets the relevant standards of Executive Order 12988. G. Review Under the Unfunded Mandates Reform Act of 1995 Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Public Law 104–4, sec. 201 (codified at 2 U.S.C. 1531). For a proposed regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed ‘‘significant intergovernmental mandate,’’ and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect small governments. On March 18, 1997, DOE published a statement of policy on its process for VerDate Sep<11>2014 14:08 Nov 18, 2015 Jkt 238001 intergovernmental consultation under UMRA. 62 FR 12820; also available at https://energy.gov/gc/office-generalcounsel. DOE examined this proposed rule according to UMRA and its statement of policy and determined that the rule contains neither an intergovernmental mandate, nor a mandate that may result in the expenditure of $100 million or more in any year, so these requirements do not apply. H. Review Under the Treasury and General Government Appropriations Act, 1999 Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105–277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. This proposed rule would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment. I. Review Under Executive Order 12630 DOE has determined, under Executive Order 12630, ‘‘Governmental Actions and Interference with Constitutionally Protected Property Rights’’ 53 FR 8859 (March 18, 1988), that this proposed rule would not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution. J. Review Under Treasury and General Government Appropriations Act, 2001 Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB. OMB’s guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE’s guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has reviewed this proposed rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines. K. Review Under Executive Order 13211 Executive Order 13211, ‘‘Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,’’ 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OMB, a Statement of Energy Effects for any proposed significant energy action. A ‘‘significant energy action’’ is defined as PO 00000 Frm 00028 Fmt 4702 Sfmt 4702 72385 any action by an agency that promulgated or is expected to lead to promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use. Today’s proposal to adopt a regional standards enforcement plan for central air conditioners is not a significant regulatory action under Executive Order 12866. Moreover, it would not have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as a significant energy action by the Administrator of OIRA. Therefore, it is not a significant energy action, and, accordingly, DOE has not prepared a Statement of Energy Effects. L. Review Under Section 32 of the Federal Energy Administration Act of 1974 Under section 301 of the Department of Energy Organization Act (Pub. L. 95– 91; 42 U.S.C. 7101), DOE must comply with section 32 of the Federal Energy Administration Act of 1974, as amended by the Federal Energy Administration Authorization Act of 1977. (15 U.S.C. 788; FEAA) Section 32 essentially provides in relevant part that, where a proposed rule authorizes or requires use of commercial standards, the notice of proposed rulemaking must inform the public of the use and background of such standards. In addition, section 32(c) requires DOE to consult with the Attorney General and the Chairman of the Federal Trade Commission (FTC) concerning the impact of the commercial or industry standards on competition. Today’s proposed rule does not requires use of any commercial standards. IV. Public Participation A. Submission of Comments DOE will accept comments, data, and information regarding this proposed rule no later than the date provided in the DATES section at the beginning of this proposed rule. Interested parties may submit comments using any of the methods described in the ADDRESSES section at the beginning of this NOPR. E:\FR\FM\19NOP1.SGM 19NOP1 rmajette on DSK2TPTVN1PROD with PROPOSALS 72386 Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules Submitting comments via regulations.gov. The regulations.gov Web page will require you to provide your name and contact information. Your contact information will be viewable to DOE Building Technologies staff only. Your contact information will not be publicly viewable except for your first and last names, organization name (if any), and submitter representative name (if any). If your comment is not processed properly because of technical difficulties, DOE will use this information to contact you. If DOE cannot read your comment due to technical difficulties and cannot contact you for clarification, DOE may not be able to consider your comment. However, your contact information will be publicly viewable if you include it in the comment or in any documents attached to your comment. Any information that you do not want to be publicly viewable should not be included in your comment, nor in any document attached to your comment. Persons viewing comments will see only first and last names, organization names, correspondence containing comments, and any documents submitted with the comments. Do not submit to regulations.gov information for which disclosure is restricted by statute, such as trade secrets and commercial or financial information (hereinafter referred to as Confidential Business Information (CBI)). Comments submitted through regulations.gov cannot be claimed as CBI. Comments received through the Web site will waive any CBI claims for the information submitted. For information on submitting CBI, see the Confidential Business Information section. DOE processes submissions made through regulations.gov before posting. Normally, comments will be posted within a few days of being submitted. However, if large volumes of comments are being processed simultaneously, your comment may not be viewable for up to several weeks. Please keep the comment tracking number that regulations.gov provides after you have successfully uploaded your comment. Submitting comments via email, hand delivery, or mail. Comments and documents submitted via email, hand delivery, or mail also will be posted to regulations.gov. If you do not want your personal contact information to be publicly viewable, do not include it in your comment or any accompanying documents. Instead, provide your contact information on a cover letter. Include your first and last names, email address, telephone number, and optional mailing address. The cover VerDate Sep<11>2014 14:08 Nov 18, 2015 Jkt 238001 letter will not be publicly viewable as long as it does not include any comments. Include contact information each time you submit comments, data, documents, and other information to DOE. If you submit via mail or hand delivery, please provide all items on a CD, if feasible. It is not necessary to submit printed copies. No facsimiles (faxes) will be accepted. Comments, data, and other information submitted to DOE electronically should be provided in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format. Provide documents that are not secured, written in English and free of any defects or viruses. Documents should not contain special characters or any form of encryption and, if possible, they should carry the electronic signature of the author. Campaign form letters. Please submit campaign form letters by the originating organization in batches of between 50 to 500 form letters per PDF or as one form letter with a list of supporters’ names compiled into one or more PDFs. This reduces comment processing and posting time. Confidential Business Information. According to 10 CFR 1004.11, any person submitting information that he or she believes to be confidential and exempt by law from public disclosure should submit via email, postal mail, or hand delivery two well-marked copies: One copy of the document marked confidential including all the information believed to be confidential, and one copy of the document marked non-confidential with the information believed to be confidential deleted. Submit these documents via email or on a CD, if feasible. DOE will make its own determination about the confidential status of the information and treat it according to its determination. Factors of interest to DOE when evaluating requests to treat submitted information as confidential include: (1) A description of the items; (2) whether and why such items are customarily treated as confidential within the industry; (3) whether the information is generally known by or available from other sources; (4) whether the information has previously been made available to others without obligation concerning its confidentiality; (5) an explanation of the competitive injury to the submitting person which would result from public disclosure; (6) when such information might lose its confidential character due to the passage of time; and (7) why disclosure of the information would be contrary to the public interest. PO 00000 Frm 00029 Fmt 4702 Sfmt 4702 It is DOE’s policy that all comments may be included in the public docket, without change and as received, including any personal information provided in the comments (except information deemed to be exempt from public disclosure). B. Issues on Which DOE Seeks Comment Although DOE welcomes comments on any aspect of this proposal, DOE is particularly interested in receiving comments and views of interested parties concerning the following issues: 1. DOE requests comments on the four clarifications to the regional standards discussed in section II.A. 2. DOE requests comments on its proposed definitions for contractor, dealer, and installation of a central air conditioner. 3. DOE requests comments on its proposed records retention requirements for manufacturers, distributors, and contractors. The Department is specifically interested in any financial burden imposed but these proposed requirements. 4. DOE requests comments on the threshold for records request and the proposed timeframe for responding to such requests. 5. DOE requests comments on the proposed violations for distributors, contractors, and dealers. 6. DOE requests comments on the factors used to determine if a violation is routine. 7. DOE requests comments on the proposed concept for remediation. 8. DOE requests comments on the proposed scheme for manufacturer liability. V. Approval of the Office of the Secretary The Secretary of Energy has approved publication of this proposed rule. List of Subjects 10 CFR Part 429 Administrative practice and procedure, Confidential business information, Energy conservation, Reporting and recordkeeping requirements. 10 CFR Part 430 Administrative practice and procedure, Confidential business information, Energy conservation, Household appliances, Imports, Intergovernmental relations, Small businesses. E:\FR\FM\19NOP1.SGM 19NOP1 Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules Issued in Washington, DC, on November 12, 2015. Kathleen B. Hogan, Deputy Assistant Secretary for Energy Efficiency, Energy Efficiency and Renewable Energy. ■ For the reasons stated in the preamble, DOE is proposing to amend parts 429 and 430 of Chapter II, subchapter D, of Title 10, Code of Federal Regulations as set forth below: § 429.140 Regional standards enforcement procedures. PART 429—CERTIFICATION, COMPLIANCE AND ENFORCEMENT FOR CONSUMER PRODUCTS AND COMMERCIAL AND INDUSTRIAL EQUIPMENT 1. The authority citation for part 429 continues to read as follows: ■ Authority: 42 U.S.C. 6291–6317. 2. Amend § 429.102 to add paragraph (c) to read as follows: ■ § 429.102 Prohibited acts subjecting persons to enforcement action. rmajette on DSK2TPTVN1PROD with PROPOSALS * * * * * (c) Violations of regional standards: (1) It is a violation for a distributor to knowingly sell a product to a contractor or dealer with knowledge that the entity will sell and/or install the product in violation of any regional standard applicable to the product. (2) It is a violation for a distributor to knowingly sell a product to a contractor or dealer with knowledge that the entity routinely violates any regional standard applicable to the product. (3) It is a violation for a contractor or dealer to knowingly sell to and/or install for an end user a central air conditioner subject to regional standards with the knowledge that such product will be installed in violation of any regional standard applicable to the product. (4) A ‘‘product installed in violation’’ includes: (i) A complete central air conditioning system that is not certified as a complete system that meets the applicable standard. Combinations that were previously validly certified may be installed after the manufacturer has discontinued the combination, provided the combination meets the currently applicable standard. (ii) An outdoor unit with no match (i.e., that is not offered for sale with an indoor unit) that is not certified as part of a combination that meets the applicable standard. (iii) An outdoor unit that is part of a certified combination rated less than the standard applicable in the region in which it is installed. VerDate Sep<11>2014 14:08 Nov 18, 2015 Jkt 238001 3. Add an undesignated center heading and § 429.140 in subpart C to read as follows: Regional Standards Enforcement Procedures Sections 429.140 through 429.158 provide enforcement procedures specific to the violations enumerated in § 429.102(c). These provisions explain the responsibilities of manufacturers, private labelers, distributors, contractors and dealers with respect to central air conditioners subject to regional standards; however, these provisions do not limit the responsibilities of parties otherwise subject to 10 CFR parts 429 and 430. ■ 4. Add § 429.142 to subpart C to read as follows: § 429.142 Records retention. (a) Record retention. The following records shall be maintained by the specified entities. (1) Contractors and dealers. (i) For installations of a central air conditioner in the states of Alabama, Arizona, Arkansas, California, Delaware, Florida, Georgia, Hawaii, Kentucky, Louisiana, Maryland, Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, or Virginia or in the District of Columbia, contractors and dealers must retain the following records for at least 48 months from the date of installation. A. For split-system central air conditioner outdoor units: The manufacturer name, model number, serial number, location of installation (including street address, city, state, and zip code), date of installation, and party from whom the unit was purchased (including person’s name, full address, and phone number); and B. For split-system central air conditioner indoor units: The manufacturer name, model number, location of installation (including street address, city, state, and zip code), date of installation, and party from whom the unit was purchased (including person’s name, full address, and phone number). (ii) For installations of a central air conditioner in the states of Arizona, California, Nevada, and New Mexico, contractors and dealers must retain the following, additional records for at least 48 months from the date of installation. A. For single-package central air conditioners: The manufacturer name, model number, serial number, location of installation (including street address, city, state, and zip code), date of installation, and party from whom the PO 00000 Frm 00030 Fmt 4702 Sfmt 4702 72387 unit was purchased (including person’s name, full address, and phone number). B. [Reserved] (2) Distributors. Beginning November 30, 2015, all distributors must retain the following records for no less than 54 months from the date of sale. (i) For split-system central air conditioner outdoor units: The outdoor unit manufacturer, outdoor unit model number, outdoor unit serial number, date unit was purchased from manufacturer, party from whom the unit was purchased (including company or individual’s name, full address, and phone number), date unit was sold to contractor or dealer, party to whom the unit was sold (including company or individual’s name, full address, and phone number), and, if delivered, delivery address. (ii) For single-package air conditioners: The manufacturer, model number, serial number, date unit was purchased from manufacturer, party from whom the unit was purchased (including company or individual’s name, full address, and phone number), date unit was sold to a contractor or dealer, party to whom the unit was sold (including company or individual’s name, full address, and phone number), and, if delivered, delivery address. (3) Manufacturers and Private Labelers. All manufacturers and private labelers must retain the following records for no less than 60 months from the date of sale. (i) For split-system central air conditioner outdoor units: The model number, serial number, date of manufacture, date of sale, and party to whom the unit was sold (including person’s name, full address, and phone number); (ii) For split-system central air conditioner indoor units: The model number, date of manufacture, date of sale, and party to whom the unit was sold (including person’s name, full address, and phone number); and (iii) For single-package central air conditioners: The model number, serial number, date of manufacture, date of sale, and party to whom the unit was sold (including person’s name, full address, and phone number). ■ 5. Add § 429.144 to subpart C to read as follows: § 429.144 Records request. (a) DOE must have reasonable belief a violation has occurred to request records specific to an on-going investigation of a violation of central air conditioner regional standards. (b) Upon request, the manufacturer, private labeler, distributor, dealer, or contractor must provide to DOE the E:\FR\FM\19NOP1.SGM 19NOP1 72388 Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules relevant records within 30 calendar days of the request. (1) DOE, at its discretion, may grant additional time for records production if the party from whom records have been requested has made a good faith effort to produce records. (2) To request additional time, the party from whom records have been requested must produce all records gathered in 30 days and provide to DOE a written explanation of the need for additional time with the requested date for completing the production of records. ■ 6. Add § 429.146 to subpart C to read as follows: § 429.146 Notice of violation. (a) If DOE determines a party has committed a violation of regional standards, DOE will issue a Notice of Violation advising that party of DOE’s determination. (b) If, however, DOE determines a noncompliant installation occurred in only one instance, the noncompliant installation is remediated prior to DOE issuing a Notice of Violation, and the party has no history of prior violations, DOE will not issue such notice. (c) If DOE does not find a violation of regional standards, DOE will notify the party under investigation. ■ 7. Add § 429.148 to subpart C to read as follows: rmajette on DSK2TPTVN1PROD with PROPOSALS § 429.148 Routine violator. (a) DOE will consider, inter alia, the following factors in determining if a person is a routine violator: Number of violations in current and past cases, length of time over which violations occurred, ratio of compliant to noncompliant installations or sales, percentage of employees committing violations, evidence of intent, evidence of training or education provided, and subsequent remedial actions. (b) In the event that DOE determines a person to be a routine violator, DOE will issue a Notice of Finding of Routine Violation. (c) In making a finding of Routine Violation, DOE will consider whether the Routine Violation was limited to a specific location. If DOE finds that the routine violation was so limited, DOE may, in its discretion, in the Notice of Finding of Routine Violation limit the prohibition on manufacturer and/or private labeler sales to a particular contractor or distribution location. ■ 8. Add § 429.150 to subpart C to read as follows: § 429.150 Appealing a finding of routine violation. 