[Federal Register Volume 74, Number 104 (Tuesday, June 2, 2009)]
[Notices]
[Pages 26397-26398]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-12793]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-8911-9]


Notice of Nationwide Waiver of Section 1605 (Buy America 
Requirement) of American Recovery and Reinvestment Act of 2009 (ARRA) 
for Projects that Solicited Bids on or after October 1, 2008 and prior 
to February 17, 2009 that are Financed through the Clean or Drinking 
Water State Revolving Funds using Assistance Provided under ARRA

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: The EPA is hereby granting a nationwide waiver of the Buy 
America requirements of ARRA Section 1605 under the authority of 
Section 1605(b)(1) (public interest waiver) for eligible projects that 
solicited bids on or after October 1, 2008, and prior to February 17, 
2009, the date of enactment of ARRA, and that did so in reasonable and 
prudent, specific anticipation of ARRA funding, or any other source of 
timely funding. This action permits the use of non-domestic iron, 
steel, and manufactured goods in such projects funded by ARRA that may 
otherwise be prohibited under section 1605(a).

DATES: Effective Date: May 22, 2009.

FOR FURTHER INFORMATION CONTACT: Jordan Dorfman, Attorney-Advisor, 
Office of Wastewater Management, (202) 564-0614, or Philip Metzger, 
Attorney-Advisor, Office of Ground Water and Drinking Water, (202) 564-
3776, Environmental Protection Agency, 1200 Pennsylvania Avenue NW., 
Washington, DC 20460.

SUPPLEMENTARY INFORMATION: In accordance with ARRA Section 1605(c), the 
EPA hereby provides notice that it is granting a nationwide waiver of 
the requirements of section 1605(a) of Public Law 111-5, Buy American 
requirements, for eligible projects for which a Clean or Drinking Water 
State Revolving Fund will conclude or has concluded an assistance 
agreement using ARRA funds for projects that solicited bids on or after 
October 1, 2008 and prior to February 17, 2009.
    The basis for the nationwide waiver is the requirement in the SRF 
appropriations heading of ARRA Title VII for giving priority to those 
projects that are ready to proceed to construction within 12 months of 
the enactment of ARRA, as follows:

    That, notwithstanding the priority rankings they would otherwise 
receive under each program, priority for funds appropriated herein 
shall be given to projects on a State priority list that are ready 
to proceed to construction within 12 months of the date of enactment 
of this Act.

This waiver also relies on the requirement in the SRF appropriations 
heading that all funds must be under contract or construction within 12 
months of the enactment of ARRA, as follows:

    That the Administrator shall reallocate funds appropriated 
herein for the Clean and Drinking Water State Revolving Funds 
(Revolving Funds) that are not under contract or construction within 
12 months of the date of enactment of this Act.

    As authorized by the Federal Water Pollution Control Act and the 
Safe Drinking Water Act, base State programs (not appropriated under 
ARRA) are not required to meet a deadline for having appropriated funds 
under contract or under construction. States are required to commit 
funds appropriated to projects within 1 year. Binding commitments, in 
the context of the SRF programs, are typically executed in the form of 
loan agreements. Loan agreements, however, do not carry a particular 
statutory deadline for assistance recipients to enter contracts or to 
begin construction. For appropriations under ARRA, however, States are 
required to ensure that all funds are under contract or construction 
within 1 year of enactment of ARRA.
    In order to meet the special requirements authorized by ARRA, most 
importantly the requirement to have all funds under contract or 
construction within 12 months of enactment, States began the 
development of priority lists and intended use plans (IUP) prior to, 
and in anticipation of, passage of the Act. Such advance planning was 
considered crucial by both States and EPA. EPA actively encouraged such 
planning in anticipation of possible deadlines for construction. Those 
States that effectively planned for such an eventuality took the 
additional step of

[[Page 26398]]

encouraging potential assistance recipients to begin the planning and 
design phase of project construction, and in some cases, actually 
solicit bids on the plans and designs. Projects that have solicited 
bids are in most cases considered to be in a ready-to-proceed category 
as among projects listed on State IUPs. Under the exceptional emphasis 
on expeditious construction of ARRA's SRF language quoted above, States 
will generally give the highest priority for ARRA SRF funding to 
eligible projects that clearly qualify to be in a ready-to-proceed 
category. This statutory language also confirms the appropriateness of 
proactive steps States had taken to encourage SRF projects' readiness 
for expeditious construction. Moreover, the ARRA SRF language cited in 
EPA's nationwide waiver for refinanced projects specified October 1, 
2008 as the opening of the window within which initiation of relevant 
action can properly be considered done ``in anticipation of ARRA'' (74 
FR 15722).
    To be included under this waiver, potential assistance recipients 
must show a verifiable basis on which they believed it was reasonable 
and prudent to solicit bids for these projects prior to concluding an 
assistance agreement with the State SRF. Such verification will show 
some objective basis under which these actions were reasonably and 
prudently undertaken in specific anticipation of ARRA funding, or any 
other source of timely funding. Such action may include an affirmative 
communication from a funding source, such as a binding commitment, high 
placement on a priority list, or other indicative and verifiable 
communication from an SRF or other government funding source, or 
regarding any affirmative steps taken to secure private bond financing 
from an appropriate industry entity. Any such objective verification 
would show that bid solicitations were undertaken reasonably and 
prudently, in order to fulfill Congress' intent in passing ARRA and in 
particular to create jobs and spur economic recovery ``by commencing 
activities and expenditures as expeditiously as possible'' (See ARRA 
Section 3(b)).
    The imposition of ARRA's Buy American requirements on projects 
eligible for SRF assistance whose assistance applicants had solicited 
bids on or after October 1, 2008 and prior to February 17, 2009, the 
date when those requirements were imposed, would require the time-
consuming rebidding of those projects and potentially a redesign. 
Specifically, those projects that can show a reasonable and prudent 
basis to solicit bids prior to the passage of the ARRA would be harmed 
by the imposition of these requirements post bid solicitation. This 
imposition would particularly conflict with the intentions and 
objectives of the bases on which those projects reasonably and 
prudently solicited bids for project construction prior to the passage 
of the ARRA: based on an affirmative communication by a State SRF 
program, or in order to meet requirements set forth or identified by a 
financing agency or source of funds in order to ensure receipt of 
financing for the project. This would clearly frustrate Congress' 
expressed intent for expeditious construction of projects supported by 
the State Revolving Funds or that had otherwise made themselves ready 
to proceed, and may imperil portions of States' ARRA funding if it 
renders them unable to meet ARRA's stringent time requirements for the 
entirety of their SRF appropriations. These projects are most likely to 
proceed to construction in a relatively short period of time, thereby 
creating jobs and stimulating the economy.
    ARRA Section 1605(b)(1) authorized the Administrator to waive the 
requirements of Section 1605(a) in any case or category of cases in 
which she finds that applying subsection (a) would be inconsistent with 
the public interest. Therefore, for the foregoing reasons, applying Buy 
America requirements to projects that reasonably and prudently 
solicited bids prior to the passage of ARRA in specific anticipation of 
ARRA funding, or any other source of timely funding, would be 
inconsistent with the public interest.

    Authority: Public Law 111-5, section 1605.

    Dated: May 22, 2009.
Michael Shapiro,
Acting Assistant Administrator for Water.
[FR Doc. E9-12793 Filed 6-1-09; 8:45 am]
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