81_FR_60448 81 FR 60278 - Notice of Policy on the Implementation of the Phased Increase in Domestic Content Under the Buy America Waiver for Rolling Stock and Notice of Public Interest Waiver of Buy America Domestic Content Requirements for Rolling Stock Procurement in Limited Circumstances

81 FR 60278 - Notice of Policy on the Implementation of the Phased Increase in Domestic Content Under the Buy America Waiver for Rolling Stock and Notice of Public Interest Waiver of Buy America Domestic Content Requirements for Rolling Stock Procurement in Limited Circumstances

DEPARTMENT OF TRANSPORTATION
Federal Transit Administration

Federal Register Volume 81, Issue 170 (September 1, 2016)

Page Range60278-60285
FR Document2016-21007

This final policy consists of the Federal Transit Administration's (FTA) policy statement regarding its implementation of the phased-in increase in domestic content for rolling stock under the FTA's Buy America statute, as amended by the Fixing America's Surface Transportation (FAST) Act. Through this final policy, FTA is providing guidance to transit agencies and transit vehicle manufacturers regarding how they are to implement the FAST Act's statutory amendments. Additionally, FTA is providing notice of public interest waivers of Buy America domestic content requirements for rolling stock procurements in limited circumstances.

Federal Register, Volume 81 Issue 170 (Thursday, September 1, 2016)
[Federal Register Volume 81, Number 170 (Thursday, September 1, 2016)]
[Rules and Regulations]
[Pages 60278-60285]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-21007]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

49 CFR Part 661

[Docket Nos. FTA-2016-0019 & FTA-2016-0020]


Notice of Policy on the Implementation of the Phased Increase in 
Domestic Content Under the Buy America Waiver for Rolling Stock and 
Notice of Public Interest Waiver of Buy America Domestic Content 
Requirements for Rolling Stock Procurement in Limited Circumstances

AGENCY: Federal Transit Administration, DOT.

ACTION: Notice of final policy and public interest waiver.

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SUMMARY: This final policy consists of the Federal Transit 
Administration's (FTA) policy statement regarding its implementation of 
the phased-in increase in domestic content for rolling stock under the 
FTA's Buy America statute, as amended by the Fixing America's Surface 
Transportation (FAST) Act. Through this final policy, FTA is providing 
guidance to transit agencies and transit vehicle manufacturers 
regarding how they are to implement the FAST Act's statutory 
amendments. Additionally, FTA is providing notice of public interest 
waivers of Buy America domestic content requirements for rolling stock 
procurements in limited circumstances.

DATES: The final policy takes effect on September 1, 2016.

FOR FURTHER INFORMATION CONTACT: Cecelia Comito, Assistant Chief 
Counsel, Office of the Chief Counsel, phone: (202) 366-2217, or email, 
[email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
II. Proposed Policy Guidance and Public Interest Waiver
    A. Proposed Policy
    B. Proposed Public Interest Waiver
III. Response to Comments
    A. What date controls the percentage of domestic content?
    B. How do the new requirements apply to options, joint 
procurements, and piggyback procurements?
    C. Do the increased domestic content requirements extend to 
subcomponents?
    D. Do the changes also apply to train control, communication, 
and traction power systems?
    E. Does the increase in domestic content requirements apply to 
remanufactured, overhauled, or rebuilt transit vehicles?
    F. Do the FAST Act amendments apply to passenger ferry vessels?
    G. How do the new rules apply to reimported domestic steel and 
iron?
    H. Will FTA issue public interest waivers for vehicle 
procurements underway when the FAST Act was enacted?
IV. Final Policy Guidance and Public Interest Waivers
    A. Final Policy Guidance
    B. Final Public Interest Waivers

I. Introduction

    This Notice provides guidance and clarification to transit agencies 
and transit vehicle manufacturers regarding FTA's implementation of the 
FAST Act's amendments to 49 U.S.C. 5323(j)(2)(C).
    Section 3011 of the FAST Act (Pub. L. 114-94, enacted December 4, 
2015) amended the rolling stock waiver in 49 U.S.C. 5323(j)(2)(C) to 
require a two-step increase in the domestic content of rolling stock as 
follows:
    When procuring rolling stock with FTA financial assistance 
(including train control, communication, traction power, and rolling 
stock prototypes), the cost of components and subcomponents produced in 
the United States for fiscal years 2016 and 2017, is more than 60 
percent of the cost of all components of the rolling stock; for fiscal 
years 2018 and 2019, is more than 65 percent of the cost of all 
components of the rolling stock; and for fiscal year 2020 and each

[[Page 60279]]

fiscal year thereafter, is more than 70 percent of the cost of all 
components of the rolling stock.
    Given the potential effect of the FAST Act changes to vehicle 
procurements by the statutory use of the term ``produced,'' transit 
agencies and transit vehicle manufacturers asked FTA to provide 
specific guidance on the applicability of the FAST Act's new Buy 
America provisions to contracts entered into before, on, or after 
October 1, 2015, the effective date set forth in section 1003 of the 
FAST Act.
    Under existing law (49 U.S.C. 5325(e)), recipients of FTA financial 
assistance may enter into rolling stock contracts for up to five years 
for buses and seven years for railcars. In FTA Circular 4220.1F, 
``Third Party Contracting Guidance,'' FTA permits these five- and 
seven-year periods to cover the recipient's ``material requirements'' 
for rolling stock and replacement needs from the effective date of the 
contract through the end of the fifth or seventh year. FTA does not 
require that ``the recipient must obtain delivery, acceptance, or even 
fabrication in five or seven years--instead, it means only that FTA 
limits a contract to purchasing no more than the recipient's material 
requirements for rolling stock or replacement parts for five or seven 
years, based on the effective date of the contract.'' See FTA Circular 
4220.1F, Chapter IV, page 23. Under this rule, options for vehicles 
must be exercised within the five- or seven-year contract term, 
although the vehicles may be produced and delivered after the contract 
term.

II. Proposed Policy and Public Interest Waiver

A. Proposed Policy Guidance

    The FAST Act identified two points in time: (1) ``when procuring 
rolling stock,'' which FTA's proposed policy interpreted as the date 
the vehicle procurement contract was signed; and (2) ``the cost of 
components and subcomponents produced in the United States for fiscal 
years . . .'', which FTA interpreted as the delivery date of the 
vehicle.
    Individual and Joint Procurements. FTA proposed to implement the 
FAST Act by requiring that if a recipient (or a group of recipients 
under a joint procurement) enters into a contract for rolling stock 
after the effective date of the FAST Act, i.e., October 1, 2015, the 
new FAST Act provisions for domestic content of the rolling stock would 
apply based on the delivery date of the vehicle. Thus, for vehicles 
delivered in FY2018 and FY2019, the domestic content would have to be 
more than 65 percent, and for vehicles delivered in FY2020 and beyond, 
the domestic content would have to be more than 70 percent. These 
higher domestic content requirements would apply to all contracts 
signed after the effective date of the FAST Act unless FTA issues a 
waiver, which FTA addressed in a separate Federal Register Notice (81 
FR 20051, April 6, 2016).
    In its proposed policy statement, FTA proposed that the FAST Act 
amendments would not apply to a contract entered into before the 
effective date of the FAST Act, i.e., October 1, 2015, even if the 
contract provides for the delivery of vehicles after FY2017. In 
addition, the policy statement proposed to continue to permit options 
to be exercised for those contracts entered into before October 1, 
2015, even if the vehicles would be delivered outside the five- or 
seven-year contract term, consistent with Circular 4220.1F.
    However, recipients who were not direct parties to a contract 
executed before October 1, 2015, would not be allowed to exercise 
options (a/k/a ``piggybacking'') on those contracts and thereby could 
not take advantage of the lower domestic content requirement. Because 
the assignment of options to a third party results in the third party 
and the vendor entering into a new contract that would be entered into 
after the effective date of the FAST Act, FTA proposed to apply the 
increased domestic content requirements to vehicles scheduled for 
delivery in FY 2018 and beyond.
    State Purchasing Schedules. In the proposed policy statement, FTA 
recognized that some recipients and subrecipients purchase rolling 
stock from a State purchasing schedule (i.e., an arrangement that a 
State has negotiated with multiple vendors in which those vendors 
essentially agree to provide an option to the State, as well as 
subordinate and local governmental entities allowed to participate in 
the schedule, to acquire specific property or services in the future at 
established prices). Because the purchasing schedule does not commit 
the State to procuring a minimum number of vehicles, a ``contract'' 
does not exist until a State, recipient, or subrecipient enters into a 
purchase order with a vendor listed on the schedule.
    Therefore, the proposed policy statement proposed to retain the 60 
percent domestic content requirement for purchase orders placed against 
State purchasing schedules before October 1, 2015, regardless of the 
ultimate delivery date(s). However, for purchase orders placed against 
State purchasing schedules on or after October 1, 2015, FTA proposed to 
adopt the elevated FAST Act content requirements.
    This interpretation is consistent with the language of the statute, 
follows Congress' intention to increase the domestic content for 
vehicles produced in FY2018 or later, and adheres to basic principles 
of statutory construction.
    Calculation of Domestic Content for Components and Subcomponents. 
In its proposed policy statement, FTA proposed to adjust the 
calculation for determining whether a component is of domestic origin 
under 49 CFR 661.11 to mirror the increase in domestic content for 
FY2018 and beyond. Currently under 49 CFR 661.11(g), ``for a component 
to be of domestic origin, more that 60 percent of the subcomponents of 
that component, by cost, must be of domestic origin, and the 
manufacture of the component must take place in the United States. If, 
under the terms of this part, a component is determined to be of 
domestic origin, its entire cost may be used in calculating the cost of 
domestic content of an end product.''
    Thus, for vehicles to be delivered in FY2018 and 2019, FTA proposed 
that more than 65 percent of the subcomponents of that component, by 
cost, must be of domestic origin, and for FY2020 and beyond, more than 
70 percent of the subcomponents of the component must be of domestic 
origin. The existing requirement that manufacture of the component take 
place in the United States would continue to apply, as well as the 
provision that states that if a component is determined to be of 
domestic origin, its entire cost may be used in calculating the 
domestic value of the rolling stock, regardless of the value of its 
individual subcomponents.

B. Proposed Public Interest Waiver

    FTA recognized that the FAST Act amendments may produce significant 
hardship for two categories of recipients and manufacturers: (1) 
Recipients who entered into contracts or placed purchase orders against 
State schedules between October 1, 2015 and December 4, 2015 (i.e., the 
effective date of the Act and its enactment date, respectively); and 
(2) recipients who entered into contracts after December 4, 2015, as a 
result of solicitations for bids or requests for proposals that were 
advertised before December 4, 2015.
    Under 49 U.S.C. 5323(j)(2)(A), the Secretary of Transportation may 
waive the Buy America requirements if the Secretary finds that applying 
the Buy America requirements would be ``inconsistent with the public 
interest.''

[[Page 60280]]

This function has been delegated to the FTA Administrator by 49 CFR 
1.91, and section 661.7(b) of FTA's implementing regulation (49 CFR 
part 661) provides: ``In determining whether the conditions exist to 
grant this public interest waiver, the Administrator will consider all 
appropriate factors on a case-by-case basis . . . . When granting a 
public interest waiver, the Administrator shall issue a detailed 
written statement justifying why the waiver is in the public interest. 
The Administrator shall publish this justification in the Federal 
Register, providing the public with a reasonable time for notice and 
comment of not more than seven calendar days.''
    In a separate Notice accompanying the proposed policy statement 
(Docket FTA-2016-0020), FTA sought comment on a general public interest 
waiver for those affected parties (81 FR 20051, April 6, 2016). FTA 
proposed a public interest waiver for the following categories of 
contracts: (1) For contracts entered into between the FAST Act's 
effective date and date of enactment (i.e., from October 1, 2015 
through December 4, 2015), the increased domestic content requirements 
for FY2018 and beyond would not apply, regardless of when the vehicles 
were delivered; and (2) for contracts entered into after December 4, 
2015 as a result of solicitations for bids or requests for proposals 
that were advertised before December 4, 2015, the increased domestic 
content requirements for FY2018 and beyond would not apply, regardless 
of when the vehicles were delivered.