14:08 Nov 18, 2015 Jkt 238001 § 429.152 Removal of finding of ‘‘routine violator’’. (a) A routine violator may be removed from DOE’s list of routine violators through completion of remediation in accordance with the requirements in § 429.154 of this subpart. (b) A routine violator that wants to remediate must contact DOE Office of Enforcement via the point of contact listed in the Notice of Finding of Routine Violation and identify the distributor(s), manufacturer(s), or private labeler(s) from whom it wishes to buy compliant replacement product. (c) DOE will contact the distributor(s), manufacturer(s), or private labeler(s) and authorize sale of central air conditioner units to the routine violator for purposes of remediation within 3 business days of receipt of the request for remediation. DOE will provide the manufacturer(s), distributor(s), and/or private labeler(s) with an official letter authorizing the sale of units for purposes of remediation. (d) DOE will contact routine violators that requested units for remediation within 30 days of sending the official letter to the manufacturer(s), distributor(s), and/or private labeler(s) to determine the status of the remediation. (e) If remediation is successfully completed, DOE will issue a Notice indicating a person is no longer considered to be a routine violator. The Notice will be issued no more than 30 days after DOE has received documentation demonstrating that remediation is complete. ■ 10. Add § 429.154 to subpart C to read as follows: § 429.154 (a) Any person found to be a routine violator may, within 30 calendar days VerDate Sep<11>2014 after the date of Notice of Finding of Routine Violation, request an administrative appeal to the Office of Hearings and Appeals. (b) The appeal must present information rebutting the finding of violation(s). (c) The Office of Hearings and Appeal will issue a decision on the appeal within 45 days of receipt of the appeal. (d) A routine violator must file a Notice of Intent to Appeal with the Office of Hearings and Appeals within three business days of the date of the Notice of Finding of Routine Violation, serving a copy on the GC Office of Enforcement to retain the ability to buy central air conditioners during the pendency of the appeal. ■ 9. Add § 429.152 to subpart C to read as follows: Remediation. (a) Any party found to be in violation of the regional standards may remediate PO 00000 Frm 00031 Fmt 4702 Sfmt 4702 by replacing the noncompliant unit at cost to the violator; the end user cannot be charged for any costs of remediation. (1) If a violator is unable to replace all noncompliant installations, then the Department may, in its discretion, consider the remediation complete if the violator satisfactorily demonstrates to the Department that it attempted to replace all noncompliant installations. (2) The Department will scrutinize any ‘‘failed’’ attempts at replacement to ensure that there was indeed a good faith effort to complete remediation of the noncompliant unit. (b) The violator must provide to DOE the serial number of any outdoor unit and/or indoor unit installed not in compliance with the applicable regional standard as well as the serial number(s) of the replacement unit(s) to be checked by the Department against warranty and other replacement claims. (c) If the remediation is approved by the Department, then DOE will issue a Notice of Remediation and the violation will not count towards a finding of ‘‘routine violator’’. ■ 11. Add § 429.156 to subpart C to read as follows: § 429.156 liability. Manufacturer and private labeler (a) In accordance with § 429.102(c), manufacturers and private labelers are prohibited from selling central air conditioners and heat pumps to a routine violator. (1) To avoid financial penalties, manufacturers and/or private labelers must cease sales to a routine violator within 3 business days from the date of issuance of a Notice of Finding of Routine Violation. (2) If a Routine Violator files a Notice of Intent to Appeal pursuant to § 429.150, then a manufacturer and/or private labeler may assume the risk of selling central air conditioners to the Routine Violator during the pendency of the appeal. (3) If the appeal of the Finding of Routine Violator is denied, then the manufacturer and/or private labeler may be fined in accordance with § 429.120, for sale of any units to a routine violator during the pendency of the appeal that do not meet the applicable regional standard. (b) If a manufacturer and/or private labeler has knowledge of routine violation, then the manufacturer can be held liable for all sales that occurred after the date the manufacturer had knowledge of the routine violation. However, if the manufacturer and/or private labeler reports its suspicion of a routine violation to DOE within 15 days of receipt of such knowledge, then it E:\FR\FM\19NOP1.SGM 19NOP1 Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules will not be liable for product sold to the suspected routine violator prior to reporting the routine violation to DOE. ■ 12. Add § 429.158 to subpart C to read as follows: or private labeler may demonstrate through installer records that individual units were installed in a region where the unit is compliant with the applicable standards. § 429.158 Product determined noncompliant with regional standards. PART 430—ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS (a) If DOE determines a model of outdoor unit fails to meet the applicable regional standard(s) when tested in a combination certified by the same manufacturer, then the outdoor unit basic model will be deemed noncompliant with the regional standard(s). In accordance with § 429.102(c), the outdoor unit manufacturer and/or private labeler is liable for distribution of noncompliant units in commerce. (b) If DOE determines a combination fails to meet the applicable regional standard(s) when tested in a combination certified by a manufacturer other than the outdoor unit manufacturer (e.g., ICM), then that combination is deemed noncompliant with the regional standard(s). In accordance with § 429.102(c), the certifying manufacturer is liable for distribution of noncompliant units in commerce. (c) All such units manufactured and distributed in commerce are presumed to have been installed in a region where they would not comply with the applicable energy conservation standard; however, a manufacturer and/ 13. The authority citation for part 430 continues to read as follows: ■ Authority: 42 U.S.C. 6291–6309; 28 U.S.C. 2461 note. 14. Amend § 430.2 by adding, in alphabetical order, new definitions for ‘‘contractor,’’ ‘‘dealer,’’ ‘‘distributor,’’ and ‘‘installation of a central air conditioner’’ to read as follows: ■ § 430.2 Definitions. * * * * * Contractor means a person (other than the manufacturer or distributor) who sells to and/or installs for an end user a central air conditioner subject to regional standards. The term ‘‘end user’’ means the entity that purchases or selects for purchase the central air conditioner. Some examples of typical ‘‘end users’’ are homeowners, building owners, building managers, and property developers. * * * * * Dealer means a type of contractor, generally with a relationship with one or more specific manufacturers. * * * * * Distributor means a person (other than a manufacturer or retailer) to whom a consumer appliance product is delivered or sold for purposes of distribution in commerce. * * * * * Installation of a central air conditioner means the connection of the refrigerant lines and/or electrical systems to make the central air conditioner operational. * * * * * ■ 15. Amend § 430.32, by revising paragraph (c) to read as follows: § 430.32 Energy and water conservation standards and their compliance dates. * * * * * (c) Central air conditioners and heat pumps. The energy conservation standards defined in terms of the heating seasonal performance factor are based on Region IV, the minimum standardized design heating requirement, and the provisions of 10 CFR 429.16 of this chapter. (1) Each basic model of single-package central air conditioners and central air conditioning heat pumps and each individual combination of split-system central air conditioners and central air conditioning heat pumps manufactured on or after January 1, 2015, shall have a Seasonal Energy Efficiency Ratio and Heating Seasonal Performance Factor not less than: Seasonal energy efficiency ratio (SEER) Product class rmajette on DSK2TPTVN1PROD with PROPOSALS (i) Split-system air conditioners ............................................................................................................................... (ii) Split-system heat pumps .................................................................................................................................... (iii) Single-package air conditioners ........................................................................................................................ (iv) Single-package heat pumps .............................................................................................................................. (v) Small-duct, high-velocity systems ...................................................................................................................... (vi)(A) Space-constrained products—air conditioners ............................................................................................. (vi)(B) Space-constrained products—heat pumps .................................................................................................. (2) In addition to meeting the applicable requirements in paragraph (c)(1) of this section, products in product class (i) of that paragraph (i.e., split-system air conditioners) that are installed on or after January 1, 2015, in the States of Alabama, Arkansas, Delaware, Florida, Georgia, Hawaii, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, or Virginia, or in the District of Columbia, shall have a Seasonal Energy Efficiency Ratio not less than 14. The least efficient combination of each basic model must comply with this standard. VerDate Sep<11>2014 14:08 Nov 18, 2015 Jkt 238001 (3) In addition to meeting the applicable requirements in paragraph (c)(1) of this section, split-system air conditioners that are installed on or after January 1, 2015, in the States of Alabama, Arkansas, Delaware, Florida, Georgia, Hawaii, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, or Virginia, or in the District of Columbia, must have a Seasonal Energy Efficiency Ratio of 14 or higher. Any outdoor unit model that has a certified combination with a rating below 14 SEER cannot be installed in these States. An outdoor unit model certified below PO 00000 Frm 00032 Fmt 4702 Sfmt 4702 72389 Heating seasonal performance factor (HSPF) 13 14 14 14 12 12 12 ........................ 8.2 ........................ 8.0 7.2 ........................ 7.4 14 SEER by the outdoor unit manufacturer cannot be installed in this region even with an independent coil manufacturer’s indoor unit that may have a certified rating at or above 14 SEER. (4) In addition to meeting the applicable requirements in paragraph (c)(1) of this section, split-system air conditioners and single-package air conditioners that are installed on or after January 1, 2015, in the States of Arizona, California, Nevada, or New Mexico must have a Seasonal Energy Efficiency Ratio of 14 or higher and have an Energy Efficiency Ratio (at a E:\FR\FM\19NOP1.SGM 19NOP1 72390 Federal Register / Vol. 80, No. 223 / Thursday, November 19, 2015 / Proposed Rules standard rating of 95 °F dry bulb outdoor temperature) not less than the following: DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 Energy efficiency ratio (EER) Product class [Docket No. FAA–2015–5914; Directorate Identifier 2014–SW–056–AD] RIN 2120–AA64 (i) Split-system rated cooling capacity less than 45,000 Btu/hr ................................. (ii) Split-system rated cooling capacity equal to or greater than 45,000 Btu/hr ........ (iii) Single-package systems 12.2 Airworthiness Directives; Airbus Helicopters (Formerly Eurocopter France) Helicopters 11.7 11.0 AGENCY: Any outdoor unit model that has a certified combination with a rating below 14 SEER or the applicable EER cannot be installed in this region. An outdoor unit model certified below 14 SEER or the applicable EER by the outdoor unit manufacturer cannot be installed in this region even with an independent coil manufacturer’s indoor unit that may have a certified rating at or above 14 SEER and the applicable EER. (5) Each basic model of single-package central air conditioners and central air conditioning heat pumps and each individual combination of split-system central air conditioners and central air conditioning heat pumps manufactured on or after January 1, 2015, shall have an average off mode electrical power consumption not more than the following: Product class rmajette on DSK2TPTVN1PROD with PROPOSALS (i) Split-system air conditioners ............................... (ii) Split-system heat pumps (iii) Single-package air conditioners ............................... (iv) Single-package heat pumps ............................... (v) Small-duct, high-velocity systems ............................. (vi) Space-constrained air conditioners ....................... (vii) Space-constrained heat pumps ............................... * * * * We propose to adopt a new airworthiness directive (AD) for Airbus Helicopters Model SA341G and SA342J helicopters. This proposed AD would require repetitive inspections of a certain part-numbered main rotor hub torsion bar (torsion bar). This proposed AD is prompted by several cases of corrosion in the metal strands of the torsion bar. The proposed actions are intended to detect corrosion and prevent failure of the torsion bar, loss of a main rotor blade, and subsequent loss of control of the helicopter. DATES: We must receive comments on this proposed AD by January 19, 2016. ADDRESSES: You may send comments by any of the following methods: • Federal eRulemaking Docket: Go to https://www.regulations.gov. Follow the online instructions for sending your comments electronically. Average • Fax: 202–493–2251. off mode • Mail: Send comments to the U.S. power Department of Transportation, Docket consumption Operations, M–30, West Building PW,OFF (watts) Ground Floor, Room W12–140, 1200 New Jersey Avenue SE., Washington, DC 20590–0001. 30 • Hand Delivery: Deliver to the 33 ‘‘Mail’’ address between 9 a.m. and 5 p.m., Monday through Friday, except 30 Federal holidays. Examining the AD Docket 30 You may examine the AD docket on the Internet at https:// www.regulations.gov by searching for and locating Docket No. FAA–2015– 5914; or in person at the Docket Operations Office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the European Aviation Safety Agency (EASA) AD, the economic evaluation, any comments received, and other information. The street address for the Docket Operations Office (telephone 800–647–5527) is in the ADDRESSES 30 33 * BILLING CODE 6450–01–P 14:08 Nov 18, 2015 SUMMARY: 33 [FR Doc. 2015–29435 Filed 11–18–15; 8:45 am] VerDate Sep<11>2014 Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking (NPRM). Jkt 238001 PO 00000 Frm 00033 Fmt 4702 Sfmt 4702 section. Comments will be available in the AD docket shortly after receipt. For service information identified in this proposed AD, contact Airbus Helicopters, 2701 N. Forum Drive, Grand Prairie, TX 75052; telephone (972) 641–0000 or (800) 232–0323; fax (972) 641–3775; or at https:// www.airbushelicopters.com/techpub. You may review the referenced service information at the FAA, Office of the Regional Counsel, Southwest Region, 10101 Hillwood Pkwy, Room 6N–321, Fort Worth, TX 76177. FOR FURTHER INFORMATION CONTACT: Robert Grant, Aviation Safety Engineer, Safety Management Group, FAA, 10101 Hillwood Pkwy, Fort Worth, Texas 76177; telephone (817) 222–5110; email robert.grant@faa.gov. SUPPLEMENTARY INFORMATION: Comments Invited We invite you to participate in this rulemaking by submitting written comments, data, or views. We also invite comments relating to the economic, environmental, energy, or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit only one time. We will file in the docket all comments that we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, we will consider all comments we receive on or before the closing date for comments. We will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. We may change this proposal in light of the comments we receive. Discussion EASA, which is the Technical Agent for the Member States of the European Union, issued EASA AD No. 2014–0216, dated September 24, 2014, to correct an unsafe condition for Airbus Helicopters Model SA341G and SA342J helicopters. EASA advises that several cases of cracks were found on the polyurethane (PU) coating of part-numbered 704A33633274 torsion bars installed on military Model SA341 helicopters. EASA states that these parts can also be E:\FR\FM\19NOP1.SGM 19NOP1

