Federal Register / Vol. 79, No. 94 / Thursday, May 15, 2014 / Proposed Rules 27795 

and, if possible, they should carry the 

electronic signature of the author. 

Campaign Form Letters 

Please submit campaign form letters 

by the originating organization in 

batches of between 50 to 500 form 

letters per PDF or as one form letter 

with a list of supporters’ names 

compiled into one or more PDFs. This 

reduces comment processing and 

posting time. 

Confidential Business Information 

According to 10 CFR 1004.11, any 

person submitting information that he 

or she believes to be confidential and 

exempt by law from public disclosure 

should submit via email, postal mail, or 

hand delivery/courier two well-marked 

copies: One copy of the document 

marked confidential including all the 

information believed to be confidential, 

and one copy of the document marked 

non-confidential with the information 

believed to be confidential deleted. 

Submit these documents via email or on 

a CD, if feasible. DOE will make its own 

determination about the confidential 

status of the information and treat it 

according to its determination. 

Factors of interest to DOE when 

evaluating requests to treat submitted 

information as confidential include: (1) 

A description of the items; (2) whether 

and why such items are customarily 

treated as confidential within the 

industry; (3) whether the information is 

generally known by or available from 

other sources; (4) whether the 

information has previously been made 

available to others without obligation 

concerning its confidentiality; (5) an 

explanation of the competitive injury to 

the submitting person which would 

result from public disclosure; (6) when 

such information might lose its 

confidential character due to the 

passage of time; and (7) why disclosure 

of the information would be contrary to 

the public interest. 

It is DOE’s policy that all comments 

may be included in the public docket, 

without change and as received, 

including any personal information 

provided in the comments (except 

information deemed to be exempt from 

public disclosure). 

Notification of Special Requests 

In preparation for future technical 

assistance activities, DOE is interested 

in public comments and additional 

information regarding the costs and 

benefits associated with the adoption 

and use of Standard 90.1, as a whole, 

and appropriate methodologies for 

assessing costs, benefits and costeffectiveness. As discussed in the 

Methodology section of this document, 

DOE is directed to provide technical 

assistance to States to support 

implementation of State residential and 

commercial building energy efficiency 

codes. (42 U.S.C. 6833(d)) As part of its 

technical assistance role, DOE 

previously established a methodology 

by which it evaluates the cost 

effectiveness of energy codes (78 FR 

47677). In the coming months, DOE 

intends to publish a request for 

information (RFI) to update this 

methodology, and to ensure DOE 

activities continue to remain in 

alignment with the national model code 

development processes. In particular, 

DOE will be interested in public 

comments identifying available and 

adequate sources of data to support 

national and State-level cost analysis, 

such as localized cost data and 

construction practices. DOE expects to 

use such input in updating its own costeffectiveness methodology, and in 

applying this methodology through 

technical assistance functions, 

including the evaluation of published 

model energy codes, as well as proposed 

changes. 

Issued in Washington, DC, on May 8, 2014. 

Kathleen B. Hogan, 

Deputy Assistant Secretary for Energy 

Efficiency, Energy Efficiency and Renewable 

Energy. 

[FR Doc. 2014–11218 Filed 5–14–14; 8:45 am] 

BILLING CODE 6450–01–P 

DEPARTMENT OF ENERGY 

10 CFR Part 600 

RIN 1991–AC02 

Administrative Requirements for 

Grants and Cooperative Agreements 

AGENCY: Department of Energy. 

ACTION: Notice of proposed rulemaking 

and opportunity for public comment. 

SUMMARY: The Department of Energy 

(DOE) is proposing to revise existing 

regulations covering the administrative 

requirements for grants and cooperative 

agreements with for-profit 

organizations. The proposed regulations 

would modify title provisions, and 

requirements related to the handling of 

real property and equipment acquired 

with federal funds. They would also add 

provisions related to export control 

requirements and supporting U.S. 

manufacturing, reporting on utilization 

of subject inventions, novation of 

financial assistance agreements, and 

changes of control of recipients. 

DATES: DOE will accept comments, data, 

and information regarding this notice of 

proposed rulemaking (NOPR) no later 

than July 14, 2014. 

ADDRESSES: Any comments submitted 

must identify this NOPR on 

Administrative Requirements for Grants 

and Cooperative Agreements, and 

provide regulatory information number 

(RIN) 1991–AC02. Comments may be 

submitted using any of the following 

methods: 

1. Federal eRulemaking Portal: 

www.regulations.gov. Follow the 

instructions for submitting comments. 

2. Email: DEARrulemaking@

hq.doe.gov. Include RIN 1991–AC02 in 

the subject line of the message. 

3. Mail: U.S. Department of Energy, 

Office of Acquisition and Program 

Management, MA–611, 1000 

Independence Avenue SW., 

Washington, DC 20585. Comments by 

email are encouraged. 

No faxes will be accepted. 

