Public Interest Phased Implementation Waiver for FY 2022 and 2023 of Build America, Buy America Provisions as Applied to Recipients of HUD Federal Financial Assistance, 17001-17004 [2023-05698]
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Federal Register / Vol. 88, No. 54 / Tuesday, March 21, 2023 / Notices
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BuildAmericaBuyAmerica@hud.gov.
SUPPLEMENTARY INFORMATION:
C. Authority
Section 3507 of the Paperwork
Reduction Act of 1995, 44 U.S.C.
Chapter 35.
Jeffrey D. Little,
General Deputy Assistant Secretary for
Housing.
[FR Doc. 2023–05691 Filed 3–20–23; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. 6331–N–10A]
Public Interest Phased Implementation
Waiver for FY 2022 and 2023 of Build
America, Buy America Provisions as
Applied to Recipients of HUD Federal
Financial Assistance
Office of the Secretary, U.S.
Department of Housing and Urban
Development (HUD).
ACTION: Notice.
AGENCY:
In accordance with the Build
America, Buy America Act (‘‘BABA’’ or
‘‘the Act’’) this notice advises that HUD
has issued a public interest waiver of
the Buy America Domestic Content
Procurement Preference (‘‘Buy America
Preference,’’ or ‘‘BAP’’) for recipients of
Federal Financial Assistance (‘‘FFA’’)
provided by HUD as set forth below.
This notice provides a waiver and sets
forth an updated implementation
schedule for application of the BAP to
HUD FFA. HUD is also announcing its
BAP implementation schedule for all
HUD FFA used to purchase iron or steel
products in infrastructure projects in
HUD programs, other than the CDBG
formula grants addressed in the
November 23, 2022, waiver. HUD is also
announcing its BAP implementation
schedule for the purchase of four
specifically-listed construction
materials: non-ferrous metals; lumber;
composite building materials; and
plastic and polymer-based pipe and
tube (herein after referred to as
‘‘specifically-listed construction
materials’’), all manufactured products,
and all other construction materials.
DATES: March 15, 2023. This waiver is
effective as stated herein for FFA
obligated by HUD on or after the
effective date of the waiver until the
implementation deadlines for the BAP
as specifically shown below.
FOR FURTHER INFORMATION CONTACT:
Faith Rogers, Department of Housing
and Urban Development, 451 Seventh
Street SW, Room 10126, Washington,
DC 20410–5000, at (202) 402–7082 (this
is not a toll-free number). HUD
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SUMMARY:
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I. Build America, Buy America
The Build America, Buy America Act
(‘‘BABA’’ or ‘‘the Act’’) was enacted on
November 15, 2021, as part of the
Infrastructure Investment and Jobs Act
(‘‘IIJA’’) (Pub. L. 117–58). The Act
establishes a domestic content
procurement preference, the BAP, for
Federal infrastructure programs. Section
70914(a) of the Act establishes that no
later than 180 days after the date of
enactment, HUD must ensure that none
of the funds made available for
infrastructure projects may be obligated
by the Department unless it has taken
steps to ensure that the iron, steel,
manufactured products, and
construction materials used in a project
are produced in the United States. In
section 70912, the Act further defines a
project to include ‘‘the construction,
alteration, maintenance, or repair of
infrastructure in the United States’’ and
includes within the definition of
infrastructure those items traditionally
included along with buildings and real
property. Thus, starting May 14, 2022,
new awards of HUD FFA, and any of
those newly obligated funds by HUD
then obligated by the grantee for
infrastructure projects, are covered
under BABA provisions of the Act, 41
U.S.C. 8301 note, unless covered by a
waiver.
II. HUD’s Progress in Implementation of
the Act
Since the enactment of the Act, HUD
has worked diligently to implement the
BAP. HUD understands that advancing
Made in America objectives is a
continuous effort and believes this
transparent schedule of future
implementation will provide industry
partners and FFA recipients with the
time and notice necessary to efficiently
and effectively implement the BAP.
HUD’s plans to move forward with the
implementation of the new BAP
requirements as set forth in this notice
are designed to maximize coordination
and collaboration to support long-term
investments in domestic production.
HUD will continue its efforts to
implement the Act consistent with the
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guidance and requirements of the Made
in America Office of the Office of
Management and Budget, including
anticipated guidance concerning
appropriate compliance with the BAP.
In order to ensure orderly
implementation of the BAP across
HUD’s programs, HUD has provided
public interest, general applicability
waivers in order to implement the BAP
in phases in connection with the
application of the BAP across HUD’s
FFA programs and to provide HUD with
sufficient time to solicit information
from the public relating to the agency’s
implementation of the BAP in
connection with FFA awards made by
HUD. HUD has previously published
general applicability, public interest
waivers to the BAP to provide the
agency with sufficient time to solicit
information from the public relating to
the agency’s implementation of the BAP
in connection with FFA awards made
by HUD. On November 23, 2022, HUD
issued a separate waiver covering all
HUD FFA obligated by HUD on or
before February 21, 2023, with the
exception of the BAP as to the purchase
of iron and steel for infrastructure
projects funded by Community
Development Block Grant (‘‘CDBG’’)
formula grants on or after November 15,
2022. Separately, HUD waived the
application of the BAP in connection
with HUD FFA provided to Tribes,
Tribally Designated Housing Entities
(‘‘TDHE’’), and other Tribal Entities
(referred to herein as ‘‘Tribal FFA’’) to
allow time for HUD to complete the
Tribal consultation process regarding
implementation of the BAP in
connection with infrastructure projects.
This Notice does not apply to Tribal
FFA covered by that separate waiver.1
Details on HUD’s implementation of
the BABA requirements, including two
public interest waivers covering Exigent
Circumstances and De Minimis and
Small Grants and a separate public
interest waiver for all Tribal FFA, can be
found at https://www.hud.gov/program_
offices/general_counsel/BABA.
