Buy America Policy, 41492-41496 [2013-16554]
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013–16529 Filed 7–9–13; 8:45 am]
BILLING CODE 8011–01–P
DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
[FHWA Docket No. FHWA–2013–0041]
Buy America Policy
Federal Highway
Administration (FHWA), DOT.
ACTION: Notice and request for
comments.
AGENCY:
The FHWA is seeking
comments regarding the continued
need, in whole or in part, for the general
waivers from Buy America for
manufactured products; for ferry boat
equipment; and for pig iron and
processed, pelletized, and reduced iron
ores. These waivers have been in effect
since 1983, 1994, and 1995,
respectively. The FHWA is also seeking
comment on the continuing need for the
FHWA’s minimal use threshold
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SUMMARY:
23 17
CFR 200.30–3(a)(12).
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(currently established at $2,500 or 1/10
of 1 percent of the total contract value,
whichever is greater).
DATES: Comments must be received on
or before August 9, 2013. Late
comments will be considered to the
extent practicable.
ADDRESSES: Mail or hand deliver
comments to the U.S. Department of
Transportation, Dockets Management
Facility, Room W12–140, 1200 New
Jersey Avenue SE., Washington, DC
20590, or submit electronically at
https://www.regulations.gov or fax
comments to (202) 493–2251. All
comments should include the docket
number that appears in the heading of
this document. All comments received
will be available for examination and
copying at the above address from 9
a.m. to 5 p.m., e.t., Monday through
Friday, except Federal holidays. Those
desiring notification or receipt of
comments must include a selfaddressed, stamped postcard or you
may print the acknowledgment page
that appears after submitting comments
electronically. You may review DOT’s
complete Privacy Act Statement in the
Federal Register published on April 11,
2000 (Volume 65, Number 70, Page
19477–78).
FOR FURTHER INFORMATION CONTACT: Mr.
Gerald Yakowenko, Contract
Administration Team Leader, Office of
Program Administration, (202) 366–
1562, or Mr. Michael Harkins, Office of
the Chief Counsel, (202) 366–4928,
Federal Highway Administration, 1200
New Jersey Avenue SE., Washington,
DC 20590. Office hours are from 8 a.m.
to 4:30 p.m., e.t., Monday through
Friday, except Federal holidays.
SUPPLEMENTARY INFORMATION:
Electronic Access and Filing
This document and all comments
received may be viewed online through
the Federal eRulemaking portal at:
https://www.regulations.gov.
Regulations.gov is available 24 hours
each day, 365 days each year. Electronic
submission and retrieval help and
guidelines are available under the help
section of the Web site. An electronic
copy of this document may also be
downloaded by accessing the Office of
the Federal Register’s home page at:
https://www.archives.gov/federalregister/, or the Government Printing
Office’s Web page at: https://
www.gpo.gov/fdsys.
Regulatory Background
The FHWA’s Buy America policy in
23 CFR 635.410 requires a domestic
manufacturing process for any steel or
iron products (including protective
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coatings) that are permanently
incorporated into a Federal-aid highway
construction project. The regulation is
based on the statutory authority in 23
U.S.C. 313(a) which states:
‘‘Notwithstanding any other provision
of law, the Secretary of Transportation
shall not obligate any funds authorized
to be appropriated to carry out the
Surface Transportation Assistance Act
of 1982 (96 Stat. 2097) or this title and
administered by the Department of
Transportation, unless steel, iron, and
manufactured products used in such
project are produced in the United
States.’’
The statute provides for the
application of the Buy America
requirements to any project using Title
23 funding; however, exceptions are
provided where the Secretary finds that:
(1) The application of the requirement
would be inconsistent with the public
interest, (2) where materials and
products are not produced in the United
States in sufficient and reasonably
available quantities and of a satisfactory
quality; or (3) that inclusion of domestic
material will increase the cost of the
overall project contract by more than 25
percent.
Based on the Secretary’s authority to
grant waivers from Buy America, the
FHWA has issued three general waivers
from Buy America. These waivers
pertain to manufactured products, ferry
boat equipment, and pig iron and
processed, pelletized, and reduced iron
ores, and have been in effect since 1983,
1994, and 1995, respectively. With this
notice, the FHWA is seeking comment
regarding whether these waivers
continue to be necessary, in whole or in
part, and, if so, what limits should be
placed on these waivers. Additionally,
FHWA’s regulations at 23 CFR
635.410(b)(4) permit the incorporation
of foreign steel and iron into a project
if the cost of such items does not exceed
one-tenth of one percent (0.1 percent) of
the total contract cost or $2,500,
whichever is greater. The FHWA is also
seeking comment on the continuing
need for the provision and, if so,
whether the threshold is appropriate.
Manufactured Products
General Manufactured Products
Section 165 of the Surface
Transportation Assistance Act (STAA)
of 1982, Public Law 97–424 (1983), is
the source legislation for FHWA’s Buy
America requirements.1 This statute
1 Congress codified Section 165 of the STAA of
1982, as amended, at 23 U.S.C. 313 with the
enactment of Section 1903 of the Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A
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replaced an earlier statutory version of
Buy America from Section 401 of the
STAA of 1978, Public Law 95–599
(1978), that applied to the Federal-aid
highway program. Section 165 of the
STAA of 1982 was implemented with a
November 25, 1983, final rule which
implemented FHWA’s Buy America
regulatory policies now found in 23 CFR
635.410. In the preamble to the 1983
final rule (48 FR 53099), the FHWA
summarized and addressed more than
560 public comments, including
comments on the FHWA’s interim
decision to waive the application of Buy
America to manufactured products (48
FR 1946), and found that it was in the
public interest to waive application of
Buy America to manufactured products
other than steel and iron manufactured
products.
In discussing the rationale for
continuing the general waiver for
manufactured products in the preamble
to the1983 final rule, the FHWA stated
that the agency had issued an identical
general waiver for manufactured
products in implementing the 1978 Buy
America provisions. In issuing the
waiver for the 1978 Buy America statute
(43 FR 53717 and 45 FR 77455), the
FHWA explained that steel was the only
significant foreign commodity having a
significant nationwide effect on the cost
of Federal-aid highway construction
projects.2 While natural materials (e.g.,
sand, stone, gravel, and earth materials)
and petroleum-based products (e.g.,
fuels, lubricants, and bituminous
products) are also used in large amounts
in Federal-aid highway construction
projects, foreign competition in natural
materials was not significant due to
their high cost in transportation and
petroleum-based products were not
available from domestic sources in
sufficient and reasonable quantities.
In examining the legislative history of
the 1983 Buy America statute, the
FHWA found that Congress considered
which products should specifically be
covered (such as steel, cement, and
asphalt), and focused solely on steel and
cement. Therefore, the FHWA
determined that the best interpretation
of congressional intent was that
Congress, with the enactment of Section
Legacy for Users (SAFETEA–LU), Public Law 109–
59 (2005).