FOR FURTHER INFORMATION CONTACT: 

Ellen Colligan, Procurement Analyst, 

U.S. Department of Energy, Office of 

Acquisition and Project Management, 

Contract and Financial Assistance 

Policy Division MA–611, Telephone: 

(202) 287–1776. Email: ellen.colligan@

hq.doe.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

II. Summary of Proposed Rule 

III. Procedural Requirements 

A. Review Under Executive Order 12866 

and 13563 

B. Review Under Executive Order 12988 

C. Review Under the Regulatory Flexibility 

Act 

D. Review Under the Paperwork Reduction 

Act 

E. Review Under the National 

Environmental Policy Act 

F. Review Under Executive Order 13132 

G. Review Under the Unfunded Mandates 

Reform Act of 1995 

H. Review Under the Treasury and General 

Government Appropriations Act, 1999 

I. Review Under Executive Order 13211 

J. Review Under the Treasury and General 

Government Appropriations Act, 2001 

I. Background 

The Department makes substantial 

use of financial assistance awards 

(grants and cooperative agreements) to 

for-profit organizations to meet its 

mission goals. To manage these awards, 

the Department issued a rule adding 

subpart D, Administrative Requirements 

for Grants and Cooperative Agreements 

with For-Profit Organizations, to Title 

10 of the Code of Federal Regulations 

effective October 1, 2003, published 

August 21, 2003 (68 FR 50646). Today 

the Department is proposing to add 


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certain requirements found in subpart 

D, and to revise others. 

This proposed rule would add 

provisions concerning: (1) The 

Department’s title to and interest in 

property purchased by financial 

assistance recipients with Federal 

funds; (2) the Department’s ability to 

monitor and control the use of Federal 

funds, property purchased with those 

funds, and any intellectual property 

developed with such funds; (3) the 

related issues of novation (that is, the 

transfer of a financial assistance 

agreement from one recipient entity to 

another) and of change of control of a 

recipient (that is, a transfer of control of 

the recipient entity from one individual, 

group of individuals or entity, to 

another); (4) reporting by recipients 

regarding the utilization of inventions 

developed with Federal funds; and (5) 

export controls applicable to inventions 

and technology developed with Federal 

funds, and support for U.S. 

manufacturing of inventions and 

technology developed with Federal 

funds. 

In particular, the Department’s 

proposed revision to 10 CFR 600.321, 

which governs the title, use, and 

disposition of real property, as defined 

at 10 CFR 600.302, and equipment 

purchased by the recipient of Federal 

funds, would add clarity for both the 

Department and recipients. The 

meanings of portions of 10 CFR 600.321 

have been questioned by parties to 

bankruptcy proceedings and in other 

contexts. Those questions have 

concerned the Government’s title to and 

interest in property, or the proceeds 

from the sale of property purchased in 

whole or in part with Federal funds. In 

particular, recipients of the 

Department’s financial assistance that 

later declare bankruptcy and acquirers 

of those recipients’ real property and 

equipment have questioned whether the 

Department’s claim to real property and 

equipment purchased with the 

Department’s funding is an unsecured 

claim as opposed to either a secured 

claim or a right in title to a portion of 

the proceeds generated from any sale of 

the real property and equipment. This 

revision seeks to provide more clarity 

with regard to this issue, not only for 

purposes of efficiency in bankruptcy, 

but for any disposition of real property 

and equipment purchased with federal 

funds. 

In addition, the Department’s 

proposed revisions would better enable 

it to understand and influence the use 

and manufacture of inventions 

developed with Federal funds. The 

Department’s proposed revisions also 

make clear its discretion to (a) continue 

funding a recipient that undergoes a 

change of control as that term is defined 

in this regulation (which may thereby 

affect the entity’s ability to carry out the 

project funded by the financial 

assistance agreement), and (b) consent 

to a request from a recipient to transfer 

its financial assistance agreement to a 

third party. These revisions will 

increase the Department’s ability to 

manage its disbursements and to 

exercise discretion with regard to both 

the entities to which funding is 

provided and domestic manufacturing. 

Contracting officers, as defined at 10 

CFR 600.3, would be required to include 

the changes of this proposed rule in all 

announcements of opportunities for 

Federal funding issued by DOE on or 

after the effective date of any final rule. 

Contracting officers may include the 

changes of any final rule in funding 

opportunity announcements issued 

before the effective date of that final rule 

at their discretion, provided award of 

the resulting financial assistance 

agreement(s) is planned on or after the 

effective date. All financial assistance 

agreements currently subject to 10 CFR 

part 600, subpart D would be affected. 

As such, contracting officers would 

incorporate the changes of this proposed 

rule into affected financial assistance 

agreements before making continuation 

or renewal awards, obligating funds in 

future budget periods, as defined at 10 

CFR 600.3, or adding additional terms 

or conditions to the award. 

II. Summary of the Proposed Rule 

Subpart D of 10 CFR part 600 contains 

the administrative requirements for 

financial assistance agreements with forprofit organizations. 

This proposed rule would add a 

paragraph to § 600.304(a) to list change 

of control and noncompliance with real 

property or equipment requirements as 

circumstances that would allow the 

Department to impose special award 

conditions. 

