[Federal Register Volume 88, Number 103 (Tuesday, May 30, 2023)]
[Notices]
[Pages 34514-34518]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-11363]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-6331-N-02C]


Extension of Public Interest, General Applicability Waiver of 
Build America, Buy America Provisions as Applied to Tribal Recipients 
of HUD Federal Financial Assistance: Final Notice

AGENCY: Office of the Secretary, Department of Housing and Urban 
Development (HUD).

ACTION: Final notice.

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SUMMARY: In accordance with the Build America, Buy America Act (BABA), 
this notice advises that HUD is extending the previously issued public 
interest, general applicability waiver for an

[[Page 34515]]

additional period of one year to the Buy America Domestic Content 
Procurement Preference (``Buy America Preference,'' or ``BAP'') as 
applied to Federal Financial Assistance (``FFA'') provided to Tribes, 
Tribally Designated Housing Entities (``TDHE''s), and other Tribal 
Entities (hereinafter collectively ``Tribal Recipients'').

DATES: Applicable May 23, 2023 for HUD Tribal FFA obligated by HUD on 
or after the effective date of the waiver. In addition, in the case of 
FFA obligated by HUD in Tribal programs on or after May 14, 2023 but 
prior to the effective date of this Final Waiver, the waiver applies to 
all expenditures incurred on or after the effective date of the Final 
Waiver.

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 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, starting May 14, 2022, new awards of HUD FFA, and any of those 
funds newly obligated 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 Generally

    Since the enactment of the Act, HUD has worked diligently to 
develop a plan to fully implement the BAP across its FFA programs 
awarding funds to non-Tribal Recipients. HUD understands that advancing 
Made in America objectives is a continuous effort and believes setting 
forth a transparent schedule of future implementation in those programs 
provides industry partners and non-Tribal Recipients with the time and 
notice necessary to efficiently and effectively implement the BAP. HUD 
recently announced plans to move forward with the implementation of the 
new BAP requirements in connection with its award of FFA to non-Tribal 
Recipients in a manner designed to maximize coordination and 
collaboration to support long-term investments in domestic production. 
HUD continues its efforts to implement the Act in those programs 
consistent with the guidance and requirements of the Made in America 
Office of the Office of Management and Budget, including guidance 
concerning appropriate compliance with the BAP.
    In order to ensure orderly implementation of the BAP across HUD's 
FFA programs awarding funds to non-Tribal Recipients, HUD has provided 
public interest, general applicability waivers in order to implement 
the BAP in phases in connection with the application of the BAP in such 
programs and announced a corresponding implementation plan for all non-
Tribal Recipients. As part of those efforts, HUD has published two 
general applicability, public interest waivers covering Exigent 
Circumstances and De Minimis and Small Grants, which can be found at 
https://www.hud.gov/program_offices/general_counsel/BABA.
    Additionally, as noted above, HUD previously published a one-year 
general applicability, public interest waiver of the BAP in connection 
with FFA provided to Tribal Recipients \1\ effective May 14, 2022 to 
provide the agency with sufficient time to complete the Tribal 
consultation process regarding implementation of the BAP in connection 
with infrastructure projects. During the pendency of such waiver, HUD 
actively participated in governmentwide consultation efforts with 
respect to the applicability of the provisions of the Build America, 
Buy America Act to Tribal Recipients, generally. Specifically, on 
September 21, 2022, eight agencies (U.S. Department of the Interior, 
U.S. Department of Agriculture, U.S. Department of Housing and Urban 
Development, U.S. Department of Homeland Security, U.S. Department of 
Energy, U.S. Department of Transportation, U.S. Department of Commerce, 
and U.S. Small Business Administration) participated in a joint 
consultation hosted by the White House Council on Native American 
Affairs to consult with Tribal Nations on discretionary Buy America 
Preference provisions and the waiver categories characterized in the 
OMB memorandum. Based on the consultations held, Tribes were requested 
to provide written comments and feedback by October 20, 2022 for 
Federal agency consideration. The resulting comments were received by 
the White House Council and distributed to agencies on October 25, 
2022.
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    \1\ For purposes of this waiver, the term ``Tribal Recipients'' 
includes all recipients of grants or loan guarantees administered by 
HUD's Office of Native American Programs. This includes Indian 
tribes and TDHEs receiving grants and loan guarantee assistance 
under the Native American Housing Assistance and Self-Determination 
Act's (NAHASDA's) Indian Housing Block Grant Program and Title VI 
Loan Guarantee Program, and Indian tribes and Tribal Organizations 
receiving Indian Community Development Block Grant funds under the 
Housing and Community Development Act of 1974. It also includes 
Federal Financial Assistance provided by HUD to the Department of 
Hawaiian Home Lands (``DHHL'') which receives annual grant funding 
under the Native Hawaiian Housing Block Grant (``NHHBG'') program. 
HUD will seek feedback from DHHL on BAP implementation and has an 
interest in ensuring that the NHHBG program aligns with the broader 
Indian Housing Block Grant program given the similarities amongst 
the two programs and the fact that they are both authorized under 
``NAHASDA''.
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    HUD is now moving forward with consultation on specific plans for 
implementation of the BAP in HUD's FFA provided to Tribal Recipients, 
in light of the comments received from the Tribal leaders and the 
progress the agency has made implementing the BAP in other FFA 
programs. In order to appropriately engage in consultation as described 
in HUD's Tribal Government-to-Government Consultation Policy,\2\ 
consistent with President Biden's ``Tribal Consultation and 
Strengthening Nation-to-Nation Relationships'' Memorandum regarding the 
appropriate application of BAP to such entities, HUD needs an 
additional period of time

