Notice2023-03555
Public Interest Phased Implementation Waiver for FY 2022 and 2023 of Build America, Buy America Provisions as Applied to Recipients of HUD Federal Financial Assistance
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Published
February 21, 2023
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 of the Buy America Domestic Content Procurement Preference ("Buy America Preference," or "BAP") for recipients of Federal Financial Assistance ("FFA") provided by HUD. When final, the waiver will provide an updated implementation schedule for application of the BAP to HUD FFA. HUD is also announcing its proposed BAP implementation schedule for all HUD FFA used to purchase iron or steel products in infrastructure projects in HUD programs other than the CDBG formula grants addressed in the November 23, 2022, waiver. HUD is also announcing its proposed BAP implementation schedule for the purchase of manufactured products and specified construction materials including: (1) non-ferrous metals; (2) lumber; (3) composite building materials; and (4) plastic and polymer-based pipe and tube (herein after referred to as "specified construction materials").
Full Text
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<title>Federal Register, Volume 88 Issue 34 (Tuesday, February 21, 2023)</title>
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[Federal Register Volume 88, Number 34 (Tuesday, February 21, 2023)]
[Notices]
[Pages 10533-10536]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-03555]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. 6331-N-10]
Public Interest Phased Implementation Waiver for FY 2022 and 2023
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 of the Buy America Domestic Content Procurement
Preference (``Buy America Preference,'' or ``BAP'') for recipients of
Federal Financial Assistance (``FFA'') provided by HUD. When final, the
waiver will provide an updated implementation schedule for application
of the BAP to HUD FFA. HUD is also announcing its proposed BAP
implementation schedule for all HUD FFA used to purchase iron or steel
products in infrastructure projects in HUD programs other than the CDBG
formula grants addressed in the November 23, 2022, waiver. HUD is also
announcing its proposed BAP implementation schedule for the purchase of
manufactured products and specified construction materials including:
(1) non-ferrous metals; (2) lumber; (3) composite building materials;
and (4) plastic and polymer-based pipe and tube (herein after referred
to as ``specified construction materials'').
DATES: HUD published this proposed waiver on its website on February
15, 2023. Comments on the waiver proposed in this document are due on
or before March 2, 2023. HUD will consider comments received and
announce any subsequent changes to this waiver through a subsequent
Notice.
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). 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
[[Page 10534]]
make an accessible telephone call, please visit <a href="http://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs">www.fcc.gov/consumers/guides/telecommunications-relay-service-trs</a>.
FOR FURTHER INFORMATION CONTACT: Faith Rogers, Department of Housing
and Urban Development, 451 Seventh Street SW, Room 10126, 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="http://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs">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#4301362a2f27022e26312a202201363a022e26312a2022032b36276d242c35"><span class="__cf_email__" data-cfemail="86c4f3efeae2c7ebe3f4efe5e7c4f3ffc7ebe3f4efe5e7c6eef3e2a8e1e9f0">[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, starting May 14, 2022, new awards of HUD FFA, and any of those
newly obligated funds by HUD then obligated by the grantee for
infrastructure projects, 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. HUD understands that advancing Made in America
objectives is a continuous effort and believes this transparent
schedule of future implementation will provide industry partners and
FFA recipients with the time and notice necessary to efficiently and
effectively implement the BAP. HUD's proposed plans to move forward
with the implementation of the new BAP requirements is designed to
maximize coordination and collaboration to support long-term
investments in domestic production. HUD will continue its efforts to
implement the Act consistent with the guidance and requirements of the
Made in America Office of the Office of Management and Budget,
including anticipated guidance concerning appropriate compliance with
the BAP. HUD is also, through this waiver, soliciting specific comment
on the appropriate manner to implement the BAP in connection with the
use of construction materials and manufactured products in all
infrastructure projects across HUD's FFA programs.
