Energy Conservation Standards for Manufactured Housing, 39755-39806 [2016-13547]

Agencies

• DEPARTMENT OF ENERGY

[Federal Register Volume 81, Number 117 (Friday, June 17, 2016)]
[Proposed Rules]
[Pages 39755-39806]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-13547]



[[Page 39755]]

Vol. 81

Friday,

No. 117

June 17, 2016

Part II





Department of Energy





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10 CFR Part 460





Energy Conservation Standards for Manufactured Housing; Proposed Rule

Federal Register / Vol. 81 , No. 117 / Friday, June 17, 2016 / 
Proposed Rules

[[Page 39756]]


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DEPARTMENT OF ENERGY

10 CFR Part 460

[Docket No. EERE-2009-BT-BC-0021]
RIN 1904-AC11


Energy Conservation Standards for Manufactured Housing

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

ACTION: Notice of proposed rulemaking and public meeting.

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SUMMARY: The U.S. Department of Energy (DOE) is publishing a proposed 
rule to implement the Energy Independence and Security Act of 2007, 
which directs DOE to establish energy conservation standards for 
manufactured housing. DOE proposes to establish energy conservation 
standards for manufactured housing based on the negotiated consensus 
recommendations of the manufactured housing working group (MH working 
group). The MH working group's recommendations were based on the 2015 
edition of the International Energy Conservation Code (IECC), the 
impact of the IECC on the purchase price of manufactured housing, total 
lifecycle construction and operating costs, factory design and 
construction techniques unique to manufactured housing, and the current 
construction and safety standards set forth by U.S. Department of 
Housing and Urban Development.

DATES: DOE will accept comments, data, and information regarding this 
proposed rule before and after the public meeting, but no later than 
August 16, 2016 DOE will hold a public meeting on Wednesday, July 13, 
2016 from 9:00 a.m. to 4:00 p.m. in Washington, DC.

ADDRESSES: The public meeting will be held at the U.S. Department of 
Energy, Forrestal Building, Room 1E-245, 1000 Independence Avenue SW., 
Washington, DC 20585-0121. To attend, please notify Ms. Brenda Edwards 
at (202) 586-2945. Please note that foreign nationals visiting DOE 
Headquarters are subject to advance security screening procedures. Any 
foreign national wishing to participate in the public meeting should 
advise DOE as soon as possible by contacting Ms. Brenda Edwards at 
(202) 586-2945 to initiate the necessary procedures.
    Any comments submitted must identify the notice title, docket 
number EERE-2009-BT-BC-0021, and/or the regulatory identifier number 
(RIN) 1904-AC11. 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: ManufacturedHousing 2009BC0021@ee.doe.gov. Include docket 
number EE-2009-BT-BC-0021 and/or RIN 1904-AC11 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.
    4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of 
Energy, Building Technologies Program, Suite 600, 950 L'Enfant Plaza 
SW., Washington, DC 20024. Telephone: (202) 586-2945.
    Due to potential delays in DOE's receipt and processing of mail 
sent through the U.S. Postal Service, DOE encourages respondents to 
submit electronically to ensure timely receipt.
    For detailed instructions on submitting comments and additional 
information on the rulemaking process, see section V of this document 
(``Public Participation'').
    Docket: The docket is available for review at www.regulations.gov 
and includes Federal Register notices, public comments, meeting 
transcript summaries, and other supporting documents and materials. All 
documents in the docket are listed in the regulations.gov index. 
However, not all documents listed in the index may be publicly 
available, such as information that is exempt from public disclosure.
    A link to the docket Web page can be found at: https://www1.eere.energy.gov/buildings/appliance_standards/rulemaking.aspx?ruleid=97. This Web page contains a link to the docket 
for this notice on the regulations.gov site. The regulations.gov Web 
page also contains instructions on how to access all documents, 
including public comments, in the docket. See section V of the 
SUPPLEMENTARY INFORMATION for more information on how to submit 
comments for this rulemaking through regulations.gov.
    For further information on how to submit or review public comments, 
participate in the public meeting, or view hard copies of the docket, 
contact Ms. Brenda Edwards, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Program, EE-2J, 
1000 Independence Avenue SW., Washington, DC 20585-0121; (202) 586-
2945; Brenda.Edwards@ee.doe.gov.

FOR FURTHER INFORMATION CONTACT: Mr. Joseph Hagerman, U.S. Department 
of Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies Program (EE-2J), 1000 Independence Avenue SW., Washington, 
DC, 20585; (202) 586-4549; joseph.hagerman@ee.doe.gov.
    For information on legal issues presented in this document, 
contact: Ms. Kavita Vaidyanathan, U.S. Department of Energy, Forrestal 
Building, Office of the General Counsel (GC-33), 1000 Independence 
Avenue SW., Washington, DC, 20585; (202) 586-0669; 
kavita.vaidyanathan@hq.doe.gov.
    DOE proposes to incorporate by reference into part 460 the 
following industry standards:
    (1) Manual J--Residential Load Calculation (8th Edition).
    (2) Manual S--Residential Equipment Selection (2nd Edition).
    Copies of Manual J and Manual S may be purchased from Air 
Conditioning Contractors of America, Inc., (ACCA), 2800 S. Shirlington 
Road, Suite 300, Arlington, VA 22206, 703-575-4477, https://www.acca.org/.
    (3) Overall U-Values and Heating/Cooling Loads--Manufactured Homes. 
Conner C.C., Taylor, Z.T., Pacific Northwest Laboratory, published 
February 1, 1992.
    You may purchase a copy of Overall U-Values and Heating/Cooling 
Loads--Manufactured Homes from https://www.huduser.org/portal/publications/manufhsg/uvalue.html 800-245-2691.
    For a further discussion of these standards, see section V.N of 
this document.

SUPPLEMENTARY INFORMATION:
I. Synopsis of the Proposed Rule
    A. The Proposed Regulations
    B. Benefits and Costs to Purchasers of Manufactured Housing
    C. Manufacturer Impact
    D. Nationwide Impacts
    E. Nationwide Environmental Benefits
    F. Total Benefits and Costs
II. Introduction
    A. Authority
    B. Background
    1. Current Regulation of Manufactured Housing
    2. The International Energy Conservation Code
    3. Development of the Proposed Rule
III. Discussion
    A. The Basis for the Proposed Standards
    B. Proposed Energy Conservation Requirements
    1. Subpart A: General
    2. Subpart B: Building thermal envelope
    3. Subpart C: HVAC, service water heating, and equipment sizing
    C. Other 2015 IECC Specifications
    1. Section R302
    2. Section R303.1
    3. Section R401.3
    4. Section R402.4
    5. Section R403

[[Page 39757]]

    6. Section R404
    7. Section R405
    8. Section R406
    9. Chapter 5
    10. Chapter 6
    D. Crosswalk of Proposed Standards With the HUD Code
    E. Compliance and Enforcement
IV. Economic Impacts and Energy Savings
    A. Economic Impacts on Individual Purchasers of Manufactured 
Homes
    B. Manufacturer Impacts
    C. Nationwide Impacts
    D. Nationwide Environmental Benefits
    E. Total Benefits and Costs
V. Regulatory Review
    A. Executive Order 12866
    B. Executive Order 13563
    C. Regulatory Flexibility Act
    D. Paperwork Reduction Act
    E. National Environmental Policy Act
    F. Executive Order 13132
    G. Executive Order 12988
    H. Unfunded Mandates Reform Act
    I. Family and General Government Appropriations Act
    J. Executive Order 12630
    K. Treasury and General Government Appropriations Act
    L. Executive Order 13211
    M. Section 32 of the Federal Energy Administration Act of 1974
    N. Materials Incorporated by Reference
VI. Public Participation
    A. Attendance at Public Meeting
    B. Procedure for Submitting Prepared General Statements for 
Distribution
    C. Conduct of Public Meeting
    D. Submission of Comments
    1. Submitting Comments via Regulations.gov
    2. Submitting Comments via Email, Hand Delivery, or Mail.
    E. Issues on Which DOE Seeks Comment
VII. Approval of the Office of the Secretary

I. Synopsis of the Proposed Rule

A. The Proposed Regulations

    The Energy Independence and Security Act of 2007 (EISA, Pub. L. 
110-140) directs the U.S. Department of Energy (DOE) to establish 
energy conservation standards for manufactured housing. EISA directs 
DOE to base the standards on the most recent version of the 
International Energy Conservation Code (IECC) and any supplements to 
that document, except where DOE finds that the IECC is not cost-
effective or where a more stringent standard would be more cost-
effective, based on the impact of the IECC on the purchase price of 
manufactured housing and on total lifecycle construction and operating 
costs. See 42 U.S.C. 17071. In accordance with this statutory 
directive, DOE is proposing energy conservation standards for 
manufactured housing. These energy conservation standards would be 
codified in a new part of the Code of Federal Regulations (CFR) under 
10 CFR part 460 subparts A, B, and C.
    Subpart A discusses generally the scope of the proposed rule and 
provides proposed definitions of key terms. The subpart also would 
provide manufacturers with a one-year lead time for compliance such 
that the standards would apply to all manufactured homes manufactured 
on or after one year following the publication of a final rule.
    Subpart B would establish requirements related to climate zones and 
the building thermal envelope of manufactured homes. DOE proposes to 
base its energy conservation requirements on four climate zones, which 
generally follow state borders, with some exceptions. Regarding the 
building thermal envelope, DOE proposes two approaches to compliance. 
The first is a prescriptive approach that would establish specific 
requirements for component and fenestration thermal resistance (R-
value), thermal transmittance (U-factor), and solar heat gain 
coefficient (SHGC). The second is a performance-based approach that 
would establish a maximum overall thermal transmittance (Uo) 
requirement for the building thermal envelope and additional U-factor 
and SHGC requirements. Subpart B also would include provisions for 
determining U-factor, R-value, SHGC, and Uo. Finally, subpart B would 
establish prescriptive requirements for insulation and sealing the 
building thermal envelope to limit air leakage.
    Subpart C would establish requirements related to duct leakage; 
heating, ventilation, and air conditioning (HVAC); service hot water 
systems; mechanical ventilation fan efficacy; and heating and cooling 
equipment sizing.

B. Benefits and Costs to Purchasers of Manufactured Housing

    As explained in greater detail in section IV of this document and 
in chapter 9 of the technical support document (TSD) accompanying this 
proposed rule, DOE estimates that benefits to manufactured homeowners 
in terms of lifecycle cost (LCC) savings and energy cost savings under 
the proposed rule would outweigh the potential increase in purchase 
price for manufactured homes. As presented in Table I.1, DOE estimates 
that the average purchase price of a manufactured home under the 
proposed rule would increase as much as $2,423 for a single-section and 
$3,745 for a multi-section manufactured home as a result of the 
increased construction costs associated with energy conservation 
improvements.

  Table I.1--National Average Manufactured Housing Purchase Price (and Percentage) Increases Under the Proposed
                                                      Rule
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                                                          Single-section                   Multi-section
                                                 ---------------------------------------------------------------
                                                        ($)             (%)             ($)             (%)
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Climate Zone 1..................................           2,422             5.3           3,748             4.5
Climate Zone 2..................................           2,348             5.1           3,668             4.4
Climate Zone 3..................................           2,041             4.5           2,655             3.2
Climate Zone 4..................................           2,208             4.8           2,877             3.4
National Average................................           2,226             4.9           3,109             3.7
----------------------------------------------------------------------------------------------------------------

    As explained in more detail in section IV.A of this document and in 
chapter 9 of the TSD, Table I.2 presents the estimated national average 
LCC savings and energy savings that a manufactured homeowner would 
experience under the proposed rule as compared to a manufactured home 
constructed in accordance with the minimum requirements of the existing 
HUD Code at 24 CFR part 3282. Table I.2 and Figure I.1 present the 
nationwide average simple payback period (purchase price increase 
divided by first year energy cost savings) under the proposed rule.

[[Page 39758]]



  Table I.2--National Average Per-Home Cost Savings Under the Proposed
                                  Rule
------------------------------------------------------------------------
                                  Single- section       Multi- section
------------------------------------------------------------------------
Lifecycle Cost Savings (30-     $3,211.............  $4,625.
 Year Lifetime).
Annual Energy Cost Savings in   $345...............  $490.
 2015 dollars.
Simple Payback................  7.1 years..........  6.9 years.
------------------------------------------------------------------------

                                                     [GRAPHIC] [TIFF OMITTED] TP17JN16.000
                                                     
C. Manufacturer Impact

    As discussed in more detail in section IV.B of this document and 
chapter 12 of the TSD, the industry net present value (INPV) is the sum 
of the discounted cash flows to the industry from the announcement year 
(2016) through the end of the analysis period (2046). Using a real 
discount rate of 9.2 percent, DOE estimates the base case INPV for 
manufacturers to be $716.7 million. Under the proposed standards, DOE 
expects that the INPV will be reduced by 0.7 to 6.8 percent. Industry 
conversion costs are expected to total $1.6 million.

D. Nationwide Impacts

    As described in more detail in section IV.C of this document and 
chapter 11 of the TSD, DOE's national impact analysis (NIA) projects a 
net benefit to the nation as a whole as a result of the proposed rule 
in terms of national energy savings (NES) and the net present value 
(NPV) of expected total manufactured homeowner costs and savings as 
compared with manufactured homes built to the minimum standards 
established in the HUD Code. As part of its NIA, DOE has projected the 
energy savings, operating cost savings, incremental equipment costs, 
and NPV of manufactured homeowner benefits for manufactured homes sold 
in a 30-year period from 2017 through 2046. The NIA builds off the LCC 
analysis discussed by the MH working group by aggregating results for 
all affected shipments over a 30-year period. All NES and percent 
energy savings calculations are relative to a no regulatory action 
alternative, which would maintain energy conservation requirements at 
the levels established in the existing HUD Code.
    Table I.3 and Table I.4 illustrate the cumulative NES over the 30-
year analysis period under the proposed rule on a full-fuel-cycle (FFC) 
energy savings basis. FFC energy savings apply a factor to account for 
losses associated with generation, transmission, and distribution of 
electricity, and the energy consumed in extracting, processing, and 
transporting or distributing primary fuels. NES differ among the 
different climate zones because of varying energy conservation 
requirements and varying shipment projections in each climate zone. All 
NES and percent energy savings calculations are relative to a no 
regulatory action alternative, which would maintain energy conservation 
requirements at the levels established in the existing HUD Code.

  Table I.3--Cumulative National Energy Savings Including Full-Fuel-Cycle of Manufactured Homes Purchased 2017-
                                          2046 With a 30-Year Lifetime
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                                                       Single-section quadrillion
                                                      British thermal units (BTUs)    Multi-section quadrillion
                                                                 (quads)                    BTUs (quads)
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Climate Zone 1......................................                         0.179                         0.294
Climate Zone 2......................................                         0.130                         0.245
Climate Zone 3......................................                         0.272                         0.474
Climate Zone 4......................................                         0.303                         0.416
                                                     -----------------------------------------------------------

[[Page 39759]]

 
  Total.............................................                         0.884                         1.428
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   Table I.4--Percentage of Cumulative National Energy Savings Including Full-Fuel-Cycle of Manufactured Homes
                                   Purchased 2017-2046 With a 30-Year Lifetime
----------------------------------------------------------------------------------------------------------------
                                                           Single-section (%)             Multi-section (%)
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Climate Zone 1......................................                          25.3                          29.9
Climate Zone 2......................................                          25.4                          30.6
Climate Zone 3......................................                          26.0                          28.1
Climate Zone 4......................................                          25.4                          26.6
                                                     -----------------------------------------------------------
  Total.............................................                          25.6                          28.3
----------------------------------------------------------------------------------------------------------------

    Table I.5 and I.6 illustrate the NPV of customer benefits over the 
30-year analysis period under the proposed rule for a discount rate of 
7 percent and 3 percent, respectively. The NPV of customer benefits 
differ among the four climate zones because of differing initial costs 
and corresponding operating cost savings, as well as differing shipment 
projections in each climate zone. Under the proposed rule, all climate 
zones have a positive NPV for both discount rates.

   Table I.5--Net Present Value of Customer Benefits for Manufactured Homes Purchased 2017-2046 With a 30-Year
                                         Lifetime at a 7% Discount Rate
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                                                         Single-section (billion       Multi-section (billion
                                                                 2015$)                        2015$)
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Climate Zone 1......................................                          0.19                          0.34
Climate Zone 2......................................                          0.16                          0.35
Climate Zone 3......................................                          0.39                          0.74
Climate Zone 4......................................                          0.52                          0.74
                                                     -----------------------------------------------------------
  Total.............................................                          1.26                          2.18
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   Table I.6--Net Present Value of Customer Benefits for Manufactured Homes Purchased 2017-2046 With a 30-Year
                                         Lifetime at a 3% Discount Rate
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                                                         Single-section (billion       Multi-section (billion
                                                                 2015$)                        2015$)
----------------------------------------------------------------------------------------------------------------
Climate Zone 1......................................                          0.66                          1.16
Climate Zone 2......................................                          0.54                          1.10
Climate Zone 3......................................                          1.22                          2.26
Climate Zone 4......................................                          1.60                          2.24
                                                     -----------------------------------------------------------
  Total.............................................                          4.03                          6.75
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E. Nationwide Environmental Benefits

    As discussed in section IV.D of this document and in the NIA 
included in chapter 11 of the TSD accompanying this proposed rule, 
DOE's analyses indicate that the proposed rule would reduce overall 
demand for energy in manufactured homes. The proposed rule also would 
produce environmental benefits in the form of reduced emissions of air 
pollutants and greenhouse gases associated with electricity production. 
DOE estimates that 18.1 million metric tons of carbon dioxide emissions 
would be avoided through the end of 2030 as a result of the proposed 
rule.
    Emissions avoided under the proposed rule are related to the energy 
savings that would be achieved within manufactured homes. DOE estimates 
that, under the proposed rule, 2.3 quadrillion Btu (quads) of FFC 
energy would be saved relative to manufactured homes constructed under 
the minimum requirements of the HUD Code over a 30-year analysis 
period. DOE estimates reductions in emissions of six pollutants 
associated with energy savings: Carbon dioxide (CO2), 
mercury (Hg), nitric oxide and nitrogen dioxide (NOX), 
sulfur dioxide (SO2), methane (CH4), and nitrous 
oxide (N2O). These emissions reductions are referred to as 
``site'' emissions reductions. Furthermore, DOE estimates reductions in 
emissions associated with the production of these fuels (including 
extracting, processing, and transporting these fuels to power plants or 
manufactured homes). These emissions reductions are referred to as 
``upstream''

[[Page 39760]]

emissions reductions. Together, site emissions reductions and upstream 
emissions reductions account for the FFC.
    Table I.7 lists the emissions reductions under the proposed rule 
for both single-section and multi-section manufactured homes.

 Table I.7--Emissions Reductions Associated With Electricity Production
   for Manufactured Homes Purchased 2017-2046 With a 30-Year Lifetime
------------------------------------------------------------------------
                                              Single-
                Pollutant                     section     Multi- section
------------------------------------------------------------------------
                        Site Emissions Reductions
------------------------------------------------------------------------
CO2 (million metric tons)...............            56.5            91.1
Hg (metric tons)........................          0.0904           0.146
NOX (thousand metric tons)..............             223             356
SO2 (thousand metric tons)..............            27.6            44.4
CH4 (thousand metric tons)..............            3.78            6.09
N2O (thousand metric tons)..............           0.632            1.02
------------------------------------------------------------------------
                      Upstream Emissions Reductions
------------------------------------------------------------------------
CO2 (million metric tons)...............            4.01            6.45
Hg (metric tons)........................        0.000944         0.00153
NOX (thousand metric tons)..............            51.8            83.2
SO2 (thousand metric tons)..............           0.615           0.991
CH4 (thousand metric tons)..............             239             385
N2O (thousand metric tons)..............          0.0294          0.0474
------------------------------------------------------------------------
                       Total Emissions Reductions
------------------------------------------------------------------------
CO2 (million metric tons)...............            60.5            97.6
Hg (metric tons)........................          0.0913           0.148
NOX (thousand metric tons)..............             275             439
SO2 (thousand metric tons)..............            28.2            45.4
CH4 (thousand metric tons)..............             243             391
N2O (thousand metric tons)..............           0.661            1.07
------------------------------------------------------------------------

    Additionally, DOE has considered the estimated monetary benefits 
likely to result from the reduced emissions of CO2 and 
NOX that would be expected to result from the proposed rule. 
DOE calculated the monetary values for each of these emissions 
reductions using the social cost of carbon (SCC) model, which estimates 
the monetized damages associated with an incremental increase in carbon 
emissions within a given year. The SCC is intended to account for, but 
is not limited to, changes in net agricultural productivity, human 
health, property damages from increased flood risk, and the value of 
ecosystem services.
    Table I.8 provides the NPV of monetized emissions benefits from 
CO2 and NOX under the proposed rule. DOE 
estimates that the monetized benefits from emissions reductions 
associated with the proposed rule would be $5,541.5 million ($4,731.4 
million in CO2 emissions reductions plus $810.1 million in 
NOX emissions reductions) over a 30-year analysis period at 
the 3 percent discount rate and the CO2 cost associated with 
the average SCC case.

Table I.8--Net Present Value of Monetized Benefits From CO2 and NOX Emissions Reductions Under the Proposed Rule
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                                                                                    Net present value (million
                                                                                              2015$)
                        Monetary benefits                          Discount rate -------------------------------
                                                                        (%)           Single-
                                                                                      section     Multi- section
----------------------------------------------------------------------------------------------------------------
CO2, Average SCC Case *.........................................               5           368.2           593.7
CO2, Average SCC Case *.........................................               3         1,810.9         2,920.5
CO2, Average SCC Case *.........................................             2.5         2,925.0         4,717.3
CO2, 95th Percentile SCC Case *.................................               3         5,581.5         9,001.5
NOX Reduction at $2,755/metric ton *............................               3           311.5           498.6
                                                                               7           119.8           191.9
----------------------------------------------------------------------------------------------------------------
* The CO2 values represent global monetized values (in 2015$) of the social cost of CO2 emissions reductions for
  manufactured homes shipped from 2017-2046 with a 30-year lifetime under several different scenarios of the SCC
  model. The ``average SCC case'' refers to average predicted monetary savings as predicted by the SCC model.
  The ``95th percentile case'' refers to values calculated using the 95th percentile impacts of the SCC model,
  which accounts for greater than expected environmental damages. The value for NOX (in 2015$) is the average of
  the low and high values used in DOE's analysis.


[[Page 39761]]

F. Total Benefits and Costs

    As explained in greater detail in section IV of this document and 
chapter 15 of the TSD, Table I.9 presents the total benefits and costs 
to manufactured homeowners associated with the proposed rule, expressed 
in terms of annualized values.\1\
---------------------------------------------------------------------------

    \1\ As stated in this preamble, DOE used a two-step calculation 
process to convert the time-series of costs and benefits into 
annualized values. First, DOE calculated a present value in 2015, 
the year used for discounting the net present value of total 
consumer costs and savings, for the time-series of costs and 
benefits using discount rates of three and seven percent for all 
costs and benefits except for the value of CO2 
reductions. For the latter, DOE used a range of discount rates, as 
shown in Table I.8. From the present value, DOE then calculated the 
fixed annual payment over a 30-year period, starting in 2017 that 
yields the same present value. The fixed annual payment is the 
annualized value. Although DOE calculated annualized values, this 
does not imply that the time-series of cost and benefits from which 
the annualized values were determined would be a steady stream of 
payments.

                            Table I.9--Total Annualized Benefits and Costs to Manufactured Homeowners Under the Proposed Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                Monetized (million 2015$/year)
                                            Discount rate (%)        -----------------------------------------------------------------------------------
                                                                         Primary  estimate **          Low  estimate **            High  estimate **
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Benefits *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operating (Energy) Cost Savings...  7...............................  516.......................  400.......................  688.
                                    3...............................  843.......................  617.......................  1,191.
CO2, Average SCC Case ***.........  5...............................  63........................  46........................  85.
CO2, Average SCC Case ***.........  3...............................  241.......................  176.......................  331.
CO2, Average SCC Case ***.........  2.5.............................  365.......................  266.......................  503.
CO2, 95th Percentile SCC Case ***.  3...............................  744.......................  543.......................  1,022.
NOX Reduction at $2,755/metric ton  7...............................  25........................  20........................  32.
 ***.                               3...............................  41........................  31........................  56.
Total (Operating Cost Savings, CO2  7 plus CO2 range................  604 to 1,285..............  466 to 962................  805 to 1,742.
 Reduction and NOX Reduction).      7...............................  783.......................  596.......................  1,052.
                                    3...............................  1,126.....................  824.......................  1,578.
                                    3 plus CO2 range................  947 to 1,628..............  694 to 1,191..............  1,332 to 2,269.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Costs *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental Purchase Price          7...............................  220.......................  165.......................  285.
 Increase.                          3...............................  277.......................  192.......................  378.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Net Benefits/Costs *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total (Operating Cost Savings, CO2  7 plus CO2 range................  384 to 1,065..............  301 to 797................  520 to 1,457.
 Reduction and NOX Reduction,       7...............................  563.......................  431.......................  767.
 Minus Incremental Cost Increase
 to Homes).
                                    3...............................  849.......................  632.......................  1,200.
                                    3 plus CO2 range................  670 to 1,351..............  502 to 999................  954 to 1,891.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The benefits and costs are calculated for homes shipped in 2017-2046.
** The Primary, Low, and High Estimates utilize forecasts of energy prices from the 2015 AEO Reference case, Low Economic Growth case, and High Economic
  Growth case, respectively.
*** The CO2 values represent global monetized values (in 2015$) of the social cost of CO2 emissions reductions over the analysis period under several
  different scenarios of the SCC model. The ``average SCC case'' refers to average predicted monetary savings as predicted by the SCC model. The ``95th
  percentile case'' refers to values calculated using the 95th percentile impacts of the SCC model, which accounts for greater than expected
  environmental damages. The value for NOX (in 2015$) is the average of the low and high values used in DOE's analysis.

II. Introduction

A. Authority

    Section 413 of EISA directs DOE to:
    Establish standards for energy conservation in manufactured 
housing;
     Provide notice of and an opportunity for comment on the 
proposed standards by manufacturers of manufactured housing and other 
interested parties;
     Consult with the Secretary of HUD, who may seek further 
counsel from the Manufactured Housing Consensus Committee (MHCC); and
     Base the energy conservation standards on the most recent 
version of the IECC and any supplements to that document, except where 
DOE finds that the IECC is not cost effective or where a more stringent 
standard would be more cost effective, based on the impact of the IECC 
on the purchase price of manufactured housing and on total lifecycle 
construction and operating costs.
    Section 413 of EISA also provides that DOE may:
    Consider the design and factory construction techniques of 
manufactured housing;
     Base the climate zones under the proposed rule on the 
climate zones established by HUD in 24 CFR part 3280 rather than the 
climate zones under the IECC; and
     Provide for alternative practices that, while not meeting 
the specific standards established by DOE, result in net estimated 
energy consumption equal to or less than the specific energy 
conservation standards as proposed.
    DOE is directed to update its standards not later than one year 
after any revision to the IECC. Finally, section 413 of EISA authorizes 
DOE to impose civil penalties on any manufacturer that violates a 
provision of part 460.

B. Background

1. Current Regulation of Manufactured Housing
    Section 413 of EISA provides DOE with the authority to regulate 
energy conservation in manufactured housing, an area of the building 
construction industry traditionally regulated by HUD.

