Enforcement for Consumer Products and Commercial and Industrial Equipment, 53691-53707 [2020-16690]

Agencies

• DEPARTMENT OF ENERGY

[Federal Register Volume 85, Number 169 (Monday, August 31, 2020)]
[Proposed Rules]
[Pages 53691-53707]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16690]


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DEPARTMENT OF ENERGY

10 CFR Parts 429 and 431

[EERE-2019-BT-CE-0015]
RIN 1904-AE34


Enforcement for Consumer Products and Commercial and Industrial 
Equipment

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: The U.S. Department of Energy (``DOE'' or the ``Department'') 
proposes to revise its existing enforcement regulations for certain 
consumer products and commercial and industrial equipment covered under 
the Energy Policy and Conservation Act of 1975, as amended (EPCA or the 
``Act''). The proposal, if adopted, would provide the regulated 
industry with further clarity and transparency about DOE's enforcement 
process, including enforcement sampling procedures and test notice 
requirements. The proposal provides for a process to petition DOE for 
reexamination of a pending determination of noncompliance, and for DOE 
to have the discretion to consider third-party certification program 
testing as official enforcement test data. Ultimately, the proposal 
will further align DOE's regulations with its statutory authority, 
foster communication between DOE and the regulated industry, and 
promote the effective and systematic enforcement of DOE's regulations.

DATES: DOE will accept comments, data, and information regarding this 
notice of proposed rulemaking (NOPR) no later than October 30, 2020. 
See section V, ``Public Participation,'' for details.

ADDRESSES: You may submit comments using any of the below methods.
    (1) Federal eRulemaking Portal: https://www.regulations.gov. Follow 
the instructions for submitting comments.
    (2) Email: [email protected]. Include the docket 
number and/or RIN in the subject line of the message.
    (3) Postal Mail: Office of the Assistant General Counsel for 
Enforcement, U.S. Department of Energy, Mailstop GC-32, 1000 
Independence Avenue SW, Washington, DC 20585-0121. Telephone: (202) 
287-5997. 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: Office of the Assistant General Counsel 
for Enforcement, U.S. Department of Energy, Mailstop GC-32, 1000 
Independence Avenue SW, Washington, DC 20585-0121. Telephone: (202) 
287-5997. If possible, please submit all items on a CD, in which case 
it is not necessary to include printed copies.
    Instructions: In any comment, include the words ``Enforcement 
NOPR'' and provide docket number EERE-2019-BT-CE-0015 and/or regulatory 
information number (RIN) number RIN 1904-AE34. For detailed 
instructions on submitting comments and additional information on the 
rulemaking process, see section V of this document (Public 
Participation).
    Docket: The docket, which includes Federal Register notices, public 
meeting attendee lists and transcripts, comments, and other supporting 
documents/materials, is available for review at 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-2019-BT-CE-0015. The docket web page will contain simple 
instructions on how to access all documents, including public comments, 
in the docket. See section V for information on how to submit comments 
through https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Ms. Smitha Vemuri, U.S. Department of 
Energy, Office of the General Counsel, GC-32, 1000 Independence Avenue 
SW, Washington, DC 20585-0121. Telephone: (202) 586-3421. Email: 
[email protected].
    For further information on how to submit a comment, 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. Authority and Background
II. Summary of the Proposal
III. Discussion of Revisions
    A. Enforcement for Electric Motors and Small Electric Motors
    B. Prohibited Acts
    C. Design Standards
    D. DOE Investigation and Basis of Noncompliance
    E. Third-Party Certification Program Testing
    F. Test Notice
    G. Basic Model Compliance
    H. Notification of Obligations
    I. Petitions for Reexamination
    J. Notice of Allowance
    K. Injunctions
    L. Response to a Notice of Proposed Civil Penalty in Writing
    M. Settlement
    N. Administrative Law Judge Hearing and Appeal
    O. Immediate Issuance of Order Assessing Civil Penalty
IV. Procedural Issues and Regulatory Review
    A. Review Under Executive Order 12866
    B. Review Under Executive Order 13771 and 13777
    C. Review Under the Regulatory Flexibility Act
    D. Review Under the Paperwork Reduction Act of 1995
    E. Review Under the National Environmental Policy Act

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    F. Review Under Executive Order 13132
    G. Review Under Executive Order 12988
    H. Review Under the Unfunded Mandates Reform Act of 1995
    I. Review Under the Treasury and General Government 
Appropriations Act, 1999
    J. Review Under Executive Order 12630
    K. Review Under Treasury and General Government Appropriations 
Act, 2001
    L. Review Under Executive Order 13211
    M. Review Under Section 32 of the Federal Energy Administration 
Act of 1974
    N. Description of Materials Incorporated by Reference
V. Public Participation
    A. Submission of Comments
    B. Requests for Comment
VI. Approval of the Office of the Secretary

I. Authority and Background

    Title III of the Energy Policy and Conservation Act of 1975, as 
amended (``EPCA'' or, in context, ``the Act''') \1\ sets forth a 
variety of provisions designed to improve energy efficiency. Part A of 
Title III (42 U.S.C. 6291-6309) provides for the Energy Conservation 
Program for Consumer Products Other Than Automobiles. The National 
Energy Conservation Policy Act (NECPA), Public Law 95-619, amended EPCA 
to add Part A-1 of Title III, which established an energy conservation 
program for certain industrial equipment. (42 U.S.C. 6311-6317) Under 
the Act, the regulatory program consists essentially of four parts: (1) 
Testing, (2) labeling, (3) Federal energy conservation standards, which 
include performance and design standards, and (4) certification and 
enforcement procedures. Provisions of the Act include definitions (42 
U.S.C. 6291, 6311), energy efficiency standards (42 U.S.C. 6295, 6313), 
test procedures (42 U.S.C. 6293, 6314), labeling provisions (42 U.S.C. 
6294, 6315), and the authority to require information and reports from 
manufacturers, as well as enforcement authority (42 U.S.C. 6296, 6316).
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    \1\ All references to EPCA refer to the statute as amended 
through the Energy Efficiency Improvement Act of 2015, Public Law 
114-11 (April 30, 2015), the Power and Security Systems (PASS) Act, 
Public Law 115-78 (November 2, 2017), and the Ceiling Fan Energy 
Conservation Harmonization Act, Public Law 115-161 (April 3, 2018).
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    The Federal Trade Commission (FTC) is primarily responsible for 
labeling consumer products, and DOE implements the remainder of the 
program. The testing requirements consist of test procedures prescribed 
under the authority of EPCA, which are used to aid in the development 
of standards for covered products or covered equipment, to make 
representations about equipment efficiency, and to determine whether 
covered products or covered equipment comply with standards promulgated 
under EPCA.
    Sections 6298-6305, and 6316 of EPCA authorize DOE to enforce 
compliance with the energy conservation standards established for 
covered products and covered equipment. To ensure that all covered 
products and covered equipment distributed in the United States comply 
with DOE's conservation standards and certification requirements, DOE 
promulgated enforcement regulations in 10 CFR part 429. On September 
16, 2010, the Department published in the Federal Register a notice of 
proposed rulemaking regarding Certification, Compliance, and 
Enforcement for Consumer Products and Commercial and Industrial 
Equipment (September 2010 NOPR). 75 FR 56796. The September 2010 NOPR 
proposed to revise, consolidate and streamline the Department's 
existing certification, compliance, and enforcement regulations for 
certain consumer products and commercial and industrial equipment 
covered under EPCA. On March 7, 2011, DOE published in the Federal 
Register a final rule on the matter that revised the Department's 
regulations to, amongst other things, allow the Department to enforce 
applicable conservation standards in a proactive and fair manner based 
on the circumstances of each case (March 2011 Final Rule). 76 FR 12422. 
Some issues addressed by the rule included DOE-witnessed testing; the 
selection of units for enforcement testing from retail, distribution, 
or manufacturer sources, depending on the circumstances, to ensure 
enforcement test results that are as unbiased, accurate, and 
representative as possible; and alternative approaches to enforcement 
testing in certain circumstances, such as when the requested model is 
low-volume. DOE subsequently published two correction notices in May 
2011 and August 2011. 76 FR 24762; 76 FR 46202.
    Separate from other covered products and equipment, the enforcement 
provisions for electric motors are currently located at 10 CFR part 
431, subpart U. On June 24, 2016, DOE published a notice of proposed 
rulemaking proposing a variety of changes to the current compliance, 
certification, and enforcement regulations for electric motors and 
small electric motors. (June 2016 NOPR) 81 FR 41378. No final rule was 
promulgated in that rulemaking, and this proposal does not address each 
of the previously proposed changes. Instead, in this rulemaking, DOE is 
only proposing to apply the enforcement procedures found at subpart C 
of part 429 to electric motors and small electric motors.

II. Summary of the Proposal

    DOE remains committed to establishing a systematic and fair 
approach to enforcement that will allow the Department to enforce 
standards and certification requirements effectively and ensure a level 
playing field in the marketplace without unduly burdening regulated 
entities. In this document, based on experience and a greater 
understanding of the challenges faced in the enforcement process by 
both DOE and the regulated industry, DOE proposes to again revise its 
enforcement regulations to ensure they convey a clear and comprehensive 
enforcement process. The document proposes revisions to existing 
enforcement procedures applicable to both covered products and covered 
equipment. Revising the current enforcement procedures will afford 
further certainty and clarity to the regulated industry, facilitate 
communication between DOE and the regulated industry, and advance the 
effective enforcement of DOE's regulations. In addition to minor edits 
throughout the regulation for clarity and readability, DOE's proposal 
is summarized below.
    To provide additional process in instances where DOE is planning to 
make a finding of noncompliance, DOE proposes to provide manufacturers 
and private labelers with a letter of intent stating DOE's intent to 
issue a notice of noncompliance determination for a basic model. DOE 
also proposes a petition process to ask DOE (within 30 days after 
issuance of a letter of intent) to reexamine the pending determination.
    To reduce manufacturer burden, DOE proposes to no longer require 
within its regulations that manufacturers inform customers of DOE's 
determination of noncompliance. Further, to ensure clarity and 
consistency regarding how to attain a notice of allowance to distribute 
a redesigned or modified basic model after a finding of noncompliance, 
DOE also proposes to provide the full notice of allowance process 
explicitly within its regulations.
    DOE is also proposing regulations to make clear the extent of the 
Department's enforcement authority under EPCA and the Department's 
process for exercising that authority. DOE desires to make more 
transparent the process by which it may exercise its statutory 
authority to: (1) Make a determination of noncompliance for a basic 
model subject to a design requirement; (2) request from any party 
information concerning the certification

[[Page 53693]]

of or compliance of a basic model with an applicable conservation 
standard; (3) make a finding of noncompliance based on information 
received through the course of an investigation, which may include 
information other than DOE's own test data; (4) pursue or settle 
enforcement actions, with adherence to statutory timeframes set forth 
in EPCA; (5) request and attain test units via the issuance of a test 
notice; and (6) seek injunctive relief.
    In response to feedback from various industry associations, DOE 
proposes within its regulations to have the discretion to consider 
third-party certification program testing as official enforcement test 
data.
    DOE proposes to restructure and clarify its regulations pertaining 
to DOE's sampling provisions. To provide manufacturers with a better 
understanding of how DOE's sampling plans apply, the proposal also 
explicitly provides that in addition to DOE enforcement testing, there 
are other bases upon which DOE may make a finding of noncompliance 
(e.g., in whole or part on DOE's own enforcement testing, testing from 
another Federal agency, or a manufacturer's own test report).
    DOE also proposes updates to current enforcement regulations to 
account for prohibited actions prescribed by Congress that are not 
reflected within DOE's enforcement regulations.
    DOE proposes that it may make a finding of noncompliance based on a 
single test where the results of the assessment test are so far from an 
applicable standard (i.e., at least 25% worse) that a finding of 
compliance is extremely unlikely.
    DOE also notes in this proposal that the Department expects to 
address administrative law judge hearing procedures in a subsequent 
rulemaking.
    DOE proposes to move the enforcement provisions for electric motors 
from 10 CFR part 431, subpart U, to 10 CFR 429.110 with corresponding 
revisions, and to move the enforcement sampling provisions unchanged to 
a new appendix E to subpart C of part 429. DOE also proposes to 
explicitly adopt for small electric motors the proposed enforcement 
provisions in subpart C to part 429.

