82 FR 41157 - Advanced Technology Vehicles Manufacturer Assistance Program

DEPARTMENT OF ENERGY

Federal Register Volume 82, Issue 167 (August 30, 2017)

Page Range		41157-41158
FR Document		2017-18400

The Department of Energy (``DOE'') is adopting an interpretive rule to clarify its interpretation of Section 136 of the Energy Independence and Security Act of 2007, as amended (``EISA'') and its implementing regulations for the Advanced Technology Vehicle Manufacturing Loan Program (the ``ATVM Loan Program'') authorized by Section 136. Section 136(f), which establishes requirements for the administrative costs associated with loans under the ATVM Loan Program, was implemented by DOE pursuant to a 2008 interim final rule governing the operation of the ATVM Program. The implementing regulation in part provided that the borrower would be required to pay at the time of the closing of the loan, an ``Administrative Fee'' equal to 10 basis points of the principal amount of the loan. DOE is adopting this interpretive rule to explain its view that the administrative costs imposed by Congress under Section 136(f) is separate from the cost of the outside advisors engaged by DOE in connection with the review and processing of their respective loan applications, negotiation of conditional commitments, and closing of loans.

Federal Register, Volume 82 Issue 167 (Wednesday, August 30, 2017)

[Federal Register Volume 82, Number 167 (Wednesday, August 30, 2017)]
[Rules and Regulations]
[Pages 41157-41158]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-18400]



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Rules and Regulations
                                                Federal Register
________________________________________________________________________

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. 

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Federal Register / Vol. 82 , No. 167 / Wednesday, August 30, 2017 / 
Rules and Regulations

[[Page 41157]]



DEPARTMENT OF ENERGY

10 CFR Part 611


Advanced Technology Vehicles Manufacturer Assistance Program

AGENCY: Loan Programs Office, Department of Energy.

ACTION: Interpretive rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Energy (``DOE'') is adopting an interpretive 
rule to clarify its interpretation of Section 136 of the Energy 
Independence and Security Act of 2007, as amended (``EISA'') and its 
implementing regulations for the Advanced Technology Vehicle 
Manufacturing Loan Program (the ``ATVM Loan Program'') authorized by 
Section 136. Section 136(f), which establishes requirements for the 
administrative costs associated with loans under the ATVM Loan Program, 
was implemented by DOE pursuant to a 2008 interim final rule governing 
the operation of the ATVM Program. The implementing regulation in part 
provided that the borrower would be required to pay at the time of the 
closing of the loan, an ``Administrative Fee'' equal to 10 basis points 
of the principal amount of the loan. DOE is adopting this interpretive 
rule to explain its view that the administrative costs imposed by 
Congress under Section 136(f) is separate from the cost of the outside 
advisors engaged by DOE in connection with the review and processing of 
their respective loan applications, negotiation of conditional 
commitments, and closing of loans.

DATES: This interpretive rule is effective on August 30, 2017.

FOR FURTHER INFORMATION CONTACT: Herbert A. Glaser, Chief Counsel, Loan 
Programs Office, U.S. Department of Energy, 1000 Independence Ave. SW., 
Washington, DC 20585-0121, email: [email protected].

SUPPLEMENTARY INFORMATION:
I. Introduction and Background
II. Approval of the Office of the Secretary

