Notice2024-29489
Notice of Proposed Waiver of Buy America Requirements for the Pacific Island Territories and the Freely Associated States
Primary source
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Published
December 16, 2024
Issuing agencies
Transportation Department
Abstract
The Department of Transportation (DOT) is seeking comments on a proposed general applicability public interest waiver of the requirements of section 70914(a) of the Build America, Buy America Act (BABA) and related domestic preference statutes administered by DOT and its Operating Administrations (OAs) for Federal financial assistance awarded for infrastructure projects located in the Commonwealth of Northern Mariana Islands (CNMI), Guam, and American Samoa, collectively referred to as the Pacific Island territories. The proposed waiver would also apply to discretionary grant assistance provided by DOT to the Freely Associated States (the Republic of Palau, Republic of the Marshall Islands, and Federated States of Micronesia) in the Pacific that is subject to a domestic preference statute (which does not include BABA, as that statute only applies to the United States and its territories). The waiver will remain in effect for five years after the effective date of the final waiver.
Full Text
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<title>Federal Register, Volume 89 Issue 241 (Monday, December 16, 2024)</title>
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[Federal Register Volume 89, Number 241 (Monday, December 16, 2024)]
[Notices]
[Pages 101688-101691]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-29489]
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DEPARTMENT OF TRANSPORTATION
Office of the Secretary
[Docket No.: DOT-OST-2024-0129]
Notice of Proposed Waiver of Buy America Requirements for the
Pacific Island Territories and the Freely Associated States
ACTION: Notice; request for comments.
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SUMMARY: The Department of Transportation (DOT) is seeking comments on
a proposed general applicability public interest waiver of the
requirements of section 70914(a) of the Build America, Buy America Act
(BABA) and related domestic preference statutes administered by DOT and
its Operating Administrations (OAs) for Federal financial assistance
awarded for infrastructure projects located in the Commonwealth of
Northern Mariana Islands (CNMI), Guam, and American Samoa, collectively
referred to as the Pacific Island territories. The proposed waiver
would also apply to discretionary grant assistance provided by DOT to
the Freely Associated States (the Republic of Palau, Republic of the
Marshall Islands, and Federated States of Micronesia) in the Pacific
that is subject to a domestic preference statute (which does not
include BABA, as that statute only applies to the United States and its
territories). The waiver will remain in effect for five years after the
effective date of the final waiver.
DATES: Comments must be received by December 31, 2024.
ADDRESSES: Please submit your comments to the U.S. Government
electronic docket site at <a href="https://www.regulations.gov">https://www.regulations.gov</a>, Docket: DOT-OST-
2024-0129.
Note: All submissions received, including any personal information
therein, will be posted without change or alteration to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. For more information, you may review DOT's
complete Privacy Act Statement published in the Federal Register on
April 11, 2000 (65 FR 19477).
FOR FURTHER INFORMATION CONTACT: For questions about this notice,
please contact Elizabeth Fox, DOT Office of the Assistant Secretary for
Transportation Policy, at <a href="/cdn-cgi/l/email-protection#4421282d3e252621302c6a222b3c04202b306a232b32"><span class="__cf_email__" data-cfemail="02676e6b78636067766a2c646d7a42666d762c656d74">[email protected]</span></a> or at 202-366-4540. For
legal questions, please contact Jennifer Kirby-McLemore, DOT Office of
the General Counsel, 405-446-6883, or via email at
<a href="/cdn-cgi/l/email-protection#0d67686363646b687f23606e616860627f684d696279236a627b"><span class="__cf_email__" data-cfemail="99f3fcf7f7f0fffcebb7f4faf5fcf4f6ebfcd9fdf6edb7fef6ef">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Background
The Buy America preferences set forth in section 70914(a) of BABA
\1\ require that all iron, steel, manufactured products, and
construction materials used for infrastructure projects in the United
States under Federal financial assistance awards be produced in the
United States.
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\1\ The Build America, Buy America Act was included as title XI,
subtitle A of the Infrastructure Investment and Jobs Act (IIJA)
(Pub. L. 117-58).
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Under section 70914(b) and in accordance with the Office of
Management and Budget (OMB)'s Guidance Memorandum M-24-02,
Implementation Guidance on Application of Buy America Preference in
Federal Financial Assistance Programs for Infrastructure, DOT may waive
the application of BABA requirements in any case in which it finds
that: (i) applying the domestic content procurement preference would be
inconsistent with the public interest; (ii) types of iron, steel,
manufactured products, or construction materials are not produced in
the U.S. in sufficient and reasonably available quantities or of a
satisfactory quality; or (iii) the inclusion of iron, steel,
manufactured products, or construction materials produced in the U.S.
will increase the cost of the overall project by more than 25 percent.
