Ms. Norma Niederhofer
Lone Star Handicap Vans, LLC
12953 State Highway 64 W
Tyler, TX 75704

Re: Final Assembly Determination

Dear Ms. Niederhofer:

I write in response to your May 19, 2014 request for a determination by the Federal Transit Administration (FTA) as to whether Lone Star Handicap Vans, LLC (Lone Star) conversion processes on minivans, such as the Chrysler Town & Country and the Dodge Caravan, into wheelchair-accessible vehicles are sufficient to meet the Buy America requirements for final assembly under 49 C.F.R. § 661.11. You also asked FTA to determine compliance with the domestic content requirement for rolling stock under 49 C.F .R. § 661.11, whereby more than 60 percent of the components of the vehicle, by cost, must be made in the United States under 49 C.F.R. § 661.11. For the reasons set forth below, I find that the manufacturing activities that take place at Lone Star's Tyler, Texas, facility are sufficient to constitute final assembly for minivans converted for wheelchair access. With respect to domestic content, because each procurement is different and may require different specifications that result in different percentage levels of domestic content, FTA will limit this determination only to final assembly and not domestic content. [1]

I. Background

A. Procedural History

On June 21, 2010, FTA issued a blanket Buy America waiver for final assembly of minivans and minivan chassis based upon its determination that there was no manufacturer that was willing and able to perform final assembly on these types of vehicles in the United States. [2]

On December 3, 2012, FTA rescinded the Buy America waiver for final assembly of minivans and minivan chassis because a vehicle that meets the Buy America requirements for final assembly-the Vehicle Production Group's MV-1-became domestically available. [3]

On June 28, 2013, FTA made two separate final assembly determinations for Braun Corporation (Braun) and ElDorado National-Kansas (ElDorado) vehicles. [4] FTA found that Braun's conversion processes on incomplete Chrysler or Dodge minivans into a wheelchair-accessible Braun Entervan were sufficient to meet the final assembly requirements under 49 C.F .R. § 661.11. Similarly, FTA found that final assembly of ElDorado Amerivans took place in the United States, as required by 49 C.F.R. § 661.11. [5]

On May 19, 2014, Lone Star requested an FTA determination on whether its conversion processes on Chrysler and Dodge minivans into wheelchair accessible minivans are sufficient to meet the final assembly requirements under 49 C.F .R. § 661.11.

B. Lone Star's Conversion Processes (or Stages)

Lone Star's facility, where the incomplete vehicles' conversion processes take place, is in Tyler, Texas. According to Lone Star:

• (1) It removes all seating carpets and door panels, and evacuates the Freon from the front and rear air conditioner (A/C) system,
• (2) It modifies and extends the existing wire loom,
• (3) It disconnects and removes the fuel system, front and rear wheel and tires, the Original Equipment Manufacturer (OEM) axle, and lines for cooling breaking system and rear heating,
• (4) It removes the OEM floor starting at the firewall in the front and rear wheel and tires; and removes the OEM axle, lines for cooling brake system and rear heating,
• (5) It assembles a new 13" lowered floor structure; installs the new floor in the chassis; and adds primer, seal, and undercoating to the new floor system,
• (6) It relocates and reinstalls the OEM fuel tank and lines; reinstalls the rear axle and assembles it using new coil springs to increase ground clearance; and reconnects the brake lines, A/C and rear heating lines and components,
• (7) It removes the front struts and installs two and one-fourth inch spacers for proper clearance in the front of van,
• (8) The vehicle is moved to the "paint and body section" of Lone Star's facility where modifications to the flooring and the body are made and the paint work is performed to match the OEM paint work; the door extensions are installed and painted to match the OEM paint work; and new ground effects are installed and painted to match the OEM paint work,
• (9) The vehicle is moved to the "carpeting station" where all new carpets and commercial flooring are installed; all of the body panels are modified and reinstalled; and factory seats are mounted on seat extensions bases with quick release,
• (10) The vehicle is moved to the "electrical area" where either a manual bi-fold ramp or a powered bi-fold ramp is installed; all and any adjustments are made to doors and seals; water testing is done to insure there are no leaks in the doors and windows;
• (11) It installs a completely new exhaust system from the catalytic converter to the rear of the van, and
• (12) The vehicle is then taken to a test track where it is checked for rattles or any defects; the van undergoes a 127-point quality control check; it is placed on a lift where all connections, fluids, brakes, torque on all bolts, tires and wheels are checked; all fluid levels under the engine hood are checked; operation of all electrical components, operation of seat-based releases, ramp operation, and headlights, among other things, are checked and adjusted as necessary; and final clean up and detail performed.

In addition, Lone Star provides a limited manufacturer's warranty and certifies as the final stage manufacturer of the completed vehicle per the National Highway Traffic Safety Administration's (NHTSA) regulations at 49 C.F.R. Parts 567 and 568, and the Federal Motor Vehicle Safety Standards (FMVSS).

Lone Star also currently employs approximately 20-25 employees, who perform the conversion processes stated above in its Tyler, Texas, facility. According to Lone Star, if it is able to certify compliance with Buy America requirements, including final assembly, it will be able to employ up to 150 people.

