Motor Vehicle Content Labeling

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 583

[Docket No. 92-64; Notice 9]

RIN 2127-AG46

Motor Vehicle Content Labeling

AGENCY: National Highway Traffic Safety Administration (NHTSA),

Department of Transportation (DOT).

ACTION: Temporary final rule; Request for comments.

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SUMMARY: Under NHTSA's content labeling program, passenger motor

vehicles (passenger cars and other light vehicles) are required to be

labeled with

[[Page 46386]]

information about their domestic and foreign parts content. In response

to petitions for rulemaking submitted by the American Automobile

Manufacturers Association and General Motors, the agency is making a

limited, temporary amendment to its content calculation procedures to

provide vehicle manufacturers added flexibility in making content

determinations where outside suppliers have not responded to requests

for content information. This flexibility will only be available for up

to 10 percent, by value, of a carline's total parts content from

outside suppliers, and only for carlines offered for sale prior to

January 1, 1997. It will also only be available where manufacturers or

allied suppliers have made a good faith effort to obtain the

information. The agency is requesting comments on whether to provide

this or similar added flexibility for a longer period of time.

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

effective September 3, 1996.

Comments: Comments must be received on or before October 3, 1996.

ADDRESSES: Comments 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.-4 p.m., Monday

through Friday.)

FOR FURTHER INFORMATION CONTACT: For non-legal issues: Mr. Orron Kee,

Office of Planning and Consumer Programs, National Highway Traffic

Safety Administration, 400 Seventh Street, SW., Washington, DC 20590

(202-366-0846).

For legal issues: Mr. J. Edward Glancy, Office of Chief Counsel,

National Highway Traffic Safety Administration, 400 Seventh Street,

SW., Washington, DC 20590 (202-366-2992).

SUPPLEMENTARY INFORMATION:

Background

On July 21, 1994, NHTSA published in the Federal Register (59 FR

37294) a new regulation, 49 CFR Part 583, Automobile Parts Content

Labeling, to implement the American Automobile Labeling Act (Labeling

Act). That Act, which is codified at 49 U.S.C. 32304, requires

passenger motor vehicles to be labeled with information about their

domestic and foreign parts content. Interested persons are encouraged

to read the July 1994 notice for a detailed explanation of this

program.

NHTSA received several petitions for reconsideration of the July

1994 final rule, and has subsequently published three notices

addressing issues raised in those or subsequent petitions. In a final

rule published in the Federal Register (60 FR 14228) on March 16, 1995,

NHTSA partially responded to the petitions for reconsideration by

extending, for an additional year, a temporary alternative approach for

data collection and calculations. This option, which ceased to be

available effective June 1, 1996, permitted manufacturers and suppliers

to use procedures that are expected to yield similar results to the

full procedures set forth in Part 583. NHTSA provided this temporary

alternative approach in the 1994 final rule because there was

insufficient remaining time, before the statutory date for beginning to

provide labeling information, for manufacturers to complete the full

procedures. The agency provided the one-year extension of the temporary

approach in light of a substantial number of complex issues raised

about the full procedures in the petitions for reconsideration and the

time needed by the agency to address those issues.

The agency completed its response to the initial set of petitions

in a final rule published in the Federal Register (60 FR 47878) on

September 15, 1995. The agency made a number of changes to reduce the

burdens associated with making content calculations and to produce more

accurate information.

NHTSA received one petition for reconsideration of the September

1995 final rule, from the American Automobile Manufacturers Association

(AAMA). That organization re-raised an issue that it had raised in its

first petition, concerning a provision in Part 583 which specifies that

the U.S./Canadian content of components is defaulted to zero if outside

suppliers fail to respond to a manufacturer's or allied supplier's

request for content information.

On April 19, 1996, NHTSA published in the Federal Register (61 FR

17253) a notice denying AAMA's petition. The agency explained that it

believes that the ability to obtain the necessary content information

from suppliers is within the control of the vehicle manufacturers.