The changes proposed to § 600.321 

would update the provisions describing 

Government title to and interest in real 

property and equipment purchased with 

Federal funds, and amend certain 

provisions regarding the use of such 

property. The revised section would 

require, among other things, recipients 

of awards with a Federal share 

exceeding $1,000,000 to file a Uniform 

Commercial Code (UCC) financing 

statement for equipment purchased 

under the financial assistance 

agreement, and would state the 

Department’s discretion to require such 

a filing for equipment purchased by a 

recipient of less than $1,000,000. Small 

Business Innovation Research and Small 

Business Technology Transfer programs 

would be excluded from this 

requirement pursuant to § 600.321. Such 

a statement would provide public notice 

of the conditional nature of the 

recipient’s title to such property, and 

the Government’s continuing interest in 

such property. Any real property or 

equipment offered as cost share would 

be subject to the same requirements as 

property purchased directly with 

Federal funds. The proposed rule would 

also modify § 600.321(a) to change 

written approval requirements for the 

purchase of real property. Prior written 

approval is required under the current 

regulations only if the Federal funds 

used to acquire the property exceed 

$5,000. The updated rule also adds 

language to §§ 600.321(b)(1) and 

600.321(g) to reflect that the contracting 

officer may make the determination as 

to whether property is no longer needed 

for the purposes of the project. The 

updated rule adds language at 

§ 600.321(b)(2) to clarify that contracting 

officer approval must be in writing for 

the recipient to encumber property. The 

rule would also add a new paragraph at 

§ 600.321(c) specifying remedies for 

failure to comply with the terms of 

§ 600.321 and new language at 

§ 600.321(d) to clarify the government’s 

interest in property purchased under the 

award. The rule currently states that the 

government has an ‘‘interest’’ in 

property; it now says that the 

government has ‘‘an undivided 

reversionary interest in the share of the 

property equal to the federal 

participation in the project.’’ 

The proposed rule would add a new 

§ 600.326 requiring recipients to report 

on the utilization of subject inventions, 

as defined at 35 U.S.C. 201(e). The new 

section would require recipients to 

submit periodic reports on the use and 

manufacture of subject inventions at the 

request of DOE or at least annually for 

ten years after the initial reporting 

subject inventions to DOE. 

The proposed rule also would add a 

new § 600.327 setting forth 

requirements to comply with existing 

export controls and to support DOE 

manufacturing goals. This new section 

would require that any technology 

transfer must be consistent with U.S. 

export laws. These export laws are as 

described at 78 FR 35195 (June 12, 

2013). This section would also give DOE 

authority to require U.S. Manufacturing 

Plans, which are voluntary 

commitments by awardees to meet a 

certain level of U.S. manufacture, as 

part of proposals to the extent 

permissible under the law, for financial 

assistance agreements for research, 

development, and/or demonstration 


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projects. The section also would provide 

that a waiver or modification of these 

commitments may be sought, and would 

describe the considerations that DOE 

may weigh in considering whether to 

approve such a request. Depending on 

the level of technological or commercial 

readiness of a particular technology, and 

the desire to develop a U.S. 

manufacturing presence for that 

technology, a DOE funding Program 

may place more or less weight on U.S. 

manufacture commitments in 

connection with technology 

development plans. 

The proposed rule would add a new 

§ 600.354 establishing procedures for 

change of control of a recipient of an 

award with a Federal share of more than 

$10,000,000. This amount was chosen to 

focus on demonstration project and 

large R&D projects, without necessarily 

including smaller assistance 

agreements. The new section would 

require the recipient to notify the 

contracting officer within 30 days of its 

knowledge of a change of control as 

defined in the proposed rule. When a 

change of control occurs, the contracting 

officer would have authority to impose 

special award conditions pursuant to 10 

CFR 600.304. 

The proposed rule would also add a 

§ 600.355 establishing procedures for, 

and clarifying the Department’s 

discretion with regard to, novation of 

financial assistance agreements. The 

new section would explicitly provide 

that financial assistance agreements are 

not assignable absent written consent 

from the contracting officer. The new 

regulation would state that if the 

contracting officer determines that it is 

not in the best interests of the 

Government to consent to a novation, 

then the original recipient would 

remain subject to the terms of the 

financial assistance agreement. 

III. Procedural Requirements 

A. Review Under Executive Orders 

12866 and 13563 

This 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. 

DOE has also reviewed this regulation 

pursuant to Executive Order 13563, 

issued on January 18, 2011 (76 FR 3821, 

Jan. 21, 2011). Executive Order 13563 is 

supplemental to and explicitly reaffirms 

the principles, structures, and 

definitions governing regulatory review 

established in Executive Order 12866. 

To the extent permitted by law, agencies 

are required by Executive Order 13563 

to: (1) Propose or adopt a regulation 

only upon a reasoned determination 

that its benefits justify its costs 

(recognizing that some benefits and 

costs are difficult to quantify); (2) tailor 

regulations to impose the least burden 

on society, consistent with obtaining 

regulatory objectives, taking into 

account, among other things, and to the 

extent practicable, the costs of 

cumulative regulations; (3) select, in 

choosing among alternative regulatory 

approaches, those approaches that 

maximize net benefits (including 

potential economic, environmental, 

public health and safety, and other 

advantages; distributive impacts; and 

equity); (4) to the extent feasible, specify 

performance objectives, rather than 

specifying the behavior or manner of 

compliance that regulated entities must 

adopt; and (5) identify and assess 

available alternatives to direct 

regulation, including providing 

economic incentives to encourage the 

desired behavior, such as user fees or 

marketable permits, or providing 

information upon which choices can be 

made by the public. 

DOE emphasizes as well that 

Executive Order 13563 requires agencies 

to use the best available techniques to 

quantify anticipated present and future 

benefits and costs as accurately as 

possible. In its guidance, the Office of 

Information and Regulatory Affairs has 

emphasized that such techniques may 

include identifying changing future 

compliance costs that might result from 

technological innovation or anticipated 

behavioral changes. DOE believes that 

today’s NOPR is consistent with these 

principles, including the requirement 

that, to the extent permitted by law, 

agencies adopt a regulation only upon a 

reasoned determination that its benefits 

justify its costs and, in choosing among 

alternative regulatory approaches, those 

approaches maximize net benefits. 

