[Federal Register Volume 78, Number 116 (Monday, June 17, 2013)]
[Notices]
[Pages 36296-36298]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-14146]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Highway Administration


Buy America Waiver Notification

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This notice provides information regarding the FHWA's finding 
that a conditional Buy America waiver is appropriate for the obligation 
of Federal-aid funds for 74 vehicle projects involving the purchase of 
approximately 3,500 vehicles (including sedans, vans, pickups, SUVs, 
trucks, buses, and equipment, such as backhoes, street sweepers, and 
tractors), including projects to retrofit vehicles with individual 
vehicle components, so long as they are assembled in the United States. 
The FHWA's Buy America requirements provide that 100 percent of all 
steel and iron that is permanently

[[Page 36297]]

incorporated into a project must be domestically manufactured. With 
respect to vehicles, manufacturers typically assemble these products 
with many different components and subcomponents containing steel and 
iron. As a result, vehicles are typically referred to as being made 
where the final product rolls off the assembly line for delivery into 
the marketplace. The FHWA is unaware of any vehicle that is comprised 
of 100 percent domestically produced steel and iron, resulting in a 
need for a conditional Buy America waiver for these projects to 
proceed.

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 regulations at 23 CFR 635.410 require 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 
conditional Buy America waiver is appropriate for the obligation of 
Federal-aid funds for the purchase of 74 vehicle projects (including 
sedans, vans, pickups, SUVs, trucks, buses, and equipment, such as 
backhoes, street sweepers, and tractors).
    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 74 vehicle projects (including sedans, vans, pickups, SUVs, trucks, 
buses, and equipment, such as backhoes, street sweepers, and tractors) 
(http://www.fhwa.dot.gov/construction/contracts/waivers.cfm?id=87) on 
April 12th. The FHWA received 28 comments in response to the 
publication. Seventeen comments in support of the waiver were from 
clean air proponents or supporters of the FHWA's Congestion Mitigation 
Air Quality (CMAQ) Improvement Program. Seven commenters objected to 
the proposed waiver but did not provide substantive information 
regarding the availability of domestic alternates that meet the 
appropriate requirements. Two individuals commented on the need to 
further define domestic content. One individual commented on the need 
to define domestic assembly and one other individual provided comment 
on the applicability of the Federal Transit Administration's Buy 
America requirements for rolling stocks, which are not applicable to 
Federal-aid program.
    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 including vehicle acquisitions and retrofit projects.
    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 74 vehicle projects (including sedans, 
vans, pickups, SUVs, trucks, buses, and equipment, such as backhoes, 
street sweepers, and tractors).
    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 (76 FR 
72027) 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. 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.
    One commenter believed that it was imperative that FHWA issue 
guidance clarifying how it intends to handle future vehicle waiver 
requests so that public agencies and companies can plan accordingly. 
Several commenters suggested that guidance be provided concerning the 
definition of final assembly and how this definition would be 
implemented for vehicle retrofit projects where vehicles manufactured

[[Page 36298]]

outside the U.S. as gasoline or diesel vehicles are imported to the 
United States and then retrofitted or modified in the United States so 
that they can operate on alternative fuels. Another commenter suggested 
that FHWA issue a policy that defines the acceptable limit on domestic 
content.
    In response to these comments, the FHWA does not believe that it is 
appropriate to establish a vehicle domestic content requirement 
threshold at the present time. The FHWA is uncertain whether such a 
condition would further the objectives of CMAQ Program to encourage 
State and local entities to pursue clean fuel technologies. Moreover, 
the FHWA has no data in order 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 a vehicle is questionable. The FHWA is 
unaware of any method by which the agency can use to determine where 
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 vehicle retrofit projects 
other than the location where the retrofitting of the vehicle takes 
place prior to turning the vehicle over to the owner. As such, the FHWA 
is not prepared to address these issues as part of this particular 
waiver request.
    As a result, State departments of transportation (DOT) 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.
    While the FHWA has not located a vehicle that meets a 100 percent 
domestic iron and steel content requirement, the FHWA does not find 
that a complete waiver based on non-availability pursuant to 23 U.S.C. 
313(b)(2) is appropriate. However, the FHWA also recognizes that at 
least a conditional waiver is necessary in order to permit the State 
DOTs to proceed with the projects. The FHWA believes that a conditional 
waiver that allows the public agencies to purchase 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).
    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 74 vehicle projects 
(including sedans, vans, pickups, SUVs, trucks, buses, and equipment, 
such as backhoes, street sweepers, and tractors) occurs in the United 
States, applicants to this waiver request may proceed to purchase these 
vehicles and equipment 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 conditional 
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 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. 2013-14146 Filed 6-14-13; 8:45 am]
BILLING CODE 4910-22-P