Defect and Noncompliance Reports; Record Retention; and Defect and Noncompliance Notification

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Parts 573, 576, and 577

[Docket No. 93-68; Notice 8]

RIN 2127-AG15

Defect and Noncompliance Reports; Record Retention; and Defect

and Noncompliance Notification

AGENCY: National Highway Traffic Safety Administration, DOT.

ACTION: Grant in part and denial in part of petitions for

reconsideration.

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SUMMARY: In this document, the National Highway Traffic Safety

Administration (NHTSA) is granting in part petitions for

reconsideration of an April 5, 1995 final rule that, among other

things, amended 49 CFR Parts 573, 576, and 577 (60 FR 17254). On

reconsideration, the agency is amending provisions of that final rule

concerning submission by manufacturers of schedules for recall

campaigns, recordkeeping regarding recalls of leased vehicles, record

retention period, and notification to lessees of recall campaigns.

NHTSA has concluded that these changes will reduce manufacturer burdens

without adversely affecting the agency's recall program.

DATES: Effective date: The amendments made by this final rule are

effective on January 4, 1996.

Any petitions for reconsideration must be received by NHTSA no

later than February 5, 1996.

ADDRESSES: Any petitions for reconsideration should refer to the docket

and notice number of this notice and be submitted to: Docket Section,

Room 5109, National Highway Traffic Safety Administration, 400 Seventh

Street SW., Washington, DC 20590. (Docket Room hours are 9:30 a.m. to 4

p.m., Monday through Friday.)

FOR FURTHER INFORMATION CONTACT:

Jonathan D. White, Office of Defects Investigation, National Highway

Traffic Safety Administration, 400 Seventh Street SW., Room 5319,

Washington, DC 20590; (202) 366-5227.

SUPPLEMENTARY INFORMATION:

Background

This final rule amends several sections of 49 CFR Parts 573, 576,

and 577, as those parts were recently amended on April 5, 1995. These

changes are being adopted by NHTSA in response to four petitions for

reconsideration of the April 5 final rule that were submitted by the

Association of International Automobile Manufacturers (AIAM), Chrysler

Corporation (Chrysler), Ford Motor Company (Ford), and General Motors

Corporation (GM).

In addition to seeking substantive changes, the petitions asked for

an extension of the original May 5, 1995 effective date of the April 5

amendments on the ground that it would be difficult to achieve

compliance by that date. On May 16, 1995, the agency published a notice

in the Federal Register setting a new effective date of July 7, 1995

for the April 5 amendments. 60 FR 26002. Subsequently, on July 7, 1995,

NHTSA suspended until further notice the effective date of four of the

provisions for which the petitioners had sought reconsideration. 60 FR

35458. That notice also confirmed that all other provisions of the

April 5 final rule would go into effect on July 7, 1995.

In September 1995, the Office of the Federal Register informed

NHTSA that it could not leave the effective date of a regulation

indefinite, as it had done in the July 7 Federal Register notice.

Accordingly, NHTSA published another notice setting January 2, 1996, as

the effective date of those four provisions, pending the decision on

reconsideration. 60 FR 50476 (Sept. 29, 1995).

Based on its review of the petitions for reconsideration, NHTSA

also decided that it would be advisable to obtain further information

from the public on four of the issues raised in the petitions.

Accordingly, the agency announced that it would hold a public meeting

in Detroit, Michigan to receive oral presentations on those issues and

to ask questions of those present, and that it would also receive

written comments on those issues. 60 FR 35459 (July 7, 1995).

The following five entities made presentations at the Detroit

meeting, which took place on July 24, 1995: AIAM, Chrysler, Ford, GM,

and the R. L. Polk Company (Polk). The following ten entities submitted

written comments to the public docket: Advocates for Highway and Auto

Safety (Advocates), American Automotive Leasing Association (AALA),

American Honda Motor Company, Inc. (Honda), Association of Consumer

Vehicle Lessors (ACVL), Ford, GM, Institute of International Container

Lessors (IICL), National Automobile Dealers Association (NADA),

National Vehicle Leasing Association (NVLA), and Truck Renting and

Leasing Association (TRALA). In addition, NHTSA placed a written

transcript of the Detroit meeting in the public docket for this

rulemaking.

