[Federal Register Volume 60, Number 244 (Wednesday, December 20, 1995)]
[Rules and Regulations]
[Pages 65509-65515]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30752]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 /
Rules and Regulations
[[Page 65509]]
DEPARTMENT OF ENERGY
10 CFR Part 600
[Docket No. PO-RM-95-101]
Financial Assistance Rules: Eligibility Determination for Certain
Financial Assistance Programs
AGENCY: Department of Energy.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Energy is amending its Financial Assistance
Rules by adding a final statement of policy, including procedures and
interpretations, to guide DOE officials in making determinations
required by section 2306 of the Energy Policy Act of 1992 (EPACT)
concerning eligibility to receive financial assistance under DOE
programs authorized by Titles XX through XXIII of EPACT.
EFFECTIVE DATE: January 19, 1996.
FOR FURTHER INFORMATION CONTACT: Dr. Robert C. Marlay, Office of
Science Policy (Mail Stop PO-81), Office of Policy, U.S. Department of
Energy, 1000 Independence Avenue, SW., Washington, D.C. 20585, (202)
586-3900. Paul Sherry, Esq., Office of General Counsel (Mail Stop GC-
61), U.S. Department of Energy, 1000 Independence Avenue, S.W.,
Washington, D.C. 20585, (202) 586-2440.
SUPPLEMENTARY INFORMATION:
I. Background
II. Discussion of Public Comments
III. Procedural Requirements
I. Background
This notice sets forth a final general statement of policy,
including procedures and interpretations, concerning implementation of
the requirements of section 2306 of EPACT (42 U.S.C. 13525). This
general statement of policy will guide implementing DOE officials in
making a special eligibility determination prerequisite to a financial
assistance award to a company under Titles XX through XXIII of EPACT.
Those titles relate to research, development, demonstration and
commercialization programs in diverse areas of energy efficiency,
energy supply, and related basic research.
Section 2306 provides for a two-part determination. An applicant
must be found to satisfy the conditions of both parts in order to be
eligible. The first part, set out in section 2306(1), involves a
finding with regard to whether an award of financial assistance to the
applicant would be in the economic interest of the United States. 42
U.S.C. 13525(1). The statute provides some illustrative examples of the
kinds of evidence that would support such a finding: investments in the
United States in research, development, and manufacturing; significant
contributions to employment in the United States; and agreements, with
respect to any technology arising from financial assistance provided,
to promote the manufacture within the United States of products
resulting from that technology and to procure parts and materials for
such manufacture from competitive suppliers.
The second part of the determination, section 2306(2), involves two
subparts, one of which must be satisfied. 42 U.S.C. 13525(2). The first
subpart is satisfied if the applicant is a ``United States-owned
company.'' The second subpart is satisfied if the applicant is found to
be incorporated in the United States and the applicant's parent company
is incorporated in a foreign country that: (a) affords opportunities to
United States-owned companies comparable to those afforded to any other
company to participate in government-supported joint ventures in energy
research and development; (b) affords opportunities to United States-
owned companies comparable to those afforded to any other company with
regard to general investment opportunities; and (c) affords adequate
and effective protection of intellectual property rights owned by
United States-owned companies.
The current list of covered programs is set forth below. This list
will be updated as appropriate and published in the Federal Register to
account for changes in activities undertaken in relation to Titles XX
through XXIII of EPACT.
