10296 Federal Register / Vol. 60, No. 36 / Thursday, February 23, 1995 / Proposed Rules

DEPARTMENT OF ENERGY

Office of Policy

10 CFR Part 600

[Docket No. PO–RM–95–101]

Financial Assistance Rules: Eligibility

Determination for Certain Financial

Assistance Programs

AGENCY: Department of Energy.

ACTION: Notice of proposed rulemaking

and public hearing.

SUMMARY: The Department of Energy

(Department or DOE) today gives notice

of a proposed general statement of

policy to guide DOE officials in making

eligibility determinations required by

section 2306 of the Energy Policy Act of

1992. The proposed general statement of

policy includes procedures and

interpretations related to the statutory

limits placed by section 2306 on

eligibility to receive financial assistance

under DOE programs authorized by

Titles XX through XXIII of that Act.

DATES: Written comments (9 copies)

must be received by DOE on or before

April 24, 1995. A public hearing will be

held on April 19, 1995 beginning at 9:30

a.m. at the address listed below.

Requests to speak must be received by

April 17, 1995, by calling (202) 586–

3012.

ADDRESSES: Written comments and

requests to speak must be submitted to:

Dr. Robert C. Marlay, Office of Science

Policy, Office of Policy, U.S.

Department of Energy, 1000

Independence Avenue, SW.,

Washington, D.C. 20585, (202) 586–

3012.

Telecopied comments will not be

accepted. The public hearing will be

held in Room 1E–245, U.S Department

of Energy, 1000 Independence Avenue

SW., Washington, D.C. 20585. See

Section V. for additional information

concerning public comment procedures.

FOR FURTHER INFORMATION CONTACT: Dr.

Robert C. Marlay, Office of Science

Policy (Mail Stop PO–81), Office of

Policy, U.S. Department of Energy, 1000

Independence Avenue, SW.,

Washington, D.C. 20585, (202) 586–

3900. Paul Sherry, Esq., Office of

General Counsel (Mail Stop GC–61),

U.S. Department of Energy, 1000

Independence Avenue SW.,

Washington, D.C. 20585, (202) 586–

2440.

SUPPLEMENTARY INFORMATION:

I. Background

This notice sets forth a proposed

general statement of policy, including

procedures and interpretations,

concerning implementation of the

requirements of section 2306 of the

Energy Policy Act of 1992 (EPAct) (42

U.S.C. 13525). The general statement of

policy, when finalized, will guide

implementing DOE officials in making a

special eligibility determination

prerequisite to a financial assistance

award to a company under Titles XX

through XXIII of EPAct. Those titles

relate to research, development,

demonstration and commercialization

programs in diverse areas of energy

efficiency, energy supply, and related

basic research.

The Department has decided to adopt

a general statement of policy and to

codify that policy in the part of the Code

of Federal Regulations containing the

Department’s financial assistance

regulations. Such a codified policy

statement is needed to communicate

guidance on these implementation

issues to Departmental officials and

potential DOE program applicants. This

policy statement applies only to DOE’s

implementation of section 2306 of

EPAct; it is not intended to apply to any

other agency or to the implementation

of any other statutory eligibility

requirement.

The eligibility restrictions addressed

in this policy statement apply to a broad

range of DOE programs (see list of

covered programs below), many of

which pre-dated enactment of EPAct.

These programs are conducted by a

large number of program and

contracting officials located in regional

and field offices as well as DOE

headquarters. This policy statement

provides uniform guidance for DOE

officials and for applicants to the broad

array of covered programs.

Section 2306 does not require the

Department to conduct a rulemaking.

Further, notice and comment

rulemaking is not required by law for

general statements of policy. However,

DOE has chosen to publish the proposed

general statement of policy in the

Federal Register in order to ensure a

full opportunity for public comment

and input prior to finalizing the policy.

Section 2306 provides for a two-part

determination. An applicant must be

found to satisfy the conditions of both

parts in order to be eligible.

The first part, set out in section

2306(1), involves a finding with regard

to whether an award to the applicant

would be in the economic interest of the

United States. 42 U.S.C. 13525(1). The

statute provides some illustrative

examples of the kinds of evidence that

would support such a finding:

Investments in the United States in

research, development, and

manufacturing; significant contributions

to employment in the United States; and

agreements, with respect to any

technology arising from financial

assistance provided, to promote the

manufacture within the United States of

products resulting from that technology

and to procure parts and materials for

such manufacture from competitive

suppliers.

