Notice2023-16798
Public Interest, General Applicability Waiver of Build America, Buy America Provisions as Applied to Pacific Island/Territory Recipients of HUD Federal Financial Assistance
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Published
August 7, 2023
Issuing agencies
Housing and Urban Development Department
Abstract
In accordance with the Build America, Buy America Act (BABA), this notice advises that HUD is proposing a public interest, general applicability waiver for a period of 18 months to the Buy America Domestic Content Procurement Preference ("Buy America Preference," or "BAP") as applied to Federal Financial Assistance ("FFA") used for infrastructure projects in the Commonwealth of Northern Mariana Islands ("CNMI"), Guam, American Samoa, (hereinafter collectively "Pacific Island/Territory Communities"). In the case of FFA obligated by HUD through its Community Development Block Grant (CDBG) programs on or after November 15, 2022, but prior to the effective date of the final waiver, the waiver applies to all expenditures incurred on or after the effective date of the final waiver up until the limited period of 18 months. For expenditures incurred on or after the effective date of the final waiver, the waiver applies both to funds obligated by HUD on or after the effective date of the final waiver and any expenditures up and until 18 months from the effective date of the final waiver.
Full Text
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<title>Federal Register, Volume 88 Issue 150 (Monday, August 7, 2023)</title>
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[Federal Register Volume 88, Number 150 (Monday, August 7, 2023)]
[Notices]
[Pages 52197-52200]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-16798]
[[Page 52197]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6407-N-01]
Public Interest, General Applicability Waiver of Build America,
Buy America Provisions as Applied to Pacific Island/Territory
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),
this notice advises that HUD is proposing a public interest, general
applicability waiver for a period of 18 months to the Buy America
Domestic Content Procurement Preference (``Buy America Preference,'' or
``BAP'') as applied to Federal Financial Assistance (''FFA'') used for
infrastructure projects in the Commonwealth of Northern Mariana Islands
(``CNMI''), Guam, American Samoa, (hereinafter collectively ``Pacific
Island/Territory Communities''). In the case of FFA obligated by HUD
through its Community Development Block Grant (CDBG) programs on or
after November 15, 2022, but prior to the effective date of the final
waiver, the waiver applies to all expenditures incurred on or after the
effective date of the final waiver up until the limited period of 18
months. For expenditures incurred on or after the effective date of the
final waiver, the waiver applies both to funds obligated by HUD on or
after the effective date of the final waiver and any expenditures up
and until 18 months from the effective date of the final waiver.
DATES: HUD published this proposed waiver for public comment on its
website on August 2, 2023. Pursuant to section 70914(c)(2) of BABA, HUD
is required to solicit comments from the public on this proposed
waiver. As a matter of policy, HUD has elected to provide the public
with an opportunity to comment for an extended period of thirty days
from the date published on HUD's web page in this instance. Comments on
the proposed waiver set out in this document are due on or before
September 1, 2023. HUD will consider comments received in response to
this Notice and announce its determination with respect to the adoption
of this notice, including any changes that may be made in response to
comments through a subsequent Notice.
ADDRESSES: Interested persons are invited to submit comments on the
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.
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
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>. Copies of all
submissions are available for inspection and downloading at
<a href="http://www.regulations.gov">www.regulations.gov</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="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#a4e6d1cdc8c0e5c9c1d6cdc7c5e6d1dde5c9c1d6cdc7c5e4ccd1c08ac3cbd2"><span class="__cf_email__" data-cfemail="c88abda1a4ac89a5adbaa1aba98abdb189a5adbaa1aba988a0bdace6afa7be">[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
funds newly obligated 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 Generally
Since the enactment of the Act, HUD has worked diligently to
develop a plan to fully implement the BAP across its FFA programs. HUD
understands that advancing Made in America objectives is a continuous
effort and believes setting forth a transparent schedule of future
implementation for FFA programs provides recipients, stakeholders, and
industry partners with the time and notice necessary to efficiently and
effectively implement the BAP in Pacific Island/Territory
Communities.\1\ Additionally, HUD
[[Page 52198]]
understands that similar to Tribal FFA Recipients, Pacific Island/
Territory Communities have significant complications accessing
construction materials, manufactured products, and steel needed for
infrastructure projects. HUD recently announced plans to move forward
with the implementation of the new BAP requirements in connection with
its award of FFA to non-Tribal Recipients in a manner designed to
maximize coordination and collaboration to support long-term
investments in domestic production. HUD continues its efforts to
implement the Act in those programs consistent with the guidance and
requirements of the Made in America Office of the Office of Management
and Budget, including guidance concerning compliance with the BAP.