[[Page 275]]

The notice published today grants the petitions for reconsideration

with respect to the four provisions specified above and denies the

petitions insofar as they sought amendments to other provisions of the

April 5 final rule. The four provisions pertain to the enforcement of

the provisions of Chapter 301 of Title 49 of the United States Code (49

U.S.C. Sec. Sec. 30101-30169) that set forth the obligations of

manufacturers of motor vehicles and motor vehicle equipment to provide

notification that motor vehicles or items of motor vehicle equipment

contain a safety-related defect or do not comply with a Federal motor

vehicle safety standard and to remedy the defect or noncompliance

without charge. 49 U.S.C. 30116-30121. The provisions of the final rule

regarding notification of defects and noncompliances in leased vehicles

implement a provision of the Intermodal Surface Transportation

Efficiency Act of 1991 (ISTEA) that requires vehicle lessors to send

their lessees a copy of notifications received from manufacturers

regarding a safety-related defect or noncompliance in the lessees'

vehicles. 49 U.S.C. 30119(f).

Amendments to Part 573--Defect and Noncompliance Reports

NHTSA is amending two sections of 49 CFR Part 573, one that sets

forth requirements regarding the submittal by manufacturers of

schedules for owner notification and remedy campaigns (recalls) under

certain circumstances (section 573.5(c)(8)), and one that specifies

recordkeeping requirements for manufacturers in connection with recalls

of leased vehicles (section 573.7(d) and (e)).

Schedule for Recall Campaigns

In order to address an increase in the number of recalls in which

there has been a significant delay between the manufacturer's decision

that a defect or noncompliance exists and the commencement and

conclusion of the manufacturer's recall campaign, NHTSA included in the

April 5 final rule a requirement that manufacturers include in their

defect/noncompliance reports submitted to NHTSA pursuant to 49 U.S.C.

30119 and 49 CFR Part 573 (Part 573 Report) a detailed schedule for

those notification campaigns that would not begin within thirty days of

the Part 573 Report or end within 75 days of that Report. Several

petitioners objected to this requirement as unnecessary and unduly

burdensome. In oral statements at the public meeting and in their

written comments, manufacturers indicated that the time periods

specified in the final rule would mean that detailed schedules would be

required in most recalls, because most notification campaigns are

either begun more than 30 days after the Part 573 Report or not

completed within 75 days of that Report. In addition, they asserted

that the need to file detailed scheduling information with NHTSA at the

outset of most recalls would have the effect of delaying implementation

of recalls, because personnel and resources would have to be taken away

from other aspects of recall implementation to ensure compliance with

the added reporting requirements.

Pursuant to 49 U.S.C. 30119(c), manufacturers must notify owners,

purchasers, and dealers of safety defects and noncompliances ``within a

reasonable time'' after the decision that the defect or noncompliance

exists. NHTSA continues to believe strongly that safety recalls should

be implemented as soon as reasonably possible. However, it also

recognizes that the concerns raised by the manufacturers are serious

and need to be considered.

In order to make the rule more responsive both to the

manufacturers' concerns and to the public safety interest in prompt

notification of safety-related defects and noncompliances, NHTSA has

decided to modify the burdensome aspects of the recall schedule

provisions of the April 5 final rule. Thus, the agency is deleting the

requirement that extensive scheduling information and explanatory

material be provided in the manufacturer's Part 573 Report in instances

where notification would begin more than 30 days after the Part 573

Report is submitted or end more than 75 days after the Report. Instead,

under the rule adopted today, manufacturers will only be required to

include in their Part 573 Reports the estimated date when owners will

first be notified that a remedy for the defect or noncompliance is

available and the estimated date when all owners will have been so

notified.

No additional scheduling information will be required under the

regulation. In those relatively rare instances where the agency wishes

to further examine whether the manufacturer's time frame for the recall

is reasonable under the circumstances, it may request more detailed

information from the manufacturer on a case-by-case basis.

