[Federal Register Volume 60, Number 36 (Thursday, February 23, 1995)]
[Proposed Rules]
[Pages 10296-10302]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-4425]
[[Page 10295]]
_______________________________________________________________________
Part VII
Department of Energy
_______________________________________________________________________
Office of Policy
_______________________________________________________________________
10 CFR Part 600
Financial Assistance Rules: Eligibility Determination for Certain
Financial Assistance Programs; Proposed Rule
Federal Register / Vol. 60, No. 36 / Thursday, February 23, 1995 /
Proposed Rules
[[Page 10296]]
DEPARTMENT OF ENERGY
Office of Policy
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: Notice of proposed rulemaking and public hearing.
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SUMMARY: The Department of Energy (Department or DOE) today gives
notice of a proposed general statement of policy to guide DOE officials
in making eligibility determinations required by section 2306 of the
Energy Policy Act of 1992. The proposed general statement of policy
includes procedures and interpretations related to the statutory limits
placed by section 2306 on eligibility to receive financial assistance
under DOE programs authorized by Titles XX through XXIII of that Act.
DATES: Written comments (9 copies) must be received by DOE on or before
April 24, 1995. A public hearing will be held on April 19, 1995
beginning at 9:30 a.m. at the address listed below. Requests to speak
must be received by April 17, 1995, by calling (202) 586-3012.
ADDRESSES: Written comments and requests to speak must be submitted to:
Dr. Robert C. Marlay, Office of Science Policy, Office of Policy, U.S.
Department of Energy, 1000 Independence Avenue, SW., Washington, D.C.
20585, (202) 586-3012.
Telecopied comments will not be accepted. The public hearing will
be held in Room 1E-245, U.S Department of Energy, 1000 Independence
Avenue SW., Washington, D.C. 20585. See Section V. for additional
information concerning public comment procedures.
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 SW.,
Washington, D.C. 20585, (202) 586-2440.
SUPPLEMENTARY INFORMATION:
I. Background
This notice sets forth a proposed general statement of policy,
including procedures and interpretations, concerning implementation of
the requirements of section 2306 of the Energy Policy Act of 1992
(EPAct) (42 U.S.C. 13525). The general statement of policy, when
finalized, 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.
The Department has decided to adopt a general statement of policy
and to codify that policy in the part of the Code of Federal
Regulations containing the Department's financial assistance
regulations. Such a codified policy statement is needed to communicate
guidance on these implementation issues to Departmental officials and
potential DOE program applicants. This policy statement applies only to
DOE's implementation of section 2306 of EPAct; it is not intended to
apply to any other agency or to the implementation of any other
statutory eligibility requirement.
The eligibility restrictions addressed in this policy statement
apply to a broad range of DOE programs (see list of covered programs
below), many of which pre-dated enactment of EPAct. These programs are
conducted by a large number of program and contracting officials
located in regional and field offices as well as DOE headquarters. This
policy statement provides uniform guidance for DOE officials and for
applicants to the broad array of covered programs.
Section 2306 does not require the Department to conduct a
rulemaking. Further, notice and comment rulemaking is not required by
law for general statements of policy. However, DOE has chosen to
publish the proposed general statement of policy in the Federal
Register in order to ensure a full opportunity for public comment and
input prior to finalizing the policy.
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 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 with regard to access to 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 to intellectual property
rights owned by United States-owned companies.
None of the statutory terms used in section 2306 is defined by
EPAct, and the legislative history sheds no light on the intended
meaning of such terms. Consequently, the Department's proposed
interpretations are based on the common usage of these terms, as
informed by their usage in similar contexts.
The Department is of the view that the proposed general statement
of policy sets forth a reasonable decisionmaking framework for the
guidance of implementing officials. If any of the provisions of the
policy would be unreasonable as applied, those officials would have the
discretion to depart from its terms based upon particular facts and
circumstances. Department officials must, in all cases, comply with the
requirements of the statute.
II. Applicability of Eligibility Requirements
Section 2306's eligibility requirements apply to applicants for
``financial assistance under Titles XX through XXIII of this Act.'' 42
U.S.C. 13525. EPAct does not define ``financial assistance.''
Consistent with the Federal Grant and Cooperative Agreement Act of
1977, 31 U.S.C. 6301-6308, and the practices of other Executive
agencies, DOE currently defines financial assistance instruments to
include grants [[Page 10297]] and cooperative agreements, but not
contracts and subcontracts. 10 CFR 600.3 (``financial assistance
instruments are grants and cooperative agreements and subawards'').
