Energy Conservation Program: Energy Conservation Standards for Manufactured Housing, 38073-38080 [2018-16650]

Agencies

• DEPARTMENT OF ENERGY

[Federal Register Volume 83, Number 150 (Friday, August 3, 2018)]
[Proposed Rules]
[Pages 38073-38080]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16650]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 83, No. 150 / Friday, August 3, 2018 / 
Proposed Rules

[[Page 38073]]



DEPARTMENT OF ENERGY

10 CFR Part 460

[EERE-2009-BT-BC-0021]
RIN 1904-AC11


Energy Conservation Program: Energy Conservation Standards for 
Manufactured Housing

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

ACTION: Notice of data availability; request for information.

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SUMMARY: The U.S. Department of Energy (DOE) is announcing this notice 
of data availability (``NODA'') and soliciting public input regarding 
data relating to certain aspects in developing energy conservation 
standards for manufactured housing. These data are likely to help serve 
as support for DOE's further refinement of certain aspects of its 
proposed standards for these structures. They may also serve as the 
basis for DOE's restructuring of its approach in laying out the 
framework for standards that would apply to manufactured housing. DOE 
is seeking comment on these data along with several options that it is 
currently considering that could form an alternative basis for 
regulating the energy efficiency of manufactured housing. DOE also 
seeks any additional information that might further inform the agency's 
views regarding the manner in which to regulate these structures.

DATES: Written comments and information are requested and will be 
accepted on or before September 17, 2018.

ADDRESSES: Interested persons are encouraged to submit comments using 
the Federal eRulemaking Portal at https://www.regulations.gov. Follow 
the instructions for submitting comments. Alternatively, interested 
persons may submit comments, identified by docket number EERE-2009-BT-
BC-0021, by any of the following methods:
    1. Federal eRulemaking Portal: https://www.regulations.gov. Follow 
the instructions for submitting comments.
    2. Email: to [email protected]. Include EERE-2009-BT-
BC-0021 in the subject line of the message.
    3. Postal Mail: Appliance and Equipment Standards Program, U.S. 
Department of Energy, Building Technologies Office, Mailstop EE-5B, 
1000 Independence Avenue SW, Washington, DC 20585-0121. If possible, 
please submit all items on a compact disc (CD), in which case it is not 
necessary to include printed copies.
    4. Hand Delivery/Courier: Appliance and Equipment Standards 
Program, U.S. Department of Energy, Building Technologies Office, 950 
L'Enfant Plaza SW, Suite 600, Washington, DC 20024. Telephone: (202) 
287-1445. If possible, please submit all items on a CD, in which case 
it is not necessary to include printed copies.
    No telefacsimilies (faxes) will be accepted. For detailed 
instructions on submitting comments and additional information on the 
rulemaking process, see section III of this document.
    Docket: The docket for this activity, which includes Federal 
Register notices, comments, and other supporting documents/materials, 
is available for review at https://www.regulations.gov. All documents in 
the docket are listed in the https://www.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/docket?D=EERE-2009-BT-BC-0021. The docket web page contains simple 
instructions on how to access all documents, including public comments, 
in the docket. See section III for information on how to submit 
comments through https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: 
    Ms. Sofie Miller, 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) 287-1943. Email: [email protected].
    Mr. Michael Kido, U.S. Department of Energy, Office of the General 
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. 
Telephone: (202) 586-8145. Email: [email protected].
    For further information on how to submit a comment or review other 
public comments and the docket, contact the Appliance and Equipment 
Standards Program staff at (202) 287-1445 or by email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Introduction
    A. Authority and Background
    B. Rulemaking History
II. Request for Information
    A. June 2016 Proposal's Analytical Assumptions
    B. Ownership-Related Costs
    C. Prescriptive and Performance-Based Standards
    D. Alternative Approaches
    E. Compliance Lead-Times
III. Submission of Comments

I. Introduction

    Manufactured housing comprises a housing category that consists of 
structures constructed in a factory, built on a permanent chassis, and 
transportable in one or more sections that are then erected on-site. 
See 24 CFR 3280.2 This type of housing has traditionally been regulated 
by the Department of Housing and Urban Development (``HUD''), which has 
regulated these structures with the purpose of reducing personal 
injuries, deaths, property damage, and insurance costs, and to improve 
the quality, durability, safety, and affordability of these homes. See 
42 U.S.C. 5401(b). Consistent with its statutory authority, HUD has 
created a comprehensive regulatory framework to address a variety of 
aspects related to these structures, including certain elements related 
to their energy efficiency. See, e.g. 24 CFR 3280.507(a) (specifying 
thermal insulation requirements) and 24 CFR 3280.508(d) (detailing 
requirements related to the installation of high-efficiency heating and 
cooling equipment in manufactured homes). HUD's standards are 
preemptive nationwide and differ from standards developed under the 
auspices of (and published by) the International Code Council 
(``ICC''). The ICC standards,

[[Page 38074]]

known as the International Energy Conservation Code (``IECC''), have 
been adopted by many state and local governments in establishing 
minimum design and construction requirements for the energy efficiency 
of residential and commercial buildings. However, due to the preemptive 
nature of HUD's standards, the ICC standards are not currently applied 
to manufactured housing. Consistent with this approach and Federal law, 
DOE is tasked with evaluating whether the adoption of standards based 
on the most recent version of the IECC would satisfy the applicable 
statutory requirements.

