U.S. Department of Transportation Federal Highway Administration

MEMORANDUM

Recently, this office has been asked whether section 1928(1) of SAFETEA-LU requires the FHWA to change its implementation of section 165 of the Surface Transportation Assistance Act of 1982, as amended (to be codified at 23 U.S.C. 313), also known as Buy America. This memorandum provides guidance on the legal applicability of section 1928(1) of SAFETEA-LU. While respectful of the "sense of Congress," this provision will not change FHWA's implementation of the law.

I. CURRENT APPLICATION OF BUY AMERICA

Title 23 U.S.C. 101(a)(21) defines the term "project," for purposes of the Federal-aid highway program, as

[a]n undertaking to construct a particular portion of a highway, or if the context so implies, the particular portion of a highway so constructed or any other undertaking eligible for assistance under [title 23, United States Code].

While the term "project" may be used in varying contexts, the meaning of the term "project," as it relates to the obligation of Federal funds under the Federal-aid highway program and application of Federal requirements, is on a contract-by-contract basis. Federal funds are obligated to a project through the execution of a specific project agreement. See 23 U.S.C. 106. Each project agreement will contain, among other things, a description of the project location, a specific Federal-aid project number, the total project costs, the amount of Federal funds obligated to the project, and a description of the work covered by the agreement. See 23 C.F.R. 630.108. Once the project agreement is executed, the State will then proceed to award a construction contract for the project work covered by the project agreement through competitive bidding. See 23 U.S.C. 112. Thus, for purposes of obligating Federal funds to a project under the Federal-aid highway program, the terms "project" and "contract" are synonymous. For each Federal-aid contract that is let by the State, there is a corresponding project agreement describing the work and scope of the project being constructed.

This process is evident in the Buy America statute. Specifically, section 165 of the Surface Transportation Assistance Act of 1982, as amended, provides

[n]otwithstanding any other provision of law, the Secretary of Transportation shall not obligate any funds authorized to be appropriated by this Act or by any Act amended by this Act or, after the date of enactment of this Act, any funds authorized to be appropriated to carry out this Act, title 23, United States Code, the Urban Mass Transportation Act of 1964, or the Surface Transportation Assistance Act of 1978 and administered by the Department of Transportation, unless steel and manufactured products used in such project are produced in the United States. (emphasis added).

Hence, the Buy America statute is specifically tailored to the project obligation requirements of the Federal-aid highway program. The statute prohibits the Secretary from obligating any funds under the Federal-aid highway program unless the steel and iron to be used in the project are produced in the United States. Since, as explained above, each Federal-aid contract is considered to be an individual project under the Federal-aid process, the application of Buy America is also on a contract-by-contract basis depending on whether Federal funds are to be used in the contract. Moreover, the Federal-aid highway program makes clear that the States have the right to determine which projects will be federally financed and that decisions as to how to fund a particular highway project are entirely within the discretion of the States. See 23 U.S.C. 145. Just because Federal funds may be used in one project that may constitute a component of a series of projects does not mean that every project in the series are subject to Federal requirements, such as Buy America requirements.

II. SECTION 1928(1) OF SAFETEA-LU

Buy America requires all steel and iron that is permanently incorporated into a Federal-aid highway construction project be domestically manufactured. Following the Federal-aid obligation process, the FHWA applies this statute on a contract-by-contract basis. As a result, some projects, in a general sense of the word "project," may be comprised of multiple contracts. For example, a bridge replacement project may have different contracts for the different components of the structure, such as the substructure, superstructure, and deck. Each of these individual contracts, for purposes of the Federal-aid highway program, is considered to be an individual project. Thus, to date, Federal requirements, such as Buy America, have only applied to the contracts for which the State intends to use Federal funds.

However, section 1928(1) of SAFETEA-LU, provides that

It is the sense of Congress that - (1) the Buy America test required by section 165 of the Surface Transportation Assistance Act of 1982 (23 U.S.C. 101 note) needs to be applied to an entire bridge project and not only to the component parts of such project.

Were this enacted as law, this section would constitute a major departure from the FHWA's long-standing application of Buy America. Under section 1928(a), Buy America would apply to all contracts involved in the construction of a bridge if Federal funds are obligated in any particular contract for the construction the structure, regardless of whether Federal funds are actually used in any particular contract.