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\1\ Pursuant to 42 U.S.C. 5302(a)(24)(24), the term ``insular
area'' means each of Guam, the Northern Mariana Islands, the Virgin
Islands, and American Samoa. As proposed, this waiver would only be
applicable for CNMI, Guam, American Samoa, if made final.
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In order to ensure orderly implementation of the BAP across HUD's
FFA programs awarding funds to non-Tribal Recipients, HUD has provided
public interest, general applicability waivers in order to implement
the BAP in phases in connection with the application of the BAP in such
programs and announced a corresponding implementation plan. As part of
those efforts, HUD has published two general applicability, public
interest waivers covering Exigent Circumstances and De Minimis and
Small Grants, which 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>.
Additionally, HUD proposes that it is in the public interest to
waive the BABA requirements for FFA awarded for infrastructure projects
in Pacific Island/Territory Communities while HUD works to gather more
information on supply chains, costs, and impacts. This proposed waiver
is critical to provide the time for HUD to collect and analyze evidence
to determine if a more targeted waiver of the BAP requirements is in
the public interest. The waiver would also allow time for HUD to offer
technical assistance to reduce the administrative burden to recipients
for projects in the remote Pacific Island/Territory Communities were
complying with the domestic sourcing requirements in BABA presents
challenges. HUD is concerned that failure to provide these remote
communities with flexibilities could perpetuate systemic barriers to
opportunities and benefits and limit HUD's ability to deliver resources
and benefits equitably to all in these Pacific Island/Territory
Communities. Additionally, HUD may need to dedicate significant staff
and contractor time to assist extremely remote Pacific Island/Territory
Communities with implementing preference requirements for the first
time and to support the increased workload to process project-specific
waivers. As such, HUD is interested in determining if these concerns
justify a targeted waiver and whether its initial assessment may or may
not be borne out by evidence.
III. Waivers
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 section 70914(b) must be published by the
agency with a detailed written explanation for the proposed
determination and provide an appropriate public comment period of 15 or
30 days depending on the substance of the waiver.
IV. Pacific Island/Territory Infrastructure and HUD Programs
Many Pacific Island/Territory Communities still lack basic
infrastructure such as roads, running water, and indoor plumbing. The
need for safe, decent, and sanitary housing is immense. For example,
the Northern Marianas are very far away from the U.S. Mainland. This
will create challenges with HUD providing technical assistance and
monitoring the use of the funds. It is also a place with very different
rules than the U.S. Mainland and is much more connected to Asia than to
the U.S. Mainland. Standard products that are absolute necessities in
the Pacific Island/Territory Communities, like typhoon-rated glass
windows and aluminum shutters, also cost significantly more if sourced
domestically. For example, representatives of Pacific Island/Territory
communities stated, ``the cost of aluminum is double if sourced from
the U.S. Mainland'' and ``The shipping cost from Korea or Asia for a
20-footer container is $3,000 but shipping from the mainland United
States is about $12,000.''
HUD is aware that substantial changes to shipping and supply chains
to incorporate domestic sourcing requirements for infrastructure
projects in Pacific Island/Territory Communities could take multiple
years to establish. For example, these economies have few local heavy
manufacturers and largely rely on established regional supply chains
from the Philippines. With the distance of economies in the Pacific
Island/Territory Communities, these communities must import products
via air or sea. Most goods, equipment, materials, and supplies are
imported and rely on shipping with associated timelines and
unpredictable shipping fuel cost fluctuations. Moreover, materials
sourced from the United States lead to additional shipping fees and
longer lead times, thus significantly extending construction activity
schedules. Lastly, ongoing gaps in supply chain availability impact
lead times for materials, increasing project timelines. For these
reasons, HUD is concerned that requiring compliance with the domestic
sourcing requirements in BABA at this time may increase already
elevated project completion times and costs--particularly in the short
run--and seeks time to better understand the local manufacturing
footprint and the balance of equities for residents of the Pacific
Island/Territory Communities.
