Notice2022-24340
Public Interest Exigent Circumstances Waiver of Build America, Buy America Provisions as Applied to Certain Recipients of HUD Federal Financial Assistance
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Published
November 7, 2022
Issuing agencies
Housing and Urban Development Department
Abstract
In accordance with the Build America, Buy America Act ("BABA" or "the Act") this notice advises that HUD is proposing a departmentwide public interest waiver to the Buy America Domestic Content Procurement Preference ("Buy America Preference," or "BAP") for grantees and recipients of Federal Financial Assistance from HUD as applied to the iron, steel, manufactured products, and construction materials requirement of BABA in certain exigent circumstances. In accordance with the Act, HUD has found that this proposed departmentwide exigent circumstances waiver is in the public interest. The waiver will assist HUD and its grantees and funding recipients in preventing immediate delays to critically important projects that serve to ensuring the safety and health of HUD constituents and continuing to provide economic opportunity through housing and community development projects. Moreover, this waiver will assist HUD in working to strengthen the housing market to bolster the economy and protect consumers, meet the need for quality affordable rental homes, utilize housing as a platform for improving quality of life, and build inclusive and sustainable communities free from discrimination.
Full Text
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<title>Federal Register, Volume 87 Issue 214 (Monday, November 7, 2022)</title>
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[Federal Register Volume 87, Number 214 (Monday, November 7, 2022)]
[Notices]
[Pages 67053-67056]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-24340]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6331-N-05]
Public Interest Exigent Circumstances Waiver of Build America,
Buy America Provisions as Applied to Certain Recipients of HUD Federal
Financial Assistance
AGENCY: Office of the Secretary, U.S. Department of Housing and Urban
Development (HUD).
ACTION: Notice.
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SUMMARY: In accordance with the Build America, Buy America Act
(``BABA'' or ``the Act'') this notice advises that HUD is proposing a
departmentwide public interest waiver to the Buy America Domestic
Content Procurement Preference (``Buy America Preference,'' or ``BAP'')
for grantees and recipients of Federal Financial Assistance from HUD as
applied to the iron, steel, manufactured products, and construction
materials requirement of BABA in certain exigent circumstances. In
accordance with the Act, HUD has found that this proposed
departmentwide exigent circumstances waiver is in the public interest.
The waiver will assist HUD and its grantees and funding recipients in
preventing immediate delays to critically important projects that serve
to ensuring the safety and health of HUD constituents and continuing to
provide economic opportunity through housing and community development
projects. Moreover, this waiver will assist HUD in working to
strengthen the housing market to bolster the economy and protect
consumers, meet the need for quality affordable rental homes, utilize
housing as a platform for improving quality of life, and build
inclusive and sustainable communities free from discrimination.
DATES: HUD published this proposed waiver on its website on October 31,
2022. Comments on the proposed waiver set out in this document are due
on or before November 15, 2022.
ADDRESSES: Interested persons are invited to submit comments on this
proposed general applicability waiver. Copies of all comments submitted
are available for inspection and downloading at <a href="http://www.regulations.gov">www.regulations.gov</a>.
[[Page 67054]]
To receive consideration as public comments, comments must be
submitted through one of two methods, specified below. All submissions
must refer to the above docket number and title.
1. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
<a href="http://www.regulations.gov">www.regulations.gov</a>.
HUD strongly encourages commenters to submit comments
electronically. Electronic submission of comments allows the commenter
maximum time to prepare and submit a comment, ensures timely receipt by
HUD, and enables HUD to make them immediately available to the public.
Comments submitted electronically through the <a href="http://www.regulations.gov">www.regulations.gov</a>
website can be viewed by other commenters and interested members of the
public. Commenters should follow the instructions provided on that site
to submit comments electronically.
2. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, Department
of Housing and Urban Development, 451 7th Street SW, Room 10276,
Washington, DC 20410-0500.
No Facsimile Comments. Facsimile (FAX) comments will not be
accepted.
3. Public Inspection of Comments. All properly submitted comments
and communications submitted to HUD will be available for public
inspection and copying between 8:00 a.m. and 5:00 p.m. weekdays at the
above address. Due to security measures at the HUD Headquarters
building, an advance appointment to review the submissions must be
scheduled by calling the Regulations Division at (202) 708-3055 (this
is not a toll-free number).