B. 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; (3) 

provide a clear legal standard for 

affected conduct rather than a general 

standard; and (4) 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 that 

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, these 

regulations meet the relevant standards 

of Executive Order 12988. 

C. Review Under the Regulatory 

Flexibility Act 

This proposed rule has been reviewed 

under the Regulatory Flexibility Act, 5 

U.S.C. 601 et seq., which requires 

preparation of an initial regulatory 

flexibility analysis for any rule that 

must be proposed for public comment 

and is likely to have a significant 

economic impact on a substantial 

number of small entities. This proposed 

rule will not have a significant impact 

on small entities as it applies to only 

for-profit entities (eliminating small 

non-profits, individuals or other small 

entities not set up as a for-profit). It also 

eliminates small for-profit entities 

receiving awards through SBIR and 

STTR programs. Historically the awards 

made by DOE under subchapter D are to 

businesses considered large in their 

industry or field. Accordingly, DOE 

certifies that this proposed rule would 

not have a significant economic impact 

on a substantial number of small 

entities, and, therefore, no regulatory 

flexibility analysis has been prepared. 

D. Review Under the Paperwork 

Reduction Act 

The proposed rule would require the 

preparation and submission of a UCC 

financing statement for awards where 

the Federal share exceeds $1 million. 

This collection of information is 

required for the Department to protect 

the taxpayers by clarifying the rights to 

real property and equipment purchased 

under financial assistance awards. 

Under the Paperwork Reduction Act, 

44 U.S.C. 3501 et seq., an agency may 

not conduct or sponsor, and a person is 

not required to respond to, a collection 

of information unless the collection has 

been reviewed and assigned a control 


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27798 Federal Register / Vol. 79, No. 94 / Thursday, May 15, 2014 / Proposed Rules 

number by Office of Management and 

Budget (OMB). 

The collection of information for DOE 

financial assistance awards has been 

approved by OMB under control 

number 1910–0400. Public reporting 

burden for the approved collection of 

information is estimated to average 

13.88 hours per response, including the 

time for reviewing instructions, 

searching existing data sources, 

gathering and maintaining the data 

needed, and completing and reviewing 

the collection of information. The 

Department is submitting to the Office 

of Management and Budget (OMB), 

simultaneously with the publication of 

this proposed rule, information 

explaining the proposed amendments to 

the current collection of information for 

review and approval under the 

Paperwork Reduction Act, 44 U.S.C. 

3501 et seq. 

E. Review Under the National 

Environmental Policy Act 

DOE has concluded that promulgation 

of this proposed rule falls into a class of 

actions which would not individually or 

cumulatively have significant impact on 

the human environment, as determined 

by DOE’s regulations, 10 CFR part 1021, 

subpart D, implementing the National 

Environmental Policy Act (NEPA) of 

1969, 42 U.S.C. 4321 et seq. 

Specifically, this proposed rule is 

categorically excluded from NEPA 

review because the amendments to 10 

CFR part 600 subpart D would be 

strictly procedural (categorical 

exclusion A6). Therefore, this proposed 

rule does not require an environmental 

impact statement or environmental 

assessment pursuant to NEPA. 

F. Review Under Executive Order 13132 

Executive Order 13132, 64 FR 43255, 

August 4, 1999, imposes certain 

requirements on agencies formulating 

and implementing policies or 

regulations that preempt state law or 

that have federalism implications. 

Agencies are required to examine the 

constitutional and statutory authority 

supporting any action that would limit 

the policymaking discretion of the states 

and carefully assess the necessity for 

such actions. DOE has examined today’s 

proposed rule and has determined that 

it would not preempt state law and 

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. No further 

action is required by Executive Order 

13132. 

G. Review Under the Unfunded 

Mandates Reform Act of 1995 

The Unfunded Mandates Reform Act 

of 1995, Public Law 104–4, requires a 

federal agency to perform a detailed 

assessment of costs and benefits of any 

rule imposing a federal mandate with 

costs to state, local or tribal 

governments, or to the private sector, of 

$100 million or more in any single year. 

This rulemaking does not impose a 

federal mandate on state, local or tribal 

governments or on the private sector. 

H. Review Under the Treasury and 

General Government Appropriations 

Act, 1999 

Section 654 of the Treasury and 

General Government Appropriations 

Act, 1999, Public Law 105–277, requires 

federal agencies to issue a Family 

Policymaking Assessment for any rule 

or policy that may affect family wellbeing. This proposed rule would have 

no impact on family well-being. 

I. 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 the Office of 

Information and Regulatory Affairs 

(OIRA), OMB, a Statement of Energy 

Effects for any significant energy action. 

A ‘‘significant energy action’’ is defined 

as any action by an agency that 

promulgates 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 proposed rule is not a significant 

energy action. Accordingly, DOE has not 

prepared a Statement of Energy Effects. 

J. Review Under the Treasury and 

General Government Appropriations 

Act, 2001 

The Treasury and General 

Government Appropriations Act, 2001, 

44 U.S.C. 3516, note, provides for 

agencies to review most disseminations 

of information to the public under 

implementing guidelines established by 

each agency pursuant to general 

guidelines issued by OMB. OMB’s 

guidelines were published at 67 FR 

8452, February 22, 2002, and DOE’s 

guidelines were published at 67 FR 

62446, October 7, 2002. DOE has 

reviewed today’s proposed rulemaking 

under the OMB and DOE guidelines and 

has concluded that it is consistent with 

applicable policies in those guidelines. 