III. Waiver Authority
Under section 70914(b), HUD and
other Federal agencies have authority to
waive the application of a domestic
content procurement preference when
(1) application of the preference would
be contrary to the public interest, (2) the
materials and products subject to the
1 General Applicability Waiver of Build America,
Buy America Provisions as Applied to Tribal
Recipients of HUD Federal Financial Assistance
(Effective until May 14, 2023) address Tribes,
Tribally Designated Housing Entities (‘‘TDHE’’), and
other Tribal Entities’ implementation of BABA.
(May 5, 2022, 87 FR 26221).
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preference are not produced in the
United States at a sufficient and
reasonably available quantity or
satisfactory quality, or (3) inclusion of
domestically produced materials and
products would increase the cost of the
overall project by more than 25 percent.
Section 70914(c) provides that a waiver
under 70914(b) must be published by
the agency with a detailed written
explanation for the proposed
determination and provide a public
comment period of not less than 15
days.
IV. Public Interest, General
Applicability Waiver of Buy America
Provisions
The Office of Management and
Budget’s April 18, 2022 memorandum,
‘‘Initial Implementation Guidance on
Application of Buy America Preference
in Federal Financial Assistance
Programs for Infrastructure’’ (M–22–11),
encourages agencies to consider ways to
provide the assistance to funding
recipients that is necessary and effective
for the implementation of the BAP,
including consideration of phased
implementation of BAP where
appropriate. Strategic and phased steps
toward full BABA compliance refines
the scope for what is exempt from BAP
while providing a clear timeline for full
implementation, consistent with the
Congressional intent and stakeholder
interest. It also allows HUD grantees and
stakeholders the time needed to
construct stronger supply channels to
include new or amended vendor
contracts that comply with BABA
requirements.
In fiscal year 2023, HUD grantees will
receive $14 billion through the
Department’s programs where
infrastructure is an eligible activity and
may be subject to the BAP. For example,
Choice Neighborhoods (‘‘CN’’) funds
may be used for infrastructure projects
(e.g., transform severely distressed
public and assisted properties with
high-quality mixed-income) or noninfrastructure uses (e.g., business
services, safety, children’s education
and to improve employment, income,
and health outcomes). HUD estimates
that up to 85 percent of Choice
Neighborhoods Implementation Grant
funds to be awarded in 2023 ($289
million of $340 million total) will be
used on housing and infrastructure
projects where the BAP may apply.
As HUD’s previous Notices advised
and as supported by several comments
received during the comment period,
many of HUD’s programs may be subject
to the BAP and have previously not
required compliance with similar Buy
American preferences. Because the
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potential application of BAP mandated
by the Act is new to the majority of
HUD’s programs and FFA, HUD chose
to implement the BAP first with respect
to all iron and steel products used in
infrastructure projects funded with HUD
FFA on or after November 15, 2022,
through its CDBG formula grants.
As required under section 70914 of
the Act, HUD published a proposed
waiver on its website on February 15,
2023. In addition, HUD published the
proposed waiver in the Federal
Register. Comments on the proposed
waiver were due on or before March 2,
2023. Through this Final Notice, HUD is
announcing that it has issued this
waiver effective March 15, 2023. This
waiver is effective as stated herein for
FFA obligated by HUD in listed
programs on or after the effective date
of the waiver until the implementation
deadlines for the BAP as specifically
shown below. In addition, in the case of
FFA obligated by HUD in listed
programs on or after February 22, 2023
but prior to the effective date of this
Final Waiver, the waiver applies to all
expenditures incurred on or after the
effective date of the Final Waiver,
except for FFA obligated by HUD after
the deadline for implementation of the
BAP with respect to the purchase of iron
or steel products in infrastructure
projects in CDBG formula grants, Choice
Neighborhood, Lead Hazard Reduction,
and Healthy Homes Production Grants.
As such, through this Final Notice,
HUD is expanding the application of the
BAP to iron and steel products used in
infrastructure projects funded with new
Choice Neighborhood, Lead Hazard
Reduction, and Healthy Homes
Production Grants obligated by HUD on
or after February 22, 2023. This waiver
advances BABA by targeting the next
phase of implementation to include
Choice Neighborhoods (‘‘CN’’), a placebased grant program which helps
communities develop and implement
locally driven comprehensive plans to
transform neighborhoods. In Fiscal Year
2023, HUD received $350 million for
CN, which Public Housing Authorities
and local jurisdictions apply for
competitively. CN provides planning
grants, which provide for the
development of comprehensive plans,
and implementation grants, which allow
communities to implement their plans—
including for use on infrastructure
activities. This allows for efficient
phased implementation while reducing
the administrative burden to potential
grantees and funding recipients where
the costs of uncertainties surrounding
compliance with BABA could distract
from the focus on higher value BABA
compliant items. Failure to provide
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recipients such flexibilities could delay
the award for infrastructure projects as
grantees and funding recipients must
exert considerable effort accounting for
the sourcing for miscellaneous, low-cost
items.
In connection with Choice
Neighborhood grants, HUD is clarifying
that this new required application of the
BAP in connection with new Choice
Neighborhood grants obligated by HUD
on or after February 22, 2023, will not
extend to supplemental awards
obligated by HUD to enable the
completion of ongoing, pre-existing
projects funded by Choice
Neighborhood grants obligated by HUD
prior to February 22, 2023. HUD is
continuing to waive the application of
the BAP in connection with any
obligation of supplemental Choice
Neighborhood grants because they are
merely serving to add additional
resources to allow completion of
projects well underway with funding
obligated prior to the application of the
BAP and any application of the BAP at
this late stage of the project would be
inconsistent with the public interest and
could jeopardize completion of those
projects. HUD believes that this
application is consistent with the intent
of the proposed waiver and clarifies that
previous awards are not subject to
conversion to BAP applicability merely
by the addition of minimal funding
needed to complete projects funded
primarily with previous FFA Choice
Neighborhood grant awards.