Petitions for Rulemaking

NHTSA has received petitions for rulemaking from AAMA (on behalf of

some of its members) and General Motors (GM) which again raise concerns

about the provision in Part 583 which specifies that the U.S./Canadian

content of components is defaulted to zero if suppliers fail to respond

to a manufacturer's or allied supplier's request for content

information. According to the petitioners, although a great deal of

effort has been put forth to obtain certificates from suppliers, some

vehicle manufacturers continue to have difficulty with non-responsive

suppliers. The petitioners requested that the agency immediately extend

for an additional six months the temporary procedures that have been in

place for the last two years. The petitioners also requested again that

NHTSA permit vehicle manufacturers and allied suppliers to make good-

faith content determinations when their outside suppliers fail to do

so.

AAMA and GM made several arguments in support of their petitions.

First, the petitioners stated that NHTSA took six months to respond to

the earlier petition for reconsideration, leaving only six weeks for

manufacturers to calculate U.S./Canadian content for 1997 model year

vehicles under new rules. They argued that it is unreasonable to expect

compliance with this provision of the rule when the agency took so long

to respond to the earlier petition.

Second, AAMA and GM stated that while NHTSA has concluded that

automakers can easily cause supplier compliance by contract, the

supplier relationship is much more complex than whether the supplier

provides one piece of data to the purchaser. They argued that to expect

a shift in production from one supplier to another for not supplying

AALA data is not realistic. The petitioners also argued that even if a

non-responsive supplier is penalized under the contract, the penalty

paid to the manufacturer is not compensatory because the ``damages''

that result are not financial but result in an understated U.S./

Canadian content value for the manufacturer's vehicles.

Third, AAMA and GM argued that any procedure that requires 100

percent compliance and does not provide alternative approaches to

determine the result will understate the U.S./Canadian value and

provide false information to the consumer. Finally, AAMA and GM stated

that NHTSA permits outside suppliers to make certain ``best effort''

determinations of where value was added, and argued that it is

inequitable not to permit allied suppliers and vehicle manufacturers

this same flexibility.

Representatives of GM met with NHTSA staff on June 12 to provide

additional information in support of that company's petition. Among

other things, they discussed a letter which Chrysler had sent to NHTSA

Deputy Administrator Philip R. Recht on May 9 concerning Chrysler's

success in

[[Page 46387]]

obtaining information from suppliers. Chrysler's letter, from Vice

Chairman and Chief Administrative Officer T. G. Denomme, read as

follows:

At our recent meeting with Secretary Pena, I mentioned that we

were not experiencing much success with our suppliers on submitting

information required under labeling legislation. You asked if we had

leveraged our suppliers on this issue.

After our meeting, I got into the issue in more detail. As it

turns out, you were correct on this one. We had not pushed the

suppliers hard enough. On April 25, only 46% of our suppliers had

returned the labeling forms (873 suppliers out of 1,924 total). With

a renewed effort on our part, by May 7 we had pushed that figure to

81% response with an expectation of getting well into the 90% level

by this summer.

I send you this because I did not want to leave you with the

wrong impression on this issue. It now appears Chrysler should be in

position to not only comply with the terms of the legislation, but

also to have virtually all of our suppliers reporting as well.

The GM representatives stated that GM's situation is different than

Chrysler's because of several factors. GM said it has more than 13,000

suppliers, while Chrysler has 1,924. GM is highly vertically

integrated; Chrysler is not. Because of vertical integration, GM must

trace parts through multiple tiers internally and externally. Finally,

the GM representatives stated that their company's multiplicity of

carlines makes the determination of domestic content more complex.

The GM representatives also discussed their efforts to obtain

certificates from outside suppliers. A number of GM employees have been

working full-time for the past several weeks to obtain certificates

from outside suppliers who have not responded to previous requests.

The GM representatives indicated that, despite these efforts, the

stated domestic content of some of GM's cars will fall by about 10

percentage points (e.g., from 95% in model year 1996 to 85% in model

year 1997), solely as a result of defaulting non-reporting supplier

content to zero domestic content. They also discussed, by way of

example, a vehicle for which GM has had particular difficulty ``getting

the last 9% [of content] identified.''

