2024-28820. Public Interest Waiver of the Application of Certain Domestic Preference Requirements and Policies for Transit-Oriented Development Housing Projects

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Department of Transportation

Office of the Secretary

1. [Docket No.: DOT-OST-2024-0130]

ACTION:

Notice; request for comment.

SUMMARY:

In order to expeditiously deliver projects and provide meaningful infrastructure results while ensuring the appropriate application of domestic content standards, the U.S. Department of Transportation (DOT) is proposing a waiver of the domestic preference requirements to transit-oriented development (TOD) projects that receive credit assistance through the Build America Bureau (the Bureau) under the Transportation Infrastructure Finance and Innovation Act (TIFIA) and Railroad Rehabilitation and Improvement Financing (RRIF) credit programs.

DATES:

Comments must be received by December 24, 2024.

ADDRESSES:

Comments on this notice may be submitted to the U.S. Government electronic docket site at https://www.regulations.gov, Docket: DOT-OST-2024-0130.

Note:

All submissions received, including any personal information therein, will be posted without change or alteration to https://www.regulations.gov. For more information, you may review DOT's complete Privacy Act Statement published in the Federal Register on April 11, 2000 (65 FR 19477).

FOR FURTHER INFORMATION CONTACT:

For questions about this notice, please contact Duane Callender, US Department of Transportation, Build America Bureau, at 202-366-2300 or [e-mail]. For legal questions, please contact, Jessica Pettrone, DOT Office of the General Counsel, at 202-366-8560 or [e-mail].

SUPPLEMENTARY INFORMATION:

Background

DOT has a longstanding policy of requiring all projects, including TOD projects, receiving TIFIA and RRIF credit assistance to comply with domestic steel, iron, and manufactured products content requirements, collectively known as “Buy America” requirements,^[1] even where not covered by a specific Buy America statute. DOT has consistently required for-profit borrowers to comply with Buy America requirements on projects receiving credit assistance since TIFIA's inception in 1998 and since 2010 for RRIF, whether or not appropriated funds were used for the cost of the credit assistance. Accordingly, because Buy America is applied to all projects receiving TIFIA or RRIF credit assistance, DOT, in an effort to ensure transparency and maintain consistency in the application of Buy America standards for all recipients (one rule for all projects and borrowers), proposes to apply this waiver to both projects with for-profit borrowers that do not use any appropriated funds for the cost of the loan, to which Buy America requirements are applied as a matter of policy, as well as to projects with non-Federal entity borrowers (whether or not such loans use appropriated funds), to which Buy America requirements apply as a matter of law. DOT proposes a waiver of the Buy America manufactured products requirement for TIFIA and RRIF TOD projects that include any housing elements (TOD Housing Projects) and that enter into creditworthiness review on or before December 31, 2025.

On November 15, 2021, President Biden signed the Bipartisan Infrastructure Law (BIL), enacted as the Infrastructure Investment and Jobs Act (IIJA). Public Law 117-58. BIL reauthorized Federal surface transportation programs and invested billions in transformational projects that are creating good-paying jobs, growing the economy, and making our transportation system safer and more resilient. TOD projects are eligible for both TIFIA (23 U.S.C. 601(a)(12)(E)) and RRIF (49 U.S.C. 22402(b)(1)(F)) financing, subject to all other eligibility criteria, and compliance with all applicable Federal requirements and creditworthiness standards.^[2]

Transportation and land use reforms are central strategies to achieving many of the Biden-Harris administration goals, including reaching net-zero greenhouse gas emissions by 2050; addressing the housing supply and affordability crises throughout the country; and advancing equity, fair ( print page 97704) housing, and environmental justice.^[3] Providing long-term, low-interest direct loans through the TIFIA and RRIF credit programs to TOD projects is one of the primary tools available to DOT to help achieve this mission.

Over the last three years, DOT has taken several concrete steps to date to facilitate TOD financing under the TIFIA and RRIF credit programs. DOT has published TOD guidance ^[4] and a policy statement ^[5] and authorized TOD projects' eligibility to borrow up to the maximum allowed under TIFIA to promote the creation of more walkable, mixed-use spaces near transit that support vibrant, sustainable, and equitable communities.^[6] Additionally, the Bureau has worked on outreach to developers and created several tools including the TOD Eligibility Map ^[7] and has conducted webinars to help educate potential borrowers about the opportunities and requirements of the programs.

The BIL also includes the Build America, Buy America Act (BABA) at div. G, sec. 70901-52. BABA greatly strengthens Made in America standards by expanding the coverage and application of Buy America preferences in Federal financial assistance programs for infrastructure. The Act requires that the head of each covered Federal agency shall ensure that “none of the funds made available for a Federal financial assistance program for infrastructure . . . may be obligated for a project unless all of the iron, steel, manufactured products, and construction materials used in the project are produced in the United States.” BIL sec. 70914(a).