----------------------------------------------------------------------------------------------------------------
Covered programs EPACT sections
----------------------------------------------------------------------------------------------------------------
Fossil energy R & D Petroleum: All Programs................ Sec. 2011, 2012
Gas: Natural Gas Research.................................. Sec. 2013-2015, 2112
All programs, including:
Resource & Extraction.............................. Sec. 2013, 2014
Delivery & Storage................................. Sec. 2013, 2014
Utilization........................................ Sec. 2013, 2014
Turbines........................................... Sec. 2112
Environmental Research & Regulatory Analysis....... Sec. 2013, 2014
Mid-continent Energy Research Center............... Sec. 2013, 2015
Fuel cells: Sec. 2115
All Programs, including:
Advanced Research.................................. Sec. 2115
Molten Carbonate Systems........................... Sec. 2115
Advanced Concepts.................................. Sec. 2115
Energy conservation:
Transportation......................................... Sec. 2021-2025, 2027, 2028, 2112
Alternative Fuels Utilization.......................... Sec. 2021, 2023
Materials Development.................................. Sec. 2021
[[Page 65510]]
Heat Engine Development................................ Sec. 2021, 2112
Electric & Hybrid Propulsion........................... Sec. 2021, 2025
Development Implementation & Deployment................ Sec. 2021
Management............................................. Sec. 2021
Capital Equipment...................................... Sec. 2021
Advanced Automotive Fuel Economy....................... Sec. 2021, 2022
Biofuels User Facility................................. Sec. 2021, 2024
Advanced Diesel Emissions Program...................... Sec. 2021, 2027
Telecommuting Study.................................... Sec. 2021, 2028
Utility: All programs...................................... Sec. 2101
Industry................................................... Sec. 2101-2108
All Programs, including:
Industrial Wastes.................................. Sec. 2101
Municipal Solid Wastes............................. Sec. 2101
Cogeneration....................................... Sec. 2101
Electric Drives.................................... Sec. 2101, 2105
Materials and Metals Processing.................... Sec. 2101, 2107
Other Process Efficiency........................... Sec. 2101
Process Heating & Cooling.......................... Sec. 2101, 2102
Implementation & Deployment............................ Sec. 2101
Management......................................... Sec. 2101
Capital Equipment.................................. Sec. 2101
National Advanced Manufacturing Tech............... Sec. 2101, 2202
Initiative Pulp & Paper............................ Sec. 2101, 2103
Steel, Aluminum, and Metal Research................ Sec. 2101, 2106
Energy Efficient Environmental Program............. Sec. 2101, 2108
Buildings.................................................. Sec. 2101-2108
All Programs, including:
Federal Energy Management Program.................. Sec. 2101
Implementation & Deployment........................ Sec. 2101
Management and Planning............................ Sec. 2101
Capital Equipment.................................. Sec. 2101
Advanced Buildings for 2005........................ Sec. 2101, 2104
Building Systems................................... Sec. 2101
Building Envelope.................................. Sec. 2101
Building Equipment................................. Sec. 2101
Codes and Standards................................ Sec. 2101
Energy Supply R & D: Energy Research:......................
Fusion Energy.......................................... Sec. 2114
All Programs, including:
Confinement Systems............................ Sec. 2114
Development & Technology....................... Sec. 2114
Applied Plasma Physics................................. Sec. 2114
Planning & Projects.................................... Sec. 2114
Inertial Fusion Energy................................. Sec. 2114
Program Direction-Op Exp............................... Sec. 2114
Capital Equipment & Construction....................... Sec. 2114
Basic Energy Sciences...................................... Sec. 2203
All Activities, including:
Materials Sciences................................. Sec. 2203
Chemical Sciences.................................. Sec. 2203
Energy Biosciences................................. Sec. 2203
Engineering & Geosciences.......................... Sec. 2203
Applied Math Sciences.............................. Sec. 2203, 2204
Advanced Energy Projects........................... Sec. 2203
Program Direction.................................. Sec. 2203
Capital Equipment.................................. Sec. 2203
Advisory & Oversight/Program Direction................. Sec. 2203
Advanced Neutron Source................................ Sec. 2203
Energy Research Analysis............................... Sec. 2203
University & Science Education Programs................ Sec. 2203
Experimental Program to Stimulate Competitive Research. Sec. 2203
Laboratory Technology Transfer......................... Sec. 2203
Multi-Program Laboratory Support....................... Sec. 2203
Nuclear Energy:
Light Water Reactor.................................... Sec. 2123, 2126
Advanced Reactor R & D................................. Sec. 2121, 2122, 2124, 2126
Facilities............................................. Sec. 2126
Solar & Renewables:
Solar & Other Energy................................... Sec. 2021, 2026, 2111, 2117
All Programs, including:
Photovoltaics...................................... Sec. 2111
Biofuels........................................... Sec. 2021, 2013, 2024, 2111
Solar Technology Transfer.......................... Sec. 2111
[[Page 65511]]
Program Direction--Other Solar Energy.............. Sec. 2111
Solar Building Technology Research................. Sec. 2111, 2104
Solar Thermal Energy Systems....................... Sec. 2111
Wind Energy Systems................................ Sec. 2111
Ocean Energy Systems............................... Sec. 2111
International Solar Energy Program................. Sec. 2111
Resource Assessment................................ Sec. 2111
Program Support.................................... Sec. 2111
Geothermal............................................. Sec. 2111
Hydrogen Research...................................... Sec. 2026
Electric Energy Systems including: Superconductivity... Sec. 2117, 2111
Energy Storage Systems................................. Sec. 2111
Environmental Rest & Waste Management:
Facility Transition--Fast Flux Test Facility........... Sec. 2116
Civilian Waste R & D................................... Sec. 2113
Electric & Magnetic Fields Research and Public Sec. 2118
Dissemination Program.