Agencies

DEPARTMENT OF ENERGY

[Federal Register Volume 80, Number 223 (Thursday, November 19, 2015)]
[Proposed Rules]
[Pages 72373-72390]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-29435]

-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

10 CFR Parts 429 and 430

[Docket No. EERE-2011-BT-CE-0077]
RIN 1904-AC68

Energy Conservation Program: Enforcement of Regional Standards
for Central Air Conditioners

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

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The U.S. Department of Energy (DOE) is proposing requirements
related to the enforcement of regional standards for central air
conditioners, as authorized by the Energy Policy and Conservation Act
(EPCA) of 1975.

DATES: DOE will accept comments, data, and information regarding this
notice of proposed rulemaking (NOPR) no later than January 4, 2016.
In compliance with the Paperwork Reduction Act, DOE is also seeking
comment on a new information collection. See the Paperwork Reduction
Act section under Procedural Issues and Regulatory Review, section
III.C. Please submit all comments relating to information collection
requirements to DOE no later than January 19, 2016. Comments to OMB are
most useful if submitted within 45 days of publication.

ADDRESSES: Any comments submitted must identify the NOPR for
Enforcement of Regional Standards for Central Air Conditioners and
provide docket number EERE-2011-BT-CE-0077 and/or regulatory
information number (RIN) 1904-AC68. Comments may be submitted using any
of the following methods:
1. Federal eRulemaking Portal: www.regulations.gov. Follow the
instructions for submitting comments.
2. Email: EnforcementFunCAC-2011-CE-0077@EE.Doe.Gov Include the
docket number and/or RIN in the subject line of the message.
3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building
Technologies Program, Mailstop EE-2J, 1000 Independence Avenue SW.,
Washington, DC 20585-0121. If possible, please submit all items on a
CD. It is not necessary to include printed copies.
4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of
Energy, Building Technologies Program, 950 L'Enfant Plaza SW., Suite
600, Washington, DC 20024. Telephone: (202) 586-2945. If possible,
please submit all items on a CD. It is not necessary to include printed
copies.
Docket: The docket, which includes Federal Register notices, public
meeting attendee lists and transcripts, comments, and other supporting
documents/materials, is available for review at regulations.gov. All
documents in the docket are listed in the regulations.gov index.
However, some documents listed in the index, such as those containing
information that is exempt from public disclosure, may not be publicly
available. The docket Web page can be found at: https://www.regulations.gov/#!docketDetail;D=EERE-2011-BT-CE-0077.
For further information on how to submit a comment, review other
public comments and the docket, or participate in the public meeting,
contact Ms. Brenda Edwards at (202) 586-2945 or by email:
Brenda.Edwards@ee.doe.gov.

FOR FURTHER INFORMATION CONTACT: Ashley Armstrong, U.S. Department of
Energy, Office of Energy Efficiency and Renewable Energy, Building
Technologies Program, EE-5B, 1000 Independence Avenue SW., Washington,
DC 20585-0121. Telephone: 202-586-6590. Email:
Ashley.Armstrong@ee.doe.gov.
Laura Barhydt, U.S. Department of Energy, Office of the General
Counsel, GC-32, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 287-5772. Email: Laura.Barhydt@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Authority and Background
A. Authority
B. Background
II. Discussion
A. Regional Standards
B. Definitions
C. Public Awareness
D. Reporting
E. Proactive Investigation
F. Record Retention and Requests
G. Violations and Routine Violations
H. Remediation
I. Labeling
J. Manufacturer Liability
K. Additional Prohibited Acts for Distributors, Contractors and
Dealers
L. Summary Table
M. Impact of Regional Enforcement Proposal on National Impacts
Analysis
III. Procedural Issues and Regulatory Review
A. Review Under Executive Order 12866
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act of 1995
D. Review Under the National Environmental Policy Act of 1969

E. Review Under Executive Order 13132
F. Review Under Executive Order 12988

[[Page 72374]]

G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under Treasury and General Government Appropriations
Act, 2001
K. Review Under Executive Order 13211
L. Review Under Section 32 of the Federal Energy Administration
Act of 1974
IV. Public Participation
A. Submission of Comments
B. Issues on Which DOE Seeks Comment
V. Approval of the Office of the Secretary

I. Authority and Background

A. Authority

Title III of the Energy Policy and Conservation Act of 1975, as
amended (``EPCA'' or, in context, ``the Act'') sets forth a variety of
provisions designed to improve energy efficiency.\1\ Part A of Title
III (42 U.S.C. 6291-6309) establishes the ``Energy Conservation Program
for Consumer Products Other Than Automobiles.'' These consumer products
include central air conditioners, which are the subject of this rule.
(42 U.S.C. 6295(d))
---------------------------------------------------------------------------

\1\ All references to EPCA in this document refer to the statute
as amended through the Energy Efficiency Improvement Act of 2015,
Public Law 114-11 (Apr. 30, 2015).
---------------------------------------------------------------------------

Under EPCA, this program consists essentially of four parts: (1)
Testing; (2) labeling; (3) Federal energy conservation standards; and
(4) certification and enforcement procedures. The Federal Trade
Commission (FTC) is primarily responsible for labeling consumer
products, and DOE implements the remainder of the program.
Pursuant to EPCA, any new or amended energy conservation standards
for covered consumer products must be designed to achieve the maximum
improvement in energy efficiency that are technologically feasible and
economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new
or amended standard must result in significant conservation of energy.
(42 U.S.C. 6295(o)(3)(B)) The Energy Independence and Security Act of
2007 (EISA 2007) amended EPCA to require that DOE consider regional
standards for certain products if the regional standards can save
significantly more energy than a national standard and are economically
justified. (42 U.S.C. 6295(o)(6)(A)) Under EPCA, DOE is authorized to
establish up to two additional regional standards for central air
conditioners and heat pumps. (42 U.S.C. 6295(o)(6)(B)(ii)) DOE must
initiate an enforcement rulemaking after DOE issues a final rule that
establishes a regional standard. (42 U.S.C. 6295(o)(6)(G)(ii)(I)) DOE
must also issue a final rule for enforcement after DOE issues a final
rule that establishes a regional standard. (42 U.S.C.
6295(o)(6)(G)(ii)(III))

B. Background

On June 27, 2011, DOE promulgated a Direct Final Rule (June 2011
DFR) that, among other things, established regional standards for
central air conditioners. 76 FR 37408. DOE subsequently published a
notice of effective date and compliance date for the June 2011 DFR on
October 31, 2011, setting a standards compliance for central air
conditioners and heat pumps of January 1, 2015. 76 FR 67037.
As required by EPCA, DOE initiated an enforcement rulemaking by
publishing a notice of data availability (NODA) in the Federal Register
that proposed three approaches to enforcing regional standards for
central air conditioners. 76 FR 76328 (December 7, 2011). DOE received
numerous comments expressing a wide range of concerns in response to
this NODA. Consequently, on June 13, 2014, DOE published a notice of
intent to form a working group to negotiate regulations for the
enforcement of regional standards for central air conditioners and
requested nominations from parties interested in serving as members of
the Working Group. 79 FR 33870. On July 16, 2014, the Department
published a notice of membership announcing the eighteen nominations
that were selected to serve as members of the Working Group, in
addition to two members from Appliance Standards and Rulemaking Federal
Advisory Committee (ASRAC), and one DOE representative.\2\ 79 FR 41456.
The members of the Working Group were selected by ASRAC to ensure a
broad and balanced array of stakeholder interests and expertise, and
included efficiency advocates, manufacturers, utility representatives,
contractors, and distributors. Id.
---------------------------------------------------------------------------

\2\ The list of members is published in Table II.1.
---------------------------------------------------------------------------

As required, the Working Group submitted a final report to ASRAC on
October 24, 2014, summarizing the group's recommendations
for DOE's rule for enforcement of regional standards for central air
conditioners. Working Group Recommendations, No. 70.\3\ The
recommendations included a statement that the nongovernmental
participants conditionally approved the recommendations contingent upon
the issuance of the final guidance (See No. 89 and No. 90 for the draft
versions) consistent with the understanding of the Working Group as set
forth in these recommendations. Working Group Recommendations, No. 70
at 37. ASRAC subsequently voted to approve these recommendations on
December 1, 2014. ASRAC Meeting Transcript, No. 73 at 42-43. In this
document, DOE is proposing to adopt the Working Group's
recommendations. Working Group Recommendations, No. 70.
---------------------------------------------------------------------------

\3\ A notation in this form provides a reference for information
that is in the docket for this rulemaking (Docket No. EERE-2011-BT-
CE-0077), which is maintained at www.regulations.gov. This notation
indicates that the statement preceding the reference is from
document number 70 in the docket.
---------------------------------------------------------------------------

After consideration of the comments received in response to the
guidance documents, DOE determined that regulatory changes were
necessary to implement the approach agreed to by the Working Group.
Accordingly, DOE has proposed changes to the unit selection and testing
requirements in a parallel test procedure rulemaking (CAC TP SNOPR). 80
FR 69278 (November 9, 2015). DOE reaffirms its commitment to the
approach advocated by the Working Group, subject to consideration of
comments received in this and the test procedure rulemaking.

II. Discussion

Between August 13, 2014, and October 24, 2014,\4\ the Working Group
held fourteen full public meetings in Washington, DC, primarily at the
DOE headquarters.\5\ Thirty-seven interested parties, including members
of the Working Group, attended the various meetings. Table II.1 lists
the entities that attended the Working Group meetings and their
affiliation. The Working Group's recommendations for enforcement of the
regional standards for central air conditioners are presented in this
proposed rule. A more detailed discussion of the recommendations can be
found in the Working Group meeting transcripts.\6\
---------------------------------------------------------------------------

\4\ The Working Group met on August 13, 2014; August 14, 2014;
August 26, 2014; August 27, 2014; August 28, 2014; September 3,
2014; September 4, 2014; September 24, 2014; September 25, 2014;
October 1, 2014; October 2, 2014; October 15, 2014; October 16,
2014; and October 24, 2014.
\5\ Due to conflicts at DOE, the August 27th meeting took place
at ACEEE's office in Washington, DC.
\6\ Docket Folder, Energy Conservation Program: Enforcement of
Regional Standards for Residential Furnaces and Central Air
Conditioners and Heat Pumps, https://www.regulations.gov/#!docketDetail;D=EERE-2011-BT-CE-0077 (last visited Aug. 26, 2015).

[[Page 72375]]

Table II.1--Interested Parties
----------------------------------------------------------------------------------------------------------------
Working group
Name Acronym Organization type membership (Y/
N)
----------------------------------------------------------------------------------------------------------------
Air Conditioning Contractors of ACCA.................... Contractor Association....... Y
America.
Air Conditioning, Heating, and AHRI.................... Manufacturer Trade Y
Refrigeration Institute. Association.
Allied Air Enterprises................ Allied Air.............. Manufacturer................. Y
American Council for an Energy- ACEEE................... Energy Efficiency Advocacy Y
Efficient Economy. Group.
American Public Gas Association....... APGA.................... Utility Association.......... ...............
California Energy Commission.......... CEC..................... California State Government Y
Agency.
California Investor Owned Utilities... CA IOUs................. Utility Association.......... ...............
Carrier Corporation................... Carrier................. Manufacturer................. Y
Daikin Corporation.................... Daikin.................. Manufacturer................. ...............
EarthJustice.......................... ........................ Energy Efficiency Advocacy Y
Group.
Edison Electric Institute............. EEI..................... Utility Association.......... ...............
Emerson............................... ........................ Manufacturer................. ...............
First Co.............................. ........................ Manufacturer................. ...............
Goodman Global, Inc................... Goodman................. Manufacturer................. Y
Scott Harris*......................... ........................ Appliance Standards and Y
Rulemaking Federal Advisory
Committee (ASRAC).
Heating, Air-conditioning and HARDI................... Distributor Trade Association ...............
Refrigeration Distributors
International.
Ingersoll Rand........................ ........................ Manufacturer................. Y
Johnson Controls Inc.................. JCI..................... Manufacturer................. Y
Johnstone Supply...................... ........................ Distributor.................. Y
Lennox International, Inc............. Lennox.................. Manufacturer................. ...............
Lincoln Electric Cooperative.......... ........................ Utility...................... Y
McDermott Will & Emery................ ........................ Law Firm..................... ...............
Mortex Products, Inc.................. Mortex.................. Manufacturer................. ...............
National Association of Home Builders. NAHB.................... Trade Association............ ...............
National Comfort Products............. ........................ Manufacturer................. ...............
National Consumer Law Center*......... ........................ Consumer Advocacy Group...... Y
National Rural Electric Cooperative NRECA................... Utility Association.......... ...............
Association.
Natural Resources Defense Council..... NRDC.................... Energy Efficiency Advocacy Y
Group.
New York State Office of Attorney ........................ Government Agency............ ...............
General.
NORDYNE Inc........................... NORDYNE................. Manufacturer................. Y
Pacific Gas and Electric Company...... PG&E.................... Utility...................... Y
Plumbing-Heating-Cooling Contractors-- PHCC.................... Contractor Association....... Y
National Association.
Pacific Northwest National Laboratory. PNNL.................... U.S. Government Research ...............
Laboratory.
Regal-Beloit Corporation.............. Regal-Beloit............ Manufacturer................. ...............
Rheem Manufacturing Company........... Rheem................... Manufacturer................. Y
Unico, Inc............................ Unico................... Manufacturer................. ...............
Xcel Energy*.......................... ........................ Utility Association.......... Y
----------------------------------------------------------------------------------------------------------------
* Withdrew from working group.

A. Regional Standards

As discussed in section I.B, DOE adopted regional standards for
central air conditioners in its June 2011 DFR. That rule set regional
standards for split-system central air conditioners and single-package
central air conditioners. 10 CFR 430.32(c). A split-system central air
conditioner is a type of air conditioner that has one or more of its
major assemblies separated from the others. Typically, the air
conditioner has a condensing unit (``outdoor unit'') that is separate
from the evaporator coil and/or blower (``indoor unit''). Accordingly,
a split-system condensing unit is often sold separately from the indoor
unit and may be matched with several different models of indoor units
and/or blowers. For this reason, a condensing unit could achieve a 14
SEER or above if it is paired with certain indoor units and/or blowers
and could perform below 14 SEER when paired with other indoor units
and/or blowers.
The Working Group suggested the regional standards required
clarification because a particular condensing unit may have a range of
efficiency ratings when paired with various indoor evaporator coils
and/or blowers. The Working Group provided the following four
recommendations to clarify the regional standards: that (1) the least
efficient rated combination for a specified model of condensing unit
must be 14 SEER for models installed in the Southeast and Southwest
regions; (2) the least efficient rated combination for a specified
model of condensing unit must meet the minimum EER for models installed
in the Southwest region; (3) any condensing unit model that has a
certified combination that is below the regional standard(s) cannot be
installed in that region; and (4) a condensing unit model certified
below a regional standard by the original equipment manufacturer cannot
be installed in a region subject to a regional standard(s) even with an
independent coil manufacturer's indoor coil or air handler combination
that may have a certified rating meeting the applicable regional
standard(s). Working Group Recommendations, No. 70 at 4.
DOE is proposing to adopt these recommendations as part of this
NOPR and requests comment on these recommendations. DOE notes that the
test procedure supplemental notice of proposed rulemaking (CAC TP
SNOPR) proposes multiple regulatory changes necessary to implement
these recommendations. See the CAC TP

[[Page 72376]]

SNOPR for those detailed proposals. 80 FR 69278. In addition, DOE has
proposed two alternatives to implement the clarification with respect
to the standards. In this rulemaking, DOE proposes to specify that any
condensing unit model that has a certified combination with a rating
below 14 SEER cannot be installed in the Southeast and Southwest United
States. To clarify responsibility with respect to split-system air
conditioners, this rulemaking proposes that a condensing unit model
certified below 14 SEER by the outdoor unit manufacturer cannot be
installed in those regions even if an independent coil manufacturer
certifies an indoor coil or air handler combination with that outdoor
unit with a rating at or above 14 SEER. In contrast, in the test
procedure rulemaking, DOE proposes to specify that the least efficient
combination of each basic model must comply with the regional standard,
but provides additional parameters regarding what combinations are
permitted to be certified. See, e.g., 80 FR 69278 at 69290. The
approach taken in this rulemaking relies less on some of the other
regulatory changes that are necessary to implement the policies the
Working Group advocated with respect to the guidance documents; the
approach taken in the test procedure rulemaking would require the
additional regulatory changes with respect to unit selection and
testing. DOE requests comment on the two approaches, whether interested
parties consider one approach to be easier to understand, and what the
pros or cons may be of the two alternatives.

