[Federal Register Volume 77, Number 239 (Wednesday, December 12, 2012)]
[Notices]
[Pages 74048-74050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-29917]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration


Buy America Waiver Notification

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice.

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SUMMARY: This notice provides information regarding the FHWA's finding 
that a public interest Buy America waiver is appropriate for the use of 
American and Canadian steel and iron products in the construction of 
the New International Trade Crossing (NITC) project.

DATES: The effective date of the waiver is December 13, 2012.

FOR FURTHER INFORMATION CONTACT: For questions about this notice, 
please contact Mr. Gerald Yakowenko, FHWA Office of Program 
Administration, (202) 366-1562, or via email at 
[email protected]. For legal questions, please contact Mr. 
Michael Harkins, FHWA Office of the Chief Counsel, (202) 366-4928, or 
via email at [email protected]. Office hours for the FHWA are 
from 8:00 a.m. to 4:30 p.m., e.t., Monday through Friday, except 
Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

    An electronic copy of this document may be downloaded from the 
Federal Register's home page at: http://www.archives.gov and the 
Government Printing Office's database at: http://www.access.gpo.gov/nara.

Background

    The NITC project is a new border crossing proposed by the State of 
Michigan and the Government of Canada over the Detroit River linking 
Detroit, Michigan, to Windsor, Ontario. The State of Michigan and 
Canada signed a Crossing Agreement on June 15, 2012, authorizing the 
construction of the NITC. This Crossing Agreement provides a framework 
for a Crossing Authority established by Canada to design, construct, 
finance, operate, and maintain a new International Crossing between 
Canada and Michigan, under the oversight of a jointly established 
International Authority, and through one or more Public-Private 
Agreements with one or more private sector Concessionaires.
    The Michigan components of the project that are not funded by the 
private sector Concessionaire(s) or by the US Federal government will 
be financed entirely with funds advanced by Canada (the ``Canadian 
Contributions''). These components include the interchange linking the 
bridge to I-75, the Michigan approach, and the Michigan plaza 
(collectively, the ``Michigan Components''). A record of decision (ROD) 
was signed by the FHWA for the NITC project on January 14, 2009, 
pursuant to the National Environmental Policy Act (NEPA), after 
extensive consideration of various alternatives, including the no build 
alternative, that were identified in the draft environmental impact 
statement (DEIS).
    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 in a Federal-aid 
construction project. The regulation also provides for a waiver of the 
Buy America requirements when the application would be inconsistent 
with the public interest or when satisfactory quality domestic steel 
and iron products are not sufficiently available. Here, the Governor of 
Michigan requests a waiver from Buy America on the basis that a

[[Page 74049]]

waiver for this project is in the public interest.
    In determining whether a waiver is in the public interest. The 
FHWA's decision is based on weighing the various factors surrounding 
each such request for a Buy America waiver. The circumstances for this 
particular waiver request by Michigan reflect the unique financing 
structure under which the Canadian government will bear the majority of 
the financial risk for constructing the NITC and the potential for the 
project to produce substantial economic and transportation benefits. 
Accordingly, this notice announces that a partial Buy America waiver is 
in the public interest to use American and Canadian steel and iron 
products in the construction of the NITC Project, and describes the 
reasons weighing in favor of this decision.