The second part of the determination,

section 2306(2), involves two subparts,

one of which must be satisfied. 42

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

satisfied if the applicant is a ‘‘United

States-owned company.’’ The second

subpart is satisfied if the applicant is

found to be incorporated in the United

States and the applicant’s parent

company is incorporated in a foreign

country that: (a) Affords opportunities

to United States-owned companies

comparable to those afforded to any

other company with regard to access to

government-supported joint ventures in

energy research and development; (b)

affords opportunities to United Statesowned companies comparable to those

afforded to any other company with

regard to general investment

opportunities; and (c) affords adequate

and effective protection to intellectual

property rights owned by United Statesowned companies.

None of the statutory terms used in

section 2306 is defined by EPAct, and

the legislative history sheds no light on

the intended meaning of such terms.

Consequently, the Department’s

proposed interpretations are based on

the common usage of these terms, as

informed by their usage in similar

contexts.

The Department is of the view that the

proposed general statement of policy

sets forth a reasonable decisionmaking

framework for the guidance of

implementing officials. If any of the

provisions of the policy would be

unreasonable as applied, those officials

would have the discretion to depart

from its terms based upon particular

facts and circumstances. Department

officials must, in all cases, comply with

the requirements of the statute.

II. Applicability of Eligibility

Requirements

Section 2306’s eligibility

requirements apply to applicants for

‘‘financial assistance under Titles XX

through XXIII of this Act.’’ 42 U.S.C.

13525. EPAct does not define ‘‘financial

assistance.’’ Consistent with the Federal

Grant and Cooperative Agreement Act of

1977, 31 U.S.C. 6301–6308, and the

practices of other Executive agencies,

DOE currently defines financial

assistance instruments to include grants
Federal Register / Vol. 60, No. 36 / Thursday, February 23, 1995 / Proposed Rules 10297

and cooperative agreements, but not

contracts and subcontracts. 10 CFR

600.3 (‘‘financial assistance instruments

are grants and cooperative agreements

and subawards’’). Contracts and

subcontracts do not constitute financial

assistance but instead provide for

payment in exchange for procured

products or services. See 31 U.S.C.

6303. Thus, the Department concludes

that contracts and subcontracts,

including cost-shared contracts and

subcontracts, fall outside the scope of

financial assistance and does not

propose modifying the current

definition of financial assistance in 10

CFR 600.3 for purposes of this subpart.

The Department’s current definition

of financial assistance also excludes

cooperative research and development

agreements (CRADAs). The StevensonWydler Technology Innovation Act, 15

U.S.C. 3710a, which authorizes the use

of CRADAs, does not authorize the

transfer of funds to a CRADA

participant and specifically

distinguishes CRADAs from cooperative

agreements. Thus any assistance

provided under CRADAs would not be

‘‘financial’’ assistance as the term

ordinarily is understood. We note as

well that existing law governing the use

of CRADAs contains a set of

considerations for the selection of

CRADA participants that address

similar policy objectives. 15 U.S.C.

3710a(c)(4).

Section 2306 applies to financial

assistance ‘‘under Titles XX through

XXIII’’ of EPAct. The intended effect of

this statutory phrase is ambiguous. The

Department proposes to interpret the

range of activities covered by section

2306 to include all Department of

Energy research and development

programs either mentioned specifically

in the text of Titles XX through XXIII or

suggested by references to similar and

related research and development

activities in the conference reports on

the Appropriations Acts for Energy and

Water Development and for Interior and

Related Agencies. This includes many

programs and program activities that

were initiated prior to the enactment of

EPAct under authority of pre-existing

law. Thus, for many programs, there are

now two or more authorities. Comment

is requested on this interpretation.

A list of covered programs for fiscal

year 1995 (FY95) is set forth in the

discussion of the term ‘‘covered

program’’ in section III below. This list

will be updated each fiscal year and

published in the Federal Register to

account for changes in appropriated

activities undertaken under Titles XX

through XXIII of EPAct.

III. Section-By-Section Analysis

Today’s proposed policy statement

would be codified as a new subpart F in

10 CFR part 600 where the Department’s

general financial assistance regulations

are codified. The following is a

discussion of the new sections that

would make up subpart F.