FOR FURTHER INFORMATION CONTACT: Joseph Carlile, Department of Housing
and Urban Development, 451 Seventh Street SW, Room 10226, Washington,
DC 20410-5000, at (202) 402-7082 (this is not a toll-free number). HUD
welcomes and is prepared to receive calls from individuals who are deaf
or hard of hearing, as well as individuals with speech and
communication disabilities. To learn more about how to make an
accessible telephone call, please visit <a href="https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs">https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs</a>. HUD encourages submission
of questions about this document be sent to
<a href="/cdn-cgi/l/email-protection#a0e2d5c9ccc4e1cdc5d2c9c3c1e2d5d9e1cdc5d2c9c3c1e0c8d5c48ec7cfd6"><span class="__cf_email__" data-cfemail="793b0c10151d38141c0b101a183b0c0038141c0b101a1839110c1d571e160f">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Build America, Buy America
The Build America, Buy America Act (``BABA'' or ``the Act'') was
enacted on November 15, 2021, as part of the Infrastructure Investment
and Jobs Act (IIJA). Public Law 117-58. The Act establishes a domestic
content procurement preference, the BAP, for Federal infrastructure
programs. Section 70914(a) of the Act establishes that no later than
180 days after the date of enactment, HUD must ensure that none of the
funds made available for infrastructure projects may be obligated by
the Department unless it has taken steps to ensure that the iron,
steel, manufactured products, and construction materials used in a
project are produced in the United States. In section 70912, the Act
further defines a project to include ``the construction, alteration,
maintenance, or repair of infrastructure in the United States'' and
includes within the definition of infrastructure those items
traditionally included along with buildings and real property. Thus,
starting May 14, 2022, new awards of Federal Financial Assistance from
a program for infrastructure, and any of those funds obligated by the
grantee, are covered under the BABA provisions of the Act, 41 U.S.C.
8301 note, unless covered by a waiver. Section 70912(4)(B) of the Act
specifically exempts from the term Federal Financial Assistance certain
assistance authorized under certain sections of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act or pre and post disaster
or emergency response expenditures.
II. HUD's Progress in Implementation of the Act
Since the enactment of the Act, HUD has worked diligently to
implement the BAP. Consistent with the requirements of section 70913 of
the Act, HUD produced a report identifying and evaluating all of HUD's
Federal Financial Assistance programs for compliance with the BAP on
January 19, 2022, by Federal Register notice ``Identification of
Federal Financial Assistance Infrastructure Programs Subject to the
Build America, Buy America Provisions of the Infrastructure Investment
and Jobs Act''. (87 FR 2894) In order to ensure orderly implementation
of the BAP across HUD's programs, HUD published two general
applicability waivers for HUD's programs on May 3, 2022. The first
notice, ``General Applicability Waiver of Build America, Buy America
Provisions as Applied to Recipients of HUD Federal Financial
Assistance'' (87 FR 26219), extended the implementation date for the
BAP until November 14, 2022, unless covered by a subsequent waiver.
Thus, no funds obligated by HUD before November 14, 2022, are subject
to the BAP. The second notice, ``General Applicability Waiver of Build
America, Buy America Provisions as Applied to Tribal Recipients of HUD
Federal Financial Assistance'' (87 FR 26221), extended the
implementation date for the BAP for Federal Financial Assistance
provided to Tribal recipients for a period of one year. Additionally,
HUD published a Request for Information ``Request for Information
Relating to the Implementation of the Build America, Buy America Act''
to gather additional information necessary to fully implement the BAP
for HUD programs and to adequately prepare necessary Paperwork
Reduction Act notices relating to such implementation. (June 1, 2022,
87 FR 33193)
Additional details on HUD's implementation of the BABA requirements
can be found at <a href="https://www.hud.gov/program_offices/general_counsel/BABA">https://www.hud.gov/program_offices/general_counsel/BABA</a>.