B. Definitions

EPCA prohibits manufacturers from selling to ``distributors,
contractors, or dealers that routinely violate the regional
standards.'' (42 U.S.C. 6302(a)(6)) EPCA defines a distributor as a
person (other than a manufacturer or retailer) to whom a consumer
appliance product is delivered or sold for purposes of distribution in
commerce. (42 U.S.C. 6291(14))
Because neither EPCA nor existing DOE regulations define the terms
``contractor'' and ``dealer,'' the Working Group recommended the
following definitions to further clarify the prohibited act:
Contractor means a person \7\ (other than the manufacturer or
distributor) who sells to and/or installs for an end user a central air
conditioner subject to regional standards.
---------------------------------------------------------------------------

\7\ DOE defines ``person'' as ``any individual, corporation,
company, association, firm, partnership, society, trust, joint
venture or joint stock company, the government, and any agency of
the United States or any State or political subdivision thereof.''
(10 CFR 430.2)
---------------------------------------------------------------------------

Dealer means a type of contractor, generally with a relationship
with one or more specific manufacturers.
The Working Group further requested DOE make clear that in the
context of the definition of ``contractor,'' the term ``end user''
means the entity that purchases or selects for purchase the central air
conditioner. Some examples of typical ``end users'' are homeowners,
building owners, building managers, and property developers.
Additionally, the Working Group recommended that DOE define the
term ``installation'' as:
Installation of a central air conditioner means the connection of
the refrigerant lines and/or electrical systems to make the central air
conditioner operational.
In this NOPR, DOE proposes to adopt the Working Group's recommended
definitions for these three terms and requests comments on these
definitions. DOE also proposes to codify the definition of
``distributor.''
The Working Group requested that DOE make explicit in this proposed
rule that, depending upon their particular conduct, parties conducting
internet sales may be considered a contractor or distributor under the
proposed definitions. Specifically, internet sellers that sell to
contractors or dealers meet the definition of a ``distributor,'' while
internet sellers that sell directly to home owners would qualify as
``contractors.'' Further, retailers who sell central air conditioners
directly to homeowners would also fit within the definition of a
``contractor.''
While not specifically discussed by the Working Group, it is also
of note that some internet sellers will be considered manufacturers if
they are the importers of the product they are selling via the
internet. Pursuant to EPCA, the term ``manufacturer'' includes
importers. (42 U.S.C. 6291(10), (12)) Those parties that import
products subject to regional standards are expected to meet the
regulatory obligations of manufacturers.
In their discussion of definitions, members of the Working Group
also raised the point that some manufacturers distribute their own
product. DOE clarified that, consistent with EPCA's definitions of
``manufacturer'' and ``distributor,'' if a manufacturer distributes its
own product, then the company (the manufacturer-owned or ``factory
owned'' distributor) is considered to be a manufacturer rather than a
distributor.
Since DOE received the recommendations of the Working Group from
ASRAC, DOE has received questions about the applicability of the
regional standards to private labelers. The Working Group did not
address this issue. The statutory prohibited acts treat manufacturers
and private labelers in the same way. (42 U.S.C. 6302(a)(6) (making it
unlawful for ``any manufacturer or private labeler to knowingly sell a
product to a distributor, contractor, or dealer with knowledge that the
entity routinely violates any regional standard applicable to the
product.'')) DOE notes that, although private labelers are liable for
distribution in commerce of noncompliant products generally, DOE does
not require private labelers to submit certification reports unless the
private labeler is also the importer. Therefore, DOE believes that it
may not be necessary for exactly the same requirements to apply to
private labelers. Consequently, DOE is proposing that the same
requirements apply to private labelers as discussed in more detail
throughout this notice. However, DOE requests comment on whether these
proposed requirements should be the same or whether different
requirements should apply. DOE may adopt the same requirements as
proposed today or some variation for private labelers in the final rule
as a result of comments received.

C. Public Awareness

The Working Group discussed the importance of public education to a
successful enforcement program for central air conditioner regional
standards. The Working Group recommended DOE establish a Web page with
information on regional standards for central air conditioners that
could be referenced by manufacturers, distributors, contractors, and
other interested parties. As recommended, DOE established a Web page
about enforcement of regional standards which can be found at https://www.energy.gov/gc/enforcement.
The Working Group also opined on the need to deliver a consistent
message to central air conditioner consumers and contractors about the
regional standards. The Working Group recommended that DOE provide
public educational materials that manufacturers and distributors could
provide their customers. Accordingly, DOE is posting links from its Web
page for regional standards to two different documents: (1) A printable
trifold tailored to provide information to consumers and (2) and a
printable flier to educate

[[Page 72377]]

contractors and answer common questions.
Beyond creating a regional standards Web page, the Working Group
recommended DOE conduct a public presentation (accessible via internet
as well as in-person) on regional standards for central air conditioner
standards and the enforcement of such standards to educate stakeholders
and the public on these regulations. The Department will issue a Notice
of Public Meeting announcing its presentation on regional standards
after the issuance of a final rule and will post the slides from the
presentation to this docket and on the regional standards Web page.
The Working Group also recommended that all information sources--
the Web page, trifold, flier, and presentation--should include
information, including email links, on how to report suspected
violations of the regional standards for central air conditioners.
Finally, the Working Group recommended that central air conditioner
manufacturers provide training about regional standards to distributors
and contractors/dealers. Distributors and contractors also agreed to
conduct their own training on regional standards. The Working Group did
not establish specific guidelines for the training.

D. Reporting

The Working Group discussed methods for facilitating the reporting
of suspected regional standards violations and recommended that the
Department provide multiple pathways for the public to report such
information. Specifically, the Working Group recommended that DOE
accept complaints regarding central air conditioners regional standards
from both an email address and call-in number. As requested, the
Department will accept reports of suspected violations of the regional
central air conditioner standards that are received via the email
address: EnergyEfficiencyEnforcement@hq.doe.gov or phone number: 202-
287-6997. DOE committed to look into all credible complaints, meaning
DOE will follow up on all complaints that provide a reasonable amount
of information to the Department. The Working Group emphasized, and DOE
affirmed, that the complainant will have confidentiality to the maximum
extent authorized by law.

E. Proactive Investigation

In addition to responding to reports of noncompliance with the
regional standards, the Working Group recommended that the Department
consider conducting proactive investigations. Specifically, the Working
Group recommended that, if funding is available, DOE consider
conducting a survey of homes in any region of the United States to
determine if a central air conditioner not in compliance with the
regional standards has been installed. DOE, as a member of the Working
Group, agreed to consider proactive investigations if funding for such
investigations is available.

F. Record Retention and Requests

To ensure that the Department is able to obtain sufficient
information to establish a noncompliant installation and the relevant
parties, the Working Group recommended that manufacturers, dealers, and
contractors retain records detailing specific information about central
air conditioner sales and installations. The Working Group recommended
the following records retention scheme.
Beginning 30 days after the issuance of a final rule, a
manufacturer must retain:
For split-system central air conditioner condensing units:
the model number, serial number, date of manufacture, date of sale, and
party to whom the unit was sold (including person's name, full address,
and phone number);
For split-system central air conditioner indoor coils or
air handlers (not including uncased coils sold as replacement parts):
the model number, date of manufacture, date of sale, and party to whom
the unit was sold (including person's name, full address, and phone
number); and
For single-package central air conditioners: the model
number, serial number, date of manufacture, date of sale, and party to
whom the unit was sold (including person's name, full address, and
phone number).
Beginning November 30, 2015, a distributor must retain:
For split-system central air conditioner condensing units:
the manufacturer, model number, serial number, date the unit was
purchased from the manufacturer, party from whom the unit was purchased
(including person's name, full address, and phone number), date unit
was sold to a dealer or contractor, party to whom the unit was sold
(including person's name, full address, and phone number), and, if
delivered to the purchaser, the delivery address; and
For single-package central air conditioners: the
manufacturer, model number, serial number, date the unit was purchased
from the manufacturer, party from whom the unit was purchased
(including person's name, full address, and phone number), date unit
was sold to dealer or contractor, party to whom the unit was sold
(including person's name, full address, and phone number), and, if
delivered to the purchaser, the delivery address.

For all installations in the Southeast and Southwest, beginning 30 days
after issuance of a final rule in this rulemaking, contractors must
retain:
For split-system central air conditioner condensing units:
the manufacturer name, model number, serial number, location of
installation (including street address, city, state, and zip code),
date of installation, and party from whom the unit was purchased
(including person's name, full address, and phone number);
For split-system central air conditioner indoor coils or
air handlers (not including uncased coils sold as replacement parts):
the manufacturer name, model number, location of installation
(including street address, city, state, and zip code), date of
installation, and party from whom the unit was purchased (including
person's name, full address, and phone number); and
For single-package central air conditioners: the
manufacturer name, model number, serial number, location of
installation (including street address, city, state, and zip code),
date of installation, and party from whom the unit was purchased
(including person's name, full address, and phone number).

See 2013-BT-NOC-0005, No. 30 at 14-16.
The Working Group recommended that contractors retain records for
48 months after the date of installation, distributors retain records
for 54 months after the date of sale, and manufacturers retain records
for 60 months after the date of sale. The Working Group explicitly
noted that retaining records allows each entity to archive records as
long as they are not deleted or disposed of. The Working Group also
clarified that the records retention requirements neither mandate that
contractors, distributors, or manufacturers create new forms for the
purpose of tracking central air conditioners nor require records to be
electronic. See 2013-BT-NOC-0005, No. 30 at 17-18. DOE proposes to
adopt these record retention requirements as with a few minor
modifications and requests comment on these requirements.
DOE proposes two modifications to the recommendations of the
Working Group. First, due to the delay issuing this notice of proposed
rulemaking, DOE proposes that distributors be

[[Page 72378]]

required to retain records as of July 1, 2016. Second, after extensive
discussion, the working group recommended that DOE refer to ``indoor
coils or air handlers'' with respect to the record retention
requirements for split-system air conditioners. DOE proposes, instead,
to use the term ``indoor unit'' to reflect the term proposed in DOE's
recent CAC TP SNOPR. See 80 FR 69278 at 69284. At the time of the
negotiation, DOE had no regulatory term that embodied the concept the
Working Group sought to describe. If ``indoor unit'' is adopted in the
test procedure final rule, then its use in the context of this
rulemaking would conform to the concept the Working Group described
while ensuring consistency within the DOE regulations.
Although not discussed by the Working Group, DOE recognizes that
some internet sellers may perform the role of contractor or
distributor, depending on who is purchasing the product. DOE proposes
that those entities will have to keep records consistent with the
requirements of the transaction, for the length of time required for
that transaction.
To limit the potential of burden associated with producing records
at the request of the Department, the Working Group recommended that
DOE must have a reasonable belief a violation occurred before
requesting records. DOE will determine if it has reasonable belief by
assessing a variety of factors, such as:
Whether it has an address of a suspected noncompliant
installation or attempted installation;
Whether it has identifying information for an installed
unit;
Whether it has physical evidence (e.g., a picture of a
noncompliant condensing unit and its nameplate, copy of EnergyGuide
label, copy of completed work order or invoice, bill of sale for
equipment, copy of bid for installation, distributor prepared price
book);
Whether there have been repeat complaints about the party;
or
Whether the complainant has a history of filing complaints
of violations that have been substantiated by the Department through
investigation.
Once DOE determines it has a reasonable belief, then it may request
records from relevant manufacturers, distributors, and contractors.
Records must be produced within 30 days of a request by the Department.
However, DOE may, at its discretion, grant additional time for
production of records if the affected entity makes a good faith effort
to produce records within 30 days. To receive this extra time, the
entity, after working to gather the records within the 30 days, must
provide DOE all the records gathered and a written explanation for the
need for additional time including the requested date for completing
the records request.
DOE proposes to adopt the Working Group's recommendations for
records requests. The Department requests comment on the threshold for
records requests and the proposed timeframe for responding to such
requests.