In order to ensure orderly implementation of the BAP across HUD's
programs, HUD has provided public interest, general applicability
waivers in order to implement the BAP in phases in connection with the
application of the BAP across HUD's FFA programs and to provide HUD
with sufficient time to solicit information from the public relating to
the agency's implementation of the BAP in connection with FFA awards
made by HUD. HUD has previously published general applicability, public
interest waivers to the BAP to provide the agency with sufficient time
to solicit information from the public relating to the agency's
implementation of the BAP in connection with FFA awards made by HUD. On
November 23, 2022, HUD issued a separate waiver covering all HUD FFA
obligated by HUD on or before February 21, 2023, with the exception of
the BAP as to the purchase of iron and steel for infrastructure
projects funded by Community Development Block Grant (``CDBG'') formula
grants on or after November 15, 2022. Separately, HUD waived the
application of the BAP in connection with HUD FFA provided to Tribes,
Tribally Designated Housing Entities (``TDHE''), and other Tribal
Entities (referred to herein as ``Tribal FFA'') to allow time for HUD
to complete the Tribal consultation process regarding implementation of
the BAP in connection with infrastructure projects. This Notice does
not apply to Tribal FFA covered by that separate waiver.\1\
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\1\ General Applicability Waiver of Build America, Buy America
Provisions as Applied to Tribal Recipients of HUD Federal Financial
Assistance (Effective until May 14, 2023) address Tribes, Tribally
Designated Housing Entities (``TDHE''), and other Tribal Entities'
implementation of BABA. (May 5, 2022, 87 FR 26221).
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Details on HUD's implementation of the BABA requirements, including
two public interest waivers covering Exigent Circumstances and De
Minimis and Small Grants and a separate public interest waiver for all
Tribal FFA, can be found at <a href="http://www.hud.gov/program_offices/general_counsel/BABA">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), 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. Strategic and phased
steps toward full BABA compliance refines the scope for what is exempt
from BAP while providing a clear timeline for full implementation,
consistent with the Congressional intent and stakeholder interest. It
also allows HUD grantees and stakeholders the time needed to construct
stronger supply channels to include new or amended vendor contracts
that comply with BABA requirements.
In fiscal year 2023, HUD grantees will receive $14 billion through
the Department's programs where infrastructure is an eligible activity
and may be subject to the BAP. For example, Choice Neighborhoods
(``CN'') funds
[[Page 10535]]
may be used for infrastructure projects (e.g., transform severely
distressed public and assisted properties with high-quality mixed-
income) or non-infrastructure uses (e.g., business services, safety,
children's education and to improve employment, income, and health
outcomes). HUD estimates that up to 85 percent of Choice Neighborhoods
Implementation Grant funds to be awarded in 2023 ($289 million of $340
million total) will be used on housing and infrastructure projects
where the BAP may 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 American preferences. Because the potential application of
BAP mandated by the Act is new to the majority of HUD's programs and
FFA, HUD chose to implement the BAP first with respect to all iron and
steel products used in infrastructure projects funded with HUD FFA on
or after November 15, 2022, through its CDBG formula grants.
To focus its efforts on the implementation of the BAP for CDBG
formula grants used to purchase iron and steel products as of November
15, 2022 and specified construction materials purchased with Fiscal
Year 2024 CDBG formula grant and Recovery Housing Program funds used in
infrastructure projects, HUD is proposing to waive the application of
the BAP: (1) as to other programs for HUD FFA used to purchase iron and
steel in addition to specified construction materials; (2) as to
construction materials not specified in this Notice; (3) manufactured
products for other programs and CDBG formula and Recovery Housing
Program grants, consistent with the proposed implementation schedule
set forth below:
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Construction
Iron and steel Construction materials--not Manufactured
materials--listed listed products
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Tribes, Tribally Designated Not Addressed in Not Addressed in Not Addressed in Not Addressed in
Housing Entities, and Tribal this Notice. See this Notice. See this Notice. See this Notice. See
Entities. note 1. note 1. note 1. note 1.
CDBG Formula Grants............ November 15, 2022-- Fiscal Year 2024.... Fiscal Year 2025.. Fiscal Year 2025.
as described in
the November 23,
2022 Final Waiver.
Choice Neighborhood, Lead February 22, 2023. August 23, 2024..... August 23, 2024... August 23, 2024.
Hazard Reduction, and Healthy
Homes Production Grants.
Recovery Housing Program August 23, 2023... Fiscal Year 2024.... Fiscal Year 2025.. Fiscal Year 2025.
(``RHP'') Grants.
All other HUD FFA except HOME, February 22, 2024. August 23, 2024..... August 23, 2024... August 23, 2024.
Housing Trust Fund, and Public
Housing FFA used for
maintenance projects.
HOME, Housing Trust Fund, and August 23, 2024... August 23, 2024..... August 23, 2024... August 23, 2024.
Public Housing FFA used for
maintenance projects.