Discussion of Comments

    In accordance with Title I, Division C, section 122 of the 
``Consolidated and Further Continuing Appropriations Act, 2012'' (Pub. 
L. 112-55), the FHWA posted a notice of, and requested comments on, a 
proposed public interest waiver on its Web site for use of American and 
Canadian steel and iron products in the construction of the NITC 
project (http://www.fhwa.dot.gov/construction/contracts/waivers.cfm?id=80) on August 31, 2012. The FHWA received 122 comments 
in response to the publication. Of these comments, 91 supported the 
proposed waiver while 13 opposed it. Also, 3 commenters did not express 
either support or opposition for the proposed waiver or the project. An 
additional 15 commenters expressed opinions on the NITC project itself, 
with 8 commenters expressed support and 7 opposed.
    Comments were mostly submitted by individuals. Comments were also 
received from five unions (United Steelworkers, Michigan AFL-CIO, 
Michigan Regional Council of Carpenters, Transportation Trades 
Department (TTD) of the AFL-CIO, and the United Auto Workers), each of 
whom expressed support for the proposed waiver. Additional comments 
were received from 13 associations, each of which also expressed 
support for the proposed waiver, including the American Iron and Steel 
Institute (AISI). Comments were also received from 11 businesses. Of 
them, five steel companies and Ford Motor Company expressed support for 
the proposed waiver. Only one of these 11 businesses, the Detroit 
International Bridge Company (DIBC), opposed the proposed waiver.
    Generally, support expressed by the commenters for the proposed 
waiver highlighted the notion of fairness of allowing the use of 
Canadian and American steel given the unique financing arrangement of 
the project under which the Canadian government is bearing most of the 
project cost. For example, the AISI commented that it is a strong 
supporter of Buy America, but given the unique financing arrangement 
for the NITC project, AISI supports granting a public interest waiver 
to allow the use of Canadian and America Steel. The United Steelworkers 
commented that this proposed waiver is a ``one-of-a-kind circumstance'' 
involving a unique financing mechanism where Canada is advancing all 
the funds to build the bridge and assuming all of the financing risk. 
The Michigan AFL-CIO noted that the NITC is financed solely by Canada. 
The Michigan Regional Council of Carpenters commented that the ``NITC 
project presents a unique situation'' whereby Canada is fronting all of 
the construction costs so it is only appropriate that the project uses 
both American and Canadian steel. The TTD commented that ``TTD has a 
clear record of urging full compliance with federal Buy America laws. 
However, given the nature of this project, the shared investment by 
both the U.S. and Canadian governments, and the uniquely integrated 
industries that span the US Canadian border, [TTD] feels that the 
waiver application is appropriate and beneficial in this specific 
instance.''
    Other comments supported the waiver as necessary in order to 
facilitate the construction of a project that has the potential to 
produce substantial economic and transportation benefits. For example, 
Ford Motor Company cited to a study by the Center of Automotive 
Research outlining the significant economic benefits of the NITC, which 
include:
     Jobs from bridge construction: 6,000 in each of the first 
2 years of construction and 5,100 jobs in the final 2 years;
     Jobs from Statewide construction projects resulting from 
the federal match: 6,600 jobs per year for 4 years;
     Jobs from bridge operations: 1,400 permanent jobs;
     Jobs from new private investment: 6,800 permanent jobs; 
and
     Overall economic growth: Michigan state domestic product 
increased by $2.2 billion, personal income increased by $4 billion, and 
State and local revenue increased by $400 million.
    Also, the United Steelworkers noted that this project will create 
good jobs, including demand for at least 10,000 direct jobs and 
thousands of indirect jobs. The United Steelworkers further noted that 
millions of jobs in both countries are dependent on trade between the 
US and Canada, and the NITC will help retain and create more trade 
between the two nations. The Michigan AFL-CIO commented that in 2011, 
the US and Canada shared $597 billion in trade. This trade relationship 
supports 11 million jobs, of which 8 million are in the US and 230,000 
are in Michigan. When complete, the NITC will position Michigan to 
expand as a trade hub creating economic growth and additional jobs. 
GreenStone Farm Credit Services commented that for 35 States, Canada is 
their principal export market, and the new bridge will create the first 
freeway-to-freeway connection between Detroit and Windsor. Amway 
Corporation commented that the new crossing is critical because 
American trade with Canada increases annually with truck traffic 
predicted to triple in the next 30 years. The TTD commented that this 
project would help create thousands of good paying American jobs with 
10,000 direct construction jobs and 25,000 indirect jobs. The United 
Auto Workers commented that this project will create many thousands of 
well-paying construction jobs and additional spin-off jobs. The United 
Auto Workers further noted that the auto industry depends on a quick 
and easy border crossing for components and completed vehicles, and the 
NITC will assure adequate border mobility for the auto industry for 
many decades into the future.
    Substantive comments opposing the proposed waiver, including 
comments from the DIBC, generally made the point that a private company 
is prepared to build a second bridge using only American iron and 
steel. The merits and impacts of constructing the NITC were extensively 
studied, weighed, and analyzed in the January 14, 2009, ROD. The 
process leading to the ROD considered numerous alternatives, including 
the DIBC proposal to construct its own new bridge. After considering 
these alternatives, the FHWA selected the present project that is 
subject to the proposed waiver.
    The DIBC also expressed other comments that were considered in the 
environmental process for the NITC project. These comments include 
statements that the NITC will destroy businesses and result in a net 
loss of jobs. For the reasons articulated in the ROD regarding the 
selection of the current project over other alternatives, including the 
alternative proposed by DIBC as well as the consideration of the