G. Violations and Routine Violations

As mentioned above, it is unlawful for any manufacturer to
knowingly sell to a distributor, contractor, or dealer with knowledge
that the entity routinely violates any regional standard applicable to
the product. (42 U.S.C. 6302(a)(6), 10 CFR 430.102(a)(10)) To clarify
this prohibited act, the Working Group discussed what activities would
constitute a violation by a distributor, contractor or dealer. For a
distributor, the Working Group agreed that it would be a violation to
knowingly sell a product to a contractor or dealer with knowledge that
the entity will sell and/or install the product in violation of any
regional standard applicable to the product. Additionally, it would be
a violation for a distributor to knowingly sell a product to a
contractor or dealer with knowledge that the entity routinely violates
any regional standard applicable to the product. For contractors, the
Working Group agreed it would be a violation to knowingly sell to and/
or install for an end user a central air conditioner subject to
regional standards with knowledge that such product would be installed
in violation of any regional standard applicable to the product.
To further clarify what constituted an installation of a central
air conditioner in violation of an applicable regional standard, the
Working Group agreed that:
(1) A person cannot install a complete central air conditioner
system--meaning the condensing unit and evaporator coil and/or blower--
unless it has been certified as a complete system that meets the
applicable standard. A previously discontinued combination may be
installed as long as the combination was previously validly certified
to the Department as compliant with the applicable regional standard
and the combination was not discontinued because it was found to be
noncompliant with the applicable standard(s);
(2) a person cannot install a replacement condensing unit unless it
is certified as part of a combination that meets the applicable
standard; and
(3) a person cannot install a condensing unit that has a certified
combination with a rating that is less than the applicable regional
standard.
To determine if a violation occurred, the Department will conduct
an investigation into the alleged misconduct. In a typical
investigation, DOE may discuss the installation in question with the
end user or the homeowner and other relevant parties, including the
alleged violator. DOE may also request records from the dealer,
contractor, distributor, and/or manufacturer if the Department has
reasonable belief a violation occurred.
The Working Group recommended that if no violation is found, the
Department should issue a case closed letter to the party being
investigated. If DOE finds that a contractor or dealer completed a
noncompliant installation in one residence or an equivalent setting
(e.g., one store), but the violator remediated that violation by
installing a compliant unit before DOE concluded its investigation,
then DOE will issue a case closed letter to the party being
investigated, as long as that person has no history of prior
violations. The purpose of this practice would be to incentivize
parties who, on one occasion, mistakenly install one noncompliant unit
to replace the product and thereby not suffer any public stigma.
However, if the non-compliant installation is not remediated and a
violation is found, DOE will issue a public ``Notice of Violation.''
The party found to be in violation can remediate the single violation
and it will not count towards the finding of ``routine violator''
unless the party is found, in the course of a subsequent investigation,
to have committed another violation. For more on remediation of a
single violation, see section II.H.
In determining whether a party ``routinely violates'' a regional
standard, the Working Group recommended that DOE consider the following
factors:
Number of violations (in both current and past
investigations);
Length of time over which the violations were committed;
Ratio of compliant to noncompliant installations or sales;
Percentage of employees committing violations;
Evidence of effort or intent to commit violations;
Evidence of training or education provided on regional
standards; and
Subsequent remedial actions.
The Working Group also agreed that DOE should consider whether the
routine violation was limited to a specific contractor or distribution

[[Page 72379]]

location. DOE would rely on the same factors considered in determining
whether a routine violation occurred.
The Working Group recommended that DOE issue a ``Notice of Finding
of Routine Violator'' if the Department determines that a violator
routinely violated a regional standard. This notice would identify the
party found to be a routine violator and explain the scope of the
violation. Additionally, if DOE, in its discretion, finds that the
routine violation was limited to a specific location, DOE may in the
Notice of Finding of Routine Violation state that the prohibition on
manufacturer sales is limited to a particular contractor or
distribution location This notice would be both posted to the
Department's enforcement Web site and would be emailed to those signed
up for email updates.\8\
---------------------------------------------------------------------------

\8\ DOE's enforcement Web site is: https://energy.gov/gc/enforcement.
---------------------------------------------------------------------------

If DOE makes a finding of routine violation, the violator has the
right to file an administrative appeal of the finding. Any appeal of a
Notice of Finding of Routine Violation would be required to be filed
within 30 days of the issuance of the notice. The appeal would be
reviewed by DOE's Office of Hearings and Appeals. The appeal must
present information rebutting the finding of routine violation. The
appeal will be decided within 45 days of filing of the appeal. The
violator may also file a Notice of Intent to Appeal with the DOE Office
of Hearings and Appeals. If this notice of intent is filed within three
business days of the Notice of Finding of Routine Violation, then
manufacturers may continue to sell products to the routine violator
during the pendency of the appeal. See section II.J for more details on
sales during the pendency of an appeal.
DOE proposes to adopt the Working Group's recommendations
pertaining to violations and routine violations and requests comment on
these proposals.

H. Remediation

As previously mentioned, the Working Group recommended that
violators may be given the opportunity to remediate. The sole method of
remediation would be the replacement of noncompliant unit with
compliant units. If a violator is unable to replace all noncompliant
units, then the Department may, in its discretion, consider the
remediation complete if the violator satisfactorily demonstrates to the
Department that it attempted to replace all noncompliant units. In
practice, the violator would have to show that they replaced almost all
of the noncompliant units and document significant, yet refused,
efforts to complete the replacement of the remaining noncompliant
units. The Department would also scrutinize those ``failed'' attempts
at replacement to ensure that there was indeed a good faith effort to
complete remediation of the noncompliant unit.
The replacement of noncompliant units with compliant units would be
at the cost of the violator. The violator would not be allowed to use
warranty or other replacement claims to recoup the cost of the
replacement from the manufacturer. To ensure that warranties or other
replacement claims are not used, the violator must provide DOE with the
serial numbers for the new and old units. The Department will then
provide these numbers to the manufacturer(s) and distributor(s) to
verify that warranties and other replacement claims were not wrongfully
used. If the violator successfully remediates, then DOE will issue a
public ``Notice of Remediation.''
The Working Group recommended that routine violators should also be
entitled to remediation. As manufacturers are prohibited from selling
to routine violators, remediation would be coordinated through the
Department. If the routine violator wants to remediate then it must
contact the DOE Office of the General Counsel, Office of Enforcement,
via the DOE point of contact listed in the Notice of Finding of Routine
Violation. The routine violator must inform DOE of the distributor or
manufacturer from whom it wishes to purchase compliant replacement
units. Within three business days of the routine violator's request to
remediate, the Department will contact the necessary distributor(s) or
manufacturer(s) and authorize sale for purposes of remediation. DOE
will also provide the manufacturer(s) or distributor(s) with an
official letter authorizing the sale for purposes of remediation for
the seller's records. The routine violator must provide documentation
of the installation of the compliant units to DOE once the remediation
is completed. DOE will also follow up with the routine violator within
30 days of the date of the official letter authorizing the sale for
purposes of remediation to determine the status of the remediation. If
a routine violator successfully remediates, then DOE will issue a
Notice indicating the entity is no longer a routine violator no more
than 30 days after DOE received documentation demonstrating the
remediation is completed.
DOE proposes to adopt the Working Group's recommendation on
remediation and requests comment on this proposal.

I. Labeling

The Working Group recommended, with DOE abstaining, that the FTC
initiate a rulemaking to adopt a simplified label for equipment rated
below the regional standards and a separate simplified label for
equipment rated at or above the regional standards. The Working Group
found that the simplified labels, as drafted by AHRI (a manufacturer
trade association), provide better alignment with the Working Group's
proposed regional enforcement plan. The simplified labels are posted in
the docket for this rulemaking. See Example Voluntary Marking, No. 91,
for sample label provided by a manufacturer during the negotiation.
The Working Group also recommended, and manufacturers agreed, to
add a label to the central air conditioner condensing unit to indicate
where the unit can legally be installed. The label would be near to, or
part of, the nameplate and ruggedized to withstand elements. For units
that do not meet the EER standards applicable to the Southwest region,
the label would state, ``Install Prohibited in Southwest.'' For units
that cannot be sold in the Southeast or Southwest because their SEER
value is below the minimum required in those regions, the label would
state, ``Install Prohibited in Southwest and Southeast.'' As a result,
a contractor should never install for an end user in a region a unit
that bears the label indicating that installation is prohibited in that
region. The manufacturers agreed they would start using the label
scheme by March 1, 2015. Additionally, AHRI stated it would require all
manufacturers participating in the AHRI certification program to apply
these labels to split-system and single package central air
conditioners with rated combinations below the minimum standard(s)
required in each region as of March 1, 2015.

J. Manufacturer Liability

In accordance with the Department's regulations on prohibited acts,
manufacturers may be fined for ``knowingly sell[ing] a product to a
distributor, contractor, or dealer with knowledge that the entity
routinely violates any regional standard applicable to the product.''
(42 U.S.C. 6302, 10 CFR 429.102(a)(10)) The Working Group had
significant discussions on the scope of the term ``product'' as it
relates to this prohibited act. The Department explained that it
interprets the term ``product'' to include

[[Page 72380]]

all classes of central air conditioners and heat pumps found within 10
CFR 430.32(c). Ultimately, the Working Group could not come to
consensus on whether the scope of any prohibition on sales could be
limited to split-system air conditioners and single-package air
conditioners instead of the Department's interpretation.\9\
---------------------------------------------------------------------------

\9\ For more details regarding this discussion, see the public
meeting transcript for October 24, 2014, No. 88.
---------------------------------------------------------------------------

EPCA defines a ``central air conditioner'' as a ``product . . .
which . . . is a heat pump or a cooling only unit'' and refers to all
central air conditioners as one ``product.'' (42 U.S.C. 6291(21))
Therefore, to be consistent with EPCA, DOE interprets the term
``product'' to be inclusive of all central air conditioner and heat
pump product classes listed in 10 CFR 430.32(c), meaning that
manufacturers may be subject to civil penalties for sales to a routine
violator of any unit within the central air conditioning product
classes.
If a manufacturer sells a central air conditioner (including heat
pumps) to a routine violator after a Notice of Finding of Routine
Violation has been issued, then the manufacturer would be liable for
civil penalties. The maximum fine a manufacturer is subject to is $200
per unit sold to a routine violator.\10\ (10 CFR 429.120)
---------------------------------------------------------------------------

\10\ As discussed in section II.B, a manufacturer-owned
distributor is considered to be a manufacturer and thus is liable
for all noncompliant sales.
---------------------------------------------------------------------------

The Working Group recommended that DOE provide manufacturers with 3
business days from the issuance of a Notice of Finding of Routine
Violation to stop all sales of central air conditioners and heat pumps
to the routine violator. During this time, manufacturers would not be
liable for sales to a routine violator. DOE noted that, consistent with
its penalty guidance,\11\ it would consider the manufacturer's efforts
to stop any sales in determining whether (or to what extent) to assess
any civil penalties for sales to a routine violator after that three
day window.
---------------------------------------------------------------------------

\11\ The DOE civil penalty guidance is available at https://energy.gov/gc/enforcement under ``Enforcement Guidance.''
---------------------------------------------------------------------------

If the routine violator is appealing the finding, the Working Group
recommended that manufacturers be allowed to continue to sell central
air conditioners and heat pumps to the routine violator during the
pendency of the appeal. In order to provide parties notice that a
routine violator is appealing the determination, the routine violator
must file a Notice of Intent to Appeal with the Office of Hearings and
Appeals within three business days after the issuance of the Notice of
Finding of Routine Violator. If the finding is ultimately upheld, then
the manufacturers could face civil penalties for sale of any products
rated below the regional standards to the routine violator.
The Working Group also recommended that DOE provide an incentive
for manufacturers to report routine violators. The Working Group
recommended that if a manufacturer has knowledge of a routine violator,
then the manufacturer can be held liable for all sales made after the
date such knowledge is obtained by the manufacturer. However, if the
manufacturer reports such knowledge to DOE within 15 days of receipt of
the knowledge, then the Department will not hold the manufacturer
liable for sales to the suspected routine violator made prior to
notifying DOE.
On a separate note, nothing in this rulemaking impacts DOE's
ability to determine that a manufacturer has manufactured and
distributed a noncompliant central air conditioner in accordance with
the existing procedures at 10 CFR 429.104-429.114. Furthermore, those
processes apply to DOE's determination of a manufacturer's manufacture
and distribution of a central air conditioner that fails to meet a
regional standard. With respect to liability, if DOE determines that a
model of condensing unit fails to meet the applicable regional
standard(s) when tested in a combination certified by the same
manufacturer (i.e., one entity manufactures both the indoor coil and
the condensing unit), the condensing unit manufacturer will be
responsible for this model's noncompliance. If DOE determines that a
basic model fails to meet regional standards when tested in a
combination certified by a manufacturer other than the outdoor unit
manufacturer (e.g., an independent coil manufacturer (ICM)), the
certifying manufacturer will be responsible for this combination's
noncompliance. The responsible manufacturer will be liable for
distribution in commerce of noncompliant units. The responsible
manufacturer can minimize liability by demonstrating on a unit-by-unit
basis that the noncompliant combination was installed in a region where
it would meet the standards. For example, if a 14 SEER split-system air
conditioner was tested by the Department and determined to be 13.5
SEER, then the manufacturer may minimize its liability by proving only
a portion of sales for this combination was installed in the Southeast
and Southwest. Manufacturers represented during the course of the
negotiations that the bulk of sales are of minimally compliant units
and so they expect most of the products that comply with the Southeast
and Southwest regional standards would be sold in those regions. Given
this, DOE will presume all units of a model rated as compliant with a
regional standard but determined to be noncompliant with that standard
were in fact installed illegally. Manufacturers can rebut this
presumption by providing evidence that a portion of the units were
instead installed in a location where they would have met the
applicable energy conservation standards.
DOE proposes to adopt these clarifications of manufacturer
liability as recommended by the Working Group and requests comment on
this proposal.

K. Additional Prohibited Acts for Distributors, Contractors and Dealers

The Working Group had significant discussions on whether to include
additional prohibited acts and ultimately could not come to consensus
on whether to include additional prohibited acts.\12\
---------------------------------------------------------------------------

\12\ For details on the discussions regarding additional
prohibited acts see the public meeting transcript for October 16,
2014. No. 87 pp. 3-87.
---------------------------------------------------------------------------

L. Summary Table

The Working Group developed a summary table for inclusion in this
document. This summary table helps explain the responsibilities for the
various parties impacted by this rulemaking and does not include any
proposed requirements not previously described in today's NOPR. DOE has
further added columns depicting the roles and responsibilities of those
making sales through the internet to this chart.

[[Page 72381]]

Table II-2--Central Air Conditioner Regional Enforcement Summary Table
--------------------------------------------------------------------------------------------------------------------------------------------------------
Internet
Manufacturer Independent Contractors or sellers to Internet
Manufacturer Importer owned distributor dealer contractors or sellers to end
distributor dealers users
--------------------------------------------------------------------------------------------------------------------------------------------------------
Subject to civil penalties Yes............. Yes............. Yes............. No.............. No............. No............. No.
based upon committing a
prohibited act.
Can be labeled a routine No.............. No.............. No.............. Yes............. Yes............ Yes............ Yes.
violator.
Considered a manufacturer Yes............. Yes............. Yes............. No.............. No............. No............. No.
under definition.
Can remediate to get off N/A............. N/A............. N/A............. Yes............. Yes............ Yes............ Yes.
routine violator list.
Right to appeal finding of N/A............. N/A............. N/A............. Yes............. Yes............ Yes............ Yes.
Routine Violation.
Record retention............. 60 months....... 60 months....... 60 months....... 54 months....... 48 months...... 54 months...... 48 months.
Record retention start date.. 30 days after 30 days after 30 days after Nov. 30, 2015 30 days after Nov. 30, 2015 30 days after
Final Rule. Final Rule. Final Rule. (DOE proposes Final Rule. (DOE proposes Final Rule.
July 1, 2016). July 1, 2016).
--------------------------------------------------------------------------------------------------------------------------------------------------------

M. Impact of Regional Enforcement Proposal on National Impacts Analysis

In the June 2011 DFR, DOE considered the economic impacts of
amending the standards for central air conditioners and heat pumps.
Included in the economic analyses was National Impacts Analysis (NIA)
which estimated the energy savings and the net present value (NPV) of
those energy savings that consumers would receive from the new energy
efficiency standards of central air conditioners (CAC) and heat pumps
(HP). This NPV was the estimated total value of future operating-cost
savings during the analysis period (2015-2045), minus the estimated
increased product costs (including installation), discounted to 2011.
However, DOE did not account for the financial burden on distributors
and installers related to record retention requirements necessary to
demonstrate compliance with the regional standards in the June 2011
DFR.
From the enforcement plan proposed in this rulemaking, DOE
estimated that manufacturers, distributors, and contractors face some
financial burden primarily related to the proposed record retention
requirements. DOE assumed that the proposed records retention
requirements would cause manufacturers, distributors, and contractors
additional labor costs from collecting and filing such records. These
labor costs would be an annual burden to the market participants. At
the Working Group public meetings, distributors stated that the
proposed records retention requirements would cause distributors to
update their enterprise resource planning (ERP) systems to track the
necessary information. DOE considered this update to the EPR systems an
initial conversion cost. The cost of retaining records on each market
participant is summarized in Table II-3.

