[Federal Register Volume 60, Number 57 (Friday, March 24, 1995)]
[Rules and Regulations]
[Pages 15478-15479]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7362]



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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Part 635


General Material Requirements; Buy America Requirements

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice of nationwide waiver of Buy America for pig iron and 
processed, pelletized, and reduced iron ore.

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SUMMARY: The FHWA is hereby granting a nationwide waiver of the Buy 
America requirements for certain iron components used in the 
manufacture of steel and/or iron materials. Based on the findings of a 
nationwide review, and after analyzing the comments submitted in 
response to the waiver proposal, the FHWA believes that the supply from 
domestic sources of pig iron and processed, pelletized, and reduced 
iron ore is not adequate to permit full [[Page 15479]] compliance with 
the Buy America requirements. This action permits the use of pig iron 
and processed, pelletized, and reduced iron ore manufactured outside of 
the United States to be used in the domestic manufacturing process for 
steel and/or iron materials used in Federal-aid highway construction 
projects.

EFFECTIVE DATE: March 24, 1995.

FOR FURTHER INFORMATION CONTACT: Mr. Gerald L. Eller, Office of 
Engineering, (202) 366-0392 or Mr. Wilbert Baccus, Office of the Chief 
Counsel, (202) 366-0780, Federal Highway Administration, 400 Seventh 
Street, SW., Washington, DC 20590. Office hours are from 7:45 a.m. to 
4:15 p.m., e.t., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION: In accordance with 23 CFR 635.410(c)(6), the 
FHWA hereby provides notice that it is granting a nationwide waiver of 
the requirements of 23 CFR 635.410, Buy America requirements, for pig 
iron and processed, pelletized, and reduced iron ore. Pig iron is made 
from molten iron which has been cast in the shape of ``pigs'' as it 
comes from a blast furnace. Processing, pelletizing, and reducing iron 
ore are methods by which raw iron ore is improved to produce enriched 
ore.
    Section 635.410 provides, with exceptions, that no Federal-aid 
highway construction project using steel or iron materials is 
authorized to proceed unless all manufacturing processes for these 
materials, including the application of coatings for such materials, 
occur in the United States. Because the domestic supply of pig iron and 
processed, pelletized, and reduced iron ore is not adequate, a 
nationwide waiver of these requirements is being granted for these 
specific iron components. Items not specifically included in the waiver 
remain subject to the Buy America requirements.
    The basis for the nationwide waiver is that pig iron and processed, 
pelletized, and reduced iron ore are not produced in the United States 
in sufficient and reasonably available quantities which are of a 
satisfactory quality. Therefore, imposing Buy America requirements on 
these materials is not in the public interest.
    On August 23, 1994, the FHWA published a notice (59 FR 43376) and 
requested comments on the proposed nationwide waiver and the 
availability of a domestic supply of the components included in the 
waiver. Ten comments were received to FHWA Docket No. 94-18. All 10 
commentors were supportive of the waiver, although some questioned the 
need for waiver.
    Several commentors concluded that domestic supplies of pig iron and 
processed, pelletized, and reduced iron ore are either inadequate or 
nonexistent in their region of the United States. Supplies were 
believed to be inadequate now and in the future. One commentor offered 
analysis of the current domestic pig iron supply, performed by an 
outside consultant. Its analysis showed that the volume of available 
domestic pig iron is insufficient to supply the electric furnace steel 
producers in the United States. Of the 23 blast furnace sites in the 
United States the analysis showed that only four currently sell pig 
iron. No commentor stated that the domestic supply of pig iron and 
processed, pelletized, and reduced iron ore is adequate. The FHWA 
concludes that the waiver is substantiated due to the unavailability of 
pig iron.
    Although supportive of the waiver several commentors questioned the 
need for a waiver, since they believed that pig iron and processed, 
pelletized, and reduced iron ore were already exempt from the Buy 
America requirements. Their belief was based on the idea that the Buy 
America requirements apply only to products further along in the 
manufacturing process of steel and iron. The FHWA has previously stated 
that products of a manufacturing process are not exempt from the Buy 
America requirements. On November 25, 1983, the FHWA published a final 
rule (48 FR 53099) of the Buy America requirements to implement 
procedures required by Sec. 165 of the Surface Transportation 
Assistance Act (STAA) of 1982 (Pub. L. 97-424). The final rule's 
discussion of manufactured materials stated that ``Raw materials used 
in the steel * * * product may be imported. All manufacturing processes 
to produce steel * * * products must occur domestically. Raw materials 
are materials such as iron ore * * * [and] waste products * * * which 
are used in the manufacturing process to produce the steel * * * 
products'' (48 FR 53099, 53103). Consistent with this interpretation, 
pig iron and processed, pelletized, and reduced iron ore are products 
of a manufacturing process and thus subject to the Buy America 
requirements.
    At least one commentor questioned whether the FHWA's Buy America 
regulation applies to certain alloys required in the production of 
steel and/or iron materials. Even though most of these alloys are 
unavailable from domestic sources, alloys were not addressed in the 
1983 final rule. Similar to the treatment of raw iron ore, alloys in 
their raw state may be imported for use in the domestic manufacturing 
process of steel and/or iron materials. Furthermore, processed alloys, 
alone, are not considered to be steel or iron materials under the Buy 
America regulation. Thus, unless alloys have been processed or refined 
to include substantial amounts of steel and/or iron materials, they are 
not subject to the Buy America requirements.

(Pub. L. 97-424, Sec. 165, 96 Stat. 2097, 2136, as amended by Pub. 
L. 98-229, Sec. 10, 98 Stat. 55, 57, and Pub. L. 102-240, 
Secs. 1041, 1048, 105 Stat. 1914, 1993, 1999; 23 U.S.C. 315; 49 CFR 
1.48; 23 CFR 635.410)

    Issued on: March 20, 1995.
Rodney E. Slater,
Federal Highway Administrator.
[FR Doc. 95-7362 Filed 3-21-95; 3:49 pm]
BILLING CODE 4910-22-P