Energy Conservation Program: Energy Conservation Standards for Manufactured Housing; Enforcement, 88844-88854 [2023-27182]

Agencies

• DEPARTMENT OF ENERGY

[Federal Register Volume 88, Number 246 (Tuesday, December 26, 2023)]
[Proposed Rules]
[Pages 88844-88854]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-27182]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

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

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Federal Register / Vol. 88, No. 246 / Tuesday, December 26, 2023 / 
Proposed Rules

[[Page 88844]]



DEPARTMENT OF ENERGY

10 CFR Part 460

[EERE-2009-BT-BC-0021]
RIN 1904-AF53


Energy Conservation Program: Energy Conservation Standards for 
Manufactured Housing; Enforcement

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) is proposing to establish 
enforcement procedures for its energy conservation standards for 
manufactured housing. DOE recently amended the compliance date for 
these standards in a final rule to delay compliance. DOE delayed the 
compliance date to allow DOE more time for this rulemaking to establish 
enforcement procedures that provide clarity for manufacturers and other 
stakeholders regarding DOE's expectations of manufacturers and DOE's 
plans for enforcing the standards.

DATES: DOE will accept comments, data, and information regarding the 
notice of proposed rulemaking received no later than February 26, 2024. 
See section V, ``Public Participation,'' for details.

ADDRESSES: The docket for this proposed rulemaking, which includes 
Federal Register notices, comments, and other supporting documents/
materials, is available for review at www.regulations.gov. All 
documents in the docket are listed in the www.regulations.gov index. 
However, not all documents listed in the index may be publicly 
available, such as information that is exempt from public disclosure.
    The docket web page can be found at www.regulations.gov/docket?D=EERE-2009-BT-BC-0021. The docket web page contains 
instructions on how to access all documents, including public comments, 
in the docket. See section V for information on how to submit comments 
through www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Mr. Matthew Schneider, U.S. Department 
of Energy, Office of the General Counsel (GC-33), 1000 Independence 
Avenue SW, Washington, DC 20585; Telephone: (240) 597-6265; Email: 
[email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. Discussion of Proposed Rule
III. Expected Costs to Manufacturers From the Proposed Rule
IV. Procedural Issues and Regulatory Review
V. Public Participation
VI. Approval of the Office of the Secretary

I. Background

    The Energy Independence and Security Act of 2007 (``EISA,'' Pub. L. 
110-140) directs the U.S. Department of Energy (``DOE'' or, in context, 
``the Department'') to establish energy conservation standards for 
manufactured housing.\1\ (42 U.S.C. 17071) Manufactured homes are 
constructed according to standards administered by the U.S. Department 
of Housing and Urban Development (``HUD Code''). 24 CFR part 3280. See 
also generally 42 U.S.C. 5401-5426. Structures, such as site-built and 
modular homes, that are constructed to state, local, or regional 
building codes are excluded from the coverage of the HUD Code.\2\
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    \1\ The National Manufactured Housing Construction and Safety 
Standards Act of 1974, as amended, defines ``manufactured home'' as 
a structure, transportable in one or more sections, which in the 
traveling mode is 8 body feet or more in width or 40 body feet or 
more in length or which when erected on-site is 320 or more square 
feet, and which is built on a permanent chassis and designed to be 
used as a dwelling with or without a permanent foundation when 
connected to the required utilities, and includes the plumbing, 
heating, air conditioning, and electrical systems contained therein 
. . . . . 42 U.S.C. 5402(6).
    \2\ See 42 U.S.C. 5403(f). See also 24 CFR 3282.12.
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    EISA directs DOE to base its standards on the most recent version 
of the International Energy Conservation Code (``IECC'') and any 
supplements to that code, except in cases where DOE finds that the IECC 
is not cost-effective or where a more stringent standard would be more 
cost-effective, based on the impact of the IECC on the purchase price 
of manufactured housing and on total life-cycle construction and 
operating costs. (See 42 U.S.C. 17071(b)(1))
    On June 17, 2016, DOE published in the Federal Register a notice of 
proposed rulemaking (``NOPR'') to propose energy conservation standards 
for manufactured housing, including proposals recommended by the 
negotiated rulemaking working group for manufactured housing. 81 FR 
39756 (``June 2016 NOPR''). DOE received nearly 50 comments on the 
proposed rule during the comment period. In addition, DOE also received 
over 700 substantively similar form letters from individuals.
    On August 3, 2018, DOE published a Notice of Data Availability 
(``NODA''), stating it was examining possible alternatives to the 
requirements proposed in the June 2016 NOPR and seeking further input 
from the public, including on first-time costs related to the purchase 
of manufactured homes. 83 FR 38073 (``August 2018 NODA''). Prior to the 
NODA, in December of 2017, the Sierra Club filed a lawsuit against DOE 
in the U.S. District Court for the District of Columbia, alleging that 
DOE had failed to meet its statutory deadline for establishing energy 
conservation standards for manufactured housing. Sierra Club v. 
Granholm, No. 1:17-cv-02700-EGS (D.D.C. filed Dec. 18, 2017). In 
November 2019, the court entered a consent decree in which DOE agreed 
to complete the rulemaking by stipulated dates.
    After evaluating the comments received in response to the June 2016 
NOPR and the August 2018 NODA, DOE published a supplemental NOPR 
(``SNOPR'') on August 26, 2021, in which DOE proposed energy 
conservation standards for manufactured homes based on the 2021 IECC. 
86 FR 47744 (``August 2021 SNOPR''). DOE's primary proposal in the 
August 2021 SNOPR was a ``tiered'' approach based on the 2021 IECC. The 
``tiered'' approach identifies a subset of less stringent energy 
conservation standards for certain manufactured homes (based on retail 
list price) in light of the cost-effectiveness considerations required 
by EISA. DOE's alternate proposal was an ``untiered'' approach, wherein 
energy conservation standards for all manufactured homes would be based 
on certain thermal envelope components and specifications of the 2021 
IECC. Both proposals replaced the

[[Page 88845]]