Table II-3--Cost of Proposed Records Retention Due to Regional Standards Enforcement for Central Air Conditioner
and Heat Pump Market Participants
----------------------------------------------------------------------------------------------------------------
Manufacturers Distributors Contractors
----------------------------------------------------------------------------------------------------------------
Estimated Total Annual Burden Hours....................... 574,167 287,083 359,949
Estimated Total Annual Cost............................... $4,162,708 $2,081,354 $2,609,631
Estimated Initial Conversion Cost......................... ................ $46,340,000 ................
----------------------------------------------------------------------------------------------------------------

In this NOPR, DOE re-evaluated the NIA to include the cost of the
proposed record retention requirements to manufacturer, distributors,
and contractors. DOE conservatively estimated the consumer benefits by
assuming that the annual cost from the proposed record retention
requirements would be passed on to consumers and thus decreasing the
NPV. However, DOE assumed that distributors would entirely bear the
initial up-front cost of updating their ERP systems, causing no impact
to the NPV for that portion of the impacts. The updated NPV results are
summarized in Table II-4. The impact of including the proposed record
retention requirement costs on the NPV is estimated to reduce the
benefit by $0.30 billion at a 3% discount rate and $0.16 billion at a
7% discount rate. The costs of the record retention requirements are
estimated to have no impact on national energy savings. Because the
record retention requirement costs have only a small impact on NPV,
ranging from a minimum of 2-percent at a discount rate of 3% and a
maximum of 4-percent at a discount rate of 7%, and no impact on
national energy savings, DOE's economic justification of the energy
conservation standards chosen and

[[Page 72382]]

published in the 2011 DFR would be unaffected by the quantification and
inclusion of enforcement plan costs. Consequently, DOE is reaffirming
the 2011 DFR energy conservation standards based on this analysis.

Table II-4--National Impacts Analysis Results With Costs From Proposed
Regional Enforcement Plan for Central Air Conditioners and Heat Pumps
------------------------------------------------------------------------
National impacts
National impacts estimated from
estimated from 2011 DFR for the
2011 DFR for the chosen energy
chosen energy conversation
conservation standards with
standards enforcement plan
costs
------------------------------------------------------------------------
National Energy Savings (quads). 3.20 to 4.22...... 3.20 to 4.22.
NPV of Consumer Benefits at 3% 14.73 to 17.55.... 14.43 to 17.25.
discount rate (2009$ billion).
NPV of Consumer Benefits at 7% 3.93 to 4.21...... 3.77 to 4.05.
discount rate (2009$ billion).
------------------------------------------------------------------------

DOE requests comment on its assumptions for the financial burden
from the proposed record retention requirements and the resulting
impact on NPV at the amended standard level.

III. Procedural Issues and Regulatory Review

A. Review Under Executive Order 12866

The Office of Management and Budget (OMB) has determined that
today's regulatory action is not a ``significant regulatory action''
under section 3(f) of Executive Order 12866, ``Regulatory Planning and
Review,'' 58 FR 51735 (Oct. 4, 1993). Accordingly, this action was not
subject to review under the Executive Order by the Office of
Information and Regulatory Affairs (OIRA) in the OMB.

B. Review Under the Regulatory Flexibility Act

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis (IFRA) for
any rule that by law must be proposed for public comment, unless the
agency certifies that the rule, if promulgated, will not have a
significant economic impact on a substantial number of small entities.
As required by Executive Order 13272, ``Proper Consideration of Small
Entities in Agency Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE
published procedures and policies on February 19, 2003, to ensure that
the potential impacts of its rules on small entities are properly
considered during the DOE rulemaking process. 68 FR 7990. DOE has made
its procedures and policies available on the Office of the General
Counsel's Web site: https://energy.gov/gc/office-general-counsel.
DOE reviewed the proposed requirements under the provisions of the
Regulatory Flexibility Act and the procedures and policies published on
February 19, 2003. As discussed in more detail below, DOE found that
the entities impacted by the proposals in this NOPR (central air
conditioning manufacturers, distributors, and contractors) could
potentially experience a financial burden associated with these new
requirements. Additionally, the majority of central air conditioning
contractors and distributors are small business as defined by the Small
Business Administration (SBA). DOE determined that it could not certify
that the proposed rule, if promulgated, would not have a significant
effect on a substantial number of small entities. Therefore, DOE has
prepared an IRFA for this rulemaking. The IRFA describes potential
impacts on small businesses associated with the proposed requirements.
DOE has transmitted a copy of this IRFA to the Chief Counsel for
Advocacy of the Small Business Administration for review.
1. Description and Estimated Number of Small Entities Regulated
The SBA has set a size threshold for manufacturers, distributors,
and contractors of central air conditioning products that define those
entities classified as ``small businesses.'' DOE used SBA's size
standards to determine whether any small businesses would be impacted
by this NOPR. 65 FR 30836, 30849 (May 15, 2000), as amended at 65 FR
53533, 53545 (Sept. 5, 2000) and codified at 13 CFR part 121. The size
standards are listed by North American Industry Classification System
(NAICS) code and industry description, and are available at https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf. The
size standards and NAICS codes relevant to this rulemaking are listed
in Table III-1.
To estimate the number of companies that could be small business
manufacturers, distributors, and contractors of equipment covered by
this rulemaking, DOE conducted a market survey using available public
information. DOE's research involved examining industry trade
association Web sites, public databases, and individual company Web
sites. DOE also solicited information from industry representatives
such as AHRI, HARDI, ACCA, and PHCC. DOE screened out companies that do
not offer products covered by this rulemaking or are not impacted by
this rulemaking, do not meet the definition of a ``small business,'' or
are foreign owned and operated.

Table III-1--Small Business Classification Summary Table
----------------------------------------------------------------------------------------------------------------
Total number Total number
Impacted entity NAICS Code NAICS Definition of of impacted of small
small business businesses businesses
----------------------------------------------------------------------------------------------------------------
Contractors \13\...................... 238220 $15 million or less in \14\ 22,207 21,763
revenue.
Distributors.......................... 423730 100 or less employees... \15\ 2,317 2,000
Manufacturers......................... 333415 750 or less employees... 29 12
----------------------------------------------------------------------------------------------------------------

[[Page 72383]]

2. Description and Estimate of Regional CAC Requirements
As discussed in the preamble of this proposed rule, the Working
Group recommended an enforcement plan for central air conditioners that
would include public awareness efforts, records retention requirements,
and voluntary efforts like remediation and labeling. The Working Group
also made explicit the terms ``violation'' and ``routine violator.''
While most of the proposals in this rulemaking will not have an impact
on manufacturers, distributors, and contractors that adhere to the
central air conditioner regional standards, the records retention
requirements may result in some financial burden.
The Working Group worked to negotiate records retention
requirements that would have limited financial burden on the impacted
parties--manufacturers, distributors, and contractors. The Working
Group made a few general provisions regarding the records retention
requirements to help mitigate some of the financial burden. The Working
Group tried to reduce the impact of the records retention requirements
by staggering the length of time for which records must be maintained.
Manufacturers, the entities understood to have the most resources and
sophistication, would have to retain records for the longest time
period (60 months); distributors would have to retain records for less
time (54 months); and contractors would have to retain records for the
least amount of time (48 months). Additionally, in the case that
records are requested, the Working Group recommended that the party
from whom the records were requested should have an extended period of
30 days to produce such records. The Working Group also explicitly
recommended that manufacturers, distributors, and contractors should
not have to create new forms to retain such records, and that the
records would not have to be retained electronically.
DOE expects central air conditioning manufacturers to be the least
burdened entity of all the affected entities by the record retention
requirements proposed in this document. Manufacturers have the fewest
record retention requirements. Many of the record retention
requirements being proposed in this rulemaking expand on DOE's existing
certification requirements and thus should only slightly increase the
recordkeeping burden. DOE does not expect manufacturers to incur any
capital expenditures as a result of the proposals since the rulemaking
does not impose any product-specific requirements that would require
changes to existing plants, facilities, product specifications, or test
procedures. Rather, this proposed rule imposes record retention
requirements, which may have a slight impact on labor costs. DOE
included certification and enforcement requirements associated with the
regional standards for central air conditioners in the June 27, 2011
energy conservation standards final rule for central air conditioners
and heat pumps.\16\
---------------------------------------------------------------------------

\13\ The number of impacted contractors and small contractors is
based on the number of contractors installing in the Southwest and
Southeast regions.
\14\ Chapter 18: Regional Standards Impacts on Market
Participants. Technical Support Document: Energy Efficiency Program
for Consumer Products: Residential Central Air Conditioners, Heat
Pumps, and Furnaces. https://www.regulations.gov/#!documentDetail;D=EERE-2011-BT-STD-0011-0012.
\15\ ``Statistics of U.S. Businesses: 2008: NAICS 423730--HVAC
equip. merchant wholesalers United States.'' U.S. Census Bureau.
https://www.census.gov/epcd/susb/2008/us/us423730.htm.
\16\ Chapter 12: Manufacturer Impact Analysis. Technical Support
Document: Energy Efficiency Program for Consumer Products:
Residential Central Air Conditioners, Heat Pumps, and Furnaces.
https://www.regulations.gov/#!documentDetail;D=EERE-2011-BT-STD-0011-
0012.
---------------------------------------------------------------------------

Based on comments at the Working Group meetings, DOE expects the
record retention requirements to cause distributors the most financial
burden. Distributors track equipment and sales in ERP systems and are
expected to incorporate the proposed recordkeeping requirements into
their ERP systems. HARDI expected that 40% of distributors currently
retain the proposed records and will not need to update their ERP
systems. HARDI expected 50% of distributors would need to make some
changes to their ERP systems and 10% of distributors would need to make
major changes to their ERP system. HARDI expected that small
distributors are more likely to require major changes to their ERP
systems because typically small distributors have older and more
inflexible systems. HARDI estimated that changes to ERP systems to
accommodate the record retention proposals may cost $20,000 to $100,000
depending on the type of change needed to the system. According to
HARDI, the entire central air conditioner distribution industry would
incur an initial conversion cost of around $46,340,000 to modify the
ERP systems. To help alleviate some of the financial burden, the
Working Group recommended that DOE not require distributors to retain
records for sales of central air conditioner indoor coils or air
handlers, which were identified as difficult components to track for
the distributors. Additionally, the Working Group recommended that
distributors should not have to start retaining records until November
30, 2015, at the earliest, which DOE is proposing in this NOPR to delay
until July 1, 2016. Finally, as previously stated, DOE is not proposing
to require records to be retained in electronic form and is not
mandating that distributors make changes in their ERP systems to retain
the information proposed in this document.
DOE believes central air conditioning contractors will experience a
minimal recordkeeping burden. DOE is proposing to limit the records
retention requirements on contractors to installations in the Southeast
and Southwest. For all central air conditioner installations in those
regions, contractors would have to keep a record of installation
location, date of installation, and purchaser. Contractors would have
to keep records specific to the type of units (outdoor condensing unit,
indoor coil or air handler, or single-package air conditioner)
installed as well. A contractor trade association remarked at the
public meetings that most contractors already retain such records and
the record retention requirements would have limited financial impacts.
(ACCA, Public Meeting Transcript, No. 77 at 12-13) DOE estimates that
any additional expense caused by the records requirements proposed in
this rulemaking would be related to the time required to file these
records. DOE estimates that contractors may spend an additional 10
minutes per installation to comply with the proposed records retention
requirements.
3. Duplication, Overlap, and Conflict With Other Rules and Regulations
DOE is not aware of any rules or regulations that duplicate,
overlap, or conflict with the proposed rule being considered today.
4. Significant Alternatives to the Rule
DOE could mitigate the potential impacts on small manufacturers,
distributors, or contractors by reducing or eliminating the proposed
types of information to be maintained. However, these requirements were
negotiated as an acceptable compromise among the participants in the
Working Group. While there may be some financial burden, the Working
Group unanimously agreed to the record retention requirements for
manufacturers, distributors, and contractors. Furthermore, DOE believes
that the record retention requirements are the least burdensome
requirements possible to provide DOE sufficient

[[Page 72384]]

information to determine whether manufacturers, distributors and
contractors are complying with regulatory requirements. Thus, DOE
rejected the alternative of reducing or eliminating the record
retention requirements and is proposing these record retention
requirements for the aforementioned parties. DOE continues to seek
input from businesses that would be affected by this rulemaking and
will consider comments received in the development of any final rule.

C. Review Under the Paperwork Reduction Act of 1995

1. Description of the Requirements
In this document, DOE proposed record retention requirements for
central air conditioner manufacturers, distributors, and contractors.
DOE is requesting approval for a new information collection associated
with these requirements. These requirements were developed as part of a
negotiated rulemaking effort for regional central air conditioner
enforcement. These requirements are described in detail in section
II.F.
2. Information Collection Request Title: Enforcement of Regional
Standards.
3. Type of Request: New.
4. Purpose: Generally, DOE is proposing that manufacturers retain
records of the model number and serial number for all split system and
single-package air conditioners, when these units were manufactured,
when these units were sold, and to whom the units were sold. DOE
proposed that manufacturers would retain these records for 60 months.
DOE proposed that distributors would retain the manufacturer, model
number and serial number for all their split system outdoor condensing
units and single-package units. In addition, distributors must keep
track of when and from whom each of these types of units was purchased,
and when and to whom each of these units was sold. Distributors would
retain these records for 54 months. Contractors must retain records of
all split system and single-package air conditioner installations in
the Southeast and Southwest region. These records would be required to
include what was installed (e.g. manufacturer and model number), date
of sale, and the party to whom the unit was sold. Contractors would
retain these records for 48 months.
This proposed rule primarily requires central air conditioner
manufacturers, distributors, and contractors to retain records for CAC
installations. If DOE has a ``reasonable belief'' that an installation
in violation of regional standards occurred, then it may request
records specific to an ongoing investigation from the relevant
manufacturer(s), distributor(s), and/or contractor(s). The Working
Group recommended that DOE determine if it has a ``reasonable belief''
of a CAC violation based on the factors described in section II.F. Once
DOE establishes reasonable belief and requests records from the
relevant parties, then the entity from whom DOE requested records has
30 days to produce those records. The party from whom DOE requested
records may ask for additional time with a written explanation of the
circumstances.
The following are DOE estimates of the total annual recordkeeping
burden imposed on manufacturers, distributors, and contractors of
central air conditioners. These estimates take into account the time
necessary collect, organized and store the record required by this
notice of proposed rulemaking.
Manufacturers
Estimated Number of Impacted Manufacturers: 29.
Estimated Time per Record: 10 minutes.
Estimated Total Annual Burden Hours: 574,167 hours.
Estimated Total Annual Cost to the Manufacturers: $4,162,708.
Distributors
Estimated Number of Impacted Distributors: 2,317.
Estimated Time per Record: 5 minutes.
Estimated Total Annual Burden Hours: 287,083 hours.
Estimated Total Annual Cost to the Distributors: $2,081,354.
Contractors
Estimated Number of Impacted Contractors: 22,207.
Estimated Time per Record: 10 minutes per installation.
Estimated Total Annual Burden Hours: 359,949 hours.
Estimated Total Annual Cost to the Contractors: $2,609,631.
5. Annual Estimated Number of Respondents: 24,553.
6. Annual Estimated Number of Total Responses: 24,553.
7. Annual Estimated Number of Burden Hours: 1,221,199.
8. Annual Estimated Reporting and Recordkeeping Cost Burden:
$8,853,693.

