Energy Conservation Program: Enforcement of Regional Standards for Central Air Conditioners, 45387-45405 [2016-16441]

Agencies

• DEPARTMENT OF ENERGY

[Federal Register Volume 81, Number 135 (Thursday, July 14, 2016)]
[Rules and Regulations]
[Pages 45387-45405]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-16441]


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DEPARTMENT OF ENERGY

10 CFR Parts 429 and 430

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


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

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

ACTION: Final rule.

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SUMMARY: In this final rule, DOE is adopting provisions pertaining to 
the enforcement of regional standards for central air conditioners, 
which were largely based on recommendations from a negotiated 
rulemaking term sheet. On November 19, 2015, the U.S.

[[Page 45388]]

Department of Energy (DOE) issued a notice of proposed rulemaking 
(NOPR) to adopt requirements related to the enforcement of regional 
standards for central air conditioners, as authorized by the Energy 
Policy and Conservation Act (EPCA) of 1975. That proposed rulemaking 
serves as the basis for this final rule. The provisions adopted in this 
final rule will aid the Department in enforcing its energy conservation 
standards for central air conditioners that are regionally based.

DATES: The effective date of this rule is August 15, 2016.

ADDRESSES: The docket, which includes Federal Register notices, public 
meeting attendee lists and transcripts, comments, and other supporting 
documents/materials, is available for review at regulations.gov. All 
documents in the docket are listed in the regulations.gov index. 
However, some documents listed in the index, such as those containing 
information that is exempt from public disclosure, may not be publicly 
available.
    The docket Web page can be found at: https://www.regulations.gov/#!docketDetail;D=EERE-2011-BT-CE-0077. This Web page will contain a 
link to this final rule on the regulations.gov site. The 
regulations.gov Web page will contain simple instructions on how to 
access all documents, including public comments, in the docket.
    For further information on how to review the docket, contact the 
Appliance and Equipment Standards staff at (202) 586-6636 or by email: 
central_air_conditioners_and_heat_pumps@ee.doe.gov.

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

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Authority and Background
    A. Authority
    B. Background
II. Discussion
    A. General Comments
    B. Clarifications to Regional Standards
    C. Private Labelers
    D. Definitions
    E. Public Awareness
    F. Reporting
    G. Proactive Investigation
    H. Records Retention and Requests
    I. Violations and Routine Violations
    J. Remediation
    K. Manufacturer Liability
    L. Impact of Regional Enforcement on National Impacts Analysis
III. Procedural Issues and Regulatory Review
IV. Approval of the Office of the Secretary

I. Authority and Background

A. Authority

    Title III of the Energy Policy and Conservation Act of 1975, as 
amended (``EPCA'' or, in context, ``the Act'') sets forth a variety of 
provisions designed to improve energy efficiency.\1\ Part A of Title 
III \2\ (42 U.S.C. 6291-6309) establishes the ``Energy Conservation 
Program for Consumer Products Other Than Automobiles.'' These consumer 
products include central air conditioners, which are the subject of 
this rule.
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    \1\ All references to EPCA in this document refer to the statute 
as amended through the Energy Efficiency Improvement Act of 2015, 
Public Law 114-11 (Apr. 30, 2015).
    \2\ For editorial reasons, Part B was redesignated as Part A 
upon incorporation into the U.S. Code (42 U.S.C. 6291-6309, as 
codified).
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    Under EPCA, this program consists essentially of four parts: (1) 
Testing; (2) labeling; (3) Federal energy conservation standards; and 
(4) certification and enforcement procedures. The Federal Trade 
Commission (FTC) is primarily responsible for labeling consumer 
products, and DOE implements the remainder of the program.
    Pursuant to EPCA, any new or amended energy conservation standards 
for covered consumer products must be designed to achieve the maximum 
improvement in energy efficiency that are technologically feasible and 
economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new 
or amended standard must result in significant conservation of energy. 
(42 U.S.C. 6295(o)(3)(B)) The Energy Independence and Security Act of 
2007 (EISA 2007) amended EPCA to require that DOE consider regional 
standards for certain products if the regional standards can save 
significantly more energy than a national standard and are economically 
justified. (42 U.S.C. 6295(o)(6)(A)) Under EPCA, DOE is authorized to 
establish up to two additional regional standards for central air 
conditioners and heat pumps. (42 U.S.C. 6295(o)(6)(B)(ii)) DOE was 
required to initiate an enforcement rulemaking after DOE issued a final 
rule that establishes a regional standard (42 U.S.C. 
6295(o)(6)(G)(ii)(I)) and issue a final rule. (42 U.S.C. 
6295(o)(6)(G)(ii)(III))

B. Background

    On June 27, 2011, DOE promulgated a Direct Final Rule (June 2011 
DFR) that, among other things, established regional standards for 
central air conditioners. 76 FR 37408. Under the June 2011 DFR, after 
January 1, 2015, split-system central air conditioners in the Southeast 
\3\ and Southwest \4\ must have a Seasonal Energy Efficiency Ratio 
(SEER) not less than 14. 76 FR at 37547. In addition, the DFR stated 
that in the Southwest, split-systems with rated cooling capacities less 
than 45,000 Btu/h must have an Energy Efficiency Ratio (EER) not less 
than 12.2, split-systems with rated cooling capacities equal to or 
greater than 45,000 Btu/h must have an EER not less than 11.7, and 
single-package systems must not have an EER less than 11.0. Id. DOE 
subsequently published a notice of effective date and compliance date 
for the June 2011 DFR on October 31, 2011, setting a standards 
compliance date for central air conditioners and heat pumps of January 
1, 2015. 76 FR 67037.
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    \3\ The southeast region includes states with a hot-humid 
climate. These states are Alabama, Arkansas, Delaware, Florida, 
Georgia, Hawaii, Kentucky, Louisiana, Maryland, Mississippi, North 
Carolina, Oklahoma, South Carolina, Tennessee, Texas, and Virginia, 
and in the District of Columbia. 76 FR at 37547.
    \4\ The southwest region includes states with a hot-dry climate. 
These states are Arizona, California, Nevada, and New Mexico. 76 FR 
at 37547.
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    As required by EPCA, DOE initiated an enforcement rulemaking by 
publishing a notice of data availability (NODA) in the Federal Register 
that proposed three approaches to enforcing regional standards for 
central air conditioners. 76 FR 76328 (December 7, 2011). DOE received 
numerous comments expressing a wide range of views in response to this 
NODA. Consequently, on June 13, 2014, DOE published a notice of intent 
to form a working group to negotiate regulations for the enforcement of 
regional standards for central air conditioners and requested 
nominations from parties interested in serving as members of the 
Working Group. 79 FR 33870. On July 16, 2014, the Department published 
a notice of membership announcing the eighteen nominations that were 
selected to serve as members of the Working Group, in addition to two 
members from Appliance Standards and Rulemaking Federal Advisory 
Committee (ASRAC), and one DOE representative. 79 FR 41456. The members 
of the Working Group were selected by ASRAC to ensure a broad and 
balanced array of stakeholder interests and expertise, and included 
efficiency advocates, utility representatives, and manufacturers,

[[Page 45389]]

contractors, and distributors of central air conditioners. Id.
    Between August 13, 2014, and October 24, 2014, the Working Group 
held fourteen public meetings in Washington, DC, primarily at the DOE 
headquarters.\5\ Thirty-seven interested parties, including members of 
the Working Group, attended the various meetings. For more details see 
the Working Group meeting transcripts.\6\
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    \5\ The Working Group met on August 13, 2014; August 14, 2014; 
August 26, 2014; August 27, 2014; August 28, 2014; September 3, 
2014; September 4, 2014; September 24, 2014; September 25, 2014; 
October 1, 2014; October 2, 2014; October 15, 2014; October 16, 
2014; and October 24, 2014. Due to space conflicts at DOE, the 
August 27th meeting took place at ACEEE's office in Washington, DC.
    \6\ Docket Folder, Energy Conservation Program: Enforcement of 
Regional Standards for Residential Furnaces and Central Air 
Conditioners and Heat Pumps, https://www.regulations.gov/#!docketDetail;D=EERE-2011-BT-CE-0077.
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    The Working Group submitted a final report to ASRAC on October 24, 
2014, summarizing the group's recommendations for DOE's rule for 
enforcement of regional standards for central air conditioners. Working 
Group Recommendations, No. 70.\7\ The recommendations included a 
statement that the nongovernmental participants conditionally approved 
the recommendations contingent upon the issuance of final guidance (see 
No. 89 and No. 90 for the draft versions) consistent with the 
understanding of the Working Group as set forth in these 
recommendations. Working Group Recommendations, No. 70 at 37. ASRAC 
subsequently voted to approve these recommendations on December 1, 
2014. (ASRAC Meeting Transcript, No. 73 at pp. 42-43).
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    \7\ A notation in this form provides a reference for information 
that is in the docket for this rulemaking (Docket No. EERE-2011-BT-
CE-0077), which is maintained at www.regulations.gov. This notation 
indicates that the statement preceding the reference is from 
document number 70 in the docket.
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    DOE presented the Working Group's recommendations in separate 
rulemakings. DOE proposed regulatory changes related to unit selection 
and testing requirements in a supplemental notice of proposed 
rulemaking for CAC test procedures (November 2015 CAC TP SNOPR) on 
November 9, 2015 and finalized them on June 8, 2016 (June 2016 CAC TP 
final rule. 80 FR 69277, 81 FR 36992. DOE presented the Working Group's 
recommendations for enforcement of regional standards for central air 
conditioners in a NOPR published on November 19, 2015 (November 2015 
NOPR). 80 FR 72373. DOE is now finalizing them in this final rule.

II. Discussion

    As previously stated, DOE proposed the Working Group's 
recommendations for enforcement of regional standards for central air 
conditioners in the November 2015 NOPR. See 80 FR 72373. In response to 
the November 2015 NOPR, DOE received comments from 11 interested 
parties including manufacturers, trade associations, advocacy groups, 
and a utility association. Interested parties provided comments on a 
range of issues, including those DOE identified in the November 2015 
NOPR, as well as issues related to the enforcement procedure changes. 
The issues on which DOE received comments, as well as DOE's responses 
to those comments and the resulting changes to the enforcement 
proposals presented in the November 2015 NOPR, are discussed in the 
subsequent sections.\8\
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    \8\ A full set of comments can be found at https://www.regulations.gov/#!docketDetail;D=EERE-2011-BT-CE-0077.