June 2016 NOPR proposal. Id. DOE sought comment on these proposals, as 
well as alternate thresholds, including a size-based threshold (e.g., 
square footage, number of sections) and a region-based threshold, and 
alternative exterior wall insulation requirements (R-21) for certain 
HUD zones. Id.
    On October 26, 2021, DOE published a NODA regarding updated inputs 
and results of the analyses presented in the August 2021 SNOPR (both 
``tiered'' and ``untiered'' approaches), including a sensitivity 
analysis regarding an alternative sized-based tier threshold and an 
alternate exterior wall insulation requirement (R-21) for certain HUD 
zones. 86 FR 59042 (``October 2021 NODA''). In addition, DOE reopened 
the public comment period on the August 2021 SNOPR through November 26, 
2021. DOE sought comments on the updated inputs and corresponding 
analyses, encouraged stakeholders to provide additional data to inform 
the analyses, and stated it might further revise the rulemaking 
analysis based on new or updated information. Id.
    On May 31, 2022, DOE published a final rule codifying the proposed 
energy conservation standards for manufactured housing in a new part of 
the Code of Federal Regulations (``CFR'') under 10 CFR part 460, 
subparts A, B, and C (``May 2022 Final Rule''). 87 FR 32728. Subpart A 
of 10 CFR part 460 presents generally the scope of the rule and 
provides definitions of key terms. Subpart B establishes new 
requirements for manufactured homes that relate to climate zones, the 
building thermal envelope, air sealing, and installation of insulation, 
based on certain provisions of the 2021 IECC. Subpart C establishes new 
requirements based on the 2021 IECC related to duct sealing; heating, 
ventilation, and air conditioning (``HVAC''); service hot water 
systems; mechanical ventilation fan efficacy; and heating and cooling 
equipment sizing.
    Under the energy conservation standards, the stringency of the 
requirements under subpart B are based on a tiered approach depending 
on the number of sections of the manufactured home. Accordingly, two 
sets of standards are established in subpart B (i.e., Tier 1 and Tier 
2). Both Tier 1 and Tier 2 incorporate building thermal envelope 
measures based on certain thermal envelope components subject to the 
2021 IECC that DOE determined applicable and appropriate for 
manufactured homes. Tier 1 applies these building thermal envelope 
provisions to single-section manufactured homes, but only includes 
components at stringencies that would increase the incremental purchase 
price by less than $750 in order to address affordability concerns that 
were raised by HUD and other stakeholders during the consultation and 
rulemaking process. Tier 2 applies these same building thermal envelope 
provisions to multi-section manufactured homes but at higher 
stringencies specified for site-built homes in the 2021 IECC, with an 
alternate exterior wall insulation requirement (R-21) for climate zones 
2 and 3 based on consideration of the design and factory construction 
techniques of manufactured homes, as presented in the August 2021 SNOPR 
and October 2021 NODA. Manufacturers can comply with the building 
thermal envelope requirements through a prescriptive pathway (e.g., 
using materials with specified ratings) or a performance pathway based 
on overall thermal transmittance (Uo) performance. See 10 CFR 
460.102(c). Further, the energy conservation standards for both tiers 
also include duct and air sealing, insulation installation, HVAC and 
service hot water system specifications, mechanical ventilation fan 
efficacy, and heating and cooling equipment sizing provisions, based on 
the 2021 IECC. DOE concluded that this approach is cost-effective based 
on the expected total life-cycle cost (``LCC'') savings for the 
lifetime of the home associated with implementation of the energy 
conservation standards. See e.g., 87 FR 32742.
    In the May 2022 Final Rule, DOE adopted a compliance date such that 
the standards would apply to manufactured homes that are manufactured 
on or after one year following the publication date of the final rule 
in the Federal Register, which is May 31, 2023. In doing so, DOE noted 
its belief that many manufacturers already have experience complying 
with efficiency requirements similar to what DOE required in the May 
2022 Final Rule based on manufacturers' previous experience with HUD Uo 
requirements and ENERGY STAR Version 2 efficiency requirements for 
homes produced on or after June 1, 2020. 87 FR 32759. DOE did not 
specify its approach for enforcement of the standards in the May 2022 
Final Rule and noted that manufacturers would be able to comply with 
the standards as they were issued. In fact, DOE noted that many of the 
requirements in the standards would require minimal compliance efforts 
(e.g., documenting the use of materials already subject to separate 
Federal or industry standards, such as the R-value of insulation or U-
factor values for fenestration). 87 FR 32758, 32790. Nevertheless, DOE 
stated in the May 2022 Final Rule that it may address compliance and 
enforcement issues and procedures in a future agency action (see 87 FR 
32757-32758), which is discussed further in section II of this 
document.
    On March 24, 2023, DOE published in the Federal Register a NOPR 
proposing to amend the compliance date for the manufactured housing 
energy conservation standards (88 FR 17745, ``March 2023 NOPR''). In 
that NOPR, DOE described the need to amend the compliance date for the 
manufactured housing standards, noting that it had not yet issued 
procedures for investigating and enforcing against noncompliance with 
the standards, and that a delay was necessary to ensure that DOE can 
receive and incorporate meaningful stakeholder feedback into its 
enforcement procedures prior to part 460's compliance date. 
Accordingly, DOE proposed to require compliance with the Tier 1 
standards beginning 60 days after publication of its final enforcement 
procedures, and compliance with the Tier 2 standards beginning 180 days 
after publication of its final enforcement procedures. By final rule 
published on May 30, 2023 (May 2023 Final Rule) DOE amended the 
compliance date for part 460 consistent with its proposed compliance 
date in the NOPR for Tier 1 (i.e., 60 days after issuance of DOE's 
enforcement procedures for part 460). However, for Tier 2, DOE amended 
the compliance date to July 1, 2025. 88 FR 34411. After consideration 
of comments on the NOPR, DOE determined that amending the compliance 
date to July 1, 2025, for Tier 2 homes would (1) provide greater 
certainty for manufacturers versus an indeterminate date, (2) ensure 
DOE will have enough time to develop enforcement procedures and engage 
in the rulemaking process, including providing adequate time for 
stakeholders to submit robust feedback on DOE's proposed enforcement 
procedures, and (3) provide manufacturers with sufficient time to 
adjust their operations and practices consistent with DOE's enforcement 
procedures. 88 FR 34412.

II. Discussion of Proposed Rule

    Pursuant to section 413 of the Energy Independence and Security Act 
(``EISA''), DOE is authorized to initiate enforcement actions to ensure 
compliance with its energy conservation standards for manufactured 
housing. In this section, DOE provides a section-by-section analysis of 
its proposed rule to establish procedures for such enforcement actions. 
As discussed herein, DOE proposes to amend subpart

[[Page 88846]]

D to its regulations at 10 CFR part 460 to set forth prohibited acts, 
civil penalty amounts, investigation and enforcement procedures, 
recordkeeping requirements, and civil penalty collection procedures. In 
particular, DOE proposes that it will determine compliance by reviewing 
certain manufacturer records. DOE is not proposing specific test 
procedures to demonstrate compliance with DOE's standards. Nor is DOE 
proposing to require manufacturers to certify that their manufactured 
home models comply with DOE's standards. In addition, DOE proposes to 
clarify that manufacturers may demonstrate compliance with the 10 CFR 
460.205 requirements for sizing of heating and cooling equipment by 
using either the approach in the Air Conditioning Contractors of 
America (ACCA) Manual J and ACCA Manual S or the approach codified in 
HUD's regulations at 24 CFR 3280.508.

General Counsel Responsibilities

    Proposed Sec.  460.302 provides that the Office of the DOE General 
Counsel may assist in investigations of alleged violations of part 460, 
prosecute civil enforcement actions under part 460, compromise and 
assess civil penalties initiated under part 460, represent DOE in any 
formal proceedings or hearings before an Administrative Law Judge 
(``ALJ'') in cases involving alleged violations of part 460, and refer 
cases to the Attorney General for the collection of civil penalties.

