    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

              EXAMINING WAYS TO IMPROVE VEHICLE AND ROADWAY SAFETY

    =======================================================================

                                     HEARING

                                   BEFORE THE

               SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                OCTOBER 21, 2015

                                   __________

                               Serial No. 114-87

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

          Printed for the use of the Committee on Energy and Commerce

                            energycommerce.house.gov

                                   ___________

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                        COMMITTEE ON ENERGY AND COMMERCE

                              FRED UPTON, Michigan
                                     Chairman
    JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
      Chairman Emeritus                    Ranking Member
    ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
    JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
    JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
    GREG WALDEN, Oregon                  GENE GREEN, Texas
    TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
    MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
    MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
      Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
    STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
    ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
    CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
    GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
    LEONARD LANCE, New Jersey            JERRY McNERNEY, California
    BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
    PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
    DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
    MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
    ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
    H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
    GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
    BILL JOHNSON, Missouri               JOSEPH P. KENNEDY, III,
    BILLY LONG, Missouri                     Massachusetts
    RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California
    LARRY BUCSHON, Indiana
    BILL FLORES, Texas
    SUSAN W. BROOKS, Indiana
    MARKWAYNE MULLIN, Oklahoma
    RICHARD HUDSON, North Carolina
    CHRIS COLLINS, New York
    KEVIN CRAMER, North Dakota

               Subcommittee on Commerce, Manufacturing, and Trade

                           MICHAEL C. BURGESS, Texas
                                     Chairman
                                         JANICE D. SCHAKOWSKY, Illinois
    LEONARD LANCE, New Jersey              Ranking Member
      Vice Chairman                      YVETTE D. CLARKE, New York
    MARSHA BLACKBURN, Tennessee          JOSEPH P. KENNEDY, III,
    GREGG HARPER, Mississippi                Massachusetts
    BRETT GUTHRIE, Kentucky              TONY CARDENAS, California
    PETE OLSON, Texas                    BOBBY L. RUSH, Illinois
    MIKE POMPEO, Kansas                  G.K. BUTTERFIELD, North Carolina
    ADAM KINZINGER, Illinois             PETER WELCH, Vermont
    GUS M. BILIRAKIS, Florida            FRANK PALLONE, Jr., New Jersey (ex
    SUSAN W. BROOKS, Indiana                 officio)
    MARKWAYNE MULLIN, Oklahoma
    FRED UPTON, Michigan (ex officio)

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. Michael C. Burgess, a Representative in Congress from the
      State of Texas, opening statement..............................     1
        Prepared statement...........................................     2
    Hon. Janice D. Schakowsky, a Representative in Congress from the
      State of Illinois, opening statement...........................     3
    Hon. Fred Upton, a Representative in Congress from the State of
      Michigan, opening statement....................................     5
        Prepared statement...........................................     5
    Hon. Frank Pallone, Jr., a Representative in Congress from the
      State of New Jersey, opening statement.........................     7

                                   Witnesses

    Mark Rosekind, Administrator, National Highway Traffic Safety
      Administration.................................................     8
        Prepared statement...........................................    11
        Answers to submitted questions...............................   170
    Maneesha Mithal, Associate Director, Division of Privacy And
      Identity Protection, Federal Trade Commission..................    14
        Prepared statement...........................................    16
        Answers to submitted questions...............................   184
    Mitch Bainwol, President and CEO, Alliance of Automobile
      Manufacturers..................................................    43
        Prepared statement...........................................    46
        Answers to submitted questions...............................   188
    John Bozzella, President and CEO, Global Automakers..............    51
        Prepared statement...........................................    53
        Answers to submitted questions...............................   196
    Ann Wilson, Senior Vice President, Motor & Equipment
      Manufacturers Association......................................    59
        Prepared statement...........................................    61
        Answers to submitted questions...............................   205
    Greg Dotson, Vice President for Energy Policy, Center for
      American Progress..............................................    67
        Prepared statement...........................................    69
        Answers to submitted questions...............................   212
    Joan Claybrook, Former Administrator, National Highway Traffic
      Safety Administration..........................................    76
        Prepared statement...........................................    78
        Answers to submitted questions...............................
    Peter Welch, President, National Automobile Dealers Association..   105
        Prepared statement...........................................   107
        Answers to submitted questions...............................   216
    Michael Wilson, CEO, Automotive Recyclers Association............   114
        Prepared statement...........................................   117
        Answers to submitted questions...............................   221

                               Submitted Material

    Statement of the National Highway Traffic Safety Administration,
      submitted by Mrs. Capps........................................   138
    Statement of Carol Houck in support of H.R. 2198, submitted by
      Mrs. Capps.....................................................   141
    Statements of GM in support of H.R. 2198, submitted by Mr. Pitts.   143
    Statement of environmental, science, and safety organizations,
      submitted by Ms. Schakowsky....................................   146
    Statement of the American Car Rental Association, submitted by
      Mr. Burgess....................................................   148
    Statement of the Auto Care Association8, submitted by Mr. Burgess   153
    Statement of the American Chemistry Council, submitted by Mr.
      Burgess........................................................   155
    Statement of the American Association of Motor Vehicle
      Administrators, submitted by Mr. Burgess.......................   157
    Statement of the Motor & Equipment Manufacturers Association,
      submitted by Mr. Burgess \1\...................................
    Statement of the Environmental Protection Agency, submitted by
      Mr. Burgess....................................................   162
    Statement of auto recyclers, submitted by Mr. Harper.............   168

    ----------
    \1\ Available at: http://docs.house.gov/meetings/if/if17/
      20151021/104070/hhrg-114-if17-20151021-sd006.pdf.

              EXAMINING WAYS TO IMPROVE VEHICLE AND ROADWAY SAFETY

                                  ----------

                          WEDNESDAY, OCTOBER 21, 2015

                      House of Representatives,
    Subcommittee on Commerce, Manufacturing, and Trade,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 10:03 a.m., in
    room 2123 Rayburn House Office Building, Hon. Michael Burgess
    (chairman of the subcommittee) presiding.
        Members present: Representatives Burgess, Lance, Blackburn,
    Guthrie, Olson, Bilirakis, Brooks, Upton (ex officio),
    Schakowsky, Kennedy, Cardenas, Butterfield, Welch, and Pallone
    (ex officio).
        Also present: Representative Capps.
        Staff present: Leighton Brown, Press Assistant; James
    Decker, Policy Coordinator, Commerce, Manufacturing, and Trade;
    Andy Duberstein, Deputy Press Secretary; Graham Dufault,
    Counsel, Commerce, Manufacturing, and Trade; Melissa Froelich,
    Counsel, Commerce, Manufacturing, and Trade; Paul Nagle, Chief
    Counsel, Commerce, Manufacturing, and Trade; Olivia Trusty,
    Professional Staff, Commerce, Manufacturing, and Trade; Dylan
    Vorbach, Legislative Clerk, Commerce, Manufacturing, and Trade;
    Michelle Ash, Chief Counsel, Commerce, Manufacturing, and
    Trade; Jeff Carroll, Staff Director; Lisa Goldman, Counsel;
    Rick Kessler, Senior Advisor and Staff Director, Energy and
    Environment; and Josh Lewis, EPA Detailee.

    OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
                  IN CONGRESS FROM THE STATE OF TEXAS

        Mr. Burgess. The committee will come to order. And good
    morning. I want to welcome everyone to our hearing today:
    ``Examining Ways to Improve Vehicle and Roadway Safety.''
        I will recognize myself for 5 minutes for the purpose of an
    opening statement.
        Certainly, lives depend on the safety of cars, safety of
    trucks, and on the roads themselves in the United States. And
    on the whole, the data is good around the decrease in
    fatalities against miles driven. But the hearings over the last
    2 years have certainly underlined the severity of problems that
    do exist, and there is no room for going slow when it comes to
    safety. And certainly, deception cannot and will not be
    tolerated.
        So it is incumbent upon us in the Congress, us on the
    committee, the National Highway Traffic Safety Administration,
    vehicle manufacturers, and others in the automotive industry to
    ensure absolute compliance with current federal motor vehicle
    safety standards and processes. Lives depend on it.
        It is also our responsibility to revisit the adequacy of
    safety standards and the processes that determine whether they
    provide sufficient protections to our nation's motorists. This
    past year, I think it has been clear to many of us on the
    committee and certainly clear to me that this is not always the
    case and that there is room for improvement.
        To that end, the discussion draft that we will examine
    today includes modifications to certain federal motor vehicle
    safety standards and their processes that will enhance safety
    practices amongst automakers, the National Highway Traffic
    Safety Administration itself, and provide more information to
    motorists and consumers about vehicle safety, and foster the
    development of new automotive technologies that will save
    lives.
        Some of these modifications include updating how the
    National Highway Traffic Safety Administration publicizes and
    makes recall information available to consumers. The discussion
    draft will address how NHTSA coordinates with automakers before
    publicizing recall notices to consumers as well. These changes
    are intended to improve overall recall awareness by providing
    drivers with more complete information about a safety recall,
    and giving them the means to take immediate action to get their
    vehicles fixed once the defect notice is received.
        The discussion draft also contains proposals intended to
    improve how the National Highway Traffic Safety Administration
    collects and analyzes vehicle safety information, and directs
    the agency to research the lifesaving potential of
    crashworthiness features that could provide additional
    protections to the driving public.
        To increase accountability and improve safety practices
    among vehicle manufacturers, the discussion draft extends their
    remedy and their repair obligations under recalls, and
    increases the time that they must maintain safety records to
    facilitate the identification of potential defects, and
    institutes safety incentives that encourage investment into
    next-generation safety technologies.
        After a record year for recalls, the draft we will examine
    today also discusses roadway safety, vehicle safety, and is a
    continuation of this subcommittee's efforts to restore
    confidence in American motorists that the cars that they are
    driving are safe, that the recall process works, and that
    automakers and the National Highway Traffic Safety
    Administration are capable of keeping pace with the technology
    and the complexity of cars of the future.
        I certainly want to thank all of our witnesses for their
    testimonies. I look forward to an engaging and lively
    discussion on these issues as we seek to improve auto safety,
    save more lives, and ultimately benefit the driving public.
        [The prepared statement of Mr. Burgess follows:]

                 Prepared statement of Hon. Michael C. Burgess

        Lives depend on the safety of cars and trucks on the road
    in the United States. And on the whole, the data is good around
    the decrease in fatalities against miles driven. But the
    hearings over the last two years have been sobering in their
    severity. There is no room for slow when it comes to safety and
    deception cannot be tolerated.
        It is incumbent upon Congress, the National Highway Traffic
    Safety Administration, vehicle manufacturers and others in the
    automotive industry to ensure absolute compliance with current
    federal motor vehicle safety standards and processes. Again,
    lives depend on it. It is also our responsibility to revisit
    the adequacy of current safety standards and processes and
    determine whether they provide sufficient protections to our
    nation's motorists. This past year, it has been clear to me
    that they do not and that there are areas ripe for improvement.
        To that end, the discussion draft that we will examine
    today includes modifications to certain federal motor vehicle
    safety standards and processes that will: enhance safety
    practices among automakers and NHTSA; provide more information
    to motorists about vehicle safety; and foster the development
    of new automotive technologies that will help save lives.
        Some of these modifications include updating how NHTSA
    publicizes and makes recall information available to consumers.
    The discussion draft addresses how NHTSA coordinates with
    automakers before publicizing recall notices to consumers as
    well. These changes are intended to improve recall awareness by
    providing drivers with more complete information about a safety
    recall and giving them the means to take immediate action to
    get their vehicles fixed once a defect notice is received. The
    discussion draft also contains proposals intended to improve
    how NHTSA collects and analyzes vehicle safety information, and
    directs the agency to research the life-saving potential of
    crashworthiness features that could provide additional
    protections to the driving public.
        To increase accountability and improve safety practices
    among vehicle manufacturers, the discussion draft extends their
    remedy and repair obligations under recalls, increases the time
    that they must maintain safety records to facilitate the
    identification of potential defects, and institutes safety
    incentives that encourage investment into next-generation
    safety technologies.
        The staff discussion draft that we will examine today on
    vehicle and roadway safety is a continuation of this
    subcommittee's efforts to, after a year of record recalls,
    restore confidence in American motorists that the cars they are
    driving are safe, that the recall process works, and that
    automakers and NHTSA are capable of keeping pace with the
    technology and complexity of cars of the future.

        [The discussion draft of the proposed bill follows:]
        Mr. Burgess. With that, I will yield back the balance of my
    time and recognize the ranking member of the subcommittee, Ms.
    Schakowsky, 5 minutes for the purpose of an opening statement,
    please.

           OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A
         REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

        Ms. Schakowsky. Thank you, Mr. Chairman, for holding
    today's hearing on a legislative effort to enhance auto safety
    and improve the recall process.
        I would like to mention at the outset that I think it is a
    mistake to hold this hearing without a non-government data
    security witness. This draft legislation includes provisions
    related to privacy and data protection, and it would benefit
    all of us to better understand the implication of those
    provisions.
        I would also like to mention that victims of the GM
    ignition switch failure are here today in the audience. It has
    been 20 months since the initial GM recall, and you would think
    this committee would have acted sooner. As we see again today
    with the Toyota recall of 6.5 million vehicles, these safety
    issues aren't going away.
        As a sponsor of legislation to achieve the goals this bill
    attempts to address, I am happy we are finally having a
    legislative hearing. Unfortunately, I believe we are having it
    on the wrong bill. This discussion draft includes some ideas
    from H.R. 1181, the Vehicle Safety Improvement Act, the bill I
    introduced with Ranking Member Pallone and five other members
    of the subcommittee in March. Those policies include
    requirements that NHTSA undergo a rulemaking to improve rear
    crashworthiness, and that every automaker has a U.S.-based
    senior executive responsible for certifying the accuracy and
    completeness of all responses to NHTSA's request for
    information relating to safety investigations.
        And I am glad those provisions were included, but it would
    have been much better and more useful for the majority to have
    engaged in a bipartisan consultation during the drafting of
    this bill, as I have repeatedly asked, rather than dumping this
    bill in our laps. Had that dialogue taken place, many of the
    weaknesses in the bill could have been addressed prior to this
    hearing.
        The Vehicle Safety Improvement Act includes several
    provisions that would enhance safety and improve the efficacy
    of recalls, none of which are included in this draft
    legislation. The VSIA would more than double NHTSA's funding
    for vehicle safety programs. This bill provides no explicit
    additional funding for the agency. The VSIA would increase the
    quantity and quality of information shared by automakers with
    NHTSA, the public, and Congress.
        While there is a nod to those priorities in this draft
    legislation, there is little meaningful change from the status
    quo. The bill would require manufacturers to fix all recalled
    vehicles free of charge rather than just those that were
    purchased within the past 10 years. This discussion draft would
    not.
        Under VSIA, NHTSA would have new imminent hazard authority
    to expedite recalls related to dangerous defects that would
    eliminate the regional recall program ensuring that all cars
    subject to a recall are repaired regardless of their location.
    Neither of those changes are part of this discussion draft.
        But beyond those missteps, the Republican draft legislation
    takes egregious steps in the wrong direction. To take one
    example, the bill would give automakers a break from health-
    based carbon emissions requirements in exchange for adding
    safety features that are readily available.
        In the wake of Volkswagen's deliberate cheating on EPA
    emissions standards, it makes no sense that we give carmakers a
    free pass to pollute beyond standards needed to maintain public
    health. This provision is a big win for the Volkswagens of the
    world but does nothing to benefit the public.
        It is about time we had a hearing in enhancing auto safety.
    The safety of American drivers, passengers, and pedestrians
    should be above partisan politics. I urge my colleagues to
    engage in a bipartisan legislative process that will yield a
    stronger and more comprehensive bill. I am anxious to
    participate in that kind of dialogue. We still have an
    opportunity to deal that.
        And unless there is someone else who would want some time,
    I yield back my time.
        Mr. Burgess. The chair thanks the gentlelady. The
    gentlelady yields back.
        The chair recognizes the chairman of the full committee,
    Mr. Upton, 5 minutes for an opening statement, please.

       OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF MICHIGAN

        Mr. Upton. Well, thank you, Mr. Chairman.
        You know, a car isn't just how you get around when you are
    from Michigan. It is a neighbor's job, it is a fiber that
    connects our communities, and the backbone of our state's
    economy, and we take great pride in the industry's
    inventiveness, resilience, and creativity. It is what has
    helped the industry become what it is today, a global leader in
    vehicle safety, comfort, and superior driving experiences.
        But over the past couple years, we have seen the best of
    what the auto industry has to offer. It is no secret that I am
    an optimist and believe that the future is bright for the auto
    industry, for Michigan, and for the country. But unfortunately,
    we have also seen safety shortcomings and flat-out dishonesty
    along the way. I am glad we are here today to start talking
    about making fixes to the National Highway Traffic Safety
    Administration and to the industry to ensure that cars are as
    safe as humanly possible.
        We are in the midst of an exciting time of automotive
    ingenuity. What was once science fiction is now becoming
    reality. This innovation is to be applauded, not only because
    it will revolutionize driving, but because of what it means for
    vehicle safety, the environment, and most importantly, saved
    lives.
        The staff discussion draft that we are going to review
    today is a starting point to achieve those ends. It includes
    proposals intended to foster greater vehicle and roadway safety
    for motorists now and for years to come. Some pieces, like
    having a corporate officer responsible for safety compliance,
    certainly isn't new. Other ideas, like how to best ensure
    cybersecurity, may need to further evolve. It is encouraging
    that the industry is setting up an Information Sharing and
    Analysis Center. There is also good talk about forming a
    working group to address cybersecurity best practices.
        The draft seeks to address concerns around recall awareness
    and incentivizes automakers to invest in new safety
    technologies that will indeed save more lives. It also includes
    plans that will help modernize the work and mission of the
    NHTSA to ensure that the agency is fully capable of keeping
    pace with the innovation and progress of the industry in the
    21st century.
        This is a lifesaving endeavor. I look forward to a
    thoughtful and engaging dialogue on the merits of each proposal
    and what additional considerations should be made by this
    committee. While we have a ton of witnesses today, I also want
    to invite everyone with an interest to give us feedback on how
    we can improve the legislation.
        This committee is unwavering in its commitment to ensure
    that the auto industry and the government are doing everything
    that they can to make cars safer and protect the lives of the
    driving public and their passengers. Our work continues to
    improve safety for drivers.
        [The prepared statement of Mr. Upton follows:]

                     Prepared statement of Hon. Fred Upton

        A car isn't just how you get around when you are from
    Michigan. It's a neighbor's job, it's a fiber that connects our
    communities, and the backbone of our state's economy. We take
    great pride in the industry's inventiveness, resilience, and
    creativity. It is what has helped the industry become what it
    is today--a global leader in vehicle safety, comfort, and
    superior driving experiences.
        Over the past few years, we have seen the best of what the
    auto industry has to offer. It's no secret that I am an
    optimist and believe that the future is bright for the auto
    industry, for Michigan, and this country. Unfortunately, we
    have also seen safety shortcomings and dishonesty along the
    way. I am glad we are here today to start talking about making
    fixes to the National Highway Traffic Safety Administration and
    to the industry to ensure that cars are as safe as humanly
    possible.
        We are in the midst of an exciting time of automotive
    ingenuity. What was once science fiction is now becoming a
    reality. This innovation is to be applauded, not only because
    it will revolutionize driving, but because of what it means for
    vehicle safety, the environment, and most importantly saved
    lives.
        The staff discussion draft that we will review today is a
    starting point to achieve those ends. It includes proposals
    intended to foster greater vehicle and roadway safety for
    motorists now and in the years to come. Some pieces, like
    having a corporate officer responsible for safety compliance,
    aren't new. Other ideas, like how to best ensure cybersecurity,
    may need to further evolve. It is encouraging that the industry
    is setting up an Information Sharing and Analysis Center. There
    is also talk of forming a working group to address
    cybersecurity best practices.
        The draft seeks to address concerns around recall awareness
    and incentivizes automakers to invest in new safety
    technologies that will save more lives. It also includes plans
    that help modernize the work and mission of the National
    Highway Traffic Safety Administration to ensure that the agency
    is fully capable of keeping pace with the innovation and
    progress of the industry in the 21st century.
        This is a life-saving endeavor. I look forward to a
    thoughtful and engaging dialogue on the merits of each
    proposal, and what additional considerations should be made by
    this committee. While we have many witnesses today, I also want
    to invite everyone with an interest to give us feedback on how
    we can improve the legislation. The Energy and Commerce
    Committee is unwavering in its commitment to ensure that the
    auto industry and the government are doing everything they can
    to make cars safer and protect the lives of the driving public.
    Our work continues to improve safety for drivers.

        Mr. Upton. And I yield the balance of my time to the vice
    chair of the full committee, Marsha Blackburn.
        Mrs. Blackburn. Thank you, Mr. Chairman, and I want to
    thank our witnesses for being here today, and Chairman Burgess,
    just to thank you for this hearing. I think you have chosen the
    perfect day to do this hearing as we go back to the future, and
    it is October 21st, 2015, and we all remember that movie and
    the significance of that date. And here we are talking about
    interconnected cars and using tablets and using this data. So
    perfect day to have this discussion. And, Chairman Burgess, I
    thank you for the draft that you have brought forward.
        My constituents are truly interested in this issue. Whether
    they work with Toyota or GM or Nissan or in the aftermarket
    auto parts industry with AutoZone, everybody has an interest in
    what we are doing. And here is the reason why: When you look at
    the stats that we are going to have a quarter-billion
    interconnected cars on the roadway by 2020, by 2020, and the
    significance of that, as automobiles have become more
    computerized, it is important for us to look at these
    technological advances such as the vehicle-to-vehicle
    communication. There is a lot of curiosity about that. We look
    forward to getting some answers as to how this is going to
    work.
        And I thank the gentleman from Texas for initiating the
    conversation and yield back.
        Mr. Burgess. The chair thanks the gentlelady. The
    gentlelady yields back.
        The chair recognizes the ranking member of the full
    committee, Mr. Pallone, 5 minutes for an opening statement,
    please.

    OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE
                IN CONGRESS FROM THE STATE OF NEW JERSEY

        Mr. Pallone. The title of today's hearing refers to vehicle
    and roadway safety, but it is clear from the draft before us
    that safety is not the focus. Instead of improving auto safety,
    this draft weakens current environmental and consumer
    protections.
        Auto safety is a pressing topic that deserves our utmost
    attention. Traffic fatalities in the U.S. grew by 14 percent in
    the first 6 months of 2015. That increase comes after years of
    declining traffic deaths. And injuries are also up. The
    National Safety Council reports that medically related motor
    vehicle injuries grew by 30 percent since 2014, and these
    increases should concern everyone.
        Earlier this year, Ranking Member Schakowsky and I
    introduced the Vehicle Safety Improvement Act of 2015 as a
    starting point for bipartisan negotiations with an eye towards
    comprehensive auto safety legislation. Our bill would make real
    improvements to ensure that the millions of drivers and
    passengers across this country are kept safe. It gets NHTSA the
    information, resources, and authorities needed to protect
    consumers, and our bill also empowers consumers with more
    information and ensures used cars are fixed before they are
    resold.
        Instead of those safety measures, this draft would give
    automakers credits towards greenhouse gas emissions and fuel
    economy requirements for incorporating crash avoidance and
    vehicle-to-vehicle or V2V technologies in new cars even though
    there is no apparent link between these technologies and lower
    emissions. Manufacturers would get these credits for things
    they are already doing, not as an incentive to improve safety.
        Not only are manufacturers continuously touting their cars
    as including the latest in crash-avoidance technologies, NHTSA
    has already released its proposal to require V2V-enabled cars.
    NHTSA also secured commitments from several automakers to
    include automatic emergency braking on all new cars, and
    furthermore, many crash-avoidance technologies are currently
    part of a prominent safety rating from the Insurance Institute
    for Highway Safety, meaning that automakers already have
    considerable incentive to add those features to cars.
        In the wake of the Volkswagen emissions fraud scandal, I am
    alarmed that Congress would even consider giving automakers a
    way around environmental regulations. In effect, auto companies
    would receive a pass on pollution because they installed
    communication devices in their vehicles. Just as Volkswagen's
    technologies did not prevent NOx emissions, communication
    devices will not prevent greenhouse gases. And this bill
    essentially creates a congressionally sanctioned defeat device.
        I am also concerned about the privacy and cybersecurity
    provisions in this draft. As more high-tech vehicle safety
    equipment is integrated into cars, strong consumer privacy and
    data protections are more important than ever. But instead of
    improving privacy or cybersecurity protections, this draft
    gives automakers liability protection for simply submitting a
    privacy policy or cybersecurity plan, even if that policy or
    plan provides no real protections for consumers, and even if
    those policies are not followed.
        Because my time is limited, I want to turn to process for a
    moment. I am disappointed by the unilateral approach taken by
    the majority in drafting this legislation. For months we have
    been trying to work with our Republican colleagues to draft
    auto safety legislation that would meaningfully reduce deaths
    and injuries on the roads. But instead of pursuing a bipartisan
    approach, the majority chose to prepare this legislation behind
    closed doors.
        In addition, I am troubled that the Environmental
    Protection Agency could not find a way to attend today.
    Regardless, if the majority wants to open up the Clean Air Act,
    then this bill must be the subject of a hearing and markup by
    the Energy and Power Subcommittee, which has the jurisdiction
    and expertise to evaluate these proposals.
        So, Mr. Chairman, this draft in my opinion fails to
    increase auto safety, it harms the environment, and relieves
    automakers from responsibility regarding consumer data. This is
    a weak bill that I can't support. Yet again, I can only express
    my hope that in the near future we can work together to make
    real progress towards improving auto safety.
        And unless someone else wants time, I yield back. Thank
    you, Mr. Chairman.
        Mr. Burgess. The gentleman yields back. The chair thanks
    the gentleman. This concludes opening statements.
        The chair would like to remind Members that, pursuant to
    committee rules, all Members' opening statements will be made
    part of the record.
        And again, we want to thank our witnesses for being here
    today, taking time to testify before the subcommittee. Today's
    hearing will consist of two panels. Each panel of witnesses
    will have the opportunity to give an opening statement followed
    by a round of questions. And once we conclude with questions on
    the first panel, we will take a brief--underscore brief--recess
    to set up for the second panel.
        Our first witness panel for today's hearing is to include
    Dr. Mark Rosekind, the Administrator of the National Highway
    Traffic Safety Administration; and Mrs. Maneesha Mithal, the
    Associate Director of the Division of Privacy and Identify
    Protection at the Federal Trade Commission. We appreciate both
    of you being here today and sharing your time with us. We will
    begin the panel with you, Dr. Rosekind, and you are recognized
    for 5 minutes for an opening statement.

     STATEMENTS OF MARK ROSEKIND, ADMINISTRATOR, NATIONAL HIGHWAY
     TRAFFIC SAFETY ADMINISTRATION; AND MANEESHA MITHAL, ASSOCIATE
    DIRECTOR, DIVISION OF PRIVACY AND IDENTITY PROTECTION, FEDERAL
                            TRADE COMMISSION

                       STATEMENT OF MARK ROSEKIND

        Mr. Rosekind. Chairman Burgess, Ranking Member Schakowsky,
    it is a privilege to represent the men and woman of the
    National Highway Traffic Safety Administration in offering the
    agency's perspective on how to strengthen our safety mission.
    Our mission is focused on saving the 32,719 lives lost,
    preventing the 2.1 million injuries, and reducing the 5.4
    million crashes that occurred on American roadways in 2013.
        NHTSA will continue to use every tool available in pursuit
    of public safety, and in just the last 10 months the agency has
    done the following:
        Strengthened our oversight and enforcement on vehicle
    safety, issuing record civil penalties for recall and safety
    reporting failures and making innovative use of consent orders
    to improve safety performance in the auto industry.
        Secured the first cybersecurity-related safety defect
    recall in automotive history, and made unprecedented use of our
    authority to explore measures to speed the most complex safety
    recall in American history, involving Takata airbag inflators.
        We have embraced Secretary Foxx's call to accelerate
    technology innovations that can save lives--accelerating
    proposed rulemaking on vehicle-to-vehicle technology;
    undertaking a review of our regulatory structure to find and
    address obstacles to safety innovations; announcing our intent
    to add automatic emergency braking to our New Car Assessment
    Program; and securing voluntary commitments from 10 major
    automakers to make AEB systems standard equipment on new
    vehicles.
        And we have answered the call of this committee and the
    American public to improve our own performance in identifying
    and addressing safety defects, pledging to fully implement
    recommendations of a recent DOT inspector general report on an
    expedited schedule and to undertake dozens of additional
    improvements to our screening, investigation, and analysis
    processes.
        These efforts underscore NHTSA's commitment to safety.
    Whatever decisions this committee or the Congress make, NHTSA
    will seek to do all we can for safety within available
    authorities and resources. And with your help, we can do even
    more.
        DOT and the Administration have identified actions Congress
    can take to strengthen NHTSA's safety mission. In the GROW
    AMERICA Act, Secretary Foxx proposed significant enhancements
    to NHTSA safety authorities, including imminent hazard
    authority similar to that already held by other safety
    regulators, criminal penalties for vehicle hacking, authority
    to prevent rentals or used-car sales of vehicles under safety
    recall, and significantly enhanced civil penalty authority to
    provide meaningful deterrence against violations of the Safety
    Act. GROW AMERICA and the fiscal year 2016 budget request would
    provide significant funding to enhance our Office of Defects
    Investigation and to more vigorously address emerging issues
    such as cybersecurity.
        These proposals are essential to enhance our safety
    mission. And as I told your Senate colleagues in June, in my
    judgment as a safety professional, failure to address gaps in
    our available authority, personnel, and resources are a known
    risk to safety.
        NHTSA has been able to spend only a few days on our
    detailed technical analysis of the staff discussion of this
    draft legislative proposal that was released late last week.
    And I would like to thank the committee members and staff for
    their initial engagement with NHTSA and hope productive
    conversations can and will continue. However, even our initial
    examination has identified examples of significant concerns.
        The discussion draft proposal includes a provision that
    would provide fuel economy and emission credits to automakers
    for deploying advanced crash technologies. I would just raise
    two general points here: First, there should not be a tradeoff
    between safety and public health. The American public expects
    vehicles that address both safety concerns and public health
    and environmental concerns. Second, the automakers already have
    ample incentive to deploy advanced safety technologies--the
    lives they can save and the injuries that they can prevent.
        The discussion draft would require a system to notify
    owners of recalled vehicles when they register or re-register
    their vehicle with state motor vehicle agencies. State agencies
    are one potential touch-point for owners, especially second or
    third owners of used vehicles. But the costs to establish or
    maintain such a system are unknown and the technology is not
    yet in place, which is why GROW AMERICA proposed a pilot
    program to work through these issues. Under the draft proposal,
    States that do not meet the requirement would be kicked out of
    the National Driver Register, an important tool that took over
    a decade to get 100 percent participation that identifies
    habitual traffic offenders and ensures that commercial drivers
    have clean records.
        The committee's discussion draft includes an important
    focus on cybersecurity, privacy, and technology innovations,
    but the current proposals may have the opposite of their
    intended effect. By providing regulated entities majority
    representation on committees to establish appropriate practices
    and standards, and then enshrining those practices as de facto
    regulations, the proposals could seriously undermine NHTSA's
    efforts to ensure safety. Ultimately, the public expects NHTSA,
    not industry, to set safety standards.
        The draft legislative proposal would require NHTSA to
    prepare certain recall notices in coordination with the
    manufacturer and would prevent NHTSA from making them public
    until manufacturers have made available complete lists of
    vehicle identification numbers for affected vehicles. This
    proposal would require NHTSA to withhold safety defect
    information from the public and give the manufacturers
    responsible for the defect control over the time line and
    release of NHTSA-initiated recall actions. This proposal
    weakens the agency's enforcement authority and is in direct
    conflict with other congressional interests to increase the
    transparency of safety information.
        It would be very hard to argue that the best response to
    recent events affecting auto safety is to erode NHTSA's ability
    to regulate and oversee safety. What is required is to
    strengthen NHTSA's ability to achieve its mission by working
    together to address gaps in our authorities and resources.
    Discussion of these and other issues is essential to our shared
    goal of greater safety on America's roads.
        I thank you, and I look forward to your questions.
        [The prepared statement of Mr. Rosekind follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Burgess. The chair thanks the gentleman, and the
    gentleman yields back.
        Ms. Mithal, you are recognized for 5 minutes for an opening
    statement, please.

