[Federal Register Volume 78, Number 116 (Monday, June 17, 2013)]
[Notices]
[Pages 36295-36296]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-14144]


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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 conditional Buy America waiver is appropriate for the obligation 
of Federal-aid Congestion Mitigation and Air Quality (CMAQ) Improvement 
program funds for the purchase of three vehicles; Sedan or hatch back 
(Driver + 4 passenger capacity) two wheeled drive with minimum 27 MPG 
for the State of Vermont.

DATES: The effective date of the waiver is June 18, 2013.

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 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. This notice provides 
information regarding the FHWA's finding that a partial Buy America 
waiver is appropriate for the obligation of Federal-aid CMAQ program 
funds for the purchase of three vehicles; Sedan or hatch back (Driver + 
4 passenger capacity) two wheeled drive with minimum 27 MPG for the 
State of Vermont.
    In accordance with Division A, section 122 of the ``Consolidated 
and Further Continuing Appropriations Act, 2012'' (Pub. L. 112-284), 
the FHWA published a notice of intent to issue a waiver on its Web site 
for the three vehicles; Sedan or hatch back (Driver + 4 passenger 
capacity) two wheeled drive with minimum 27 MPG for the State of 
Vermont (http://www.fhwa.dot.gov/construction/contracts/waivers.cfm?id=67) on March 5, 2012. The FHWA received 18 comments in 
response to the publication. Fifteen commenters objected to the 
proposed waiver but did not provide evidence of a domestic source that 
meets the appropriate requirements. Three of the commenters expressed 
partial or full support for the proposed waiver based on the belief 
that there are no domestic manufacturers that are able to provide a 
vehicle with 100 percent domestic steel and iron content. Several 
commenters questioned the need for this specific type of vehicle; 
however, Vermont's representative explained that the vehicles are 
necessary to meet their needs of the CarShare program.
    During the 15-day comment period, the FHWA conducted additional 
review but was unable to locate a domestic manufacturer that could meet 
a 100 percent domestic steel and iron content requirement. Based on all 
the information available to the agency, the FHWA concludes that there 
are no domestic manufacturers that could meet a 100 percent domestic 
steel and iron content for the Sedan or hatch back (Driver + 4 
passenger capacity) two

[[Page 36296]]

wheeled drive with minimum 27 MPG for the State of Vermont.
    The FHWA's Buy America requirement was initially established in 
1983 when the acquisition of vehicles was not eligible for assistance 
under the Federal-aid highway program. As such, the FHWA's Buy America 
requirements were tailored to the types of products that are typically 
used in highway construction, which generally meet a 100 percent 
domestic steel and iron content requirement. Vehicles were not the 
types of products that were initially envisioned as being purchased 
with Federal-aid highway funds when Buy America was first enacted. In 
today's global industry, vehicles are assembled with components that 
are made all over the world. The FHWA is not aware of any vehicle on 
the market that can claim to incorporate 100 percent domestic steel and 
iron content. For instance, the Chevy Volt, which was identified by 
many commenters in a November 21, 2011, Federal Register Notice as 
being a car that is made in the United States, comprises only 40 
percent United States and Canada content according to the window 
sticker (http://www.cheersandgears.com/uploads/1298005091/med_gallery_51_113_449569.png). There is no indication of how much of 
this 40 percent United States/Canadian content is United States-made 
content. Thus, the FHWA does not believe that application of a domestic 
content standard should be applied to the purchase of vehicles. 
However, it appears that there is an indication of whether vehicles are 
assembled in the United States. Specifically, the window sticker for 
the Chevy Volt says that the vehicle's final assembly point was in the 
United States.
    While the manufacture of steel and iron products that are typically 
used in highway construction (such as pipe, rebar, struts, and beams) 
generally refers to the various processes that go into actually making 
the entire product, the manufacture of vehicles typically refers to 
where the vehicle is assembled. Thus, given the inherent differences in 
the type of products that are typically used in highway construction 
and vehicles, we feel that simply waiving the Buy America requirement, 
which is based on the domestic content of the product, without any 
regard to where the vehicle is assembled would diminish the purpose of 
the Buy America requirement. Moreover, in today's economic environment, 
the Buy America requirement is especially significant in that it will 
ensure that Federal Highway Trust Fund (HTF) dollars are used to 
support and create jobs in the United States.
    Several commenters noted that FHWA has historically limited the 
application of Buy America requirements to products that are 
permanently incorporated into a Federal-aid highway construction 
project. These commenters questioned the applicability of the Buy 
America requirements to vehicle acquisitions and retrofit projects. In 
response to these commenters, the FHWA is implementing the statutory 
provisions of 23 U.S.C. 313(a) which preclude FHWA from obligating any 
funds ``. . . unless steel, iron, and manufactured products used in 
such project are produced in the United States.'' The requirements are 
applicable to all Federal-aid projects funded under Title 23, United 
States Code. The basis for most of the opposing comments was that the 
State should be required to buy an American vehicle, such as the Chevy 
Volt. Since the FHWA is not aware of any vehicles containing 100 
percent domestic content, including the Chevy Volt, the FHWA interprets 
these comments as advocating for a vehicle that is assembled in the 
United States. Therefore, the FHWA believes that a conditional waiver 
that allows Vermont to purchase these vehicles so long as the final 
assembly of the vehicle as the end product occurs in the United States 
is appropriate. This approach is similar to the conditional waivers 
given to Alameda County, San Francisco County, and Merced County, CA, 
for vehicle purchases on November 21, 2011 (76 FR 72027 and 76 FR 
72028) and March 30, 2012 (77 FR 19410).
    As a result, State departments of transportation will need to make 
a good faith effort to determine whether the final assembly of a 
vehicle or vehicle retrofit occurs in the United States. With respect 
to passenger motor vehicles, the FHWA notes that the National Highway 
Traffic Safety Administration has established criteria in 49 CFR Part 
583 for vehicles subject to the America Automobile Labeling Act (AALA) 
(http://www.nhtsa.gov/Laws+&+Regulations/Part+583+American+Automobile+Labeling+Act+(AALA)+Reports). Vehicles 
meeting the criteria for final assembly under the AALA is one option 
for State DOTs to make a good faith effort in determining whether final 
assembly of vehicles subject to AALA requirements occurs in the United 
States. The FHWA will publish a notice in the Federal Register at a 
future date to request public comments on what standards should apply 
to vehicles. In the meantime, the FHWA does not wish to further delay 
these projects while the appropriate standard for vehicles is 
established.
    In conclusion, and in light of the above, pursuant to 23 U.S.C. 
313(b)(1), the FHWA finds that it is in the public interest to grant a 
conditional waiver from the general 100 percent domestic content 
requirement that applies to Federal-aid highway projects under Buy 
America. Under this conditional waiver, however, the final assembly of 
any vehicles purchased with HTF funds must occur in the United States. 
Thus, so long as the final assembly of the sedans or hatch backs 
(Driver + 4 passenger capacity) two wheeled drive with minimum 27 MPG 
occurs in the United States, Vermont may proceed to purchase these 
vehicles consistent with the Buy America requirement.
    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 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 the Vermont waiver page noted above.

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

     Issued on: June 6, 2013.
Victor M. Mendez,
Administrator, Federal Highway Administration.
[FR Doc. 2013-14144 Filed 6-14-13; 8:45 am]
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