I. Introduction and Background

    Section 136 of EISA authorizes the Secretary of Energy (the 
``Secretary'') to issue grants and direct loans to applicants for the 
costs of reequipping, expanding, or establishing manufacturing 
facilities in the United States to produce qualified advanced 
technology vehicles, or qualifying components. Section 136 also 
authorizes the Secretary to issue grants and direct loans for the costs 
of engineering integration performed in the United States of qualifying 
advanced technology vehicles and qualifying components. DOE promulgated 
regulations implementing Section 136 at 10 CFR part 611, 73 FR 66721 
(November 12, 2008). The regulations included implementation of Section 
136(f), ``Fees,'' which specifies that administrative costs shall be no 
more than $100,000 or 10 basis points of the loan. This statutory 
requirement is implemented at 10 CFR 611.107(e), which states that 
``[t]he Borrower will be required to pay at the time of the closing of 
the loan a fee equal to 10 basis points of the principal amount of the 
loan.'' This payment is referred to as the ``Administrative Fee.''
    Although the Administrative Fee has been the sole fee imposed by 
DOE under the ATVM Loan Program to date, DOE does not interpret Section 
136(f) as restricting its ability to assess other fees and charges on 
borrowers or other applicants, as defined in the implementing 
regulation at 10 CFR 611.2. Moreover, DOE does not interpret 
Section136(f) as limiting the Secretary's discretion to impose on 
borrowers or other applicants the cost of outside advisors engaged by 
DOE in connection with the processing and review of their respective 
loan applications or the negotiation and closing of their respective 
loan commitments and closings (collectively, ``Transaction Advisory 
Costs''). In the 2008 rulemaking, DOE discussed its interpretation of 
Section 136(f), explaining that DOE interprets the statute as 
authorizing DOE to charge borrowers an administrative fee and as 
providing DOE with the flexibility to choose either monetary option set 
forth in the statute. DOE decided in the 2008 rulemaking that 
administrative costs imposed on each borrower will be 10 basis points 
of the loan, to be paid by the borrower on the closing date of the 
loan. DOE based its decision on the need for fairness among borrowers 
and the belief that administrative costs for a loan would be in excess 
of 10 basis points, and by selecting 10 basis points as the fee for all 
loans, DOE ensured that borrowers of smaller loans would pay smaller 
Administrative Fees. Nothing in the rulemaking sought to define 
``administrative costs,'' nor did it suggest that Section 136(f) 
limited DOE's authority to recover costs not considered 
``administrative costs.'' In this regard, the preamble to the 2008 
interim final rule refers to a ``fee'', but does not suggest that the 
fee is exclusive. Moreover, both Section 136(f) and the implementing 
regulations are silent as to the allocation, between DOE and 
applicants, of Transaction Advisory Costs or other costs that fall 
outside of the scope of administrative costs.
    Generally, the costs incurred by DOE to date to carry out the ATVM 
Loan Program can be divided into two categories: Those costs 
attributable generally to the overall administration of the ATVM 
Program, including payroll and other overhead costs of the Loan 
Programs Office ATVM Division, which are incurred irrespective of the 
volume or complexity of loan applications (``Category I Costs''), and 
those costs attributable directly to the review, processing, closing 
and management of specific loan transactions, including Transaction 
Advisory Costs (``Category II Costs''). Transaction Advisory Costs and 
other Category II Costs vary significantly in relation to the maturity 
and organization of the applicant and the complexity of the proposed 
project, among other factors.
    In this rulemaking, DOE interprets ``administrative costs'' as used 
in Section 136(f) not to include Category II Costs, including 
Transactional Advisory Costs. DOE interprets Section 136(f) to instead 
establish a limit on the Category I Costs of the ATVM Loan Program that 
can be recovered through the imposition of the Administrative Fee. 
Allocating to the applicant the responsibility for Transaction Advisory 
Costs associated with the applicant's transaction is consistent with 
the prevailing practices of similar federal financing programs and 
commercial lenders in similar transactions. Accordingly, DOE does not 
interpret either Section 136(f) or the

[[Page 41158]]

implementing regulations to restrict DOE's ability to allocate the 
Transaction Advisory Costs or other Category II Costs associated with a 
particular application to the relevant applicant.
    Based on its interpretation of the statute as explained in this 
rule, applicants for ATVM loans can bear all Transaction Advisory Costs 
associated with their respective applications. Applicants would pay 
Transaction Advisory Costs pursuant to direct agreements executed by 
and between the applicant and each relevant outside transaction 
advisor, in a form acceptable to DOE and each such transaction advisor, 
no later than the date determined by DOE in its discretion with respect 
to such pending application.

II. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this 
interpretive rule.

List of Subjects in 10 CFR Part 611

    Administrative practice and procedure, Loan programs--energy, 
Reporting and recordkeeping requirements.