      Table II.1--Stakeholders That Submitted Comments on the NOPR
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              Name                      Acronym        Organization type
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Advanced Distributor Products,    ADP...............  Manufacturer.
 LLC.
Air-Conditioning, Heating and     AHRI..............  Trade Association.
 Refrigeration Institute.
California Investor Owned         CA IOUs...........  Utility
 Utilities.                                            Association.
Carrier Corporation.............  Carrier...........  Manufacturer.
Earthjustice....................  Earthjustice......  Energy Efficiency
                                                       Advocacy Group.
Heating, Air-conditioning, and    HARDI.............  Trade Association.
 Refrigeration Distributors
 International.
Ingersoll Rand Residential        Ingersoll Rand....  Manufacturer.
 Solutions.
Lennox International, Inc.......  Lennox............  Manufacturer.
Natural Resources Defense         NRDC..............  Energy Efficiency
 Council.                                              Advocacy Group.
Appliance Standards Awareness     ASAP..............  Energy Efficiency
 Project.                                              Advocacy Group.
Rheem Manufacturing Company.....  Rheem.............  Manufacturer.
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A. General Comments

    DOE received several general comments in response to the November 
2015 NOPR. NRDC, Earthjustice, and ASAP support the proposal for 
enforcement of regional standards for central air conditioners. (NRDC, 
Earthjustice, and ASAP, No. 96 at p. 1) Ingersoll Rand commented that 
they support AHRI's comments. (Ingersoll Rand, No. No. 100 at p. 2)
    In addition, DOE received some comments pertaining to the effective 
dates, enforcement policies, and other aspects of the proposed rule. 
Rheem commented that the updates to Sec.  430.32 that are shown 
beginning on the NOPR page 72389 clarify the effective dates to (1) 
include the agreements on the sell through period; and (2) the off-mode 
power requirements for which there is currently no finalized test 
procedure. 80 FR 72373, 72389 (Nov. 19, 2015). Rheem suggested that the 
Federal Register should include a complete, accurate, and transparent 
account of the effective dates and enforcement policies associated with 
each for both current and historical references. (Rheem, No. 98 at p. 
1)
    In response, DOE clarifies that the updates to Sec.  430.32 that 
were proposed in the NOPR did not change the effective compliance and 
installation dates for the regional standard. DOE proposed to remove 
the former energy conservation standards that were surpassed by the 
current standard levels, and DOE added language related to the Working 
Group's recommendation that units rated below the regional standard by 
the OEM cannot be installed in such region. 80 FR 72373, 72389 (Nov. 
19, 2015). DOE published a notice of effective date and compliance date 
for the June 2011 DFR on October 31, 2011, which detailed the 
compliance dates for central air conditioners and heat pumps standards. 
76 FR 67037. As Rheem indicated, DOE issued enforcement guidance 
stating that DOE will not seek civil penalties for violations of the 
regional standards applicable to central air conditioners

[[Page 45390]]

that occur prior to July 1, 2016, provided that the violations are 
related to the distribution in commerce of units manufactured prior to 
January 1, 2015.\9\ This enforcement guidance does not amend the 
compliance dates of the for central air conditioners and heat pumps 
standards, but rather is an exercise of DOE's discretion by providing a 
sell through period for central air conditioners impacted by regional 
standards.
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    \9\ Enforcement Policy Statement: Regional Standards Sell-
Through. The full enforcement policy can be found at: https://www.energy.gov/gc/downloads/enforcement-policy-regional-standards-sell-through.
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    In regard to the off-mode power consumption standards, Carrier 
commented that, while it has no issue with the specific level of watt 
consumption requirements, it has issues with the retroactive 
implementation date of January 1, 2015. Carrier cited the DOE 
Enforcement Policy Statement of July 8, 2014, which stated ``. . . 
until 180 days following publication of final rule establishing a test 
method. . . .'' \10\ Based on this enforcement policy, Carrier believed 
DOE should modify the compliance date in the CFR to at least 180 days 
following the publishing of the final test procedure, and requested 
that DOE consider a 360 day implementation to allow for testing of 
highest sales volume tested combination. (Carrier, No. 97 at pp. 5-6)
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    \10\ Enforcement Policy Statement: Off Mode Standards for 
Central Air Conditioners and Central Air Conditioning Heat Pumps. 
The full enforcement policy can be found at: https://www.energy.gov/gc/downloads/enforcement-policy-statement-mode-standards-cachp.
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    In response to Carrier and Rheem's comments regarding off-mode 
power consumption, DOE established the effective date and compliance 
date for the June 2011 DFR in a separate rule published on October 31, 
2011. 76 FR 67037. As Carrier stated, DOE's enforcement policy 
statement for off mode standards for central air conditioners and heat 
pumps is currently applicable to off-mode standards for central air 
conditioners and heat pumps, and will be until the dates mentioned in 
the policy statement.\11\ Specifically, DOE finalized test procedures 
for off-mode standards in a final rule published on June 8, 2016. 81 FR 
36992. In accordance with the enforcement policy statement, DOE will 
not assert civil penalty authority for violation of the off mode 
standard specified at 10 CFR 430.32(c)(6) until December 5, 2016, which 
is 180 days after the publication of the final rule. This enforcement 
policy does not change the legal requirements or the compliance date. 
Therefore, manufacturers will be required to comply with the July 8, 
2016 for off-mode testing.
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    \11\ Id.
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    HARDI requested in its comments that DOE effectively communicate 
all aspects of this standard and its subsequent enforcement to state 
governments, as some states may enact policies that preempt federal 
policy. (HARDI, No. 94 at p. 2) As recommended by the Working Group, 
DOE is promoting public awareness of the regional standards and 
regional enforcement policy by establishing a Web site, hosting a 
public meeting, and publishing informative literature on its Web site. 
DOE's Web page for regional standards can be found at https://www.energy.gov/gc/regional-standards-enforcement. This Web page 
includes a brochure for installers and purchasers of central air 
conditioners. DOE has also been answering questions from state and 
local governments regarding both the regional standards and DOE's 
enforcement policy and will continue to do so.

B. Clarifications to Regional Standards

    As previously mentioned, DOE adopted regional standards for central 
air conditioners in its June 2011 DFR. That rule established regional 
standards for split-system central air conditioners and single-package 
central air conditioners. 10 CFR 430.32(c).
    A split-system central air conditioner is a kind of air conditioner 
that has one or more of its major assemblies separated from the others. 
Typically, the air conditioner has a condensing unit (``outdoor unit'') 
that is separate from the evaporator coil and/or blower (``indoor 
unit''). Accordingly, a split-system condensing unit is often sold 
separately from the indoor unit and may be matched with several 
different models of indoor units and/or blowers. For this reason, a 
condensing unit could achieve a 14 SEER or above if it is paired with 
certain indoor units and/or blowers and could perform below 14 SEER 
when paired with other indoor units and/or blowers. 80 FR 72373 
(November 19, 2015).
    During their meetings, the Working Group suggested the regional 
standards required clarification because a particular condensing unit 
may have a range of efficiency ratings when paired with various indoor 
evaporator coils and/or blowers. The Working Group provided the 
following four recommendations to clarify the regional standards: (1) 
The least efficient rated combination for a specified model of 
condensing unit must be 14 SEER for models installed in the Southeast 
and Southwest regions; (2) the least efficient rated combination for a 
specified model of condensing unit must meet the minimum EER for models 
installed in the Southwest region; (3) any condensing unit model that 
has a certified combination that is below the regional standard(s) 
cannot be installed in that region; and (4) a condensing unit model 
certified below a regional standard by the original equipment 
manufacturer cannot be installed in a region subject to a regional 
standard(s) even with an independent coil manufacturer's indoor coil or 
air handler combination that may have a certified rating meeting the 
applicable regional standard(s). Working Group Recommendations, No. 70 
at 4. In the November 2015 NOPR, DOE proposed to adopt these 
recommendations and requested comment on these recommendations. 80 FR 
72373, 72375 (November 19, 2015).
    Interested parties submitted comments on the proposed clarification 
to the regional standards. In their comments, ADP and Lennox supported 
the clarifications discussed in the NOPR. Further, ADP and Lennox 
recommended these clarifications be used to provide consistent language 
in the central air conditioner test procedure rulemaking that are based 
on basic models. (ADP, No. 93 at p. 1; Lennox, No. 95 at p. 2) Rheem 
also agreed with the four clarifications to the regional standards 
discussed in the November 2015 NOPR. In its comments, Rheem stated it 
could also support the new alternative proposed by DOE concerning 
combinations permitted to be certified, if the alternative would not 
impose additional testing costs and burdens. (Rheem, No. 98 at p. 2) CA 
IOUs supported DOE's conclusion that split-system condensing units 
should be rated with their lowest performing evaporator combination. 
(CA IOUs, No. 99 at p. 2)
    Alternatively, Carrier and AHRI commented that the approach 
proposed in the November 2015 NOPR was preferable to the approach 
proposed in the CAC test procedure SNOPR. Carrier and AHRI explained 
that the SNOPR approach would mean that an ICM (independent coil 
manufacturer) could have a CAC basic model meeting the Southeast or 
Southwest Regional Standard even when the outdoor unit manufacturer 
certified the condensing unit paired with the ICMs indoor unit below 14 
SEER. (Carrier, No. 97 at p. 2; AHRI, No. 101 at p.3)
    DOE's proposal in the CAC test procedure SNOPR was to make clear 
that it is not permissible for an outdoor unit that is certified as 
meeting a

[[Page 45391]]

regional standard (i.e., the OUM (outdoor unit manufacturer) does not 
make any representation below the regional standard for that outdoor 
unit) to be certified in a combination that does not meet the regional 
standard. That includes both certifications by an OUM and an ICM. DOE 
has finalized that approach in the CAC test procedure final rule.\12\
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    \12\ See the Section III.A.4 of the CAC test procedure final 
rule at 81 FR 36992 (June 8, 2016).
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    Nonetheless, DOE understands AHRI and Carrier to be concerned that, 
if an ICM certifies a combination in violation of the regulations, 
there is no separate prohibition against installing that combination. 
DOE had proposed in the November 2015 NOPR to include the following 
language at 10 CFR 430.32(c)(3)-(4): ``An outdoor unit model certified 
below 14 SEER by the outdoor unit manufacturer cannot be installed in 
this region even with an independent coil manufacturer's indoor unit 
that may have a certified rating at or above 14 SEER.'' For consistency 
between its CAC TP and regional standards, DOE clarified in the June 
2016 CAC TP final rule at 10 CFR 429.16(a)(3)(A) specific limitations 
for tested combinations subject to regional standards (``a basic model 
may only be certified as compliant with a regional standard if all 
individual combinations within that basic model meet the regional 
standard for which it is certified . . . [and] an ICM cannot certify a 
basic model containing a representative value that is more efficient 
than any combination certified by an OUM containing the same outdoor 
unit''). In this final rule, DOE is adopting complementary language at 
10 CFR 430.32(c)(3)-(4): ``[a]ny outdoor unit model that has a 
certified combination with a rating below 14 SEER cannot be installed 
in these States.'' DOE intends this modified language to prevent any 
model that is rated below the Southeast or Southwest Regional Standard 
by the OUM from being installed in those regions. Further, this 
language maintains the Working Group's clarification that an outdoor 
unit certified below a regional standard by the original equipment 
manufacturer cannot be installed in a region subject to a regional 
standard(s) even with an independent coil manufacturer's indoor coil.

