This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

65509

Vol. 60, No. 244

Wednesday, December 20, 1995

DEPARTMENT OF ENERGY

10 CFR Part 600

[Docket No. PO–RM–95–101]

Financial Assistance Rules: Eligibility

Determination for Certain Financial

Assistance Programs

AGENCY: Department of Energy.

ACTION: Final rule.

SUMMARY: The Department of Energy is

amending its Financial Assistance Rules

by adding a final statement of policy,

including procedures and

interpretations, to guide DOE officials in

making determinations required by

section 2306 of the Energy Policy Act of

1992 (EPACT) concerning eligibility to

receive financial assistance under DOE

programs authorized by Titles XX

through XXIII of EPACT.

EFFECTIVE DATE: January 19, 1996.

FOR FURTHER INFORMATION CONTACT: Dr.

Robert C. Marlay, Office of Science

Policy (Mail Stop PO–81), Office of

Policy, U.S. Department of Energy, 1000

Independence Avenue, SW.,

Washington, D.C. 20585, (202) 586–

3900. Paul Sherry, Esq., Office of

General Counsel (Mail Stop GC–61),

U.S. Department of Energy, 1000

Independence Avenue, S.W.,

Washington, D.C. 20585, (202) 586–

2440.

SUPPLEMENTARY INFORMATION:

I. Background

II. Discussion of Public Comments

III. Procedural Requirements

I. Background

This notice sets forth a final general

statement of policy, including

procedures and interpretations,

concerning implementation of the

requirements of section 2306 of EPACT

(42 U.S.C. 13525). This general

statement of policy will guide

implementing DOE officials in making a

special eligibility determination

prerequisite to a financial assistance

award to a company under Titles XX

through XXIII of EPACT. Those titles

relate to research, development,

demonstration and commercialization

programs in diverse areas of energy

efficiency, energy supply, and related

basic research.

Section 2306 provides for a two-part

determination. An applicant must be

found to satisfy the conditions of both

parts in order to be eligible. The first

part, set out in section 2306(1), involves

a finding with regard to whether an

award of financial assistance to the

applicant would be in the economic

interest of the United States. 42 U.S.C.

13525(1). The statute provides some

illustrative examples of the kinds of

evidence that would support such a

finding: investments in the United

States in research, development, and

manufacturing; significant contributions

to employment in the United States; and

agreements, with respect to any

technology arising from financial

assistance provided, to promote the

manufacture within the United States of

products resulting from that technology

and to procure parts and materials for

such manufacture from competitive

suppliers.

The second part of the determination,

section 2306(2), involves two subparts,

one of which must be satisfied. 42

U.S.C. 13525(2). The first subpart is

satisfied if the applicant is a ‘‘United

States-owned company.’’ The second

subpart is satisfied if the applicant is

found to be incorporated in the United

States and the applicant’s parent

company is incorporated in a foreign

country that: (a) affords opportunities to

United States-owned companies

comparable to those afforded to any

other company to participate in

government-supported joint ventures in

energy research and development; (b)

affords opportunities to United Statesowned companies comparable to those

afforded to any other company with

regard to general investment

opportunities; and (c) affords adequate

and effective protection of intellectual

property rights owned by United Statesowned companies.

The current list of covered programs

is set forth below. This list will be

updated as appropriate and published

in the Federal Register to account for

changes in activities undertaken in

relation to Titles XX through XXIII of

EPACT.

Covered programs EPACT sections

Fossil energy R & D Petroleum: All Programs ............................................................................................................... § 2011, 2012

Gas: Natural Gas Research ........................................................................................................................................... § 2013–2015, 2112

All programs, including:

Resource & Extraction ..................................................................................................................................... § 2013, 2014

Delivery & Storage ........................................................................................................................................... § 2013, 2014

Utilization .......................................................................................................................................................... § 2013, 2014

Turbines ............................................................................................................................................................ § 2112

Environmental Research & Regulatory Analysis ............................................................................................. § 2013, 2014

Mid-continent Energy Research Center ........................................................................................................... § 2013, 2015

Fuel cells: § 2115

All Programs, including:

Advanced Research ......................................................................................................................................... § 2115

Molten Carbonate Systems .............................................................................................................................. § 2115

Advanced Concepts ......................................................................................................................................... § 2115

Energy conservation:

Transportation .......................................................................................................................................................... § 2021–2025, 2027, 2028,

2112

Alternative Fuels Utilization ..................................................................................................................................... § 2021, 2023

Materials Development ............................................................................................................................................ § 2021
65510 Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Rules and Regulations