    Issued in Washington, DC, on August 24, 2017.
John Sneed,
Executive Director, Loan Programs Office.
[FR Doc. 2017-18400 Filed 8-29-17; 8:45 am]
BILLING CODE 6450-01-P

41157

Rules and Regulations Federal Register
Vol. 82, No. 167

Wednesday, August 30, 2017

This section of the FEDERAL REGISTER II. Approval of the Office of the Secretary basis points of the loan, to be paid by
contains regulatory documents having general the borrower on the closing date of the
applicability and legal effect, most of which
I. Introduction and Background
loan. DOE based its decision on the
are keyed to and codified in the Code of Section 136 of EISA authorizes the need for fairness among borrowers and
Federal Regulations, which is published under Secretary of Energy (the ‘‘Secretary’’) to the belief that administrative costs for a
50 titles pursuant to 44 U.S.C. 1510. issue grants and direct loans to loan would be in excess of 10 basis
The Code of Federal Regulations is sold by applicants for the costs of reequipping, points, and by selecting 10 basis points
the Superintendent of Documents. expanding, or establishing as the fee for all loans, DOE ensured that
manufacturing facilities in the United borrowers of smaller loans would pay
States to produce qualified advanced smaller Administrative Fees. Nothing in
DEPARTMENT OF ENERGY technology vehicles, or qualifying the rulemaking sought to define
components. Section 136 also ‘‘administrative costs,’’ nor did it
10 CFR Part 611 authorizes the Secretary to issue grants suggest that Section 136(f) limited
and direct loans for the costs of DOE’s authority to recover costs not
Advanced Technology Vehicles
engineering integration performed in the considered ‘‘administrative costs.’’ In
Manufacturer Assistance Program
United States of qualifying advanced this regard, the preamble to the 2008
AGENCY: Loan Programs Office, technology vehicles and qualifying interim final rule refers to a ‘‘fee’’, but
Department of Energy. components. DOE promulgated does not suggest that the fee is
ACTION: Interpretive rule. regulations implementing Section 136 at exclusive. Moreover, both Section 136(f)
10 CFR part 611, 73 FR 66721 and the implementing regulations are
SUMMARY: The Department of Energy (November 12, 2008). The regulations silent as to the allocation, between DOE
(‘‘DOE’’) is adopting an interpretive rule included implementation of Section and applicants, of Transaction Advisory
to clarify its interpretation of Section 136(f), ‘‘Fees,’’ which specifies that Costs or other costs that fall outside of
136 of the Energy Independence and administrative costs shall be no more the scope of administrative costs.
Security Act of 2007, as amended than $100,000 or 10 basis points of the Generally, the costs incurred by DOE
(‘‘EISA’’) and its implementing loan. This statutory requirement is to date to carry out the ATVM Loan
regulations for the Advanced implemented at 10 CFR 611.107(e), Program can be divided into two
Technology Vehicle Manufacturing which states that ‘‘[t]he Borrower will categories: Those costs attributable
Loan Program (the ‘‘ATVM Loan be required to pay at the time of the generally to the overall administration
Program’’) authorized by Section 136. closing of the loan a fee equal to 10 of the ATVM Program, including payroll
Section 136(f), which establishes basis points of the principal amount of and other overhead costs of the Loan
requirements for the administrative the loan.’’ This payment is referred to as Programs Office ATVM Division, which
costs associated with loans under the the ‘‘Administrative Fee.’’ are incurred irrespective of the volume
ATVM Loan Program, was implemented Although the Administrative Fee has or complexity of loan applications
by DOE pursuant to a 2008 interim final been the sole fee imposed by DOE under (‘‘Category I Costs’’), and those costs
rule governing the operation of the the ATVM Loan Program to date, DOE attributable directly to the review,
ATVM Program. The implementing does not interpret Section 136(f) as processing, closing and management of
regulation in part provided that the restricting its ability to assess other fees specific loan transactions, including
borrower would be required to pay at and charges on borrowers or other Transaction Advisory Costs (‘‘Category
the time of the closing of the loan, an applicants, as defined in the II Costs’’). Transaction Advisory Costs
‘‘Administrative Fee’’ equal to 10 basis implementing regulation at 10 CFR and other Category II Costs vary
points of the principal amount of the 611.2. Moreover, DOE does not interpret significantly in relation to the maturity
loan. DOE is adopting this interpretive Section136(f) as limiting the Secretary’s and organization of the applicant and
rule to explain its view that the discretion to impose on borrowers or the complexity of the proposed project,
administrative costs imposed by other applicants the cost of outside among other factors.
Congress under Section 136(f) is advisors engaged by DOE in connection In this rulemaking, DOE interprets
separate from the cost of the outside with the processing and review of their ‘‘administrative costs’’ as used in
advisors engaged by DOE in connection respective loan applications or the Section 136(f) not to include Category II
with the review and processing of their negotiation and closing of their Costs, including Transactional Advisory
respective loan applications, negotiation respective loan commitments and Costs. DOE interprets Section 136(f) to
of conditional commitments, and closings (collectively, ‘‘Transaction instead establish a limit on the Category
closing of loans. Advisory Costs’’). In the 2008 I Costs of the ATVM Loan Program that
DATES: This interpretive rule is effective rulemaking, DOE discussed its can be recovered through the imposition
on August 30, 2017. interpretation of Section 136(f), of the Administrative Fee. Allocating to
FOR FURTHER INFORMATION CONTACT: explaining that DOE interprets the the applicant the responsibility for
Herbert A. Glaser, Chief Counsel, Loan statute as authorizing DOE to charge Transaction Advisory Costs associated
Programs Office, U.S. Department of borrowers an administrative fee and as with the applicant’s transaction is
Energy, 1000 Independence Ave. SW., providing DOE with the flexibility to consistent with the prevailing practices
Washington, DC 20585–0121, email: choose either monetary option set forth of similar federal financing programs
lgprogram@hq.doe.gov. in the statute. DOE decided in the 2008 and commercial lenders in similar
SUPPLEMENTARY INFORMATION: rulemaking that administrative costs transactions. Accordingly, DOE does not
I. Introduction and Background imposed on each borrower will be 10 interpret either Section 136(f) or the