                      STATEMENT OF MANEESHA MITHAL

        Ms. Mithal. Thank you. Dr. Burgess, Ranking Member
    Schakowsky, and members of the subcommittee, I am Maneesha
    Mithal from the Federal Trade Commission. I appreciate the
    opportunity to present the Commission's testimony on the
    privacy- and security-related provisions of the discussion
    draft to provide greater transparency, accountability, and
    safety authority for the NHTSA.
        The FTC has served as the primary federal agency charged
    with protecting consumer privacy and security for the past 45
    years. We have brought hundreds of privacy and data security
    cases targeting violations of the Federal Trade Commission Act
    and other laws.
        In addition to enforcing a wide range of privacy and
    security laws, the FTC also educates consumers and businesses.
    Most recently, the FTC launched its Start With Security
    business education initiative that includes new guidance for
    businesses, as well as a series of conferences across the
    country designed to educate small businesses on security. The
    next conference will take place on November 5 in Austin, Texas.
        On the policy front, we conducted a workshop on the
    Internet of Things where we specifically hosted a panel on
    connected cars. We released a report on the workshop earlier
    this year.
        With this background, we are pleased to offer our views on
    Title III of the discussion draft. We have serious concerns
    about the privacy, hacking, and security provisions of Title
    III.
        First, as to privacy, we are concerned that the safe harbor
    from FTC action is too broad. A manufacturer who submits a
    privacy policy that meets specific requirements but does not
    follow them may not be subject to any enforcement mechanisms.
    Furthermore, even though the privacy policy is only required to
    describe protections for vehicle data collected from owners,
    renters, and lessees, the Commission could be precluded from
    bringing a Section 5 action based on any privacy-related
    misrepresentation on a manufacturer's Web site, even if the
    misrepresentation is unrelated to vehicle data.
        Second, as to hacking, Section 302 of the discussion draft
    would prohibit unauthorized access to vehicle data systems.
    Security researchers, however, have uncovered security
    vulnerabilities in connected cars by accessing such systems.
    Responsible researchers often contact companies to inform them
    of these vulnerabilities so that the companies can voluntarily
    make their cars safer. By prohibiting such access even for
    research purposes, this provision would likely discourage such
    research to the detriment of consumers' privacy, security, and
    safety.
        Finally, as to security, the bill creates an advisory
    council to develop best practices. Manufacturers that implement
    these best practices will have a safe harbor under Section 5 of
    the FTC Act. However, the current draft may not result in best
    practices robust enough to protect consumers for several
    reasons:
        First, at least 50 percent of the council's membership must
    consist of representatives of automobile manufacturers. Because
    any best practices approved by the council will be by a simple
    majority of members, manufacturers alone could decide what best
    practices would be adopted.
        Second, the discussion draft contains eight areas the best
    practices may, but not must, cover. In this respect, the draft
    does not even create a minimum standard of best practices.
        Third, there is no requirement to update practices in light
    of emerging risks and technologies.
        Fourth, by creating a clear and convincing evidence
    standard for disapproving best practices submitted by
    companies, the bill gives NHTSA too little discretion and would
    likely result in the approval of plans that may meet the bare
    minimum best practices on paper but are in practice not
    appropriately tailored to foreseeable evolving threats.
         Finally, the proposed safe harbor is so broad that it
    would immunize manufacturers from liability even as to
    deceptive statements. For example, false claims on a
    manufacturer's Web site about its use of firewalls or other
    specific security features would not be actionable if these
    subjects were also covered by the best practices.
        In sum, the Commission understands the desire to provide
    businesses with certainty and incentives in the form of safe
    harbors to implement best practices. However, the security
    provisions of the discussion draft would allow manufacturers to
    receive substantial liability protections in exchange for
    potentially weak best practices instituted by a council that
    they control. The proposed legislation as drafted could
    substantially weaken the security and privacy protections that
    consumers have today.
        Thank you for the opportunity to provide the Commission's
    views on the privacy and security provisions of the discussion
    draft. We look forward to continuing to work with the
    subcommittee, Congress, and our partners at NHTSA on this
    critical issue.
        [The prepared statement of Ms. Mithal follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Burgess. The gentlelady yields back. The chair thanks
    the gentlelady. I thank you both for your testimony, and we
    will move to the question-and-answer portion of the hearing.
    And to begin, I will recognize myself for 5 minutes.
        Ms. Mithal, let me just ask you to clarify because I don't
    think it was in the written statement that I had available to
    me last night. You mentioned that there would be one of your
    Start With Security business education initiatives in Austin,
    Texas. Is that correct?
        Ms. Mithal. That is correct.
        Mr. Burgess. And what was the date that you gave for that?
        Ms. Mithal. November 5.
        Mr. Burgess. Very well. So for the benefit of our C-SPAN
    audience, I just wanted to repeat that because, although my
    congressional district is a little north of Austin, it
    obviously will affect people in my State.
        Dr. Rosekind, thank you for being here. Thank you for
    always being very generous with your time and very forthcoming
    whenever there are questions. Thank you for opening up the
    doors of the National Highway Traffic Safety Administration to
    committee members to come and visit with you and see the good
    work that you and the men and women employed there, the good
    work that you are doing.
        I do have a copy of the inspector general's audit report. I
    am sure you are familiar with it. The inspector general's
    report was issued in June of this year. Can you take just a
    moment and go through which recommendations have been
    implemented?
        Mr. Rosekind. Certainly. And just as context I will be
    clear that one of the things we did was actually commit to
    fulfilling all 17 recommendations within a year, of which the
    inspector general made sure I understood that is never done, to
    actually make that kind of commitment. And we actually gave a
    schedule. I mention that because the first one has been
    completed 2 weeks ahead of schedule and we are on schedule for
    all the other 16 at this point.
        Mr. Burgess. Very well. Can you briefly describe the
    operations for the council of vehicle electronics, vehicle
    software, and emerging technologies, that council that is being
    set up at NHTSA?
        Mr. Rosekind. The current--I am sorry. I am just trying to
    clarify----
        Mr. Burgess. Is there a council for vehicle electronics at
    NHTSA?
        Mr. Rosekind. We have an office.
        Mr. Burgess. An office?
        Mr. Rosekind. Yes. Right.
        Mr. Burgess. OK.
        Mr. Rosekind. And I am just trying to get my bearings here.
    So in 2015 actually--and we can send it to you--we published
    NHTSA and Vehicle Cybersecurity, and what that did was talk
    about what we have been doing in this arena. And so it actually
    describes how, starting in 2012, we reorganized our offices to
    have a specific office that addresses that with specific people
    looking at the cybersecurity issues related to electronic
    controls in vehicles.
        Mr. Burgess. And is there a separate office for vehicle
    software?
        Mr. Rosekind. That is in that electronic vehicles----
        Mr. Burgess. Contained?
        Mr. Rosekind [continuing]. control, correct. And we have
    seven people in D.C. and three at our Ohio Vehicle Research and
    Testing Center that is there.
        Mr. Burgess. And who leads that office or that council?
        Mr. Rosekind. Well, right now, the Associate Administrator
    Nat Beuse is the technical lead on that.
        Mr. Burgess. And that also includes the Center for Emerging
    Technologies at NHTSA?
        Mr. Rosekind. Correct.
        Mr. Burgess. Is there a mission statement that has been
    published for that office or that council?
        Mr. Rosekind. I don't know if there is a specific mission
    statement for that office, but all of that would be in the 2015
    NHTSA and Vehicle Cybersecurity that we will send you.
        Mr. Burgess. If you were to give us a thumbnail of what the
    mission of that office is, could you do that?
        Mr. Rosekind. Sure. You know, in 2012 I think this was
    trying to look ahead. What has been interesting for me is
    everyone saying this is an issue now. NHTSA has been on this
    for at least 3 years, starting with a structural change to the
    agency that would at least have focused people looking at this.
        And they are looking at policy, testing, research, and
    having continual interactions with the industry to make sure
    that we are up on whatever the latest things are people are
    thinking about.
        Mr. Burgess. Now, Ms. Mithal, let me just ask you. Does the
    Federal Trade Commission currently coordinate with the National
    Highway Traffic Safety Administration on data privacy and
    security?
        Ms. Mithal. We do, yes. So, for example, we have had
    several meetings with NHTSA staff. We also commented on their
    report on vehicle-to-vehicle communications last year.
        Mr. Burgess. Let me just take a minute. Dr. Rosekind, this
    may not be entirely within your area, but I mean you are aware
    that another subcommittee held a hearing on the Volkswagen
    emission problem and the defeat device. Do you know, what are
    the standard allowable nitrous oxide emissions under current
    EPA guidelines? We were told in the other subcommittee that 10
    to 20 to 40 percent more than was allowable. Can you actually
    give me a figure in grams or liters what is allowable under
    nitrous oxide emissions?
        Mr. Rosekind. I can make sure we send you a technical
    report so I can give you a specific number.
        Mr. Burgess. That would be great. And I would also like the
    information as to what that was in calendar year 2000 just as a
    reference point. Would that be possible?
        Mr. Rosekind. You bet.
        Mr. Burgess. All right. Thank you very much. I will yield
    back and recognize the ranking member of the subcommittee Ms.
    Schakowsky 5 minutes for questions, please.
        Ms. Schakowsky. Thank you.
        I would actually like the victims or the families of the GM
    switch failure to at least raise their hands so we know where
    you are. I want to thank you very much for coming today. I know
    this is of great interest to you.
        I have a question for Dr. Rosekind. So this draft would
    require NHTSA to coordinate with auto manufacturers before
    publishing notice of any vehicle defect or noncompliance. I am
    concerned about how this would affect NHTSA's ability to
    independently determine that a recall is necessary and notify
    the public if the affected manufacturer disagrees. It seems as
    though a manufacturer could obstruct the notification process
    at least temporarily by failing to submit the affected vehicle
    identification numbers.
        So let me ask you, Dr. Rosekind. How would requiring NHTSA
    to coordinate with manufacturers before publishing a notice of
    a defect present a risk to NHTSA's ability to issue recalls
    when necessary
        Mr. Rosekind. And I would like to handle this actually from
    two angles. One is what you are highlighting. This actually
    addresses NHTSA-initiated actions. Why that is important is
    because many of the recalls that occur are initiated by the
    automakers. They identify something; they move forward. A
    NHTSA-initiated recall is because they have denied the need to
    do that, and we have had to have the action. And so the concern
    is, as at least currently drafted, basically the time line and
    control of that would be basically under the control of the
    person who created the defect.
        But I think the other part really has to do with
    withholding the safety information. I mean this committee, we
    have heard you. It is really frustrating to put the information
    out and not have the supply of parts ready, et cetera. But I
    can't imagine any of us sitting here knowing that we had safety
    defect information, holding it back, and then having somebody
    lose their lives due to that defect when we had the
    information. I mean that has been part of what we have done
    from the beginning is make sure people get to make that choice,
    not the government, that if they have that information, they
    get to choose what they would like to do, including park their
    car or get a rental or do whatever else.
        So one has to do with the control and time line; that would
    be the manufacturer. But the other I think is for us just to
    think about the potential delay in providing information which
    clearly we would rather do as soon as we have it.
        Ms. Schakowsky. Thank you. It is clear that the ability to
    move quickly, then, in situations in which a vehicle defect
    poses a serious public safety risk, perhaps even the life of
    someone is essential, but NHTSA currently has no authority to
    take emergency action. That is why in the legislation that Mr.
    Pallone and I have introduced, the Vehicle Safety Improvement
    Act, includes imminent hazard authority, which gives the
    Administration the ability to step in and issue a recall in
    cases where a defect substantially increases the likelihood of
    serious injury or death.
        So how would this imminent hazard authority be helpful to
    NHTSA in carrying out its mission to reduce deaths, injuries,
    and economic loss resulting from motor vehicle crashes?
        Mr. Rosekind. And thank you, Congresswoman, for
    identifying--we don't want to go from withholding information.
    We actually think we need to be in the other direction, which
    is what you have highlighted. There is a gap. Other safety
    regulators have it. Imminent hazard would have allowed us to
    get the Takata airbag inflators off years before. And that
    authority, which, again, others already have, it not available
    currently to NHTSA.
        Ms. Schakowsky. Some of my colleagues have noted today
    traffic deaths rose by 14 percent in the first 6 months of
    2015. Injuries have risen by 30 percent since 2014. I am
    concerned that this draft bill would put more strain on NHTSA
    and its already over-stressed resources without actually
    improving safety. According to one estimate, the number of
    vehicles on U.S. roads grew by nearly 4 million vehicles from
    2013 to 2014.
        Meanwhile, NHTSA's budget has remained relatively flat over
    the past few years. Appropriations for fiscal year 2016
    continue that trend, coming in more than $70 million short of
    NHTSA's request.
        So, Dr. Rosekind, do you believe that stagnant funding for
    NHTSA has made it harder for the Administration to do its job
    of keeping unsafe vehicles off the road?
        Mr. Rosekind. There is no question. The last time I
    appeared before you I made the comment, ``give us more
    resources; we will give you more safety.'' The equation is very
    straightforward. If you give us more requirements at the same
    resources, you will get less safety.
        Ms. Schakowsky. This draft calls on NHTSA to conduct at
    least eight new reports and studies without providing any
    additional funding. Would you expect additional reports and
    studies to require a diversion of resources from other NHTSA
    programs?
        Mr. Rosekind. Absolutely. We need the technical and other
    resources to produce these kinds of reports.
        Ms. Schakowsky. Thank you. I yield back.
        Mr. Burgess. The gentlelady yields back. The chair thanks
    the gentlelady.
        The chair recognizes the vice chair of the subcommittee,
    Mr. Lance, 5 minutes for questions, please.
        Mr. Lance. Thank you, Mr. Chairman.
        Good morning to you both.
        The state motor vehicle agency in New Jersey has contacted
    me, and I think this is a concern of various state agencies.
    There is a section directing motor vehicle agencies to notify
    drivers of open recalls on their vehicles when they are
    renewing registration, and in New Jersey, that is once a year
    and I presume that is true in other states as well. And there
    is some concern at the state level that this would put an undue
    burden on the various states.
        I certainly understand the benefit in increasing
    notification and recall remedy rates, and we all favor that.
    However, I do share some of the concerns of the agency in New
    Jersey. And could you please, Dr. Rosekind, comment on the
    feasibility of your agency's coordinating with state agencies
    to ensure they are able to have the information necessary to
    inform drivers of open recalls on vehicles within their states.
        Mr. Rosekind. And, Congressman, you just used the word,
    which is the feasibility. And NHTSA held a Retooling Recalls
    day event to see how do we increase to 100 percent? Automakers
    have been doing research to understand not just about recalls,
    how do we get remedies. But you have hit on the concern. There
    is no technology. Nobody knows the cost. Nobody knows the
    procedures to use DMVs to get this information out.
        It is a great concept. There is super touchpoint to get to
    people. The question is how to do it. And that is why in GROW
    AMERICA the suggestion was for a pilot study to figure it out
    and make sure that it would actually be effective.
        Mr. Lance. And I presume the pilot study would be with one
    or several of the various jurisdictions. And is there
    anticipation as to how that pilot study would occur, Dr.
    Rosekind?
        Mr. Rosekind. Yes. Some of that is outlined in GROW
    America, and it involves two states. And just the things that I
    mentioned, which is we need to figure out the technology, what
    would be the procedures, what would be the cost. You do a pilot
    and a couple studies obviously with your view to how you would
    scale it for the country, with does it even work that way or
    not?
        Mr. Lance. Is it typical in the states that a vehicle
    registration is once a year or are there multiyear
    registrations in some of the states?
        Mr. Rosekind. I believe it is annual. If there is an
    exception, I can find that out for you.
        Mr. Lance. Thank you very much.
        Under the legislation, automakers would be required to take
    reasonable steps to ensure that other entities adhere to the
    automakers' privacy policies. And the automakers' privacy
    policies, as applied to automakers, would not be subject to FTC
    jurisdiction. What about the privacy policies of other entities
    that would potentially have to adhere to the automakers'
    privacy policy? So I request any comments you might have on
    that.
        Ms. Mithal. Sure. So it appears from a read of the bill
    that the safe-harbor-from-FTC action would apply to the
    manufacturers. So I would believe that we would still have the
    authority to go after other entities under Section 5 of the FTC
    Act.
        Mr. Lance. Thank you very much. I yield back the balance of
    my time, Mr. Chairman.
        Mr. Burgess. The chair thanks the gentleman. The gentleman
    yields back. The chair recognizes the gentleman from New
    Jersey, Mr. Pallone, 5 minutes for questions, please.
        Mr. Pallone. Thank you, Mr. Chairman.
        High-tech vehicle safety technologies are expected to save
    thousands of lives per year once they are in broad use, and a
    NHTSA report estimates that two types of V2V technology alone
    could prevent more than 300,000 crashes. I am concerned,
    however, that in spite of the benefits of these technologies,
    Title V of this bill is based on a false tradeoff: vehicle
    safety instead of environmental safety. Sections 502 and 503
    would exchange greenhouse gas emissions and fuel economy
    credits for manufacturers installing advanced safety technology
    and V2V in new cars. Particularly in light of the shocking
    emission fraud scandal surrounding Volkswagen, I am worried of
    any opportunity for automakers to avoid complying with
    environmental regulations.
        So let me start, Dr. Rosekind, I understand that NHTSA is
    already working with auto manufacturers on including advanced
    safety technology in more vehicles, is that correct?
        Mr. Rosekind. Yes. And if I could just--two things. One is
    Secretary Foxx has asked us to accelerate anything that is a
    new lifesaving technology. And so the vehicle-to-vehicle
    proposed rule for 2016 will actually get out at the end of this
