Advanced Technology Vehicles Manufacturer Assistance Program, 41157-41158 [2017-18400]

Download as PDF 41157 Rules and Regulations Federal Register Vol. 82, No. 167 Wednesday, August 30, 2017 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. DEPARTMENT OF ENERGY 10 CFR Part 611 Advanced Technology Vehicles Manufacturer Assistance Program Loan Programs Office, Department of Energy. ACTION: Interpretive rule. AGENCY: 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: lgprogram@hq.doe.gov. SUPPLEMENTARY INFORMATION: I. Introduction and Background VerDate Sep<11>2014 13:47 Aug 29, 2017 Jkt 241001 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 PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 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 E:\FR\FM\30AUR1.SGM 30AUR1 41158 Federal Register / Vol. 82, No. 167 / Wednesday, August 30, 2017 / Rules and Regulations 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 BUREAU OF CONSUMER FINANCIAL PROTECTION 12 CFR Part 1026 Truth in Lending (Regulation Z) Annual Threshold Adjustments (Credit Cards, HOEPA, and ATR/QM) Bureau of Consumer Financial Protection. ACTION: Final rule; official interpretation. AGENCY: SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is issuing this final rule amending the official interpretations for Regulation Z, which implements the Truth in Lending Act (TILA). The Bureau is required to calculate annually the dollar amounts for several provisions in Regulation Z; this final rule revises, as applicable, the dollar amounts for provisions implementing TILA and amendments to TILA, including under the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act), the Home Ownership and Equity Protection Act of 1994 (HOEPA), and the Dodd- VerDate Sep<11>2014 13:47 Aug 29, 2017 Jkt 241001 Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The Bureau is adjusting these amounts, where appropriate, based on the annual percentage change reflected in the Consumer Price Index (CPI) in effect on June 1, 2017. DATES: This final rule is effective January 1, 2018. FOR FURTHER INFORMATION CONTACT: Jaclyn Maier, Counsel, Office of Regulations, Consumer Financial Protection Bureau, 1700 G Street NW., Washington, DC 20552 at (202) 435– 7700. SUPPLEMENTARY INFORMATION: The Bureau is amending the official interpretations for Regulation Z, which implements TILA, to update the dollar amounts of various thresholds that are adjusted annually based on the annual percentage change in the CPI as published by the Bureau of Labor Statistics (BLS). Specifically, for openend consumer credit plans under TILA, the threshold that triggers requirements to disclose minimum interest charges will remain unchanged at $1.00 in 2018. For open-end consumer credit plans under the CARD Act amendments to TILA, the adjusted dollar amount for the safe harbor for a first violation penalty fee will remain unchanged at $27 in 2018 and the adjusted dollar amount for the safe harbor for a subsequent violation penalty fee will remain unchanged at $38 in 2018. For HOEPA loans, the adjusted total loan amount threshold for high-cost mortgages in 2018 will be $21,032. The adjusted points and fees dollar trigger for highcost mortgages in 2018 will be $1,052. For the general rule to determine consumers’ ability to repay mortgage loans, the maximum thresholds for total points and fees for qualified mortgages in 2018 will be 3 percent of the total loan amount for a loan greater than or equal to $105,158; $3,155 for a loan amount greater than or equal to $63,095 but less than $105,158; 5 percent of the total loan amount for a loan greater than or equal to $21,032 but less than $63,095; $1,052 for a loan amount greater than or equal to $13,145 but less than $21,032; and 8 percent of the total loan amount for a loan amount less than $13,145. I. Background A. Credit Card Annual Adjustments Minimum Interest Charge Disclosure Thresholds Sections 1026.6(b)(2)(iii) and 1026.60(b)(3) of the Bureau’s Regulation Z implement sections 127(a)(3) and 127(c)(1)(A)(ii)(II) of TILA. Sections PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 1026.6(b)(2)(iii) and 1026.60(b)(3) require the disclosure of any minimum interest charge exceeding $1.00 that could be imposed during a billing cycle and provide that, for open-end consumer credit plans, the minimum interest charge thresholds will be recalculated annually using the CPI that was in effect on the preceding June 1; the Bureau uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI–W) for this adjustment. When the cumulative change in the adjusted minimum value derived from applying the annual CPI– W level to the current amounts in §§ 1026.6(b)(2)(iii) and 1026.60(b)(3) has risen by a whole dollar, the minimum interest charge amounts set forth in the regulation will be increased by $1.00. The BLS publishes consumer-based indices monthly but does not report a CPI change on June 1; adjustments are reported in the middle of the month. This adjustment analysis is based on the CPI–W index in effect on June 1, 2017, which was reported by BLS on May 12, 2017, and reflects the percentage change from April 2016 to April 2017. The CPI– W is a subset of the Consumer Price Index for All Urban Consumers (CPI–U) index and represents approximately 28 percent of the U.S. population. The adjustment analysis accounts for a 2.1 percent increase in the CPI–W from April 2016 to April 2017. This increase in the CPI–W when applied to the current amounts in §§ 1026.6(b)(2)(iii) and 1026.60(b)(3) did not trigger an increase in the minimum interest charge threshold of at least $1.00, and the Bureau is therefore not amending §§ 1026.6(b)(2)(iii) and 1026.60(b)(3). Safe Harbor Penalty Fees Section 1026.52(b)(1)(ii)(A) and (B) of the Bureau’s Regulation Z implements section 149(e) of TILA, established by the CARD Act.1 Section 1026.52(b)(1)(ii)(D) provides that the safe harbor provision, which establishes the permissible penalty fee thresholds in § 1026.52(b)(1)(ii)(A) and (B), will be re-calculated annually using the CPI that was in effect on the preceding June 1; the Bureau uses the CPI–W for this adjustment. The BLS publishes consumer-based indices monthly but does not report a CPI change on June 1; adjustments are reported in the middle of the month. The CPI–W is a subset of the CPI–U index and represents approximately 28 percent of the U.S. population. When the cumulative change in the adjusted value derived 1 Credit Card Accountability Responsibility and Disclosure Act of 2009, Public Law 111–24, 123 Stat. 1734 (2009). E:\FR\FM\30AUR1.SGM 30AUR1

Agencies

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



========================================================================
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. 

========================================================================


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: lgprogram@hq.doe.gov.

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
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