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This proposed phased implementation, will allow for further
consideration of the most efficient methods of implementation across
the remaining HUD programs and for manufactured products and
construction materials not specified in this Notice. The proposed
waiver advances BABA by providing transparency in HUD's implementation
of the BAP, 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 an orderly and efficient manner, and provides transparency
concerning the full implementation plans in connection with the
purchase of iron and steel for infrastructure products. HUD anticipates
that it may propose a new implementation schedule for construction
materials in other programs, construction materials not specified in
this Notice as to other programs in addition to CDBG formula grant and
Recovery Housing Program funds, and manufactured products for all HUD
programs once further clarity and guidance on the implementation is
available. Failure to provide recipients such flexibilities and
transparency could delay the award for infrastructure projects as
grantees and funding recipients must exert considerable effort in
changing their plans and accounting for the sourcing of materials in
construction projects without the benefit of complete guidance on the
Act's requirements.
Additionally, HUD believes that better coordination in the
implementation of BABA will avoid unnecessary and undue hardship that
could jeopardize the timely and cost-effective completion of such
projects as grantees and funding recipients that have previously not
been subject to requirements similar to BAP await guidance on how to
come into full compliance. Such a waiver will allow grantees and
funding recipients to focus their efforts on such critical projects and
allow HUD to focus its training and technical assistance on those
grantees beginning the implementation process. Proposing this waiver is
not an alternative to increasing domestic production. It is a tool to
assist HUD in its implementation of 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 and lead globally in
the 21st century. This waiver is in the interest of efficiency, to ease
burdens for HUD grantees and funding recipients, avoid unnecessary
costs, and avoid delays to projects that are critical and time
sensitive. This 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 our
economic and national security. This
[[Page 10536]]
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 grantees. 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 we seek to serve.
As HUD's previous Notice advised and as supported by several
comments received during the comment period, many of the HUD's programs
may be subject to the BAP and have previously not required compliance
with similar Buy American preferences. Because the potential
application of BAP mandated by the Act is new to the majority of HUD's
program FFA, this waiver advances BABA by targeting the next phase of
implementation to include Choice Neighborhoods (``CN''), a place-based
grant program which helps communities develop and implement locally
driven comprehensive plans to transform neighborhoods. In Fiscal Year
2023, HUD received $350 million for CN, which Public Housing
Authorities and local jurisdictions apply for competitively. CN
provides planning grants, which provide for the development of
comprehensive plans, and implementation grants, which allow communities
to implement their plans--including for use on infrastructure
activities. This allows for efficient phased implementation while
reducing the administrative burden to potential grantees and funding
recipients where the costs of uncertainties surrounding compliance with
BABA could distract from the focus on higher value BABA compliant
items. Failure to provide recipients such flexibilities could delay the
award for infrastructure projects as grantees and funding recipients
must exert considerable effort accounting for the sourcing for
miscellaneous, low-cost items. HUD is seeking comment on the further
implementation of the BAP but will focus specific attention on the full
implementation of the BAP in connection with the use of iron and steel
in infrastructure projects in other FFA programs utilizing HUD FFA
within this waiver period, except for Tribal FFA, and in connection
with the use of specified construction materials in infrastructure
projects funded by CDBG formula grant and Recovery Housing Program
funds within this waiver period.
V. Impact of This Waiver on Other FFA
HUD will not require compliance with the BAP in connection with the
use of any HUD FFA obligated by HUD before November 14, 2022, or during
the pendency of any other applicable BABA waiver issued by HUD,
including this waiver, as applicable, after it is finalized. However,
where the BAP or other ``Buy American'' 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 FFA.
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. 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.
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 its updated implementation schedule
and corresponding waiver of application of the BAP in connection with
infrastructure projects funded by HUD FFA. HUD also seeks specific
comment on how it may best further phase in the application of the BAP:
(1) as to other programs for HUD FFA used to purchase iron and steel in
addition to specified construction materials; (2) as to construction
materials not specified in this Notice; (3) manufactured products for
other programs and CDBG formula and Recovery Housing Program grants HUD
invites comments on what time period would be appropriate purposes of
achieving these various phases of orderly implementation of the Act.
If issued, the waiver would be applicable to HUD FFA that HUD
obligates on or after the effective date of the final waiver and
throughout the applicable waiver periods consistent with the
implementation schedule as described above. Additionally, for HUD FFA
obligated by HUD on or after February 22, 2023, but prior to the
effective date of the final waiver described in this Notice, HUD would
waive application of BAP for all expenditures incurred by grantees
after the effective date of the Final Notice, consistent with the
implementation periods described above.
Marcia L. Fudge,
Secretary.
[FR Doc. 2023-03555 Filed 2-17-23; 8:45 am]
BILLING CODE 4210-67-P
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