    year. And, yes, I think we need to acknowledge 10 manufacturers
    came forward and made a commitment to make automatic emergency
    braking standard on all their vehicles. That was without any
    mandates.
        Mr. Pallone. So the proposed rule you mentioned would
    require all manufacturers to make their vehicles V2V-enabled?
        Mr. Rosekind. Correct.
        Mr. Pallone. And that you said by the end of the year?
        Mr. Rosekind. The proposal will be out by the end of the
    year.
        Mr. Pallone. And then you said manufacturers are already
    installing these advanced technologies in their cars. Are there
    other incentives such as revising NCAP that you are considering
    to get these technologies deployed to all cars and not just the
    luxury cars?
        Mr. Rosekind. There are three tools. We like to use all of
    them. Rulemaking is one of them. NCAP, the New Car Assessment
    Program, which is under review right now, more to talk about
    that in the near future. But I am also highlighting these 10
    auto manufacturers who came together basically with IIHS, the
    Insurance Institute for Highway Safety, and NHTSA to do this on
    their own. These are three different tools. And I really have
    been pushing collaboration and the opportunity to expedite and
    expand safety beyond the minimums that we get from rulemaking.
        Mr. Pallone. So again, a requirement that V2V be installed
    in every new vehicle is already in the pipeline, and you said
    that the Insurance Institute for Highway Safety already
    requires--I don't know if you mentioned this--requires the
    vehicle to be equipped with certain advanced safety
    technologies to qualify for its top safety ratings. Is that
    correct?
        Mr. Rosekind. That is correct.
        Mr. Pallone. And then you said you worked with IIHS to get
    certain commitments on technologies for manufacturers?
        Mr. Rosekind. Correct. And in January we announced that
    automatic emergency braking is being added to NCAP, and there
    are further changes that are coming soon.
        Mr. Pallone. OK. I think most consumers would like to have
    a car that is both fuel efficient and safe. That makes sense.
    Do you support giving automakers CAFE credits for installing
    advanced automotive technologies?
        Mr. Rosekind. I think the general principles that I stated
    are pretty important here. The American public expects both
    safety and public health. And the second part is I really hope
    that the manufacturers have enough incentive for lifesaving
    technologies. Those are going to be the lives they save and the
    injuries they prevent by putting those advanced technologies in
    their vehicles.
        Mr. Pallone. So do you want to give me an opinion, though,
    whether you like or support this idea of giving the automakers
    the CAFE credits because they install these advanced auto
    technologies?
        Mr. Rosekind. And we will provide sort of detailed
    technical analysis on that, but we don't think there should be
    a compromise. You should be able to get safety and public
    health and environmental concerns addressed because I think the
    incentives are already there: save lives, prevent injuries.
    That should be the highest incentive that anybody needs to add
    advanced technologies.
        Mr. Pallone. All right. I appreciate that.
        What impact would the Corporate Average Fuel Economy, or
    CAFE, credit provision in this draft have on vehicle fuel
    economy? And how might that affect consumers who buy these new
    cars? Do you want to comment on that? In other words, what
    impact would the CAFE credit provision have on vehicle fuel
    economy?
        Mr. Rosekind. The credit?
        Mr. Pallone. Yes.
        Mr. Rosekind. I am not sure it would change the levels of
    what are actually covered under fuel efficiency may not change.
    It is more really the incentivizing, I think, that is part of
    that proposal.
        Mr. Pallone. And so do you want to venture a guess as to
    how it would affect consumers who buy these new cars?
        Mr. Rosekind. Yes. That is the sort of thing I think we
    need a little bit more time to technically--these are very good
    questions, but I think we would want to get a little more
    detailed before taking a specific position on them.
        Mr. Pallone. Yes. All right. Well, thanks a lot. I
    appreciate it.
        Thank you, Mr. Chairman.
        Mr. Burgess. The chair thanks the gentleman. The gentleman
    yields back.
        The chair recognizes the gentleman from Kentucky, Mr.
    Guthrie, 5 minutes for your questions, please.
        Mr. Guthrie. Thank you, Mr. Chairman. I appreciate it.
        Dr. Rosekind, did NHTSA or the Department of Transportation
    participate in the development of the NIST cybersecurity
    framework, and will it participate in future iterations of that
    framework?
        Mr. Rosekind. We have ongoing interactions with all kinds
    of government agencies, including NIST and DOD, et cetera. So
    we are always involved pretty much in at least participating,
    as well as having them participate in our activities.
        Mr. Guthrie. OK. Are there ways that NHTSA could currently
    participate or facilitate industry efforts to develop best
    practices for automotive cybersecurity?
        Mr. Rosekind. Yes. And in fact, if you look at the model of
    having the 10 manufacturers come together to work on AEB as
    standard, it is a model to be applied across all kinds of
    issues, including cybersecurity. And so everybody has already
    read the Secretary is planning on having a meeting with the
    CEOs about the safety concerns that we have all been reading
    about, and he has specifically identified both safety and
    cybersecurity to talk to those CEOs about.
        Mr. Guthrie. OK. And then another question kind of follows
    what you just said. Has NHTSA and the auto industry had
    discussion on best how to apply the NIST cybersecurity risk-
    management framework to the development of automotive security?
        Mr. Rosekind. Yes, those discussions have begun.
        Mr. Guthrie. Thank you.
        And then, Ms. Mithal, by what standard does the FTC
    determine if auto manufacturers have tested the security of
    cars appropriately before putting them on the market?
        Ms. Mithal. Sure. So our standard is Section 5 of the FTC
    Act, which prohibits unfair or deceptive practices. So if a
    company makes a misrepresentation about a security practice,
    then we can take action.
        An unfair practice is one that causes or is likely to cause
    substantial consumer injury not outweighed by the benefits to
    competition and not reasonably avoidable by consumers. So, in
    essence, it is a cost-benefit analysis. So there is no such
    thing as perfect security, but what we do require is reasonable
    security.
        Mr. Guthrie. Reasonable security, thank you. And then in
    your testimony you discuss the FTC's Start With Security, a
    business initiative. Can you discuss how that should be applied
    to car companies and others involved in the connected car
    space?
        Ms. Mithal. Sure. So I can give a couple of examples. So
    one example that we give in the Start With Security business
    guidance is that companies should test products before they
    launch them as opposed to launching the products first and then
    seeing about problems later. So it is something that we call
    security by design.
        Another thing we talk about in our Start With Security
    guidance is having a vehicle to accept vulnerability reports so
    that companies can have their ears to the ground and know of
    security research that is out there and evolving threats and
    emerging issues in their devices----
        Mr. Guthrie. OK. Thank you.
        Ms. Mithal [continuing]. Including cars.
        Mr. Guthrie. I appreciate it. I appreciate your answer.
        That is all I have, Mr. Chairman. I yield back.
        Mr. Burgess. The chair thanks the gentleman. The gentleman
    yields back.
        The chair recognizes the gentleman from Massachusetts 5
    minutes for questions, please.
        Mr. Kennedy. Chairman, Doctor, thank you very much. To the
    panelists, thank you very much for your testimony here today.
    And I want to thank the chairman for calling the hearing.
        Many of today's cars contain a range of navigation,
    telematics, and event data recording systems, among others,
    that all have the ability to record driving history
    information. Auto manufacturers, other third parties also have
    access to this wealth of information. It is a bit concerning to
    me, candidly, and I am sure it concerns a number of other
    consumers as well. People want to know that their data is being
    kept safe and being kept private, and at least when it is used,
    being used with their consent.
        So, Dr. Rosekind, I was hoping that you might be able to
    start the discussion. The data privacy provision in this
    discussion draft would require that car companies submit
    privacy policies to NHTSA, but it does not give NHTSA any
    authority to recommend changes or to set a standard for
    acceptable policies. Is that how you read the legislation as
    well?
        Mr. Rosekind. That is how we read it, yes.
        Mr. Kennedy. So do you think consumers could be or should
    be concerned that there is no ability for NHTSA to recommend
    any changes?
        Mr. Rosekind. I think the public expects and wants NHTSA
    both to regulate and set guidelines, not the manufacturers, to
    what the standards are that protect the traveling public.
        Mr. Kennedy. And, Ms. Mithal?
        Ms. Mithal. Yes, I think there are concerns that, although
    the bill prescribes certain requirements to be placed in
    privacy policies, it may not require the companies to follow
    them or it may not provide enforcement mechanisms to require
    the companies to follow those guidelines.
        Mr. Kennedy. So that is where we are going. It is my
    understanding that under the draft bill, an automaker will
    receive protection from civil penalties and FTC enforcement
    simply by providing NHTSA with a privacy policy that addresses
    the required items in the draft such as whether or not the
    automaker collects, uses, or shares data, and whether the
    consumer has any choice regarding the collection or use. It
    will not matter how a given company chooses to address those
    items, though.
        So, as I read Section 301, a carmaker can hypothetically
    submit a privacy policy to NHTSA, violate that policy, and
    still be protected from FTC enforcement. It means that a
    carmaker can make promises to consumers about protecting their
    data, break those promises, and suffer no consequences under
    Section 5 of the FTC Act. So, Ms. Mithal, is that your
    understanding of how this system is set up under the draft
    legislation?
        Ms. Mithal. That is our understanding and it is a real
    concern.
        Mr. Kennedy. Do you think the bill provides sufficient
    incentives for automakers to create and adhere to the strong
    data privacy provisions for consumers?
        Ms. Mithal. No. Unfortunately, no.
        Mr. Kennedy. So if we have a situation where a car company
    claims to have expansive privacy policies to protect consumer
    data and then violates those policies, isn't that an unfair
    incentive practice?
        Ms. Mithal. Yes, it would be, and that would be something
    that the bill would strip the FTC's authority over.
        Mr. Kennedy. Thank you. I also have some additional
    questions about the anti-hacking provision, which would create
    a civil penalty from gaining unauthorized access into a
    vehicle's data or critical system. While we can all agree that
    we would like to prevent bad actors from accessing our car's
    control systems, some observers have expressed concerns about
    penalizing independent researchers, or so-called white-hat
    hackers, who hack into vehicles' systems to draw attention to
    vulnerabilities or to conduct tests. In the past 6 months
    alone, these types of researchers made headlines by uncovering
    massive vehicle emissions fraud in Volkswagen and exposing
    vulnerabilities in a Jeep by controlling it remotely via the
    internet.
        We also heard from several small local auto repair shops
    that they think they could be precluded from accessing
    important information they needed to effectively repair cars.
    They suggest that non-auto dealers repair up to 80 percent of
    all cars that are not still under warranty.
        So, Ms. Mithal, do you have any thoughts on that provision?
    In particular, from your expertise in reviewing data security
    cases, could you envision a scenario where information could be
    siloed so that repair shops could get enough information to
    repair cars but not fiddle with, say, emergency brakes?
        Ms. Mithal. So let me be clear. We agree that there should
    be civil penalties for malicious hackers, but we are concerned
    that this bill would disincentive legitimate security
    researchers who responsibly contact companies, suggest that
    they fix those vulnerabilities, and companies fix those
    vulnerabilities to help consumers. And so we believe that the
    bill would create an impediment to that. On the auto repair
    issue, I would defer to NHTSA on that issue.
        Mr. Kennedy. So you mentioned this a little bit. Can you
    discuss the importance of those researchers to your data
    security work?
        Ms. Mithal. It is very important. Often, it is the white-
    hat hackers and security researchers that are bringing these
    problems to the attention of both the car manufacturers and
    regulators like the FTC.
        Mr. Kennedy. And do you have any idea on how to make that
    distinction between white-hat and black-hat so to speak?
        Ms. Mithal. I think that is something that will require
    very careful drafting, and we look forward to working with this
    subcommittee on that.
        Mr. Kennedy. Great. Thank you. I yield back.
        Mr. Burgess. The chair thanks the gentleman. The gentleman
    yields back.
         The chair recognizes the gentlelady from Tennessee, Mrs.
    Blackburn, for 5 minutes for questions, please.
        Mrs. Blackburn. Thank you, Mr. Chairman.
        OK. Let's stay with this regulation issue. And one of our
    concerns is a dual regulation, because as you all may or may
    not be aware, we have kind of grappled with this. And, Ms.
    Mithal, I know that you are with privacy in the internet space
    with the FCC trying to get in on top of the FTC jurisdiction.
    And that has caused a tremendous amount of confusion.
        So let me go right where Mr. Kennedy was and let's talk
    about the way you have got a manufacturer that can get the safe
    harbor and then avoid that Section 5 enforcement if the
    manufacturer is meeting those requirements that are listed.
        Now, NHTSA already handles the issue of privacy in the
    automotive space, and so what we want to do is avoid this
    confusion and this dual regulation. So is the FTC going to
    honor the recognition that NHTSA has this lead, and are they
    going to honor the safe harbor provision and act in good faith
    when they are reviewing these manufacturers' privacy policies
    and making certain that they meet those requirements?
        Ms. Mithal. So if I can make two points in response to your
    question?
        Mrs. Blackburn. Sure.
        Ms. Mithal. First, the concern is that the safe harbor is
    too broad in many respects. One example is that the privacy
    policy requirements only apply to vehicle data collected from
    owners, renters, or lessees. So, for example, if a manufacturer
    makes a misrepresentation on a Web site that applies to
    shoppers about how they are collecting shoppers' data, that
    wouldn't be covered by the privacy policy but the FTC couldn't
    bring action. So we have concerns about the breadth of the safe
    harbor.
        Putting aside that, we work very well with NHTSA and we
    support the goal of avoiding overlapping and duplicative
    requirements. But at the same time, I think NHTSA and the FTC
    have different focuses. So, for example, NHTSA does recalls and
    we defer to their expertise in car safety issues. At the same
    time, we have the ability to get equitable relief against
    companies that don't maintain privacy and security of consumers
    in the form of, for example, implementing a security program,
    getting outside audits, in some cases disgorgement and redress.
    So we think that both agencies bring particular expertise to
    bear and can bring different remedies to the issue.
        Mrs. Blackburn. And you are committed to making certain
    that we draw the lines here so that we don't end up with a dual
    regulation or with confusion----
        Ms. Mithal. Exactly.
        Mrs. Blackburn [continuing]. Much of which exists--you all
    have borne the brunt of this if you will.
        Ms. Mithal. That is exactly right. I think----
        Mrs. Blackburn. And consumers have been quite confused
    about the reach of the FCC and the FTC and is it diminishing
    your jurisdiction.
        So as we look at this issue and knowing that cars are going
    to be more interconnected, not less, that they are going to be
    more computerized, not less, that you are going to have more
    data and people are going to say what are you doing with the
    data? How do you turn that into usable information? Then, this
    is something that should be cleaned up and handled
    appropriately on the front end.
        Administrator Rosekind, I want to come to you for a couple
    things. How is NHTSA addressing the data collection practices
    of automakers and others in the automotive space? What kind of
    formal guidance are you currently giving? Have you laid that
    out? And what do you intend to do? Because we all know you
    can't be technology-specific if you will. You are going to have
    to umbrella this. So speak for just a moment before we run out
    of time. Speak to that.
        Mr. Rosekind. And I can just very quickly tell you some of
    those are already clearly outlined, things like the electronic
    data recorders that exist. There are privacy concerns there.
    They, for example, don't actually collect anything about the
    drivers. So that is just more a communications issue.
        I think what we are now talking about is a lot of new areas
    that we are just understanding because our cars are computers.
    And I think you have highlighted something really important. It
    is going to actually require increased collaboration between
    our agencies for us to be able to apply our expertise so we
    make sure we protect people, and when there are malicious
    attempts to go after that data, we have ways to keep people
    protected.
        Mrs. Blackburn. Well, I appreciate that. And we know that
    the data collection practices from the automakers and others in
    the industry can be used to provide some increased safety
    protocols. And I think consumers are interested in that, but
    they want to guard their privacy and they want to make certain
    that the data that is there is useful information, it is
    utilized in an appropriate way.
        I yield back.
        Mr. Burgess. The gentlelady yields back. The chair thanks
    the gentlelady.
        The chair recognizes the gentleman from North Carolina, Mr.
    Butterfield, 5 minutes for questions.
        Mr. Butterfield. Thank you, Mr. Chairman, and let me thank
    the two witnesses for their testimony. I have been watching you
    intermittently on television, and both of you look good on
    television. So thank you very much.
        Mr. Chairman, I would like to focus my questions on the
    rental car safety bill that I introduced with the support of
    Ranking member Schakowsky and Congresswoman Capps, H.R. 2198.
    The companion legislation passed the Senate with bipartisan
    support as part of the Senate's highway bill, and it is
    supported by the rental car industry. Many of them are here
    today, consumer organizations and General Motors and Honda and
    others. It would ensure that rental car companies fix recalled
    vehicles in their fleets before renting or selling them.
        And so let me ask you, Mr. Administrator--thank you for
    coming today. Some opponents of the rental car safety
    legislation have said that rental car companies should be
    allowed to rent or sell unrepaired defective recalled cars
    unless the manufacturer has specifically issued a do-not-drive
    warning. Is there any federal standard for when a do-not-drive
    warning must be issued?
        Mr. Rosekind. Thank you for pointing that out because that
    do-not-drive is issued by the manufacturer, not NHTSA. So they
    are determining whether or not the criteria would be to allow
    that to occur under rental or used car. So that happens
    extremely rarely.
        Mr. Butterfield. So state again for the record who decides
    when such a warning is issued?
        Mr. Rosekind. The manufacturer who has the defect that has
    been created in the vehicle is the one who determines the do-
    not-drive.
        Mr. Butterfield. OK. Can you give us some examples of
    defects where a do-not-drive warning was not issued by the
    manufacturer? For example, has any manufacturer issued a do-
    not-drive warning for Takata airbags?
        Mr. Rosekind. That would be the example that I would give,
    given that that is the largest recall in auto history for sure