[[Page 39762]]

HUD has regulated the manufactured housing industry since 1976, when it 
first promulgated the HUD Code. The purpose of the HUD Code has been to 
reduce personal injuries, deaths, property damage, and insurance costs, 
and to improve the quality, durability, safety, and affordability of 
manufactured homes. See 42 U.S.C. 5401(b).
    The HUD Code includes requirements related to the energy 
conservation of manufactured homes. Specifically, Subpart F of the HUD 
Code, entitled ``Thermal Protection,'' establishes requirements for Uo 
of the building thermal envelope. Uo is a measurement of the heat loss 
or gain rate through the building thermal envelope of a manufactured 
home; therefore, a lower Uo corresponds with a more insulated building 
thermal envelope. The HUD Code contains maximum requirements for the 
combined Uo value of walls, ceilings, floors, fenestration, and 
external ducts within the building thermal envelope for manufactured 
homes installed in different climate zones. See 24 CFR 3280.507(a).
    The HUD Code also provides an alternate pathway to compliance that 
allows manufacturers to construct manufactured homes that meet adjusted 
Uo requirements based on the installation of high-efficiency heating 
and cooling equipment in the manufactured home. See id. 3280.508(d). 
Moreover, Subpart F of the HUD Code establishes requirements to reduce 
air leakage through the building thermal envelope. See id. 3280.505.
    Subpart H of the HUD Code, entitled ``Heating, Cooling and Fuel 
Burning Systems,'' establishes requirements for sealing air supply 
ducts and for insulating both air supply and return ducts. See id. 
3280.715(a). R-value is the measure of a building component's ability 
to resist heat flow (thermal resistance). A higher R-value represents a 
greater ability to resist heat flow and generally corresponds with a 
thicker level of insulation. The HUD Code contains no requirements for 
fenestration SHGC, mechanical system piping insulation, or installation 
of insulation.
    It is important to note that the statutory authority for DOE's 
rulemaking effort is different from the statutory authority underlying 
the HUD Code. EISA directs DOE to establish energy conservation 
standards for manufactured housing without reference to existing HUD 
Code requirements that also address energy conservation. In development 
of the proposed regulations, DOE seeks to make every effort to ensure 
that compliance with this proposed requirements would not impinge a 
manufacturer from complying with the requirements set forth in the HUD 
Code.
    Additionally, DOE is seeking to avoid any potential redundancy 
between the proposed requirements and the HUD Code. Accordingly, 
section III.D of this document charts the relationship between the 
energy conservation requirements in the HUD Code and the proposed DOE 
requirements. Given the level of detail required in analyzing all 
aspects of energy conservation contained in both the proposed rule and 
the HUD Code, DOE requests comment on any potential inconsistencies 
that would result from promulgation of the proposed regulations.
2. The International Energy Conservation Code
    The statutory authority for this rulemaking requires DOE to base 
its standards on the most recent version of the IECC and any 
supplements to that document, except where DOE finds that the IECC is 
not cost-effective or where a more stringent standard would be more 
cost-effective, based on the impact of the IECC on the purchase price 
of manufactured housing and on total lifecycle construction and 
operating costs. See 42 U.S.C. 17071. The IECC is a nationally 
recognized model code, developed under the auspices of, and published 
by, the International Code Council (ICC), which many state and local 
governments have adopted in establishing minimum design and 
construction requirements for the energy efficiency of residential and 
commercial buildings, including site-built residential and modular 
homes. The IECC is developed through a consensus process that seeks 
input from industry stakeholders and is updated on a rolling basis, 
with new editions of the IECC published approximately every three 
years. The IECC was first published in 1998, and it has been updated 
continuously since that time. The 2015 edition of the IECC (the 2015 
IECC) was published in May 2014.
    Chapter 4 of the 2015 IECC sets forth specifications for 
residential energy efficiency, including specifications for building 
thermal envelope energy conservation, thermostats, duct insulation and 
sealing, mechanical system piping insulation, circulating hot water 
system piping, and mechanical ventilation. Chapter 4 of the 2015 IECC 
was developed for residential buildings generally and are not specific 
to manufactured housing. To the extent that the HUD Code regulates 
similar aspects of energy conservation as the 2015 IECC, the 2015 IECC 
is generally considered to be more stringent than the corresponding 
requirement in the HUD Code given that many areas of the HUD Code are 
not updated as frequently as the IECC.
3. Development of the Proposed Rule
    Manufactured housing accounts for approximately six percent of all 
homes in the United States.\2\ Because the purchase price of 
manufactured homes often is lower than similarly sized site-built 
homes, manufactured homes serve as affordable housing options, 
particularly for low-income families. Nevertheless, the operational 
costs to the homeowner may not be reflected in the purchase price of 
the home. Manufactured housing home owners often have higher utility 
bills than comparably built site-built and modular homes in part due to 
different criteria for energy conservation and variability among 
building codes and industry practice.
---------------------------------------------------------------------------

    \2\ See U.S. Census Bureau, American Housing Survey 2013--
National Summary Tables.
---------------------------------------------------------------------------

    Establishing robust energy conservation requirements for 
manufactured homes would result in the dual benefit of substantially 
reducing manufactured home energy use and easing the financial burden 
on owners of manufactured homes in meeting their monthly utility 
expenses. Improved energy conservation standards are expected to 
provide nationwide benefits of reducing utility energy production 
levels that would in turn reduce greenhouse gas emissions and other air 
pollutants.
    On February 22, 2010, DOE published an advance notice of proposed 
rulemaking (ANOPR) to initiate the process of developing energy 
conservation standards for manufactured housing and to solicit 
information and data from industry and stakeholders. See 75 FR 7556. 
The ANOPR identified thirteen specific issue areas on which DOE sought 
additional information. DOE received a total of twelve written comments 
in response to the ANOPR, all of which are available for public viewing 
at the regulations.gov Web page.\3\
---------------------------------------------------------------------------

    \3\ The ANOPR comments can be accessed at: https://www.regulations.gov/#!docketDetail;D=EERE-2009-BT-BC-0021.
---------------------------------------------------------------------------

    DOE also has consulted with HUD in developing the proposed 
requirements and in obtaining input and suggestions that would increase 
energy conservation in manufactured housing while maintaining 
affordability. In addition to meeting with HUD on multiple occasions, 
DOE attended three MHCC

[[Page 39763]]

meetings, where DOE gathered information from MHCC members. DOE also 
initiated further discussions with members of the manufactured housing 
industry following the issuance of the ANOPR, including the 
Manufactured Housing Institute and several of its member manufacturers, 
the State of California Department of Housing and Community 
Development, the State of Georgia Manufactured Housing Division, three 
private sector third-party primary inspection agencies under the HUD 
manufactured housing program, and one private sector stakeholder 
familiar with manufactured housing. A summary of each meeting is 
available at the regulations.gov Web page.
    The following section provides a summary of comments DOE received 
in response to the ANOPR. Generally, the comments can be grouped into 
five main areas: Climate zones; the basis for the proposed standards; 
specific building thermal envelope requirements; enforcement of DOE's 
proposed energy conservation standards; and the need for, and scope of, 
the proposed rule.
    Regarding the issue of climate zones, DOE received comments 
recommending that DOE define climate zones at the county level, 
possibly based on the climate zones established in the IECC or on a 
subset of those climate zones to align with the requirements for site-
built homes. Generally, these commenters stated that the IECC climate 
zones are recognized and understood by the manufacturing and regulatory 
sectors. Conversely, DOE received other comments indicating a 
preference for retaining the three climate zones established in the HUD 
Code. DOE also received comments suggesting that DOE consider more 
refined climate zones in the southern United States, noting the 
abundance of manufactured homes sold in that region of the country. As 
discussed in section III.B.2.a) of the document, DOE proposes to base 
its energy conservation standards on four climate zones. DOE requests 
comment on the proposed use of four climate zones relative to adopting 
the three HUD climate zones and whether there are any potential impacts 
on manufacturing costs, compliance costs, or other impacts, in 
particular in Arizona, Texas, Louisiana, Mississippi, Alabama, and 
Georgia, where the agency has proposed two different energy efficiency 
standards within the same state.
    DOE received numerous comments suggesting that DOE base its 
proposed energy conservation standards on the IECC rather than on the 
energy conservation standards established by HUD. Specifically, one 
commenter stated that IECC training and related support services would 
be available if DOE based its energy conservation standards on the IECC 
that would be absent if DOE used a different basis for the proposed 
energy conservation standards. Another commenter suggested that the 
proposed energy conservation standards should be at a minimum as 
efficient as the requirements contained in the most recent edition of 
the IECC or better where lifecycle cost effective. One commenter stated 
that the IECC was not intended to apply to manufactured housing and 
that DOE should consider altering IECC standards to be compatible with 
manufactured housing building processes. However, another commenter 
stated that there are no intrinsic differences between site-built and 
factory-built construction techniques that would limit DOE from 
proposing energy conservation standards to the level set forth in the 
most recent edition of the IECC and beyond.
    Other commenters discussed specific energy conservation 
requirements that should be included in the proposed rule, including 
requiring high-efficiency furnaces, boilers, and heat pump heating in 
colder climate zones, high-efficiency air conditioners in warmer 
climate zones, ENERGY STAR appliances, and improved lighting systems, 
where cost-effective. Commenters also requested that DOE consider 
requiring R-5 windows, passive solar design, and establishing 
provisions to address barriers to future technology. Conversely, one 
commenter stated that the HUD Code balances requirements related to 
both air leakage and condensation. Other commenters requested that DOE 
consider the National Fire Protection Association (NFPA) Standard on 
Manufactured Housing in developing its proposed standards and that DOE 
also consider certain applicable requirements contained in the 
International Residential Code. Another commenter suggested that DOE 
develop standards that would allow above-code programs, such as ENERGY 
STAR, to build upon the requirements set forth by DOE. DOE also 
received several comments that manufactured homes should be as energy 
efficient as site-built and modular homes while asserting that DOE's 
energy conservation standards be no more stringent than the 
requirements for site-built housing. However, it also was suggested 
that DOE consider establishing one or more performance tiers above the 
minimum DOE energy conservation standards, with associated incentives 
for manufacturers, to drive the market for high performance 
manufactured housing.
    As discussed further in section III.A of this document, DOE 
proposes to base its energy conservation standards on the 2015 IECC 
while accounting for the potential effects on purchase price, total 
lifecycle construction and operating costs, and design and factory 
construction techniques unique to manufactured homes.
    With respect to the potential effects of the proposed rule on 
purchase price and total lifecycle construction and operating costs, 
DOE received comments providing specific information that assisted DOE 
in its preliminary economic analyses for developing the proposed 
requirements. Regarding the issue of home financing, commenters 
recommended that DOE's economic analysis on financing assume terms of 
loans similar to those for new site-built homes, accompanied by a three 
percent discount rate. Other commenters suggested that DOE's economic 
analyses assume terms of loans that reflect a mix of real estate and 
personal property loans that are reflective of the market share of each 
type of loan and that account for historical trends in loans for 
manufactured housing. Another commenter suggested that DOE account for 
conventional financing rates of five to seven percent and assume full 
resale recovery, as recognized by the National Automobile Dealers 
Association in appraisal value for ENERGY STAR-labeled manufactured 
homes.
    It was suggested that DOE account for volume procurement purchasing 
prices, collect cost data from manufacturers and major suppliers 
provided in manufactured homes by state and region, and use standard 
industry mark-ups in conducting its economic analyses. Commenters also 
stated that any increase in the purchase price of a manufactured home 
could exacerbate the lack of affordable housing. Commenters further 
stated that although manufacturers offer manufactured homes that exceed 
the energy conservation requirements contained in the HUD Code, 
financing the cost of those additional energy features often is an 
obstacle to such homes being purchased. Accordingly, it was suggested 
that DOE apply the same analytical framework that DOE uses for 
developing energy efficiency standards for appliances in developing the 
proposed energy conservation standards. Specifically, one commenter 
suggested that DOE conduct parametric and statistical modeling analyses 
accounting for various factors, including

[[Page 39764]]

single-wide versus multi-wide manufactured homes, differences among 
fuel types, duct locations, eliminating various ``trade-offs,'' and 
evaluating solar thermal and photovoltaic systems in establishing the 
proposed standards.
    With respect to design and construction techniques unique to 
manufactured homes, DOE received several comments highlighting that the 
manufactured housing industry has been producing manufactured homes 
that exceed the energy conservation requirements contained in the HUD 
Code. One commenter stated that since 1989, over 100,000 manufactured 
homes had been built in the Pacific Northwest region of the United 
States that have an energy efficiency level that complies with the most 
recent version of the IECC. Another commenter provided specific 
examples of manufactured homes that exceeded the energy conservation 
requirements contained in the HUD Code. Indeed, DOE received comments 
stating that 90 percent of manufactured housing builders had adopted 
the U.S. Environmental Protection Agency (EPA) ENERGY STAR program for 
manufactured housing. Another commenter suggested that DOE utilize 
research results and information from the DOE Building America Program 
and the Partnership for Advancing Technology in Housing program at HUD 
in developing the proposed energy conservation standards and in 
determining the costs and benefits of more stringent standards. It was 
suggested that DOE also evaluate products such as foam wall sheathing, 
innovative roof systems, and solar thermal and photovoltaic systems in 
developing the proposed energy conservation standards, and to obtain 
information from HVAC equipment manufacturers on available equipment 
efficiencies specific to manufactured homes.
    With respect to design and construction techniques unique to 
manufactured homes, one commenter suggested that DOE adopt the energy 
efficiency specifications contained in the IECC unless something unique 
about the production of a manufactured home necessitated a different 
standard. Another commenter stated that DOE should coordinate with HUD 
on the development of the proposed rule and to make recommendations to 
HUD on non-energy-related issues for HUD consideration in updating the 
HUD Code. Specifically, it was suggested that DOE recognize exterior 
height and width limitations of manufactured homes in its proposed 
standards. DOE has attempted to address these comments by proposing 
thermal performance requirements that are similar to the HUD Code, 
while proposing other specific energy conservation requirements that 
are based on the requirements set forth in the 2015 edition of the 
IECC. DOE also has attempted to address unique aspects of manufactured 
homes in the proposed rule that would not be addressed by the proposed 
requirements for overall thermal performance.
    Regarding specific building thermal envelope requirements, DOE 
received a number of comments requesting that DOE retain the thermal 
envelope performance approach set forth in the HUD Code, rather than 
component prescriptive measures, in order to facilitate application and 
use of innovative technology and materials. Another commenter suggested 
that DOE consider HUD's U-factor calculation manual in developing the 
proposed standards. As discussed in section III.B.2.b) of this 
document, DOE proposes to establish thermal envelope requirements as a 
function of the overall thermal transmittance of the building thermal 
envelope of a manufactured home for consistency with the approach set 
forth in the HUD Code. DOE also proposes prescriptive requirements as 
an alternative to the Uo requirement.
    Regarding compliance with, and enforcement of, DOE's proposed 
energy conservation standards, DOE received a range of comments. First, 
DOE received comments suggesting that DOE rely on HUD's existing 
enforcement system rather than develop a separate DOE system of 
enforcement. Specifically, one commenter suggested that DOE consider 
using the existing HUD-approved third-party primary inspection agencies 
to ensure compliance with both HUD and DOE requirements for 
manufactured housing in order to avoid an increase in manufacturer fees 
and the creation of a duplicative system of compliance certification. 
Another commenter suggested that the HUD label be modified to reflect 
compliance with both the HUD and DOE requirements. Secondly, DOE 
received a comment that DOE develop a separate compliance certification 
system that would be independent of the existing HUD certification 
system. In this regard, it was suggested that DOE conduct in-plant and 
onsite inspections and audits using the DOE Building America Program 
and ENERGY STAR quality assurance protocols. It also was suggested that 
DOE's certification system ``complement'' the existing HUD system and 
that prospective DOE third-party certifiers receive adequate training 
to ensure that inspections would be conducted properly. Another 
commenter suggested that DOE rely on the EPA ENERGY STAR verification 
and labeling program to ensure compliance with the DOE energy 
conservation standards. One commenter suggested that DOE check the 
quality of construction while asserting that HUD should enforce 
violations of the DOE energy conservation standards. Furthermore, a 
commenter suggested that all manufactured homes be labeled using the 
DOE EnergySmart Home scale tool to demonstrate compliance with the 
proposed energy conservation standards.
    Finally, DOE received comments questioning the need for the 
development of energy conservation standards, noting the state of the 
housing market and the time and cost associated with the process to 
develop such requirements. Conversely, DOE received other comments 
indicating that more stringent energy conservation requirements are 
``urgently needed'' to prevent lost opportunities for energy and 
operating cost savings that are not currently being captured. DOE also 
was asked to consider adopting various energy efficiency improvements 
contained in the 2010 version of NFPA Standard 501. DOE received 
further comments indicating that the manufactured housing industry is 
in the unique position to meet national energy conservation goals while 
preserving home affordability. One commenter stated that increases in 
the purchase price of manufactured homes due to energy conservation 
improvements could raise issues of affordability without government 
subsidies or incentives. Another commenter similarly stated that 
raising energy conservation standards too quickly could impact 
manufacturers' ability to modify their in-plant production and site-
installation processes and procedures. Other commenters requested that 
DOE delay the effective date of any energy conservation requirements 
due to current economic conditions in order to give manufacturers 
sufficient time to meet the new energy conservation standards. Finally, 
commenters urged DOE to consult and collaborate with HUD, EPA, and the 
manufactured housing industry in development of the proposed rule. DOE 
notes that it is required by statute to set forth energy conservation 
standards for manufactured homes, and DOE carefully has considered 
comments regarding the scope of the proposed rule in developing the 
energy conservation requirements proposed herein.
    On June 25, 2013, DOE published a request for information (RFI) 
seeking information on indoor air quality,

[[Page 39765]]

financing and related incentives, model systems of enforcement, and 
other studies and research relevant to DOE's effort to establish 
conservation standards for manufactured housing. (78 FR 37995) With 
regard to indoor air quality, one commenter mentioned that reductions 
in air leakage can lead to increased formaldehyde concentrations and 
noted that increased mechanical ventilation also can increase moisture 
infiltration in humid climates, potentially leading to deleterious 
impacts such as mold growth. Several other commenters noted that there 
have been no reported issues with occupant health in energy efficient 
homes that have been sealed tightly to reduce air infiltration. 
Moreover, commenters noted that a home that is equipped with proper 
mechanical ventilation, such as the mechanical ventilation level 
required by the HUD Code, is adequate to ensure indoor air quality. DOE 
is preparing the draft EA in parallel with this rulemaking, and it will 
be posted to the DOE Web site separately. This draft EA will discuss 
the relationship among indoor air quality, air leakage, and occupant 
health.
    Comments on financing focused on the affordability of manufactured 
housing and the potential impacts of the proposed rule on the ability 
of purchasers of manufactured homes to qualify for financing. 
Commenters noted that increased costs associated with more energy 
efficient homes could have a negative impact on affordability in an 
industry in which the majority of home purchasers are low-income 
individuals and families. DOE has designed the proposed standards to 
achieve greater energy conservation in manufactured housing while 
accounting for the costs and benefits of the proposed standards on 
manufactured homeowners. In this regard, DOE has analyzed the lifecycle 
costs to low-income purchasers of manufactured homes (see chapter 9 of 
the TSD) and potential changes in manufactured home shipments in 
response to changes in purchase price (see chapter 10 of the TSD).
    Commenters generally agreed that DOE should integrate a program of 
compliance and enforcement into the existing structure utilized by HUD. 
Commenters also noted, however, that DOE should maintain a role in 
overseeing enforcement of its standards. Although DOE is not 
considering compliance and enforcement in this proposed rule, DOE will 
consider these comments in a future rulemaking if appropriate.
    DOE received other comments and data, including information on the 
average term of a manufactured housing loan. Another commenter stated 
that DOE should establish requirements that achieve the greatest 
possible energy conservation in manufactured housing, as the benefits 
of potential energy savings would outweigh potential increased purchase 
prices. Another commenter suggested that DOE develop standards that 
match the IECC as closely as possible. Finally, a commenter suggested 
that DOE abandon its rulemaking effort and begin the process anew while 
a set of joint commenters urged DOE to expedite publishing of a 
proposed rule. DOE has considered these comments in its analysis and 
the development of this proposed rule.
    After reviewing the comments received in response both to the ANOPR 
and to the June 2013 RFI and other stakeholder input, DOE ultimately 
determined that development of proposed manufactured housing energy 
conservation standards would benefit from a negotiated rulemaking 
process. On June 13, 2014, DOE published a notice of intent to 
establish a negotiated rulemaking MH working group to discuss and, if 
possible, reach consensus on a proposed rule. See 79 FR 33873. On July 
16, 2014, the MH working group was established under ASRAC in 
accordance with the Federal Advisory Committee Act and the Negotiated 
Rulemaking Act. See 79 FR 41456; 5 U.S.C. 561-70, App. 2. The MH 
working group consisted of representatives of interested stakeholders 
with a directive to consult, as appropriate, with a range of external 
experts on technical issues in development of a term sheet with 
recommendations on the proposed rule. The MH working group consisted of 
22 members, including one member from ASRAC and one DOE representative. 
The MH working group met in person during six sets of public meetings 
held in 2014 on August 4-5, August 21-22, September 9-10, September 22-
23, October 1-2, and October 23-24. See 79 FR 48097; 79 FR 59154.
    On October 31, 2014, the MH working group reached consensus on 
energy conservation standards in manufactured housing and assembled its 
recommendations for DOE into a term sheet that was presented to ASRAC. 
See public docket EERE-2009-BT-BC-0021-0107 (Term Sheet). ASRAC 
approved the term sheet during an open meeting on December 1, 2014, and 
sent it to the Secretary of Energy to develop a proposed rule.
    On February 11, 2015, DOE published an RFI (the 2015 RFI) 
requesting information that would aid in its determination of proposed 
SHGC requirements for certain climate zones. (80 FR 7550) One commenter 
indicated that DOE's negotiated rulemaking process was analytically 
flawed and made many procedural errors in carrying out the rulemaking 
process, including the operation of the MH working group and the 
interpretation of the underlying statutory directive on accounting for 
cost-effectiveness. This commenter also provided alternative cost data 
for use in the cost-benefit analysis. DOE has included a more detailed 
discussion of the comments received in response to the request for 
information in section III.B of this document.
    Following preparation and submission of the term sheet by the MH 
working group, DOE engaged in further consultation with HUD regarding 
DOE's proposed energy conservation standards. In addition to meeting 
with HUD, DOE prepared two presentations to discuss the proposed rule 
with the MHCC members, designed to gather information on the 
development of the proposed standards.
    DOE has considered all information ascertained from HUD, state 
agencies, the manufactured housing industry, and the public in 
developing the proposed rule. In an attempt to understand how certain 
requirements included in DOE's proposed rule would impact other aspects 
of the design and construction of manufactured homes, DOE also has 
carefully reviewed the HUD Code to ensure that the proposed rule would 
avoid unintended conflicts with HUD requirements both related and 
unrelated to energy conservation.
    The MH working group was established to negotiate energy 
conservation standards for manufactured housing and did not address 
options for systems of compliance and enforcement. DOE thus has not 
included proposed compliance and enforcement provisions in this 
document. DOE maintains its authority to address these issues in a 
future rulemaking.
    DOE also has not included proposed provisions related to waivers or 
exception relief that would be available to manufacturers in achieving 
compliance with this Part. Regarding waivers, DOE is interested in 
receiving information on whether a process is warranted by which a 
manufacturer could petition DOE for relief from an individual 
requirement. DOE also seeks public input on whether to establish 
proposed provisions for exception relief, which would be warranted in 
instances in which compliance with the proposed regulations would 
result in serious hardship, gross inequity, or unfair distribution of 
burdens on the part of a

[[Page 39766]]

manufacturer. DOE may consider including proposed provisions in this 
regard in a future rulemaking.

III. Discussion

A. The Basis for the Proposed Standards

    EISA requires that DOE establish energy conservation standards for 
manufactured housing that are ``based on the most recent version of the 
[IECC] . . . , except in cases in which [DOE] finds that the [IECC] is 
not cost-effective, or a more stringent standard would be more cost-
effective, based on the impact of the [IECC] on the purchase price and 
on total life-cycle construction and operating costs.'' See 42 U.S.C. 
17071(b). Given that the 2015 edition of the IECC (the 2015 IECC) 
constitutes ``the most recent version of the IECC,'' the MH working 
group based its recommendations on the specifications included in the 
2015 IECC that are appropriate for manufactured homes, which DOE has 
considered in developing the proposed rule.
    As noted above, the 2015 IECC applies generally to residential 
buildings, including site-built and modular housing, and is not 
specific to the manufactured housing industry. Consistent with the 
recommendations of the MH working group, DOE proposes standards that 
are based on certain specifications included in the 2015 IECC and that 
account for the unique aspects of manufactured housing. DOE carefully 
considered the following aspects of manufactured housing design and 
construction in developing the proposed standards:
     Manufactured housing structural requirements contained in 
the HUD Code;
     External dimensional limitations associated with 
transportation restrictions;
     The need to optimize interior space within manufactured 
homes; and
     Factory construction techniques that facilitate sealing 
the building thermal envelope to limit air leakage.
    Based on these considerations, and consistent with the 
recommendations of the MH working group, DOE is proposing certain 
requirements that differ from similar provisions contained in the 2015 
IECC. These include presenting the building thermal envelope 
requirements in terms of Uo of the entire building thermal 
envelope, accounting for space limitations in ceiling assemblies when 
establishing insulation requirements and other revisions to ensure the 
text is applicable to manufactured housing.
    Additionally, the MH working group recommended, and DOE considered, 
in developing this proposed rule the potential effects on purchase 
price and total lifecycle construction and operating costs, design and 
factory construction techniques unique to manufactured homes, and the 
impacts of reliance on the climate zones established by HUD and as set 
forth in the 2015 IECC. A detailed discussion of each of these issues 
is contained in chapter 8 of the TSD and sections III.B and III.C of 
this document.
    The following section discusses in detail the proposed energy 
conservation standards as set forth in the proposed rule. Subpart A as 
proposed contemplates the scope of the proposed standards, proposed 
definitions of key terms, and other commercial standards that would be 
incorporated by reference into this part. The subpart also proposes a 
compliance date of one year following the publication of the final 
rule.
    Proposed subpart B would include energy conservation requirements 
associated with the building thermal envelope of a manufactured home 
according to the climate zone in which the home is located. DOE 
proposes to base its building thermal envelope energy conservation 
standards on four climate zones, which generally follow state borders 
with some exceptions. DOE proposes two options to ensure an appropriate 
level of thermal transmittance through the building thermal envelope. 
The first approach contemplates prescriptive requirements for 
components of the building thermal envelope. The second is a 
performance-based approach under which a manufactured home would be 
required to achieve a maximum Uo in addition to fenestration 
U-factor and SHGC requirements. Subpart B also would establish 
prescriptive requirements for insulation and sealing the building 
thermal envelope to limit air leakage.
    Subpart C would include requirements related to duct leakage; HVAC 
thermostats and controls; service water heating; mechanical ventilation 
fan efficacy; and equipment sizing.
    As noted in this preamble, EISA requires DOE to update its energy 
conservation standards for manufactured housing not later than one year 
after any revision to the IECC. Pursuant to this statutory direction, 
DOE intends to update its energy conservation standards for 
manufactured housing, if promulgated, within one year of the 
publication of any revision to the 2015 IECC. This proposed rule 
invites comments on all DOE proposals and issues presented herein, and 
requests comments, data, and other information that would assist DOE in 
developing a final rule.

B. Proposed Energy Conservation Requirements

1. Subpart A: General
(a) Sec.  460.1 Scope
    Pursuant to section 413 of EISA, Congress directed DOE to establish 
standards for energy conservation in manufactured housing. Section 
460.1 would restate the statutory requirement and introduce the scope 
of the proposed requirements. Section 460.1 also would require 
manufactured homes that are manufactured on or after one year following 
publication of the final rule to comply with the requirements 
established in part 460.
    DOE proposes a one-year period following publication of a final 
rule to allow manufacturers to transition their designs, materials, and 
factory operations and processes to comply with the finalized DOE 
energy conservation standards and regulations. A one-year notice period 
is common industry practice for amendments to the IECC and other 
changes to building codes; however, DOE seeks input on whether these 
standards are analogous to IECC or whether they would impose a 
different level of manufacturer research and effort to comply. In 
addition, DOE seeks comment on whether additional lead time is 
necessary to harmonize compliance and enforcement with HUD's 
manufactured housing program, redesign manufactured housing to meet the 
standards, and test and certify the new designs. The agency also 
requests comment on whether there are any particular timing 
considerations that the agency should consider due to manufacturers 
choosing to comply with either the prescriptive or thermal envelope 
compliance paths. DOE requests comment on the scope and effective date 
of the proposed rule and whether the proposed effective date would 
provide manufacturers sufficient lead time to prepare to comply with 
the standards.
(b) Sec.  460.2 Definitions
    Section 460.2 would define key terms used throughout the proposed 
regulations, many of which were derived from either the 2015 IECC or 
the HUD Code, with modifications where further clarification was needed 
in the context of manufactured housing. Proposed definitions based on 
terms included in the 2015 IECC were developed in accordance with 
recommendations from the MH working group. See Term Sheet at 1. DOE has 
included a discussion of each of the

[[Page 39767]]

proposed definitions in the following paragraphs.
    (a) Accessible. DOE proposes to adopt the definition of the term 
``accessible'' from the 2015 IECC while clarifying that the definition 
would allow access to certain labels or control interfaces that require 
close approach upon inspection or repair.
    (b) Air barrier. The term ``air barrier'' also would be based on 
the definition of the same term in the 2015 IECC while clarifying that 
an air barrier could consist of a single material or combination of 
materials. DOE intends for the definition of this term to include the 
materials involved in limiting air leakage to meet air sealing 
requirements and requests comment on whether further clarification is 
needed on the meaning in this regard.
    (c) Automatic. DOE proposes to adopt the definition of the term 
``automatic'' from the 2015 IECC. The terms ``automatic'' and 
``manual'' would differentiate between controls that are operated by 
impersonal (automatic) and personal (manual) influences.
    (d) Building thermal envelope. DOE has derived the proposed 
definition of ``building thermal envelope'' from the definition of the 
same term in the 2015 IECC, with revisions that account for the manner 
in which manufactured homes are designed and constructed. The proposed 
definition does not include basement walls, for example, given the 
unique construction of a manufactured home relative to a site-built 
home.
    (e) Ceiling. DOE proposes to define the term ``ceiling,'' which is 
not defined in the 2015 IECC or the HUD Code, to ensure specificity 
with the proposed prescriptive standards of part 460.
    (f) Circulating hot water system. DOE would define the term 
``circulating hot water system'' to be consistent with the 2015 IECC to 
describe water distribution systems in a manufactured home that uses a 
pump to circulate water between water-heating equipment and fixtures.
    (g) Climate zone. DOE proposes to define the term ``climate zone'' 
in accordance with the term as defined in the 2015 IECC, with revisions 
as applicable to the specific geographic regions set forth in the 
proposed rule. The proposed rule establishes different energy 
conservation standards for manufactured homes located in different 
climate zones.
    (h) Conditioned space. DOE would adopt the definition of the term 
``conditioned space'' from the 2015 IECC to describe areas, rooms, or 
spaces that are enclosed within the building envelope.
    (i) Continuous air barrier. DOE proposes to adopt the definition of 
the term ``continuous air barrier'' from the 2015 IECC to encompass the 
material or combination of materials that limit air leakage through the 
building thermal envelope.
    (j) Door. DOE would define the term ``door,'' which is not defined 
in the 2015 IECC or the HUD Code, to ensure specificity with the 
proposed prescriptive standards of part 460.
    (k) Dropped ceiling. DOE proposes to define the term ``dropped 
ceiling,'' which is not defined in the 2015 IECC or the HUD Code, to 
ensure specificity with the proposed standards under Sec. Sec.  
460.103(a) and 460.104.
    (l) Dropped soffit. DOE would define the term ``dropped soffit,'' 
which also is not defined in the 2015 IECC or the HUD Code, to ensure 
specificity with the proposed prescriptive standards under Sec. Sec.  
460.104(a) and 460.104.
    (m) Duct. DOE proposes to adopt the definition of the term ``duct'' 
from the 2015 IECC to include tubes or conduits, except air passages 
within a self-contained system, used for conveying air to or from 
heating, cooling, or venting equipment.
    (n) Duct system. DOE proposes to define the term ``duct system'' as 
derived from the meaning of the term under the 2015 IECC to refer to a 
continuous passageway for the transmission of air, composed of ducts 
and other required accessories.
    (o) Eave. DOE would define the term ``eave,'' which is not defined 
in the 2015 IECC or the HUD Code, to ensure specificity with the 
proposed prescriptive standards under Sec. Sec.  460.103(a) and 
460.104.
    (p) Equipment. DOE proposes to define the term ``equipment,'' which 
is not defined in the 2015 IECC or the HUD Code, to add further 
clarification to the meaning of the proposed prescriptive provisions of 
this part.
    (q) Exterior wall. DOE proposes to adopt the definition of the term 
``exterior wall'' from the 2015 IECC and describes walls that enclose 
conditioned space.
    (r) Fenestration. DOE would derive the definition of the term 
``fenestration'' from the 2015 IECC, which encompasses both vertical 
fenestration and skylights. DOE requests comment on whether to amend 
the definition of ``fenestration'' to include tubular daylighting 
devices.
    (s) Floor. DOE proposes to define the term ``floor,'' which is not 
defined in the 2015 IECC or the HUD Code, to ensure specificity with 
the proposed prescriptive standards of part 460.
    (t) Glazed or glazing. DOE would define the terms ``glazed'' or 
``glazing,'' which are not defined in the 2015 IECC or the HUD Code, to 
ensure specificity with the proposed prescriptive standards of this 
Part and for consistency with the meaning of the terms as used in the 
National Fenestration Rating Council Standard 100-2004.
    (u) Infiltration. DOE proposes to adopt the definition of the term 
``infiltration'' from the 2015 IECC, which describes the uncontrolled 
air leakage into a manufactured home.
    (v) Insulation. DOE would define the term ``insulation'' to mean 
material qualifying as ``insulation'' for consistency with the U.S. 
Federal Trade Commission definition of insulation and to ensure 
specificity with the proposed standards of part 460.
    (w) Manufactured home. DOE proposes to adopt the same definition of 
``manufactured home'' as used in the HUD Code in order to ensure 
consistency among both agencies' regulations.
    (x) Manufacturer. As discussed below, the underlying statutory 
authority for this rulemaking does not define the term 
``manufacturer.'' DOE proposes to adopt the definition of the term 
under the HUD Code to mean any person engaged in the factory 
construction or assembly of a manufactured home, including any person 
engaged in import of a manufactured home for resale.
    (y) Manual. DOE proposes to define the term ``manual'' to be 
consistent with the 2015 IECC. As stated in this preamble, the terms 
``automatic'' and ``manual'' would differentiate between controls that 
are operated by impersonal (automatic) and personal (manual) 
influences.
    (z) R-value (thermal resistance). DOE would adopt the definition of 
the term ``R-value'' from the 2015 IECC to refer to a defined 
quantitative measure of the resistance to heat flow of a material or 
assembly of materials.
    (A) Rough opening. The term ``rough opening,'' which is not defined 
in the 2015 IECC or the HUD Code, would identify the location 
corresponding to the area of an assembly containing fenestration.
    (B) Service hot water. DOE proposes to adopt the definition of the 
term ``service hot water'' from the 2015 IECC to refer to the supply of 
hot water for uses other than space or comfort heating, such as for 
bathing.
    (C) Skylight. DOE proposes to define the term ``skylight'' based on 
the meaning of the term in the 2015 IECC, clarifying that the term 
includes the entire assembly of glass or other transparent or 
translucent glazing material and the frame, installed at a slope of 
less than 60 degrees from the horizontal.