List of Subjects in 10 CFR Part 600 

Accounting, Administrative practice 

and procedure, Grant programs, 

Reporting and recordkeeping 

requirements. 

Issued in Washington, DC, on May 7, 2014. 

Paul Bosco, 

Director, Office of Acquisition and Project 

Management, Department of Energy. 

Barbara H. Stearrett, 

Director, Office of Acquisition Management, 

National Nuclear Security Administration. 

For the reasons stated in the 

preamble, the Department of Energy 

proposes to amend part 600 of chapter 

II, title 10 of the Code of Federal 

Regulations to read as follows: 

PART 600—FINANCIAL ASSISTANCE 

RULES 

■ 1. The authority citation for part 600 

continues to read as follows: 

Authority: 42 U.S.C. 7101 et seq.; 31 U.S.C. 

6301–6308; 50 U.S.C. 2401 et seq. 

■ 2. Amend § 600.304 by revising 

paragraphs (a)(4) and (5) and adding 

paragraphs (a)(6) and (7) to read as 

follows: 

§ 600.304 Special award conditions. 

(a) * * * 

(4) Has not conformed to the terms 

and conditions of a previous award; 

(5) Has a change of control as defined 

in § 600.354; 

(6) Fails to comply with real property 

and equipment requirements at 

§ 600.321(b); or 

(7) Is not otherwise responsible. 

* * * * * 

■ 3. Revise § 600.321 to read as follows: 

§ 600.321 Real property and equipment. 

(a) Prior approvals for acquisition 

with Federal funds. Recipients may 

purchase real property or equipment 

with an acquisition cost per unit of 

$5,000 or more in whole or in part with 

Federal funds only with the prior 

written approval of the contracting 

officer or in accordance with express 

award terms. 

(b) Title. Unless a statute specifically 

authorizes and the award specifies that 

title to property vests unconditionally in 

the recipient, title to real property or 

equipment vests in the recipient, subject 


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to all terms and conditions of the award 

and that the recipient shall: 

(1) Use the real property or equipment 

for the authorized purposes of the 

project until funding for the project 

ceases, or until the real property or 

equipment is no longer needed for the 

purposes of the project, as may be 

determined by the contracting officer; 

(2) Not encumber or permit any 

encumbrance on the real property or 

equipment without the prior written 

approval of the contracting officer; 

(3) Use and dispose of the real 

property or equipment in accordance 

with paragraphs (e), (f) and (g) of this 

section; and 

(4) Properly record, and consent to the 

Department’s ability to properly record 

if the recipient fails to do so, UCC 

financing statement(s) for all equipment 

purchased with Federal funds 

(Financial assistance awards made 

under the Small Business Innovation 

Research/Small Business Technology 

Transfer (SBIR/STTR) program are 

exempt from this requirement unless 

otherwise specified within the grant 

agreement); such a filing is required 

when the Federal share of the financial 

assistance agreement is more than 

$1,000,000, and the Contracting Officer 

may require it in his or her discretion 

when the Federal share is less than 

$1,000,000. These financing 

statement(s) must be approved in 

writing by the contracting officer prior 

to the recording, and they shall provide 

notice that the recipient’s title to all 

equipment (not real property) purchased 

with Federal funds under the financial 

assistance agreement is conditional 

pursuant to the terms of this section, 

and that the Government retains an 

undivided reversionary interest in the 

equipment. The UCC financing 

statement(s) must be filed before the 

contracting officer may reimburse the 

recipient for the Federal share of the 

equipment unless otherwise provided 

for in the relevant financial assistance 

agreement. The recipient shall further 

make any amendments to the financing 

statements or additional recordings, 

including appropriate continuation 

statements, as necessary or as the 

contracting officer may direct. 

(c) Remedies. If the recipient fails at 

any time to comply with any of the 

conditions or requirements of paragraph 

(b) of this section, then the contracting 

officer may: 

(1) Notify the recipient of 

noncompliance in accordance with 

§ 600.352, which may lead to 

suspension or termination of the award; 

(2) Impose special award conditions 

pursuant to § 600.304; 

(3) Issue instructions to the recipient 

for disposition of the property in 

accordance with paragraph (g) of this 

section; 

(4) In the case of a failure to properly 

record UCC financing statement(s) in 

accordance with paragraph (b)(4) of this 

section, effect such a recording; and 

(5) Apply other remedies that may be 

legally available. 

(d) Title to and Federal interest in real 

property or equipment offered as costshare. As provided in § 600.313, a 

recipient may offer the fair market value 

of real property or equipment that is 

purchased with recipient’s funds or that 

is donated by a third party to meet a 

portion of any required cost sharing or 

matching. If a resulting award includes 

such property as a portion of the 

recipient’s cost share, the recipient 

holds conditional title to the property 

and the Government has an undivided 

reversionary interest in the share of the 

property value equal to the Federal 

participation in the project. The 

property is treated as if it had been 

acquired in part with Federal funds, and 

is subject to the provisions of paragraph 

(b) of this section and to the provisions 

of § 600.323. 

(e) Insurance. Recipients must, at a 

minimum, provide the equivalent 

insurance coverage for real property and 

equipment acquired with Federal funds 

as provided to property owned by the 

recipient. 