2 Note that the 1983 final rule did not use the
term ‘‘general waiver.’’ Instead, the 1983 final rule
simply said that the FHWA found it in the public
interest to waive the application of Buy America to
manufactured products other than steel and cement
manufactured products. The term ‘‘general waiver’’
is being used for purposes of this notice to help
clarify that the waiver issued for manufactured
products in the 1983 final rule is a waiver of general
applicability that is not subject to a project-byproject determination.
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165 of the STAA of 1982, did not intend
to override the existing policy with
respect to manufactured products that
applied to the 1978 Buy America
statute. While Congress subsequently
modified the 1983 Buy America statute
to repeal the statute’s coverage of
cement (Pub. L. 98–229, Section 10
(1984) and to add coverage for iron
(Intermodal Surface Transportation
Efficiency Act (ISTEA), Pub. L. 102–240,
Section 1048(a) (1991)), Congress left
the remaining provisions intact.
Additionally, in the preamble to the
1983 final rule, the FHWA noted, and
agreed with, statements from
commenters who noted the difficulty in
tracing the origin of various materials
comprising manufactured products. The
FHWA further noted comments
regarding the difficulty of tracing the
origin of steel components and
subcomponents of various
manufactured products, such as traffic
controllers. After consideration of all
the comments, the FHWA found that it
was in the public interest to waive the
application of Buy America to
manufactured products other than steel
and cement manufactured products.
Subsequently, in a December 12, 1997,
memorandum, the FHWA reinforced
and clarified the concept of this public
interest exclusion by stating that Buy
America requirements are applicable to
the steel components of predominantly
steel products. However, that memo did
not define the term ‘‘predominantly
steel product.’’
The American Recovery and
Reinvestment Act of 2009 (Recovery
Act) brought a renewed interest from
public and industry representatives in
ensuring that Federal funds were used
to support domestic manufacturing.
While the ‘‘Buy American’’ provisions
of the Recovery Act Section 1605 did
not apply to the Federal-aid highway
program, the FHWA took great efforts to
ensure that Buy America provisions
were included and enforced on all
Recovery Act projects.3
As a result of this heightened
awareness, construction project
inspection staff and audit
representatives spent significant
resources in examining compliance with
Buy America requirements for all steel
or iron products. Compliance issues
were noted regarding manufactured
3 Title XII of the Recovery Act specifically stated
that Recovery Act funded highway projects were to
be administered as if apportioned under chapter 1
of title 23 U.S.C. Therefore, Recovery Act-funded
highway projects were administered under the
FHWA’s traditional Buy America requirements in
23 CFR 635.410 instead of the Recovery Act specific
Buy American provisions codified in 2 CFR Part
172.
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products that contained miscellaneous
steel or iron components such as light
bulbs, sinks, toilets, faucets, tie wires,
lifting hooks, traffic controller mounting
brackets, nuts, bolts, washers and
screws. Many of these products would
typically have been labeled as
miscellaneous steel components or steel
subcomponents comprising part of a
manufactured product that would have
been subject to the general waiver
granted in the 1983 final rule.
Nevertheless, continuing requests for
clarifications regarding Buy America
requirements during Recovery Act
implementation and National Review
Team oversight efforts led the FHWA to
issue a memorandum on December 21,
2012. Moreover, given the broadened
scope of the Federal-aid highway
program since 1983 as well as the
evolution of technologies, products, and
construction methods used in highway
and bridge construction, the FHWA felt
that issuing some guidance to clarify the
existence and use of this waiver was
prudent. This December 2012
memorandum was intended to clarify
the long-standing policy regarding the
application of Buy America
requirements to steel or iron
manufactured products as it related to
the waiver granted for manufactured
products in the 1983 final rule. Since
the existence of this waiver is found in
the preamble of the 1983 rulemaking
document with very little other
guidance available regarding its
existence and application, the FHWA
wanted to ensure that FHWA Division
Offices were aware of the existence of
the waiver and that the waiver was
consistently applied. The memorandum
specifically identified a list of products
that are subject to Buy America
requirements, defined the term
predominantly steel or iron
manufactured product by a 90 percent
content requirement, and provided
examples of miscellaneous steel or iron
products.
However, this correspondence has
triggered opposition from various
groups in the manufacturing industry.
Also, a bill has been introduced in the
House of Representatives (HR 949) that
would require the FHWA to reexamine
the agency’s standing nationwide Buy
America waivers by issuing a notice and
request for public comments on the
continuing need for these waivers.
While the FHWA maintains that the
agency has not changed the application
or scope of the manufactured products
waiver, the FHWA agrees with the
intent of HR 949 that, due to the age of
the manufactured products waiver, it is
prudent to seek public comments as part
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of a review of the continued need for
this waiver.
The FHWA supports the application
of Buy America in the most effective
and efficient manner possible. The
application of Buy America is most
effective and efficient whenever it is
applied to products that are available
from domestically produced sources in
sufficient and reasonably available
quantities and of a satisfactory quality.
As stated in the 1983 final rule, the
FHWA found that the waiver of Buy
America to manufactured products does
not have any significant impact since
manufactured products comprised a
small percent of the highway
construction program. With this notice,
the FHWA is reevaluating this finding
and requesting comments on the
manufactured products waiver as well
as the needed parameters of the waiver
if continued.
The most prevalent materials used in
highway construction can be included
in four major material categories:
Bituminous products, Portland cement
products, aggregates, and steel products.
Based on a report titled ‘‘Distribution of
Costs on Federal-aid Highway
Construction Contracts Over $1,000,000
on the National Highway System
Reported During Calendar Year 2004’’
(the last year for which data was
available), the approximate value of the
materials used as a percentage of the
overall value of all construction contract
was as follows: Bituminous products
(7.8%), Portland cement products
(0.7%), aggregates (17.8%) and steel
products (4.8%) (https://
www.fhwa.dot.gov/policy/ohim/hs04/
htm/costpie.htm#alt1). Of these
materials, it appears that only steel/iron
products would be appropriate for
consideration under the public interest
waiver provisions available under 23
U.S.C. 313.
The market conditions and
assumptions that led to FHWA’s
decision not to include oil products
(bituminous products or asphaltic
cement) in the November 25, 1983,
general waiver still exist today.
Petroleum and petroleum-based
products that are permanently
incorporated in a project (such as
asphalt cement) are generally not
available from domestic sources in
sufficient and reasonably available
quantities. In the preamble to the 1983
final rule, the FHWA noted that over
200 comments were received regarding
the application of Buy America
provisions to oil products and virtually
all commenters asked that oil and/or
petroleum products and/or asphalt be
exempt from coverage.