Prohibited Acts and Civil Penalties

    Proposed Sec.  460.304 lists prohibited acts that will be subject 
to civil enforcement action under part 460. These prohibited acts 
include the sale, importation, or distribution into commerce in the 
United States of a manufactured home that is not in compliance with any 
energy conservation standard or requirement in part 460. (42 U.S.C. 
17071) They also include any failure of a manufacturer to maintain, 
provide to DOE, or permit DOE access to any information, records, or 
documents required under part 460.
    DOE also proposes in Sec.  460.304 to clarify that certain acts 
relating to sizing of heating and cooling equipment comply with the 
energy conservation standard and do not constitute a violation under 
Sec.  460.304(a)(2). Specifically, in Sec.  460.304(d), DOE proposes to 
clarify that a manufacturer may use the approach codified in HUD 
regulations referencing the American Society of Heating, Refrigerating 
and Air Conditioning Engineers (ASHRAE) Handbook of Fundamentals for 
determining manufactured home heat loss/heat gain. See 24 CFR 3280.508. 
DOE is proposing to clarify that this approach can be used in lieu of 
using Air Conditioning Contractors of America (ACCA) Manual J and ACCA 
Manual S for sizing of heating and cooling equipment as specified in 
the energy conservation standard at 10 CFR 460.205. DOE has tentatively 
determined that both approaches sufficiently align with the intent of 
10 CFR 460.205 supporting appropriate sizing of heating and cooling 
equipment in manufactured housing and are not expected to impact the 
stringency of the energy conservation standards in Sec.  460.205. 
Further, DOE understands that certain details of the final installation 
location, such as the house orientation, may not always be available 
when equipment sizing is occurring. Thus, DOE proposes to allow an 
alternate sizing approach to be used as specified by the ASHRAE 
Handbook of Fundamentals pursuant to the methodology adopted by HUD.
    Proposed Sec.  460.304 explains the potential civil penalties for 
prohibited acts under part 460. It provides that a manufacturer that 
commits a prohibited act may be subject to assessment of a civil 
penalty of up to one percent of the manufacturer's retail list price of 
the manufactured home per violation, in keeping with the maximum civil 
penalty for violations of provisions of DOE's energy conservation 
manufactured housing regulations set forth in accordance with section 
413(c) of EISA.
    Proposed Sec.  460.304 also describes how DOE will calculate civil 
penalties for prohibited acts. It provides that each day a manufacturer 
fails to maintain, provide, or permit access to information, records, 
or documents will be considered a separate violation. It also provides 
that each failure to comply with a standard or requirement of part 460, 
per unit sold, imported, or introduced into commerce in the United 
States, will be considered a separate violation. For example, if a 
manufactured home model fails to comply with three standards in part 
460, the manufacturer has sold, imported, or distributed in commerce 
100 units of that model,\3\ and the retail list price of that model is 
$200,000, then the manufacturer will subject to a civil penalty of up 
to $600,000 ($200,000 retail list price x 1% x 3 violations x 100 
units).
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    \3\ As discussed in the Notice of Noncompliance section, for the 
first five years after the compliance date for a type of home (Tier 
1 or 2), DOE will consider only units the manufacturer sold, 
imported, or distributed in commerce from the compliance date for 
that type of home (Tier 1 or 2) to the date the notice of 
noncompliance determination is issued. Once five years has passed 
from the compliance date for a type of home, DOE will consider units 
the manufacturer sold, imported, or distributed in commerce for the 
five years prior to the date the notice of noncompliance is issued.
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    DOE notes that section 413 of EISA does not specifically provide 
for the assessment of civil penalties for a manufacturer's failure to 
maintain or provide to DOE information, records, or documents. However, 
section 413(a) requires the Secretary, by regulation, to establish 
standards for energy efficiency in manufactured housing. Section 413(c) 
provides that any manufacturer of manufactured housing that violates a 
provision of the regulations issued under section 413(a) is liable to 
the United States for a civil penalty. DOE is proposing to add these 
enforcement procedures pursuant to section 413(a) to carry out its 
obligation under EISA to ensure that manufacturers comply with DOE's 
energy conservation standards. Accordingly, DOE is proposing to require 
manufacturers to maintain and provide information, records, and 
documents related to compliance with DOE's energy conservation 
standards, and subjecting manufacturers that fail or refuse to do so to 
civil penalties, so that DOE can ensure that manufacturers provide DOE 
with the records necessary to determine whether they are complying with 
the manufactured housing energy conservation standards. DOE is also 
evaluating and considering its subpoena authority under EISA.
    In addition, the Secretary has the authority under 42 U.S.C. 7254 
to prescribe procedural and administrative rules and regulations that 
the Secretary ``may deem necessary or appropriate to administer and 
manage the functions now or hereafter vested in'' the Secretary. Under 
42 U.S.C. 7101(b), the term ``function'' includes reference to any 
duty, obligation, power, authority, responsibility, right, privilege, 
and activity, or the plural thereof. The Secretary has determined that 
the proposed recordkeeping requirements and civil penalties in this 
rulemaking are necessary to administer and manage the Secretary's 
duties and obligations under EISA.

Investigation Procedures

    Proposed Sec.  460.306 explains how DOE will conduct investigations 
to determine whether manufacturers are in compliance with the energy 
conservation standards and other requirements of part 460. DOE may 
initiate an investigation on its own or upon receipt of information 
alleging

[[Page 88847]]

potential noncompliance. DOE will not require manufacturers to certify 
to the Department that their designs or manufactured homes comply with 
part 460. Rather, DOE may request that a manufacturer provide one or 
more of the records listed in this section so that DOE can determine 
whether the manufacturer is in compliance with the requirements of part 
460. If DOE makes such a request of a manufacturer during an 
administrative action, investigation, or audit conducted by DOE 
pursuant to part 460, the manufacturer will be required to provide the 
requested records to DOE. As discussed previously, if a manufacturer 
fails or refuses to do so, the manufacturer will be subject to civil 
penalties.
    Paragraph (a) of the proposed Sec.  460.306 lists four types of 
records that DOE may request from a manufacturer to determine whether 
the manufacturer is in compliance with part 460. These are records that 
manufacturers must already maintain or provide to the Department of 
Housing and Urban Development (``HUD'') pursuant to HUD regulations in 
24 CFR part 3282.\4\ Under proposed paragraph (c), DOE may request 
additional available records if DOE determines they are necessary as 
part of an administrative action, investigation, or audit. During the 
course of any such action, investigation, or audit, DOE also may obtain 
additional information and records from publicly available sources.
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    \4\ See 24 CFR 3282.203, 3282.417, and 3282.608.
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    DOE proposes to require manufacturers to maintain the records 
listed in paragraph (a) in accordance with HUD requirements. DOE is 
also considering requiring the records it is proposing to require 
manufacturers to maintain in Sec.  460.306(a) to be retained for a 
specific period of years. DOE requests comment on whether it should 
proceed with such a requirement and what period of time may be 
appropriate. While DOE is not proposing to require manufacturers to 
maintain any additional records, under paragraph (c), a manufacturer 
may be required to provide to DOE additional records in its possession 
if DOE requests such records pursuant to an administrative action, 
audit, or investigation conducted by DOE against the manufacturer.