BABA applies to Federal financial assistance, which term includes “all expenditures by a Federal agency to a non-Federal entity for an infrastructure project.” BIL sec. 70912(4)(B). “Non-Federal entity,” as defined in 2 CFR 200.1, does not include for-profit entities. Therefore, BABA by its terms does not apply to Federal financial assistance to for-profit entities. ^[8] However, in accordance with the Office of Management and Budget (OMB)'s Guidance Memorandum M-24-02, Guidance on Application of Buy America Preference in Federal Financial Assistance Programs for Infrastructure, Federal agencies may consider applying domestic preference requirements to for-profit entities, consistent with their legal authorities. DOT has a longstanding policy of requiring all projects, including TOD projects, receiving TIFIA or RRIF credit assistance to comply with domestic steel, iron, and manufactured products content requirements, collectively known as “Buy America” requirements,^[9] even where not covered by a specific Buy America statute, including chapter 83 of title 41, United States Code (Buy American), because no appropriated funds are used for the cost of the loan. DOT has consistently required for-profit borrowers to comply with Buy America requirements on projects receiving credit assistance since TIFIA's inception in 1998 and since 2010 for RRIF, whether or not appropriated funds were used for the cost of the credit assistance. Accordingly, because Buy America is applied to all projects receiving TIFIA or RRIF credit assistance, DOT, in an effort to ensure transparency and maintain consistency in the application of Buy America standards for all recipients (one rule for all projects and borrowers), will apply this waiver to both projects with for-profit borrowers that do not use any appropriated funds for the cost of the loan, to which Buy America requirements are applied as a matter of policy, as well as to projects with non-Federal entity borrowers (whether or not such loans use appropriated funds), to which Buy America requirements apply as a matter of law. DOT is proposing a waiver of the Buy America manufactured products requirement for TOD Housing Projects that enter into creditworthiness review on or before December 31, 2025.

TOD projects are a class of eligible capital projects under the TIFIA and RRIF credit programs administered by the Bureau. The Bureau recently provided guidance on Federal requirements for TOD projects receiving TIFIA or RRIF credit assistance.^[10] Pursuant to that guidance, the Bureau reiterated the DOT's longstanding policy of requiring all projects, including TOD projects, receiving TIFIA and RRIF credit assistance to comply with domestic steel, iron, and manufactured products content requirements, collectively known as “Buy America” requirements, even where not covered by a specific Buy America statute, including Buy American requirements because no appropriated funds are used for the cost of the loan.

Waiver

DOT is proposing to issue a public interest waiver of the Buy America requirements for manufactured products that apply to Bureau-financed TOD Housing Projects that enter into creditworthiness review on or before December 31, 2025. For these projects, DOT would continue to apply domestic steel, iron, and construction materials content requirements.

To ensure transparency and maintain consistency in the application of Buy America standards for all recipients (one rule for all projects and borrowers), this waiver will apply to both TOD Housing Projects with for-profit borrowers and those with non-Federal entity borrowers.

To continue to support the goals of Buy America policies, DOT will work closely with TOD Housing Project borrowers to better understand and document the sources of materials and products used in such projects. This research will assist DOT in refining its domestic preference requirements policy for TOD projects entering enter the Bureau's creditworthiness review phase after January 1, 2026, and to further support both the delivery of housing and domestic manufacturing.

Under OMB Memorandum M-24-02, 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. DOT's analysis has concluded that this assessment is not applicable to this waiver.

DOT will consider all comments received in the initial 15-day comment ( print page 97705) period during our consideration of the proposed waiver. Comments received after this period, but before notice of our finding is published in the Federal Register , will be considered to the extent practicable.

Issued in Washington, DC.

Polly E. Trottenberg,

Deputy Secretary.

Footnotes

1.  As described in more detail below, after the enactment of the Infrastructure Investment and Jobs Act in 2021 (Pub. L. 117-58), Buy America requirements now include domestic construction material requirements.

2.  Eligible TOD projects can take many forms, including joint development; public infrastructure; and economic development, including commercial and residential development. One of the key parameters of the programs, among others, is that TOD projects must be within walking distance of a qualifying transit or passenger rail station. See https://www.transportation.gov/​buildamerica/​TOD.

3.   https://www.whitehouse.gov/​briefing-room/​statements-releases/​2022/​05/​16/​president-biden-announces-new-actions-to-ease-the-burden-of-housing-costs/​.

4.   https://www.transportation.gov/​buildamerica/​TOD.

5.   https://www.transportation.gov/​buildamerica/​sites/​buildamerica.dot.gov/​files/​2023-10/​TOD%20Policy%20Statement.pdf

6.   https://www.transportation.gov/​buildamerica/​TIFIA49.

7.   https://www.transportation.gov/​buildamerica/​about/​resources-mode/​interactive-map-tifia-and-rrif-tod-eligibility.

8.   See OMB Memorandum M-22-11 Initial Implementation Guidance on Application of Buy America Preference in Federal Financial Assistance Programs for Infrastructure (April 18, 2022), p. 2 (“for-profit organizations are not considered non-Federal entities”); OMB Memorandum M-24-02 Implementation Guidance on Application of Buy America Preference in Federal Financial Assistance Programs for Infrastructure (October 25, 2023), p. 4 (restating the guidance on for-profit entities from M-22-11); and 88 FR 57750, 57774 (October 23, 2023) (“Thus—although OMB does not require them to do so—Federal agencies are allowed, under the existing structure of part 200, to apply part 200, including the domestic preferences at § 200.322, to for-profit entities”).

9.  As noted above, after the enactment of BABA, Buy America requirements now include domestic construction material requirements per BIL sec. 70914(a).

10.   https://www.transportation.gov/​buildamerica/​about/​resources-mode/​tod-project-federal-requirements-guidance.