(f) Additional Uses During and After 

the Project Period. Unless a statute and 

the award terms expressly provide for 

the vesting of unconditional title to real 

property or equipment with the 

recipient, the real property or 

equipment acquired wholly or in part 

with Federal funds is subject to the 

following: 

(1) During the Project Period, the 

recipient must make real property and 

equipment available for use on other 

projects or programs, if such other use 

does not interfere with the work on the 

project or program for which the real 

property or equipment was originally 

acquired. Use of the real property or 

equipment on other projects is subject to 

the following order of priority: 

(i) Activities sponsored by DOE 

grants, cooperative agreements, or other 

assistance awards; 

(ii) Activities sponsored by other 

Federal agencies’ grants, cooperative 

agreements, or other assistance awards; 

(iii) Activities under Federal 

procurement contracts or activities not 

sponsored by any Federal agency. If so 

used, use charges must be assessed to 

those activities. For real property or 

equipment, the use charges must be at 

rates equivalent to those for which 

comparable real property or equipment 

may be leased. 

(2) After Federal funding for the 

project ceases, or if, as may be 

determined by the contracting officer, 

the real property or equipment is no 

longer needed for the purposes of the 

project, or if the recipient suspends 

work on the project, the recipient may 

use the real property or equipment for 

other projects, if: 

(i) There are Federally sponsored 

projects for which the real property or 

equipment may be used; 

(ii) The recipient obtains written 

approval from the contracting officer to 

do so. The contracting officer must 

ensure that there is a formal change of 

accountability for the real property or 

equipment to a currently funded Federal 

award; and 

(iii) The recipient’s use of the real 

property or equipment for other projects 

is in the same order of priority as 

described in paragraph (e)(1) of this 

section. 

(iv) If the only use for the real 

property or equipment is for projects 

that have no Federal sponsorship, the 

recipient must proceed with disposition 

of the real property or equipment in 

accordance with paragraph (g) of this 

section. 

(g) Disposition. (1) If, as determined 

by the contracting officer, an item of real 

property or equipment is no longer 

needed for Federally sponsored projects, 

or if the recipient has suspended work 

on the project, the recipient has the 

following options: 

(i) If the property is equipment with 

a current per unit fair market value of 

less than $5,000, it may be retained, 

sold, or otherwise disposed of with no 

further obligation to DOE. 

(ii) If the property is equipment 

(rather than real property) and with the 

written approval of the contracting 

officer, the recipient may replace it with 

an item that is needed currently for the 

project by trading in or selling to offset 

the costs of the replacement equipment. 

(iii) The recipient may elect to retain 

title, without further obligation to the 

Federal Government, by compensating 

the Federal Government for that 

percentage of the current fair market 

value of the real property or equipment 

that is attributable to the Federal 

participation in the project. 

(iv) If the recipient does not elect to 

retain title to real property or equipment 

or does not request approval to use 

equipment as trade-in or offset for 

replacement equipment, the recipient 

must request disposition instructions 

from the responsible agency. 


TKELLEY on DSK3SPTVN1PROD with PROPOSALS
27800 Federal Register / Vol. 79, No. 94 / Thursday, May 15, 2014 / Proposed Rules 

(2) If a recipient requests disposition 

instructions, the contracting officer 

must: 

(i) For either real property or 

equipment, issue instructions to the 

recipient for disposition of the property 

no later than 120 calendar days after the 

recipient’s request. The contracting 

officer’s options for disposition are to 

direct the recipient to: 

(A) Transfer title to the real property 

or equipment to the Federal 

Government or to a third party 

designated by the contracting officer 

provided that, in such cases, the 

recipient is entitled to compensation for 

its attributable percentage of the current 

fair market value of the real property or 

equipment, plus any reasonable 

shipping or interim storage costs 

incurred; or 

(B) Sell the real property or 

equipment and pay the Federal 

Government for that percentage of the 

current fair market value of the property 

that is attributable to the Federal 

participation in the project (after 

deducting actual and reasonable selling 

and fix-up expenses, if any, from the 

sale proceeds). If the recipient is 

authorized or required to sell the real 

property or equipment, the recipient 

must use competitive procedures that 

result in the highest practicable return. 

(3) If the contracting officer fails to 

issue disposition instructions within 

120 calendar days of the recipient’s 

request, the recipient must dispose of 

the real property or equipment through 

the option described in paragraph 

(g)(2)(i)(B) of this section. 

■ 4. Add § 600.326 to subpart D to read 

as follows: 

§ 600.326 Reporting on utilization of 

subject inventions. 

(a) Unless otherwise instructed, a 

recipient that obtains title to an 

invention made under an award shall 

submit annual reports on the utilization 

or efforts to obtain utilization of the 

invention for at least 10 years from the 

date the invention was first disclosed to 

DOE (Utilization Reports). Utilization 

Reports shall include at least the 

following information: 

(1) Status of development; 

(2) Date of first commercial sale or 

use; 

(3) Gross royalties received by the 

recipient; 

(4) The location of any manufacture of 

products embodying the subject 

invention; and 

(5) Any such other data and 

information as DOE may reasonably 

specify. 

(b) To the extent data or information 

supplied in a Utilization Report is 

considered by the recipient to be 

privileged and confidential and is so 

marked by the recipient, DOE agrees 

that, to the extent permitted by law, it 

shall not disclose such information to 

persons outside the Government. 