Warning Letters

    Proposed Sec.  460.308 would allow DOE to dispose of a matter with 
a Warning Letter if DOE determines that a violation or alleged 
violation of part 460 does not warrant the assessment of a civil 
penalty. This proposed section specifies that a Warning Letter issued 
under this section does not constitute a formal adjudication of the 
matter and is not subject to the appeal procedures proposed in this 
proposed rulemaking.

Notice of Noncompliance Determination

    Proposed Sec.  460.310 provides that if DOE determines that a 
manufactured home design or model does not conform to a standard or 
requirement in part 460, based on DOE's investigation or admissions by 
a manufacturer, DOE may issue a notice of noncompliance determination 
to the manufacturer.\5\ DOE will review records to evaluate whether one 
or more of the aspects of a manufactured home design or model is 
noncompliant. If DOE determines that one or more aspects of the design 
or model is noncompliant, DOE may issue to the manufacturer a notice of 
noncompliance determination addressing each violation depending on the 
facts of the specific case. A manufacturer that receives a notice of 
noncompliance determination from DOE would be required to provide to 
DOE, within the 30-day time period prescribed by DOE, information 
pertaining to the acquisition, ordering, storage, shipment, 
importation, or sale of units of the design or model of manufactured 
home determined to be noncompliant.
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    \5\ A determination issued by DOE under this proposed rule shall 
be distinct from any other notices issued to a manufacturer by other 
agencies under their respective enforcement authority.
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    As noted previously, DOE issued a final rule (88 FR 34411) to delay 
compliance until July 1, 2025, for Tier 2 homes, and until 60 days 
after issuance of enforcement procedures for Tier 1 homes. Accordingly, 
for the first five years after the compliance date for a type of home 
(Tier 1 or 2), DOE will request such information for the time from the 
compliance date for that type of home (Tier 1 or 2) to the date the 
notice of noncompliance determination is issued. Once five years has 
passed from the compliance date for a type of home, DOE will request 
such information for the five years prior to the date the notice of 
noncompliance is issued. For example, if DOE issues a notice of 
noncompliance determination for a Tier 2 manufactured home on August 1, 
2027, DOE will request sales and other information for that model from 
July 1, 2025 (the compliance date for Tier 2 homes), through August 1, 
2027. However, if DOE issues a notice of noncompliance determination 
for a Tier 2 home on August 1, 2031, DOE will request sales and other 
information for that model for the five years prior to August 1, 2031.
    DOE will give manufacturers 30 calendar days to provide the 
requested information. A manufacturer that fails or refuses to provide 
such information will be subject to civil penalties under part 460.

Civil Enforcement Procedures

    Prior to imposing a civil penalty for noncompliance with part 460, 
DOE proposes to provide manufacturers with written notice of the 
proposed penalty and options for responding to the notice. Under 
proposed Sec.  460.312, a manufacturer that receives a Notice of 
Proposed Civil Penalty will have 30 days from receipt of the notice to 
exercise one of the following options: (1) request that DOE issue an 
Order assessing the civil penalty proposed in the notice, in which case 
the manufacturer waives the right to request a hearing before an ALJ; 
(2) request a settlement conference with the DOE attorney who issued 
the notice, in which case the manufacturer also may submit to DOE 
additional information and evidence related to the alleged violations, 
the amount of the proposed civil penalty, and the manufacturer's 
ability to pay the proposed civil penalty; or (3) request a hearing 
before an ALJ. DOE is also considering providing manufacturers the 
option of seeking judicial review of the notice of civil penalty in a 
U.S. District Court in lieu of a hearing before an ALJ. DOE requests 
public comment on whether to include this option.
    DOE proposes in Sec.  460.316 that if: a manufacturer does not 
respond to the notice within 30 days of receipt; the manufacturer 
selects option (2) but fails to attend the settlement conference; or 
the manufacturer selects option (2) and DOE and the manufacturer are 
unable to resolve the matter informally, DOE will issue a Final Notice 
of Proposed Civil Penalty to the manufacturer. The manufacturer will 
then have 15 days from receipt of the final notice to exercise one of 
the following options: (1) request that DOE issue an Order assessing 
the civil penalty proposed in the final notice, in which case the 
manufacturer waives the right to request a hearing before an ALJ; or 
(2) request a hearing before an ALJ.
    If the manufacturer fails to respond to the final notice within 15 
days of receipt, the manufacturer waives the right to participate in 
the informal procedures set forth in this subpart and the right to 
request a formal hearing before an ALJ, and DOE will issue to the 
manufacturer an Order in which DOE finds that the manufacturer 
committed the violations alleged, and assesses the

[[Page 88848]]

civil penalty proposed, in the final notice.
    Proposed Sec.  460.314 would allow DOE to compromise and settle 
civil penalty cases brought under part 460 at any time prior to a final 
decision by a Federal court of competent jurisdiction. In compromising 
or settling a civil penalty case, DOE may consider aggravating and 
mitigating factors. For more information on DOE's civil penalty policy, 
see https://www.energy.gov/gc/articles/civil-penalties-energy-conservation-standards-program-violations-policy-statement.
    If DOE and the manufacturer agree to compromise the proposed civil 
penalty at any time prior to a final decision by a Federal court of 
competent jurisdiction, DOE will issue to the manufacturer an Order 
assessing the agreed upon civil penalty. If a manufacturer requested a 
hearing before an ALJ, and the ALJ's initial decision recommending a 
civil penalty is not appealed, DOE will issue an Order assessing the 
civil penalty recommended by the ALJ. DOE proposes to give 
manufacturers 30 days after receipt of any Order assessing a civil 
penalty under part 460 to pay the civil penalty.
    DOE believes the procedures in proposed Sec. Sec.  460.312 to 
460.316 are necessary to provide for the expeditious resolution of 
civil penalty cases under part 460, while maintaining the opportunity 
for manufacturers to engage with DOE to settle cases and providing due 
process to manufacturers, including the opportunity for hearings before 
an ALJ and the opportunity to appeal ALJ decisions.