III. Discussion of Revisions

    In this section, DOE provides a detailed analysis of its proposed 
rule.

A. Enforcement for Electric Motors and Small Electric Motors

    As a part of this comprehensive proposed rule regarding DOE's 
enforcement procedures, DOE proposes that the enforcement provisions in 
subpart C to part 429 that apply to all other types of covered products 
and equipment apply to electric motors and small electric motors. DOE 
proposes to transition the enforcement provisions currently in place 
for electric motors from 10 CFR part 431, subpart U to 10 CFR part 429, 
subpart C, and to move the enforcement sampling provisions to a new 
appendix E in subpart C of part 429. DOE proposes to reserve subpart U.
    The enforcement provisions for electric motors are currently 
located at 10 CFR part 431, subpart U. As for other types of covered 
products and equipment, these regulations prescribe an enforcement 
process through which DOE determines whether an electric motor 
manufacturer is in violation of the energy conservation requirements of 
EPCA. The current regulations, amongst other things, identify various 
prohibited acts that may subject a manufacturer to civil penalties. 
Subpart U also details remedies for addressing cases of noncompliance 
and a process for the assessment and recovery of civil penalties.
    Harmonizing the enforcement process for motors with the process for 
all other types of covered products and equipment would ensure that 
electric motors and small electric motors manufacturers are afforded 
the same processes (e.g., the petition for reexamination process 
discussed in Section III.I.) as manufacturers of all other covered 
products and equipment. The enforcement process provided in 10 CFR part 
429 is significantly more developed than the current procedures for 
electric motors, so transitioning motors to the Part 429 process will 
provide greater clarity to manufacturers. The proposal provides that 
enforcement testing for motors would only be conducted by a laboratory 
that is accredited to the International Organization for 
Standardization (ISO)/International Electrotechnical Commission (IEC), 
``General requirements for the competence of testing and calibration 
laboratories,'' ISO/IEC 17025:2005(E). Further, the proposal would 
remove the regulatory provision allowing electric motors manufacturers 
to request additional DOE testing after DOE makes a noncompliance 
determination, and permit DOE to use its discretion to conduct 
additional testing due to a defective unit in the initial sample.
    There are also several proposed prohibited acts regarding electric 
motors and small electric motors that reflect the unique statutory 
provisions for each type of equipment, and that are proposed to be 
relocated to 10 CFR part 429. Those prohibited acts are discussed in 
more detail in Section III.B. of this proposed rulemaking.

B. Prohibited Acts

    DOE proposes to remove the prohibited act currently at 10 CFR 
429.102(a)(7) (i.e., distribution in commerce by a manufacturer or 
private labeler of a basic model of a covered product or covered 
equipment after a notice of noncompliance determination (NND) has been 
issued to the manufacturer or private labeler). DOE understands that 
this regulatory language suggests that it is a separate violation to 
distribute a noncompliant product after DOE issues a notice of 
noncompliance determination. However, pursuant to EPCA, it is a 
prohibited act to distribute in commerce in the U.S. any covered 
product or equipment not in compliance with an applicable energy 
conservation standard, regardless of whether DOE has issued an NND or 
not. 42 U.S.C. 6302(a)(5) Thus, the prohibited act intended to be 
covered by 10 CFR 429.102(a)(7) is currently covered under 10 CFR 
429.102(a)(6).
    DOE proposes to add prohibited acts to 10 CFR 429.102(a) for 
distribution of rough service lamps and vibration service lamps that do 
not meet the applicable standard(s) and to codify at 10 CFR 429.102(a) 
the prohibited acts related to grid-enabled water heaters. DOE also 
proposes to amend 10 CFR 429.102(a)(9) to clarify that DOE interprets 
the provision as prohibiting the distribution of an adapter designed to 
allow the use of a non-medium screw base lamp in a medium screw base 
socket. Because the term ``incandescent lamp,'' which is used in the 
current text, is defined to include only lamps with a medium screw 
base, the provision would lead to the absurd result of prohibiting 
distribution of an adapter for only medium screw base lamps that do not 
have a medium screw base, which renders the provision a nullity.
    DOE proposes to move certain prohibited acts to 10 CFR 429.102, and 
adjust two of these acts to reflect that the prohibitions apply (by 
statute) to all covered equipment for which DOE has promulgated a 
labeling rule. Specifically, DOE proposes to move and adjust the 
prohibited acts from 10 CFR 431.382(a)(1), (2), and (4) to 10 CFR 
429.102 as follows: (1) Manufacturers and private labelers are 
prohibited from distributing in commerce any covered equipment that is 
not labeled in accordance with part 431; (2) Manufacturers, 
distributors, retailers, and private labelers are prohibited from 
removing or rendering illegible from any

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covered equipment any label required to be provided under part 431; and 
(3) Manufacturers, distributors, retailers, and private labelers are 
prohibited from advertising electric motors in a catalog from which the 
equipment may be purchased, without including in the catalog all 
information as required by 10 CFR 431.31(b), provided, however, that 
this shall not apply to an advertisement of an electric motor in a 
catalog if distribution of the catalog began before the effective date 
of the labeling rule applicable to that motor. DOE requests comment on 
whether the last clause of the third prohibited act (i.e., ``provided, 
however, that this shall not apply to an advertisement of an electric 
motor in a catalog if distribution of the catalog began before the 
effective date of the labeling rule applicable to that motor'') 
provides any value given that the labeling provision for electric 
motors has been in effect for motors manufactured since October 5, 
2000.
    The inclusion of electric motors in 10 CFR 429.102 would also 
clarify that certain additional prohibited acts not currently specified 
in 10 CFR 431.382 also apply to electric motor manufacturers.\2\ As 
discussed in the March 7, 2011 CCE final rule (see 76 FR 12422, 12440), 
these prohibited acts are within the scope of the prohibited acts 
specified in EPCA at 42 U.S.C. 6302 (See 42 U.S.C. 6316(a)).
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    \2\ These entail prohibitions against the following actions: 
Failure to test any covered product or covered equipment subject to 
an applicable energy conservation standard in conformance with the 
applicable test requirements prescribed in 10 CFR part 430 or 431; 
deliberate use of controls or features in a covered product or 
covered equipment to circumvent the requirements of a test procedure 
to produce test results that are unrepresentative of a product's 
energy or water consumption if measured pursuant to DOE's required 
test procedure; and knowing misrepresentation by a manufacturer or 
private labeler by certifying an energy use or efficiency rating of 
any covered product or covered equipment distributed in commerce in 
a manner that is not supported by test data.
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    EPCA provides in 42 U.S.C. 6317(f)(1)(A) prohibited acts that apply 
to small electric motors (and distribution transformers and HID lamps) 
identical in effect to those found at section 6302(a)(1) and (2); 
however, DOE has not adopted labeling provisions for small electric 
motors and is not proposing in this rule to do so. Accordingly, the 
prohibited acts related to labeling would not apply to small electric 
motors or any other type of covered equipment for which DOE has not 
established labeling provisions.

C. Design Standards

    DOE proposes edits to 10 CFR 429.106 in order to clarify that 
design requirements are energy conservation standards that are subject 
to DOE investigation and enforcement. EPCA explicitly provides that 
energy conservation standards include design requirements for certain 
enumerated products, and that DOE may enforce such standards. (42 
U.S.C. 6291, 6311, 6303, and 6316). Nevertheless, DOE believes that the 
proposed edits to DOE's regulations are necessary, as it has received 
some questions from manufacturers as to whether manufacturers and 
private labelers of products are subject to design standards are also 
subject to the enforcement process set forth in 10 CFR part 429, 
subpart C. To provide the regulated industry with an explicit 
understanding of how DOE may make its determination of noncompliance 
for models subject to a design standard, DOE's proposal explicitly 
states that a test unit of a basic model subject to a design 
requirement may be selected for enforcement testing or examination. In 
such an instance, DOE will make a determination of noncompliance for 
the basic model based on an examination of whether a single unit of the 
basic model fails to comply with the applicable design requirements, as 
the standard applies to a design--not the measured performance of 
individual units--such that one unit can demonstrate noncompliance.

D. DOE Investigation and Basis of Noncompliance

    Pursuant to EPCA, DOE has authority to initiate enforcement actions 
to ensure compliance with, amongst other things, its certification 
requirements and energy conservation standards. Current DOE regulations 
already provide that DOE may request any information relevant to 
determining compliance. DOE proposes to revise its procedures to 
provide that the Department retains the discretion to request data, 
underlying the certification of a basic model or belief as to whether a 
basic model is compliant with an applicable standard, from any party. 
DOE has historically requested this information from manufacturers of 
covered products and equipment. DOE proposes to revise its regulations 
to include explicitly that DOE may request the information from a party 
other than the manufacturer of the covered equipment, such as a third-
party certification program or other manufacturer with independent test 
data. This proposal ensures that DOE can enforce its regulations in 
instances where relevant information is retained by parties other than 
the manufacturer. Parties other than the manufacturer often conduct 
independent testing to determine compliance with applicable standards. 
In such instances, DOE's ability to retrieve that test information 
could save government testing resources, and ensure that DOE can 
enforce in a timely manner, which will further DOE's goals of 
maintaining a level playing field for all parties and encouraging 
compliance.
    Should DOE obtain information from any party demonstrating that a 
basic model does not comply with a certification requirement or energy 
conservation standard, DOE may make a finding of noncompliance and 
impose civil penalties pursuant to its authority under EPCA. (42 U.S.C. 
6303) To provide transparency within the regulation and further align 
its regulations with its statutory authority, DOE also proposes 
regulatory text at 10 CFR 429.112, explicitly setting forth that DOE's 
determination of noncompliance may be based on test data from a variety 
of sources: The manufacturer or private labeler, another Federal 
agency, or a third-party certification program; testing pursuant to 
Sec. Sec.  429.104 and 429.110; and/or an admission. Stating the 
various bases upon which DOE may make a determination of noncompliance 
provides clarity for all parties.

