Notice2022-27095
Public Interest Waiver of Build America, Buy America Provisions for Exigent Circumstances as Applied to Certain Recipients of HUD Federal Financial Assistance
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Published
December 14, 2022
Effective
November 23, 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 issuing 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 ("FFA") 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 departmentwide waiver for exigent circumstances 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 239 (Wednesday, December 14, 2022)</title>
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[Federal Register Volume 87, Number 239 (Wednesday, December 14, 2022)]
[Notices]
[Pages 76505-76508]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-27095]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6331-N-05A]
Public Interest Waiver of Build America, Buy America Provisions
for Exigent Circumstances 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: Final 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 issuing 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 (``FFA'')
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
departmentwide waiver for exigent circumstances is in the public
interest. The waiver will assist HUD and its grantees and funding
[[Page 76506]]
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: As required under section 70914 of the Act, HUD published this
proposed waiver on its website on October 31, 2022, for public comment.
In addition, HUD published the proposed waiver in the Federal Register.
Comments on the proposed waiver set out in this document were due on or
before November 15, 2022. Through this Final Notice, HUD is announcing
that it has issued this waiver effective November 23, 2022. This waiver
will remain effective for a period of five years or such shorter time
period as HUD may announce via notice.
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#a1e3d4c8cdc5e0ccc4d3c8c2c0e3d4d8e0ccc4d3c8c2c0e1c9d4c58fc6ced7"><span class="__cf_email__" data-cfemail="d99bacb0b5bd98b4bcabb0bab89baca098b4bcabb0bab899b1acbdf7beb6af">[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 FFA 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
FFA 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. HUD published a notice proposing the waiver that
is being finalized through this notice on its website on October 31,
2022, and via the Federal Register. 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 issuing 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. 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 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 FFA
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.\i\ Such a waiver will
[[Page 76507]]
allow HUD grantees and funding recipients to focus their efforts on
such critical projects. Issuing this waiver is not an alternative to
increasing domestic production. 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, delays
may occur to critical activities to protect life, safety, and property,
which may negatively impact the most vulnerable Americans HUD seeks to
serve.
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\i\ 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 infrastructure project 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. Consideration of Public Comments on the Waiver
As required under section 70914 of the Act, HUD solicited comment
from the public on the public interest waiver announced in this notice
on its website and then published the proposed waiver in the Federal
Register. A total of 11 comments were received in response to the
proposed waiver. HUD thoroughly reviewed and considered each of the
comments in determining to move forward with the issuance of this
waiver as published in this final notice. The comments generally
favored an exigent circumstances waiver as proposed.
A few commenters expressed support for a broader waiver and greater
deference to the determinations of grantees in terms of projects that
fall within the scope of exigent circumstances. Several proponents of
the waiver requested that HUD provide greater clarity regarding the
implementation of the BAP and the appropriate application of this
waiver. HUD appreciates these comments and will continue to work to
develop robust guidance regarding the implementation of the BAP across
its programs. HUD remains committed to reviewing the waivers it issues
every five years or more often if necessary and appropriate.
A few comments were received from manufacturers and trade
organizations that opposed portions of the proposed waiver because they
would prefer a more narrowly tailored waiver, if a waiver is issued at
all. Several of these comments expressed concern that the waiver would
give rise to a loophole to avoid compliance with the BAP. HUD
appreciates the comments but believes that the waiver is sufficiently
narrowly tailored to specific actions necessary to protect life, safety
and property from imminent threats that the risk of abuse is outweighed
by the need to provide flexibility to act swiftly in exigent
circumstances.
HUD expects the future guidance and technical assistance it
provides to grantees regarding the implementation of the Act to address
any concerns that the scope or applicability of this waiver will be
misconstrued by grantees. HUD will not allow the use of the waiver in
any artificial or contrived circumstances designed to avoid the proper
application of the BAP requirements. HUD has therefore declined to
modify the waiver at this time, but will continue to monitor the usage
of the waiver so it may swiftly address any future confusion over the
proper application of the waiver. The complexities of applying the BAP
in exigent circumstances where there is a risk posed to life, safety,
or property are such that HUD maintains, for the reasons outlined
herein, the public interest necessitates this waiver of the BAP.
HUD will continue its work to assess compliance alternatives and
options best suited to enable grantees and funding recipients to
swiftly address projects necessitated by exigent circumstances and will
reevaluate this waiver in five years or sooner as appropriate.
Additionally, HUD will continue to assess the need for and provide
additional guidance for funding
[[Page 76508]]
recipients and grantees to ensure the appropriate implementation of the
BAP in its programs. At this time, HUD is issuing, without substantive
change other than minor, inconsequential grammatical revisions this
Exigent Circumstances Waiver via this final notice.
VI. 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.
VII. 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.\ii\ 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 use of waivers
caused by dumping of foreign-sourced products.
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\ii\ 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>.
Marcia L. Fudge,
Secretary.
[FR Doc. 2022-27095 Filed 12-13-22; 8:45 am]
BILLING CODE 4210-67-P
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