FederalTaxes & SpendingTransportationTexas High-Speed Rail Project May Be Eligible for Biden’s ‘Buy American’ Funds Despite Foreign Contracts

Texas Central wants to receive federal infrastructure money to help construct its high-speed rail project, though questions are raised as to whether it would qualify.
March 17, 2022
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In his State of the Union address on March 1, President Joe Biden praised the passage of the bipartisan Infrastructure Investment and Jobs Act in November, saying, “It is going to transform America and put us on a path to win the economic competition of the 21st century.”

One of the provisions in the bill that Biden pointed to in supporting American jobs is the “Buy American” requirements for infrastructure projects to “make sure American taxpayers’ dollars support American jobs and businesses.”

Texas Central Railroad, the high-speed rail project proposed between Dallas and Houston, is looking for federal infrastructure money to help fund its project, according to CEO Carlos Aguilar. 

However, Texas Central’s train will be based on Central Japan Railway’s Tokaido Shinkansen train system, it has signed a design-build contract with an Italian firm, Salini Impregilo — now known as WeBuild. It named Renfe Operadora, a state-owned Spanish company, as the rail operator.

While the president touted the infrastructure law as supporting American jobs and businesses, the language of the “Buy American” section of the bill doesn’t appear to prohibit Texas Central’s use of these foreign companies for their services, including the Japanese technology being used.

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Vance Ginn, chief economist at the Texas Public Policy Foundation, agrees. He believes the language of the law allows for foreign providers as long as the iron, steel, and other supplies are manufactured in the United States.

Ginn also pointed out that whenever the government has a “Buy American” requirement, there is always a trade-off.  Companies aren’t then allowed to consider whether they are using the highest quality goods available and if their “American” choice is best for the consumer.

Furthermore, as Ginn noted, the Office of Management and Budget has a year to promulgate regulations for complying with the Buy American Act.

William Scofield, president of Bud Adams Ranches, Inc, which lies along the proposed route and will be impacted if it is built, expressed concerns about the Texas Central project’s compliance with the Buy American requirements in a letter to the editor he submitted to the Washington Times.

In the letter, he proposed that projects be ranked by scores on a number of criteria “such as the number of citizens served, the feasibility of financing construction, compliance with federal social justice and climate policy priorities, and full compliance with the National Environmental Protection Act and the Endangered Species Act.”

Scofield doesn’t believe that Texas Central’s high-speed rail project sufficiently meets these criteria.

The infrastructure law contains provisions that allow for the “Buy American” requirement to be waived if (1) “domestic procurement” would be inconsistent with the public interest; (2) if the types of iron, steel, or other manufactured products are not sufficiently available domestically; or (3) if use of the domestically produced products would increase the cost by more than 25 percent.

Over the past month, the Federal Railroad Administration (FRA) was seeking public comment about “how the Program should be implemented to best facilitate the development of intercity passenger rail corridors.” The infrastructure bill makes funding available for the planning and development of projects.

The City of Dallas filed public comments urging FRA to provide support for the implementation of the Dallas-to-Houston high-speed rail project as the city considers it “critical to mobility, economic development, and sustainability, with recent growth in Texas cities and metropolitan areas.”

Texas Central did not reply to a request for comment before the time of publication.

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Kim Roberts

Kim Roberts is a reporter for the Texan in the DFW metroplex area where she has lived for over twenty years. She has a Juris Doctor from Baylor University Law School and a Bachelor's in government from Angelo State University. In her free time, Kim home schools her daughter and coaches high school extemporaneous speaking and apologetics. She has been happily married to her husband for 23 years, has three wonderful children, and two dogs.