E. Third-Party Certification Program Testing

    DOE proposes that test data (for units tested in accordance with 
the applicable DOE test procedure) from a third-party certification 
program may be considered official enforcement test data upon which DOE 
may make a finding of noncompliance. Various industry associations have 
asked DOE to consider their test results as a part of DOE's enforcement 
process. DOE understands that reliance on a third-party certification 
program test in lieu of, or in addition to, testing conducted by DOE 
pursuant to a test notice may save resources for all parties and may 
lead to a more expedient enforcement process in some circumstances. 
Thus, this proposal provides DOE the opportunity to contemplate and 
potentially rely on test data obtained under a third-party 
certification test program as an official enforcement test.

F. Test Notice

    DOE's proposal is intended to provide more specificity and 
transparency regarding DOE's current test notice process, and to make 
consistent with all other enforcement actions the test notice process 
for electric motors and small electric motors.

[[Page 53695]]

1. Test Notice Information
    DOE seeks to provide manufacturers with more specific information 
about the units requested in a test notice. Unfortunately, in various 
enforcement actions, DOE has often received units that are not 
responsive to a test notice (e.g., units with varied designs or 
features as compared to the assessment test unit, units with similar 
nameplates but that are in fact different (in design, components, 
materials, etc.) from the assessment test unit). DOE's request in a 
test notice does not constitute a flexible request for units that a 
manufacturer may fulfill at its own discretion. In instances where DOE 
has already conducted an assessment test, the requested units are meant 
to be equivalent to the assessment test unit. Thus, in addition to 
identifying in the test notice the basic model selected for enforcement 
testing, DOE proposes that it may also include other characteristics or 
specifications of the requested units (e.g., individual model numbers, 
serial numbers, manufacturer date ranges, manufacture location). DOE 
anticipates that additional identifying information within the test 
notice will alleviate any confusion about exactly what units DOE is 
requesting. This additional communication will result in clarity and 
saved resources for all parties.
    Current regulations state that DOE will identify in the test notice 
the exact date DOE is scheduled to begin testing the requested units. 
The proposed edits provide instead that DOE will identify in the test 
notice the approximate date of testing. The proposal accounts for the 
fact that the test laboratory's schedule can fluctuate such that it is 
not realistic to assure that testing will begin on one specific day. 
DOE is, however, able to schedule an approximate date for testing that 
is usually within a one- to two-week range. Therefore, an approximate 
date in the test notice is more realistic and reliable.
2. Availability of Units
    Current regulations state that DOE will work with the manufacturer 
to create an enforcement plan for testing when the requested units are 
low volume or built to order. In current practice, DOE in fact works 
with manufacturers to create an enforcement plan in other instances as 
well, such as when the manufacturer does not have the exact requested 
units and is unable to produce them, but can produce similar units. DOE 
proposes various edits to address scenarios where fewer than the 
requested number of units in the test notice are available for 
shipment.
    In instances where manufacturers believe that test units are 
unavailable, DOE has found that the manufacturers often send alternate 
units (i.e., units that are different than those requested in the test 
notice) without communicating the circumstances of the potential 
unavailability to DOE. In some cases, DOE has learned that the 
manufacturer provided alternate units only upon the DOE laboratory 
inspection or test of the units. To foster communication and avoid 
wasted resources for both parties, the proposed edits address both DOE 
and the manufacturer's next steps when the manufacturer believes that 
the requested units are unavailable for shipment. Specifically, the 
manufacturer must inform DOE if it believes that the requested units in 
the test notice are unavailable and must provide details regarding the 
unavailability. The manufacturer must also inform DOE if it does not 
have the requested units but has similar ones, along with details about 
the similar units.
    If DOE determines that the requested units are in fact unavailable, 
DOE will contact the manufacturer to develop a plan for enforcement 
testing. In such instances, DOE may test the available units, which may 
include testing of similar units identified by the manufacturer and/or 
may test units that become available within 30 days. Although these 
options are not novel to the test notice process, DOE proposes to 
restructure the options within the regulations to ensure applicability 
to all scenarios of test unit unavailability (as opposed to only when 
the units are low volume or built to order).
3. Selection of Units
    The proposed edits provide that a test notice will specify whether 
DOE or the manufacturer will select units for testing. When DOE 
finalized existing regulations in 2011, DOE was in the practice of 
selecting all test units. However, over time the process has changed 
such that manufacturers often select units. Thus, the proposed edits 
capture both scenarios.
    In addition, the proposed text further explains and clarifies the 
process of randomly selecting units in response to a test notice. 
Although the random selection of units has been discussed by DOE 
previously in the September 2010 NOPR and March 2011 Final Rule (75 FR 
56804; 76 FR 12430), DOE finds that manufacturers continue to be 
uncertain about how to make selections, particularly in regards to how 
a batch sample is selected when the units are sourced from the 
manufacturer's warehouse, distributor, or other facility affiliated 
with the manufacturer. In order to provide clarification, in this 
proposal, DOE explains that the batch sample must be selected at random 
from all units of the specified model that are in inventory on the date 
of the test notice, including all units that have not yet been shipped. 
From that batch sample, the initial test sample should be randomly 
selected. DOE expects that the clarifying edits to the regulatory text 
will alleviate confusion about how to make the required random 
selection of units.
    DOE also proposes to explicitly provide within its regulations the 
current practice regarding documentation required after issuance of a 
test notice. Specifically, the proposed text provides that DOE may ask 
for documentation demonstrating the location from which each unit is 
selected, and that the unit was in inventory at such location on the 
date the test notice was issued. DOE typically asks manufacturers to 
provide this information as it provides assurance that the units are 
from inventory as required and ensures that DOE understands the source 
of the test units.
4. Preparation of Units
    Current regulatory text provides that a test unit provided in 
response to a test notice shall not be prepared, modified, or adjusted 
in any manner unless such preparation, modification, or adjustment is 
allowed by the applicable DOE test procedure. DOE has received 
inquiries as to whether these restrictions on preparation, 
modification, and adjustment also apply to DOE, or if DOE is permitted 
to alter test units. Thus, DOE proposes edits to current regulations in 
order to clarify that upon receipt of a test unit, DOE will only 
prepare, modify, or adjust a unit if allowable under the DOE test 
procedure or authorized by the manufacturer. Further, DOE will also 
notify the manufacturer if a test unit is received by the test lab in a 
condition that may impact performance. In such an instance, DOE may 
decide to test another unit depending on the condition of the 
particular unit. DOE may also determine that it can rectify the 
condition easily to continue with the test, for example, by replacing a 
commonly available part. However, in such an instance, DOE would still 
discuss the matter with the manufacturer prior to any modification.

[[Page 53696]]

G. Basic Model Compliance

1. General Applicability of Enforcement Sampling Procedures
    DOE proposes restructuring and clarifying edits to regulations 
pertaining to DOE's enforcement sampling procedures. A significant 
portion of the information contained within DOE's proposal is currently 
contained at 10 CFR 429.110(e), and is restructured in DOE's proposed 
10 CFR 429.111, but the current applicable sample sizes and references 
to the applicable appendices remain unchanged. DOE also proposes some 
new provisions to 10 CFR 429.111, which are discussed in further detail 
below. DOE also proposes to move the current enforcement sampling plan 
for electric motors, which is at appendix A to subpart U of part 431, 
to a new appendix E to subpart C of part 429 without change.
    To provide the regulated industry with a better understanding of 
how DOE's sampling plans apply, as noted previously, DOE's proposal 
explicitly provides that in addition to DOE enforcement testing, there 
are other bases upon which DOE may make a finding of noncompliance 
(e.g., in whole or part on DOE's own enforcement testing, testing from 
another Federal agency, or a manufacturer's own test report.)
2. Sample Size
a. Reduced Sample Size
    Current regulations at 10 CFR 429.110 indicate that, in an instance 
where units are unavailable for testing, DOE may make a determination 
of noncompliance based on a sample size of less than the otherwise 
required number of units. DOE's current regulations at 10 CFR 
429.110(e)(7) also state that a reduced sample size may be used when 
testing is impractical or where a basic model has unusual testing 
requirements. To provide a more fulsome understanding of when DOE may 
rely on a reduced sample size, DOE also proposes 10 CFR 429.111(a)(7), 
which provides that a reduced sample size may also apply in other 
circumstances, such as when DOE makes a determination of noncompliance 
for a basic model subject to design requirements, or based on the 
manufacturer's test data.
b. Sample Comprised of a Single Unit
    DOE also proposes to explicitly state that for all products, if the 
sample size is comprised of a single unit, DOE will determine 
noncompliance for the basic model based solely on the results of the 
single test. In such an instance, the sampling plans in the appendices 
do not apply. Although DOE believes that it is inherently understood 
that sampling statistics would not be applicable to a single unit, 
explicit inclusion within regulations provides transparency in the 
compliance determination process.
c. Noncompliance Determined by Single Assessment Test
    DOE proposes that if the results of an assessment test show that 
the basic model performed at least 25% worse than the applicable energy 
conservation standard, DOE may make a determination of noncompliance 
for the basic model based solely on the results of such test. In such 
an instance, the sampling plans would not apply, as the determination 
is based on a single unit. This new process would avoid unnecessary 
expenditure of resources by both the manufacturer and DOE and would 
permit DOE to make a finding of noncompliance based on a single test 
where the results of the assessment test were so far below an 
efficiency standard or above a conservation standard that compliance is 
extremely unlikely.
3. Addition of Walk-In Cooler and Freezer Doors & Panels
    DOE's proposal adds walk-in cooler and freezer doors and panels to 
the list of equipment subject to the low-volume enforcement sampling 
procedures (i.e., the Sampling Plan for Enforcement Testing of Covered 
Equipment and Certain Low-Volume Covered Products in Appendix B to 
Subpart C of Part 429). This equipment is not currently included within 
DOE's list because at the time the current regulations were drafted, 
only design standards applied to such equipment (versus the now also 
applicable performance standards), and thus, sampling provisions were 
not necessary at that time.
4. Design Standards
    In line with the above discussion regarding models that are subject 
to design standards, in this proposal DOE explicitly states that the 
sampling plans in the appendices do not apply in instances where DOE is 
evaluating whether a basic model complies with an applicable design 
requirement, as the determination is based on a single unit.

H. Notification of Obligations

    Current regulations at 10 CFR 429.114 address notification to the 
manufacturer of certain obligations and requirements of the 
manufacturer upon issuance of a notice of noncompliance determination. 
To this section, DOE proposes various clarifying edits for readability 
and proposes to remove the requirement that manufacturers must inform 
their customers of DOE's noncompliance determination.