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41158 Federal Register / Vol. 82, No. 167 / Wednesday, August 30, 2017 / Rules and Regulations

implementing regulations to restrict Frank Wall Street Reform and Consumer 1026.6(b)(2)(iii) and 1026.60(b)(3)
DOE’s ability to allocate the Transaction Protection Act (Dodd-Frank Act). The require the disclosure of any minimum
Advisory Costs or other Category II Bureau is adjusting these amounts, interest charge exceeding $1.00 that
Costs associated with a particular where appropriate, based on the annual could be imposed during a billing cycle
application to the relevant applicant. percentage change reflected in the and provide that, for open-end
Based on its interpretation of the Consumer Price Index (CPI) in effect on consumer credit plans, the minimum
statute as explained in this rule, June 1, 2017. interest charge thresholds will be re-
applicants for ATVM loans can bear all DATES: This final rule is effective calculated annually using the CPI that
Transaction Advisory Costs associated January 1, 2018. was in effect on the preceding June 1;
with their respective applications. FOR FURTHER INFORMATION CONTACT: the Bureau uses the Consumer Price
Applicants would pay Transaction Jaclyn Maier, Counsel, Office of Index for Urban Wage Earners and
Advisory Costs pursuant to direct Regulations, Consumer Financial Clerical Workers (CPI–W) for this
agreements executed by and between Protection Bureau, 1700 G Street NW., adjustment. When the cumulative
the applicant and each relevant outside Washington, DC 20552 at (202) 435– change in the adjusted minimum value
transaction advisor, in a form acceptable 7700. derived from applying the annual CPI–
to DOE and each such transaction W level to the current amounts in
SUPPLEMENTARY INFORMATION: The
advisor, no later than the date §§ 1026.6(b)(2)(iii) and 1026.60(b)(3) has
Bureau is amending the official risen by a whole dollar, the minimum
determined by DOE in its discretion
interpretations for Regulation Z, which interest charge amounts set forth in the
with respect to such pending
implements TILA, to update the dollar regulation will be increased by $1.00.
application.
amounts of various thresholds that are The BLS publishes consumer-based
II. Approval of the Office of the adjusted annually based on the annual indices monthly but does not report a
Secretary percentage change in the CPI as CPI change on June 1; adjustments are
The Secretary of Energy has approved published by the Bureau of Labor reported in the middle of the month.
publication of this interpretive rule. Statistics (BLS). Specifically, for open- This adjustment analysis is based on the
end consumer credit plans under TILA, CPI–W index in effect on June 1, 2017,
List of Subjects in 10 CFR Part 611 the threshold that triggers requirements which was reported by BLS on May 12,
Administrative practice and to disclose minimum interest charges 2017, and reflects the percentage change
procedure, Loan programs—energy, will remain unchanged at $1.00 in 2018. from April 2016 to April 2017. The CPI–
Reporting and recordkeeping For open-end consumer credit plans W is a subset of the Consumer Price
requirements. under the CARD Act amendments to Index for All Urban Consumers (CPI–U)
TILA, the adjusted dollar amount for the index and represents approximately 28
Issued in Washington, DC, on August 24,
2017. safe harbor for a first violation penalty percent of the U.S. population. The
fee will remain unchanged at $27 in adjustment analysis accounts for a 2.1
John Sneed,
2018 and the adjusted dollar amount for percent increase in the CPI–W from
Executive Director, Loan Programs Office.
the safe harbor for a subsequent April 2016 to April 2017. This increase