§ 600.500 Purpose and scope.

This section states that the subpart

provides procedures and interpretations

to guide DOE officials in making

eligibility determinations under section

2306 of the EPAct.

§ 600.501 Definitions.

The definition section begins by

alerting readers that the existing

definitions in § 600.3 of the general

subpart are applicable to the new

subpart F. Section 600.3 contains

definitions of ‘‘applicant,’’ ‘‘cooperative

agreement,’’ ‘‘financial assistance,’’

‘‘grant,’’ and ‘‘State.’’

The term ‘‘company’’ is defined to

mean any for-profit business entity. The

eligibility requirements of section 2306

would apply only to companies. This

definition, based on common usage of

the term company, is intended to

include for-profit corporations, general

or limited partnerships, sole

proprietorships, and other forms of

business entities. It is also intended to

cover joint ventures involving one or

more such entities. The definition does

not include governmental entities, and

thus such entities would not be subject

to this restriction on eligibility to

receive financial assistance. Moreover,

the definition does not include nonprofit organizations. The Department

invites comment on whether it is

appropriate to exclude all non-profit

organizations from this definition, or

whether it would be more appropriate to

exclude a narrower class of educational

and charitable organizations, such as

organizations exempted from Federal

income tax under section 501(c)(3) of

the Internal Revenue Code.

The term ‘‘covered program’’ is

defined in order to have a convenient

term for referring to the list of activities

under Titles XX through XXIII of the

Energy Policy Act of 1992 to which the

section 2306 eligibility restrictions

apply. Set out below is the proposed list

of covered programs for FY95:

COVERED PROGRAMS—FY 95

Fossil energy R & D EPACT

sections

Petroleum:

All Programs ..................... § 2011, 2012

COVERED PROGRAMS—FY 95—

Continued

Fossil energy R & D EPACT

sections

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

Midcontinent 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

Heat Engine Development § 2021, 2112

Electric & Hybrid Propulsion Development.§ 2021, 2025

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: § 2101

All programs.

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 Initiative.§ 2101, 2202

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
10298 Federal Register / Vol. 60, No. 36 / Thursday, February 23, 1995 / Proposed Rules

COVERED PROGRAMS—FY 95—

Continued

Fossil energy R & D EPACT

sections

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

COVERED PROGRAMS—FY 95—

Continued

Fossil energy R & D EPACT

sections

All Programs, including:

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

Biofuels ......................... § 2021, 2013,

2024, 2111

Solar Technology Transfer.§ 2111

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

The term ‘‘parent company’’ is

defined as a company that exercises

ultimate ownership of the applicant

company. The parent company would

be identified by first determining

whether any company owns a majority

of the applicant company’s voting

securities. If so, then the same test

would be applied to that company, i.e.,

does any company own a majority of

that company’s voting securities? The

parent company would be the company

that exercises control over the applicant

company by means of this chain of

majority stock ownership, and which

itself is not subject to the majority stock

ownership of any other company.

DOE would interpret the term ‘‘parent

company’’ to mean the ultimate parent

company as just described in order to

avoid confusion in cases where an

applicant company and its immediate

parent are both organized in the U.S.,

but where the immediate parent is, in

turn, owned by a company organized

abroad.

The Department recognizes that there

may be situations in which one

company effectively controls the actions

of another without owning a majority of

its voting securities. However, given

that the sole purpose of this inquiry into

corporate lineage would be to identify

the foreign country with which a nonU.S.-owned applicant can be most

directly associated, this approach is felt

to be both adequate and appropriate.

The definition of ‘‘United States’’ is a

standard definition used in many of the

Department’s programs. It includes the

50 States, the District of Columbia, and

all commonwealths, territories and

possessions of the United States.

The term ‘‘United States-owned

company’’ is a key part of section

2306(2). The Department proposes to

permit an applicant to use either of two

alternative definitions of this term: (1) A

company that has majority ownership

by individuals who are citizens of the

United States, or (2) a company

organized under the laws of a State that

either has no parent company or has an

ultimate parent company that is

organized under the laws of a State.