For example, HUD Community Planning and Development Formula Program
Allocations for Pacific Island/Territory Communities include Community
Development Block Grant, HOME, Emergency Solutions Grant (``ESG''),
Housing Opportunities for Persons With AIDS Program (``HOPWA''), and
Housing Trust Fund (``HTF''). As shown below, there are HUD CDBG
formula grant recipients that are subject to the BAP pursuant to HUD's
Public Interest Phased Implementation Waiver of Build America, Buy
America Provisions as Applied to Recipients of HUD Federal Financial
Assistance, for 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 HOME and HTF, BABA applicability
will be in effect for funds obligated by HUD on or after August 23,
2024. For all other HUD FFA including ESG and HOPWA, BABA applicability
will be in effect for FFA used to purchase iron and steel used in
infrastructure projects for funds obligated by HUD on February 22,
2024. Subsequently, BABA applicability will be in effect for HUD FFA
obligated on or after August 23, 2024, for construction materials and
manufactured products. Therefore,
[[Page 52199]]
without a waiver, HUD FFA used in Pacific Island/Territory Communities
for infrastructure projects will be subject to the BAP.\2\
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\2\ See <a href="https://www.hud.gov/program_offices/comm_planning/budget">https://www.hud.gov/program_offices/comm_planning/budget</a>.
FY 2023 Community Planning and Development Formula Program Allocations
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Name STA CDBG HOME ESG HOPWA HTF
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American Samoa.................... AS................... $1,029,433 $298,791 $85,296 $0 $0
Guam.............................. GU................... 3,185,755 1,256,171 263,963 0 157,106.91
Northern Mariana Islands.......... MP................... 980,125 489,268 81,210 0 76,533.43
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FY 2023 Public and Indian Housing Program Allocations
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Name STA Operating fund Capital funds Section 8
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Guam............................ GU................ $5.33 million..... $3.2 million...... $38.3 million.
Northern Mariana Islands........ MP................ $0................ $0................ $3.3 million.
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Additionally, the Public and Indian Housing (``PIH'') Program
Allocations for Pacific Island/Territory Communities include the Guam
Housing & Urban Renewal Authority in Guam and the Northern Marianas
Housing Corporation in the Northern Marianas islands. Pursuant to the
phased implementation waiver, BABA applicability will be in effect for
funds obligated by HUD on or after August 23, 2024, for public housing
FFA used to purchase iron and steel, construction materials, and
manufactured products for maintenance projects.
The above-named programs are critical because they allow HUD to
support affordable housing and infrastructure needs in these specific
Pacific Island/Territory Communities--particularly for the benefit of
low- and moderate-income families. As of November 15, 2022, the BAP
applies to CDBG formula grants used to purchase iron and steel for
infrastructure projects. Accordingly, HUD must ensure that Pacific
Island/Territory Recipients are able to effectively implement the BAP
in a manner that ensures that the purposes of BABA are carried out,
while at the same time preventing additional undue barriers to the
development of Pacific Island/Territory infrastructure, which has
suffered from decades of underinvestment.
HUD has determined that additional time is needed to fully assess
the impacts that the BAP will have on Pacific Island/Territory
Recipients and to plan for the efficient and orderly implementation of
the BAP, as appropriate. HUD is particularly interested in developing a
specifically tailored waiver based on stakeholder and Pacific Island/
Territory Recipient feedback regarding the impact of the BAP on
infrastructure projects that are funded under HUD's various Pacific
Island/Territory programs. With the benefit of HUD's recently published
phased implementation waiver and Tribal consultation waiver extension,
HUD needs additional time to seek feedback from Pacific Island/
Territory Communities and funding recipients on whether and when HUD
should take a similar phased approach with respect to the
implementation of the BAP under its Pacific Island/Territory programs.
HUD will also assess the unique and diverse conditions of Pacific
Island/Territory Communities across the country and determine how the
BAP should be applied after taking those conditions into account.
V. Public Interest in a General Applicability Waiver of Buy America
Provisions for Pacific Island/Territory Recipients
In this Notice, HUD is seeking comment on a new limited, 18-month
public interest, general applicability waiver of the BAP in connection
with HUD's FFA used for infrastructure in Pacific Island/Territory
Communities to provide the Department with sufficient information to
successfully implement BABA. Infrastructure is an eligible activity
under some of the above-named programs and will be subject to the BAP.