As NHTSA noted in the preamble to the April 5 final rule, in most

cases, manufacturers develop a recall implementation schedule for their

own internal use at the time they decide that a defect or noncompliance

exists, or promptly thereafter. The final rule adopted today simply

requires manufacturers to provide the agency with the two most basic

elements of this scheduling information when they file their Part 573

Reports. Under this revision, manufacturers will have flexibility to

tailor the recall notification schedule to the circumstances of the

particular recall, with far less of a reporting burden, while NHTSA

will retain the ability, on a case-by-case basis, to ensure that the

timing of recall notification is reasonable. The agency is retaining

its authority, as set forth in new section 577.7(a)(1), to order a

manufacturer to notify owners on a specific date when it finds, after

consideration of available information and the views of the

manufacturer, that such notification is in the public interest.

NHTSA recognizes that in some cases a manufacturer may not have any

scheduling information at the time it submits its Part 573 Report

(e.g., where the remedy has not been developed or tested, or where the

scope of the recall is uncertain). In such instances, the manufacturer

should indicate in the Report that the information is not available.

Thereafter, in accordance with section 573.5(b), the required

information ``shall be submitted as it becomes available.''

On reconsideration, NHTSA has also decided to rescind new section

573.5(c)(8)(iii), which would have required a manufacturer to describe

all factors that it anticipated could interfere with its ability to

adhere to the proposed recall schedule and to describe with specificity

the likely effect of each of those factors. The agency believes that

the burden of requiring advance information about events which might

never actually have any effect on the recall significantly outweighs

whatever safety benefit might be derived from it. In addition, the

agency believes that the purpose of that requirement can as readily be

served by the requirement, retained in today's final rule, that a

manufacturer must promptly advise NHTSA if circumstances arise that can

result in unanticipated delays of two weeks or more in recall campaign

implementation. This requirement, formerly included in section

573.5(c)(8)(iv), is now renumbered as Sec. 573.5(c)(8)(ii).

This final rule renumbers sections 573.5(c)(8) (v) and (vi) as

sections 573.5(c)(8) (iii) and (iv), respectively, and makes minor

changes in those paragraphs to reflect the changes to this section

described above, but makes no substantive changes. These provisions are

concerned with the effect on the requirement to file a notification

[[Page 276]]

schedule of a manufacturer's intent to submit a petition for an

exemption from the recall requirements of the statute on the ground

that the defect or noncompliance is inconsequential.

Recordkeeping Regarding Recalls of Leased Vehicles

After reviewing the petitions for reconsideration and the oral and

written comments, NHTSA has decided to revise 49 CFR Sec. 573.7 (d) and

(e), which imposed requirements on manufacturers and lessors to

maintain lists of the names and addresses of ``known'' lessees of

vehicles covered by recall campaigns.

All of the manufactures that participated in the reconsideration

process stated that the divisions of the company that deal with recalls

and maintain owner lists do not know whether a particular vehicle is

leased. However, the manufacturers were concerned that they could be

held responsible under the rule for ``knowing'' that a vehicle was

leased because that information is contained in records maintained

elsewhere in the organization, such as corporate offices or

subsidiaries involved with fleet operations or consumer credit matters.

These manufacturers stated that it would be extremely costly and

time-consuming to integrate their leased vehicle records with the

vehicle owner lists prepared in connection with recall campaigns. Such

records are generally maintained in separate databases in separate

parts of the company and integrating the databases and reprogramming

the systems to generate the information in the manner required by

section 573.7(d) would require many months of work and substantial

additional financial cost. Similarly, Polk, which is the principal

source of vehicle registration information used by manufacturers in

recall mailings, stated at the public meeting that it could not

specifically identify for their manufacturer clients which vehicles on

a given list of registered vehicles were leased. Finally, even apart

from cost considerations, the manufacturers contended that they should

not have to bear the burden of maintaining records reflecting lessee

notification, since that should be the responsibility of the vehicle

lessors.