C. Private Labelers

    As discussed in the November 2015 NOPR, DOE received questions 
about the applicability of the regional standards to private labelers, 
which was an entity not addressed by the Working Group. In response, 
DOE noted that, although private labelers are liable for distribution 
in commerce of noncompliant products generally, DOE does not require 
private labelers to submit certification reports unless the private 
labeler is also the importer. DOE suggested that it may not be 
necessary for exactly the same requirements to apply to private 
labelers. Consequently, DOE requested comment on whether these proposed 
requirements should be the same for manufacturers and private labelers 
or whether different requirements should apply. 80 FR 72373.
    Commenters generally agreed that the proposed requirements should 
apply to private labelers in the same way that the requirements apply 
to manufacturers. Lennox strongly recommended that DOE apply the same 
enforcement requirements for manufacturers to private labelers of 
products covered under this rule. (Lennox, No. 95 at p. 2) NRDC, 
Earthjustice, and ASAP also supported the Department's proposal to 
treat private labelers the same as manufacturers. (NRDC, Earthjustice, 
and ASAP, No. 96 at p. 1) Carrier and AHRI commented that if private 
labelers are importers, then the private labelers should be subject to 
the same requirements as manufacturers, consistent with DOE's 
determination elsewhere in the November 2015 NOPR. Carrier and AHRI 
further stated that, even if private labelers are not importers and the 
product does not bear the brand, trademark, or other marking of the 
manufacturer of the product, then the private labeler should still be 
treated as a manufacturer. (Carrier, No. 97 at p. 4; AHRI, No. 101 at 
p. 3)
    Accordingly, DOE adopts the same requirements for private labelers 
and manufacturers in this final rule as a result of comments received.

D. Definitions

    EPCA prohibits manufacturers from selling to ``distributors, 
contractors, or dealers that routinely violate the regional 
standards.'' (42 U.S.C. 6302(a)(6)) In the November 2015 NOPR, DOE 
proposed definitions for ``contractor,'' ``dealer,'' and ``installation 
of a central air conditioner.'' Under the November 2015 SNOPR, a 
``contractor'' is a person (other than the manufacturer or distributor) 
who sells to and/or installs for an end user a central air conditioner 
subject to regional standards. A ``dealer'' is a type of contractor, 
generally with a relationship with one or more specific manufacturers. 
``Installation of a central air conditioner'' means the connection of 
the refrigerant lines and/or electrical systems to make the central air 
conditioner operational. 80 FR 72373 (November 19, 2015).
    Commenters agreed with the proposed definitions. (ADP, No. 93 at p. 
1; Rheem, No. 98 at p. 2; Carrier, No. 97 at p. 3; Lennox, No. 95 at p. 
2) Accordingly, DOE adopts the November 2015 NOPR proposed definitions 
for contractor, dealer, and installation of a central air conditioner 
in this final rule.

E. Public Awareness

    In the November 2015 NOPR, DOE reiterated the Working Group's 
recommendations related to public awareness. 80 FR 72373, 72376-77 
(Nov. 19, 2015). DOE did not receive any comments specific to the 
Working Groups recommendations on public awareness.
    Per the Working Group's recommendation, DOE established a Web page 
with information on regional standards for CACs that could be 
referenced by manufacturers, distributors, contractors, and other 
interested parties. This Web page can be found at https://www.energy.gov/gc/regional-standards-enforcement. DOE posted on its 
regional standards Web page a printable trifold to provide information 
to consumers and contractors and to answer common questions. All 
information sources include information, including email links, on how 
to report suspected violations of the CAC regional standards. DOE 
encourages manufacturers to provide the information to its 
distributors, distributors to provide the information to contractors, 
and contractors to provide this information to purchasers.
    The Working Group also recommended that DOE conduct a public 
presentation (accessible via internet as well as in-person) on regional 
standards for CACs and the enforcement of such standards in order to 
educate stakeholders and the public on these regulations. DOE will 
announce the details for an educational presentation about regional 
standards soon. (DOE expects that the presentation will be in July 
2016.) After the presentation, DOE will post the slides from the 
presentation to the docket for this rulemaking and on the regional 
standards Web page.
    Finally, the Working Group recommended that CAC manufacturers 
provide training about regional standards to distributors and 
contractors/dealers. Distributors and contractors also agreed to 
conduct their own training on regional standards. The Working Group did 
not establish specific guidelines for the training. DOE

[[Page 45392]]

does not have information about whether or to what extent the 
manufacturers, distributors and contractors have conducted/participated 
in such training. However, DOE encourages all CAC manufacturers to 
provide training to their distributors and contractors/dealers as part 
of their commitment to the Working Group.

F. Reporting

    The Working Group discussed methods for facilitating the reporting 
of suspected regional standards violations and recommended that the 
Department provide multiple pathways for the public to report such 
information, such as accepting complaints regarding CAC regional 
standards from an email address and call-in number. The Working Group 
emphasized the importance that a complainant receive confidential 
treatment to the maximum extent authorized by law. DOE did not receive 
any comments specific to the Working Groups recommendations on 
reporting of suspected regional standards violations.
    As discussed in the November 2015 NOPR, the Department accepts 
reports of suspected violations of the regional central air conditioner 
standards that are received via email at 
EnergyEfficiencyEnforcement@hq.doe.gov or phone at 202-287-6997. 80 FR 
72373, 72377 (Nov. 19, 2015). DOE remains committed to investigating 
all credible complaints.

G. Proactive Investigation

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

H. Records Retention and Requests

    In the November 2015 NOPR, DOE proposed to adopt the Working 
Group's recommended records retention requirements for contractors and 
dealers, distributors, and manufacturers and private labelers with two 
modifications. Due to the delay in issuing the NOPR, DOE proposed that 
distributors be required to retain records beginning July 1, 2016, 
instead of November 30, 2015. Additionally, DOE proposed to replace the 
term ``indoor coils or air handlers'' with the term ``indoor unit'' in 
order to harmonize with the CAC TP supplemental notice of proposed 
rulemaking (SNOPR). See 80 FR 69278 at 69284. The records retention 
scheme was proposed as follows:
    Beginning 30 days after the issuance of a final rule, a 
manufacturer must retain:
     For split-system central air conditioner condensing units: 
The model number, serial number, date of manufacture, date of sale, and 
party to whom the unit was sold (including person's name, full address, 
and phone number);
     For split-system central air conditioner indoor units (not 
including uncased coils sold as replacement parts): The model number, 
date of manufacture, date of sale, and party to whom the unit was sold 
(including person's name, full address, and phone number); and
     For single-package central air conditioners: The model 
number, serial number, date of manufacture, date of sale, and party to 
whom the unit was sold (including person's name, full address, and 
phone number).
    Beginning July 1, 2016,\13\ a distributor must retain:
---------------------------------------------------------------------------

    \13\ The Working Group originally recommended that distributors 
retain records beginning on November 30, 2015.
---------------------------------------------------------------------------

     For split-system central air conditioner condensing units: 
The manufacturer, model number, serial number, date the unit was 
purchased from the manufacturer, party from whom the unit was purchased 
(including person's name, full address, and phone number), date unit 
was sold to a dealer or contractor, party to whom the unit was sold 
(including person's name, full address, and phone number), and, if 
delivered to the purchaser, the delivery address; and
     For single-package central air conditioners: The 
manufacturer, model number, serial number, date the unit was purchased 
from the manufacturer, party from whom the unit was purchased 
(including person's name, full address, and phone number), date unit 
was sold to dealer or contractor, party to whom the unit was sold 
(including person's name, full address, and phone number), and, if 
delivered to the purchaser, the delivery address.
    For all installations in the Southeast and Southwest, beginning 30 
days after issuance of a final rule in this rulemaking, contractors 
must retain:
     For split-system central air conditioner condensing units: 
The manufacturer name, model number, serial number, location of 
installation (including street address, city, state, and zip code), 
date of installation, and party from whom the unit was purchased 
(including person's name, full address, and phone number);
     For split-system central air conditioner indoor units (not 
including uncased coils sold as replacement parts): The manufacturer 
name, model number, location of installation (including street address, 
city, state, and zip code), date of installation, and party from whom 
the unit was purchased (including person's name, full address, and 
phone number); and
     For single-package central air conditioners: The 
manufacturer name, model number, serial number, location of 
installation (including street address, city, state, and zip code), 
date of installation, and party from whom the unit was purchased 
(including person's name, full address, and phone number).
    The Working Group recommended that contractors retain records for 
48 months after the date of installation, distributors retain records 
for 54 months after the date of sale, and manufacturers retain records 
for 60 months after the date of sale. The Working Group explicitly 
noted that retaining records allows each entity to archive records as 
long as the entity does not delete or dispose of the records. The 
Working Group also clarified that the records retention requirements 
neither mandate that contractors, distributors, or manufacturers create 
new forms for the purpose of tracking central air conditioners nor 
require records to be electronic. DOE proposed in the November 2015 
NOPR to adopt these record retention period requirements. See 2013-BT-
NOC-0005, No. 30 at 17-18, 80 FR 72373, 72377-78 (Nov. 19, 2015).
    Interested parties generally supported the proposed records 
retention requirements. (ADP, No. 93 at p. 2; CA IOUs, No. 99 at p. 3; 
Carrier, No. 97 at p. 3; Lennox, No. 95 at p. 2; Rheem, No. 98 at p. 2) 
HARDI specifically supported DOE's proposal to require record keeping 
for distributors to take effect on July 1, 2016. (HARDI, No. 94 at p. 
1) AHRI noted that DOE's proposed regulatory text for record retention 
requirements would need to be aligned with the revised date for 
distributors proposed by DOE (July 1, 2016), instead of the date of 
November 30, 2015. (AHRI, No. 101 at p. 6)

[[Page 45393]]

    Some commenters noted that the proposed requirements impose 
additional costs on contractors, dealers, distributors, manufacturers, 
and private labelers. Carrier noted there would be a cost associated 
with record retrieval but stated it supported the proposed 
requirements. (Carrier, No. 97 at p. 3) Although HARDI commented that 
the cost to alter inventory accounting systems and modify processes for 
the recordkeeping requirements is significant, it also noted that it 
was part Working Group and voted in support of these requirements. 
(HARDI, No. 94 at p. 1) In response, DOE understands that there is an 
additional cost. However, as HARDI commented, DOE notes that the 
Working Group was fully aware of the additional cost when it voted to 
support these provisions and the Working Group attempted to minimize 
the cost to the greatest extent possible.
    Some commenters disagreed with DOE's proposed use of the term 
``indoor unit'' with respect to the record retention requirements for 
split-system air conditioners. Because DOE proposed a definition for 
``indoor unit'' that does not include casing or expansion device, AHRI 
expressed concern that the uncased coil would no longer be within the 
scope of regulation. At the same time, AHRI supported the current 
status of service coils as ``not rated'' and would like DOE to make it 
clear that they will not be rated in the future. To aid DOE in 
addressing this problem, AHRI recommended definitions for the terms 
uncased coil, cased coil, service coil, air handler, blower coil, coil-
only, and indoor unit.\14\ (AHRI, No. 101 at pp. 2-3)
---------------------------------------------------------------------------