Covered programs EPACT sections

Heat Engine Development ...................................................................................................................................... § 2021, 2112

Electric & Hybrid Propulsion .................................................................................................................................... § 2021, 2025

Development Implementation & Deployment .......................................................................................................... § 2021

Management ............................................................................................................................................................ § 2021

Capital Equipment ................................................................................................................................................... § 2021

Advanced Automotive Fuel Economy ..................................................................................................................... § 2021, 2022

Biofuels User Facility ............................................................................................................................................... § 2021, 2024

Advanced Diesel Emissions Program ..................................................................................................................... § 2021, 2027

Telecommuting Study .............................................................................................................................................. § 2021, 2028

Utility: All programs ......................................................................................................................................................... § 2101

Industry ........................................................................................................................................................................... § 2101–2108

All Programs, including:

Industrial Wastes .............................................................................................................................................. § 2101

Municipal Solid Wastes .................................................................................................................................... § 2101

Cogeneration .................................................................................................................................................... § 2101

Electric Drives .................................................................................................................................................. § 2101, 2105

Materials and Metals Processing ..................................................................................................................... § 2101, 2107

Other Process Efficiency .................................................................................................................................. § 2101

Process Heating & Cooling .............................................................................................................................. § 2101, 2102

Implementation & Deployment ................................................................................................................................ § 2101

Management ..................................................................................................................................................... § 2101

Capital Equipment ............................................................................................................................................ § 2101

National Advanced Manufacturing Tech .......................................................................................................... § 2101, 2202

Initiative Pulp & Paper ...................................................................................................................................... § 2101, 2103

Steel, Aluminum, and Metal Research ............................................................................................................ § 2101, 2106

Energy Efficient Environmental Program ......................................................................................................... § 2101, 2108

Buildings ......................................................................................................................................................................... § 2101–2108

All Programs, including:

Federal Energy Management Program ............................................................................................................ § 2101

Implementation & Deployment ......................................................................................................................... § 2101

Management and Planning .............................................................................................................................. § 2101

Capital Equipment ............................................................................................................................................ § 2101

Advanced Buildings for 2005 ........................................................................................................................... § 2101, 2104

Building Systems .............................................................................................................................................. § 2101

Building Envelope ............................................................................................................................................. § 2101

Building Equipment .......................................................................................................................................... § 2101

Codes and Standards ...................................................................................................................................... § 2101

Energy Supply R & D: Energy Research:.

Fusion Energy ......................................................................................................................................................... § 2114

All Programs, including:

Confinement Systems ............................................................................................................................... § 2114

Development & Technology ...................................................................................................................... § 2114

Applied Plasma Physics .......................................................................................................................................... § 2114

Planning & Projects ................................................................................................................................................. § 2114

Inertial Fusion Energy ............................................................................................................................................. § 2114

Program Direction-Op Exp ...................................................................................................................................... § 2114

Capital Equipment & Construction .......................................................................................................................... § 2114

Basic Energy Sciences ................................................................................................................................................... § 2203

All Activities, including:

Materials Sciences ........................................................................................................................................... § 2203

Chemical Sciences ........................................................................................................................................... § 2203

Energy Biosciences .......................................................................................................................................... § 2203

Engineering & Geosciences ............................................................................................................................. § 2203

Applied Math Sciences ..................................................................................................................................... § 2203, 2204

Advanced Energy Projects ............................................................................................................................... § 2203

Program Direction ............................................................................................................................................ § 2203

Capital Equipment ............................................................................................................................................ § 2203

Advisory & Oversight/Program Direction ................................................................................................................. § 2203

Advanced Neutron Source ...................................................................................................................................... § 2203

Energy Research Analysis ...................................................................................................................................... § 2203

University & Science Education Programs ............................................................................................................. § 2203

Experimental Program to Stimulate Competitive Research .................................................................................... § 2203

Laboratory Technology Transfer ............................................................................................................................. § 2203

Multi-Program Laboratory Support .......................................................................................................................... § 2203

Nuclear Energy:

Light Water Reactor ................................................................................................................................................ § 2123, 2126

Advanced Reactor R & D ........................................................................................................................................ § 2121, 2122, 2124, 2126

Facilities ................................................................................................................................................................... § 2126

Solar & Renewables:

Solar & Other Energy .............................................................................................................................................. § 2021, 2026, 2111, 2117

All Programs, including:

Photovoltaics .................................................................................................................................................... § 2111

Biofuels ............................................................................................................................................................. § 2021, 2013, 2024, 2111

Solar Technology Transfer ............................................................................................................................... § 2111
Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Rules and Regulations 65511