On the basis of the foregoing information, NHTSA has concluded that

any benefit to be gained by requiring manufacturers to identify those

vehicles on its recall notification lists that are leased and the

person or entity to whom notification was sent as the lessor or lessee

is far outweighed by the cost and time burdens that manufacturers would

incur to implement such a system. Moreover, the agency agrees that it

is not appropriate to require manufacturers to bear the burdens

associated with keeping records regarding the notification of lessees,

when Congress imposed the responsibility for such notification on the

lessors.

Accordingly, NHTSA has decided to rescind in its entirety section

573.7(d) of the April 5 final rule. The agency will monitor lessor

compliance with notification requirements of section 30119(f) through

direct contact with lessors rather than by reviewing manufacturer

records. To identify such lessors, NHTSA plans to obtain information

from manufacturers and lessor organizations.

For similar reasons, the agency is also amending section 573.7(e),

which primarily sets forth recordkeeping requirements applicable to

lessors, by deleting language in the last two sentences that are

applicable to record retention by manufacturers who send out recall

notifications directly to lessees pursuant to agreements with lessors.

Such lessees are, in effect, being notified as if they were owners,

without any lessor involvement, so there is no need to apply additional

recordkeeping burdens on the manufacturers to assure compliance

requirements of section 30119(f).

Two commenters, AALA and TRALA, representing lessors, contended

that the recordkeeping requirements for lessors set forth in section

573.7(e) are overly burdensome and time consuming because they require

them to establish new systems for keeping these records. In addition,

AALA questioned the utility of requiring lessors to maintain these

records in light of the fact that, once the lease has expired, the

vehicle generally undergoes one or more rapid changes of ownership.

AALA questioned the purpose behind the requirement to maintain records

on ``vehicles whose future ownership the lessor would be unable to

verify.''

The purpose of this recordkeeping requirement is not to verify

``future ownership'' of vehicles; it is to give NHTSA a means of

verifying that lessors are complying with their duty to provide their

lessees with copies of safety recall notifications. This is analogous

to the requirement that manufacturers must keep a record of recall

notifications sent to registered owners.

The agency has made every effort to ensure that the recordkeeping

requirements impose as little burden as possible on lessors. The

information required is minimal (less than what is required of

manufacturers), and it should not entail great expenditure of resources

to develop and maintain a record retention system. For these reasons,

NHTSA is retaining the substantive requirements of section 573.7(e) as

they apply to the lists that must be maintained by lessors.

Amendments to Part 576--Record Retention

Prior to the April 5 final rule, 49 CFR Sec. 576.5 required vehicle

manufacturers to retain relevant records for five years from the date

they are generated or acquired. The April 5 rule amended section 576.5

to require such records to be maintained for eight years from the last

date of the model year in which the vehicle to which the records relate

was produced. After considering the petitions for reconsiderations and

the oral and written comments submitted on this subject, NHTSA has

decided to rescind the amendment to section 576.5 and reinstate the

preexisting requirement.

The primary reason for this decision is the time and cost burdens

that the amendment would have placed upon vehicle manufacturers.

Several manufacturers stated that it would be highly costly and

extremely time consuming to change their computerized record keeping

systems to comply with the new record retention requirements. The

agency has concluded that the safety benefit that would be derived from

revising the record retention period requirements would be far

outweighed by costs and other burdens on resources that would be

incurred by manufacturers in order to make the change.

The agency is also making a technical amendment to 49 CFR

Sec. 576.6, which defines the records that must be retained by

manufacturers under Part 576. Ford pointed out that in the text of the

April 5 amendment, the word ``such'' does not appear as a modifier to

the term ``malfunctions'' the second time that word appears (in the

second sentence of the section). Ford expressed concern that the

removal of the word ``such'' could be construed to broaden the scope of

the section to cover additional types of records beyond those related

to motor vehicle safety.

The agency does not agree that the slight change in the wording of

this phrase would have had a substantive affect on the record retention

requirements, since the revised language specified that the requirement

only applied to records of ``malfunctions that may be related to motor

vehicle safety.'' Nevertheless, to prevent any possible

misunderstanding, NHTSA is making a

[[Page 277]]

technical amendment to this section to reinstate the preexisting

wording. The agency wishes to emphasize that the April 5 amendment to

section 576.6 that clarified that the record retention requirements

apply to records made on electronic media has not changed, and remains

in effect.