The GM representatives argued that, unless the agency provides

immediate relief, consumers will receive information about that

company's vehicles which is inaccurate. The need for immediate relief

arises from the fact that the vehicle manufacturers are in the final

stages of making content calculations for their model year 1997

vehicles. Under the content labeling program, these calculations are

made only once per model year for a carline. Subsequent to the meeting,

GM sent the agency a list of its 1997 model year startup dates. Most of

the startup dates were between late June and very early August, with

many in the middle of July.

Response to Petitions

NHTSA notes that the AAMA and GM petitions re-raise many issues

which the agency has addressed at length in responding to previous

petitions. Since the petitions did not provide any new arguments

significantly different from the ones previously offered by the

petitioners, the agency is not changing its views with respect to those

basic issues.

However, based on the new information provided by AAMA and GM,

NHTSA has decided that a very narrow, temporary change should be made

in the content calculation procedures. The agency is amending Part 583

to provide that, in limited situations where outside suppliers have not

responded to requests for content information, allied suppliers and

manufacturers are permitted to make those content calculations. This

flexibility will only be available if the allied supplier or

manufacturer has a good faith basis for making the calculation.

Moreover, this flexibility will only be available for up to 10 percent,

by value, of a carline's total parts content from outside suppliers.

Finally, the flexibility will only be available where manufacturers or

allied suppliers have made a good faith effort to obtain the

information.

Today's amendment applies only to carlines offered for sale before

January 1, 1997. The agency has not decided whether the applicability

of the amendment, or a similar one, should be extended past that date.

However, the agency is requesting comments on that issue.

NHTSA is issuing today's amendment in light of several factors. On

the one hand, NHTSA believes that Chrysler's experience demonstrates

that the ability to obtain the necessary content information from

suppliers is within the control of the vehicle manufacturers. However,

the agency also agrees that there are differences between Chrysler and

GM, related to number of suppliers and degree of vertical integration,

which make efforts by GM to obtain content information from its

suppliers considerably more complex.

The agency has previously recognized that a certain amount of

confusion is likely during the time period when a new program, such as

content labeling, is implemented. The content labeling program is still

a relatively new program. Indeed, model year 1997 is the first year for

which the full content calculation procedures of Part 583 are required,

i.e., the temporary alternative procedures are not available.

The agency believes that GM has demonstrated that it has been

making significant efforts in recent months to obtain content

information from non-responsive suppliers. Moreover, GM has shown that,

despite those efforts, it is having difficulty obtaining information

for the last portion of a carline's content.

Finally, NHTSA believes that, all other things being equal, a good

faith content determination by a vehicle manufacturer or allied

supplier of equipment it receives is likely to be more accurate than

simply applying a ``default-to-zero'' provision. Thus, adoption of

today's amendment should result in more accurate information for

consumers.

The agency recognizes, of course, that the most accurate

determinations are those provided by the outside suppliers themselves,

since they obviously have much more complete information about the

content of the equipment they manufacture than the purchaser.

Therefore, the agency must consider whether its actions would have the

effect of reducing the incentives for outside suppliers to provide the

required information, or for the vehicle manufacturers to make efforts

to obtain the information.

NHTSA has concluded that adoption of today's temporary amendment

will not reduce incentives for outside suppliers or vehicle

manufacturers for model year 1997. Given that the vehicle manufacturers

are already in the final stages of making content calculations for

these vehicles, today's amendment should not have any effect on whether

outside suppliers provide, or do not provide, the required information

for model year 1997. However, the agency will consider this issue

further in deciding whether to extend the applicability of today's

temporary amendment. NHTSA also emphasizes that today's amendment does

not excuse outside suppliers for failure to comply with Part 583.

The agency notes that today's temporary amendment is much narrower

than the temporary one requested by AAMA and GM. The petitioners

requested a six-month extension of the temporary procedures that have

been in place for the last two years. However, they raised concerns

about only one of Part 583's provisions, the one concerning non-

responsive outside suppliers. AAMA and GM did not give any reasons why

the agency

[[Page 46388]]

should provide flexibility for other aspects of the content labeling

calculation procedures. Therefore, the agency declines to provide

relief related to other sections.