Covered programs EPACT sections

Program Direction—Other Solar Energy .......................................................................................................... § 2111

Solar Building Technology Research ............................................................................................................... § 2111, 2104

Solar Thermal Energy Systems ....................................................................................................................... § 2111

Wind Energy Systems ...................................................................................................................................... § 2111

Ocean Energy Systems ................................................................................................................................... § 2111

International Solar Energy Program ................................................................................................................. § 2111

Resource Assessment ..................................................................................................................................... § 2111

Program Support .............................................................................................................................................. § 2111

Geothermal .............................................................................................................................................................. § 2111

Hydrogen Research ................................................................................................................................................. § 2026

Electric Energy Systems including: Superconductivity ........................................................................................... § 2117, 2111

Energy Storage Systems ......................................................................................................................................... § 2111

Environmental Rest & Waste Management:

Facility Transition—Fast Flux Test Facility ............................................................................................................. § 2116

Civilian Waste R & D ............................................................................................................................................... § 2113

Electric & Magnetic Fields Research and Public Dissemination Program ............................................................. § 2118

Spark M. Matsunaga Renewable Energy & Ocean Technology Center ................................................................ § 2111, 2119

On February 23, 1995, DOE published

a proposed statement of policy for

public comment in the Federal Register

(60 FR 10296). The public comment

period ended April 24, 1995. The

Department received seven comments.

In addition, a public hearing was held

on April 19, 1995, in Washington, DC.

Comments were received from the

Delegation of the European

Commission, individual corporations,

and associations representing

corporations and commercial interests.

The official rulemaking record is

available in the Department’s Freedom

of Information reading room.

II. Discussion of Public Comments

A. Applicability of Eligibility

Requirements

One commenter questioned the

Department’s overall approach of

implementing section 2306 through a

‘‘general statement of policy’’ which

allows DOE officials considerable

flexibility. The commenter noted that

§ 2306 is mandatory, not advisory, and

that the Department’s interpretation of

what constitutes compliance with this

provision should also be mandatory in

the form of a final binding rule. In

addition, the commenter expressed the

view that allowing discretion in

applying section 2306 will lead to

arbitrary and inconsistent results.

The policy statement recognizes the

limitations of DOE’s discretion by

announcing that ‘‘Department officials

must, in all cases, comply with the

requirements of the statute.’’ The

Department has decided to adopt a

general statement of policy which

provides uniform guidance for DOE

officials and potential DOE program

applicants, but allows implementing

officials discretion in applying this

policy to a large number of programs in

diverse energy areas.

Most importantly, the Department’s

general statement of policy sets forth a

reasonable decisionmaking framework

for the purpose of allowing full

compliance with—not avoidance of—

section 2306. This decisionmaking

framework has been designed to avoid

arbitrary decisionmaking by ensuring

that all implementation actions under

section 2306 comply with the

requirements of that provision.

Several comments were received

concerning the ‘‘retroactive’’ application

of section 2306 by the Department. One

commenter asserted that the Department

should not retroactively impose

conditions on program participants

granted awards prior to the enactment of

EPACT.

Section 2306, which governs the

award of financial assistance covered by

Titles XX to XXIII of EPACT, became

effective on October 24, 1992. The

eligibility requirements will not be

applied to financial assistance awards

made prior to the effective date of the

Act. This policy statement will apply to

any new financial assistance awards or

renewals of such awards under covered

programs made after the effective date

stated in this notice.

Several commenters also raised

retroactivity issues with respect to

which programs are covered. One

commenter asserted that section 2306

applies to programs authorized by

EPACT but commenced prior to the

passage of that Act. Another commenter

disagreed and asserted that DOE

improperly proposed to apply section

2306 to programs that pre-date the

enactment of EPACT. Departmental

programs that pre-date EPACT but are

referenced in Titles XX through XXIII of

the Act will be considered covered

programs as of the effective date of the

Act.

Two commenters expressed opposing

views with respect to the scope of

programs ‘‘under Titles XX through

XXIII’’ of EPACT. One commenter

asserted that the requirements of section

2306 should be applied broadly.

Another commenter asserted that it

would be inappropriate to apply section

2306 to programs not specifically

authorized under titles XX through

XXIII of EPACT. The Department has

developed the list of covered programs

set forth above to include both activities

specifically authorized by Titles XX

through XXIII of EPACT and other

activities that are reasonably judged to

be undertaken pursuant to program

directions set out in those titles.