■ 5. Add § 600.327 to subpart D to read 

as follows: 

§ 600.327 Export Control and U.S. 

Manufacturing and Competitiveness. 

(a) Export Control. Any recipient of 

any award for research, development 

and/or demonstration must comply with 

all applicable U.S. laws regarding export 

control. 

(b) U.S. Manufacturing and 

Competitiveness. It is the policy of DOE 

to ensure that DOE-funded research, 

development, and/or demonstration 

projects foster domestic manufacturing. 

Funding opportunity announcements 

(FOAs), therefore, may require that 

applicants submit a ‘‘U.S. 

Manufacturing Plan’’ in their 

applications. Such FOAs may encourage 

U.S. Manufacturing Plans to include 

proposals by recipients and any subrecipients to manufacture DOE-funded 

technologies in the United States; 

however, the FOAs will also state that 

these plans should not include 

requirements regarding the source of 

inputs used during the manufacturing 

process. Regardless of whether such 

plans will be part of the merit review 

criteria or a program policy factor, and 

to the extent legally permissible, all 

awards subject to this subpart, including 

subawards, for research, development, 

and/or demonstration, must include a 

provision that provides plans by the 

recipient and any subrecipients to 

support manufacturing in the United 

States of technology developed under 

the award. The recipient and any 

subrecipients must agree to make those 

plans binding on any assignee or 

licensee or any entity otherwise 

acquiring rights to any subject invention 

or developed technology covered under 

the award. A recipient, subrecipient, 

assignee, licensee, or any entity 

otherwise acquiring the rights to any 

subject invention or developed 

technology may request a waiver or 

modification of U.S. manufacturing 

plans from DOE. DOE will determine 

whether to approve such a waiver in 

light of equitable considerations, 

including, for example, whether the 

requester satisfactorily shows that the 

planned support is not economically 

feasible and whether there is a 

satisfactory alternative net benefit to the 

U.S. economy if the requested waiver or 

modification is approved. 

■ 6. Add § 600.354 to subpart D under 

the undesignated center heading ‘‘PostAward Requirements’’ to read as 

follows: 

§ 600.354 Change of control. 

(a) Change of control is defined as any 

of the following: 

(1) Any event by which any 

individual or entity other than the 

recipient becomes the beneficial owner 

of more than 50% of the total voting 

power of the voting stock of the 

recipient; 

(2) The recipient merges with or into 

any entity other than in a transaction in 

which the shares of the recipient’s 

voting stock are converted into a 

majority of the voting stock of the 

surviving entity; 

(3) The sale, lease or transfer of all or 

substantially all of the assets of the 

recipient to any individual or entity 

other than the recipient in one or a 

series of related transactions; 

(4) The adoption of a plan relating to 

the liquidation or dissolution of the 

recipient; or 

(5) Where the recipient is a whollyowned subsidiary at the time of award 

or novation, and the recipient’s parent 

entity undergoes a change of control as 

defined in this section. 

(b) When the Federal share of the 

financial assistance agreement is more 

than $10,000,000 or DOE requests the 

information in writing, the recipient 

must provide the contracting officer 

with documentation identifying all 

parties who exercise control in the 

recipient at the time of award. 

(c) When there is a change of control 

of a recipient, or the recipient has 

reason to know a change of control is 

likely, the recipient must notify the 

contracting officer within 30 days of its 

knowledge of such change of control. 

Such notification must include, at a 

minimum, copies of documents 

necessary to reflect the transaction that 

resulted or will result in the change of 

control, and identification of all entities, 

individuals or other parties to such 

transaction. Failure to notify the 

contracting officer of a change of control 

is grounds for suspension or termination 

of the award for failure to comply with 

the terms and conditions of the award. 

(d) The contracting officer must 

authorize a change of control for the 

purposes of the award. Failure to 

receive the contracting officer’s 

authorization for a change of control 

may lead to a suspension of the award, 

termination for failure to comply with 

the terms and conditions of the award, 

or imposition of special award 

conditions pursuant to 10 CFR 600.304. 

Special award conditions may include 

but are not limited to: 


TKELLEY on DSK3SPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 94 / Thursday, May 15, 2014 / Proposed Rules 27801 

1 12 U.S.C. 1467a(e)(2)(E), 1828(c), 1842(d)(2), 

1843(i)(8). The nationwide deposit cap generally 

prohibits the appropriate Federal banking agency 

from approving an application by a bank holding 

company, insured depository institution, or savings 

and loan holding company to acquire an insured 

depository institution located in a different home 

state than the acquiring company if the acquiring 

company controls, or following the acquisition 

would control, more than 10 percent of the total 

amount of deposits of insured depository 

institutions in the United States. 

2Nonbank financial companies supervised by the 

Board are companies that have been designated by 

the Financial Stability Oversight Council for 

supervision by the Board pursuant to section 113 

of the Dodd-Frank Act. See 12 U.S.C. 5323. 

(1) Additional reporting requirements 

related to the change of control; and 

(2) Suspension of payments due to the 

recipient. 

■ 7. Add § 600.355 to subpart D under 

the undesignated center heading ‘‘PostAward Requirements’’ to read as 

follows: 

§ 600.355 Novation of Financial Assistance 

Agreements. 