Contracts and subcontracts do not constitute financial assistance but
instead provide for payment in exchange for procured products or
services. See 31 U.S.C. 6303. Thus, the Department concludes that
contracts and subcontracts, including cost-shared contracts and
subcontracts, fall outside the scope of financial assistance and does
not propose modifying the current definition of financial assistance in
10 CFR 600.3 for purposes of this subpart.
The Department's current definition of financial assistance also
excludes cooperative research and development agreements (CRADAs). The
Stevenson-Wydler Technology Innovation Act, 15 U.S.C. 3710a, which
authorizes the use of CRADAs, does not authorize the transfer of funds
to a CRADA participant and specifically distinguishes CRADAs from
cooperative agreements. Thus any assistance provided under CRADAs would
not be ``financial'' assistance as the term ordinarily is understood.
We note as well that existing law governing the use of CRADAs contains
a set of considerations for the selection of CRADA participants that
address similar policy objectives. 15 U.S.C. 3710a(c)(4).
Section 2306 applies to financial assistance ``under Titles XX
through XXIII'' of EPAct. The intended effect of this statutory phrase
is ambiguous. The Department proposes to interpret the range of
activities covered by section 2306 to include all Department of Energy
research and development programs either mentioned specifically in the
text of Titles XX through XXIII or suggested by references to similar
and related research and development activities in the conference
reports on the Appropriations Acts for Energy and Water Development and
for Interior and Related Agencies. This includes many programs and
program activities that were initiated prior to the enactment of EPAct
under authority of pre-existing law. Thus, for many programs, there are
now two or more authorities. Comment is requested on this
interpretation.
A list of covered programs for fiscal year 1995 (FY95) is set forth
in the discussion of the term ``covered program'' in section III below.
This list will be updated each fiscal year and published in the Federal
Register to account for changes in appropriated activities undertaken
under Titles XX through XXIII of EPAct.
III. Section-By-Section Analysis
Today's proposed policy statement would be codified as a new
subpart F in 10 CFR part 600 where the Department's general financial
assistance regulations are codified. The following is a discussion of
the new sections that would make up subpart F.
Sec. 600.500 Purpose and scope.
This section states that the subpart provides procedures and
interpretations to guide DOE officials in making eligibility
determinations under section 2306 of the EPAct.
Sec. 600.501 Definitions.
The definition section begins by alerting readers that the existing
definitions in Sec. 600.3 of the general subpart are applicable to the
new subpart F. Section 600.3 contains definitions of ``applicant,''
``cooperative agreement,'' ``financial assistance,'' ``grant,'' and
``State.''
The term ``company'' is defined to mean any for-profit business
entity. The eligibility requirements of section 2306 would apply only
to companies. This definition, based on common usage of the term
company, is intended to include for-profit corporations, general or
limited partnerships, sole proprietorships, and other forms of business
entities. It is also intended to cover joint ventures involving one or
more such entities. The definition does not include governmental
entities, and thus such entities would not be subject to this
restriction on eligibility to receive financial assistance. Moreover,
the definition does not include non-profit organizations. The
Department invites comment on whether it is appropriate to exclude all
non-profit organizations from this definition, or whether it would be
more appropriate to exclude a narrower class of educational and
charitable organizations, such as organizations exempted from Federal
income tax under section 501(c)(3) of the Internal Revenue Code.
The term ``covered program'' is defined in order to have a
convenient term for referring to the list of activities under Titles XX
through XXIII of the Energy Policy Act of 1992 to which the section
2306 eligibility restrictions apply. Set out below is the proposed list
of covered programs for FY95:
Covered Programs--FY 95
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Fossil energy R & D EPACT sections
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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
Midcontinent 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
Heat Engine Development........................... Sec. 2021, 2112
Electric & Hybrid Propulsion Development.......... Sec. 2021, 2025
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: Sec. 2101
All programs......................................
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 Initiative. Sec. 2101, 2202
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
[[Page 10298]]
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 Sec. 2203
Sciences.
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 Sec. 2203
Research.
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
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: Sec. 2117, 2111
Superconductivity.
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 Sec. 2111, 2119
Technology Center.