A. Authority and Background

    Section 413 of the Energy Independence and Security Act of 2007, 
Public Law 110-140 (December 19, 2007) (``EISA'') requires DOE to 
establish by regulation standards for the energy efficiency of 
manufactured housing. See 42 U.S.C. 17071(a)(1). Prior to establishing 
these regulations, DOE must satisfy two conditions--(1) provide 
manufacturers and other interested parties with notice and an 
opportunity for comment and (2) consult with the Secretary of HUD, who 
may then ``seek further counsel from the Manufactured Housing Consensus 
Committee.'' \1\ 42 U.S.C. 17071(a)(2). These standards must generally 
be based on the most recent version of the IECC, except where DOE finds 
that the IECC is not cost effective, or a more stringent standard would 
be more cost effective. A finding that standards based on the IECC are 
not cost effective or that standards more stringent than the IECC are 
cost effective would be based on the impact of the adoption of the IECC 
standards on the purchase price of manufactured housing and on total 
life-cycle construction and operating costs. See 42 U.S.C. 17071(b)(1). 
In establishing its standards, DOE may consider:
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    \1\ HUD describes its Manufactured Housing Consensus Committee 
as ``a statutory Federal Advisory Committee body charged with 
providing recommendations to the Secretary on the revision and 
interpretation of HUD's manufactured home construction and safety 
standards and related procedural and enforcement regulations. The 
[Committee] is charged with developing proposed model installation 
standards for the manufactured housing industry.'' https://www.hud.gov/program_offices/housing/rmra/manufacturedhousings/cc1 
(last accessed on July 9, 2018).
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     The design and factory construction techniques of 
manufactured housing,
     The climate zones established in the U.S. Department of 
Housing and Urban Development's Manufactured Home Construction and 
Safety Standards (``the HUD Code'') rather than the climate zones 
included as part of the IECC, and
     Alternative practices that result in net estimated energy 
consumption equal to or less than the specific IECC standards. See 42 
U.S.C. 17071(b)(2).
    In addition, EISA provides that a manufacturer who violates the 
regulations established by DOE under 42 U.S.C. 17071(a) ``is liable to 
the United States for a civil penalty in an amount not exceeding 1 
percent of the manufacturer's retail list price of the manufactured 
housing.'' See 42 U.S.C. 17071(c).

B. Rulemaking History

    In the years since EISA became law, DOE has undertaken several 
steps down the complex regulatory path of fulfilling Section 413's 
directive for promulgating new regulations under the processes and 
conditions set forth in the statute. After studying the issue, on 
February 22, 2010, DOE published an advanced notice of proposed 
rulemaking and request for comment identifying 13 distinct issues 
concerning energy efficiency in manufactured housing about which it 
sought public input. See Energy Standards for Manufactured Housing, 75 
FR 7556, 7557 (February 22, 2010). After receiving and considering the 
submitted comments, DOE prepared a draft notice of proposed rulemaking 
(``draft NOPR'') and submitted it to the Office of Information and 
Regulatory Affairs (``OIRA'') in the Office of Management and Budget 
for review, pursuant to Executive Order 12866. Ultimately, the draft 
NOPR did not clear the OIRA review process, and DOE withdrew it on 
March 13, 2014.\2\
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    \2\ The withdrawn date can be found at https://www.reginfo.gov/public/do/eoAdvancedSearch and entering ``1904-AC11'' for the RIN 
and checking ``Concluded'' under ``Review Status''. Additionally, 
while the OIRA review was ongoing, on June 25, 2013, DOE published a 
request for information in which it sought additional public input 
regarding four identified issues related to its rulemaking. See 
Energy Efficiency Standards for Manufactured Housing, 78 FR 37995, 
37996-37997 (June 25, 2013).
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    Following the withdrawal of the draft NOPR from OIRA, DOE notified 
the public of its intent to establish a negotiated rulemaking working 
group for manufactured housing. DOE believed that this approach would 
be ``better suited to resolving complex technical issues'' concerning 
the standards, among other benefits. 79 FR 33874 (June 13, 2014). The 
working group was convened and met for a total of 12 days over a three-
month period. See Energy Conservation Program: Energy Efficiency 
Standards for Manufactured Housing, 80 FR 7550, 7551 (February 11, 
2015).\3\ These meetings led to the adoption of a term sheet detailing 
numerous technical recommendations for energy efficiency standards for 
manufactured housing. See Document ID EERE-2009-BT-BC-0021-0107.\4\ 
Also, in accordance with a recommendation from the working group, DOE 
sought further public comment regarding some technical issues that had 
arisen in the rulemaking process. See 80 FR 7551-7553. In addition to 
these extensive efforts to solicit comments from the public and the 
expertise of the working group, DOE also held meetings with HUD 
throughout the regulatory process and engaged in discussions with the 
Manufactured Housing Consensus Committee. See 81 FR 39762-39763, 39765. 
It has also conferred with various other stakeholders. See id. 81 FR 
39763, 39765.
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    \3\ See also Appliance Standards and Rulemaking Federal Advisory 
Committee (ASRAC)--Manufactured Housing Working Group, 79 FR 48097 
(August 15, 2014); Appliance Standards and Rulemaking Federal 
Advisory Committee (ASRAC)--Manufactured Housing Working Group, 79 
FR 59154 (October 1, 2014).
    \4\ Available at: https://www.regulations.gov/document?D=EERE-2009-BT-BC-0021-0107.
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    On June 17, 2016, DOE published in the Federal Register a NOPR, 
which, in addition to comprehensively describing DOE's analysis, was 
accompanied by a technical support document detailing DOE's analyses 
supporting that proposal. See 81 FR 39756. See also Document ID EERE-
2009-BT-BC-0021-0136.\5\ The agency also prepared a draft environmental 
assessment pursuant to the National Environmental Policy Act, on which 
it sought public input, particularly regarding the impacts of the 
proposed standards on the indoor air quality of manufactured homes. See 
Draft Environmental Assessment for Notice of Proposed Rulemaking, 
``Energy Conservation Standards for Manufactured Housing'' With Request 
for Information on Impacts to Indoor Air Quality, 81 FR 42576 (June 30, 
2016). DOE received nearly 50 comments on the proposed rule during the 
comment period. After considering those comments, DOE prepared a draft 
final rule governing energy efficiency in manufactured housing and 
submitted it to OIRA for review under Executive Order 12866. OIRA 
received the draft final rule on November 1, 2016.\6\ Again,