To focus its efforts on the
implementation of the BAP for new FFA
obligated by HUD on or after the dates
shown below for each of the programs
and for the items shown below, HUD is
proposing to waive the application of
the BAP: (1) as to FFA obligated by HUD
and used to purchase iron and steel
before the BAP implementation point
shown below; (2) as to FFA obligated by
HUD and used to purchase specificallylisted construction materials before the
BAP implementation point shown
below; (3) as to FFA obligated by HUD
and used to purchase all construction
materials not listed before the BAP
implementation point shown below;
and (4) as to FFA obligated by HUD and
used to purchase any manufactured
products before the BAP
implementation point shown below. For
purposes of HUD FFA, the BAP
implementation point shall be the point
shown in schedule set forth below. The
table’s columns describe four separate
elements of the BAP and the rows
describe various HUD FFA programs.
The cells in the table set forth the point
at which this waiver expires, and each
element of the BAP becomes effective,
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for the various HUD FFA programs for
each BAP element. Regarding the
second column, the specifically listed
construction materials under this waiver
are: (1) non-ferrous metals; (2) lumber;
(3) composite building materials; and (4)
plastic and polymer-based pipe and
tube. Regarding the two rows that
reference new FFA HUD obligates from
Tribes, Tribally Designated
Housing Entities, and
Tribal Entities.
CDBG Formula Grants ......
Choice Neighborhood,
Lead Hazard Reduction,
and Healthy Homes Production Grants.
Recovery Housing Program (‘‘RHP’’) Grants.
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All other HUD FFA except
HOME, Housing Trust
Fund, and Public Housing FFA used for maintenance projects.
HOME, Housing Trust
Fund, and Public Housing FFA used for maintenance projects.
years for the relevant element, but the
waiver will not be effective for any FFA
HUD obligates from the appropriations
for the fiscal year referenced in the cell
and following fiscal years, to which the
relevant element of the BAP will apply.
The implementation schedule
established by HUD in this final waiver
is as follows:
Iron and steel—BAP
implementation point
Construction materials—
specifically-listed—BAP
implementation point
Construction materials—
not listed—BAP
implementation point
Manufactured products—
BAP implementation point
Not Addressed in this Notice. See note 1.
Not Addressed in this Notice. See note 1.
Not Addressed in this Notice. See note 1.
Not Addressed in this Notice. See note 1.
November 15, 2022—as
described in the November 23, 2022 Final Waiver.
New FFA obligated by
HUD on or after February 22, 2023.
As of the date HUD obligates new FFA from Fiscal Year 2024 appropriations.
New FFA obligated by
HUD on or after August
23, 2024.
As of the date HUD obligates new FFA from Fiscal Year 2025 appropriations.
New FFA obligated by
HUD on or after August
23, 2024.
As of the date HUD obligates new FFA from Fiscal Year 2025 appropriations.
New FFA obligated by
HUD on or after August
23, 2024.
New FFA obligated by
HUD on or after August
23, 2023.
New FFA obligated by
HUD on or after February 22, 2024.
As of the date HUD obligates new FFA from Fiscal Year 2024 appropriations.
New FFA obligated by
HUD on or after August
23, 2024.
As of the date HUD obligates new FFA from Fiscal Year 2025 appropriations.
New FFA obligated by
HUD on or after August
23, 2024.
As of the date HUD obligates new FFA from Fiscal Year 2025 appropriations.
New FFA obligated by
HUD on or after August
23, 2024.
New FFA obligated by
HUD on or after August
23, 2024.
New FFA obligated by
HUD on or after August
23, 2024.
New FFA obligated by
HUD on or after August
23, 2024.
New FFA obligated by
HUD on or after August
23, 2024.
This phased implementation of the
BAP advances the goals of BABA by
providing transparency in HUD’s
implementation of the BAP, reducing
the administrative burden to potential
assistance recipients where the costs of
uncertainty in compliance with BABA
could distract from the focus on the
efficient and effective implementation
of BABA in an orderly and efficient
manner, and provides transparency
concerning the full implementation
plans in connection with HUD FFA
used in infrastructure projects. Failure
to provide recipients such flexibilities
and transparency could delay the award
for infrastructure projects as grantees
and funding recipients must exert
considerable effort in changing their
plans and accounting for the sourcing of
materials in construction projects
without the benefit of complete
guidance on the Act’s requirements.
Additionally, HUD believes that this
coordination in the implementation of
BABA will avoid unnecessary and
undue hardship that could jeopardize
the timely and cost-effective completion
of such projects as grantees and funding
recipients that have previously not been
subject to requirements similar to BAP
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the appropriations for a particular fiscal
year (i.e., CDBG formula grants and RHP
grants), except for iron and steel, the
waiver will not expire on a single date
for the entire program for any element
of the BAP; instead, the waiver will
remain effective and continue to waive
the BAP for any FFA HUD obligates
from the appropriations for prior fiscals
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react to anticipated guidance on how to
come into full compliance. This
implementation schedule and
corresponding waiver allows grantees
and funding recipients to focus their
efforts in beginning the implementation
of the BAP and allows HUD to focus its
training and technical assistance on
those grantees beginning the
implementation process. This waiver is
not an alternative to increasing domestic
production, but rather serves as a tool to
assist HUD in its implementation of the
Buy American provisions in the most
efficient manner in order to promote
investment in HUD’s domestic
manufacturing base, strengthen critical
supply chains, and position United
States workers and businesses to
compete and lead globally in the 21st
century. The implementation schedule
is designed to ensure that domestic
manufacturers have sufficient time to
become aware of and respond to the
market signals from HUD recipients that
additional BABA compliant
construction materials and
manufactured products will be in
demand. This waiver is in the interest
of efficiency, to ease burdens for HUD
grantees and funding recipients, avoid
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unnecessary costs, and avoid delays to
projects that are critical and time
sensitive. This waiver allows HUD to
focus, particularly in the early phases of
BABA implementation, on key products
and critical supply chains where
increased U.S. manufacturing can best
advance our economic and national
security. This waiver allows grantees
and funding recipients to continue with
projects in connection with iron and
steel products where Made in America
requirements have long been
contemplated—providing greater ease of
implementation for HUD’s grantees.
