Rescinds Grant Programs for Schools, Hospitals, and Local Government Buildings

Content

ACTION:

Final rule.

SUMMARY:

The Department of Energy (DOE) publishes a final rule to eliminate the subject regulations due to their non-applicability
to operating DOE programs. In 1996, DOE consolidated legacy programs into the State Energy Program and determined all programming
would be regulated through a different regulatory framework, leaving the regulations at this part without utility. Now, these
regulations are a legacy of an ancestral program and remain in place despite decades without Congress funding the underlying
statutory program. This final rule has no impact on stakeholders and further streamlines the State Energy Program by eliminating
extraneous and derelict regulations, and does not directly reduce availability of financial assistance.

DATES:

This rule is effective on May 14, 2026.

FOR FURTHER INFORMATION CONTACT:

Mr. Michael Li, U.S. Department of Energy, Office of State and Community Energy Programs, 1000 Independence Avenue SW, Washington,
DC 20585; (240) 204-3026 or michael.li@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

I. General Discussion

On May 16, 2025, the U.S. Department of Energy (DOE) published a proposed rule to rescind the Grant Programs for Schools and
Hospitals and Buildings Owned by Units of Local Government and Public Care Institutions regulations at 10 CFR part 455. 90
FR 20945; (May 2025 proposal). In the proposal, DOE explained that the regulations were established to implement the Institutional
Conservation Program (ICP), which provided grants to various institutions to fund detailed energy audits, called technical
assistance programs, and energy conservation measures. The ICP and its regulations were authorized under Title III of the
Energy Policy and Conservation Act, as amended, 42 U.S.C. 6371 et seq.

As discussed in the May 2025 proposal, the ICP was consolidated in 1996 with the State Energy Conservation Program (SECP)
to establish the State Energy Program (SEP), which provides formula grants using SECP's amended regulations at 10 CFR part
420. Through that consolidation process, DOE did not eliminate ICP's regulations at 10 CFR part 455 and instead directed states
wishing to undertake activities previously administered through ICP to apply to SEP and comply with the newly amended regulations
at 10 CFR part 420. 90 FR 20945, 20945.

This final rule rescinds those regulations that remained in place even though the supporting statutory authority for the ICP
has gone unfunded for many years and the regulations are no longer in use.

II. Response to Comments

DOE received three comments in response to the May 2025 proposal.

| Commenter | Reference in this Final Rule | Comment No.
in the Docket | Commenter
type |
| --- | --- | --- | --- |
| Anonymous | Anonymous | 2 | Individual. |
| Misty Duvall | Duvall | 3 | Individual. |
| Christina Sobczak | Sobczak | 4 | Individual. |
Anonymous commenter and Christina Sobczak do not support rescinding 10 CFR part 455 on the basis that Federal grant programs
are beneficial to local governments, schools, and public care institutions. Sobczak commented that 30 percent of schools have
poor energy efficiency and cited firsthand experience as to the importance of children having well-maintained schools. Misty
Duvall advocates for protecting against impairments to institutions currently using the regulations in 10 CFR part 455.

In response, DOE notes that all comments received reflect a misunderstanding of the consequences of the proposed rule. Commenters
advocated for funding opportunities for energy efficiency measures in schools, hospitals, and buildings of local units of
government and discussed the benefit of such measures to children, patients, and citizens, which will not be impacted by the
recission of 10 CFR part 455. This is precisely why Congress has regularly appropriated the State Energy Program (SEP), which
utilizes the regulations in 10 CFR part 420 to accomplish these and other energy efficiency measures in public buildings.
The purpose of this final rule is to eliminate extraneous and derelict regulations that have no bearing on an existing program.

III. Conclusion

For the reasons discussed in the preceding sections of this document, DOE is finalizing this final rule.

IV. Procedural Issues and Regulatory Review

A. Review Under Executive Order 12866

Section 6(a) of Executive Order (“E.O.”) 12866, “Regulatory Planning and Review,” 58 FR 51735 (Oct. 4, 1993), requires agencies
to submit “significant regulatory actions” to the Office of Information and Regulatory Affairs (“OIRA”) in the Office of Management
and Budget (“OMB”) for review. OIRA has determined that this

  regulatory action does not constitute a “significant regulatory action” under section 3(f) of E.O. 12866. Accordingly, this
  action was not submitted to OIRA for review under E.O. 12866.

B. Review Under Additional Executive Orders and Presidential Memoranda

DOE has examined this final rule and has determined that it is consistent with the policies and directives outlined in E.O.
14154 “Unleashing American Energy,” E.O. 14192, “Unleashing Prosperity Through Deregulation,” and Presidential Memorandum,
“Delivering Emergency Price Relief for American Families and Defeating the Cost-of-Living Crisis.” While this final rule does
not result in cost savings per E.O. 14192, DOE considers this a deregulatory action because it removes obsolete regulations.

C. Review Under Regulatory Flexibility Act

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires preparation of an initial regulatory flexibility analysis (“IRFA”) and a final regulatory flexibility analysis (“FRFA”)
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. DOE has made its procedures and policies available on the Office of the General Counsel's website (www.energy.gov/gc/office-general-counsel).

DOE reviewed this final rule under the provisions of the Regulatory Flexibility Act and the policies and procedures published
on February 19, 2003. This final rule will not impact small businesses/entities as there is no active Financial Assistance
program subject to 10 CFR part 455. Therefore, DOE concludes that the impacts of the rule would not have a “significant economic
impact on a substantial number of small entities,” and that the preparation of an FRFA is not warranted. DOE will transmit
this certification and supporting statement of factual basis to the Chief Counsel for Advocacy of the Small Business Administration
for review under 5 U.S.C. 605(b).