B. Definitions

Two comments were received

concerning the proposed definition of

‘‘financial assistance.’’ One commenter

agreed with the Department’s proposal

to define ‘‘financial assistance’’ to

include grants and cooperative

agreements and not contracts,

subcontracts, and cooperative research

and development agreements

(CRADAs). Another commenter argued

that the exclusion of contracts and

subcontracts from the definition thwarts

the intent of Congress and reduces the

applicability of the statute to ‘‘near

zero.’’

The term ‘‘financial assistance’’ is not

defined in EPACT, and the legislative

history to that Act is silent as to its

intended meaning. The Department has

chosen to apply its pre-existing

definition of the term ‘‘financial

assistance’’, found at 10 CFR 600.3,

which includes grants and cooperative

agreements but does not include

contracts, subcontracts or CRADAs. This

definition is consistent with the usual

connotations of the term.

The Department invited comment on

the definition of ‘‘company’’ in order to

assess whether it was appropriate to

exclude all non-profit organizations
65512 Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Rules and Regulations

from that definition, or whether it

would be more appropriate to exclude a

narrower class of non-profit educational

and charitable organizations. One

commenter expressed the view that

excluding all non-profit organizations

from the definition of that term would

invite efforts to circumvent the purpose

of section 2306.

The Department has concluded that

the definition of ‘‘company’’ should not

exclude all not-for-profit organizations,

but should instead exclude educational

or charitable organizations.

Accordingly, § 600.501 defines

‘‘company’’ as ‘‘any business entity

other than an organization of the type

described in section 501(c)(3) of the

Internal Revenue Code of 1954 (26

U.S.C. § 501(c)(3)).’’ This definition is

intended to include corporations,

general or limited partnerships, sole

proprietorships, joint ventures, and

other forms of business entities. It is not

intended to include governmental

entities. Not-for-profit corporations and

associations are included unless they

are educational or other institutions

qualified under section 501(c)(3) of the

Internal Revenue Code.

One commenter noted that the term

‘‘affiliates’’ is not defined in the

proposed rule and suggested that a

definition be added. Section 600.503, in

which the term is used, simply provides

that investment and employment in the

U.S. by affiliates may be considered in

assessing whether the applicant’s

participation is in the economic

interests of the U.S. Accordingly, the

Department does not believe that a

technical definition of ‘‘affiliates’’ is

necessary.

Another commenter suggested a

change to the definition of ‘‘parent

company’’ to clarify that, in the case of

indirect control, each company in a

series must have a majority control of its

subsidiary. Such a rigid approach could

permit use of organizational structures

designed to circumvent effective review

under section 2306. Therefore, the

definition has not been modified.

C. Economic Interest Determination

Several comments were received

concerning the scope of Departmental

discretion in determining whether a

company’s participation is in the

economic interest of the United States.

One commenter, asserting that DOE has

substantial discretion in this area,

suggested that this determination

should include a comparison of the

records of applicant companies in

particular areas, for example, in the area

of providing U.S. jobs. A second

commenter asserted that economic

interest assessments must not be based

simply on static comparisons among

applicants. This same commenter

emphasized that the Department should

be flexible in the factors it considers in

every case and should consider all

available evidence in making its

economic interest determination. A

third commenter agreed, taking the

position that the Department’s economic

interest determination should not be too

narrowly focused. As an example, the

third commenter noted that in certain

cases there could be a clear economic

benefit to the United States even though

some prospective awardees have no

presence in the United States and could

not be expected to have any in the

future.

Determinations concerning the

economic interest of the United States

will be based on consideration of all

available evidence. The statement of

policy provides that any evidence that

shows that an award would be in the

economic interest of the United States

can be considered. The Department also

agrees with the position that economic

interest assessments should not be

based on comparisons among

applicants.

Several commenters cautioned that, in

applying the economic interest criteria,

DOE should not impose performance

requirements or other similar conditions

on applicants, directly or indirectly.

Some of these comments refer to U.S.

Government obligations under the

World Trade Organization (WTO)

Agreement on Subsidies and

Countervailing Measures and the WTO

Agreement on Trade-Related Investment

Measures, which prohibit import

substitution requirements and local

purchasing requirements, respectively.

The policy statement does not impose

performance requirements or other

similar conditions on applicants.

D. Section 2306(2)(B) Determination

One commenter recommended that

the sole basis for DOE’s finding should

be the outcome of proceedings

conducted by the Office of the United

States Trade Representative under

section 301 of the Trade Act of 1974, as

amended. This commenter notes that

the Congress and the Executive Branch

have established a comprehensive

system of identifying, evaluating and

eliminating foreign trade barriers under

section 301. This commenter argues that

such an approach would ensure that all

concerned parties have an opportunity

to express views; would ensure

predictable results; and would ensure

that DOE’s finding supports U.S.

market-opening efforts. Another

commenter argued that DOE should

consider evidence of compliance or

non-compliance with laws and

international agreements affecting trade,

and should not limit its analysis to the

outcome of section 301 proceedings.