[[Page 39768]]

    (D) Solar heat gain coefficient (SHGC). DOE would adopt the 
definition of the term ``solar heat gain coefficient'' from the 2015 
IECC. SHGC is an important property of transparent or translucent 
fenestration that affects the heat gain and loss of the building 
thermal envelope. The SHGC of a fenestration assembly is defined as the 
ratio of the amount of solar heat gain transmitted or reradiated 
through the assembly to the amount of incident solar radiation.
    (E) State. The term ``state'' would include each of the 50 states, 
the District of Columbia, the Commonwealth of Puerto Rico, Guam, the 
U.S. Virgin Islands, and American Samoa.
    (F) Thermostat. DOE proposes to adopt the definition of the term 
``thermostat'' from the 2015 IECC to describe automatic control devices 
used to maintain a given temperature.
    (G) U-factor (thermal transmittance). DOE would adopt the 
definition of the term ``U-factor'' from the 2015 IECC to refer to a 
defined quantitative measure of the transmittance of heat of a material 
or assembly of materials.
    (H) Uo (overall thermal transmittance). DOE proposes to define the 
term Uo (overall thermal transmittance), which is not defined in the 
2015 IECC or HUD Code, as the coefficient of heat transmission (air to 
air) through the entire building thermal envelope, equal to the time 
rate of heat flow per unit area and unit temperature difference between 
the warm side and cold side air films.
    (I) Ventilation. DOE proposes to adopt the definition of the term 
``ventilation'' from the 2015 IECC to refer to the supply or removal of 
air from any space by natural or mechanical means.
    (J) Vertical fenestration. DOE would adopt the definition of the 
term ``vertical fenestration'' from the 2015 IECC to include materials, 
such as windows and doors that may be glazed or opaque, installed at an 
angle of greater than or equal to 60 degrees from horizontal.
    (K) Wall. DOE proposes to define the term ``wall,'' which is not 
defined in the 2015 IECC or the HUD Code, to ensure specificity with 
the proposed standards under this Part.
    (L) Whole-house mechanical ventilation system. DOE proposes to 
adopt the definition of the term ``whole-house mechanical ventilation 
system'' from the 2015 IECC to refer to a mechanical system that is 
designed to exchange indoor air with outdoor air either periodically or 
continuously.
    (M) Window. DOE proposes to define the term ``window,'' which is 
not defined in the 2015 IECC or the HUD Code, to ensure specificity 
with the proposed standards under this part.
    (N) Zone. DOE would adopt the definition of the term ``zone'' from 
the 2015 IECC to apply to controls within a manufactured home and to 
refer to a space or group of spaces within a manufactured home with 
sufficiently similar requirements for heating and cooling that can be 
maintained using a single controlling device.
    DOE would not include certain definitions that are contemplated in 
the 2015 IECC, including ``above-grade wall,'' ``addition,'' 
``alteration,'' ``approved,'' ``approved agency,'' ``basement wall,'' 
``building,'' ``building site,'' ``C-factor,'' ``code official,'' 
``commercial building,'' ``conditioned floor area,'' ``continuous 
insulation,'' ``curtain wall,'' ``demand recirculation water,'' 
``DOE,'' ``energy analysis,'' ``energy cost,'' ``energy simulation 
tool,'' ``energy rating index (ERI) reference design,'' ``fenestration 
product,'' ``site-built,'' ``F-factor,'' ``heated slab,'' ``high-
efficacy lamps,'' ``historic building,'' ``insulating sheathing,'' 
``insulated siding,'' ``labeled,'' ``listed,'' ``low-voltage 
lighting,'' ``proposed design,'' ``rated design,'' ``readily 
accessible,'' ``repair,'' ``reroofing,'' ``residential building,'' 
``roof assembly,'' ``roof recover,'' ``roof repair,'' ``roof 
replacement,'' ``standard reference design,'' ``sunroom,'' ``thermal 
envelope,'' ``thermal isolation,'' ``ventilation air,'' and ``visible 
transmittance.'' These terms are either not relevant to manufactured 
housing or not relevant to the energy conservation requirements 
proposed in this subpart.
    DOE requests comment on each of the proposed definitions and seeks 
input on the need for additional clarification to ensure consistency 
among the HUD Code and general industry practice.
(c) Sec.  460.3 Materials Incorporated by Reference
    DOE proposes to incorporate certain materials by reference in the 
proposed rule, including Air Conditioning Contractors of America (ACCA) 
Manual J; ACCA Manual S; and ``Overall U-Values and Heating/Cooling 
Loads--Manufactured Homes'' by Conner and Taylor (the Battelle Method). 
ACCA Manuals J and S would be incorporated by reference in accordance 
with Sec.  460.205 of this subpart and would relate to the selection 
and sizing of heating and cooling equipment. The Battelle Method is an 
industry standard methodology for calculating the overall thermal 
transmittance of a manufactured home. The Battelle method currently is 
referenced in the HUD Code for calculation of overall thermal 
transmittance. To maintain consistency with the practices of the 
manufactured home industry, DOE has determined these materials are 
appropriate for inclusion in the proposed rule.
2. Subpart B: Building Thermal Envelope
    DOE proposes to establish energy conservation standards for 
manufactured housing based on the size and geographic location of a 
home, as doing so would allow DOE to capture a more accurate balance 
between energy conservation and cost-effectiveness in developing its 
standards. For example, manufactured homes frequently are identified by 
size, including single-section and multi-section homes. Manufactured 
homes of varying size are capable of reaching different levels of 
energy conservation based on the ratio of floor square footage to 
building thermal envelope surface area. A single energy conservation 
standard for manufactured homes of all sizes thus would be more 
difficult to achieve in a single-section homes as compared to a multi-
section home. Consistent with the recommendations of the MH working 
group, DOE proposes to establish different standards for manufactured 
homes located in different regions of the country and for manufactured 
homes of different size. Subpart B reflects DOE's proposed approach in 
this regard, and DOE requests comment in this regard.
(a) Sec.  460.101 Climate Zones
    Pursuant to EISA, DOE may consider basing its energy conservation 
standards on the climate zones established by HUD rather than on the 
climate zones contained in the IECC. See 42 U.S.C. 17071(b)(2)(B). The 
potential for climatic differences to affect energy consumption 
supports an approach in which energy conservation standards account for 
geographic differences in climate. For example, the appropriate level 
of insulation for a manufactured home located in southern Florida would 
not necessarily be appropriate for a manufactured home located in New 
Hampshire.
    As indicated in Figure III.1, the HUD Code divides the United 
States into three distinct climate zones for the purpose of setting its 
building thermal envelope requirements, the boundaries of which are 
separated along state lines. Conversely, as indicated in Figure III.2, 
section R301.1 of the 2015 IECC divides the country into eight climate 
zones, the boundaries of which are separated along county lines. The 
2015 IECC also provides requirements for three possible variants (dry, 
moist, and marine) within

[[Page 39769]]

certain climate zones, as indicated in Figure III.2. The HUD Code 
climate zones were developed to be sensitive to the manner in which the 
manufactured housing industry constructed and placed manufactured homes 
into the market. The 2015 IECC climate zones are separated along county 
lines to reflect a more accurate overview of climate distinctions 
within the United States and to facilitate state and local enforcement 
of the IECC for residential and commercial buildings, including site-
built and modular construction.
[GRAPHIC] [TIFF OMITTED] TP17JN16.001

    The 2015 IECC includes climate zone-specific prescriptive energy 
conservation specifications for the building thermal envelope. In 
accounting for the design and factory construction techniques for 
manufactured homes, the MH working group recommended that DOE perform a 
LCC analysis on various cities located in each of the 2015 IECC climate 
zones. The MH working group also recommended that DOE incorporate into

[[Page 39770]]

its LCC analysis several alternatives to certain 2015 IECC prescriptive 
specifications, including alternative levels of insulation in ceilings, 
walls, and floors.
    DOE calculated the LCC for various alternatives to the 2015 IECC 
prescriptive specifications for 19 cities, representing a 
geographically diverse set of climates, with at least one city in each 
of the 2015 IECC climate zones. As discussed in greater detail in 
section III.B.2.b of this document and chapters 6 and 8 of the TSD, 
DOE's LCC analysis demonstrated that common building thermal envelope 
requirements for multiple groups of cities proved to be most cost-
effective. After reviewing DOE's LCC analysis, the MH working group 
recommended that DOE establish four climate zones that placed cities 
with the same set of most-cost-effective building thermal envelope 
requirements in the same climate zone. The MH working group found that 
a four climate zone approach would improve upon the HUD Code climate 
zones with regard to energy conservation by more accurately 
distinguishing among regions with similar climates while simultaneously 
minimizing the extensive subdivisions of states found in the 2015 IECC. 
Consistent with the recommendations of the MH working group \4\ and as 
illustrated in Figure III.3, Sec.  460.101 would establish a new 
climate zone arrangement that reflects the advantages of both the HUD 
Code and the 2015 IECC climate zones. See Term Sheet at 2.
---------------------------------------------------------------------------

    \4\ The term sheet named the four climate zones 1A, 1B, 2, and 
3. DOE proposes to rename these climate zones as 1 (former climate 
zone 1A), 2, (former climate zone 1B), 3 (former climate zone 2), 
and 4 (former climate zone 3).
[GRAPHIC] [TIFF OMITTED] TP17JN16.002

    If DOE's proposed energy conservation standards adopted the eight 
climate zones established in the 2015 IECC, 40 states would be divided 
into two or more climate zones. Although the 2015 IECC climate zones 
more precisely account for climatic conditions that affect energy use 
in the United States, any loss of accuracy in addressing climatic 
differences is negligible compared to the impracticality to the 
manufactured housing industry of designing and constructing 
manufactured homes that comply with eight different sets of climate 
zone requirements and planning home shipments based on individual 
states with multiple climate zones. A large number of climate zones, 
particularly within a state, would burden the manufactured housing 
industry because manufacturers are not always certain of the eventual 
destination of a home during the manufacturing process. That is, 
although some manufactured homes are custom orders where the 
destination is known prior to manufacture, many other manufactured 
homes are stocked as inventory with manufactured housing dealers. In 
particular, manufactured housing dealers and installers in states with 
multiple climate zones would encounter increased complexities 
associated with ordering, stocking, selling, installing, and servicing 
manufactured homes.
    Although DOE generally prioritized establishment of a single 
climate zone per state where appropriate, the size or varied climate of 
certain states necessitated two climate zones in some instances. DOE's 
proposed climate zones bifurcate Texas, Louisiana, Alabama, 
Mississippi, Georgia, and Arizona. Data indicates that the inland 
climate of Texas, Louisiana, Alabama, Mississippi, and Georgia varies 
significantly from these states' coastal climates along the borders of 
the Gulf of Mexico. Similarly, southwestern Arizona exhibits different 
weather patterns from the rest of the state.
    DOE requests comment on the proposal to establish four climate 
zones as well as input with regard to categorization of states and 
counties that comprise each climate zone. To the extent that a 
particular approach is advocated, commenters also should provide 
analyses and data on the potential impact to the costs and benefits of 
the proposed rule. DOE also requests comment on the need for additional 
training of state and local building officials who must be familiar 
with the requirements of two rather than one climate zone.

[[Page 39771]]

(b) Sec.  460.102 Building Thermal Envelope Requirements
    Section 460.102 would establish requirements related to the 
building thermal envelope, which includes the materials within a 
manufactured home that separate the interior conditioned space from the 
exterior of the building or interior spaces that are not conditioned 
space. As discussed in this preamble, Sec.  460.102(a) would establish 
two approaches to ensure that the building thermal envelope would meet 
more stringent energy conservation levels: A prescriptive option and a 
maximum Uo option.
    In developing recommendations under this section, the MH working 
group carefully considered section R402.1 of the 2015 IECC, which sets 
forth two primary compliance pathways. First, sections R402.1.2 and 
R402.1.4 of the 2015 IECC contain climate zone-specific prescriptive 
building thermal envelope component R-value requirements, prescriptive 
fenestration U-factor requirements, and prescriptive SHGC requirements. 
Second, section R402.1.5 of the 2015 IECC provides an alternate pathway 
to compliance, which allows for a home to be constructed using a 
variety of materials as long as the entire building thermal envelope 
has a singular total UA value \5\ that is less than or equal to the sum 
of the component U-factor requirements under section R402.1.4 
multiplied by the surface area of the building thermal envelope 
components. The first option is referred to as a ``prescriptive-based 
approach'' and the second option is referred to as a ``performance-
based approach.''
---------------------------------------------------------------------------

    \5\ Total UA is a metric that is very similar to Uo 
that typically is used in the context of site-built construction. 
Section R402.1.5 of the 2015 IECC uses the metric ``total UA,'' 
which denotes the sum of each building thermal envelope component's 
U-factor multiplied by the assembly area of the component. This 
metric is referred to as ``Uo'' in the manufactured 
housing industry and serves the same function as ``total UA.''
---------------------------------------------------------------------------

    DOE considered developing proposed requirements in line with either 
a prescriptive-based approach or a performance-based approach for 
specific assemblies that comprise the building thermal envelope. 
Ultimately, however, and consistent with the recommendation of the MH 
working group, DOE determined that allowing manufacturers to choose 
between two pathways for compliance would realize cost-effective energy 
savings for homeowners while providing for flexibility within the 
manufactured housing industry. See Term Sheet at 3-4.
    The prescriptive approach would establish specific component R-
value, U-factor, and SHGC requirements, providing a straightforward 
option for construction planning. This pathway would facilitate the 
ease of compliance but would restrict manufacturer flexibility in 
making trade-offs, such as increasing insulation levels in some 
building thermal envelope components while decreasing insulation levels 
in other building thermal envelope components.
    In contrast, the performance-based approach would allow a 
manufactured home to be constructed using a variety of different 
materials with varying thermal properties so long as the building 
thermal envelope achieved a required level of overall thermal 
performance. The performance-based approach thus would provide 
manufacturers with greater flexibility in identifying and implementing 
cost-effective approaches to building thermal envelope design. The 
performance-based approach is familiar to the manufactured housing 
industry, as this approach is the basis for the building thermal 
envelope requirements under the HUD Code. The proposed performance-
based requirements would be intended to be functionally equivalent to 
the prescriptive-based requirements in that both options would result 
in manufactured homes with approximately the same amount of energy use.
    DOE requests comment on the proposal to set forth prescriptive and 
performance options for the purpose of compliance with the proposed 
building thermal envelope requirements. In particular, DOE requests 
comment on the requirements of each pathway as well as their 
equivalency in terms of overall thermal performance.
    The proposed prescriptive building thermal envelope requirements 
under Sec.  460.102(b) are stated in terms of minimum R-value and 
maximum U-factor and SHGC requirements. The MH working group 
recommended the prescriptive values set forth in Table III.3 that DOE 
has adopted in this rulemaking by assessing and revising the 2015 IECC 
specifications to ensure cost-effectiveness based on the impact on the 
purchase price of manufactured homes and on total lifecycle 
construction and operating costs. See Term Sheet at 3.

                                        Table III.1--Proposed Building Thermal Envelope Prescriptive Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                     Ceiling R-                                       Window U-      Skylight U-                    Glazed fenestration
           Climate zone                 value       Wall R-value    Floor R-value      factor          factor       Door U-factor           SHGC
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................              30              13              13            0.35            0.75            0.40  0.25.
2................................              30              13              13            0.35            0.75            0.40  0.33.
3................................              30              21              19            0.35            0.55            0.40  0.33.
4................................              38              21              30            0.32            0.55            0.40  No Rating.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As discussed in greater detail in chapter 6 of the TSD, DOE 
developed the requirements included in Sec.  460.102(b), as illustrated 
in Table III.1, by evaluating the cost-effectiveness of the 2015 IECC 
building thermal envelope specifications and alternatives to these 
specifications. DOE performed LCC analysis for all alternatives to the 
2015 IECC specifications that were recommended by the MH working group, 
in order to assist in the development of cost-effective standards under 
this rule.
    The MH working group requested that DOE evaluate variations in the 
R-value requirement for ceilings, walls, and floors, and the U-factor 
requirement for windows, to determine the impact on cost-effectiveness 
relative to the 2015 IECC requirements. Upon analyzing a range of 
ceiling insulation requirements from R-22 to R-38, wall insulation 
requirements from R-13 to R-21, floor insulation requirements from R-13 
to R-38, and window U-factor requirements from 0.40 to 0.31, DOE has 
proposed the most cost-effective energy conservation requirement for 
each climate zone, as included in Table III.1.
    The MH working group also requested that DOE conduct sensitivity 
analyses of window SHGC. See Term Sheet at 3. In climate zone 1, DOE 
analyzed a range of window SHGC from 0.25 to 0.40. DOE is proposing the 
most cost-effective

[[Page 39772]]

SHGC requirement for climate zone 1, as included in Table III.1. In 
climate zone 4, the MH working group requested that DOE not run 
sensitivity analyses for different SHGC options for most cities found 
in climate zone 4. SHGC has a smaller impact on energy use in regions 
dominated by heating rather than cooling loads. In these locations, 
more stringent SHGC requirements can lead to increased energy 
consumption by blocking the solar heating effects of sunlight. For 
these reasons, the MH working group proposed to not modify the 2015 
IECC specification of no requirement, and DOE is incorporating the 2015 
IECC specification of no SHGC requirement for proposed climate zone 4. 
Please see chapter 6 of the TSD for additional detail on DOE's SHGC 
sensitivity analyses.
    The MH working group also recommended that DOE perform a 
sensitivity analysis of the total cost of ownership to determine the 
most cost-effective SHGC for climate zones 2 and 3. See Term Sheet at 
3. DOE recognizes that many variables affecting the selection of 
recommended SHGC values were discussed by the MH working group over the 
course of multiple public meetings. At the recommendation of the MH 
working group, DOE studied the potential economic impacts of several 
SHGC values with the intent of proposing prescriptive SHGC requirements 
that provide the greatest economic benefit. Economic impact was the 
primary decision tool used in proposing prescriptive SHGC values, and 
DOE has prepared an economic analysis that supports different SHGC 
requirements for climate zones 2 and 3. DOE specifically found that an 
SHGC of 0.30 was the most cost-effective SHGC value based on a 10-year 
cost of ownership savings calculation. See 80 FR 7550. In arriving at 
this value, DOE placed all windows on one side of the manufactured 
home, with the windows facing west. DOE used this window orientation in 
its sensitivity analysis in order to arrive at SHGC values that would 
have the greatest impact on energy savings. DOE sought public input on 
this methodology and analysis in the 2015 RFI. See 80 FR 7550.
    In response to the 2015 RFI, several commenters stated that factors 
other than total cost of ownership should be considered when proposing 
a prescriptive SHGC requirement. One commenter suggested that the total 
cost of ownership analysis should not be the sole consideration for 
choosing the SHGC requirement and that DOE should consider the 2015 
IECC SHGC specifications, lifecycle costs, potential impacts on the 
purchase price of manufactured housing, air conditioner down-sizing and 
cost savings opportunities, reductions in peak electric loads, and 
manufacturer benefits in harmonizing SHGC across climate zones. Another 
commenter suggested that equipment downsizing, reduction in peak 
demand, improved occupant comfort leading to behavioral changes in 
adjusting a thermostat, synchronizing with the 2015 IECC, and lifecycle 
costs should be considered as a basis for the proposed SHGC 
requirements. The commenter also recommended that an SHGC of 0.25 in 
climate zones 1, 2, and 3 would be beneficial, as doing so would 
establish only two window requirements (SHGC of 0.25 in climate zones 
1, 2, and 3; and no SHGC requirement for climate zone 4) and would 
simplify and streamline the purchasing of windows for manufacturers of 
manufactured homes.
    Other commenters noted that placing all windows on one side of a 
manufactured home with the assumption that all windows face west was an 
atypical assumption. The commenters suggested that window orientation 
should follow the same ``industry average'' convention used in all 
other assumptions used in DOE's SHGC analysis. The commenters presented 
analysis based on their assessment of industry averages to demonstrate 
that such assumptions would support an SHGC requirement of 0.33; 
however, this analysis included assumptions that differed from those 
agreed upon by the MH working group, including window-to-floor area, 
window shading, and window cost. The commenters also noted that a group 
of windows with a weighted SHGC of 0.30 would require a mixture of 
window products of dissimilar aesthetic. Finally, the commenters 
believed that the likely industry response to a 0.30 SHGC requirement 
would be to assemble manufactured homes with a single window product 
SHGC value closer to 0.25. DOE also received a comment that supported 
the window orientation that DOE employed in its analysis, recommending 
that the analysis properly based SHGC assumptions on window orientation 
that would experience the highest energy use.
    In response to the aforementioned comments, DOE determined that the 
window orientation assumption used in its SHGC analysis was 
inconsistent with other analytical assumptions under the proposed rule, 
as a more representative SHGC analysis would place windows uniformly on 
all sides of a manufactured home. Although the assumption of all 
windows facing west represents the highest energy use window 
orientation, manufactured homes with other window orientations would 
not experience as large an economic benefit. DOE also found no reason 
to deviate from the other assumptions in the submitted analysis 
(window-to-floor area, window shading, and window cost) that formed the 
basis of the MH working group's deliberations and recommendations. 
Finally, DOE notes that factors such as lifecycle costs, potential 
impacts on the purchase price of manufactured housing are included in 
its analysis.
    DOE did not include air conditioner down-sizing and cost savings 
opportunities in its SHGC analysis. Although in some instances a 
manufacturer may be able to install a smaller air conditioner, for 
example, leading to reduced energy costs and a lower purchase price, 
this is not always possible. DOE did not prioritize peak electric load 
reduction over lifecycle cost savings to individual manufactured 
homeowners under its analysis. Finally, while equivalent SHGC 
requirements across climate zones could simplify window procurement for 
manufacturers, DOE notes that manufacturers could elect to use the same 
window types for manufactured homes shipped to any climate zone in 
accordance with the proposed rule.
    DOE repeated its SHGC sensitivity analysis of climate zones 2 and 3 
using a uniform window orientation to study the economic impacts of 
SHGC values of 0.25, 0.30, and 0.33. This analysis indicated SHGC of 
0.33 had the greatest total cost of ownership savings; therefore, DOE 
proposes requiring SHGC of 0.33 in climate zones 2 and 3. Because the 
sensitivity analysis performed for climate zone 1 during the negotiated 
consensus process used the original assumption of uniform window 
distribution, this analysis was not repeated for climate zone 1.
    For skylight U-factor requirements, the MH working group did not 
request that DOE evaluate the effect of variations of the 2015 IECC 
requirements on cost-effectiveness. Because there were LCC savings 
associated with the 2015 IECC requirements, DOE is proposing to adopt 
the 2015 IECC U-factor requirements for skylights into the proposed 
rule. This proposal is consistent with the recommendation of the MH 
working group. See Term Sheet at 3.
    For door U-factor requirements, DOE found that a manufactured home 
with a U-factor of 0.40 was cost-effective. Therefore, DOE proposes a 
prescriptive door U-factor requirement of 0.40 in all climate zones for 
the proposed rule.

[[Page 39773]]

This proposal is consistent with the recommendation of the MH working 
group. See Term Sheet at 3.
    Section 460.102(b)(2) as proposed would require the truss heel 
height to be a minimum of 5.5 inches at the outside face of each 
exterior wall for the purpose of compliance with the prescriptive 
ceiling insulation R-value requirement established under Sec.  
460.102(b)(1). This minimum heel height requirement would ensure that a 
minimum space is available in the eaves of the ceiling, allowing for 
adequate insulation coverage near the eaves. This proposal is also 
consistent with the recommendation of the MH working group. See Term 
Sheet at 3.
    Section 460.102(b)(3) would authorize manufacturers to install 
ceiling insulation with either a uniform thickness or a uniform 
density. In many cases, a ceiling may need to be filled with loose 
blown insulation to a greater height at the center of the ceiling 
relative to the edges near the eaves to meet average overall R-value 
requirements. Although uniform insulation thickness is not required 
under the proposed standard, the 5.5-inch minimum truss heel height 
encourages a minimum insulation thickness at the eaves. This proposal 
is also consistent with the recommendations of the MH working group. 
See Term Sheet at 3.
    Section 460.102(b)(4) would authorize manufacturers to use a 
combination of R-21 batt insulation and R-14 blanket insulation in lieu 
of R-30 insulation for the purpose of compliance with the climate zone 
4 floor insulation R-value requirement under paragraph (b)(1) of this 
section. This requirement would reflect industry practice in which 
manufactured homes often do not have space in the floor to accommodate 
R-30 insulation without compression. DOE thus proposes that R-21 batt 
insulation plus R-14 blanket insulation would be deemed compliant with 
the R-30 requirement in order to provide a prescriptive alternative for 
space-constrained floors. This proposal is also consistent with the 
recommendation of the MH working group. See Term Sheet at 3.
    Section 460.102(b)(5) would authorize manufacturers to exclude from 
the SHGC requirements under Sec.  460.102(a) any individual skylight 
with an SHGC that is less than or equal to 0.30. This requirement 
effectively would establish an exception for skylights to the SHGC 
requirements in climate zone 1, setting forth a maximum skylight SHGC 
requirement of 0.30. This exception is set forth in the 2015 IECC in 
footnote ``b'' to Table R402.1.2. The MH working group recommended that 
DOE retain this requirement, and DOE agrees with including this 
exception in the proposed rule. See Term Sheet at 3.
    DOE also considered the potential impact of adopting sections 
R402.3.3 and R402.3.4 of the 2015 IECC in this rulemaking. Section 
R402.3.3 specifies that 15 square feet of glazed fenestration may be 
exempt from SHGC and U-factor requirements. DOE proposes not to adopt 
this requirement because the prescriptive fenestration SHGC and U-
factor requirements would apply to all fenestration. Given that 15 
square feet represents a large portion of the overall fenestration area 
that comprises a manufactured home, adoption of this requirement 
potentially would exclude from these requirements a significant source 
of energy conservation. Section R402.3.4 of the 2015 IECC exempts one 
side-hinged opaque door of up to 24 square feet in surface area from 
the 2015 IECC U-factor requirements. DOE has not adopted section 
R402.3.4 of the 2015 IECC, as excluding these types of doors from this 
proposed rulemaking also would represent the loss of a significant 
source of home energy conservation.
    Section R402.5 of the 2015 IECC specifies maximum U-factor 
requirements for sunroom fenestration. Because sunrooms are not 
commonly offered in manufactured housing, DOE determined this section 
was not applicable to manufactured housing and proposes not to include 
sunroom fenestration requirements in this proposed rule.
    Section 460.102(b)(6) would establish maximum U-factor values as 
alternatives to the minimum R-value requirements established under 
Sec.  460.102(a). See Term Sheet at 5. DOE determined each proposed U-
factor alternative by calculating the U-factor corresponding to a 
building component (e.g., wall) with typical dimensions and 
construction using the insulation material R-value specified in Table 
III.1. More detail on establishing the proposed U-factor alternatives 
is provided in chapter 7 of the TSD. DOE notes that the proposed U-
factor alternatives are based on a representative single-section 
manufactured home, which are an average of 4.2 percent higher than the 
corresponding calculations of U-factor alternatives using the 
dimensions of a representative multi-section manufactured home.
    DOE requests comment on the U-factor alternatives and their 
equivalency with the R-value requirements for ceiling, wall, and floor 
insulation. Specifically, DOE invites comment on the use of U-factor 
alternatives for ceiling insulation based on a conversion calculation 
using a representative single-section manufactured home.
    Section 460.102(b)(7) would establish a maximum ratio of 12 percent 
for glazed fenestration area to floor area. As discussed in further 
detail in chapter 7 of the TSD, DOE used this ratio as a typical 
housing characteristic in its analyses for determining the prescriptive 
requirements. Manufactured homes with window to floor area greater than 
12 percent would use more energy (all else held equal), because glazed 
fenestration generally has a greater U-factor than other building 
components (such as walls). Although this requirement limits the amount 
of glazed fenestration in a manufactured home when a manufacturer is 
using the prescriptive requirements for compliance with the proposed 
rule, a manufacturer may instead follow the performance-based 
requirements for compliance if they wish to increase the area of glazed 
fenestration (in exchange for increasing the performance of other 
building thermal envelope components).
    The proposed performance-based requirements under Sec.  460.102(c) 
are stated in terms of maximum Uo of the entire building thermal 
envelope as a function of climate zone. The Uo requirements proposed in 
Sec.  460.102(c) were determined by applying the proposed prescriptive 
building thermal envelope requirements under Sec.  460.102(b) to 
manufactured homes using typical dimensions and construction techniques 
and then calculating the resultant Uo. See chapter 7 of the TSD for 
more detailed information on the typical dimensions of manufactured 
homes and the Battelle Method for more detailed information on the 
calculation of Uo.
    As discussed in chapter 7 of the TSD, the proposed maximum Uo for a 
multi-section manufactured home was calculated by assuming a 1,568-
square-foot double-section manufactured home. The proposed maximum Uo 
for a single-section manufactured home was calculated by assuming a 
924-square-foot single-section manufactured home. Both multi- and 
single-section home Uo values were calculated assuming manufactured 
homes built with wood framing and a window area equal to 12 percent of 
the floor area. DOE's proposed approach to determining Uo is consistent 
with HUD's approach to determining Uo under the HUD Code (see 24 CFR 
3280.507(a)), and is very similar to the ICC's approach to determining 
total UA under section R402.1.5 of the 2015 IECC. DOE believes

