Notice2022-27096
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
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 has issued 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 issue a new public interest waiver of the application of the BAP for all other FFA obligated by HUD. By this notice, HUD announces that it is waiving the application of the BAP on or after the effective date of this waiver for all FFA obligated by HUD on or before February 21, 2023, 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, HUD is waiving the application of the BAP for 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.
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 76500-76502]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-27096]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6331-N-06A]
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: 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 has issued 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
issue a new public interest waiver of the application of the BAP for
all other FFA obligated by HUD. By this notice, HUD announces that it
is waiving the application of the BAP on or after the effective date of
this waiver for all FFA obligated by HUD on or before February 21,
2023, 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, HUD is
waiving the application of the BAP for 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.
DATES: As required under section 70914 of the Act, HUD published a new
proposed public interest phased implementation waiver on its website on
November 3, 2022. In addition, HUD published the proposed waiver in the
Federal Register. Comments on that proposed waiver were initially
stated to be due on or before November 17, 2022, but HUD extended the
deadline to comment until November 21, 2022. Through this final notice,
HUD is announcing that it has issued this waiver effective November 23,
2022. This waiver is effective as stated herein for FFA obligated on
the effective date of the waiver and until February 21, 2023 for a
total of ninety (90) days and, in the case of FFA obligated by HUD on
or after November 15, 2022 but prior to the effective date of the final
waiver, for 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.
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 <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#0e4c7b67626a4f636b7c676d6f4c7b774f636b7c676d6f4e667b6a20696178"><span class="__cf_email__" data-cfemail="0c4e796560684d61697e656f6d4e79754d61697e656f6d4c647968226b637a">[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
[[Page 76501]]
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 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 published two
additional long-term public interest waivers of the application of the
BAP in exigent circumstances and in connection with Small Grants and De
Minimis expenditures. Additionally, HUD determined that it 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, unless such purchases are covered by
another applicable waiver issued by HUD. 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'' (``OMB Memorandum M-22-11''),\i\ 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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\i\ <a href="https://www.whitehouse.gov/wp-content/uploads/2022/04/M-22-11.pdf">https://www.whitehouse.gov/wp-content/uploads/2022/04/M-22-11.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 (``FFA''), 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 waiving the application of the BAP in
connection with all other FFA provided by HUD. 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 FFA 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. Issuing this
[[Page 76502]]
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 also allows 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.
By this notice, HUD announces that it is waiving the application of
the BAP for all FFA obligated by HUD on or after November 23, the
effective date of this waiver, and on or before February 21, 2023,
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, HUD is waiving the
application of the BAP for 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.
As HUD's previous notice advised and as supported by several
comments received during the comment period for that waiver, 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
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 intends to 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. 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 15 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 were supportive
of the orderly implementation of the BAP, but were varied in the
commenters' recommendations as to how to best accomplish such
implementation.
A few commenters expressed support for a waiver of broader scope,
potentially excluding all affordable housing programs from requirements
to apply the BAP. A similar number of commenters requested that HUD
move more expeditiously to fully implement the BAP across all HUD FFA
programs. HUD appreciates the comments from both perspectives, but
believes that the strategic implementation of iron and steel purchase
requirements of the BAP in connection with CDBG formula grants
obligated by HUD on or after November 15, 2022, is an appropriate first
step towards the appropriate implementation of the BAP. Such a measured
step forward in implementation of the Act represents an appropriate
balancing of the intent of the Act with the public interest in the
continued efficiency and success of infrastructure projects funded
through HUD's affordable housing and community development programs,
the majority of which have not previously been subject to Buy America
requirements to the extent of those included in the BAP. HUD therefore
declines to alter the scope of the proposed phased implementation
waiver at this time. HUD will continue to monitor the implementation of
the BAP across its programs to ensure the most robust application
possible in light of the important public interests discussed above.
Several proponents of the waiver requested that HUD provide
guidance regarding the implementation of the BAP and extend this waiver
until after the provision of such guidance. HUD appreciates these
comments as well and will continue to work to develop robust guidance
regarding the implementation of the BAP across its programs. HUD
remains committed to reviewing its plans to provide for the effective
and efficient implementation of the Act across its programs but is
declining to extend the term of this waiver at this time.
V. Impact of This Waiver on Other Federal Financial Assistance
No funds that have been obligated by HUD on or 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, 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. 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.
Marcia L. Fudge,
Secretary.
[FR Doc. 2022-27096 Filed 12-13-22; 8:45 am]
BILLING CODE 4210-67-P
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