Without this waiver, HUD could lose
grantee and funding recipient
participation, be exposed to liabilities if
HUD forces grantees and funding
recipients to modify their current plans
to come into compliance, or delay
critical activities to protect life, safety
and property, and could negatively
impact the most vulnerable Americans
we seek to serve.
V. Public Comments on the Waiver
As required under section 70914 of
the Act, HUD solicited comment from
the public on the public interest waiver
announced in this Notice on its website
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and then published the proposed waiver
in the Federal Register. A total of 16
comments were received in response to
the proposed waiver and
implementation plan. HUD thoroughly
reviewed and considered each of the
comments in determining to move
forward with the issuance of this waiver
and implementation plan as published
in this Final Notice. Several
commenters were supportive of the
orderly implementation of the BAP but
requested further time and guidance
prior to proceeding with such
implementation. A few commenters
again expressed support for a waiver of
broader scope that could potentially
exclude all affordable single and
multifamily housing programs from the
requirements of BABA. Additional
commenters requested further delays in
the implementation schedule, citing
resource constraints and cost
uncertainties in support of further
delays in implementation. Other
commenters expressed concern that the
agency is not moving forward with the
full implementation of the BAP across
all programs immediately.
HUD appreciates the comments from
both perspectives, but given the totality
of the comments, believes its
implementation schedule and
corresponding waiver of the application
of the BAP as set forth in this Final
Notice is appropriate and in the public
interest.2
HUD has expressed its desire to move
forward with the full implementation of
the BAP across its FFA programs, but
believes that the public interest is
served best by a measured approach to
implementation of the Act, allowing for
the appropriate balancing of the intent
of the Act with the public interest in the
continued efficiency and success of
infrastructure projects funded through
HUD’s affordable housing and
community development programs.
HUD therefore declines to alter the
proposed phased implementation plan
and corresponding waiver at this time,
but is taking this opportunity to clarify
that the application of the BAP for iron
and steel will apply to new awards of
FFA in connection with Choice
Neighborhood grants and will not
retroactively convert ongoing projects to
required compliance with the BAP
merely because additional supplemental
funding awards have been made to
2 HUD has and will continue to provide training
sessions with grantees to increase grantees’
knowledge about Build America, Buy America and
the Buy America Preference requirements as they
relate to HUD programs and HUD FFA used by
Non-Federal entities to purchase iron and steel,
construction materials, and manufactured products
to be used infrastructure projects.
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facilitate orderly completion of those
ongoing projects. HUD will continue to
monitor the implementation of the BAP
across its programs to ensure the most
robust application possible in light of
the important public interests discussed
above.
Several proponents of the waiver
requested that HUD provide further
guidance regarding the implementation
of the BAP and HUD commits to
developing robust guidance regarding
the implementation of the BAP across
its programs. HUD further recognizes
that proposed guidance 3 has been
issued by the Office of Management and
Budget (OMB) concerning the
implementation of BABA across FFA
programs and will continue to monitor
the outcome of the proposed effort to
update OMB’s guidance in connection
with the development of its own
guidance for grantees and funding
recipients. HUD remains committed to
reviewing its plans to provide for the
effective and efficient implementation
of the Act across its programs and
providing timely and appropriate
guidance but believes that further
extension of its waiver of application of
the BAP beyond the implementation
points provided in this Final Notice is
not necessary at this time.
VI. Impact of This Waiver on Other
FFA
HUD will not require compliance
with the BAP in connection with the
use of any HUD FFA obligated by HUD
before November 14, 2022, or during the
pendency of any other applicable BABA
waiver issued by HUD, including this
waiver, as applicable, after it is
finalized. However, where the BAP or
other ‘‘Buy American’’ requirements are
made applicable to a project of a grantee
or funding recipient by another Federal
agency, those requirements are not
waived by this waiver, nor is the grantee
or funding recipient exempt from the
application of those requirements in
accordance with the requirements of the
Federal agency providing such FFA.
VII. Assessment of Cost Advantage of a
Foreign-Sourced Product
Under OMB Memorandum M–22–11,
‘‘Memorandum for Heads of Executive
Departments and Agencies,’’ published
on April 18, 2022, agencies are expected
to assess ‘‘whether a significant portion
of any cost advantage of a foreignsourced product is the result of the use
of dumped steel, iron, or manufactured
products or the use of injuriously
subsidized steel, iron, or manufactured
products’’ as appropriate before granting
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a public interest waiver. HUD’s analysis
has concluded that this assessment is
not applicable to this waiver, as this
waiver is not based in the cost of
foreign-sourced products. HUD will
perform additional market research
during the waiver period to better
understand the market and to limit the
use of waivers caused by dumping of
foreign-sourced products.
Marcia L. Fudge,
Secretary.
[FR Doc. 2023–05698 Filed 3–20–23; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No.: FR–7077–N–07]
Privacy Act of 1974; System of
Records
Office of Public and Indian
Housing, HUD.
ACTION: Notice of a modified system of
records.
