Exemptions From Average Fuel Economy Standards; Federal Motor Vehicle Theft Prevention Standard; Federal Motor Vehicle Safety Standards; Bumper Standard

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Parts 525, 541, 555, 571, and 581

[Docket No. 95-95, Notice 1]

Exemptions From Average Fuel Economy Standards; Federal Motor

Vehicle Theft Prevention Standard; Federal Motor Vehicle Safety

Standards; Bumper Standard

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

ACTION: Notice of public meeting; request for comments.

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SUMMARY: This notice announces a public meeting at which NHTSA will

seek information from small volume manufacturers and the public on

regulatory problems of such manufacturers. Previously, NHTSA announced

that it is interested in developing a legislative package tailored to

reduce the burden of its requirements

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on small businesses and manufacturers. NHTSA is requesting suggestions

for actions with respect to NHTSA's Corporate Average Fuel Economy

(CAFE) regulations, Theft Prevention Standard, Federal Motor Vehicle

Safety Standards, and Bumper Standard, that govern the compliance and

exemption of such vehicles. This notice also invites written comments

on the same subjects.

DATES: The public meeting will be held on Wednesday, March 13, 1996, at

9:00 a.m. An agenda for the meeting will be made based on the number of

persons wishing to make oral presentations and will be available on the

day of the meeting. Those wishing to make oral presentations at the

meeting should contact Taylor Vinson, at the address or telephone

number listed below, by the close of business Monday, February 26,

1996. Written comments may be submitted at any time before or after the

meeting, but not later than April 4, 1996.

ADDRESSES: Public meeting: The public meeting will be held in Rooms

6244-6248, Nassif Building (DOT headquarters), 400 Seventh Street, SW,

Washington, DC.

Written comments: Written comments should be sent to the Docket

Section, National Highway Traffic Safety Administration, Room 5109, 400

7th Street, SW., Washington, DC 20590, ATTN: Docket No. 95-95; Notice

1.

FOR FURTHER INFORMATION CONTACT: Taylor Vinson, Office of Chief

Counsel, NHTSA, 400 7th Street, SW, Washington, DC 20590 (telephone

202-366-5263).

SUPPLEMENTARY INFORMATION:

Regulatory Reform

Calling for a new approach to the way Government regulates the

private sector, President Clinton has asked Executive Branch agencies

to improve the regulatory process. Specifically, the President

requested that agencies (1) cut obsolete regulations; (2) create

grassroots partnerships by meeting with those affected by regulations

and other interested parties; and (3) make more frequent use of

consensual rulemaking such as regulatory negotiation.

This is the second of NHTSA's announced meetings to create

grassroots partnerships with regulated industries that do not deal with

NHTSA on a daily basis. By meeting with these groups, NHTSA believes

that it can derive a better understanding of their needs and concerns.

Other groups that the agency plans to meet with are manufacturers of

school buses, heavy trucks, child seats, and lamps and reflectors. The

agency met on December 12, 1995, with manufacturers of multistage

vehicles.

As part of its contribution towards regulatory reform to reduce

unnecessary regulatory burdens, NHTSA has announced that it plans to

develop a legislative package tailored to reduce the burden of its

requirements on small manufacturers. Such a package could include

longer leadtimes for small manufacturers and greater flexibility in

granting small-manufacturer exemptions. NHTSA recognizes that small

volume manufacturers are faced with somewhat different problems than

manufacturers who produce in larger quantities. Therefore, the agency

has decided to hold a public meeting to receive the comments of this

group and the public on how the regulatory process might be improved

without any diminution of regulatory goals.

Small-Volume Manufacturers

Under the current statutes and regulations administered by NHTSA,

there is no specific definition of ``small-volume manufacturer''.

However, eligibility for application for exemption from average fuel

economy standards and motor vehicle safety standards is statutorily

predicated upon the volume of production. This statutory criterion is

reflected in the agency's regulations. Under 49 CFR Part 525 Exemptions

From Average Fuel Economy Standards, a manufacturer who produces fewer

than 10,000 passenger automobiles may apply for an exemption.

Similarly, under 49 CFR Part 555 Temporary Exemption From Motor Vehicle

Safety Standards, a manufacturer whose total motor vehicle production

(passenger cars and all other types) does not exceed 10,000 may apply

for an exemption on grounds that compliance would cause it substantial

economic hardship. Thus, at present, a manufacturer whose annual motor

vehicle production does not reach 10,000 units can apply for regulatory

relief that is not available to manufacturers whose yearly production

is greater. NHTSA, therefore, considers any manufacturer of motor

vehicles that which fabricates not more than 10,000 units a year to be

a ``small-volume manufacturer'' within the meaning of its outreach

program, regardless of whether it has petitioned for exemption under

Part 525 or Part 555.