The first alternative is based on the

statutory definition of the term ‘‘United

States-owned company’’ used in a

similar eligibility limitation, which

defines United States-owned company

in terms of majority ownership or

control by citizens of the United States.

15 U.S.C. 278n(j)(2). This test of

ownership is based on the citizenship of

individual owners or shareholders.

Where an applicant company is a

wholly- or majority-owned subsidiary of

a parent company, or a majority of its

stock is held by other corporations or

institutional investors rather than

individuals, the ownership analysis

would be applied to these corporations

or institutional investors to determine

whether they are owned by individuals

who are citizens of the United States.

The second alternative definition of

United States-owned company is a

company organized under the laws of a

State that either has no parent company

or has an ultimate parent organized

under the laws of a State. This

alternative is based on a presumption

that companies incorporated or

organized in the U.S. that are not

majority-owned by a foreign company

will not have sufficiently strong

connection to any foreign country to

justify using the section 2306(2)(B)

reciprocity determinations. The

Department will request applicants

claiming to be U.S.-owned companies to

make a certification to that effect.

The term ‘‘voting security,’’ which is

used in the definition of parent

company, is defined by reference to the

statutory definition in the Public Utility

Holding Company Act. 15 U.S.C.

15b(17). This broad definition includes

any security that gives the holder a vote
Federal Register / Vol. 60, No. 36 / Thursday, February 23, 1995 / Proposed Rules 10299

in the direction or management of the

company, such as common stock in a

corporation and partnership interests in

a partnership.

§ 600.502 What DOE Must Determine

This section follows the sequence of

provisions of section 2306 which

provide for the two mandatory elements

of the eligibility determination. The first

mandatory element is a finding that the

applicant’s participation in a particular

program is in the economic interest of

the United States. The second

mandatory element has two alternative

subparts—either (a) the company is a

U.S.-owned company; or (b) the

company is found to be incorporated in

the U.S. and the government of the

parent company’s country of

incorporation affords U.S.-owned

companies local investment

opportunities comparable to those

offered to any other company on

investment and access to energy

research and development, and protects

U.S.-owned intellectual property in that

country.

In order to avoid seemingly

unintended consequences in

interpreting section 2306(2)(B), the

Department proposes interpreting the

statutory phrase ‘‘company * * *

incorporated in the United States’’ to

include both corporations incorporated

in the U.S. and other companies,

defined as for-profit business entities,

organized under the laws of any State in

the U.S. Thus, for example, a

partnership organized under State law

in the U.S. would be included.

Similarly, the Department proposes

interpreting the statutory phrase ‘‘parent

company which is incorporated’’ in a

foreign country to include both

corporations and other for-profit

business entities organized under

foreign law.

The Department invites comment on

how to make the required determination

in the context of relatively small

financial assistance awards. Under the

proposed rule, all applicants would

need to submit the same types of

information and the Department would

undertake the same type of

determination. One possible alternative

is to ask applicants for awards below

$100,000 to certify that they satisfy all

the eligibility requirements of section

2306(1) and (2)(a), if applicable, and to

rely on such a certification unless the

Department has reason to believe that

further investigation is warranted. This

approach would permit the Department

to target its administrative resources to

making eligibility determinations for

larger awards, and at the same time

preserve the Department’s appropriate

role in reviewing eligibility for smaller

awards where there is reason to

question an applicant’s eligibility. The

Department invites comment on such an

alternative for small awards.

§ 600.503 Determining the economic

interest of the United States.

This section provides guidelines as to

information that may support an

affirmative determination that a

financial assistance award would be in

the economic interest of the United

States. Section 600.503 describes

examples, based on the statute, of the

type of evidence that may be

considered. Section 600.503 of the

general statement of policy makes it

clear that any other evidence that shows

that an award would be in the economic

interest of the United States can be

considered. Determinations concerning

the economic interest of the United

States will be based on consideration of

all available evidence.

The evidence to be considered

concerning investments or employment

in the U.S. may include evidence

related to affiliates of the applicant

company (e.g., the parent company of an

applicant corporation, the general

partners in an applicant partnership).

DOE will consider the facts relating to

each applicant in context.

Where the applicant for financial

assistance is a joint venture, DOE would

apply the economic interest test of

section 2306(1) to the joint venture as a

whole. Under section 2306(2), however,

DOE would apply the relevant tests to

each company participating in the joint

venture.