BABA also provides that the preferences under section 70914 apply
[[Page 101689]]
only to the extent that a domestic content procurement preference as
described in section 70914 does not already apply to iron, steel,
manufactured products, and construction materials. IIJA section
70917(a)-(b). Federal financial assistance programs administered by
DOT's Operating Administrations (OAs) \2\ are subject to a variety of
mode-specific statutes that apply particular Buy America \3\
requirements to iron, steel, and manufactured products, including 49
U.S.C. 50101 (FAA); 23 U.S.C. 313 (FHWA); 49 U.S.C. 5323(j) (FTA); and
46 U.S.C. 54101(d)(2) (MARAD). Recent annual appropriations acts have
also required DOT to apply the Buy American Act (41 U.S.C. chapter 83)
to funds appropriated under those acts,\4\ where a mode-specific
statute is not in place. These statutes also allow for waivers of the
Buy America requirements to be issued when the Department determines
that doing so is in the public interest.
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\2\ DOT OAs that provide or administer financial assistance
covered under this proposed waiver include the Federal Aviation
Administration (FAA); Federal Highway Administration (FHWA); Federal
Transit Administration (FTA); and the Maritime Administration
(MARAD).
\3\ In this notice, references to ``Buy America'' include
domestic preference laws referred to ``Buy American'' that apply to
DOT financial assistance programs.
\4\ For example, section 409 of the Transportation, Housing and
Urban Development, and Related Agencies Appropriations Act, 2024
states that ``no funds appropriated pursuant to this Act may be
expended by an entity unless the entity agrees that in expending the
assistance the entity will comply with sections 2 through 4 of the
Act of March 3, 1933 (41 U.S.C. 8301-8305, popularly known as the
`Buy American Act').''
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DOT and its OAs provide financial assistance to the three Pacific
Island territories of Guam, American Samoa, and CNMI through both
discretionary grants and allocated programs, including assistance
programs for highways and bridges, public transportation, airports, and
port facilities. The Freely Associated States (the Republic of Palau,
Republic of the Marshall Islands, and Federated States of Micronesia)
in the Pacific region are also eligible recipients of discretionary
grants under FAA's Airport Improvement Program (AIP).
During FY 2024, DOT OAs provided more than $132.7 million in
financial assistance for at least 20 capital projects in the Pacific
Island territories under various programs where infrastructure is an
eligible activity and may be subject to BABA or other DOT existing Buy
America requirements. DOT also provided $47.6 million in AIP
discretionary grants to the Freely Associated States in the Pacific
region for 3 projects during that time.
On April 29, 2024, DOT issued a temporary general applicability
waiver of the requirements of section 70914(a) of BABA and related
domestic preference statutes administered by DOT and its OAs. The DOT
waiver was part of an interagency effort, led by the OMB, to provide
time for DOT and other infrastructure agencies to collect and analyze
evidence to determine if a long-term waiver of these requirements is in
the public interest and allow time for DOT and its OAs to offer
technical assistance to potential assistance recipients in the remote
communities in the Pacific Island territories and Freely Associated
States. The temporary waiver expires on March 1, 2025.
During the temporary general applicability waiver period, DOT has
worked with OMB's Made in America Office (MIAO) and with other
infrastructure agencies to better understand the local manufacturing
environment, consider how to best balance the equities for residents of
the Pacific Island territories and domestic suppliers, and explore ways
to potentially ease supply chain challenges for infrastructure projects
in those territories. The Pacific Islands are over 5,000 miles from the
mainland United States and must import products via air or sea. These
economies have few local heavy manufacturers and largely rely on
regional supply chains from east Asia, Australia, and New Zealand. Most
goods, equipment, materials, and supplies are imported and rely on
shipping with extended timelines and unpredictable shipping cost
fluctuations. Moreover, materials sourced from the mainland U.S. lead
to additional shipping fees and longer lead times, thus significantly
extending construction activity schedules.
Along with other Federal agencies, DOT has reviewed the U.S.
