and information submitted by a local applicant and other interested persons, the Operations Office Manager shall determine whether or not to award a grant to a local applicant, and the amount thereof. The Operations Office Manager may provide financial assistance to a local applicant to carry out one or more weatherization projects.

(Approved by the Office of Management and Budget under Control Number 19040047)

§ 440.14 State plans

(a) Before submitting an application, a State shall give not less than 10 days notice of hearing, reasonably calculated to inform prospective subgrantees, and shall conduct one or more public hearing for the purpose of receiving comments on a proposed State plan. The proposed State plan shall identify and describe proposed weatherization projects, including a statement of proposed subgrantees and the amount each will receive; shall address the other items contained in paragraph (b) of this section; and shall be made available throughout the State prior to the hearing. The notice for the hearing shall specify that copies of the plan are available and how they may be obtained. A transcript of the hearings shall be prepared and written submission of views and data shall be accepted for the record.

(b) Subsequent to the hearing, the State shall prepare a final State plan which shall identify and describe:

(1) The production schedule for the State which shall indicate projected expenditures and the number of dwelling units which are expected to be weatherized each month during the program year;

(2) An estimate of the number of dwelling units expected to be weatherized during the program year by category to include:

(i) Single family and multi family residences;

(ii) Elderly persons residences; (iii) Handicapped persons residences; (iv) Renters residences; and

(v) If Native Americans do not receive direct grants under § 440.11, Native American residences.

(3) The climatic conditions within the State;

(4) The type of weatherization work to be done;

(5) An estimate of the amount of energy to be conserved;

(6) An estimate of the number of eligible dwelling units in which the elderly reside;

(7) An estimate of the number of eligible dwelling units in which the handicapped reside;

(8) Each area to be served by a weatherization project within the State, and shall include for each area: (i) The tentative allocation;

(ii) The number of dwelling units expected to be weatherized during the program year;

(iii) The estimated number of rental dwelling units to be weatherized; and (iv) Sources of labor.

(9) The manner in which the State plan is to be implemented, and shall include:

(i) An analysis of the existence and effectiveness of any weatherization project being carried out by a subgrantee;

(ii) An explanation of the method used to select each area to be served by a weatherization project;

(iii) The extent to which priority will be given to the weatherization of single-family or other high energy consuming dwelling units;

(iv) The amount of non-Federal resources to be applied to the program; (v) The amount of Federal resources, other than DOE weatherization grant funds, to be applied to the program;

(vi) The amount of weatherization grant funds tentatively allocated to the State under this part;

(vii) The expected average cost per dwelling to be weatherized, taking into account the total number of dwellings to be weatherized and the total amount of funds, Federal and nonFederal, expected to be applied to the program;

(viii) The maximum amount to be applied to any dwelling unit from DOE funds;

(ix) The amount to be spent per dwelling unit for program support and labor in accordance with § 440.18(a)(1)(ii); and

(x) Procedures for determining the most cost-effective measures in a dwelling unit or a statement that Project Retro-Tech will be used.

(Approved by the Office of Management and Budget under Control Number 1904-0047)

$440.15 Subgrantees.

(a) The grantee shall ensure that: (1) Each subgrantee is a CAA or other public or nonprofit entity;

(2) Each subgrantee is selected on the basis of public comment received during a public hearing conducted pursuant to §440.14(a) and other appropriate findings regarding:

or

(i) The subgrantee's experience and performance in weatherization housing renovation activities;

(ii) The subgrantee's experience in assisting low-income persons in the area to be served; and

(iii) The subgrantee's capacity to undertake a timely and effective weatherization program.

(3) In selecting a subgrantee, preference is given to any CAA or other public or nonprofit entity which has, or is currently administering, an effective program under this part or under Title II of the Economic Opportunity Act of 1964, with program effectiveness evaluated by consideration of factors including, but not necessarily limited to, the following:

(i) The extent to which the past or current program achieved or is achieving weatherization goals in a timely fashion;

(ii) The quality of work performed by the subgrantee;

(iii) The number, qualifications, and experience of the staff members of the subgrantee; and

(iv) The ability of the subgrantee to secure volunteers, training participants, and public service employment workers pursuant to JTPA.

(b) The grantee shall ensure that the funds received under this part will be allocated to the entities selected in accordance with paragraph (a) of this section, such that funds will be allocated to areas on the basis of the relative need for a weatherization project by low-income persons.

(c) If DOE finds that a subgrantee selected to undertake weatherization

activities under this part has failed to comply substantially with the provisions of the Act or this part and should be replaced, such finding shall be treated as a finding under § 440.30(d) for purposes of § 440.30.

