Notice2025-01113
Public Interest Waiver of the Application of Certain Domestic Preference Requirements and Policies for Transit-Oriented Development Housing Projects
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
January 17, 2025
Effective
January 17, 2025
Issuing agencies
Transportation Department
Abstract
In order to expeditiously deliver projects and provide meaningful infrastructure results while ensuring the appropriate application of domestic content standards, the U.S. Department of Transportation (DOT) is issuing waiver for the domestic preference requirements for manufactured products applicable to certain transit- oriented development (TOD) housing projects that receive credit assistance through the Build America Bureau (the Bureau) under the Transportation Infrastructure Finance and Innovation Act (TIFIA) and Railroad Rehabilitation and Improvement Financing (RRIF) credit programs.
Full Text
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<title>Federal Register, Volume 90 Issue 11 (Friday, January 17, 2025)</title>
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[Federal Register Volume 90, Number 11 (Friday, January 17, 2025)]
[Notices]
[Pages 6048-6050]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-01113]
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DEPARTMENT OF TRANSPORTATION
Office of the Secretary
[Docket No.: DOT-OST-2024-0130]
Public Interest Waiver of the Application of Certain Domestic
Preference Requirements and Policies for Transit-Oriented Development
Housing Projects
ACTION: Notice.
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SUMMARY: In order to expeditiously deliver projects and provide
meaningful infrastructure results while ensuring the appropriate
application of domestic content standards, the U.S. Department of
Transportation (DOT) is issuing waiver for the domestic preference
requirements for manufactured products applicable to certain transit-
oriented development (TOD) housing projects that receive credit
assistance through the Build America Bureau (the Bureau) under the
Transportation Infrastructure Finance and Innovation Act (TIFIA) and
Railroad Rehabilitation and Improvement Financing (RRIF) credit
programs.
DATES: The effective date of the waiver is January 17, 2025 and will
apply to all TOD housing projects that enter into the Bureau's
creditworthiness review on or before December 31, 2025.
FOR FURTHER INFORMATION CONTACT: For questions about this notice,
please contact Dan Schned, U.S. Department of Transportation, Build
America Bureau, at 202-366-2300 or <a href="/cdn-cgi/l/email-protection#6d090c03040801431e0e050308092d090219430a021b"><span class="__cf_email__" data-cfemail="93f7f2fdfaf6ffbde0f0fbfdf6f7d3f7fce7bdf4fce5">[email protected]</span></a>. For legal
questions, please contact, Jessica Pettrone, DOT Office of the General
Counsel, at (202) 366-8560 or <a href="/cdn-cgi/l/email-protection#e68c8395958f8587c89683929294898883a6828992c8818990"><span class="__cf_email__" data-cfemail="3b515e484852585a154b5e4f4f4954555e7b5f544f155c544d">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
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Background
On November 15, 2021, the Infrastructure Investment and Jobs Act
(IIJA) Public Law 117-58 was enacted. IIJA reauthorized Federal surface
transportation programs and invested billions in making the United
States transportation system safer and more resilient. TOD projects are
eligible for both TIFIA (23 U.S.C. 601(a)(12)(E)) and RRIF (49 U.S.C.
22402(b)(1)(F)) financing, subject to all other eligibility criteria,
and compliance with all applicable Federal requirements and
creditworthiness standards.\1\
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\1\ Eligible TOD projects can take many forms, including joint
development; public infrastructure; and economic development,
including commercial and residential development. One of the key
parameters of the programs, among others, is that TOD projects must
be within walking distance of a qualifying transit or passenger rail
station. See <a href="https://www.transportation.gov/buildamerica/TOD">https://www.transportation.gov/buildamerica/TOD</a>.
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Transportation and land use reforms are central strategies to
achieving many goals, including reaching net-zero greenhouse gas
emissions by 2050; addressing the housing supply and affordability
crises throughout the country; and advancing equity, fair housing, and
environmental justice.\2\ Providing long-term, low-interest direct
loans through the TIFIA and RRIF credit programs to TOD projects is one
of the primary tools available to DOT to help achieve this mission.
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\2\ <a href="https://www.transportation.gov/buildamerica/sites/buildamerica.dot.gov/files/2023-10/TOD%20Policy%20Statement.pdf">https://www.transportation.gov/buildamerica/sites/buildamerica.dot.gov/files/2023-10/TOD%20Policy%20Statement.pdf</a>.