Spark M. Matsunaga Renewable Energy & Ocean Technology Sec. 2111, 2119
Center.
----------------------------------------------------------------------------------------------------------------
On February 23, 1995, DOE published a proposed statement of policy
for public comment in the Federal Register (60 FR 10296). The public
comment period ended April 24, 1995. The Department received seven
comments. In addition, a public hearing was held on April 19, 1995, in
Washington, DC. Comments were received from the Delegation of the
European Commission, individual corporations, and associations
representing corporations and commercial interests. The official
rulemaking record is available in the Department's Freedom of
Information reading room.
II. Discussion of Public Comments
A. Applicability of Eligibility Requirements
One commenter questioned the Department's overall approach of
implementing section 2306 through a ``general statement of policy''
which allows DOE officials considerable flexibility. The commenter
noted that Sec. 2306 is mandatory, not advisory, and that the
Department's interpretation of what constitutes compliance with this
provision should also be mandatory in the form of a final binding rule.
In addition, the commenter expressed the view that allowing discretion
in applying section 2306 will lead to arbitrary and inconsistent
results.
The policy statement recognizes the limitations of DOE's discretion
by announcing that ``Department officials must, in all cases, comply
with the requirements of the statute.'' The Department has decided to
adopt a general statement of policy which provides uniform guidance for
DOE officials and potential DOE program applicants, but allows
implementing officials discretion in applying this policy to a large
number of programs in diverse energy areas.
Most importantly, the Department's general statement of policy sets
forth a reasonable decisionmaking framework for the purpose of allowing
full compliance with--not avoidance of--section 2306. This
decisionmaking framework has been designed to avoid arbitrary
decisionmaking by ensuring that all implementation actions under
section 2306 comply with the requirements of that provision.
Several comments were received concerning the ``retroactive''
application of section 2306 by the Department. One commenter asserted
that the Department should not retroactively impose conditions on
program participants granted awards prior to the enactment of EPACT.
Section 2306, which governs the award of financial assistance
covered by Titles XX to XXIII of EPACT, became effective on October 24,
1992. The eligibility requirements will not be applied to financial
assistance awards made prior to the effective date of the Act. This
policy statement will apply to any new financial assistance awards or
renewals of such awards under covered programs made after the effective
date stated in this notice.
Several commenters also raised retroactivity issues with respect to
which programs are covered. One commenter asserted that section 2306
applies to programs authorized by EPACT but commenced prior to the
passage of that Act. Another commenter disagreed and asserted that DOE
improperly proposed to apply section 2306 to programs that pre-date the
enactment of EPACT. Departmental programs that pre-date EPACT but are
referenced in Titles XX through XXIII of the Act will be considered
covered programs as of the effective date of the Act.
Two commenters expressed opposing views with respect to the scope
of programs ``under Titles XX through XXIII'' of EPACT. One commenter
asserted that the requirements of section 2306 should be applied
broadly. Another commenter asserted that it would be inappropriate to
apply section 2306 to programs not specifically authorized under titles
XX through XXIII of EPACT. The Department has developed the list of
covered programs set forth above to include both activities
specifically authorized by Titles XX through XXIII of EPACT and other
activities that are reasonably judged to be undertaken pursuant to
program directions set out in those titles.
B. Definitions
Two comments were received concerning the proposed definition of
``financial assistance.'' One commenter agreed with the Department's
proposal to define ``financial assistance'' to include grants and
cooperative agreements and not contracts, subcontracts, and cooperative
research and development agreements (CRADAs). Another commenter argued
that the exclusion of contracts and subcontracts from the definition
thwarts the intent of Congress and reduces the applicability of the
statute to ``near zero.''
The term ``financial assistance'' is not defined in EPACT, and the
legislative history to that Act is silent as to its intended meaning.
The Department has chosen to apply its pre-existing definition of the
term ``financial assistance'', found at 10 CFR 600.3, which includes
grants and cooperative agreements but does not include contracts,
subcontracts or CRADAs. This definition is consistent with the usual
connotations of the term.