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As noted above, Congress specifically
modified the 1983 Buy America statute
to repeal the statute’s coverage of
cement. Aggregates and other natural
materials, such as sand, stone, and
gravel are used in large quantities in
highway construction; however, foreign
competition is very limited due to the
difficulty and high cost of transporting
these heavy materials over long
distances. Thus, subjecting these
products to Buy America requirements
will place an undue administrative
burden on State DOTs in ensuring Buy
America compliance and could
unnecessarily delay, or even halt,
projects for difficulties in tracing the
origin of all items used to manufacture
these products. Moreover, some of the
ingredients used to make concrete
products, such as Portland cement in
concrete or asphalt cement in
bituminous concrete, are not
domestically manufactured in sufficient
and reasonably available quantities to
meet the demand for these products.
Thus, the application of Buy America
to only steel and iron products seems to
have the highest potential of realizing
the intent of the Buy America statutory
provisions in protecting the domestic
manufacturing industry. The FHWA has
applied, and intends to continue to
apply, Buy America to predominantly
steel and iron products delivered to a
project site for permanent incorporation
into that project. This includes
predominantly steel and iron products
that are incorporated into precast
concrete products.
Additionally, for items that may be
comprised of steel and iron components
or subcomponents, the application of
Buy America to the steel and iron in
these items would have no impact
because the availability of these items
are not driven by the demands of the
needs for highway construction. For
example, some projects, such as in the
construction and improvement of rest
areas, may involve the incorporation of
light bulbs. Light bulbs are not made
special for highway construction and,
thus, there is no way to trace where the
steel and iron that is incorporated into
a light bulb is manufactured. The same
problem is attendant with other
products, also involved in the
construction and improvement of rest
areas, such as faucets and door hinges.
The preamble to the 1983 final rule
cited the example of a traffic controller
as a manufactured product, where it
would be inconsistent with the public
interest to apply Buy America
requirements. In general, traffic
controllers and traffic management
hardware and equipment are examples
of manufactured products that are
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composed of multiple components and
subcomponents whose origins are
difficult, if not impossible to trace.
Vehicles
One example of the broadened scope
of the Federal-aid highway program
involves the Congestion Mitigation and
Air Quality Improvement (CMAQ)
Program. The CMAQ program was
created under the Intermodal Surface
Transportation Efficiency Act (ISTEA)
of 1991, Public Law 102–240, and is
codified at 23 U.S.C. 149. The CMAQ
Program provides annual
apportionments to States for projects or
programs that will contribute to
attainment or maintenance of the
national ambient air quality standards
(NAAQS) for ozone, carbon monoxide
(CO), and particulate matter (PM). One
type of CMAQ project that is being
programmed at a growing rate by State,
local governments, and private sector
sponsors is acquisition of fuel efficient
and low emission vehicles and
equipment. With recent developments
in clean fuel and low emission
technologies as well as broader
production and availability of these
types of vehicles in the U.S. market by
the automotive industry, the FHWA is
seeing an increased demand to use
CMAQ funds to purchase these vehicles
and associated items, such as
construction equipment and
locomotives.
The FHWA currently has not
established a Buy America policy for
these types of projects. While vehicles
are a manufactured product, with the
increased use of CMAQ funds for these
types of projects, the FHWA has
recently determined that the Buy
America program is appropriate to
apply to these types of projects. For
example, the FHWA granted conditional
waivers given to Alameda County, San
Francisco County, and Merced County,
CA, for vehicle purchases on November
21, 2011, notices (76 FR 72027 and 76
FR 72028) and March 30, 2012 (77 FR
19410). These waivers were granted
upon the condition that the final
assembly of the vehicles occur in the
United States. However, the FHWA did
not apply a domestic content standard
to these waivers. A vehicle
manufacturer relies on numerous
international sources for various
components and it is virtually
impossible to track the specific country
of origin for small steel components and
subcomponents even though a
manufacturer can certify where the final
assembly of the vehicle occurs. The
difficulty of tracing and documenting
domestic manufacturing processes for
every manufacturing step for all
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components and subcomponents
illustrates the need for the public
interest exception provided by 23 U.S.C.
313(b).
The FHWA was, and remains,
uncertain whether such a domestic
content requirement would further the
objectives of the CMAQ Program in
encouraging State and local entities to
pursue clean fuel technologies.
Moreover, the FHWA has no data 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 vehicles or
equipment is questionable. The FHWA
is unaware of any method the agency
can use to determine where the
components and subcomponents,
including 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 vehicles as
well as vehicle retrofit projects.
Ferry Boat Equipment
On February 9, 1994, FHWA
published a notice in the Federal
Register (59 FR 6080) announcing a
nationwide waiver of the Buy America
requirements for certain steel products
used in the construction of ferry boats.
The FHWA granted this waiver after
publishing a notice in the Federal
Register (58 FR 33295) and requesting
comment for which two comments were
received. The items included in the
waiver are marine diesel engines,
electrical switchboards and switchgear,
electric motors, pumps, ventilation fans,
boilers, electrical controls, and
electronic equipment. Other steel and
iron products used in the construction
of ferry boats that are manufactured
domestically are not waived, including
steel and stainless steel plate and
shapes, sheet steel and stainless steel,
steel and stainless steel pipe and tubing,
and galvanized steel products. The
FHWA has not reevaluated the
continuing need for this waiver since it
was issued in 1994. Based on the
FHWA’s present knowledge, however,
the FHWA has no information that
would lead us to believe that domestic
manufacturers of the waived ferry boat
components are now available. The
FHWA invites comments on the
continuing need for this nationwide
waiver.
Pig Iron and Processed, Pelletized, and
Reduced Iron Ores
On March 24, 1995, FHWA published
a notice in the Federal Register
announcing a nationwide waiver of the
Buy America requirements for certain
components used in the manufacturing
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process for steel and iron products. The
specific components include pig iron
and processed, pelletized, and reduced
iron ores. The FHWA granted this
waiver after publishing a notice in the
Federal Register (59 FR 43376) and
requesting comment for which 10
comments were received. Based on the
findings of a nationwide review, and a
review of the comments submitted in
response to the waiver proposal, the
FHWA believed that the supply from
domestic sources of pig iron and
processed, pelletized, and reduced iron
ore was not adequate to permit full
compliance with the Buy America
requirements. The FHWA has not
reevaluated the continuing need for this
waiver since it was issued in 1995.
Based on the FHWA’s present
knowledge, however, the FHWA has no
information that would lead us to
believe that the supply of domestic pig
iron and processed, pelletized, and
reduced iron ore is adequate to meet the
needs of domestic steel and iron
manufacturers. The FHWA invites
comments on the continuing need for
this nationwide waiver.
Minimal Use Exclusion
One regulatory criterion that was
addressed in the November 25, 1983,
final rule to implement the publicinterest exclusion provision of 23 U.S.C.