III. Response to Comments

    FTA received comments from 24 entities in Docket FTA-2016-0019 and 
comments from 14 entities in Docket FTA-2016-0020 from a broad cross-
section of transit agencies, transit vehicle manufacturers, transit 
industry trade associations, the passenger vessel industry, an alliance 
of domestic manufacturing interests, compliance auditors, and the 
general public. The comments and proposals were diverse. The comments 
and questions can be categorized into the following primary categories:

A. What date controls the percentage of domestic content?

    Numerous commenters objected to the proposed policy statement's use 
of the delivery schedule as the determining factor. Some suggested that 
domestic content should be based on the solicitation date, which 
establishes the transit agency's domestic content expectations for 
prospective bidders, and allows suppliers to begin identifying domestic 
suppliers. They claimed that using the solicitation date of an 
invitation for bids or a request for proposals provides certainty to 
transit vehicle manufacturers, as transit agencies and transit vehicle 
manufacturers cannot forecast when a contract will be signed or when 
the vehicles will be delivered.
    As an alternative to the solicitation date, a significant number of 
commenters proposed that FTA apply the domestic content requirements 
based upon the date a contract was entered into, for three primary 
reasons--consistency in vehicle components to avoid cardinal changes 
and increased pricing risks, reduction of administrative burdens, and 
consistency with the approach Congress used in implementing the last 
legislative increase in domestic content, which took place in 1987.
    According to transit vehicle manufacturers, their vehicle bid 
quotes are based on the price of components known at the time the 
vehicle manufacturer receives the transit agency's solicitation and 
begins planning its supply chain by contacting potential suppliers. 
According to commenters, FTA's proposed policy had the potential of 
requiring three different component calculations based on a multi-year 
delivery schedule stemming from a single contract--one for vehicles 
delivered during FYs 2016-2017, another for FYs 2018-2019, and a third 
for FYs 2020 and beyond. This would require the vehicle manufacturer to 
identify new and potentially untried domestic suppliers for each 
successive configuration, integrate those new components in the midst 
of an ongoing production line, and incur the risk of price increases 
for those new components, as well as the possibility that the 
replacement or substitution of components might be characterized by 
some competitors as a ``cardinal change.'' Commenters also noted that a 
vehicle scheduled for delivery during the FY 2018-2019 time frame with 
a 65 percent domestic content requirement could find itself subject to 
a 70 percent domestic content requirement if delays and slippages 
beyond the control of the transit agency and the transit vehicle 
manufacturer resulted in the vehicle being delivered in FY 2020 or 
later. They requested a constant domestic content level that would 
exist for the duration of the production contract.
    In addition, transit agencies expressed concerns regarding the 
administrative costs and burdens of performing three separate pre-award 
audits and three separate post-award audits on three potentially 
different vehicle configurations. As a term and condition of 
assistance, recipients of FTA funding must conduct a pre-award and 
post-delivery audit on every rolling stock model they procure. If 
domestic content was based on the delivery date, a transit agency with 
a multi-year delivery schedule faced the possibility that their 
vehicles could have three different levels of domestic content, which 
they would need to verify and confirm. In addition, unforeseen delays 
in production could result in a vehicle delivery occurring in a 
subsequent fiscal year with a higher domestic content obligation.
    Several commenters pointed out that when Congress elevated the 
domestic content requirement from 50 percent to 60 percent in section 
337 of Title III of the Surface Transportation and Urban Relocation 
Assistance Act of 1987 (Pub. L. 100-17) (STURAA), Congress provided 
that a vehicle's domestic content percentage would be based on the date 
the procurement contract was signed. Commenters suggested that FTA 
follow that approach.
    Finally, one commenter requested clarification on the Notice's use 
of the term ``advertised'' when referring to ``solicitations for bids 
or requests for proposals that were advertised before December 4, 
2015.'' FTA will address this request in the discussion of the public 
interest waiver, below.
    FTA's Response:
    Basing domestic content standards on the date the solicitation is 
made available to the public and potential bidders or on the date the 
contract is executed is contrary to language in the FAST Act. Using the 
date of solicitation would allow transit agencies to lock in a lower 
domestic content threshold for a contract that may be signed at a date 
when the higher domestic content standards are in effect, contrary to 
the statutory language. FTA believes Congress provided adequate advance 
notice in the FAST Act regarding the increase in domestic content, such 
that manufacturers and vendors have sufficient time to amend open 
solicitations for bids prior to the submission of bid proposals or the 
execution of a contract, and in fact, FTA is aware of transit agencies 
that have amended solicitations after they have been published. FTA 
also is aware that some vehicle manufacturers have indicated through a 
survey of pre-award audit data that they are already capable of meeting 
a higher domestic content threshold.
    FTA does not find the request to follow the language used in 
earlier revisions to domestic content requirements to be persuasive. 
When

[[Page 60281]]

Congress enacted STURRA in 1987, it amended the statutory language in 
the authorizing statute to increase the domestic content requirement 
from 50 percent to 55 percent effective October 1, 1989, and section 
337(a)(1)(B) increased the domestic content from 55 percent to 60 
percent effective October 1, 1991. Specifically, section 337(a)(2)(B) 
provided that the amendments shall not apply with respect to any 
supplier or contractor or any successor in interest or assignee which 
qualified under the provisions of section 165(b)(3) of the Surface 
Transportation Assistance Act of 1982 prior to the date of enactment of 
this Act under a contract entered into prior to April 1, 1992.
    UMTA (FTA's predecessor agency) quickly published an implementing 
Notice that stated:

    The Buy America domestic content requirement for buses, rolling 
stock and associated equipment will be increased from its existing 
50 percent to 55 percent at the end of three years, and to 60 
percent at the end of five years, except that any company that has 
met the existing Buy America requirement would be exempted from 
these increases for all contracts entered into before April 1, 1992. 
In addition, the rolling stock price differential waiver is 
increased from its current 10 percent to 25 percent, and the 
definition of ``components'' is specifically to include 
``subcomponents.'' UMTA will be revising its Buy America regulation 
to reflect these changes. (52 FR 15440, April 28, 1987)

    UMTA then published a Notice of Proposed Rulemaking to implement 
these new provisions (53 FR 32994, August 29, 1988), issuing its Final 
Rule on January 9, 1991 (56 FR 926). In the Final Rule, UMTA stated 
that it ``believes that Congress intended to apply the increased 
domestic content requirements on an accelerated basis to firms entering 
the marketplace after April 2, 1987, and that it intended to 
grandfather existing firms that had complied with previous Buy America 
requirements regardless of the number of contracts or the product 
supplied (e.g., a bus versus a rail car).''
    Although Congress had the precedent of the timing language used in 
STURAA when it drafted the FAST Act, Congress declined to reintroduce 
that language.
    However, FTA finds the requests that the domestic content of a 
vehicle be fixed upon a single date that establishes the domestic 
content level for the duration of the contract to be persuasive, for 
the reasons articulated by the commenters. For those reasons, the 
applicable domestic content percentage will be based on the scheduled 
delivery date of the first production vehicle (i.e., the first vehicle 
intended to carry passengers in revenue service), final acceptance 
notwithstanding. This approach is closest to the FAST Act's statutory 
language and to Congress' clear direction. If the delivery date slips 
into a subsequent FY due to unforeseen circumstances, FTA will address 
those situations on a case-by-case basis. (Note that FTA is basing the 
domestic content requirement on the delivery date of the first 
production vehicle, rather than on the delivery date of a prototype 
unit, for several reasons. First, prototype units are constructed by 
the manufacturer for the limited purpose of design qualification 
testing, and may not necessary represent the finalized car design or 
car content. Second, prototypes are produced for testing purposes, and 
do not typically enter revenue (i.e., passenger) service in their 
prototype configuration. Finally, prototype units are delivered several 
months before the scheduled delivery date of the first production model 
and may not necessarily represent the final vehicle configuration, 
although the scheduled delivery date of the first production unit will 
undoubtedly control the components contained in the prototype unit. 
Consistent with the FAST Act, however, prototype units must contain an 
identical percentage of domestic content as the production units.)
    This approach of using the date of first production vehicle 
delivery best reflects the statutory language of the FAST Act, while 
providing the consistency in componentry and relieving the need to 
conduct multiple pre-award and post-delivery audits raised as concerns 
by numerous commenters. The FAST Act's phased-in approach provides 
adequate notice to transit agencies and transit vehicle manufacturer 
suppliers of the domestic content requirements.

B. How do the new requirements apply to options, joint procurements, 
and piggyback procurements?

    FTA received numerous comments regarding the effect of the higher 
domestic content provisions on options, joint procurements, and 
piggyback procurements. One commenter objected to extending the 
domestic content percentages throughout the life of a multi-year 
contract, including the exercise of any options, believing that 
Congress intended to increase domestic content as soon as possible, and 
that allowing the exercise of options would lock in a lower domestic 
content threshold well through FY 2020 and beyond. In contrast, several 
transit agencies and vehicle manufacturers proposed that the domestic 
content for rolling stock extend to the exercise of options for 
additional vehicles of identical manufacture, citing the benefits to 
rolling stock manufacturers and transit agencies, such as the 
predictability of pricing, the availability of components, consistency 
within the supply chain, and facilitating the ongoing manufacturing of 
rolling stock. They also cited the retroactive effect of such an 
approach, stating that applying a higher domestic content standard to a 
pre-existing contract that established a lower threshold was 
inconsistent with public interest and general principles of contract 
law.
    One commenter sought clarity regarding the applicability of the 
proposed policy guidance to joint procurement contracts executed prior 
to the effective date of the FAST Act.
    Several commenters objected to FTA's proposed guidance that would 
not allow recipients to piggyback on another agency's contract unless 
the vehicles being produced under the original contract met the 
domestic content requirements at the time the optioned vehicles are 
delivered.
    FTA's Response:
    FTA's proposed policy recognized the differences between the 
exercise of options by the original parties to a contract or a joint 
procurement between two or more purchasers and a single vehicle 
manufacturer, and piggyback procurements by third parties who were not 
parties to the original contract. With regard to the exercise of 
options, FTA is persuaded that the predictability of pricing and 
consistency within the supply chain outweighs any risks that the FAST 
Act is being circumvented. Therefore, FTA is modifying its final policy 
guidance to reflect that the date of the delivery of the first 
production vehicle under the contract controls the domestic content of 
all vehicles delivered under the contract, including vehicles delivered 
pursuant to the exercise of options. The exercise of options by the 
original parties to the contract or joint procurement establishes a 
predictable contract price for the buyers, and provides a standardized 
component list for the transit vehicle manufacturer, while at the same 
time it allows the transit vehicle manufacturer to keep its production 
line open, ensuring American jobs. However, only the original parties 
to a contract (including signatories to a joint procurement) are 
entitled to the benefits of exercising rights under that procurement.
    FTA is not persuaded by the commenters who objected to FTA's 
limitations on the use of piggyback

[[Page 60282]]

procurements during this transition period. The right to exercise an 
option does not create a contractual obligation until that contract is 
actually signed. Thus, assigning contract options to a third party will 
result in a new contract between that third party and the transit 
vehicle manufacturer, negating commenters' concerns that an increase in 
domestic content might be viewed as a ``cardinal change.'' Third 
parties seeking the assignment of procurement options (a/k/a 
``piggybacking'') have no contractual or statutory right to that 
option, and FTA considers that procurement to be a ``new'' contract and 
therefore subject to the applicable FAST Act standard based upon the 
scheduled delivery date of the first production vehicle under the new 
contract.

C. Do the increased domestic content requirements extend to 
subcomponents?

    In its April 6 publication, FTA proposed to extend the elevated 
domestic content requirements to the subcomponents that constitute a 
component. FTA received relatively little comment on this specific 
provision. Several commenters proposed that a component's domestic 
content be based upon the date the component was offered in response to 
a solicitation, rather than upon the component's actual date of 
manufacture or the vehicle's intended delivery date. In support of 
their position, transit vehicle manufacturers said that they solicit 
bids for vendors for specific vehicle components. The prices submitted 
by those bidders are based upon quotes received from their suppliers 
and sub-suppliers, and the transit vehicle manufacturer has limited 
ability to leverage that bidder to increase the domestic content of its 
subcomponents. In addition, changing suppliers midway through a 
production schedule would be disruptive to production schedules, 
particularly if a manufacturer must switch to an untested supplier 
solely to meet a gradual increase in domestic content. In contrast, the 
association supporting domestic manufacturing expressed concerns that 
maintaining fixed domestic component and subcomponent levels throughout 
the life of the contract discourages new rolling stock suppliers from 
entering the market.
    FTA's Response:
    With the exception of components manufactured by the transit 
vehicle manufacturer itself, the vehicle manufacturer has little 
influence over the subcomponent content of a given component, and given 
the prevalence of multi-year vehicle delivery schedules, the effective 
date for a component's domestic content will be based upon the 
requirements in the contract. For solicitations advertised after the 
effective date of this Notice, however, the solicitation must include 
the appropriate statutory domestic content percentages for both 
components and subcomponents.
    FTA is sensitive to the position that the elevated domestic content 
requirements eventually will encourage new entrants into the vehicle 
supply chain. All contracts signed after the FAST Act's effective date, 
including piggyback procurements and procurements off a state's 
procurement schedule, will be subject to the higher domestic content 
standards, resulting in more domestic suppliers entering the supply 
chain and the incorporation of more domestic content into vehicles 
funded with FTA financial assistance.