    \14\ A full description of the definitions proposed by AHRI can 
be found in AHRI's comment at https://www.regulations.gov/#!docketDetail;D=EERE-2011-BT-CE-0077.
---------------------------------------------------------------------------

    ADP and Lennox commented that DOE needed a clear definition of 
``uncased coils sold as replacement parts'' that are not required to be 
recorded versus uncased coils sold as a part of a new CAC installation 
that are required to be recorded. (ADP, No. 93 at p. 2; Lennox, No. 95 
at p. 2) Rheem also mentioned that that comments it submitted in 
response to the test procedure SNOPR requested that DOE ensure that 
``service coils'' are not a covered product and that consistent 
terminologies are used to describe air handlers, blower coils, coil-
only and indoor units.
    DOE appreciates the suggested definitions and clarifications 
suggested by AHRI, Lennox, ADP, and Rheem. To address these comments 
and the comments received in response to the CAC TP SNOPR, DOE adopted 
definitions of the terms blower coil indoor unit, blower coil system, 
cased coil, coil-only indoor unit, coil-only system, indoor unit, 
service coil, and uncased coil. For more details on these definitions 
see the CAC test procedure final rule at 81 FR 36992 (June 8, 2016). In 
addition, as requested by Rheem, ADP, and Lennox, DOE is not requiring 
manufacturers, distributors, or installers to retain records for 
service coils.
    Therefore, in this final rule, DOE adopts the record retention 
requirements recommended by the Working Group with the two 
modifications proposed in the November 2015 NOPR. 80 FR 72373, 72377-
72378 (Nov. 19 2015).
    In the November 2015 NOPR, DOE defined a threshold for records 
requests and proposed a timeframe for responding to such requests. 
Specifically, DOE proposed that DOE must have reasonable belief that a 
violation has occurred to request records specific to an on-going 
investigation of a violation of central air conditioner regional 
standards. Upon request, the manufacturer, private labeler, 
distributor, dealer, or contractor must provide to DOE the relevant 
records within 30 calendar days of the request. DOE may grant 
additional time for records production at its discretion. 80 FR 72373, 
72378 (November 19, 2015).
    DOE requested comments from interested parties on the proposed 
threshold for a records request and proposed a timeframe for responding 
to such requests in its November 2015 NOPR. Commenters generally agreed 
with the proposed threshold and timeframe. (ADP, No. 92 at p. 2; Rheem, 
No. 98 at p. 2; Lennox, No. 95 at p. 3) Some commenters agreed with the 
proposed threshold and timeframe but emphasized the need for discretion 
to grant additional time for production of records. Carrier agreed with 
the threshold for records request and the proposed 30-day timeframe, as 
long as DOE uses discretion to grant additional time for production of 
records as long as the entity is making a good-faith effort. (Carrier, 
No. 93 at p. 3) HARDI stated that it believes the 30-day threshold is 
sufficient, but expressed the view that DOE should allow for extra time 
upon request, as many small entities have little or no experience in 
complying with such a request. (HARDI, No. 94 at p. 2)
    To address Carrier's and HARDI's concerns, DOE reiterates that it 
may grant additional time for production of records as long as the 
affected entity makes a good faith effort to respond to the records 
request. As explained in the November 2015 NOPR, to receive this extra 
time, the entity, after working to gather the records within the 30 
days, must provide DOE all the records gathered and a written 
explanation for the need for additional time including the requested 
date for completing the records request. 80 FR at 72377. DOE also notes 
that both Carrier and HARDI were part of the negotiated rulemaking and 
agreed to these terms as part of the Working Group.
    In this final rule, DOE adopts the proposed threshold for records 
requests and the timeline to respond to such requests.

I. Violations and Routine Violations

    In the November 2015 NOPR, DOE proposed to adopt the Working 
Group's recommendations on regional standards violations for 
distributors, contractors or dealers in order to clarify the 
prohibition on manufacturers knowingly selling to such entities that 
are routine violators. (42 U.S.C. 6302(a)(6), 10 CFR 430.102(a)(10))
    For a distributor, the Working Group agreed that it would be a 
violation to knowingly sell a product to a contractor or dealer with 
knowledge that the entity will sell and/or install the product in 
violation of any regional standard applicable to the product. 
Additionally, it would be a violation for a distributor to knowingly 
sell a product to a contractor or dealer with knowledge that the entity 
routinely violates any regional standard applicable to the product. For 
contractors, the Working Group agreed it would be a violation to 
knowingly sell to and/or install for an end user a central air 
conditioner subject to regional standards with knowledge that such 
product would be installed in violation of any regional standard 
applicable to the product. 80 FR 72373 (November 19, 2015).
    To further clarify what constituted an installation of a central 
air conditioner in violation of an applicable regional standard, the 
Working Group agreed that:
    (1) A person cannot install a complete central air conditioner 
system--meaning the condensing unit and evaporator coil and/or blower--
unless it has been certified as a complete system that meets the 
applicable standard. A previously discontinued combination may be 
installed as long as the combination was previously validly certified 
to the Department as compliant with the applicable regional standard 
and the combination was not discontinued because it was found to be 
noncompliant with the applicable standard(s);

[[Page 45394]]

    (2) A person cannot install a replacement condensing unit unless it 
is certified as part of a combination that meets the applicable 
standard; and
    (3) A person cannot install a condensing unit that has a certified 
combination with a rating that is less than the applicable regional 
standard.
    Interested parties submitted comments on the proposed violations 
for distributors, contractors, and dealers. Commenters generally agreed 
with the proposed violations. (ADP, No. 93 at p. 2; CA IOUs, No. 99 at 
p. 2; Lennox, No. 95 at p. 3; Rheem, No. 98 at p. 3) Therefore, DOE 
adopts these violations in thisa final rule.
    Carrier agreed with the proposed violations, but requested that DOE 
further elaborate on the term ``manufacturer'' as it pertains to 
violations to include clarification that some manufacturers may also 
act as distributors, but are still subject to the fines of a prohibited 
act as a manufacturer. (Carrier, No. 97 at p. 4)
    DOE agrees with Carrier's clarification that manufacturer-owned 
distributors are considered manufacturers. Because EPCA defines the 
term ``distributor'' as a person, other than a manufacturer or 
retailer, to whom a consumer product is delivered or sold for purposes 
of distribution in commerce, then a company that both manufactures and 
distributes is considered a manufacturer. 42 U.S.C. 6291(14). 
Therefore, manufacturer-owned distributors cannot be found to be 
routine violators as adopted in this rule, but are instead prohibited 
from knowingly selling a product to a distributor, contractor, or 
dealer with knowledge that the entity routinely violates any regional 
standard applicable to the product. (42 U.S.C. 6302, 10 CFR 
429.102(a)(10))
    To determine if a violation occurred, the Department explained it 
will conduct an investigation into the alleged misconduct. In a typical 
investigation, DOE may discuss the installation in question with the 
end user or the homeowner and other relevant parties, including the 
alleged violator. DOE may also request records from the dealer, 
contractor, distributor, and/or manufacturer if the Department has 
reasonable belief a violation occurred.
    The Working Group recommended and DOE proposed in the November 2015 
NOPR that if no violation is found, the Department should issue a case 
closed letter to the party being investigated. The Working Group also 
recommended that, if DOE finds that a contractor or dealer completed a 
noncompliant installation in one residence or an equivalent setting 
(e.g., one store), but the violator remediated that violation by 
installing a compliant unit before DOE concluded its investigation, 
then DOE should issue a case closed letter to the party being 
investigated, as long as that person has no history of prior 
violations. The purpose of this practice would be to incentivize 
parties who, on one occasion, mistakenly install one noncompliant unit 
to replace the product and thereby not suffer any public stigma. 
However, if the noncompliant installation is not remediated and a 
violation is found, DOE should issue a public ``Notice of Violation.'' 
The party found to be in violation can remediate the single violation 
and it will not count towards the finding of ``routine violator'' 
unless the party is found, in the course of a subsequent investigation, 
to have committed another violation. For more on remediation of a 
single violation, see section II.J. See 80 FR 72373, 72378 (Nov. 19, 
2015).
    In determining whether a party ``routinely violates'' a regional 
standard, the Working Group recommended that DOE consider the following 
factors:
     Number of violations (in both current and past 
investigations);
     Length of time over which the violations were committed;
     Ratio of compliant to noncompliant installations or sales;
     Percentage of employees committing violations;
     Evidence of effort or intent to commit violations;
     Evidence of training or education provided on regional 
standards; and
     Subsequent remedial actions.
    The Working Group also agreed that DOE should consider whether the 
routine violation was limited to a specific contractor or distribution 
location. DOE would rely on the same factors considered in determining 
whether a routine violation occurred.
    Interested parties submitted comments supporting the factors DOE 
proposed to consider to determine if a violation is routine. (ADP, No. 
93 at p. 2; Rheem, No. 98 at p. 3; Carrier, No. 97 at p. 4; Lennox, No. 
95 at p. 3) Accordingly, DOE is adopting these factors are part of its 
provisions for identifying routine violations.
    In the November 2015 NOPR, DOE proposed adopting the Working 
Group's recommendation that DOE issue a ``Notice of Finding of Routine 
Violator'' if the Department determines that a violator routinely 
violated a regional standard. This notice would identify the party 
found to be a routine violator and explain the scope of the violation. 
Additionally, if DOE, in its discretion, finds that the routine 
violation was limited to a specific location, DOE may in the Notice of 
Finding of Routine Violation state that the prohibition on manufacturer 
sales is limited to a particular contractor or distribution location 
This notice would be both posted to the Department's enforcement Web 
site \15\ and would be emailed to those signed up for email 
updates.\16\ See 80 FR 72373, 72378 (Nov. 19, 2015).
---------------------------------------------------------------------------

    \15\ DOE's enforcement Web site is: https://energy.gov/gc/enforcement.
    \16\ Sign up for updates at https://public.govdelivery.com/accounts/USEERE/subscriber/new and select ``Regional Enforcement 
Standards'' under ``Appliance and Equipment Standards.''
---------------------------------------------------------------------------

    DOE also proposed that if DOE makes a finding of routine violation, 
the violator has the right to file an administrative appeal of the 
finding. Any appeal of a Notice of Finding of Routine Violation would 
be required to be filed within 30 days of the issuance of the notice. 
The appeal would be reviewed by DOE's Office of Hearings and Appeals. 
The appeal must present information rebutting the finding of routine 
violation. The appeal will be decided within 45 days of filing of the 
appeal. The violator may file a Notice of Intent to Appeal with the DOE 
Office of Hearings and Appeals. If this notice of intent is filed 
within three business days of the Notice of Finding of Routine 
Violation, then manufacturers may continue to sell products to the 
routine violator during the pendency of the appeal. See section II.J 
for more details on sales during the pendency of an appeal. See 80 FR 
72373, 72378 (Nov. 19, 2015).
    In response, the CA IOUs commented that DOE should be aware of the 
potential for units to cross region borders illegally, as once a 
condenser unit is shipped to a given region, there would be potential 
for it to cross region borders. The CA IOUs stated that the ability to 
label the distributor as a ``routine violator'' would help this 
problem. Further, the CA IOUs supported publically disciplining 
distributors who sell non-compliant units by labeling such distributors 
as ``routine violators.'' (CA IOUs, No. 99 at p. 2)
    DOE received no other comments related to its proposed regulatory 
framework for violations and routing violations. Therefore, in this 
rule DOE adopts its proposals related to issuing a Notice of Violation 
or Notice of Finding of Routine Violations. Further, DOE adopts its 
proposal to allow findings of routine violation to be appealed. The CA 
IOUs recommendation goes beyond

[[Page 45395]]

the scope of DOE's proposal and is not addressed in this rulemaking.