313(b) is the minimal use provision in
23 CFR 635.410(b)(4). This provision
allows for a minimal amount of nondomestic steel to be incorporated if
‘‘. . . the cost of such materials used
does not exceed one-tenth of one
percent (0.1 percent) of the total
contract cost or $2,500, whichever is
greater.’’ However, this provision
requires the contracting agency to
maintain a running list of non-domestic
steel or iron components or
subcomponents as a construction
project proceeds. The threshold
amounts have not been revised since the
November 25, 1983, final rule and
managing the documentation of
compliance with this threshold can be
problematic on large, complex projects.
One potential method of easing the
inspection and reporting burden on
contracting agencies for Buy America
compliance would be to raise the
minimal use threshold; however, there
is no clear approach for doing so.
Consideration could be given to raising
the $2,500 threshold by a multiplier
related to relevant producer price
indices for steel or iron products or
relevant cost indices for highway
construction. In either case, it is
difficult to establish an index that is
representative of all of the iron and steel
products that are used in the Federal-aid
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41495
highway program. The multiplier could
be as high as 2.5 (based on the Producer
Price Index Commodity information for
iron and steel products for the period
1983 to 2013 for group WPS101).
(https://data.bls.gov/pdq/querytool.jsp?
survey=wp). The FHWA invites
comment on the continuing need for the
minimal use threshold contained in the
regulations. For commenters believing
that this provision continues to be
needed, the FHWA requests comment
on whether the monetary threshold
should be raised and the appropriate
method of doing so.
Invitation for Public Comment
The FHWA requests public comment
and input on issues related to the
application of Buy America
requirements to manufactured products,
including various manufactured
products that include steel or iron
subcomponents. Specifically, the FHWA
invites public comment on the
following issues:
1. Has the nature of the Federal-aid
highway program and the U.S. steel/iron
manufacturing industry changed to such
a degree that FHWA needs to reconsider
its criteria for applying Buy America
requirements to manufactured products?
2. Are there specific or general types
of manufactured products that should
not be covered by a public interest
waiver and why?
3. Are there specific or general types
of manufactured products that should
be covered by a public interest waiver
and why?
4. Are there specific issues that
should be considered for manufactured
products that include steel or iron
components and subcomponents?
Should the FHWA continue to
distinguish manufactured products that
are comprised predominantly of steel
and iron for purposes of requiring all
manufacturing processes to occur in the
United States? How should a
predominantly steel and iron product be
defined? Should the FHWA continue to
consider a predominantly steel and iron
product as one comprising 90 percent
steel and iron?
5. Should vehicles be subject to Buy
America? If so, what types of vehicles?
How should the FHWA define vehicle?
Should the definition of vehicle include
construction equipment, such as street
sweepers, backhoes, refuse trucks,
dump trucks, graders, etc.? Should the
FHWA broaden the definition of vehicle
to include bicycles, electric bicycles,
and neighborhood vehicles? Also, what
standard should the FHWA apply (i.e.,
final assembly in the U.S.)? For final
assembly, what constitutes final
assembly? Should there be a domestic
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content threshold? If so, what content
should be covered (i.e., steel and iron or
all content comprising a vehicle) and
what should the percentages be? Should
be there be different percentages for
different types of vehicles? What data is
available to support the use of a
percentage? What types of vehicles
would be available to State and local
agencies at any given percentage?
6. Should vehicle retrofits be subject
to Buy America? If so, what standard
should be applied? Should the standard
differ from that of a whole vehicle (i.e.,
if final assembly is the standard for a
vehicle, should the FHWA be concerned
about Buy America when an engine is
purchased on its own for incorporation
into a vehicle)?
7. What standard should apply to
locomotives, rail cars, and locomotive
parts that are purchased for locomotive
retrofits? Should the FHWA require the
application of the Federal Railroad
Administration’s policy, which views
locomotives and rail cars as ‘‘end
products’’ that must be assembled in the
United States and all components
(including components purchased for
retrofits) be manufactured in the United
States?
8. Do the minimal use threshold
provisions of 23 CFR 635.410(b)(4)
represent reasonable criteria for
expressing the public interest exclusion
limitations for the Federal-aid highway
program, and present an appropriate
balance between an undue
administrative burden in accounting for
every steel and iron item in a project
versus giving effect to the intent of Buy
America?
9. Are there any domestic suppliers
available that can domestically produce
pig iron and processed, pelletized, and
reduced iron ores in sufficient
quantities of a satisfactory quality to
supply the entire need for Federal-aid
highway projects?
10. Are there any domestic suppliers
available that can domestically produce
ferry boat equipment in compliance
with the FHWA’s Buy America
requirements?
11. If any of the general waivers
(manufactured products, ferry boat
equipment, and pig iron) to Buy
America are rescinded, what would be
the implications to administering
Federal-aid highway projects?
12. What would be the potential
advantages or disadvantages of FHWA
adopting a policy for manufactured
products similar to that used by many
Federal agencies who implemented the
Recovery Act Buy America
requirements? (Note: 2 CFR
176.70(a)(2)(i) states: ‘‘Production in the
United States of the iron or steel used
VerDate Mar<15>2010
17:42 Jul 09, 2013
Jkt 229001
in the project requires that all
manufacturing processes must take
place in the United States, except
metallurgical processes involving
refinement of steel additives. These
requirements do not apply to iron or
steel used as components or
subcomponents of manufactured goods
used in the project.’’)
Issued on: July 3, 2013.
Victor M. Mendez,
Federal Highway Administrator.
[FR Doc. 2013–16554 Filed 7–9–13; 8:45 am]
BILLING CODE 4910–22–P
DEPARTMENT OF TRANSPORTATION
Pipeline and Hazardous Materials
Safety Administration
[Docket No. PHMSA–2013–0156]
Pipeline Safety: Meetings of the Gas
and Liquid Pipeline Advisory
Committees
Pipeline and Hazardous
Materials Safety Administration
(PHMSA), DOT.
ACTION: Notice of advisory committee
meeting.
AGENCY:
This notice announces a
public meeting of the Gas Pipeline
Advisory Committee (GPAC) also
known as the Technical Pipeline Safety
Standards Committee, and the Liquid
Pipeline Advisory Committee (LPAC)
also known as the Technical Hazardous
Liquid Pipeline Safety Standards
Committee. The committees will meet
in joint session to discuss a variety of
topics to keep committee members upto-date on DOT’s pipeline safety
program.
SUMMARY:
The meetings will be held on
August 8–9, 2013.
ADDRESSES: The meeting will take place
at The Westin Arlington Gateway, 801
Glebe Road, Arlington, VA 22203,
Fitzgerald Ballroom, Phone (703) 717–
6200, Web site https://www.starwood
hotels.com/westin/property/overview/
index.html?propertyID=1513.
Any additional information will be
published on the PHMSA Web site at
https://www.phmsa.dot.gov/public,
under ‘‘News and Updates’’ on the
homepage.