AGENCY:
Under the Privacy Act of
1974, as amended, the U.S. Department
of Housing and Urban Development
(HUD), Office of Public and Indian
Housing (PIH) gives notice of its intent
to modify a system of records notice
(SORN): Inventory Management System,
also known as the Public and Indian
Housing Information Center (IMS/PIC),
to add two routine uses to the Routine
Use section published in the Federal
Register on March 25, 2019 and update
the name of the system manager.
DATES: Comments will be accepted on or
before April 20, 2023. This proposed
action will be effective on the date
following the end of the comment
period unless comments are received
which result in a contrary
determination.
SUMMARY:
You may submit comments,
identified by docket number and title,
by one of these methods:
Federal e-Rulemaking Portal: https://
www.regulations.gov. Follow the
instructions provided on that site to
submit comments electronically.
Fax: 202–619–8365.
Email: privacy@hud.gov.
Mail: Attention: Privacy Office; Mr.
Ladonne White, Chief Privacy Officer,
Office of the Executive Secretariat; 451
Seventh Street SW, Room 10139,
Washington, DC 20410–0001.
Instructions: All submissions received
must include the agency name and
docket number for this rulemaking. All
comments received will be posted
without change to https://
ADDRESSES:
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]]>Agencies
[Federal Register Volume 88, Number 54 (Tuesday, March 21, 2023)]
[Notices]
[Pages 17001-17004]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-05698]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. 6331-N-10A]
Public Interest Phased Implementation Waiver for FY 2022 and 2023
of Build America, Buy America Provisions as Applied to Recipients of
HUD Federal Financial Assistance
AGENCY: Office of the Secretary, U.S. Department of Housing and Urban
Development (HUD).
ACTION: Notice.
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SUMMARY: In accordance with the Build America, Buy America Act
(``BABA'' or ``the Act'') this notice advises that HUD has issued a
public interest waiver of the Buy America Domestic Content Procurement
Preference (``Buy America Preference,'' or ``BAP'') for recipients of
Federal Financial Assistance (``FFA'') provided by HUD as set forth
below. This notice provides a waiver and sets forth an updated
implementation schedule for application of the BAP to HUD FFA. HUD is
also announcing its BAP implementation schedule for all HUD FFA used to
purchase iron or steel products in infrastructure projects in HUD
programs, other than the CDBG formula grants addressed in the November
23, 2022, waiver. HUD is also announcing its BAP implementation
schedule for the purchase of four specifically-listed construction
materials: non-ferrous metals; lumber; composite building materials;
and plastic and polymer-based pipe and tube (herein after referred to
as ``specifically-listed construction materials''), all manufactured
products, and all other construction materials.
DATES: March 15, 2023. This waiver is effective as stated herein for
FFA obligated by HUD on or after the effective date of the waiver until
the implementation deadlines for the BAP as specifically shown below.
FOR FURTHER INFORMATION CONTACT: Faith Rogers, Department of Housing
and Urban Development, 451 Seventh Street SW, Room 10126, Washington,
DC 20410-5000, at (202) 402-7082 (this is not a toll-free number). HUD
welcomes and is prepared to receive calls from individuals who are deaf
or hard of hearing, as well as individuals with speech and
communication disabilities. To learn more about how to make an
accessible telephone call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs. HUD encourages submission
of questions about this document be sent to
[email protected].
SUPPLEMENTARY INFORMATION:
I. Build America, Buy America
The Build America, Buy America Act (``BABA'' or ``the Act'') was
enacted on November 15, 2021, as part of the Infrastructure Investment
and Jobs Act (``IIJA'') (Pub. L. 117-58). The Act establishes a
domestic content procurement preference, the BAP, for Federal
infrastructure programs. Section 70914(a) of the Act establishes that
no later than 180 days after the date of enactment, HUD must ensure
that none of the funds made available for infrastructure projects may
be obligated by the Department unless it has taken steps to ensure that
the iron, steel, manufactured products, and construction materials used
in a project are produced in the United States. In section 70912, the
Act further defines a project to include ``the construction,
alteration, maintenance, or repair of infrastructure in the United
States'' and includes within the definition of infrastructure those
items traditionally included along with buildings and real property.
Thus, starting May 14, 2022, new awards of HUD FFA, and any of those
newly obligated funds by HUD then obligated by the grantee for
infrastructure projects, are covered under BABA provisions of the Act,
41 U.S.C. 8301 note, unless covered by a waiver.
II. HUD's Progress in Implementation of the Act
Since the enactment of the Act, HUD has worked diligently to
implement the BAP. HUD understands that advancing Made in America
objectives is a continuous effort and believes this transparent
schedule of future implementation will provide industry partners and
FFA recipients with the time and notice necessary to efficiently and
effectively implement the BAP. HUD's plans to move forward with the
implementation of the new BAP requirements as set forth in this notice
are designed to maximize coordination and collaboration to support
long-term investments in domestic production. HUD will continue its
efforts to implement the Act consistent with the guidance and
requirements of the Made in America Office of the Office of Management
and Budget, including anticipated guidance concerning appropriate
compliance with the BAP.
