Buy America Waiver Notification |
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Victor M. Mendez
Federal Highway Administration
June 17, 2013
[Federal Register Volume 78, Number 116 (Monday, June 17, 2013)]
[Notices]
[Pages 36296-36298]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-14146]
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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 conditional Buy America waiver is appropriate for the obligation
of Federal-aid funds for 74 vehicle projects involving the purchase of
approximately 3,500 vehicles (including sedans, vans, pickups, SUVs,
trucks, buses, and equipment, such as backhoes, street sweepers, and
tractors), including projects to retrofit vehicles with individual
vehicle components, so long as they are assembled in the United States.
The FHWA's Buy America requirements provide that 100 percent of all
steel and iron that is permanently
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incorporated into a project must be domestically manufactured. With
respect to vehicles, manufacturers typically assemble these products
with many different components and subcomponents containing steel and
iron. As a result, vehicles are typically referred to as being made
where the final product rolls off the assembly line for delivery into
the marketplace. The FHWA is unaware of any vehicle that is comprised
of 100 percent domestically produced steel and iron, resulting in a
need for a conditional Buy America waiver for these projects to
proceed.
DATES: The effective date of the waiver is June 18, 2013.
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 FHWA's Buy America regulations at 23 CFR 635.410 require 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. This
notice provides information regarding the FHWA's finding that a
conditional Buy America waiver is appropriate for the obligation of
Federal-aid funds for the purchase of 74 vehicle projects (including
sedans, vans, pickups, SUVs, trucks, buses, and equipment, such as
backhoes, street sweepers, and tractors).
In accordance with Division A, section 122 of the Consolidated and
Further Continuing Appropriations Act, 2012'' (Pub. L. 112-284), the
FHWA published a notice of intent to issue a waiver on its Web site for
the 74 vehicle projects (including sedans, vans, pickups, SUVs, trucks,
buses, and equipment, such as backhoes, street sweepers, and tractors)
(http://www.fhwa.dot.gov/construction/contracts/waivers.cfm?id=87) on
April 12th. The FHWA received 28 comments in response to the
publication. Seventeen comments in support of the waiver were from
clean air proponents or supporters of the FHWA's Congestion Mitigation
Air Quality (CMAQ) Improvement Program. Seven commenters objected to
the proposed waiver but did not provide substantive information
regarding the availability of domestic alternates that meet the
appropriate requirements. Two individuals commented on the need to
further define domestic content. One individual commented on the need
to define domestic assembly and one other individual provided comment
on the applicability of the Federal Transit Administration's Buy
America requirements for rolling stocks, which are not applicable to
Federal-aid program.
Several commenters noted that FHWA has historically limited the
application of Buy America requirements to products that are
permanently incorporated into a Federal-aid highway construction
project. These commenters questioned the applicability of the Buy
America requirements to vehicle acquisitions and retrofit projects. In
response to these commenters, the FHWA is implementing the statutory
provisions of 23 U.S.C. 313(a) which preclude FHWA from obligating any
funds ``. . . unless steel, iron, and manufactured products used in
such project are produced in the United States.'' The requirements are
applicable to all Federal-aid projects funded under Title 23, United
States Code including vehicle acquisitions and retrofit projects.
During the 15-day comment period, the FHWA conducted additional
review but was unable to locate a domestic manufacturer that could meet
a 100 percent domestic steel and iron content requirement. Based on all
the information available to the agency, the FHWA concludes that there
are no domestic manufacturers that could meet a 100 percent domestic
steel and iron content for the 74 vehicle projects (including sedans,
vans, pickups, SUVs, trucks, buses, and equipment, such as backhoes,
street sweepers, and tractors).
The FHWA's Buy America requirement was initially established in
1983 when the acquisition of vehicles was not eligible for assistance
under the Federal-aid highway program. As such, the FHWA's Buy America
requirements were tailored to the types of products that are typically
used in highway construction, which generally meet a 100 percent
domestic steel and iron content requirement. Vehicles were not the
types of products that were initially envisioned as being purchased
with Federal-aid highway funds when Buy America was first enacted. In
today's global industry, vehicles are assembled with components that
are made all over the world. The FHWA is not aware of any vehicle on
the market that can claim to incorporate 100 percent domestic steel and
iron content. For instance, the Chevy Volt, which was identified by
many commenters in a November 21, 2011, Federal Register Notice (76 FR
72027) as being a car that is made in the United States, comprises only
40 percent United States and Canada content according to the window
sticker (http://www.cheersandgears.com/uploads/1298005091/med_gallery_51_113_449569.png). There is no indication of how much of
this 40 percent United States/Canadian content is United States-made
content. However, it appears that there is an indication of whether
vehicles are assembled in the United States. Specifically, the window
sticker for the Chevy Volt says that the vehicle's final assembly point
was in the United States.