[[Page 38075]]

however, DOE's draft final rule did not clear the OIRA review process 
and was withdrawn on January 31, 2017.\7\
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    \5\ Available at: https://www.regulations.gov/document?D=EERE-2009-BT-BC-0021-0136.
    \6\ See supra, note 2. On November 9, 2016, DOE also published a 
notice of proposed rulemaking for test procedures, as a companion to 
the draft energy efficiency standards rule for manufactured housing. 
See Energy Conservation Program: Test Procedures for Manufactured 
Housing, 81 FR 78733 (November 9, 2016). Test procedures specify how 
those subject to energy efficiency standards are to confirm products 
are in compliance with such standards.
    \7\ See supra, note 2.
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II. Request for Information

    Since the publication of DOE's proposals, the agency has re-
examined its available data and re-evaluated its approach in developing 
standards for manufactured housing. In particular, HUD made DOE aware 
of the adverse impacts on manufactured housing affordability that would 
likely follow if DOE were to adopt the approach laid out in its June 
2016 proposal. As a result, and in consideration of specific 
suggestions offered by HUD, DOE initiated a review of its data and 
analysis and has begun reconsidering the framework to use in regulating 
these structures. In particular, DOE had previously considered a 
regulatory regime similar to the one it administers with regard to 
appliance and commercial equipment standards, i.e., setting a uniform, 
minimum mandatory level of efficiency that must be achieved by all 
subject products. However, DOE's authority to establish energy 
efficiency standards for appliance standards is separate from its 
authority to establish energy conservation standards for manufactured 
homes. Thus, DOE is examining if it must set a single, mandatory level 
of efficiency. As a result of this re-examination, DOE developed a 
number of alternatives on which it seeks further input from the public. 
These alternatives would facilitate a variety of different levels of 
efficiency. In developing these alternatives, DOE gave careful 
consideration to a variety of factors, including the first-time costs 
related to the purchase of these homes. In the following sections, DOE 
presents a series of issues on which it seeks input to aid in the 
development of the technical and economic analyses regarding each of 
these potential alternatives to the proposed regulatory framework 
contained in DOE's June 2016 standards proposal.
    Additionally, DOE welcomes comments on other issues relevant to the 
conduct of this process that may not specifically be identified in this 
document. In particular, DOE notes that under Executive Order 13771, 
``Reducing Regulation and Controlling Regulatory Costs,'' Executive 
Branch agencies such as DOE are directed to manage the costs associated 
with the imposition of expenditures required to comply with Federal 
regulations. See 82 FR 9339 (February 3, 2017). Consistent with that 
Executive Order, DOE encourages the public to provide input on measures 
DOE could take to lower the cost of its regulations applicable to 
manufactured housing consistent with the requirements of EISA.

A. June 2016 Proposal's Analytical Assumptions

    As with any of its appliance and equipment standards rulemaking 
proposals, DOE made a number of analytical assumptions to determine 
what minimum level of efficiency it should use in establishing 
mandatory energy conservation standards for manufactured housing. These 
assumptions spanned a variety of factors, including affordability, 
which climate zones to use, which solar heat gain coefficient 
(``SHGC'') to use in a given climate zone, the price elasticity value 
to use in DOE's calculation of potential impacts, whether to include 
certification, compliance, and enforcement costs as part of DOE's 
analysis, and whether the tightening of a manufactured home's building 
envelope--which is what the proposed standards were designed to help 
accomplish--would impact indoor air quality by increasing the 
likelihood of trapping pollutants inside the building.
    Issue 1: What analytical aspects related to DOE's June 2016 
proposal--aside from those specifically noted later in this document--
should DOE consider re-examining as part of its ongoing consideration 
of a final rule for manufactured housing? (Within this context, this 
request also encompasses whether DOE's analysis sufficiently addresses 
the cost-effectiveness of standards based on the current IECC code when 
considering the code's impact on both the purchase price of 
manufactured housing and on total life-cycle construction and operating 
costs. See 42 U.S.C. 1771(b)(1). Why should DOE reconsider these 
aspects and what specific changes, if any, should DOE make to them? As 
part of this request, DOE is interested in any specific supplemental 
supporting data regarding any changes that commenters may suggest.
    Additionally, in further researching the manufactured housing 
market, DOE has examined additional information from a variety of 
sources. Of particular note is information from the Consumer Financial 
Protection Bureau (``CFPB''), which released a report in 2014 that 
focused on this particular market.\8\ That report, ``Manufactured-
Housing Consumer Finance in the United States,'' [hereinafter, ``CFPB 
Report''] detailed the characteristics of manufactured housing 
consumers and the market for manufactured home financing. Key findings 
from the report include:
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    \8\ See https://files.consumerfinance.gov/f/201409_cfpb_report_manufactured-housing.pdf.
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     Manufactured home ownership varies widely by region, with 
the majority of manufactured homes located outside of metropolitan 
areas;
     Manufactured home owners tend to have lower incomes and 
less net worth than their counterparts who own site-built homes;
     There is an extremely constrained secondary market for 
manufactured homes, following the collapse of the manufactured home 
market in the late 1990s through the early 2000s;
     Most manufactured-housing purchasers who finance their 
homes obtained a loan of between $10,000 and $80,000, with a median 
loan value of $55,000.
    These data suggest that manufactured housing purchasers face 
substantial constraints compared to traditional home purchasers. In 
turn, these constraints may make purchasers of manufactured homes more 
price-sensitive to potential changes that would impact the costs to 
construct (and purchase) a manufactured home.\9\
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    \9\ The CFPB Report also suggests that manufactured home 
consumers are particularly cost-driven: ``There is evidence that 
some households who move into manufactured housing are less 
satisfied with their homes than those who choose to move into site-
built housing. These results suggest that for at least some 
households, the choice to live in a manufactured home may be more 
cost-driven than quality-driven.'' CFPB, Manufactured-housing 
consumer finance in the United States, at 22 (September 2014) 
[hereinafter, ``CFPB Report''] (available at https://files.consumerfinance.gov/f/201409_cfpb_report_manufactured-housing.pdf).
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    The CFPB data also point to certain key demographic 
characteristics. On a regional level, the CFPB noted that manufactured 
housing is more common in certain regions than others--with this type 
of housing being more common in the South and the West than in certain 
Northeastern states. Manufactured homes are also much more prevalent in 
rural areas, with about \2/3\ of all occupied manufactured homes being 
located outside of metropolitan statistical areas; in these areas, 14% 
of homes are manufactured homes. Manufactured housing as a proportion 
of occupied housing units is lowest in Maryland, New Jersey, 
Connecticut, Hawaii and Massachusetts (1%) and highest in South 
Carolina, New Mexico, and Mississippi (17%, 16%, and 15%, 
respectively). See CFPB Report, at 10-12.