J. Remediation

    DOE proposed in its November 2015 NOPR a concept for remediation 
that would apply to any party found to be in violation of the regional 
standards. The Department explained that any violator may remediate by 
replacing the noncompliant unit at cost to the violator; the end user 
could not be charged for any costs of remediation. The violator would 
be required to provide to DOE the serial number of any outdoor unit 
and/or indoor unit installed not in compliance with the applicable 
regional standard and the serial number(s) of the replacement unit(s) 
to be checked by the Department against warranty and other replacement 
claims. If the remediation is approved by the Department, then DOE 
would issue a Notice of Remediation and the violation would not count 
toward a finding of ``routine violator.'' 80 FR 72373, 72379 (Nov. 19, 
2015).
    Commenters agreed with the proposed concept for remediation. (ADP, 
No. 93 at p. 2; Carrier, No. 97 at p. 5; HARDI, No. 94 at p. 2; Lennox, 
No. 95 at p. 3; Rheem, No. 98 at p. 3). Accordingly, DOE adopts the 
proposed concept for remediation in this final rule.

K. Manufacturer Liability

    In accordance with the Department's regulations on prohibited acts, 
manufacturers may be fined for ``knowingly sell[ing] a product to a 
distributor, contractor, or dealer with knowledge that the entity 
routinely violates any regional standard applicable to the product.'' 
(42 U.S.C. 6302, 10 CFR 429.102(a)(10)) The Working Group had 
significant discussions on the scope of the term ``product'' as it 
relates to this prohibited act. During the Working Group meetings, the 
Department explained that it interprets the term ``product'' to include 
all classes of central air conditioners and heat pumps found within 10 
CFR 430.32(c). Ultimately, the Working Group could not come to 
consensus on whether the scope of any prohibition on sales could be 
limited to split-system air conditioners and single-package air 
conditioners instead of the Department's interpretation.\17\ 80 FR 
72373, 72380 (Nov. 19, 2015).
---------------------------------------------------------------------------

    \17\ For more details regarding this discussion, see the public 
meeting transcript for October 24, 2014, No. 88.
---------------------------------------------------------------------------

    EPCA defines a ``central air conditioner'' as a ``product . . . 
which . . . is a heat pump or a cooling only unit'' and refers to all 
central air conditioners as one ``product.'' (42 U.S.C. 6291(21)) 
Therefore, to be consistent with EPCA, DOE proposed in the November 
2015 NOPR to interpret the term ``product'' to be inclusive of all 
central air conditioner and heat pump product classes listed in 10 CFR 
430.32(c), meaning that manufacturers may be subject to civil penalties 
for sales to a routine violator of any unit within the central air 
conditioning product classes. 80 FR 72373, 72380 (Nov. 19, 2015).
    DOE also proposed that, if a manufacturer sells a central air 
conditioner (including heat pumps) to a routine violator after a Notice 
of Finding of Routine Violation has been issued, then the manufacturer 
would be liable for civil penalties. 80 FR 72373, 72380 (Nov. 19, 
2015). The maximum fine a manufacturer is subject to is $200 per unit 
sold to a routine violator. (42 U.S.C. 6303(d), 10 CFR 429.120)
    CA IOUs commented in support of DOE's decision to fine 
manufacturers for violations of the regional standard. CA IOUs 
explained that ultimately manufacturers are responsible for where their 
units are shipped for end use sale and should bear the penalty of being 
out of compliance. (CA IOUs, No. 99 at p. 2)
    In response, DOE clarifies that manufacturers are only subject to 
penalties if they commit a prohibited act. See 10 CFR 429.120. The 
violations DOE established in this rulemaking are a pathway to 
establishing whether or not a manufacturer is knowingly selling to a 
distributor, contractor, or dealer with knowledge that the entity 
routinely violates any regional standard.
    DOE also proposed to adopt the Working Group's recommendation that 
DOE provide manufacturers with 3 business days from the issuance of a 
Notice of Finding of Routine Violation to stop all sales of central air 
conditioners and heat pumps to the routine violator. During this time, 
manufacturers would not be liable for sales to a routine violator. DOE 
noted that, consistent with its penalty guidance,\18\ it would consider 
the manufacturer's efforts to stop any sales in determining whether (or 
to what extent) to assess any civil penalties for sales to a routine 
violator after that three day window. 80 FR 72373, 72380 (Nov. 19, 
2015).
---------------------------------------------------------------------------

    \18\ The DOE civil penalty guidance is available at https://energy.gov/gc/enforcement under ``Enforcement Guidance.''
---------------------------------------------------------------------------

    If the routine violator is appealing the finding, the Working Group 
recommended that manufacturers be allowed to continue to sell central 
air conditioners and heat pumps to the routine violator during the 
pendency of the appeal. In order to provide parties notice that a 
routine violator is appealing the determination, the routine violator 
must file a Notice of Intent to Appeal with the Office of Hearings and 
Appeals within three business days after the issuance of the Notice of 
Finding of Routine Violator. If the finding is ultimately upheld, then 
the manufacturers could face civil penalties for sale of any products 
rated below the regional standards to the routine violator. DOE 
proposed to adopt this recommendation in the November 2015 NOPR. 80 FR 
72373, 72380 (Nov. 19, 2015).
    The Working Group also recommended that DOE provide an incentive 
for manufacturers to report routine violators. The Working Group 
recommended that if a manufacturer has knowledge of a routine violator, 
then the manufacturer can be held liable for all sales made after the 
date such knowledge is obtained by the manufacturer. However, if the 
manufacturer reports such knowledge to DOE within 15 days of receipt of 
the knowledge, then the Department will not hold the manufacturer 
liable for sales to the suspected routine violator made prior to 
notifying DOE. DOE proposed to adopt this recommendation in the 
November 2015 NOPR. 80 FR 72373, 72380 (Nov. 19, 2015).
    In the November 2015 NOPR, DOE proposed to adopt the clarifications 
of manufacturer liability, as recommended by the Working Group, and 
requested comment on this proposal. Interested parties submitted 
comments on DOE's proposed scheme for manufacturer liability. One 
commenter supported DOE's proposed scheme. Some commenters agreed in 
part with DOE's proposed scheme but offered additional, suggested 
clarification. Some commenters disagreed with DOE's use of the term 
``product.''
    Lennox supported DOE's proposed scheme for manufacturer liability. 
(Lennox, No. 95 at p. 3) ADP agreed with DOE's proposal as it pertains 
to independent coil manufacturers, with the clarification that the 
independent coil manufacturer would not be responsible for noncompliant 
installations performed after the combination has been removed from the 
certification database and is no longer being distributed in commerce. 
(ADP, No. 93 at p. 2) Rheem agreed with the proposed scheme. (Rheem, 
No. 98 at p. 3) Carrier also expressed in basic agreement with the 
scheme for

[[Page 45396]]

manufacturer liability. (Carrier, No. 97 at p. 5)
    Accordingly, DOE adopts the proposed framework and procedures for 
making findings of violations.
    Rheem commented that the prohibited act should only apply to 
manufacturers of products subject to regional standards. Rheem stated 
that the November 2015 NOPR language gives the Department the ability 
to fine manufacturers for the sale of product even if there is no 
regional standard applicable to that product and stated that it 
believes this to be outside the authority of this NOPR. (Rheem, No. 98 
at p. 3) Rheem further stated that regional standards products were 
specifically defined in the ground rules of the working group as 
residential split-system and single package air conditioners that are 
subject to the regional standards. (Rheem, No. 98 at p. 3). Carrier 
also did not agree with the NOPR's scope relative to manufacturer's 
liability for covered products. Carrier stated the focus of the Working 
Group was on split systems and single package systems. Carrier also 
stated that manufacturer liability should be limited to these specific 
classes that are not subject to regional standards,\19\ and fully 
supported AHRI's position in their more extensive comments relative to 
this matter. (Carrier, No. 97 at p. 5) AHRI stated that to accept DOE's 
expansive view of the ``products'' affected by the regional standards 
enforcement would result in DOE's ability to ban the sale of products 
that are not subject to a regional standard, and that are fully 
compliant with the applicable national standard. AHRI believed that DOE 
ignored the Working Group's Ground Rules, which referred specifically 
to split systems and single package systems. AHRI commented that, 
instead, when interpreting the prohibited act as it relates to regional 
standards, DOE focused exclusively on the word ``product'' in isolation 
from both the Working Group's approved scope and EPCA's statutory text. 
(AHRI, No. 101 at p. 5) AHRI stated that manufacturers of central air 
conditioning products (other than split system and single package) were 
provided no notice that the Working Group would be developing an 
enforcement standard that would ban the sale of their equipment even 
though it is not subject to regional standards. (AHRI, No. 101 at pp. 
5-6)
---------------------------------------------------------------------------

    \19\ Read in context, DOE believes Carrier intended to say that 
liability should be limited to classes that are subject to regional 
standards.
---------------------------------------------------------------------------

