[Federal Register Volume 88, Number 34 (Tuesday, February 21, 2023)]
[Notices]
[Pages 10533-10536]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03555]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. 6331-N-10]


Public Interest Phased Implementation Waiver for FY 2022 and 2023 
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 of the Buy America Domestic Content Procurement 
Preference (``Buy America Preference,'' or ``BAP'') for recipients of 
Federal Financial Assistance (``FFA'') provided by HUD. When final, the 
waiver will provide an updated implementation schedule for application 
of the BAP to HUD FFA. HUD is also announcing its proposed BAP 
implementation schedule for all HUD FFA used to purchase iron or steel 
products in infrastructure projects in HUD programs other than the CDBG 
formula grants addressed in the November 23, 2022, waiver. HUD is also 
announcing its proposed BAP implementation schedule for the purchase of 
manufactured products and specified construction materials including: 
(1) non-ferrous metals; (2) lumber; (3) composite building materials; 
and (4) plastic and polymer-based pipe and tube (herein after referred 
to as ``specified construction materials'').

DATES: HUD published this proposed waiver on its website on February 
15, 2023. Comments on the waiver proposed in this document are due on 
or before March 2, 2023. HUD will consider comments received and 
announce any subsequent changes to this waiver through a subsequent 
Notice.

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). 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

[[Page 10534]]

make an accessible telephone call, please visit www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.

FOR FURTHER INFORMATION CONTACT: Faith Rogers, Department of Housing 
and Urban Development, 451 Seventh Street SW, Room 10126, 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 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, starting May 14, 2022, new awards of HUD FFA, and any of those 
newly obligated funds by HUD then obligated by the grantee for 
infrastructure projects, 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. HUD understands that advancing Made in America 
objectives is a continuous effort and believes this transparent 
schedule of future implementation will provide industry partners and 
FFA recipients with the time and notice necessary to efficiently and 
effectively implement the BAP. HUD's proposed plans to move forward 
with the implementation of the new BAP requirements is designed to 
maximize coordination and collaboration to support long-term 
investments in domestic production. HUD will continue its efforts to 
implement the Act consistent with the guidance and requirements of the 
Made in America Office of the Office of Management and Budget, 
including anticipated guidance concerning appropriate compliance with 
the BAP. HUD is also, through this waiver, soliciting specific comment 
on the appropriate manner to implement the BAP in connection with the 
use of construction materials and manufactured products in all 
infrastructure projects across HUD's FFA programs.
    In order to ensure orderly implementation of the BAP across HUD's 
programs, HUD has provided public interest, general applicability 
waivers in order to implement the BAP in phases in connection with the 
application of the BAP across HUD's FFA programs and to provide HUD 
with sufficient time to solicit information from the public relating to 
the agency's implementation of the BAP in connection with FFA awards 
made by HUD. HUD has previously published general applicability, public 
interest waivers to the BAP to provide the agency with sufficient time 
to solicit information from the public relating to the agency's 
implementation of the BAP in connection with FFA awards made by HUD. On 
November 23, 2022, HUD issued a separate waiver covering all HUD FFA 
obligated by HUD on or before February 21, 2023, with the exception of 
the BAP as to the purchase of iron and steel for infrastructure 
projects funded by Community Development Block Grant (``CDBG'') formula 
grants on or after November 15, 2022. Separately, HUD waived the 
application of the BAP in connection with HUD FFA provided to Tribes, 
Tribally Designated Housing Entities (``TDHE''), and other Tribal 
Entities (referred to herein as ``Tribal FFA'') to allow time for HUD 
to complete the Tribal consultation process regarding implementation of 
the BAP in connection with infrastructure projects. This Notice does 
not apply to Tribal FFA covered by that separate waiver.\1\
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    \1\ General Applicability Waiver of Build America, Buy America 
Provisions as Applied to Tribal Recipients of HUD Federal Financial 
Assistance (Effective until May 14, 2023) address Tribes, Tribally 
Designated Housing Entities (``TDHE''), and other Tribal Entities' 
implementation of BABA. (May 5, 2022, 87 FR 26221).
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    Details on HUD's implementation of the BABA requirements, including 
two public interest waivers covering Exigent Circumstances and De 
Minimis and Small Grants and a separate public interest waiver for all 
Tribal FFA, can be found at 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), 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. Strategic and phased 
steps toward full BABA compliance refines the scope for what is exempt 
from BAP while providing a clear timeline for full implementation, 
consistent with the Congressional intent and stakeholder interest. It 
also allows HUD grantees and stakeholders the time needed to construct 
stronger supply channels to include new or amended vendor contracts 
that comply with BABA requirements.
    In fiscal year 2023, HUD grantees will receive $14 billion through 
the Department's programs where infrastructure is an eligible activity 
and may be subject to the BAP. For example, Choice Neighborhoods 
(``CN'') funds