(d) Any new or additional subgrantee shall be selected at a hearing in accordance with § 440.14(a) and upon the basis of the criteria in paragraph (a) of this section.

§440.16 Minimum program requirements.

Prior to the expenditure of any grant funds each grantee shall develop, publish, and implement procedures to ensure that:

(a) No dwelling unit may be weatherized without documentation that the dwelling unit is an eligible dwelling unit as provided in § 440.22;

(b) Priority is given to identifying and providing weatherization assistance to elderly and handicapped lowincome persons, and such priority as the applicant determines is appropriate is given to single-family or other high-energy-consuming dwelling units;

(c) Financial assistance provided under this part will be used to supplement, and not supplant, State or local funds, and, to the maximum extent practicable as determined by DOE, to increase the amounts of these funds that would be made available in the absence of Federal funds provided under this part;

(d) To the maximum extent practicable, the grantee will secure the services of volunteers, training participants and public service employment workers, pursuant to JTPA, to work under the supervision of qualified supervisors and foremen;

(e) To the maximum extent practicable, the use of weatherization assistance shall be coordinated with other Federal, State, local, or privately funded programs in order to improve to conserve efficiency and energy energy;

(f) The low-income members of an Indian tribe shall receive benefits equivalent to the assistance provided to other low-income persons within a State unless the grantee has made the recommendation provided in

§ 440.12(b)(5); and

(g) No dwelling unit may be reported to DOE as completed until the subgrantee, or its authorized representative, has performed a final inspection and certified that applicable work has been completed in a workmanlike manner and in accordance with the priority determined by the audit procedures required by $440.21(b). (Approved by the Office of Management and Budget under Control Number 1904-0047).

$440.17 Policy Advisory Council.

(a) Prior to the expenditure of any grant funds, a State policy advisory council shall be established by a State or by the Operations Office Manager if a State does not participate in the program which:

(1) Has special qualifications and sensitivity with respect to solving the problems of low-income persons, including the weatherization and energy conservation problems of these per

sons;

(2) Is broadly representative of organizations and agencies, including consumer groups that represent lowincome persons, particularly elderly and handicapped low-income persons and low-income Native Americans, in the State or geographical area in question; and

(3) Has responsibility for advising the appropriate official or agency administering the allocation of financial assistance in the State or area with respect to the development and implementation of a weatherization assistance program.

§ 440.18 Allowable expenditures.

(a) To the maximum extent practicable, the grant funds provided under this part shall be used for the purchase of weatherization materials and related matter described in paragraph (a)(1) of this section. Allowable expenditures under this part include only:

(1) A maximum of $1,000 for any dwelling unit, except as provided in paragraph (d) of this section and § 440.19(b), for:

(i) The cost of purchase and delivery of weatherization materials;

(ii) The amount per dwelling unit, determined by a grantee and approved

by the Operations Office Manager for the cost of program support and labor consisting of:

(A) Transportation of weatherization materials, tools, equipment, and work crews to a storage site and to the site of weatherization work;

(B) Maintenance, operation, and insurance of vehicles used to transport weatherization materials;

(C) Maintenance of tools and equipment;

(D) Purchase or annual lease of tools, equipment, and vehicles, except that any purchase of vehicles shall be referred to DOE for prior approval in every instance;

(E) Employment of on-site supervisory personnel;

(F) Labor costs, in accordance with § 440.19; and

(G) Storage of weatherization materials, tools and equipment.

(iii) The cost, not to exceed $150 per dwelling unit, of incidental repairs.

(2) The cost of liability insurance for weatherization projects for personal injury and for property damage;

(3) Allowable administration expenses under paragraph (b) of this section; and

(4) The cost of carrying out lowcost/no-cost weatherization activities in accordance with § 440.20.

(b) Not more than 10 percent of any grant made to a State may be used by the grantee and subgrantees for administrative purposes in carrying out duties under this part, except that not more than 5 percent may be used by the State for such purposes.

(c) No grant funds awarded under this part shall be used for any of the following purposes:

(1) To install or otherwise provide weatherization materials for a dwelling unit weatherized previously with grant funds under paragraph (a)(1) of this section, except as provided under § 440.20, unless such dwelling unit has been damaged by fire, flood, or act of God and repair of the damage to weatherization materials is not paid for by insurance or

(2) To weatherize a dwelling unit which is designated for acquisition or clearance by a Federal, State, or local program within twelve months from the date weatherization of the dwell

(a) Payments for labor costs under § 440.18(a)(1)(ii)(F) shall consist of:

(1) Payments permitted by the Department of Labor to supplement wages paid to training participants and public service employment workers pursuant to JTPA and

(2) Payments to employ labor (particularly persons eligible for training under JTPA) or to engage a contractor (particularly a nonprofit organization or a business owned by disadvantaged individuals which performs weatherization services), to install weatherization materials provided a grantee has determined an adequate number of volunteers, training participants, and public service employment workers, assisted pursuant to JTPA, are not available to weatherize dwelling units for a subgrantee under the supervision of qualified supervisors.

