(8) Program activities to modify patterns of energy consumption so as to reduce peak demands for energy and improve the efficiency of energy supply systems, including electricity supply systems;

(9) Program activities to promote energy efficiency as an integral component of economic development planning conducted by State, local, or other governmental entities or by energy utilities;

(10) Program activities (enlisting appropriate trade and professional organizations in the development and financing of such programs) to provide training and education (including, if appropriate, training workshops, practice manuals, and testing for each area of energy efficiency technology) to building designers and contractors involved in building design and construction or in the sale, installation, and maintenance of energy systems and equipment to promote building energy efficiency;

(11) Program activities for the development of building retrofit standards and regulations, including retrofit ordinances enforced at the time of the sale of a building;

(12) Program activities to provide support for prefeasibility and feasibility studies for projects that utilize renewable energy and energy efficiency resource technologies in order to facilitate access to capital and credit for such projects;

(13) Program activities to facilitate and encourage the voluntary use of renewable energy technologies for eligible participants in Federal agency programs, including the Rural Electrification Administration and the Farmers Home Administration; and

(14) In accordance with paragraph (b) of this section, program activities to implement the Energy Technology Commercialization Services Program. (b) This section prescribes requirements for establishing State-level Energy Technology Commercialization

Services Program as an optional element of State plans.

(1) The program activities to implement the functions of the Energy Technology Commercialization Services Program shall:

(i) Aid small and start-up businesses in discovering useful and practical information relating to manufacturing and commercial production techniques and costs associated with new energy technologies;

(ii) Encourage the application of such information in order to solve energy technology product development and manufacturing problems;

(iii) Establish an Energy Technology Commercialization Services Program affiliated with an existing entity in each State;

(iv) Coordinate engineers and manufacturers to aid small and start-up businesses in solving specific technical problems and improving the cost effectiveness of methods for manufacturing new energy technologies;

(v) Assist small and start-up businesses in preparing the technical portions of proposals seeking financial assistance for new energy technology commercialization; and

(vi) Facilitate contract research between university faculty and students and small start-up businesses, in order to improve energy technology product development and independent quality control testing.

(2) Each State Energy Technology Commercialization Services Program shall develop and maintain a data base of engineering and scientific experts in energy technologies and product commercialization interested in participating in the service. Such data base shall, at a minimum, include faculty of institutions of higher education, retired manufacturing experts, and National Laboratory personnel.

(3) The services provided by the Energy Technology Commercialization Services Program established under this subpart shall be available to any small or start-up business. Such service programs shall charge fees which are affordable to a party eligible for assistance, which shall be determined by examining factors, including the following: the costs of the services received; the need of the recipient for the

services; and the ability of the recipient to pay for the services.

[61 FR 35895, July 8, 1996, as amended at 62 FR 26727, May 14, 1997; 64 FR 46114, Aug. 24, 1999]

§ 420.18 Expenditure prohibitions and

limitations.

(a) No financial assistance provided to a State under this subpart shall be used:

(1) For construction, such as construction of mass transit systems and exclusive bus lanes, or for construction or repair of buildings or structures;

(2) To purchase land, a building or structure or any interest therein;

(3) To subsidize fares for public transportation;

(4) To subsidize utility rate demonstrations or State tax credits for energy conservation measures or renewable energy measures; or

(5) To conduct, or purchase equipment to conduct, research, development or demonstration of energy efficiency or renewable energy techniques and technologies not commercially available.

(b) No more than 20 percent of the financial assistance awarded to the State for this program shall be used to purchase office supplies, library materials, or other equipment whose purchase is not otherwise prohibited by this section. Nothing in this paragraph shall be read to apply this 20 percent limitation to petroleum violation escrow funds used under this subpart.

(c) Demonstrations of commercially available energy efficiency or renewable energy techniques and technologies are permitted, and are not subject to the prohibitions § 420.18(a)(1), or to the limitation on equipment purchases of § 420.18(b).

of

(d) A State may use regular or revolving loan mechanisms to fund SEP services which are consistent with this subpart and which are included in the State's approved SEP plan. The State may use loan repayments and any interest on the loan funds only for activities which are consistent with this subpart and which are included in the State's approved SEP plan.