D. Do the changes also apply to train control, communication, and 
traction power systems?

    For purposes of Buy America, rolling stock includes train control, 
communication, and traction power equipment. 49 U.S.C. 5323(j)(2)(C). 
See also 49 CFR 661.11(t), (u), and (v). One commenter pointed out that 
the delivery of components on a construction contract differs from the 
delivery schedule of a rolling stock contract. Unlike rolling stock 
procurements where the transit agency is contracting for a fleet of 
homogenous transit vehicles, a construction contract may encompass a 
communication system, a traction power system, and a train control 
system, all of which may have differing construction schedules and 
varying component lists. Attempting to impose a domestic content based 
on when components are delivered to a job site, or the completion date 
of a particular construction segment may force the substitution of 
materials midway through a construction project, or in a worse-case 
scenario, may force the removal and replacement of components if delays 
push the completion of the contract into a subsequent fiscal year. The 
commenter proposed that the contracting date for the construction 
project would be a better determinant of the domestic content 
requirement, rather than one based on the installation date of each 
component or the completion of a particular portion of a construction 
contract.
    FTA's Response:
    FTA agrees with the commenter that there are significant 
differences between procurements for identical units of rolling stock, 
and a construction contract consisting of multiple deliverables, and 
therefore, the contracting award dates for train control, 
communication, and traction power systems will determine the contract's 
domestic content percentage. If a contract was signed in FY2016 or 
FY2017, the resulting components must consist of at least 60 percent 
domestically-manufactured components. If a construction contract is 
awarded during FY 2018 or FY 2019, the contract must include a domestic 
content percentage for that project that exceeds the 65 percent 
threshold. And if a construction contract is awarded in FY 2020 or 
beyond, the percentage of domestically-manufactured components must 
exceed 70 percent.

E. Does the increase in domestic content requirements apply to 
remanufactured, overhauled, or rebuilt transit vehicles?

    A transit vehicle rebuilder proposed that the FAST Act amendments 
should not apply to overhauls, rebuilds or remanufacture of any buses 
procured prior to the effective date of the FAST Act. The commenter 
also asked that the requirements be applied consistently throughout the 
duration of a contract so that the resulting vehicles will have 
consistent Buy America content. The commenter argues that the FAST Act 
amendments should not be interpreted in any manner that decreases 
transit agencies' abilities to complete their intended overhauls by 
forcing a higher standard of American content at the time of overhaul 
than when the bus was originally manufactured.
    FTA's Response:
    Consistent with the commenter's recommendation, FTA agrees that the 
domestic content in effect at the time the vehicle was delivered will 
apply to any future contracts for overhaul, rebuild, or remanufacturing 
projects, limited to the parties on the original contract.

F. Do the FAST Act amendments apply to passenger ferry vessels?

    FTA received two comments from the passenger ferry vessel industry 
and a ferry operator that proposed an implementation process for ferry 
vessels that based the domestic content requirement on the date of 
vessel contracting, rather than on the delivery date of the vessel. 
Commenters argued that it can be hard at the time of the contract's 
execution to anticipate with specificity exactly when the constructed 
ferry vessel will be finished, pass required regulatory inspections and 
sea trials, and be delivered to the customer. For vessels scheduled to 
be delivered over a multi-year program, they noted the difficulty and 
inefficiency in

[[Page 60283]]

maintaining multiple component lists for identical vessels that would 
be delivered across different fiscal years.
    FTA's Response:
    FTA acknowledges that the long lead times associated with issuing 
design specifications, obtaining Coast Guard and other regulatory 
approval, bid solicitations, and construction of a ferry vessel exceed 
that required for other traditional types of rolling stock. 
Accordingly, for ferry vessels, the date on which a transit agency 
signs the procurement contract will govern the domestic content for all 
vessels delivered under that contract.

G. How do the new rules apply to reimported domestic steel and iron?

    One commenter asked that FTA address the applicability of section 
3011 of the FAST Act, which added 49 U.S.C. 5323(j)(5), allowing the 
inclusion of steel and iron produced in the United States and 
incorporated into a rolling stock frame or car shell outside the United 
States, provided that the frame or car shell is imported back into the 
United States for final assembly.
    FTA's Response:
    Consistent with the statutory provision, the cost of any domestic 
steel and iron may be included in the calculation of the transit 
vehicle's domestic content, provided that the average cost of the 
vehicle exceeds $300,000, as provided by the FAST Act. Manufacturers 
may include the cost of domestic steel and iron on vehicles produced 
after October 1, 2015, the effective date of the FAST Act.

H. Will FTA issue public interest waivers for vehicle procurements 
underway when the FAST Act was enacted?

    In a Notice published concurrently with the proposed policy 
statement (81 FR 20051, April 6, 2016), FTA invited the public to 
comment on a proposed public interest waiver that would apply the 
current domestic content standard to rolling stock contracts entered 
into between October 1, 2015 (the effective date of the FAST Act) and 
December 4, 2015, (the date on which the Act was enacted), and for 
contracts entered into after December 4, 2015, as a result of 
solicitations for bids or requests for proposals that were advertised 
before December 4, 2015.
    FTA received 14 comments on the proposed waiver from: A transit 
industry trade association, a passenger vessel trade group, several 
public transportation agencies, numerous transit vehicle manufacturers 
and remanufacturers, and Buy America consultants, all of whom supported 
the proposed waiver. Among the cited benefits of a waiver were the 
avoidance of additional costs to transit agencies that would have to 
rewrite and re-advertise existing solicitations to incorporate the new 
domestic content thresholds, the administrative costs to vehicle 
manufacturers who would need to identify and solicit new domestic 
suppliers, and most importantly, predictable delays in the acquisition 
of new transit vehicles, which would pose a disservice to transit 
riders.
    The passenger vessel group asked that FTA extend the waiver to 
ferry vessel procurements for which the vessel design was substantially 
complete before the enactment of the FAST Act; vehicle remanufacturers 
asked that the waiver extend to contracts for rebuilds, overhauls, and 
remanufacturing entered into prior to the enactment date of the FAST 
Act; and several transit agencies and vehicle manufacturers asked that 
the waiver extend to contract options assigned to another transit 
agency if the contract was entered into prior to the FAST Act's 
enactment date.
    FTA's Response:
    Based on the foregoing discussion of the FAST Act's implementation 
and input from commenters, FTA believes that a request for a public 
interest waiver to address contracts signed before the date the FAST 
Act was enacted is reasonable, and is extending the waiver to contracts 
for ferry vessels and to contracts for the remanufacturing, rebuilding, 
and overhaul of a recipient's existing fleet. However, as stated 
previously, FTA will not extend pre-FAST Act domestic content 
percentages to options exercised by a third party after the effective 
date of the Act.
    Further, to avoid the disruption of ongoing contract solicitations 
and to facilitate the delivery of transit vehicles to the public, FTA 
is extending the waiver to contract solicitations advertised on or 
after December 4, 2015, provided the contract is awarded within 60 days 
after the publication date of this Notice. If a solicitation was 
advertised (i.e., published or distributed to potential bidders in 
manner that constitutes constructive notice) on or after the enactment 
date of the FAST Act and the parties are unable to execute a contract 
within 60 days of this Notice, the solicitation must be amended to 
reflect the applicable domestic content standard that will be in effect 
when the first production vehicle is scheduled to be delivered. If 
compliance with this requirement would pose an undue hardship, FTA will 
evaluate requests for a waiver on a case-by-case basis.
    A request for a public interest waiver should set forth the 
detailed justification for the proposed waiver, including information 
about the history of the procurement and the burden on the recipient 
and/or the industry in complying with the FAST Act. Public interest 
waivers should be narrowly tailored and FTA will not generally look 
favorably on waivers that provide for contracts that include the 
exercise of options for vehicles that will be delivered beyond FY2020. 
FTA will act expeditiously on public interest waiver requests that 
provide the information requested.

IV. Final Policy Guidance and Public Interest Waiver

A. Final Policy Guidance

    Individual and Joint Procurements of Buses and Railcars. For 
rolling stock contracts entered into on or after October 1, 2015, i.e., 
the effective date of the FAST Act, the applicable domestic content 
percentage under section 5323(j)(2)(C) will be based on the scheduled 
delivery date of the first production vehicle (i.e., the first vehicle 
intended to carry passengers in revenue service), final acceptance 
notwithstanding. Thus, if a recipient or group of recipients as part of 
a joint procurement enter into a contract for rolling stock on or after 
October 1, 2015, then the new FAST Act provisions applicable for the 
date of delivery of the first production vehicle shall apply. 
Accordingly, if the first production vehicle is delivered in FY2018 or 
FY2019, the domestic content must be more than 65 percent, and if the 
first production vehicle is delivered in FY2020 or beyond, the domestic 
content must be more than 70 percent. These delivery provisions apply 
to contracts entered into on or after October 1, 2015, unless a waiver 
is granted. If the delivery date of the first production vehicle is 
delayed such that it will be delivered in a year with a higher domestic 
content, FTA will address those situations on a case-by-case basis.
    The FAST Act amendments do not apply to contracts entered into 
before October 1, 2015, even if the contract provides for the delivery 
of the first production vehicle after FY2017. For contracts entered 
into before October 1, 2015, all vehicles delivered under the original 
contract base order and any properly exercised options by recipients 
who are direct parties to the contract may contain a domestic content 
of more than 60 percent, per the pre-FAST Act requirements. Recipients 
who are not direct parties to a contract executed before October 1, 
2015, however, may

[[Page 60284]]

not exercise assigned options (a/k/a ``piggybacking'') on such 
contracts.
    Procurements of Ferry Vessels. Due to the long lead time in 
establishing vessel design specifications, obtaining Coast Guard 
certifications and other regulatory approval, and the bid solicitation 
and review process that exceeds that required for other traditional 
types of rolling stock, the date on which a transit agency signs the 
vessel contract will govern the domestic content for all vessels 
delivered under that contract. Therefore, for vessel contracts signed 
during FYs 2016 or 2017, the vessels must contain a minimum of 60 
percent domestic content; contracts signed in FYs 2018 or 2019 must 
require no less than 65 percent domestic content; and contracts signed 
in FY 2020 or beyond must mandate a domestic content of no less than 70 
percent.
    Train Control, Communication and Traction Power Equipment. For 
purposes of Buy America, rolling stock includes train control, 
communication, and traction power equipment. 49 U.S.C. 5323(j)(2)(C). 
See also 49 CFR 661.11(t), (u), and (v). The domestic content 
requirement in effect on the date a contract was signed for train 
control, communication, and traction power equipment will control. If 
the contract is signed in FY2016 or FY2017, the contract shall require 
an overall domestic content that exceeds 60 percent; if a contract is 
signed in FYs 2018 or 2019, the contract must include an overall 
domestic content percentage that exceeds 65 percent; and if a contract 
is signed in FY2020 or beyond, the domestic content must exceed 70 
percent.
    State Purchasing Schedules. Some recipients purchase rolling stock 
from a State purchasing schedule. A State purchasing schedule is an 
arrangement that a State has established with multiple vendors in which 
those vendors agree to provide essentially an option to the State and 
its subordinate governmental entities and others it might include in 
its programs, to acquire specific property or services in the future at 
established prices. Because the purchasing schedule does not commit the 
State to procuring a minimum number of vehicles, a ``contract'' does 
not exist until a State, recipient or subrecipient enters into a 
purchase order with a vendor listed on the schedule.
    Therefore, for purchase orders placed against State purchasing 
schedules before October 1, 2015, for the delivery of rolling stock in 
FY2018 and beyond, the increased domestic content requirements will not 
apply. For purchase orders placed against State schedules on or after 
October 1, 2015, for rolling stock that will be delivered in FY 2016 or 
2017, the domestic content requirement must exceed 60%. For purchase 
orders placed against State schedules for rolling stock that will be 
delivered in FYs 2018 or 2019, the domestic content must exceed 65%, 
and for purchase orders placed against State schedules for rolling 
stock that will be delivered in FY 2020 or beyond, the domestic content 
must exceed 70%.
    Calculation of Domestic Content. FTA will adjust the calculation 
for determining whether a component is of domestic origin under 49 CFR 
661.11 to accommodate the increase in domestic content for FY2018 and 
beyond. Currently under 49 CFR 661.11(g), ``for a component to be of 
domestic origin, more that 60 percent of the subcomponents of that 
component, by cost, must be of domestic origin, and the manufacture of 
the component must take place in the United States. If, under the terms 
of this part, a component is determined to be of domestic origin, its 
entire cost may be used in calculating the cost of domestic content of 
an end product.''
    Thus, for vehicles to be delivered in FY2018 or 2019, for a 
component to be of domestic content, more than 65 percent of the 
subcomponents of that component, by cost, must be of domestic origin, 
and for FY2020 or beyond, more than 70 percent of the subcomponents of 
the component must be of domestic origin. The requirement that 
manufacture of the component take place in the United States still 
applies. Additionally, if a component is determined to be of domestic 
origin, its entire cost may be used in calculating the cost of content 
of an end product.
    Cost of Domestic Steel and Iron for Rolling Stock Frame or Car 
Shell. Section 3011 of the FAST Act, which added 49 U.S.C. 5323(j)(5), 
allows domestic content to include steel and iron produced in the 
United States and incorporated into a rolling stock frame or car shell 
outside the United States, provided that the frame or car shell is 
imported back into the United States for final assembly. Consistent 
with the statutory provision, the cost of any domestic steel and iron 
may be included in the calculation of the transit vehicle's domestic 
content, provided that the average cost of the vehicles exceeds 
$300,000, as provided by the FAST Act. Manufacturers may include the 
cost of domestic steel and iron on vehicles produced after October 1, 
2015, the effective date of the FAST Act.