The Department invited comment on the definition of ``company'' in
order to assess whether it was appropriate to exclude all non-profit
organizations
[[Page 65512]]
from that definition, or whether it would be more appropriate to
exclude a narrower class of non-profit educational and charitable
organizations. One commenter expressed the view that excluding all non-
profit organizations from the definition of that term would invite
efforts to circumvent the purpose of section 2306.
The Department has concluded that the definition of ``company''
should not exclude all not-for-profit organizations, but should instead
exclude educational or charitable organizations.
Accordingly, Sec. 600.501 defines ``company'' as ``any business
entity other than an organization of the type described in section
501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C.
Sec. 501(c)(3)).'' This definition is intended to include corporations,
general or limited partnerships, sole proprietorships, joint ventures,
and other forms of business entities. It is not intended to include
governmental entities. Not-for-profit corporations and associations are
included unless they are educational or other institutions qualified
under section 501(c)(3) of the Internal Revenue Code.
One commenter noted that the term ``affiliates'' is not defined in
the proposed rule and suggested that a definition be added. Section
600.503, in which the term is used, simply provides that investment and
employment in the U.S. by affiliates may be considered in assessing
whether the applicant's participation is in the economic interests of
the U.S. Accordingly, the Department does not believe that a technical
definition of ``affiliates'' is necessary.
Another commenter suggested a change to the definition of ``parent
company'' to clarify that, in the case of indirect control, each
company in a series must have a majority control of its subsidiary.
Such a rigid approach could permit use of organizational structures
designed to circumvent effective review under section 2306. Therefore,
the definition has not been modified.
C. Economic Interest Determination
Several comments were received concerning the scope of Departmental
discretion in determining whether a company's participation is in the
economic interest of the United States. One commenter, asserting that
DOE has substantial discretion in this area, suggested that this
determination should include a comparison of the records of applicant
companies in particular areas, for example, in the area of providing
U.S. jobs. A second commenter asserted that economic interest
assessments must not be based simply on static comparisons among
applicants. This same commenter emphasized that the Department should
be flexible in the factors it considers in every case and should
consider all available evidence in making its economic interest
determination. A third commenter agreed, taking the position that the
Department's economic interest determination should not be too narrowly
focused. As an example, the third commenter noted that in certain cases
there could be a clear economic benefit to the United States even
though some prospective awardees have no presence in the United States
and could not be expected to have any in the future.
Determinations concerning the economic interest of the United
States will be based on consideration of all available evidence. The
statement of policy provides that any evidence that shows that an award
would be in the economic interest of the United States can be
considered. The Department also agrees with the position that economic
interest assessments should not be based on comparisons among
applicants.
Several commenters cautioned that, in applying the economic
interest criteria, DOE should not impose performance requirements or
other similar conditions on applicants, directly or indirectly. Some of
these comments refer to U.S. Government obligations under the World
Trade Organization (WTO) Agreement on Subsidies and Countervailing
Measures and the WTO Agreement on Trade-Related Investment Measures,
which prohibit import substitution requirements and local purchasing
requirements, respectively. The policy statement does not impose
performance requirements or other similar conditions on applicants.
D. Section 2306(2)(B) Determination
One commenter recommended that the sole basis for DOE's finding
should be the outcome of proceedings conducted by the Office of the
United States Trade Representative under section 301 of the Trade Act
of 1974, as amended. This commenter notes that the Congress and the
Executive Branch have established a comprehensive system of
identifying, evaluating and eliminating foreign trade barriers under
section 301. This commenter argues that such an approach would ensure
that all concerned parties have an opportunity to express views; would
ensure predictable results; and would ensure that DOE's finding
supports U.S. market-opening efforts. Another commenter argued that DOE
should consider evidence of compliance or non-compliance with laws and
international agreements affecting trade, and should not limit its
analysis to the outcome of section 301 proceedings. DOE agrees that
section 301 proceedings are an important factor in making the necessary
finding, but consideration of relevant evidence that is not produced as
a result of a section 301 proceeding also is appropriate.
One commenter urged DOE to consider whether U.S.-owned firms have
non-discriminatory market access in making its determinations. The
criteria contained in section 2306(2)(B) of EPACT address comparable
access to research opportunities, comparable investment opportunities
and adequate and effective intellectual property protections. Section
2306(2)(B) does not provide for DOE to consider whether U.S.-owned
firms have access to comparable trade opportunities in the relevant
foreign country.