[[Page 39774]]

that its approach to determining Uo would reduce the compliance burden 
on manufacturers by avoiding the need for manufacturers to perform two 
separate calculations under both the HUD Code and the DOE requirements.
    Section R402.5 of the 2015 IECC includes specifications for maximum 
allowable fenestration U-factors when following the performance-based 
approach. The 2015 IECC specifies a maximum area-weighted average U-
factor of 0.48 in IECC climate zones 4 and 5 for vertical fenestration, 
a maximum area-weighted average U-factor of 0.40 for IECC climate zones 
6 through 8 for vertical fenestration, and a maximum area-weighted 
average U-factor of 0.75 for skylights in IECC climate zones 4 through 
8. Consistent with the recommendations of the MH working group (see 
Term Sheet at 1), DOE proposes to adopt these requirements under 
Sec. Sec.  460.102(c)(2) and 460.102(c)(3) by limiting area-weighted 
vertical fenestration U-factor to 0.48 in climate zone 3, limiting 
area-weighted vertical fenestration U-factor to 0.40 in climate zone 4, 
and limiting area-weighted skylight U-factor to 0.75 in climate zones 3 
and 4. Sections 460.102(c)(2) and 460.102(c)(3) would serve the purpose 
of limiting the extent to which window performance can be traded off 
for improved performance in other components of a manufactured home and 
would prevent areas of a manufactured home that are located in close 
proximity to vertical fenestration and skylights from being subject to 
excessive rates of heat loss.
    Finally, Sec.  460.102(c)(4) would require windows, skylights, and 
doors containing more than 50 percent glazing by area to satisfy the 
SHGC requirements under Sec.  460.102(a) on the basis of an area-
weighted average and seeks to ensure flexibility among manufacturers 
that choose to use unique glazed fenestration products that otherwise 
would not meet the SHGC requirement individually. This proposal is also 
consistent with the recommendations of the MH working group. See Term 
Sheet at 4.
    DOE invites comment on proposal to include an area-weighted average 
calculation of SHGC for compliance with Sec.  460.102(c). DOE also 
requests comment on all other prescriptive and performance requirements 
proposed in this section. To the extent that a commenter supports the 
proposed requirements or suggests alternative building thermal envelope 
criteria, DOE is specifically interested in data and calculations that 
would support the commenter's position.
    Section 460.102(d) would establish procedures for ensuring 
compliance with the prescriptive building thermal envelope standards 
under Sec.  460.102(b). As discussed in this preamble, however, the MH 
working group did not address options for systems of compliance and 
enforcement, and DOE has not included proposed compliance and 
enforcement provisions in rule. In the event that DOE addresses 
compliance assurance in a future rulemaking, paragraphs (d)(1), (d)(2), 
(d)(4), (d)(5), and (d)(7) would be reserved to provide a methodology 
for calculating the R-value of insulation; the R-value of non-
insulating materials; fenestration U-factor; the U-factor of walls, 
ceilings, and floors; and glazed fenestration SHGC that would provide 
for an accurate and repeatable procedure to determine compliance with 
the standards proposed under Sec.  460.102(b).
    Section 460.102(d)(3) would establish that the total R-value of a 
component is the sum of the R-values of each layer of insulation that 
compose the component. This proposed requirement is consistent with 
section R402.1.3 of the 2015 IECC, which specifies that component 
insulation materials installed in layers has a total R-value equal to 
the sum of the R-values of each layer.
    Sections 460.102(d)(6) and 460.102(d)(8) would authorize 
manufacturers to determine U-factor or SHGC for certain fenestration 
products and doors in accordance with the prescriptive default values 
set forth in Tables 460.102-4, 460.102-5, and 460.102-6. DOE 
anticipates that a manufacturer could rely on these prescriptive 
default U-factor values to facilitate the ease of compliance with this 
proposed rule. DOE has designed proposed Sec.  460.102(d)(6) for 
consistency with Tables R303.1.3(1), R303.1.3(2), and R303.1.3(3) of 
the 2015 IECC and in accordance with the MH working group's 
recommendations. DOE has proposed conservative prescriptive default 
values to provide an incentive to manufacturers to determine the actual 
performance value of the windows, doors, or skylights installed in a 
manufactured home. DOE expects the default tables would be used 
primarily in instances in which the actual performance value of a 
window, door, or skylight is unavailable or unknown.
    Section 460.102(e) would establish procedures for ensuring 
compliance with the building thermal envelope Uo standards under Sec.  
460.102(c). As discussed in this preamble, the MH working group did not 
address options for systems of compliance and enforcement, and DOE has 
not included proposed compliance and enforcement provisions in this 
proposed rule. In the event that DOE addresses compliance assurance in 
a future rulemaking, paragraphs (e)(1)(i), (e)(1)(ii), and (e)(2) would 
be reserved to provide a methodology for calculating the R-value of 
insulation, the R-value of non-insulating materials, and glazed 
fenestration SHGC that would provide for an accurate and repeatable 
procedure to determine compliance with the standards proposed under 
Sec.  460.102(c).
    The MH working group recommended, however, that Uo be determined in 
accordance with the ``Battelle Method.'' The Battelle Method is an 
industry standard methodology for determining Uo and is commonly 
utilized in the manufactured home industry. The Battelle Method's 
methodology is based on recommendations in the ASHRAE Handbook of 
Fundamentals but provides more specificity to determining Uo for 
manufactured housing. The Battelle Method provides a step-by-step 
process for calculating Uo by calculating the U-value of each unique 
area of the building thermal envelope and by calculating a weighted 
average. Both of these references serve as the basis for calculating 
overall thermal transmittance under the HUD Code (see 24 CFR 3280.508) 
while only the ASHRAE Handbook of Fundamentals is referenced in section 
R402.1.5 of the 2015 IECC.
    Finally, Sec.  460.102(e)(3) would authorize manufacturers to 
determine the SHGC of certain glazed fenestration products in 
accordance with the prescriptive default values set forth in Table 
460.102-6 for consistency with the rationale accompanying Sec.  
460.102(d)(8) of this section. Table 460.102-6 differentiates between 
single- and double-pane windows, glazed block windows, as well as clear 
and tinted glass. Single- and double-pane windows refer to the number 
of panes of glass that are in the window assembly. A single-pane window 
consists of one pane of glass while a double-pane window consists of 
two panes of glass separated within the window assembly at a fixed 
distance. The space between the two panes of glass serves to reduce 
heat transfer through the window. A glazed block window refers to a 
window assembly that consists of glass blocks that are arranged or laid 
out like bricks. These types of windows cannot be opened and are 
typically used in ground level or basement floors for security 
purposes. The terms ``clear'' and ``tinted'' glass characterize the 
light transmission properties of the glass. Clear glass is uncoated and 
transparent,

[[Page 39775]]

admitting all light through its body. Tinted glass instead has an 
altered chemical composition or surface coating that affects light 
transmission and color. Different types of tinted glass block and 
reflect different quantities and types of light. Table 460.102-6 
provides proposed default SHGC values for these different types of 
windows.
(c) Sec.  460.103 Installation of Insulation
    Section 460.103(a) would require manufacturers to install 
insulation according to both the insulation manufacturer's installation 
instructions and the instructions set forth in Table 460.103. DOE 
proposes to require manufacturers to comply with the insulation 
manufacturer's installation instructions both for consistency with 
section R303.2 of the 2015 IECC and to ensure that the intended 
performance of the insulation is achieved. Unlike section R303.2 of the 
2015 IECC, however, Sec.  460.103 would not require insulation to be 
installed in accordance with the International Building Code or the 
International Residential Code, as the HUD Code already sets forth 
requirements in this regard. DOE also proposes additional insulation 
requirements under Sec.  460.103(a) that are based in part on section 
R402.4.1.1 of the 2015 IECC, with clarifications to account for the 
unique design of manufactured homes, to ensure that insulation is able 
to achieve its intended thermal performance.
    Table 460.103 would include a general requirement that air-
permeable insulation must not be used as a material to establish the 
air barrier. This proposed requirement is consistent with Table 
R402.4.1.1 of the 2015 IECC, which the MH working group recommended 
that DOE include this in the proposed rule. See Term Sheet at 1. DOE 
proposes to adopt this requirement to improve energy conservation in 
manufactured housing through the reduction of natural air infiltration 
through the building thermal envelope.
    Proposed Table 460.103 also includes insulation requirements for 
access hatches, panels, and doors between conditioned space and 
unconditioned space. Section 460.103(a) would require each access 
hatch, panel, and door leading from conditioned space to unconditioned 
space to be insulated to a level equivalent to the level of insulation 
immediately adjacent to the access hatch, panel, and door. This 
requirement would ensure that the thermal performance of the access 
hatch, panel, or door would be identical to the surrounding ceiling and 
would ensure that the ceiling insulation achieves the same level of 
performance as ceiling insulation without an access hatch, panel, or 
door. Section 460.103(a) also would require each access hatch, panel, 
and door to provide access to all equipment without damaging or 
compressing the insulation. Damaging or compressing the insulation 
would reduce the performance of the insulation and increase the energy 
losses associated with the ceiling. Finally, each access hatch, panel, 
and door must be equipped with a wood-framed or equivalent baffle or 
retainer when loose fill insulation is installed within a ceiling 
assembly to retain the insulation on the access hatch, panel, or door. 
That is, an access hatch, panel, or door must use baffles or a retainer 
to prevent loose-fill insulation installed within a ceiling assembly 
from spilling into the living space upon use of the access hatch, 
panel, or door. Each of these requirements have been adopted from 
section R402.2.4 of the 2015 IECC are consistent with the 
recommendations of the MH working group, and seek to preserve the 
performance of insulation within a manufactured home. See Term Sheet at 
1.
    Section R402.2.4 of the 2015 IECC also includes a specification for 
vertical doors that provide access from conditioned to unconditioned 
spaces to meet certain fenestration insulation requirements. The MH 
working group recommended not adopting this specification in the 
proposed rule because vertical doors that separate conditioned and 
unconditioned spaces typically are not installed in manufactured homes. 
Consistent with the recommendation of the MH working group, DOE 
proposes not to include this requirement in this proposed rule. See 
Term Sheet at 1.
    Proposed Table 460.103 includes requirements for installing 
insulation adjacent to baffles. Baffles must be constructed using a 
solid material, maintain an opening equal or greater than the size of 
the eave vent, and extend over the top of the attic insulation. Baffles 
allow for air circulation from the exterior of the manufactured home to 
the attic space between the ceiling insulation and the top of the roof. 
The installation requirement would ensure proper attic ventilation and 
that insulation would not interfere with a baffle's ability to 
facilitate air circulation. The proposed requirements would be 
consistent with section R402.2.3 of the 2015 IECC and the MH working 
group's recommendations, and would help ensure proper ventilation in 
attic spaces. See Term Sheet at 1.
    Table 460.103 as proposed includes a requirement for installing 
insulation in ceilings or attics. Specifically, the requirement states 
that insulation installed in any dropped ceiling or dropped soffit must 
be aligned with the air barrier. The requirement would ensure that 
there would not be excessive air infiltration through the building 
thermal envelope if a dropped ceiling or dropped soffit is present in a 
manufactured home. This requirement is consistent with Table R402.4.1.1 
in the 2015 IECC, and the MH working group recommended that DOE include 
this requirement in the proposed rule. See Term Sheet at 1.
    To address the unique practice of HVAC duct installation in 
manufactured homes, Table 460.103 would require insulation to be 
installed to maintain permanent contact with the underside of the rough 
floor decking over which the finished floor, flooring material, or 
carpet is laid, except where air ducts directly contact the underside 
of the rough floor decking. This requirement is generally consistent 
with section R402.2.8 of the 2015 IECC, which specifies that floor 
insulation be installed in direct contact with the underside of the 
subfloor decking. Given that HVAC ducts in manufactured homes generally 
are located in the floor space between the insulation and the underside 
of the subfloor decking, DOE would require the same floor insulation 
requirements as the 2015 IECC while recognizing the need to insulate 
around HVAC ducts. DOE requests comment on the proposed floor 
insulation requirement and whether it would be consistent with industry 
practice.
    Table 460.103 as proposed includes an insulation installation 
requirement associated with narrow cavities such that batts installed 
in narrow cavities must be cut to fit or filled by insulation that upon 
installation readily conforms to the available cavity space. This 
requirement would ensure that all wall cavities are properly insulated, 
even if they have a non-standard width. This type of narrow cavity 
could occur in a wall area adjacent to a window frame. This requirement 
would be consistent with Table R402.4.1.1 of the 2015 IECC, which the 
MH working group recommended that DOE adopt in the proposed rule. See 
Term Sheet at 1. DOE proposes to include this requirement in the 
proposed rule because it ensures that all cavities are properly 
insulated to achieve the expected thermal performance.
    Table 460.103 also would require rim joists to be insulated. This 
requirement would ensure that the entire floor assembly of a 
manufactured home

[[Page 39776]]

achieves the desired thermal performance. The requirement is consistent 
with Table R402.4.1.1 of the 2015 IECC, and the MH working group 
recommended that DOE include this requirement in the proposed rule. See 
Term Sheet at 1.
    Table 460.103 includes an insulation installation requirement that 
would require exterior walls adjacent to showers and tubs to be 
insulated. This proposed requirement is consistent with Table 
R402.4.1.1 of the 2015 IECC, which the MH working group recommended 
that DOE adopt in the proposed rule. See Term Sheet at 1. DOE proposes 
to include this requirement in the proposed rule because it would 
ensure that all wall assemblies with showers and tubs would achieve the 
expected thermal performance requirements established under Sec.  
460.102.
    Table 460.103 also would require air permeable exterior building 
thermal envelope insulation for framed walls to completely fill the 
wall cavity, including cavities within stud bays caused by blocking lay 
flats or headers. The requirement clarifies the 2015 IECC requirement 
for wall insulation installation found in Table R402.4.1.1. The MH 
working group recommended that DOE modify the language of the 2015 IECC 
requirement to account for the unique design of manufactured housing. 
See 9/23 Working Group Transcript, EERE-2009-BT-BC-0021-0122 at p. 315. 
DOE proposes to adopt this requirement, along with the recommended 
modifications from the MH working group, to ensure that wall assemblies 
in manufactured homes achieve the proposed thermal performance 
requirements set forth under Sec.  460.102.
    Finally, the 2015 IECC contemplates additional specifications for 
insulating areas associated with the building thermal envelope that DOE 
has not included in this proposed rule. For example, section R402.1.1 
of the 2015 IECC specifies that wall assemblies in the building thermal 
envelope comply with the vapor retarder requirements of section R702.7 
of the International Residential Code or section 1405.3 of the 
International Building Code. DOE has not incorporated this requirement 
into this proposed rule, as this specification is a construction 
requirement that was not addressed by the MH working group.
    Section R402.2.13 of the 2015 IECC establishes sunroom insulation 
specifications. Sunrooms typically are not commonly installed in 
manufactured homes; accordingly, DOE has not incorporated this 
provision of the 2015 IECC into this proposed rule. Similarly, section 
R402.2.12 of the 2015 IECC specifies that insulation is not required on 
the horizontal portion of the foundation that supports a masonry 
veneer. Given that masonry veneers typically are not used in 
manufactured homes, DOE has not incorporated this provision of the 2015 
IECC into this proposed rule
    The 2015 IECC also includes building thermal envelope 
specifications for mass walls, steel-framed buildings, walls with 
partial structural sheathing, basement and below-grade walls, slab-on 
grade construction, and crawl space walls in sections R402.2.5, 
R402.2.6, R402.2.7, R402.2.9, R402.2.10, R402.2.11, respectively. DOE 
has not included these requirements in the proposed rule because they 
are not directly relevant to manufactured housing.
(d) Sec.  460.104 Building Thermal Envelope Air Leakage
    Section 460.104 would require manufacturers to seal manufactured 
homes against air leakage in order to ensure the conservation of energy 
within a manufactured home. Section 460.104 would establish both 
general and specific requirements for sealing a manufactured home to 
prevent air leakage, all of which are based on Table 402.4.1.1 of the 
2015 IECC and related recommendations from the MH working group. See 
Term Sheet at 5. Unlike the 2015 IECC, the proposed rule would not 
establish maximum building thermal envelope air leakage rate 
requirements. The MH working group recommended sealing requirements 
that would ensure that a home can be tightly sealed with techniques 
that can be visually inspected, thus minimizing the compliance burden 
on manufacturers. The MH working group also recommended the adoption of 
air leakage sealing requirements designed to achieve an overall air 
exchange rate of 5 ACH within a manufactured home. See Term Sheet at 5.
    The general requirements in Sec.  460.104 require that 
manufacturers properly seal all joints, seams, and penetrations in the 
building thermal envelope to establish a continuous air barrier and use 
appropriate sealing materials to allow for differential expansion and 
contraction of dissimilar materials. These requirements would ensure 
that there would not be excessive air infiltration through the building 
thermal envelope and that air seals would be durable through seasonal 
changes in temperature. Because these requirements would result in 
reduced energy use through proper air sealing in a manufactured home, 
DOE proposes to adopt the MH working group's recommendations in the 
proposed rule. DOE requests comment on the effectiveness of the 
proposed prescriptive criteria of Sec.  460.104 for the purpose of 
sealing the building thermal envelope to limit air leakage.
    Table 460.104 also would include requirements for establishing an 
air barrier for specific building components. The proposed requirements 
included in Table 460.104 for ceilings or attics, duct system register 
boots, recessed lighting, and windows, skylights, and exterior doors 
are all consistent with Table R402.4.1.1 of the 2015 IECC. The MH 
working group recommended that these 2015 IECC-based requirements also 
be included in the proposed rule. See Term Sheet at 1. Because these 
specifications reduce energy use by helping to ensure proper 
installation of an air barrier for the applicable building components, 
DOE proposes to adopt the 2015 IECC specifications as requirements in 
the proposed rule.
    The requirements of Table 460.104 for walls, floors, and electrical 
boxes or phone boxes on exterior walls are based on specifications 
included in Table R402.4.1.1 of the 2015 IECC with modifications based 
on the recommendation of the MH working group. See Term Sheet at 1. The 
2015 IECC specifications save energy by helping to ensure proper 
installation of an air barrier, and the MH working group recommended 
modifications to the specifications based on the unique nature of the 
manufactured housing industry. Rather than use the term ``air sealed 
boxes'' from the 2015 IECC, the MH working group described directly how 
this could be achieved using the phrasing ``the air barrier must be 
sealed around the box penetration.'' DOE thus proposes to adopt the 
2015 IECC specifications, as amended, in the proposed rule.
    Table 460.104 also would establish requirements for mating line 
surfaces, as recommended by the MH working group. See Term Sheet at 5. 
The proposed requirements would ensure proper sealing of the mating 
line surface between the two sections of a multi-section manufactured 
home and would reduce energy use by ensuring that multi-section 
manufactured homes have a continuous air barrier.
    The proposed requirements of Table 460.104 for rim joists, and 
showers or tubs adjacent to exterior walls are consistent with the 
specifications of Table R402.4.1.1 of the 2015 IECC. The MH working 
group recommended that DOE adopt the 2015 IECC specifications

[[Page 39777]]

in the proposed rule given that they would result in additional energy 
conservation within a manufactured home by helping to ensure a 
continuous air barrier. See Term Sheet at 1.
    Table R402.4.1.1 of the 2015 IECC also contains specifications for 
air leakage sealing in crawl space walls, garage separation, plumbing 
and wiring, and concealed sprinklers. The MH working group recommended 
that DOE not propose these specifications in the proposed rule. See 
Term Sheet at 1. Given that these requirements are not directly 
applicable to manufactured home construction, DOE is not proposing to 
include these requirements in the proposed rule.
    The 2015 IECC includes specifications for air leakage of 
fenestration and recessed luminaires that DOE has not included in this 
proposed rule. In section R402.4.3 of the 2015 IECC, windows, 
skylights, and sliding glass doors have a specified maximum air leakage 
rate of 0.3 cubic feet per minute (cfm) and swinging doors have a 
specified maximum air leakage rate of 0.5 cfm. Section R402.4.5 of the 
2015 IECC specifies air leakage around recessed luminaires most be no 
greater than 2.0 cfm when tested at a 75 pascal pressure differential. 
The MH working group recommended not to include these requirements for 
fenestration and recessed luminaire air leakage in order to reduce the 
testing burden on manufacturers. See Term Sheet at 1. DOE agrees with 
the MH working group's recommendation and has not proposed to include 
air leakage requirements for fenestration and recessed luminaires, as 
air leakage standards already are addressed generally at the building 
thermal envelope level. Nevertheless, DOE has designed its proposed 
prescriptive building thermal envelope air leakage standards, which 
include requirements to seal the space between fenestration and framing 
and between recessed luminaires and drywall, to achieve an air leakage 
rate of five ACH.
    DOE also reviewed section R402.4.4 of the 2015 IECC regarding rooms 
containing fuel-burning appliances. Section R402.4.4 includes 
specifications for the placement of fuel-burning appliances (outside of 
conditioned space), for sealing of the room enclosing the appliance, 
and for insulation of ducts and waterlines. Although these provisions 
have potential to save energy, the HUD Code already specifies that the 
combustion system for fuel burning devices must be completely separated 
from the interior atmosphere of the manufactured home. See 24 CFR 
3280.709(d). Therefore, DOE is not including these requirements in this 
proposed rulemaking. However, DOE may consider the merits of including 
R402.4.4 in future revisions of energy conservation standards for 
manufactured housing. DOE requests comment on the fireplace 
requirements based on section R402.4.2 of the 2015 IECC and the 
proposal not to include insulation and air sealing requirements 
pertaining to rooms containing fuel-burning appliances.
3. Subpart C: HVAC, Service Water Heating, and Equipment Sizing
(a) Sec.  460.201 Duct Sealing
    Section 460.201(a) would require manufacturers to equip each 
manufactured home with a duct system designed to limit total air 
leakage to less than or equal to four cubic feet per minute per 100 
square feet of conditioned floor area, when tested in accordance with 
Sec.  460.201(b). Section R403.3.4 of the 2015 IECC specifies that the 
total air leakage of duct systems is to be less than or equal to four 
cubic feet per minute per 100 square feet of conditioned floor area 
under a post-construction test. The 2015 IECC also includes 
specifications for a rough-in test performed with or without an air 
handler. The MH working group recommended that DOE consider only the 
post-construction test 2015 IECC specifications in developing the 
proposed standards given the unique nature of manufactured homes 
relative to site-built housing. See 9/10 Working Group Transcript, 
EERE-2009-BT-BC-0021-0133 at 227. DOE proposes to adopt the post-
construction test specifications of the 2015 IECC as it would be more 
cost-effective to the manufactured housing industry.
    Section R403.3.5 of the 2015 IECC specifies that building framing 
cavities must not be used as plenums. A plenum is a space within a 
building that facilitates the circulation of air. Building framing 
cavities are typically not tightly sealed and do not provide an 
adequate barrier to foreign bodies for air quality reasons. The use of 
building framing cavities as ducts and plenums is generally considered 
to be poor practice and is not a typical practice in the manufactured 
housing industry. Therefore, consistent with the 2015 IECC and the 
recommendation of the MH working group (see Term Sheet at p. 1), DOE 
proposes to require that building framing cavities not be used as ducts 
or plenums under Sec.  460.201(a).
    Section 460.201(b) would establish procedures for ensuring 
compliance with the duct system air leakage standard under Sec.  
460.201(a). As discussed in this preamble, the MH working group did not 
address options for systems of compliance and enforcement, and DOE has 
not included proposed compliance and enforcement provisions in this 
rule. In the event that DOE addresses compliance assurance in a future 
rulemaking, paragraph (b) would be reserved to provide a methodology 
for determining compliance with this standard that would provide for an 
accurate and repeatable procedure.
    The 2015 IECC also includes specifications associated with duct 
systems that DOE has not included in this proposed rule. Section 
R403.3.1 of the 2015 IECC specifies that supply ducts in attics shall 
be insulated to a minimum of R-8 while all other ducts shall be 
insulated to a minimum of R-6. The MH working group did not discuss 
this section of the 2015 IECC. Because ducts are typically located 
within the building thermal envelope in manufactured homes, DOE did not 
include this IECC requirement. DOE requests comment on this proposal.
    DOE also would not incorporate sections R403.3.2 and R403.3.2.1 of 
the 2015 IECC, which specify that sealing of ducts, air handlers, and 
filter boxes must be in accordance with the International Mechanical 
Code or the International Residential Code. DOE believes that 
additional sealing requirements are not needed in conjunction with the 
proposed quantitative sealing requirements in Sec.  460.201(a). DOE 
recognizes, however, that some manufacturers may choose to meet the 
requirements of Sec.  460.201(a) in part by voluntarily following the 
requirements of the International Mechanical Code or the International 
Residential Code.
(b) Sec.  460.202 Thermostats and Controls
    Section R403.1 of the 2015 IECC specifies that at least one 
thermostat shall be provided for each separate heating and cooling 
system. Section R403.1.1 of the 2015 IECC also specifies that the 
thermostat controlling the primary heating or cooling system must be 
capable of controlling the heating and cooling system on a daily 
schedule to maintain different temperature set points at different 
times of the day. The 2015 IECC further specifies that where the 
primary heating system is a forced-air furnace, at least one thermostat 
per dwelling unit must be capable of controlling the heating and 
cooling system on a daily schedule to maintain different temperature 
set points at different times of the day. The 2015 IECC also specifies 
that this thermostat to have the capability of setting back, or

[[Page 39778]]

temporarily operating, the system to maintain zone temperatures as low 
as 55 [deg]F or as high as 85 [deg]F.
    DOE has adopted section R403.1 of the 2015 IECC into Sec.  
460.202(a) without revision. DOE also has incorporated section R403.1.1 
of the 2015 IECC into Sec.  460.202(b). As proposed, Sec.  460.202 
would apply to any thermostat and controls installed by the 
manufacturer. A thermostat is a necessary interface for establishing 
desired temperature levels within a home, and already standard practice 
currently. Programmable thermostats help consumers save energy by 
providing the capability reduce energy use automatically during 
predetermined times (generally times the home is not occupied). This is 
also consistent with recommendations of the MH working group. See Term 
Sheet at 1.
    Moreover, section R403.1.2 of the 2015 IECC specifies that heat 
pumps having supplementary electric-resistance heat to have controls 
that, except during defrost, prevent supplemental heat operation when 
the heat pump compressor can meet the heating load. Supplementary 
electric-resistance heating equipment is less efficient and less cost-
effective as a heating method than heat-pump heating equipment. 
Therefore, preventing supplementary electric-resistance heating except 
for during defrost would reduce energy usage and manufactured home 
energy bills. DOE notes that Sec.  3280.714(a)(1)(ii) of the HUD Code 
establishes requirements for heat pumps. DOE is not aware of any 
instances in which the proposed requirement, which provides that the 
heating system be provided with controls that, except during defrost, 
prevent supplemental heat operation when the heat pump compressor can 
meet the heating load, would conflict with Sec.  3280.714(a)(1)(ii). 
DOE thus proposes to include this requirement in this rule, as 
recommended by the MH working group. See Term Sheet at 1.
    DOE requests comment on the proposed requirements contained in 
Sec.  460.202. Specifically, DOE requests comment and information on 
the potential interaction between proposed Sec.  460.202(c) and Sec.  
3280.714(a)(1)(ii) of the HUD Code.
(c) Sec.  460.203 Service Hot Water Systems
    Section 460.203(a) would require manufacturers to install service 
water heating systems according to the service water heating system 
manufacturer's installation instructions. As proposed, Sec.  460.203 
would apply to any service water heating system installed by a 
manufacturer. In addition, Sec.  460.203 would require manufacturers to 
provide maintenance instructions for the service water heating system 
with the manufactured home. These requirements would promote the 
correct installation and maintenance of service water heating equipment 
and help to ensure that such equipment performs at its intended level 
of efficiency.
    Section 403.5.1 of the 2015 IECC specifies that automatic controls, 
temperature sensors, and pumps related to service water heating must be 
accessible and that manual controls be ``readily accessible.'' Sec.  
460.203(b) would require any automatic and manual controls, temperature 
sensors, pumps associated with service water heating systems to be 
similarly accessible. This requirement would ensure that manufactured 
homeowners would have adequate control over service water heating 
equipment in order to achieve the intended level of efficiency 
contemplated under part 460. This is also consistent with the 
recommendation of the MH working group. See Term Sheet at 1.
    Section 403.5.1.1 of the 2015 IECC specifies that (1) heated water 
circulation systems be provided with a circulation pump, and the system 
return pipe be a dedicated return pipe or cold water supply pipe; (2) 
gravity and thermosyphon circulation systems are prohibited; (3) 
controls for circulating hot water system pumps must start the pump 
based on the identification of a demand for hot water within the 
occupancy; and (4) the controls must automatically turn off the pump 
when the water in the circulation loop is at the desired temperature 
and when there is no demand for hot water. Heated water circulation 
systems must have a circulation pump (if they are not of the gravity or 
thermosyphon variety) to function properly. Moreover, gravity or 
thermosyphon circulation systems are less efficient than those that use 
a pump. Manufactured homeowners would benefit from the energy savings 
associated with controls used to operate the circulation pump based on 
demand from a user and that automatically turn off the pump when there 
is no demand for hot water. Finally, controls that automatically turn 
off the pump once the desired temperature is reached reduce energy use 
relative to a system that runs the pump continuously. Accordingly, DOE 
has incorporated each of these specifications into proposed Sec.  
460.203(c) without change to ensure heated water circulation systems 
are designed in an energy efficient manner.
    Section R403.5.2 of the 2015 IECC includes specifications that are 
related to demand recirculation systems. Conventional hot water systems 
send cold water (hot water that has cooled) standing in the hot water 
pipe down the drain when hot water is demanded by the home owner. After 
the cold water is flushed out, hot water from the water heater reaches 
the point of use. Demand recirculation systems differ from conventional 
hot water systems in that any cold water standing in hot water pipes at 
the time hot water is demanded is sent back to the hot water system 
rather than being dumped down the drain. Given that these systems, 
while technically feasible to install in manufactured housing, are not 
currently in use by the industry, DOE proposes not to include any 
requirements relating to demand recirculation systems in this proposed 
rule; however, DOE requests comment on the potential benefits and 
burdens of including demand recirculation system standards for 
consideration in development of a final rule.
    Section R403.5.4 of the 2015 IECC specifies standards and test 
procedures for drain water heat recovery units. Given that these 
devices typically are not used in manufactured homes, DOE proposes not 
to include any requirements related to drain water heat recovery units 
in this proposed rule; however, DOE requests comment on the potential 
benefits and burdens of drain water heat recovery unit procedures for 
consideration in development of a final rule.
    DOE proposes that all hot water pipes outside conditioned space 
would be required to be insulated to at least R-3, and that all hot 
water pipes from a water heater to a distribution manifold would be 
required to be insulated to at least R-3. Section R403.5.3 of the 2015 
IECC specifies seven categories of hot water pipe (such as piping 
outside the conditioned space) that must be insulated to at least R-3. 
Section 460.203(e) has incorporated each of the categories of piping 
listed under section R403.5.3 of the 2015 IECC that are relevant to 
manufactured housing. Accordingly, DOE has not adopted specifications 
related to piping under a floor slab, buried-in piping, and supply and 
return piping in recirculation system other than demand recirculation 
systems. Any piping located within conditioned space is unlikely to 
affect energy use dramatically, as hot water eventually will reach room 
temperature regardless of whether R-3 insulation is in place. Hot water 
piping outside of conditioned space is exposed to a larger temperature 
gradient and therefore

[[Page 39779]]

piping insulation would have a greater opportunity for energy 
conservation within a manufactured home. This is also consistent with 
the recommendations of the MH working group. See Term Sheet at 6.
(d) Sec.  460.204 Mechanical Ventilation Fan Efficacy
    Table 403.6.1 of the 2015 IECC includes requirements for mechanical 
ventilation system fan efficacy. Consistent with the recommendations of 
the MH working group, and because DOE considers that there would be 
significant potential energy savings benefits associated with fan 
efficacy, DOE proposes to incorporate these specifications, without 
change, into Table 460.204. See Term Sheet at 1.
    Section 403.6.1 of the 2015 IECC specifies that if mechanical 
ventilation fans are integral to tested and listed HVAC equipment, then 
they must be powered with an electronically commutated motor. The MH 
working group (see Term Sheet at 1) recommended that DOE include this 
requirement in the proposed rule without change. Since electronically 
commutated motors offer substantially increased energy conservation 
over conventional induction motors, DOE proposes to include this 
requirement in the proposed rule.
    Section 3280.103(b) of the HUD Code establishes whole-house 
ventilation requirements, including that a manufactured home must be 
capable of providing 0.035 cubic feet (air volume) per minute per 
square foot (floor area) of mechanical ventilation. Section 3280.103(b) 
also requires that the flow rate of the system must be between 50 and 
90 cubic feet per minute. In contrast, Sec.  460.204 would establish 
requirements for the electrical efficiency of the fans providing the 
ventilation. These regulations would not conflict, as HUD regulates the 
``size'' of the ventilation system while DOE would regulate the 
efficiency of the fans that provide ventilation.
(e) Sec.  460.205 Equipment Sizing
    Section R403.7 of the 2015 IECC sets forth specifications on the 
appropriate sizing of heating and cooling equipment within a 
manufactured home, which the MH working group recommended for inclusion 
in the proposed rule. See Term Sheet at 1. This section of the 2015 
IECC requires the use of ACCA Manual S to select appropriately sized 
heating and cooling equipment based on building loads calculated using 
ACCA Manual J. The 2015 IECC also includes the option to use ``other 
approved'' calculation methodologies and requires that new or 
replacement heating and cooling equipment meet minimum energy 
efficiency requirements as required by federal law. Section 460.205 
would set forth specific requirements for the utilization of ACCA 
Manuals S and Manual J for the purposes of selecting equipment size and 
calculating building load. The ACCA manuals are industry standards that 
DOE has determined are adequate for these calculations. DOE has not 
approved any other calculation methodologies because no other 
applicable, widely-used methodologies are currently available. DOE 
requests comment on the applicability of ACCA Manual S and ACCA Manual 
J for the purposes of heating and cooling equipment sizing.
    Section R403.7 of the 2015 IECC also specifies that any replacement 
heating or cooling equipment be compliant with federal law. DOE would 
not adopt section R403.7 as there would be no need to remind 
manufacturers of the requirement to comply with existing federal law.