In order to ensure orderly implementation of the BAP across HUD's
programs, HUD has provided public interest, general applicability
waivers in order to implement the BAP in phases in connection with the
application of the BAP across HUD's FFA programs and to provide HUD
with sufficient time to solicit information from the public relating to
the agency's implementation of the BAP in connection with FFA awards
made by HUD. HUD has previously published general applicability, public
interest waivers to the BAP to provide the agency with sufficient time
to solicit information from the public relating to the agency's
implementation of the BAP in connection with FFA awards made by HUD. On
November 23, 2022, HUD issued a separate waiver covering all HUD FFA
obligated by HUD on or before February 21, 2023, with the exception of
the BAP as to the purchase of iron and steel for infrastructure
projects funded by Community Development Block Grant (``CDBG'') formula
grants on or after November 15, 2022. Separately, HUD waived the
application of the BAP in connection with HUD FFA provided to Tribes,
Tribally Designated Housing Entities (``TDHE''), and other Tribal
Entities (referred to herein as ``Tribal FFA'') to allow time for HUD
to complete the Tribal consultation process regarding implementation of
the BAP in connection with infrastructure projects. This Notice does
not apply to Tribal FFA covered by that separate waiver.\1\
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\1\ General Applicability Waiver of Build America, Buy America
Provisions as Applied to Tribal Recipients of HUD Federal Financial
Assistance (Effective until May 14, 2023) address Tribes, Tribally
Designated Housing Entities (``TDHE''), and other Tribal Entities'
implementation of BABA. (May 5, 2022, 87 FR 26221).
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Details on HUD's implementation of the BABA requirements, including
two public interest waivers covering Exigent Circumstances and De
Minimis and Small Grants and a separate public interest waiver for all
Tribal FFA, can be found at https://www.hud.gov/program_offices/general_counsel/BABA.
III. Waiver Authority
Under section 70914(b), HUD and other Federal agencies have
authority to waive the application of a domestic content procurement
preference when (1) application of the preference would be contrary to
the public interest, (2) the materials and products subject to the
[[Page 17002]]
preference are not produced in the United States at a sufficient and
reasonably available quantity or satisfactory quality, or (3) inclusion
of domestically produced materials and products would increase the cost
of the overall project by more than 25 percent. Section 70914(c)
provides that a waiver under 70914(b) must be published by the agency
with a detailed written explanation for the proposed determination and
provide a public comment period of not less than 15 days.
IV. Public Interest, General Applicability Waiver of Buy America
Provisions
The Office of Management and Budget's April 18, 2022 memorandum,
``Initial Implementation Guidance on Application of Buy America
Preference in Federal Financial Assistance Programs for
Infrastructure'' (M-22-11), encourages agencies to consider ways to
provide the assistance to funding recipients that is necessary and
effective for the implementation of the BAP, including consideration of
phased implementation of BAP where appropriate. Strategic and phased
steps toward full BABA compliance refines the scope for what is exempt
from BAP while providing a clear timeline for full implementation,
consistent with the Congressional intent and stakeholder interest. It
also allows HUD grantees and stakeholders the time needed to construct
stronger supply channels to include new or amended vendor contracts
that comply with BABA requirements.
In fiscal year 2023, HUD grantees will receive $14 billion through
the Department's programs where infrastructure is an eligible activity
and may be subject to the BAP. For example, Choice Neighborhoods
(``CN'') funds may be used for infrastructure projects (e.g., transform
severely distressed public and assisted properties with high-quality
mixed-income) or non-infrastructure uses (e.g., business services,
safety, children's education and to improve employment, income, and
health outcomes). HUD estimates that up to 85 percent of Choice
Neighborhoods Implementation Grant funds to be awarded in 2023 ($289
million of $340 million total) will be used on housing and
infrastructure projects where the BAP may apply.
As HUD's previous Notices advised and as supported by several
comments received during the comment period, many of HUD's programs may
be subject to the BAP and have previously not required compliance with
similar Buy American preferences. Because the potential application of
BAP mandated by the Act is new to the majority of HUD's programs and
FFA, HUD chose to implement the BAP first with respect to all iron and
steel products used in infrastructure projects funded with HUD FFA on
or after November 15, 2022, through its CDBG formula grants.
As required under section 70914 of the Act, HUD published a
proposed waiver on its website on February 15, 2023. In addition, HUD
published the proposed waiver in the Federal Register. Comments on the
proposed waiver were due on or before March 2, 2023. Through this Final
Notice, HUD is announcing that it has issued this waiver effective
March 15, 2023. This waiver is effective as stated herein for FFA
obligated by HUD in listed programs on or after the effective date of
the waiver until the implementation deadlines for the BAP as
specifically shown below. In addition, in the case of FFA obligated by
HUD in listed programs on or after February 22, 2023 but prior to the
effective date of this Final Waiver, the waiver applies to all
expenditures incurred on or after the effective date of the Final
Waiver, except for FFA obligated by HUD after the deadline for
implementation of the BAP with respect to the purchase of iron or steel
products in infrastructure projects in CDBG formula grants, Choice
Neighborhood, Lead Hazard Reduction, and Healthy Homes Production
Grants.
As such, through this Final Notice, HUD is expanding the
application of the BAP to iron and steel products used in
infrastructure projects funded with new Choice Neighborhood, Lead
Hazard Reduction, and Healthy Homes Production Grants obligated by HUD
on or after February 22, 2023. This waiver advances BABA by targeting
the next phase of implementation to include Choice Neighborhoods
(``CN''), a place-based grant program which helps communities develop
and implement locally driven comprehensive plans to transform
neighborhoods. In Fiscal Year 2023, HUD received $350 million for CN,
which Public Housing Authorities and local jurisdictions apply for
competitively. CN provides planning grants, which provide for the
development of comprehensive plans, and implementation grants, which
allow communities to implement their plans--including for use on
infrastructure activities. This allows for efficient phased
implementation while reducing the administrative burden to potential
grantees and funding recipients where the costs of uncertainties
surrounding compliance with BABA could distract from the focus on
higher value BABA compliant items. Failure to provide recipients such
flexibilities could delay the award for infrastructure projects as
grantees and funding recipients must exert considerable effort
accounting for the sourcing for miscellaneous, low-cost items.