While the manufacture of steel and iron products that are typically
used in highway construction (such as pipe, rebar, struts, and beams)
generally refers to the various processes that go into actually making
the entire product, the manufacture of vehicles typically refers to
where the vehicle is assembled. Thus, given the inherent differences in
the type of products that are typically used in highway construction
and vehicles, we feel that simply waiving the Buy America requirement,
which is based on the domestic content of the product, without any
regard to where the vehicle is assembled would diminish the purpose of
the Buy America requirement. Moreover, in today's economic environment,
the Buy America requirement is especially significant in that it will
ensure that Federal Highway Trust Fund (HTF) dollars are used to
support and create jobs in the United States.
One commenter believed that it was imperative that FHWA issue
guidance clarifying how it intends to handle future vehicle waiver
requests so that public agencies and companies can plan accordingly.
Several commenters suggested that guidance be provided concerning the
definition of final assembly and how this definition would be
implemented for vehicle retrofit projects where vehicles manufactured
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outside the U.S. as gasoline or diesel vehicles are imported to the
United States and then retrofitted or modified in the United States so
that they can operate on alternative fuels. Another commenter suggested
that FHWA issue a policy that defines the acceptable limit on domestic
content.
In response to these comments, the FHWA does not believe that it is
appropriate to establish a vehicle domestic content requirement
threshold at the present time. The FHWA is uncertain whether such a
condition would further the objectives of CMAQ Program to encourage
State and local entities to pursue clean fuel technologies. Moreover,
the FHWA has no data in order to determine what such a content standard
should be. Also, the practicality of establishing such a limit for just
the iron and steel components in a vehicle is questionable. The FHWA is
unaware of any method by which the agency can use to determine where
the steel and iron contained in the steel and iron components of a
vehicle were manufactured. Similarly, the FHWA has no basis for
defining the point of final assembly for vehicle retrofit projects
other than the location where the retrofitting of the vehicle takes
place prior to turning the vehicle over to the owner. As such, the FHWA
is not prepared to address these issues as part of this particular
waiver request.
As a result, State departments of transportation (DOT) will need to
make a good faith effort to determine whether the final assembly of a
vehicle or vehicle retrofit occurs in the United States. With respect
to passenger motor vehicles, the FHWA notes that the National Highway
Traffic Safety Administration has established criteria in 49 CFR Part
583 for vehicles subject to the America Automobile Labeling Act (AALA)
(http://www.nhtsa.gov/Laws+&+Regulations/Part+583+American+Automobile+Labeling+Act+(AALA)+Reports). Vehicles
meeting the criteria for final assembly under the AALA is one option
for State DOTs to make a good faith effort in determining whether final
assembly of vehicles subject to AALA requirements occurs in the United
States. The FHWA will publish a notice in the Federal Register at a
future date to request public comments on what standards should apply
to vehicles. In the meantime, the FHWA does not wish to further delay
these projects while the appropriate standard for vehicles is
established.
While the FHWA has not located a vehicle that meets a 100 percent
domestic iron and steel content requirement, the FHWA does not find
that a complete waiver based on non-availability pursuant to 23 U.S.C.
313(b)(2) is appropriate. However, the FHWA also recognizes that at
least a conditional waiver is necessary in order to permit the State
DOTs to proceed with the projects. The FHWA believes that a conditional
waiver that allows the public agencies to purchase vehicles so long as
the final assembly of the vehicle as the end product occurs in the
United States is appropriate. This approach is similar to the
conditional waivers given to Alameda County, San Francisco County, and
Merced County, CA, for vehicle purchases on November 21, 2011 (76 FR
72027 and 76 FR 72028) and March 30, 2012 (77 FR 19410).
In conclusion, and in light of the above, pursuant to 23 U.S.C.
313(b)(1), the FHWA finds that it is in the public interest to grant a
conditional waiver from the general 100 percent domestic content
requirement that applies to Federal-aid highway projects under Buy
America. Under this conditional waiver, however, the final assembly of
any vehicles purchased with HTF funds must occur in the United States.
Thus, so long as the final assembly of the 74 vehicle projects
(including sedans, vans, pickups, SUVs, trucks, buses, and equipment,
such as backhoes, street sweepers, and tractors) occurs in the United
States, applicants to this waiver request may proceed to purchase these
vehicles and equipment consistent with the Buy America requirement.
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 conditional
waiver of Buy America requirements 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 the waiver page noted above.
Authority: 23 U.S.C. 313; Pub. L. 110-161, 23 CFR 635.410.
Issued on: June 6, 2013.
Victor M. Mendez,
Administrator, Federal Highway Administration.
[FR Doc. 2013-14146 Filed 6-14-13; 8:45 am]
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