In addition, as noted above, the added flexibility is limited to no

more than 10 percent, by value, of a carline's total parts content from

outside suppliers. The relief is thus tailored to the fact that the

problem faced by the vehicle manufacturers is in obtaining the last

portion of outside content value for particular carlines. Also, the

amendment ensures that the added flexibility can only be used for a

very small portion of a carline's total outside content, and that the

vast majority of U.S./Canadian content determinations will be based on

supplier certificates.

This flexibility will also only be available where manufacturers or

allied suppliers have made a good faith effort to obtain the

information. NHTSA is not including a specific definition of what

constitutes ``good faith effort'' in today's final rule. However, the

agency intends the term to mean at least some effort beyond the request

for information and certificates that is required by Part 583, e.g.,

some kind of follow-up effort.

NHTSA will not provide specific responses to all of the other

issues raised by AAMA and GM in their petitions, because the agency has

responded to many of those issues in previous notices. The agency

specifically incorporates by reference its responses to these issues

set forth in the September 15, 1995 and April 19, 1996 notices

referenced earlier in this document.

However, the agency will address two issues. First, NHTSA rejects

the suggestion that it should amend Part 583 because it took six months

to respond to AAMA's earlier petition for reconsideration. NHTSA's

regulations clearly specify that the filing of a petition for

reconsideration does not mean that a rule does not take effect. See 49

CFR 553.35(d).

Second, the agency does not believe there is anything inequitable

about providing different procedures for outside and allied suppliers.

The Labeling Act establishes vastly different procedures for outside

and allied suppliers. For example, in making domestic content

calculations, outside suppliers need determine only whether an item of

equipment has at least 70 percent U.S./Canadian content, while allied

suppliers must make precise calculations based on certificates from

outside suppliers. The differences in Part 583's procedures for outside

and allied suppliers reflect the specific statutory differences for

these two groups and/or the agency's efforts to limit the regulatory

burdens associated with the content labeling program. For example, a

significant reason why the agency permits outside suppliers to make

good faith estimates of the U.S./Canadian content of the materials they

purchase is that, unlike the situation for allied suppliers, suppliers

to outside suppliers are not required, by statute or regulation, to

provide certificates of content.

NHTSA finds that the issuance of this final rule without prior

opportunity for comment is necessary in view of the immediate

difficulties that some manufacturers, including GM, are having

obtaining content information from a number of outside suppliers, and

the fact that the manufacturers are necessarily in the final stages of

making content determinations for their model year 1997 vehicles.

Unless the agency amends the standard on an immediate basis, consumers

will receive less accurate content information for model year 1997

vehicles. NHTSA also finds good cause to establish an immediate

effective date for this final rule. In the absence of an immediate

effective date, the manufacturers could not avail themselves of the

added flexibility in making content determinations for their model year

1997 vehicles. The final rule does not impose any new requirements but

instead provides additional flexibility to manufacturers in making

content determinations.

NHTSA notes that, since model year 1997 production has begun for

some carlines, some vehicles have probably already been labeled. Given

the circumstances of today's final rule, the agency believes it would

be appropriate for manufacturers to re-label these vehicles, should

they wish to do so.1 In such an instance, however, NHTSA urges

manufacturers to take steps to prevent confusion when consumers compare

the labels of vehicles within the same carline manufactured at

different times. For example, manufacturers could take steps to re-

label all of the vehicles within a carline that have not yet been sold

to a consumer. Alternatively, the revised label could include a note

indicating that the carline percentages have been revised during the

model year.

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\1\ While content percentages are ordinarily calculated only

once for a carline for a particular model year, NHTSA has previously

concluded that, under special circumstances, manufacturers may

revise the carline percentages. See interpretation letter to Diamond

Star Motors dated February 10, 1995.