Based upon the information provided above, Lone Star asserts that its conversion activities are sufficient to meet FTA's Buy America regulations at 49 C.F.R. § 661.11 and Appendix D, and is requesting confirmation by FTA.

II. Buy America

A. Buy America requirements for Buses and Rail Cars

Under 49 U.S.C. § 5323(j)(l), FTA may not obligate funds for a project unless the steel, iron, and manufactured goods used in a project are produced in the United States. For rolling stock procurements, this requirement does not apply if the cost of the components produced in the United States is more than 60 percent of the cost of all components and final assembly takes place in the United States. [6] Final assembly is defined as "the creation of the end product from individual elements brought together for that purpose through application of manufacturing processes." [7]

The typical minimum final assembly requirements for rolling stock are further provided in Appendix D to § 661.11 and distinguished between minimum final assembly requirements for rail cars and buses. FTA provided guidance on the final assembly requirement for buses in a March 18, 1997 Dear Colleague Letter on Buy America: Pre-Award and Post-Delivery Audits, which has been added to FTA's existing regulation and is still applicable today:

In the case of a new bus, final assembly would typically include, at a minimum, the installation and interconnection of the engine, transmission, axles, including the cooling and braking systems; the installation and interconnection of the heating and air conditioning equipment; the installation of pneumatic and electrical systems, door systems, passenger seats, passenger grab rails, destination signs, wheelchair lifts; and road testing, final inspection, repairs and preparation of the vehicles for delivery. [8]

If a manufacturer's assembly processes do not include all of the activities typically considered final assembly, the manufacturer may request an FTA determination of compliance. [9] FTA reviews these requests for compliance case by case, based upon the information provided by the manufacturer. [10]

B. Final Assembly Requirement for Minivans

For the most part, FTA addresses only the typical final assembly requirements for buses and rail cars in its regulations and guidance documents, but generally does not cover minivans. [11]

With respect to wheelchair-accessible minivans that use a slide-door ramp, FTA has found that the following conversion activities collectively constitute final assembly as required by 49 C.F.R. § 661.11(a) and (r):

• (a) "Strip-Out": consists of" removal of the front and rea[r] seating components ... , interior wall and door panels, and all carpeting."
• (b) "Seat Re-Engineering & Modifications": consists of "remanufactured [front seats] to be easily removable for wheelchair access" and rear seats are "modified to permit forward folding for access to a kneeling system linear actuator and a proprietary vehicle slide door/ramp controller."
• (c) "Subsystem Re-Engineering & Modifications": installing new, longer, reconfigured rear brake, fuel, heat, and air conditioning and fuel lines.
• (d) "Fuel Tank System Re-Engineering & Modifications": removal of the original fuel tank and charcoal canister from its mid-vehicle location, rotated, relocated, and reinstalled to aft of the rear axle location. The original fuel fill pipe assembly is removed and discarded and a "new, reconfigured fuel pipe assembly is installed to meet the relocated and rotated fuel tank."
• (e) "Fabrication of Lowered Floor Unit Body": fabrication of a new low floor unit body.
• (f) "Floor Re-Engineering & Modifications": removal of the Original Equipment Manufacturer (OEM) floor and undercarriage from the toe pan to the rear axle, adding of a new aft rear axle fuel tank support structure, a new kneeling system actuator housing and structure, a new spare tire/storage tub, and a new lowered floor structure, and various body work to accommodate the new lowered floor structure.
• (g) "Exhaust Re-Engineering & Modifications": removal of the heat shields, and installing a new reconfigured exhaust pipe, hanger brackets, and muffler.
• (h) "Engine/Transmission/Front Suspension Assembly Modifications": disconnection from the vehicle and removed, but with the engine lines and hoses left attached. Modifications are made to the engine/transmission/front suspension assembly, such as adding various types of spacing brackets, custom steering shaft extension, and two engine cradle safety bracket tube extensions. The engine/transmission/front suspension assembly is then reinstalled. In addition, a CARB compliant fuel system is installed, and the exhaust system and heat shields are installed as well.
• (i) "Slide Door Re-Engineering & Modifications": removal of the slide doors and modifications made to accommodate a lowered floor/wheelchair ramp entrance. The doors are then reinstalled.
• (j) "Rear Axle & Suspension Re-Engineering & Modifications": removal, modifications done to the sway bar mounting, and coil spring mounts, addition of a kneel chain bracket, and reinstallation of the rear axle.
• (k) "Flooring & Walls": installation of a marine grade flooring substrate and covering and carpet or plastic panels with carpeted inserts. Walls are covered with new interior panels and trims.
• (I) "Rear Bumper Re-Engineering & Modifications": involves removal of the rear bumper, reinforcing the rear bumper, and reinstalling it.
• (m) "Wiring Re-Engineering & Modifications": reconfiguration of the seating systems and air bag systems, and modifications to accommodate the wheelchair ramp system, slide door operation, kneel function, and other accessibility modifications.
• (n) "Ramp": installation of the manual or power wheelchair ramps.
• (o) "Paint & Undercoat": newly installed components are painted and the entire floor is undercoated.
• (p) "Miscellaneous": Among other things, the vehicle is inspected, weighed, and recertified by [the wheelchair minivan conversion manufacturer]. [12]