    As DOE explained in the November 2015 NOPR, EPCA defines a 
``central air conditioner'' as a ``product . . . which . . . is a heat 
pump or a cooling only unit'' and refers to all central air 
conditioners as one ``product.'' (42 U.S.C. 6291(21)) EPCA also sets 
forth a prohibited act for a manufacturer to ``knowingly sell a product 
to a distributor, contractor, or dealer with knowledge that the entity 
routinely violates any regional standard applicable to the product.'' 
(42 U.S.C. 6302(a)(6) emphasis added) Accordingly, DOE interprets the 
term ``product'' in 42 U.S.C. 6302 to be inclusive of all central air 
conditioner and heat pump product classes listed in 10 CFR 430.32(c), 
meaning that manufacturers may be subject to civil penalties for sales 
to a routine violator of any unit within the central air conditioning 
product classes. 80 FR 72373 (November 19, 2015).
    In response to Rheem, DOE notes that, with respect to national 
standards, the prohibited act reads ``for any manufacturer or private 
labeler to distribute in commerce any new covered product which is not 
in conformity with an applicable energy conservation standard 
established in or prescribed under this part, except to the extent that 
the new covered product is covered by a regional standard that is more 
stringent than the base national standard.'' (42 U.S.C. 6302(a)(5)) In 
contrast, the prohibited act with respect to regional standards does 
not mention the ``conformity'' of the product being distributed with 
respect to the regional standard. Instead, the relevant analysis is 
whether the sale of the product is to a routine violator. (See 42 
U.S.C. 6302(a)(6).)
    In arriving at its interpretation, DOE notes that the installer, 
distributor, and manufacturer have multiple opportunities to remediate 
violations and to avoid further violations. In the course of the 
negotiation, the regulated parties have ensured that there is a very 
high bar for DOE to make a finding that a manufacturer has knowingly 
sold a product to a distributor, contractor, or dealer with knowledge 
that the entity is a routine violator. Therefore, not only does the 
plain language of EPCA support the interpretation, DOE finds that the 
remedy is proportionate to the violation.
    AHRI, Carrier and Rheem suggested in their comments that DOE's 
interpretation is at odds with the scope of the Working Group. DOE 
disagrees. The parties agreed to negotiate a procedure for enforcement 
of regional standards under 42 U.S.C. 6295(o)(6)(G), which are 
applicable only to split systems and single package CAC systems. DOE is 
not enforcing a regional standard against heat pumps. DOE's 
interpretation is that the ramifications for a distributor, contractor, 
or dealer that is a routine violator of regional standards include a 
limitation on the availability of all classes of central air 
conditioners. Nothing prevents manufacturers from selling to other 
distributors, contractors, or dealers.
    With respect to AHRI's contention that this interpretation results 
in DOE's ability to ban the sale of products that are not subject to a 
regional standard, DOE notes that it is not banning the sale of 
products--it is only asserting authority to assess civil penalties for 
commission of prohibited acts. As mentioned above, manufacturers can 
continue to sell products to entities that have not been found to 
routinely violate the regional standards without penalty. Manufacturers 
can continue to sell central air conditioners to entities that have 
been found to routinely violate the regional standards, albeit subject 
to penalty. Manufacturers may continue to sell other types of covered 
products or equipment (other than central air conditioners) and 
products that are not subject to standards to entities that have been 
found to routinely violate the regional standards without penalty. 
Manufacturers are only subject to penalty for the sale of central air 
conditioners to a distributor, contractor, or dealer that has been 
found to routinely violate the regional standards.
    AHRI also commented that this interpretation would prevent 
manufacturers from selling products that are fully compliant with the 
applicable national standard to an entity that has been found to 
routinely violate the regional standards. Again, manufacturers could do 
so but would be subject to penalty--it is not a ban. More to the point, 
however, DOE agrees that it would be a prohibited act to sell a central 
air conditioner that meets the base national standard to an entity that 
has been found to routinely violate the regional standards. This is 
entirely consonant with the statutory language, which is markedly 
different with respect to regional standards than national standards. 
If an entity has failed to remediate past violations and has continued 
to violate the regional standards, there should be a significant 
consequence. The likely lack of availability of central air 
conditioners should produce a significant incentive for a routine 
violator to remediate past violations--or, hopefully, to avoid being 
identified as a routine violator at all.
    As DOE noted in the NOPR, nothing in this rulemaking impacts DOE's 
ability to determine that a manufacturer has manufactured and 
distributed a noncompliant central air conditioner in

[[Page 45397]]

accordance with the existing procedures at 10 CFR 429.104-114. 
Furthermore, those processes apply to DOE's determination of a 
manufacturer's manufacture and distribution of a central air 
conditioner that fails to meet a regional standard. With respect to 
liability, if DOE determines that a model of condensing unit fails to 
meet the applicable regional standard(s) when tested in a combination 
certified by the same manufacturer (i.e., one entity manufactures both 
the indoor coil and the condensing unit), the condensing unit 
manufacturer will be responsible for this model's noncompliance. If DOE 
determines that a basic model fails to meet regional standards when 
tested in a combination certified by a manufacturer other than the 
outdoor unit manufacturer (e.g., an independent coil manufacturer 
(ICM)), the certifying manufacturer will be responsible for this 
combination's noncompliance. The responsible manufacturer will be 
liable for distribution in commerce of noncompliant units. That 
manufacturer can minimize liability by demonstrating on a unit-by-unit 
basis that the noncompliant combination was installed in a region where 
it would meet the standards. For example, if a 14 SEER split-system air 
conditioner was tested by the Department and determined to be 13.5 
SEER, then the manufacturer may minimize its liability by proving only 
a portion of sales for this combination was installed in the Southeast 
and Southwest. Manufacturers represented during the course of the 
negotiations that the bulk of sales are of minimally compliant units 
and so they expect most of the products that comply with the Southeast 
and Southwest regional standards would be sold in those regions. Given 
this, the Working Group agreed that there should be a presumption that 
the units were sold in a region subject to a regional standard and that 
DOE would presume all units of a model rated as compliant with a 
regional standard but determined to be noncompliant with that standard 
were in fact installed illegally. Manufacturers can rebut this 
presumption by providing evidence that a portion of the units were 
instead installed in a location where they would have met the 
applicable energy conservation standards. 80 FR 72373, 72380 (Nov. 19, 
2015).

L. Impact of Regional Enforcement on National Impacts Analysis

    In the June 2011 DFR, DOE considered the economic impacts of 
amending the standards for central air conditioners and heat pumps. 
Included in the economic analyses was a National Impacts Analysis (NIA) 
which estimated the energy savings and the net present value (NPV) of 
those energy savings that consumers would receive from the new energy 
efficiency standards of central air conditioners (CAC) and heat pumps 
(HP). This NPV was the estimated total value of future operating-cost 
savings during the analysis period (2015-2045), minus the estimated 
increased product costs (including installation), discounted to 2011. 
However, DOE did not account for the financial burden on distributors 
and installers related to record retention requirements necessary to 
demonstrate compliance with the regional standards in the June 2011 
DFR.
    From the enforcement plan proposed in the November 2015 NOPR, DOE 
estimated that manufacturers, distributors, and contractors face some 
financial burden related to the proposed record retention requirements. 
DOE assumed that the proposed records retention requirements would 
cause manufacturers, distributors, and contractors additional labor 
costs from collecting and filing such records. These labor costs would 
be an annual burden to the market participants. At the Working Group 
public meetings, distributors stated that, if they had to update their 
enterprise resource planning (ERP) systems to track the necessary 
information electronically, initial costs could be as high as 
$46,340,000. DOE did not receive any quantitative comments on its 
assumptions for the financial burden from the proposed record retention 
requirements, but upon review, has increased the estimated total annual 
cost to manufacturers. Because DOE is not requiring distributors to 
track the necessary information electronically and therefore 
distributors are not required to update their ERP systems, DOE has not 
included that cost in the updated cost of retaining records on each 
market participant, which is summarized in Table II.2.

Table II.2--Cost of Records Retention Due to Regional Standards Enforcement for Central Air Conditioner and Heat
                                            Pump Market Participants
----------------------------------------------------------------------------------------------------------------
                                                                   Manufacturers   Distributors     Contractors
----------------------------------------------------------------------------------------------------------------
Total Annual Burden Hours.......................................         574,167         287,083         359,949
Estimated Total Annual Cost.....................................     $57,416,667      $2,081,354      $2,609,631
----------------------------------------------------------------------------------------------------------------

    In the November 2015 NOPR, DOE re-evaluated the NIA to include the 
cost of the proposed record retention requirements to manufacturer, 
distributors, and contractors. DOE conservatively estimated the 
consumer benefits by assuming that the annual cost from the proposed 
record retention requirements would be passed on to consumers and thus 
decreasing the NPV. DOE revised this analysis for the final rule using 
the updated costs to manufacturers and excluding initial ERP costs, 
which are not required by the rule. The updated NPV results are 
summarized in Table II.3. The impact of including the proposed record 
retention requirement costs on the NPV is estimated to reduce the 
benefit by $1.86 billion (11-percent) at a 3% discount rate and $0.99 
billion (25-percent) at a 7% discount rate. The costs of the record 
retention requirements are estimated to have no impact on national 
energy savings. DOE's economic justification of the energy conservation 
standards chosen and published in the 2011 DFR would be unaffected by 
the quantification and inclusion of enforcement plan costs. In this 
final rule, DOE reaffirms the 2011 DFR energy conservation standards 
based on this analysis and adopts its evaluation in the November 2015 
NOPR. 80 FR 72373, 72382 (Nov. 19, 2015).

[[Page 45398]]



Table II.3--National Impacts Analysis Results With Costs From Proposed Regional Enforcement Plan for Central Air
                                           Conditioners and Heat Pumps
----------------------------------------------------------------------------------------------------------------
                                                                               National impacts estimated from
                                          National impacts estimated from       2011 DFR for the chosen energy
                                           2011 DFR for the chosen energy        conservation  standards with
                                              conservation  standards               enforcement plan costs
----------------------------------------------------------------------------------------------------------------
Savings (quads).......................  3.20 to 4.22.......................  3.20 to 4.22.
NPV of Consumer Benefits at 3%          14.73 to 17.55.....................  12.88 to 15.69.
 discount rate (2009$ billion).
NPV of Consumer Benefits at 7%          3.93 to 4.21.......................  2.94 to 3.22.
 discount rate (2009$ billion).
----------------------------------------------------------------------------------------------------------------

III. Procedural Issues and Regulatory Review

A. Review Under Executive Order 12866

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

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of a regulatory flexibility analysis (FRA) 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 (August 16, 2002), DOE published 
procedures and policies on February 19, 2003 to ensure that the 
potential impacts of its rules on small entities are properly 
considered during the DOE rulemaking process. 68 FR 7990. DOE has made 
its procedures and policies available on the Office of the General 
Counsel's Web site: https://energy.gov/gc/.
    DOE reviewed the proposed requirements under the provisions of the 
Regulatory Flexibility Act and the procedures and policies published on 
February 19, 2003. As discussed in more detail in this preamble, DOE 
found that the entities impacted by this rule (central air conditioning 
manufacturers, distributors, and contractors) could potentially 
experience a financial burden associated with these new requirements. 
Additionally, the majority of central air conditioning contractors and 
distributors are small business as defined by the Small Business 
Administration (SBA). DOE determined that it could not certify that the 
proposed rule, if promulgated, would not have a significant effect on a 
substantial number of small entities. Therefore, DOE has prepared an 
RFA for this rulemaking. The RFA describes potential impacts on small 
businesses associated with the requirements adopted in this rulemaking.
    DOE has transmitted a copy of this RFA to the Chief Counsel for 
Advocacy of the Small Business Administration for review.
1. Description and Estimated Number of Small Entities Regulated
    The SBA has set a size threshold for manufacturers, distributors, 
and contractors of central air conditioning products that define those 
entities classified as ``small businesses.'' DOE used SBA's size 
standards to determine whether any small businesses would be impacted 
by this rule. 65 FR 30836, 30849 (May 15, 2000), as amended at 65 FR 
53533, 53545 (Sept. 5, 2000) and codified at 13 CFR part 121. The size 
standards are listed by North American Industry Classification System 
(NAICS) code and industry description, and are available at https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf. The 
size standards and NAICS codes relevant to this rulemaking are listed 
in Table III-1.
    To estimate the number of companies that could be small business 
manufacturers, distributors, and contractors of equipment covered by 
this rulemaking, DOE conducted a market survey using available public 
information. DOE's research involved examining industry trade 
association Web sites, public databases, and individual company Web 
sites. DOE also solicited information from industry representatives 
such as AHRI, HARDI, ACCA, and PHCC. DOE screened out companies that do 
not offer products covered by this rulemaking or are not impacted by 
this rulemaking, do not meet the definition of a ``small business,'' or 
are foreign owned and operated. In addition, DOE prepared an IRFA and 
requested comment in the November 2015 NOPR proposing the concepts 
adopted in this final rule. DOE did not receive any substantive 
comments in response to its IRFA.
---------------------------------------------------------------------------

    \20\ The number of impacted contractors and small contractors is 
based on the number of contractors installing in the Southwest and 
Southeast regions.
    \21\ Chapter 18: Regional Standards Impacts on Market 
Participants. Technical Support Document: Energy Efficiency Program 
for Consumer Products: Residential Central Air Conditioners, Heat 
Pumps, and Furnaces. https://www.regulations.gov/#!documentDetail;D=EERE-2011-BT-STD-0011-0012.
    \22\ ``Statistics of U.S. Businesses: 2008: NAICS 423730--HVAC 
equip. merchant wholesalers United States.'' U.S. Census Bureau. 
https://www.census.gov/epcd/susb/2008/us/us423730.htm.

