Notice2022-24510
Public Interest Phased Implementation Waiver of Build America, Buy America Provisions as Applied to Recipients of HUD Federal Financial Assistance
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Published
November 9, 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 public interest waiver to further HUD's phased implementation of the Buy America Domestic Content Procurement Preference ("Buy America Preference," or "BAP") for recipients of Federal Financial Assistance ("FFA") provided by HUD. On May 5, 2022, HUD previously issued a separate waiver covering all FFA obligated by HUD on or before November 14, 2022, including Community Development Block Grant ("CDBG") formula grants. In order to fully focus on the successful implementation of the BAP in CDBG formula grants, one of HUD's largest grant programs, HUD has determined that it is in the public interest to propose a new public interest waiver of the application of the BAP for all other FFA provided by HUD. HUD is proposing that this waiver cover all FFA obligated by HUD during the ninety (90) day period after its effective date except for those funds utilized in connection with the purchase of iron or steel products in infrastructure projects funded by CDBG formula grants obligated by HUD on or after November 15, 2022. In addition, in the case of FFA obligated by HUD on or after November 15, 2022, but prior to the effective date of the final waiver, the waiver will apply to all expenditures incurred on or after the date of the final waiver, except for those funds utilized in connection with the purchase of iron or steel products in infrastructure projects funded by CDBG formula grants obligated by HUD on or after November 15, 2022. HUD is also, through this waiver, soliciting specific comment on the further phased implementation of the BAP in connection with the iron and steel products used in other non-CDBG formula grant FFA provided by HUD and in the full implementation of the BAP in connection with the use of construction materials and manufactured products in all infrastructure projects across HUD's FFA programs.
Full Text
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<title>Federal Register, Volume 87 Issue 216 (Wednesday, November 9, 2022)</title>
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[Federal Register Volume 87, Number 216 (Wednesday, November 9, 2022)]
[Notices]
[Pages 67709-67711]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-24510]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6331-N-06]
Public Interest Phased Implementation Waiver of Build America,
Buy America Provisions as Applied to 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
public interest waiver to further HUD's phased implementation of the
Buy America Domestic Content Procurement Preference (``Buy America
Preference,'' or ``BAP'') for recipients of Federal Financial
Assistance (``FFA'') provided by HUD. On May 5, 2022, HUD previously
issued a separate waiver covering all FFA obligated by HUD on or before
November 14, 2022, including Community Development Block Grant
(``CDBG'') formula grants. In order to fully focus on the successful
implementation of the BAP in CDBG formula grants, one of HUD's largest
grant programs, HUD has determined that it is in the public interest to
propose a new public interest waiver of the application of the BAP for
all other FFA provided by HUD. HUD is proposing that this waiver cover
all FFA obligated by HUD during the ninety (90) day period after its
effective date except for those funds utilized in connection with the
purchase of iron or steel products in infrastructure projects funded by
CDBG formula grants obligated by HUD on or after November 15, 2022. In
addition, in the case of FFA obligated by HUD on or after November 15,
2022, but prior to the effective date of the final waiver, the waiver
will apply to all expenditures incurred on or after the date of the
final waiver, except for those funds utilized in connection with the
purchase of iron or steel products in infrastructure projects funded by
CDBG formula grants obligated by HUD on or after November 15, 2022. HUD
is also, through this waiver, soliciting specific comment on the
further phased implementation of the BAP in connection with the iron
and steel products used in other non-CDBG formula grant FFA provided by
HUD and in the full implementation of the BAP in connection with the
use of construction materials and manufactured products in all
infrastructure projects across HUD's FFA programs.
DATES: HUD published this proposed waiver on its website on November 3,
2022. Comments on the waiver proposed in this document are due on or
before November 17, 2022. HUD will consider comments received and
announce any subsequent changes to this waiver through a subsequent
notice. If issued, the waiver would be applicable to awards that are
obligated on the effective date of the waiver and eighty-nine (89) days
thereafter for a total of ninety (90) days.
ADDRESSES: Interested persons are invited to submit comments on this
public interest, 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>.
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#e8aa9d81848ca9858d9a818b89aa9d91a9858d9a818b89a8809d8cc68f879e"><span class="__cf_email__" data-cfemail="c082b5a9aca481ada5b2a9a3a182b5b981ada5b2a9a3a180a8b5a4eea7afb6">[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'') (Pub. L. 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, beginning May 14, 2022, new awards of FFA by HUD through a
program for infrastructure, and any of those newly obligated funds then
obligated by the grantee, are covered under BABA provisions of the Act,
41 U.S.C. 8301 note, unless covered by a waiver.
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
[[Page 67710]]
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, on June 1, 2022(87 FR 33193) 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.