C. Other 2015 IECC Specifications

    The following section discusses certain specifications included in 
the 2015 IECC that DOE has not included in the development of its 
proposed energy conservation standards. DOE requests comment with 
regard to each of these specifications, including whether DOE should 
incorporate any of the specifications in development of a final rule.
1. Section R302
    Section R302 of the 2015 IECC specifies interior design 
temperatures that are to be used for heating and cooling load 
calculations when using energy use modeling. Given that the proposed 
rule does not include an option for compliance with the building 
thermal envelope requirements that makes use of simulated performance 
(see section R405 of the 2105 IECC), DOE has not included this 
requirement in the proposed rule. DOE requests comment on the 
practicality and functionality of using a simulated performance 
alternative that contemplates the adoption of sections R302 and R405 of 
the 2015 IECC.
2. Section R303.1
    Section R303.1 of the 2015 IECC specifies how materials, systems, 
and equipment are to be identified. DOE has not incorporated these 
specifications in the proposed rule as the underlying statutory 
authority provides no direction for DOE to impose requirements on 
component manufacturers.
3. Section R401.3
    Section R401.3 of the 2015 IECC specifies that a permanent 
certificate be posted in a utility room that gives the performance 
values of major building components and systems. Provisions related to 
enforcement and compliance of the proposed DOE standards were not 
contemplated by the MH working group and therefore are not included in 
this proposed rule.
4. Section R402.4
    Section R402.4.2 of the 2015 IECC specifies that wood-burning 
fireplaces shall have tight fitting doors and outdoor combustion air. 
The IECC also requires that the fireplace and tight fitting doors must 
be listed and labeled in accordance with certain referenced standards. 
DOE is proposing not to include these requirements in this rule because 
they were not specifically addressed by the MH working group.
    Section R402.4.5 of the 2015 IECC also specifies that recessed 
luminaires must be IC-rated. DOE has not adopted section R402.4.5 as 
fire safety was not contemplated by the MH working group.
5. Section R403
    Section R403.2 of the 2015 IECC includes specifications for hot 
water boiler outdoor temperature setback. Given that hot water boilers 
used to supply building heat are not used in manufactured homes, DOE 
has not adopted requirements based on section R403.2 of the 2015 IECC 
under this proposed rule.
    Section R403.5.1.2 of the 2015 IECC includes specifications for 
electric heat trace systems. The IECC requires that these systems 
comply with certain referenced standards. DOE is proposing not to 
include this requirement because electric heat trace systems are not 
commonly used in manufactured housing.
    Section R403.4 of the 2015 IECC specifies a minimum of R-3 
insulation on mechanical system piping capable of carrying fluids above 
105 [deg]F or below 55 [deg]F. Section R403.4.1 of the 2015 IECC 
specifies that mechanical system piping insulation exposed to weather 
must be protected to prevent insulation degradation. These 
specifications are intended to reduce heat loss or gain and improve the 
energy efficiency of the piping delivery system. Mechanical systems 
that require piping holding fluids in this temperature range are 
unusual for manufactured housing. See Cavco, EERE-2009-BT-BC-0021-0133 
at p. 63. Furthermore, DOE expects that the manufacturer of the 
mechanical system would require piping insulation

[[Page 39780]]

of at least R-3 for proper installation. For the aforementioned 
reasons, DOE is not proposing to include the requirements of section 
R403.4 and R403.4.1 of the 2015 IECC. DOE requests comment on this 
proposal.
    Section R403.8 of the 2015 IECC includes specifications for systems 
serving as multiple dwelling units. Consistent with the recommendation 
of the MH working group (see Term Sheet at 1), and because a 
manufactured home typically functions only as a single dwelling unit, 
DOE has not adopted requirements related to section R403.8 of the 2015 
IECC under this proposed rule.
    Section R403.9 of the 2015 IECC includes specifications for 
pavement snow- and ice-melting controls. Consistent with the 
recommendation of the MH working group (see Term Sheet at 1), and 
because the factory assembly of manufactured homes does not contemplate 
driveway conditions, DOE has not adopted requirements related to 
section R403.9 of the 2015 IECC in this proposed rule.
    Sections R403.10, R403.11, and R403.12 of the 2015 IECC include 
specifications associated with the energy consumption of pools, 
permanent spas, and portable spas. Consistent with the recommendation 
of the MH working group (see Term Sheet at 1), and because the factory 
assembly of manufactured homes does not include pools and spas, DOE has 
not adopted requirements related to these sections of the 2015 IECC in 
this proposed rule.
6. Section R404
    Section R404.1 of the 2015 IECC specifies either that a minimum of 
75 percent of the lamps within each permanently installed lighting 
fixture be high-efficacy lamps or that a minimum of 75 percent of the 
permanently installed lighting fixtures contain only high-efficacy 
lamps. The 2015 IECC defines high-efficacy lighting as (1) compact 
fluorescent lamps; (2) T8 or smaller diameter linear fluorescent lamps; 
or (3) lamps with a minimum efficacy of 60 lumens per watt for lamps 
greater than 40 watts, 50 lumens per watt for lamps greater than 15 
watts and less than or equal to 40 watts, and 40 lumens per watt for 
lamps less than or equal to 15 watts. Consumer adoption of high-
efficacy lighting has increased over the past decade, as evidenced by 
section 3.4.5 of the preliminary TSD associated with the DOE general 
service lamp energy conservation standard. See 79 FR 73503 (Dec. 11, 
2014). This ongoing rulemaking for general service lamps studies the 
benefits and burdens of establishing nationwide minimum lamp efficacy 
standards. DOE also completed a final rule adopting revised lamp 
efficacy standards for general service fluorescent lamps on January 26, 
2015. See 80 FR 4041. Given DOE's ongoing efforts in this regard, DOE 
has not adopted requirements related to lighting in the proposed rule 
and requests comment on whether DOE's other rulemaking efforts would be 
insufficient to achieve lighting efficiency in manufactured housing.
    Section R404.1.1 of the 2015 IECC includes specifications for fuel 
gas lighting systems. Given that manufactured homes do not utilize fuel 
gas lighting systems, DOE has not adopted requirements related to 
section R404.1.1 of the 2015 IECC in this proposed rule.
7. Section R405
    Section R405 of the 2015 IECC establishes criteria for compliance 
using a simulated energy performance analysis, which involves 
calculating expected building energy use and comparing that value to 
the energy use of a standard reference building that complies with the 
minimum specifications of the 2015 IECC. Although DOE believes that 
simulated performance is a valid and technically feasible option, such 
an option does not appear to offer additional flexibility in the design 
of a manufactured home relative to the performance-based approach for 
the building thermal envelope. Accordingly, DOE has not adopted 
requirements associated with alternative performance under the proposed 
rule. DOE requests comment on the practicality and functionality of 
using a simulated performance alternative that contemplates the 
adoption of sections R302 and R405 of the 2015 IECC.
8. Section R406
    Section R406 of the 2015 IECC establishes criteria for compliance 
using an energy rating index (ERI) that contemplates the use of 
software to calculate the energy use of a building. Although DOE 
believes that ERI analysis is a valid and technically feasible option, 
such an option does not appear to offer additional flexibility in the 
design of a manufactured home relative to the performance-based 
approach for the building thermal envelope. Accordingly, DOE has not 
adopted requirements associated with alternative performance under the 
proposed rule. DOE requests comment on the practicality and 
functionality of adopting an ERI alternative that contemplates the 
adoption of section R406 of the 2015 IECC.
9. Chapter 5
    Chapter 5 of the 2015 IECC includes specifications related to the 
alteration, repair, addition, and change of occupancy of existing 
buildings and structures. Given that the proposed rule contemplates the 
energy conservation of newly constructed manufactured homes, DOE has 
not adopted any of the specifications included in chapter 5 of the 2015 
IECC.
10. Chapter 6
    Chapter 6 of the 2015 IECC lists the industry standards referenced 
in the 2015 IECC. Section 460.3 incorporates by reference only the 
industry standards relevant to the proposals included in this proposed 
rule, with specific modifications as applicable to manufactured 
housing. Accordingly, DOE has not adopted the industry standards as 
referenced in chapter 6 of the 2015 IECC.

D. Crosswalk of Proposed Standards With the HUD Code

    As discussed in this preamble, DOE's intention in proposing energy 
conservation standards for manufactured homes is that, if finalized, 
there would be no conflict between the proposed requirements and the 
construction and safety standards for manufactured homes as established 
by HUD. That is, compliance with the proposed requirements would not 
prohibit a manufacturer from complying with the HUD Code. Table III.2 
lists the proposed energy conservation standards and discusses their 
relationship to similar requirements contained in the HUD Code. As this 
proposed approach requires careful analysis of all aspects of energy 
conservation contained in both the proposed rule and in the HUD Code, 
DOE requests comment on any inconsistencies that would result from this 
proposed approach.

[[Page 39781]]



     Table III.2--Crosswalk of Proposed Standards With the HUD Code
------------------------------------------------------------------------
 DOE Proposed rule (10 CFR part    HUD Code (24 CFR
              460)                    part 3280)             Notes
------------------------------------------------------------------------
Sec.   460.101 would establish    Sec.   3280.506     HUD Code climate
 four climate zones, which would   establishes three   zone 3 and the
 be delineated by home size and    climate zones       northern portion
 both state and county             delineated by       of HUD Code
 boundaries.                       state boundaries.   climate zone 2
                                   The HUD Code        cover a similar
                                   establishes one     region to climate
                                   standard for        zones 3 and 4 of
                                   homes of all        the proposed
                                   sizes within a      rule. HUD Code
                                   climate zone.       climate zones 1
                                                       and the southern
                                                       portion of HUD
                                                       Code climate zone
                                                       2 cover a similar
                                                       region to climate
                                                       zones 1, 2, and 3
                                                       of the proposed
                                                       rule.
Sec.   460.102(a) would           Sec.   3280.506
 establish building thermal        establishes a
 envelope prescriptive and         performance
 performance compliance options.   approach.
Sec.   460.102(b) would set       Sec.   3280.506
 forth the prescriptive option     establishes a
 for compliance with the           performance
 building thermal envelope         approach only.
 requirements.
Sec.   460.102(b)(2) would        No corresponding
 establish a minimum truss heel    requirement.
 height.
Sec.   460.102(b)(3) would        No corresponding
 require ceiling insulation to     requirement.
 have uniform thickness and
 density.
Sec.   460.102(b)(4) would        No corresponding
 establish an acceptable batt      requirement.
 and blanket insulation
 combination for compliance with
 the floor insulation
 requirement in climate zone 4.
Sec.   460.102(b)(5) would        No corresponding
 identify certain skylights not    requirements.
 subject to SHGC requirements.
Sec.   460.102(b)(6) would        No corresponding
 establish U-factor alternatives   requirements.
 for the R-value requirements
 under Sec.   460.102(b)(1).
Sec.   460.102(b)(7) would        No corresponding
 establish a maximum ratio of 12   requirements.
 percent for glazed fenestration
 area to floor area under the
 prescriptive option.
Sec.   460.102(c)(1) would        Sec.   3280.506(a)  The proposed
 establish maximum building        establishes         maximum building
 thermal envelope Uo               maximum building    thermal envelope
 requirements by home size and     thermal envelope    Uo requirements
 climate zone.                     Uo requirements     would be lower
                                   by climate zone.    than the
                                                       corresponding
                                                       maximum Uo
                                                       requirements
                                                       under Sec.
                                                       3280.506(a).
                                                       Compliance with
                                                       the proposed Uo
                                                       requirements
                                                       would achieve
                                                       compliance with
                                                       the Uo
                                                       requirements
                                                       under the HUD
                                                       Code.
Sec.   460.102(c)(2) would        No corresponding
 establish maximum area-weighted   requirements.
 vertical fenestration U-factor
 requirements in climate zones 3
 and 4.
Sec.   460.102(c)(3) would        No corresponding
 establish maximum area-weighted   requirements.
 average skylight U-factor
 requirements in climate zones 3
 and 4.
Sec.   460.102(c)(4) would        No corresponding
 authorize windows, skylights      requirements.
 and doors containing more than
 50 percent glazing by area to
 satisfy the SHGC requirements
 of Sec.   460.102(a) on the
 basis of an area-weighted
 average.
Sec.   460.102(d)(1)............  ..................  [Reserved].
Sec.   460.102(d)(2)............  ..................  [Reserved].
Sec.   460.102(d)(3) would        Sec.   3280.508(a)
 establish a method of             and (b) reference
 determining total R-value where   the Overall U-
 multiple layers comprise a        values and
 component.                        Heating/Cooling
                                   Loads--Manufactur
                                   ed Homes method
                                   and the 1997
                                   ASHRAE Handbook
                                   of Fundamentals.
Sec.   460.102(d)(4)............  ..................  [Reserved].
Sec.   460.102(d)(5)............  ..................  [Reserved].
Sec.   460.102(d)(6) would        Sec.   3280.508(a)
 establish prescriptive default    and (b) reference
 U-factor values.                  the Overall U-
                                   values and
                                   Heating/Cooling
                                   Loads--Manufactur
                                   ed Homes method
                                   and the 1997
                                   ASHRAE Handbook
                                   of Fundamentals.
Sec.   460.102(d)(7)............  ..................  [Reserved].
Sec.   460.102(d)(8) would        No corresponding
 establish prescriptive default    requirements.
 U-factor values.
Sec.   460.102(e)(1) would        Sec.   3280.508(a)
 establish a method of             and (b) reference
 determining Uo.                   the Overall U-
                                   values and
                                   Heating/Cooling
                                   Loads--Manufactur
                                   ed Homes method
                                   and the 1997
                                   ASHRAE Handbook
                                   of Fundamentals.
Sec.   460.102(e)(2)............  ..................  [Reserved].

[[Page 39782]]

 
Sec.   460.102(e)(3) would        Sec.   3280.508(a)  DOE's proposed
 establish default fenestration    and (b) reference   default values
 and door U-factor and             the Overall U-      originate from
 fenestration SHGC values.         values and          the 2015 IECC.
                                   Heating/Cooling     These default
                                   Loads--Manufactur   values generally
                                   ed Homes method     result in lower
                                   and the 1997        performance than
                                   ASHRAE Handbook     the HUD Code
                                   of Fundamentals.    values. DOE
                                   These references    expects
                                   contain default     compliance with
                                   values.             the proposed rule
                                                       to result in
                                                       compliance with
                                                       the HUD Code.
Sec.   460.103(a) would require   No corresponding
 insulating materials to be        requirements.
 installed according to the
 manufacturer installation
 instructions and the
 prescriptive requirements of
 Table 460.103.
Sec.   460.103(b) would           No corresponding
 establish requirements for the    requirements.
 installation of batt, blanket,
 loose fill, and sprayed
 insulation materials.
Sec.   460.104 would require      Sec.   3280.505
 manufactured homes to be sealed   establishes air
 against air leakage at all        sealing
 joints, seams, and penetrations   requirements of
 associated with the building      building thermal
 thermal envelope in accordance    envelope
 with the manufacturer's           penetrations and
 installation instructions and     joints.
 the requirements set forth in
 Table 460.104.
Sec.   460.201(a) would require   Sec.
 each manufactured home to be      3280.715(a)(4)
 equipped with a duct system       establishes
 that must be sealed to limit      requirements for
 total air leakage to less than    airtightness of
 or equal to 4 cfm per 100         supply duct
 square feet of floor area when    systems.
 tested according to Sec.
 460.201(b) and specifies that
 building framing cavities are
 not to be used as ducts or
 plenums.
Sec.   460.201(b)...............  ..................  [Reserved].
Sec.   460.202(a) would require   Sec.   3280.707(e)  Both the proposed
 at least one thermostat to be     requires that       rule and the HUD
 provided for each separate        each space          Code would
 heating and cooling system        heating, cooling,   require the
 installed by the manufacturer.    or combination      installation of
                                   heating and         at least one
                                   cooling system be   thermostat that
                                   provided with at    is capable of
                                   least one           maintaining zone
                                   adjustable          temperatures.
                                   automatic control
                                   for regulation of
                                   living space
                                   temperature.
Sec.   460.202(b) would require   No corresponding
 that installed thermostats        requirements.
 controlling the primary heating
 or cooling system be capable of
 maintaining different set
 temperatures at different times
 of day.
Sec.   460.202(c) would require   Sec.                Both the proposed
 heat pumps with supplementary     3280.714(a)(1)(ii   rule and the HUD
 electric resistance heat to be    ) requires heat     Code would
 provided with controls that,      pumps to be         require heat
 except during defrost, prevent    certified to        pumps with
 supplemental heat operation       comply with ARI     supplemental
 when the pump compressor can      Standard 210/240-   electric
 meet the heating load.            89, heat pumps      resistance heat
                                   with supplemental   to prevent
                                   electrical          supplemental heat
                                   resistance heat     operation when
                                   to be sized to      the heat pump
                                   provide by          compressor can
                                   compression at      meet the heating
                                   least 60 percent    load of the
                                   of the calculated   manufactured
                                   annual heating      home.
                                   requirements of
                                   the manufactured
                                   home, and that a
                                   control be
                                   provided and set
                                   to prevent
                                   operation of
                                   supplemental
                                   electrical
                                   resistance heat
                                   at outdoor
                                   temperatures
                                   above 40 [deg]F.
Sec.   460.203(a) would           No corresponding
 establish requirements for the    requirements.
 installation of service water
 heating systems.
Sec.   460.203(b) would require   No corresponding
 any automatic and manual          requirement.
 controls, temperature sensors,
 pumps associated with service
 water heating systems to be
 accessible.
Sec.   460.203(c) would           No corresponding
 establish requirements for        requirements.
 heated water circulation
 systems.
Sec.   460.203(d) would           No corresponding
 establish requirement for the     requirements.
 insulation of hot water pipes.
Sec.   460.204 would establish    No corresponding    HUD requirements
 requirements for mechanical       requirements.       at Sec.
 ventilation system fan efficacy.                      3280.103(b) do
                                                       not overlap with
                                                       DOE's proposal.
                                                       DOE's proposal is
                                                       for fan
                                                       electrical
                                                       efficiency, while
                                                       HUD requirements
                                                       specify minimum
                                                       and maximum air
                                                       flow rates.
Sec.   460.205 would establish    No corresponding
 requirements for heating and      requirements.
 cooling equipment sizing.
------------------------------------------------------------------------


[[Page 39783]]

E. Compliance and Enforcement

    Although DOE is not considering compliance and enforcement in this 
proposed rule, DOE anticipates assessing compliance and enforcement 
mechanisms in a future rulemaking. As a result, the costs and benefits 
resulting from any compliance and enforcement mechanism are not 
included in the economic impact analysis that is included in this 
rulemaking. DOE anticipates it will provide a detailed analysis of the 
costs and benefits resulting from compliance and enforcement activities 
in its future rulemaking. A variety of possibilities may be considered 
in that rulemaking process including, but not limited to, the three 
options described in this paragraph. First, HUD could directly 
administer a compliance and enforcement program for DOE's manufactured 
housing regulations via the existing HUD system outlined at 24 CFR 
3282. This option would require that HUD adopt the energy conservation 
standards resulting from this rulemaking into its Manufactured Home 
Construction and Safety Standards. Second, DOE could implement a 
compliance and enforcement program mirroring HUD's system codified at 
24 CFR 3282. Third, manufacturers could self-certify compliance to DOE 
by submitting documentation attesting that manufactured homes are 
compliant with DOE regulations. This third compliance option could be 
paired with a variety of enforcement mechanisms ranging from 
unannounced inspections and audits to a system mirroring HUD's 
enforcement system at 24 CFR 3282.
    By way of background, under HUD's compliance and enforcement 
system, manufacturers are required to: (1) Contract for services with a 
HUD accepted Design Approval Primary Inspection Agency (DAPIA) to 
evaluate their designs and quality assurance manual for conformance 
with the Standards and Regulations; and (2) contract for services with 
a HUD accepted Production Inspection Primary Inspection Agency (IPIA) 
to evaluate, through on-going surveillance of the production process, 
that each plant is continuing to follow its DAPIA approved quality 
assurance manual and quality control procedures and to verify that each 
factory is continuing to produce homes in conformance with the 
Standards. In addition, the actions of all primary inspection agencies 
(DAPIAs, IPIAs) and State Administrative Agencies (SAAs) are monitored 
to determine whether they are fulfilling their responsibilities under 
HUD's regulatory system. In addition, manufacturers are also subject to 
system of notification and correction procedures whenever they produce 
homes that contain imminent safety hazards or failures to conform to 
the HUD standards.
    DOE seeks comment on potential options for compliance and 
enforcement to be considered in a future rulemaking, including 
information regarding the rationale for any recommended option. DOE 
also seeks comment on the estimated costs (only direct compliance and 
enforcement costs, not engineering costs for redesign) and time (design 
review validation, inspection frequency and duration, administrative 
procedures) associated with the potential options.

IV. Economic Impacts and Energy Savings

A. Economic Impacts on Individual Purchasers of Manufactured Homes

    DOE used the LCC and payback period (PBP) analyses developed during 
the MH working group negotiations to inform the development of the 
proposed rule based on the economic impacts on individual purchasers of 
manufactured homes. The LCC of a manufactured home refers to the total 
homeowner expense over the life of the manufactured home, consisting of 
purchase expenses (i.e., mortgage or cash purchase) and operating costs 
(i.e., energy costs). To compute the operating costs, DOE discounted 
future operating costs to the time of purchase and summed them over the 
30-year lifetime of the home used for the purpose of analysis in this 
rulemaking. The PBP refers to the estimated amount of time (in years) 
for manufactured homeowners to recover the increased purchase cost 
(including installation) of their homes through lower operating costs. 
DOE calculates the PBP by dividing the incremental increase in purchase 
cost by the reduction in average annual operating costs that would 
result from this proposed rule.
    The LCC analysis demonstrates that increased purchase prices would 
be offset by the benefits manufactured homeowners would experience in 
operating cost savings under the proposed rule. DOE has evaluated these 
projected impacts on individual manufactured homeowners by analyzing 
the potential impacts to LCC, energy savings, and purchase price of 
manufactured homes under the proposed rule. For the purpose of this 
economic analysis, DOE compared the purchase price and LCC for 
manufactured homes built in accordance with the proposed rule relative 
to a baseline manufactured home built in compliance with the minimum 
requirements of the HUD Code. Specifically, DOE performed energy 
simulations on manufactured homes located in 19 geographically diverse 
locations across the United States, accounting for five common heating 
fuel/system types and two typical industry sizes of manufactured homes 
(single-section and double-section \6\ manufactured homes). Further 
information on how DOE calculated LCC impacts and energy savings for 
the alternative efficiency levels discussed here is included in chapter 
8 of the TSD. DOE requests comment on the methodology and results of 
the LCC analysis.
---------------------------------------------------------------------------

    \6\ Double-section manufactured homes were used to represent all 
multi-section homes. Double-section manufactured homes have the 
largest market share by shipments (about 98 percent) of all multi-
section homes.
---------------------------------------------------------------------------

    Table IV.1 provides the preliminary average purchase price 
increases to manufactured homes associated with the proposed rule under 
each of the proposed climate zones. These costs are based on estimates 
for the increased costs associated with more energy efficient 
components, as provided by the MH working group. See EERE-2009-BT-BC-
0021-0091. These costs are discussed in further detail in chapter 5 and 
chapter 9 of the TSD.

Table IV.1--Average Manufactured Home Purchase Price and Percentage Increases Under the Proposed Rule by Climate
                                                      Zone
----------------------------------------------------------------------------------------------------------------
                                                          Single-section                   Multi-section
                                                 ---------------------------------------------------------------
                                                         $               %               $               %
----------------------------------------------------------------------------------------------------------------
Climate Zone 1..................................           2,422             5.3           3,748             4.5
Climate Zone 2..................................           2,348             5.1           3,668             4.4

[[Page 39784]]

 
Climate Zone 3..................................           2,041             4.5           2,655             3.2
Climate Zone 4..................................           2,208             4.8           2,877             3.4
National Average................................           2,226             4.9           3,109             3.7
----------------------------------------------------------------------------------------------------------------

    Although DOE preliminarily has determined that the proposed 
standards would result in increased purchase prices of manufactured 
homes, manufactured homeowners, on average, would realize significant 
LCC savings and energy savings as a result of the proposed rule. DOE 
requests comment on affordability with respect to the projected average 
increase in purchase cost (see Table IV.1 below) on the ability of low-
income consumers to obtain credit and financing to purchase a 
manufactured home. DOE also requests comments on affordability in 
context of the potential for reduced operating costs (energy bills) and 
total LCC.
    Figure IV.1 illustrates the average annual energy cost savings for 
space heating and air conditioning for the first year of occupation by 
geographic location under the proposed rule based on the estimated fuel 
costs provided in chapter 8 of the TSD. Heating cost savings are 
generally higher than cooling cost savings, so locations with cold 
climates would have higher amounts of energy cost savings because of 
the reduced heating energy use.
[GRAPHIC] [TIFF OMITTED] TP17JN16.003

    Figure IV.2 illustrates the average 30-year LCC savings by 
geographic location (averaged across the five different heating fuel/
system types) associated with the proposed rule for both single-section 
and multi-section manufactured homes. As discussed in detail in chapter 
9 of the TSD, Figure IV.2 accounts for LCC savings and impacts over a 
30-year period of analysis, including energy cost savings and mortgage 
payment increases discounted to a present value using the discount 
rates discussed in chapter 4 of the TSD. These preliminary results also 
are based on the costs associated with energy conservation 
improvements, as discussed in chapter 5 of the TSD.

[[Page 39785]]

[GRAPHIC] [TIFF OMITTED] TP17JN16.004

    The estimated LCC impacts under Figure IV.2 vary by location for 
three primary reasons. First, each geographic location analyzed is 
situated in one of four proposed climate zones and therefore would be 
subject to different energy conservation requirements. Second, 
geographic locations within the same climate zone would experience 
different levels of energy savings. For example, both El Paso and 
Baltimore would be situated in climate zone 3. However, a manufactured 
home in Baltimore that meets the proposed climate zone 3 requirements 
would experience greater savings than a manufactured home in El Paso 
that meets the proposed climate zone 3 requirements because cooler 
climates would have greater energy cost savings as a result of greater 
reductions in heating costs. Finally, the level of energy cost savings 
depends on the type of heating system installed and fuel type used in a 
manufactured home. As discussed in chapter 8 of the TSD, DOE has 
accounted for regional differences in heating systems and fuel types 
commonly installed in manufactured housing.
    Table IV.2 provides the preliminary national average LCC savings 
under the proposed rule and annual energy cost savings associated with 
the proposed rule for space heating and air conditioning (and percent 
reduction in space heating and cooling costs), both of which are 
measured against a baseline manufactured home constructed in accordance 
with the HUD Code. As discussed in further detail in chapter 9 of the 
TSD, each geographic location preliminary has been determined to result 
in LCC savings and energy savings, on average.

  Table IV.2--National Average Per-Home Savings Under the Proposed Rule
------------------------------------------------------------------------
                                                       Single-   Multi-
                                                       section   section
------------------------------------------------------------------------
Lifecycle Cost Savings (30 Years)...................    $3,211    $4,625
Annual Energy Cost Savings..........................       345       490
------------------------------------------------------------------------

    Table IV.3 shows the benefits and costs to the manufactured 
homeowner associated with the proposed rule, expressed in terms of 
annualized values.

          Table IV.3--Annualized Benefits and Costs to Manufactured Homeowners Under the Proposed Rule
----------------------------------------------------------------------------------------------------------------
                                                                          Monetized (million 2015$/year)
                                                   Discount Rate -----------------------------------------------
                                                        (%)           Primary      Low  estimate  High  estimate
                                                                    estimate **         **              **
----------------------------------------------------------------------------------------------------------------
                                                   Benefits *
----------------------------------------------------------------------------------------------------------------
Operating (Energy) Cost Savings.................               7             516             400             688
                                                               3             843             617           1,191
----------------------------------------------------------------------------------------------------------------
                                                     Costs *
----------------------------------------------------------------------------------------------------------------
Incremental Purchase Price Increase.............               7             220             165             285
                                                               3             277             192             378
----------------------------------------------------------------------------------------------------------------
                                              Net Benefits/Costs *
----------------------------------------------------------------------------------------------------------------
                                                               7             296             235             403
                                                               3             566             425             813
----------------------------------------------------------------------------------------------------------------
* The benefits and costs are calculated for homes shipped in 2017-2046.
** The Primary, Low, and High Estimates utilize forecasts of energy prices from the 2015 AEO Reference case, Low
  Economic Growth case, and High Economic Growth case, respectively.