In connection with Choice Neighborhood grants, HUD is clarifying
that this new required application of the BAP in connection with new
Choice Neighborhood grants obligated by HUD on or after February 22,
2023, will not extend to supplemental awards obligated by HUD to enable
the completion of ongoing, pre-existing projects funded by Choice
Neighborhood grants obligated by HUD prior to February 22, 2023. HUD is
continuing to waive the application of the BAP in connection with any
obligation of supplemental Choice Neighborhood grants because they are
merely serving to add additional resources to allow completion of
projects well underway with funding obligated prior to the application
of the BAP and any application of the BAP at this late stage of the
project would be inconsistent with the public interest and could
jeopardize completion of those projects. HUD believes that this
application is consistent with the intent of the proposed waiver and
clarifies that previous awards are not subject to conversion to BAP
applicability merely by the addition of minimal funding needed to
complete projects funded primarily with previous FFA Choice
Neighborhood grant awards.
To focus its efforts on the implementation of the BAP for new FFA
obligated by HUD on or after the dates shown below for each of the
programs and for the items shown below, HUD is proposing to waive the
application of the BAP: (1) as to FFA obligated by HUD and used to
purchase iron and steel before the BAP implementation point shown
below; (2) as to FFA obligated by HUD and used to purchase
specifically-listed construction materials before the BAP
implementation point shown below; (3) as to FFA obligated by HUD and
used to purchase all construction materials not listed before the BAP
implementation point shown below; and (4) as to FFA obligated by HUD
and used to purchase any manufactured products before the BAP
implementation point shown below. For purposes of HUD FFA, the BAP
implementation point shall be the point shown in schedule set forth
below. The table's columns describe four separate elements of the BAP
and the rows describe various HUD FFA programs. The cells in the table
set forth the point at which this waiver expires, and each element of
the BAP becomes effective,
[[Page 17003]]
for the various HUD FFA programs for each BAP element. Regarding the
second column, the specifically listed construction materials under
this waiver are: (1) non-ferrous metals; (2) lumber; (3) composite
building materials; and (4) plastic and polymer-based pipe and tube.
Regarding the two rows that reference new FFA HUD obligates from the
appropriations for a particular fiscal year (i.e., CDBG formula grants
and RHP grants), except for iron and steel, the waiver will not expire
on a single date for the entire program for any element of the BAP;
instead, the waiver will remain effective and continue to waive the BAP
for any FFA HUD obligates from the appropriations for prior fiscals
years for the relevant element, but the waiver will not be effective
for any FFA HUD obligates from the appropriations for the fiscal year
referenced in the cell and following fiscal years, to which the
relevant element of the BAP will apply. The implementation schedule
established by HUD in this final waiver is as follows:
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Construction
Iron and steel-- Construction materials-- materials--not Manufactured
BAP specifically-listed--BAP listed--BAP products--BAP
implementation implementation point implementation implementation
point point point
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Tribes, Tribally Designated Not Addressed in Not Addressed in this Not Addressed in Not Addressed in
Housing Entities, and Tribal this Notice. See Notice. See note 1. this Notice. this Notice.
Entities. note 1. See note 1. See note 1.
CDBG Formula Grants........... November 15, As of the date HUD As of the date As of the date
2022--as obligates new FFA from HUD obligates HUD obligates
described in the Fiscal Year 2024 new FFA from new FFA from
November 23, appropriations. Fiscal Year Fiscal Year
2022 Final 2025 2025
Waiver. appropriations. appropriations.
Choice Neighborhood, Lead New FFA obligated New FFA obligated by HUD New FFA New FFA
Hazard Reduction, and Healthy by HUD on or on or after August 23, obligated by obligated by
Homes Production Grants. after February 2024. HUD on or after HUD on or after
22, 2023. August 23, 2024. August 23,
2024.
Recovery Housing Program New FFA obligated As of the date HUD As of the date As of the date
(``RHP'') Grants. by HUD on or obligates new FFA from HUD obligates HUD obligates
after August 23, Fiscal Year 2024 new FFA from new FFA from
2023. appropriations. Fiscal Year Fiscal Year
2025 2025
appropriations. appropriations.
All other HUD FFA except HOME, New FFA obligated New FFA obligated by HUD New FFA New FFA
Housing Trust Fund, and by HUD on or on or after August 23, obligated by obligated by
Public Housing FFA used for after February 2024. HUD on or after HUD on or after
maintenance projects. 22, 2024. August 23, 2024. August 23,
2024.
HOME, Housing Trust Fund, and New FFA obligated New FFA obligated by HUD New FFA New FFA
Public Housing FFA used for by HUD on or on or after August 23, obligated by obligated by
maintenance projects. after August 23, 2024. HUD on or after HUD on or after
2024. August 23, 2024. August 23,
2024.
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This phased implementation of the BAP advances the goals of BABA by
providing transparency in HUD's implementation of the BAP, reducing the
administrative burden to potential assistance recipients where the
costs of uncertainty in compliance with BABA could distract from the
focus on the efficient and effective implementation of BABA in an
orderly and efficient manner, and provides transparency concerning the
full implementation plans in connection with HUD FFA used in
infrastructure projects. Failure to provide recipients such
flexibilities and transparency could delay the award for infrastructure
projects as grantees and funding recipients must exert considerable
effort in changing their plans and accounting for the sourcing of
materials in construction projects without the benefit of complete
guidance on the Act's requirements.
