Temporary Exemption From Motor Vehicle Safety Standards

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 555

[Docket 94-69; Notice 1]

Temporary Exemption From Motor Vehicle Safety Standards

AGENCY: National Highway Traffic Safety Administration (NHTSA), DOT.

ACTION: Notice of request for comments.

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SUMMARY: This document requests comments on the recommendation by the

National Performance Review that the number of motor vehicles which may

be exempted from compliance with the Federal motor vehicle safety

standards (FMVSSs) on the basis that they possess innovative safety

features be increased from the 2,500 per year presently specified by

statute. The recommendation is based on the belief that an increase may

encourage vehicle manufacturers to seek exemptions allowing them to

introduce safety innovations.

DATES: The closing date for comments is October 24, 1994.

ADDRESSES: Comments should refer to the docket number and the notice

number, and be submitted to: Docket Section, room 5109, Nassif

Building, 400 Seventh Street, SW, Washington, DC 20590. (Docket hours

are from 9:30 a.m. to 4 p.m.).

FOR FURTHER INFORMATION CONTACT: Noble Bowie, Office of Plans and

Programs, NHTSA (202-366-2549).

SUPPLEMENTARY INFORMATION:

Existing Exemption Authority

NHTSA is directed by 49 U.S.C. 30111 (formerly 15 U.S.C. 1392) to

issue FMVSSs to reduce the number and severity of vehicle crashes and

to reduce the likelihood that deaths and injuries will occur in those

crashes. In recognition of the need to provide exemptions from the

FMVSSs in special, limited circumstances, NHTSA requested Congress in

1972 to give it express authority for this purpose. The authority was

intended to, among other things, permit the agency to grant exemptions

to permit vehicle manufacturers to allow them to incorporate new safety

features into their vehicles.

In response, Congress enacted legislation later that same year to

authorize the agency to exempt a motor vehicle manufacturer from any

FMVSS based on any one of four findings. 49 U.S.C. 30113 (formerly

section 123 of the National Traffic and Motor Vehicle Safety Act, 15

U.S.C. 1410). One was a finding that ``the exemption would make easier

the development or field evaluation of a new motor vehicle safety

feature providing a safety level at least equal to the safety level of

the standard.'' Such an exemption may be granted for a period that does

not exceed two years (subject to renewal). The exemption may not cover

``more than 2,500 vehicles to be sold in the United States in any 12-

month period''. (49 U.S.C. 30113 (d) and (e)).

There is scant legislative history regarding the congressional

intentions underlying this exemption provision.

A single sentence of explanation appeared in floor statements made

on October 6, 1972 by Senator Hartke:

The purpose of this provision is to enable manufacturers to

experiment with innovative safety concepts but not endanger the

health and safety of the motoring public.

(See pages S34207-34209)

In issuing FMVSSs, the agency drafts them to be as performance

oriented as possible to minimize the need to amend them to accommodate

future technological advances. If a vehicle manufacturer nevertheless

finds that a provision of an existing standard has the effect of

prohibiting a new device, it may petition the agency to amend that

provision so as to allow the device. At any given time, the agency is

conducting numerous rulemaking proceedings in response to such

petitions. In a very few cases since 1972, vehicle manufacturers have

petitioned for exemption under the provision relating to innovative

safety features. Indeed, exemption on the grounds of an innovative

safety feature has been the least frequently used of the four statutory

bases upon which a manufacturer may submit an exemption petition.

National Performance Review

This notice responds to a recommendation by The National

Performance Review (NPR), which was chaired by the Vice President of

the United States. The NPR reviewed NHTSA's statutes and regulations,

and recommended in its report, ``From Red Tape to Results,'' that the

number of vehicles that may be covered by a safety exemption be raised.

For the benefit of readers unfamiliar with this particular NPR

recommendation, the agency has set forth below the relevant passages

from the accompanying Report of the National Performance Review--

September 1993 (pp. 23-24):

Background

Technology and consumer preferences often change faster than the

rulemaking process of the National Highway Traffic Safety

Administration (NHTSA) can move. Today, for example, automotive

safety is an important concern of consumers. Manufacturers who can

deliver the safety features their customers want are at a sales

advantage. Manufacturers, therefore, have a financial incentive for

investing time and money in new or improved safety features--if they

thought they could make their way through the NHTSA approval process

in time to capitalize on the current trends in consumer preference.

Current enabling legislation and the NHTSA rulemaking processes,

however, are too encumbering and time consuming to enable NHTSA to

turn short-term consumer trends into long-term safety advances. The

cost and time required to assemble the needed justification and the

average two-year duration of the rulemaking process can inhibit

manufacturers from introducing safety improvements. As a result,

consumers have to wait two years or more before improvements reach

the market.