Importers of vehicles for resale are statutorily treated as

``manufacturers'' for most purposes and required to comply with

obligations of fabricating manufacturers. Aside from factory-owned

U.S.-based concerns importing certified vehicles, importers of vehicles

for resale generally import vehicles originally intended for sale in a

country other than the United States and thus not manufactured to

conform to Federal requirements. Such importers are treated as

``registered importers'' (RIs) in the agency's authorizing statute and

under 49 CFR Part 592. None imports more than 10,000 units a year. The

agency is well aware of the problems faced by RIs in qualifying

nonconforming vehicles for entry and modifying them after entry.

However, these problems are of a different nature than those faced by

small manufacturers actually involved in fabrication. For this reason,

the agency does not intend to include non-fabricating small-volume

manufacturers in the agenda for this meeting.

The following paragraphs briefly describe the existing statutory

provisions regarding the establishing of standards and the NHTSA

regulations implementing those provisions.

Corporate Average Fuel Economy (CAFE)

The CAFE standards originate in 49 U.S.C. Chapter 329--Automobile

Fuel Economy. This chapter requires passenger automobiles to meet a

CAFE standard of 27.5 miles per gallon for each model year. Under 49

U.S.C. 32902(d)(1), a manufacturer may apply for a CAFE exemption if it

produced less than 10,000 passenger automobiles in the model year 2

years before the model year for which application is made. An exemption

for the model year may be granted if the agency finds that the

applicable CAFE standard is more stringent than the maximum feasible

average fuel economy level that the manufacturer can achieve, and then

prescribes an alternative standard that is based upon the finding.

The exemption provisions of Chapter 329 have been implemented by 49

C.F.R. Part 525 Exemptions From Average Fuel Economy Standards. This

regulation sets out the contents of applications and the application

procedures. Exempted manufacturers and their individual CAFE standards

are listed at 49 C.F.R. 531.5(b).

Theft Prevention Standard

The agency's efforts to reduce the theft of motor vehicles are

governed by 49 U.S.C. Chapter 331--Theft Prevention. Under Sec. 33102,

NHTSA is required to issue a theft prevention standard that applies to

parts of vehicles that have been designated high theft lines. Sec.

33103 requires NHTSA to extend the standard to vehicle lines that have

not been designated high theft. Sec. 33106 allows manufacturers to

apply for exemption for passenger motor vehicles equipped with

antitheft

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devices. However, the right to apply is independent of the quantity of

vehicles produced by the applicant. Sec. 33114 prohibits the

importation of either a motor vehicle or replacement part covered by a

theft standard unless it conforms to the standard. The prohibition is

absolute and does not provide for importing noncomplying vehicles or

parts and subsequently bringing them into compliance with the theft

prevention standard.

Chapter 331 has been implemented in pertinent part by 49 C.F.R.

Part 541 Federal Motor Vehicle Theft Prevention Standard and Part 543

Exemption From Vehicle Theft Prevention Standard. Part 541 requires the

marking of parts in the manner prescribed. Part 543 contains the

procedures for applying for theft prevention standard exemptions.

Vehicles with antitheft devices that are exempted in their entirety

from the standard are listed in Appendix A of Part 541. Some of them

are produced by small-volume manufacturers within the meaning of this

notice.

Federal Motor Vehicle Safety Standards

49 U.S.C. Chapter 301--Motor Vehicle Safety is the authority for

the regulations published under 49 C.F.R. Part 571 Federal Motor

Vehicle Safety Standards. Every motor vehicle must meet all applicable

Federal motor vehicle safety standards by virtue of Sec. 30112(a),

except as provided elsewhere in Sec. 30112, and in Secs. 30113 and

30114. Sec. 30113(d) provides that a manufacturer whose annual motor

vehicle production is 10,000 units or less is eligible to apply for an

exemption under Sec. 30113(b)(3)(B)(i), on the basis that compliance

would cause substantial economic hardship to a manufacturer that has

tried to comply with the standard in good faith.

Some small-volume manufacturers have petitioned for temporary

exemption from the safety standards on grounds other than substantial

economic hardship, principally electric vehicle manufacturers who argue

that an exemption would facilitate the development and field evaluation

of a low-emission vehicle, a basis allowed by Sec. 30113(b)(3)(B)(iii).

Eligibility to apply is not predicated upon limited production volume.

This and the remaining categories of exemptions (innovative safety

devices, equivalent overall level of safety) are available to all

manufacturers regardless of production (though only 2,500 vehicles per

year can be exempted). Nevertheless, the agency intends to include all

four categories of statutory exemption in this review, even though they

affect all manufacturers and not just those whose volume is limited.