I. Petitions for Reexamination

    DOE proposes to add new Sec.  429.115 to 10 CFR part 429. This 
addition to the enforcement regulations provides the manufacturer or 
private labeler with a formal process to ask DOE to reexamine a pending 
determination of noncompliance. Historically, DOE has always accepted 
any information from parties both before and after the issuance of a 
test notice or notice of noncompliance determination. However, in order 
to provide manufacturers and private labelers with a specific process 
to request DOE to consider certain information and arguments prior to 
DOE's issuance of a notice of noncompliance determination, DOE proposes 
to adopt regulations detailing a specific procedure and substance for 
such a request.
    The proposal states that, at least 30 calendar days prior to the 
issuance of a notice of noncompliance determination, DOE will issue to 
the manufacturer or private labeler a letter of intent stating DOE's 
intent to issue a notice of noncompliance determination for the basic 
model. Within 30 days of DOE's issuance of a letter of intent, DOE will 
accept a petition for reexamination of the pending determination, which 
must include a variety of information: The material issue(s) that the 
manufacturer or private labeler has with the assessment and/or 
enforcement testing of the basic model; complete test reports or 
alternative efficiency determination methods (AEDM) information (if 
applicable) the manufacturer or private labeler believes demonstrate 
the basic model meets the applicable standard; all legal and other 
arguments that the manufacturer or private labeler wishes to make in 
support of its position; and information/test data regarding any 
previous representations of the basic model's energy consumption. The 
process as proposed provides the petitioner and DOE with a clear 
understanding of the information DOE requires to inform its 
reexamination of the pending determination, while still allowing the 
petitioner to submit any other information it deems pertinent.
    The proposed process also serves to ensure that the petitioner, in 
support of its request, provides DOE with test data that is in fact 
relevant to the finding of noncompliance. As such, all test reports 
must demonstrate that the applicable DOE test procedure was followed. 
In addition, petitioners must inform DOE if the units it tested are 
different (in design, components, materials, etc.) from the units that 
are the basis of the

[[Page 53697]]

pending finding of noncompliance, or if the units were modified prior 
to or during the test. In addition, for any testing completed after the 
issuance of the letter of intent, the manufacturer must provide DOE 
with documentation, such as the source of the units, how they were 
selected, and if relevant, whether and how many units were available in 
inventory or from a retailer on the date of testing.
    Upon review of a petition, DOE may modify or leave unchanged its 
pending determination. In any case, the process ensures that DOE 
considered the petitioner's submission of relevant materials. DOE also 
notes that although the petition must be submitted within 30 days of 
issuance of the letter of intent, the petitioner may always compile and 
share information at any earlier date, such as upon DOE's issuance of a 
test notice.
    DOE also notes that the proposed petition for reexamination process 
addresses DOE's obligations under Section 6 of Executive Order 13892, 
``Promoting the Rule of Law Through Transparency and Fairness in Civil 
Administrative Enforcement and Adjudication,'' which requires that DOE, 
before issuing a notice of noncompliance determination, must afford the 
manufacturer or private labeler an opportunity to be heard regarding 
the pending determination.

J. Notice of Allowance

    The Department proposes to provide within its regulations the 
complete process for attaining a notice of allowance after DOE has made 
a finding of noncompliance for a basic model. DOE has received feedback 
from various respondents indicating that the process, as currently 
explained within 10 CFR part 429 and the body of the notice of 
noncompliance determination, is not intuitive and deserves 
clarification. After review of current regulations at Sec.  429.114(d), 
DOE also believes that further clarity and explanation of the process 
within its regulations would be helpful to all parties. The proposal 
clarifies and captures various aspects of the notice of allowance 
process, including that a manufacturer or private labeler must, prior 
to distribution in commerce of a modified model, receive a notice of 
allowance from DOE for that modified model. The proposal also 
explicitly states that the manufacturer or private labeler must, prior 
to receipt of a notice of allowance, provide DOE with a detailed 
explanation of all modifications and test data demonstrating that the 
modified basic model meets the applicable standard(s). If the 
manufacturer chooses to modify the noncompliant basic model, DOE also 
proposes that, as a part of its records, the manufacturer or private 
labeler maintain records of serial numbers of and the modifications 
made to any units of the noncompliant basic model in existing stock.
    DOE regulations currently permit in-house or independent testing 
for determining compliance with DOE's performance based conservation 
standards. Currently, Sec.  429.116 provides that DOE may require 
testing by an independent third-party if DOE determines it is necessary 
to ensure compliance. Third-party testing may be essential to ensuring 
compliance in some circumstances, such as with manufacturers who are 
routinely found to violate standards, or in instances where DOE 
believes that the manufacturer's in-house testing is inaccurate or 
unreliable. Although DOE may rely on 10 CFR 429.116, for the sake of 
transparency and clarity of process, DOE proposes that the regulations 
pertaining to the notice of allowance process also explicitly 
incorporate this requirement--that the manufacturer or private 
labeler's testing in support of the request for a notice of allowance 
be performed at an independent, third-party testing facility.

K. Injunctions

    DOE proposes minor edits to clarify that, in instances where a 
person fails to cease engaging in a prohibited act, DOE may either 
immediately seek an injunction or allow the person an opportunity to 
first implement a corrective action plan.

L. Response to a Notice of Proposed Civil Penalty in Writing

    DOE proposes that a respondent's election of procedures in response 
to a notice of proposed civil penalty be made to the Department in 
writing. This is an established practice, and DOE believes that 
explicitly requiring the response to be in writing ensures that the 
respondent's election is made without miscommunication or 
misinterpretation.

M. Settlement

    The respondent's election to settle a case, while available in 
every enforcement case, is not explicitly stated within current 
regulations. Thus, the proposed text explicitly provides a respondent 
in an enforcement action with the option of settlement. Further, DOE's 
proposal explains in greater detail the settlement process, including 
that the compromise agreement will set forth the terms of the 
agreement, and that DOE's General Counsel will sign an order adopting 
the agreement and assessing the civil penalty. The proposal as a whole 
completes the comprehensive list of the respondent's election of 
procedures, and provides clarity of the settlement process.

N. Administrative Law Judge Hearing and Appeal

    DOE's proposal includes some minor edits to 10 CFR 429.126 for 
clarity and readability. In addition, the proposal includes a reference 
to a new subpart D, for which DOE plans to propose administrative law 
judge hearing procedures in the future.

O. Immediate Issuance of Order Assessing Civil Penalty

    DOE proposes edits to ensure that DOE's regulations clearly convey 
the statutory requirement that an election to have the procedures of 10 
CFR 429.128 apply (i.e., in lieu of an administrative law judge 
hearing, the respondent elects to have DOE immediately issue an order 
assessing the civil penalty) must be made by the respondent within 30 
days of the notice of proposed civil penalty. The 30-day window within 
which this option is available is a timeframe mandated by EPCA and is 
currently captured within DOE regulations at 10 CFR 429.122. 
Nevertheless, DOE has found that there is confusion over the timeframe 
to elect this option and believes that further clarification and 
additional references to the 30-day window will help create a better 
understanding of the statutory requirement.
    Further, current regulations provide that, in instances where the 
respondent takes the maximum 30 days allowable to make a selection for 
the immediate issuance of an adopting order, the General Counsel must 
issue such order on that very same day. In order to create a more 
reasonable and realistic timeline, DOE also proposes edits to current 
regulations such that the General Counsel will not sign an adopting 
order sooner than 60 days after the issuance of the notice of proposed 
civil penalty.

IV. Procedural Issues and Regulatory Review

A. Review Under Executive Order 12866

    This regulatory action is not a ``significant regulatory action'' 
under section 3(f) of Executive Order 12866. 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).

[[Page 53698]]

B. Review Under Executive Orders 13771 and 13777

    On January 30, 2017, the President issued Executive Order (E.O.) 
13771, ``Reducing Regulation and Controlling Regulatory Costs.'' E.O. 
13771 stated the policy of the executive branch is to be prudent and 
financially responsible in the expenditure of funds, from both public 
and private sources. E.O. 13771 stated it is essential to manage the 
costs associated with the governmental imposition of private 
expenditures required to comply with Federal regulations.
    Additionally, on February 24, 2017, the President issued E.O. 
13777, ``Enforcing the Regulatory Reform Agenda.'' E.O. 13777 required 
the head of each agency designate an agency official as its Regulatory 
Reform Officer (RRO). Each RRO oversees the implementation of 
regulatory reform initiatives and policies to ensure that agencies 
effectively carry out regulatory reforms, consistent with applicable 
law. Further, E.O. 13777 requires the establishment of a regulatory 
task force at each agency. The regulatory task force is required to 
make recommendations to the agency head regarding the repeal, 
replacement, or modification of existing regulations, consistent with 
applicable law. At a minimum, each regulatory reform task force must 
attempt to identify regulations that:
    (i) Eliminate jobs, or inhibit job creation;
    (ii) Are outdated, unnecessary, or ineffective;
    (iii) Impose costs that exceed benefits;
    (iv) Create a serious inconsistency or otherwise interfere with 
regulatory reform initiatives and policies;
    (v) Are inconsistent with the requirements of Information Quality 
Act, or the guidance issued pursuant to that Act, in particular those 
regulations that rely in whole or in part on data, information, or 
methods that are not publicly available or that are insufficiently 
transparent to meet the standard for reproducibility; or
    (vi) Derive from or implement Executive Orders or other 
Presidential directives that have been subsequently rescinded or 
substantially modified.
    DOE initially concludes that this rulemaking is consistent with the 
directives set forth in these executive orders.
    As discussed in this NOPR, DOE is proposing to revise its 
enforcement regulations to ensure they convey a clear and comprehensive 
enforcement process and to revise existing enforcement procedures 
applicable to both covered products and covered equipment. The 
following section provides an overview of the costs and burdens 
discussed previously in this document.