[FR Doc. 2017–18400 Filed 8–29–17; 8:45 am] violation penalty fee will remain
BILLING CODE 6450–01–P
in the CPI–W when applied to the
unchanged at $38 in 2018. For HOEPA current amounts in §§ 1026.6(b)(2)(iii)
loans, the adjusted total loan amount and 1026.60(b)(3) did not trigger an
threshold for high-cost mortgages in increase in the minimum interest charge
BUREAU OF CONSUMER FINANCIAL 2018 will be $21,032. The adjusted
PROTECTION threshold of at least $1.00, and the
points and fees dollar trigger for high- Bureau is therefore not amending
cost mortgages in 2018 will be $1,052. §§ 1026.6(b)(2)(iii) and 1026.60(b)(3).
12 CFR Part 1026 For the general rule to determine
consumers’ ability to repay mortgage Safe Harbor Penalty Fees
Truth in Lending (Regulation Z) Annual
Threshold Adjustments (Credit Cards, loans, the maximum thresholds for total Section 1026.52(b)(1)(ii)(A) and (B) of
HOEPA, and ATR/QM) points and fees for qualified mortgages the Bureau’s Regulation Z implements
in 2018 will be 3 percent of the total section 149(e) of TILA, established by
AGENCY: Bureau of Consumer Financial loan amount for a loan greater than or the CARD Act.1 Section
Protection. equal to $105,158; $3,155 for a loan 1026.52(b)(1)(ii)(D) provides that the
ACTION: Final rule; official amount greater than or equal to $63,095 safe harbor provision, which establishes
interpretation. but less than $105,158; 5 percent of the the permissible penalty fee thresholds
total loan amount for a loan greater than in § 1026.52(b)(1)(ii)(A) and (B), will be
SUMMARY: The Bureau of Consumer or equal to $21,032 but less than re-calculated annually using the CPI
Financial Protection (Bureau) is issuing $63,095; $1,052 for a loan amount that was in effect on the preceding June
this final rule amending the official greater than or equal to $13,145 but less 1; the Bureau uses the CPI–W for this
interpretations for Regulation Z, which than $21,032; and 8 percent of the total adjustment. The BLS publishes
implements the Truth in Lending Act loan amount for a loan amount less than consumer-based indices monthly but
(TILA). The Bureau is required to $13,145. does not report a CPI change on June 1;
calculate annually the dollar amounts adjustments are reported in the middle
for several provisions in Regulation Z; I. Background
of the month. The CPI–W is a subset of
this final rule revises, as applicable, the A. Credit Card Annual Adjustments the CPI–U index and represents
dollar amounts for provisions approximately 28 percent of the U.S.
implementing TILA and amendments to Minimum Interest Charge Disclosure
Thresholds population. When the cumulative
TILA, including under the Credit Card change in the adjusted value derived
Accountability Responsibility and Sections 1026.6(b)(2)(iii) and
Disclosure Act of 2009 (CARD Act), the 1026.60(b)(3) of the Bureau’s Regulation 1 Credit Card Accountability Responsibility and
Home Ownership and Equity Protection Z implement sections 127(a)(3) and Disclosure Act of 2009, Public Law 111–24, 123
Act of 1994 (HOEPA), and the Dodd- 127(c)(1)(A)(ii)(II) of TILA. Sections Stat. 1734 (2009).

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Document Created: 2017-08-30 04:08:37
Document Modified: 2017-08-30 04:08:37

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Interpretive rule.
Dates		This interpretive rule is effective on August 30, 2017.
Contact		Herbert A. Glaser, Chief Counsel, Loan Programs Office, U.S. Department of Energy, 1000 Independence Ave. SW., Washington, DC 20585-0121, email: [email protected]
FR Citation		82 FR 41157
CFR Associated		Administrative Practice and Procedure; Loan Programs-Energy and Reporting and Recordkeeping Requirements