(e) A State may use funds under this subpart for the purchase and installation of equipment and materials for en

ergy efficiency measures and renewable energy measures, including reasonable design costs, subject to the following terms and conditions:

(1) Such use must be included in the State's approved plan and, if funded by petroleum violation escrow funds, must be consistent with any judicial or administrative terms and conditions imposed upon State use of such funds;

(2) A State may use for these purposes no more than 50 percent of all funds allocated by the State to SEP in a given year, regardless of source, except that this limitation shall not include regular and revolving loan programs funded with petroleum violation escrow funds, and is subject to waiver by DOE for good cause. Loan documents shall ensure repayment of principal and interest within a reasonable period of time, and shall not include provisions of loan forgiveness.

(3) Buildings owned or leased by the United States are not eligible for energy efficiency measures or renewable energy measures under paragraph (e) of this section;

(4) Funds must be used to supplement and no funds may be used to supplant weatherization activities under the Weatherization Assistance Program for Low-Income Persons, under 10 CFR part 440;

(5) Subject to paragraph (f) of this section, a State may use a variety of financial incentives to fund purchases and installation of materials and equipment under paragraph (e) of this section including, but not limited to, regular loans, revolving loans, loan buy-downs, performance contracting, rebates and grants.

(f) The following mechanisms are not allowed for funding the purchase and installation of materials and equipment under paragraph (e) of this section:

(1) Rebates for more than 50 percent of the total cost of purchasing and installing materials and equipment (States shall set appropriate restrictions and limits to insure the most efficient use of rebates); and

(2) Loan guarantees.

[61 FR 35895, July 8, 1996, as amended at 62 FR 26727, May 14, 1997; 64 FR 46114, Aug. 24, 1999]

§ 420.19 Administrative review.

(a) A State shall have 20 days from the date of receipt of a decision under § 420.14 to file a notice requesting administrative review in accordance with paragraph (b) of this section. If an applicant does not timely file such a notice, the decision under § 420.14 shall become final for DOE.

(b) A notice requesting administrative review shall be filed with the cognizant Regional Office Director and shall be accompanied by a written statement containing supporting arguments. If the cognizant Regional Office Director has disapproved an entire application for financial assistance, the State may request a public hearing.

(c) A notice or any other document shall be deemed filed under this section upon receipt.

(d) on or before 15 days from receipt of a notice requesting administrative review which is timely filed, the cognizant Regional Office Director shall forward to the Deputy Assistant Secretary, the notice requesting administrative review, the decision under § 420.14 as to which administrative review is sought, a draft recommended final decision for concurrence, and any other relevant material.

(e) If the State requests a public hearing on the disapproval of an entire application for financial assistance under this subpart, the Deputy Assistant Secretary, within 15 days, shall give actual notice to the State and FEDERAL REGISTER notice of the date, place, time, and procedures which shall apply to the public hearing. Any public hearing under this section shall be informal and legislative in nature.

(f) on or before 45 days from receipt of documents under paragraph (d) of this section or the conclusion of the public hearing, whichever is later, the Deputy Assistant Secretary shall concur in, concur in as modified, or issue a substitute for the recommended decision of the cognizant Regional Office Director.

(g) on or before 15 days from the date of receipt of the determination under paragraph (f) of this section, the Governor may file an application for discretionary review by the Assistant Secretary. On or before 15 days from filing, the Assistant Secretary shall send a

notice to the Governor stating whether the Deputy Assistant Secretary's determination will be reviewed. If the Assistant Secretary grants a review, a decision shall be issued no later than 60 days from the date review is granted. The Assistant Secretary may not issue a notice or decision under this paragraph without the concurrence of the DOE Office of General Counsel.

(h) A decision under paragraph (f) of this section shall be final for DOE if there is no review under paragraph (g) of this section. If there is review under paragraph (g) of this section, the decision thereunder shall be final for DOE and no appeal shall lie elsewhere in DOE.

(i) Prior to the effective date of the termination or suspension of a grant award for failure to implement an approved State plan in compliance with the requirements of this subpart, a grantee shall have the right to written notice of the basis for the enforcement action and of the opportunity for public hearing before the DOE Financial Assistance Appeals Board notwithstanding any provisions to the contrary of 10 CFR 600.22, 600.24, 600.25, and 600.243. To obtain a public hearing, the grantee must request an evidentiary hearing, with prior FEDERAL REGISTER notice, in the election letter submitted under Rule 2 of 10 CFR 1024.4 and the request shall be granted notwithstanding any provisions to the contrary of Rule 2.

