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Buy America Waiver Notification

American Government Special Collections Reference Desk

American Government

Buy America Waiver Notification

Gregory G. Nadeau
Federal Highway Administration
July 29, 2014


[Federal Register Volume 79, Number 145 (Tuesday, July 29, 2014)]
[Notices]
[Pages 44082-44083]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-17787]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration


Buy America Waiver Notification

AGENCY: Federal Highway Administration (FHWA), Department of 
Transportation (DOT).

ACTION: Notice.

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SUMMARY: This notice provides information regarding FHWA's finding that 
a Buy America waiver is appropriate for the obligation of Federal-aid 
funds for 30 State projects involving the purchase or retrofit of 
vehicles or vehicle components on the condition that they be assembled 
in the U.S.

DATES: The effective date of the waiver is July 30, 2014.

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. Jomar Maldonado, FHWA Office of 
the Chief Counsel, 202-366-1373, or via email at 
jomar.maldonado@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

    This notice provides information regarding FHWA's finding that a 
Buy America waiver is appropriate for the obligation of Federal-aid 
funds for 30 State projects involving the purchase or retrofit of 
vehicles (including sedans, vans, pickups, SUVs, trucks, buses, street 
sweepers) or vehicle components (such as exhaust controls and auxiliary 
power units) on the condition that they be assembled in the U.S. The 
waiver would apply to approximately 340 vehicles. The requests, 
available at http://www.fhwa.dot.gov/construction/contracts/cmaq140623.cfm, are incorporated by reference into this notice. The 
purposes of these projects include the improvement of air quality 
(Congestion Mitigation and Air Quality Improvement Program projects), 
implementation of the National Bridge and Tunnel Inventory and 
Inspection Program, and the implementation of the FHWA's Recreational 
Trails Program.
    Title 23, Code of Federal Regulations, section 635.410 requires 
that steel or iron materials (including protective coatings) that will 
be permanently incorporated in a Federal-aid project must be 
manufactured in the U.S. For FHWA, this means that all the processes 
that modified the chemical content, physical shape or size, or final 
finish of the material (from initial melting and mixing, continuing 
through the bending and coating) occurred in the U.S. The statute and 
regulations create a process for granting waivers from the Buy America 
requirements when its application would be inconsistent with the public 
interest or when satisfactory quality domestic steel and iron products 
are not sufficiently available. In 1983, the FHWA determined that it 
was both in the public interest and consistent with the legislative 
intent to waive Buy America for manufactured products other than steel 
manufactured products. However, FHWA's national waiver for manufactured 
products does not apply to the requests in this notice because they 
involve predominately steel and iron manufactured products. The FHWA's 
Buy America requirements do not have special provisions for applying 
Buy America to ``rolling stock'' such as vehicles or vehicle components 
(see title 49, United States Code, section 5323(j)(2)(C) (49 U.S.C. 
5323(j)(2)(C)), 49 CFR 661.11, and 49 U.S.C. 24405(a)(2)(C) for 
examples of Buy America rolling stock provisions for other DOT 
agencies).
    Based on all the information available to the agency, FHWA 
concludes that there are no domestic manufacturers that produce the 
vehicles and vehicle components identified in this notice in such a way 
that their steel and iron elements are manufactured domestically. The 
FHWA's Buy America requirements were tailored to the types of products 
that are typically used in highway construction, which generally meet 
the requirement that steel and iron materials be manufactured 
domestically. Vehicles were not the types of products that were 
initially envisioned to meet FHWA Buy America requirements. In today's 
global industry, vehicles are assembled with iron and steel components 
that are manufactured all over the world. The FHWA is not aware

[[Page 44083]]

of any domestically produced vehicle on the market that meets the 
FHWA's Buy America requirement to have all its iron and steel be 
manufactured exclusively in the U.S. For example, the Chevrolet Volt, 
which was identified by many commenters in a November 21, 2011, Federal 
Register Notice (76 FR 72027) as a car that is made in the U.S., is 
comprised of only 45 percent of U.S. and Canadian content according to 
the National Highway Traffic Safety Administration's Part 583 American 
Automobile Labeling Act Report Web page (http://www.nhtsa.gov/Laws+&+Regulations/Part+583+American+Automobile+Labeling+Act+(AALA)+Reports). Moreover, 
there is no indication of how much of this 45 percent content is U.S.-
manufactured (from initial melting and mixing) iron and steel content.
    In accordance with Division A, section 122 of the Consolidated and 
Further Continuing Appropriations Act of 2012 (Pub. L. 112-284), FHWA 
published a notice of intent to issue a waiver on its Web site at 
(http://www.fhwa.dot.gov/construction/contracts/waivers.cfm?id=97) on 
June 23. The FHWA received 11 comments in response to the publication. 
Three commenters supported granting a waiver on the basis that the 
waiver would allow important air quality improvement and bridge 
inspection projects to move forward. Eight commenters disagreed with 
the need for the waiver and provided general statements that U.S. tax 
dollars should go toward domestic labor and materials that help create 
jobs; however, none of these commenters identified a vehicle that 
complies with the FHWA requirement that steel and iron materials are 
manufactured domestically. A representative of the Alliance for 
American Manufacturing suggested that a domestic content standard for 
vehicles purchased or retrofitted using FHWA funds be implemented for 
programs funded by FHWA. This commenter noted that the Federal Transit 
Administration (FTA) and the Federal Railroad Administration (FRA) both 
apply domestic content standards to vehicles and require assembly in 
the United States. In response to this comment, the FHWA recognizes the 
use of domestic content requirements by FTA and FRA; however, their 
statutory and regulatory authority are different. The FHWA does not 
have a domestic content standard.
    Based on FHWA's conclusion that there are no domestic manufacturers 
that can produce the vehicles and vehicle components identified in this 
notice in such a way that steel and iron materials are manufactured 
domestically, and after consideration of the comments received, FHWA 
finds that application of the FHWA's Buy America requirements to these 
products is inconsistent with the public interest (23 U.S.C. 313(b)(1) 
and 23 CFR 635.410(c)(2)(i)). However, FHWA believes that it is in the 
public interest and consistent with the Buy America requirements to 
impose the condition that the vehicles and the vehicle components be 
assembled in the U.S. Requiring final assembly to be performed in the 
U.S. is consistent with past guidance to the FHWA Division Offices on 
manufactured products (see Memorandum on Buy America Policy Response, 
Dec. 22, 1997, http://www.fhwa.dot.gov/programadmin/contracts/122297.cfm). A waiver of the Buy America requirement 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 dollars are used to support and create 
jobs in the U.S. This approach is similar to the partial waivers 
previously given for various vehicle projects. Thus, so long as the 
final assembly of the 30 vehicle projects (including sedans, vans, 
pickups, SUVs, trucks, buses, street sweepers, and tractors) and 
vehicle components (such as exhaust controls and auxiliary power units) 
occurs in the U.S., 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 Safe, 
Accountable, Flexible, Efficient Transportation Equity Act: A Legacy 
for Users, Technical Corrections Act of 2008 (Pub. L. 110-244), FHWA is 
providing this notice of its finding that a public interest waiver of 
Buy America requirements is appropriate on the condition that the 
vehicles and vehicle components identified in the notice be assembled 
in the U.S. 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 FHWA's Web site via the link provided to 
the waiver page noted above.

    Authority: (23 U.S.C. 313; P.L. 110-161, 23 CFR 635.410)

    Issued on: July 21, 2014.
Gregory G. Nadeau,
Deputy Administrator, Federal Highway Administration.
[FR Doc. 2014-17787 Filed 7-28-14; 8:45 am]
BILLING CODE 4910-22-P

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