Because the application of BAP mandated by the Act is new to all HUD
FFA for Pacific Island/Territory infrastructure projects, HUD needs
additional time to engage Pacific Island/Territory Communities about
the application of the BAP for Pacific Island/Territory projects--
particularly with the distance from economies, it is imperative to
determine how the BAP should be effectively applied to HUD's various
FFA for Pacific Island/Territory projects, how the BAP should be phased
in to allow for successful implementation, and how compliance will be
verified--all in a way to enhance infrastructure projects in these
areas. As such, there is a significant need for HUD to further engage
with Pacific Island/Territory Recipients. HUD now has the benefit of
having fully considered an appropriate method of phased implementation
across its other FFA programs and has begun the methodical
implementation of the BAP in those other FFA programs. At the same
time, HUD has determined that it is in the public's interest to not
apply the BAP to FFA awarded for infrastructure projects in Pacific
Island/Territory Communities prior to additional engagement.
VI. Planned Pacific Island/Territory Engagement
Based on HUD's observations about disaster recovery for three 2018
disasters in the Pacific--American Samoa's recovery from Cyclone Gita
and the most severe disaster--Typhoon's Mangkhut and Super Typhoon Yutu
in the Northern Marianas, it is necessary for HUD to solicit feedback
from Pacific Island/Territory Communities on other related issues,
including how to effectively implement the BAP for extremely remote
communities, such as the American Samoa. For example, the Northern
Marianas is comprised of fifteen islands, three of them that are
populated. Of the three, the most populated is Saipan (population
48,220), the nearby Tinian (3,136), and Rota (2,527), which is closer
to Guam than it is to Saipan. Much different than American Samoa, the
Northern Marianas are connected to Asia--two to four hours of flying to
get to Asia is closer than anywhere on the U.S. Mainland except Guam.
HUD acknowledges that Pacific Island/
[[Page 52200]]
Territory Communities have major concerns about availability of
American-made products from the U.S. Mainland and continue to struggle
with challenges because of their distance away from main supply
sources. Pacific Island/Territory Communities are already facing major
challenges with accessing construction materials, and major cost
overruns due to a lack of available materials--particularly in remote
Pacific Island/Territory Communities.
During the 18-month waiver period, HUD will thoroughly engage
Pacific Island/Territory housing practitioners, stakeholders, and FFA
recipients. HUD will do so by soliciting written feedback from Pacific
Island/Territory Communities and stakeholders specifically addressing
the impact of the BAP on HUD's Pacific Island/Territory programs. After
engaging and receiving feedback, HUD will seek to implement the BAP in
a manner that advances the Made in America objectives while also
ensuring that the BAP implementation does not serve as a major barrier
to Pacific Island/Territory Communities' efforts to develop critical
infrastructure. HUD will implement the BAP in a thoughtful manner that
ensures that Pacific Island/Territory Recipients can effectively
implement the BAP without substantial negative impacts on planned and
ongoing critical infrastructure projects. HUD will also seek to provide
additional technical assistance resources to ensure that Pacific
Island/Territory Recipients can build capacity and be in a better
position to comply with the BAP.
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. HUD's analysis has concluded
that this assessment is not applicable to this waiver, as this waiver
is not based on the cost of foreign-sourced products.
VIII. Limited Duration of the Waiver
HUD remains committed to the successful implementation of the
important BAP across its programs providing covered FFA for
infrastructure projects, while recognizing the unique needs and
geographically related challenges of Pacific Island/Territory
Communities. HUD is committed to engaging with Island/Territory
Communities, stakeholders, and FFA recipients as noted above to further
this goal.
IX. Solicitation of Comments
HUD is soliciting comment from the public on the proposed waiver
described in this Notice for a period of 30 days from the date of
publication on HUD's web page. If issued, this waiver will be
applicable to Pacific Island/Territory FFA that HUD obligates on or
after the effective date of the final waiver and in connection with the
expenditure of FFA, which had been previously obligated by HUD,
throughout the applicable waiver period.
Dated: August 2, 2023.
Marcia L. Fudge,
Secretary.
[FR Doc. 2023-16798 Filed 8-4-23; 8:45 am]
BILLING CODE 4210-67-P
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