D. Review Under Paperwork Reduction Act

This final rule imposes no new information collection requirements subject to the Paperwork Reduction Act and OMB clearance
is not required. (44 U.S.C. 3501 et seq.)

E. Review Under National Environmental Policy Act of 1969

Pursuant to the National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.), DOE has analyzed this action in accordance with NEPA, as amended, DOE's NEPA implementing regulations (set forth in 10
CFR part 1021), and DOE's NEPA implementing procedures (published outside the Code of Federal Regulations on June 30, 2025
(Available at: www.energy.gov/nepa/articles/doe-nepa-implementing-procedures-june-2025)). On July 3, 2025, DOE published an interim final rule in the
Federal Register
which revised 10 CFR part 1021 to contain only administrative and routine actions excepted from NEPA review in appendix A,
its existing categorical exclusions in appendix B, related requirements, and a provision for emergency circumstances. 90 FR
29676. DOE notes that appendix A in 10 CFR part 1021 (formerly categorical exclusions) are now administrative and routine
actions that do not require NEPA review.

DOE is rescinding the regulations at 10 CFR part 455 because these regulations are no longer in use; no new appropriations
have been directed/provided to ICP since 1998 as new funding has been directed to SEP (the successor program) since that time.
As such, DOE has determined that this rulemaking is strictly procedural and, therefore, is an administrative and routine action
and is not a major Federal action significantly affecting the quality of the human environment within the meaning of NEPA
and no further environmental review is needed. For more information, please see appendix A of 10 CFR part 1021 (“A6, Procedural
rulemakings”) and appendix A of DOE's NEPA implementing procedures, A6, Procedural rulemakings (June 30, 2025).”

F. Review Under Executive Order 13132

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

G. Review Under Executive Order 12988

With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order
12988, “Civil Justice Reform,” 61 FR 4729 (February 7, 1996), imposes on Executive 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. With regard to the review required by section 3(a), section 3(b) of Executive Order 12988 specifically requires
that Executive agencies make every reasonable effort to ensure that the regulation: (1) clearly specifies the preemptive effect,
if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected
conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately
defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines
issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in
light of applicable standards in 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, this
final rule meets the relevant standards of Executive Order 12988.

H. Review Under Unfunded Mandates Reform Act of 1995

Title II of the Unfunded Mandates Reform Act of 1995 (“UMRA”) requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the private sector. Public Law 104-4, sec. 201 (codified at
2 U.S.C. 1531). For a regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal
governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation),
section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits,
and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective
process to permit timely input by elected officers of State, local, and Tribal governments on a “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 them. On March 18, 1997, DOE published a
statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820. DOE's policy statement is also
available at www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.

DOE examined this final rule according to UMRA and its statement of policy and determined that the final rule does not contain
a Federal intergovernmental mandate, nor is it expected to require expenditures of $100 million or more in any one year by
State, local, and Tribal governments, in the aggregate, or by the private sector. As a result, the analytical requirements
of UMRA do not apply.

I. Review Under Treasury and General Government Appropriations Act, 1999

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

J. Review Under Executive Order 12630

Pursuant to E.O. 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights,” 53 FR 8859
(March 18, 1988), DOE has determined that this final rule would not result in any takings that might require compensation
under the Fifth Amendment to the U.S. Constitution.

K. Review Under Treasury and General Government Appropriations Act, 2001

Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies
to review most disseminations of information to the public under information quality guidelines established by each agency
pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE's guidelines
were published at 67 FR 62446 (Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving Implementation of the Information
Quality Act (April 24, 2019), DOE published updated guidelines which are available at: www.energy.gov/cio/department-energy-information-quality-guidelines. DOE has reviewed this final rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable
policies in those guidelines.

L. Review Under Executive Order 13211

Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66
FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OIRA at OMB, a Statement of Energy Effects for
any significant energy action. A “significant energy action” is defined as any action by an agency that promulgated or is
expected to lead to promulgation of a final rule, and that: (1) is a significant regulatory action under Executive Order 12866,
or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy,
or (3) is designated by the Administrator of OIRA as a significant energy action. For any 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 final rule is not a significant regulatory action under E.O. 12866. Moreover, it would not have a significant adverse
effect on the supply, distribution, or use of energy, nor has it been designated as such by the Administrator at OIRA. Accordingly,
DOE has not prepared a Statement of Energy Effects.

M. Congressional Notification

As required by 5 U.S.C. 801, DOE will submit to Congress a report regarding the issuance of this final rule prior to the effective
date set forth at the outset of this final rule. The report will state that it has been determined that the rule is not a
“major rule” as defined by 5 U.S.C. 804(2).

V. Approval of the Office of the Secretary

The Secretary of Energy has approved publication of final rule.

List of Subjects in 10 CFR Part 455

Administrative practice and procedure, Buildings and facilities, Community facilities, Energy conservation, Grant programs—energy,
Health facilities, Hospitals, Reporting and recordkeeping requirements, Schools, Solar energy, and Technical assistance.

Signing Authority

This document of the Department of Energy was signed on February 2, 2026, by Michael Li, Director, Office of State and Community
Energy Programs, 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 April 10, 2026. Treena V. Garrett, Federal Register Liaison Officer, U.S. Department of Energy. Regulatory Text For the reasons set forth in the preamble, under the authority of 42 U.S.C. 6371 et seq., and 42 U.S.C. 7101 et seq., DOE is removing and reserving 10 CFR part 455.

[FR Doc. 2026-07165 Filed 4-13-26; 8:45 am] BILLING CODE 6450-01-P

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