The meetings will not be web cast;
however, presentations will be available
on the meeting Web site and posted in
the E-Gov Web site at https://
www.regulations.gov in docket number
PHMSA–2013–0156 within 30 days
following the meeting.
DATES:
PO 00000
Frm 00145
Fmt 4703
Sfmt 4703
Comments: Comments on the meeting
may be submitted to the docket in the
following ways:
E-Gov Web site: https://
www.regulations.gov. This site allows
the public to enter comments on any
Federal Register notice issued by any
agency.
Fax: 1–202–493–2251.
Mail: Docket Management Facility;
U.S. Department of Transportation
(DOT), 1200 New Jersey Avenue SE.,
West Building, Room W12–140,
Washington, DC 20590–001.
Hand Delivery: Room W12–140 on the
ground level of the DOT West Building,
1200 New Jersey Avenue SE.,
Washington, DC, between 9:00 a.m. and
5:00 p.m., Monday through Friday,
except Federal holidays.
Instructions: Identify the docket
number PHMSA–2013–0156 at the
beginning of your comments. Note that
all comments received will be posted
without change to https://
www.regulations.gov, including any
personal information provided. You
should know that anyone is able to
search the electronic form of all
comments received into any of our
dockets by the name of the individual
submitting the comment (or signing the
comment, if submitted on behalf of an
association, business, labor union, etc.).
Therefore, you may want to review
DOT’s complete Privacy Act Statement
in the Federal Register published on
April 11, 2000, (65 FR 19477) or view
the Privacy Notice at https://
www.regulations.gov before submitting
any such comments.
Docket: For access to the docket or to
read background documents or
comments, go to https://
www.regulations.gov at any time or to
Room W12–140 on the ground level of
the DOT West Building, 1200 New
Jersey Avenue SE., Washington, DC,
between 9:00 a.m. and 5:00 p.m.,
Monday through Friday, except Federal
holidays.
If you wish to receive confirmation of
receipt of your written comments,
please include a self-addressed,
stamped postcard with the following
statement: ‘‘Comments on PHMSA–
2013–0156.’’ The Docket Clerk will
date-stamp the postcard prior to
returning it to you via the U.S. mail.
Please note that due to delays in the
delivery of U.S. mail to Federal offices
in Washington, DC, we recommend that
persons consider an alternative method
(internet, fax, or professional delivery
service) of submitting comments to the
docket and ensuring their timely receipt
at DOT.
E:\FR\FM\10JYN1.SGM
10JYN1
Agencies
[Federal Register Volume 78, Number 132 (Wednesday, July 10, 2013)]
[Notices]
[Pages 41492-41496]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-16554]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
[FHWA Docket No. FHWA-2013-0041]
Buy America Policy
AGENCY: Federal Highway Administration (FHWA), DOT.
ACTION: Notice and request for comments.
-----------------------------------------------------------------------
SUMMARY: The FHWA is seeking comments regarding the continued need, in
whole or in part, for the general waivers from Buy America for
manufactured products; for ferry boat equipment; and for pig iron and
processed, pelletized, and reduced iron ores. These waivers have been
in effect since 1983, 1994, and 1995, respectively. The FHWA is also
seeking comment on the continuing need for the FHWA's minimal use
threshold (currently established at $2,500 or 1/10 of 1 percent of the
total contract value, whichever is greater).
DATES: Comments must be received on or before August 9, 2013. Late
comments will be considered to the extent practicable.
ADDRESSES: Mail or hand deliver comments to the U.S. Department of
Transportation, Dockets Management Facility, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590, or submit electronically at
https://www.regulations.gov or fax comments to (202) 493-2251. All
comments should include the docket number that appears in the heading
of this document. All comments received will be available for
examination and copying at the above address from 9 a.m. to 5 p.m.,
e.t., Monday through Friday, except Federal holidays. Those desiring
notification or receipt of comments must include a self-addressed,
stamped postcard or you may print the acknowledgment page that appears
after submitting comments electronically. You may review DOT's complete
Privacy Act Statement in the Federal Register published on April 11,
2000 (Volume 65, Number 70, Page 19477-78).
FOR FURTHER INFORMATION CONTACT: Mr. Gerald Yakowenko, Contract
Administration Team Leader, Office of Program Administration, (202)
366-1562, or Mr. Michael Harkins, Office of the Chief Counsel, (202)
366-4928, Federal Highway Administration, 1200 New Jersey Avenue SE.,
Washington, DC 20590. Office hours are from 8 a.m. to 4:30 p.m., e.t.,
Monday through Friday, except Federal holidays.
SUPPLEMENTARY INFORMATION:
Electronic Access and Filing
This document and all comments received may be viewed online
through the Federal eRulemaking portal at: https://www.regulations.gov.
Regulations.gov is available 24 hours each day, 365 days each year.
Electronic submission and retrieval help and guidelines are available
under the help section of the Web site. An electronic copy of this
document may also be downloaded by accessing the Office of the Federal
Register's home page at: https://www.archives.gov/federal-register/, or
the Government Printing Office's Web page at: https://www.gpo.gov/fdsys.
Regulatory Background
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 into a Federal-
aid highway construction project. The regulation is based on the
statutory authority in 23 U.S.C. 313(a) which states: ``Notwithstanding
any other provision of law, the Secretary of Transportation shall not
obligate any funds authorized to be appropriated to carry out the
Surface Transportation Assistance Act of 1982 (96 Stat. 2097) or this
title and administered by the Department of Transportation, unless
steel, iron, and manufactured products used in such project are
produced in the United States.''
The statute provides for the application of the Buy America
requirements to any project using Title 23 funding; however, exceptions
are provided where the Secretary finds that: (1) The application of the
requirement would be inconsistent with the public interest, (2) where
materials and products are not produced in the United States in
sufficient and reasonably available quantities and of a satisfactory
quality; or (3) that inclusion of domestic material will increase the
cost of the overall project contract by more than 25 percent.
Based on the Secretary's authority to grant waivers from Buy
America, the FHWA has issued three general waivers from Buy America.
These waivers pertain to manufactured products, ferry boat equipment,
and pig iron and processed, pelletized, and reduced iron ores, and have
been in effect since 1983, 1994, and 1995, respectively. With this
notice, the FHWA is seeking comment regarding whether these waivers
continue to be necessary, in whole or in part, and, if so, what limits
should be placed on these waivers. Additionally, FHWA's regulations at
23 CFR 635.410(b)(4) permit the incorporation of foreign steel and iron
into a project if the cost of such items does not exceed one-tenth of
one percent (0.1 percent) of the total contract cost or $2,500,
whichever is greater. The FHWA is also seeking comment on the
continuing need for the provision and, if so, whether the threshold is
appropriate.