Administrative Law Judge Hearing and Appeal

    Proposed Sec.  460.320 explains that if a manufacturer responds to 
a Notice of Proposed Civil Penalty or Final Notice of Proposed Civil 
Penalty by electing a formal hearing before an Administrative Law 
Judge, DOE will conduct such hearings in accordance with DOE's 
Procedures for Administrative Adjudication of Civil Penalty Actions, 
which are available at: https://www.energy.gov/gc/doe-procedures-administrative-adjudication-civil-penalty-actions.
    Proposed Sec.  460.320 provides that after considering all matters 
of record in a proceeding, the ALJ will issue an initial decision. The 
ALJ's initial decision will include a statement of the ALJ's findings 
and conclusions on all material issues of fact, law, and discretion, as 
well as the ALJ's reasons for such findings and conclusions. If the ALJ 
finds that a manufacturer committed a prohibited act and that a civil 
penalty is warranted, the decision will include the amount of the civil 
penalty. DOE notes that nothing in this subpart guarantees that a case 
will proceed to a formal hearing, as an ALJ may issue an initial 
decision after considering the pleadings and any motions for decision.
    Proposed Sec.  460.320 provides that if the ALJ's initial decision 
includes a finding that a manufacturer committed a prohibited act and a 
recommended civil penalty, and the initial decision is not appealed in 
accordance with DOE's Procedures for Administrative Adjudication of 
Civil Penalty Actions, the DOE General Counsel will issue an Order 
assessing the civil penalty. The DOE General Counsel will include in 
the Order the ALJ's findings of fact, conclusions of law and 
discretion, and the amount of the civil penalty.
    Finally, proposed Sec.  460.320 provides that if the ALJ's initial 
decision is appealed in accordance with DOE's Procedures for 
Administrative Adjudication of Civil Penalty Actions, then the DOE 
Decision Maker will issue a final agency decision in accordance with 
those procedures. The proposed section deviates from the procedures 
with respect to judicial review, however, in that it provides that any 
such final agency decision may be appealed to a federal court with 
competent jurisdiction instead of to a federal circuit court of 
appeals. It also provides that only a final agency decision may be 
appealed to a federal court of competent jurisdiction.

Collection of Civil Penalties

    DOE proposes that if a manufacturer fails to pay an assessed civil 
penalty within 30 days of receipt of the Order assessing the civil 
penalty, DOE may refer the debt to the U.S. Treasury Department or the 
Attorney General of the United States, or his or her delegate, for 
collection of the civil penalty. DOE proposes that in any such action, 
the validity and appropriateness of the Order assessing the civil 
penalty will not be subject to review.

III. Expected Costs to Manufacturers From the Proposed Rule

    In the May 2022 Final Rule, DOE monetized the costs and benefits 
expected to result from the amended standards. These costs included 
costs to manufacturers to produce and transport compliant manufactured 
homes, the increased installed costs that the consumer would see when 
purchasing and installing a new manufactured home, along with the 
incremental utility bill savings and incremental maintenance costs that 
a consumer would expect to experience during the lifetime operation. At 
the time of the May 2022 Final Rule, DOE had not determined the 
specific procedures it would utilize to ensure compliance with the 
energy conservation standards being adopted, but DOE noted its 
expectation that only minimal compliance efforts would be required, and 
that such efforts would result in minimal additional costs to 
manufacturers. See 87 FR 23758. Based on the procedures DOE is 
proposing in this document, DOE tentatively concludes, consistent with 
the expectations it stated in the May 2022 Final Rule, see Id., that 
the costs of complying with DOE's enforcement mechanisms will be 
minimal. Specifically, in this rulemaking, DOE is not proposing to 
require manufacturers to conduct any testing of manufactured homes, 
require manufactured homes to be inspected prior to sale to consumers, 
or require manufacturers (or any third-party agency) to certify 
compliance with DOE's energy conservation standards. Rather, the 
proposed regulations in this document outline DOE's procedures for 
investigating potential instances of noncompliance, assessing civil 
penalties in accordance with EISA, and the associated appeals 
procedures. To ensure DOE is able to conduct such investigations, this 
proposed rule requires that a manufacturer maintain and provide to DOE 
information and records relevant to investigating and determining 
compliance with the energy conservation standards. However, the 
documentation that manufacturers would be required to maintain by Sec.  
460.306(a) of this proposed rule is already subject to separate, 
existing maintenance requirements imposed by HUD. Therefore, this 
proposed rule would not impose any new, additional costs beyond the 
costs already required by separate requirements. See 88 FR 45237. 
Specifically, DOE is proposing to require manufacturers to maintain the 
following records in accordance with HUD requirements: the information 
and records submitted by a manufacturer and approved by its Design 
Approval Primary Inspection Agency (DAPIA) pursuant to 24 CFR 
3282.203(g) and 3282.361(b)(4); \6\ the approved quality assurance 
manual received from a DAPIA pursuant to 24 CFR

[[Page 88849]]

3282.361(c)(3); \7\ records related to a manufacturer's determination 
of noncompliance, defect, serious defect, or imminent safety hazard, as 
well as any corrections made by the manufacturer that the manufacturer 
is required to maintain under 24 CFR 3282.417; \8\ and records and 
reports related to on-site construction of manufactured homes that the 
manufacturer is required to maintain pursuant to 24 CFR 3282.608.\9\
---------------------------------------------------------------------------

    \6\ 24 CFR 3282.203(g) requires manufacturers to maintain a copy 
of the drawings, specifications, and sketches from each approved 
design received from a DAPIA under 24 CFR 3282.361(b)(4) and a copy 
of the approved quality assurance manual received from a DAPIA under 
24 CFR 3282.361(c)(3). It requires the manufacturer to keep these 
materials current and readily accessible for use by the Secretary of 
HUD or other parties acting under the HUD regulations.
    \7\ Id.
    \8\ 24 CFR 3282.417(e) requires a manufacturer to maintain 
records related to such determinations, notifications, and 
corrections.
    \9\ 24 CFR 3282.608(n) requires a manufacturer to maintain the 
approval notification from the DAPIA, the manufacturer's final on-
site inspection report and certification of completion, and the 
Production Inspection Primary Inspection Agency's acceptance of the 
final site inspection report and certification. A manufacturer is 
required to make these records available for review by HUD in the 
factory of origin. In addition, 24 CFR 3282.608(q) requires a 
manufacturer to maintain all records for on-site completion for each 
home, as required by 24 CFR 3282.608, in the unit file to be 
maintained by the manufacturer.
---------------------------------------------------------------------------

    In light of the previous, DOE tentatively concludes additional 
costs imposed by this proposed rule would be minimal. For this reason, 
the adoption of the enforcement procedures proposed in this document 
would not alter DOE's assessment in the May 2022 Final Rule of the 
costs resulting from the adoption of DOE's energy conservation 
standards.