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The term ``parent company'' is defined as a company that exercises
ultimate ownership of the applicant company. The parent company would
be identified by first determining whether any company owns a majority
of the applicant company's voting securities. If so, then the same test
would be applied to that company, i.e., does any company own a majority
of that company's voting securities? The parent company would be the
company that exercises control over the applicant company by means of
this chain of majority stock ownership, and which itself is not subject
to the majority stock ownership of any other company.
DOE would interpret the term ``parent company'' to mean the
ultimate parent company as just described in order to avoid confusion
in cases where an applicant company and its immediate parent are both
organized in the U.S., but where the immediate parent is, in turn,
owned by a company organized abroad.
The Department recognizes that there may be situations in which one
company effectively controls the actions of another without owning a
majority of its voting securities. However, given that the sole purpose
of this inquiry into corporate lineage would be to identify the foreign
country with which a non-U.S.-owned applicant can be most directly
associated, this approach is felt to be both adequate and appropriate.
The definition of ``United States'' is a standard definition used
in many of the Department's programs. It includes the 50 States, the
District of Columbia, and all commonwealths, territories and
possessions of the United States.
The term ``United States-owned company'' is a key part of section
2306(2). The Department proposes to permit an applicant to use either
of two alternative definitions of this term: (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 an ultimate parent company that is
organized under the laws of a State.
The first alternative is based on the statutory definition of the
term ``United States-owned company'' used in a similar eligibility
limitation, which defines United States-owned company in terms of
majority ownership or control by citizens of the United States. 15
U.S.C. 278n(j)(2). This test of ownership is based on the citizenship
of individual owners or shareholders. Where an applicant company is a
wholly- or majority-owned subsidiary of a parent company, or a majority
of its stock is held by other corporations or institutional investors
rather than individuals, the ownership analysis would be applied to
these corporations or institutional investors to determine whether they
are owned by individuals who are citizens of the United States.
The second alternative definition of United States-owned company is
a company organized under the laws of a State that either has no parent
company or has an ultimate parent organized under the laws of a State.
This alternative is based on a presumption that companies incorporated
or organized in the U.S. that are not majority-owned by a foreign
company will not have sufficiently strong connection to any foreign
country to justify using the section 2306(2)(B) reciprocity
determinations. The Department will request applicants claiming to be
U.S.-owned companies to make a certification to that effect.
The term ``voting security,'' which is used in the definition of
parent company, is defined by reference to the statutory definition in
the Public Utility Holding Company Act. 15 U.S.C. 15b(17). This broad
definition includes any security that gives the holder a vote
[[Page 10299]] in the direction or management of the company, such as
common stock in a corporation and partnership interests in a
partnership.
Sec. 600.502 What DOE Must Determine
This section follows the sequence of provisions of section 2306
which provide for the two mandatory elements of the eligibility
determination. The first mandatory element is a finding that the
applicant's participation in a particular program is in the economic
interest of the United States. The second mandatory element has two
alternative subparts--either (a) the company is a U.S.-owned company;
or (b) the company is found to be incorporated in the U.S. and the
government of the parent company's country of incorporation affords
U.S.-owned companies local investment opportunities comparable to those
offered to any other company on investment and access to energy
research and development, and protects U.S.-owned intellectual property
in that country.
In order to avoid seemingly unintended consequences in interpreting
section 2306(2)(B), the Department proposes interpreting the statutory
phrase ``company * * * incorporated in the United States'' to include
both corporations incorporated in the U.S. and other companies, defined
as for-profit business entities, organized under the laws of any State
in the U.S. Thus, for example, a partnership organized under State law
in the U.S. would be included. Similarly, the Department proposes
interpreting the statutory phrase ``parent company which is
incorporated'' in a foreign country to include both corporations and
other for-profit business entities organized under foreign law.
The Department invites comment on how to make the required
determination in the context of relatively small financial assistance
awards. Under the proposed rule, all applicants would need to submit
the same types of information and the Department would undertake the
same type of determination. One possible alternative is to ask
applicants for awards below $100,000 to certify that they satisfy all
the eligibility requirements of section 2306(1) and (2)(a), if
applicable, and to rely on such a certification unless the Department
has reason to believe that further investigation is warranted. This
approach would permit the Department to target its administrative
resources to making eligibility determinations for larger awards, and
at the same time preserve the Department's appropriate role in
reviewing eligibility for smaller awards where there is reason to
question an applicant's eligibility. The Department invites comment on
such an alternative for small awards.