Although NHTSA can grant a temporary exemption from standards to

help advance new safety systems, no more than 2,500 vehicles can be

sold per year for each exemption granted. This number is too low to

provide manufacturers with sufficient economic and marketing

incentives and to allow extensive, real-world evaluations.

Actions

1. Legislation should be enacted to raise the current 2,500-vehicle

limit on exemptions.

NHTSA should consider all factors that are relevant to expanding

the exemption provision into a more effective mechanism for

encouraging safety innovations. NHTSA should then determine what

higher exemption authority is desirable and draft legislation for

submission to Congress at the beginning of the next session (January

1995).

Legislation should be enacted to authorize NHTSA to grant such

exemptions after public notice and comment.

NHTSA should grant exemptions only after it is satisfied that a

manufacturer will thoroughly evaluate the actual ``on-road''

benefits (or problems) of the exempted safety system. NHTSA should

ensure that the manufacturers carry out the evaluation and help them

to do this.

Implications

By increasing the vehicle limits, NHTSA will promote cooperation

between government and industry, motivate industry to introduce new

safety devices because of the economic advantage of selling

innovative safety features, enhance support from industry and

consumers for possible safety improvements, and introduce some

safety advances to the marketplace sooner than might occur through

lengthy, costly, and contentious rulemaking.

Fiscal Impact

Both industry and government will be able to reduce costs

associated with research and evaluation. NHTSA will also realize a

reduction in staff resources currently devoted to rulemaking;

however, the specific fiscal implications will depend on the nature

and frequency of exemptions and cannot be estimated.

Issues for Public Comment

In order to assess the need for legislation and to prepare a

request for it by January 1995, if such is warranted, NHTSA requests

information that will assist it in identifying ways in which its

exemption authority could be amended to encourage manufacturers to seek

exemptions in order to incorporate new safety technologies in

production vehicles at the earliest time in advance of possible

amendments of relevant FMVSSs. Two particular concerns underlie the NPR

report: (1) the minimum size of production runs of new safety features

necessary to be economically feasible; and (2) the minimum number of

vehicles required to provide statistically significant data for

evaluation. Therefore, NHTSA asks vehicle manufacturers to quantify

these two minima, and explain the basis for their responses.

Manufacturers and other commenters should submit documents, analyses,

or other data that are germane to these concerns.

NHTSA also requests comments on the following issues--

1. Whether impediments exist, such as liability concerns, that

discourage vehicle manufacturers from using the exemption process to

evaluate safety innovations.

2. The identity of any specific existing or anticipated safety

innovations whose introduction might be prohibited by an existing or

proposed FMVSS and for which vehicle manufacturers would apply for

exemption if the number of vehicles covered were increased, and/or if

the exemption term were longer.

3. The level to which the number of exempted vehicles would have to

be increased and/or the extent to which exemption term would have to be

lengthened in order to encourage vehicle manufacturers to apply for

temporary exemptions.

4. Whether the number of exempted vehicles and/or term should be

left to the Administrator's discretion, instead of being statutorily

specified as at present.

5. Under expanded exemption authority, how the agency should

assess, in advance of the results of an on-the-road evaluation, the

likelihood that an innovative safety feature will yield equal or

superior safety benefits. The agency is mindful of the concern

expressed in the legislative history that the issuance of exemptions

for innovative safety features should not endanger the health and

safety of the motoring public. If the number of vehicles that can be

covered by in a single exemption is increased, there could be a

commensurate increase in the potential adverse consequences of an

erroneous judgment by the agency that an innovative feature will

provide safety benefits that equal or exceed those of complying

features.

6. Whether there are other amendments to NHTSA's existing statutory

authority, 49 U.S.C. Chapter 301--Motor Vehicle Safety (formerly 15

U.S.C. 1381 et seq., the National Traffic and Motor Vehicle Safety Act)

which would encourage automotive safety innovations without

compromising safety.

7. The validity of the assumptions underlying NPR's analysis and

conclusions.

It is requested but not required that ten copies of each comment be

submitted. No comments may exceed 15 (fifteen) pages in length (49 CFR

553.21). Necessary attachments may be appended to submissions without

regard to the 15-page limit.

All comments received before the close of business on the comment

closing date listed above will be considered and will be available for

examination in the docket room and the above address both before and

after that date. To the extent possible, comments filed after the

closing date will be considered. The agency will continue to file

relevant information as it becomes available. It is recommended that

interested persons continue to examine the docket for new material.

Those commenters desiring to be notified upon receipt of their comments

by the docket section should include a self-addressed, stamped postcard

in the envelope with their comments. Upon receipt of their comments,

the docket supervisor will return the postcard by mail.

Authority: 49 U.S.C. 30117.

Issued on: August 16, 1994.

Donald C. Bischoff,

Associate Administrator for Plans and Policy.

[FR Doc. 94-20635 Filed 8-22-94; 8:45 am]

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