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may be used for infrastructure projects (e.g., transform severely 
distressed public and assisted properties with high-quality mixed-
income) or non-infrastructure uses (e.g., business services, safety, 
children's education and to improve employment, income, and health 
outcomes). HUD estimates that up to 85 percent of Choice Neighborhoods 
Implementation Grant funds to be awarded in 2023 ($289 million of $340 
million total) will be used on housing and infrastructure projects 
where the BAP may 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 American preferences. Because the potential application of 
BAP mandated by the Act is new to the majority of HUD's programs and 
FFA, HUD chose to implement the BAP first with respect to all iron and 
steel products used in infrastructure projects funded with HUD FFA on 
or after November 15, 2022, through its CDBG formula grants.
    To focus its efforts on the implementation of the BAP for CDBG 
formula grants used to purchase iron and steel products as of November 
15, 2022 and specified construction materials purchased with Fiscal 
Year 2024 CDBG formula grant and Recovery Housing Program funds used in 
infrastructure projects, HUD is proposing to waive the application of 
the BAP: (1) as to other programs for HUD FFA used to purchase iron and 
steel in addition to specified construction materials; (2) as to 
construction materials not specified in this Notice; (3) manufactured 
products for other programs and CDBG formula and Recovery Housing 
Program grants, consistent with the proposed implementation schedule 
set forth below:

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                                                                              Construction
                                   Iron and steel        Construction        materials--not       Manufactured
                                                       materials--listed         listed             products
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Tribes, Tribally Designated      Not Addressed in    Not Addressed in      Not Addressed in    Not Addressed in
 Housing Entities, and Tribal     this Notice. See    this Notice. See      this Notice. See    this Notice. See
 Entities.                        note 1.             note 1.               note 1.             note 1.
CDBG Formula Grants............  November 15, 2022-- Fiscal Year 2024....  Fiscal Year 2025..  Fiscal Year 2025.
                                  as described in
                                  the November 23,
                                  2022 Final Waiver.
Choice Neighborhood, Lead        February 22, 2023.  August 23, 2024.....  August 23, 2024...  August 23, 2024.
 Hazard Reduction, and Healthy
 Homes Production Grants.
Recovery Housing Program         August 23, 2023...  Fiscal Year 2024....  Fiscal Year 2025..  Fiscal Year 2025.
 (``RHP'') Grants.
All other HUD FFA except HOME,   February 22, 2024.  August 23, 2024.....  August 23, 2024...  August 23, 2024.
 Housing Trust Fund, and Public
 Housing FFA used for
 maintenance projects.
HOME, Housing Trust Fund, and    August 23, 2024...  August 23, 2024.....  August 23, 2024...  August 23, 2024.
 Public Housing FFA used for
 maintenance projects.
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    This proposed phased implementation, will allow for further 
consideration of the most efficient methods of implementation across 
the remaining HUD programs and for manufactured products and 
construction materials not specified in this Notice. The proposed 
waiver advances BABA by providing transparency in HUD's implementation 
of the BAP, 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 an orderly and efficient manner, and provides transparency 
concerning the full implementation plans in connection with the 
purchase of iron and steel for infrastructure products. HUD anticipates 
that it may propose a new implementation schedule for construction 
materials in other programs, construction materials not specified in 
this Notice as to other programs in addition to CDBG formula grant and 
Recovery Housing Program funds, and manufactured products for all HUD 
programs once further clarity and guidance on the implementation is 
available. Failure to provide recipients such flexibilities and 
transparency could delay the award for infrastructure projects as 
grantees and funding recipients must exert considerable effort in 
changing their plans and accounting for the sourcing of materials in 
construction projects without the benefit of complete guidance on the 
Act's requirements.
    Additionally, HUD believes that better coordination in the 
implementation of BABA will avoid unnecessary and undue hardship that 
could jeopardize the timely and cost-effective completion of such 
projects as grantees and funding recipients that have previously not 
been subject to requirements similar to BAP await guidance on how to 
come into full compliance. Such a waiver will allow grantees and 
funding recipients to focus their efforts on such critical projects and 
allow HUD to focus its training and technical assistance on those 
grantees beginning the implementation process. Proposing this waiver is 
not an alternative to increasing domestic production. It is a tool to 
assist HUD in its implementation of the Buy American provisions in the 
most efficient manner in order to promote investment in HUD's domestic 
manufacturing base, strengthen critical supply chains, and position 
United States workers and businesses to compete and lead globally in 
the 21st century. This waiver is in the interest of efficiency, to ease 
burdens for HUD grantees and funding recipients, avoid unnecessary 
costs, and avoid delays to projects that are critical and time 
sensitive. This waiver will also 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