E. Comparable Access to Research Opportunities
One commenter stated that it would defy common sense to find that a
parent company incorporated in a country with no similar research
program satisfies the requirements of section 2306. At the public
hearing, the same commenter stated that section 2306 of EPACT requires
DOE to disqualify any applicant if the applicant is headquartered in a
country that has no comparable research program.
Section 2306(2)(B) directs DOE to consider whether a foreign
country affords U.S. companies ``opportunities, comparable to those
afforded to any other company, to participate in any joint venture
similar to those authorized under this Act.'' 42 U.S.C. 13525(2)(B).
This finding relates to whether there is discrimination against U.S.-
owned firms relative to other firms with regard to access to any
foreign-government-sponsored programs comparable to those covered under
EPACT. The law does not provide for a finding that a foreign country
has comparable energy research and development programs.
F. Comparable Access to Investment Opportunities
One commenter stated that DOE should not limit its review to
whether U.S.-owned firms have a legal right to foreign investment
opportunities under international agreements. The commenter stated that
DOE should not find an affected applicant eligible to participate in a
DOE covered program unless U.S. firms have actual investment
opportunities in the country of the applicant's parent company that are
comparable to the opportunities
[[Page 65513]]
available to foreign investors in the United States. Another commenter
stated that DOE's main source of information on investment barriers
should be the National Trade Estimates Report on Foreign Trade Barriers
published annually by the Office of the United States Trade
Representative.
Section 2306(2)(B) provides that DOE must determine whether the
country ``affords to United States-owned companies local investment
opportunities comparable to those afforded to any other company.'' 42
U.S.C. 13525(2)(B). DOE will consider available information on the
legal regimes and de facto practices governing foreign investment in
relevant countries. The statement of policy states that DOE may
consider obligations of the country involved and local investment
opportunities afforded to U.S.-owned companies in that country. DOE
will consult with other Federal government agencies, as appropriate.
G. Protection of Intellectual Property Rights
One commenter stated that DOE should use the annual National Trade
Estimate Reports on Foreign Trade Barriers published by the Office of
the U.S. Trade Representative as a main source of information
concerning foreign government practices related to the protection of
the intellectual property rights of U.S.-owned companies. The commenter
recommended that DOE use the reports to allow foreign-owned companies
to know whether or not they are likely to be eligible to participate in
such programs prior to submitting an application. Two commenters
recommended that DOE work with other federal agencies to ensure that
DOE's policy is implemented in a manner that is predictable and
consistent with U.S. Government trade policies, including intellectual
property rights protection. Section 600.505 allows DOE to consider any
information related to the protection of intellectual property rights
of U.S.-owned companies and to seek and consider advice from other
federal agencies concerning such information, as appropriate. To
promote consistency, DOE has considered information on intellectual
property rights protection developed by other federal agencies and has
consulted with appropriate federal agencies in applying the section
2306(2)(B) standards. DOE intends to continue this practice.
H. Administrative Issues
DOE received several comments concerning the ``burden'' of
requirements established in the proposed rulemaking imposed on
applicants. One commenter expressed the view that DOE should avoid the
imposition of requirements which divert scarce research and development
resources to purposes of administration. This commenter also took issue
with the proposed certification procedures including those set forth at
Sec. 600.504(d) calling for a certification of status as a ``United
States-owned company.'' The commenter viewed these requirements as
overly legalistic and creating an unnecessary administrative burden and
expense. The Department agrees that the administrative burden on
applicants in complying with the requirements of section 2306 should be
minimized wherever possible. The Department has modified Sec. 600.504
(b) and (c) to provide for representations as opposed to certifications
concerning ownership status and other factors. This approach will allow
the applicant to demonstrate eligibility while minimizing any
administrative burden or added expense.
Another commenter, also urging that the administrative burden of
complying with section 2306 should be minimized, argued that there is
no reason to impose section 2306 requirements on firms meeting the
definition of ``small business'' under the regulations of the Small
Business Administration (SBA) because such firms, to be approved as a
small business by SBA, must already meet most of the requirements of
section 2306. The Department does not agree that qualifying for small
business status is equivalent to satisfying the eligibility criteria of
section 2306. Compare 13 CFR Sec. 121.403 with 42 U.S.C. 13525.