[[Page 34516]]

in which to further consult on the more specific application of the BAP 
to HUD's Tribal Recipients.
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    \2\ https://www.hud.gov/program_offices/public_indian_housing/ih/regs/govtogov_tcp. See also 81 FR 40893.
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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 section 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. Pursuant to section 70914(d)(2), when seeking to extend a waiver 
of general applicability, HUD is required to provide for a public 
comment period of not less than 30 days on the continued need for such 
waiver.
    On May 14, 2022, HUD published a General Applicability Waiver of 
Build America, Buy America Provisions as Applied to Tribal Recipients 
of HUD Federal Financial Assistance for a period of one year. The 
current waiver expires on May 14, 2023. During this time period, HUD 
participated in an interagency Tribal Consultation on the 
implementation of BABA and participated in an interagency workgroup to 
address issues raised during the joint consultation.

IV. Tribal Infrastructure and HUD Programs

    Many Tribal communities still lack basic infrastructure such as 
roads, running water, and indoor plumbing. The need for safe, decent, 
and sanitary housing is immense. In its 2017 Housing Needs Study, HUD 
concluded that 68,000 new units were needed in Indian Country to 
replace inadequate units and eliminate severe overcrowding. That same 
study found that the lack of infrastructure was the number one barrier 
to housing development in many Tribal communities. Not only is 
infrastructure in many Tribal communities in dire need of repair and 
modernization, but Tribes also often find it difficult to locate 
available supplies, suppliers, and construction labor necessary to 
develop that infrastructure.
    The COVID-19 pandemic compounded the infrastructure challenges 
faced by many Native American communities. Recent feedback from Tribal 
Recipients has disclosed the numerous challenges they experienced while 
implementing the various HUD COVID-19 relief programs. A lack of 
supplies and a lack of available contractors working in Tribal 
communities were identified as the primary challenges faced by Tribal 
Recipients. Tribal Recipients indicated to HUD that procuring supplies 
and materials can be very difficult at times, and this made HUD-funded 
infrastructure projects challenging to implement to completion and at 
budgeted cost. Even when supplies were available for purchase, 
increased costs for steel, lumber, and transportation combined with 
lack of developers to bid on projects led to a backlog of construction 
projects and severely impacted Tribes' ability to complete important 
infrastructure projects and construct new housing.
    Unfortunately, many Tribes are more disconnected from American 
supply chains than the average HUD grantee due to their remoteness. For 
example, some Alaska Native villages are not on the road system, must 
develop infrastructure and housing during an extremely short 
construction season, and must grapple with unique transportation 
limitations, including having to ship basic construction materials only 
twice per year by barge at extremely elevated costs. These Tribes often 
report to HUD that it can be a major challenge to secure space on a 
barge for construction materials. At times, even when space is secured, 
any unexpected setbacks faced, such as loss of cargo, materials damaged 
through shipping, or miscalculation of the appropriate amount or 
quality of materials needed, can result in infrastructure and housing 
projects being delayed an entire construction season. These Tribes end 
up waiting for the next barge in six months and face cost overruns.
    Annually, HUD provides over $1 billion in FFA to almost 600 
sovereign Tribal Nations. Programs like the Indian Housing Block Grant 
(``IHBG'') and the Indian Community Development Block Grant (``ICDBG'') 
program are critical programs that allow the Federal Government to 
carry out its trust responsibilities and support affordable housing and 
infrastructure development in Tribal communities. Under these programs, 
HUD provides block grant funding to Tribal Recipients to help address 
these housing and infrastructure needs--particularly for the benefit of 
low- and moderate-income families. HUD anticipates that the BAP will 
apply to some projects funded under these programs. Accordingly, HUD 
must ensure that Tribal Recipients are able to effectively implement 
the BAP in a manner that ensures that the purposes of BABA are carried 
out, while at the same time preventing additional undue barriers to the 
development of Tribal infrastructure, which has suffered from decades 
of underinvestment.
    HUD has determined that the prior one-year waiver period was 
insufficient to fully consult and assess the impacts that BAP will have 
on HUD's Tribal Recipients. While the interagency consultation webinar 
provided HUD with some additional insight into how the BAP will impact 
Tribal communities generally, HUD is particularly interested in seeking 
more tailored Tribal feedback on the impact of the BAP on 
infrastructure projects that are funded under HUD's various Tribal 
programs. Additionally, since the interagency webinar was held in 2022, 
HUD has determined to implement the BAP in a phased manner across its 
non-Tribal programs. With the benefit of this recent determination, HUD 
needs additional time to seek Tribal feedback on whether and when HUD 
should take a similar phased approach with respect to the 
implementation of the BAP under its Tribal programs. HUD will also 
assess the unique and diverse conditions of Tribal communities across 
Indian Country and determine how the BAP should be applied after taking 
those conditions into account. Additional time is needed to consult 
with Tribal Leaders.