[[Page 39786]]

    Figure IV.3 illustrates the nationwide average simple payback 
period (purchase price increase divided by first year energy cost 
savings) under the proposed rule. The estimated simple payback periods 
under Figure IV.3 vary by geographic location based on the different 
climate zone requirements for manufactured housing, geographic climatic 
differences within climate zones, and the type of heating system 
installed and fuel type used in a manufactured home.
[GRAPHIC] [TIFF OMITTED] TP17JN16.005

B. Manufacturer Impacts

    DOE performed a manufacturer impact analysis (MIA) to estimate the 
potential financial impact of energy conservation standards on 
manufacturers of manufactured homes. The MIA relied on the Government 
Regulatory Impact Model (GRIM), an industry cash-flow model used to 
estimate changes in industry value as a result of energy conservation 
standards. The key GRIM inputs are data on: Industry financial metrics, 
manufacturer production cost estimates, shipments forecasts, conversion 
expenditures estimates, and assumptions about manufacturer markups. The 
primary output of the GRIM is industry net present value (INPV), which 
is the sum of industry annual cash flows over the analysis period 
(2016-2046), discounted using the industry weighted average cost of 
capital. The GRIM has a slightly different analysis period than the NIA 
and LCC because it takes into account the conversion period, the time 
between the announcement of the standard and the effective date of the 
standard, since manufacturers may need to make upfront investments to 
bring their covered products ahead of the standard going into effect. 
The GRIM estimates the impacts of more-stringent energy conservation 
standards on a given industry by comparing changes in INPV and domestic 
manufacturing employment between a base case and the standards case. To 
capture the uncertainty relating to manufacturer pricing strategy 
following new standards, the GRIM estimates a range of possible impacts 
under different markup scenarios. Each of the inputs and output is 
discussed in chapter 12 of the NOPR TSD. DOE used the GRIM to calculate 
cash flows using standard accounting principles and to compare changes 
in INPV between a base case and a standards case. The percent change in 
INPV between the base and standards cases represents the financial 
impact of new energy conservation standards on manufacturers of 
manufactured homes. Additional detail on the GRIM can be found in 
Appendix 12A.
    DOE conducted the MIA analysis in three phases. In Phase 1 of the 
MIA, DOE analyzed the upfront investments, conversation costs, 
manufacturers would need to make to bring their products into 
compliance with the new energy conservation standards. These upfront 
investments include product conversion costs and capital conversion 
costs. Product conversion costs are one-time investments in research, 
development, labeling updates, and other costs necessary to make 
product designs comply with energy conservation standards. Capital 
conversion costs are one-time investments in property, plant and 
equipment to adapt or change existing production lines to fabricate and 
assemble new product designs that comply with the energy conservation 
standards.
    DOE calculated that the proposed rule would result in an average 
upfront investment, or conversion cost, of $37,500 per manufacturer. 
This figure includes $32,500 per manufacturer for product conversion 
costs and $5,000 per manufacturer for capital conversion costs. DOE 
assumed in its analysis that manufacturers would incur all upfront 
costs in the year following publication of the final rule. Additional 
detail on the conversion costs can be found in chapter 12 of the TSD.
    In Phase 2 of the MIA, DOE analyzed the effect the proposed 
standards would have on manufacturer production costs. To be 
conservative in its analysis, DOE assumed that all units sold are at 
the HUD minimum. Thus, the analysis does not account for the reduced 
impact on units sold that may exceed the HUD minimum. Based on this 
analysis, DOE estimates average manufacturer production costs would 
increase by $1,321 for each single-section unit and by $1,840 for each 
multi-section unit. The estimated increases in manufacturer production 
costs are derived from the estimated increases in purchase price,

[[Page 39787]]

the retail markup and the manufacturer markup on these units. As a 
starting point, DOE used the retail prices of manufactured homes in 19 
cities that include all four proposed climate zones. The retail prices 
were for the base case in each city and the standard case in each city. 
Using public sources of information, including company SEC 10-K filings 
\7\ and corporate annual reports, DOE applied a consistent manufacturer 
markup of 1.25 and a retail markup of 1.30 for the base cases and 
standards cases. DOE used these two markups, and along with a sales tax 
multiplier, to back-calculate the manufacturer production cost for each 
city. Details on the derivation of the sales tax multiplier, retail 
markup, manufacturer markup, and manufacturer production cost for each 
city can be found in chapter 12 of the NOPR TSD. DOE requests comments 
on whether other manufacturer and retailer markups for base case and 
standards cases should be considered (e.g., a combined mark-up of 2.30 
has historically been used in the past by HUD to assess combined 
manufacturer and retailer mark-ups to determine potential first cost 
impacts on consumers).
---------------------------------------------------------------------------

    \7\ U.S. Securities and Exchange Commission. Annual 10-K 
Reports. Various Years. <https://sec.gov.
---------------------------------------------------------------------------

    In Phase 3 of the MIA, DOE modeled two scenarios that reflect 
changes in the manufacturer's ability to pass on their upfront 
investments and increases in production costs to the customers. As 
manufacturer production costs increase, manufacturers may need to 
adjust their markup structure. For the MIA, DOE modeled two standards 
case markup scenarios for manufactured homes to represent the 
uncertainty regarding the potential impacts on prices and profitability 
for manufactured home manufacturers following the implementation of the 
proposed rule. DOE modeled a high and a low scenario for a manufacturer 
to pass on their upfront investments and increases in production costs 
to the customer: (1) A preservation of gross margin percentage markup 
scenario; and (2) a preservation of operating profit markup scenario. 
These scenarios lead to different markup values that, when applied to 
the inputted manufacturer production costs, result in varying revenue 
and cash flow impacts on the manufacturer.
    Under the preservation of gross margin percentage markup scenario, 
manufacturers maintain their current average markup of 1.25 even as 
production costs increase. Manufacturers are able to maintain the same 
amount of profit as a percentage of revenues, suggesting that they are 
able to pass on the costs of compliance to their customers. DOE 
considers this scenario the upper bound to industry profitability.
    In the preservation of per unit operating profit scenario, 
manufacturer markups are set so that operating profit one year after 
the compliance date of the amended energy conservation standard is the 
same as in the base case on a per unit basis. Under this scenario, as 
the costs of production increase under a standards case, manufacturers 
are generally required to reduce their markups. The implicit assumption 
behind this markup scenario is that the industry can only maintain its 
operating profit in absolute dollars per unit after compliance with the 
new standard is required. Therefore, operating margin is reduced 
between the base case and standards case. This markup scenario 
represents a lower bound to industry profitability under an amended 
energy conservation standard.
    DOE calculated an industry average discount rate of 9.2% based on 
SEC filings for public manufacturers of manufactured homes. This 
discount rate was used to estimate the time-value of money when 
discounting future cash flows. The INPV is the sum of the discounted 
cash flows over the analysis period, which begins in 2016 and ends in 
2046. When applying the two different markup scenarios, DOE is able to 
estimate a range of potential impacts to INPV and the industry. DOE 
compares the INPV of the base case to that of the proposed level. The 
difference between INPV in the base case and INPV at the proposed level 
is an estimate of the economic impacts on the industry.

                  Table IV.4--INPV Results: Preservation of Gross Margin Percentage Scenario *
----------------------------------------------------------------------------------------------------------------
                                                                  Single-section   Multi-section  Total industry
----------------------------------------------------------------------------------------------------------------
Base Case INPV (million 2015$)..................................           229.0           487.8           716.7
Standards Case INPV (million 2015$).............................           227.9           485.8           713.6
Change in INPV (million 2015$)..................................           (1.1)           (2.0)           (3.1)
Change in INPV (%)..............................................           -0.5%           -0.4%           -0.4%
                                                                 -----------------------------------------------
    Total Conversion Costs (million 2015$)......................             0.5             1.1             1.6
----------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative values.


                  Table IV.5--INPV Results: Preservation of Operating Profit Markup Scenario *
----------------------------------------------------------------------------------------------------------------
                                                                  Single-section   Multi-section  Total industry
----------------------------------------------------------------------------------------------------------------
Base Case INPV (million 2015$)..................................           229.0           487.8           716.7
Standards Case INPV (million 2015$).............................           215.0           465.0           680.0
Change in INPV (million 2015$)..................................          (14.0)          (22.8)          (36.8)
Change in INPV (%)..............................................           -6.1%           -4.7%           -5.1%
                                                                 -----------------------------------------------
    Total Conversion Costs (million 2015$)......................             0.5             1.1             1.6
----------------------------------------------------------------------------------------------------------------
* Values in parentheses are negative values.

    For single-section units, the base case INPV is $229.0 million. The 
proposed standard could result in a drop of industry value ranging from 
-0.5 percent to -6.1 percent, or a loss of $1.1 million to $14.0 
million. For multi-section units, the base case INPV is $487.8 million. 
The proposed standard could result in a drop of industry value

[[Page 39788]]

ranging from -0.4 percent to -4.7 percent, or a loss of $2.0 million to 
$22.8 million. For the industry as a whole, the base case INPV is 
$716.7 million. The proposed standard could result in a drop in INPV of 
-0.4 percent to -5.1 percent, or a loss of $3.1 million to $36.8 
million. Industry conversion costs total $1.6 million at the proposed 
level.
    Though DOE's analysis assumes all manufactured homes are sold at 
the HUD minimum level (analyzed as the baseline in this rulemaking), 
select manufactured homes are available in the market at higher 
efficiencies. If a manufacturer currently produces homes that are more 
efficient than the HUD minimum level, the impacts associated with that 
manufacturer will be reduced. For example, the incremental manufacturer 
production cost would be smaller for a manufacturer already producing 
homes above the minimum level. If a manufacturer already produces homes 
compliant with the proposed level, then the manufacturer would 
experience no conversion costs or increases in production costs for 
those models.
    DOE requests comment on the conversion costs for proposed standard. 
DOE welcomes additional data regarding the cost to redesign model plans 
to meet the proposed standard and the capital expenditures that the 
proposed standard would require.
    DOE also requests comment on the average manufacturer markup for 
single-section and multi-section homes, including any differences in 
markup between minimally compliant homes and homes with upgrades that 
improve energy performance. Additionally, DOE requests comment on the 
average retail markup in the industry.

C. Nationwide Impacts

    DOE's NIA projects a net benefit to the nation as a whole as a 
result of the proposed rule in terms of NES and the NPV of total 
customer costs and savings that would be expected as a result of the 
proposed rule in comparison with the minimum requirements of the HUD 
Code. DOE calculated the NES and NPV based on annual energy consumption 
and total construction and lifecycle cost data from the LCC analysis 
(developed during the MH working group negotiation process) described 
in section IV.A of this SUPPLEMENTARY INFORMATION and shipment 
projections. DOE projected the energy savings, operating cost savings, 
equipment costs, and NPV of customer benefits sold in a 30-year period 
from 2017 through 2046. The analysis also accounts for costs and 
savings for a manufactured home lifetime of 30 years. A detailed 
description of the NIA methodology is provided in chapter 11 of the 
TSD. DOE requests comment on the methodology and initial findings of 
the NIA.
    DOE developed a shipments model to forecast the shipments of 
manufactured homes during the analysis period. DOE first gathered 
historical shipments spanning 1990-2013 from a report developed and 
written by the Institute for Building Technology and Safety and 
published by the Manufactured Housing Institute.\8\ Then, using the 
growth rate (1.8 percent) in new residential housing starts from the 
AEO 2015, DOE projected the number of manufactured housing shipments 
from 2014 through 2046 in the base case (no new standards adopted by 
DOE). For the standards case shipments, DOE used this same growth rate 
estimate (1.8 percent), but also applied an estimate for price 
elasticity of demand. Price elasticity of demand (price elasticity) is 
an economic concept that describes the change of the quantity demanded 
in response to a change in price. DOE used the price elasticity value 
of -0.48 (a 10-percent price increase would translate to a 4.8-percent 
reduction in manufactured home shipment) based on a study published in 
the Journal of Housing Economics \9\ for estimating standards case 
shipments.
---------------------------------------------------------------------------

    \8\ See Manufactured Home Shipments by Product Mix (1990-2013), 
Manufactured Housing Institute (2014).
    \9\ See Marshall, M.I. & Marsh, T.L. Consumer and investment 
demand for manufactured housing units. J. Hous. Econ. 16, 59-71 
(2007).
---------------------------------------------------------------------------

    In a second sensitivity analysis, DOE also considered a standards 
case shipment scenario in which the price elasticity is -2.4 (instead 
of -0.48) This would project a 2.4 percent reduction in shipments based 
on the projected cost increases in the proposed rule. DOE based this 
sensitivity case on previous HUD estimates of -2.4 price elasticity 
based on a 1992 paper written by Carol Meeks.\11\ This would translate 
to a 12 percent reduction in shipments based on a 5 percent increase in 
price as forecasted in the proposed rule.
---------------------------------------------------------------------------

    \11\ Meeks, C., 1992, Price Elasticity of Demand for 
Manufactured Homes: 1961-1989.
---------------------------------------------------------------------------

    A detailed description of the shipments methodology is provided in 
chapter 10 of the TSD. DOE requests comment on the methodology and 
initial findings of the shipments analysis.
    Table IV.6 and Table IV.7 reflect the NES results over a 30-year 
analysis period under the proposed rule on a primary energy savings 
basis. Primary energy savings apply a factor to account for losses 
associated with generation, transmission, and distribution of 
electricity. Primary energy savings differ among the different climate 
zones because of differing energy conservation requirements in each 
climate zone and different shipment projections in each climate zone.

  Table IV.6--Cumulative National Energy Savings of Manufactured Homes
               Purchased 2017-2046 With a 30-Year Lifetime
------------------------------------------------------------------------
                                              Single-
                                              section     Multi- section
                                              (quads)         (quads)
------------------------------------------------------------------------
Climate Zone 1..........................           0.171           0.281
Climate Zone 2..........................           0.124           0.234
Climate Zone 3..........................           0.259           0.449
Climate Zone 4..........................           0.279           0.382
                                         -------------------------------
    Total...............................           0.833           1.346
------------------------------------------------------------------------


[[Page 39789]]


  Table IV.7--Cumulative National Energy Savings of Manufactured Homes
               Purchased 2017-2046 With a 30-Year Lifetime
------------------------------------------------------------------------
                                              Single-     Multi- section
                                            section (%)         (%)
------------------------------------------------------------------------
Climate Zone 1..........................            25.3            29.9
Climate Zone 2..........................            25.4            30.6
Climate Zone 3..........................            26.0            28.1
Climate Zone 4..........................            25.4            26.5
                                         -------------------------------
    Total...............................            25.6            28.4
------------------------------------------------------------------------

    Table IV.8 and Table IV.9 illustrate the cumulative NES over the 
30-year analysis period under the proposed rule on a FFC energy savings 
basis. FFC energy savings apply a factor to account for losses 
associated with generation, transmission, and distribution of 
electricity, and the energy consumed in extracting, processing, and 
transporting or distributing primary fuels. NES differ amongst the 
different climate zones because of differing energy efficiency 
requirements in each climate zone and different shipment projections in 
each climate zone.

  Table IV.8--Cumulative National Energy Savings, Including Full-Fuel-
 Cycle of Manufactured Homes Purchased 2017-2046 With a 30-Year Lifetime
------------------------------------------------------------------------
                                              Single-
                                              section     Multi- section
                                              (quads)         (quads)
------------------------------------------------------------------------
Climate Zone 1..........................           0.179           0.294
Climate Zone 2..........................           0.130           0.245
Climate Zone 3..........................           0.272           0.474
Climate Zone 4..........................           0.303           0.416
                                         -------------------------------
    Total...............................           0.884           1.428
------------------------------------------------------------------------


  Table IV.9--Cumulative National Energy Savings, Including Full-Fuel-
 Cycle of Manufactured Homes Purchased 2017-2046 With a 30-Year Lifetime
------------------------------------------------------------------------
                                              Single-     Multi- section
                                            section (%)         (%)
------------------------------------------------------------------------
Climate Zone 1..........................            25.3            29.9
Climate Zone 2..........................            25.4            30.6
Climate Zone 3..........................            26.0            28.1
Climate Zone 4..........................            25.4            26.6
                                         -------------------------------
    Total...............................            25.6            28.3
------------------------------------------------------------------------

    Table IV.10 and Table IV.11 illustrate the NPV of customer benefits 
over the 30-year analysis period under the proposed rule for a discount 
rate of 7 percent and 3 percent respectively. The NPV of manufactured 
homeowner benefits differ among the different climate zones because 
there are different up-front costs and operating cost savings 
associated with each climate zone and different shipment projections in 
each climate zone. All climate zones have a positive NPV for both 
discount rates under this proposed rule.

Table IV.10--Net Present Value of Manufactured Homes Purchased 2017-2046
              With a 30-Year Lifetime at a 7% Discount Rate
------------------------------------------------------------------------
                                              Single-
                                              section     Multi- section
                                             (billion        (billion
                                              2015$)          2015$)
------------------------------------------------------------------------
Climate Zone 1..........................            0.19            0.34
Climate Zone 2..........................            0.16            0.35
Climate Zone 3..........................            0.39            0.74
Climate Zone 4..........................            0.52            0.74
                                         -------------------------------
    Total...............................            1.26            2.18
------------------------------------------------------------------------


[[Page 39790]]


Table IV.11--Net Present Value of Manufactured Homes Purchased 2017-2046
              With a 30-Year Lifetime at a 3% Discount Rate
------------------------------------------------------------------------
                                              Single-
                                              section     Multi- section
                                             (billion        (billion
                                              2015$)          2015$)
------------------------------------------------------------------------
Climate Zone 1..........................            0.66            1.16
Climate Zone 2..........................            0.54            1.10
Climate Zone 3..........................            1.22            2.26
Climate Zone 4..........................            1.60            2.24
                                         -------------------------------
    Total...............................            4.03            6.75
------------------------------------------------------------------------

    DOE considered two sensitivity analyses relating to shipments. 
First, DOE considered a shipment scenario in which the growth rate is 
6.5 percent (instead of 1.8 percent) based on the trend in actual 
manufactured home shipments from 2011 to 2014. This growth rate applies 
to both the base case and standards case shipments. DOE's primary 
scenario is based on the residential housing start data from AEO 2015. 
The sensitivity analysis calculates the increase in NES and NPV 
associated with a much larger future market for manufactured homes. See 
Table IV.12 for results of the sensitivity analysis. A detailed 
description of the sensitivity analysis is provided in appendix 11A of 
the TSD. DOE requests comment on the shipment growth rate assumption 
used in the shipments analysis.

                   Table IV.12--Shipments Growth Rate Sensitivity Analysis NES and NPV Results
----------------------------------------------------------------------------------------------------------------
                                                                     National       Net present     Net present
                                                                      energy         value 3%        value 7%
                                                                   savings (full   discount rate   discount rate
                                                                    fuel cycle       (billion        (billion
                                                                      quads)          2015$)          2015$)
----------------------------------------------------------------------------------------------------------------
1.8% Shipment Growth (primary scenario).........................             2.3           10.93            3.47
6.5% Shipment Growth............................................             5.8           26.19            7.38
----------------------------------------------------------------------------------------------------------------

    In a second sensitivity analysis, DOE considered a standards case 
shipment scenario in which the price elasticity is -2.4 (instead of -
0.48). HUD has used an estimate of -2.4 in analysis of revisions to its 
regulations \10\ promulgated at 24 CFR 3282 based on a 1992 paper 
written by Carol Meeks.\11\ DOE's primary scenario is based on a study 
published in 2007 in the Journal of Housing Economics. The sensitivity 
analysis calculates the decrease in NES and NPV associated with a 
larger decrease in shipments resulting from the more negative price 
elasticity value. Price elasticity of -2.4 would translate to a 12 
percent reduction in shipments based on a 5 percent increase in price 
as projected by the proposed rule. Price elasticity of -0.48 would 
project a 2.4 percent reduction in shipments based on the projected 
cost increases in this proposed rule. See Table IV.13 for results of 
the sensitivity analysis. A detailed description of the sensitivity 
analysis is provided in appendix 11A of the TSD. DOE requests comment 
on the price elasticity assumption used in the standards case shipments 
analysis.
---------------------------------------------------------------------------

    \10\ For example, see https://www.regulations.gov/#!documentDetail;D=HUD-2014-0033-0001.
    \11\ Meeks, C., 1992, Price Elasticity of Demand for 
Manufactured Homes: 1961 to 1989.

                Table IV.13--Price Elasticity of Demand Sensitivity Analysis NES and NPV Results
----------------------------------------------------------------------------------------------------------------
                                                                     National       Net present     Net present
                                                                      energy         value 3%        value 7%
                                                                   savings (full   discount rate   discount rate
                                                                    fuel cycle       (billion        (billion
                                                                      quads)          2015$)          2015$)
----------------------------------------------------------------------------------------------------------------
-0.48 Price Elasticity (primary scenario).......................             2.3           10.93            3.47
-2.4 Price Elasticity...........................................             2.1           10.04            3.19
----------------------------------------------------------------------------------------------------------------

D. Nationwide Environmental Benefits

    DOE's analyses indicate that this proposed rule would reduce 
overall demand for energy in manufactured housing. The proposed rule 
also would produce environmental benefits in the form of reduced 
emissions of air pollutants and greenhouse gases associated with 
electricity production. Emissions avoided under the proposed rule would 
be directly proportional to energy savings that would be achieved. DOE 
has based these estimates on a 30-year analysis period of manufactured 
home shipments, accounting for a 30-year home lifetime. DOE's analysis 
estimates reductions in emissions of six pollutants associated with 
energy savings: Carbon dioxide (CO2), mercury (Hg), nitric 
oxide and nitrogen dioxide (NOX), sulfur dioxide 
(SO2), methane (CH4), and nitrous oxide 
(N2O). These reductions are referred to as ``site'' 
emissions reductions. Furthermore, DOE estimated reductions in 
emissions associated with the production of these fuels (extracting, 
processing, transporting to power plants or homes). Such reductions are 
referred to as

[[Page 39791]]

``upstream'' emissions reductions. Together, site emissions reductions 
and upstream emissions reductions account for the FFC. In accordance 
with DOE's FFC Statement of Policy (see 76 FR 51282 (Aug. 18, 2011), 77 
FR 49701 (Aug. 17, 2012)), the FFC analysis includes impacts on 
emissions of CH4 and N2O, both of which are 
recognized as greenhouse gases (GHGs).
    The emissions reduction estimates are based on emission intensity 
factors for each pollutant, which depend on the type of fuel associated 
with energy savings (electricity, natural gas, liquefied petroleum gas, 
fuel oil). These emission intensity factors were derived from data in 
the AEO 2015 \12\ and from the EPA GHG Emissions Factors Hub.\13\ Full 
details of this methodology are described in chapter 13 of the TSD. 
Table IV.14 reflects the emissions reductions for both single-section 
and multi-section manufactured homes. DOE requests comment on the 
methodology and initial findings of the emissions analysis.
---------------------------------------------------------------------------

    \12\ See Energy Information Administration, Annual Energy 
Outlook 2015 with Projections to 2040 (2015), available at https://www.eia.gov/forecasts/aeo/pdf/0383(2015).pdf.
    \13\ See U.S. Environmental Protection Agency, Emissions Factors 
for Greenhouse Gas Inventories (2014), available at https://www.epa.gov/climateleadership/documents/emission-factors.pdf.

   Table IV.14--Emissions Reductions as a Result of the Proposed Rule
------------------------------------------------------------------------
                                                     Single-     Multi-
                     Pollutant                       section    section
------------------------------------------------------------------------
                        Site Emissions Reductions
------------------------------------------------------------------------
CO2 (million metric tons).........................       56.5       91.1
Hg (metric tons)..................................     0.0904      0.146
NOX (thousand metric tons)........................        223        356
SO2 (thousand metric tons)........................       27.6       44.4
CH4 (thousand metric tons)........................       3.78       6.09
N2O (thousand metric tons)........................      0.632       1.02
------------------------------------------------------------------------
                      Upstream Emissions Reductions
------------------------------------------------------------------------
CO2 (million metric tons).........................       4.01       6.45
Hg (metric tons)..................................   0.000944    0.00153
NOX (thousand metric tons)........................       51.8       83.2
SO2 (thousand metric tons)........................      0.615      0.991
CH4 (thousand metric tons)........................        239        385
N2O (thousand metric tons)........................     0.0294     0.0474
------------------------------------------------------------------------
                       Total Emissions Reductions
------------------------------------------------------------------------
CO2 (million metric tons).........................       60.5       97.6
Hg (metric tons)..................................     0.0913      0.148
NOX (thousand metric tons)........................        275        439
SO2 (thousand metric tons)........................       28.2       45.4
CH4 (thousand metric tons)........................        243        391
N2O (thousand metric tons)........................      0.661       1.07
------------------------------------------------------------------------

    Additionally, DOE considered the estimated monetary benefits likely 
to result from the reduced emissions of CO2 and 
NOX that would be expected to result from the proposed rule. 
In order to make this calculation similar to the calculation of the net 
present value of consumer benefit, DOE considered the reduced emissions 
expected to result over the lifetime of products shipped in the 
analysis period (2017-2046) under the proposed rule. DOE has calculated 
the monetary values for each of these emissions using the social cost 
of carbon (SCC) methodology, which estimates the monetized damages 
associated with an incremental increase in carbon emissions within a 
given year. The SCC is intended to account for, but is not limited to, 
changes in net agricultural productivity, human health, property 
damages from increased flood risk, and the value of ecosystem services. 
SCC estimates are given in terms of dollars per metric ton of 
CO2 emitted.
    The SCC is comprised of monetization estimate results from three 
different integrated assessment models, which have different 
methodologies for calculating the damages associated with 
CO2 emissions. The SCC values used for this rulemaking were 
generated using the most recent versions of the three integrated 
assessment models that have been published in peer-reviewed 
literature.\14\ As a result, four SCC estimates of emitted 
CO2 value are available, representing different aggregation 
of these three models and utilization of a variety of discount rates. 
Three sets of the monetization factors utilize the average impacts 
projected by the three assessment models that comprise the SCC. The 
fourth set of monetization factors utilizes the 95th percentile impacts 
of the three assessment models and is intended to capture higher than 
expected impacts. For the purposes of capturing the uncertainty of 
emitted CO2 value, the interagency group recommends 
including all four sets of available SCC values. Full details of this 
methodology are described in chapter 14 of the TSD. These estimates 
have been developed by an interagency process and are presented with an 
acknowledgement of uncertainty. These results should be treated as 
revisable, as the estimates of emitted CO2 monetary value 
evolve with improved scientific and economic understanding.
---------------------------------------------------------------------------

    \14\ See Technical Update of the Social Cost of Carbon for 
Regulatory Impact Analysis Under Executive Order 12866, Interagency 
Working Group on Social Cost of Carbon, United States Government. 
May 2013; (revised November 2013), available at www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf.
---------------------------------------------------------------------------

    DOE also has estimated monetary benefits for NOX 
emissions under the proposed rule. Estimates of the monetary value of 
reducing NOX from stationary sources range from $489 to 
$5,023 per metric ton (2015$). DOE calculated monetary benefits using 
an intermediate value for NOX emissions of $2,755 per metric 
ton (in 2015$), and real discount rates of 3 and 7 percent. DOE is 
evaluating appropriate monetization of avoided SO2 and Hg 
emissions in energy conservation standards rulemakings and has not 
included such monetization in the current analysis. DOE has similarly 
not included monetization of reductions in emissions of CH4 
or N2O. DOE requests comments on the methodology and results 
of the monetization of emissions reductions benefits analysis. Table 
IV.15 provides the NPVs from the savings of reduced CO2 and 
NOX emissions resulting from manufactured homes built in 
accordance with the proposed rule.

[[Page 39792]]



  Table IV.15--Net Present Value of Monetized Benefits From CO2 and NOX Emissions Reductions Under the Proposed
                                                      Rule
----------------------------------------------------------------------------------------------------------------
                                                                                    Net present value (million
                                                                   Discount rate              2015$)
                                                                        (%)      -------------------------------
                                                                                  Single-section   Multi-section
----------------------------------------------------------------------------------------------------------------
                                                Monetary Benefits
----------------------------------------------------------------------------------------------------------------
CO2, Average SCC Case...........................................               5           368.2           593.7
CO2, Average SCC Case...........................................               3         1,810.9         2,920.5
CO2, Average SCC Case...........................................             2.5         2,925.0         4,717.3
CO2, 95th Percentile SCC Case...................................               3         5,581.5         9,001.5
NOX Reduction...................................................               3           311.5           498.6
                                                                               7           119.8           191.9
----------------------------------------------------------------------------------------------------------------

E. Total Benefits and Costs

    As explained in greater detail in section IV of this SUPPLEMENTARY 
INFORMATION and in chapter 15 of the TSD, Table IV.16 reflects the 
total benefits and costs (from the manufactured homeowner's 
perspective) associated with the proposed rule, expressed in terms of 
annualized values.\15\
---------------------------------------------------------------------------

    \15\ As stated above, DOE used a two-step calculation process to 
convert the time-series of costs and benefits into annualized 
values. First, DOE calculated a present value in 2015, the year used 
for discounting the net present value of total consumer costs and 
savings, for the time-series of costs and benefits using discount 
rates of three and seven percent for all costs and benefits except 
for the value of CO2 reductions. For the latter, DOE used 
a range of discount rates, as shown in Table IV.16. From the present 
value, DOE then calculated the fixed annual payment over a 30-year 
period, starting in 2017 that yields the same present value. The 
fixed annual payment is the annualized value. Although DOE 
calculated annualized values, this does not imply that the time-
series of cost and benefits from which the annualized values were 
determined would be a steady stream of payments.

                           Table IV.16--Total Annualized Benefits and Costs to Manufactured Homeowners Under the Proposed Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Monetized (million 2015$/year)
                                   ---------------------------------------------------------------------------------------------------------------------
                                            Discount rate (%)             Primary estimate **           Low estimate **            High estimate **
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Benefits *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operating (Energy) Cost Savings...  7...............................  516.......................  400.......................  688.
                                    3...............................  843.......................  617.......................  1,191.
CO2, Average SCC Case ***.........  5...............................  63........................  46........................  85.
CO2, Average SCC Case ***.........  3...............................  241.......................  176.......................  331.
CO2, Average SCC Case ***.........  2.5.............................  365.......................  266.......................  503.
CO2, 95th Percentile SCC Case ***.  3...............................  744.......................  543.......................  1,022.
NOX Reduction at $2,773/metric ton  7...............................  25........................  20........................  32.
 ***.
                                    3...............................  41........................  31........................  56.
Total (Operating Cost Savings, CO2  7 plus CO2 range................  604 to 1,285..............  466 to 962................  805 to 1,742.
 Reduction and NOX Reduction).      7...............................  783.......................  596.......................  1,052.
                                                                      1,126.....................  824.......................  1,578.
                                    2...............................  947 to 1,628..............  694 to 1,191..............  1,332 to 2,269.
                                    3 plus CO2 range................
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Costs *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental Purchase Price          7...............................  220.......................  165.......................  285.
 Increase.
                                    3...............................  277.......................  192.......................  378.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Net Benefits/Costs *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total (Operating Cost Savings, CO2  7 plus CO2 range................  384 to 1,065..............  301 to 797................  520 to 1,457.
 Reduction and NOX Reduction,       7...............................  563.......................  431.......................  767.
 Minus Incremental Cost Increase                                      849.......................  632.......................  1,200.
 to Homes).
                                    3...............................  670 to 1,351..............  502 to 999................  954 to 1,891.
                                    3 plus CO2 range................
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The benefits and costs are calculated for homes shipped 2017-2046.
** The Primary, Low, and High Estimates utilize forecasts of energy prices from the 2015_AEO Reference case, Low Economic Growth case, and High Economic
  Growth case, respectively.
*** The CO2 values represent global monetized values (in 2015$) of the social cost of CO2 emissions reductions over the analysis period under several
  different scenarios of the SCC model. The ``average SCC case'' refers to average predicted monetary savings as predicted by the SCC model. The ``95th
  percentile case'' refers to values calculated using the 95th percentile impacts of the SCC model, which accounts for greater than expected
  environmental damages. The value for NOX (in 2015$) is the average of the low and high values used in DOE's analysis.


[[Page 39793]]

    DOE is well aware that scientific and economic knowledge about the 
contribution of CO2 and other GHG emissions to changes in 
the future global climate and the potential resulting damages to the 
world economy continues to evolve rapidly. Thus, any value placed in 
this proposed rulemaking on reducing CO2 emissions is 
subject to change. DOE, together with other federal agencies, will 
continue to review various methodologies for estimating the monetary 
value of reductions in CO2 and other GHG emissions. This 
ongoing review will consider any comments on this subject that are part 
of the public record for this and other rulemakings, as well as other 
methodological assumptions and issues. However, consistent with DOE's 
legal obligations, and taking into account the uncertainty involved 
with this particular issue, DOE has included in this proposed 
rulemaking the most recent values and analyses resulting from the 
ongoing interagency review process.
    Although adding the value of consumer savings to the values of 
emission reductions provides a valuable perspective, two issues should 
be considered. First, the national operating savings are domestic U.S. 
consumer monetary savings that would occur as a result of market 
transactions, while the value of CO2 reductions is based on 
a global value. Second, the assessments of operating cost savings and 
CO2 savings are performed with different methods that use 
quite different time frames for analysis. The national operating cost 
savings is measured for the lifetime of manufactured homes shipped in 
the 30-year period after the compliance date. The SCC values, on the 
other hand, reflect the present value of future climate-related impacts 
resulting from the emission of one ton of CO2 in each year. 
These impacts would go well beyond 2100.