However, DOE sought comment on how it should make the required section
2306 determination in the context of relatively small financial
assistance awards. DOE suggested that one possible alternative would be
to ask applicants for awards below $100,000 to certify that they
satisfy all the eligibility requirements of section 2306 (1) and
(2)(A). The Department, in implementing this policy statement, expects
to establish such self-certification procedures to minimize the compli-
ance burden for awards of less than $100,000. Guidance on the
procedures for establishing eligibility is available from the DOE
Office of Procurement and Assistance Management (202-586-8613).
III. Procedural Requirements
A. Review Under Executive Order 12866
Today's regulatory action has been determined to be a ``significant
regulatory action'' under Executive Order 12866, ``Regulatory Planning
and Review,'' 58 FR 51735 (October 4, 1993). Accordingly, today's
action was reviewed by the Office of Information and Regulatory
Affairs. Today's action and any other documents submitted to OIRA for
review have been made a part of the rulemaking record and are available
for public review as provided in the Supplementary Information section
of this rule.
B. Review Under Paperwork Reduction Act
No new information collection requirements subject to the Paperwork
Reduction Act, 44 U.S.C. 3501 et seq., are imposed by today's
regulatory action.
C. Review Under the National Environmental Policy Act
Pursuant to the Council on Environmental Quality Regulations (40
CFR parts 1500-1508), the Department of Energy has established
regulations for its compliance with the National Environmental Policy
Act of 1969 (42 U.S.C. 4321 et seq.). Pursuant to appendix A of subpart
D of 10 CFR part 1021, the Department has determined that today's
regulatory action is categorically exempt as a procedural rule for
implementation of statutory requirements.
D. Review Under Executive Order 12612
Executive Order 12612, 52 FR 41685 (October 30, 1987), requires
that rules be reviewed for any substantial direct effect on States, on
the relationship between the National Government and the States, or in
the distribution of power and responsibilities among various levels of
government. If there are sufficient substantial direct effects, then
the Executive Order requires preparation of a federalism assessment to
be used in all decisions involved in promulgating and implementing a
policy action. Today's action interprets the section 2306 eligibility
requirements to be inapplicable to State applications for financial
assistance. Therefore, the Department has determined that they will not
have a substantial direct effect on the institutional interests or
traditional functions of States.
E. Review Under Executive Order 12778
Section 2 of Executive Order 12778 instructs each agency to adhere
to certain requirements in promulgating new regulations. These
requirements, set forth in section 2 (a) and (b)(2), include
eliminating drafting errors and needless ambiguity, drafting the
regulations to minimize litigation, providing clear and certain legal
[[Page 65514]]
standards for affected legal conduct, and promoting simplification and
burden reduction. Agencies are also instructed to make every reasonable
effort to ensure that regulations define key terms and are clear on
such matters as exhaustion of administrative remedies and preemption.
The Department certifies that today's regulatory action meets the
requirements of section 2 (a) and (b)(2) of Executive Order 12778.
Issued in Washington, DC, on this 13th day of December 1995.
Dan W. Reicher,
Acting Assistant Secretary for Policy.
For the reasons stated in the preamble, part 600 of title 10,
Subchapter H of the Code of Federal Regulations is amended as set forth
below:
PART 600--FINANCIAL ASSISTANCE RULES
1. The authority citation for part 600 is revised to read as
follows:
Authority: 42 U.S.C. 7254, 7256, 13525; 31 U.S.C. 6301-6308,
unless otherwise noted.
2. New subpart F, consisting of Secs. 600.500 through 600.505, is
added to read as follows:
Subpart F--Eligibility Determination for Certain Financial Assistance
Programs--General Statement of Policy
Sec.
600.500 Purpose and scope.
600.501 Definitions.
600.502 What must DOE determine.
600.503 Determining the economic interest of the United States.
600.504 Information an applicant must submit.
600.505 Other information DOE may consider.
Subpart F--Eligibility Determination for Certain Financial
Assistance Programs--General Statement of Policy
Sec. 600.500 Purpose and scope.
This subpart implements section 2306 of the Energy Policy Act of
1992, 42 U.S.C. 13525, and sets forth a general statement of policy,
including procedures and interpretations, for the guidance of
implementing DOE officials in making mandatory pre-award determinations
of eligibility for financial assistance under Titles XX through XXIII
of that Act.
Sec. 600.501 Definitions.
The definitions in Sec. 600.3 of this part, including the
definition of the term ``financial assistance,'' are applicable to this
subpart. In addition, as used in this subpart:
Act means the Energy Policy Act of 1992.