B. General Public Interest Waivers

    FTA is issuing two general public interest waivers to address two 
categories of recipients and manufacturers: (1) Recipients who entered 
into contracts or placed purchase orders against State schedules 
between October 1, 2015 and December 4, 2015; and (2) recipients who 
have entered into contracts after December 4, 2015, as a result of 
solicitations for bids or requests for proposals that were advertised 
before December 4, 2015. In addition, FTA is issuing a third public 
interest waiver for recipients who solicited contracts on or after 
December 4, 2015, provided they enter into a contract within 60 days of 
publication of this Notice.
    Under 49 U.S.C. 5323(j)(2)(A), the Administrator may waive the Buy 
America requirements if the Administrator finds that applying the Buy 
America requirements would be inconsistent with the public interest. 
``In determining whether the conditions exist to grant a public 
interest waiver, the Administrator will consider all appropriate 
factors on a case-by-case basis . . . When granting a public interest 
waiver, the Administrator shall issue a detailed written statement 
justifying why the waiver is in the public interest. The Administrator 
shall publish this justification in the Federal Register, providing the 
public with a reasonable time for notice and comment of not more than 
seven calendar days.'' 49 CFR 661.7(b).
    Public interest waiver for contracts entered into between October 
1, 2015 and December 4, 2015. FTA grants a general public interest 
waiver for contracts entered into between the FAST Act's effective date 
and date of enactment (i.e., between October 1, 2015 and December 4, 
2015). For these contracts, the increased domestic content requirements 
for FY2018 and beyond will not apply, regardless of when the first 
production vehicle is delivered. However, consistent with FTA's policy 
statement above, parties to the contracts may exercise options under 
the contract, but recipients will not be permitted to piggyback on the 
contracts.
    Public interest waiver for contracts entered into after December 4, 
2015 as a result of solicitations advertised before December 4, 2015. 
FTA grants a general public interest waiver for contracts entered into 
after December 4, 2015 as a result of solicitations for bids or 
requests for proposals that were advertised (i.e., published or 
distributed to potential bidders in a manner that constitutes 
constructive notice) before

[[Page 60285]]

December 4, 2015. Under these circumstances, the increased domestic 
content requirements for FY2018 and beyond will not apply, regardless 
of when the first production vehicle is delivered. However, consistent 
with FTA's policy statement above, parties to the contracts may 
exercise options under the contract, but recipients will not be 
permitted to piggyback on the contracts.
    Public interest waiver for contract solicitations advertised on or 
after December 4, 2015 and entered into within 60 days of publication 
of this notice. To avoid the disruption of ongoing contract 
solicitations and to facilitate the delivery of transit vehicles to the 
public, FTA is extending the waiver to contract solicitations 
advertised on or after December 4, 2015, and entered into within 60 
days after the publication date of this Notice. If a solicitation was 
advertised (i.e., published or distributed to potential bidders in a 
manner that constitutes constructive notice) after the enactment date 
of the FAST Act and the parties are unable to execute a contract within 
60 days of this Notice, the solicitation must be amended to reflect the 
applicable domestic content standard that will be in effect when the 
first production vehicle is scheduled to be delivered. If compliance 
with this requirement would pose an undue hardship, FTA will evaluate 
requests for a waiver on a case-by-case basis.
    Recipients may apply to FTA for individual public interest waivers 
for contracts that do not fall within the scope of a general public 
interest waiver. A request for a public interest waiver should set 
forth the detailed justification for the proposed waiver, including 
information about the history of the procurement and the burden on the 
recipient and/or the industry in complying with the FAST Act. Public 
interest waivers should be narrowly tailored and FTA will not generally 
look favorably on waivers that provide for contracts that include the 
exercise of options for vehicles that will be delivered beyond FY2020. 
FTA will act expeditiously on public interest waiver requests that 
provide the information requested.

V. Effective Date

    Because the statute is self-effectuating, the changes are effective 
upon the FAST Act's enactment. FTA will be initiating a subsequent 
rulemaking updating 49 CFR part 661 to reflect these changes; however, 
today's Policy Statement and Waiver represents FTA's implementation of 
the FAST Act provisions during this interim period.

    Dated: August 26, 2016.
Ellen Partridge,
Chief Counsel.
[FR Doc. 2016-21007 Filed 8-31-16; 8:45 am]
 BILLING CODE 4910-57-P



                                                  60278              Federal Register / Vol. 81, No. 170 / Thursday, September 1, 2016 / Rules and Regulations

                                                                                                                TABLE 52.385—EPA-APPROVED REGULATIONS
                                                                                                                              Dates
                                                                                                                                                         Federal
                                                   Connecticut state cita-            Title/subject                 Date             Date                Register        Section 52.370              Comments/description
                                                           tion                                                  adopted by       approved by             citation
                                                                                                                    state            EPA


                                                                        *                          *                      *                      *                       *                   *                     *
                                                  22a–174–1 .................   Definitions .................          2/1/10           9/1/16       [Insert Federal            (c)(113)   Approved 22a–174–1(19) definition of
                                                                                                                                                        Register cita-                       ‘‘brush’’ for purposes of Connecticut Gen-
                                                                                                                                                        tion].                               eral Statutes (CGS) Section 22a–174(f);
                                                                                                                                                                                             see paragraph (c)(113)(A) of this section.

                                                                   *                           *                          *                      *                       *                  *                     *
                                                  22a–174–17 (formerly          Control of Open                        4/4/72           9/1/16       [Insert Federal              (b)(2)   DEEP regulation to control open burning.
                                                    19–508–17).                   Burning.                                                              Register cita-                      Paragraph (b) was revised 9/1/16 by re-
                                                                                                                                                        tion].                              designating paragraph (b) as (b)(1) and
                                                                                                                                                                                            adding paragraph (b)(2) to read as fol-
                                                                                                                                                                                            lows: This rule, formerly known as Sec-
                                                                                                                                                                                            tion 19–508–17, which was approved in
                                                                                                                                                                                            paragraph (b)(1), is removed from the
                                                                                                                                                                                            SIP and replaced by Connecticut General
                                                                                                                                                                                            Statute (CGS) section 22a–174(f) and
                                                                                                                                                                                            RCSA section 22a–174–1(19); see para-
                                                                                                                                                                                            graph (c)(113)(A) of this section.

                                                                       *                        *                         *                      *                       *                  *                     *
                                                  22a–174–43 ...............    Portable Fuel Con-                    5/10/04           9/1/16       [Insert Federal             (c)(95)   DEEP regulation to control portable fuel
                                                                                  tainer Spillage Con-                                                  Register cita-                      container spillage. Paragraph (c)(95) was
                                                                                  trol.                                                                 tion].                              revised 9/1/16 by removing and reserving
                                                                                                                                                                                            paragraph (c)(95)(i)(C).

                                                                      *                        *                          *                      *                       *                   *                    *
                                                  Connecticut General           Powers of the com-                    3/30/00           9/1/16       [Insert Federal            (c)(113)   Control of open burning; see paragraph
                                                    Statute, Title 446c,          missioner. Open                                                       Register cita-                      (c)(113)(A) of this section.
                                                    Section 22a–174(f).           Burning.                                                              tion].



                                                  [FR Doc. 2016–21012 Filed 8–31–16; 8:45 am]                        agencies and transit vehicle                                 F. Do the FAST Act amendments apply to
                                                  BILLING CODE 6560–50–P                                             manufacturers regarding how they are to                         passenger ferry vessels?
                                                                                                                     implement the FAST Act’s statutory                           G. How do the new rules apply to
                                                                                                                     amendments. Additionally, FTA is                                reimported domestic steel and iron?
                                                                                                                                                                                  H. Will FTA issue public interest waivers
                                                  DEPARTMENT OF TRANSPORTATION                                       providing notice of public interest                             for vehicle procurements underway
                                                                                                                     waivers of Buy America domestic                                 when the FAST Act was enacted?
                                                  Federal Transit Administration                                     content requirements for rolling stock                     IV. Final Policy Guidance and Public Interest
                                                                                                                     procurements in limited circumstances.                          Waivers
                                                  49 CFR Part 661                                                    DATES: The final policy takes effect on                      A. Final Policy Guidance
                                                                                                                     September 1, 2016.                                           B. Final Public Interest Waivers
                                                  [Docket Nos. FTA–2016–0019 & FTA–2016–
                                                  0020]                                                              FOR FURTHER INFORMATION CONTACT:                           I. Introduction
                                                                                                                     Cecelia Comito, Assistant Chief                               This Notice provides guidance and
                                                  Notice of Policy on the Implementation                             Counsel, Office of the Chief Counsel,
                                                  of the Phased Increase in Domestic                                                                                            clarification to transit agencies and
                                                                                                                     phone: (202) 366–2217, or email,                           transit vehicle manufacturers regarding
                                                  Content Under the Buy America Waiver                               Cecelia.Comito@dot.gov.
                                                  for Rolling Stock and Notice of Public                                                                                        FTA’s implementation of the FAST
                                                                                                                     SUPPLEMENTARY INFORMATION:                                 Act’s amendments to 49 U.S.C.
                                                  Interest Waiver of Buy America
                                                  Domestic Content Requirements for                                  Table of Contents                                          5323(j)(2)(C).
                                                  Rolling Stock Procurement in Limited                                                                                             Section 3011 of the FAST Act (Pub. L.
                                                                                                                     I. Introduction                                            114–94, enacted December 4, 2015)
                                                  Circumstances                                                      II. Proposed Policy Guidance and Public                    amended the rolling stock waiver in 49
                                                                                                                           Interest Waiver
                                                  AGENCY:      Federal Transit Administration,                                                                                  U.S.C. 5323(j)(2)(C) to require a two-step
                                                                                                                        A. Proposed Policy
                                                  DOT.                                                                  B. Proposed Public Interest Waiver                      increase in the domestic content of
                                                  ACTION:  Notice of final policy and public                         III. Response to Comments                                  rolling stock as follows:
                                                  interest waiver.                                                      A. What date controls the percentage of                    When procuring rolling stock with
                                                                                                                           domestic content?                                    FTA financial assistance (including
                                                  SUMMARY:    This final policy consists of                             B. How do the new requirements apply to                 train control, communication, traction
                                                  the Federal Transit Administration’s                                     options, joint procurements, and                     power, and rolling stock prototypes), the
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                                                  (FTA) policy statement regarding its                                     piggyback procurements?                              cost of components and subcomponents
                                                  implementation of the phased-in                                       C. Do the increased domestic content                    produced in the United States for fiscal
                                                  increase in domestic content for rolling                                 requirements extend to subcomponents?                years 2016 and 2017, is more than 60
                                                                                                                        D. Do the changes also apply to train
                                                  stock under the FTA’s Buy America                                        control, communication, and traction
                                                                                                                                                                                percent of the cost of all components of
                                                  statute, as amended by the Fixing                                        power systems?                                       the rolling stock; for fiscal years 2018
                                                  America’s Surface Transportation                                      E. Does the increase in domestic content                and 2019, is more than 65 percent of the
                                                  (FAST) Act. Through this final policy,                                   requirements apply to remanufactured,                cost of all components of the rolling
                                                  FTA is providing guidance to transit                                     overhauled, or rebuilt transit vehicles?             stock; and for fiscal year 2020 and each


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                                                                   Federal Register / Vol. 81, No. 170 / Thursday, September 1, 2016 / Rules and Regulations                                        60279