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The second issue to be considered is whether the applicability of

today's amendment, or a similar one, should be extended for a longer

period of time. The agency believes that the guiding principle for

making this decision should be the statutory direction specifying that

regulations promulgated under the Labeling Act are to provide the

ultimate purchaser of a new passenger motor vehicle with the best and

most understandable information possible about the foreign and U.S./

Canadian origin of the equipment of the vehicles without imposing

costly and unnecessary burdens on the manufacturers. 49 U.S.C.

32304(e).

There is no question that the ``best'' determinations of the

content of equipment provided by outside suppliers are those provided

by the suppliers themselves, since they obviously have much more

complete information about the content of the equipment they

manufacture than the purchaser. There is also no question that the

Labeling Act contemplates the vehicle manufacturers basing their

content calculations on certificates provided by the outside suppliers,

and that outside suppliers are statutorily required to provide this

information. See 49 U.S.C. 32304(e). Thus, the only question is the

extent, if any, to which the agency should provide alternatives to

address situations where outside suppliers fail to provide the required

information despite being asked to do so by the vehicle manufacturers.

As indicated above, an important consideration is whether such

alternatives would have the effect of reducing the incentives for

outside suppliers to provide the required information, or for the

vehicle manufacturers to make efforts to obtain the information. It is

clear that the ``default-to-zero'' provision does provide significant

incentives in this regard. Therefore, the agency will not simply drop

that provision.

To the extent that the non-responsive supplier problem experienced

by GM is likely to continue, it could be argued that, at some point,

the costs of obtaining the last portion of outside supplier content

value for a particular carline become unreasonable. This argument could

be used to support extending the temporary amendment. The length of

such extension would depend on how long the problem was likely to

continue.

On the other hand, NHTSA is not convinced that the vehicle

manufacturers cannot ultimately obtain the necessary content

information from essentially 100 percent of their suppliers, without

costly efforts. The agency included the following discussion in its

March 16, 1996 notice

[[Page 46389]]

denying AAMA's earlier petition on this subject:

NHTSA notes that AAMA's petition did not discuss whether its

member companies experienced difficulty in obtaining content

information from suppliers in the presence or absence of specific

contractual provisions intended to ensure the provision of content

information by suppliers. As stated in the September 1995 notice,

outside suppliers are dependent on the vehicle manufacturers for

their business. Therefore, the agency believed, and continues to

believe, that the ability to obtain the necessary content

information is within the control of the vehicle manufacturers.

The purpose of including any specific provision in a business

contract is to make observance of the terms of that provision a

required element of the business relationship. Just as such things

as meeting material specifications, strength requirements and

specified time of delivery are a necessary part of a supplier's

doing business with a vehicle manufacturer and are ensured by

provisions included in contractual agreements, the providing of

content information can also be made a necessary part of that

business relationship and be reflected in the purchase contract.

Moreover, just as liquidated damages clauses can be inserted in

a contract for failure to comply with any other part of the

contract, so can such a provision be included for failure to provide

timely content reports. If a supplier knows that it will be paid

less money if it fails to provide content information, it will have

a strong incentive to provide the information.

The agency also notes that the supplier industry is highly

competitive. If one supplier is unwilling to agree to provide

content information (an agreement to do no more than comply with

existing Federal law), other suppliers would step in to take

advantage of the opportunity for new business.

For the above reasons, including those presented in the

September 1995 notice, NHTSA continues to believe that the vehicle

manufacturers will be able to obtain the required content

information from their suppliers.

As indicated above, AAMA and GM argued in their new petitions that

even if a non-responsive supplier is penalized under the contract, the

penalty paid to the manufacturer is not compensatory because the

``damages'' cannot offset the effects of understating the U.S./Canadian

content value for the manufacturer's vehicles. NHTSA believes, in

contrast, that the contractual provisions would help ensure that

outside suppliers provide content information without the need to

actually impose ``damages.'' The agency believes outside suppliers

would not sign contracts that they planned to violate. Also, given that

it is not very costly to provide content information, it would be

irrational for outside suppliers to decide to pay damages instead of

simply providing the information (information that they are, in any

event, required by Federal law to provide).