Company means any business entity other than an organization of the
type described in section 501(c)(3) of the Internal Revenue Code of
1954 (26 U.S.C. Sec. 501 (c)(3)).
Covered program means a program under Titles XX through XXIII of
the Act. (A list of covered programs, updated periodically as
appropriate, is maintained and published by the Department of Energy.)
Parent company means a company that:
(1) Exercises ultimate ownership of the applicant company either
directly, by ownership of a majority of that company's voting
securities, or indirectly, by control over a majority of that company's
voting securities through one or more intermediate subsidiary companies
or otherwise, and
(2) Is not itself subject to the ultimate ownership control of
another company.
United States means the several States, the District of Columbia,
and all commonwealths, territories, and possessions of the United
States.
United States-owned company means:
(1) A company that has majority ownership by individuals who are
citizens of the United States, or
(2) A company organized under the laws of a State that either has
no parent company or has a parent company organized under the laws of a
State.
Voting security has the meaning given the term in the Public
Utility Holding Company Act (15 U.S.C. 15b(17)).
Sec. 600.502 What must DOE determine.
A company shall be eligible to receive an award of financial
assistance under a covered program only if DOE finds that--
(a) Consistent with Sec. 600.503, the company's participation in a
covered program would be in the economic interest of the United States;
and
(b) The company is either--
(1) A United States-owned company; or
(2) Incorporated or organized under the laws of any State and has a
parent company which is incorporated or organized under the laws of a
country which--
(i) Affords to the United States-owned companies opportunities,
comparable to those afforded to any other company, to participate in
any joint venture similar to those authorized under the Act;
(ii) Affords to United States-owned companies local investment
opportunities comparable to those afforded to any other company; and
(iii) Affords adequate and effective protection for the
intellectual property rights of United States-owned companies.
Sec. 600.503 Determining the economic interest of the United States.
In determining whether participation of an applicant company in a
covered program would be in the economic interest of the United States
under Sec. 600.502(a), DOE may consider any evidence showing that a
financial assistance award would be in the economic interest of the
United States including, but not limited to--
(a) Investments by the applicant company and its affiliates in the
United States in research, development, and manufacturing (including,
for example, the manufacture of major components or subassemblies in
the United States);
(b) Significant contributions to employment in the United States by
the applicant company and its affiliates; and
(c) An agreement by the applicant company, with respect to any
technology arising from the financial assistance being sought--
(1) To promote the manufacture within the United States of products
resulting from that technology (taking into account the goals of
promoting the competitiveness of United States industry); and
(2) To procure parts and materials from competitive suppliers.
Sec. 600.504 Information an applicant must submit.
(a) Any applicant for financial assistance under a covered program
shall submit with the application for financial assistance, or at such
later time as may be specified by DOE, evidence for DOE to consider in
making findings required under Sec. 600.502(a) and findings concerning
ownership status under Sec. 600.502(b).
(b) If an applicant for financial assistance is submitting evidence
relating to future undertakings, such as an agreement under
Sec. 600.503(c) to promote manufacture in the United States of products
resulting from a technology developed with financial assistance or to
procure parts and materials from competitive suppliers, the applicant
shall submit a representation affirming acceptance of these
undertakings. The applicant should also briefly describe its plans, if
any, for any manufacturing of products arising from the program-
supported research and development, including the location where such
manufacturing is expected to occur.
(c) If an applicant for financial assistance is claiming to be a
United States-owned company, the applicant
[[Page 65515]]
must submit a representation affirming that it falls within the
definition of that term provided in Sec. 600.501.
(d) DOE may require submission of additional information deemed
necessary to make any portion of the determination required by
Sec. 600.502.
Sec. 600.505 Other information DOE may consider.
In making the determination under Sec. 600.502(b)(2), DOE may--
(a) consider information on the relevant international and domestic
law obligations of the country of incorporation of the parent company
of an applicant;
(b) consider information relating to the policies and practices of
the country of incorporation of the parent company of an applicant with
respect to:
(1) The eligibility criteria for, and the experience of United
States-owned company participation in, energy-related research and
development programs;
(2) Local investment opportunities afforded to United States-owned
companies; and
(3) Protection of intellectual property rights of United States-
owned companies;
(c) seek and consider advice from other federal agencies, as
appropriate; and
(d) consider any publicly available information in addition to the
information provided by the applicant.
[FR Doc. 95-30752 Filed 12-19-95; 8:45 am]
BILLING CODE 6450-01-P