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Over the last three years, DOT has taken several concrete steps to
date to facilitate TOD financing under the TIFIA and RRIF credit
programs. DOT has published TOD guidance \3\ and a policy statement \4\
and authorized TOD projects' eligibility to borrow up to the maximum
allowed under TIFIA to promote the creation of more walkable, mixed-use
spaces near transit that support vibrant, sustainable, and equitable
communities.\5\ Additionally, the Bureau has worked on outreach to
developers and created several tools including the TOD Eligibility Map
\6\ and has conducted webinars to help educate potential borrowers
about the opportunities and requirements of the programs.
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\3\ <a href="https://www.transportation.gov/buildamerica/TOD">https://www.transportation.gov/buildamerica/TOD</a>.
\4\ <a href="https://www.transportation.gov/buildamerica/sites/buildamerica.dot.gov/files/2023-10/TOD%20Policy%20Statement.pdf">https://www.transportation.gov/buildamerica/sites/buildamerica.dot.gov/files/2023-10/TOD%20Policy%20Statement.pdf</a>.
\5\ <a href="https://www.transportation.gov/buildamerica/TIFIA49">https://www.transportation.gov/buildamerica/TIFIA49</a>.
\6\ <a href="https://www.transportation.gov/buildamerica/about/resources-mode/interactive-map-tifia-and-rrif-tod-eligibility">https://www.transportation.gov/buildamerica/about/resources-mode/interactive-map-tifia-and-rrif-tod-eligibility</a>.
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The IIJA also includes the Build America, Buy America Act (BABA) at
div. G, sec. 70901-27. BABA greatly strengthens Made in America
standards by expanding the coverage and application of Buy America
preferences in Federal financial assistance programs for
infrastructure. The Act requires that the head of each covered Federal
agency shall ensure that ``none of the funds made available for a
Federal financial assistance program for infrastructure . . . may be
obligated for a project unless all of the iron, steel, manufactured
products, and construction materials used in the project are produced
in the United States.'' IIJA sec. 70914(a).
BABA applies to Federal financial assistance, which term includes
``all expenditures by a Federal agency to a non-Federal entity for an
infrastructure project.'' IIJA sec. 70912(4)(B). ``Non-Federal
entity,'' as defined in 2 CFR 200.1, does not include for-profit
entities. Therefore, BABA by its terms does not apply to Federal
financial assistance to for-profit entities.\7\ However, in accordance
with the Office of Management and Budget (OMB)'s Guidance Memorandum M-
24-02, Guidance on Application of Buy America Preference in Federal
Financial Assistance Programs for Infrastructure, Federal agencies may
consider applying domestic preference requirements to for-profit
entities, consistent with their legal authorities.
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\7\ See OMB Memorandum M-22-11 Initial Implementation Guidance
on Application of Buy America Preference in Federal Financial
Assistance Programs for Infrastructure (April 18, 2022), p. 2
(``for-profit organizations are not considered non-Federal
entities''); OMB Memorandum M-24-02 Implementation Guidance on
Application of Buy America Preference in Federal Financial
Assistance Programs for Infrastructure (October 25, 2023), p. 4
(restating the guidance on for-profit entities from M-22-11); and 88
FR 57750, 57774 (October 23, 2023) (``Thus--although OMB does not
require them to do so--Federal agencies are allowed, under the
existing structure of part 200, to apply part 200, including the
domestic preferences at Sec. 200.322, to for-profit entities'').
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DOT has a longstanding policy of requiring all borrowers receiving
TIFIA or RRIF credit assistance to comply with domestic steel, iron,
and manufactured products content requirements, collectively known as
``Buy America'' requirements,\8\ for the projects receiving TIFIA or
RRIF credit assistance, even where not covered by a specific Buy
America statute, including chapter 83 of title 41, United States Code
(Buy American), because no appropriated funds are used for the cost of
the loan. DOT has consistently applied this policy to for-profit
borrowers as well. Accordingly, because Buy America is applied to all
projects receiving TIFIA or RRIF credit assistance, DOT, in an effort
to ensure transparency and maintain consistency in the application of
Buy America standards for all recipients (one rule for all projects and
borrowers), applies this waiver to the domestic manufactured products
requirements as applied to both TOD housing projects with for-profit
borrowers that do not use any appropriated funds for the cost of the
loan (to which Buy America requirements are applied as a matter of
policy), as well as to TOD housing projects with non-Federal entity
borrowers (to which Buy America requirements apply as a matter of law,
whether or not such loans use appropriated funds), and, in each case,
that enter into the Bureau's creditworthiness review on or before
December 31, 2025.