D. Review Under the National Environmental Policy Act of 1969

DOE has determined that this proposed rule falls into a class of
actions that are categorically excluded from review under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and DOE's
implementing regulations at 10 CFR part 1021. Specifically, this
proposed rule would adopt changes to the manner in which regional
standards for central air conditioners are enforced, which would not
affect the amount, quality or distribution of energy usage, and,
therefore, would not result in any environmental impacts. Thus, this
rulemaking is covered by Categorical Exclusion A6 under 10 CFR part
1021, subpart D. Accordingly, neither an environmental assessment nor
an environmental impact statement is required.

E. Review Under Executive Order 13132

Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4, 1999)
imposes certain requirements on agencies formulating and implementing
policies or regulations that preempt State law or that have Federalism
implications. The Executive Order requires agencies to examine the
constitutional and statutory authority supporting any action that would
limit the policymaking discretion of the States and to carefully assess
the necessity for such actions. The Executive Order also requires
agencies to have an accountable process to ensure meaningful and timely
input by State and local officials in the development of regulatory
policies that have Federalism implications. On March 14, 2000, DOE
published a statement of policy describing the intergovernmental
consultation process it will follow in the development of such
regulations. 65 FR 13735. DOE has examined this proposed rule and has
determined that it would not have a substantial direct effect on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government. EPCA governs and prescribes Federal
preemption of State regulations as to energy conservation for the
products that are the subject of today's proposed rule. States can
petition DOE for exemption from such preemption to the extent, and
based on criteria, set forth in EPCA. (42 U.S.C. 6297(d)) No further
action is required by Executive Order 13132.

F. Review Under Executive Order 12988

Regarding the review of existing regulations and the promulgation
of new regulations, section 3(a) of Executive Order 12988, ``Civil
Justice Reform,'' 61 FR 4729 (Feb. 7, 1996), imposes on Federal
agencies the general

[[Page 72385]]

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

G. Review Under the Unfunded Mandates Reform Act of 1995

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531).
For a proposed regulatory action likely to result in a rule that may
cause the expenditure by State, local, and Tribal governments, in the
aggregate, or by the private sector of $100 million or more in any one
year (adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy.
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to
develop an effective process to permit timely input by elected officers
of State, local, and Tribal governments on a proposed ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect small governments. On March 18, 1997,
DOE published a statement of policy on its process for
intergovernmental consultation under UMRA. 62 FR 12820; also available
at https://energy.gov/gc/office-general-counsel. DOE examined this
proposed rule according to UMRA and its statement of policy and
determined that the rule contains neither an intergovernmental mandate,
nor a mandate that may result in the expenditure of $100 million or
more in any year, so these requirements do not apply.

H. Review Under the Treasury and General Government Appropriations Act,
1999

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

I. Review Under Executive Order 12630

DOE has determined, under Executive Order 12630, ``Governmental
Actions and Interference with Constitutionally Protected Property
Rights'' 53 FR 8859 (March 18, 1988), that this proposed rule would not
result in any takings that might require compensation under the Fifth
Amendment to the U.S. Constitution.

J. Review Under Treasury and General Government Appropriations Act,
2001

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

K. Review Under Executive Order 13211

Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355
(May 22, 2001), requires Federal agencies to prepare and submit to OMB,
a Statement of Energy Effects for any proposed significant energy
action. A ``significant energy action'' is defined as any action by an
agency that promulgated or is expected to lead to promulgation of a
final rule, and that: (1) Is a significant regulatory action under
Executive Order 12866, or any successor order; and (2) is likely to
have a significant adverse effect on the supply, distribution, or use
of energy; or (3) is designated by the Administrator of OIRA as a
significant energy action. For any proposed significant energy action,
the agency must give a detailed statement of any adverse effects on
energy supply, distribution, or use should the proposal be implemented,
and of reasonable alternatives to the action and their expected
benefits on energy supply, distribution, and use.
Today's proposal to adopt a regional standards enforcement plan for
central air conditioners is not a significant regulatory action under
Executive Order 12866. Moreover, it would not have a significant
adverse effect on the supply, distribution, or use of energy, nor has
it been designated as a significant energy action by the Administrator
of OIRA. Therefore, it is not a significant energy action, and,
accordingly, DOE has not prepared a Statement of Energy Effects.

L. Review Under Section 32 of the Federal Energy Administration Act of
1974

Under section 301 of the Department of Energy Organization Act
(Pub. L. 95-91; 42 U.S.C. 7101), DOE must comply with section 32 of the
Federal Energy Administration Act of 1974, as amended by the Federal
Energy Administration Authorization Act of 1977. (15 U.S.C. 788; FEAA)
Section 32 essentially provides in relevant part that, where a proposed
rule authorizes or requires use of commercial standards, the notice of
proposed rulemaking must inform the public of the use and background of
such standards. In addition, section 32(c) requires DOE to consult with
the Attorney General and the Chairman of the Federal Trade Commission
(FTC) concerning the impact of the commercial or industry standards on
competition. Today's proposed rule does not requires use of any
commercial standards.

IV. Public Participation

A. Submission of Comments

DOE will accept comments, data, and information regarding this
proposed rule no later than the date provided in the DATES section at
the beginning of this proposed rule. Interested parties may submit
comments using any of the methods described in the ADDRESSES section at
the beginning of this NOPR.

[[Page 72386]]

Submitting comments via regulations.gov. The regulations.gov Web
page will require you to provide your name and contact information.
Your contact information will be viewable to DOE Building Technologies
staff only. Your contact information will not be publicly viewable
except for your first and last names, organization name (if any), and
submitter representative name (if any). If your comment is not
processed properly because of technical difficulties, DOE will use this
information to contact you. If DOE cannot read your comment due to
technical difficulties and cannot contact you for clarification, DOE
may not be able to consider your comment.
However, your contact information will be publicly viewable if you
include it in the comment or in any documents attached to your comment.
Any information that you do not want to be publicly viewable should not
be included in your comment, nor in any document attached to your
comment. Persons viewing comments will see only first and last names,
organization names, correspondence containing comments, and any
documents submitted with the comments.
Do not submit to regulations.gov information for which disclosure
is restricted by statute, such as trade secrets and commercial or
financial information (hereinafter referred to as Confidential Business
Information (CBI)). Comments submitted through regulations.gov cannot
be claimed as CBI. Comments received through the Web site will waive
any CBI claims for the information submitted. For information on
submitting CBI, see the Confidential Business Information section.
DOE processes submissions made through regulations.gov before
posting. Normally, comments will be posted within a few days of being
submitted. However, if large volumes of comments are being processed
simultaneously, your comment may not be viewable for up to several
weeks. Please keep the comment tracking number that regulations.gov
provides after you have successfully uploaded your comment.
Submitting comments via email, hand delivery, or mail. Comments and
documents submitted via email, hand delivery, or mail also will be
posted to regulations.gov. If you do not want your personal contact
information to be publicly viewable, do not include it in your comment
or any accompanying documents. Instead, provide your contact
information on a cover letter. Include your first and last names, email
address, telephone number, and optional mailing address. The cover
letter will not be publicly viewable as long as it does not include any
comments.
Include contact information each time you submit comments, data,
documents, and other information to DOE. If you submit via mail or hand
delivery, please provide all items on a CD, if feasible. It is not
necessary to submit printed copies. No facsimiles (faxes) will be
accepted.
Comments, data, and other information submitted to DOE
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file format. Provide documents that
are not secured, written in English and free of any defects or viruses.
Documents should not contain special characters or any form of
encryption and, if possible, they should carry the electronic signature
of the author.
Campaign form letters. Please submit campaign form letters by the
originating organization in batches of between 50 to 500 form letters
per PDF or as one form letter with a list of supporters' names compiled
into one or more PDFs. This reduces comment processing and posting
time.
Confidential Business Information. According to 10 CFR 1004.11, any
person submitting information that he or she believes to be
confidential and exempt by law from public disclosure should submit via
email, postal mail, or hand delivery two well-marked copies: One copy
of the document marked confidential including all the information
believed to be confidential, and one copy of the document marked non-
confidential with the information believed to be confidential deleted.
Submit these documents via email or on a CD, if feasible. DOE will make
its own determination about the confidential status of the information
and treat it according to its determination.
Factors of interest to DOE when evaluating requests to treat
submitted information as confidential include: (1) A description of the
items; (2) whether and why such items are customarily treated as
confidential within the industry; (3) whether the information is
generally known by or available from other sources; (4) whether the
information has previously been made available to others without
obligation concerning its confidentiality; (5) an explanation of the
competitive injury to the submitting person which would result from
public disclosure; (6) when such information might lose its
confidential character due to the passage of time; and (7) why
disclosure of the information would be contrary to the public interest.
It is DOE's policy that all comments may be included in the public
docket, without change and as received, including any personal
information provided in the comments (except information deemed to be
exempt from public disclosure).

B. Issues on Which DOE Seeks Comment

Although DOE welcomes comments on any aspect of this proposal, DOE
is particularly interested in receiving comments and views of
interested parties concerning the following issues:
1. DOE requests comments on the four clarifications to the regional
standards discussed in section II.A.
2. DOE requests comments on its proposed definitions for
contractor, dealer, and installation of a central air conditioner.
3. DOE requests comments on its proposed records retention
requirements for manufacturers, distributors, and contractors. The
Department is specifically interested in any financial burden imposed
but these proposed requirements.
4. DOE requests comments on the threshold for records request and
the proposed timeframe for responding to such requests.
5. DOE requests comments on the proposed violations for
distributors, contractors, and dealers.
6. DOE requests comments on the factors used to determine if a
violation is routine.
7. DOE requests comments on the proposed concept for remediation.
8. DOE requests comments on the proposed scheme for manufacturer
liability.

V. Approval of the Office of the Secretary

The Secretary of Energy has approved publication of this proposed
rule.

List of Subjects

10 CFR Part 429

Administrative practice and procedure, Confidential business
information, Energy conservation, Reporting and recordkeeping
requirements.

10 CFR Part 430

Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Imports,
Intergovernmental relations, Small businesses.

[[Page 72387]]

Issued in Washington, DC, on November 12, 2015.
Kathleen B. Hogan,
Deputy Assistant Secretary for Energy Efficiency, Energy Efficiency and
Renewable Energy.

For the reasons stated in the preamble, DOE is proposing to amend
parts 429 and 430 of Chapter II, subchapter D, of Title 10, Code of
Federal Regulations as set forth below:

PART 429--CERTIFICATION, COMPLIANCE AND ENFORCEMENT FOR CONSUMER
PRODUCTS AND COMMERCIAL AND INDUSTRIAL EQUIPMENT

0
1. The authority citation for part 429 continues to read as follows:

Authority: 42 U.S.C. 6291-6317.

0
2. Amend Sec. 429.102 to add paragraph (c) to read as follows:

Sec. 429.102 Prohibited acts subjecting persons to enforcement
action.

* * * * *
(c) Violations of regional standards:
(1) It is a violation for a distributor to knowingly sell a product
to a contractor or dealer with knowledge that the entity will sell and/
or install the product in violation of any regional standard applicable
to the product.
(2) It is a violation for a distributor to knowingly sell a product
to a contractor or dealer with knowledge that the entity routinely
violates any regional standard applicable to the product.
(3) It is a violation for a contractor or dealer to knowingly sell
to and/or install for an end user a central air conditioner subject to
regional standards with the knowledge that such product will be
installed in violation of any regional standard applicable to the
product.
(4) A ``product installed in violation'' includes:
(i) A complete central air conditioning system that is not
certified as a complete system that meets the applicable standard.
Combinations that were previously validly certified may be installed
after the manufacturer has discontinued the combination, provided the
combination meets the currently applicable standard.
(ii) An outdoor unit with no match (i.e., that is not offered for
sale with an indoor unit) that is not certified as part of a
combination that meets the applicable standard.
(iii) An outdoor unit that is part of a certified combination rated
less than the standard applicable in the region in which it is
installed.
0
3. Add an undesignated center heading and Sec. 429.140 in subpart C to
read as follows:

Regional Standards Enforcement Procedures

Sec. 429.140 Regional standards enforcement procedures.

Sections 429.140 through 429.158 provide enforcement procedures
specific to the violations enumerated in Sec. 429.102(c). These
provisions explain the responsibilities of manufacturers, private
labelers, distributors, contractors and dealers with respect to central
air conditioners subject to regional standards; however, these
provisions do not limit the responsibilities of parties otherwise
subject to 10 CFR parts 429 and 430.
0
4. Add Sec. 429.142 to subpart C to read as follows:

Sec. 429.142 Records retention.