DOE agrees that section 301 proceedings

are an important factor in making the

necessary finding, but consideration of

relevant evidence that is not produced

as a result of a section 301 proceeding

also is appropriate.

One commenter urged DOE to

consider whether U.S.-owned firms

have non-discriminatory market access

in making its determinations. The

criteria contained in section 2306(2)(B)

of EPACT address comparable access to

research opportunities, comparable

investment opportunities and adequate

and effective intellectual property

protections. Section 2306(2)(B) does not

provide for DOE to consider whether

U.S.-owned firms have access to

comparable trade opportunities in the

relevant foreign country.

E. Comparable Access to Research

Opportunities

One commenter stated that it would

defy common sense to find that a parent

company incorporated in a country with

no similar research program satisfies the

requirements of section 2306. At the

public hearing, the same commenter

stated that section 2306 of EPACT

requires DOE to disqualify any

applicant if the applicant is

headquartered in a country that has no

comparable research program.

Section 2306(2)(B) directs DOE to

consider whether a foreign country

affords U.S. companies ‘‘opportunities,

comparable to those afforded to any

other company, to participate in any

joint venture similar to those authorized

under this Act.’’ 42 U.S.C. 13525(2)(B).

This finding relates to whether there is

discrimination against U.S.-owned firms

relative to other firms with regard to

access to any foreign-governmentsponsored programs comparable to

those covered under EPACT. The law

does not provide for a finding that a

foreign country has comparable energy

research and development programs.

F. Comparable Access to Investment

Opportunities

One commenter stated that DOE

should not limit its review to whether

U.S.-owned firms have a legal right to

foreign investment opportunities under

international agreements. The

commenter stated that DOE should not

find an affected applicant eligible to

participate in a DOE covered program

unless U.S. firms have actual

investment opportunities in the country

of the applicant’s parent company that

are comparable to the opportunities
Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Rules and Regulations 65513

available to foreign investors in the

United States. Another commenter

stated that DOE’s main source of

information on investment barriers

should be the National Trade Estimates

Report on Foreign Trade Barriers

published annually by the Office of the

United States Trade Representative.

Section 2306(2)(B) provides that DOE

must determine whether the country

‘‘affords to United States-owned

companies local investment

opportunities comparable to those

afforded to any other company.’’ 42

U.S.C. 13525(2)(B). DOE will consider

available information on the legal

regimes and de facto practices governing

foreign investment in relevant countries.

The statement of policy states that DOE

may consider obligations of the country

involved and local investment

opportunities afforded to U.S.-owned

companies in that country. DOE will

consult with other Federal government

agencies, as appropriate.

G. Protection of Intellectual Property

Rights

One commenter stated that DOE

should use the annual National Trade

Estimate Reports on Foreign Trade

Barriers published by the Office of the

U.S. Trade Representative as a main

source of information concerning

foreign government practices related to

the protection of the intellectual

property rights of U.S.-owned

companies. The commenter

recommended that DOE use the reports

to allow foreign-owned companies to

know whether or not they are likely to

be eligible to participate in such

programs prior to submitting an

application. Two commenters

recommended that DOE work with other

federal agencies to ensure that DOE’s

policy is implemented in a manner that

is predictable and consistent with U.S.

Government trade policies, including

intellectual property rights protection.

Section 600.505 allows DOE to consider

any information related to the

protection of intellectual property rights

of U.S.-owned companies and to seek

and consider advice from other federal

agencies concerning such information,

as appropriate. To promote consistency,

DOE has considered information on

intellectual property rights protection

developed by other federal agencies and

has consulted with appropriate federal

agencies in applying the section

2306(2)(B) standards. DOE intends to

continue this practice.

H. Administrative Issues

DOE received several comments

concerning the ‘‘burden’’ of

requirements established in the

proposed rulemaking imposed on

applicants. One commenter expressed

the view that DOE should avoid the

imposition of requirements which divert

scarce research and development

resources to purposes of administration.