[[Page 38076]]

    Further, manufactured home owners are more likely to be older and 
likely to have lower incomes or net worth. The median annual income of 
families living in manufactured homes is also slightly over $26,000, 
and the median net worth of these families is $26,000 (a quarter of 
that of families in site-built homes). See id. at 16-18.
    The CFPB also made a number of other observations with respect to 
the available financial data it examined.
    First, it indicated that the manufactured home market collapsed in 
the late 1990s through the early 2000s as consumers experienced loan 
repayment difficulties driven by low-quality manufactured home lending. 
Following the collapse, at least eight large lenders exited the 
manufactured home lending market, some of which drove losses in the 
secondary market. See generally id. at 26-29. At the time of CFPB's 
report, sales and production remained depressed with an extremely 
constrained resale market for manufactured homes. See id. at 6, 26-28, 
37.
    Second, most manufactured-housing purchasers finance between 
$10,000 and $80,000, with a loan median of $55,000. See id. at 30. 
Owners of manufactured homes finance different amounts depending on 
whether they finance the costs of only the manufactured home or the 
costs of both the home and the land on which it is sited. See id. at 
21.
    Manufactured home owners who finance their homes tend to pay higher 
interest rates than their site-built home counterparts. A key reason 
for this difference is that the vast majority of manufactured housing 
stock is titled as chattel, and as a result is eligible only for 
chattel financing. Chattel financing is typically offered to purchasers 
at a significantly higher interest rate than the rates offered to their 
site-built home counterparts. While some manufactured home owners who 
also own the land on which the manufactured home is sited may be 
eligible for mortgage financing, there is a tradeoff between lower 
origination costs with significantly higher interest rates (chattel 
loans) and higher origination costs with significantly lower interest 
rates and greater consumer protections (mortgage). See id. at 23-25.
    Issue 2: a. DOE seeks comment regarding the CFPB's findings. Are 
these findings reasonably accurate or are there other factors that DOE 
should consider when determining the economic impact of energy 
conservation standards on the ability of purchasers to buy manufactured 
homes? Assuming that these findings are reasonably accurate, what role, 
if any, should they play in shaping the standards that DOE ultimately 
adopts for manufactured housing and why? If the CFPB's findings are not 
accurate, what specific shortcomings do they have and what assumptions/
changes should DOE apply when determining the stringency and types of 
standards the agency should establish for manufactured housing?
    b. DOE's own data from its Residential Energy Consumption Survey of 
2015 suggests that manufactured housing households pay about 60% more 
for their energy per square foot than the entire housing stock. Is this 
estimate accurate--and if so, why? What specific factors contribute to 
this condition? If this estimate is not accurate, why--what specific 
factors are being overlooked in the survey that contribute to this 
inaccuracy?

