Buy America Waiver Notification |
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Victor M. Mendez
Federal Highway Administration
December 12, 2012
[Federal Register Volume 77, Number 239 (Wednesday, December 12, 2012)]
[Notices]
[Pages 74048-74050]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-29917]
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DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
Buy America Waiver Notification
AGENCY: Federal Highway Administration (FHWA), DOT.
ACTION: Notice.
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SUMMARY: This notice provides information regarding the FHWA's finding
that a public interest Buy America waiver is appropriate for the use of
American and Canadian steel and iron products in the construction of
the New International Trade Crossing (NITC) project.
DATES: The effective date of the waiver is December 13, 2012.
FOR FURTHER INFORMATION CONTACT: For questions about this notice,
please contact Mr. Gerald Yakowenko, FHWA Office of Program
Administration, (202) 366-1562, or via email at
gerald.yakowenko@dot.gov. For legal questions, please contact Mr.
Michael Harkins, FHWA Office of the Chief Counsel, (202) 366-4928, or
via email at michael.harkins@dot.gov. Office hours for the FHWA are
from 8:00 a.m. to 4:30 p.m., e.t., Monday through Friday, except
Federal holidays.
SUPPLEMENTARY INFORMATION:
Electronic Access
An electronic copy of this document may be downloaded from the
Federal Register's home page at: http://www.archives.gov and the
Government Printing Office's database at: http://www.access.gpo.gov/nara.
Background
The NITC project is a new border crossing proposed by the State of
Michigan and the Government of Canada over the Detroit River linking
Detroit, Michigan, to Windsor, Ontario. The State of Michigan and
Canada signed a Crossing Agreement on June 15, 2012, authorizing the
construction of the NITC. This Crossing Agreement provides a framework
for a Crossing Authority established by Canada to design, construct,
finance, operate, and maintain a new International Crossing between
Canada and Michigan, under the oversight of a jointly established
International Authority, and through one or more Public-Private
Agreements with one or more private sector Concessionaires.
The Michigan components of the project that are not funded by the
private sector Concessionaire(s) or by the US Federal government will
be financed entirely with funds advanced by Canada (the ``Canadian
Contributions''). These components include the interchange linking the
bridge to I-75, the Michigan approach, and the Michigan plaza
(collectively, the ``Michigan Components''). A record of decision (ROD)
was signed by the FHWA for the NITC project on January 14, 2009,
pursuant to the National Environmental Policy Act (NEPA), after
extensive consideration of various alternatives, including the no build
alternative, that were identified in the draft environmental impact
statement (DEIS).
The FHWA's Buy America policy in 23 CFR 635.410 requires a domestic
manufacturing process for any steel or iron products (including
protective coatings) that are permanently incorporated in a Federal-aid
construction project. The regulation also provides for a waiver of the
Buy America requirements when the application would be inconsistent
with the public interest or when satisfactory quality domestic steel
and iron products are not sufficiently available. Here, the Governor of
Michigan requests a waiver from Buy America on the basis that a
[[Page 74049]]
waiver for this project is in the public interest.
In determining whether a waiver is in the public interest. The
FHWA's decision is based on weighing the various factors surrounding
each such request for a Buy America waiver. The circumstances for this
particular waiver request by Michigan reflect the unique financing
structure under which the Canadian government will bear the majority of
the financial risk for constructing the NITC and the potential for the
project to produce substantial economic and transportation benefits.
Accordingly, this notice announces that a partial Buy America waiver is
in the public interest to use American and Canadian steel and iron
products in the construction of the NITC Project, and describes the
reasons weighing in favor of this decision.
Discussion of Comments
In accordance with Title I, Division C, section 122 of the
``Consolidated and Further Continuing Appropriations Act, 2012'' (Pub.
L. 112-55), the FHWA posted a notice of, and requested comments on, a
proposed public interest waiver on its Web site for use of American and
Canadian steel and iron products in the construction of the NITC
project (http://www.fhwa.dot.gov/construction/contracts/waivers.cfm?id=80) on August 31, 2012. The FHWA received 122 comments
in response to the publication. Of these comments, 91 supported the
proposed waiver while 13 opposed it. Also, 3 commenters did not express
either support or opposition for the proposed waiver or the project. An
additional 15 commenters expressed opinions on the NITC project itself,
with 8 commenters expressed support and 7 opposed.