V. Public Interest in a General Applicability Waiver of Buy America 
Provisions for Tribes, TDHEs, and Other Tribal Entities (``Tribal 
Recipients'')

    HUD sought public comment on a limited, one-year extension of HUD's 
existing public interest, general applicability waiver of the BAP in 
connection with HUD's FFA to Tribal Recipients to provide the 
Department with sufficient time to complete consultation consistent 
with HUD's Tribal Government-to-Government Consultation Policy. HUD's 
`Tribal Government-to-Government Consultation Policy' was adopted in 
compliance with Executive Order 13175, ``Consultation with Indian 
Tribal Governments,'' and outlines the internal procedures and 
principles HUD must follow when communicating and coordinating on HUD 
programs and activities that affect Native American Tribes. HUD's 
Tribal Consultation policy recognizes the right of Tribes to self-
government and facilitates Tribal

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participation and input in HUD's implementation of programs and FFA 
directed to Tribal communities.
    In fiscal year 2023, Tribal Entities received over $1 billion 
through the Department's programs. Infrastructure is an eligible 
activity under some of these programs and could be subject to the BAP. 
HUD believes that full compliance with the BAP will create ongoing 
demand for domestically produced products and deepen domestic supply 
chains. Because the potential application of BAP mandated by the Act 
would be new to all HUD Tribal FFA recipients, HUD has not had the 
benefit of engaging in fulsome consultation consistent with its Tribal 
Consultation policy concerning the application of the BAP to Tribal 
Recipients--particularly with respect to how the BAP should apply to 
HUD's various Tribal programs, how the BAP should be phased in to allow 
for successful implementation, and how compliance will be verified. 
While HUD participated in a general consultation session as part of a 
governmentwide interagency process regarding the general application of 
the BAP to Tribal Recipients, because of the significance and 
potentially wide scope of new requirements necessary to demonstrate 
compliance with BAP or to seek waivers of BAP for specific products or 
projects, it is imperative that HUD further engage in Tribal 
consultation on the specific intended application of the BAP to FFA 
awarded to HUD's Tribal Recipients.
    HUD now has the benefit of having fully considered an appropriate 
method of phased implementation across its other FFA programs and has 
begun the methodical implementation of the BAP in those other FFA 
programs. With the benefit of this experience and the benefit of the 
governmentwide consultation efforts, HUD will conduct a more tailored 
consultation process with the Tribal Recipients of HUD FFA specifically 
focused on the BAP application to HUD's various Tribal housing and 
community development programs. HUD believes that the Tribal 
consultation process is necessary for the successful implementation of 
the BAP across its covered FFA programs funding infrastructure 
projects, that a full and meaningful Tribal consultation process will 
allow HUD to determine the potential impact of the Act's Buy America 
Preference on Tribal governments and communities and will inform a 
tailored implementation for Tribal Recipients that recognizes the 
sovereignty and unique status of Tribal governments. Accordingly, HUD 
has determined that it would be contrary to the public's interest to 
apply the BAP to FFA awards to Tribal Recipients prior to completion of 
further Tribal consultation. In addition, HUD published the proposed 
waiver in the Federal Register with an extension of the comment period 
to May 8, 2023.