B. Ownership-Related Costs

    DOE's analysis for its June 2016 proposal considered the economic 
impacts of the proposed standards on individual manufactured home 
purchasers. Similar to its approach toward appliance standards, these 
analyses focused on the prospect of applying a single, uniform minimum 
standard that all manufactured homes of a given size (single- or multi-
section) and in a given climate zone (i.e., region of the country would 
need to meet. Necessarily, this approach examined the overall economic 
impacts in a broad fashion by applying a uniform standard to all 
manufactured housing units within a given climate zone and home size 
category. However, the approaches that the Department has taken with 
respect to appliance standards may not be suitable in the case of 
manufactured housing, which fills a distinct need for housing for a 
particular subset of consumers. In particular, under the statutory 
provision requiring the Department to develop standards for 
manufactured housing, the standards must generally be based on the most 
recent version of the IECC, except where DOE finds that the IECC is not 
cost effective, or a more stringent standard would be more cost 
effective. A finding that standards based on the IECC are not cost 
effective or that standards more stringent than the IECC are cost 
effective would be based on the impact of the adoption of the IECC 
standards on the purchase price of manufactured housing and on total 
life-cycle construction and operating costs. As a result, the approach 
presented by the working group (and adopted by DOE in its proposal) may 
have inadvertently overlooked certain factors and yielded an incomplete 
picture regarding the potential impacts flowing from its proposal and 
whether the standards must be based on the most recent version of the 
IECC. Consequently, DOE is seeking comment on a variety of issues 
related to these factors to help further inform its views regarding the 
economic impacts related to the establishment of energy efficiency 
standards for manufactured housing, and how those impacts effect use of 
the most recent version of the IECC.
    Issue 3: Manufactured housing owners tend to be lower-income than 
other homeowners,\10\ and are also likely to finance their manufactured 
housing purchase using high-rate chattel loans. As a result, the 
Department is particularly interested in comments and data regarding 
the affordability of manufactured housing and how the options outlined 
in this NODA would affect upfront manufactured housing affordability. 
DOE also seeks comment on whether and how the different approaches 
outlined in this NODA would differently affect the affordability of 
manufactured homes.
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    \10\ ``Certain consumer segments are disproportionately 
represented among owners and renters of manufactured homes, in 
particular older consumers, consumers that have completed only high 
school, households with relatively low income, and households with 
relatively low net worth.'' CFPB Report, at 13.
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    Additionally, as part of this inquiry, DOE seeks public input on 
each of the following items:
    a. Affordability is a combination of upfront cost, which may price 
out some consumers at time of purchase, and operating costs, which will 
affect all manufactured housing owners over a longer time horizon. The 
Department seeks comments that provide information on how to weigh 
these components in defining ``affordability,'' with particular focus 
on affordability for low-income consumers.
    b. The Department also seeks comment on what a reasonable payback 
period might be for efficiency in manufactured homes, and any relevant 
tradeoffs between upfront cost and payback period that the Department 
should consider to avoid creating a situation where the upfront cost 
increases may price consumers out of the market for new homes, even if 
those costs might be recouped over time. While the cost of site-built 
home efficiency upgrades may be recouped when an owner sells the home, 
the same may not be true of manufactured homes because (1) manufactured 
housing owners have relatively short tenancies \11\

[[Page 38077]]

and (2) the resale market for manufactured housing is highly 
constrained,\12\ such that the original owner will likely not recoup 
upfront efficiency investments if the payback period exceeds tenancy. 
DOE seeks additional information from commenters on the manufactured 
housing resale market that would inform the Department's consideration 
of what a reasonable payback period would be. If available, the 
Department also seeks information on the distribution of manufactured 
housing tenancy rates.
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    \11\ See Consumer Financial Protection Bureau, Manufactured-
housing consumer finance in the United States, September 2014 at 42-
43: https://files.consumerfinance.gov/f/201409_cfpb_report_manufactured-housing.pdf.
    \12\ Kevin Jewell. ``Manufactured Housing Appreciation: 
Stereotypes and Data.'' Consumers Union, Southwest Regional Office. 
May 2003. Page 6. https://consumersunion.org/pdf/manufacturedhousing/Appreciation.pdf.
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    c. The Department is also interested in comments that inform 
whether special consideration should be given to affordability, 
particularly given that low-income and older consumers are 
disproportionately represented among manufactured housing owners.\13\ 
Executive Order 13563, which reinforces the principles of Executive 
Order 12866, indicates that agencies ``may consider (and discuss 
qualitatively) values that are difficult or impossible to quantify, 
including equity, human dignity, fairness, and distributive impacts'' 
\14\ where appropriate and permitted by law.
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    \13\ See footnote 10, supra.
    \14\ Executive Order 13563, Section 1(c), 76 FR 3821 (January 
21, 2011).
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    d. The Department seeks data and information regarding basing 
standards on the most recent version of the IECC, in particular, 
whether standards based on the most recent version of the IECC would 
not be cost effective or that standards more stringent than the most 
recent version of the IECC would be cost effective, in either case 
based on the impact of the adoption of the IECC standards on the 
purchase price of manufactured housing and on total life-cycle 
construction and operating costs.
    Issue 4: DOE is aware that efficiency standards for manufactured 
housing may affect consumers in different regions differently, and 
seeks information on (1) the disparate regional effects of a standard, 
and (2) whether these effects are mitigated by use of tiered standards 
or a tiered labeling program.
    Issue 5: DOE seeks to better understand the market for manufactured 
homes. Available sources provide information regarding the average or 
median manufactured housing purchase price \15\ or the proportion of 
manufactured housing owners who borrowed different amounts to finance 
their manufactured housing purchase,\16\ but do not directly show the 
distribution of manufactured housing prices across the market and the 
percentage of consumers who purchase at each price category. DOE is 
interested in such information, particularly to the extent that such 
information could inform the consideration of threshold standards.
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    \15\ See U.S. Census Bureau, Cost and Size Comparison: New 
Manufactured Homes and Single-Family Site Built Homes (2007-2014), 
for example.
    \16\ See Consumer Financial Protection Bureau, Manufactured-
housing consumer finance in the United States, September 2014, for 
example.
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C. Prescriptive and Performance-Based Standards

    In DOE's June 2016 standards proposal, the agency laid out two 
possible approaches it was considering at the time. The first option 
involved potential prescriptive requirements that would apply to a 
variety of components used in constructing the thermal envelope of a 
given manufactured home. These requirements laid out prescribed 
specifications related to thermal resistance (R-value) for wall, 
ceiling, and floor insulation, thermal transmittance specifications (U-
factor) for windows, skylights, and doors, and glass glazing (SHGC) 
requirements. See 81 FR 39757. These prescriptive levels would vary 
based on the climate zone in which the home is located. 81 FR 39766. 
The second option presented a potential performance-based approach that 
would establish a maximum overall thermal transmittance for requirement 
for the building structure's thermal envelope (Uo) and set additional 
U-factor and SHGC requirements. See id. Like with the prescriptive 
approach, these requirements would also vary by climate zone.
    In addition to these approaches, DOE also considered including 
provisions for determining U-factor, R-value, SHGC, and Uo. It also 
considered establishing prescriptive requirements for installation of 
insulation and sealing the building's thermal envelope and duct system 
to limit air leakage, which would in turn reduce potential thermal 
losses. See id.
    Issue 6: DOE is interested in feedback regarding whether any 
aspects of its 2016 proposal need further consideration and if so, why. 
For comments pointing to weaknesses or strengths with respect to DOE's 
proposal, the agency seeks any supporting data in addition to that 
which DOE has already made public as part of the manufactured housing 
standards rulemaking docket.