Sec. 30113 General exemptions has been implemented by 49 C.F.R.

Part 555 Temporary Exemption From Motor Vehicle Safety Standards. Under

the authority of this regulation, in effect since 1973, over 100

applications have been considered, and the greater part of them

granted.

Sec. 30114 Special exemptions provides NHTSA with the authority to

exempt a motor vehicle or an item of motor vehicle equipment on terms

that the agency decides are necessary ``for research, investigations,

demonstrations, training, or competitive racing events.'' Since its

original enactment in P.L. 100-562, The Imported Vehicle Safety Act of

1988, Sec. 30114 has been implemented solely with respect to the

importation of vehicles and equipment, in 49 C.F.R. Sec. 591.5(j)(i).

However, that statutory provision appears to have other applications as

well, such as permitting manufacturers to operate non-conforming

prototype vehicles on the public roads.

Bumper Standards

Reduction of damage from motor vehicle accidents is the purpose of

49 U.S.C. Chapter 325--Bumper Standards. Sec. 32502 requires NHTSA to

promulgate bumper standards for passenger motor vehicles as defined by

the statute. A limited exemption authority is provided to NHTSA by Sec.

32502(c) to exempt from any part of a standard a multipurpose passenger

vehicle or a make, model, or class of a passenger motor vehicle

manufactured for a special use, if the standard would interfere

unreasonably with the special use of the vehicle. However, this

exemption authority is silent as to the right of a manufacturer to

petition for relief. At the most, a manufacturer could petition only

for relief of a class and not for relief on an individual basis, no

matter what the volume of the manufacturer's production.

The statutory requirement for a standard has been implemented by 49

C.F.R. Part 581--Bumper Standard. The regulation is silent on exemption

procedures.

Comments

The agency believes that it would be helpful to have comments on

the following topics, with respect to the statutory authority and

regulations discussed above--

Expansion or addition of exemption authority.

Administrative/compliance burdens.

Deferred compliance until end of phase-in period for

phased-in regulations.

Cost effectiveness.

Costs to consumers of the existing regulation and the

changes suggested by the commenter.

Costs to regulated parties of testing or certification.

Effects on fuel economy, theft prevention, safety, or

property damage.

Effects on small business.

Enforceability.

Whether the statute or regulation reflects a ``common

sense'' approach to solving the problem.

Written statements should be arranged by the CFR Part numbers

addressed, be as specific as possible and provide the best available

supporting information. Suggestions should be accompanied by a

rationale for the suggested action and a forecast of the expected

consequences of that action. Statements also should specify whether any

change recommended in the regulatory process would require a

legislative change in NHTSA's authority.

Procedural Matters

The agency intends to conduct the meeting informally so as to allow

for maximum participation by all who attend. Interested persons may ask

questions or provide comments during any period after a person has

completed his or her presentation on a time allowed basis, as

determined by the presiding official. If time permits, persons who did

not ask prior to the meeting for an opportunity to speak, but would

like to make a statement, will be afforded an opportunity to do so.

Those speaking at the public meeting should limit their

presentations to 20 minutes. If the presentation will include slides,

motion pictures, or other visual aids, please so inform the contact

person identified above so that the proper equipment may be made

available. Presenters should bring at least one copy of their

presentation to the meeting so that NHTSA can readily include the

material in the public record.

A schedule of participants making oral presentations will be

available in the designated meeting room before the beginning of the

meeting. NHTSA will place a copy of any written statement in Docket No.

95-95; Notice 1. The public may inspect the Docket for comments and

statements which may be received before or after the meeting. A

verbatim transcript of the meeting will be prepared and also placed in

the NHTSA docket as soon as possible after the meeting.

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Participation in the meeting is not a prerequisite for the

submission of written comments. NHTSA invites written comments from all

interested parties. It is requested but not required that 10 copies be

submitted.

If a commenter wishes to submit certain information under a claim

of confidentiality, three copies of the complete submission, including

purportedly confidential business information, should be submitted to

the Chief Counsel, NHTSA, Room 5219, at the street address given above,

and copies from which the purportedly confidential information has been

deleted should be submitted to the 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 before the close of business on March 21,

1996, will be considered in formulating a decision on the issues

raised. After the closing date, NHTSA will continue to file relevant

comments and information in the docket as it becomes available. It is

therefore recommended that interested persons continue to examine the

docket for new material.

Issued: January 30, 1996.

Barry Felrice,

Associate Administrator for Safety Performance Standards.

[FR Doc. 96-2330 Filed 2-2-96; 8:45 am]

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