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\8\ As noted above, after the enactment of BABA, Buy America
requirements now include domestic construction material requirements
per BIL sec. 70914(a).
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TOD projects are a class of eligible capital projects under the
TIFIA and RRIF credit programs administered by the Bureau. The Bureau
recently provided guidance on Federal requirements for TOD projects
receiving TIFIA or RRIF credit assistance.\9\ Pursuant to that
guidance, the Bureau reiterated the DOT's longstanding policy of
requiring sponsors of all projects receiving TIFIA and RRIF credit
assistance to comply with domestic steel, iron, and manufactured
products content requirements, collectively known as ``Buy America''
requirements, for the projects receiving credit assistance, even where
not covered by a specific Buy America statute, including Buy American
requirements because no appropriated funds are used for the cost of the
loan.
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\9\ <a href="https://www.transportation.gov/buildamerica/about/resources-mode/tod-project-federal-requirements-guidance">https://www.transportation.gov/buildamerica/about/resources-mode/tod-project-federal-requirements-guidance</a>.
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Issuance of Waiver and Discussion of Comments Received
DOT proposed a waiver of the Buy America manufactured products
requirement for TIFIA and RRIF TOD projects that include any housing
elements (TOD Housing Projects) that enter into creditworthiness review
on or before December 31, 2025, in the Federal Register (FR Doc. 2024-
28820). DOT received two comments on the proposed waiver, one from an
advisor on various TOD projects and one from a public policy think tank
that represents the interests of real estate entities. Both commenters
supported the proposed waiver.
One commenter requested that DOT issue a ``blanket waiver'' that
would effectively establish a new domestic
[[Page 6050]]
preference standard (e.g., 60-70 percent) that applies to all products
and materials involved in TOD projects. They argued that this would
simplify the compliance process by preventing the need for sponsors to
request many individual product waivers, thereby reducing the burden on
DOT resources and expediting the advancement of TOD Housing Projects.
As was described in the notice, to support both the delivery of housing
and domestic manufacturing, DOT will continue to work closely with
borrowers to better understand and document the sources of materials
and products used in TOD Housing Projects and the challenges that
compliance with DOT's domestic preference standards present and
determine appropriate solutions.
One commenter requested that DOT update its guidance for TOD
projects to include a ``plain language'' list of examples of
manufactured products covered by this waiver. As was described in the
notice, DOT recently provided guidance on Federal requirements
applicable to TOD projects receiving TIFIA or RRIF credit assistance.
DOT appreciates the suggestion and will consider it in determining the
best ways of providing technical assistance to borrowers for TOD
Housing Projects.
Finding on the Waiver
Based on the information available, DOT is issuing a public
interest waiver of the Buy America requirements for manufactured
products that apply to Bureau-financed TOD Housing Projects. This
waiver is limited to TOD Housing Projects that enter into
creditworthiness review on or before December 31, 2025. For these
projects, DOT will continue to apply domestic steel, iron, and
construction materials content requirements.
To ensure transparency and maintain consistency in the application
of Buy America standards for all recipients (one rule for all projects
and borrowers), this waiver will apply to both TOD Housing Projects
with for-profit borrowers and those with non-Federal entity borrowers.
To continue to support the goals of Buy America policies, DOT will
work closely with TOD Housing Project borrowers to better understand
and document the sources of materials and products used in such
projects. This research will assist DOT in refining its domestic
preference requirements policy for TOD projects entering enter the
Bureau's creditworthiness review phase after January 1, 2026, and to
further support both the delivery of housing and domestic
manufacturing.
Issued in Washington, DC.
Morteza Farajian,
Executive Director, Build America Bureau.
[FR Doc. 2025-01113 Filed 1-16-25; 8:45 am]
BILLING CODE 4910-9X-P
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</html>Indexed from Federal Register on January 17, 2025.
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.