    and maybe the United States. There is no do-not-drive out on
    any Takata airbag inflator recall.
        Mr. Butterfield. Thank you. That is what I needed to get
    into the record, Mr. Chairman. Thank you. I yield back.
        Mr. Burgess. The chair thanks the gentleman. The gentleman
    yields back.
        The chair recognizes the gentleman from Houston, Texas, Mr.
    Olson, 5 minutes for questions, please.
        Mr. Olson. I thank the chair.
        Welcome, Dr. Rosekind and Ms. Mithal.
        When I started driving in 1978, vehicle safety depended
    upon turning wrenches and sockets, and now it is all about
    keyboards and electronics.
        My first question is for you, Dr. Rosekind. In NHTSA's
    view, should cybersecurity weaknesses be treated the same way
    as traditional vehicle safety defects? If so, what federal
    motor safety standards is NHTSA using to make that
    determination? If not, how is this addressing cybersecurity
    weaknesses in vehicles?
        Mr. Rosekind. So there are actually a few questions in
    there and I will try to go to the core. You are right--things
    have changed dramatically. And the Secretary and NHTSA are
    really excited about seeing technology innovations accelerate
    our work in safety. But cybersecurity is one of the areas that
    is going to take a collaboration across government to
    manufacturers and others who understand cybersecurity to figure
    out what needs to get done.
        We have all kinds of tools from rulemaking to all kinds of
    voluntary efforts that manufacturers want to do, so we have to
    absolutely acknowledge that the Information Sharing and
    Analysis Center, or ISAC, was created by the automakers to make
    sure that they could get together and identify and share
    information, a critical element.
        I keep pointing out that you can ask for all the regulation
    you want, but in cybersecurity, nimble and flexible is
    critical. By the time your regulations come out, it is probably
    10 versions too late of what needs to get done. We are going to
    have to identify current and new tools to deal with this issue
    going into the future.
        Mr. Olson. Is this using the NIST cybersecurity framework
    to guide its work in keeping vehicles safe?
        Mr. Rosekind. That is one source, but we have been in
    contact with a full range, DOD, Homeland Security, DARPA,
    anybody that has expertise, including private technology
    companies of course that have done protection for our mobile
    phones and other elements. So we are in contact with the full
    range of trying to learn from them and how we can apply it to
    cybersecurity in the auto industry.
        Mr. Olson. And about data collection, Dr. Rosekind, Section
    4109(a) of the GROW AMERICA Act would prohibit the rental of a
    vehicle by a rental company if there is an open recall. I have
    a few questions regarding data collection attributed to this
    policy change in the highway bill. How many lives did NHTSA
    estimate will be saved if every rental vehicle under open
    recall is grounded by rental companies, as required by Section
    4109(a) of the GROW AMERICA Act?
        Mr. Rosekind. And I will get you that analysis. As part of
    our technical assistance in supporting your efforts here, we
    will get you that analysis for both used, as well as rental
    cars.
        Mr. Olson. How about injuries? How many injuries did NHTSA
    estimate will be prevented if the rental car grounding
    requirement in Section 4019(a) is enacted?
        Mr. Rosekind. And we will include both fatalities and
    injuries and, if we can, crashes in that analysis for you.
        Mr. Olson. Thank you. And, Ms. Mithal, how many data
    security cases has the FTC brought against car companies in the
    last 5 years? Any idea?
        Ms. Mithal. We have not brought any connected-car cases. We
    have brought about 55 general data security cases in a variety
    of sectors from retail to healthcare to mobile apps to
    internet-connected cameras. I believe all the principles that
    those cases stand for apply equally to connected cars.
        Mr. Olson. So zero for cars so far?
        Ms. Mithal. Correct.
        Mr. Olson. OK. What is the Commission's expertise with
    respect to the security of critical safety systems in vehicles?
    Are there differences in how critical safety systems in
    vehicles and should be treated compared to other critical
    infrastructures?
        Ms. Mithal. So our focus has been on process, so all of our
    55 cases stand for the lesson that companies need to implement
    processes upfront to make sure to protect against security
    violations. So, for example, companies, including car
    companies, need to hire people responsible for security. They
    need to conduct risk assessments. They need to oversee their
    service providers. They need to keep abreast of technologies
    surrounding them and emerging technologies that affect their
    areas. And that is very consistent with the NIST cybersecurity
    framework approach.
        Mr. Olson. And as Dr. Rosekind mentioned, we have to be
    very nimble because this changes like that, and we have to keep
    up with these changes.
        I yield back, my friend. Thank you.
        Mr. Burgess. The chair thanks the gentleman. The gentleman
    yields back.
        The chair recognizes the gentlelady from California 5
    minutes for questions, please.
        Mrs. Capps. Thank you, Mr. Chairman, for holding this
    hearing and granting my request to participate.
        The draft legislation before us, it touches on many issues,
    and I want to continue to explore the topic brought up by my
    colleague--well, actually, the two last questioners, Mr.
    Butterfield in particular--the critical issue that has been
    omitted from the draft: rental car safety.
        In 2004, two young sisters, Raechel and Jacqueline Houck,
    were killed when their rented Chrysler PT cruiser caught fire
    and crashed. The sisters were returning home after visiting
    their parents just outside my district in Ojai, California, and
    had no idea that the car they were driving was subject to a
    safety recall that had not been fixed, nor acknowledged, before
    the rental company gave them this car. Despite receiving the
    safety recall notice a month before renting them the car, the
    rental company failed to get the free safety repairs done.
        While federal law prohibits car dealers from selling new
    cars subject to recall, there is no similar law to stop rental
    car companies from running out dangerous recalled cars. This is
    a clear safety oversight and one that can and must be fixed,
    and that is why, as has been acknowledged, I introduced
    bipartisan legislation H.R. 2198 with my colleagues Walter
    Jones, Ms. Schakowsky, Mr. Butterfield to close this loophole.
    Our commonsense bill would simply fix federal law to prohibit
    rental car companies from renting or selling recalled cars.
        The bill is strongly supported by the rental car industry,
    consumer safety groups, General Motors, Honda, and others. The
    bill did pass the Senate as part of the DRIVE Act. And a
    Change.org petition to pass the bill recently started by
    Raechel and Jackie's mother, Cally Houck, has been signed by
    nearly 150,000 consumers across the country, yet I am
    disappointed this issue is not even mentioned in the draft we
    are considering today.
        Administrator Rosekind, I know NHTSA and the Administration
    have been working to address this important issue. Does NHTSA
    support legislation to prohibit the rental of recalled
    vehicles?
        Mr. Rosekind. Yes.
        Mrs. Capps. Opponents of the bill erroneously claim that
    H.R. 2198 legislation would not improve consumer safety. Given
    NHTSA's support for banning the rental of recalled vehicles, I
    think it is clear that you perhaps disagree with this
    assessment. Would you briefly elaborate? Thank you.
        Mr. Rosekind. New, used, or rental vehicles that have a
    known defect should be remedied before they are on the road.
        Mrs. Capps. Thank you. Despite the broad support behind
    H.R. 2198, the auto manufacturer and dealer groups are fighting
    against this commonsense effort. Under pressure, the Alliance
    of Automobile Manufacturers instead proposed a potentially very
    harmful alternative that only requires rental companies to
    disclose that the vehicle is under recall before renting it
    out. Their proposal only prohibits the rental of recalled cars
    with do-not-drive notices, as was referenced, despite the fact
    that such notices represent only a tiny fraction of safety
    recalls.
        Administrator Rosekind, last year, NHTSA provided a letter
    to Senators Boxer and McCaskill expressing its opposition to
    the Alliance proposal. Would you elaborate on why NHTSA
    believes this proposal would fail to protect rental consumers?
        Mr. Rosekind. I will repeat to be clear. New, used, rental,
    if it has a defect, it should be off the road. And as we were
    discussing, the do-not-drive is determined by the manufacturer
    of the defect----
        Mrs. Capps. Exactly.
        Mr. Rosekind [continuing]. Not NHTSA. And it is very rare.
        Mrs. Capps. Thank you for clarifying that and really
    underscoring it.
        Some opponents of H.R. 2198 have argued that many NHTSA
    recalls are frivolous because so few of them come with do-not-
    drive requirements. Does NHTSA issue frivolous recalls? By
    definition, aren't all safety recalls due to serious safety
    risk?
        Mr. Rosekind. Yes. And we have a specific investigation
    process to determine those defects.
        Mrs. Capps. Thank you. And I will yield back my time, but
    before doing so, I ask unanimous consent to enter into the
    record a November 2014 letter from NHTSA to Senator McCaskill
    outlining the agency's response to the auto alliance proposal.
        [The information appears at the conclusion of the hearing.]
        Mrs. Capps. And I yield back the balance of my time.
        Mr. Burgess. The chair thanks the gentlelady. The
    gentlelady yields back.
        Seeing no other Members present to ask questions, let me
    just ask the ranking member if she would like a second question
    or redirect?
        Ms. Schakowsky. No, I am fine. Thank you. Thank you to the
    witnesses.
        Mr. Burgess. Dr. Rosekind, I just wanted to make sure that
    we offer once again the concept of people checking their
    vehicle identification numbers against the database that you
    provide, and perhaps you could just detail how someone would do
    that if they wanted to check.
        Mr. Rosekind. Chairman Burgess, every time I appear before
    you, you graciously make sure that we provide information for
    consumers to do something about recalls. I can't thank you
    enough for that because I don't think we are ever done getting
    the information out.
        People can go to SaferCar.govand look up their vehicle
    identification number and see if there are any open recalls.
    What is most important is if they find something, they have to
    act on it. Call their dealer, get it fixed.
        Mr. Burgess. Now, what if, like me, they don't know their
    vehicle identification number off the top of their head? Is
    there a place where they can find that information?
        Mr. Rosekind. And, good point, because I am not sure any of
    us would know that off the top of our head. You can find that
    at the bottom left of your windshield. It is usually on the
    insurance card. So there are multiple places you can go. We
    even have a mobile app you can look it up now.
        Mr. Burgess. And very good advice. And our trip out to your
    location, your fine people informed me that I had a problem
    with my vehicle, not the one I was expecting, but nevertheless,
    it was important information to have.
        Now, unless people think that we just come here with
    assigned talking points and we never listen to each other, I
    also wanted to point out after your testimony here earlier in
    the year, that very time we were doing the appropriations bill
    for the Department of Transportation, and I did offer an
    amendment that night because of your testimony during the day
    that took $4 million from the Secretary's general and
    accounting line item off the budget and moved it to your line
    item on the budget for additional safety work. I think
    afterwards when I discussed with you that the offer still
    stands and I will be happy to discuss with you or even go with
    you to the appropriate Appropriations Subcommittee when the
    budget request is made to the Appropriations Committee next
    year, because this is important.
        Just one final observation and then I am going to go to Mr.
    Cardenas. In the inspector general's audit report, your
    response that is in the appendix to the auto report, your
    response to the things that were brought up I just wanted to
    highlight. One of the bullet points is use of a safety-systems
    approach to look for possible relationships between a symptom
    in one vehicle's system and a possible critical failure in
    another system.
        And this is prior to your tenure, but last year, we were
    going through on another subcommittee the ignition problems on
    the Cobalt vehicles and the non-deployment of airbags, that
    being such a critical finding. It was of concern to me that
    this would appear in accident reports, albeit over a 10-year
    time span. And there weren't a large number, but nevertheless,
    any time a vehicle airbag non-deployment occurred, it seemed
    like that should be a seminal event and something which must be
    investigated.
        And you even outlined here to consider if it is possible
    defect theories that do not fit with previously held
    assumptions, in other words, look for another reason other than
    something where you normally would. And I will never forget the
    accident report where there were two vehicles involved in a
    head-on collision. Unfortunately, it was not survivable in
    either vehicle, but in one vehicle the airbag goes off, the
    other it doesn't, and there you have got the perfect test case.
    There wasn't a curb that was hit; there wasn't a tree that was
    glanced that would perhaps jar the ignition switch. It was a
    straight up head-on collision. One airbag works, one doesn't.
    Why did the one not work?
        So I am grateful to see that line item in your discussion
    of the points that were brought up by the IG's report, and I
    think that is of critical importance.
        I am going to yield to Mr. Cardenas 5 minutes for
    questions, please.
        Mr. Cardenas. Thank you very much, Mr. Chairman. I
    appreciate this opportunity and want to thank the witnesses for
    being here to answer our questions.
        Keeping in mind the millions of cars on our roads, keeping
    them safe is complicated and expensive, the draft we are
    looking at today does not address increasing funding for NHTSA,
    though many of its provisions would certainly present
    significant additional costs and responsibilities to the
    agency.
        Dr. Rosekind, in your testimony today you said the failure
    to address gaps in NHTSA's available personnel and resources
    are a known risk to safety. Can you explain how civil penalties
    for violations of motor vehicle safety standards and other
    violations affect those gaps?
        Mr. Rosekind. All of the penalties that are collected go
    right to the U.S. Treasury, so we don't get any of those for
    our work.
        Mr. Cardenas. OK. So no matter how effective you are or
    even industry admits and/or forwards those penalties, there is
    no direct correlation between the amount of work that comes to
    your agency versus the amount of effective work that you are
    rendering?
        Mr. Rosekind. That is correct. And the last time I appeared
    here I made this statement that if you gave us more resources,
    we could deliver more safety, and that equation is very clear.
    If you give us more demands without more resources, you get
    less safety.
        Mr. Cardenas. OK. Well, thank you.
        This draft does not address raising the cap on civil
    penalties that NHTSA can seek for manufacturers for violation.
    The Vehicle Safety Improvement Act would eliminate that cap. In
    the past few years, there have been several widely publicized
    scandals surrounding the auto industry, and in 2014 alone,
    NHTSA issued more than 127 million in civil penalties.
        Dr. Rosekind, 35 million sounds like a large amount of
    money, but we continue to hear about new egregious safety
    violations in the industry. In fact, NHTSA has had to be
    creative in finding ways to make penalties appropriate for the
    violations. And the current maximum penalty, is that enough to
    be an effective deterrent?
        Mr. Rosekind. No, and that is why in GROW AMERICA we
    suggested a $300 million cap. No cap is good with us, too, but
    at least 300 million is what is proposed in GROW AMERICA to
    have a meaningful deterrent.
        Mr. Cardenas. Now, if the $35 million cap were
    significantly raised, what in your opinion would affect the
    expectation of how the behavior of automakers may or may not
    change?
        Mr. Rosekind. I think our expectation would be, with
    appropriate deterrence like the civil penalties, that we would
    want to see a more proactive safety culture catch defects,
    conduct recalls earlier and faster.
        Mr. Cardenas. OK. Would raising the per-violation fine and
    eliminating the cap on civil penalties improve safety in your
    opinion?
        Mr. Rosekind. That is the intent, and we think its current
    level is not the deterrent it should be.
        Mr. Cardenas. And when was the last time that level was
    raised?
        Mr. Rosekind. Good question. I will make sure that is in
    our technical assistance when we provide that to you, but it
    has been a while so that the 35 million has basically been on
    the books for a long time.
        Mr. Cardenas. So for years now?
        Mr. Rosekind. Yes.
        Mr. Cardenas. And the curve on activity or the volume of
    vehicles and the industry dollar amount value year to year, has
    been going up?
        Mr. Rosekind. Absolutely. And if you are trying to make
    that distinction, yes, our authorities have stayed at a certain
    level while the number of vehicles--we are at about 265 million
    on our roadways now--the number of recalls, et cetera, is going
    this way while we have been staying this way. In fact, if you
    look at the budget, which we talked about last time I was here,
    really in real dollars, we are down from where we were 10 years
    ago.
        Mr. Cardenas. I constantly hear elected officials across
    the country talking about how we should run government more
    like a business. Does it seem like we are running your
    department like a business when you just described the amount
    of activity going up, the dollar amount in the industry going
    up, et cetera, yet your budget and your ability to create more
    safe activity is flat?
        Mr. Rosekind. No. And I will make a personal comment, which
    I have a different unique background, having been in academics
    and as a scientist, had my own business, which consulted with
    top 100 companies all over the world. And so I bring that
    perspective for efficiencies, effectiveness, measure things, et
    cetera, and it is one of the major frustrations basically of
    wanting to do more with, you know, not enough resources,
    people, money.
        Mr. Cardenas. Well, I am of the opinion in this country
    that we are fortunate to take public safety for granted in so
    many ways. It is unfortunate that we are not fortifying you
    with the resources necessary to keep us as safe as you can.
        Thank you so much. I yield back.
        Mr. Burgess. The chair thanks the gentleman. The gentleman
    yields back.
        And seeing there are no further Members wishing to ask
    questions for our first panel, I do want to sincerely thank
    both of our witnesses for being here today, for their time.
    This will conclude our first panel, and we will take a 2-minute
    recess to set up for the second panel.
        Ms. Schakowsky. Yes, thank you to both our witnesses.
        Ms. Mithal. Thank you.
        [Recess.]
        Mr. Burgess. Welcome back. Thank you all for your patience
    and taking time to be with us here today. We will move into our
    second panel for today's hearing. We will follow the same
    format as during the first panel. Each witness will be given 5
    minutes for an opening statement followed by a round of
    questions from Members.
        For our second panel we have the following witnesses: Mr.
    Mitch Bainwol, the President and CEO of the Alliance of
    Automobile Manufacturers; Mr. John Bozzella, President and CEO
    of Global Automakers; Mrs. Ann Wilson, Senior Vice President at
    the Motor & Equipment Manufacturers Association; Mr. Greg
    Dotson, Vice President for Energy Policy at the Center for
    American Progress; Ms. Joan Claybrook, former Administrator of
    the National Highway Traffic Safety Administration; Mr. Peter
    Welch, President of the National Automobile Dealers
    Association; and Mr. Michael Wilson, the CEO of the Automotive
    Recyclers Association.
        We do appreciate all of you being here with us this
    morning. We are grateful for your forbearance during the first
    panel. We will begin this panel with Mr. Bainwol, and you are
    recognized for 5 minutes for your opening statement, please.