This commenter also took issue with the

proposed certification procedures

including those set forth at § 600.504(d)

calling for a certification of status as a

‘‘United States-owned company.’’ The

commenter viewed these requirements

as overly legalistic and creating an

unnecessary administrative burden and

expense. The Department agrees that the

administrative burden on applicants in

complying with the requirements of

section 2306 should be minimized

wherever possible. The Department has

modified § 600.504 (b) and (c) to

provide for representations as opposed

to certifications concerning ownership

status and other factors. This approach

will allow the applicant to demonstrate

eligibility while minimizing any

administrative burden or added

expense.

Another commenter, also urging that

the administrative burden of complying

with section 2306 should be minimized,

argued that there is no reason to impose

section 2306 requirements on firms

meeting the definition of ‘‘small

business’’ under the regulations of the

Small Business Administration (SBA)

because such firms, to be approved as a

small business by SBA, must already

meet most of the requirements of section

2306. The Department does not agree

that qualifying for small business status

is equivalent to satisfying the eligibility

criteria of section 2306. Compare 13

CFR § 121.403 with 42 U.S.C. 13525.

However, DOE sought comment on how

it should make the required section

2306 determination in the context of

relatively small financial assistance

awards. DOE suggested that one

possible alternative would be to ask

applicants for awards below $100,000 to

certify that they satisfy all the eligibility

requirements of section 2306 (1) and

(2)(A). The Department, in

implementing this policy statement,

expects to establish such selfcertification procedures to minimize the

compli-ance burden for awards of less

than $100,000. Guidance on the

procedures for establishing eligibility is

available from the DOE Office of

Procurement and Assistance

Management (202–586–8613).

III. Procedural Requirements

A. Review Under Executive Order 12866

Today’s regulatory action has been

determined to be a ‘‘significant

regulatory action’’ under Executive

Order 12866, ‘‘Regulatory Planning and

Review,’’ 58 FR 51735 (October 4, 1993).

Accordingly, today’s action was

reviewed by the Office of Information

and Regulatory Affairs. Today’s action

and any other documents submitted to

OIRA for review have been made a part

of the rulemaking record and are

available for public review as provided

in the Supplementary Information

section of this rule.

B. Review Under Paperwork Reduction

Act

No new information collection

requirements subject to the Paperwork

Reduction Act, 44 U.S.C. 3501 et seq.,

are imposed by today’s regulatory

action.

C. Review Under the National

Environmental Policy Act

Pursuant to the Council on

Environmental Quality Regulations (40

CFR parts 1500–1508), the Department

of Energy has established regulations for

its compliance with the National

Environmental Policy Act of 1969 (42

U.S.C. 4321 et seq.). Pursuant to

appendix A of subpart D of 10 CFR part

1021, the Department has determined

that today’s regulatory action is

categorically exempt as a procedural

rule for implementation of statutory

requirements.

D. Review Under Executive Order 12612

Executive Order 12612, 52 FR 41685

(October 30, 1987), requires that rules be

reviewed for any substantial direct

effect on States, on the relationship

between the National Government and

the States, or in the distribution of

power and responsibilities among

various levels of government. If there

are sufficient substantial direct effects,

then the Executive Order requires

preparation of a federalism assessment

to be used in all decisions involved in

promulgating and implementing a

policy action. Today’s action interprets

the section 2306 eligibility requirements

to be inapplicable to State applications

for financial assistance. Therefore, the

Department has determined that they

will not have a substantial direct effect

on the institutional interests or

traditional functions of States.

E. Review Under Executive Order 12778

Section 2 of Executive Order 12778

instructs each agency to adhere to

certain requirements in promulgating

new regulations. These requirements,

set forth in section 2 (a) and (b)(2),

include eliminating drafting errors and

needless ambiguity, drafting the

regulations to minimize litigation,

providing clear and certain legal
65514 Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Rules and Regulations

standards for affected legal conduct, and

promoting simplification and burden

reduction. Agencies are also instructed

to make every reasonable effort to

ensure that regulations define key terms

and are clear on such matters as

exhaustion of administrative remedies

and preemption. The Department

certifies that today’s regulatory action

meets the requirements of section 2 (a)

and (b)(2) of Executive Order 12778.

Issued in Washington, DC, on this 13th day

of December 1995.

Dan W. Reicher,

Acting Assistant Secretary for Policy.

For the reasons stated in the

preamble, part 600 of title 10,

Subchapter H of the Code of Federal

Regulations is amended as set forth

below:

PART 600—FINANCIAL ASSISTANCE

RULES

1. The authority citation for part 600

is revised to read as follows:

Authority: 42 U.S.C. 7254, 7256, 13525; 31

U.S.C. 6301–6308, unless otherwise noted.

2. New subpart F, consisting of

§§ 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

§ 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.

§ 600.501 Definitions.