Comments were mostly submitted by individuals. Comments were also
received from five unions (United Steelworkers, Michigan AFL-CIO,
Michigan Regional Council of Carpenters, Transportation Trades
Department (TTD) of the AFL-CIO, and the United Auto Workers), each of
whom expressed support for the proposed waiver. Additional comments
were received from 13 associations, each of which also expressed
support for the proposed waiver, including the American Iron and Steel
Institute (AISI). Comments were also received from 11 businesses. Of
them, five steel companies and Ford Motor Company expressed support for
the proposed waiver. Only one of these 11 businesses, the Detroit
International Bridge Company (DIBC), opposed the proposed waiver.
Generally, support expressed by the commenters for the proposed
waiver highlighted the notion of fairness of allowing the use of
Canadian and American steel given the unique financing arrangement of
the project under which the Canadian government is bearing most of the
project cost. For example, the AISI commented that it is a strong
supporter of Buy America, but given the unique financing arrangement
for the NITC project, AISI supports granting a public interest waiver
to allow the use of Canadian and America Steel. The United Steelworkers
commented that this proposed waiver is a ``one-of-a-kind circumstance''
involving a unique financing mechanism where Canada is advancing all
the funds to build the bridge and assuming all of the financing risk.
The Michigan AFL-CIO noted that the NITC is financed solely by Canada.
The Michigan Regional Council of Carpenters commented that the ``NITC
project presents a unique situation'' whereby Canada is fronting all of
the construction costs so it is only appropriate that the project uses
both American and Canadian steel. The TTD commented that ``TTD has a
clear record of urging full compliance with federal Buy America laws.
However, given the nature of this project, the shared investment by
both the U.S. and Canadian governments, and the uniquely integrated
industries that span the US Canadian border, [TTD] feels that the
waiver application is appropriate and beneficial in this specific
instance.''
Other comments supported the waiver as necessary in order to
facilitate the construction of a project that has the potential to
produce substantial economic and transportation benefits. For example,
Ford Motor Company cited to a study by the Center of Automotive
Research outlining the significant economic benefits of the NITC, which
include:
Jobs from bridge construction: 6,000 in each of the first
2 years of construction and 5,100 jobs in the final 2 years;
Jobs from Statewide construction projects resulting from
the federal match: 6,600 jobs per year for 4 years;
Jobs from bridge operations: 1,400 permanent jobs;
Jobs from new private investment: 6,800 permanent jobs;
and
Overall economic growth: Michigan state domestic product
increased by $2.2 billion, personal income increased by $4 billion, and
State and local revenue increased by $400 million.
Also, the United Steelworkers noted that this project will create
good jobs, including demand for at least 10,000 direct jobs and
thousands of indirect jobs. The United Steelworkers further noted that
millions of jobs in both countries are dependent on trade between the
US and Canada, and the NITC will help retain and create more trade
between the two nations. The Michigan AFL-CIO commented that in 2011,
the US and Canada shared $597 billion in trade. This trade relationship
supports 11 million jobs, of which 8 million are in the US and 230,000
are in Michigan. When complete, the NITC will position Michigan to
expand as a trade hub creating economic growth and additional jobs.
GreenStone Farm Credit Services commented that for 35 States, Canada is
their principal export market, and the new bridge will create the first
freeway-to-freeway connection between Detroit and Windsor. Amway
Corporation commented that the new crossing is critical because
American trade with Canada increases annually with truck traffic
predicted to triple in the next 30 years. The TTD commented that this
project would help create thousands of good paying American jobs with
10,000 direct construction jobs and 25,000 indirect jobs. The United
Auto Workers commented that this project will create many thousands of
well-paying construction jobs and additional spin-off jobs. The United
Auto Workers further noted that the auto industry depends on a quick
and easy border crossing for components and completed vehicles, and the
NITC will assure adequate border mobility for the auto industry for
many decades into the future.