V. Regulatory Review

A. Executive Order 12866

    Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (Oct. 4, 1993), requires each agency to identify 
the problem that it intends to address, including, where applicable, 
the failures of private markets or public institutions that warrant new 
agency action, as well as to assess the significance of that problem. 
The problems that this proposed standards address are as follows:
    (1) Under current federal standards, manufactured homes typically 
conserve less energy than comparably built site-built and modular 
homes, and.
    (2) There are external benefits resulting from improved energy 
conservation in manufactured housing. These benefits include 
externalities related to environmental protection and energy security 
that are not reflected in energy prices, such as reduced emissions of 
greenhouse gases.
    DOE has determined that this regulatory action is an ``economically 
significant regulatory action'' under section 3(f)(1) of Executive 
Order 12866. Accordingly, section 6(a)(3) of the Executive Order 
requires that DOE prepare a regulatory impact analysis (RIA) on this 
proposed rule and that the Office of Information and Regulatory Affairs 
(OIRA) in OMB review this proposed rule. DOE has presented the proposed 
rule and supporting documents, including the RIA, to OIRA for review 
and has included these documents in the rulemaking record. The 
assessments prepared pursuant to Executive Order 12866 can be found in 
chapter 11 of the TSD for this rulemaking. They are available for 
public review in the Resource Room of DOE's Building Technologies 
Program, 950 L'Enfant Plaza SW., Suite 600, Washington, DC 20024, (202) 
586-2945, between 9:00 a.m. and 4:00 p.m., Monday through Friday, 
except federal holidays.
    DOE also has reviewed this regulation pursuant to Executive Order 
13563, issued on January 18, 2011 (76 FR 3281, Jan. 21, 2011). 
Executive Order 13563 is supplemental to and reaffirms the principles, 
structures, and definitions governing regulatory review established in 
Executive Order 12866. To the extent permitted by law, federal agencies 
are required by these Executive Orders to, among other things:
    (1) Propose or adopt a regulation only upon a reasoned 
determination that its benefits justify its costs (recognizing that 
some benefits and costs are difficult to quantify);
    (2) Tailor regulations to impose the least burden on society, 
consistent with obtaining regulatory objectives, taking into account, 
among other things, and to the extent practicable, the costs of 
cumulative regulations;
    (3) Select, in choosing among alternative regulatory approaches, 
those approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity);
    (4) To the extent feasible, specify performance objectives, rather 
than specifying the behavior or manner of compliance that regulated 
entities must adopt; and
    (5) Identify and assess available alternatives to direct 
regulation, including providing economic incentives to encourage the 
desired behavior, such as user fees or marketable permits, or providing 
information upon which choices can be made by the public.
    For the reasons stated in the chapter 11 of the TSD and in section 
III of the document, DOE believes that this proposed rule is consistent 
with these principles.

B. Executive Order 13563

    DOE has also reviewed this regulation pursuant to Executive Order 
13563 (see 76 FR 3281, Jan. 21, 2011), which is supplemental to, and 
explicitly reaffirms the principles, structures, and definitions 
governing regulatory review established in Executive Order 12866. To 
the extent permitted by law, agencies are required by Executive Order 
13563 to: (1) Propose or adopt a regulation only upon a reasoned 
determination that its benefits justify its costs (recognizing that 
some benefits and costs are difficult to quantify); (2) tailor 
regulations to impose the least burden on society, consistent with 
obtaining regulatory objectives, taking into account, among other 
things, and to the extent practicable, the costs of cumulative 
regulations; (3) select, in choosing among alternative regulatory 
approaches, those approaches that maximize net benefits (including 
potential economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity); (4) to the extent 
feasible, specify performance objectives, rather than specifying the 
behavior or manner of compliance that regulated entities must adopt; 
and (5) identify and assess available alternatives to direct 
regulation, including providing economic incentives to encourage the 
desired behavior, such as user fees or marketable permits, or providing 
information upon which choices can be made by the public.
    DOE emphasizes that Executive Order 13563 requires agencies ``to 
use the best available techniques to quantify anticipated present and 
future benefits and costs as accurately as possible.'' In its guidance, 
the Office of Information and Regulatory Affairs has emphasized that 
such techniques may include ``identifying changing future compliance 
costs that might result from technological innovation or anticipated 
behavioral changes.'' This proposed rule is consistent with these 
principles, including that, to the extent permitted

[[Page 39794]]

by law, agencies adopt a regulation only upon a reasoned determination 
that its benefits justify its costs and select, in choosing among 
alternative regulatory approaches, those approaches that maximize net 
benefits.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (IRFA) 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 rulemaking process. 68 FR 7990. DOE has made its 
procedures and policies available on the Office of the General 
Counsel's Web site (www.energy.gov/gc/office-general-counsel). DOE has 
prepared the following IRFA for small manufacturers of manufactured 
homes that are the subject of this proposed rulemaking.
    For the manufacturers of manufactured homes, the Small Business 
Administration (SBA) has set a size threshold, which defines those 
entities classified as ``small businesses'' for the purposes of the 
statute. DOE used the SBA's small business size standards to determine 
whether any small entities would be subject to the requirements of the 
rule. 65 FR 30836, 30848 (May 15, 2000), as amended at 65 FR 53533, 
53544 (Sept. 5, 2000) and codified at 13 CFR part 121. The size 
standards are listed by NAICS code and industry description and are 
available at https://www.sba.gov/content/table-small-business-size-standards. The covered manufacturers are classified under NAICS 321991, 
``Manufactured Home (Mobile Home) Manufacturing.'' The SBA sets a 
threshold of 500 employees or less for an entity to be considered as a 
small business for this category.
    DOE reviewed the potential standards considered in this NOPR under 
the provisions of the Regulatory Flexibility Act and the procedures and 
policies published on February 19, 2003. To better assess the potential 
impacts of this rulemaking on small entities, DOE conducted a more 
focused inquiry of the companies that could be small business 
manufacturers of manufactured homes. During its market survey, DOE used 
available public information to identify potential small manufacturers. 
DOE's research involved industry trade association membership 
directories, information from previous rulemakings, individual company 
Web sites, and market research tools (e.g., Hoover's reports) to create 
a list of companies that manufacture or sell manufactured homes covered 
by this rulemaking.
    To assess the potential impacts of this rulemaking on small 
entities, DOE conducted a focused inquiry of the companies that could 
be small business manufacturers of manufactured homes. During its 
market survey, DOE used available public information to identify 
potential small manufacturers. DOE's research involved individual 
company Web sites and market research tools (e.g., Hoovers reports 
\16\) to create a list of companies that manufacture homes covered by 
this rulemaking. DOE also asked stakeholders and industry 
representatives if they were aware of any other small manufacturers.
---------------------------------------------------------------------------

    \16\ Hoovers. https://www.hoovers.com/.
---------------------------------------------------------------------------

    DOE identified forty-six manufacturers of manufactured homes. Of 
the forty-six, DOE identified twenty-five manufacturers that qualified 
as small businesses. All small manufacturers identified are domestic 
manufacturers. DOE contacted all 25 identified manufactured home 
manufacturers for interviews. DOE spoke with two small manufacturers.
    During discussions with small manufacturers, DOE asked 
participating companies to describe their major concerns with regard to 
the rulemaking. The primary concern cited by small manufacturers was 
the potential for an energy conservation standard to result in a 
shrinking market for manufactured homes. Manufacturers noted two 
possible reasons. First, they were concerned that the standard would be 
set at a level where the economics do not make sense for the home 
purchaser. One manufacturer specifically requested the Department 
perform an analysis that showed the proposed level would result in 
cost-savings for the home owner. Second, the manufacturers noted the 
possibility that cost increases for the baseline homes could 
potentially price out some consumers, specifically lower income 
consumers. One of the small manufacturers noted that the market for the 
minimally compliant homes is dominated by much larger manufacturers. In 
particular, they noted Clayton Homes is the biggest player in that 
market with roughly half of the overall market for manufactured homes.
    Based on HUD data, research reports, and SEC filings, as described 
in section IV.C and chapter 12 of the TSD, DOE understands the retail 
prices, markups, and manufacturer production costs used in its 
manufacturer impact analysis are representative of the industry. DOE 
estimates that the proposed rule would reduce INPV by 0.4 to 5.1 
percent. DOE did not receive sufficient quantitative data to conclude 
that small manufacturer would experience impacts that are substantially 
different from the industry-at-large.
    Since the proposed standards could cause competitive concerns for 
small manufacturers, DOE cannot certify that the proposed standards 
would not have a significant impact on a substantial number of small 
businesses. DOE requests additional information and data regarding the 
number and market share of domestic small manufacturers of manufactured 
homes. DOE also requested information on the conversion costs small 
manufacturers would face and on other potential small business impacts 
related to the proposed energy conservation standards.

D. Paperwork Reduction Act

    This rulemaking does not include any information collection 
requirements subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.).

E. National Environmental Policy Act

    DOE is preparing a draft Environmental Assessment (EA) pursuant to 
the Council on Environmental Quality's Regulations for Implementing the 
Procedural Provisions of the National Environmental Policy Act (40 CFR 
parts 1500-1508), the National Environmental Policy Act of 1969, as 
amended (42 U.S.C. 4321 et seq.), DOE's National Environmental Policy 
Act (NEPA) Implementing Procedures (10 CFR part 1021), and DOE Order 
451.1B. DOE is preparing the draft EA in parallel with this rulemaking, 
and it will be posted to the DOE Web site separately. Reduced emissions 
of air pollutants and greenhouse gases associated with electricity 
production and fuel usage are discussed in section IV.D of this 
SUPPLEMENTARY INFORMATION.

F. 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

[[Page 39795]]

Executive Order also requires agencies to have a 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 action and has determined that it will not 
pre-empt State law. This action impacts energy efficiency requirements 
for manufacturers of manufactured homes. Accordingly, no further action 
is required by Executive Order 13132.

G. Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on 
Executive agencies the general duty to adhere to the following 
requirements: (1) Eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for affected conduct, rather than a general standard, and 
promote simplification and burden reduction. Regarding the review 
required by section 3(a), 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 either that those standards are met 
or it is unreasonable to meet one or more of them. DOE has completed 
the required review and preliminarily has determined that, to the 
extent permitted by law, this proposed rule meets the relevant 
standards of Executive Order 12988.

H. Unfunded Mandates Reform Act

    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 an amended 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. 
See 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 ``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. See 62 FR 12820. DOE's 
policy statement is also available at https://energy.gov/gc/office-general-counsel.
    This proposed rule does not contain a federal intergovernmental or 
private sector mandate, as those terms are defined in UMRA.

I. Family and General Government Appropriations Act

    Section 654 of the Family and General Government Appropriations Act 
of 1999 (Pub. L. 105-277) requires federal agencies to issue a Family 
Policymaking Assessment for any proposed 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 preliminarily concluded that it is not necessary to prepare a 
Family Policymaking Assessment.

J. 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.

K. Treasury and General Government Appropriations Act

    Section 515 of the Treasury and General Government Appropriations 
Act of 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 (February 22, 2002), 
and DOE's guidelines were published at 67 FR 62446 (October 7, 2002). 
DOE has reviewed this proposed rule under the OMB and DOE guidelines 
and preliminarily has concluded that it is consistent with applicable 
policies in those guidelines.

L. 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 OIRA 
a Statement of Energy Effects for any proposed significant energy 
action. A ``significant energy action'' is defined as any action by an 
agency that promulgates or is expected to lead to promulgation of a 
final rule or regulation, 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.
    DOE preliminarily has concluded that this regulatory action, which 
sets forth energy conservation standards for manufactured homes, is not 
a significant energy action because the proposed standards are not 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy, nor has it been designated as such by 
the Administrator at OIRA. Accordingly, DOE has not prepared a 
Statement of Energy Effects for this proposed rule.

M. Section 32 of the Federal Energy Administration Act of 1974

    Under section 301 of the Department of Energy Organization Act 
(Pub. L. 95-91), 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). Section 32 
provides in part that, where a proposed rule contains or involves use 
of commercial standards, the rulemaking

[[Page 39796]]

must inform the public of the use and background of such standards.
    The rule proposed in this notice incorporates testing methods 
contained in the following commercial standards: The ACCA ``Manual J--
Residential Load Calculation (8th Edition)'' (ACCA Manual J); the ACCA 
``Manual S--Residential Equipment Selection (2nd Edition)'' (ACCA 
Manual S); and the PNNL ``Overall U-Values and Heating/Cooling Loads--
Manufactured Homes'' (Overall U-Values and Heating/Cooling Loads--
Manufactured Homes).
    DOE has evaluated these standards and is unable to conclude whether 
they fully comply with the requirements of section 32(b) of the Federal 
Energy Administration Act of 1974, as amended. DOE will consult with 
the Attorney General and the Chairman of the Federal Trade Commission 
before prescribing a final rule concerning the impact on competition of 
requiring manufacturers to use the methods contained in these standards 
to test various components of manufactured homes.

N. Materials Incorporated by Reference

    In this NOPR, DOE proposes to incorporate by reference the test 
standard published by ACCA, titled ``Manual J--Residential Load 
Calculation (8th Edition).'' ACCA Manual J is an industry accepted 
standard for calculating the heating and cooling load associated with a 
building. DOE proposes requiring building heating and cooling loads to 
be calculated (for purposes of equipment sizing) in accordance with 
ACCA Manual J. ACCA Manual J is readily available on ACCA's Web site at 
https://www.acca.org/.
    DOE also proposes to incorporate by reference the test standard 
published by ACCA, titled ``Manual S--Residential Equipment Selection 
(2nd Edition).'' ACCA Manual S is an industry accepted standard for 
calculating the appropriate heating and cooling equipment size for a 
building. DOE proposes requiring building heating and cooling equipment 
to be sized in accordance with ACCA Manual S. ACCA Manual S is readily 
available on ACCA's Web site at https://www.acca.org/.
    DOE also proposes to incorporate by reference the test standard 
titled ``Overall U-Values and Heating/Cooling Loads--Manufactured 
Homes'' written by Conner C.C., Taylor, Z.T. of Pacific Northwest 
Laboratory. This test standard (often referred to as the Battelle 
Method) is an industry accepted method for calculating the overall 
thermal transmittance of a manufactured home. DOE proposes requiring 
manufactured housing manufacturers to calculate the overall thermal 
transmittance of a manufactured home in accordance with this test 
standard. This test standard is readily available on the U.S. 
Department of Housing and Urban Development's Web site at https://www.huduser.org/portal/publications/manufhsg/uvalue.html.

VI. Public Participation

A. Attendance at Public Meeting

    The time, date, and location of the public meeting are listed in 
the DATES and ADDRESSES sections at the beginning of this document. If 
you plan to attend the public meeting, please notify Ms. Brenda Edwards 
at (202) 586-2945 or Brenda.Edwards@ee.doe.gov. As explained in the 
ADDRESSES section, foreign nationals visiting DOE Headquarters are 
subject to advance security screening procedures.

B. Procedure for Submitting Prepared General Statements for 
Distribution

    Any person who has plans to present a prepared general statement 
may request that copies of his or her statement be made available at 
the public meeting. Such persons may submit requests, along with an 
advance electronic copy of their statement in PDF (preferred), 
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to 
the appropriate address shown in the ADDRESSES section at the beginning 
of this notice. The request and advance copy of statements must be 
received at least one week before the public meeting and may be 
emailed, hand-delivered, or sent by U.S. mail. DOE prefers to receive 
requests and advance copies via email. Please include a telephone 
number to enable DOE staff to make follow-up contact, if needed.

C. Conduct of Public Meeting

    DOE will designate a DOE official to preside at the public meeting 
and may also use a professional facilitator to aid discussion. A court 
reporter will be present to record the proceedings and prepare a 
transcript. DOE reserves the right to schedule the order of 
presentations and to establish the procedures governing the conduct of 
the public meeting. After the public meeting, interested parties may 
submit further comments on the proceedings as well as on any aspect of 
the rulemaking until the end of the comment period.
    The public meeting will be conducted in an informal, conference 
style. DOE will present summaries of comments received before the 
public meeting, allow time for prepared general statements by 
participants, and encourage all interested parties to share their views 
on issues affecting this rulemaking. Each participant will be allowed 
to make a general statement (within time limits determined by DOE), 
before the discussion of specific topics. DOE will permit, as time 
permits, other participants to comment briefly on any general 
statements.
    At the end of all prepared statements on a topic, DOE will permit 
participants to clarify their statements briefly and comment on 
statements made by others. Participants should be prepared to answer 
questions by DOE and by other participants concerning these issues. DOE 
representatives also may ask questions of participants concerning other 
matters relevant to this rulemaking. The official conducting the public 
meeting will accept additional comments or questions from those 
attending, as time permits. The presiding official will announce any 
further procedural rules or modification of the above procedures that 
may be needed for the proper conduct of the public meeting.
    A transcript of the public meeting will be included in the docket, 
which can be viewed as described in the DOCKET section at the beginning 
of this proposed rulemaking. In addition, any person may buy a copy of 
the transcript from the transcribing reporter.

D. Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed rule before or after the public meeting, but 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 proposed 
rule.
1. 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.

[[Page 39797]]

    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 
below.
    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.
2. 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. Email submissions are 
preferred. 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 are 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).

E. 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. Relationship With the HUD Code
    Potential inconsistencies or conflicts between the proposed rule 
and the HUD Code, as discussed in detail in section II.B.1 of this 
document.
2. Scope and Effective Date
    The scope and effective date of the proposed rule, as discussed in 
section III.B.1.a) of the document. DOE requests comment on whether a 
one-year compliance period would be sufficient for manufacturers to 
transition their designs, materials, and factory operations and 
processes in order to comply with the finalized DOE energy conservation 
standards and for DOE to develop and implement regulations to enforce 
its standards. DOE also requests comments on what additional lead time 
should be allowed if it elects to use HUD's existing enforcement 
system, which would require HUD to adopt the energy standards resulting 
from this rulemaking. The agency also requests comment on whether there 
are any particular timing considerations that the agency should 
consider due to manufacturers choosing to comply with either the 
prescriptive or thermal envelope compliance paths.
3. Definitions
    Proposed additions, exclusions, modifications, and potential 
inconsistencies among the definitions proposed under this rule, the HUD 
Code, and the 2015 IECC, as discussed in section III.B.1.b) of this 
document.
4. Air Barrier
    Potential clarification on the meaning of the term ``air barrier,'' 
as discussed in section III.B.1.b) of this document.
5. Tubular Daylighting Devices
    Whether to include tubular daylighting devices in the definition of 
the term ``fenestration,'' as discussed in section III.B.1.b) of this 
document.
6. Climate Zones
    The proposal to establish four climate zones and the specific 
categorization of states and counties included in each climate zone, as 
discussed in section III.B.2.a) of this SUPPLEMENTARY INFORMATION and 
chapter 4 of the TSD. DOE also requests comment on the proposed use of 
four climate zones relative to adopting the three HUD climate zones and 
whether there are any potential impacts on manufacturing costs, 
compliance costs, or other impacts, in particular in Arizona, Texas, 
Louisiana, Mississippi, Alabama, and

[[Page 39798]]

Georgia, where the agency has proposed two different energy efficiency 
standards within the same state.
7. Home Size
    The proposal to establish separate requirements for single- and 
multi-section manufactured homes, as discussed in section III.B.2.a) of 
this document.
8. Paths for Compliance With the Building Thermal Envelope Standards
    The proposal to establish prescriptive and performance options for 
achieving compliance with the proposed building thermal envelope 
requirements, the requirements of each option, and their equivalency in 
terms of overall thermal performance, as discussed in section 
III.B.2.b) of this SUPPLEMENTARY INFORMATION and chapter 6 of the TSD.
9. Insulated Siding
    The proposal to include a requirement similar to section R402.1.3 
of the 2015 IECC while excluding the insulated siding specification, as 
discussed in section III.B.2.b) of this document.
10. U-Factor Alternatives
11. The proposed U-factor alternatives and their equivalency with the 
prescriptive R-value requirements for ceiling, wall, and floor 
insulation, as discussed in section III.B.2.b) of this document.
12. Calculation of Average SHGC
    The proposal to include an area-weighted average calculation of 
SHGC for compliance with Sec.  460.102(c), as discussed in section 
III.B.2.b) of this document.
13. Insulation Installation Requirements for Floors
    Whether the insulation installation requirements in Sec.  460.103, 
including installation of insulation in floors, may be readily 
implemented by the manufactured housing industry, as discussed in 
section III.B.2.c) of this document.
14. Design Criteria for Envelope Sealing
    The effectiveness of the prescriptive building thermal envelope 
sealing requirements, as discussed in section III.B.2.d) of this 
SUPPLEMENTARY INFORMATION.
15. Impact of Envelope Sealing on Indoor Air Quality
    The potential impacts associated with the reduction in levels of 
natural air infiltration (through sealing leaks in the building thermal 
envelope), if any, relative to the minimum requirements of the HUD Code 
on reduced indoor air quality, the importance of natural air 
infiltration for whole-house ventilation strategies in manufactured 
housing, the relationship between the proposed standards and the 
mechanical ventilation requirements under the HUD Code, the basis by 
which the ICC determines a whole-house ventilation strategy is safe, 
and the minimum total air flow (in ACH units) through a manufactured 
home that is required to adequately protect public health and safety, 
as discussed in section V.E of this document.
16. Duct Sealing
    The proposed duct sealing and duct leakage requirements, as 
discussed in section III.B.3.a) of this document.
17. Thermostats and Controls
    The proposed requirements for thermostats and controls, and any 
potential inconsistencies with the HUD Code, as discussed in III.B.3.b) 
of this document.
18. Demand Recirculation Systems
    The initial decision not to propose requirements related to demand 
recirculation systems in this rule, as discussed in section III.B.3.c) 
of this document.
19. Drain Water Heat Recovery Units
    The initial decision not to propose requirements related to drain 
water heat recovery units, as discussed in section III.B.3.c) of this 
document.
20. Equipment Sizing
    The proposed requirements for equipment sizing and the 
applicability of ACCA Manuals S and J, as discussed in section 
III.B.3.e) of this document.
21. Lighting Equipment Standards
    The initial determination not to propose lighting equipment 
standards specific to manufactured housing, as discussed in section 
III.C.6 of this document.
22. Simulated Performance Alternative
    The exclusion of a simulated performance alternative as a pathway 
to compliance, as discussed in section III.C.7 of this document.
23. Waivers and Exception Relief
    A process for authorizing manufacturers to obtain waivers or 
exception relief from the energy conservation requirements, as 
discussed in section II.B.3 of this document.
24. Compliance and Enforcement Program Options
    The potential options DOE may consider in a future rulemaking 
regarding compliance and enforcement, as discussed in section III.E of 
this document.
25. Compliance and Enforcement Program Costs and Time Requirements
    The estimated costs (only direct compliance and enforcement costs, 
not engineering costs for redesign) and time (design compliance review, 
inspection frequency and duration, administrative procedures) 
associated with the potential compliance and enforcement options, as 
discussed in section III.E of this document.
26. Increased Costs of Components
    The assumptions underlying DOE's analyses associated with the 
increased costs of manufactured home components, as discussed in 
section IV.A of this document.
27. Lifecycle Cost Analysis
    The methodology and initial findings of the lifecycle cost 
analysis, as discussed in IV.A of this SUPPLEMENTARY INFORMATION and 
chapter 8 of the TSD.
28. Affordability
    The affordability of the proposed rule, with respect to the 
increased purchase cost, reduced operating costs (energy bills), and 
total lifecycle cost, as discussed in IV.A of this SUPPLEMENTARY 
INFORMATION and chapter 8 of the TSD.
29. Manufacturer Impacts Analysis--Markups
    Whether manufacturer and retailer mark-ups for the base-case and 
standards case other than the primary estimate should be considered. 
(e.g., a combined mark-up of 2.30 has historically been used in the 
past to assess combined manufacturer and retailer mark-ups to determine 
potential first cost impacts on consumers), as discussed in IV.B of 
this SUPPLEMENTARY INFORMATION and chapter 12 of the TSD.
30. Shipments Analysis
    The methodology and initial findings of the shipments analysis, as 
discussed in section IV.B of this SUPPLEMENTARY INFORMATION and chapter 
10 of the TSD.
31. Shipment Growth Rate
    The estimate of the future growth rate of manufactured home 
shipments, as discussed in section IV.C of this SUPPLEMENTARY 
INFORMATION and chapter 10 and appendix 11A of the TSD.
32. Price Elasticity
    The estimate of the price elasticity of demand of manufactured 
homes, as

[[Page 39799]]

discussed in section IV.C of this SUPPLEMENTARY INFORMATION and chapter 
10 and appendix 11A of the TSD.
33. National Impacts Analysis
    The methodology and initial findings of the national impacts 
analysis, as discussed in section IV.C of this SUPPLEMENTARY 
INFORMATION and chapter 11 of the TSD.
34. Emissions Analysis
    The methodology and results of the emissions analysis and the 
proper monetization of emissions, as discussed in section IV.D of this 
SUPPLEMENTARY INFORMATION and chapter 13 of the TSD.

VII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this notice of 
proposed rulemaking.

List of Subjects in 10 CFR Part 460

    Administrative practice and procedure, Buildings and facilities, 
Energy conservation, Housing standards, Incorporation by reference, 
Reporting and recordkeeping requirements.

    Issued in Washington, DC, on May 20, 2016.
David Friedman,
Principal Deputy Assistant Secretary, Energy Efficiency and Renewable 
Energy.

    For the reasons stated in the preamble, DOE proposes to add part 
460 of title 10 of the Code of Federal Regulations as set forth below:

PART 460--ENERGY CONSERVATION STANDARDS FOR MANUFACTURED HOMES

Subpart A--General
Sec.
460.1 Scope.
460.2 Definitions.
460.3 Materials incorporated by reference.
Subpart B--Building Thermal Envelope
460.101 Climate zones.
460.102 Building thermal envelope requirements.
460.103 Installation of insulation.
460.104 Building thermal envelope air leakage.
Subpart C--HVAC, Service Water Heating, and Equipment Sizing
460.201 Duct systems.
460.202 Thermostats and controls.
460.203 Service water heating.
460.204 Mechanical ventilation fan efficacy.
460.205 Equipment sizing.

    Authority:  42 U.S.C. 17071; 42 U.S.C. 7101 et seq.

Subpart A--General


Sec.  460.1  Scope.

    This subpart establishes energy conservation standards for 
manufactured homes. A manufactured home that is manufactured on or 
after the date one year following issuance of the final rule must 
comply with all applicable requirements of this part.


Sec.  460.2  Definitions.

    As used in this part--
    Accessible means admitting close approach as a result of not being 
guarded by locked doors, elevation, or other effective means.
    Air barrier means material or materials assembled and joined 
together to provide a barrier to air leakage through the building 
thermal envelope.
    Automatic means self-acting or operating by its own mechanism when 
actuated by some impersonal influence.
    Building thermal envelope means exterior walls, floor, ceiling or 
roof, and any other building elements that enclose conditioned space or 
provide a boundary between conditioned space and unconditioned space.
    Ceiling means an assembly that supports and forms the overhead 
interior surface of a building or room that covers its upper limit and 
is horizontal or tilted at an angle less than 60 degrees (1.05 rad) 
from horizontal.
    Circulating hot water system means a water distribution system in 
which one or more pumps are operated in the service hot water piping to 
circulate heated water from the water heating equipment to fixtures and 
back to the water heating equipment.
    Climate zone means a geographical region identified in Sec.  
460.101.
    Conditioned space means an area, room, or space that is enclosed 
within the building thermal envelope and that is directly heated or 
cooled, or an area, room, or space that has a fixed opening directly 
into an adjacent area, room, or space that is enclosed within the 
building thermal envelope and that is directly heated or cooled.
    Continuous air barrier means a combination of materials and 
assemblies that restrict or prevent the passage of air from conditioned 
space to unconditioned space.
    Door means an operable barrier used to block or allow access to an 
entrance of a manufactured home.
    Dropped ceiling means a secondary nonstructural ceiling, hung below 
the main ceiling.
    Dropped soffit means a secondary nonstructural ceiling that is hung 
below the ceiling and that covers only a portion of the ceiling.
    Duct means a tube or conduit, except an air passage within a self-
contained system, utilized for conveying air to or from heating, 
cooling, or ventilating equipment.
    Duct system means a continuous passageway for the transmission of 
air that, in addition to ducts, includes duct fittings, dampers, 
plenums, fans, and accessory air-handling equipment and appliances.
    Eave means the edge of the roof that overhangs the face of a wall 
and normally projects beyond the side of the manufactured home.
    Equipment includes material, appliances, devices, fixtures, 
fittings, or accessories both in the construction of, and in the 
plumbing, heating, cooling, and electrical systems of, a manufactured 
home.
    Exterior wall means a wall that separates conditioned space from 
unconditioned space.
    Fenestration means vertical fenestration and skylights.
    Floor means a horizontal assembly that supports and forms the lower 
interior surface of a building or room upon which occupants can walk.
    Glazed or glazing means an infill material, including glass, 
plastic, or other transparent or translucent material, used in 
fenestration.
    Infiltration means the uncontrolled air leakage into a manufactured 
home caused by the pressure effects of wind and/or the effect of 
differences in the indoor and outdoor air density.
    Insulation means material deemed to be insulation under 16 CFR 
460.2.
    Manufactured home means a structure, transportable in one or more 
sections, which in the traveling mode is 8 body feet or more in width 
or 40 body feet or more in length or which when erected on-site is 320 
or more square feet, and which is built on a permanent chassis and 
designed to be used as a dwelling with or without a permanent 
foundation when connected to the required utilities, and includes the 
plumbing, heating, air conditioning, and electrical systems contained 
in the structure. This term includes all structures that meet the above 
requirements except the size requirements and with respect to which the 
manufacturer voluntarily files a certification pursuant to 24 CFR 
3282.13 and complies with the construction and safety standards set 
forth in 24 CFR part 3280. The term does not include any self-propelled 
recreational vehicle. Calculations used to determine the number of 
square feet in a structure will be based on the structure's exterior 
dimensions, measured at the largest horizontal projections when erected 
on

[[Page 39800]]

site. These dimensions will include all expandable rooms, cabinets, and 
other projections containing interior space, but do not include bay 
windows. Nothing in this definition should be interpreted to mean that 
a manufactured home necessarily meets the requirements of the U.S. 
Department of Housing and Urban Development Minimum Property Standards 
(HUD Handbook 4900.1) or that it is automatically eligible for 
financing under 12 U.S.C. 1709(b).
    Manufacturer means any person engaged in the factory construction 
or assembly of a manufactured home, including any person engaged in 
importing manufactured homes for resale.
    Manual means capable of being operated by personal intervention.
    R-value (thermal resistance) means the inverse of the time rate of 
heat flow through a body from one of its bounding surfaces to the other 
surface for a unit temperature difference between the two surfaces, 
under steady state conditions, per unit area (h [middot] ft\2\ [middot] 
[deg]F/Btu).
    Rough opening means an opening in the wall or roof, sized for 
installation of fenestration.
    Service hot water means supply of hot water for purposes other than 
comfort heating.
    Skylight means glass or other transparent or translucent glazing 
material, including framing materials, installed at an angle less than 
60 degrees (1.05 rad) from horizontal.
    Solar heat gain coefficient (SHGC) means the ratio of the solar 
heat gain entering a space through a fenestration assembly to the 
incident solar radiation. Solar heat gain includes directly transmitted 
solar heat and absorbed solar radiation that is then reradiated, 
conducted, or convected into the space.
    State means each of the 50 states, the District of Columbia, the 
Commonwealth of Puerto Rico, Guam, the U.S. Virgin Islands, and 
American Samoa.
    Thermostat means an automatic control device used to maintain 
temperature at a fixed or adjustable set point.
    U-factor (thermal transmittance) means the coefficient of heat 
transmission (air to air) through a building component or assembly, 
equal to the time rate of heat flow per unit area and unit temperature 
difference between the warm side and cold side air films (Btu/h 
[middot] ft\2\ [middot] [deg]F).
    Uo (overall thermal transmittance) means the coefficient of heat 
transmission (air to air) through the building thermal envelope, equal 
to the time rate of heat flow per unit area and unit temperature 
difference between the warm side and cold side air films (Btu/h 
[middot] ft\2\ [middot]; [deg]F).
    Ventilation means the natural or mechanical process of supplying 
conditioned or unconditioned air to, or removing such air from, any 
space.
    Vertical fenestration means windows (fixed or moveable), opaque 
doors, glazed doors, glazed block and combination opaque and glazed 
doors composed of glass or other transparent or translucent glazing 
materials and installed at a slope of greater than or equal to 60 
degrees (1.05 rad) from horizontal.
    Wall means an assembly that is vertical or tilted at an angle equal 
to greater than 60 degrees (1.05 rad) from horizontal that encloses or 
divides an area of a building or room.
    Whole-house mechanical ventilation system means an exhaust system, 
supply system, or combination thereof that is designed to mechanically 
exchange indoor air with outdoor air when operating continuously or 
through a programmed intermittent schedule.
    Window means glass or other transparent or translucent glazing 
material, including framing materials, installed at an angle greater 
than 60 degrees (1.05 rad) from horizontal.
    Zone means a space or group of spaces within a manufactured home 
with heating or cooling requirements that are sufficiently similar so 
that desired conditions can be maintained using a single controlling 
device.