III. Discussion

Upon careful review of Lone Star's conversion or manufacturing processes in consultation with FTA engineers, I find that Lone Star's processes are sufficient to meet the final assembly requirement for rolling stock under 49 C.F.R. § 661.11(a) and (r). [13] In two separate June 27, 2013 letters of interpretation, FTA found Braun and ElDorado's manufacturing processes sufficient to meet final assembly for Buy America purposes, as discussed supra. In a June 25, 2014 letter of interpretation, FTA found another manufacturer, AutoAbility, LLC, to meet the final assembly requirements because its processes were substantially similar, if not the same, as the activities described within Braun and ElDorado's scope of work. [14] FTA also finds that Lone Star's manufacturing processes are similar, if not the same, as Braun and ElDorado's processes.

Lone Star makes substantial changes to the interior and exterior of the minivan, including, among other things, the fuel system, exhaust system, A/C and heating systems, the vehicle body, seating, doors, floors, and wiring, and installs a hi-fold wheelchair ramp--manual or powered. These activities result in a significantly different vehicle from the Chrysler and Dodge minivans, which requires that Lone Star conduct various tests and certify the vehicle as the final stage manufacturer. Finally, Lone Star provides a limited manufacturer's warranty for its product. Accordingly, Lone Star's manufacturing activities in the United States are sufficient to meet the final assembly requirements under 49 C.F.R. § 661.11(a) and (r), as a minivan that is converted for wheelchair accessibility.

IV. Conclusion

Based upon the foregoing, I find that Lone Star's manufacturing activities meet the minimum final assembly requirements under 49 C.F .R. § 661.11. This decision is limited solely to minivans that are converted for wheelchair accessibility by Lone Star, as the final processes are described in this memorandum. Deviation from these described processes may result in a different conclusion. Moreover, as stated above, this decision does not cover the domestic content requirement under 49 U.S.C. § 5323(j)(2)(C)(i) and 49 C.P.R.§ 661.11.

If you have any questions, please contact Richard Wong at (202) 366-0675 or richard.wong@dot.gov.

Sincerely,

Dana C. Nifosi
Acting Chief Counsel

[1] I note that Lone Star provided a sample domestic content worksheet, which contains two separate lists. One list provides the Chrysler components and the domestic content percentages for each component and the total percentage. The second list contains a breakdown of components that are installed on vehicles that Lone Star manufactures and provides the monetary cost of each component and the total cost. When calculating domestic material cost and whether it meets the 60 percent threshold, the percentage of a specific component can only be determined by calculating the total costs of all of the components, i.e., the components provided in both lists. Additionally, please note that the cost of the final assembly activities may not be included in the calculation of the domestic content. 49 C.F .R. § 661.11 (q).

[2] 75 Fed. Reg. 35, 123.

[3] 77 Fed. Reg. 71, 673.

[4] Letter from Peter Rogoff, Administrator, FTA, to Nick Gutwein, President, BraunAbility (July I, 2013); Letter from Peter Rogoff, Administrator, FTA, to Andrew Imanse, Group President of Commercial Bus & Ambulance Division, Thor Industries, Inc. (July I, 2013).

[5] On June 25, 2014, FTA also made a determination with respect to final assembly for AutoAbility, LLC's conversion processes for its wheelchair accessible minivans and found that those processes were sufficient to meet the final assembly requirements under 49 C.F.R. § 661.11.

[6] 49 U.S.C. § 5323G)(2)(C); 49 C.F.R. § 66l.ll(a).

[7] 49 C.F.R. § 661.11(r).

[8] See also 49 C.F .R. § 611.11 app. D, para. b.

[9] FTA Dear Colleague Letter, March 18, 1997; 49 C.F.R. § 661.11 app. D, para. c.

[10] 49 C.F.R. § 661.11 app. D, para. c.

[11] See, e.g., 49 C.F.R. § 611.11 app. D.

[12] Memorandum from Dorval R. Carter, Jr., Chief Counsel, FTA, on the determination as to whether the process by which the Braun Corporation (Braun) converts incomplete Chrysler minivans into Braun Entervans satisfies FTA's Buy America requirements for final assembly to Peter M. Rogoff, Administrator, FTA 2-3 (June 28, 2013); see also Memorandum from Dorval R. Carter, Jr., Chief Counsel, FTA, on the determination as to whether the process by which ElDorado National-Kansas (ElDorado) converts incomplete Chrysler and Dodge minivans into Eldorado Amerivans satisfies FTA's Buy America requirements for final assembly to Peter M. Rogoff, Administrator, FTA 2-3 (June 28, 2013).

[13] As stated supra, FTA does not make a determination here with respect to the domestic content requirement under 49 U.S.C. § 5323(j)(2)(C)(i) and 49 C.F.R. § 661.11.

[14] See supra note 5.