D. Alternative Approaches

    DOE is also considering an altogether different approach consisting 
of incremental packages that maximize energy savings of a manufactured 
home within certain incremental cost parameters. These options respond 
to concerns from stakeholders, including HUD, regarding the potentially 
prohibitive upfront costs of its 2016 proposed standards. As a result, 
this analysis illustrates packages that maximize energy savings within 
incremental cost thresholds of $500, $1,000, or $1,500. DOE is seeking 
comment on whether any of the cost threshold packages presented here 
(i.e. either $500, $1,000, or $1,500), when applied as a national 
standard, would address the concerns of stakeholders regarding the high 
upfront cost of its 2016 proposed standards. Further, DOE developed two 
sets of cost threshold packages: One set includes envelope and duct 
sealing as options to include in the cost threshold packages, and one 
set does not include envelope and duct sealing regardless of cost 
effectiveness.
    Unlike the tiered standards discussed in this NODA, these cost 
threshold packages illustrate the costs and benefits of a potential 
national standard that would apply across the fleet of manufactured 
homes. However, given the Department's interest in tailoring its 
standards to consumers with differing preferences and needs, DOE is 
also soliciting comments on whether it can employ a tiered approach to 
these standards, wherein the $500, $1,000, and $1,500 cost packages 
could be applied to, or offered as an option for, various segments of 
the market for manufactured homes.
    The Department also recognizes the value of providing accurate 
information on potential energy savings. In addition to being low 
incremental or additional cost to manufacturers, better informed 
consumers are empowered to make choices that meet their individual 
needs for energy savings within their own personal economic 
circumstances. This approach builds on the guidance in Executive Order 
12866, which instructs each agency to identify opportunities to provide 
information the public can use to make informed choices.\17\ To this 
end, the Department is considering a tiered labeling approach that 
would classify various levels of energy savings based on stringency and 
categorize these options within certain tiers, such as a Brass, Bronze, 
Silver, Gold, and Platinum tier, wherein the Platinum tier

[[Page 38078]]

would represent the most efficient products on the market and Brass 
would represent the least efficient.
---------------------------------------------------------------------------

    \17\ Executive Order 12866, ``Regulatory Planning and Review,'' 
58 FR 51735 (October 4, 1993) (Section 1(b)(3)).
---------------------------------------------------------------------------

    Consequently, DOE is evaluating the following options:
    Package 1--This package would maximize the energy savings of a 
manufactured home at an upfront cost of either $500, $1,000, or $1,500. 
The accompanying analysis illustrates the associated lifecycle costs 
and payback period for each potential standard level across climate 
zones.\18\ This package would exclude envelope and duct sealing to 
maximize energy savings under any of the cost threshold options 
examined.
---------------------------------------------------------------------------

    \18\ See https://www.regulations.gov/document?D=EERE-2009-BT-BC-0021-0200.
---------------------------------------------------------------------------

    Package 2--Like Package 1, this package would maximize the energy 
savings of a manufactured home at an upfront cost of either $500, 
$1,000, or $1,500. The accompanying analysis illustrates the associated 
lifecycle costs and payback period for each potential standard level 
across climate zones.\19\ Unlike Package 1, this package would allow 
envelope and duct sealing to maximize energy savings under all of the 
cost threshold options examined.
---------------------------------------------------------------------------

    \19\ See footnote 18, supra.
---------------------------------------------------------------------------