[[Page 74050]]

impacts to businesses, the FHWA directs commenters' attention to the 
ROD and other supporting documents and analyses, including the November 
21, 2008, final environmental impact statement (FEIS). Because these 
impacts have already been considered in the environmental process, the 
FHWA declines to conduct a redundant analysis to reevaluate the merits 
of other alternatives. As such, the FHWA does not deem these factors to 
be relevant to consideration of the appropriateness of a Buy America 
waiver.
    DIBC comments that this waiver is not in the public interest 
because the construction of the NITC is not authorized under Michigan 
State law. However, the FHWA declines to take a position on the 
application of Michigan State law.
    The DIBC also comments that the proposed waiver is not in the 
public interest for the reasons specified in the DIBC's comments to the 
Secretary of State regarding the Governor's application for a 
Presidential permit. These comments, while voluminous, do not directly 
address the FHWA's consideration of the proposed waiver.
    Some commenters suggested that specific percentages be established 
regarding the ratios of Canadian and American steel and iron that will 
be used in the construction of the NITC. While the specification of 
such percentages may appear reasonable, the FHWA does not believe that 
the specification of such percentages in advance of a decision on the 
proposed waiver is in the public interest. It will be difficult to 
determine exactly how such percentages would be established absent 
specific contractor bids or proposals from potential public private 
partnership entities.
    Another comment asked that, in light of Michigan's plan to leverage 
the Canadian financial contribution to the NITC as the State's matching 
share for other Federal-aid highway projects, the FHWA should clarify 
whether the proposed waiver is specific to the NITC or whether it will 
apply more broadly to Michigan's highway program in general. In 
response to this concern, the FHWA clarifies that the waiver proposed 
here is specific only to the NITC and will not apply to any other 
Federal-aid highway projects.
    After considering and weighing all of the comments that have been 
submitted in response to the proposed waiver, including those 
specifically mentioned and discussed above, it is the FHWA's decision 
that the Governor's request to partially waive the application of Buy 
America to the NITC project to allow the use of both American and 
Canadian steel and iron is granted. The proposed waiver here presents a 
unique circumstance, as mentioned by the commenters highlighted above, 
under which Canada is assuming all financial liability and risk for the 
construction of this project. In light of the Canadian financial 
contribution, the FHWA believes that the basic notion of fairness 
weighs in favor of allowing Canadian iron and steel to be used so long 
as American iron and steel is allowed to compete on an equal basis. 
Moreover, the Canadian financial contribution to the project will make 
possible the creation of thousands of direct and indirect construction 
jobs, as well as numerous other jobs in the American economy, as a 
result of increased trade and productivity between the US and Canada.
    In accordance with the provisions of section 117 of the SAFETEA-LU 
Technical Corrections Act of 2008 (Pub. L. 110-244, 122 Stat. 1572), 
the FHWA is providing this notice as its finding that a waiver of Buy 
America requirements for the NITC project is appropriate. The FHWA 
invites public comment on this finding for an additional 15 days 
following the effective date of the finding. Comments may be submitted 
to the FHWA's Web site via the link provided to NITC waiver page noted 
above.

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

    Issued on: December 5, 2012.
Victor M. Mendez,
Administrator.
[FR Doc. 2012-29917 Filed 12-11-12; 8:45 am]
BILLING CODE 4910-22-P