(a) Financial assistance agreements 

are not assignable absent written 

consent from the contracting officer. At 

his or her sole discretion, the 

contracting officer may, through 

novation, recognize a third party as the 

successor in interest to a financial 

assistance agreement if such recognition 

is in the Government’s interest, 

conforms with all applicable laws and 

the third party’s interest in the 

agreement arises out of the transfer of: 

(1) All of the recipient’s assets; or 

(2) The entire portion of the assets 

necessary to perform the project 

described in the agreement. 

(b) When the contracting officer 

determines that it is not in the 

Government’s interest to consent to the 

novation of a financial assistance 

agreement from the original recipient to 

a third party, the original recipient 

remains subject to the terms of the 

financial assistance agreement, and the 

Department may exercise all legally 

available remedies under 10 CFR 

600.25, or that may be otherwise 

available, should the original recipient 

not perform. 

(c) The contracting officer may require 

submission of any documentation in 

support of a request for novation, 

including but not limited to documents 

identified in 48 CFR Subpart 42.12. The 

contracting officer may use the format in 

48 CFR 42.1204 as guidance for 

novation agreements identified in 

paragraph (a) of this section. 

[FR Doc. 2014–11117 Filed 5–14–14; 8:45 am] 

BILLING CODE 6450–01–P 

FEDERAL RESERVE SYSTEM 

12 CFR Part 251 

[Regulation XX; Docket No. R–1489] 

RIN 7100–AE 18 

Concentration Limits on Large 

Financial Companies 

AGENCY: Board of Governors of the 

Federal Reserve System (‘‘Board’’). 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Board invites comment 

on a proposed rule (Regulation XX) that 

would implement section 622 of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act. Section 622, 

which adds a new section 14 to the 

Bank Holding Company Act of 1956, 

establishes a financial sector 

concentration limit that generally 

prohibits a financial company from 

merging or consolidating with, or 

acquiring, another company if the 

resulting company’s liabilities upon 

consummation would exceed 10 percent 

of the aggregate liabilities of all financial 

companies as calculated under that 

section. In addition, the proposal would 

establish reporting requirements for 

certain financial companies that are 

necessary to implement section 622. 

DATES: Comments must be received no 

later than July 8, 2014. 

ADDRESSES: You may submit comments, 

identified by Docket No. R–1489 and 

RIN 7100 AE 18, by any of the following 

methods: 

• Agency Web site: http://

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/general

info/foia/ProposedRegs.cfm. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Email: regs.comments@

federalreserve.gov. Include the docket 

number in the subject line of the 

message. 

• Fax: (202) 452–3819 or (202) 452– 

3102. 

• Mail: Robert deV. Frierson, 

Secretary, Board of Governors of the 

Federal Reserve System, 20th Street and 

Constitution Avenue NW., Washington, 

DC 20551. 

All public comments will be made 

available on the Board’s Web site at 

http://www.federalreserve.gov/

generalinfo/foia/ProposedRegs.cfm as 

submitted, unless modified for technical 

reasons. Accordingly, comments will 

not be edited to remove any identifying 

or contact information. Public 

comments may also be viewed 

electronically or in paper in Room MP– 

500 of the Board’s Martin Building (20th 

and C Streets NW.) between 9:00 a.m. 

and 5:00 p.m. on weekdays. 

FOR FURTHER INFORMATION CONTACT: 

Laurie S. Schaffer, Associate General 

Counsel, (202) 452–2272, Christine 

Graham, Counsel, (202) 452–3005, or Joe 

Carapiet, Senior Attorney, (202) 973– 

6957, Legal Division; Felton Booker, 

Senior Supervisory Financial Analyst, 

(202) 912–4651, or Sean Healey, Senior 

Financial Analyst, (202) 912–4611, 

Division of Banking Supervision and 

Regulation; Dean Amel, Senior 

Economist, (202) 452–2911; Board of 

Governors of the Federal Reserve 

System, 20th and C Streets NW., 

Washington, DC 20551. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

II. Financial Sector Concentration Limit 

III. Administrative Law Matters 

A. Regulatory Flexibility Act 

B. Paperwork Reduction Act 

C. Solicitation of Comments on Use of 

Plain Language 

I. Background 

Section 622 of the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act (Dodd-Frank Act) established a 

financial sector concentration limit that 

prevents a financial company from 

merging or consolidating with, 

acquiring all or substantially all of the 

assets of, or otherwise acquiring control 

of another company (‘‘covered 

acquisition’’) if the resulting company’s 

consolidated liabilities would exceed 10 

percent of the aggregate consolidated 

liabilities of all financial companies. 

The concentration limit supplements 

the nationwide deposit cap in Federal 

banking law by imposing an additional 

limit on liabilities of financial 

companies.1 ‘‘Financial companies’’ 

subject to the concentration limit 

include insured depository institutions, 

bank holding companies, savings and 

loan holding companies, other 

companies that control an insured 

depository institution, foreign banks or 

companies that are treated as bank 

holding companies, and nonbank 

financial companies supervised by the 

Board.2 Section 622 measures 

‘‘liabilities’’ of a financial company as 

risk-weighted assets minus regulatory 

capital. For foreign financial companies, 

only the liabilities of the U.S. operations 

of the company are considered in 

applying the concentration limit. 

Section 622 directs the Financial 

Stability Oversight Council (Council) to 

complete a study of the extent to which 

the statutory concentration limit would 

affect financial stability, moral hazard in 


TKELLEY on DSK3SPTVN1PROD with PROPOSALS