Sec. 600.503 Determining the economic interest of the United States.
This section provides guidelines as to information that may support
an affirmative determination that a financial assistance award would be
in the economic interest of the United States. Section 600.503
describes examples, based on the statute, of the type of evidence that
may be considered. Section 600.503 of the general statement of policy
makes it clear that any other evidence that shows that an award would
be in the economic interest of the United States can be considered.
Determinations concerning the economic interest of the United States
will be based on consideration of all available evidence.
The evidence to be considered concerning investments or employment
in the U.S. may include evidence related to affiliates of the applicant
company (e.g., the parent company of an applicant corporation, the
general partners in an applicant partnership). DOE will consider the
facts relating to each applicant in context.
Where the applicant for financial assistance is a joint venture,
DOE would apply the economic interest test of section 2306(1) to the
joint venture as a whole. Under section 2306(2), however, DOE would
apply the relevant tests to each company participating in the joint
venture.
In evaluating whether an applicant's participation is in the
economic interest of the United States, DOE may consider the activities
of the applicant's contractors or suppliers or other companies that
would have a significant role in the government-supported work. In
determining which contractors, suppliers or other companies may be
considered in assessing an applicant's eligibility, DOE would consider
whether the company's participation is a factor advanced by the
applicant for consideration in evaluating the merits of the
application. For example, where an applicant chooses to rely on the
qualifications of named component suppliers or other contractors in
making an application to a covered program, the activities of any such
named contractors or suppliers may be evaluated in determining whether
the applicant's participation is in the economic interest of the United
States.
Sec. 600.504 Information an applicant must submit.
This section makes clear that the burden of producing information
to support an affirmative determination concerning the economic
interest of the United States and the ownership status of the applicant
would rest on the applicant. The allocation of this burden to the
applicant is appropriate because the applicant will usually be in the
best position to provide relevant information. The Department may
request that information needed to make an eligibility determination be
submitted with the application for financial assistance, or may
specify, in the solicitation, a later stage in the process for
submission of such information.
If an applicant for financial assistance proposes to demonstrate
that an award is in the economic interest of the United States by
asserting that it will undertake future action, such as promoting
manufacture of products in the United States or procuring parts and
materials from competitive suppliers, DOE will require it to provide an
appropriate certification concerning such future action. In support of
such certifications, the applicant should also provide a brief
commercialization plan for the technology that is expected to result
from the program-supported research and development. The Department
expects to give considerable weight to these plans in assessing whether
the applicant's participation is in the economic interest of the United
States.
In order to be treated as a ``United States-owned company'' for
eligibility purposes, an applicant would be required to submit an
appropriate certification that it satisfies the definition in
Sec. 600.501.
The section concludes with a paragraph providing for DOE requests
for information in addition to that submitted with the application for
financial assistance, if necessary.
Sec. 600.505 Other information DOE may consider.
This section identifies certain kinds of information, in addition
to the information provided by the applicant, that may be relevant in
making the required findings. DOE, in making the findings required
under section 2306(2)(B), intends to consult with and seek information
from a number of sources, including, but not limited to, appropriate
agencies of the federal government as well as publicly available
information.
With respect to whether a foreign government ``affords to United
States-owned companies opportunities, [[Page 10300]] comparable to
those afforded to any other company, to participate in any joint
venture similar to those authorized by the Act,'' DOE expects to
consider the regime that governs eligibility of U.S.-owned companies
seeking to participate in research and development sponsored by that
government.
The DOE analysis of this issue would consider discrimination
against foreign subsidiaries of U.S.-owned companies relative to any
other company in providing access to research and development programs.
DOE would consider both discriminatory policies and discriminatory
practices. Where a foreign government does not have research and
development programs comparable to those authorized by EPAct, the
absence of such programs would not preclude companies headquartered in
that country from participating in DOE programs.
The statutory phrase ``joint venture similar to those authorized
under this Act'' has uncertain meaning given that EPAct authorizes a
number of government-supported programs, but the Department has not, to
date, used joint ventures per se. Given the apparent intent of the
statute to promote opportunities comparable to those afforded to any
other company in energy research and development programs, DOE would
construe this phrase to mean government-supported research and
development programs similar to those covered by section 2306.
With regard to whether a foreign country ``affords to United
States-owned companies local investment opportunities comparable to
those afforded to any other company,'' DOE expects to consider a review
of applicable international obligations to provide to U.S. investors
opportunities comparable to those offered to other companies.