                                                  fiscal year thereafter, is more than 70                 content would have to be more than 65                 schedules on or after October 1, 2015,
                                                  percent of the cost of all components of                percent, and for vehicles delivered in                FTA proposed to adopt the elevated
                                                  the rolling stock.                                      FY2020 and beyond, the domestic                       FAST Act content requirements.
                                                     Given the potential effect of the FAST               content would have to be more than 70                    This interpretation is consistent with
                                                  Act changes to vehicle procurements by                  percent. These higher domestic content                the language of the statute, follows
                                                  the statutory use of the term                           requirements would apply to all                       Congress’ intention to increase the
                                                  ‘‘produced,’’ transit agencies and transit              contracts signed after the effective date             domestic content for vehicles produced
                                                  vehicle manufacturers asked FTA to                      of the FAST Act unless FTA issues a                   in FY2018 or later, and adheres to basic
                                                  provide specific guidance on the                        waiver, which FTA addressed in a                      principles of statutory construction.
                                                  applicability of the FAST Act’s new Buy                 separate Federal Register Notice (81 FR                  Calculation of Domestic Content for
                                                  America provisions to contracts entered                 20051, April 6, 2016).                                Components and Subcomponents. In its
                                                  into before, on, or after October 1, 2015,                 In its proposed policy statement, FTA              proposed policy statement, FTA
                                                  the effective date set forth in section                 proposed that the FAST Act                            proposed to adjust the calculation for
                                                  1003 of the FAST Act.                                   amendments would not apply to a                       determining whether a component is of
                                                     Under existing law (49 U.S.C.                        contract entered into before the effective            domestic origin under 49 CFR 661.11 to
                                                  5325(e)), recipients of FTA financial                   date of the FAST Act, i.e., October 1,                mirror the increase in domestic content
                                                  assistance may enter into rolling stock                 2015, even if the contract provides for               for FY2018 and beyond. Currently
                                                  contracts for up to five years for buses                the delivery of vehicles after FY2017. In             under 49 CFR 661.11(g), ‘‘for a
                                                  and seven years for railcars. In FTA                    addition, the policy statement proposed               component to be of domestic origin,
                                                  Circular 4220.1F, ‘‘Third Party                         to continue to permit options to be                   more that 60 percent of the
                                                  Contracting Guidance,’’ FTA permits                     exercised for those contracts entered                 subcomponents of that component, by
                                                  these five- and seven-year periods to                   into before October 1, 2015, even if the              cost, must be of domestic origin, and the
                                                  cover the recipient’s ‘‘material                        vehicles would be delivered outside the               manufacture of the component must
                                                  requirements’’ for rolling stock and                    five- or seven-year contract term,                    take place in the United States. If, under
                                                  replacement needs from the effective                    consistent with Circular 4220.1F.                     the terms of this part, a component is
                                                  date of the contract through the end of                    However, recipients who were not                   determined to be of domestic origin, its
                                                  the fifth or seventh year. FTA does not                 direct parties to a contract executed                 entire cost may be used in calculating
                                                  require that ‘‘the recipient must obtain                before October 1, 2015, would not be                  the cost of domestic content of an end
                                                  delivery, acceptance, or even fabrication               allowed to exercise options (a/k/a                    product.’’
                                                  in five or seven years—instead, it means                ‘‘piggybacking’’) on those contracts and                 Thus, for vehicles to be delivered in
                                                  only that FTA limits a contract to                      thereby could not take advantage of the               FY2018 and 2019, FTA proposed that
                                                  purchasing no more than the recipient’s                 lower domestic content requirement.                   more than 65 percent of the
                                                  material requirements for rolling stock                 Because the assignment of options to a                subcomponents of that component, by
                                                  or replacement parts for five or seven                  third party results in the third party and            cost, must be of domestic origin, and for
                                                  years, based on the effective date of the               the vendor entering into a new contract               FY2020 and beyond, more than 70
                                                  contract.’’ See FTA Circular 4220.1F,                   that would be entered into after the                  percent of the subcomponents of the
                                                  Chapter IV, page 23. Under this rule,                   effective date of the FAST Act, FTA                   component must be of domestic origin.
                                                  options for vehicles must be exercised                  proposed to apply the increased                       The existing requirement that
                                                  within the five- or seven-year contract                 domestic content requirements to                      manufacture of the component take
                                                  term, although the vehicles may be                      vehicles scheduled for delivery in FY                 place in the United States would
                                                  produced and delivered after the                        2018 and beyond.                                      continue to apply, as well as the
                                                                                                             State Purchasing Schedules. In the                 provision that states that if a component
                                                  contract term.
                                                                                                          proposed policy statement, FTA                        is determined to be of domestic origin,
                                                  II. Proposed Policy and Public Interest                 recognized that some recipients and                   its entire cost may be used in
                                                  Waiver                                                  subrecipients purchase rolling stock                  calculating the domestic value of the
                                                                                                          from a State purchasing schedule (i.e.,               rolling stock, regardless of the value of
                                                  A. Proposed Policy Guidance                             an arrangement that a State has                       its individual subcomponents.
                                                    The FAST Act identified two points                    negotiated with multiple vendors in
                                                  in time: (1) ‘‘when procuring rolling                   which those vendors essentially agree to              B. Proposed Public Interest Waiver
                                                  stock,’’ which FTA’s proposed policy                    provide an option to the State, as well                  FTA recognized that the FAST Act
                                                  interpreted as the date the vehicle                     as subordinate and local governmental                 amendments may produce significant
                                                  procurement contract was signed; and                    entities allowed to participate in the                hardship for two categories of recipients
                                                  (2) ‘‘the cost of components and                        schedule, to acquire specific property or             and manufacturers: (1) Recipients who
                                                  subcomponents produced in the United                    services in the future at established                 entered into contracts or placed
                                                  States for fiscal years . . .’’, which FTA              prices). Because the purchasing                       purchase orders against State schedules
                                                  interpreted as the delivery date of the                 schedule does not commit the State to                 between October 1, 2015 and December
                                                  vehicle.                                                procuring a minimum number of                         4, 2015 (i.e., the effective date of the Act
                                                    Individual and Joint Procurements.                    vehicles, a ‘‘contract’’ does not exist               and its enactment date, respectively);
                                                  FTA proposed to implement the FAST                      until a State, recipient, or subrecipient             and (2) recipients who entered into
                                                  Act by requiring that if a recipient (or                enters into a purchase order with a                   contracts after December 4, 2015, as a
                                                  a group of recipients under a joint                     vendor listed on the schedule.                        result of solicitations for bids or
asabaliauskas on DSK3SPTVN1PROD with RULES




                                                  procurement) enters into a contract for                    Therefore, the proposed policy                     requests for proposals that were
                                                  rolling stock after the effective date of               statement proposed to retain the 60                   advertised before December 4, 2015.
                                                  the FAST Act, i.e., October 1, 2015, the                percent domestic content requirement                     Under 49 U.S.C. 5323(j)(2)(A), the
                                                  new FAST Act provisions for domestic                    for purchase orders placed against State              Secretary of Transportation may waive
                                                  content of the rolling stock would apply                purchasing schedules before October 1,                the Buy America requirements if the
                                                  based on the delivery date of the                       2015, regardless of the ultimate delivery             Secretary finds that applying the Buy
                                                  vehicle. Thus, for vehicles delivered in                date(s). However, for purchase orders                 America requirements would be
                                                  FY2018 and FY2019, the domestic                         placed against State purchasing                       ‘‘inconsistent with the public interest.’’


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                                                  60280            Federal Register / Vol. 81, No. 170 / Thursday, September 1, 2016 / Rules and Regulations

                                                  This function has been delegated to the                 identifying domestic suppliers. They                  configurations. As a term and condition
                                                  FTA Administrator by 49 CFR 1.91, and                   claimed that using the solicitation date              of assistance, recipients of FTA funding
                                                  section 661.7(b) of FTA’s implementing                  of an invitation for bids or a request for            must conduct a pre-award and post-
                                                  regulation (49 CFR part 661) provides:                  proposals provides certainty to transit               delivery audit on every rolling stock
                                                  ‘‘In determining whether the conditions                 vehicle manufacturers, as transit                     model they procure. If domestic content
                                                  exist to grant this public interest waiver,             agencies and transit vehicle                          was based on the delivery date, a transit
                                                  the Administrator will consider all                     manufacturers cannot forecast when a                  agency with a multi-year delivery
                                                  appropriate factors on a case-by-case                   contract will be signed or when the                   schedule faced the possibility that their
                                                  basis . . . . When granting a public                    vehicles will be delivered.                           vehicles could have three different
                                                  interest waiver, the Administrator shall                   As an alternative to the solicitation              levels of domestic content, which they
                                                  issue a detailed written statement                      date, a significant number of                         would need to verify and confirm. In
                                                  justifying why the waiver is in the                     commenters proposed that FTA apply                    addition, unforeseen delays in
                                                  public interest. The Administrator shall                the domestic content requirements                     production could result in a vehicle
                                                  publish this justification in the Federal               based upon the date a contract was                    delivery occurring in a subsequent fiscal
                                                  Register, providing the public with a                   entered into, for three primary reasons—              year with a higher domestic content
                                                  reasonable time for notice and comment                  consistency in vehicle components to                  obligation.
                                                  of not more than seven calendar days.’’                 avoid cardinal changes and increased                     Several commenters pointed out that
                                                     In a separate Notice accompanying                    pricing risks, reduction of                           when Congress elevated the domestic
                                                  the proposed policy statement (Docket                   administrative burdens, and consistency               content requirement from 50 percent to
                                                  FTA–2016–0020), FTA sought comment                      with the approach Congress used in                    60 percent in section 337 of Title III of
                                                  on a general public interest waiver for                 implementing the last legislative                     the Surface Transportation and Urban
                                                  those affected parties (81 FR 20051,                    increase in domestic content, which                   Relocation Assistance Act of 1987 (Pub.
                                                  April 6, 2016). FTA proposed a public                   took place in 1987.                                   L. 100–17) (STURAA), Congress
                                                  interest waiver for the following                          According to transit vehicle                       provided that a vehicle’s domestic
                                                  categories of contracts: (1) For contracts              manufacturers, their vehicle bid quotes               content percentage would be based on
                                                  entered into between the FAST Act’s                     are based on the price of components                  the date the procurement contract was
                                                  effective date and date of enactment                    known at the time the vehicle                         signed. Commenters suggested that FTA
                                                  (i.e., from October 1, 2015 through                     manufacturer receives the transit                     follow that approach.
                                                  December 4, 2015), the increased                        agency’s solicitation and begins                         Finally, one commenter requested
                                                  domestic content requirements for                       planning its supply chain by contacting               clarification on the Notice’s use of the
                                                  FY2018 and beyond would not apply,                      potential suppliers. According to                     term ‘‘advertised’’ when referring to
                                                  regardless of when the vehicles were                    commenters, FTA’s proposed policy had                 ‘‘solicitations for bids or requests for
                                                  delivered; and (2) for contracts entered                the potential of requiring three different            proposals that were advertised before
                                                  into after December 4, 2015 as a result                 component calculations based on a                     December 4, 2015.’’ FTA will address
                                                  of solicitations for bids or requests for               multi-year delivery schedule stemming                 this request in the discussion of the
                                                  proposals that were advertised before                   from a single contract—one for vehicles               public interest waiver, below.
                                                  December 4, 2015, the increased                         delivered during FYs 2016–2017,                          FTA’s Response:
                                                  domestic content requirements for                       another for FYs 2018–2019, and a third                   Basing domestic content standards on
                                                  FY2018 and beyond would not apply,                      for FYs 2020 and beyond. This would                   the date the solicitation is made
                                                  regardless of when the vehicles were                    require the vehicle manufacturer to                   available to the public and potential
                                                  delivered.                                              identify new and potentially untried                  bidders or on the date the contract is
                                                                                                          domestic suppliers for each successive                executed is contrary to language in the
                                                  III. Response to Comments                               configuration, integrate those new                    FAST Act. Using the date of solicitation
                                                     FTA received comments from 24                        components in the midst of an ongoing                 would allow transit agencies to lock in
                                                  entities in Docket FTA–2016–0019 and                    production line, and incur the risk of                a lower domestic content threshold for
                                                  comments from 14 entities in Docket                     price increases for those new                         a contract that may be signed at a date
                                                  FTA–2016–0020 from a broad cross-                       components, as well as the possibility                when the higher domestic content
                                                  section of transit agencies, transit                    that the replacement or substitution of               standards are in effect, contrary to the
                                                  vehicle manufacturers, transit industry                 components might be characterized by                  statutory language. FTA believes
                                                  trade associations, the passenger vessel                some competitors as a ‘‘cardinal                      Congress provided adequate advance
                                                  industry, an alliance of domestic                       change.’’ Commenters also noted that a                notice in the FAST Act regarding the
                                                  manufacturing interests, compliance                     vehicle scheduled for delivery during                 increase in domestic content, such that
                                                  auditors, and the general public. The                   the FY 2018–2019 time frame with a 65                 manufacturers and vendors have
                                                  comments and proposals were diverse.                    percent domestic content requirement                  sufficient time to amend open
                                                  The comments and questions can be                       could find itself subject to a 70 percent             solicitations for bids prior to the
                                                  categorized into the following primary                  domestic content requirement if delays                submission of bid proposals or the
                                                  categories:                                             and slippages beyond the control of the               execution of a contract, and in fact, FTA
                                                                                                          transit agency and the transit vehicle                is aware of transit agencies that have
                                                  A. What date controls the percentage of                 manufacturer resulted in the vehicle                  amended solicitations after they have
                                                  domestic content?                                       being delivered in FY 2020 or later.                  been published. FTA also is aware that
                                                     Numerous commenters objected to the                  They requested a constant domestic                    some vehicle manufacturers have
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                                                  proposed policy statement’s use of the                  content level that would exist for the                indicated through a survey of pre-award
                                                  delivery schedule as the determining                    duration of the production contract.                  audit data that they are already capable
                                                  factor. Some suggested that domestic                       In addition, transit agencies expressed            of meeting a higher domestic content
                                                  content should be based on the                          concerns regarding the administrative                 threshold.
                                                  solicitation date, which establishes the                costs and burdens of performing three                    FTA does not find the request to
                                                  transit agency’s domestic content                       separate pre-award audits and three                   follow the language used in earlier
                                                  expectations for prospective bidders,                   separate post-award audits on three                   revisions to domestic content
                                                  and allows suppliers to begin                           potentially different vehicle                         requirements to be persuasive. When