      STATEMENTS OF MITCH BAINWOL, PRESIDENT AND CEO, ALLIANCE OF
      AUTOMOBILE MANUFACTURERS; JOHN BOZZELLA, PRESIDENT AND CEO,
     GLOBAL AUTOMAKERS; ANN WILSON, SENIOR VICE PRESIDENT, MOTOR &
        EQUIPMENT MANUFACTURERS ASSOCIATION; GREG DOTSON, VICE
    PRESIDENT FOR ENERGY POLICY, CENTER FOR AMERICAN PROGRESS; JOAN
       CLAYBROOK, FORMER ADMINISTRATOR, NATIONAL HIGHWAY TRAFFIC
        SAFETY ADMINISTRATION; PETER WELCH, PRESIDENT, NATIONAL
       AUTOMOBILE DEALERS ASSOCIATION; AND MICHAEL WILSON, CEO,
                    AUTOMOTIVE RECYCLERS ASSOCIATION

                       STATEMENT OF MITCH BAINWOL

        Mr. Bainwol. Thank you, Chairman Burgess, Ranking Member
    Schakowsky, and members of the subcommittee. Given the size of
    this panel, I am reminded of what former Senator John Warner
    said when he became Elizabeth Taylor's sixth husband. He said I
    know what to do; I am just not sure how to make it interesting.
    So here I go.
        Thank you for the opportunity to testify today on behalf of
    12 global OEMs based in the U.S. in Europe and in Asia. Our
    companies represent about 75 percent of the marketplace. Our
    industry will put about a billion new cars on the road over the
    next decade around the world with more than 15 percent of those
    here in the U.S. That is a lot of steel and a lot of aluminum
    and an astounding level of production with massive job and
    economic implications. But even more striking than scale is the
    game-changing innovation mobility that will generate enormous
    social benefits.
        Our companies are investing about $100 billion a year in
    research, including the development of the next generation of
    connected vehicle technologies. These technologies will save
    lives, save fuel, and enhance mobility.
        Over the last decade, your House colleagues at T&I have
    invested substantial highway dollars to make smart vehicles and
    infrastructure a reality. The bill they mark up tomorrow
    includes an additional $175 million over the next 6 years.
        They are making this investment for an important reason,
    and that is because congestion wastes roughly 3 billion gallons
    of fuel, 27 million metric tons of CO2 emissions
    every year. The Federal Highway Administration estimates that
    roughly 12.5 percent of congestion, 12.5 percent of congestion,
    3 million metric tons is directly, directly attributable to
    crashes. Thus, there is a direct link between reducing crashes
    and reducing CO2 emissions.
        But for this subcommittee, the focus is the potential of
    this technology to save lives. Crash-avoidance and connected-
    vehicle technologies offer us the opportunity to address the 94
    percent, if not more, of all accidents that NHTSA attributes to
    driver error. That is right, addressing driver error is
    absolutely crucial.
        You know the statistics. More than 32,000 people died in
    car crashes last year, far too many. That number is 25 percent
    below what it was a decade ago, but it is still far too many.
        NHTSA has said that connected vehicles have the potential
    to mitigate as much as 80 percent of non-impaired crashes. And
    just last week, the Boston Consulting Group released a study
    that Ann Wilson will talk about showing that advanced driver-
    assist systems could prevent almost 10,000 fatalities and 30
    percent of all crashes occurring annually in the U.S.
        We should all share the goal of deploying these
    technologies as soon as possible. How can we not? It is why the
    modest incentives included for advanced automotive technologies
    make sense. A connected car with crash-avoidance technologies
    is safer and cleaner. It is not a trade-off. It is a
    convergence of interest. This hominization of safety and
    environmental gains that these technologies offer changes the
    policy paradigm. It calls upon all of us to determine how we
    can accelerate the integration of these technologies into the
    fleet to improve safety, environmental, and productivity
    outcomes.
        So we applaud this committee for introducing the notion of
    market incentives to save lives. If passed, the potential of
    this legislation to prevent tragedies is very real, and the
    impact on greenhouse gas emissions is also equally real.
        While the benefits of the new technologies are profound,
    connectivity and data also introduce new challenges, including
    privacy and cybersecurity. We commend the committee for
    generating new proposals here as well.
        Last year, the industry became the first non-internet
    sector, the first non-internet sector to issue consumer privacy
    protection principles that build off of the well-established
    FIPS and include heightened protection for the most sensitive
    consumer information: where and how you drive. And what we did
    was a floor for companies.
        We are also moving aggressively on cybersecurity. As this
    committee knows, automakers will soon stand up the Information
    Sharing and Analysis Center, the ISAC, to facilitate sharing of
    potential cyber threats and countermeasures in real time in.
    Yet we hear you loud and clear. We do hear you loud and clear.
    Even before the introduction of this draft, we know that you
    wanted us to move further. So we are now moving forward with
    the best practices initiative as well so that we have a fully
    integrated approach to addressing hacking risks.
        The future of mobility is extremely bright. We are on the
    precipice of a golden era of mobility. Technology will make all
    this happen. It will enable safety outcomes, more
    environmentally friendly travel, and an economy that is more
    productive because people and goods will be able to move much
    more efficiently around the country.
        This committee has started this conversation about the
    future of mobility in earnest. We look forward to working with
    you to build this new reality.
        [The prepared statement of Mr. Bainwol follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Burgess. The chair thanks the gentleman. The gentleman
    yields back.
        Mr. Bozzella, you are recognized for 5 minutes for
    questions, please.

                       STATEMENT OF JOHN BOZZELLA

        Mr. Bozzella. Mr. Chairman, Ranking Member Schakowsky,
    members of the subcommittee, thank you very much for the
    opportunity to testify today. I am John Bozzella, President and
    CEO of Global Automakers. Mr. Chairman, thank you for your
    thoughtful work on motor vehicle safety and for holding this
    hearing today.
        Our industry has been in the news a great deal lately and
    not always for the best of reasons. This hearing gives us the
    chance to discuss our ongoing efforts to improve motor vehicle
    safety and enhance public trust through the research and
    development of new technologies.
        The draft bill released last week contains a number of
    important ideas designed to advance our shared goal of improved
    motor vehicle safety. We appreciate the subcommittee's
    commitment to improving recall completion rates and exploring
    innovative ways to address new and emerging challenges
    associated with the development of vehicles that not only
    actively avoid collisions, but talk to one another and to the
    surrounding infrastructure.
        In the time available, I will focus on three important
    issues: 1) recall notification during vehicle registration; 2)
    adoption of connected-car technology; and 3) industry efforts
    to stay ahead of privacy and cybersecurity challenges.
        Consumers should be informed of the recall status of their
    vehicles. Global Automakers believes an effective way to
    achieve this end is to use state DMV offices to notify vehicle
    owners of open recalls at the time they register or renew their
    registration. We now have some initial data that suggests there
    is public support for this approach. In a recent survey
    commissioned by Global Automakers and the Alliance of
    Automobile Manufacturers, we looked at how consumers respond to
    and think about recall notices and found overwhelming support
    for the idea of receiving recall information from the DMV. Over
    70 percent of those asked about this issue supported not only
    notification at registration, but a requirement that recalls be
    remedied prior to registration. More research needs to be done,
    but these initial results indicate that the subcommittee is
    moving in the right direction as it explores ways to increase
    recall completion rates.
        We are also pleased that the draft bill recognizes the
    substantial benefits associated with the installation of
    dedicated short-range communications, or DSRC devices, that
    allow cars to communicate with each other and the surrounding
    infrastructure, leading to fewer crashes, less congestion, and
    other potential benefits. NHTSA agrees that this technology
    could be a ``game-changer'' potentially addressing 80 percent
    of vehicle crashes involving non-impaired drivers. Encouraging
    the fastest deployment possible of DSRC will spread the
    benefits of this lifesaving technology more quickly and more
    widely.
        The enormous benefits of connected-car technologies
    outweigh the challenges that come with living in a connected
    world. As automakers pursue these innovations and the benefits
    that they bring, we recognize strong cybersecurity and privacy
    protections are essential to building consumer confidence.
        To ensure the security of safety-critical driving systems
    and to protect the privacy of consumer data, we have begun
    establishing industry-wide cybersecurity best practices. These
    best practices will allow automakers the flexibility to quickly
    and effectively respond to the dynamic nature of cyber
    challenges. This builds on steps we have already taken, such as
    the creation of industry privacy principles to protect consumer
    information and the launch of the Automotive Information
    Sharing and Analysis Center, or Auto-ISAC, to share
    intelligence on immediate threats and vulnerabilities.
        Last year, U.S. automakers took unprecedented steps to
    protect the privacy of consumers through the responsible
    stewardship of information collected from in-vehicle
    technologies and services and the meaningful disclosure of
    privacy principles and practices. We engaged with privacy
    advocates and the Federal Trade Commission during the
    development of these principles. As early as January of 2016,
    all major auto manufacturers will be accountable to the FTC for
    these privacy commitments. We have questions about how the
    privacy provisions outlined in the bill would interact with the
    commitments that have already been made by automakers.
        In August, U.S. automakers incorporated the Auto-ISAC. The
    Auto-ISAC will enable secure and timely sharing of cyber threat
    information and potential vulnerabilities in vehicle
    electronics or networks. By the end of the year, we expect the
    ISAC infrastructure to be fully operational.
        Cybersecurity challenges in the Internet of Things are not
    unique to automakers. Any approach to address cyber threats
    should be consistent with approaches used in other industries.
        Thank you again for the opportunity to appear before you
    today. I am happy to answer any questions you may have.
        [The prepared statement of Mr. Bozzella follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Burgess. The chair thanks the gentleman.
        Ms. Wilson, you are recognized for 5 minutes, please, for
    an opening statement.

                        STATEMENT OF ANN WILSON

        Ms. Ann Wilson. Thank you. Chairman Burgess, Ranking Member
    Schakowsky, members of the subcommittee, my name is Ann Wilson.
    I serve as the Senior Vice President of Government Affairs for
    the Motor & Equipment Manufacturers Association. Thank you for
    the invitation today to testify about motor vehicle safety
    issues.
        MEMA represents more than 1,000 companies that manufacture
    components and systems for use in the light- and heavy-duty
    vehicle original equipment and aftermarket industries. Our
    members provide more than 734,000 direct jobs nationwide,
    making the motor vehicle parts industry the largest employer of
    manufacturing jobs nationwide.
        Suppliers work closely with vehicle manufacturers to
    provide cutting-edge and innovative systems and components for
    new vehicles. In fact, suppliers manufacture more than 2/3 of
    the value of today's vehicles.
        Today, I will focus on the safety benefits of advanced
    driver assistance systems, or ADAS. These technologies are
    included in the discussion draft in the term Advanced
    Automotive Technology.
        As is widely recognized and as has been previously
    discussed, motor vehicle safety continues to improve in this
    country. The most influential safety factors are improvements
    to vehicles' structural design and advanced vehicle
    technologies, including ADAS. MEMA recently published, as Mr.
    Bainwol discussed, a study prepared by the Boston Consulting
    Group on the benefits of ADAS technologies. A complete copy of
    the study has been circulated to all the committee members.
        The MEMA study focused on current technologies that can
    provide immediate safety benefits and form the pathway to a
    partially or fully autonomous vehicle fleet that could
    virtually eliminating traffic fatalities. However, the study
    did find that a suite of ADAS technologies that are currently
    available have the potential to prevent 30 percent of all
    crashes nationwide, a total of 10,000 lives saved every year.
        Today, however, relatively few vehicles on the road have
    ADAS technologies, and their penetration in the market is only
    growing about 2 to 5 percent annually. Since the vast majority
    of accidents in the U.S. are caused by driver error, the lack
    of adoption of these technologies within the U.S. fleet is a
    significant missed opportunity.
        I would like to take a minute and discuss exactly what ADAS
    is. They can be grouped into three broad categories: those that
    aid the driver, those that warn the driver, and those that can
    assist the driver in performing certain basic driving
    functions. Aid features include visual aids such as night
    vision, rear-mounted cameras that enhance the driver's rear
    vision, and adaptive lighting and surround-view systems.
        Warn features alert the driver of potential dangers.
    Examples include park assist, forward collision warning, lane
    departure warning, which typically activates a beeper or causes
    the driver's seat to vibrate when the vehicle drifts out of its
    lane. Other warning systems include blind spot and rear cross-
    traffic detectors and driver monitoring systems.
        Assistance features actively engage steering, acceleration,
    and/or braking systems as is needed in order to ensure the
    vehicle's safe operations. Such features include forward
    collision assist, adaptive cruise control, self-parking, and
    lane-keeping assist, which actively returns the vehicle to its
    original lane when it is in danger of drifting from it. There
    is also pedestrian avoidance, which warns the driver of an
    impending collision with a pedestrian, and in some instances
    will assist the driver with steering and braking to avoid that
    collision.
        Better consumer information and education, as well as
    market incentives, will increase the adoption and lower the
    cost of these technologies, and MEMA supports the efforts of
    this committee to promote ADAS technologies through the
    expansion of the New Car Assessment Program and advanced
    credits for fuel economy and greenhouse gas emissions.
        We do have the following comments on the committee draft:
    In Title V, Section 501, suppliers must be specifically
    included in the Advanced Automotive Technology Advisory
    Committee. Furthermore, we believe the 35-percent threshold
    specified for inclusion of the technology on the Monroney label
    is too high. Collision avoidance systems are currently
    available, and if they are in new vehicles, they must be listed
    in the NCAP rating as part of all new vehicle labels.
        In Section 502, MEMA supports awarding credits for advanced
    technologies for fuel efficiency and greenhouse gas emissions.
    The use of these technologies will result in better traffic
    flow, less fuel consumed, and fewer vehicle emissions. However,
    there should not be a difference in the credits for vehicles
    with at least three advanced safety technologies and vehicles
    with one connected vehicle technology.
        MEMA thanks the committee on its foresight to provide
    greater consumer acceptance of ADAS technologies. The industry
    is committed to working with you to establish new and
    innovative ways to increase the adoption of these life-saving
    technologies and to address other critical issues.
        Thank you.
        [The prepared statement of Ms. Ann Wilson follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Burgess. The chair thanks the witness.
        Mr. Dotson, you are recognized for 5 minutes for the
    purpose of an opening statement, please.

