Notice of Nationwide Waiver of Section 1605 (Buy American Requirement) of American Recovery and Reinvestment Act of 2009 (ARRA) for Projects With Debt Incurred on or After October 1, 2008 and Before February 17, 2009 That Are Refinanced Through the Clean or Drinking Water State Revolving Funds Using Assistance Provided Under ARRA, 15722-15723 [E9-7828]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 74, Number 65 (Tuesday, April 7, 2009)]
[Notices]
[Pages 15722-15723]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-7828]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-8789-9]


Notice of Nationwide Waiver of Section 1605 (Buy American 
Requirement) of American Recovery and Reinvestment Act of 2009 (ARRA) 
for Projects With Debt Incurred on or After October 1, 2008 and Before 
February 17, 2009 That Are Refinanced Through the Clean or Drinking 
Water State Revolving Funds Using Assistance Provided Under ARRA

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The EPA is hereby granting a nationwide waiver of the Buy 
American requirements of ARRA Section 1605 under the authority of 
Section 1605(b)(1) (public interest waiver) for eligible projects for 
which debt was incurred on or after October 1, 2008 and before February 
17, 2009, the date of enactment of ARRA. This action permits the use of 
non-domestic iron, steel, and manufactured goods in such projects 
funded by ARRA that may otherwise be prohibited under section 1605(a).

DATES: Effective Date: April 1, 2009.

FOR FURTHER INFORMATION CONTACT: Cynthia Dougherty, Director, Office of 
Ground Water and Drinking Water, (202) 564-3750 or Jim Hanlon, 
Director, Office of Wastewater Management, (202) 564-0748, 
Environmental Protection Agency, 1200 Pennsylvania Avenue NW., 
Washington, DC 20460.

SUPPLEMENTARY INFORMATION: In accordance with ARRA Section 1605(c), the 
EPA hereby provides notice that it is granting a nationwide waiver of 
the requirements of section 1605(a) of Public Law 111-5, Buy American 
requirements, for eligible projects for which a Clean or Drinking Water 
State Revolving Fund (SRF) has concluded or will conclude an assistance 
agreement using ARRA funds to refinance a debt incurred on or after 
October 1, 2008, and before February 17, 2009.
    The basis for the nationwide waiver is the authorization in the SRF 
appropriations heading of ARRA for refinancing using ARRA funds of 
certain debt obligations, as follows:

    That notwithstanding section 603(d)(2) of the Federal Water 
Pollution Control Act and section 1452(f)(2) of the Safe Drinking 
Water Act, funds may be used to buy, refinance or restructure the 
debt obligations of eligible recipients only where such debt was 
incurred on or after October 1, 2008.

    In the ordinary course of SRF business, refinancing of any existing 
debt obligations of assistance recipients eligible for refinancing is 
an allowable type of assistance under the sections referenced in the 
ARRA provision above, largely irrespective of when the debt was 
incurred. As the purpose of the SRF provisions of ARRA was to stimulate 
economic recovery by funding current infrastructure construction, the 
purpose of this ARRA provision was not to provide more advantageous 
financing for any projects whose construction had substantially already 
occurred. Rather, with the House of Representatives' passage of H.R. 
7110 in late September 2008 giving notice of Congress' strong interest 
in economic recovery legislation, this refinancing provision was 
intended to include within the favorable financing terms of ARRA, 
eligible projects undertaken after that time (and within the Fiscal 
Year 2009 timeframe of ARRA as a supplemental appropriation) in 
anticipation of ARRA.
    Moreover, as the debate on the legislation that ultimately became 
ARRA continued through November and December, 2008 into January and 
February, 2009, States and utilities increasingly reported that action 
on eligible projects that State SRFs wished to support and for which 
there was available funding under the base SRF program were being 
deferred, in the hope of obtaining more advantageous financing terms 
from the ARRA appropriation. In part because this deferral of financing 
and construction for genuinely ``shovel ready'' projects was in direct 
conflict with the most fundamental economic recovery purposes of ARRA, 
Congress adopted this refinancing provision to enable eligible projects 
which began creating jobs after October 1, 2008, to receive ARRA 
funding to recognize and support those projects' contribution to 
economic recovery. This is confirmed in the declaration of the Joint 
Explanatory Statement of the Conference (H. Rpt. 111-16, at 444) that 
``[t]o ensure that funds are used to create jobs, the bill also limits 
the use of the revolving funds to buy, refinance, or restructure debt 
incurred prior to October 1, 2008.''
    The proponents of projects that fall within the scope of this SRF 
refinancing provision for ARRA had, in order to obtain the initial 
financing, specified designs which may include elements which have 
limited or often no domestic availability, many may have solicited bids 
from prospective contractors, and some subsequently awarded 
construction contracts, and in some cases began construction, prior to 
the February 17, 2009, enactment of ARRA. All of these actions were in 
fulfillment of Congress' intention in passing ARRA and in particular, 
adopting this SRF refinancing provision, to create jobs and spur 
economic recovery ``by commencing activities and expenditures as 
expeditiously as possible.'' (See ARRA Section 3.)
    Moreover, in all cases of initial financing prior to February 17, 
the project proponents were proceeding in good faith and without fair 
notice as to the existence and statutory scope of any Buy American 
requirement.
    The imposition of ARRA's Buy American requirements on projects 
eligible for SRF assistance whose assistance applicants had already 
obtained financing on or after October 1, 2008 and prior to February 
17, 2009, the date on which those requirements were imposed, would in 
all cases entail time-consuming delay and thus displace the ``shovel 
ready'' status of these projects. This would frustrate Congress' 
specific and explicit intent to allow for the use of ARRA funds to 
refinance those projects through the SRFs, as well as for expeditious 
construction generally. ARRA Section 1605(b)(1) authorized the 
Administrator to waive the requirements of Section 1605(a) in any case 
or category of cases in which she finds that applying subsection (a) 
would be inconsistent with the public interest.
    Therefore, for the foregoing reasons, imposing ARRA's Buy American 
requirements for the category of cases described herein is not in the 
public interest. This supplementary information constitutes the 
``detailed written justification'' required by Section 1605(c) for 
waivers ``based on a finding under subsection (b).''

    Authority: Public Law 111-5, section 1605.


[[Page 15723]]


    Dated: April 1, 2009.
Michael H. Shapiro,
Acting Assistant Administrator for Water.
 [FR Doc. E9-7828 Filed 4-6-09; 8:45 am]
BILLING CODE 6560-50-P