III. Waiver Authority
Under section 70914(b), HUD has authority to waive the application
of a domestic content procurement preference when (1) application of
the preference would be contrary to the public interest, (2) the
materials and products subject to the preference are not produced in
the United States at a sufficient and reasonably available quantity or
satisfactory quality, or (3) inclusion of domestically produced
materials and products would increase the cost of the overall project
by more than 25 percent. Section 70914(c) provides that a waiver under
70914(b) must be published by the agency with a detailed written
explanation for the proposed determination and provide a public comment
period of not less than 15 days.
IV. Public Interest in This General Applicability Waiver of Buy America
Provisions
HUD is proposing this waiver not as an alternative to increasing
domestic production, but as an important tool to implement the Buy
American provisions in the most efficient manner in order to promote
investment in HUD's domestic manufacturing base, strengthen critical
supply chains, and position United States workers and businesses to
compete globally in the 21st century. HUD understands that advancing
Made in America objectives is a continuous effort. HUD plans to move
forward to implement the new requirements in a way that maximizes
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coordination and collaboration to support long-term investments in
domestic production.
HUD recognizes that there are exigent circumstances, particularly
with respect to the conduct of maintenance and other rehabilitation and
repair activities in connection with affordable housing and community
development projects, that warrant the exclusion from the application
of the BAP in the public interest. Specifically, where an award for
Federal Financial Assistance is being utilized to repair or conduct
maintenance of infrastructure within the meaning of the Act in exigent
circumstances, the ability to quickly respond and address the need is
critical to ensuring the protection of life, safety and property of
residents and community members. This ability to immediately respond to
such situations could be compromised if the grantee or recipient is
required to navigate the complex BAP requirements for such an activity
in the midst of the exigent circumstances.\1\ Such a waiver will allow
HUD grantees and funding recipients to focus their efforts on such
critical projects. Proposing the waiver is not an alternative to
increasing domestic production. It is actually a tool to promote
investment in our domestic manufacturing base in the long term. The
waiver is in the interest of efficiency, to ease burdens for grantees
and recipients, avoid unnecessary costs, and avoid delays to projects
that are critical and time sensitive. The waiver will also allow HUD to
focus, particularly in the early phases of BABA implementation, on key
products and critical supply chains where increased U.S. manufacturing
can best advance HUD's economic and national security. This waiver will
also allow recipients to continue with projects. Without this waiver,
HUD will likely lose grantee and funding recipient participation, be
exposed to liabilities if HUD forces grantees and funding recipients to
modify their current plans to come into compliance or delay critical
activities to protect life, safety and property, and will negatively
impact the most vulnerable Americans HUD seeks to serve.
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\1\ Please note that section 70912(4)(B) of the Act excludes
``pre and post disaster or emergency response expenditures from
inclusion within the definition of Federal Financial Assistance
subject to the BAP. The Office of Management and Budget's April 18,
2022, memorandum, ``Initial Implementation Guidance on Application
of Buy America Preference in Federal Financial Assistance Programs
for Infrastructure'' (M-22-11) confirms that pre and post disaster
or emergency response expenditures'' includes those expenditures
``that are (1) authorized by statutes other than the Stafford Act,
42 U.S.C. 5121 et seq., and (2) made in anticipation of or response
to an event or events that qualify as an ``emergency'' or ``major
disaster'' within the meaning of the Stafford Act, id. section
5122(1), (2).'' As a result, HUD's provision of Federal Financial
Assistance through specific emergency and disaster recovery grants,
(e.g., CDBG-DR grants), which are appropriated by Congress in in
response to an emergency or disaster within the meaning of the
Stafford Act are statutorily excluded from the applicability of BAP.
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For example, if a public housing development is damaged by a boiler
malfunction in the middle of the winter, the need to repair the damaged
structure and replace the boiler is of immediate concern in protecting
the life, safety, and property of the residents of that public housing
development. Additionally, for example, if an emergency or fire exit
door is damaged and becomes unusable, the need to repair the exit door
is of immediate concern to protecting the life, safety and property of
the residents of that public housing development. Included within the
scope of exigent circumstances are the remediation of defects impacting
housing quality standards that existing HUD policy requires to be
completed within 30 days or less. The potential consequences and impact
of incidents meeting these standards can endanger the life, safety or
property of residents and the community, and necessitate urgent action
to remediate the issue. Thus, for purposes of this waiver, HUD will
consider exigent circumstances to include circumstances where
undertaking the BAP covered activity without delay is necessary to
protect life, safety or provide necessary security to residents or
community members, or to prevent the destruction of property. The
waiver of BAP will apply provided such remediation is carried out
within the time period required by HUD policy.