The definitions in § 600.3 of this part,

including the definition of the term

‘‘financial assistance,’’ are applicable to

this subpart. In addition, as used in this

subpart:

Act means the Energy Policy Act of

1992.

Company means any business entity

other than an organization of the type

described in section 501(c)(3) of the

Internal Revenue Code of 1954 (26

U.S.C. § 501 (c)(3)).

Covered program means a program

under Titles XX through XXIII of the

Act. (A list of covered programs,

updated periodically as appropriate, is

maintained and published by the

Department of Energy.)

Parent company means a company

that:

(1) Exercises ultimate ownership of

the applicant company either directly,

by ownership of a majority of that

company’s voting securities, or

indirectly, by control over a majority of

that company’s voting securities

through one or more intermediate

subsidiary companies or otherwise, and

(2) Is not itself subject to the ultimate

ownership control of another company.

United States means the several

States, the District of Columbia, and all

commonwealths, territories, and

possessions of the United States.

United States-owned company means:

(1) A company that has majority

ownership by individuals who are

citizens of the United States, or

(2) A company organized under the

laws of a State that either has no parent

company or has a parent company

organized under the laws of a State.

Voting security has the meaning given

the term in the Public Utility Holding

Company Act (15 U.S.C. 15b(17)).

§ 600.502 What must DOE determine.

A company shall be eligible to receive

an award of financial assistance under

a covered program only if DOE finds

that—

(a) Consistent with § 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.

§ 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

§ 600.502(a), DOE may consider any

evidence showing that a financial

assistance award would be in the

economic interest of the United States

including, but not limited to—

(a) Investments by the applicant

company and its affiliates in the United

States in research, development, and

manufacturing (including, for example,

the manufacture of major components or

subassemblies in the United States);

(b) Significant contributions to

employment in the United States by the

applicant company and its affiliates;

and

(c) An agreement by the applicant

company, with respect to any

technology arising from the financial

assistance being sought—

(1) To promote the manufacture

within the United States of products

resulting from that technology (taking

into account the goals of promoting the

competitiveness of United States

industry); and

(2) To procure parts and materials

from competitive suppliers.

§ 600.504 Information an applicant must

submit.

(a) Any applicant for financial

assistance under a covered program

shall submit with the application for

financial assistance, or at such later time

as may be specified by DOE, evidence

for DOE to consider in making findings

required under § 600.502(a) and

findings concerning ownership status

under § 600.502(b).

(b) If an applicant for financial

assistance is submitting evidence

relating to future undertakings, such as

an agreement under § 600.503(c) to

promote manufacture in the United

States of products resulting from a

technology developed with financial

assistance or to procure parts and

materials from competitive suppliers,

the applicant shall submit a

representation affirming acceptance of

these undertakings. The applicant

should also briefly describe its plans, if

any, for any manufacturing of products

arising from the program-supported

research and development, including

the location where such manufacturing

is expected to occur.

(c) If an applicant for financial

assistance is claiming to be a United

States-owned company, the applicant
Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / Rules and Regulations 65515

must submit a representation affirming

that it falls within the definition of that

term provided in § 600.501.

(d) DOE may require submission of

additional information deemed

necessary to make any portion of the

determination required by § 600.502.

§ 600.505 Other information DOE may

consider.

In making the determination under

§ 600.502(b)(2), DOE may—

(a) consider information on the

relevant international and domestic law

obligations of the country of

incorporation of the parent company of

an applicant;

(b) consider information relating to

the policies and practices of the country

of incorporation of the parent company

of an applicant with respect to:

(1) The eligibility criteria for, and the

experience of United States-owned

company participation in, energyrelated research and development

programs;

(2) Local investment opportunities

afforded to United States-owned

companies; and

(3) Protection of intellectual property

rights of United States-owned

companies;

(c) seek and consider advice from

other federal agencies, as appropriate;

and

(d) consider any publicly available

information in addition to the

information provided by the applicant.

[FR Doc. 95–30752 Filed 12–19–95; 8:45 am]

BILLING CODE 6450–01–P

FEDERAL ELECTION COMMISSION

[Notice 1995–24]

11 CFR Part 110

Communications Disclaimer

Requirements

AGENCY: Federal Election Commission.

ACTION: Final rule; announcement of

effective date.

SUMMARY: On Oct. 5, 1995 (60 FR

52069), the Commission published the

text of revised regulations governing

disclaimers on campaign

communications. On Nov. 29, 1995, the

Commission published a correction to

the preamble of the revised regulations.