                            Table III.1--Small Business Classification Summary Table
----------------------------------------------------------------------------------------------------------------
                                                                                   Total number    Total number
            Impacted entity               NAICS Code       NAICS Definition of      of impacted      of small
                                                             small business         businesses      businesses
----------------------------------------------------------------------------------------------------------------
Contractors \20\......................          238220  $15 million or less in       \21\ 22,207          21,763
                                                         revenue.
Distributors..........................          423730  100 or less employees...      \22\ 2,317           2,000
Manufacturers.........................          333415  750 or less employees...              29              12
----------------------------------------------------------------------------------------------------------------


[[Page 45399]]

2. Description and Estimate of Regional CAC Requirements
    As discussed in the preamble of this rule, the Working Group 
recommended an enforcement plan for central air conditioners that would 
include public awareness efforts, records retention requirements, and 
voluntary efforts like remediation and labeling. The Working Group also 
made explicit the terms ``violation'' and ``routine violator.'' While 
most of the regulations in this rule will not have an impact on 
manufacturers, distributors, and contractors that adhere to the central 
air conditioner regional standards, the records retention requirements 
may result in some financial burden.
    At the Working Group meetings. HARDI stated that distributors track 
equipment and sales in ERP systems and are expected to incorporate the 
proposed recordkeeping requirements into their ERP systems. HARDI 
expected that 40% of distributors currently retain the proposed records 
and will not need to update their ERP systems. HARDI expected 50% of 
distributors would need to make some changes to their ERP systems and 
10% of distributors would need to make major changes to their ERP 
system. HARDI expected that small distributors are more likely to 
require major changes to their ERP systems because typically small 
distributors have older and more inflexible systems. HARDI estimated 
that changes to ERP systems to accommodate the record retention 
proposals may cost $20,000 to $100,000 depending on the type of change 
needed to the system. According to HARDI, the entire central air 
conditioner distribution industry would incur an initial conversion 
cost of around $46,340,000 to modify the ERP systems. To help alleviate 
some of the financial burden, the Working Group recommended that DOE 
not require distributors to retain records for sales of central air 
conditioner indoor coils or air handlers, which were identified as 
difficult components to track for the distributors. Additionally, the 
Working Group recommended that distributors should not have to start 
retaining records until November 30, 2015, at the earliest, which DOE 
has delayed until August 15, 2016.
    The Working Group worked to negotiate records retention 
requirements that would have limited financial burden on the impacted 
parties--manufacturers, distributors, and contractors. The Working 
Group made a few general provisions regarding the records retention 
requirements to help mitigate some of the financial burden. The Working 
Group tried to reduce the impact of the records retention requirements 
by staggering the length of time for which records must be maintained. 
Manufacturers, the entities understood to have the most resources and 
sophistication, would have to retain records for the longest time 
period (60 months); distributors would have to retain records for less 
time (54 months); and contractors would have to retain records for the 
least amount of time (48 months). Additionally, in the case that 
records are requested, the Working Group recommended that the party 
from whom the records were requested should have an extended period of 
30 days to produce such records. The Working Group also explicitly 
recommended that manufacturers, distributors, and contractors should 
not have to create new forms to retain such records, and that the 
records would not have to be retained electronically.
    DOE expects central air conditioning manufacturers to be the least 
burdened entity of all the affected entities by the record retention 
requirements in this final rule. Manufacturers have the fewest record 
retention requirements. Many of the record retention requirements being 
in this final rule expand on DOE's existing certification requirements 
and thus should only slightly increase the recordkeeping burden. DOE 
does not expect manufacturers to incur any capital expenditures as a 
result of the proposals since the rulemaking does not impose any 
product-specific requirements that would require changes to existing 
plants, facilities, product specifications, or test procedures. Rather, 
this proposed rule imposes record retention requirements, which may 
have a slight impact on labor costs. DOE included certification and 
enforcement requirements associated with the regional standards for 
central air conditioners in the June 27, 2011 \23\ energy conservation 
standards final rule for central air conditioners and heat pumps. To 
avoid the potential costs to distributors, the Working Group 
recommended DOE not require electronic record retention, and DOE is 
neither requiring records to be retained in electronic form nor 
mandating that distributors make changes in their ERP systems to retain 
the information proposed in this rule.
---------------------------------------------------------------------------

    \23\ Chapter 12: Manufacturer Impact Analysis. Technical Support 
Document: Energy Efficiency Program for Consumer Products: 
Residential Central Air Conditioners, Heat Pumps, and Furnaces. 
https://www.regulations.gov/#!documentDetail;D=EERE-2011-BT-STD-0011-
0012.
---------------------------------------------------------------------------

    DOE believes central air conditioning contractors will experience a 
minimal recordkeeping burden. DOE is limiting the records retention 
requirements on contractors to installations in the Southeast and 
Southwest. For all central air conditioner installations in those 
regions, contractors must keep a record of installation location, date 
of installation, and purchaser. Contractors must keep records specific 
to the type of units (outdoor condensing unit, indoor coil or air 
handler, or single-package air conditioner) installed as well. A 
contractor trade association remarked at the public meetings that most 
contractors already retain such records and the record retention 
requirements would have limited financial impacts. (ACCA, Public 
Meeting Transcript, No. 77 at 12-13) DOE estimates that any additional 
expense caused by the records requirements adopted in this rule would 
be related to the time required to file these records. DOE estimates 
that contractors may spend an additional 10 minutes per installation to 
comply with the records retention requirements.
3. Duplication, Overlap, and Conflict With Other Rules and Regulations
    DOE is not aware of any rules or regulations that duplicate, 
overlap, or conflict with the rule being considered.
4. Significant Alternatives to the Rule
    DOE could mitigate the potential impacts on small manufacturers, 
distributors, or contractors by reducing or eliminating the proposed 
types of information to be maintained. However, these requirements were 
negotiated as an acceptable compromise among the participants in the 
Working Group. While there may be some financial burden, the Working 
Group unanimously agreed to the record retention requirements for 
manufacturers, distributors, and contractors. Furthermore, DOE believes 
that the record retention requirements are the least burdensome 
requirements possible to provide DOE sufficient information to 
determine whether manufacturers, distributors and contractors are 
complying with regulatory requirements. Thus, in the November 2015 
NOPR, DOE rejected the alternative of reducing or eliminating the 
record retention requirements and is proposing these record retention 
requirements for the aforementioned parties. DOE adopts this proposal 
in this final rule. 80 FR 72373, 72383-72384 (Nov. 19, 2015).

C. Review Under the Paperwork Reduction Act of 1995

    1. Description of the Requirements: In this final rule, DOE is 
adopting record

[[Page 45400]]

retention requirements for central air conditioner manufacturers, 
distributors, and contractors. DOE requested approval for a new 
information collection associated with these requirements. These 
requirements were developed as part of a negotiated rulemaking effort 
for regional central air conditioner enforcement. These requirements 
are described in detail in section II.H.
    2. Information Collection Request Title: Enforcement of Regional 
Standards.
    3. Type of Request: New.
    4. Purpose: Generally, DOE is requiring that manufacturers retain 
records of the model number and serial number for all split system and 
single-package air conditioners, when these units were manufactured, 
when these units were sold, and to whom the units were sold. 
Manufacturers must retain these records for 60 months. Distributors 
must retain the manufacturer, model number and serial number for all 
their split system outdoor condensing units and single-package units. 
In addition, distributors must keep track of when and from whom each of 
these types of units was purchased, and when and to whom each of these 
units was sold. Distributors must retain these records for 54 months. 
Contractors must retain records of all split system and single-package 
air conditioner installations in the Southeast and Southwest region. 
These records are required to include what was installed (e.g., 
manufacturer and model number), date of sale, and the party to whom the 
unit was sold. Contractors must retain these records for 48 months.
    This final rule primarily requires central air conditioner 
manufacturers, distributors, and contractors to retain records for CAC 
installations. If DOE has a ``reasonable belief'' that an installation 
in violation of regional standards occurred, then it may request 
records specific to an ongoing investigation from the relevant 
manufacturer(s), distributor(s), and/or contractor(s). The Working 
Group recommended that DOE determine if it has a ``reasonable belief'' 
of a CAC violation based on the factors described in section II.I. Once 
DOE establishes reasonable belief and requests records from the 
relevant parties, then the entity from whom DOE requested records has 
30 days to produce those records. The party from whom DOE requested 
records may ask for additional time with a written explanation of the 
circumstances.
    The following are DOE estimates of the total annual recordkeeping 
burden imposed on manufacturers, distributors, and contractors of 
central air conditioners. These estimates take into account the time 
necessary collect, organized and store the record required by this 
rulemaking. See the supporting statement for detailed explanations of 
the estimates.
Manufacturers
    Estimated Number of Impacted Manufacturers: 29.
    Estimated Time per Record: 10 minutes.
    Estimated Total Annual Burden Hours: 574,167 hours.
    Estimated Total Annual Cost to the Manufacturers: $57,416,667.
Distributors
    Estimated Number of Impacted Distributors: 2,317.
    Estimated Time per Record: 5 minutes.
    Estimated Total Annual Burden Hours: 287,083 hours.
    Estimated Total Annual Cost to the Distributors: $2,081,354.
Contractors
    Estimated Number of Impacted Contractors: 22,207.
    Estimated Time per Record: 10 minutes per installation.
    Estimated Total Annual Burden Hours: 359,949 hours.
    Estimated Total Annual Cost to the Contractors: $2,609,631.

    5. Annual Estimated Number of Respondents: 24,553.
    6. Annual Estimated Number of Total Responses: 24,553.
    7. Annual Estimated Number of Burden Hours: 1,221,199.
    8. Annual Estimated Reporting and Recordkeeping Cost Burden: 
$62,107,652.