Manufactured Products
General Manufactured Products
Section 165 of the Surface Transportation Assistance Act (STAA) of
1982, Public Law 97-424 (1983), is the source legislation for FHWA's
Buy America requirements.\1\ This statute
[[Page 41493]]
replaced an earlier statutory version of Buy America from Section 401
of the STAA of 1978, Public Law 95-599 (1978), that applied to the
Federal-aid highway program. Section 165 of the STAA of 1982 was
implemented with a November 25, 1983, final rule which implemented
FHWA's Buy America regulatory policies now found in 23 CFR 635.410. In
the preamble to the 1983 final rule (48 FR 53099), the FHWA summarized
and addressed more than 560 public comments, including comments on the
FHWA's interim decision to waive the application of Buy America to
manufactured products (48 FR 1946), and found that it was in the public
interest to waive application of Buy America to manufactured products
other than steel and iron manufactured products.
---------------------------------------------------------------------------
\1\ Congress codified Section 165 of the STAA of 1982, as
amended, at 23 U.S.C. 313 with the enactment of Section 1903 of the
Safe, Accountable, Flexible, Efficient Transportation Equity Act: A
Legacy for Users (SAFETEA-LU), Public Law 109-59 (2005).
---------------------------------------------------------------------------
In discussing the rationale for continuing the general waiver for
manufactured products in the preamble to the1983 final rule, the FHWA
stated that the agency had issued an identical general waiver for
manufactured products in implementing the 1978 Buy America provisions.
In issuing the waiver for the 1978 Buy America statute (43 FR 53717 and
45 FR 77455), the FHWA explained that steel was the only significant
foreign commodity having a significant nationwide effect on the cost of
Federal-aid highway construction projects.\2\ While natural materials
(e.g., sand, stone, gravel, and earth materials) and petroleum-based
products (e.g., fuels, lubricants, and bituminous products) are also
used in large amounts in Federal-aid highway construction projects,
foreign competition in natural materials was not significant due to
their high cost in transportation and petroleum-based products were not
available from domestic sources in sufficient and reasonable
quantities.
---------------------------------------------------------------------------
\2\ Note that the 1983 final rule did not use the term ``general
waiver.'' Instead, the 1983 final rule simply said that the FHWA
found it in the public interest to waive the application of Buy
America to manufactured products other than steel and cement
manufactured products. The term ``general waiver'' is being used for
purposes of this notice to help clarify that the waiver issued for
manufactured products in the 1983 final rule is a waiver of general
applicability that is not subject to a project-by-project
determination.
---------------------------------------------------------------------------
In examining the legislative history of the 1983 Buy America
statute, the FHWA found that Congress considered which products should
specifically be covered (such as steel, cement, and asphalt), and
focused solely on steel and cement. Therefore, the FHWA determined that
the best interpretation of congressional intent was that Congress, with
the enactment of Section 165 of the STAA of 1982, did not intend to
override the existing policy with respect to manufactured products that
applied to the 1978 Buy America statute. While Congress subsequently
modified the 1983 Buy America statute to repeal the statute's coverage
of cement (Pub. L. 98-229, Section 10 (1984) and to add coverage for
iron (Intermodal Surface Transportation Efficiency Act (ISTEA), Pub. L.
102-240, Section 1048(a) (1991)), Congress left the remaining
provisions intact.
Additionally, in the preamble to the 1983 final rule, the FHWA
noted, and agreed with, statements from commenters who noted the
difficulty in tracing the origin of various materials comprising
manufactured products. The FHWA further noted comments regarding the
difficulty of tracing the origin of steel components and subcomponents
of various manufactured products, such as traffic controllers. After
consideration of all the comments, the FHWA found that it was in the
public interest to waive the application of Buy America to manufactured
products other than steel and cement manufactured products.
Subsequently, in a December 12, 1997, memorandum, the FHWA reinforced
and clarified the concept of this public interest exclusion by stating
that Buy America requirements are applicable to the steel components of
predominantly steel products. However, that memo did not define the
term ``predominantly steel product.''
The American Recovery and Reinvestment Act of 2009 (Recovery Act)
brought a renewed interest from public and industry representatives in
ensuring that Federal funds were used to support domestic
manufacturing. While the ``Buy American'' provisions of the Recovery
Act Section 1605 did not apply to the Federal-aid highway program, the
FHWA took great efforts to ensure that Buy America provisions were
included and enforced on all Recovery Act projects.\3\
---------------------------------------------------------------------------
\3\ Title XII of the Recovery Act specifically stated that
Recovery Act funded highway projects were to be administered as if
apportioned under chapter 1 of title 23 U.S.C. Therefore, Recovery
Act-funded highway projects were administered under the FHWA's
traditional Buy America requirements in 23 CFR 635.410 instead of
the Recovery Act specific Buy American provisions codified in 2 CFR
Part 172.
---------------------------------------------------------------------------
As a result of this heightened awareness, construction project
inspection staff and audit representatives spent significant resources
in examining compliance with Buy America requirements for all steel or
iron products. Compliance issues were noted regarding manufactured
products that contained miscellaneous steel or iron components such as
light bulbs, sinks, toilets, faucets, tie wires, lifting hooks, traffic
controller mounting brackets, nuts, bolts, washers and screws. Many of
these products would typically have been labeled as miscellaneous steel
components or steel subcomponents comprising part of a manufactured
product that would have been subject to the general waiver granted in
the 1983 final rule.
Nevertheless, continuing requests for clarifications regarding Buy
America requirements during Recovery Act implementation and National
Review Team oversight efforts led the FHWA to issue a memorandum on
December 21, 2012. Moreover, given the broadened scope of the Federal-
aid highway program since 1983 as well as the evolution of
technologies, products, and construction methods used in highway and
bridge construction, the FHWA felt that issuing some guidance to
clarify the existence and use of this waiver was prudent. This December
2012 memorandum was intended to clarify the long-standing policy
regarding the application of Buy America requirements to steel or iron
manufactured products as it related to the waiver granted for
manufactured products in the 1983 final rule. Since the existence of
this waiver is found in the preamble of the 1983 rulemaking document
with very little other guidance available regarding its existence and
application, the FHWA wanted to ensure that FHWA Division Offices were
aware of the existence of the waiver and that the waiver was
consistently applied. The memorandum specifically identified a list of
products that are subject to Buy America requirements, defined the term
predominantly steel or iron manufactured product by a 90 percent
content requirement, and provided examples of miscellaneous steel or
iron products.
However, this correspondence has triggered opposition from various
groups in the manufacturing industry. Also, a bill has been introduced
in the House of Representatives (HR 949) that would require the FHWA to
reexamine the agency's standing nationwide Buy America waivers by
issuing a notice and request for public comments on the continuing need
for these waivers. While the FHWA maintains that the agency has not
changed the application or scope of the manufactured products waiver,
the FHWA agrees with the intent of HR 949 that, due to the age of the
manufactured products waiver, it is prudent to seek public comments as
part
[[Page 41494]]
of a review of the continued need for this waiver.