[[Page 10536]]

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 grantees. Without this waiver, HUD 
will likely lose grantee and funding recipient participation, be 
exposed to liabilities if HUD forces grantees and funding recipients to 
modify their current plans to come into compliance, or delay critical 
activities to protect life, safety and property, and will negatively 
impact the most vulnerable Americans we seek to serve.
    As HUD's previous Notice advised and as supported by several 
comments received during the comment period, many of the HUD's programs 
may be subject to the BAP and have previously not required compliance 
with similar Buy American preferences. Because the potential 
application of BAP mandated by the Act is new to the majority of HUD's 
program FFA, this waiver advances BABA by targeting the next phase of 
implementation to include Choice Neighborhoods (``CN''), a place-based 
grant program which helps communities develop and implement locally 
driven comprehensive plans to transform neighborhoods. In Fiscal Year 
2023, HUD received $350 million for CN, which Public Housing 
Authorities and local jurisdictions apply for competitively. CN 
provides planning grants, which provide for the development of 
comprehensive plans, and implementation grants, which allow communities 
to implement their plans--including for use on infrastructure 
activities. This allows for efficient phased implementation while 
reducing the administrative burden to potential grantees and funding 
recipients where the costs of uncertainties surrounding compliance with 
BABA could distract from the focus on higher value BABA compliant 
items. Failure to provide recipients such flexibilities could delay the 
award for infrastructure projects as grantees and funding recipients 
must exert considerable effort accounting for the sourcing for 
miscellaneous, low-cost items. HUD is seeking comment on the further 
implementation of the BAP but will focus specific attention on the full 
implementation of the BAP in connection with the use of iron and steel 
in infrastructure projects in other FFA programs utilizing HUD FFA 
within this waiver period, except for Tribal FFA, and in connection 
with the use of specified construction materials in infrastructure 
projects funded by CDBG formula grant and Recovery Housing Program 
funds within this waiver period.

V. Impact of This Waiver on Other FFA

    HUD will not require compliance with the BAP in connection with the 
use of any HUD FFA obligated by HUD before November 14, 2022, or during 
the pendency of any other applicable BABA waiver issued by HUD, 
including this waiver, as applicable, after it is finalized. However, 
where the BAP or other ``Buy American'' 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 FFA.

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. 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.

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 its updated implementation schedule 
and corresponding waiver of application of the BAP in connection with 
infrastructure projects funded by HUD FFA. HUD also seeks specific 
comment on how it may best further phase in the application of the BAP: 
(1) as to other programs for HUD FFA used to purchase iron and steel in 
addition to specified construction materials; (2) as to construction 
materials not specified in this Notice; (3) manufactured products for 
other programs and CDBG formula and Recovery Housing Program grants HUD 
invites comments on what time period would be appropriate purposes of 
achieving these various phases of orderly implementation of the Act.
    If issued, the waiver would be applicable to HUD FFA that HUD 
obligates on or after the effective date of the final waiver and 
throughout the applicable waiver periods consistent with the 
implementation schedule as described above. Additionally, for HUD FFA 
obligated by HUD on or after February 22, 2023, but prior to the 
effective date of the final waiver described in this Notice, HUD would 
waive application of BAP for all expenditures incurred by grantees 
after the effective date of the Final Notice, consistent with the 
implementation periods described above.

Marcia L. Fudge,
Secretary.
[FR Doc. 2023-03555 Filed 2-17-23; 8:45 am]
BILLING CODE 4210-67-P