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                                                                   Federal Register / Vol. 81, No. 170 / Thursday, September 1, 2016 / Rules and Regulations                                       60281

                                                  Congress enacted STURRA in 1987, it                     intended to carry passengers in revenue               proposed that the domestic content for
                                                  amended the statutory language in the                   service), final acceptance                            rolling stock extend to the exercise of
                                                  authorizing statute to increase the                     notwithstanding. This approach is                     options for additional vehicles of
                                                  domestic content requirement from 50                    closest to the FAST Act’s statutory                   identical manufacture, citing the
                                                  percent to 55 percent effective October                 language and to Congress’ clear                       benefits to rolling stock manufacturers
                                                  1, 1989, and section 337(a)(1)(B)                       direction. If the delivery date slips into            and transit agencies, such as the
                                                  increased the domestic content from 55                  a subsequent FY due to unforeseen                     predictability of pricing, the availability
                                                  percent to 60 percent effective October                 circumstances, FTA will address those                 of components, consistency within the
                                                  1, 1991. Specifically, section                          situations on a case-by-case basis. (Note             supply chain, and facilitating the
                                                  337(a)(2)(B) provided that the                          that FTA is basing the domestic content               ongoing manufacturing of rolling stock.
                                                  amendments shall not apply with                         requirement on the delivery date of the               They also cited the retroactive effect of
                                                  respect to any supplier or contractor or                first production vehicle, rather than on              such an approach, stating that applying
                                                  any successor in interest or assignee                   the delivery date of a prototype unit, for            a higher domestic content standard to a
                                                  which qualified under the provisions of                 several reasons. First, prototype units               pre-existing contract that established a
                                                  section 165(b)(3) of the Surface                        are constructed by the manufacturer for               lower threshold was inconsistent with
                                                  Transportation Assistance Act of 1982                   the limited purpose of design                         public interest and general principles of
                                                  prior to the date of enactment of this Act              qualification testing, and may not                    contract law.
                                                  under a contract entered into prior to                  necessary represent the finalized car                    One commenter sought clarity
                                                  April 1, 1992.                                          design or car content. Second,                        regarding the applicability of the
                                                     UMTA (FTA’s predecessor agency)                      prototypes are produced for testing                   proposed policy guidance to joint
                                                  quickly published an implementing                       purposes, and do not typically enter                  procurement contracts executed prior to
                                                  Notice that stated:                                     revenue (i.e., passenger) service in their            the effective date of the FAST Act.
                                                                                                          prototype configuration. Finally,                        Several commenters objected to FTA’s
                                                     The Buy America domestic content                                                                           proposed guidance that would not allow
                                                  requirement for buses, rolling stock and
                                                                                                          prototype units are delivered several
                                                                                                          months before the scheduled delivery                  recipients to piggyback on another
                                                  associated equipment will be increased from
                                                  its existing 50 percent to 55 percent at the            date of the first production model and                agency’s contract unless the vehicles
                                                  end of three years, and to 60 percent at the            may not necessarily represent the final               being produced under the original
                                                  end of five years, except that any company              vehicle configuration, although the                   contract met the domestic content
                                                  that has met the existing Buy America                   scheduled delivery date of the first                  requirements at the time the optioned
                                                  requirement would be exempted from these                production unit will undoubtedly                      vehicles are delivered.
                                                  increases for all contracts entered into before         control the components contained in the                  FTA’s Response:
                                                  April 1, 1992. In addition, the rolling stock           prototype unit. Consistent with the                      FTA’s proposed policy recognized the
                                                  price differential waiver is increased from its         FAST Act, however, prototype units                    differences between the exercise of
                                                  current 10 percent to 25 percent, and the                                                                     options by the original parties to a
                                                  definition of ‘‘components’’ is specifically to
                                                                                                          must contain an identical percentage of
                                                                                                          domestic content as the production                    contract or a joint procurement between
                                                  include ‘‘subcomponents.’’ UMTA will be                                                                       two or more purchasers and a single
                                                  revising its Buy America regulation to reflect          units.)
                                                  these changes. (52 FR 15440, April 28, 1987)               This approach of using the date of                 vehicle manufacturer, and piggyback
                                                                                                          first production vehicle delivery best                procurements by third parties who were
                                                     UMTA then published a Notice of                      reflects the statutory language of the                not parties to the original contract. With
                                                  Proposed Rulemaking to implement                        FAST Act, while providing the                         regard to the exercise of options, FTA is
                                                  these new provisions (53 FR 32994,                      consistency in componentry and                        persuaded that the predictability of
                                                  August 29, 1988), issuing its Final Rule                relieving the need to conduct multiple                pricing and consistency within the
                                                  on January 9, 1991 (56 FR 926). In the                  pre-award and post-delivery audits                    supply chain outweighs any risks that
                                                  Final Rule, UMTA stated that it                         raised as concerns by numerous                        the FAST Act is being circumvented.
                                                  ‘‘believes that Congress intended to                    commenters. The FAST Act’s phased-in                  Therefore, FTA is modifying its final
                                                  apply the increased domestic content                    approach provides adequate notice to                  policy guidance to reflect that the date
                                                  requirements on an accelerated basis to                 transit agencies and transit vehicle                  of the delivery of the first production
                                                  firms entering the marketplace after                    manufacturer suppliers of the domestic                vehicle under the contract controls the
                                                  April 2, 1987, and that it intended to                  content requirements.                                 domestic content of all vehicles
                                                  grandfather existing firms that had                                                                           delivered under the contract, including
                                                  complied with previous Buy America                      B. How do the new requirements apply                  vehicles delivered pursuant to the
                                                  requirements regardless of the number                   to options, joint procurements, and                   exercise of options. The exercise of
                                                  of contracts or the product supplied                    piggyback procurements?                               options by the original parties to the
                                                  (e.g., a bus versus a rail car).’’                         FTA received numerous comments                     contract or joint procurement
                                                     Although Congress had the precedent                  regarding the effect of the higher                    establishes a predictable contract price
                                                  of the timing language used in STURAA                   domestic content provisions on options,               for the buyers, and provides a
                                                  when it drafted the FAST Act, Congress                  joint procurements, and piggyback                     standardized component list for the
                                                  declined to reintroduce that language.                  procurements. One commenter objected                  transit vehicle manufacturer, while at
                                                     However, FTA finds the requests that                 to extending the domestic content                     the same time it allows the transit
                                                  the domestic content of a vehicle be                    percentages throughout the life of a                  vehicle manufacturer to keep its
                                                  fixed upon a single date that establishes               multi-year contract, including the                    production line open, ensuring
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                                                  the domestic content level for the                      exercise of any options, believing that               American jobs. However, only the
                                                  duration of the contract to be                          Congress intended to increase domestic                original parties to a contract (including
                                                  persuasive, for the reasons articulated                 content as soon as possible, and that                 signatories to a joint procurement) are
                                                  by the commenters. For those reasons,                   allowing the exercise of options would                entitled to the benefits of exercising
                                                  the applicable domestic content                         lock in a lower domestic content                      rights under that procurement.
                                                  percentage will be based on the                         threshold well through FY 2020 and                       FTA is not persuaded by the
                                                  scheduled delivery date of the first                    beyond. In contrast, several transit                  commenters who objected to FTA’s
                                                  production vehicle (i.e., the first vehicle             agencies and vehicle manufacturers                    limitations on the use of piggyback


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                                                  60282            Federal Register / Vol. 81, No. 170 / Thursday, September 1, 2016 / Rules and Regulations

                                                  procurements during this transition                     domestic content will be based upon the               deliverables, and therefore, the
                                                  period. The right to exercise an option                 requirements in the contract. For                     contracting award dates for train
                                                  does not create a contractual obligation                solicitations advertised after the                    control, communication, and traction
                                                  until that contract is actually signed.                 effective date of this Notice, however,               power systems will determine the
                                                  Thus, assigning contract options to a                   the solicitation must include the                     contract’s domestic content percentage.
                                                  third party will result in a new contract               appropriate statutory domestic content                If a contract was signed in FY2016 or
                                                  between that third party and the transit                percentages for both components and                   FY2017, the resulting components must
                                                  vehicle manufacturer, negating                          subcomponents.                                        consist of at least 60 percent
                                                  commenters’ concerns that an increase                      FTA is sensitive to the position that              domestically-manufactured
                                                  in domestic content might be viewed as                  the elevated domestic content                         components. If a construction contract
                                                  a ‘‘cardinal change.’’ Third parties                    requirements eventually will encourage                is awarded during FY 2018 or FY 2019,
                                                  seeking the assignment of procurement                   new entrants into the vehicle supply                  the contract must include a domestic
                                                  options (a/k/a ‘‘piggybacking’’) have no                chain. All contracts signed after the                 content percentage for that project that
                                                  contractual or statutory right to that                  FAST Act’s effective date, including                  exceeds the 65 percent threshold. And
                                                  option, and FTA considers that                          piggyback procurements and                            if a construction contract is awarded in
                                                  procurement to be a ‘‘new’’ contract and                procurements off a state’s procurement                FY 2020 or beyond, the percentage of
                                                  therefore subject to the applicable FAST                schedule, will be subject to the higher               domestically-manufactured components
                                                  Act standard based upon the scheduled                   domestic content standards, resulting in              must exceed 70 percent.
                                                  delivery date of the first production                   more domestic suppliers entering the
                                                                                                          supply chain and the incorporation of                 E. Does the increase in domestic content
                                                  vehicle under the new contract.
                                                                                                          more domestic content into vehicles                   requirements apply to remanufactured,
                                                  C. Do the increased domestic content                    funded with FTA financial assistance.                 overhauled, or rebuilt transit vehicles?
                                                  requirements extend to subcomponents?                                                                           A transit vehicle rebuilder proposed
                                                     In its April 6 publication, FTA                      D. Do the changes also apply to train                 that the FAST Act amendments should
                                                  proposed to extend the elevated                         control, communication, and traction                  not apply to overhauls, rebuilds or
                                                  domestic content requirements to the                    power systems?                                        remanufacture of any buses procured
                                                  subcomponents that constitute a                            For purposes of Buy America, rolling               prior to the effective date of the FAST
                                                  component. FTA received relatively                      stock includes train control,                         Act. The commenter also asked that the
                                                  little comment on this specific                         communication, and traction power                     requirements be applied consistently
                                                  provision. Several commenters                           equipment. 49 U.S.C. 5323(j)(2)(C). See               throughout the duration of a contract so
                                                  proposed that a component’s domestic                    also 49 CFR 661.11(t), (u), and (v). One              that the resulting vehicles will have
                                                  content be based upon the date the                      commenter pointed out that the delivery               consistent Buy America content. The
                                                  component was offered in response to a                  of components on a construction                       commenter argues that the FAST Act
                                                  solicitation, rather than upon the                      contract differs from the delivery                    amendments should not be interpreted
                                                  component’s actual date of manufacture                  schedule of a rolling stock contract.                 in any manner that decreases transit
                                                  or the vehicle’s intended delivery date.                Unlike rolling stock procurements                     agencies’ abilities to complete their
                                                  In support of their position, transit                   where the transit agency is contracting               intended overhauls by forcing a higher
                                                  vehicle manufacturers said that they                    for a fleet of homogenous transit                     standard of American content at the
                                                  solicit bids for vendors for specific                   vehicles, a construction contract may                 time of overhaul than when the bus was
                                                  vehicle components. The prices                          encompass a communication system, a                   originally manufactured.
                                                  submitted by those bidders are based                    traction power system, and a train                      FTA’s Response:
                                                  upon quotes received from their                         control system, all of which may have                   Consistent with the commenter’s
                                                  suppliers and sub-suppliers, and the                    differing construction schedules and                  recommendation, FTA agrees that the
                                                  transit vehicle manufacturer has limited                varying component lists. Attempting to                domestic content in effect at the time
                                                  ability to leverage that bidder to                      impose a domestic content based on                    the vehicle was delivered will apply to
                                                  increase the domestic content of its                    when components are delivered to a job                any future contracts for overhaul,
                                                  subcomponents. In addition, changing                    site, or the completion date of a                     rebuild, or remanufacturing projects,
                                                  suppliers midway through a production                   particular construction segment may                   limited to the parties on the original
                                                  schedule would be disruptive to                         force the substitution of materials                   contract.
                                                  production schedules, particularly if a                 midway through a construction project,
                                                                                                                                                                F. Do the FAST Act amendments apply
                                                  manufacturer must switch to an                          or in a worse-case scenario, may force
                                                                                                                                                                to passenger ferry vessels?
                                                  untested supplier solely to meet a                      the removal and replacement of
                                                  gradual increase in domestic content. In                components if delays push the                            FTA received two comments from the
                                                  contrast, the association supporting                    completion of the contract into a                     passenger ferry vessel industry and a
                                                  domestic manufacturing expressed                        subsequent fiscal year. The commenter                 ferry operator that proposed an
                                                  concerns that maintaining fixed                         proposed that the contracting date for                implementation process for ferry vessels
                                                  domestic component and subcomponent                     the construction project would be a                   that based the domestic content
                                                  levels throughout the life of the contract              better determinant of the domestic                    requirement on the date of vessel
                                                  discourages new rolling stock suppliers                 content requirement, rather than one                  contracting, rather than on the delivery
                                                  from entering the market.                               based on the installation date of each                date of the vessel. Commenters argued
                                                     FTA’s Response:                                      component or the completion of a                      that it can be hard at the time of the
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                                                     With the exception of components                     particular portion of a construction                  contract’s execution to anticipate with
                                                  manufactured by the transit vehicle                     contract.                                             specificity exactly when the constructed
                                                  manufacturer itself, the vehicle                           FTA’s Response:                                    ferry vessel will be finished, pass
                                                  manufacturer has little influence over                     FTA agrees with the commenter that                 required regulatory inspections and sea
                                                  the subcomponent content of a given                     there are significant differences between             trials, and be delivered to the customer.
                                                  component, and given the prevalence of                  procurements for identical units of                   For vessels scheduled to be delivered
                                                  multi-year vehicle delivery schedules,                  rolling stock, and a construction                     over a multi-year program, they noted
                                                  the effective date for a component’s                    contract consisting of multiple                       the difficulty and inefficiency in