Additionally, HUD believes that this coordination in the
implementation of BABA will avoid unnecessary and undue hardship that
could jeopardize the timely and cost-effective completion of such
projects as grantees and funding recipients that have previously not
been subject to requirements similar to BAP react to anticipated
guidance on how to come into full compliance. This implementation
schedule and corresponding waiver allows grantees and funding
recipients to focus their efforts in beginning the implementation of
the BAP and allows HUD to focus its training and technical assistance
on those grantees beginning the implementation process. This waiver is
not an alternative to increasing domestic production, but rather serves
as a tool to assist HUD in its implementation of the Buy American
provisions in the most efficient manner in order to promote investment
in HUD's domestic manufacturing base, strengthen critical supply
chains, and position United States workers and businesses to compete
and lead globally in the 21st century. The implementation schedule is
designed to ensure that domestic manufacturers have sufficient time to
become aware of and respond to the market signals from HUD recipients
that additional BABA compliant construction materials and manufactured
products will be in demand. This waiver is in the interest of
efficiency, to ease burdens for HUD grantees and funding recipients,
avoid unnecessary costs, and avoid delays to projects that are critical
and time sensitive. This waiver allows HUD to focus, particularly in
the early phases of BABA implementation, on key products and critical
supply chains where increased U.S. manufacturing can best advance our
economic and national security. This waiver allows grantees and funding
recipients to continue with projects in connection with iron and steel
products where Made in America requirements have long been
contemplated--providing greater ease of implementation for HUD's
grantees. Without this waiver, HUD could lose grantee and funding
recipient participation, be exposed to liabilities if HUD forces
grantees and funding recipients to modify their current plans to come
into compliance, or delay critical activities to protect life, safety
and property, and could negatively impact the most vulnerable Americans
we seek to serve.
V. Public Comments on the Waiver
As required under section 70914 of the Act, HUD solicited comment
from the public on the public interest waiver announced in this Notice
on its website
[[Page 17004]]
and then published the proposed waiver in the Federal Register. A total
of 16 comments were received in response to the proposed waiver and
implementation plan. HUD thoroughly reviewed and considered each of the
comments in determining to move forward with the issuance of this
waiver and implementation plan as published in this Final Notice.
Several commenters were supportive of the orderly implementation of the
BAP but requested further time and guidance prior to proceeding with
such implementation. A few commenters again expressed support for a
waiver of broader scope that could potentially exclude all affordable
single and multifamily housing programs from the requirements of BABA.
Additional commenters requested further delays in the implementation
schedule, citing resource constraints and cost uncertainties in support
of further delays in implementation. Other commenters expressed concern
that the agency is not moving forward with the full implementation of
the BAP across all programs immediately.
HUD appreciates the comments from both perspectives, but given the
totality of the comments, believes its implementation schedule and
corresponding waiver of the application of the BAP as set forth in this
Final Notice is appropriate and in the public interest.\2\
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\2\ HUD has and will continue to provide training sessions with
grantees to increase grantees' knowledge about Build America, Buy
America and the Buy America Preference requirements as they relate
to HUD programs and HUD FFA used by Non-Federal entities to purchase
iron and steel, construction materials, and manufactured products to
be used infrastructure projects.
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HUD has expressed its desire to move forward with the full
implementation of the BAP across its FFA programs, but believes that
the public interest is served best by a measured approach to
implementation of the Act, allowing for the appropriate balancing of
the intent of the Act with the public interest in the continued
efficiency and success of infrastructure projects funded through HUD's
affordable housing and community development programs. HUD therefore
declines to alter the proposed phased implementation plan and
corresponding waiver at this time, but is taking this opportunity to
clarify that the application of the BAP for iron and steel will apply
to new awards of FFA in connection with Choice Neighborhood grants and
will not retroactively convert ongoing projects to required compliance
with the BAP merely because additional supplemental funding awards have
been made to facilitate orderly completion of those ongoing projects.
HUD will continue to monitor the implementation of the BAP across its
programs to ensure the most robust application possible in light of the
important public interests discussed above.
Several proponents of the waiver requested that HUD provide further
guidance regarding the implementation of the BAP and HUD commits to
developing robust guidance regarding the implementation of the BAP
across its programs. HUD further recognizes that proposed guidance \3\
has been issued by the Office of Management and Budget (OMB) concerning
the implementation of BABA across FFA programs and will continue to
monitor the outcome of the proposed effort to update OMB's guidance in
connection with the development of its own guidance for grantees and
funding recipients. HUD remains committed to reviewing its plans to
provide for the effective and efficient implementation of the Act
across its programs and providing timely and appropriate guidance but
believes that further extension of its waiver of application of the BAP
beyond the implementation points provided in this Final Notice is not
necessary at this time.
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\3\ Regulations.gov.
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VI. Impact of This Waiver on Other FFA
HUD will not require compliance with the BAP in connection with the
use of any HUD FFA obligated by HUD before November 14, 2022, or during
the pendency of any other applicable BABA waiver issued by HUD,
including this waiver, as applicable, after it is finalized. However,
where the BAP or other ``Buy American'' requirements are made
applicable to a project of a grantee or funding recipient by another
Federal agency, those requirements are not waived by this waiver, nor
is the grantee or funding recipient exempt from the application of
those requirements in accordance with the requirements of the Federal
agency providing such FFA.
VII. Assessment of Cost Advantage of a Foreign-Sourced Product
Under OMB Memorandum M-22-11, ``Memorandum for Heads of Executive
Departments and Agencies,'' published on April 18, 2022, agencies are
expected to assess ``whether a significant portion of any cost
advantage of a foreign-sourced product is the result of the use of
dumped steel, iron, or manufactured products or the use of injuriously
subsidized steel, iron, or manufactured products'' as appropriate
before granting a public interest waiver. HUD's analysis has concluded
that this assessment is not applicable to this waiver, as this waiver
is not based in the cost of foreign-sourced products. HUD will perform
additional market research during the waiver period to better
understand the market and to limit the use of waivers caused by dumping
of foreign-sourced products.
Marcia L. Fudge,
Secretary.
[FR Doc. 2023-05698 Filed 3-20-23; 8:45 am]
BILLING CODE 4210-67-P