Substantive comments opposing the proposed waiver, including
comments from the DIBC, generally made the point that a private company
is prepared to build a second bridge using only American iron and
steel. The merits and impacts of constructing the NITC were extensively
studied, weighed, and analyzed in the January 14, 2009, ROD. The
process leading to the ROD considered numerous alternatives, including
the DIBC proposal to construct its own new bridge. After considering
these alternatives, the FHWA selected the present project that is
subject to the proposed waiver.
The DIBC also expressed other comments that were considered in the
environmental process for the NITC project. These comments include
statements that the NITC will destroy businesses and result in a net
loss of jobs. For the reasons articulated in the ROD regarding the
selection of the current project over other alternatives, including the
alternative proposed by DIBC as well as the consideration of the
[[Page 74050]]
impacts to businesses, the FHWA directs commenters' attention to the
ROD and other supporting documents and analyses, including the November
21, 2008, final environmental impact statement (FEIS). Because these
impacts have already been considered in the environmental process, the
FHWA declines to conduct a redundant analysis to reevaluate the merits
of other alternatives. As such, the FHWA does not deem these factors to
be relevant to consideration of the appropriateness of a Buy America
waiver.
DIBC comments that this waiver is not in the public interest
because the construction of the NITC is not authorized under Michigan
State law. However, the FHWA declines to take a position on the
application of Michigan State law.
The DIBC also comments that the proposed waiver is not in the
public interest for the reasons specified in the DIBC's comments to the
Secretary of State regarding the Governor's application for a
Presidential permit. These comments, while voluminous, do not directly
address the FHWA's consideration of the proposed waiver.
Some commenters suggested that specific percentages be established
regarding the ratios of Canadian and American steel and iron that will
be used in the construction of the NITC. While the specification of
such percentages may appear reasonable, the FHWA does not believe that
the specification of such percentages in advance of a decision on the
proposed waiver is in the public interest. It will be difficult to
determine exactly how such percentages would be established absent
specific contractor bids or proposals from potential public private
partnership entities.
Another comment asked that, in light of Michigan's plan to leverage
the Canadian financial contribution to the NITC as the State's matching
share for other Federal-aid highway projects, the FHWA should clarify
whether the proposed waiver is specific to the NITC or whether it will
apply more broadly to Michigan's highway program in general. In
response to this concern, the FHWA clarifies that the waiver proposed
here is specific only to the NITC and will not apply to any other
Federal-aid highway projects.
After considering and weighing all of the comments that have been
submitted in response to the proposed waiver, including those
specifically mentioned and discussed above, it is the FHWA's decision
that the Governor's request to partially waive the application of Buy
America to the NITC project to allow the use of both American and
Canadian steel and iron is granted. The proposed waiver here presents a
unique circumstance, as mentioned by the commenters highlighted above,
under which Canada is assuming all financial liability and risk for the
construction of this project. In light of the Canadian financial
contribution, the FHWA believes that the basic notion of fairness
weighs in favor of allowing Canadian iron and steel to be used so long
as American iron and steel is allowed to compete on an equal basis.
Moreover, the Canadian financial contribution to the project will make
possible the creation of thousands of direct and indirect construction
jobs, as well as numerous other jobs in the American economy, as a
result of increased trade and productivity between the US and Canada.
In accordance with the provisions of section 117 of the SAFETEA-LU
Technical Corrections Act of 2008 (Pub. L. 110-244, 122 Stat. 1572),
the FHWA is providing this notice as its finding that a waiver of Buy
America requirements for the NITC project is appropriate. The FHWA
invites public comment on this finding for an additional 15 days
following the effective date of the finding. Comments may be submitted
to the FHWA's Web site via the link provided to NITC waiver page noted
above.
Authority: 23 U.S.C. 313; Pub. L. 110-161, 23 CFR 635.410.
Issued on: December 5, 2012.
Victor M. Mendez,
Administrator.
[FR Doc. 2012-29917 Filed 12-11-12; 8:45 am]
BILLING CODE 4910-22-P