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                                                                   Federal Register / Vol. 81, No. 170 / Thursday, September 1, 2016 / Rules and Regulations                                       60283

                                                  maintaining multiple component lists                    proposed waiver. Among the cited                         A request for a public interest waiver
                                                  for identical vessels that would be                     benefits of a waiver were the avoidance               should set forth the detailed
                                                  delivered across different fiscal years.                of additional costs to transit agencies               justification for the proposed waiver,
                                                     FTA’s Response:                                      that would have to rewrite and re-                    including information about the history
                                                     FTA acknowledges that the long lead                  advertise existing solicitations to                   of the procurement and the burden on
                                                  times associated with issuing design                    incorporate the new domestic content                  the recipient and/or the industry in
                                                  specifications, obtaining Coast Guard                   thresholds, the administrative costs to               complying with the FAST Act. Public
                                                  and other regulatory approval, bid                      vehicle manufacturers who would need                  interest waivers should be narrowly
                                                  solicitations, and construction of a ferry              to identify and solicit new domestic                  tailored and FTA will not generally look
                                                  vessel exceed that required for other                   suppliers, and most importantly,                      favorably on waivers that provide for
                                                  traditional types of rolling stock.                     predictable delays in the acquisition of              contracts that include the exercise of
                                                  Accordingly, for ferry vessels, the date                new transit vehicles, which would pose                options for vehicles that will be
                                                  on which a transit agency signs the                     a disservice to transit riders.                       delivered beyond FY2020. FTA will act
                                                  procurement contract will govern the                       The passenger vessel group asked that              expeditiously on public interest waiver
                                                  domestic content for all vessels                        FTA extend the waiver to ferry vessel                 requests that provide the information
                                                  delivered under that contract.                          procurements for which the vessel                     requested.
                                                                                                          design was substantially complete
                                                  G. How do the new rules apply to                        before the enactment of the FAST Act;                 IV. Final Policy Guidance and Public
                                                  reimported domestic steel and iron?                     vehicle remanufacturers asked that the                Interest Waiver
                                                     One commenter asked that FTA                         waiver extend to contracts for rebuilds,              A. Final Policy Guidance
                                                  address the applicability of section 3011               overhauls, and remanufacturing entered
                                                  of the FAST Act, which added 49 U.S.C.                  into prior to the enactment date of the                  Individual and Joint Procurements of
                                                  5323(j)(5), allowing the inclusion of                   FAST Act; and several transit agencies                Buses and Railcars. For rolling stock
                                                  steel and iron produced in the United                   and vehicle manufacturers asked that                  contracts entered into on or after
                                                  States and incorporated into a rolling                  the waiver extend to contract options                 October 1, 2015, i.e., the effective date
                                                  stock frame or car shell outside the                    assigned to another transit agency if the             of the FAST Act, the applicable
                                                  United States, provided that the frame                  contract was entered into prior to the                domestic content percentage under
                                                  or car shell is imported back into the                  FAST Act’s enactment date.                            section 5323(j)(2)(C) will be based on
                                                  United States for final assembly.                          FTA’s Response:                                    the scheduled delivery date of the first
                                                     FTA’s Response:                                         Based on the foregoing discussion of               production vehicle (i.e., the first vehicle
                                                     Consistent with the statutory                        the FAST Act’s implementation and                     intended to carry passengers in revenue
                                                  provision, the cost of any domestic steel               input from commenters, FTA believes                   service), final acceptance
                                                  and iron may be included in the                         that a request for a public interest                  notwithstanding. Thus, if a recipient or
                                                  calculation of the transit vehicle’s                    waiver to address contracts signed                    group of recipients as part of a joint
                                                  domestic content, provided that the                     before the date the FAST Act was                      procurement enter into a contract for
                                                  average cost of the vehicle exceeds                     enacted is reasonable, and is extending               rolling stock on or after October 1, 2015,
                                                  $300,000, as provided by the FAST Act.                  the waiver to contracts for ferry vessels             then the new FAST Act provisions
                                                  Manufacturers may include the cost of                   and to contracts for the                              applicable for the date of delivery of the
                                                  domestic steel and iron on vehicles                     remanufacturing, rebuilding, and                      first production vehicle shall apply.
                                                  produced after October 1, 2015, the                     overhaul of a recipient’s existing fleet.             Accordingly, if the first production
                                                  effective date of the FAST Act.                         However, as stated previously, FTA will               vehicle is delivered in FY2018 or
                                                                                                          not extend pre-FAST Act domestic                      FY2019, the domestic content must be
                                                  H. Will FTA issue public interest                       content percentages to options exercised              more than 65 percent, and if the first
                                                  waivers for vehicle procurements                        by a third party after the effective date             production vehicle is delivered in
                                                  underway when the FAST Act was                          of the Act.                                           FY2020 or beyond, the domestic content
                                                  enacted?                                                   Further, to avoid the disruption of                must be more than 70 percent. These
                                                     In a Notice published concurrently                   ongoing contract solicitations and to                 delivery provisions apply to contracts
                                                  with the proposed policy statement (81                  facilitate the delivery of transit vehicles           entered into on or after October 1, 2015,
                                                  FR 20051, April 6, 2016), FTA invited                   to the public, FTA is extending the                   unless a waiver is granted. If the
                                                  the public to comment on a proposed                     waiver to contract solicitations                      delivery date of the first production
                                                  public interest waiver that would apply                 advertised on or after December 4, 2015,              vehicle is delayed such that it will be
                                                  the current domestic content standard to                provided the contract is awarded within               delivered in a year with a higher
                                                  rolling stock contracts entered into                    60 days after the publication date of this            domestic content, FTA will address
                                                  between October 1, 2015 (the effective                  Notice. If a solicitation was advertised              those situations on a case-by-case basis.
                                                  date of the FAST Act) and December 4,                   (i.e., published or distributed to                       The FAST Act amendments do not
                                                  2015, (the date on which the Act was                    potential bidders in manner that                      apply to contracts entered into before
                                                  enacted), and for contracts entered into                constitutes constructive notice) on or                October 1, 2015, even if the contract
                                                  after December 4, 2015, as a result of                  after the enactment date of the FAST                  provides for the delivery of the first
                                                  solicitations for bids or requests for                  Act and the parties are unable to                     production vehicle after FY2017. For
                                                  proposals that were advertised before                   execute a contract within 60 days of this             contracts entered into before October 1,
                                                  December 4, 2015.                                       Notice, the solicitation must be                      2015, all vehicles delivered under the
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                                                     FTA received 14 comments on the                      amended to reflect the applicable                     original contract base order and any
                                                  proposed waiver from: A transit                         domestic content standard that will be                properly exercised options by recipients
                                                  industry trade association, a passenger                 in effect when the first production                   who are direct parties to the contract
                                                  vessel trade group, several public                      vehicle is scheduled to be delivered. If              may contain a domestic content of more
                                                  transportation agencies, numerous                       compliance with this requirement                      than 60 percent, per the pre-FAST Act
                                                  transit vehicle manufacturers and                       would pose an undue hardship, FTA                     requirements. Recipients who are not
                                                  remanufacturers, and Buy America                        will evaluate requests for a waiver on a              direct parties to a contract executed
                                                  consultants, all of whom supported the                  case-by-case basis.                                   before October 1, 2015, however, may


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                                                  60284            Federal Register / Vol. 81, No. 170 / Thursday, September 1, 2016 / Rules and Regulations