(60 FR 61199) 11 CFR Part 110. These

regulations implement a provision of

the Federal Election Campaign Act of

1971, as amended. The Commission

announces that these rules are effective

as of December 20, 1995.

EFFECTIVE DATE: December 20, 1995.

FOR FURTHER INFORMATION CONTACT:

Ms. Susan E. Propper, Assistant General

Counsel, or Ms. Rita A. Reimer, 999 E

Street NW., Washington, DC 20463,

(202) 219–3690 or toll free (800) 424–

9530.

SUPPLEMENTARY INFORMATION: Section

438(d) of Title 2, United States Code,

requires that any rule or regulation

prescribed by the Commission to

implement Title 2 of the United States

Code be transmitted to the Speaker of

the House of Representatives and the

President of the Senate thirty legislative

days prior to final promulgation. The

revisions to 11 CFR Part 110 were

transmitted to Congress on Oct. 2, 1995.

Thirty legislative days expired in the

Senate on Nov. 28, 1995, and in the

House of Representatives on Dec. 5,

1995.

The Commission subsequently

published a corrections notice to the

preamble of these rules. The Speaker of

the House of Representatives and the

President of the Senate were notified of

the correction notice on Nov. 27, 1995.

The correction did not affect the text of

the rules.

The rules address the circumstances

under which a disclaimer must be

included on campaign communications,

as well as what information must be

included in the disclaimer. The

correction notice deleted a potentially

misleading reference to phone bank

activity that had inadvertently been

included in the Explanation and

Justification to the revised rules.

Announcement of Effective Date: 11

CFR 110.11, as published at 60 FR

52069, is effective as of December 20,

1995.

Dated: December 15, 1995.

Lee Ann Elliot,

Vice Chairman, Federal Election Commission.

[FR Doc. 95–30940 Filed 12–19–95; 8:45 am]

BILLING CODE 6715–01–M

FEDERAL HOUSING FINANCE BOARD

12 CFR Part 934

[No. 95–74]

Repeal of the Charitable Contribution

Limitation Regulation

AGENCY: Federal Housing Finance

Board.

ACTION: Final rule.

SUMMARY: The Federal Housing Finance

Board (Finance Board) has determined

that the making of charitable donations

is within the corporate power of the

Federal Home Loan Banks (FHLBanks)

and that issues of safety and soundness

to which excessive donations might give

rise can be adequately addressed

through the Finance Board’s FHLBank

examination process. Therefore, the

Finance Board is repealing the

regulation that requires that FHLBanks

obtain the approval of the Board of

Directors of the Finance Board before

making charitable donations in excess of

$5,000 to one organization, or $25,000

total, during one calendar year. The

repeal of this regulation is intended to

allow the FHLBanks to use their own

discretion in making such donations,

subject only to the Finance Board’s

power to enforce standards of safety and

soundness in FHLBank operations. This

result is in keeping with the Finance

Board’s continuing effort to devolve

corporate governance authority to the

FHLBanks.

EFFECTIVE DATE: December 20, 1995.

FOR FURTHER INFORMATION CONTACT:

Ellen E. Hancock, Assistant Director,

Office of Policy and Financial

Reporting, (202) 408–2906, or Janice A.

Kaye, Attorney-Advisor, Office of

General Counsel, (202) 408–2505,

Federal Housing Finance Board, 1777 F

Street NW., Washington, D.C. 20006.

SUPPLEMENTARY INFORMATION:

I. Statutory and Regulatory Background

Section 934.11 of the Finance Board’s

regulations requires prior approval of

the Board of Directors of the Finance

Board, or its designee, for charitable

contributions by a FHLBank that exceed

$5,000 to one organization, or $25,000

in total during a calendar year. 12 CFR

934.11. As a result of an ongoing

internal review of its regulations, the

Finance Board, for the reasons set forth

below, has determined that this

regulation is unnecessary. Accordingly,

the Finance Board is repealing section

934.11.

The substance of section 934.11

originally appeared at section 524.11 of

the regulations of the Finance Board’s

predecessor, the Federal Home Loan

Bank Board (FHLBB). In 1959, the

FHLBB promulgated a regulation

prohibiting the FHLBanks from making

charitable donations. See 12 CFR 524.11

(1959) (amended). The FHLBB had

determined that a FHLBank did not

have the legal authority to make

charitable donations and, further,

wanted to prevent FHLBanks from

favoring some communities in their

districts over others.

In 1975, the FHLBB reconsidered its

position and concluded that charitable

donations, within reasonable limits,

would further the corporate interests of

the FHLBanks. See 40 FR 46302 (Oct. 7,

1975). Therefore, the FHLBB amended