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[Federal Register Volume 90, Number 11 (Friday, January 17, 2025)]
[Notices]
[Pages 6048-6050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-01113]

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

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

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

ACTION: Notice.

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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 issuing waiver for the domestic preference 
requirements for manufactured products applicable to certain transit-
oriented development (TOD) housing 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: The effective date of the waiver is January 17, 2025 and will 
apply to all TOD housing projects that enter into the Bureau's 
creditworthiness review on or before December 31, 2025.

FOR FURTHER INFORMATION CONTACT: For questions about this notice, 
please contact Dan Schned, U.S. Department of Transportation, Build 
America Bureau, at 202-366-2300 or [email protected]. For legal 
questions, please contact, Jessica Pettrone, DOT Office of the General 
Counsel, at (202) 366-8560 or [email protected].

SUPPLEMENTARY INFORMATION:

[[Page 6049]]

Background

    On November 15, 2021, the Infrastructure Investment and Jobs Act 
(IIJA) Public Law 117-58 was enacted. IIJA reauthorized Federal surface 
transportation programs and invested billions in making the United 
States 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.\1\
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    \1\ 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.
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    Transportation and land use reforms are central strategies to 
achieving many goals, including reaching net-zero greenhouse gas 
emissions by 2050; addressing the housing supply and affordability 
crises throughout the country; and advancing equity, fair housing, and 
environmental justice.\2\ 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.
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    \2\ https://www.transportation.gov/buildamerica/sites/buildamerica.dot.gov/files/2023-10/TOD%20Policy%20Statement.pdf.
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    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 \3\ and a policy statement \4\ 
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.\5\ Additionally, the Bureau has worked on outreach to 
developers and created several tools including the TOD Eligibility Map 
\6\ and has conducted webinars to help educate potential borrowers 
about the opportunities and requirements of the programs.
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    \3\ https://www.transportation.gov/buildamerica/TOD.
    \4\ https://www.transportation.gov/buildamerica/sites/buildamerica.dot.gov/files/2023-10/TOD%20Policy%20Statement.pdf.
    \5\ https://www.transportation.gov/buildamerica/TIFIA49.
    \6\ https://www.transportation.gov/buildamerica/about/resources-mode/interactive-map-tifia-and-rrif-tod-eligibility.
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    The IIJA also includes the Build America, Buy America Act (BABA) at 
div. G, sec. 70901-27. 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.'' IIJA 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.'' IIJA 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.\7\ 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.
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    \7\ 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 Sec.  200.322, to for-profit entities'').
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    DOT has a longstanding policy of requiring all borrowers receiving 
TIFIA or RRIF credit assistance to comply with domestic steel, iron, 
and manufactured products content requirements, collectively known as 
``Buy America'' requirements,\8\ for the projects receiving TIFIA or 
RRIF credit assistance, 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 applied this policy to for-profit 
borrowers as well. 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), applies this waiver to the domestic manufactured products 
requirements as applied to both TOD housing 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 TOD housing projects with non-Federal entity 
borrowers (to which Buy America requirements apply as a matter of law, 
whether or not such loans use appropriated funds), and, in each case, 
that enter into the Bureau's creditworthiness review on or before 
December 31, 2025.
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    \8\ As noted above, after the enactment of BABA, Buy America 
requirements now include domestic construction material requirements 
per BIL sec. 70914(a).
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    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.\9\ Pursuant to that 
guidance, the Bureau reiterated the DOT's longstanding policy of 
requiring sponsors of all projects receiving TIFIA and RRIF credit 
assistance to comply with domestic steel, iron, and manufactured 
products content requirements, collectively known as ``Buy America'' 
requirements, for the projects receiving credit assistance, 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.
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    \9\ https://www.transportation.gov/buildamerica/about/resources-mode/tod-project-federal-requirements-guidance.
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Issuance of Waiver and Discussion of Comments Received

    DOT proposed a waiver of the Buy America manufactured products 
requirement for TIFIA and RRIF TOD projects that include any housing 
elements (TOD Housing Projects) that enter into creditworthiness review 
on or before December 31, 2025, in the Federal Register (FR Doc. 2024-
28820). DOT received two comments on the proposed waiver, one from an 
advisor on various TOD projects and one from a public policy think tank 
that represents the interests of real estate entities. Both commenters 
supported the proposed waiver.
    One commenter requested that DOT issue a ``blanket waiver'' that 
would effectively establish a new domestic

[[Page 6050]]

preference standard (e.g., 60-70 percent) that applies to all products 
and materials involved in TOD projects. They argued that this would 
simplify the compliance process by preventing the need for sponsors to 
request many individual product waivers, thereby reducing the burden on 
DOT resources and expediting the advancement of TOD Housing Projects. 
As was described in the notice, to support both the delivery of housing 
and domestic manufacturing, DOT will continue to work closely with 
borrowers to better understand and document the sources of materials 
and products used in TOD Housing Projects and the challenges that 
compliance with DOT's domestic preference standards present and 
determine appropriate solutions.
    One commenter requested that DOT update its guidance for TOD 
projects to include a ``plain language'' list of examples of 
manufactured products covered by this waiver. As was described in the 
notice, DOT recently provided guidance on Federal requirements 
applicable to TOD projects receiving TIFIA or RRIF credit assistance. 
DOT appreciates the suggestion and will consider it in determining the 
best ways of providing technical assistance to borrowers for TOD 
Housing Projects.

Finding on the Waiver

    Based on the information available, DOT is issuing a public 
interest waiver of the Buy America requirements for manufactured 
products that apply to Bureau-financed TOD Housing Projects. This 
waiver is limited to TOD Housing Projects that enter into 
creditworthiness review on or before December 31, 2025. For these 
projects, DOT will 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.

    Issued in Washington, DC.
Morteza Farajian,
Executive Director, Build America Bureau.
[FR Doc. 2025-01113 Filed 1-16-25; 8:45 am]
BILLING CODE 4910-9X-P
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