Following the expiration of the ``General Applicability Waiver of
Build America, Buy America Provisions as Applied to Recipients of HUD
Federal Financial Assistance'' (87 FR 26219), HUD will fully implement
the BAP for purposes of the purchase of iron and steel products used in
infrastructure projects funded with Federal Financial Assistance
provided by HUD through its CDBG formula grants obligated by HUD on or
after November 15, 2022. 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 and other Federal agencies have
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, General Applicability Waiver of Buy America
Provisions
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),\1\ encourages agencies to consider ways to
provide the assistance to funding recipients that is necessary and
effective for the implementation of the BAP, including consideration of
phased implementation of BAP where appropriate.
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\1\ 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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In Fiscal Year 2022, HUD grantees will receive more than $15
billion through the Department's programs where infrastructure is an
eligible activity that 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.
As HUD's previous Notices advised and as supported by several
comments received during the comment period, many of HUD's programs may
be subject to the BAP and have previously not required compliance with
similar Buy America preferences. Because the potential application of
BAP mandated by the Act is new to the majority of HUD's programs and
Federal Financial Assistance (``FAA''), HUD is choosing to implement
the BAP first with respect to all iron and steel products used in
infrastructure projects funded with FFA provided by HUD through its
CDBG formula grants on or after November 15, 2022. In order to focus on
this implementation, HUD is proposing to waive the application of the
BAP in connection with all other FAA. This will provide an additional
limited period to allow for further consideration of the most efficient
methods of implementation of the BAP across the remaining HUD programs
for construction materials and manufactured products more generally.
This waiver advances BABA by reducing the administrative burden to
potential assistance recipients where the costs of uncertainty in
compliance with BABA could distract from the focus on the efficient and
effective implementation of BABA in one of HUD's largest FFA programs
and allows for broader phased implementation once further clarity and
guidance on the implementation is received. Failure to provide
recipients such flexibilities could delay the award for infrastructure
projects as grantees and funding recipients must exert considerable
effort in accounting for the sourcing for miscellaneous, low-cost
construction materials without the benefit of complete guidance on the
Act's requirements.
HUD believes that better coordination with HUD FAA recipients in
the implementation of BABA will avoid unnecessary and undue hardship.
Such a waiver will allow grantees and funding recipients to focus their
efforts on such critical projects. Proposing this waiver is not an
alternative to increasing domestic production. Rather this waiver will
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 our economic and national
security. This waiver will also allow grantees and funding recipients
to continue with projects in connection with iron and steel products
where Made in America requirements have long been contemplated--
providing greater ease of implementation for HUD's CDBG formula
grantees. Without this waiver, HUD grantee and funding recipient
participation could be impacted, such as modification of current plans.
As HUD's previous Notice advised and as supported by several
comments received during the comment period, many of the HUD's programs
that may be subject to the BAP and have previously not required
compliance with similar Buy America preferences. Because the potential
application of BAP mandated by the Act is new to the
[[Page 67711]]
majority of HUD's FFA programs, this waiver advances BABA by targeting
the initial phased implementation to a well-developed industry in
connection with infrastructure projects being undertaken by
sophisticated CDBG formula grantees. HUD is seeking comment on the
further implementation of the BAP but will focus specific attention to
the full implementation of the BAP in connection with the use of iron
and steel in infrastructure projects in other FFA programs utilizing
HUD funds within this waiver period.
No funds obligated by HUD or the grantee/funding recipient during
the period of the waiver that would be exempted from compliance with
BAP as a result of the waiver will be required to apply the BAP.
V. Impact of This Waiver on Other Federal Financial Assistance
No funds that have been obligated by HUD before November 14, 2022,
or during the pendency of this waiver will require compliance with the
BAP, with the exception of iron and steel products used in connection
with infrastructure projects funded through CDBG formula grants
obligated by HUD on or after November 15, 2022, or unless otherwise
required by another FFA award. Where the BAP or other BABA requirements
are made applicable to a project of a grantee or funding recipient by
another Federal agency, those requirements are not waived by this
waiver, 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 waiver period to
better understand the market and to limit the 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 waiver announced in this Notice. In
particular, HUD invites comments on the waiver of application of the
BAP for iron and steel products in connection with infrastructure
projects funded through HUD's FFA programs other than CDBG formula
grants. HUD also seeks specific comment on how it may best further
phase in the application of the BAP for all construction materials and
manufactured products in connection with CDBG formula grants and all
other HUD FFA programs. HUD invites comments on what time period would
be appropriate for purposes of achieving these various phases of
orderly implementation of the Act.
Marcia L. Fudge,
Secretary.
[FR Doc. 2022-24510 Filed 11-7-22; 11:15 am]
BILLING CODE 4210-67-P
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