ACA Requests Buy America Coatings Clarifications

FRIDAY, MARCH 22, 2024


Earlier this month, the American Coatings Association contacted the U.S. Transportation and Infrastructure Subcommittee on Highways and Transit, expressing its need for insight into how the Build America, Buy America requirements affect the coatings industry.

The ACA reportedly believes that further clarification regarding provisions in these implementation rules could help its members as they continue to manufacture paint and coatings for infrastructure projects across the nation.

The association adds that its members have produced coatings for steel structures, coatings used in traffic marking, coatings used for corrosion prevention and many other categories.

About the Law

The ACA's letter references that on Nov. 15, 2021, the Infrastructure Investment and Jobs Act was signed into law, followed by the implementation of the Build America, Buy America Act.

This reportedly established a domestic content procurement requirement for iron and steel products, manufactured products and construction materials for infrastructure projects receiving Federal financial assistance.    

According to a final rule issued in August 2023, the Office of Management and Budget revised its guidance to add part 184 to title 2 of the Code of Federal Regulations to implement the requirements of BABA. The Guidance for Grants and Agreements, 88 Federal Register 57,750 (Department of Commerce Aug. 23, 2023) (final rule; notification of final guidance).

The final rule reportedly became effective on Oct. 23, 2023.

According to Buy America requirement 70914(a), “none of the funds made available for a Federal financial assistance program for infrastructure may be obligated for a project unless all of the iron, steel, manufactured products, and construction materials used in the project are produced in the United States.”

Association Concerns

However, the ACA states that the manufacturing standard that reportedly applies to coatings used on these infrastructure projects will depend on whether the coating is:

  • Applied to a construction material;
  • Applied to an iron or steel product;
  • Brought to the work site as a coating for incorporation into an infrastructure project (meaning if the coating is the manufactured product); or 
  • Applied to a manufactured product before the product is brought to the work site (such as if the coating is a component of the manufactured product).  

According to the ACA, each of these scenarios relates to the use of coatings in infrastructure projects and reportedly requires manufacturers to begin a different analysis in order to determine how to classify and treat coatings under Buy America. 

The ACA adds that examples to consider include:

  • If the coating is applied to the construction material, it is not considered a “construction material” and does not need to be domestically sourced; 
  • The coating may or may not change the classification of the construction material that it is being applied to and, if it does, the coating could be considered a component of the manufactured product and subject to other requirements;
  • Coatings manufacturers need to decide if the coating is determined to be a minor addition to the construction material as this can change the classification of the construction material as well;
  • For coatings applied to iron or steel, it must be applied in the United States; and    
  • Coatings brought to the worksite and applied onsite will likely be considered a manufactured product but coatings that are shop-applied will likely be treated as a component of a manufactured product.   

The association explains that in these scenarios, the coatings product at issue could be the same or a similar product. Adding on to this, there is reportedly no clarifying information or guidance on the terms “manufactured in the United States” or “minor addition”. 

Additionally, it is believed the coatings industry will need clearer guidance on the application of the Buy America requirements. The association says that it supports the committee’s interest in exploring these requirements further and urges the committee to work with the OMB and other relevant agencies to clarify the requirements applicable to the coatings industry.  

The letter was reportedly addressed to Elizabeth Holmes Norton, Ranking Committee on Transportation and Infrastructure Subcommittee on Highways and Transit; and Rick Crawford, Chairman Committee on Transportation and Infrastructure Subcommittee on Highways and Transit. It was penned by Heidi K. McAuliffe, ACA’s Senior Vice President, Government Affairs.

   

Tagged categories: American Coatings Association (ACA); Building materials; Coating Materials; Coating Materials; Coatings; Coatings Technology; Construction; Funding; Government; Grants; Infrastructure; Infrastructure; NA; North America; Paint; Paint application; President Biden; Program/Project Management; Regulations; Steel

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