[61 FR 35895, July 8, 1996, as amended at 64 FR 46114, Aug. 24, 1999]

(c) The types of funded activities may vary from year to year, and from State to State, depending upon funds available for each type of activity and DOE and State priorities.

(d) A number of end-use sector programs in the Office of Energy Efficiency and Renewable Energy participate in the funding of these activities, and the projects must meet the requirements of those programs.

(e) The purposes of the special project activities are:

(1) To utilize States to accelerate deployment of energy efficiency, renewable energy, and alternative transportation fuel technologies;

(2) To facilitate the commercialization of emerging and underutilized energy efficiency and renewable energy technologies; and

(3) To increase the responsiveness of Federally funded technology development efforts to the needs of the marketplace.

§ 420.31 Notice of availability.

(a) If in any fiscal year DOE has funds available for special projects, DOE shall publish in the FEDERAL REGISTER one or more notice(s) of availability of SEP special projects financial assistance.

(b) Each notice of availability shall cite this part and shall include:

(1) Brief descriptions of the activities for which funding is available;

(2) The amount of money DOE has available or estimates it will have available for award for each type of activity, and the total amount available;

(3) The program official to contact for additional information, application forms, and the program guidance/solicitation document; and

(4) The dates when:

(i) The program guidance/solicitation will be available; and

(ii) The applications for financial assistance must be received by DOE.

§ 420.32 Program guidance/solicitation. After the publication of the notice of availability in the FEDERAL REGISTER, DOE shall, upon request, provide States interested in applying for one or more project(s) under the special projects financial assistance with a de

tailed program guidance/solicitation that will include:

(a) The control number of the program;

(b) The expected duration of DOE support or period of performance;

(c) An application form or the format to be used, location for application submission, and number of copies required;

(d) The name of the DOE program office contact from whom to seek additional information;

(e) Detailed descriptions of each type of program activity for which financial assistance is being offered;

(f) The amount of money available for award, together with any limitations as to maximum or minimum amounts expected to be awarded;

(g) Deadlines for submitting applications;

(h) Evaluation criteria that DOE will apply in the selection and ranking process for applications for each program activity;

(i) The evaluation process to be applied to each type of program activity;

(j) A listing of program policy factors if any that DOE may use in the final selection process, in addition to the results of the evaluations, including:

(1) The importance and relevance of the proposed applications to SEP and the participating programs in the Office of Energy Efficiency and Renewable Energy; and

(2) Geographical diversity;
(k) Reporting requirements;
(1) References to:

(1) Statutory authority for the program;

(2) Applicable rules; and

(3) Other terms and conditions applicable to awards made under the program guidance/solicitation; and

(m) A statement that DOE reserves the right to fund in whole or in part, any, all, or none of the applications submitted.

§ 420.33 Application requirements.

(a) Consistent with § 420.32 of this part, DOE shall set forth general and special project activity-specific requirements for applications for special projects financial assistance in the program guidance/solicitation.

(b) In addition to any other requirements, all applications shall provide:

(1) A detailed description of the proposed project, including the objectives of the project in relationship to DOE's program and the State's plan for carrying it out;

(2) A detailed budget for the entire proposed period of support, with written justification sufficient to evaluate the itemized list of costs provided on the entire project; and

(3) An implementation schedule for carrying out the project.

(c) DOE may, subsequent to receipt of an application, request additional budgetary information from a State when necessary for clarification or to make informed preaward determinations.

(d) DOE may return an application which does not include all information and documentation required by this subpart, 10 CFR part 600, or the program guidance/solicitation, when the nature of the omission precludes review of the application.

[61 FR 35895, July 8, 1996, as amended at 64 FR 46114, Aug. 24, 1999]

DOE may require (as set forth in the program guidance/solicitation) States to provide either:

(a) A matching contribution of at least a specified percentage of the Federal financial assistance award; or

(b) A specified share of the total cost of the project for which financial assistance is provided.

$ 420.35 Application evaluation.

(a) DOE staff at the cognizant Regional Office shall perform an initial review of all applications to ensure that the State has provided the information required by this subpart, 10 CFR part 600, and the program guidance/solicitation.

(b) DOE shall group, and technically evaluate according to program activity, all applications determined to be complete and satisfactory.

(c) DOE shall select evaluators on the basis of their professional qualifications and expertise relating to the particular program activity being evaluated.

(1) DOE anticipates that evaluators will primarily be DOE employees; but