U.S. steel producers fight efforts to change what counts as domestic content in water projects

In language that is evidenced in a 2019 appropriations request, domestic steelmakers successfully eliminated products “substantially transformed” as qualifying as domestic content in EPA water programs.

“Made in America” considerations have come into play over the past few years with regard to iron and steel products used by cities, counties, and states when they repair or build drinking water and sewer systems. That trend continues as Congress fights back efforts to change the rules.

Based on language in the fiscal 2019 appropriations bill for three Environmental Protection Agency (EPA) programs—the drinking water and sewer state revolving funds (SRFs) and the Water Infrastructure Finance and Innovation Act (WIFIA) program, the two SRFs are to be funded at a total of $2.5 billion and the WIFIA program at $75 million. The SRFs offer loans at low interest rates. The WIFIA offers credit assistance that could lead to $8 billion in loans.

Appropriation bills for the EPA and other agencies have not yet been approved, but Congress has been preoccupied with trying to reopen the government. The result has been Congress passing continuing resolutions, which leave agency budgets at 2018 levels.

In the past Congress has included in appropriations bills for these EPA programs a provision affording a procurement preference for iron and steel products produced in the U.S. There was some controversy on this issue this year. The House Appropriations subcommittee with authority over the EPA made a change from past language by clarifying its intent that “iron and steel products that are substantially transformed in the U.S. shall be considered product in the U.S.” for the purpose of water infrastructure projects. The subcommittee emphasized that any coating processes that are applied to the external surface of iron and steel components that otherwise qualify under the procurement preference shall not render such products ineligible for the procurement preference regardless of where the coating processes occur, provided that final assembly of the products occurs in the U.S. The subcommittee then directed the EPA, which administers both the SRFs and the WIFIA program, to consider U.S. manufacturing costs, including labor, machining, coating, assembly, and testing, when determining if a product is primarily iron or steel.

When the full House Appropriations Committee voted on the bill, that language was eliminated and different language, close to what has applied in the past, was substituted. The bill Congress is likely to pass (because that full committee language matches the Senate bill) is stricter saying any iron or steel cannot be used in an SRF project “unless all of the iron and steel products used in the project are produced in the United States.” The substantially transformed exception is gone. The bill then goes on to specify the products that the provision applies to: lined or unlined pipes and fittings, manhole covers and other municipal castings, hydrants, tanks, flanges, pipe clamps and restraints, valves, structural steel, reinforced precast concrete, and construction materials. Exceptions are provided for iron and steel products that are not produced in the U.S. in reasonably available quantities and of a satisfactory quality or where domestic iron or steel would increase the cost of the overall project by more than 25 percent.

OSHA Proposes Changes to Beryllium Rule

The Occupational Safety and Health Administration (OSHA) is proposing a number of mostly cosmetic changes in the beryllium standard the agency issued in January 2017, just as the Obama administration was giving way to the Trump administration.

The point of the proposed rule issued in December was to simplify compliance. OSHA officials, however, think the changes will result only in some minor cost savings. (The main focus of this regulation are companies that employ approximately 50,000 or more manufacturing workers.)

One of the changes is the proposed new definition of a “beryllium work area.” Once a manufacturing facility is forced to designate a beryllium work area, that triggers the application of a number of the standard’s provisions. For example, a manufacturer has to establish and maintain a written exposure control plan for releases of airborne beryllium, and it has to provide at least one method of exposure control, which includes material or process substitution, isolation of the work area, local exhaust ventilation, or mechanized process control.