With regard to protection of intellectual property rights in
foreign countries, DOE expects to consider certain lists that contain
relevant information prepared by other Executive agencies, such as the
``Special 301 Priority Foreign Country List,'' issued by the U.S. Trade
Representative.
In making the determinations required under section 2306(2)(B), the
Department expects to seek the advice of other appropriate federal
agencies.
IV. 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.
The draft of 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 ADDRESSES section of
this notice.
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 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.
V. Opportunity for Public Comment
A. Written Comments
Interested persons are invited to participate in this proceeding by
submitting data, views, or comments with respect to today's notice.
Nine copies of written comments should be submitted to the address
indicated in ADDRESSES section of this notice. Comments should be
identified on the outside of the envelope and on the documents
themselves with the designation ``Financial Assistance Rules:
Eligibility Determination for Certain Financial Assistance Programs,
Docket No. PO-RM-95-101.'' In the event any person wishing to provide
written comments cannot provide nine copies, alternative arrangements
can be made in advance with the Department.
All comments received will be available for public inspection as
part of the administrative record on file for this rulemaking in the
Department of Energy Freedom of Information Office Reading Room, 1E-
090, Forrestal Building, 1000 Independence Avenue, S.W., Washington,
D.C. 20585, 202-586-6020, between 9 a.m. and 4 p.m., Monday through
Friday, except Federal holidays.
Any person submitting information which that person believes to be
confidential and which may be exempt by law from public disclosure,
should submit one complete copy, as well as two copies from which the
information claimed to be confidential has been deleted. The Department
reserves the right to determine the confidential status of the
information and to treat it accordingly under 10 CFR 1004.11.
B. Public Hearing
One public hearing will be held pursuant to this notice at the
time, date and place indicated above in the DATES and ADDRESSES
sections of this notice. Any person who has an interest in making an
oral presentation should make a written request to speak. Such a
request should be sent to the address given in the ADDRESSES section of
this notice and must be received by 4:30 p.m. on the date specified in
the DATES section. The person also should provide a daytime phone
number where the person may be reached. Those persons requesting an
opportunity to make an [[Page 10301]] oral presentation should bring
nine (9) copies of their statement to the hearing.
DOE will establish the procedures governing the conduct of the
hearing. The length of each presentation will be limited to ten (10)
minutes. A DOE official will preside at the hearing, and may ask
questions. Any further procedural rules needed for the proper conduct
of the hearing will be announced by the presiding officer.
If DOE must cancel the hearing, DOE will make every effort to give
advance notice of the cancellation. The hearing may be cancelled in the
event no requests to speak are received by the deadline for submission
of such a request.
List of Subjects in 10 CFR Part 600
Administrative practice and procedure, Grant programs.
Issued in Washington, D.C., on this 17th day of February 1995.
Susan F. Tierney,
Assistant Secretary, Policy, Planning, and Program Management.
For the reasons stated in the preamble, part 600 of title 10,
Subchapter H of the Code of Federal Regulations is proposed to be
amended as set forth below:
Part 600--FINANCIAL ASSISTANCE RULES
1. The authority citation for part 600 continues to read as
follows:
Authority: 42 U.S.C. 7254, 7256; 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 are applicable to this
subpart, and in addition, as used in this subpart:
Act means the Energy Policy Act of 1992.
Company means any for-profit business entity.
Covered program means a program under Titles XX through XXIII of
the Act, as listed separately and updated annually by the Department of
Energy for each fiscal year.
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 a series of one or more intermediate
subsidiary companies, 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 financial assistance 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 paragraph (a) of Sec. 600.502, 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 in 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) The applicant for financial assistance has the burden of
producing sufficient information to warrant making each required
finding under Sec. 600.502.
(c) If an applicant for financial assistance is submitting evidence
relating to future undertakings, such as an agreement under paragraph
(c) of Sec. 600.503 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 certification affirming
acceptance of these undertakings. The applicant should also
[[Page 10302]] 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.
(d) If an applicant for financial assistance is claiming to be a
United States-owned company, the applicant must submit a certification
affirming that it falls within the definition of that term provided in
Sec. 600.501.
(e) 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 paragraph (b)(2) of Sec. 600.502,
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. 95-4425 Filed 2-22-95; 8:45 am]
BILLING CODE 6450-01-P