International Trade Commission's 2023 report ``U.S.-Pacific Islands
Trade and Investment: Impediments and Opportunities'', which noted the
geographic isolation, high costs of shipping, dependence on imports,
regulatory barriers, limited economies of scale, and environmental
challenges as persistent barriers that the Pacific Island territories
face. Additionally, the lack of available land on the Pacific Island
territories creates barriers for developing new manufacturing and
assembly facilities. Those infrastructure products readily available
and produced locally on the Pacific Islands, such as aggregates and
cement products, are mostly statutorily exempt from BABA requirements.
For these reasons, the DOT remains concerned that complying with the
domestic sourcing requirements may increase already elevated project
time and costs.
In considering this waiver, DOT consulted with the relevant Federal
assistance programs in the respective OAs, including the regional
offices in those agencies that directly administer DOT funding programs
in the Pacific Island territories and Freely Associated States. DOT
also relied on other communications that it has received from
stakeholders in those territories. For example, CNMI and Guam have
cited their isolated location in the Western Pacific and reliance on
ocean freight as the only mode of transporting commodities to the
island as creating significant challenges in obtaining materials from
domestic sources, with impacts on both project costs and delivery
schedules. The two territories have also indicated that shipping
construction materials from the continental United States raises
shipping costs by approximately 30 percent above the cost to ship
directly to the islands from Asia.
In August 2024, the U.S. Department of the Interior (DOI) hosted
the third Territorial Climate and Infrastructure Workshop in Honolulu,
HI, which included many representatives from various territorial
agencies and departments. During the workshop, DOI and DOT led a
session on the Build America, Buy America Act, during which many
participants described the structural challenges the territories face
in complying with Buy America requirements and the desire for relief
due to the significant cost increases and delays in project timelines
that would ensue. In addition, in February 2023, DOI hosted the
Interagency Group on Insular Areas, at which the governors of the
Territories expressed concerns related to BABA implementation and
potential project delays and requested that Federal agencies be
flexible in these requirements, including consideration of waivers.
Additionally, representatives from American Samoa have indicated to
the Federal Emergency Management Agency that ``As a containerized
community, our territories depend on goods, equipment, materials, and
supplies to be imported.'' They further stated that ``we can purchase
equipment from foreign countries closer to American Samoa and with
reasonable prices and shorter shipping time.'' American Samoa
representatives also noted that availability of materials from nearby
foreign countries such as New Zealand and Australia would result in a
significant cost savings to the grantors.
[[Page 101690]]
Proposed Waiver and Request for Comments
DOT is proposing to use its authority under section 70914(b)(1) to
waive the Act's Buy America preferences for iron and steel,
manufactured products, and construction materials used in
infrastructure projects located within the Pacific Island territories
of CNMI, Guam, or American Samoa and funded under DOT-administered
financial assistance programs, on the basis that doing so would be in
the public interest. The proposed waiver would apply to all awards
obligated after the effective date and, in the case of awards obligated
prior to the effective date, the proposed waiver would apply to all
expenditures for non-domestic iron, steel, manufactured products, and
construction materials incurred after the effective date. The proposed
waiver would not apply to the following products that have been
identified by OMB as critical supply chains that warrant special
consideration:
<bullet> Telecommunications infrastructure:
[cir] Telecommunications equipment used to transmit and receive
digital signals across constructed networks (e.g., vaults, cabinets,
routers, switches, optical line terminals (OLTs), optical network
terminals (ONTs), wi-fi capable customer equipment, and other
electronic hardware used to connect the network). This includes:
[ssquf] Video surveillance equipment, including any equipment that
is used in fixed and mobile networks that provides advanced
communications service in the form of a video surveillance service,
provided the equipment includes or uses electronic components. This
encompasses any equipment that can be used in a fixed or mobile
broadband network to enable users to originate and receive high quality
voice, data, graphics, and video telecommunications using technology
with connection speeds of at least 200 kbps in either direction.\5\
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\5\ <a href="https://www.fcc.gov/laboratory-division/equipment-authorization-approval-guide/equipment-authorization-system#step2">https://www.fcc.gov/laboratory-division/equipment-authorization-approval-guide/equipment-authorization-system#step2</a>.
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[ssquf] Broadcasting equipment, including radio frequency devices
contained in electronic-electrical products that are capable of
emitting radio frequency energy by radiation, conduction, or other
means. These products have the potential to cause interference to radio
services operating in the radio frequency range of 9 kHz to 3000
GHz.\6\
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\6\ <a href="https://www.fcc.gov/oet/ea/rfdevice">https://www.fcc.gov/oet/ea/rfdevice</a>.