The FHWA supports the application of Buy America in the most
effective and efficient manner possible. The application of Buy America
is most effective and efficient whenever it is applied to products that
are available from domestically produced sources in sufficient and
reasonably available quantities and of a satisfactory quality. As
stated in the 1983 final rule, the FHWA found that the waiver of Buy
America to manufactured products does not have any significant impact
since manufactured products comprised a small percent of the highway
construction program. With this notice, the FHWA is reevaluating this
finding and requesting comments on the manufactured products waiver as
well as the needed parameters of the waiver if continued.
The most prevalent materials used in highway construction can be
included in four major material categories: Bituminous products,
Portland cement products, aggregates, and steel products. Based on a
report titled ``Distribution of Costs on Federal-aid Highway
Construction Contracts Over $1,000,000 on the National Highway System
Reported During Calendar Year 2004'' (the last year for which data was
available), the approximate value of the materials used as a percentage
of the overall value of all construction contract was as follows:
Bituminous products (7.8%), Portland cement products (0.7%), aggregates
(17.8%) and steel products (4.8%) (https://www.fhwa.dot.gov/policy/ohim/hs04/htm/costpie.htm#alt1). Of these materials, it appears that only
steel/iron products would be appropriate for consideration under the
public interest waiver provisions available under 23 U.S.C. 313.
The market conditions and assumptions that led to FHWA's decision
not to include oil products (bituminous products or asphaltic cement)
in the November 25, 1983, general waiver still exist today. Petroleum
and petroleum-based products that are permanently incorporated in a
project (such as asphalt cement) are generally not available from
domestic sources in sufficient and reasonably available quantities. In
the preamble to the 1983 final rule, the FHWA noted that over 200
comments were received regarding the application of Buy America
provisions to oil products and virtually all commenters asked that oil
and/or petroleum products and/or asphalt be exempt from coverage.
As noted above, Congress specifically modified the 1983 Buy America
statute to repeal the statute's coverage of cement. Aggregates and
other natural materials, such as sand, stone, and gravel are used in
large quantities in highway construction; however, foreign competition
is very limited due to the difficulty and high cost of transporting
these heavy materials over long distances. Thus, subjecting these
products to Buy America requirements will place an undue administrative
burden on State DOTs in ensuring Buy America compliance and could
unnecessarily delay, or even halt, projects for difficulties in tracing
the origin of all items used to manufacture these products. Moreover,
some of the ingredients used to make concrete products, such as
Portland cement in concrete or asphalt cement in bituminous concrete,
are not domestically manufactured in sufficient and reasonably
available quantities to meet the demand for these products.
Thus, the application of Buy America to only steel and iron
products seems to have the highest potential of realizing the intent of
the Buy America statutory provisions in protecting the domestic
manufacturing industry. The FHWA has applied, and intends to continue
to apply, Buy America to predominantly steel and iron products
delivered to a project site for permanent incorporation into that
project. This includes predominantly steel and iron products that are
incorporated into precast concrete products.
Additionally, for items that may be comprised of steel and iron
components or subcomponents, the application of Buy America to the
steel and iron in these items would have no impact because the
availability of these items are not driven by the demands of the needs
for highway construction. For example, some projects, such as in the
construction and improvement of rest areas, may involve the
incorporation of light bulbs. Light bulbs are not made special for
highway construction and, thus, there is no way to trace where the
steel and iron that is incorporated into a light bulb is manufactured.
The same problem is attendant with other products, also involved in the
construction and improvement of rest areas, such as faucets and door
hinges. The preamble to the 1983 final rule cited the example of a
traffic controller as a manufactured product, where it would be
inconsistent with the public interest to apply Buy America
requirements. In general, traffic controllers and traffic management
hardware and equipment are examples of manufactured products that are
composed of multiple components and subcomponents whose origins are
difficult, if not impossible to trace.
Vehicles
One example of the broadened scope of the Federal-aid highway
program involves the Congestion Mitigation and Air Quality Improvement
(CMAQ) Program. The CMAQ program was created under the Intermodal
Surface Transportation Efficiency Act (ISTEA) of 1991, Public Law 102-
240, and is codified at 23 U.S.C. 149. The CMAQ Program provides annual
apportionments to States for projects or programs that will contribute
to attainment or maintenance of the national ambient air quality
standards (NAAQS) for ozone, carbon monoxide (CO), and particulate
matter (PM). One type of CMAQ project that is being programmed at a
growing rate by State, local governments, and private sector sponsors
is acquisition of fuel efficient and low emission vehicles and
equipment. With recent developments in clean fuel and low emission
technologies as well as broader production and availability of these
types of vehicles in the U.S. market by the automotive industry, the
FHWA is seeing an increased demand to use CMAQ funds to purchase these
vehicles and associated items, such as construction equipment and
locomotives.
The FHWA currently has not established a Buy America policy for
these types of projects. While vehicles are a manufactured product,
with the increased use of CMAQ funds for these types of projects, the
FHWA has recently determined that the Buy America program is
appropriate to apply to these types of projects. For example, the FHWA
granted conditional waivers given to Alameda County, San Francisco
County, and Merced County, CA, for vehicle purchases on November 21,
2011, notices (76 FR 72027 and 76 FR 72028) and March 30, 2012 (77 FR
19410). These waivers were granted upon the condition that the final
assembly of the vehicles occur in the United States. However, the FHWA
did not apply a domestic content standard to these waivers. A vehicle
manufacturer relies on numerous international sources for various
components and it is virtually impossible to track the specific country
of origin for small steel components and subcomponents even though a
manufacturer can certify where the final assembly of the vehicle
occurs. The difficulty of tracing and documenting domestic
manufacturing processes for every manufacturing step for all
[[Page 41495]]
components and subcomponents illustrates the need for the public
interest exception provided by 23 U.S.C. 313(b).
The FHWA was, and remains, uncertain whether such a domestic
content requirement would further the objectives of the CMAQ Program in
encouraging State and local entities to pursue clean fuel technologies.
Moreover, the FHWA has no data 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 vehicles or equipment is
questionable. The FHWA is unaware of any method the agency can use to
determine where the components and subcomponents, including 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 vehicles as well as vehicle retrofit projects.
Ferry Boat Equipment
On February 9, 1994, FHWA published a notice in the Federal
Register (59 FR 6080) announcing a nationwide waiver of the Buy America
requirements for certain steel products used in the construction of
ferry boats. The FHWA granted this waiver after publishing a notice in
the Federal Register (58 FR 33295) and requesting comment for which two
comments were received. The items included in the waiver are marine
diesel engines, electrical switchboards and switchgear, electric
motors, pumps, ventilation fans, boilers, electrical controls, and
electronic equipment. Other steel and iron products used in the
construction of ferry boats that are manufactured domestically are not
waived, including steel and stainless steel plate and shapes, sheet
steel and stainless steel, steel and stainless steel pipe and tubing,
and galvanized steel products. The FHWA has not reevaluated the
continuing need for this waiver since it was issued in 1994. Based on
the FHWA's present knowledge, however, the FHWA has no information that
would lead us to believe that domestic manufacturers of the waived
ferry boat components are now available. The FHWA invites comments on
the continuing need for this nationwide waiver.