    Package 3--Rather than setting a national standard within a 
specified cost threshold, this option would create a framework where 
several different tiers of energy efficiency would be offered to 
consumers based on their particular needs and pricing sensitivities. 
These tiers would be based on cost increments, which, for purposes of 
DOE's current analysis, would be based on $500 increments with a cap at 
$1,500.
    Package 4--This package would require each manufactured home to 
include a label prior to sale indicating expected energy use and 
savings. The labeling system would be tiered in the sense that 
different levels of energy savings would be labeled differently, such 
as by being categorized with a Brass, Bronze, Silver, Gold, or Platinum 
rating. These tiers would be based on potential energy savings. The 
Department is considering this package in conjunction with any of the 
other alternatives discussed above or with potential alternatives that 
may be suggested in response to this request for comment.
    Package 5--Finally, to ensure that manufactured housing continues 
to be a viable source for affordable housing, this package would 
exclude all manufactured homes with a cost level and retail purchase 
price (not including land costs) equal to or less than the loan limit 
established in accordance with Section 2(b)(1)(C) of the National 
Housing Act, 12 U.S.C. 1703(b)(1)(C), plus 5% (Title I Loan Limits). 
(Currently = $73,162 or 1.05 x $69,678.) Similarly, under this package, 
DOE would apply a higher price threshold ($294,515) under the same 
conditions--i.e. cost level and purchase price (not including land 
costs)--that would encourage (but not require) manufactured housing at 
a certain price to meet DOE's standards. For all other manufactured 
housing that exceeds this level, DOE could apply one of the package 
approaches described under Packages 1 through 4.
    In evaluating these various options, DOE is considering a scenario 
where manufacturers continue to offer more economical versions of 
manufactured homes for certain segments of the market that are 
currently available but that may not necessarily fall into one of the 
cost incremental categories described above. A regime in which 
manufacturers continue to offer those manufactured homes that are 
currently available on the market as well as variants at greater levels 
of efficiency would allow particularly price sensitive individuals who 
may not have the financial means to pursue other housing options to 
maintain their ability to purchase a manufactured home of their choice 
while also allowing those with greater means who desire increased 
energy efficiency to purchase a manufactured home that suits their 
desires. Under any of these scenarios, DOE would consider developing a 
labeling framework to inform consumers regarding these options. DOE 
also seeks comment on implementing a tiered labeling system in 
conjunction with the other options discussed in this document to 
address any potential information asymmetry and preserve consumer 
choice.
    Issue 7: DOE seeks comment on whether it should consider and 
implement a cost-based tier structure with respect to regulating the 
energy efficiency of manufactured housing. DOE notes that a tiered 
approach could better address some of the concerns that may exist with 
respect to the first-time costs that purchasers may encounter with more 
efficient--but more expensive--manufactured homes. If so, why--and if 
not, why not?
    Issue 8: Consumers may fail to optimize the efficiency of their 
homes due to a lack of available information on the benefits of energy 
savings. Recognizing this, the NODA presents an option that would 
provide tiered labeling for consumers to compare and contrast 
information on upfront costs and long-term energy savings across 
manufactured housing structures. The Department is seeking comments on 
the benefit of providing consumers with such information, which 
preserves consumer choice, and the best way to provide consumers with 
information that they can easily understand and put to use.
    a. What information is available to consumers when they make 
manufactured housing purchasing decisions, and what additional 
information would be useful? Further, how can the Department add value 
in the provision and display of information?
    b. DOE seeks comments regarding whether access to information is a 
barrier to manufactured housing consumers, and if so, what is the 
magnitude of this barrier (i.e. to what extent does the lack of 
information prevent consumers from purchasing efficient homes)?
    Issue 9: DOE is also considering a number of approaches that would 
increase consumer access to information and increase the efficiency of 
manufactured homes.
    a. In weighing these approaches, the Department seeks comment on 
the advantages and disadvantages of using a tiered approach for 
efficiency standards versus using a single national standard that would 
apply to all manufactured homes within a single climate zone. DOE also 
seeks information regarding what a labeling framework would need to 
consider if a tiered approach were used and what the costs of such an 
approach would likely be. The Department further seeks comment on the 
advantages and disadvantages of using a tiered approach to labeling 
requirements versus a single national labeling standard for 
manufactured homes.
    b. Within the tiered options discussed above, the Department seeks 
public input on what the appropriate criteria are to use for 
establishing thresholds (e.g., price, cost, region, etc.) and how best 
to define these criteria (e.g., manufacturer added cost, retail price, 
etc.). DOE also seeks public input on other factors that it should 
consider when establishing tiered standards.
    With respect to tightening a manufactured home's building envelope, 
the agency notes that this technique appears to be a cost-effective way 
to increase energy efficiency. However, many previous commenters, 
including HUD's Manufactured Housing Consensus Committee, raised the 
possibility that sealing requirements may pose challenges for indoor 
air

[[Page 38079]]

quality.\20\ Degraded indoor air quality could introduce additional 
costs in terms of health and safety or operation and maintenance that 
may impede the cost efficacy of these approaches.
---------------------------------------------------------------------------

    \20\ https://www.regulations.gov/document?D=EERE-2009-BT-BC-0021-0162.
---------------------------------------------------------------------------

    Previous commenters have submitted existing literature on 
manufactured housing indoor air quality, including a report from the 
Centers for Disease Control and Prevention (``CDC''), an agency within 
the Department of Health and Human Services (``HHS''). The CDC report, 
which was prepared in conjunction with HUD, found generally that indoor 
air can contain a number of contaminants that contribute to health 
complaints, and that indoor air quality is of particular concern in 
manufactured housing due to its confined spaces and, in some cases, 
lower ventilation and air exchange rates.\21\ In addition, the CDC 
report found that ``manufactured structures with relatively less air 
circulation may develop higher levels of indoor contaminants.'' 
However, comprehensive data on air quality in manufactured homes was 
unavailable at the time of CDC's report.\22\
---------------------------------------------------------------------------

    \21\ CDC and HHS. Safety and Health in Manufactured Structures 
(2011) [hereinafter, ``Safety and Health''].
    \22\ Safety and Health, at p. 25.
---------------------------------------------------------------------------

    Issue 10: Is new information available on the relationship between 
tightening the home envelope and indoor air quality? If so, what is the 
nature of that information, why should DOE consider it, and how should 
the agency integrate it into its analyses?
    Issue 11: DOE is particularly interested in baseline measures of 
air flow in recently-built manufactured housing against which to 
measure any potential reductions in air changes per hour (``ACH''). DOE 
also seeks information related to what the appropriate ACH threshold is 
for maintaining adequate indoor air quality.\23\
---------------------------------------------------------------------------

    \23\ As of 2003, ASHRAE and HUD had established a minimum whole-
house ventilation requirement of 0.35 ACH for achieving appropriate 
indoor air quality. See https://www.huduser.gov/publications/pdf/moisturereport.pdf.
---------------------------------------------------------------------------

    Issue 12: What potential health and safety costs of incremental 
reductions in ACH and/or indoor air quality should the Department 
consider when evaluating this approach and why? What steps should DOE 
consider taking to reduce these costs while preserving indoor air 
quality for manufactured home residents and what disadvantages, if any, 
are there to each of these specific steps?
    Issue 13: Regarding the overall structure of DOE's approach to its 
proposed climate zones, should these zones be reconsidered--and if so, 
why? Should DOE use HUD's existing climate zones? If DOE were to 
develop its own climate zones, what factors should it consider in doing 
so? What factors would support the continued use of the proposed 
climate zones and how do those factors weigh against using HUD's 
existing climate zones or in favor of adjusting them further?

