[Federal Register Volume 87, Number 216 (Wednesday, November 9, 2022)]
[Notices]
[Pages 67709-67711]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-24510]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6331-N-06]


Public Interest Phased Implementation Waiver 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 is proposing a 
public interest waiver to further HUD's phased implementation of the 
Buy America Domestic Content Procurement Preference (``Buy America 
Preference,'' or ``BAP'') for recipients of Federal Financial 
Assistance (``FFA'') provided by HUD. On May 5, 2022, HUD previously 
issued a separate waiver covering all FFA obligated by HUD on or before 
November 14, 2022, including Community Development Block Grant 
(``CDBG'') formula grants. In order to fully focus on the successful 
implementation of the BAP in CDBG formula grants, one of HUD's largest 
grant programs, HUD has determined that it is in the public interest to 
propose a new public interest waiver of the application of the BAP for 
all other FFA provided by HUD. HUD is proposing that this waiver cover 
all FFA obligated by HUD during the ninety (90) day period after its 
effective date except for those funds utilized in connection with the 
purchase of iron or steel products in infrastructure projects funded by 
CDBG formula grants obligated by HUD on or after November 15, 2022. In 
addition, in the case of FFA obligated by HUD on or after November 15, 
2022, but prior to the effective date of the final waiver, the waiver 
will apply to all expenditures incurred on or after the date of the 
final waiver, except for those funds utilized in connection with the 
purchase of iron or steel products in infrastructure projects funded by 
CDBG formula grants obligated by HUD on or after November 15, 2022. HUD 
is also, through this waiver, soliciting specific comment on the 
further phased implementation of the BAP in connection with the iron 
and steel products used in other non-CDBG formula grant FFA provided by 
HUD and in the full implementation of the BAP in connection with the 
use of construction materials and manufactured products in all 
infrastructure projects across HUD's FFA programs.

DATES: HUD published this proposed waiver on its website on November 3, 
2022. Comments on the waiver proposed in this document are due on or 
before November 17, 2022. HUD will consider comments received and 
announce any subsequent changes to this waiver through a subsequent 
notice. If issued, the waiver would be applicable to awards that are 
obligated on the effective date of the waiver and eighty-nine (89) days 
thereafter for a total of ninety (90) days.

ADDRESSES: Interested persons are invited to submit comments on this 
public interest, general applicability waiver. Copies of all comments 
submitted are available for inspection and downloading at 
www.regulations.gov.
    To receive consideration as public comments, comments must be 
submitted through one of two methods, specified below. All submissions 
must refer to the above docket number and title.
    1. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
www.regulations.gov.
    HUD strongly encourages commenters to submit comments 
electronically. Electronic submission of comments allows the commenter 
maximum time to prepare and submit a comment, ensures timely receipt by 
HUD, and enables HUD to make them immediately available to the public. 
Comments submitted electronically through the www.regulations.gov 
website can be viewed by other commenters and interested members of the 
public. Commenters should follow the instructions provided on that site 
to submit comments electronically.
    2. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW, Room 10276, 
Washington, DC 20410-0500.
    No Facsimile Comments. Facsimile (FAX) comments will not be 
accepted.
    3. Public Inspection of Comments. All properly submitted comments 
and communications submitted to HUD will be available for public 
inspection and copying between 8:00 a.m. and 5:00 p.m. weekdays at the 
above address. Due to security measures at the HUD Headquarters 
building, an advance appointment to review the submissions must be 
scheduled by calling the Regulations Division at (202) 708-3055 (this 
is not a toll-free number).

FOR FURTHER INFORMATION CONTACT: Joseph Carlile, Department of Housing 
and Urban Development, 451 Seventh Street SW, Room 10226, 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, beginning May 14, 2022, new awards of FFA by HUD through a 
program for infrastructure, and any of those newly obligated funds then 
obligated by the grantee, 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. Consistent with the requirements

[[Page 67710]]