IV. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866, 13563 and 14094

    Executive Order (``E.O.'') 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (Oct. 4, 1993), as supplemented and reaffirmed by 
E.O. 13563, ``Improving Regulation and Regulatory Review,'' 76 FR 3821 
(Jan. 21, 2011), and amended by E.O. 14094, ``Modernizing Regulatory 
Review,'' 88 FR 21879 (April 11, 2023) requires agencies, to the extent 
permitted by law, to (1) propose or adopt a regulation only upon a 
reasoned determination that its benefits justify its costs (recognizing 
that some benefits and costs are difficult to quantify); (2) tailor 
regulations to impose the least burden on society, consistent with 
obtaining regulatory objectives, taking into account, among other 
things, and to the extent practicable, the costs of cumulative 
regulations; (3) select, in choosing among alternative regulatory 
approaches, those approaches that maximize net benefits (including 
potential economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity); (4) to the extent 
feasible, specify performance objectives, rather than specifying the 
behavior or manner of compliance that regulated entities must adopt; 
and (5) identify and assess available alternatives to direct 
regulation, including providing economic incentives to encourage the 
desired behavior, such as user fees or marketable permits, or providing 
information upon which choices can be made by the public. DOE 
emphasizes as well that E.O. 13563 requires agencies to use the best 
available techniques to quantify anticipated present and future 
benefits and costs as accurately as possible. In its guidance, the 
Office of Information and Regulatory Affairs (``OIRA'') within the 
Office of Management and Budget (OMB) has emphasized that such 
techniques may include identifying changing future compliance costs 
that might result from technological innovation or anticipated 
behavioral changes. For the reasons stated in the preamble, this 
proposed regulatory action is consistent with these principles.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires the 
preparation of an initial regulatory flexibility analysis (IRFA) for 
any rule that by law must be proposed for public comment, unless the 
agency certifies that the rule, if promulgated, will not have a 
significant economic impact on a substantial number of small entities. 
As required by E.O. 13272, Proper Consideration of Small Entities in 
Agency Rulemaking, 67 FR 53461 (Aug. 16, 2002), DOE published 
procedures and policies on February 19, 2003, to ensure that the 
potential impacts of its rules on small entities are properly 
considered during the rulemaking process. (68 FR 7990). The Department 
has made its procedures and policies available on the Office of General 
Counsel's website: www.energy.gov/gc/office-general-counsel.
    The proposed rule would establish enforcement procedures for DOE's 
manufactured housing energy conservation standards. The proposed 
regulations largely outline DOE's procedures for investigating 
instances of noncompliance, assessing civil penalties in accordance 
with EISA, and associated appeals procedures. DOE expects any costs 
borne by manufacturers as a result of the proposed rule to be 
negligible. Moreover, the proposed rule would apply equally across 
manufacturers and does not place small entities at a significant 
competitive disadvantage. Accordingly, DOE certifies that this proposed 
rule would not have a significant economic impact on a substantial 
number of small entities, and, therefore, no regulatory flexibility 
analysis is required. Accordingly, DOE did not prepare an IRFA for this 
proposed rulemaking. DOE's certification and supporting statement of 
factual basis will be provided to the Chief Counsel for Advocacy of the 
Small Business Administration for review under 5 U.S.C. 605(b).

C. Review Under the Paperwork Reduction Act of 1995

    The proposed rule would impose no new information or record keeping 
requirements. Accordingly, OMB clearance is not required under the 
Paperwork Reduction Act. (44 U.S.C. 3501 et seq.)

D. Review Under the National Environmental Policy Act of 1969

    DOE is analyzing this proposed regulation in accordance with the 
National Environmental Policy Act of 1969 (``NEPA'') and DOE's NEPA 
implementing regulations (10 CFR part 1021). DOE's regulations include 
a categorical exclusion for amending an existing rule or regulation 
that does not change the environmental effect of the rule or regulation 
being amended. 10 CFR part 1021, subpart D, appendix A5. DOE 
anticipates that this rulemaking qualifies for categorical exclusion A5 
because it is a rulemaking that is amending an existing rule or 
regulation that does not change the environmental effect of the rule or 
regulation being amended, and categorical exclusion A6, because it is 
procedural. No extraordinary circumstances exist that require further 
environmental analysis, and it otherwise meets the requirements for 
application of a categorical exclusion. See 10 CFR 1021.410. 
Accordingly, neither an environmental assessment nor an environmental 
impact statement is required.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 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 E.O. 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

[[Page 88850]]

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. (See 65 
FR 13735.) DOE examined this proposed rule and determined that it would 
not preempt State law and 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 E.O. 
13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of E.O. 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; and (3) provide a clear legal standard for 
affected conduct, rather than a general standard and promote 
simplification and burden reduction. Section 3(b) of E.O. 12988 
specifically requires that executive agencies make every reasonable 
effort to ensure that the regulation: (1) clearly specifies its 
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 its 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 E.O. 12988 requires executive agencies to 
review regulations in light of applicable standards in section 3(a) and 
section 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 
would meet the relevant standards of E.O. 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. 
L. 104-4) requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and tribal governments and the 
private sector. 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) and (b)). The section of 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 www.energy.gov/gc/office-general-counsel). This 
proposed rule contains neither an intergovernmental mandate nor a 
mandate that may result in the expenditure of $100 million or more in 
any year by State, local, and tribal governments, in the aggregate, or 
by the private sector, so these requirements under the Unfunded 
Mandates Reform Act do not apply.

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

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

I. Review Under Executive Order 12630

    DOE has determined, under E.O. 12630, ``Governmental Actions and 
Interference with Constitutionally Protected Property Rights,'' 53 FR 
8859 (Mar. 18, 1988), that this proposed rule would not result in any 
takings which might require compensation under the Fifth Amendment to 
the United States Constitution.

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

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

K. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 
(May 22, 2001), requires Federal agencies to prepare and submit to 
OIRA, a Statement of Energy Effects for any proposed significant energy 
action. A ``significant energy action'' is defined as any action by an 
agency that promulgated or is expected to lead to promulgation of a 
final rule, and that: (1) is a significant regulatory action under E.O. 
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. This proposed rule establishes 
enforcement procedures for DOE's manufactured housing energy 
conservation standards and therefore does not meet the second 
criterion. Additionally, OIRA has not designated this proposed rule as 
a significant energy action. Accordingly, the requirements of E.O. 
13211 do not apply.

V. Public Participation

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, data, and other information using any of the methods 
described in the ADDRESSES section at the beginning of this document.
    Submitting comments via www.regulations.gov. The 
www.regulations.gov web page will require you to provide your name and 
contact information. Your contact information will be viewable to DOE

[[Page 88851]]

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 itself 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. Otherwise, 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 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 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 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 www.regulations.gov 
provides after you have successfully uploaded your comment.
    Submitting comments via email. Comments and documents submitted via 
email also will be posted to 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 in 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. No telefacsimiles (``faxes'') 
will be accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, that are written in English, and that are free from 
any defects or viruses. Documents should not contain special characters 
or any form of encryption and, if possible, 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. Pursuant 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 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. DOE will make 
its own determination about the confidential status of the information 
and treat it according to its determination.
    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).

VI. Approval of the Office of the Secretary

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

List of Subjects in 10 CFR Part 460

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

Signing Authority

    This document of the Department of Energy was signed on December 6, 
2023, by Samuel Walsh, General Counsel for the Department of Energy, 
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 December 7, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

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

PART 460--ENERGY CONSERVATION STANDARDS FOR MANUFACTURED HOMES

0
1. The authority citation for part 460 continues to read as follows:

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

0
2. Add subpart D to part 460 to read as follows:

Subpart D--Enforcement

Sec.
460.300 Purpose and scope.
460.302 Office of the General Counsel Responsibilities.
460.304 Prohibited acts and civil penalties.
460.306 Investigation of compliance.
460.308 Warning letters.
460.310 Notice of noncompliance.
460.312 Notice of proposed Civil Penalty.
460.314 Compromise and settlement.
460.316 Final Notice of Proposed Civil Penalty.
460.318 Order assessing a civil penalty.
460.320 Administrative law judge hearing and appeal.
460.322 Collection of civil penalties.