E. Compliance Lead-Times

    The June 2016 proposal used a compliance date lead-time of one year 
from the publication of a final rule. DOE proposed a lead-time of one 
year under the belief that this amount of time would be sufficient to 
allow manufacturers to transition their designs, materials, and factory 
operations and processes to comply with the finalized version of the 
energy conservation standards that DOE considered adopting. In light of 
the amount of time that has elapsed since the date of DOE's June 2016 
proposal, and the possibility that the agency may explore an 
alternative approach for regulating the energy efficiency of 
manufactured homes through the use of a tiered system along with 
variants of DOE's earlier proposal that would rely on HUD's three 
climate zones, DOE is interested in soliciting public comment on 
whether its proposed lead-time remains appropriate.
    Issue 14: Should DOE continue to apply a one year lead-time to the 
energy conservation standards for manufactured housing? Does the 
approach--i.e. single uniform national standard versus a multi-tiered 
national standard--impact the amount of lead-time manufacturers would 
require to meet the applicable standards? If so, why--and if not, why 
not? If DOE were to adopt an approach that presented different 
compliance options in the form of cost-based tiers, would manufacturers 
require more, less, or the same amount of lead-time as the agency's 
proposal (i.e. one year)? Why or why not?
    Issue 15: With respect to the manufactured housing standards that 
DOE promulgates, DOE seeks comment on what enforcement mechanism would 
be the most appropriate to apply and why. In considering enforcement 
mechanisms, DOE is interested in information concerning the burden and 
cost impacts for suggested approach(es), as well as the compliance 
lead-time needed by the industry. Further, DOE seeks information as to 
whether enforcement cost of any suggested approach may extend beyond 
the manufacturing industry to the sales and distribution channels that 
interface with prospective purchasers.

III. Submission of Comments

    DOE invites all interested parties to submit in writing by the date 
listed in DATES, comments and information on matters addressed in this 
notice and on other matters relevant to DOE's consideration of energy 
conservation standards for manufactured housing. These comments and 
information will aid in the development of energy conservation 
standards for these structures.
    Submitting comments via https://www.regulations.gov. The https://www.regulations.gov web page will require you to provide your name and 
contact information. Your contact information will be viewable to DOE 
Building Technologies staff only. Your contact information will not be 
publicly viewable except for your first and last names, organization 
name (if any), and submitter representative name (if any). If your 
comment is not processed properly because of technical difficulties, 
DOE will use this information to contact you. If DOE cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, DOE may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment or in any documents attached to your comment. 
Any information that you do not want to be publicly viewable should not 
be included in your comment, nor in any document attached to your 
comment. Persons viewing comments will see only first and last names, 
organization names, correspondence containing comments, and any 
documents submitted with the comments.
    Do not submit to https://www.regulations.gov information for which 
disclosure is restricted by statute, such as trade secrets and 
commercial or financial information (hereinafter referred to as 
Confidential Business Information (``CBI'')). Comments submitted 
through https://www.regulations.gov cannot be claimed as CBI. Comments 
received through the website will waive any CBI claims for the 
information submitted. For information on submitting CBI, see the 
Confidential Business Information section.
    DOE processes submissions made through https://www.regulations.gov 
before posting. Normally, comments will be posted within a few days of 
being submitted. However, if large volumes of comments are being 
processed simultaneously, your

[[Page 38080]]

comment may not be viewable for up to several weeks. Please keep the 
comment tracking number that https://www.regulations.gov provides after 
you have successfully uploaded your comment.
    Submitting comments via email, hand delivery, or mail. Comments and 
documents submitted via email, hand delivery, or mail also will be 
posted to https://www.regulations.gov. If you do not want your personal 
contact information to be publicly viewable, do not include it in your 
comment or any accompanying documents. Instead, provide your contact 
information on a cover letter. Include your first and last names, email 
address, telephone number, and optional mailing address. The cover 
letter will not be publicly viewable as long as it does not include any 
comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. If you submit via mail or hand 
delivery, please provide all items on a CD, if feasible. It is not 
necessary to submit printed copies. No facsimiles (faxes) will be 
accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, written in English and free of any defects or viruses. 
Documents should not contain special characters or any form of 
encryption and, if possible, they should carry the electronic signature 
of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. According to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email, postal mail, or hand delivery two well-marked copies: One copy 
of the document marked confidential including all the information 
believed to be confidential, and one copy of the document marked ``non-
confidential'' with the information believed to be confidential 
deleted. Submit these documents via email or on a CD, if feasible. DOE 
will make its own determination about the confidential status of the 
information and treat it according to its determination.
    Factors of interest to DOE when evaluating requests to treat 
submitted information as confidential include (1) a description of the 
items, (2) whether and why such items are customarily treated as 
confidential within the industry, (3) whether the information is 
generally known by or available from other sources, (4) whether the 
information has previously been made available to others without 
obligation concerning its confidentiality, (5) an explanation of the 
competitive injury to the submitting person which would result from 
public disclosure, (6) when such information might lose its 
confidential character due to the passage of time, and (7) why 
disclosure of the information would be contrary to the public interest.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).
    DOE considers public participation to be a very important part of 
the process for developing test procedures and energy conservation 
standards. DOE actively encourages the participation and interaction of 
the public during the comment period in each stage of the rulemaking 
process. Interactions with and between members of the public provide a 
balanced discussion of the issues and assist DOE in the rulemaking 
process. Anyone who wishes to be added to the DOE mailing list to 
receive future notices and information about this process should 
contact Appliance and Equipment Standards Program staff at (202) 287-
1445 or via email at [email protected].

    Signed in Washington, DC, on July 31, 2018.
Cathy Tripodi,
Acting Assistant Secretary, Energy Efficiency and Renewable Energy.
[FR Doc. 2018-16650 Filed 8-2-18; 8:45 am]
 BILLING CODE 6450-01-P