    Table IV.1--Summary of Cost Impacts for Enforcement for Consumer
            Products and Commercial and Industrial Equipment
------------------------------------------------------------------------
                                           Present value
                Category                    (thousands     Discount rate
                                              2016$)         (percent)
------------------------------------------------------------------------
                              Cost Savings
------------------------------------------------------------------------
Reduction in Notification Costs.........             109               3
                                                      42               7
------------------------------------------------------------------------
                          Total Net Cost Impact
------------------------------------------------------------------------
    Total Net Cost Impact...............           (109)               3
                                                    (42)               7
------------------------------------------------------------------------


   Table IV.2--Summary of Annualized Cost Impacts for Enforcement for
        Consumer Products and Commercial and Industrial Equipment
------------------------------------------------------------------------
                                            Annualized
                                               value       Discount rate
                Category                    (thousands       (percent)
                                              2016$)
------------------------------------------------------------------------
                         Annualized Cost Savings
------------------------------------------------------------------------
Reduction in Notification Costs.........             3.3               3
                                                     2.9               7
------------------------------------------------------------------------
                    Total Net Annualized Cost Impact
------------------------------------------------------------------------
          Total Net Cost Impact                    (3.3)               3
                                                   (2.9)               7
------------------------------------------------------------------------

    As discussed in section III.H, DOE proposes to remove the 
requirement that manufacturers must inform their customers of DOE's 
noncompliance determination. DOE estimates that this will reduce 
manufacturer burden when manufacturers are issued a noncompliance 
determination by DOE, resulting in costs savings for manufactures. 
Based on a review of previous noncompliance determinations spanning the 
previous five years, DOE estimates there are on average 14.8 
noncompliance determinations each year.
    To estimate the cost savings manufacturers would experience due to 
the proposal to remove the requirement to notify consumers of 
noncompliance determinations, DOE first estimated the cost savings of 
drafting a notification letter and then of identifying all customers 
that purchased noncompliant units.
    DOE assumes manufacturers currently incur costs to write a 
noncompliance letter to their customers. DOE estimates

[[Page 53699]]

that an average noncompliance determination would result in a general 
and operations manager spending one hour writing a letter and an 
executive spending 30 minutes reviewing the letter that would be sent 
to all customers that purchased noncompliant units. DOE estimated that 
the average hourly rate to employ a general and operations manager is 
$77.67 and the average hourly rate to employ an executive is 
$125.48.\3\ Therefore, the average cost to draft a noncompliance 
notification letter to all customers is approximately $140 per basic 
model that is found to be noncompliant. This proposal is estimated to 
result in approximately $2,078 of costs savings annually for all 
manufacturers to forgo drafting on average 14.8 notifications of 
noncompliance each year.
---------------------------------------------------------------------------

    \3\ The Bureau of Labor Statistics mean hourly wage rate 
``General and Operations Manager'' is $59.56 (May 2018: https://www.bls.gov/oes/current/oes111021.htm) and the mean hourly wage for 
``Chief Executives'' is $96.22 (May 2018: https://www.bls.gov/oes/current/oes111011.htm).
    Additionally, according to the Annual Survey of Manufacturers 
for NAICS code 31-33, all manufacturing, wages represent 
approximately 77 percent of the total cost of employment. (AMS 2016, 
NAICS code 31-33; https://www.census.gov/programs-surveys/asm.html).
---------------------------------------------------------------------------

    DOE assumes manufacturers currently incur costs to identify 
customers that have purchased noncompliant units. DOE assumes there are 
two types of basic models that are found to be noncompliant, low-volume 
basic models with less than 100 units sold and, high-volume basic 
models with 100 or more units sold. DOE assumes low-volume basic models 
are typically sold individually, with each customer only purchasing one 
unit on average, while high-volume basic models are typically sold in a 
group of 50 units per customer, with each customer purchasing 50 units 
as a single purchase on average. DOE assumes that it takes 
manufacturers approximately 5 minutes to identify a single customer's 
contact information. This equally applies to customers of low-volume 
and high-volume basic models. Therefore, it takes manufacturers an 
equal amount of time to identify the low-volume customer that purchased 
one unit and the high-volume customer that purchased 50 units.
    Based on previous noncompliance findings, DOE estimates that 
typically 31 units are sold for a low-volume basic model and 600 units 
are sold for a high-volume basic model. Therefore, a low-volume basic 
model manufacturer would have to identify 31 customers on average and a 
high-volume basic model manufacturer would have to identify 12 
customers on average (600 divided by 50).
    Again, DOE assumes that a general and operations manager would be 
responsible for identifying customers and the average hourly rate for 
this employee is $77.67.\4\ Therefore, on average it costs 
approximately $201 to identify all customers of low-volume basic models 
and $78 to identify all customers of high-volume basic models.\5\ Based 
on the weighted average of low-volume and high-volume basic models 
found noncompliant,\6\ this proposal is estimated to result in cost 
savings of approximately $1,640 annually for all manufacturers to forgo 
identifying customers of noncompliant basic models.
---------------------------------------------------------------------------

    \4\ The Bureau of Labor Statistics mean hourly wage rate 
``General and Operations Manager'' is $59.56 (May 2018: https://www.bls.gov/oes/current/oes111021.htm).
    Additionally, according to the Annual Survey of Manufacturers 
for NAICS code 31-33, all manufacturing, wages represent 
approximately 77 percent of the total cost of employment. (AMS 2016, 
NAICS code 31-33; https://www.census.gov/programs-surveys/asm.html).
    \5\ There are on average 31 customers of low-volume models and 
on average 122 customers of high-volume models. The hour employment 
cost is $77.67, and each customer take approximately 10 minutes to 
identify ($77.67 * \1/6\ hr * 31 = $401; $77.67 * \1/6\ hr * 122 = 
$1,579).
    \6\ Based on previous noncompliance findings over the past five 
years, DOE estimated that approximately 27 percent of noncompliant 
models had less than 100 units sold, and 73 percent of noncompliant 
models had 100 or more units sold.
---------------------------------------------------------------------------

    Overall, this proposal is estimated to result in cost savings of 
approximately $3,718 annually for all manufacturers to forgo drafting 
on average 14.8 notifications of noncompliance each year, identifying 
customers of noncompliant models, and sending noncompliance letters to 
customers.
    DOE anticipates that the remainder of the amendments proposed in 
this document would not impact manufacturers' burden during the 
enforcement process. Most of the proposed amendments will provide 
additional certainty and clarity to the regulated industry, facilitate 
communication between DOE and the regulated industry, and advance the 
effective enforcement of DOE's regulations.
    This proposed rule is estimated to result in cost savings. The 
proposed rule would yield an annualized cost saving of approximately 
$2,926 (2016$) using a perpetual time horizon discounted to 2016 at a 7 
percent discount rate. Therefore, if finalized as proposed, this rule 
is expected to be an E.O. 13771 deregulatory action.
    DOE requests comment on its understanding of the impact and 
associated costs of these proposed amendments.

C. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (IFRA) for 
any rule that by law must be proposed for public comment, unless the 
agency certifies that the rule, if promulgated, will not have a 
significant economic impact on a substantial number of small entities. 
As required by Executive Order 13272, ``Proper Consideration of Small 
Entities in Agency Rulemaking,'' 67 FR 53461 (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 website: https://energy.gov/gc/office-general-counsel.
    Under the provisions of the Regulatory Flexibility Act and the 
procedures and policies published on February 19, 2003, DOE reviewed 
this proposal. DOE certifies that the proposed rule, if adopted, would 
not have a significant economic impact on a substantial number of small 
entities. The factual basis of this certification is set forth in the 
following paragraphs.
    The Small Business Administration (SBA) considers a business entity 
to be a small business, if, together, with its affiliates, it employs 
less than a threshold number of workers specified in 13 CFR part 121. 
These size standards and codes established by the North American 
Industry Classification System (NAICS) and are available at https://
www.sba.gov/document/support--table-size-standards.
    This proposal impacts manufacturers of all covered products and 
covered equipment subject to DOE's energy conservation, water 
conservation, and design standards. DOE estimates that the 
manufacturing of all these covered products and covered equipment 
includes approximately 20 unique NAICS codes. The SBA threshold number 
of employees for these 20 NAICS codes ranges from 500 to 1,500 total 
employees. DOE estimates there are several hundred small businesses 
that manufacture the products and equipment covered by this proposal.
    DOE is attempting to revise the current enforcement procedures on 
manufacturers of covered products and covered equipment to give 
certainty and clarity to the regulated industries, to facilitate 
communication between DOE

[[Page 53700]]

and the regulated industries, to reduce burden, and to advance the 
effective enforcement of DOE's regulations. Since this proposal would 
reduce burden and result in cost savings, as described in section IV.B, 
on all manufacturers, including small businesses, DOE tentatively 
concludes that the impacts of this proposal would not have a 
``significant economic impact on a substantial number of small 
entities,'' and that the preparation of an IRFA is not warranted. DOE 
will transmit the certification and supporting statement of factual 
basis to the Chief Counsel for Advocacy of the Small Business 
Administration for review under 5 U.S.C. 605(b).
    DOE requests comment on its finding that this proposal would not 
present a significant economic impact on the several hundred small 
businesses that manufacture products and equipment covered by this 
proposal.

D. Review Under the Paperwork Reduction Act of 1995

    The Paperwork Reduction Act (PRA) of 1995 requires that U.S. 
Federal Government agencies obtain Office of Management and Budget 
(OMB) approval prior to collecting data in any situation where 10 or 
more respondents, within a 12 month period, are involved and the 
questions are standardized in nature. This proposed rule does not seek 
to collect any information or data in such a manner; accordingly, DOE 
has determined that neither review nor approval by OMB under the PRA is 
required.

E. Review Under the National Environmental Policy Act

    We are analyzing this proposed regulation in accordance with NEPA 
and DOE's NEPA implementing regulations (10 CFR part 1021). We invite 
the public to comment on the extent to which this proposed regulation 
may have a significant impact on the human environment, or fall within 
one of the categorical exclusions for actions that have no individual 
or cumulative effect on the quality of the human environment. We will 
complete our analysis, in compliance with NEPA, before finalizing this 
regulation.

F. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4, 1999) 
imposes certain requirements on agencies formulating and implementing 
policies or regulations that preempt State law or that have Federalism 
implications. The Executive Order requires agencies to examine the 
constitutional and statutory authority supporting any action that would 
limit the policymaking discretion of the States and to carefully assess 
the necessity for such actions. The Executive Order also requires 
agencies to have an accountable process to ensure meaningful and timely 
input by State and local officials in the development of regulatory 
policies that have Federalism implications. On March 14, 2000, DOE 
published a statement of policy describing the intergovernmental 
consultation process it will follow in the development of such 
regulations. 65 FR 13735. DOE has examined this proposed rule and has 
determined that it would not have a substantial direct effect on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. No further action is required by 
Executive Order 13132.

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

H. Review Under the Unfunded Mandates Reform Act of 1995

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

I. 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 rule would not have any impact on the autonomy or integrity of the 
family as an institution. Accordingly, DOE has concluded that it is not 
necessary to prepare a Family Policymaking Assessment.

J. Review Under Executive Order 12630

    DOE has determined, under Executive Order 12630, ``Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights'' 53 FR 8859

[[Page 53701]]

(March 18, 1988) that this regulation would not result in any takings 
that might require compensation under the Fifth Amendment to the U.S. 
Constitution.

K. 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 
to maximize the quality, objectivity, utility, and integrity of 
information. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 
2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 
2002). DOE has reviewed this proposed rule under the OMB and DOE 
guidelines and has concluded that it is consistent with applicable 
policies in those guidelines.

L. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 
(May 22, 2001), requires Federal agencies to prepare and submit to OMB, 
a Statement of Energy Effects for any proposed significant energy 
action. A ``significant energy action'' is defined as any action by an 
agency that promulgated or is expected to lead to promulgation of a 
final rule, and that (1) is a significant regulatory action under 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy; or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any proposed significant energy action, 
the agency must give a detailed statement of any adverse effects on 
energy supply, distribution, or use should the proposal be implemented, 
and of reasonable alternatives to the action and their expected 
benefits on energy supply, distribution, and use.
    DOE has reviewed this proposed rule under the Executive Order 
13211, and has concluded that it is not a significant regulatory action 
under Executive Order 12866; would not have a significant adverse 
effect on the supply, distribution, or use of energy; and that the 
Administrator of OIRA has not designated it as a significant energy 
action. Accordingly, DOE has concluded that it is not necessary to 
prepare a Statement of Energy Affects.

