Exemption From Buy America Requirements


Printer Friendly Number 49 FR 13944
04-09-84

DEPARTMENT OF TRANSPORTATION
Urban Mass Transportation Administration
AGENCY: Urban Mass Transportation Administration, DOT.
49 FR 13944
April 9, 1984

Exemption From Buy America Requirements

ACTION: Notice of granted waiver.

SUMMARY: Section 165 of the Surface Transportation Assistance Act of 1982 provides that Federal funds may not be obligated for the purchase of mass transportation vehicles unless the cost of components of the vehicles which are produced in the United States is more than 50 percent of the cost of all components and final assembly of the vehicles takes place in the United States. Section 165 further provides that any of its provisions may be waived if their application would be inconsistent with the public interest. The Chrysler Corporation, along with several States, petitioned the Urban Mass Transportation Administration (UMTA) to grant such a waiver for Chrysler's 15-passenger vans which are assembled in Canada. The requested waiver was granted on February 27, 1984.

FOR FURTHER INFORMATION CONTACT:Edward J. Gill, Jr., Office of the Chief Counsel, Room 9228, 400 Seventh Street SW., Washington, D.C. 20590, (202) 426-4063.

TEXT: SUPPLEMENTARY INFORMATION: On February 1, 1984, UMTA published a Notice (49 FR 4062) that Chrysler had requested a waiver to the "Buy America" requirements for its 15-passenger vans. In the Notice, UMTA requested that interested parties submit comments on the Chrysler request by February 15, 1984.

Eighteen States had originally supported the Chrysler request. As a result of the February 1st Notice, an additional eleven States informed UMTA of their support of Chrysler's request. UMTA also received indications of support from numerous providers or rural mass transportation and providers of transportation services to the elderly and handicapped.

Section 165(b)(3) of the Surface Transportation Assistance Act of 1982 provides that in the case of the procurement of buses and other rolling stock, the cost of components which are produced in the United States must exceed 50 percent of the cost of all components, and final assembly must take place in the United States. Chrysler requested a waiver for its 15-passenger vans since the final assembly of these vans takes place in Canada. Seventy-four percent of the components of these vans, by cost, are produced in the United States.

Chrysler's request for a public interest waiver was based on the fact that the public interest would be best served by having competition in the market. Information was presented to UMTA which indicated that 15-passenger vans are only produced by the Ford Motor Company and Chrysler. The waiver request asserted that if Chrysler were not granted the waiver, UMTA grantees would not be able to purchase 15-passenger vans from Chrysler using Federal funds and would, because of the lack of competition, be in the position of only purchasing the vans from one company.

After reviewing all of the information and materials available to UMTA and after consultation with the Office of the United States Trade Representative, UMTA determined that it is in the public interest to grant Chrysler the requested waiver and did so effective February 27, 1984.

Under the terms of the waiver, Chrysler is only relieved from the requirement that the final assembly of the 15-passenger vans take place in the United States. Chrysler is still required to meet the requirement that the cost of the vans' components which are produced in the United States exceed 50 percent of the cost of all components.

Dated: March 28, 1984.

Ralph L. Stanley,

Administrator.

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