In evaluating whether an applicant’s

participation is in the economic interest

of the United States, DOE may consider

the activities of the applicant’s

contractors or suppliers or other

companies that would have a significant

role in the government-supported work.

In determining which contractors,

suppliers or other companies may be

considered in assessing an applicant’s

eligibility, DOE would consider whether

the company’s participation is a factor

advanced by the applicant for

consideration in evaluating the merits of

the application. For example, where an

applicant chooses to rely on the

qualifications of named component

suppliers or other contractors in making

an application to a covered program, the

activities of any such named contractors

or suppliers may be evaluated in

determining whether the applicant’s

participation is in the economic interest

of the United States.

§ 600.504 Information an applicant must

submit.

This section makes clear that the

burden of producing information to

support an affirmative determination

concerning the economic interest of the

United States and the ownership status

of the applicant would rest on the

applicant. The allocation of this burden

to the applicant is appropriate because

the applicant will usually be in the best

position to provide relevant

information. The Department may

request that information needed to make

an eligibility determination be

submitted with the application for

financial assistance, or may specify, in

the solicitation, a later stage in the

process for submission of such

information.

If an applicant for financial assistance

proposes to demonstrate that an award

is in the economic interest of the United

States by asserting that it will undertake

future action, such as promoting

manufacture of products in the United

States or procuring parts and materials

from competitive suppliers, DOE will

require it to provide an appropriate

certification concerning such future

action. In support of such certifications,

the applicant should also provide a brief

commercialization plan for the

technology that is expected to result

from the program-supported research

and development. The Department

expects to give considerable weight to

these plans in assessing whether the

applicant’s participation is in the

economic interest of the United States.

In order to be treated as a ‘‘United

States-owned company’’ for eligibility

purposes, an applicant would be

required to submit an appropriate

certification that it satisfies the

definition in § 600.501.

The section concludes with a

paragraph providing for DOE requests

for information in addition to that

submitted with the application for

financial assistance, if necessary.

§ 600.505 Other information DOE may

consider.

This section identifies certain kinds of

information, in addition to the

information provided by the applicant,

that may be relevant in making the

required findings. DOE, in making the

findings required under section

2306(2)(B), intends to consult with and

seek information from a number of

sources, including, but not limited to,

appropriate agencies of the federal

government as well as publicly available

information.

With respect to whether a foreign

government ‘‘affords to United Statesowned companies opportunities,
10300 Federal Register / Vol. 60, No. 36 / Thursday, February 23, 1995 / Proposed Rules

comparable to those afforded to any

other company, to participate in any

joint venture similar to those authorized

by the Act,’’ DOE expects to consider

the regime that governs eligibility of

U.S.-owned companies seeking to

participate in research and development

sponsored by that government.

The DOE analysis of this issue would

consider discrimination against foreign

subsidiaries of U.S.-owned companies

relative to any other company in

providing access to research and

development programs. DOE would

consider both discriminatory policies

and discriminatory practices. Where a

foreign government does not have

research and development programs

comparable to those authorized by

EPAct, the absence of such programs

would not preclude companies

headquartered in that country from

participating in DOE programs.

The statutory phrase ‘‘joint venture

similar to those authorized under this

Act’’ has uncertain meaning given that

EPAct authorizes a number of

government-supported programs, but

the Department has not, to date, used

joint ventures per se. Given the apparent

intent of the statute to promote

opportunities comparable to those

afforded to any other company in energy

research and development programs,

DOE would construe this phrase to

mean government-supported research

and development programs similar to

those covered by section 2306.

With regard to whether a foreign

country ‘‘affords to United States-owned

companies local investment

opportunities comparable to those

afforded to any other company,’’ DOE

expects to consider a review of

applicable international obligations to

provide to U.S. investors opportunities

comparable to those offered to other

companies.

With regard to protection of

intellectual property rights in foreign

countries, DOE expects to consider

certain lists that contain relevant

information prepared by other Executive

agencies, such as the ‘‘Special 301

Priority Foreign Country List,’’ issued

by the U.S. Trade Representative.

In making the determinations

required under section 2306(2)(B), the

Department expects to seek the advice

of other appropriate federal agencies.