M. 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.
    Because this proposed rulemaking does not authorize or require use 
of any commercial standard, the FEAA requirements do not apply.

N. Description of Materials Incorporated by Reference

    In this NOPR, DOE is not proposing to incorporate by reference any 
new industry standard. The incorporation by reference of ISO/IEC 
17025:2005(E) in Sec.  429.110 has already been approved by the 
Director of the Federal Register and there are no proposed changes in 
this NOPR.

V. Public Participation

A. Submission of Comments

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

[[Page 53702]]

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 DOE considers when evaluating requests to treat submitted 
information as confidential include (1) a description of the items, (2) 
whether and why such items are customarily treated as confidential 
within the industry, (3) whether the information is generally known by 
or available from other sources, (4) whether the information has 
previously been made available to others without obligation concerning 
its confidentiality, (5) an explanation of the competitive injury to 
the submitting person which would result from public disclosure, (6) 
when such information might lose its confidential character due to the 
passage of time, and (7) why disclosure of the information would be 
contrary to the public interest.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).

B. Requests for Comment

    DOE welcomes written comments from the public on all aspects of its 
proposal, and any subject related to DOE's enforcement process, 
including topics not specifically raised in this proposed rule. DOE 
continues to seek views from all interested parties on how DOE's 
enforcement rules can best be developed to ensure effective 
enforcement. DOE requests comment on its finding that this proposal 
would not present a significant economic impact on the several hundred 
small businesses that manufacture products and equipment covered by 
this proposal.

VI. Approval of the Office of the Secretary

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

List of Subjects

10 CFR Part 429

    Confidential business information, Energy conservation, Household 
appliances, Imports, Incorporation by reference, Reporting and 
recordkeeping requirements.

10 CFR Part 431

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

Signing Authority

    This document of the Department of Energy was signed on July 28, 
2020, by William S. Cooper III, General Counsel and Daniel R. Simmons, 
Assistant Secretary for Energy Efficiency, pursuant to delegated 
authority from the Secretary of Energy. That document with the original 
signature and date is maintained by DOE. For administrative purposes 
only, and in compliance with requirements of the Office of the Federal 
Register, the undersigned DOE Federal Register Liaison Officer has been 
authorized to sign and submit the document in electronic format for 
publication, as an official document of the Department of Energy. This 
administrative process in no way alters the legal effect of this 
document upon publication in the Federal Register.

    Signed in Washington, DC, on July 28, 2020.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
    For the reasons stated in the preamble, DOE is proposing to amend 
parts 429 and 431 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, 28 U.S.C. 2461 note.

0
2. Revise Sec.  429.1 to read as follows:


Sec.  429.1  Purpose and scope.

    This part sets forth the procedures to be followed for 
certification, determination and enforcement of compliance of covered 
products and covered equipment with the applicable conservation 
standards set forth in parts 430 and 431 of this subchapter.
0
3. Section 429.2(a) is revised to read as follows:


Sec.  429.2  Definitions.

    (a) The definitions found in 10 CFR parts 430 and 431 of this 
chapter apply for purposes of this part.
* * * * *
0
4. Revise Sec.  429.100 to read as follows:


Sec.  429.100   Purpose and scope.

    This subpart describes the enforcement authority of DOE to ensure 
compliance with the conservation standards regulations in 10 CFR parts 
429, 430 and 431.
0
5. Section 429.102 is amended by:
0
a. Revising paragraphs (a)(1), and (5) through (10);
0
b. Adding paragraphs (a)(11) through (14); and
0
c. Revising paragraph (c)(4)(iii).
    The revisions and additions read as follows:


Sec.  429.102  Prohibited acts subjecting persons to enforcement 
action.

    (a) * * *
    (1) Failure of a manufacturer to provide, maintain, permit access 
to, or copying of records required to be supplied under the Act or this 
part or failure to make reports or provide other information required 
to be supplied under the Act or this part, including but not limited to 
failure to properly certify covered products and covered equipment in 
accordance with subpart B of this part;
* * * * *
    (5) Failure of a manufacturer to permit a DOE representative to 
observe any testing required by the Act, this part, or 10 CFR part 430 
or part 431 of this chapter, or to inspect the results of such testing;
    (6) Distribution in commerce by a manufacturer or private labeler 
of any new covered product or covered

[[Page 53703]]

equipment that is not in compliance with an applicable energy 
conservation standard;
    (7) Knowing misrepresentation by a manufacturer or private labeler 
by certifying an energy use or efficiency rating of any covered product 
or covered equipment distributed in commerce in a manner that is not 
supported by test data;
    (8) For any manufacturer, distributor, retailer, or private labeler 
to distribute in commerce an adapter that--
    (i) Is designed to allow a lamp that does not have a medium screw 
base to be installed into a fixture or lamp holder with a medium screw 
base socket; and
    (ii) Is capable of being operated at a voltage range at least 
partially within 110 and 130 volts;
    (9) For any manufacturer or private labeler to knowingly sell a 
product to a distributor, contractor, or dealer with knowledge that the 
entity routinely violates any regional standard applicable to the 
product; or
    (10) For any person to sell at retail a rough service lamp or 
vibration service lamp in a package containing more than one lamp; or
    (11) For any person--
    (i) To activate an activation lock for a grid-enabled water heater 
with knowledge that such water heater is not used as part of an 
electric thermal storage or demand response program;
    (ii) To distribute an activation key for a grid-enabled water 
heater with knowledge that such activation key will be used to activate 
a grid-enabled water heater that is not used as part of an electric 
thermal storage or demand response program;
    (iii) To otherwise enable a grid-enabled water heater to operate at 
its designed specification and capabilities with knowledge that such 
water heater is not used as part of an electric thermal storage or 
demand response program; or
    (iv) To knowingly remove or render illegible the required label of 
a grid-enabled water heater; or
    (12) Distribution in commerce by a manufacturer or private labeler 
of any covered equipment that is not labeled in accordance with 10 CFR 
part 431 of this chapter; or
    (13) Removal from any covered equipment or rendering illegible, by 
a manufacturer, distributor, retailer, or private labeler, any label 
required to be provided under 10 CFR part 431 of this chapter; or
    (14) Advertisement of an electric motor, by a manufacturer, 
distributor, retailer, or private labeler, in a catalog from which the 
equipment may be purchased, without including in the catalog all 
information as required by Sec.  431.31(b) of this chapter, provided, 
however, that this shall not apply to an advertisement of an electric 
motor in a catalog if distribution of the catalog began before the 
effective date of the labeling rule applicable to that motor.
* * * * *
    (c) * * *
    (4) * * *
    (iii) An outdoor unit that is part of any combination certified at 
less than the standard applicable in the region in which it is 
installed.
0
6. Section 429.106(b) is revised to read as follows:


Sec.  429.106  Investigation of compliance.

* * * * *
    (b) DOE may, at any time, request any information relevant to 
determining compliance with any requirement under 10 CFR parts 429, 430 
and 431, including data from any party that underlies the certification 
of a basic model and/or demonstrates whether a basic model complies 
with an applicable conservation standard (including any applicable 
design requirements).
0
7. Section 429.110 is revised to read as follows:


Sec.  429.110  Enforcement testing.

    (a) DOE may determine that test data for units tested in accordance 
with the applicable test procedure specified in 10 CFR part 430 or part 
431 of this chapter by DOE pursuant to this section or Sec.  429.104, 
another Federal agency pursuant to other provisions or programs, or a 
third-party certification program is official enforcement test data 
upon which DOE may make a finding of noncompliance.
    (b) If DOE has reason to believe that a basic model does not comply 
with an applicable standard, it may select and test units as follows.
    (1) Test location. DOE testing will be conducted at a laboratory 
accredited to the International Organization for Standardization (ISO)/
International Electrotechnical Commission (IEC), ``General requirements 
for the competence of testing and calibration laboratories,'' ISO/IEC 
17025:2005(E) (incorporated by reference; see Sec.  429.4). If testing 
cannot be completed at an independent laboratory, DOE, at its 
discretion, may allow enforcement testing at a manufacturer's 
laboratory, so long as the lab is accredited to ISO/IEC 17025:2005(E) 
and DOE representatives witness the testing. In addition, for 
commercial packaged boilers with rated input greater than 5,000,000 
Btu/h, DOE, at its discretion, may allow enforcement testing of a 
commissioned commercial packaged boiler in the location in which it was 
commissioned for use, pursuant to the test provisions at Sec.  
431.86(c) of this chapter, for which accreditation to ISO/IEC 
17025:2005(E) would not be required.
    (2) Test notice. To obtain units for enforcement testing to 
determine compliance with an applicable standard, DOE will issue a test 
notice addressed to the manufacturer in accordance with the following 
requirements:
    (i) DOE will send the test notice to the manufacturer.
    (ii) The test notice will specify the basic model selected for 
testing, and may include other characteristics or specifications of the 
requested units (e.g., individual or nameplate model numbers, serial 
number or manufacture date range(s), manufacture location). In 
addition, for electric motors with non-standard endshields or flanges 
and partial electric motors, the test notice may specify that the 
manufacturer provide a general purpose electric motor of equivalent 
electrical design and enclosure.
    (iii) The test notice will specify the method of selecting the test 
sample, the maximum size of the sample and the size of the initial test 
sample, the approximate date testing is to be started, and the facility 
at which testing will be conducted. The test notice may also provide 
for situations in which the selected basic model is unavailable for 
testing and may include alternative models or basic models.
    (iv) DOE will state in the test notice whether DOE or the 
manufacturer will select the units for testing.
    (v) The test notice will specify whether the units selected must be 
from the manufacturer's inventory, from one or more distributors, and/
or from one or more retailers. DOE may ask for documentation 
demonstrating the location from which each unit was selected, and that 
the unit was in inventory at such location on the date the test notice 
was issued. If any unit is selected from a distributor or retailer, the 
manufacturer shall make arrangements with the distributor or retailer 
for compensation for or replacement of any such units.
    (vi) DOE may require in the test notice that the manufacturer of a 
basic model ship or cause to be shipped from a retailer or distributor 
at the manufacturer's expense the requested number of units of a basic 
model specified in such test notice to the testing laboratory specified 
in the test notice. The manufacturer shall ship or cause to be shipped 
the specified test unit(s) of the basic model to the testing

