FOUNDATIONAL LEGISLATION, RULES, AND DOCUMENTS
Energy Policy Act of 2005
Final Rule (10 CFR Part 609)
Title XVII requires compliance with the implementing regulations set forth in Part 609 under Chapter II of Title 10 of the Code of Federal Regulations (10 CFR Part 609). The Final Rule (January 17, 2017) is also available at the Electronic Code of Federal Regulations.
The Open Solicitations allocate direct loan guarantee authority under the following appropriations. Applicants should review the final solicitation AND all supplements before submitting an application.
DOE will make up to $8.5 billion in loan guarantee authority available under the Solicitation for Advanced Fossil Energy Projects. DOE’s authority to issue this amount of loan guarantees was provided by the (a) Revised Continuing Appropriations Resolution, 2007, P.L. 110-5 (the “2007 Appropriations Act”) and (b) Omnibus Appropriations Act, 2009, P.L. No. 111-8, as amended by Section 408 of the Supplemental Appropriations Act, 2009, P.L. No. 111-32 (the “2009 Appropriations Act”) and remains available until committed.
Under the Renewable Energy and Efficient Energy Projects solicitation, DOE will make available up to $3 billion in loan guarantee authority, plus an additional amount that can be imputed based on the availability of an appropriation for the credit subsidy cost of such imputed loan guarantee authority. The amount of total loan guarantee authority available pursuant to this Solicitation will depend on credit subsidy rates.
DOE’s authority to issue this amount of loan guarantees was provided by the (a) Revised Continuing Appropriations Resolution, 2007, P.L. 110-5 (the “2007 Appropriations Act”); (b) Omnibus Appropriations Act, 2009, P.L. 111-8, as amended by Section 408 of the Supplemental Appropriations Act, 2009, P.L. No. 111-32 (the “2009 Appropriations Act”); and (c) Department of Defense and Full-Year Continuing Appropriations Act, 2011, P.L. 112-10 (the “2011 Appropriations Act”) (the 2007, 2009, and 2011 Appropriations Acts are referred to herein collectively as the “Appropriations Acts”). DOE’s authority to issue this amount of loan guarantees remains available until committed.
Under the Advanced Nuclear Energy Projects solicitation, DOE will make available up to $12.5 billion in loan guarantee authority. DOE’s authority to issue this amount of loan guarantees was provided by the Omnibus Appropriations Act, 2009, P.L. 111-8, as amended by Section 408 of the Supplemental Appropriations Act, 2009, P.L. No. 111-32 (the “2009 Appropriations Act”). DOE’s authority to issue this amount of loan guarantees remains available until committed.
Subject to limited exceptions that are set forth in the 2009 Appropriations Act and the 2011 Appropriations Act, DOE may not be able to issue loan guarantees to projects using funds appropriated under those acts that will benefit directly or indirectly from certain other forms of federal support, such as grants or other loan guarantees from federal agencies or entities, including DOE, federal agencies or entities as a customer or off-taker of the Project’s products or services, or other federal contracts, including acquisitions, leases and other arrangements, that support the Project.
Cargo Preference Act
All projects that receive a loan guarantee under Title XVII must comply with the Cargo Preference Act of 1954, which establishes certain requirements for the use of U.S. flagged vessels in the movement of cargo in international waters. These requirements may apply to shipments contracted for or made prior to receiving a loan guarantee. DOE urges applicants to contact the Maritime Administration directly to ensure that relevant project agreements provide for compliance with the Cargo Preference Act.
General information on cargo preference can be found at the Maritime Administration’s web site: https://www.marad.dot.gov/ships-and-shipping/cargo-preference/. Potential applicants may also address questions on cargo preference to the Maritime Administration’s Office of Cargo and Commercial Sealift at (202) 366-4610 or via email to email@example.com.
Loan guarantees under Title XVII of the Energy Policy Act of 2005 require that laborers and mechanics employed by contractors and subcontractors in the performance of construction (as defined in Department of Labor (DOL) regulations at 29 CFR 5.2(j)) financed in whole or in part by such loan guarantee be paid at rates not less than those prevailing on projects of a character similar in the locality of the project, as determined by the Secretary of Labor in accordance with the Davis Bacon Act (DBA).
Under DOL regulations at 29 CFR 5.5(a)(6), a borrower who receives a loan guarantee under the Title XVII loan program is responsible for DBA compliance by all contractors and subcontractors. In accordance with DBA regulations at 29 CFR §1.6(g), the DBA must be complied with beginning with the construction of a project, regardless of when the issuance of the DOE loan guarantee has occurred. As such, an applicant seeking a DOE loan guarantee under Section 1703 for a project that has commenced such construction prior to the issuance of such a loan guarantee will have to make any necessary wage adjustments no later than the closing of the DOE guaranteed loan. There is an exception if the Administrator of the Wage and Hour Division, Employment Standards Administration at DOL finds that (i) such relief is necessary and proper in the public interest to prevent injustice or undue hardship and (ii) there was no evidence of intent to apply for federal funding or assistance prior to the start of construction.
Please see the Department of Labor DBA website for more information and links to the DBA and its regulations.
FEDERAL CREDIT PROGRAMS
AMERICAN RECOVERY AND REINVESTMENT ACT
The American Recovery and Reinvestment Act (ARRA) provided authority for the Department to issue loan guarantees under Section 1705 of Title XVII for U.S. based projects that commenced construction not later than September 30, 2011. LPO is not currently authorized to issue additional loan guarantees under Section 1705 of Title XVII.