                        STATEMENT OF GREG DOTSON

        Mr. Dotson. Thank you. Chairman Burgess, Ranking Member
    Schakowsky, and members of the subcommittee, thank you for the
    opportunity to testify today. My name is Greg Dotson. I am Vice
    President for Energy Policy at the Center for American
    Progress, a nonprofit think tank dedicated to improving the
    lives of Americans through progressive ideas and actions.
        The auto manufacturing industry touches the lives of all of
    us. Many Americans rely on their cars and trucks to get to
    work, to do their jobs, to transport their families safely. For
    these reasons, the industry is regulated in a number of vitally
    important ways: to minimize the risk of accidents, to minimize
    our dependence on oil, and to prevent pollution from choking
    our communities. The result is that today's vehicles have
    attributes once believed to be incompatible. They are safer,
    more efficient, and less polluting.
        Today, I am going to focus my testimony on Sections 502 and
    503 of the discussion draft. I have provided a lengthier
    statement for the record, but I would like to highlight the
    five important reasons that these sections are flawed.
        First, the discussion draft presents a false choice by
    asking Members of Congress to choose vehicle safety over
    pollution reduction. That is an unnecessary tradeoff. The fact
    is that we need both safer motor vehicles and cleaner cars and
    trucks, and there is no reason the American people can't have
    both.
        Second, there is not a sound analytic basis for the
    proposal. The bill would encourage automakers to use this
    technology by giving them pollution credits for every car they
    manufacture with crash-avoidance technology like automatic
    emergency braking or technology that helps with congestion
    mitigation like an in-dash GPS. Unfortunately, there just isn't
    sufficient data to support these pollution credits.
        In 2012, the Environmental Protection Agency and the
    Department of Transportation examined this issue. The automaker
    Daimler had argued that the agency should provide pollution
    credits for crash avoidance technology. The agency said that
    credits should only be awarded where the technologies provided
    real-world improvements to fuel economy and pollution
    reduction, the improvements must be verifiable, and the process
    by which they are granted should be transparent.
        The agencies determined that none of these factors were
    satisfied for technologies used for crash avoidance.
    Consequently, the agencies concluded that the advancement of
    crash-avoidance systems is best left to NHTSA's exercise of its
    vehicle safety authority.
        The discussion draft would reverse this conclusion. Under
    this proposal, Section 502(a) provides a credit of 3 or more
    grams of carbon dioxide per mile to any vehicle that is
    equipped with an advanced vehicle technology. The bill also
    offers a credit of 6 or more grams of carbon dioxide per mile
    to any vehicle that is equipped with connected-vehicle
    technology. Three grams might not sound like a lot, but it is
    many times more than Daimler argued to EPA was warranted for
    this technology in 2012.
        And although EPA is still in the process of determining the
    extent of Volkswagen's violations, in all the publicly
    discussed estimates, the excess pollution from the non-
    complying VW vehicles is less than 3 grams per mile. The fact
    is 3 grams per mile for every mile every day for every year for
    every car adds up to substantial pollution.
        Third, the discussion draft would allow more pollution for
    using technologies that are going to be used even without this
    additional incentive. For instance, just last month, 10 major
    vehicle manufacturers publicly committed to making automatic
    emergency braking a standard feature in all new vehicles. It
    makes no sense to give these companies an incentive for
    something they intend to do anyway.
        Fourth, the loopholes created by this bill could only grow
    bigger over time. Section 503(a) would authorize the Secretary
    of Transportation to select any technology and award that
    technology as many pollution credits as necessary to
    ``incentivize'' its adoption. There is no upper-bound limit on
    how many credits might be awarded under this language.
        Finally, the bill, as currently drafted, would curb the
    role of States in innovating carbon pollution reductions at the
    state level. As we have seen time and again, the States are the
    laboratories of innovation. They have demonstrated countless
    successes, and there is no basis for so easily stripping them
    of their important role. We should remember that it was the
    State of California that led the way in detecting the VW
    emissions scandal.
        Mr. Chairman, Ranking Member, and members of the
    subcommittee, it has not been easy for the United States to
    establish a regulatory structure that is transparent, data-
    driven, technology-based, and effective. I urge you to reject
    pleas for new special-interest loopholes and maintain our
    current rigorous system. The American people expect a
    regulatory system that cuts pollution and increases safety.
    Let's not sacrifice one for the other.
        And I would be happy to take any questions you have.
        [The prepared statement of Mr. Dotson follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Burgess. The chair thanks the gentleman. The gentleman
    yields back.
        Ms. Claybrook, you are recognized for 5 minutes for your
    opening statement, please.

                      STATEMENT OF JOAN CLAYBROOK

        Ms. Claybrook. Thank you very much, Mr. Chairman and
    Ranking Member Schakowsky and members of the subcommittee.
        I am Joan Claybrook, Consumer Co-chair of Advocates for
    Highway and Auto Safety and former Administrator of NHTSA. I
    appreciate the opportunity to testify before you today on such
    an important issue, the safety of our families and friends on
    our nation's roads and highways.
        Let me share with you some important statistics as you
    begin considering this bill: 33,000 deaths and over 2 million
    horrible injuries annually in motor vehicle crashes; 801
    manufacturer recalls and service campaigns of more than 63
    million vehicles in 2014; 613 recalls already in 2015 involving
    40 million vehicles. For these recalls, at least 200 people
    innocently killed and hundreds injured because automakers sold
    cars they knew had safety defects.
        There have been House and Senate hearings over the last 2
    years on faulty GM ignition switches and exploding Takata
    airbags where I heard countless hours of testimony and
    indignation expressed by committee members. There have been
    over 2 billion in Department of Justice and civil fines against
    recalls since 2010 because of the NHTSA enforcement and Justice
    enforcement; total NHTSA safety budget, a measly $130 million a
    year, a measly 130 million.
        Eleven family members sitting behind me today and millions
    of Americans expect their legislators to enact sensible
    solutions for serious safety problems, one opportunity to get
    it right.
        Congressional hearings, media reports, and DOT inspector
    general reports have all uncovered industry misconduct and
    NHTSA missteps that put millions of Americans at risk on the
    highway. The outstanding problems that need legislation that
    addresses them are: a chronically underfunded and understaffed
    agency responsible for regulating giant corporations and
    ensuring public safety; a lack of adequate civil and criminal
    penalties to deter automakers from putting profits before
    public safety; a predisposition by NHTSA to needlessly withhold
    information from consumers about vehicle safety problems that
    thwarts their ability to legally challenge the agency actions--
    all that is now changing under Mr. Rosekind; thank you, a legal
    loophole that allows consumers to drive off the lot of a rental
    car company or a used-car dealer with a vehicle under recall
    but not repaired; and agency powerlessness to take swift action
    when there is imminent hazard.
        The draft bill will set a safety agenda for the agency for
    the next 6 years. At a time when motor vehicle deaths and
    injuries are climbing, stronger safety standards are urgently
    needed. Serious problems have been exposed and new challenges
    face the agency.
        What does this bill due to enhance safety and equip the
    agency with the legal and financial tools to fulfill its safety
    mission? Very little. Instead, it seriously dilutes critical
    vehicle emission controls and wastes taxpayer dollars by
    turning NHTSA into the National Highway Traffic Study
    Administration. The bill diverts precious government resources
    to conduct at least 16 burdensome studies and reports and put
    the auto industry in the driver's seat on vehicle safety at the
    expense of public safety.
        Under the draft bill, automakers can barter and trade off
    fuel economy and safety when we know the technologies exist to
    build safe, fuel-efficient, and clean cars. Other provisions
    delay public notification of recalls until NHTSA is in receipt
    of all the vehicle identification numbers subject to the
    recall, and NHTSA is required to draft its notice of a safety
    defect and noncompliance in coordination with the manufacturer,
    something that a regulator should not be limited to.
        The bill provides a blanket exemption for motor vehicle
    safety standards for replica and other vehicles intended for
    testing and evaluation, and these giveaways are unnecessary
    because NHTSA already has a regulatory process to do this in
    the law.
        Furthermore, the draft bill provides a breathtaking double
    standard for manufacturers at the expense of consumers. And
    Section 406 mandates that industry failure to follow DOT
    voluntary guidelines cannot be used as evidence in a civil
    action. However, industry may use compliance with those same
    guidelines to show compliance with federal regulations in the
    same civil action.
        The real intention of these and other provisions setting up
    industry-stacked advisory committees and councils are not to
    advance safety but to thwart NHTSA from regulating industry and
    to keep the public out.
        Problem-solving proposals to the problems identified by the
    hearings that you have heard again and again are found in H.R.
    1181 that has been introduced by Ranking Member Frank Pallone
    and Subcommittee Ranking Member Jan Schakowsky. It is a
    comprehensive approach that includes tougher penalties, eminent
    hazard authority, improved transparency, pedestrian safety
    measures, prohibitions on renting vehicles or selling used cars
    under recall, judicial review of final agency actions on
    recalls, and revolving-door protections, and an overdue
    direction to the agency to address the tragedies of unattended
    children left behind in a vehicle, and some 200 of them die a
    year.
        Unless this committee acts to pass meaningful legislation
    that will prevent illegal and immoral behavior by the auto
    industry, this string of scandals will continue: Firestone
    tires, Toyota sudden acceleration, GM faulty switches, Takata
    exploding airbags, and now cheating VW cells. There are no
    credible excuses for delaying any longer the adoption of
    consumer protections, increased penalties for corporate
    misbehavior, strengthening NHTSA's authority and resources, and
    improve vehicle safety standards that can really save lives and
    reduce injuries and prevent industry fraud.
        Thank you so much for the opportunity.
        [The prepared statement of Ms. Claybrook follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Burgess. The chair thanks the gentlelady. The
    gentlelady yields back.
        Mr. Welch, you are recognized for 5 minutes, please, for an
    opening statement.

                        STATEMENT OF PETER WELCH

        Mr. Welch. Mr. Chairman, Ranking Member Schakowsky, my name
    is Peter K. Welch, not to be confused with anybody else, and I
    am the President of the National Automobile Dealers
    Association. NADA is a nationwide trade association that
    represents the interests of over 16,000 franchised new car and
    truck dealers throughout the country.
        The draft bill before you today contains a number of
    provisions NADA supports, including several provisions to
    improve recall notification and completion rates. Dealers
    support a 100 percent recall completion rate. And again, we
    commend the subcommittee for its efforts to help us achieve
    that goal.
        The recall system Congress enacted depends on new car
    dealers to fix the millions of vehicles that are now under
    recall. Last year alone, our members performed 59 million
    warranty and recall repairs, and unfortunately, we are set to
    break that record again today with the burgeoning number of
    recalls that are being issued.
        For the owners of recalled vehicles, it is their local
    dealer who remedies the defect or nonconformance and at no
    charge to the owner. When owners receive a recall notice but
    fail to act, many dealers on their own initiative will contact
    their customers to schedule a service appointment. One of our
    Texas dealer members found that sending bright pink postcards
    reminding owners that their vehicles were under recall is an
    effective way to get those cars into the service bay and to get
    them fixed.
        Currently, the overall recall completion rate is around 75
    percent, which means there is lots of room for improvement.
    Back-ordered repair parts and recall notices that are
    disregarded by consumers are the two main reasons that the
    completion rates lag. It is not unusual for a dealer to wait 60
    days or more for a back-ordered recall repair part. In some
    instances, repair parts can be unavailable for over a year. I
    don't know of any dealer who isn't eager to remedy a recall
    vehicle and make a customer happy, but they need repair parts
    to do that
        Inaction by consumers after receiving a recall notice also
    hinders completion rates. One idea NADA has suggested to NHTSA
    at its April recall workshop was for NHTSA to launch a media
    campaign targeted to those demographic groups that are less
    likely to respond to recall notices. We ask the subcommittee to
    consider that idea.
        Improving NHTSA's recall database and lookup tool is
    another way to boost the recall completion rate. The current
    system was designed for single-vehicle lookups by consumers. It
    was not designed for commercial use. Depending on its size, the
    dealer can have dozens to thousands of used vehicles in its
    inventory. This bill should include a provision directing NHTSA
    to upgrade its recall database to allow dealerships to
    automatically check on a daily basis which used vehicles in
    their inventory are under open recall. A tool that is
    searchable, automated, and can batch multiple requests is
    critical to identifying open recall vehicles in a dealer's
    inventory in getting them fixed.
        We also support Section 203, which would provide
    notification by state DMV of a recall at the time of
    registration renewal. It is all about notification and
    awareness, and we think that this is a good idea to help
    increase the remedy rate.
        Section 205 would extend the period for which cars could be
    recalled from 10 to 15 years. With the average vehicle on the
    road today at 11.5 years, this provision also makes sense.
        In conclusion, Congress must ensure that any new recall
    policy it enacts is data-driven. The most successful highway
    safety policies such as enactment of primary safety belt laws
    and anti-drunk driving measures were all based on hard data and
    now are proven countermeasures. We commend the subcommittee for
    its hard work and stand ready to work with you on strong safety
    measures that will protect America's driving public.
        Thank you, and I look forward to answering any questions.
        [The prepared statement of Mr. Welch follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Burgess. The chair thanks the gentleman.
        Mr. Wilson, you are recognized for 5 minutes, please, for
    an opening statement.