In addition to providing an extra incentive for outside suppliers,

such contractual provisions would provide an educational function. AAMA

stated in its petition that ``suppliers that deliberately do not

respond cite the uncompensated cost to establish the information on

content in their parts, the increased employees to calculate the data,

and the burdens they already face in generating multiple content

reports such as for NAFTA, AALA, CAFE and others each with its own

rules.'' These sorts of explanations by suppliers suggest that they

were unaware of the need to provide content information when they

signed their contracts. The inclusion of a specific contract provision

concerning the need to provide content information would make suppliers

aware of this obligation. While the costs of providing content

information may not be compensated directly, such costs are simply a

necessary part of doing business. Assuming that suppliers are aware of

these costs, they will presumably consider them in negotiating their

contracts, just as they consider other costs of doing business.

As indicated above, NHTSA has not decided whether to extend today's

amendment beyond December 31 of this year, but is requesting comments

on this issue. The agency requests commenters to address the following

questions:

1. Can the problems being experienced by some vehicle manufacturers

with non-responsive suppliers be resolved by contractual provisions?

Have the vehicle manufacturers experiencing these problems included

specific provisions concerning content labeling in their contracts? If

not, why? If such provisions are not included in contracts, how long

would it take to add them? Are there other ways to resolve these

problems, particularly without costly efforts by the vehicle

manufacturers?

2. If the agency were to extend the applicability of today's

amendment beyond December 31 of this year, how long should the

extension be? Should such an extension continue to provide the same

type and degree of flexibility, i.e., flexibility for up to 10 percent,

by value, of a carline's total parts content from outside suppliers?

Would another value, or a somewhat different means for providing

flexibility, be more appropriate?

3. If the agency provides flexibility past December 31 of this

year, should the flexibility be limited to situations where the vehicle

manufacturers have made specified good-faith efforts to obtain the

information from an outside supplier (beyond the initial request to the

supplier)? If so, what good-faith efforts should be specified in the

regulation, e.g., certain contractual provisions, follow-up letters

and/or phone calls, etc.?

NHTSA recognizes that, to the extent commenters argue that a

somewhat different amendment should apply to models introduced after

December 31 of this year, those arguments may bear also on the

appropriateness of the relief provided up to that date. However, given

the imminence of the introduction of most model year 1997 vehicles, it

is not clear whether it would be feasible to consider amendments to the

relief provided for models introduced before December 31. Nonetheless,

the agency invites commenters to address this issue. Moreover, to

accommodate the possibility of making such an amendment, the agency

expediting the comment process by limiting the comment period to 30

days.

For the reasons discussed above, NHTSA is granting the AAMA and GM

petitions to the extent reflected in today's final rule and request for

comments. The petitions are otherwise denied.

Rulemaking Analyses and Notices

A. Executive Order 12866 (Regulatory Planning and Review) and DOT

Regulatory Policies and Procedures

This rulemaking document was not reviewed under Executive Order

12866. NHTSA has considered the economic implications of this

regulation and determined that it is not significant within the meaning

of the DOT Regulatory Policies and Procedure. Today's amendments will

not affect manufacturer or supplier costs. They simply provide

additional flexibility to vehicle manufacturers and their allied

suppliers in making content calculations.

B. Regulatory Flexibility Act

In accordance with the Regulatory Flexibility Act, NHTSA has

evaluated the effects of this action on small entities. Based upon this

evaluation, I certify that the final rule will not have a significant

economic impact on a substantial number of small entities. Today's

amendments simply provide additional flexibility to vehicle

manufacturers and their allied suppliers in making content

calculations. Therefore, a regulatory flexibility analysis is not

required for this action.

[[Page 46390]]

C. 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 final rule did not have sufficient Federalism implications to

warrant preparation of a Federalism Assessment. No state laws are

affected.

D. Executive Order 12778 (Civil Justice Reform)

This final rule does not have any retroactive effect. States are

preempted from promulgating laws and regulations contrary to the

provisions of this rule. The rule does not require submission of a

petition for reconsideration or other administrative proceedings before

parties may file suit in court.