IV. Procedural Requirements

A. Review Under Executive Order 12866

Today’s regulatory action has been

determined to be a ‘‘significant

regulatory action’’ under Executive

Order 12866, ‘‘Regulatory Planning and

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

Accordingly, today’s action was

reviewed by the Office of Information

and Regulatory Affairs.

The draft of today’s action and any

other documents submitted to OIRA for

review have been made a part of the

rulemaking record and are available for

public review as provided in the

ADDRESSES section of this notice.

B. Review Under Paperwork Reduction

Act

No new information collection

requirements subject to the Paperwork

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

are imposed by today’s regulatory

action.

C. Review Under the National

Environmental Policy Act

Pursuant to the Council on

Environmental Quality Regulations (40

CFR parts 1500–1508), the Department

of Energy has established regulations for

its compliance with the National

Environmental Policy Act of 1969 (42

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

appendix A of subpart D of 10 CFR part

1021, the Department has determined

that today’s regulatory action is

categorically exempt as a procedural

rule for implementation of statutory

requirements.

D. Review Under Executive Order 12612

Executive Order 12612, 52 FR 41685

(October 30, 1987), requires that rules be

reviewed for any substantial direct

effect on States, on the relationship

between the National Government and

the States, or in the distribution of

power and responsibilities among

various levels of government. If there

are sufficient substantial direct effects,

then the Executive Order requires

preparation of a federalism assessment

to be used in all decisions involved in

promulgating and implementing a

policy action. Today’s action interprets

the section 2306 eligibility requirements

to be inapplicable to State applications

for financial assistance. Therefore, the

Department has determined that they

will not have a substantial direct effect

on the institutional interests or

traditional functions of States.

E. Review Under Executive Order 12778

Section 2 of Executive Order 12778

instructs each agency to adhere to

certain requirements in promulgating

new regulations. These requirements,

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

include eliminating drafting errors and

needless ambiguity, drafting the

regulations to minimize litigation,

providing clear and certain legal

standards for affected legal conduct, and

promoting simplification and burden

reduction. Agencies are also instructed

to make every reasonable effort to

ensure that regulations define key terms

and are clear on such matters as

exhaustion of administrative remedies

and preemption. The Department

certifies that today’s regulatory action

meets the requirements of section 2(a)

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

V. Opportunity for Public Comment

A. Written Comments

Interested persons are invited to

participate in this proceeding by

submitting data, views, or comments

with respect to today’s notice.

Nine copies of written comments

should be submitted to the address

indicated in ADDRESSES section of this

notice. Comments should be identified

on the outside of the envelope and on

the documents themselves with the

designation ‘‘Financial Assistance

Rules: Eligibility Determination for

Certain Financial Assistance Programs,

Docket No. PO-RM–95–101.’’ In the

event any person wishing to provide

written comments cannot provide nine

copies, alternative arrangements can be

made in advance with the Department.

All comments received will be

available for public inspection as part of

the administrative record on file for this

rulemaking in the Department of Energy

Freedom of Information Office Reading

Room, 1E–090, Forrestal Building, 1000

Independence Avenue, S.W.,

Washington, D.C. 20585, 202–586–6020,

between 9 a.m. and 4 p.m., Monday

through Friday, except Federal holidays.

Any person submitting information

which that person believes to be

confidential and which may be exempt

by law from public disclosure, should

submit one complete copy, as well as

two copies from which the information

claimed to be confidential has been

deleted. The Department reserves the

right to determine the confidential

status of the information and to treat it

accordingly under 10 CFR 1004.11.

B. Public Hearing

One public hearing will be held

pursuant to this notice at the time, date

and place indicated above in the DATES

and ADDRESSES sections of this notice.

Any person who has an interest in

making an oral presentation should

make a written request to speak. Such

a request should be sent to the address

given in the ADDRESSES section of this

notice and must be received by 4:30

p.m. on the date specified in the DATES

section. The person also should provide

a daytime phone number where the

person may be reached. Those persons

requesting an opportunity to make an
Federal Register / Vol. 60, No. 36 / Thursday, February 23, 1995 / Proposed Rules 10301

oral presentation should bring nine (9)

copies of their statement to the hearing.

DOE will establish the procedures

governing the conduct of the hearing.

The length of each presentation will be

limited to ten (10) minutes. A DOE

official will preside at the hearing, and

may ask questions. Any further

procedural rules needed for the proper

conduct of the hearing will be

announced by the presiding officer.