In fiscal year 2022, HUD grantees will receive more than $15
billion through the Department's programs where infrastructure is an
eligible activity and may be subject to the BAP. For example, Community
Development Block Grant (``CDBG'') funds may be used for infrastructure
projects (e.g., water and sewer improvements, street improvements,
neighborhood facilities) or non-infrastructure uses (e.g., senior
services, youth services, operation of food banks, administrative and
planning expenses). HUD estimates that 40 percent of CDBG funds awarded
in 2021 ($1.4 billion of $3.5 billion total) were used on
infrastructure projects where the BAP could apply. HUD does not
currently track funds used on infrastructure projects for an exigent
circumstance, but estimates that in an average year, less than 1
percent of annual CDBG funds are used for urgent needs activities.
HUD believes that full compliance with the BAP in exigent
circumstances will create undue hardship due to the anticipated
burdensome delays to ensure compliance with the BAP and, as noted,
could jeopardize the life, health and safety of residents and community
members unnecessarily for funds being utilized in exigent
circumstances. As a result, HUD has determined that it is not in the
public interest to impose the BAP on projects completing covered
infrastructure activities in exigent circumstances.
HUD expects to review this waiver every five years from the
effective date of this waiver or more often as appropriate. Funds
obligated by HUD during the time period this waiver is effective will
not be required to apply the BAP when funds are expended by the grantee
or funding recipient in connection with exigent circumstances as
described in this waiver.
V. Impact of This Waiver on Other Federal Financial Assistance
Where the BAP or other BABA requirements are made applicable to
projects of a grantee or funding recipient by another Federal agency,
the grantee or funding recipient may not rely on this waiver as a
waiver of any requirement imposed by the other Federal agency for the
projects, nor is the grantee or funding recipient exempt from the
application of those requirements in accordance with the requirements
of the Federal agency providing such Federal Financial Assistance.
VI. Assessment of Cost Advantage of a Foreign-Sourced Product
Under OMB Memorandum M-22-11, ``Memorandum for Heads of Executive
Departments and Agencies,'' published on April 18, 2022, agencies are
expected to assess ``whether a significant portion of any cost
advantage of a foreign-sourced product is the result of the use of
dumped steel, iron, or manufactured products or the use of injuriously
subsidized steel, iron, or manufactured products'' as appropriate
before granting a public interest waiver.\2\ HUD's analysis has
concluded that this assessment is not applicable to this waiver, as
this waiver is not based in the cost of foreign-sourced products. HUD
will perform additional market research during the duration of the
waiver to better understand the market to limit the
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use of waivers caused by dumping of foreign-sourced products.
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\2\ See OMB Memorandum M-22-08, Identification of Federal
Financial Assistance Infrastructure Programs Subject to the Build
America, Buy America Provisions of the Infrastructure Investment and
Jobs Act, <a href="https://www.whitehouse.gov/wp-content/uploads/2021/12/M-22-08.pdf">https://www.whitehouse.gov/wp-content/uploads/2021/12/M-22-08.pdf</a>.
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VII. Solicitation of Comments on the Waiver
As required under section 70914 of the Act, HUD is soliciting
comment from the public on the public interest waiver announced in this
Notice. In particular, HUD invites comments on the definition of
exigent circumstances that serves as the foundation for the application
of the waiver, including the types of activities undertaken in response
to such circumstances that should be considered within the scope of
this waiver. HUD also invites comments on the process through which
grantees or funding recipients may demonstrate or document reliance on
this waiver.
Marcia L. Fudge,
Secretary.
[FR Doc. 2022-24340 Filed 11-3-22; 4:15 pm]
BILLING CODE 4210-67-P
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