Amendments to Part 577--Defect and Noncompliance Notification

In its September 1993 notice of proposed rulemaking (NPRM) to

implement the ISTEA requirement that vehicle lessors furnish their

lessees with copies of notifications of safety-related defects and

noncompliances in leased vehicles, NHTSA proposed to require

manufacturers to include language in all recall notification letters to

lessors that would remind them of their statutory obligations. Several

comments submitted in response to the NPRM pointed out that it would be

very difficult for manufacturers to identify which owners were lessors.

On the basis of those comments, the April 5 final rule added a new

section 577.5(h), which required manufacturers to include language

describing a lessor's obligation to notify lessees of safety recalls in

all owner notification letters.

During the reconsideration process, this requirement was vigorously

challenged. Most commenters stated that the inclusion of lessor/lessee

language in all owner notification letters would add clutter to the

letter and could confuse the recipients of the owner notification

letter who are not lessors/lessees. In addition, commenters

representing various elements of the leased vehicle industry generally

expressed the view that requiring manufacturers to notify lessors of

their obligations is unnecessary for several alternative reasons: (1)

Many lessors have an arrangement with manufacturers in which the latter

mails recall letters directly to individuals on a list furnished by the

lessor; (2) many individual lessees receive notification letters

directly from manufacturers because the name of the lessee appears on

the title as the owner; and (3) many lessors are already aware of their

obligations and are complying with them.

These commenters also argued that the rule as written failed to

take into account several features of the leased vehicle market: e.g.,

the fact that in consumer leasing, the lessee is likely to be the

driver, whereas in commercial leasing, the vehicles will be driven by

individuals who are not the lessee of record; and the fact that some

lessors regard their lists of lessees as trade secrets and do not

disclose them to manufacturers (which are often perceived as

competitors).

On reconsideration, the agency has concluded that section 577.5(h)

should be rescinded. The likely confusion resulting from the inclusion

of this information in all owner notification letters will outweigh any

potential safety benefit associated with reminding lessors of their

obligations, particularly since there is reason to believe that most

lessors are already aware of those obligations. However, since it is

likely that not all lessors are aware of the duty to notify their

lessees of recalls, the agency believes that further steps are

appropriate to maximize the number of lessors that are informed of

their obligations under the statute and regulations. To that end, NHTSA

plans to send a notice to vehicle lessors informing them of their

statutory and regulatory obligations with respect to recall

notification of their lessees. The agency will also monitor the

performance of such lessors through periodic compliance reviews. The

agency plans to identify vehicle lessors from several sources,

including manufacturers, lessor associations, and commercial

publications.

Other Issues

The agency has also considered issues raised by petitioners and

commenters concerning other aspects of the April 5 final rule. Several

entities asserted that NHTSA should have allowed more time to comply

with the April 5 amendments. The agency recognized that the original

30-day period may not have allowed sufficient time for those affected

by the changes to come into compliance. However, NHTSA remains

convinced that the extension of the effective date for the provisions

not affected by the petitions for reconsideration to July 7 (providing

a total of over 90 days) was sufficient.

Most of the concerns about the time centered on the provisions

regarding manufacturer recordkeeping for leased car notifications

(section 573.7) and the changes in the duration of the record retention

requirements of section 576.5. However, those concerns are now moot due

to the substantive changes made to those sections on reconsideration.

The other issues raised by the petitions for reconsideration were

essentially restatements of arguments made during the comment period

prior to issuance of the final rule. The agency has concluded that no

change of those provisions is warranted.

Advocates objected to the fact that NHTSA postponed the effective

date of several provisions of the final rule while it was considering

the merits of the petitions for reconsideration. It noted that the

agency had recently failed to stay a regulatory action when Advocates

filed a petition for reconsideration.

Under 49 CFR Sec. 553.35(d), a petition for reconsideration does

not stay the effectiveness of a rule ``unless the Administrator so

provides.'' Thus, a decision whether or not to stay the effective date

of a rule pending consideration of petitions for reconsideration is

within the discretion of the Administrator.