of section 70913 of the Act, HUD produced a report identifying and 
evaluating all of HUD's Federal Financial Assistance programs for 
compliance with the BAP on January 19, 2022, by Federal Register notice 
``Identification of Federal Financial Assistance Infrastructure 
Programs Subject to the Build America, Buy America Provisions of the 
Infrastructure Investment and Jobs Act'' (87 FR 2894). In order to 
ensure orderly implementation of the BAP across HUD's programs, HUD 
published two general applicability waivers for HUD's programs on May 
3, 2022. The first notice, ``General Applicability Waiver of Build 
America, Buy America Provisions as Applied to Recipients of HUD Federal 
Financial Assistance'' (87 FR 26219), extended the implementation date 
for the BAP until November 14, 2022, unless covered by a subsequent 
waiver. Thus, no funds obligated by HUD before November 14, 2022, are 
subject to the BAP. The second notice, ``General Applicability Waiver 
of Build America, Buy America Provisions as Applied to Tribal 
Recipients of HUD Federal Financial Assistance'' (87 FR 26221), 
extended the implementation date for the BAP for Federal Financial 
Assistance provided to Tribal recipients for a period of one year. 
Additionally, on June 1, 2022(87 FR 33193) HUD published a Request for 
Information ``Request for Information Relating to the Implementation of 
the Build America, Buy America Act'' to gather additional information 
necessary to fully implement the BAP for HUD programs and to adequately 
prepare necessary Paperwork Reduction Act notices relating to such 
implementation.
    Following the expiration of the ``General Applicability Waiver of 
Build America, Buy America Provisions as Applied to Recipients of HUD 
Federal Financial Assistance'' (87 FR 26219), HUD will fully implement 
the BAP for purposes of the purchase of iron and steel products used in 
infrastructure projects funded with Federal Financial Assistance 
provided by HUD through its CDBG formula grants obligated by HUD on or 
after November 15, 2022. Additional details on HUD's implementation of 
the BABA requirements 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 
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),\1\ 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.
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    \1\ See OMB Memorandum M-22-08, Identification of Federal 
Financial Assistance Infrastructure Programs Subject to the Build 
America, Buy America Provisions of the Infrastructure Investment and 
Jobs Act, https://www.whitehouse.gov/wp-content/uploads/2021/12/M-22-08.pdf.
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    In Fiscal Year 2022, HUD grantees will receive more than $15 
billion through the Department's programs where infrastructure is an 
eligible activity that may be subject to the BAP. For example, 
Community Development Block Grant (``CDBG'') funds may be used for 
infrastructure projects (e.g., water and sewer improvements, street 
improvements, neighborhood facilities) or non-infrastructure uses 
(e.g., senior services, youth services, operation of food banks, 
administrative and planning expenses). HUD estimates that 40 percent of 
CDBG funds awarded in 2021 ($1.4 billion of $3.5 billion total) were 
used on infrastructure projects where the BAP could 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 America preferences. Because the potential application of 
BAP mandated by the Act is new to the majority of HUD's programs and 
Federal Financial Assistance (``FAA''), HUD is choosing to implement 
the BAP first with respect to all iron and steel products used in 
infrastructure projects funded with FFA provided by HUD through its 
CDBG formula grants on or after November 15, 2022. In order to focus on 
this implementation, HUD is proposing to waive the application of the 
BAP in connection with all other FAA. This will provide an additional 
limited period to allow for further consideration of the most efficient 
methods of implementation of the BAP across the remaining HUD programs 
for construction materials and manufactured products more generally. 
This waiver advances BABA by 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 one of HUD's largest FFA programs 
and allows for broader phased implementation once further clarity and 
guidance on the implementation is received. Failure to provide 
recipients such flexibilities could delay the award for infrastructure 
projects as grantees and funding recipients must exert considerable 
effort in accounting for the sourcing for miscellaneous, low-cost 
construction materials without the benefit of complete guidance on the 
Act's requirements.
    HUD believes that better coordination with HUD FAA recipients in 
the implementation of BABA will avoid unnecessary and undue hardship. 
Such a waiver will allow grantees and funding recipients to focus their 
efforts on such critical projects. Proposing this waiver is not an 
alternative to increasing domestic production. Rather this waiver will 
allow 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 will also allow 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 CDBG formula 
grantees. Without this waiver, HUD grantee and funding recipient 
participation could be impacted, such as modification of current plans.
    As HUD's previous Notice advised and as supported by several 
comments received during the comment period, many of the HUD's programs 
that may be subject to the BAP and have previously not required 
compliance with similar Buy America preferences. Because the potential 
application of BAP mandated by the Act is new to the

[[Page 67711]]

majority of HUD's FFA programs, this waiver advances BABA by targeting 
the initial phased implementation to a well-developed industry in 
connection with infrastructure projects being undertaken by 
sophisticated CDBG formula grantees. HUD is seeking comment on the 
further implementation of the BAP but will focus specific attention to 
the full implementation of the BAP in connection with the use of iron 
and steel in infrastructure projects in other FFA programs utilizing 
HUD funds within this waiver period.
    No funds obligated by HUD or the grantee/funding recipient during 
the period of the waiver that would be exempted from compliance with 
BAP as a result of the waiver will be required to apply the BAP.

V. Impact of This Waiver on Other Federal Financial Assistance

    No funds that have been obligated by HUD before November 14, 2022, 
or during the pendency of this waiver will require compliance with the 
BAP, with the exception of iron and steel products used in connection 
with infrastructure projects funded through CDBG formula grants 
obligated by HUD on or after November 15, 2022, or unless otherwise 
required by another FFA award. Where the BAP or other BABA 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 Federal Financial Assistance.

VI. 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.\2\ 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.
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    \2\ See OMB Memorandum M-22-08, Identification of Federal 
Financial Assistance Infrastructure Programs Subject to the Build 
America, Buy America Provisions of the Infrastructure Investment and 
Jobs Act, https://www.whitehouse.gov/wp-content/uploads/2021/12/M-22-08.pdf.
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VII. Solicitation of Comments on the Waiver

    As required under section 70914 of the Act, HUD is soliciting 
comment from the public on the waiver announced in this Notice. In 
particular, HUD invites comments on the waiver of application of the 
BAP for iron and steel products in connection with infrastructure 
projects funded through HUD's FFA programs other than CDBG formula 
grants. HUD also seeks specific comment on how it may best further 
phase in the application of the BAP for all construction materials and 
manufactured products in connection with CDBG formula grants and all 
other HUD FFA programs. HUD invites comments on what time period would 
be appropriate for purposes of achieving these various phases of 
orderly implementation of the Act.

Marcia L. Fudge,
Secretary.
[FR Doc. 2022-24510 Filed 11-7-22; 11:15 am]
BILLING CODE 4210-67-P