[[Page 53704]]

laboratory within 5 working days from the date of the test notice.
    (3) Test Unit Availability. (i) If the manufacturer believes that 
it is unable to provide DOE with units of the basic model as specified 
in the test notice (e.g., having the same design, components, 
materials, manufacture date or date range, manufacture location, and 
nameplate or individual model number), the manufacturer must 
immediately notify DOE in writing, and include details of why the units 
are unavailable and what efforts the manufacturer has taken to secure 
them. If the manufacturer believes that it has similar, but not exactly 
the same, units that should satisfy the test notice, it must 
immediately notify DOE in writing, and include details about the 
specific units available and an explanation of how such units differ 
from the units requested. If DOE determines that the requested units 
are unavailable, DOE will contact the manufacturer to develop a plan 
for enforcement testing, which may include testing of similar units 
identified by the manufacturer.
    (ii) If DOE determines that fewer than the requested units of a 
basic model are available for testing when the manufacturer receives 
the test notice, then DOE may test the available unit(s) (which may, 
under paragraph (b)(3)(i) of this section, include testing of similar 
units identified by the manufacturer) and/or one or more other units of 
the basic model if expected to become available within 30 calendar 
days.
    (iii) For the purposes of this section, available units are those 
that are available for distribution in commerce within the United 
States.
    (4) Test unit selection. As specified by DOE in the test notice, 
either DOE or the manufacturer will select units for testing from one 
of the following sources:
    (i) Manufacturer's warehouse, distributor, or other facility 
affiliated with the manufacturer. DOE or the manufacturer will select a 
batch sample at random in accordance with the provisions in Sec.  
429.111 and the conditions specified in the test notice. The batch 
sample must be selected at random from all units of the specified model 
that are in inventory on the date of the test notice, including all 
units that have not yet been shipped. From that batch sample, DOE or 
the manufacturer will randomly select an initial test sample of units 
for testing in accordance with the instructions in the test notice.
    (ii) Retailer or other party not affiliated with the manufacturer. 
DOE, the retailer, or other party not affiliated with the manufacturer 
will select an initial test sample of units at random from the 
inventory of the retailer or other party. This sample must provide the 
minimum units necessary for testing in accordance with the instructions 
in the test notice. Depending on the results of the testing, DOE may 
select additional units for testing from the retailer or other 
facility.
    (iii) Previously commissioned commercial packaged boilers with a 
rated input greater than 5,000,000 Btu/h. DOE may test a sample of at 
least one unit in the location in which it was commissioned for use.
    (5) Test unit preparation. (i) Prior to and during testing, a test 
unit selected for enforcement testing will not be prepared, modified, 
or adjusted in any manner by DOE unless such preparation, modification, 
or adjustment is allowed by the applicable DOE test procedure, or is 
authorized by the manufacturer in response to a specific modification 
request by DOE. One test shall be conducted for each test unit in 
accordance with the applicable test procedure prescribed in 10 CFR part 
430 or part 431 of this chapter.
    (ii) Prior to and during testing, a test unit selected for 
enforcement testing shall not be prepared, modified, or adjusted in any 
manner by the manufacturer. No quality control, testing or assembly 
procedures shall be performed by the manufacturer on a test unit, or 
any parts and subassemblies thereof, that is not performed during the 
production and assembly of all other units included in the basic model.
    (iii) DOE may consider a test unit to be defective if such unit is 
inoperative or is found to be in noncompliance due to failure of the 
unit to operate according to the manufacturer's operating instructions. 
DOE will notify the manufacturer if a test unit is received by the test 
lab in a condition that may impact its performance. DOE may authorize 
testing of an additional unit on a case-by-case basis.
    (c) A test unit of a basic model subject to a design requirement 
may be selected in accordance with the procedures under paragraph (b) 
of this section. In such an instance, DOE will make a determination of 
noncompliance for the basic model based on an examination of whether a 
single unit of the basic model fails to comply with the applicable 
design requirements.
0
8. Section 429.111 is added to read as follows:


Sec.  429.111  Basic model compliance.

    (a) DOE will evaluate whether a basic model complies with an 
applicable performance standard(s) based on testing conducted in 
accordance with the applicable test procedure specified in 10 CFR part 
430 or 431 of this chapter, and with the following sampling procedures:
    (1) For all products, if the sample size is comprised of a single 
unit, DOE will determine noncompliance for the basic model based solely 
on the results of the single test. In such an instance, the sampling 
plans in the appendices of this subpart do not apply.
    (2) For products with applicable energy conservation standard(s) in 
Sec.  430.32 of this chapter, and commercial pre-rinse spray valves, 
illuminated exit signs, traffic signal modules and pedestrian modules, 
commercial clothes washers, dedicated-purpose pool pumps, and metal 
halide lamp fixtures, and compressors:
    (i) If the sample size is comprised of two or three units, DOE will 
apply appendix B of this subpart (Sampling Plan for Enforcement Testing 
of Covered Equipment and Certain Low-Volume Covered Products) using a 
sample size (n1) equal to the number of units tested to 
determine if the basic model is noncompliant.
    (ii) If the sample size is comprised of four or more units (up to 
21), DOE will apply appendix A of this subpart (Sampling Plan for 
Enforcement Testing of Covered Consumer Products and Certain High-
Volume Commercial Equipment) using a sample size equal to the total 
number of units tested to determine if the basic model is noncompliant.
    (3) For automatic commercial ice makers; commercial refrigerators, 
freezers, and refrigerator-freezers; refrigerated bottled or canned 
vending machines; commercial HVAC & WH products; walk-in cooler and 
walk-in freezer panels, and walk-in cooler and walk-in freezer doors; 
and walk-in cooler and walk-in freezer refrigeration systems, if the 
sample size is comprised of two or more units (up to four), DOE will 
apply appendix B of this subpart (Sampling Plan for Enforcement Testing 
of Covered Equipment and Certain Low-Volume Covered Products) using a 
sample size (n1) equal to the number of units tested to 
determine if the basic model is noncompliant.
    (4) For distribution transformers, if the sample size is comprised 
of two or more units (up to five), DOE will apply appendix C of this 
subpart (Sampling Plan for Enforcement Testing of Distribution 
Transformers).
    (5) For pumps subject to the standards specified in Sec.  
431.465(a) of this chapter, DOE will determine if the basic model is 
noncompliant based on the arithmetic mean of the sample (up to four 
units).

[[Page 53705]]

    (6) For uninterruptible power supplies, if a basic model is 
certified for compliance to the applicable energy conservation 
standard(s) in Sec.  430.32 of this chapter according to the sampling 
plan in Sec.  429.39(a)(2)(iv)(A) or is not certified, DOE will make a 
determination of noncompliance using a sample size of not more than 21 
units and follow the sampling plan in appendix A of this subpart 
(Sampling Plan for Enforcement Testing of Covered Consumer Products and 
Certain High-Volume Commercial Equipment). If a basic model is 
certified for compliance to the applicable energy conservation 
standard(s) in Sec.  430.32 of this chapter according to the sampling 
plan in Sec.  429.39(a)(2)(iv)(B), DOE will make a determination of 
noncompliance using a sample size of at least one unit (up to four) and 
follow the sampling plan in appendix D of this subpart (Sampling Plan 
for Enforcement Testing of Uninterruptible Power Supplies).
    (7) For electric motors and small electric motors, if the sample 
size is comprised of five or more units (up to 20) DOE will apply 
appendix E of this subpart (Sampling Plan for Enforcement Testing of 
Electric Motors and Small Electric Motors) using a sample size 
(n1) equal to the number of units tested to determine if the 
basic model is noncompliant.
    (8) DOE may make a determination of noncompliance based on a sample 
size of less than four units (five for distribution transformers, 
electric motors, and small electric motors) in limited circumstances 
(e.g., when DOE makes a determination of noncompliance for a basic 
model subject to design requirements; when DOE's test notice process 
pursuant to Sec.  429.110(a)(3) results in a reduced sample size).
    (b) DOE will evaluate whether a basic model complies with an 
applicable design requirement(s) based on examination of a single unit 
of the basic model, on design information, or pursuant to a test notice 
issued under Sec.  429.110(b). In such an instance, the sampling plans 
in the appendices of this subpart do not apply.
    (c) If the results of any assessment test conducted pursuant to 
Sec.  429.104 provides results that the basic model performed 25% or 
worse than the applicable energy conservation standard, DOE may make a 
determination of noncompliance for the basic model based solely on the 
results of such test. In such an instance, the sampling plans in the 
appendices of this subpart do not apply.
0
9. Section 429.112 is added to read as follows:


Sec.  429.112  Basis of noncompliance determination.

    DOE may make a determination that a basic model does not comply 
with an applicable energy conservation standard based on test data from 
manufacturer or private labeler, another Federal agency, or a third-
party certification program; testing pursuant to Sec. Sec.  429.104 and 
429.110 of this part; and/or an admission.
0
10. Section 429.114 is revised to read as follows:


Sec.  429.114  Notice of noncompliance determination and notice to 
cease distribution of a basic model.

    (a) In the event that a basic model is determined to be 
noncompliant with an applicable energy conservation standard, DOE may 
issue a notice of noncompliance determination to the manufacturer or 
private labeler.
    (1) The notice of noncompliance determination will notify the 
manufacturer or private labeler that it is a prohibited act to 
distribute in commerce a basic model that does not meet applicable 
standards.
    (2) The manufacturer or private labeler must, within 30 calendar 
days of the issuance of the notice of noncompliance determination, 
submit to DOE records, reports and other documentation pertaining to 
the acquisition, ordering, storage, shipment, or sale of the basic 
model(s) determined to be in noncompliance.
    (b) In the event that DOE determines a manufacturer has failed to 
comply with an applicable certification requirement with respect to a 
particular basic model, DOE may issue a notice of noncompliance 
determination to the manufacturer.
    (1) The notice of noncompliance determination will notify the 
manufacturer of its obligation to immediately comply with the 
applicable certification requirement.
    (2) The manufacturer must, within 30 calendar days of the issuance 
of the notice of noncompliance determination, submit to DOE records, 
reports and other documentation pertaining to the acquisition, 
ordering, storage, shipment, or sale of the basic model.
    (c) At least 30 calendar days prior to the issuance of a notice of 
noncompliance determination, DOE will issue to the manufacturer or 
private labeler a letter of intent stating DOE's intent to issue a 
notice of noncompliance determination for the basic model.
0
11. Section 429.115 is added to read as follows:


Sec.  429.115  Petitions for reexamination.