Pig Iron and Processed, Pelletized, and Reduced Iron Ores
On March 24, 1995, FHWA published a notice in the Federal Register
announcing a nationwide waiver of the Buy America requirements for
certain components used in the manufacturing process for steel and iron
products. The specific components include pig iron and processed,
pelletized, and reduced iron ores. The FHWA granted this waiver after
publishing a notice in the Federal Register (59 FR 43376) and
requesting comment for which 10 comments were received. Based on the
findings of a nationwide review, and a review of the comments submitted
in response to the waiver proposal, the FHWA believed that the supply
from domestic sources of pig iron and processed, pelletized, and
reduced iron ore was not adequate to permit full compliance with the
Buy America requirements. The FHWA has not reevaluated the continuing
need for this waiver since it was issued in 1995. Based on the FHWA's
present knowledge, however, the FHWA has no information that would lead
us to believe that the supply of domestic pig iron and processed,
pelletized, and reduced iron ore is adequate to meet the needs of
domestic steel and iron manufacturers. The FHWA invites comments on the
continuing need for this nationwide waiver.
Minimal Use Exclusion
One regulatory criterion that was addressed in the November 25,
1983, final rule to implement the public-interest exclusion provision
of 23 U.S.C. 313(b) is the minimal use provision in 23 CFR
635.410(b)(4). This provision allows for a minimal amount of non-
domestic steel to be incorporated if ``. . . the cost of such materials
used does not exceed one-tenth of one percent (0.1 percent) of the
total contract cost or $2,500, whichever is greater.'' However, this
provision requires the contracting agency to maintain a running list of
non-domestic steel or iron components or subcomponents as a
construction project proceeds. The threshold amounts have not been
revised since the November 25, 1983, final rule and managing the
documentation of compliance with this threshold can be problematic on
large, complex projects.
One potential method of easing the inspection and reporting burden
on contracting agencies for Buy America compliance would be to raise
the minimal use threshold; however, there is no clear approach for
doing so. Consideration could be given to raising the $2,500 threshold
by a multiplier related to relevant producer price indices for steel or
iron products or relevant cost indices for highway construction. In
either case, it is difficult to establish an index that is
representative of all of the iron and steel products that are used in
the Federal-aid highway program. The multiplier could be as high as 2.5
(based on the Producer Price Index Commodity information for iron and
steel products for the period 1983 to 2013 for group WPS101). (https://data.bls.gov/pdq/querytool.jsp?survey=wp). The FHWA invites comment on
the continuing need for the minimal use threshold contained in the
regulations. For commenters believing that this provision continues to
be needed, the FHWA requests comment on whether the monetary threshold
should be raised and the appropriate method of doing so.
Invitation for Public Comment
The FHWA requests public comment and input on issues related to the
application of Buy America requirements to manufactured products,
including various manufactured products that include steel or iron
subcomponents. Specifically, the FHWA invites public comment on the
following issues:
1. Has the nature of the Federal-aid highway program and the U.S.
steel/iron manufacturing industry changed to such a degree that FHWA
needs to reconsider its criteria for applying Buy America requirements
to manufactured products?
2. Are there specific or general types of manufactured products
that should not be covered by a public interest waiver and why?
3. Are there specific or general types of manufactured products
that should be covered by a public interest waiver and why?
4. Are there specific issues that should be considered for
manufactured products that include steel or iron components and
subcomponents? Should the FHWA continue to distinguish manufactured
products that are comprised predominantly of steel and iron for
purposes of requiring all manufacturing processes to occur in the
United States? How should a predominantly steel and iron product be
defined? Should the FHWA continue to consider a predominantly steel and
iron product as one comprising 90 percent steel and iron?
5. Should vehicles be subject to Buy America? If so, what types of
vehicles? How should the FHWA define vehicle? Should the definition of
vehicle include construction equipment, such as street sweepers,
backhoes, refuse trucks, dump trucks, graders, etc.? Should the FHWA
broaden the definition of vehicle to include bicycles, electric
bicycles, and neighborhood vehicles? Also, what standard should the
FHWA apply (i.e., final assembly in the U.S.)? For final assembly, what
constitutes final assembly? Should there be a domestic
[[Page 41496]]
content threshold? If so, what content should be covered (i.e., steel
and iron or all content comprising a vehicle) and what should the
percentages be? Should be there be different percentages for different
types of vehicles? What data is available to support the use of a
percentage? What types of vehicles would be available to State and
local agencies at any given percentage?
6. Should vehicle retrofits be subject to Buy America? If so, what
standard should be applied? Should the standard differ from that of a
whole vehicle (i.e., if final assembly is the standard for a vehicle,
should the FHWA be concerned about Buy America when an engine is
purchased on its own for incorporation into a vehicle)?
7. What standard should apply to locomotives, rail cars, and
locomotive parts that are purchased for locomotive retrofits? Should
the FHWA require the application of the Federal Railroad
Administration's policy, which views locomotives and rail cars as ``end
products'' that must be assembled in the United States and all
components (including components purchased for retrofits) be
manufactured in the United States?
8. Do the minimal use threshold provisions of 23 CFR 635.410(b)(4)
represent reasonable criteria for expressing the public interest
exclusion limitations for the Federal-aid highway program, and present
an appropriate balance between an undue administrative burden in
accounting for every steel and iron item in a project versus giving
effect to the intent of Buy America?
9. Are there any domestic suppliers available that can domestically
produce pig iron and processed, pelletized, and reduced iron ores in
sufficient quantities of a satisfactory quality to supply the entire
need for Federal-aid highway projects?
10. Are there any domestic suppliers available that can
domestically produce ferry boat equipment in compliance with the FHWA's
Buy America requirements?
11. If any of the general waivers (manufactured products, ferry
boat equipment, and pig iron) to Buy America are rescinded, what would
be the implications to administering Federal-aid highway projects?
12. What would be the potential advantages or disadvantages of FHWA
adopting a policy for manufactured products similar to that used by
many Federal agencies who implemented the Recovery Act Buy America
requirements? (Note: 2 CFR 176.70(a)(2)(i) states: ``Production in the
United States of the iron or steel used in the project requires that
all manufacturing processes must take place in the United States,
except metallurgical processes involving refinement of steel additives.
These requirements do not apply to iron or steel used as components or
subcomponents of manufactured goods used in the project.'')
Issued on: July 3, 2013.
Victor M. Mendez,
Federal Highway Administrator.
[FR Doc. 2013-16554 Filed 7-9-13; 8:45 am]
BILLING CODE 4910-22-P