Sec.  460.300   Purpose and scope.

    This subpart describes DOE's investigative and enforcement 
procedures for ensuring compliance with the energy conservation 
standards set forth in this part.


Sec.  460.302   Office of the General Counsel Responsibilities.

    The Department's Office of the General Counsel may:
    (a) Assist in investigations, hold settlement conferences, issue 
subpoenas, require the production of relevant documents and records, 
and take evidence and depositions;

[[Page 88852]]

    (b) Initiate civil penalties under 42 U.S.C. 17071 and this subpart 
for any alleged violations of this part;
    (c) Compromise and assess civil penalties under 42 U.S.C. 17071 and 
this subpart for any violations of this part;
    (d) Represent DOE in any proceedings or hearings before an 
Administrative Law Judge (ALJ) in cases involving alleged violations of 
this part; and
    (e) Refer cases to the Attorney General of the United States, or 
the delegate of the Attorney General, for the collection of civil 
penalties.


Sec.  460.304   Prohibited acts and civil penalties.

    (a) Each of the following acts is prohibited:
    (1) Failure of a manufacturer to provide, maintain, or permit 
access to any information, records, or documents required to be 
provided to DOE under this part.
    (2) Sale, importation, or distribution into commerce in the United 
States by a manufacturer of a manufactured home that is not in 
compliance with a standard or requirement under this part.
    (b) A manufacturer that commits a prohibited act may be subject to 
assessment of a civil penalty of no more than one percent of the 
manufacturer's retail list price of the manufactured home per 
violation.
    (c) For violations of Sec.  460.302(a)(1), each day of 
noncompliance shall constitute a separate violation. For violations of 
Sec.  460.302(a)(2), each failure to comply with a standard or 
requirement of this part per unit sold, imported, or introduced into 
commerce in the United States shall constitute a separate violation.
    (d) Notwithstanding Sec.  460.304(a)(2) of this section, use of the 
American Society of Heating, Refrigerating and Air Conditioning 
Engineers (ASHRAE) Handbook of Fundamentals as codified in HUD 
regulations at 24 CFR 3280.508, in lieu of Air Conditioning Contractors 
of America (ACCA) Manual J and ACCA Manual S for the sizing of heating 
and cooling equipment as specified in 10 CFR 460.205, shall not be 
considered noncompliance.


Sec.  460.306   Investigation of compliance.

    (a) For the purposes of this subpart, DOE may request that a 
manufacturer provide information and records relevant to determining 
compliance with any standard or requirement under this part, including 
one or more of the following:
    (1) The information and records submitted by a manufacturer to a 
Design Approval Primary Inspection Agency (DAPIA) pursuant to 24 CFR 
3282.203 and approved by the DAPIA pursuant to 24 CFR 3282.361, 
including design deviation reports;
    (2) The approved quality assurance manual received from a DAPIA 
pursuant to 24 CFR 3282.361, including quality assurance manual 
deviation reports;
    (3) Records related to a manufacturer's determination of 
noncompliance, defect, serious defect, or imminent safety hazard, as 
well as any corrections made by the manufacturer, that the manufacturer 
is required to maintain under 24 CFR 3282.417; and
    (4) Records and reports related to on-site construction of 
manufactured homes that the manufacturer is required to maintain 
pursuant to 24 CFR 3282.606 and 608.
    (b) A manufacturer must maintain the information and records 
described in paragraph (a) of this section in accordance with HUD 
requirements.
    (c) A manufacturer must provide to DOE the information and records 
described in paragraph (a) of this section, and any additional 
available records DOE determines necessary to determine a 
manufacturer's compliance with any standard or requirement under this 
part, during an administrative action, investigation, or audit 
conducted by DOE against the manufacturer pursuant to this subpart.


Sec.  460.308   Warning letters.

    (a) If DOE determines that a violation or an alleged violation of 
this part does not require the assessment of a civil penalty, DOE may 
dispose of the case by issuing a Warning Letter.
    (b) A Warning Letter shall recite the relevant facts and 
information about the incident or condition and indicate that it may 
have been a violation of this part.
    (c) A Warning Letter issued under this section does not constitute 
a formal adjudication of the matter and is not subject to appeal under 
this subpart.


Sec.  460.310   Notice of noncompliance.

    (a) If DOE determines that a manufactured home design or model is 
noncompliant with a standard or requirement under this part, DOE may 
issue a notice of noncompliance determination to the manufacturer.
    (b) A manufacturer that receives a notice of noncompliance 
determination from DOE must provide to DOE, within 30 days of the 
manufacturer's receipt of the notice of noncompliance determination, 
information pertaining to the acquisition, ordering, storage, shipment, 
importation, or sale of units of the design or model of manufactured 
home determined to be noncompliant.


Sec.  460.312   Notice of proposed Civil Penalty.

    (a) Issuance. The DOE General Counsel, or delegee, may initiate a 
civil penalty action under this part by serving a Notice of Proposed 
Civil Penalty on the manufacturer charged with a prohibited act.
    (b) Contents. The Notice of Proposed Civil Penalty shall:
    (1) Include a statement of the material facts constituting the 
alleged violation;
    (2) Include the statute, regulation, standard, and/or requirement 
allegedly violated;
    (3) Include the amount of the proposed civil penalty; and
    (4) Inform the manufacturer of its options in responding to the 
Notice of Proposed Civil Penalty.
    (c) Response. Not later than 30 days after receipt of the Notice of 
Proposed Civil Penalty, the manufacturer must submit to DOE:
    (1) A written request that DOE issue an Order assessing the civil 
penalty proposed in the Notice of Proposed Civil Penalty without 
further notice, in which case the manufacturer waives the right to 
request a formal hearing before an ALJ, and payment of the civil 
penalty is due within 30 days of the manufacturer's receipt of the 
Order;
    (2) A written request for a settlement conference, at a date agreed 
upon by DOE and the manufacturer, to attempt to settle the matter 
informally, in which case the manufacturer also may submit to DOE 
written information and other evidence demonstrating that the 
manufactured home model is in compliance with the applicable standards 
and requirements under this part, that the proposed civil penalty is 
not warranted by the circumstances, or that the manufacturer is 
financially unable to pay the proposed civil penalty; or
    (3) A written request for a formal hearing before an ALJ in 
accordance with DOE's Procedures for Administrative Adjudication of 
Civil Penalty Actions, available at: https://www.energy.gov/gc/doe-procedures-administrative-adjudication-civil-penalty-actions.


Sec.  460.314   Compromise and settlement.

    (a) DOE may compromise, modify, or remit, with or without 
conditions, any civil penalty (with leave of court if necessary).
    (b) In exercising its authority under paragraph (a) of this 
section, DOE may consider the nature and seriousness of the violation, 
the efforts of the manufacturer to remedy the violation in

[[Page 88853]]

a timely manner, and other factors as justice may require.
    (c) DOE's authority to compromise, modify, or remit a civil penalty 
may be exercised at any time prior to a final decision by a Federal 
court of competent jurisdiction.
    (d) Notwithstanding paragraph (a) of this section, DOE or the 
manufacturer may propose to settle a civil penalty case. If a 
settlement is agreed to by the parties, the manufacturer is notified, 
and the case is closed in accordance with the terms of the settlement.