VI. Planned Tribal Consultation

    Similar to other HUD programs, HUD will seek Tribal feedback 
consistent with HUD's Tribal Government-to-Government Consultation 
Policy and Executive Order 13175 on when and how to phase in the BAP 
for FFA provided to Tribal Recipients. HUD will also solicit Tribal 
feedback on other related issues, including how to effectively 
implement the BAP for extremely remote communities, such as remote 
Native Alaskan Villages, that are more disconnected from traditional 
supply chains, have an extremely short construction seasons, are 
located off the road system, and are reliant on barges to ship 
construction materials. HUD acknowledges that rural Tribal communities 
and Alaska Native Villages have expressed major concerns about 
availability of American-made products and continue to struggle with 
challenges because of their proximity away from main supply sources. 
Tribes are already facing major challenges with accessing construction 
materials, and major cost overruns due to a lack of available 
materials--particularly in remote Tribal communities.
    During the one-year waiver period, HUD has identified various 
scheduled national and regional convenings and conferences where HUD 
intends to host in-person Tribal consultation sessions with Tribal 
leaders to discuss the BAP. Currently, HUD is scheduled to present 
during the Forum on Affordable Housing and Community Development Annual 
Conference. Additionally, HUD will seek to engage with Tribes and 
Tribal housing practitioners at the various quarterly and semi-annual 
regional housing association meetings that are planned during the one-
year waiver period. These association meetings are routinely attended 
by HUD Tribal Recipients who will be charged with complying with the 
BAP once it goes into effect. Consistent with past practice, HUD also 
intends to conduct some Tribal consultation virtually. HUD will do so 
by soliciting written feedback from Tribal leaders specifically 
addressing the impact of the BAP on HUD's Tribal programs.
    After receiving Tribal feedback, HUD will seek to implement the BAP 
in a manner that advances the Made in America objectives while also 
ensuring that the BAP implementation does not serve as a major barrier 
to Tribal communities' efforts to develop critical infrastructure. Many 
Tribal communities lack running water, sewer, roads, and basic 
infrastructure. HUD will implement the BAP in a thoughtful manner that 
ensures that Tribal Recipients can effectively implement the BAP 
without substantial negative impacts on planned and ongoing critical 
infrastructure projects. HUD will also seek to provide additional 
technical assistance resources to ensure that Tribal Recipients can 
build capacity and be in a better position to comply with the BAP. 
Therefore, HUD is extending for a period of one year the waiver of its 
general applicability, public interest waiver of the application of the 
BAP in connection with FFA awards to Tribal Recipients that are 
obligated by HUD during the pendency of the waiver.

VII. 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.

VIII. Limited Duration of the Waiver

    HUD remains committed to the successful implementation of the 
important BAP across its programs providing covered FFA for 
infrastructure projects, while recognizing the unique government-to-
government relationship it has with Tribal Recipients receiving HUD FFA 
for infrastructure projects. HUD is committed to engaging in a timely 
consultation process as noted above to further this goal.

IX. Solicitation of Comments

    As required under section 70914 of the Act, HUD solicited comment 
from the public on the waiver announced in a Notice on its website for 
a period of 30 days and published the proposed waiver in the Federal 
Register. A total of three comments were received in response to the 
proposed one-year waiver extension. HUD thoroughly reviewed and 
considered each of the comments in determining to move forward with the 
issuance of this waiver and implementation plan as published

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in this Final Notice. Two of the commenters were very supportive of the 
one-year waiver extension. One of the commenters opposed the one-year 
extension waiver with respect to steel, in particular. HUD appreciates 
the comments and believes the one-year waiver extension of the 
application of the BAP as set forth in this Final Notice is appropriate 
and in the public interest in light of the importance of HUD's planned 
tribal consultation.\3\ HUD will continue to monitor the implementation 
of the BAP across its programs to ensure the most robust application 
possible in light of the important public interests discussed above.
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    \3\ HUD has and will continue to provide training sessions with 
grantees to increase grantees' knowledge about Build America, Buy 
America and the Buy America Preference requirements as they relate 
to HUD programs and HUD FFA used by Non-Federal entities to purchase 
iron and steel, construction materials, and manufactured products to 
be used infrastructure projects.
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    This Final Notice is applicable to Tribal FFA obligated by HUD on 
or after the effective date of this Final Notice throughout the one-
year waiver period. This Final Notice is also applicable to any 
expenditures of Tribal FFA obligated by HUD between May 14, 2023 and 
the effective date of this Final Notice that occur on or after the 
effective date of this Final Notice.

    Dated: May 23, 2023.
Marcia L. Fudge,
Secretary.
[FR Doc. 2023-11363 Filed 5-26-23; 8:45 am]
BILLING CODE 4210-67-P