Sec.  460.3  Materials incorporated by reference.

    (a) General. We incorporate by reference the following standards 
into part 460. The material listed has been approved for incorporation 
by reference by the Director of the Federal Register in accordance with 
5 U.S.C. 552(a) and 1 CFR part 51. Any subsequent amendment to a 
standard by the standard-setting organization will not affect the DOE 
regulations unless and until amended by DOE. Material is incorporated 
as it exists on the date of the approval and a notice of any change in 
the material will be published in the Federal Register. All approved 
material is available for inspection at the National Archives and 
Records Administration (NARA). For information on the availability of 
this material at NARA, call 202-741-6030 or go to https://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html. This material also is available for inspection at 
U.S. Department of Energy, Office of Energy Efficiency and Renewable 
Energy, Building Technologies Office, 6th Floor, 950 L'Enfant Plaza 
SW., Washington, DC 20024, 202-586-2945, between 9 a.m. and 4 p.m., 
Monday through Friday, except Federal holidays. Standards can be 
obtained from the sources listed.
    (b) ACCA. Air Conditioning Contractors of America, Inc., 2800 S. 
Shirlington Road, Suite 300, Arlington, VA 22206, 703-575-4477, https://www.acca.org/.
    (1) Manual J--Residential Load Calculation (8th Edition). IBR 
approved for Sec.  460.205 of subpart C.
    (2) Manual S--Residential Equipment Selection (2nd Edition). IBR 
approved for Sec.  460.205 of subpart C.
    (c) HUD. U.S. Department of Housing and Urban Development, https://www.huduser.org/portal/publications/manufhsg/uvalue.html, 800-245-2691.
    (1) Overall U-Values and Heating/Cooling Loads--Manufactured Homes. 
Conner C.C., Taylor, Z.T., Pacific Northwest Laboratory, published 
February 1, 1992, IBR approved for Sec.  460.102 of subpart B.
    (2) Reserved.

Subpart B--Building Thermal Envelope


Sec.  460.101  Climate zones.

    Manufactured homes must comply with the requirements applicable to 
one or more of the climate zones set forth in Figure 460.101 and Tables 
460.101-1 and 460.101-2 of this section.

[[Page 39801]]

[GRAPHIC] [TIFF OMITTED] TP17JN16.006


                       Table 460.101-1--U.S. States and Territories With One Climate Zone
----------------------------------------------------------------------------------------------------------------
                Zone 1                          Zone 2                   Zone 3                   Zone 4
----------------------------------------------------------------------------------------------------------------
Florida..............................  South Carolina.........  Arkansas...............  Alaska.
Hawaii...............................  .......................  Delaware...............  Colorado.
American Samoa.......................  .......................  District of Columbia...  Connecticut.
Guam.................................  .......................  Kansas.................  Idaho.
The Commonwealth of Puerto Rico......  .......................  Kentucky...............  Illinois.
U.S. Virgin Islands..................  .......................  Maryland...............  Indiana.
                                                                Missouri...............  Iowa.
                                                                New Mexico.............  Maine.
                                                                North Carolina.........  Massachusetts.
                                                                Oklahoma...............  Michigan.
                                                                Tennessee..............  Minnesota.
                                                                Virginia...............  Montana.
                                                                West Virginia..........  Nebraska.
                                                                                         Nevada.
                                                                                         New Hampshire.
                                                                                         New Jersey.
                                                                                         New York.
                                                                                         North Dakota.
                                                                                         Ohio.
                                                                                         Oregon.
                                                                                         Pennsylvania.
                                                                                         Rhode Island.
                                                                                         South Dakota.
                                                                                         Utah.
                                                                                         Vermont.
                                                                                         Washington.
                                                                                         Wisconsin.
                                                                                         Wyoming.
----------------------------------------------------------------------------------------------------------------


                                              Table 460.101-2--U.S. States With More Than One Climate Zone
--------------------------------------------------------------------------------------------------------------------------------------------------------
              State                   Zone          Counties              Counties              Counties              Counties             Counties
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama..........................          1  Baldwin.............  Mobile..............
                                           2  Autauga.............  Barbour.............  Bibb................  Blount.............  Bullock.
                                              Butler..............  Calhoun.............  Chambers............  Cherokee...........  Chilton.
                                              Choctaw.............  Clarke..............  Clay................  Cleburne...........  Coffee.
                                              Colbert.............  Conecuh.............  Coosa...............  Covington..........  Crenshaw.
                                              Cullman.............  Dale................  Dallas..............  DeKalb.............  Elmore.
                                              Escambia............  Etowah..............  Fayette.............  Franklin...........  Geneva.
                                              Greene..............  Hale................  Henry...............  Houston............  Jackson.
                                              Jefferson...........  Lamar...............  Lauderdale..........  Lawrence...........  Lee.
                                              Limestone...........  Lowndes.............  Macon...............  Madison............  Marengo.
                                              Marion..............  Marshall............  Monroe..............  Montgomery.........  Morgan.
                                              Perry...............  Pickens.............  Pike................  Randolph...........  Russell.

[[Page 39802]]

 
                                              St. Clair...........  Shelby..............  Sumter..............  Talladega..........  Tallapoosa.
                                              Tuscaloosa..........  Walker..............  Washington..........  Wilcox.............  Winston.
Arizona..........................          1  La Paz..............  Maricopa............  Pima................  Pinal..............  Yuma.
                                           3  Apache..............  Cochise.............  Coconino............  Graham.............  Greenlee.
                                              Mohave..............  Navajo..............  Santa Cruz..........  Yavapai............
Georgia..........................          1  Appling.............  Atkinson............  Bacon...............  Baker..............  Berrien.
                                              Brantley............  Brooks..............  Bryan...............  Camden.............  Charlton.
                                              Chatham.............  Clinch..............  Colquitt............  Cook...............  Decatur.
                                              Echols..............  Effingham...........  Evans...............  Glynn..............  Grady.
                                              Jeff Davis..........  Lanier..............  Liberty.............  Long...............  Lowndes.
                                              McIntosh............  Miller..............  Mitchell............  Pierce.............  Seminole.
                                              Tattnall............  Thomas..............  Toombs..............  Ware...............  Wayne.
                                           2  Baldwin.............  Banks...............  Barrow..............  Bartow.............  Ben Hill.
                                              Bibb................  Bleckley............  Bulloch.............  Burke..............  Butts.
                                              Calhoun.............  Candler.............  Carroll.............  Catoosa............  Chattahoochee.
                                              Chattooga...........  Cherokee............  Clarke..............  Clay...............  Clayton.
                                              Cobb................  Coffee..............  Columbia............  Coweta.............  Crawford.
                                              Crisp...............  Dade................  Dawson..............  DeKalb.............  Dodge.
                                              Dooly...............  Dougherty...........  Douglas.............  Early..............  Elbert.
                                              Emanuel.............  Fannin..............  Fayette.............  Floyd..............  Forsyth.
                                              Franklin............  Fulton..............  Gilmer..............  Glascock...........  Gordon.
                                              Greene..............  Gwinnett............  Habersham...........  Hall...............  Hancock.
                                              Haralson............  Harris..............  Hart................  Heard..............  Henry.
                                              Houston.............  Irwin...............  Jackson.............  Jasper.............  Jefferson.
                                              Jenkins.............  Johnson.............  Jones...............  Lamar..............  Laurens.
                                              Lee.................  Lincoln.............  Lumpkin.............  McDuffie...........  Macon.
                                              Madison.............  Marion..............  Meriwether..........  Monroe.............  Montgomery.
                                              Morgan..............  Murray..............  Muscogee............  Newton.............  Oconee.
                                              Oglethorpe..........  Paulding............  Peach...............  Pickens............  Pike.
                                              Polk................  Pulaski.............  Putnam..............  Quitman............  Rabun.
                                              Randolph............  Richmond............  Rockdale............  Schley.............  Screven.
                                              Spalding............  Stephens............  Stewart.............  Sumter.............  Talbot.
                                              Taliaferro..........  Taylor..............  Telfair.............  Terrell............  Tift.
                                              Towns...............  Treutlen............  Troup...............  Turner.............  Twiggs.
                                              Union...............  Upson...............  Walker..............  Walton.............  Warren.
                                              Washington..........  Webster.............  Wheeler.............  White..............  Whitfield.
                                              Wilcox..............  Wilkes..............  Wilkinson...........  Worth.
Louisiana........................          1  Acadia..............  Allen...............  Ascension...........  Assumption.........  Avoyelles.
                                              Beauregard..........  Calcasieu...........  Cameron.............  East Baton Rouge...  East Feliciana.
                                              Evangeline..........  Iberia..............  Iberville...........  Jefferson..........  Jefferson Davis.
                                              Lafayette...........  Lafourche...........  Livingston..........  Orleans............  Plaquemines.
                                              Pointe Coupee.......  Rapides.............  St. Bernard.........  St. Charles........  St. Helena.
                                              St. James...........  St. John the Baptist  St. Landry..........  St. Martin.........  St. Mary.
                                              St. Tammany.........  Tangipahoa..........  Terrebonne..........  Vermilion..........  Washington.
                                              West Baton Rouge....  West Feliciana......
                                           2  Bienville...........  Bossier.............  Caddo...............  Caldwell...........  Catahoula.
                                              Claiborne...........  Concordia...........  De Soto.............  East Carroll.......  Franklin.
                                              Grant...............  Jackson.............  LaSalle.............  Lincoln............  Madison.
                                              Morehouse...........  Natchitoches........  Ouachita............  Red River..........  Richland.
                                              Sabine..............  Tensas..............  Union...............  Vernon.............  Webster.
                                              West Carroll........  Winn................
Mississippi......................          1  Hancock.............  Harrison............  Jackson.............  Pearl River........  Stone.
                                           2  Adams...............  Alcorn..............  Amite...............  Attala.............  Benton.
                                              Bolivar.............  Calhoun.............  Carroll.............  Chickasaw..........  Choctaw.
                                              Claiborne...........  Clarke..............  Clay................  Coahoma............  Copiah.
                                              Covington...........  DeSoto..............  Forrest.............  Franklin...........  George.
                                              Greene..............  Grenada.............  Hinds...............  Holmes.............  Humphreys.
                                              Issaquena...........  Itawamba............  Jasper..............  Jefferson..........  Jefferson Davis.
                                              Jones...............  Kemper..............  Lafayette...........  Lamar..............  Lauderdale.
                                              Lawrence............  Leake...............  Lee.................  Leflore............  Lincoln.
                                              Lowndes.............  Madison.............  Marion..............  Marshall...........  Monroe.
                                              Montgomery..........  Neshoba.............  Newton..............  Noxubee............  Oktibbeha.
                                              Panola..............  Perry...............  Pike................  Pontotoc...........  Prentiss.
                                              Quitman.............  Rankin..............  Scott...............  Sharkey............  Simpson.
                                              Smith...............  Sunflower...........  Tallahatchie........  Tate...............  Tippah.
                                              Tishomingo..........  Tunica..............  Union...............  Walthall...........  Warren.
                                              Washington..........  Wayne...............  Webster.............  Wilkinson..........  Winston.
                                              Yalobusha...........  Yazoo...............
Texas............................          1  Anderson............  Angelina............  Aransas.............  Atascosa...........  Austin.
                                              Bandera.............  Bastrop.............  Bee.................  Bell...............  Bexar.
                                              Bosque..............  Brazoria............  Brazos..............  Brooks.............  Burleson.
                                              Caldwell............  Calhoun.............  Cameron.............  Chambers...........  Colorado.

[[Page 39803]]

 
                                              Comal...............  Coryell.............  DeWitt..............  Dimmit.............  Duval.
                                              Edwards.............  Falls...............  Fayette.............  Fort Bend..........  Freestone.
                                              Frio................  Galveston...........  Goliad..............  Gonzales...........  Grimes.
                                              Guadalupe...........  Hardin..............  Harris..............  Hays...............  Hidalgo.
                                              Hill................  Houston.............  Jackson.............  Jasper.............  Jefferson.
                                              Jim Hogg............  Jim Wells...........  Karnes..............  Kenedy.............  Kinney.
                                              Kleberg.............  La Salle............  Lavaca..............  Lee................  Leon.
                                              Liberty.............  Limestone...........  Live Oak............  Madison............  Matagorda.
                                              Maverick............  McLennan............  McMullen............  Medina.............  Milam.
                                              Montgomery..........  Newton..............  Nueces..............  Orange.............  Polk.
                                              Real................  Refugio.............  Robertson...........  San Jacinto........  San Patricio.
                                              Starr...............  Travis..............  Trinity.............  Tyler..............  Uvalde.
                                              Val Verde...........  Victoria............  Walker..............  Waller.............  Washington.
                                              Webb................  Wharton.............  Willacy.............  Williamson.........  Wilson.
                                              Zapata..............  Zavala..............
                                           3  Andrews.............  Archer..............  Armstrong...........  Bailey.............  Baylor.
                                              Blanco..............  Borden..............  Bowie...............  Brewster...........  Briscoe.
                                              Brown...............  Burnet..............  Callahan............  Camp...............  Carson.
                                              Cass................  Castro..............  Cherokee............  Childress..........  Clay.
                                              Cochran.............  Coke................  Coleman.............  Collin.............  Collingsworth.
                                              Comanche............  Concho..............  Cooke...............  Cottle.............  Crane.
                                              Crockett............  Crosby..............  Culberson...........  Dallam.............  Dallas.
                                              Dawson..............  Deaf Smith..........  Delta...............  Denton.............  Dickens.
                                              Donley..............  Eastland............  Ector...............  Ellis..............  El Paso.
                                              Erath...............  Fannin..............  Fisher..............  Floyd..............  Foard.
                                              Franklin............  Gaines..............  Garza...............  Gillespie..........  Glasscock.
                                              Gray................  Grayson.............  Gregg...............  Hale...............  Hall.
                                              Hamilton............  Hansford............  Hardeman............  Harrison...........  Hartley.
                                              Haskell.............  Hemphill............  Henderson...........  Hockley............  Hood.
                                              Hopkins.............  Howard..............  Hudspeth............  Hunt...............  Hutchinson.
                                              Irion...............  Jack................  Jeff Davis..........  Johnson............  Jones.
                                              Kaufman.............  Kendall.............  Kent................  Kerr...............  Kimble.
                                              King................  Knox................  Lamar...............  Lamb...............  Lampasas.
                                              Lipscomb............  Llano...............  Loving..............  Lubbock............  Lynn.
                                              McCulloch...........  Marion..............  Martin..............  Mason..............  Menard.
                                              Midland.............  Mills...............  Mitchell............  Montague...........  Moore
                                              Morris..............  Motley..............  Nacogdoches.........  Navarro............  Nolan.
                                              Ochiltree...........  Oldham..............  Palo Pinto..........  Panola.............  Parker.
                                              Parmer..............  Pecos...............  Potter..............  Presidio...........  Rains.
                                              Randall.............  Reagan..............  Red River...........  Reeves.............  Roberts.
                                              Rockwall............  Runnels.............  Rusk................  Sabine.............  San Augustine.
                                              San Saba............  Schleicher..........  Scurry..............  Shackelford........  Shelby.
                                              Sherman.............  Smith...............  Somervell...........  Stephens...........  Sterling.
                                              Stonewall...........  Sutton..............  Swisher.............  Tarrant............  Taylor.
                                              Terrell.............  Terry...............  Throckmorton........  Titus..............  Tom Green.
                                              Upshur..............  Upton...............  Van Zandt...........  Ward...............  Wheeler.
                                              Wichita.............  Wilbarger...........  Winkler.............  Wise...............  Wood.
                                              Yoakum..............  Young.
--------------------------------------------------------------------------------------------------------------------------------------------------------

Sec.  460.102  Building thermal envelope requirements.

    (a) Compliance options. The building thermal envelope of a 
manufactured home must meet either the prescriptive requirements of 
paragraph (b) of this section or the performance requirements of 
paragraph (c) of this section.
    (b) Prescriptive requirements. (1) The building thermal envelope 
must meet the minimum R-value, and the maximum U-factor and SHGC, 
requirements set forth in Table 460.102-1.

                                          Table 460.102-1--Building Thermal Envelope Prescriptive Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Ceiling          Wall            Floor
          Climate zone             insulation R-   insulation R-   insulation R-     Window U-      Skylight U-    Door U-factor    Glazed fenestration
                                       value           value           value          factor          factor                               SHGC
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...............................              30              13              13            0.35            0.75            0.40  0.25
2...............................              30              13              13            0.35            0.75            0.40  0.33
3...............................              30              21              19            0.35            0.55            0.40  0.33
4...............................              38              21              30            0.32            0.55            0.40  Not Applicable
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 39804]]

    (2) For the purpose of compliance with the ceiling insulation R-
value requirement of paragraph (b)(1) of this section, the truss heel 
height must be a minimum of 5.5 inches at the outside face of each 
exterior wall.
    (3) Ceiling insulation must have either a uniform thickness or a 
uniform density.
    (4) A combination of R-21 batt insulation and R-14 blanket 
insulation may be used for the purpose of compliance with the floor 
insulation R-value requirement of Sec.  460.102(b)(1) for climate zone 
4.
    (5) An individual skylight that has an SHGC that is less than or 
equal to 0.30 is not subject to the glazed fenestration SHGC 
requirements established in Table 460.102-1.
    (6) U-factor alternatives to R-value requirements. Compliance with 
paragraph (b)(1) of this section may be determined using the maximum U-
factor values set forth in Table 460.102-2, which reflect the thermal 
transmittance of the component, excluding fenestration, and not just 
the insulation of that component, as an alternative to the minimum R-
value requirements set forth in Table 460.102-1.
    (7) The total area of glazed fenestration must be no greater than 
12 percent of the area of the floor.

                         Table 460.102-2--U-Factor Alternatives to R-Value Requirements
----------------------------------------------------------------------------------------------------------------
                                                                    Ceiling U-
                          Climate zone                                factor       Wall U-factor  Floor U-factor
----------------------------------------------------------------------------------------------------------------
1...............................................................          0.0446          0.0943          0.0776
2...............................................................          0.0446          0.0943          0.0776
3...............................................................          0.0446          0.0628          0.0560
4...............................................................          0.0377          0.0628          0.0322
----------------------------------------------------------------------------------------------------------------

    (c) Performance requirements. (1) The building thermal envelope 
must have a Uo that is less than or equal to the value specified in 
Table 460.102-3.

   Table 460.102-3--Building Thermal Envelope Performance Requirements
------------------------------------------------------------------------
                                                     Single-     Multi-
                   Climate zone                      section    section
                                                        Uo         Uo
------------------------------------------------------------------------
1.................................................      0.087      0.084
2.................................................      0.087      0.084
3.................................................      0.070      0.068
4.................................................      0.059      0.056
------------------------------------------------------------------------

    (2) Area-weighted average vertical fenestration U-factor must not 
exceed 0.48 in climate zone 3 or 0.40 in climate zone 4.
    (3) Area-weighted average skylight U-factor must not exceed 0.75 in 
climate zone 3 and climate zone 4.
    (4) Windows, skylights and doors containing more than 50 percent 
glazing by area must satisfy the SHGC requirements established in Table 
460.102-1 on the basis of an area-weighted average.
    (d) Determination of compliance with paragraph (b) of this section.
    (1)-(2) [Reserved].
    (3) The total R-value of a component is the sum of the R-values of 
each layer of insulation that comprise the component.
    (4)-(5) [Reserved].
    (6) The U-factor for certain fenestration products and doors may be 
determined in accordance with the prescriptive default values set forth 
in Tables 460.102-4 and 460.102-5.
    (7) [Reserved].
    (8) The SHGC of certain glazed fenestration products may be 
determined in accordance with the prescriptive glazed fenestration 
default values set forth in Table 460.102-6.
    (e) Determination of compliance with Sec.  460.102(c). (1) Uo must 
be determined in accordance with Overall U-Values and Heating/Cooling 
Loads--Manufactured Homes (incorporated by reference; see Sec.  460.3) 
with the following exceptions:
    (i)-(ii) [Reserved].
    (iii) The U-factor for certain fenestration products and doors may 
be determined in accordance with the prescriptive default values set 
forth in Tables 460.102-4 and 460.102-5 of this section.
    (2) [Reserved].
    (3) The SHGC of certain glazed fenestration products may be 
determined in accordance with the prescriptive glazed fenestration 
default values set forth in Table 460.102-6.

                          Table 460.102-4--Default Glazed Fenestration U-Factor Values
----------------------------------------------------------------------------------------------------------------
                                                                                         Skylight U-factor
                   Frame type                        Window U-       Window U-   -------------------------------
                                                      factor          factor        Single pane     Double pane
----------------------------------------------------------------------------------------------------------------
Metal...........................................            1.20            0.80            2.00            1.30
Metal with Thermal Break........................            1.10            0.65            1.90            1.10
Nonmetal or Metal Clad..........................            0.95            0.55            1.75            1.05
                                                 ---------------------------------------------------------------
Glazed Block....................................                               0.60
----------------------------------------------------------------------------------------------------------------


              Table 460.102-5--Default Door U-Factor Values
------------------------------------------------------------------------
                        Door type                            U-factor
------------------------------------------------------------------------
Uninsulated Metal.......................................            1.20
Insulated Metal.........................................            0.60
Wood....................................................            0.50
Insulated, nonmetal edge, maximum 45 percent glazing,               0.35
 any glazing double pane................................
------------------------------------------------------------------------


[[Page 39805]]


                            Table 460.102-6--Default Glazed Fenestration SHGC Values
----------------------------------------------------------------------------------------------------------------
                                            Single pane                     Double pane
                                 ----------------------------------------------------------------  Glazed block
                                       Clear          Tinted           Clear          Tinted
----------------------------------------------------------------------------------------------------------------
SHGC............................             0.8             0.7             0.7             0.6             0.6
----------------------------------------------------------------------------------------------------------------

Sec.  460.103  Installation of insulation.

    Insulating materials must be installed according to the insulation 
manufacturer's installation instructions and the requirements set forth 
in Table 460.103.

                Table 460.103--Installation of Insulation
------------------------------------------------------------------------
             Component                    Installation requirements
------------------------------------------------------------------------
General...........................  Air-permeable insulation must not be
                                     used as a material to establish the
                                     air barrier.
Access hatches, panels, and doors.  Access hatches, panels, and doors
                                     between conditioned space and
                                     unconditioned space must be
                                     insulated to a level equivalent to
                                     the insulation of the surrounding
                                     surface, must provide access to all
                                     equipment that prevents damaging or
                                     compressing the insulation, and
                                     must provide a wood-framed or
                                     equivalent baffle or retainer when
                                     loose fill insulation is installed
                                     within a ceiling assembly to retain
                                     the insulation both on the access
                                     hatch, panel, or door and within
                                     the building thermal envelope.
Baffles...........................  Baffles must be constructed using a
                                     solid material, maintain an opening
                                     equal or greater than the size of
                                     the vents, and extend over the top
                                     of the attic insulation.
Ceiling or attic..................  The insulation in any dropped
                                     ceiling or dropped soffit must be
                                     aligned with the air barrier.
Eave vents........................  Air-permeable insulations in vented
                                     attics within the building thermal
                                     envelope must be installed adjacent
                                     to eave vents.
Floors............................  Floor insulation must be installed
                                     to maintain permanent contact with
                                     the underside of the rough floor
                                     decking over which the finished
                                     floor, flooring material, or carpet
                                     is laid, except where air ducts
                                     directly contact the underside of
                                     the rough floor decking.
Narrow cavities...................  Batts in narrow cavities must be cut
                                     to fit or narrow cavities must be
                                     filled by insulation that upon
                                     installation readily conforms to
                                     the available cavity space.
Rim joists........................  Rim joists must be insulated.
Shower or tub adjacent to exterior  Exterior walls adjacent to showers
 wall.                               and tubs must be insulated.
Walls.............................  Air permeable exterior building
                                     thermal envelope insulation for
                                     framed walls must completely fill
                                     the cavity, including within stud
                                     bays caused by blocking lay flats
                                     or headers.
------------------------------------------------------------------------

Sec.  460.104  Building thermal envelope air leakage.

    Manufactured homes must be sealed against air leakage at all 
joints, seams, and penetrations associated with the building thermal 
envelope in accordance with the component manufacturer's installation 
instructions and the requirements set forth in Table

460.104. Sealing methods between dissimilar materials must allow for 
differential expansion and contraction and must establish a continuous 
air barrier upon installation of all opaque components of the building 
thermal envelope. All gaps and penetrations in the ceiling, floor, and 
exterior walls,

including ducts, flue shafts, plumbing, piping, electrical wiring, 
utility penetrations, bathroom and kitchen exhaust fans, recessed 
lighting fixtures adjacent to unconditioned space, and light tubes 
adjacent to unconditioned space, must be sealed with caulk, foam, 
gasket or other suitable material.

            Table 460.104--Air Barrier Installation Criteria
------------------------------------------------------------------------
             Component                      Air barrier criteria
------------------------------------------------------------------------
Ceiling or attic..................  The air barrier in any dropped
                                     ceiling or dropped soffit must be
                                     aligned with the insulation and any
                                     gaps in the air barrier must be
                                     sealed with caulk, foam, gasket, or
                                     other suitable material. Access
                                     hatches, panels, and doors, drop
                                     down stairs, or knee wall doors to
                                     unconditioned attic spaces must be
                                     weatherstripped or equipped with a
                                     gasket to produce a continuous air
                                     barrier.
Duct system register boots........  Duct system register boots that
                                     penetrate the building thermal
                                     envelope or the air barrier must be
                                     sealed to the air barrier or the
                                     interior finish materials with
                                     caulk, foam, gasket, or other
                                     suitable material.
Electrical box or phone box on      The air barrier must be installed
 exterior walls.                     behind electrical or communication
                                     boxes or the air barrier must be
                                     sealed around the box penetration
                                     with caulk, foam, gasket, or other
                                     suitable material.
Floors............................  The air barrier must be installed at
                                     any exposed edge of insulation. The
                                     bottom board may serve as the air
                                     barrier.
Mating line surfaces..............  Mating line surfaces must be
                                     equipped with a continuous and
                                     durable gasket.
Recessed lighting.................  Recessed light fixtures installed in
                                     the building thermal envelope must
                                     be sealed to the drywall with
                                     caulk, foam, gasket, or other
                                     suitable material.
Rim joists........................  The air barrier must enclose the rim
                                     joists.
Shower or tub adjacent to exterior  The air barrier must separate
 wall.                               showers and tubs from exterior
                                     walls.
Walls.............................  The junction of the top plate and
                                     the ceiling, and the junction of
                                     the bottom plate and the floor,
                                     along exterior walls must be sealed
                                     with caulk, foam, gasket, or other
                                     suitable material.
Windows, skylights, and exterior    The rough openings around windows,
 doors.                              exterior doors, and skylights must
                                     be sealed with caulk or foam.
------------------------------------------------------------------------


[[Page 39806]]

Subpart C--HVAC, Service Water Heating, and Equipment Sizing


Sec.  460.201  Duct system.

    (a) Each manufactured home must be equipped with a duct system, 
which may include air handlers and filter boxes, that must be sealed to 
limit total air leakage to less than or equal to four (4) cubic feet 
per minute per 100 square feet of conditioned floor area when tested 
according to paragraph (b) of this section. Building framing cavities 
must not be used as ducts or plenums.
    (b) [Reserved].


Sec.  460.202  Thermostats and controls.

    (a) At least one thermostat must be provided for each separate 
heating and cooling system installed by the manufacturer.
    (b) Programmable thermostat. Any thermostat installed by the 
manufacturer that controls the heating or cooling system must--
    (1) Be capable of controlling the heating and cooling system on a 
daily schedule to maintain different temperature set points at 
different times of the day;
    (2) Include the capability to set back or temporarily operate the 
system to maintain zone temperatures down to 55 [deg]F (13 [deg]C) or 
up to 85 [deg]F (29 [deg]C); and
    (3) Be programmed with a heating temperature set point no higher 
than 70 [deg]F (21 [deg]C) and a cooling temperature set point no lower 
than 78 [deg]F (26 [deg]C).
    (c) Heat pumps with supplementary electric-resistance heat must be 
provided with controls that, except during defrost, prevent 
supplemental heat operation when the heat pump compressor can meet the 
heating load.


Sec.  460.203  Service water heating.

    (a) Service water heating systems installed by the manufacturer 
must be installed according to the service water heating manufacturer's 
installation instructions. Where service water heating systems are 
installed by the manufacturer, the manufacturer must ensure that any 
maintenance instructions received from the service water heating system 
manufacturer are provided with the manufactured home.
    (b) Any automatic and manual controls, temperature sensors, pumps 
associated with service water heating systems must be accessible.
    (c) Heated water circulation systems must--
    (1) Be provided with a circulation pump;
    (2) Ensure that the system return pipe is a dedicated return pipe 
or a cold water supply pipe;
    (3) Not include any gravity or thermosyphon circulation systems;
    (4) Ensure that controls for circulating heated water circulation 
pumps start the pump based on the identification of a demand for hot 
water within the occupancy; and
    (5) Ensure that the controls automatically turn off the pump when 
the water in the circulation loop is at the desired temperature and 
when there is no demand for hot water.
    (d) All hot water pipes--
    (1) Outside conditioned space must be insulated to a minimum R-
value of R-3; and
    (2) From a service water heating system to a distribution manifold 
must be insulated to a minimum R-value of R-3.


Sec.  460.204  Mechanical ventilation fan efficacy.

    (a) Whole-house mechanical ventilation system fans must meet the 
minimum efficacy requirements set forth in Table 460.204.

        Table 460.204--Mechanical Ventilation System Fan Efficacy
------------------------------------------------------------------------
                                                              Minimum
                  Fan type description                    efficacy (cfm/
                                                               watt)
------------------------------------------------------------------------
Range hoods (all air flow rates)........................             2.8
In-line fans (all air flow rates).......................             2.8
Bathroom and utility room fans (10 cfm <= air flow rate              1.4
 <90 cfm)...............................................
Bathroom and utility room fans (air flow rate >=90 cfm).             2.8
------------------------------------------------------------------------

    (b) Mechanical ventilation fans that are integral to heating, 
ventilating, and air conditioning equipment must be powered by an 
electronically commutated motor.


Sec.  460.205  Equipment sizing.

    Sizing of heating and cooling equipment installed by the 
manufacturer must be determined in accordance with ACCA Manual S 
(incorporated by reference; see Sec.  460.3) based on building loads 
calculated in accordance with ACCA Manual J (incorporated by reference; 
see Sec.  460.3).

[FR Doc. 2016-13547 Filed 6-16-16; 8:45 am]
 BILLING CODE 6450-01-P