If DOE must cancel the hearing, DOE

will make every effort to give advance

notice of the cancellation. The hearing

may be cancelled in the event no

requests to speak are received by the

deadline for submission of such a

request.

List of Subjects in 10 CFR Part 600

Administrative practice and

procedure, Grant programs.

Issued in Washington, D.C., on this 17th

day of February 1995.

Susan F. Tierney,

Assistant Secretary, Policy, Planning, and

Program Management.

For the reasons stated in the

preamble, part 600 of title 10,

Subchapter H of the Code of Federal

Regulations is proposed to be amended

as set forth below:

Part 600—FINANCIAL ASSISTANCE

RULES

1. The authority citation for part 600

continues to read as follows:

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

6301–6308, unless otherwise noted.

2. New subpart F, consisting of

§§ 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

are applicable to this subpart, and in

addition, as used in this subpart:

Act means the Energy Policy Act of

1992.

Company means any for-profit

business entity.

Covered program means a program

under Titles XX through XXIII of the

Act, as listed separately and updated

annually by the Department of Energy

for each fiscal year.

Parent company means a company

that:

(1) Exercises ultimate ownership of

the applicant company either directly,

by ownership of a majority of that

company’s voting securities, or

indirectly, by control over a majority of

that company’s voting securities

through a series of one or more

intermediate subsidiary companies, and

(2) Is not itself subject to the ultimate

ownership control of another company.

United States means the several

States, the District of Columbia, and all

commonwealths, territories, and

possessions of the United States.

United States-owned company means:

(1) A company that has majority

ownership by individuals who are

citizens of the United States, or

(2) A company organized under the

laws of a State that either has no parent

company or has a parent company

organized under the laws of a State.

Voting security has the meaning given

the term in the Public Utility Holding

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

§ 600.502 What must DOE determine.

A company shall be eligible to receive

financial assistance 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

paragraph (a) of § 600.502, DOE may

consider any evidence showing that a

financial assistance award would be in

the economic interest of the United

States including, but not limited to—

(a) Investments by the applicant

company and its affiliates in the United

States in research, development, and

manufacturing (including, for example,

the manufacture of major components or

subassemblies in the United States);

(b) Significant contributions to

employment in the United States by the

applicant company and its affiliates;

and

(c) An agreement by the applicant

company, with respect to any

technology arising from the financial

assistance being sought—

(1) To promote the manufacture

within the United States of products

resulting from that technology (taking

into account the goals of promoting the

competitiveness of United States

industry); and

(2) To procure parts and materials

from competitive suppliers.

§ 600.504 Information an applicant must

submit.

(a) Any applicant for financial

assistance in a covered program shall

submit with the application for financial

assistance, or at such later time as may

be specified by DOE, evidence for DOE

to consider in making findings required

under § 600.502(a) and findings

concerning ownership status under

§ 600.502(b).

(b) The applicant for financial

assistance has the burden of producing

sufficient information to warrant

making each required finding under

§ 600.502.

(c) If an applicant for financial

assistance is submitting evidence

relating to future undertakings, such as

an agreement under paragraph (c) of

§ 600.503 to promote manufacture in the

United States of products resulting from

a technology developed with financial

assistance or to procure parts and

materials from competitive suppliers,

the applicant shall submit a certification

affirming acceptance of these

undertakings. The applicant should also
10302 Federal Register / Vol. 60, No. 36 / Thursday, February 23, 1995 / Proposed Rules

briefly describe its plans, if any, for any

manufacturing of products arising from

the program-supported research and

development, including the location

where such manufacturing is expected

to occur.

(d) If an applicant for financial

assistance is claiming to be a United

States-owned company, the applicant

must submit a certification affirming

that it falls within the definition of that

term provided in § 600.501.

(e) 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

paragraph (b)(2) of § 600.502, DOE

may—

(a) consider information on the

relevant international and domestic law

obligations of the country of

incorporation of the parent company of

an applicant;

(b) consider information relating to

the policies and practices of the country

of incorporation of the parent company

of an applicant with respect to:

(1) The eligibility criteria for, and the

experience of United States-owned

company participation in, 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. 95–4425 Filed 2–22–95; 8:45 am]

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