D. Review Under the National Environmental Policy Act of 1969

    DOE has determined that this rule falls into a class of actions 
that are categorically excluded from review under the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and DOE's 
implementing regulations at 10 CFR part 1021. Specifically, this rule 
would adopt changes to the manner in which regional standards for 
central air conditioners are enforced, which would not affect the 
amount, quality or distribution of energy usage, and, therefore, would 
not result in any environmental impacts. Thus, this rulemaking is 
covered by Categorical Exclusion A5 under 10 CFR part 1021, subpart D, 
which applies to any rulemaking that interprets or amends an existing 
rule without changing the environmental effect of that rule. 
Accordingly, neither an environmental assessment nor an environmental 
impact statement is required.

E. Review Under Executive Order 13132

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

F. Review Under Executive Order 12988

    Regarding the review of existing regulations and the promulgation 
of new regulations, section 3(a) of Executive Order 12988, ``Civil 
Justice Reform,'' 61 FR 4729 (Feb. 7, 1996), imposes on Federal 
agencies the general duty to adhere to the following requirements: (1) 
Eliminate drafting errors and ambiguity; (2) write regulations to 
minimize litigation; (3) provide a clear legal standard for affected 
conduct rather than a general standard; and (4) promote simplification 
and burden reduction. Section 3(b) of Executive Order 12988 
specifically requires that Executive agencies make every reasonable 
effort to ensure that the regulation: (1) Clearly specifies the 
preemptive effect, if any; (2) clearly specifies any effect on existing 
Federal law or regulation; (3) provides a clear

[[Page 45401]]

legal standard for affected conduct while promoting simplification and 
burden reduction; (4) specifies the retroactive effect, if any; (5) 
adequately defines key terms; and (6) addresses other important issues 
affecting clarity and general draftsmanship under any guidelines issued 
by the Attorney General. Section 3(c) of Executive Order 12988 requires 
Executive agencies to review regulations in light of applicable 
standards in sections 3(a) and 3(b) to determine whether they are met 
or it is unreasonable to meet one or more of them. DOE has completed 
the required review and determined that, to the extent permitted by 
law, this final rule meets the relevant standards of Executive Order 
12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

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

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

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

I. Review Under Executive Order 12630

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

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

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

K. Review Under Executive Order 13211

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

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

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

M. Congressional Notification

    As required by 5 U.S.C. 801, DOE will report to Congress on the 
promulgation of this final rule before its effective date. The report 
will state that it has been determined that the rule is not a ``major 
rule'' as defined by 5 U.S.C. 804(2).

IV. Approval of the Office of the Secretary

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

List of Subjects

10 CFR Part 429

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

10 CFR Part 430

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Household appliances, Imports, 
Incorporation by reference,

[[Page 45402]]

Intergovernmental relations, Small businesses.

    Issued in Washington, DC, on June 10, 2016.
Kathleen B. Hogan,
Deputy Assistant Secretary for Energy Efficiency, Energy Efficiency and 
Renewable Energy.

    For the reasons stated in the preamble, DOE amends parts 429 and 
430 of chapter II of title 10, Code of Federal Regulations, as set 
forth below:

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

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

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


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


Sec.  429.102  Prohibited acts subjecting persons to enforcement 
action.

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

0
3. Add an undesignated center heading after Sec.  429.134 in subpart C 
to read as follows:

Regional Standards Enforcement Procedures

0
4. Add Sec.  429.140 to subpart C to read as follows:


Sec.  429.140  Regional standards enforcement procedures.

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

0
5. Add Sec.  429.142 to subpart C to read as follows:


Sec.  429.142  Records retention.

    (a) Record retention. The following entities must maintain the 
specified records--(1) Contractors and dealers. (i) Contractors and 
dealers must retain the following records for at least 48 months from 
the date of installation of a central air conditioner in the states of 
Alabama, Arizona, Arkansas, California, Delaware, Florida, Georgia, 
Hawaii, Kentucky, Louisiana, Maryland, Mississippi, Nevada, New Mexico, 
North Carolina, Oklahoma, South Carolina, Tennessee, Texas, or Virginia 
or in the District of Columbia:
    (A) For split-system central air conditioner outdoor units: The 
manufacturer name, model number, serial number, location of 
installation (including street address, city, state, and zip code), 
date of installation, and party from whom the unit was purchased 
(including person's name, full address, and phone number); and
    (B) For split-system central air conditioner indoor units: The 
manufacturer name, model number, location of installation (including 
street address, city, state, and zip code), date of installation, and 
party from whom the unit was purchased (including person's name, full 
address, and phone number).
    (ii) Contractors and dealers must retain the following, additional 
records for at least 48 months from the date of installation of a 
central air conditioner in the states of Arizona, California, Nevada, 
and New Mexico:
    (A) For single-package central air conditioners: The manufacturer 
name, model number, serial number, location of installation (including 
street address, city, state, and zip code), date of installation, and 
party from whom the unit was purchased (including person's name, full 
address, and phone number).
    (B) [Reserved]
    (2) Distributors. Beginning July 1, 2016, all distributors must 
retain the following records for no less than 54 months from the date 
of sale:
    (i) For split-system central air conditioner outdoor units: The 
outdoor unit manufacturer, outdoor unit model number, outdoor unit 
serial number, date unit was purchased from manufacturer, party from 
whom the unit was purchased (including company or individual's name, 
full address, and phone number), date unit was sold to contractor or 
dealer, party to whom the unit was sold (including company or 
individual's name, full address, and phone number), and, if delivered, 
delivery address.
    (ii) For single-package air conditioners: The manufacturer, model 
number, serial number, date unit was purchased from manufacturer, party 
from whom the unit was purchased (including company or individual's 
name, full address, and phone number), date unit was sold to a 
contractor or dealer, party to whom the unit was sold (including 
company or individual's name, full address, and phone number), and, if 
delivered, delivery address.
    (3) Manufacturers and private labelers. All manufacturers and 
private labelers must retain the following records for no less than 60 
months from the date of sale:
    (i) For split system air conditioner outdoor units: The model 
number, serial number, date of manufacture, date of sale, and party to 
whom the unit was sold (including person's name, full address, and 
phone number);
    (ii) For split system central air conditioner indoor units: The 
model number, date of manufacture, date of sale, and party to whom the 
unit was sold (including person's name, full address, and phone 
number); and
    (iii) For single-package central air conditioners: The model 
number, serial number, date of manufacture, date of sale, and party to 
whom the unit was sold (including person's name, full address, and 
phone number).
    (b) [Reserved]

0
6. Add Sec.  429.144 to subpart C to read as follows:


Sec.  429.144  Records request.

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

[[Page 45403]]

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

0
7. Add Sec.  429.146 to subpart C to read as follows:


Sec.  429.146  Notice of violation.

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

0
8. Add Sec.  429.148 to subpart C to read as follows:


Sec.  429.148  Routine violator.

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

0
9. Add Sec.  429.150 to subpart C to read as follows:


Sec.  429.150  Appealing a finding of routine violation.

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

0
10. Add Sec.  429.152 to subpart C to read as follows:


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

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

0
11. Add Sec.  429.154 to subpart C to read as follows:


Sec.  429.154  Remediation.

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

0
12. Add Sec.  429.156 to subpart C to read as follows:


Sec.  429.156  Manufacturer and private labeler liability.

    (a) In accordance with Sec.  429.102, paragraphs (a)(10) and (c), 
manufacturers and private labelers are prohibited from selling central 
air conditioners and heat pumps to a routine violator.
    (1) To avoid financial penalties, manufacturers and/or private 
labelers must cease sales to a routine violator within 3 business days 
from the date of issuance of a Notice of Finding of Routine Violation.
    (2) If a Routine Violator files a Notice of Intent to Appeal 
pursuant to Sec.  429.150, then a manufacturer and/or private labeler 
may assume the risk of selling central air conditioners to the Routine 
Violator during the pendency of the appeal.
    (3) If the appeal of the Finding of Routine Violator is denied, 
then the manufacturer and/or private labeler may be fined in accordance 
with Sec.  429.120, for sale of any units to a routine violator during 
the pendency of the appeal that do not meet the applicable regional 
standard.

[[Page 45404]]

    (b) If a manufacturer and/or private labeler has knowledge of 
routine violation, then the manufacturer can be held liable for all 
sales that occurred after the date the manufacturer had knowledge of 
the routine violation. However, if the manufacturer and/or private 
labeler reports its suspicion of a routine violation to DOE within 15 
days of receipt of such knowledge, then it will not be liable for 
product sold to the suspected routine violator prior to reporting the 
routine violation to DOE.

0
13. Add Sec.  429.158 to subpart C to read as follows:


Sec.  429.158  Product determined noncompliant with regional standards.

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

PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS

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

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


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


Sec.  430.2  Definitions.

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

0
16. Section 430.32 is amended by revising paragraph (c) to read as 
follows:


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

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

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

    (2) In addition to meeting the applicable requirements in paragraph 
(c)(1) of this section, split-system air conditioners that are 
installed on or after January 1, 2015, in the States of Alabama, 
Arkansas, Delaware, Florida, Georgia, Hawaii, Kentucky, Louisiana, 
Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, 
Tennessee, Texas, or Virginia, or in the District of Columbia, must 
have a Seasonal Energy Efficiency Ratio (SEER) of 14 or higher. Any 
outdoor unit model that has a certified combination with a rating below 
14 SEER cannot be installed in these States. The least efficient 
combination of each basic model must comply with this standard.
    (3)(i) In addition to meeting the applicable requirements in 
paragraph (c)(1) of this section, split-system air conditioners and 
single-package air conditioners that are installed on or after January 
1, 2015, in the States of Arizona, California, Nevada, or New Mexico 
must have a Seasonal Energy Efficiency Ratio (SEER) of 14 or higher and 
have an Energy Efficiency Ratio (EER) (at a standard rating of 
95[emsp14][deg]F dry bulb outdoor temperature) not less than the 
following:

------------------------------------------------------------------------
                                                                Energy
                                                              efficiency
                       Product class                            ratio
                                                                (EER)
------------------------------------------------------------------------
(A) Split-system rated cooling capacity less than 45,000            12.2
 Btu/hr....................................................

[[Page 45405]]

 
(B) Split-system rated cooling capacity equal to or greater         11.7
 than 45,000 Btu/hr........................................
(C) Single-package systems.................................         11.0
------------------------------------------------------------------------

    (ii) Any outdoor unit model that has a certified combination with a 
rating below 14 SEER or the applicable EER cannot be installed in this 
region. The least efficient combination of each basic model must comply 
with this standard.
    (4) Each basic model of single-package central air conditioners and 
central air conditioning heat pumps and each individual combination of 
split-system central air conditioners and central air conditioning heat 
pumps manufactured on or after January 1, 2015, shall have an average 
off mode electrical power consumption not more than the following:

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

* * * * *
[FR Doc. 2016-16441 Filed 7-13-16; 8:45 am]
 BILLING CODE 6450-01-P