In the Federal Register notice that first extended the effective

date of all provisions of the April 5 rule from May 5 to July 7, 1995

(60 FR 26002), the agency noted, ``The [petitioners] have presented

NHTSA with information that makes a credible showing that they are not

able to achieve compliance with at least some provisions of the final

rule by May 5, and that it will be some months before they are able to

do so.'' In addition, NHTSA noted that the short time between the

filing of the petitions for reconsideration and original effective date

precluded it from sorting through all of the provisions of this

multifaceted rule and the arguments in the petitions in order to

identify particular provisions whose effective date should have been

extended. Id.

The agency extended the effective date of four specified provisions

of the final rule beyond July 7, because it had decided that it needed

to gather further information on those issues. See 60 FR 35458 (July 7,

1995). The agency believes that this decision was reasonable under the

circumstances, and was adequately explained at the time.

The fact that the agency did not stay a rule for which Advocates

sought reconsideration is not material. Unlike the manufacturers,

Advocates did not risk noncompliance with Federal law if the agency had

not stayed its action.

Advocates also contended that NHTSA should not have considered the

merits of the arguments raised in the petitions for reconsideration

because the manufacturers did not present any new information that

could not have been presented prior to the issuance of the final rule.

While it may be true that the information was previously available,

there were relatively significant changes made to each of the four

provisions between the NPRM and the April 5 final rule. The

manufacturers could not have known exactly what the agency would

require in those provisions. Thus, it was appropriate to consider the

additional information and arguments presented in the reconsideration

petitions and in the subsequent comments.

[[Page 278]]

Rule Making Analyses and Notices

1. Executive Order 12866 (Federal Regulations) and DOT Regulatory

Policies and Procedures

NHTSA has analyzed the changes made by this revised final rule and

determined that it is not ``significant'' within the meaning of the

Department of Transportation regulatory policies and procedures. OMB

has also determined that it is not significant within the meaning of

Executive Order 12866. These changes will not impose any costs on the

regulated parties and are likely to reduce such costs.

2. Regulatory Flexibility Act

The agency has also considered the effects of this rulemaking

action under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). I

certify that this proposed rule will not, if promulgated, have a

significant economic impact on a substantial number of small entities.

3. National Environmental Policy Act

In accordance with the National Environmental Policy Act of 1969,

the agency has analyzed the environmental impacts of this rulemaking

action and determined that implementation of this action will not have

a significant impact on the quality of the human environment.

4. Paperwork Reduction Act

The amendments made by this final rule on reconsideration will not

impose any new recordkeeping burdens and are likely to reduce such

burdens.

5. Executive Order 12612 (Federalism)

This action has been analyzed in accordance with the principles and

criteria contained in Executive Order 12612, and it has been determined

that the rule making does not have sufficient federalism implications

to warrant the preparation of a Federalism Assessment.

6. Civil Justice Reform Act

This final rule does not have a retroactive or preemptive effect.

Judicial review of this rule may be obtained pursuant to 5 U.S.C.

section 702. That section does not require that a petition for

reconsideration be filed prior to seeking judicial review.

List of Subjects

49 CFR Part 573

Imports; Motor vehicle safety; Motor vehicles; Reporting and record

keeping requirements; Tires.

49 CFR Part 576

Motor vehicle safety; Reporting and recordkeeping requirements.

49 CFR Part 577

Motor vehicle safety.

In consideration of the foregoing, Parts 573, 576, and 577 of Title

49 of the Code of Federal Regulations are amended as follows:

PART 573--DEFECT AND NONCOMPLIANCE REPORTS

1. The authority citation for part 573 continues to read as

follows:

Authority: 49 U.S.C. 30102-30103, 30112, 30117-30121, 30166-

30167; delegation of authority at 49 CFR 1.50

2. Section 573.5 is amended by removing paragraphs (c)(8) (ii),

(iii), and (iv), redesignating paragraphs (c)(8) (v) and (vi) as

paragraphs (c)(8) (iii) and (iv) and revising them, and by adding a new

paragraph (c)(8)(ii) to read as follows:

Sec. 573.5 Defect and noncompliance information report.