E. National Environmental Policy Act

The agency has considered the environmental implications of this

rule in accordance with the National Environmental Policy Act of 1969

and determined that this rule will not significantly affect the human

environment.

Comments

Interested persons are invited to submit comments on this document.

It is requested but not required that 10 copies be submitted.

All comments must not exceed 15 pages in length (49 CFR 553.21).

Necessary attachments may be appended to these submissions without

regard to the 15-page limit. This limitation is intended to encourage

commenters to detail their primary arguments in a concise fashion.

If a commenter wishes to submit certain information under a claim

of confidentiality, three copies of the complete submission, including

the purportedly confidential business information, should be submitted

to the Chief Counsel, NHTSA, at the street address given above, and

seven copies from which the purportedly confidential information has

been deleted should be submitted to the NHTSA Docket Section. A request

for confidentiality should be accompanied by a cover letter setting

forth the information specified in the agency's confidential business

information regulation. 49 CFR Part 512.

All comments received by NHTSA before the close of business on the

comment closing date indicated above will be considered, and will be

available for examination in the docket at the above address both

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

after the closing date will also be considered. Comments received too

late for consideration in regard to this rulemaking action will be

considered as suggestions for further rulemaking action. Comments on

the document will be available for inspection in the docket. The NHTSA

will continue to file relevant information as it becomes available in

the docket after the closing date, and recommends that interested

persons continue to examine the docket for new material.

Those persons desiring to be notified upon receipt of their

comments in the rules docket should enclose a self-addressed, stamped

postcard in the envelope with their comments. Upon receiving the

comments, the docket supervisor will return the postcard by mail.

List of Subjects in 49 CFR Part 583

Motor vehicles, Imports, Labeling, Reporting and recordkeeping

requirements.

In consideration of the foregoing, 49 CFR part 583 is amended as

follows:

PART 583--AUTOMOBILE PARTS CONTENT LABELING

1. The authority for part 583 continues to read as follows:

Authority: 49 U.S.C. 32304, 49 CFR 1.50, 501.2(f).

2. Section 583.6 is amended by revising paragraph (c)(5) and adding

paragraph (c)(6) to read as follows:

Sec. 583.6 Procedure for determining U.S./Canadian parts content.

* * * * *

(c) * * *

(5) Except as provided in paragraph (c)(6) of this section, if a

manufacturer or allied supplier does not receive information from one

or more of its suppliers concerning the U.S./Canadian content of

particular equipment, the U.S./Canadian content of that equipment is

considered zero. This provision does not affect the obligation of

manufacturers and allied suppliers to request this information from

their suppliers or the obligation of the suppliers to provide the

information.

(6) For carlines which are first offered for sale to ultimate

purchasers before January 1, 1997, if a manufacturer or allied supplier

requests information in a timely manner from one or more of its outside

suppliers concerning the U.S./Canadian content of particular equipment,

but does not receive that information despite a good faith effort to

obtain it, the manufacturer or allied supplier may make its own good

faith value added determinations, subject to the following provisions:

(i) The manufacturer or allied supplier shall make the same value

added determinations as would be made by the outside supplier, i.e.,

whether 70 percent or more of the value of equipment is added in the

United States and/or Canada;

(ii) The manufacturer or allied supplier shall consider the amount

of value added and the location in which the value was added for all of

the stages that the outside supplier would be required to consider;

(iii) The manufacturer or allied supplier may determine that the

value added in the United States and/or Canada is 70 percent or more

only if it has a good faith basis to make that determination;

(iv) A manufacturer and its allied suppliers may, on a combined

basis, make value added determinations for no more than 10 percent, by

value, of a carline's total parts content from outside suppliers;

(v) Value added determinations made by a manufacturer or allied

supplier under this paragraph shall have the same effect as if they

were made by the outside supplier;

(vi) This provision does not affect the obligation of outside

suppliers to provide the requested information.

Issued on: August 28, 1996.

Ricardo Martinez,

Administrator.

[FR Doc. 96-22409 Filed 8-28-96; 5:08 pm]

BILLING CODE 4910-59-P