If given effect, this section could adversely impact current on-going bridge projects, and hinder the States' flexibility to use Federal funds in such projects in the future. For example, if, at the time of enactment of SAFETEA-LU, a State had already awarded two contracts out of five for the overall reconstruction of a bridge, and those two contracts were not subject to Buy America, the State would be precluded from using Federal funds in the remaining three contracts even though the State had planned on using Federal funds in those contracts. Moreover, for future overall bridge reconstruction projects, the interpretation of section 1928(1) may cause a State to choose not to use Federal funds for such projects even though Federal funding might be available because Buy America, unlike any other Federal requirement, would apply to contracts not involving Federal funds.

III. LEGAL EFFECT OF SECTION 1928(1) OF SAFETEA-LU

The law is very clear that a "sense of Congress" provision in enacted legislation is merely guidance and not positive, enforceable law. First, a review of the relevant case law supports this conclusion. In Yang v. California Dept of Social Service, 183 F.3d 953 (9th Cir 1999), the court considered whether a provision in the Balanced Budget Act of 1997 (Pub. L. No. 105-33, sec 5566(b)), which required certain welfare benefits, such as food stamps, be extended to Hmong veterans, was enforceable. Specifically, the Congressional provision at issue stated, "It is the sense of Congress that Hmong and other Highland Lao veterans who fought on behalf of the Armed Forces of the US during the Vietnam conflict and have lawfully been admitted to the US for permanent residence should be considered veterans for purposes of continuing welfare benefits...." Subsequently, the USDA issued an interpretation that this section did not actually authorize the allocation of food stamps to Hmong veterans. After affected Hmong veterans were notified that they were no longer eligible for food stamp benefits, they challenged the USDA's interpretation as being contrary to law. The court found that this provision was merely a precatory sense of Congress and did not amount to positive, enforceable law. Id. at 958. Rather, it merely showed that Congress may be planting a seed for future legislation that reinstates certain welfare benefits to Hmong veterans.

Also, in Little Traverse Bay Bands of Odawa Indians v. Great Spring Waters of America, 203 F. Supp. 2d 853, 856 fn. 3 (S.D. Mich. 2002), the court stated that provisions of public laws couched in the "sense of Congress" language are not binding and merely indicators of the intent of Congress in enacting the legislation. In support of this finding, the court cited Yang; U.S. v. Amer, 110 F.3d 873, 882 (2nd Cir 1997); and Trojan Technologies, Inc. v. Pennsylvania, 916 F.2d 903, 909 (3rd Cir 1990). Thus, the case law makes it very clear that "sense of Congress" provisions are not enforceable, binding law is the general rule in at least three different circuits.

Lastly, there are two attorney general opinions holding that "sense of Congress" provisions are not enforceable, binding law. In 37 U.S. Op. Atty. Gen. 546, 548 (1934), the Attorney General ruled that Public Resolution 17 of March 26, 1934 was not mandatory by merely a rule of guidance. Subsequently, in addressing a request to reconsider this opinion, the Attorney General ruled that Public Resolution 17 of March 26, 1934, which resolved that it was the sense of Congress that loans made by the Government to foster the exporting of agricultural products require that such products be carried exclusively in US vessels, did not impose a mandatory requirement. See In 42 U.S. Op. Atty. Gen. 301, 302 (1965). The Attorney General further stated that

[a] resolution expressing the 'sense of Congress' is literally a statement of opinion and not a command; it expresses Congress' judgment of the policies which it believes ought to be followed but which, for various reasons, it does not want to make mandatory. Had Congress wanted to impose a mandatory requirement that government-financed exports be shipped exclusively in American ships, it could readily have done so by adopting a statute in the usual form.

Id. at 303. Thus, as you can see, the "sense of Congress" provision in section 1928(1) of SAFETEA-LU is merely guidance and not binding, enforceable law.

We are very respectful of Congress, but the form in which this language was adopted is very significant. If Congress wanted section 1928(1) to be mandatory, it could have chosen to adopt a statute but, instead, chose not to do so. In section 1903 of SAFETEA-LU, Congress codified the Buy America requirement without any substantive change and ignoring the sense of Congress provision of section 1928(1). Hence, it is logical that Congress wanted to express its sense of interpretation, but continue to leave it to the FHWA to determine whether it is appropriate or not to change its implementation of the actual statutory text.

IV. CONCLUSION

In this instance, the long-standing FHWA interpretation and practice is both sensible and correct. Changing it would be problematic, and was not required by statutory texts. Section 1928(1) of SAFETEA-LU constitutes merely precatory guidance and not mandatory law. As such, the FHWA is not bound by section 1928(1) of SAFETEA-LU and may continue administering Federally-funded bridge projects in accordance with current policies. No change will occur.