Sec.  460.316   Final Notice of Proposed Civil Penalty.

    (a) Issuance. DOE may issue a Final Notice of Proposed Civil 
Penalty to a manufacturer charged with committing a prohibited act in 
the following circumstances:
    (1) The manufacturer fails to respond to a Notice of Proposed Civil 
Penalty in accordance with Sec.  460.307(c) within 30 days of receipt 
of the notice;
    (2) The manufacturer requested a settlement conference under Sec.  
460.307(c)(2) but failed to attend the conference or provide the DOE 
attorney a written request to reschedule the conference; or
    (3) DOE and the manufacturer have participated in a settlement 
conference but have not agreed to settle the action, and DOE has not 
agreed to withdraw the Notice of Proposed Civil Penalty.
    (b) Contents. The Final Notice of Proposed Civil Penalty shall 
contain a statement of the material facts constituting the alleged 
violation; the statute, regulation, standard, and/or requirement 
allegedly violated; the amount of the proposed civil penalty; and the 
manufacturer's options in responding to the Final Notice of Proposed 
Civil Penalty. The Final Notice of Proposed Civil Penalty may reflect a 
modified allegation or proposed civil penalty as a result of new 
information submitted to DOE after the issuance of the Notice of 
Proposed Civil Penalty.
    (c) Response. Not later than 15 days after receipt of the Final 
Notice of Proposed Civil Penalty, the manufacturer must submit to DOE:
    (1) A written request that DOE issue an Order assessing the civil 
penalty proposed in the Final Notice of Proposed Civil Penalty without 
further notice, in which case the manufacturer waives the right to 
request a formal hearing before an ALJ, and payment of the civil 
penalty is due within 30 days of the manufacturer's receipt of the 
Order; or
    (2) A written request for a formal hearing before an ALJ in 
accordance with DOE's Procedures for Administrative Adjudication of 
Civil Penalty Actions, available at: https://www.energy.gov/gc/doe-procedures-administrative-adjudication-civil-penalty-actions.
    (d) Failure to respond. If a manufacturer fails to respond to a 
Final Notice of Proposed Civil Penalty in accordance with this section 
within 15 days of the final notice, the manufacturer waives the right 
to participate in the informal procedures set forth in this subpart and 
the right to request a formal hearing before an ALJ, and DOE shall 
issue to the manufacturer an Order finding the violations alleged, and 
assessing the civil penalty proposed, in the Final Notice of Proposed 
Civil Penalty.


Sec.  460.318   Order assessing a civil penalty.

    (a) Issuance pursuant to a settlement. DOE shall issue an Order 
assessing a civil penalty if DOE and the manufacturer have agreed to a 
civil penalty amount in compromise of a civil penalty case, in which 
case the manufacturer waives the right to request a formal hearing 
before an ALJ, and payment of the civil penalty is due within 30 days 
of the manufacturer's receipt of the Order, unless DOE and the 
manufacturer agree to extend the payment deadline.
    (b) Issuance pursuant to a manufacturer's request. DOE shall issue 
an Order assessing a civil penalty upon receipt of a written request 
from a manufacturer that DOE issue an Order assessing the civil penalty 
proposed in the Notice of Proposed Civil Penalty or Final Notice of 
Proposed Civil Penalty without further notice, in which case the 
manufacturer waives the right to request a formal hearing before an 
ALJ, and payment of the civil penalty is due within 30 days of the 
manufacturer's receipt of the Order.
    (c) Issuance pursuant to a manufacturer's failure to respond to a 
Final Notice of Proposed Civil Penalty. DOE shall issue an Order 
assessing a civil penalty if a manufacturer fails to respond to a Final 
Notice of Proposed Civil Penalty within 15 days of receipt of the final 
notice, in which case the manufacturer waives the right to request a 
formal hearing before an ALJ, and payment of the civil penalty is due 
within 30 days of manufacturer's receipt of the Order. In the Order, 
DOE shall find the violations alleged, and assess the civil penalty 
proposed, in the Final Notice of Proposed Civil Penalty.
    (d) Issuance pursuant to an ALJ initial decision. Unless the ALJ's 
initial decision is appealed in accordance with DOE's Procedures for 
Administrative Adjudication of Civil Penalty Actions, DOE shall issue 
an Order assessing a civil penalty if an ALJ finds that a manufacturer 
committed a prohibited act and civil penalty is warranted, in which 
case payment of the civil penalty is due within 30 days of the 
manufacturer's receipt of the Order.


Sec.  460.320   Administrative law judge hearing and appeal.

    (a) When elected pursuant to Sec.  460.312(c)(3) or Sec.  
460.316(c)(3), DOE shall refer a civil penalty action brought under 
this part to an ALJ in accordance with DOE's Procedures for 
Administrative Adjudication of Civil Penalty Actions.
    (b) After considering all matters of record in the proceeding, the 
ALJ will issue an initial decision. The initial decision will include a 
statement of the findings and conclusions, and the reasons therefore, 
on all material issues of fact, law, and discretion. If the ALJ finds 
that a manufacturer committed a prohibited act and that a civil penalty 
is warranted, the initial decision will include a civil penalty.
    (c) If the initial decision includes a finding that a manufacturer 
committed a prohibited act and a recommended civil penalty, and the 
initial decision is not appealed in accordance with DOE's Procedures 
for Administrative Adjudication of Civil Penalty Actions, the DOE 
General Counsel, or delegee, shall issue an Order assessing a civil 
penalty. The Order shall include the findings of fact, conclusions of 
law, the amount of the civil penalty, and the reasons therefore.
    (d) If the initial decision is appealed in accordance with DOE's 
Procedures for Administrative Adjudication of Civil Penalty Actions, 
then the DOE Decision Maker will issue a final agency decision in 
accordance with those procedures. If the DOE Decision Maker upholds an 
ALJ initial decision that a manufacturer committed a prohibited act and 
that a civil penalty is warranted, the final agency decision and order 
shall assess a civil penalty. The manufacturer shall have 60 days from 
the date the final agency decision and order is issued to either pay 
the civil penalty or appeal the final agency decision and order.
    (e) Exhaustion of administrative remedies. Only a final agency 
decision, as decided by the DOE Decision Maker, may be appealed to a 
Federal court of competent jurisdiction.


Sec.  460.322   Collection of civil penalties.

    If any manufacturer fails to pay an assessment of a civil penalty 
in accordance with Sec.  460.310, DOE may refer the debt for collection 
or may refer

[[Page 88854]]

the case to the Attorney General of the United States, or his or her 
delegate, for collection of the civil penalty. In any such action, the 
validity and appropriateness of the Order assessing the civil penalty 
shall not be subject to review.

[FR Doc. 2023-27182 Filed 12-22-23; 8:45 am]
BILLING CODE 6450-01-P