* * * * *

(c) * * *

(8) * * *

(ii) The estimated date on which it will begin sending

notifications to owners that there is a safety-related defect or

noncompliance and that a remedy without charge will be available, and

the estimated date on which it will have completed such notification.

If a manufacturer subsequently becomes aware that either the beginning

or the completion date reported to the agency will be delayed by more

than two weeks, it shall promptly advise the agency of the delay and

the reasons therefor, and furnish a revised estimate.

(iii) If a manufacturer intends to file a petition for an exemption

from the recall requirements of the Act on the basis that a defect or

noncompliance is inconsequential as it relates to motor vehicle safety,

it shall notify NHTSA of that intention in its report to NHTSA of the

defect or noncompliance under this section. If such a petition is filed

and subsequently denied, the manufacturer shall provide the information

required by paragraph (c)(8)(ii) of this section within five Federal

government business days from the date the petition denial is published

in the Federal Register.

(iv) If a manufacturer advises NHTSA that it intends to file such a

petition for exemption from the notification and remedy requirements on

the grounds that the defect or noncompliance is inconsequential as it

relates to motor vehicle safety, and does not do so within the 30-day

period established by 49 CFR 556.4(c), the manufacturer must submit the

information required by paragraph (c)(8)(ii) of this section no later

than the end of that 30-day period.

3. Section 573.7 is amended by removing paragraph (d),

redesignating paragraph (e) as paragraph (d), and revising new

paragraph (d) to read as follows:

Sec. 573.7 Lists of purchasers, owners, lessors and lessees.

* * * * *

(d) Each lessor of leased motor vehicles that receives a

notification from the manufacturer of such vehicles that the vehicle

contains a safety-related defect or fails to comply with a Federal

motor vehicle safety standard shall maintain, in a form suitable for

inspection, such as computer information storage devices or card files,

a list of the names and addresses of all lessees to which the lessor

has provided notification of a defect or noncompliance pursuant to 49

CFR 577.5(h). The list shall also include the make, model, model year,

and vehicle identification number of each such leased vehicle, and the

date on which the lessor mailed notification of the defect or

noncompliance to the lessee. The information required by this paragraph

must be retained by the lessor for one calendar year from the date the

vehicle lease expires.

PART 576--RECORD RETENTION

4. The authority citation for part 576 continues to read as

follows:

Authority: 49 U.S.C. 30112, 30115, 30117-30121, 30166-30167;

delegation of authority at 49 CFR 1.50.

5. Section 576.5 is revised to read as follows:

Sec. 576.5 Basic requirements.

Each manufacturer of motor vehicles shall retain as specified in

Sec. 576.7 all records described in Sec. 576.6 for a period of five

years from the date on which they were generated or acquired by the

manufacturer.

6. Section 576.6 is revised to read as follows:

Sec. 576.6 Records.

Records to be retained by manufacturers under this part include all

documentary materials, films, tapes, and other information-storing

media that contain information concerning malfunctions that may be

related to motor vehicle safety. Such records include, but are not

limited to, communications from vehicle users and memoranda of user

complaints; reports and other documents, including material generated

or communicated by computer, telefax or other electronic means, that

are related to work

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performed under, or claims made under, warranties; service reports or

similar documents, including electronic transmissions, from dealers or

manufacturer's field personnel; and any lists, compilations, analyses,

or discussions of such malfunctions contained in internal or external

correspondence of the manufacturer, including communications

transmitted electronically.

PART 577--DEFECT AND NONCOMPLIANCE NOTIFICATION

7. The authority citation for part 577 continues to read as

follows:

Authority: 49 U.S.C. 30102-30103, 30112, 30115, 30117-30121,

30166-30167; delegations of authority at 49 CFR 1.50 and 49 CFR

501.8.

Sec. 577.5 [Amended]

8. Section 577.5 is amended by removing paragraph (h) and

redesignating paragraph (i) as paragraph (h).

Issued on: December 21, 1995.

Ricardo Martinez,

Administrator.

[FR Doc. 95-31583 Filed 12-29-95; 10:49 am]

BILLING CODE 4910-59-M