(a) Record retention. The following records shall be maintained by
the specified entities.
(1) Contractors and dealers.
(i) For installations of a central air conditioner in the states of
Alabama, Arizona, Arkansas, California, Delaware, Florida, Georgia,
Hawaii, Kentucky, Louisiana, Maryland, Mississippi, Nevada, New Mexico,
North Carolina, Oklahoma, South Carolina, Tennessee, Texas, or Virginia
or in the District of Columbia, contractors and dealers must retain the
following records for at least 48 months from the date of installation.
A. For split-system central air conditioner outdoor units: The
manufacturer name, model number, serial number, location of
installation (including street address, city, state, and zip code),
date of installation, and party from whom the unit was purchased
(including person's name, full address, and phone number); and
B. For split-system central air conditioner indoor units: The
manufacturer name, model number, location of installation (including
street address, city, state, and zip code), date of installation, and
party from whom the unit was purchased (including person's name, full
address, and phone number).
(ii) For installations of a central air conditioner in the states
of Arizona, California, Nevada, and New Mexico, contractors and dealers
must retain the following, additional records for at least 48 months
from the date of installation.
A. For single-package central air conditioners: The manufacturer
name, model number, serial number, location of installation (including
street address, city, state, and zip code), date of installation, and
party from whom the unit was purchased (including person's name, full
address, and phone number).
B. [Reserved]
(2) Distributors. Beginning November 30, 2015, all distributors
must retain the following records for no less than 54 months from the
date of sale.
(i) For split-system central air conditioner outdoor units: The
outdoor unit manufacturer, outdoor unit model number, outdoor unit
serial number, date unit was purchased from manufacturer, party from
whom the unit was purchased (including company or individual's name,
full address, and phone number), date unit was sold to contractor or
dealer, party to whom the unit was sold (including company or
individual's name, full address, and phone number), and, if delivered,
delivery address.
(ii) For single-package air conditioners: The manufacturer, model
number, serial number, date unit was purchased from manufacturer, party
from whom the unit was purchased (including company or individual's
name, full address, and phone number), date unit was sold to a
contractor or dealer, party to whom the unit was sold (including
company or individual's name, full address, and phone number), and, if
delivered, delivery address.
(3) Manufacturers and Private Labelers. All manufacturers and
private labelers must retain the following records for no less than 60
months from the date of sale.
(i) For split-system central air conditioner outdoor units: The
model number, serial number, date of manufacture, date of sale, and
party to whom the unit was sold (including person's name, full address,
and phone number);
(ii) For split-system central air conditioner indoor units: The
model number, date of manufacture, date of sale, and party to whom the
unit was sold (including person's name, full address, and phone
number); and
(iii) For single-package central air conditioners: The model
number, serial number, date of manufacture, date of sale, and party to
whom the unit was sold (including person's name, full address, and
phone number).
0
5. Add Sec. 429.144 to subpart C to read as follows:

Sec. 429.144 Records request.

(a) DOE must have reasonable belief a violation has occurred to
request records specific to an on-going investigation of a violation of
central air conditioner regional standards.
(b) Upon request, the manufacturer, private labeler, distributor,
dealer, or contractor must provide to DOE the

[[Page 72388]]

relevant records within 30 calendar days of the request.
(1) DOE, at its discretion, may grant additional time for records
production if the party from whom records have been requested has made
a good faith effort to produce records.
(2) To request additional time, the party from whom records have
been requested must produce all records gathered in 30 days and provide
to DOE a written explanation of the need for additional time with the
requested date for completing the production of records.
0
6. Add Sec. 429.146 to subpart C to read as follows:

Sec. 429.146 Notice of violation.

(a) If DOE determines a party has committed a violation of regional
standards, DOE will issue a Notice of Violation advising that party of
DOE's determination.
(b) If, however, DOE determines a noncompliant installation
occurred in only one instance, the noncompliant installation is
remediated prior to DOE issuing a Notice of Violation, and the party
has no history of prior violations, DOE will not issue such notice.
(c) If DOE does not find a violation of regional standards, DOE
will notify the party under investigation.
0
7. Add Sec. 429.148 to subpart C to read as follows:

Sec. 429.148 Routine violator.

(a) DOE will consider, inter alia, the following factors in
determining if a person is a routine violator: Number of violations in
current and past cases, length of time over which violations occurred,
ratio of compliant to noncompliant installations or sales, percentage
of employees committing violations, evidence of intent, evidence of
training or education provided, and subsequent remedial actions.
(b) In the event that DOE determines a person to be a routine
violator, DOE will issue a Notice of Finding of Routine Violation.
(c) In making a finding of Routine Violation, DOE will consider
whether the Routine Violation was limited to a specific location. If
DOE finds that the routine violation was so limited, DOE may, in its
discretion, in the Notice of Finding of Routine Violation limit the
prohibition on manufacturer and/or private labeler sales to a
particular contractor or distribution location.
0
8. Add Sec. 429.150 to subpart C to read as follows:

Sec. 429.150 Appealing a finding of routine violation.

(a) Any person found to be a routine violator may, within 30
calendar days after the date of Notice of Finding of Routine Violation,
request an administrative appeal to the Office of Hearings and Appeals.
(b) The appeal must present information rebutting the finding of
violation(s).
(c) The Office of Hearings and Appeal will issue a decision on the
appeal within 45 days of receipt of the appeal.
(d) A routine violator must file a Notice of Intent to Appeal with
the Office of Hearings and Appeals within three business days of the
date of the Notice of Finding of Routine Violation, serving a copy on
the GC Office of Enforcement to retain the ability to buy central air
conditioners during the pendency of the appeal.
0
9. Add Sec. 429.152 to subpart C to read as follows:

Sec. 429.152 Removal of finding of ``routine violator''.

(a) A routine violator may be removed from DOE's list of routine
violators through completion of remediation in accordance with the
requirements in Sec. 429.154 of this subpart.
(b) A routine violator that wants to remediate must contact DOE
Office of Enforcement via the point of contact listed in the Notice of
Finding of Routine Violation and identify the distributor(s),
manufacturer(s), or private labeler(s) from whom it wishes to buy
compliant replacement product.
(c) DOE will contact the distributor(s), manufacturer(s), or
private labeler(s) and authorize sale of central air conditioner units
to the routine violator for purposes of remediation within 3 business
days of receipt of the request for remediation. DOE will provide the
manufacturer(s), distributor(s), and/or private labeler(s) with an
official letter authorizing the sale of units for purposes of
remediation.
(d) DOE will contact routine violators that requested units for
remediation within 30 days of sending the official letter to the
manufacturer(s), distributor(s), and/or private labeler(s) to determine
the status of the remediation.
(e) If remediation is successfully completed, DOE will issue a
Notice indicating a person is no longer considered to be a routine
violator. The Notice will be issued no more than 30 days after DOE has
received documentation demonstrating that remediation is complete.
0
10. Add Sec. 429.154 to subpart C to read as follows:

Sec. 429.154 Remediation.

(a) Any party found to be in violation of the regional standards
may remediate by replacing the noncompliant unit at cost to the
violator; the end user cannot be charged for any costs of remediation.
(1) If a violator is unable to replace all noncompliant
installations, then the Department may, in its discretion, consider the
remediation complete if the violator satisfactorily demonstrates to the
Department that it attempted to replace all noncompliant installations.
(2) The Department will scrutinize any ``failed'' attempts at
replacement to ensure that there was indeed a good faith effort to
complete remediation of the noncompliant unit.
(b) The violator must provide to DOE the serial number of any
outdoor unit and/or indoor unit installed not in compliance with the
applicable regional standard as well as the serial number(s) of the
replacement unit(s) to be checked by the Department against warranty
and other replacement claims.
(c) If the remediation is approved by the Department, then DOE will
issue a Notice of Remediation and the violation will not count towards
a finding of ``routine violator''.
0
11. Add Sec. 429.156 to subpart C to read as follows:

Sec. 429.156 Manufacturer and private labeler liability.

(a) In accordance with Sec. 429.102(c), manufacturers and private
labelers are prohibited from selling central air conditioners and heat
pumps to a routine violator.
(1) To avoid financial penalties, manufacturers and/or private
labelers must cease sales to a routine violator within 3 business days
from the date of issuance of a Notice of Finding of Routine Violation.
(2) If a Routine Violator files a Notice of Intent to Appeal
pursuant to Sec. 429.150, then a manufacturer and/or private labeler
may assume the risk of selling central air conditioners to the Routine
Violator during the pendency of the appeal.
(3) If the appeal of the Finding of Routine Violator is denied,
then the manufacturer and/or private labeler may be fined in accordance
with Sec. 429.120, for sale of any units to a routine violator during
the pendency of the appeal that do not meet the applicable regional
standard.
(b) If a manufacturer and/or private labeler has knowledge of
routine violation, then the manufacturer can be held liable for all
sales that occurred after the date the manufacturer had knowledge of
the routine violation. However, if the manufacturer and/or private
labeler reports its suspicion of a routine violation to DOE within 15
days of receipt of such knowledge, then it

[[Page 72389]]

will not be liable for product sold to the suspected routine violator
prior to reporting the routine violation to DOE.
0
12. Add Sec. 429.158 to subpart C to read as follows:

Sec. 429.158 Product determined noncompliant with regional standards.

(a) If DOE determines a model of outdoor unit fails to meet the
applicable regional standard(s) when tested in a combination certified
by the same manufacturer, then the outdoor unit basic model will be
deemed noncompliant with the regional standard(s). In accordance with
Sec. 429.102(c), the outdoor unit manufacturer and/or private labeler
is liable for distribution of noncompliant units in commerce.
(b) If DOE determines a combination fails to meet the applicable
regional standard(s) when tested in a combination certified by a
manufacturer other than the outdoor unit manufacturer (e.g., ICM), then
that combination is deemed noncompliant with the regional standard(s).
In accordance with Sec. 429.102(c), the certifying manufacturer is
liable for distribution of noncompliant units in commerce.
(c) All such units manufactured and distributed in commerce are
presumed to have been installed in a region where they would not comply
with the applicable energy conservation standard; however, a
manufacturer and/or private labeler may demonstrate through installer
records that individual units were installed in a region where the unit
is compliant with the applicable standards.

PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS

0
13. The authority citation for part 430 continues to read as follows:

Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.

0
14. Amend Sec. 430.2 by adding, in alphabetical order, new definitions
for ``contractor,'' ``dealer,'' ``distributor,'' and ``installation of
a central air conditioner'' to read as follows:

Sec. 430.2 Definitions.

* * * * *
Contractor means a person (other than the manufacturer or
distributor) who sells to and/or installs for an end user a central air
conditioner subject to regional standards. The term ``end user'' means
the entity that purchases or selects for purchase the central air
conditioner. Some examples of typical ``end users'' are homeowners,
building owners, building managers, and property developers.
* * * * *
Dealer means a type of contractor, generally with a relationship
with one or more specific manufacturers.
* * * * *
Distributor means a person (other than a manufacturer or retailer)
to whom a consumer appliance product is delivered or sold for purposes
of distribution in commerce.
* * * * *
Installation of a central air conditioner means the connection of
the refrigerant lines and/or electrical systems to make the central air
conditioner operational.
* * * * *
0
15. Amend Sec. 430.32, by revising paragraph (c) to read as follows:

Sec. 430.32 Energy and water conservation standards and their
compliance dates.

* * * * *
(c) Central air conditioners and heat pumps. The energy
conservation standards defined in terms of the heating seasonal
performance factor are based on Region IV, the minimum standardized
design heating requirement, and the provisions of 10 CFR 429.16 of this
chapter.
(1) Each basic model of single-package central air conditioners and
central air conditioning heat pumps and each individual combination of
split-system central air conditioners and central air conditioning heat
pumps manufactured on or after January 1, 2015, shall have a Seasonal
Energy Efficiency Ratio and Heating Seasonal Performance Factor not
less than:

------------------------------------------------------------------------
Seasonal Heating
energy seasonal
Product class efficiency performance
ratio (SEER) factor (HSPF)
------------------------------------------------------------------------
(i) Split-system air conditioners....... 13 ..............
(ii) Split-system heat pumps............ 14 8.2
(iii) Single-package air conditioners... 14 ..............
(iv) Single-package heat pumps.......... 14 8.0
(v) Small-duct, high-velocity systems... 12 7.2
(vi)(A) Space-constrained products--air 12 ..............
conditioners...........................
(vi)(B) Space-constrained products--heat 12 7.4
pumps..................................
------------------------------------------------------------------------

(2) In addition to meeting the applicable requirements in paragraph
(c)(1) of this section, products in product class (i) of that paragraph
(i.e., split-system air conditioners) that are installed on or after
January 1, 2015, in the States of Alabama, Arkansas, Delaware, Florida,
Georgia, Hawaii, Kentucky, Louisiana, Maryland, Mississippi, North
Carolina, Oklahoma, South Carolina, Tennessee, Texas, or Virginia, or
in the District of Columbia, shall have a Seasonal Energy Efficiency
Ratio not less than 14. The least efficient combination of each basic
model must comply with this standard.
(3) In addition to meeting the applicable requirements in paragraph
(c)(1) of this section, split-system air conditioners that are
installed on or after January 1, 2015, in the States of Alabama,
Arkansas, Delaware, Florida, Georgia, Hawaii, Kentucky, Louisiana,
Maryland, Mississippi, North Carolina, Oklahoma, South Carolina,
Tennessee, Texas, or Virginia, or in the District of Columbia, must
have a Seasonal Energy Efficiency Ratio of 14 or higher. Any outdoor
unit model that has a certified combination with a rating below 14 SEER
cannot be installed in these States. An outdoor unit model certified
below 14 SEER by the outdoor unit manufacturer cannot be installed in
this region even with an independent coil manufacturer's indoor unit
that may have a certified rating at or above 14 SEER.
(4) In addition to meeting the applicable requirements in paragraph
(c)(1) of this section, split-system air conditioners and single-
package air conditioners that are installed on or after January 1,
2015, in the States of Arizona, California, Nevada, or New Mexico must
have a Seasonal Energy Efficiency Ratio of 14 or higher and have an
Energy Efficiency Ratio (at a

[[Page 72390]]

standard rating of 95[emsp14][deg]F dry bulb outdoor temperature) not
less than the following:

------------------------------------------------------------------------
Energy
Product class efficiency
ratio (EER)
------------------------------------------------------------------------
(i) Split-system rated cooling capacity less than 45,000 12.2
Btu/hr.................................................
(ii) Split-system rated cooling capacity equal to or 11.7
greater than 45,000 Btu/hr.............................
(iii) Single-package systems............................ 11.0
------------------------------------------------------------------------

Any outdoor unit model that has a certified combination with a
rating below 14 SEER or the applicable EER cannot be installed in this
region. An outdoor unit model certified below 14 SEER or the applicable
EER by the outdoor unit manufacturer cannot be installed in this region
even with an independent coil manufacturer's indoor unit that may have
a certified rating at or above 14 SEER and the applicable EER.
(5) Each basic model of single-package central air conditioners and
central air conditioning heat pumps and each individual combination of
split-system central air conditioners and central air conditioning heat
pumps manufactured on or after January 1, 2015, shall have an average
off mode electrical power consumption not more than the following:

------------------------------------------------------------------------
Average off
mode power
Product class consumption
PW,OFF
(watts)
------------------------------------------------------------------------
(i) Split-system air conditioners....................... 30
(ii) Split-system heat pumps............................ 33
(iii) Single-package air conditioners................... 30
(iv) Single-package heat pumps.......................... 33
(v) Small-duct, high-velocity systems................... 30
(vi) Space-constrained air conditioners................. 30
(vii) Space-constrained heat pumps...................... 33
------------------------------------------------------------------------

* * * * *
[FR Doc. 2015-29435 Filed 11-18-15; 8:45 am]
BILLING CODE 6450-01-P

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