(b) The Operations Office Manager may increase the limitation of $1,000 per dwelling unit described in § 440.18(a) to not more than $1,600 per dwelling unit to cover costs referred to in paragraph (a) of this section in an area where the Operations Office Manager, based upon satisfactory documentation, determines that there are an insufficient number of volunteers, training participants, and public service employment workers, assisted pursuant to JTPA, available to weatherize dwelling units for a subgrantee under the supervision of qualified supervi

sors.

§ 440.20 Low-cost/no-cost weatherization

activities.

(a) An eligible dwelling unit may be weatherized without regard to the limitations contained in § 440.18(c)(1) or § 440.21(b) from funds designated by the grantee for carrying out low-cost/ no-cost weatherization activities provided:

(1) Inexpensive weatherization materials are used, such as water flow controllers, furnace or cooling filters, or items which are primarily directed toward reducing infiltration, including weatherstripping, caulking, glass patching, and insulation for plugging and

(2) No labor paid with funds provided under this part is used to install weatherization materials referred to in paragraph (a)(1) of this section.

(b) A maximum of 10 percent of the amount allocated to a subgrantee, not to exceed $50 in materials costs per dwelling unit, may be expended to carry out low-cost/no-cost weatherization activities, unless the Operations Office Manager approves a higher expenditure per dwelling unit.

§ 440.21 Standards and techniques for weatherization.

(a) Only weatherization materials which meet or exceed standards prescribed in Appendix A to this part shall be purchased with funds provided under this part.

(b) The most cost-effective weatherization materials for each dwelling unit shall be determined by audit procedures using the following formula:

(1) The cost of fuel saved per year by installing a weatherization material in a dwelling unit;

(2) Multiplied by the appropriate lifetime of the weatherization material; and

(3) Divided by the cost of the weatherization material and the cost of the installation of the weatherization material.

(c) The computation of the cost of fuel saved per year must take into account the number of heating or cooling degree days in the area for which the computation is being made and must otherwise use reasonable methods and assumptions.

(f) The audit procedures used in Project Retro-Tech to determine the most cost-effective weatherization materials comply with this section. The grantee or subgrantee may use other audit procedures to determine the most cost-effective weatherization materials, provided that these procedures comply with this section and are approved by the Operations Office Manager prior to their use. A grantee or subgrantee may use results obtained from audits conducted under the Residential Conservation Service Program as part of the audit procedures which have been approved by the Operations Office Manager.

§ 440.22 Eligible Dwelling Units

(a) A dwelling unit shall be eligible for weatherization assistance under this part if it is occupied by a family unit:

(1) Whose income is at or below 125 percent of the poverty level determined in accordance with criteria established by the Director of the Office of Management and Budget; or

(2) Which contains a member who has received cash assistance payments under Title IV or XVI of the Social Security Act or applicable State or local law during the twelve-month period preceding the determination of eligibility for weatherization assist

ance.

(b) A subgrantee may weatherize a building containing rental dwelling units using financial assistance for dwelling units eligible for weatherization assistance under paragraph (a) of this section, where:

(1) The subgrantee has obtained the written permission of the owner or his agent:

(2) Not less than 66 percent (50 percent for duplexes and four-unit buildings) of the dwelling units in the building:

(i) Are eligible dwelling units, or

(ii) Will become eligible dwelling units within 180 days under a Federal, State or local government program for rehabilitating the building or making similar improvements to the building; and

(3) The grantee has established procedures approved by the Operations Office Manager to insure that:

(i) Rents shall not be raised because of the increased value of dwelling units due solely to weatherization assistance provided under this part and

(ii) No undue or excessive enhancement shall occur to the value of the dwelling units.

(b) DOE shall also carry out periodic evaluations of a program and weatherization projects that are not carried out by a CAA and that are receiving financial assistance under this part.

(c) The Secretary and the appropriate Operations Office Manager, the Comptroller General of the United States, and for a weatherization project carried out by a CAA, the Secretary of Health and Human Services or any of their duly authorized representatives, shall have access to any books, documents, papers, information, and records of any weatherization project receiving financial assistance under the Act for the purpose of audit and examination.