                                                  not exercise assigned options (a/k/a                    purchase orders placed against State                  B. General Public Interest Waivers
                                                  ‘‘piggybacking’’) on such contracts.                    schedules on or after October 1, 2015,                   FTA is issuing two general public
                                                     Procurements of Ferry Vessels. Due to                for rolling stock that will be delivered              interest waivers to address two
                                                  the long lead time in establishing vessel               in FY 2016 or 2017, the domestic                      categories of recipients and
                                                  design specifications, obtaining Coast                  content requirement must exceed 60%.                  manufacturers: (1) Recipients who
                                                  Guard certifications and other                          For purchase orders placed against State              entered into contracts or placed
                                                  regulatory approval, and the bid                        schedules for rolling stock that will be              purchase orders against State schedules
                                                  solicitation and review process that                    delivered in FYs 2018 or 2019, the                    between October 1, 2015 and December
                                                  exceeds that required for other                         domestic content must exceed 65%, and                 4, 2015; and (2) recipients who have
                                                  traditional types of rolling stock, the                 for purchase orders placed against State              entered into contracts after December 4,
                                                  date on which a transit agency signs the                schedules for rolling stock that will be              2015, as a result of solicitations for bids
                                                  vessel contract will govern the domestic                delivered in FY 2020 or beyond, the                   or requests for proposals that were
                                                  content for all vessels delivered under                 domestic content must exceed 70%.                     advertised before December 4, 2015. In
                                                  that contract. Therefore, for vessel
                                                                                                             Calculation of Domestic Content. FTA               addition, FTA is issuing a third public
                                                  contracts signed during FYs 2016 or
                                                  2017, the vessels must contain a                        will adjust the calculation for                       interest waiver for recipients who
                                                  minimum of 60 percent domestic                          determining whether a component is of                 solicited contracts on or after December
                                                  content; contracts signed in FYs 2018 or                domestic origin under 49 CFR 661.11 to                4, 2015, provided they enter into a
                                                  2019 must require no less than 65                       accommodate the increase in domestic                  contract within 60 days of publication
                                                  percent domestic content; and contracts                 content for FY2018 and beyond.                        of this Notice.
                                                  signed in FY 2020 or beyond must                        Currently under 49 CFR 661.11(g), ‘‘for                  Under 49 U.S.C. 5323(j)(2)(A), the
                                                  mandate a domestic content of no less                   a component to be of domestic origin,                 Administrator may waive the Buy
                                                  than 70 percent.                                        more that 60 percent of the                           America requirements if the
                                                     Train Control, Communication and                     subcomponents of that component, by                   Administrator finds that applying the
                                                  Traction Power Equipment. For                           cost, must be of domestic origin, and the             Buy America requirements would be
                                                  purposes of Buy America, rolling stock                  manufacture of the component must                     inconsistent with the public interest.
                                                  includes train control, communication,                  take place in the United States. If, under            ‘‘In determining whether the conditions
                                                  and traction power equipment. 49                        the terms of this part, a component is                exist to grant a public interest waiver,
                                                  U.S.C. 5323(j)(2)(C). See also 49 CFR                   determined to be of domestic origin, its              the Administrator will consider all
                                                  661.11(t), (u), and (v). The domestic                   entire cost may be used in calculating                appropriate factors on a case-by-case
                                                  content requirement in effect on the                    the cost of domestic content of an end                basis . . . When granting a public
                                                  date a contract was signed for train                    product.’’                                            interest waiver, the Administrator shall
                                                  control, communication, and traction                                                                          issue a detailed written statement
                                                                                                             Thus, for vehicles to be delivered in              justifying why the waiver is in the
                                                  power equipment will control. If the                    FY2018 or 2019, for a component to be
                                                  contract is signed in FY2016 or FY2017,                                                                       public interest. The Administrator shall
                                                                                                          of domestic content, more than 65                     publish this justification in the Federal
                                                  the contract shall require an overall                   percent of the subcomponents of that
                                                  domestic content that exceeds 60                                                                              Register, providing the public with a
                                                                                                          component, by cost, must be of                        reasonable time for notice and comment
                                                  percent; if a contract is signed in FYs                 domestic origin, and for FY2020 or
                                                  2018 or 2019, the contract must include                                                                       of not more than seven calendar days.’’
                                                                                                          beyond, more than 70 percent of the                   49 CFR 661.7(b).
                                                  an overall domestic content percentage                  subcomponents of the component must
                                                  that exceeds 65 percent; and if a                                                                                Public interest waiver for contracts
                                                                                                          be of domestic origin. The requirement                entered into between October 1, 2015
                                                  contract is signed in FY2020 or beyond,                 that manufacture of the component take
                                                  the domestic content must exceed 70                                                                           and December 4, 2015. FTA grants a
                                                                                                          place in the United States still applies.             general public interest waiver for
                                                  percent.                                                Additionally, if a component is
                                                     State Purchasing Schedules. Some                                                                           contracts entered into between the
                                                                                                          determined to be of domestic origin, its              FAST Act’s effective date and date of
                                                  recipients purchase rolling stock from a
                                                                                                          entire cost may be used in calculating                enactment (i.e., between October 1, 2015
                                                  State purchasing schedule. A State
                                                  purchasing schedule is an arrangement                   the cost of content of an end product.                and December 4, 2015). For these
                                                  that a State has established with                          Cost of Domestic Steel and Iron for                contracts, the increased domestic
                                                  multiple vendors in which those                         Rolling Stock Frame or Car Shell.                     content requirements for FY2018 and
                                                  vendors agree to provide essentially an                 Section 3011 of the FAST Act, which                   beyond will not apply, regardless of
                                                  option to the State and its subordinate                 added 49 U.S.C. 5323(j)(5), allows                    when the first production vehicle is
                                                  governmental entities and others it                     domestic content to include steel and                 delivered. However, consistent with
                                                  might include in its programs, to                       iron produced in the United States and                FTA’s policy statement above, parties to
                                                  acquire specific property or services in                incorporated into a rolling stock frame               the contracts may exercise options
                                                  the future at established prices. Because               or car shell outside the United States,               under the contract, but recipients will
                                                  the purchasing schedule does not                        provided that the frame or car shell is               not be permitted to piggyback on the
                                                  commit the State to procuring a                         imported back into the United States for              contracts.
                                                  minimum number of vehicles, a                           final assembly. Consistent with the                      Public interest waiver for contracts
                                                  ‘‘contract’’ does not exist until a State,              statutory provision, the cost of any                  entered into after December 4, 2015 as
                                                  recipient or subrecipient enters into a                 domestic steel and iron may be included               a result of solicitations advertised before
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                                                  purchase order with a vendor listed on                  in the calculation of the transit vehicle’s           December 4, 2015. FTA grants a general
                                                  the schedule.                                           domestic content, provided that the                   public interest waiver for contracts
                                                     Therefore, for purchase orders placed                average cost of the vehicles exceeds                  entered into after December 4, 2015 as
                                                  against State purchasing schedules                      $300,000, as provided by the FAST Act.                a result of solicitations for bids or
                                                  before October 1, 2015, for the delivery                Manufacturers may include the cost of                 requests for proposals that were
                                                  of rolling stock in FY2018 and beyond,                  domestic steel and iron on vehicles                   advertised (i.e., published or distributed
                                                  the increased domestic content                          produced after October 1, 2015, the                   to potential bidders in a manner that
                                                  requirements will not apply. For                        effective date of the FAST Act.                       constitutes constructive notice) before


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                                                                   Federal Register / Vol. 81, No. 170 / Thursday, September 1, 2016 / Rules and Regulations                                      60285

                                                  December 4, 2015. Under these                             Dated: August 26, 2016.                             Act (Magnuson-Stevens Act) by
                                                  circumstances, the increased domestic                   Ellen Partridge,                                      regulations at 50 CFR part 622.
                                                  content requirements for FY2018 and                     Chief Counsel.                                           The recreational ACL for the other
                                                  beyond will not apply, regardless of                    [FR Doc. 2016–21007 Filed 8–31–16; 8:45 am]           porgies complex is 106,914 lb (48,495
                                                  when the first production vehicle is                    BILLING CODE 4910–57–P                                kg), round weight. In accordance with
                                                  delivered. However, consistent with                                                                           regulations at 50 CFR 622.193(w)(2)(i), if
                                                  FTA’s policy statement above, parties to                                                                      the recreational ACL is met, or is
                                                  the contracts may exercise options                                                                            projected to be met, the NMFS Assistant
                                                                                                          DEPARTMENT OF COMMERCE
                                                  under the contract, but recipients will                                                                       Administrator (AA) will file a
                                                  not be permitted to piggyback on the                    National Oceanic and Atmospheric                      notification with the Office of the
                                                  contracts.                                              Administration                                        Federal Register to close the recreational
                                                     Public interest waiver for contract                                                                        sector for the remainder of the fishing
                                                  solicitations advertised on or after                    50 CFR Part 622                                       year. Recreational landings in 2016 from
                                                  December 4, 2015 and entered into                                                                             the Southeast Fisheries Science Center
                                                  within 60 days of publication of this                   [Docket No. 120815345–3525–02]
                                                                                                                                                                indicate that the recreational ACL has
                                                  notice. To avoid the disruption of                      RIN 0648–XE831                                        already been harvested. As a result, the
                                                  ongoing contract solicitations and to                                                                         recreational sector for the other porgies
                                                  facilitate the delivery of transit vehicles             Snapper-Grouper Fishery of the South                  complex will be closed effective 12:01
                                                  to the public, FTA is extending the                     Atlantic; 2016 Recreational                           a.m., local time, September 3, 2016.
                                                  waiver to contract solicitations                        Accountability Measure and Closure                       During the closure, the bag and
                                                  advertised on or after December 4, 2015,                for the South Atlantic Other Porgies                  possession limits for species in the other
                                                  and entered into within 60 days after                   Complex                                               porgies complex in or from the South
                                                  the publication date of this Notice. If a                                                                     Atlantic EEZ are zero. The recreational
                                                  solicitation was advertised (i.e.,                      AGENCY:  National Marine Fisheries
                                                                                                          Service (NMFS), National Oceanic and                  sector for the other porgies complex will
                                                  published or distributed to potential                                                                         reopen on January 1, 2017, the
                                                  bidders in a manner that constitutes                    Atmospheric Administration (NOAA),
                                                                                                          Commerce.                                             beginning of the 2017 recreational
                                                  constructive notice) after the enactment                                                                      fishing year.
                                                  date of the FAST Act and the parties are                ACTION: Temporary rule; closure.
                                                  unable to execute a contract within 60                                                                        Classification
                                                  days of this Notice, the solicitation must              SUMMARY:   NMFS implements an
                                                                                                          accountability measure (AM) for the                     The Regional Administrator for the
                                                  be amended to reflect the applicable                                                                          NMFS Southeast Region has determined
                                                  domestic content standard that will be                  other porgies complex recreational
                                                                                                          sector in the exclusive economic zone                 this temporary rule is necessary for the
                                                  in effect when the first production
                                                                                                          (EEZ) of the South Atlantic for the 2016              conservation and management of the
                                                  vehicle is scheduled to be delivered. If
                                                                                                          fishing year through this temporary rule.             South Atlantic other porgies complex
                                                  compliance with this requirement
                                                                                                          In the South Atlantic, the other porgies              and is consistent with the Magnuson-
                                                  would pose an undue hardship, FTA
                                                                                                          complex includes jolthead porgy,                      Stevens Act and other applicable laws.
                                                  will evaluate requests for a waiver on a
                                                  case-by-case basis.                                     knobbed porgy, whitebone porgy, scup,                   This action is taken under 50 CFR
                                                     Recipients may apply to FTA for                      and saucereye porgy. NMFS has                         622.193(w)(2)(i) and is exempt from
                                                  individual public interest waivers for                  determined that recreational landings of              review under Executive Order 12866.
                                                  contracts that do not fall within the                   species in the other porgies complex                  These measures are exempt from the
                                                  scope of a general public interest                      have reached the recreational annual                  procedures of the Regulatory Flexibility
                                                  waiver. A request for a public interest                 catch limit (ACL). Therefore, NMFS                    Act because the temporary rule is issued
                                                  waiver should set forth the detailed                    closes the recreational sector for the                without opportunity for prior notice and
                                                  justification for the proposed waiver,                  other porgies complex in the South                    comment. This action responds to the
                                                  including information about the history                 Atlantic EEZ on September 3, 2016.                    best scientific information available.
                                                  of the procurement and the burden on                    This recreational closure is necessary to               The AA finds that the need to
                                                  the recipient and/or the industry in                    protect the other porgies complex                     immediately implement this action to
                                                  complying with the FAST Act. Public                     resource.                                             close the recreational sector for the
                                                  interest waivers should be narrowly                                                                           other porgies complex constitutes good
                                                                                                          DATES:  This rule is effective 12:01 a.m.,            cause to waive the requirements to
                                                  tailored and FTA will not generally look                local time, September 3, 2016, until
                                                  favorably on waivers that provide for                                                                         provide prior notice and opportunity for
                                                                                                          12:01 a.m., local time, January 1, 2017.              public comment pursuant to the
                                                  contracts that include the exercise of
                                                                                                          FOR FURTHER INFORMATION CONTACT:                      authority set forth in 5 U.S.C. 553(b)(B),
                                                  options for vehicles that will be
                                                  delivered beyond FY2020. FTA will act                   Mary Vara, NMFS Southeast Regional                    as such procedures are unnecessary and
                                                  expeditiously on public interest waiver                 Office, telephone: 727–824–5305, or                   contrary to the public interest. Such
                                                  requests that provide the information                   email: mary.vara@noaa.gov.                            procedures are unnecessary because the
                                                  requested.                                              SUPPLEMENTARY INFORMATION: The                        rule implementing the AM has already
                                                                                                          snapper-grouper fishery of the South                  been subject to notice and comment,
                                                  V. Effective Date                                       Atlantic includes species in the other                and all that remains is to notify the
                                                     Because the statute is self-                         porgies complex and is managed under                  public of the closure. Such procedures
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                                                  effectuating, the changes are effective                 the Fishery Management Plan for the                   are contrary to the public interest
                                                  upon the FAST Act’s enactment. FTA                      Snapper-Grouper Fishery of the South                  because there is a need to immediately
                                                  will be initiating a subsequent                         Atlantic Region (FMP). The FMP was                    implement this action to protect the
                                                  rulemaking updating 49 CFR part 661 to                  prepared by the South Atlantic Fishery                species in the other porgies complex.
                                                  reflect these changes; however, today’s                 Management Council and is                             Prior notice and opportunity for public
                                                  Policy Statement and Waiver represents                  implemented by NMFS under the                         comment would require time and would
                                                  FTA’s implementation of the FAST Act                    authority of the Magnuson-Stevens                     potentially allow the recreational sector
                                                  provisions during this interim period.                  Fishery Conservation and Management                   to further exceed its ACL.


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Document Created: 2018-02-09 11:57:29
Document Modified: 2018-02-09 11:57:29
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionNotice of final policy and public interest waiver.
DatesThe final policy takes effect on September 1, 2016.
ContactCecelia Comito, Assistant Chief Counsel, Office of the Chief Counsel, phone: (202) 366-2217, or email, [email protected]
FR Citation81 FR 60278 

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