    (a) Within 30 calendar days after issuance of DOE's letter of 
intent to issue a notice of noncompliance determination under Sec.  
429.114, the manufacturer or private labeler may petition DOE to 
reexamine such determination. Such petitions must be submitted to DOE 
in writing, and must contain:
    (1) The material issue(s) that the manufacturer or private labeler 
has with the assessment and/or enforcement testing of the basic model;
    (2) Complete test reports or AEDM information (if applicable) the 
manufacturer or private labeler believes demonstrate the basic model 
meets the applicable standard;
    (3) All legal and other arguments that the manufacturer or private 
labeler wishes to make in support of its position;
    (4) Information regarding any previous representations of the basic 
model's energy consumption, and if different than paragraph (a)(3) of 
this section, the complete test reports or AEDM information in support 
of such representations; and
    (5) Any other pertinent material.
    (b) Test reports submitted as a part of a petition must demonstrate 
that the applicable DOE test procedure specified in 10 CFR part 430 or 
part 431 of this chapter was followed in its entirety.
    (c) The manufacturer or private labeler must, for each test report 
submitted as a part of the petition, inform DOE if the tested units' 
design, components, materials, manufacture date or date range, or 
manufacture location differ in any way from the unit(s) of the basic 
model (specified in the letter of intent) tested pursuant to Sec.  
429.104 or 429.110. If no units of the basic model specified in the 
letter of intent were tested pursuant to Sec.  429.104 or 429.110, the 
manufacturer or private labeler must, for each test report submitted as 
a part of the petition, inform DOE if the tested unit's design, 
components, or materials differ in any way from the least efficient 
model within such basic model.
    (d) The manufacturer or private labeler must, for each test report 
submitted as a part of the petition, inform DOE whether the tested 
units were prepared, modified, or adjusted in any manner prior to and 
during testing.
    (e) In the event that, as a part of its petition, a manufacturer or 
private labeler submits test reports for testing completed after the 
date of issuance of the letter of intent, the manufacturer or private 
labeler must provide DOE with documentation identifying the source of 
the tested units and an explanation of

[[Page 53706]]

how the units were selected for testing. If the tested units were built 
subsequent to the date of issuance of the letter of intent, the 
manufacturer or private labeler must provide documentation 
demonstrating whether and how many units were available in inventory or 
from a retailer on the date of testing.
    (f) Failure to submit a petition as specified in this section 
constitutes a waiver of the right to petition DOE to reexamine the 
pending determination.
    (g) DOE will only consider validly submitted petitions, as required 
in paragraphs (a) through (e) of this section.
    (h) DOE may require that the manufacturer or private labeler 
provide information or documentation to supplement its petition.
    (i) Upon review of a validly submitted petition, DOE may modify or 
leave unchanged DOE's pending determination of noncompliance of the 
basic model.
0
12. Section 429.116 is revised to read as follows:


Sec.  429.116  Additional certification testing requirements.

    If DOE determines that independent, third-party testing is 
necessary to ensure compliance with the rules of this part, 10 CFR part 
430, or part 431, a manufacturer must base its certification of a basic 
model under subpart B of this part on independent, third-party 
laboratory testing.
0
13. Section 429.117 is added to read as follows:


Sec.  429.117  Notice of allowance.

    (a) After issuance of a noncompliance determination under Sec.  
429.114(a), a manufacturer or private labeler may modify a noncompliant 
basic model in such manner as to make it comply with the applicable 
standard(s).
    (b) Prior to distribution in commerce in the United States of the 
modified model, the manufacturer or private labeler must request in 
writing a notice of allowance from DOE.
    (c) The manufacturer or private labeler's request to DOE for a 
notice of allowance must include:
    (1) A detailed explanation of all modifications made, including a 
clear explanation of all features removed or added to make the model 
comply with the applicable standard(s).
    (2) Complete test data, which satisfy the sampling requirements 
under Sec.  429.11 and the product-specific sections in subpart B of 
this part, and demonstrate that:
    (i) The applicable DOE test procedure specified in 10 CFR part 430 
or part 431 of this chapter was followed in its entirety; and
    (ii) The modified basic model meets the applicable standard when 
applying the appropriate sampling provisions under subpart B of this 
part.
    (d) DOE may require that the manufacturer or private labeler's 
testing in support of the request for a notice of allowance be 
performed at an independent, third-party testing facility.
    (e) The manufacturer or private labeler must treat the modified 
basic model as a new basic model, to include:
    (1) The modified basic model must be assigned a new basic model 
number;
    (2) Any model within the new basic model must be assigned a new 
individual model number; and
    (3) Such new basic model must be certified in accordance with the 
provisions of this part.
    (f) The manufacturer or private labeler must maintain records for 
the modified basic model, including records of serial numbers of and 
the modifications made to any units of the noncompliant basic model in 
existing stock.
    (g) Such records shall be organized and indexed in a fashion that 
makes them readily accessible for review by DOE upon request.
    (h) The manufacturer or private labeler must retain these records 
consistent with Sec.  429.71.
0
14. Section 429.118 is revised to read as follows:


Sec.  429.118   Injunctions.

    (a) If a manufacturer, private labeler or any other person as 
required fails to cease engaging in a prohibited act, DOE may 
immediately seek an injunction. In such instance, DOE will notify the 
manufacturer, private labeler or any other person as required, of the 
prohibited act(s) at issue and DOE's intent to seek a judicial order 
enjoining the prohibited act(s).
    (b) DOE may, in its discretion, provide the manufacturer, private 
labeler or other person, an opportunity to deliver to DOE, within 15 
calendar days of the notification provided pursuant to paragraph (a) of 
this section, a corrective action and compliance plan detailing the 
steps it will take to ensure that the prohibited act(s) cease(s). DOE 
will review the plan and, if satisfactory, monitor implementation of 
such plan. If DOE determines the manufacturer, private labeler or other 
person is not effectively implementing such plan, DOE may seek an 
injunction immediately upon notifying the manufacturer, private labeler 
or other person of this decision and DOE's renewed intent to seek an 
injunction.
0
15. Section 429.120 is revised to read as follows:


Sec.  429.120  Maximum civil penalty.

    Any person who knowingly commits a prohibited action listed in 
Sec.  429.102(a) may be subject to assessment of a civil penalty of no 
more than $460 for each violation. As to Sec.  429.102(a)(1) with 
respect to failure to certify, and as to Sec.  429.102(a)(2), and (5) 
through (12), each unit of a basic model of a covered product or 
covered equipment distributed shall constitute a separate violation. 
For violations of Sec.  429.102(a)(1), (3), and (4), each day of 
noncompliance shall constitute a separate violation for each basic 
model at issue.
0
16. Section 429.122 is revised to read as follows:


Sec.  429.122  Notice of proposed civil penalty.

    (a) The General Counsel (or delegee) shall provide notice of any 
proposed civil penalty.
    (b) The notice of proposed civil penalty shall:
    (1) Include the amount of the proposed civil penalty;
    (2) Include a statement of the material facts constituting the 
alleged violation; and
    (3) Inform the person of the opportunity to elect in writing within 
30 calendar days of receipt of the notice to have the procedures of 
Sec.  429.128 (in lieu of those of Sec.  429.126) apply with respect to 
the penalty.
0
17. Section 429.124 is revised to read as follows:


Sec.  429.124   Election of procedures.

    (a) In responding to a notice of proposed civil penalty, the 
respondent may:
    (1) Request, in writing, an administrative hearing before an 
Administrative Law Judge (ALJ) under Sec.  429.126;
    (2) Within 30 calendar days of issuance of such notice, elect in 
writing to have the procedures of Sec.  429.128 apply; or
    (3) Submit a signed compromise agreement (provided by DOE pursuant 
to Sec.  429.132), to settle the matter for the civil penalty amount 
and conditions provided by DOE within such agreement.
    (b) Any election to have the procedures of Sec.  429.128 apply may 
not be revoked except with the consent of the General Counsel (or 
delegee).
    (c) If the respondent fails to respond to a notice issued under 
Sec.  429.120 or otherwise fails to indicate its election of 
procedures, DOE shall refer the civil penalty action to an ALJ for a 
hearing under Sec.  429.126.
0
18. Section 429.126 is revised to read as follows:

[[Page 53707]]

Sec.  429.126   Administrative law judge hearing and appeal.

    (a) Pursuant to Sec.  429.124, DOE shall refer a civil penalty 
action brought under Sec.  429.122 to an Administrative law judge 
(ALJ), who shall afford the respondent an opportunity for an agency 
hearing on the record in accordance with the procedures of subpart D of 
this part.
    (b) After consideration of all matters of record in the proceeding, 
the ALJ will issue a recommended decision and, if appropriate, 
recommend a civil penalty. The decision will include a statement of the 
findings and conclusions, and the reasons therefore, on all material 
issues of fact, law, and discretion.
    (c)(1) The General Counsel (or delegee) shall adopt, modify, or set 
aside the conclusions of law or discretion contained in the ALJ's 
recommended decision and shall issue a final order, which may assess a 
civil penalty. The General Counsel (or delegee) shall include in the 
final order the ALJ's findings of fact and the reasons for the final 
agency actions.
    (2) Any person against whom a penalty is assessed under this 
section may, within 60 calendar days after the date of the final order 
assessing such penalty, institute an action in the United States Court 
of Appeals for the appropriate judicial circuit for judicial review of 
such order in accordance with chapter 7 of title 5, United States Code. 
The court shall have jurisdiction to enter a judgment affirming, 
modifying, or setting aside in whole or in part, the final order, or 
the court may remand the proceeding to the Department for such further 
action as the court may direct.
0
19. Section 429.128 is revised to read as follows:


Sec.  429.128   Immediate issuance of order assessing civil penalty.

    (a) A respondent may elect within 30 calendar days of issuance of a 
notice of proposed civil penalty for DOE to issue an order assessing 
the civil penalty. In such case, the General Counsel (or delegee) shall 
issue an order assessing the civil penalty proposed in the notice of 
proposed penalty under Sec.  429.122, not sooner than 60 calendar days 
after the respondent's receipt of the notice of proposed penalty.
    (b) If within 60 calendar days of receiving the assessment order in 
paragraph (a) of this section the respondent does not pay the civil 
penalty amount, DOE shall institute an action in the appropriate United 
States District Court for an order affirming the assessment of the 
civil penalty. The court shall have authority to review de novo the law 
and the facts involved and shall have jurisdiction to enter a judgment 
enforcing, modifying, and enforcing as so modified, or setting aside in 
whole or in part, such assessment.
0
20. Section 429.132 is amended by adding paragraph (e) to read as 
follows:


Sec.  429.132  Compromise and settlement.

* * * * *
    (e) If a settlement is agreed to by the parties, a compromise 
agreement setting forth the terms of the agreement shall be signed by 
the respondent and DOE, and the General Counsel (or delegee) shall set 
forth a final order adopting the compromise agreement and assessing any 
civil penalty. The case shall be closed in accordance with the terms of 
the settlement.

Appendix A to Subpart C of Part 429 [Amended]

0
21. Appendix A to subpart C of part 429, paragraph (a), is amended by 
removing the reference ``Sec.  429.57(e)(1)(i)'' and adding in its 
place, ``Sec.  429.111''.

Appendix B to Subpart C of Part 429 [Amended]

0
22. Appendix B to subpart C of part 429, paragraph (a), is amended by 
removing the reference ``Sec.  429.57(e)(1)(ii)'' and adding in its 
place, ``Sec.  429.111''.

PART 431--ENERGY EFFICIENCY PROGRAM FOR CERTAIN COMMERCIAL AND 
INDUSTRIAL EQUIPMENT

0
23. The authority citation for part 431 continues to read as follows:

    Authority:  42 U.S.C. 6291-6317; 28 U.S.C. 2461 note.

0
24. Appendix A to subpart U of part 431 is redesignated as appendix E 
to subpart C of part 429.
0
25. Revise the heading to newly redesignated appendix E to subpart C of 
part 429 to read as follows:

Appendix E to Subpart C of Part 429--Sampling Plan for Enforcement 
Testing of Electric Motors and Small Electric Motors

* * * * *

Subpart U--[Removed and Reserved]

0
26. Remove and reserve subpart U of part 431, consisting of Sec. Sec.  
431.381 through 431.387.

[FR Doc. 2020-16690 Filed 8-28-20; 8:45 am]
BILLING CODE 6450-01-P