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[cir] Broadband equipment (e.g., fiber/coax cable, conduit,
pedestals, handholes, tower structures, and other physical components
used to connect to telecommunication equipment)
<bullet> Grid-connected utility-scale energy generation and
stationary storage (>5MW)
<bullet> Cargo handling equipment, including cranes, that are
manufactured by or contain any networks, operating systems, or software
identified in U.S. Maritime Advisory 2024-0026 or successor advisories
\7\
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\7\ 2024-002-Worldwide-Foreign Adversarial Technological,
Physical, and Cyber Influence <a href="https://www.maritime.dot.gov/msci/2024-002-worldwide-foreign-adversarial-technological-physical-and-cyber-influence">https://www.maritime.dot.gov/msci/2024-002-worldwide-foreign-adversarial-technological-physical-and-cyber-influence</a>.
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While these items would be excluded from this general waiver, DOT
recognizes that purchases of these items from non-domestic sources as
part of a federally-assisted project may be warranted in certain
circumstances. For those individual projects, DOT and its OAs will
consider requests for potential waivers of BABA or other Buy America
requirements on a case-by-case basis, with special attention to any
strategic security issues that may be associated with those purchases.
DOT specifically requests comment on the items that have been
identified by OMB as critical supply chains that warrant special
consideration and whether any of those items should be removed from the
list, for example broadband equipment. If items are removed from this
list following the public comment period, then those products would be
included within the scope of the final waiver.
Because many DOT-administered financial assistance programs are
also subject to program-specific domestic preference requirements, the
waiver proposed in this notice would also apply to those requirements.
Specifically, the waiver would also be an exercise of DOT's authority
to issue public interest waivers under 23 U.S.C. 313(b)(1), 49 U.S.C.
5323(j), 46 U.S.C. 54101(d)(2)(B)(i)(I), 49 U.S.C. 50101(b)(1), and 41
U.S.C. chapter 83. Under those DOT authorities, the proposed waiver
would also apply to projects in the Freely Associated States (the
Republic of Palau, Republic of the Marshall Islands, and Federated
States of Micronesia).\8\
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\8\ The proposed waiver under section 70914(b)(1) of BABA
excludes projects in the Freely Associated States because the
requirements under section 70914(a) are applicable only to
infrastructure projects ``in the United States'' and, therefore, the
BABA requirements to not apply to projects in the Freely Associated
States. However, airports located in the Freely Associated States
are eligible recipients under FAA's Airport Improvement Program, and
the Buy American requirements specific to that program would thus
also apply to the Freely Associated States.
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The proposed duration of the waiver is five years after the
effective date of the final waiver. The Department will periodically
review this waiver to assess whether it remains necessary to the
fulfillment of DOT's missions and goals and consistent with applicable
legal authorities, such as the IIJA, Executive Order 14005, and OMB M-
24-02. The Department may, based on the results of that review,
terminate the waiver, or take action to develop a new waiver in
consultation with the MIAO.
Without the waiver, DOT-assisted infrastructure projects located
within the Pacific Island territories will experience challenges with
product delivery, availability, reliability, and project scheduling.
Infrastructure project schedules rely on readily available products
delivered within reasonable timeframes. Due to the extreme distances
that manufacturers for products produced in the mainland United States
would have to ship products to the Pacific Island territories and due
to the lack of existing local product supply networks for these
products, manufacturers may not be able to assure on-time delivery of
compliant products and associated projects. As a result, the Pacific
Island territories could potentially face unreasonable scheduling
uncertainty.
Under OMB Memorandum M-24-02, 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. DOT's analysis has concluded that this assessment is
not applicable to this waiver.
DOT will consider all comments received in the initial 15-day
comment period during our consideration of the proposed waiver, as
required by section 70914(c)(2) of IIJA. Comments received after this
period, but before notice of our finding is published in the Federal
Register, will be considered to the extent practicable. Pursuant to
section 117 of the SAFETEA-LU Technical Corrections Act of 2008 (Pub.
L. 110-244, 122 Stat. 1572), if FHWA makes a finding that a waiver is
appropriate under 23 U.S.C. 313(b), FHWA will also invite public
comment on this finding for an additional 5 days following the date of
publication of the finding.
[[Page 101691]]
Comments received during that period will be reviewed, but the finding
will continue to remain valid. Those comments may influence DOT/FHWA's
decision to terminate or modify a finding.
Issued in Washington, DC.
Polly E. Trottenberg,
Deputy Secretary.
[FR Doc. 2024-29489 Filed 12-13-24; 8:45 am]
BILLING CODE 4910-9X-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.