Comment on FR Doc # E8-26832

On behalf of the City of San José, California, I hereby provide comments in response to the Request for Comment on the Interim Final Rule for the Department of Energy’s Advanced Technology Vehicles Manufacturing (ATVM) Incentive Program, 73 Fed. Reg. 66721 (Nov. 12, 2008). San José is the tenth largest city in the country and at the center of Silicon Valley, where many transformative energy and transportation technologies are being created and moved into production by emerging companies. The City’s interest in the ATVM program is premised on our continuing economic development role in fostering the region’s Clean Tech innovation cluster for research, venture capital investment, and commercialization of new products. Recognizing that many potential ATVM program applicants will be among these new or expanding companies, the City is concerned that the Department's evaluation criteria does not disadvantage such companies in the competitive selection process. Therefore, the City urges the Department to clarify the application of evaluation criteria in §611.103(b)(4) and §611.206, related to consideration given to loan or grant use for existing facilities. These sections apply the statutory provision in 42 U.S.C. 17013(g), using precisely the same language without further explanation – “The Secretary shall, in making awards or loans to those manufacturers that have existing facilities, give priority to those facilities that are oldest or have been in existence for at least 20 years. Such facilities can currently be sitting idle.” As drafted, this provision should apply only to the Department's evaluation of manufacturers that actually own existing facilities, not to those without facilities. In then evaluating applications from that cohort against each other, it would require that the Department prioritize proposals to improve their oldest assets first. The effect of the provision is to afford a preference among established automakers to those with a long-standing commitment to domestic manufacturing. Because the statute explicitly included a reference that distinguishes those manufacturers which have existing facilities, Congressional intent is clear that proposing use of funds for old facilities is not an overarching competitive factor in assessing all applications. The standard would not apply to new companies without any facilities, and thus does not require the Department to prioritize applications from established companies that own old assets over applications from those new companies. To interpret otherwise would either exclude or dramatically disadvantage emerging companies without facilities, effectively requiring them to first acquire an old building as a precondition to apply for ATVM program funding. Such an approach would run counter to the ATVM program mission and slow the commercialization process by placing these innovating companies with new technologies at a competitive disadvantage in seeking federal support to establish manufacturing operations. However, based on discussions with potential applicants to the ATVM program, the City believes that the Final Rule would benefit from a clarification to avoid confusion about this provision and formally reaffirm policy within the Department regarding the evaluation criteria. Specifically, the Final Rule should make explicit that not currently owning any manufacturing facility will have no positive or negative impact on an applicant’s chances of success when competing against established companies that have existing facilities. The City recommends adding the following language at the end of §611.103(b)(4) and §611.206 – “Manufacturers that do not have any existing facilities will be given equal priority to those do, without regard to the age of the facility in which the new manufacturing operations will be established.” With significant advancements in the alternative transportation industry being led by completely new companies that lack existing manufacturing assets, it is critical that the Department make clear these entrepreneurial ventures will receive equal consideration under the ATVM program. Thank you for your consideration of these comments. Sincerely, Chuck Reed Mayor of San José, California