                      STATEMENT OF MICHAEL WILSON

        Mr. Michael Wilson. Chairman Burgess, Ranking Member
    Schakowsky, members of the subcommittee, thank you very much
    for the opportunity to testify. I am Michael Wilson, CEO of the
    Automotive Recyclers Association.
        The Association is dedicated to the efficient removal and
    reutilization of genuine original equipment automotive parts
    and the proper recycling of inoperable motor vehicles. ARA
    represents the interests of over 4,000 automotive recycling
    facilities in the United States who each day sell over 500,000
    recycled parts directly to consumers, mechanical shops,
    collision repair shops and automobile dealers.
        These quality, recycled original equipment parts are
    designed by automakers and built to meet their requirements for
    fit, finish, durability, reliability, and safety. These parts
    are often reutilized in the repair and service of vehicles
    throughout their lifespan, and these replacement parts continue
    to operate as they were originally intended in terms of form,
    function, performance, and safety.
        I urge Congress to add language to the subcommittee's draft
    legislation that would provide the automotive recycling
    industry access to critical original equipment parts data on
    all motor vehicles. The critical data includes part numbers,
    names, and descriptions tied to each vehicle's specific vehicle
    identification number.
        The straightforward reason that this information is
    necessary is because manufacturers and dealers in the
    automotive industry speak a totally different parts language
    than those in the auto recycling community. Automakers and
    dealers utilize original equipment part numbers, while
    automotive recyclers have historically utilized Hollander
    Interchange part numbers.
        The Hollander Interchange enables automotive recyclers and
    enthusiasts to identify and find parts they need to keep their
    vehicles running and in original condition. The Hollander
    Interchange indexes millions of parts and their interchangeable
    equivalent from other vehicles, for example, a specific part
    that is in a Ford F-150 is also interchangeable with the same
    part in a Ford Expedition, a Mercury Mountaineer, or a Lincoln
    Navigator.
        It is only through the utilization of both original
    equipment part numbers and the Hollander Interchange part
    numbers that automotive manufacturers and recyclers can come
    together to enhance overall motor vehicle safety, help improve
    recall remedy rates, and comply with the federal recall remedy
    statute for used equipment enacted 15 years ago in the TREAD
    Act.
        First, I would like to address the challenge automotive
    recyclers face in identifying automakers' non-remedied
    defective parts in their current inventory. Regrettably, the
    TREAD Act, MAP-21, and their respective rulemakings did not
    compel the automakers to provide essential parts data, making
    it functionally impossible for used replacement part
    stakeholders to comply with the federal statute.
        Automakers are fully aware that the lifecycle of their
    parts can go beyond the initial utilization in a motor vehicle
    from the factory. This recognition was underscored in August
    2014, when General Motors contracted with a third-party
    supplier to coordinate the purchase and return of certain used
    parts, which are subject to a product safety ignition switch
    recall from automotive recycling facilities.
        In a third-party notice to recycling facilities, the
    correspondence not only included the make, model, and year of
    the vehicles subject to the recall but also detailed the
    specific GM part and the ACDelco service part numbers, which
    the notice stated, ``are provided so the manager can identify
    the parts being recalled.'' The notice also included the
    Hollander Interchange number for ignition switches. Clearly, GM
    understands that specific part numbers are vital to correctly
    and efficiently locate the affected parts.
        In NHTSA's current SaferCar.gov site, individuals or
    companies who sell a significant number of vehicles or parts do
    not have the multiple VIN lookup capability to necessary
    information and are severely limited by objections to allowing
    electronic integration of important data to enhance safety.
    Just as problematic is the data provided by the automakers
    through safercar.gov is many times a recall narrative rather
    than actual part numbers, names, or descriptions, making it all
    but impossible to identify specific recalled parts
    electronically.
        It is essential that our recyclers be able to
    electronically identify those parts associated with VINs which
    have been recalled and not remedied before vehicles are
    potentially purchased at auction or acquired from the general
    public. If the automakers provide access to parts data, it will
    allow the recycling community to comply with its obligations
    under the TREAD Act, and can help protect our nation's drivers
    from the manufacturers' defective parts.
        While some automakers may concede to the need for providing
    the original equipment data for their defective parts, it is
    important to understand this is not enough. The number of
    defective automotive parts in today's marketplace is increasing
    at alarming rates. In fact, some 100 million vehicles have been
    recalled since the beginning of 2014. These recall campaigns
    create multiple challenges for my members who provide safe and
    quality recycled original equipment parts to the marketplace.
        Also consider the original equipment parts that automotive
    recyclers sell today and are subject to a recall at some future
    date. If automotive recyclers don't have access to all original
    equipment parts data, there is no specific part number to track
    it going forward if there is a subsequent recall on that part.
        Most agree that the private sector has developed or has the
    potential to develop highly effective solutions to the vehicle
    and the part identification, along with the remedy-tracking
    problem. However, these systems would only be as good as the
    data the companies have access to and are able to provide to
    the affected parties. Unfortunately, IIHS and other data
    providers currently do not have access to part numbers,
    descriptions, and other important data needed to track recalled
    parts and to significantly increase recall remedy rates.
        Automakers are accountable for the safety of all original
    equipment parts throughout their lifecycle and should be
    required to share whatever parts information is necessary to
    identify and locate recalled defective parts within the
    recycled original equipment parts population. The practice of
    sharing original equipment part numbers with recyclers should
    not be an anomaly. Rather, it should be a standard automotive
    industry practice, especially in light of the new safety norm.
        Consumer demand for a safe and vibrant replacement parts
    market makes it imperative that Congress include language that
    would require automakers to remove the barriers they have
    constructed so that all parts data is available to the
    professional automotive recycling industry.
        Thank you.
        [The prepared statement of Mr. Michael Wilson follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Burgess. The chair thanks the gentleman, and thank all
    of you for your testimony. We will move into the question-and-
    answer portion of the hearing, and I will begin that by----
        Mr. Butterfield. Mr. Chairman, I have a unanimous consent
    request.
        Mr. Burgess. The gentleman may state his request.
        Mr. Butterfield. Yes, I am preparing to chair a meeting in
    just a few minutes with 45 Members. May I submit my questions
    for the record and have the witnesses respond later in writing?
        Mr. Burgess. The gentleman certainly understands there is a
    lot of Members who are wanting to ask questions, but I would be
    prepared to yield to the gentleman to go first for his
    questions if you would like.
        Mr. Butterfield. You are very kind, and I can talk fast.
        Mr. Burgess. Proceed. The gentleman is recognized.
        Mr. Butterfield. Ms. Claybrook----
        Mr. Burgess. And I will hold off all the other Members.
        Mr. Butterfield. You are very kind. Thank you.
        Ms. Claybrook, thank you for coming. Ms. Claybrook, as you
    know, I have worked closely with Lois Capps and Ms. Schakowsky
    and others on rental car safety legislation. In fact, in May we
    introduced 2189, the Raechel and Jacqueline Houck Safe Rental
    Car Act of 2015. I am disappointed that the text of that bill
    was not included in the base text of the safety title, but it
    was included in the bill that the Senate is working on. Do you
    share in my disappointment in any way that the text of 2189 was
    not included as a part of the title?
        Ms. Claybrook. I certainly do. And as you heard
    Administrator Rosekind, he does, too. We believe that all cars
    that have been subject to recall, whether new cars or used cars
    or rental cars, should all be fixed immediately.
        Mr. Butterfield. Thank you. Why is enacting a federal
    standard with regard to rental car safety so important?
        Ms. Claybrook. Well, it is important because it causes
    death and injury on the highway for unsuspecting owners or
    renters, and that is the bottom line is safety on the highway.
        Mr. Butterfield. And to the best of your knowledge, do the
    vast majority of rental car companies support a federal rental
    car safety standard?
        Ms. Claybrook. That is my understanding: the vast majority
    do. And the public does overwhelmingly.
        Mr. Butterfield. OK. Is there anyone on the panel that
    would dispute that?
        [Nonverbal response.]
        Mr. Butterfield. Consumers for Auto Reliability and Safety
    and the Consumers Union and the Consumer Federation of America,
    AAA, and the American Rental Car Association all support 2189,
    and they have called on this committee to move the bill either
    on its own or as part of a larger package. Do you agree or
    disagree?
        Ms. Claybrook. Oh, I completely agree. And warning is not
    enough, by the way. The car has to be fixed. The vehicle has to
    be fixed.
        Mr. Butterfield. All right. And finally, for Mr. Welch,
    thank you very much, Mr. Welch, for coming, and you certainly
    know we have a Member named Peter Welch from Vermont.
        Your association, Mr. Welch, believes that we should focus
    more on fixing recalled rental cars instead of grounding them.
    It seems to me that the rental companies have every incentive
    to repair a grounded vehicle and get it back on the road as
    soon as possible. And so I would think that a requirement to
    ground an unrepaired vehicle would actually speed up the repair
    rate. As you know, federal law already requires new recalled
    cars to be grounded until they are fixed. Do your members
    prefer to fix these new recalled cars quickly or simply have
    them to sit on the lot?
        Mr. Welch. Well, of course our members are the ones that
    perform the vast majority of recall fixes and remedies across
    the country.
        With respect to the rental car bill, we are supportive of
    the premise behind the bill that vehicles that are unsafe to
    drive should not be put into the hands of the public. Our
    issues with that bill is the definition of when is it unsafe to
    drive a vehicle and differentiating between recalls that would
    not render a vehicle unsafe to drive, as determined by either
    NHTSA or the original equipment manufacturer of the vehicle.
    And I think we could have lots of discussions and hope to have
    discussions on drawing a clear, bright line on when a vehicle
    is unsafe to drive to distinguish it, for instance, between
    those types of recalls that would not affect the safety of
    driving the vehicle.
        We have a number of other issues. I can get into it if you
    want, but in the interest of time, specific provisions on that
    bill, for instance, it is overly broad because it paints all of
    these vehicles with the same brush. We think it is unfair to
    small businesses. Eighty percent of our members are small
    businesses. It treats our members the same. If I have five
    vehicles in a loaner fleet, for instance, I am subject to the
    same penalties and fines that Hertz and Avis is. So there are a
    number of issues.
        Mr. Butterfield. Do you think that rental companies would
    have the same incentive to repair?
        Mr. Welch. Well, of course that raises another issue, and
    that is the fight for parts. As I mentioned before, the only
    thing that is holding us back from fixing any vehicle that
    comes onto our lot is the availability of parts, and we have
    commissioned some research on that. And the average delayed
    part on trade-in vehicles, for instance, is 60 days. And we
    have some concern that the rental car companies might get in a
    tug-of-war with the manufacturers for the availability of parts
    that may adversely affect our customers that are coming in to
    get their vehicles repaired.
        Mr. Butterfield. Thank you. Thank you very much, Mr. Welch.
        Ms. Claybrook. Mr. Chairman, could I comment on one thing?
        Mr. Butterfield. Yes?
        Ms. Claybrook. Could I comment on one thing? It seems to me
    that in terms of whether the car is safe to drive that the
    manufacturer has already made that decision. When they do a
    recall, they are saying this is a safety issue and this car
    needs to be fixed. And there are very few cars that are unsafe
    when they are not driven. So it seems to me that the
    manufacturer has already made that decision, and it is not up
    to somebody else to decide, NHTSA or anybody else to decide
    whether or not it is safe to drive that.
        Mr. Welch. If I could respond to that?
        Mr. Butterfield. All right.
        Mr. Welch. The manufacturers and NHTSA do in fact issue
    stop-drive notices, and it is about 6 percent of the recalls
    that they do stop-drive. And I understand that there could be a
    dispute between whether it ought to be 8 percent or 10 percent
    or 40 percent or whatever. Again, we are the monkey in the
    middle. The car dealers, we are there looking for parts to fix
    the cars. But there is a big difference between, for instance,
    a mislabel--and I don't want to be trite in any way, shape, or
    form, characterize any violation of a statute subject a vehicle
    to recall but there----
        Ms. Claybrook. When would you fix it? So you don't want to
    fix it today because it is OK to drive it with a bad label.
    When are you going to fix it? Are you going to fix it----
        Mr. Butterfield. Well, maybe some of the other Members
    will----
        Mr. Welch. As soon as the part is available, it will get
    fixed so they----
        Mr. Butterfield. The chairman was so kind----
        Mr. Burgess. And I will reclaim----
        Mr. Butterfield [continuing]. To yield to me and I----
        Mr. Burgess. I will reclaim the time. The dais will ask the
    questions.
        Mr. Butterfield. Thank you, Mr. Chairman. Thank you so very
    much.
        Mr. Burgess. Thank you, Mr. Butterfield. And good luck with
    your meeting.
        I will now recognize myself for 5 minutes for questions. So
    that was an interesting exchange.
        Let me just ask Mr. Bainwol about this ISAC, the gathering
    of data. What is the mechanism for disseminating information
    back then to your members or anyone else involved?
        Mr. Bainwol. The ISAC, again, which will be stood up in a
    matter of weeks--I think today an announcement went out with
    the board of directors so it is very much in process. The board
    is comprised of auto companies, so this is really a form for
    members, OEMs, to share information about risk and
    countermeasures. And so the mechanism is the ISAC itself, and
    that is precisely why it has been established.
        We are augmenting the ISAC--which, by definition, deals
    with problems after they have been manifest--with the best
    practices to preempt the possibility of problems. So this is a
    comprehensive approach. We are going to be working, obviously,
    with NHTSA using guideposts as we develop these best practices,
    including NIST, but the ISAC itself is comprised of the OEMs,
    and down the road, we will broaden out to include suppliers.
        Mr. Burgess. And how do you then get the word out? Is it
    certified mail, e-mail, carrier pigeon? What are you doing?
        Mr. Bainwol. So the process is being established but they
    are talking to each other. The OEM community is a relatively
    small one and----
        Mr. Burgess. So you don't see that as being an obstacle or
    a barrier?
        Mr. Bainwol. The communications when events happen, I
    think, will be very quick, accelerated, and that will not be a
    problem.
        Mr. Burgess. Very well. Mr. Welch, if I can ask you a
    question because, of course, this committee and another
    subcommittee has been very involved on the airbag recall, and
    of course in the Fort Worth-Dallas area. The backorder, you
    brought up the issue of the backorder of the recalled repair
    parts. And what has been the experience with your member
    dealers as far as being able to get the parts, specifically the
    airbags, for replacement when someone brings their vehicle in
    to have it fixed?
        Mr. Welch. Well, that has been a particularly troublesome
    recall, as you know. There are some 24 million vehicles that
    are involved in that, and in order to produce sophisticated
    airbags in sufficient numbers to replace 24 million of them are
    going to take time. In fact, the backorders on those, depending
    on the make, the model, what factory they are coming from,
    availability, could well be over a year.
        And the dilemma that we face day in and day out because of
    the publicity that this recall has received, we have to deal
    with our consumers, your constituents that come in, and we
    don't have the replacement part. And the dilemma is that they
    don't affect all of the vehicles the same depending on what the
    climate is. There is a humidity issue with them, and I think
    our partners the manufacturers are doing as good a job as they
    can in trying to triage the availability of those parts and get
    them to the regions of the country where they would have the
    largest impact with respect to it.
        But we are just going to have to wait through that and do
    the best that we can with the availability. We have got
    databases with people waiting, priority issues, and some of
    them want us to disengage the airbag, which creates a whole
    other dilemma, and we don't think that is a good idea. And then
    there is the debate between the risk of the occupant having an
    airbag since not all of them have the defect in them. So it is
    a very complex issue, Mr. Chair.
        Mr. Burgess. And, of course, in the hearings that we have
    held on this, this is all made more difficult because no one
    knows what the central defect is, and the replacement parts
    that you are putting in the cars that do come in that are
    subject to the recall and do require a replacement part, no
    complete assurance that the replacement part is actually
    compliant since we don't know what the defect was in the first
    place.
        You brought up getting the information out to targeted
    demographics, and that is something that has been the subject
    of a lot of discussion in this subcommittee as well, because
    typically, this is the third or fourth owner of a vehicle. I
    know in the market in the Dallas paper, one of the automotive
    manufacturers actually took out full-page ads in the paper, if
    you have one of our cars that is of this vintage, call the
    number or bring it in or whatever their requirement was.
        But they said it is very, very difficult to get the
    information out to, again, that third or fourth owner who may
    not be someone who reads the newspaper regularly that is maybe
    difficult to reach that individual. So is that one of the
    things that your association is working on as well? How do we
    get people in?
        Mr. Welch. Well, any way that we can contact our customer
    base. Unfortunately, as the vehicles get older in age, they
    don't continue to bring them to the franchise dealer for their
    ordinary maintenance.
        I might add that the completion rate, the remedy rate for
    vehicles that are 5 years old or newer is actually 85 percent,
    and one of the primary reasons for that is those vehicles are
    still coming in for warranty work. And trust me, any time a
    vehicle comes into our service department, we are scanning the
    VIN, we are running it if we have access to the database, and
    we are snagging it there and repairing them at our service
    bays.
        Mr. Burgess. And my time is expired. I yield to the
    gentlelady from Illinois 5 minutes for questions, please.
        Ms. Schakowsky. Thank you.
        I wanted to ask a yes or no question, a couple of them, for
    Mr. Bainwol. Did the Alliance of Automobile Manufacturers ask
    the committee for the provision in the bill that would give
    automakers a break from health-based carbon emissions
    requirements in exchange for adding safety features?
        Mr. Bainwol. We did not request it per se but we had a
    conversation about the value of----
        Ms. Schakowsky. Yes or no, do you support that provision?
    Yes or no?
        Mr. Bainwol. We certainly support the provision, sure.
        Ms. Schakowsky. You do?
        Mr. Bainwol. Sure.
        Ms. Schakowsky. And, Mr. Bozzella, I am asking the same
    question of the association of Global Automakers. Did you ask
    the committee for that provision?
        Mr. Bozzella. We did not.
        Ms. Schakowsky. Do you support it?
        Mr. Bozzella. The provision to incentivize lifesaving
    technologies we think is a very important conversation to have.
        Ms. Schakowsky. Well, I want all consumers to understand
    that manufacturers of automobiles support a provision that
    would actually increase pollution in exchange for providing--I
    am not asking now; I am talking--to improve safety of the
    automobiles. I think it is outrageous. Consumers like myself
    who now have a hybrid are seeking that. I would imagine that
    auto dealers would find the consumers are coming in and wanting
    more fuel-efficient cars. And to add this as an incentive to
    get safety often for safety features that are readily available
    is completely outrageous.
        I want to thank you, Mr. Dotson, for your testimony on this
    matter, and I want to move on to something else.
        Mr. Bainwol. May we comment on that?
        Ms. Schakowsky. Briefly.
        Mr. Bainwol. OK. Well, I will try to be brief.
        Ms. Schakowsky. No, you will be brief.
        Mr. Bainwol. Well----
        Ms. Schakowsky. It is my time. Go ahead.
        Mr. Bainwol. It is your time. So the challenge here is I
    think to some extent we are talking past each other. You define
    safety as a matter of defect policy and we define safety as a
    totality of the problem. So when you look at the issue, and
    this chart I think makes it pretty clear, 94 percent of the
    challenge when it comes to death if not more, if not close to
    99 percent, is a function of driver error. The magic of this
    technology is that it will address the totality of the problem.
        Ms. Schakowsky. What are you talking about? We are talking
    about incentives that increase auto pollution----
        Mr. Bainwol. We are----
        Ms. Schakowsky [continuing]. In exchange for getting those
    safety----
        Mr. Bainwol. We are talking about maximizing and
    accelerating the deployment of lifesaving technologies.
        Ms. Schakowsky. Exactly. And doing it in a way that
    increases auto emissions.
        Mr. Bainwol. In a----
        Ms. Schakowsky. I am sorry. I want to move on. It is my
    time.
        This is for Ms. Claybrook. Over the last several years, we
    have seen multiple scandals involving auto manufacturers and
    major safety defects that were internally reported but allowed
    to endanger people for years before the company did anything
    about this. NHTSA's ability to collect safety-related
    information from carmakers is critical to catching and fixing
    those problems. The draft we are looking at today asked NHTSA
    to conduct eight new studies and reports without providing any
    additional funding. Meanwhile, it does almost nothing to
    improve the communication of vital safety information from
    manufacturers to the agencies. My legislation, the Vehicle
    Safety Improvement Act, would facilitate communications.
        Let me ask you. As former NHTSA administrator, do you
    believe that more information from auto manufacturers would
    allow the agency to be more effective in its safety mission?
        Ms. Claybrook. Absolutely, I believe more information is
    necessary. The early warning system that was created by the
    2000 law for the TREAD Act did not give a lot of specificity
    about what the manufacturers had to report. They often report
    inconsistent information, it is very difficult to understand,
    and they fail to report information. Many have been fined for
    that recently. So that law needs to be upgraded, and your bill
    does a good job of helping to do that.
        I also think there need to be criminal penalties when the
    manufacturers fail to give that kind of information knowingly
    and willfully because otherwise they are not going to stop
    doing it.
        Ms. Schakowsky. And do you think the penalties currently
    are adequate?
        Ms. Claybrook. No. First of all, if you look at what the
    U.S. Attorney fined Toyota, 1.2 billion; and General Motors,
    900 million; and NHTSA's maximum penalty is 35 million. So it
    is clear that that number has to be drastically increased or
    there has to be no maximum. But there also need to be criminal
    penalties because when a manufacturer knows that they might go
    to jail, they are going to behave differently and they are
    going to pay more attention to what is going on.
        When the counsel of General Motors said that he didn't even
    know about settlements of lawsuits involving the ignition
    switch and that they were covering up information from those
    lawsuits, that was just incomprehensible. And so I think that
    there needs to be much stronger penalty provisions.
        Ms. Schakowsky. I appreciate that. Thank you. I yield back.
        Mr. Burgess. The gentlelady's time has expired. The
    gentlelady yields back.
        The chair recognizes the gentleman from Kentucky 5 minutes
    for your questions, please.
        Mr. Guthrie. Thank you. Thank you for having this meeting.
    I appreciate the panel for being here. And I apologize. There
    is another subcommittee of this committee going on, so I was in
    the other one during your opening remarks. If some of my
    questions repeat those, then I apologize. I will give you a
    chance to elaborate if you have already addressed some of
    these.
        This is for Mr. Bainwol and then Mr. Bozzella. Have NHTSA
    and the auto industry had discussions on how best to apply the
    NIST cybersecurity risk management framework to the development
    of automobile security?
        Mr. Bainwol. Not directly the question of NIST but we have
    had discussions with the administrator about best practices. We
    met with him in September, and it was his view that the pace of
    innovation is so rapid that it would be wise for us to move
    forward with the best practices, that we would be, in his
    words, more nimble. And as a result of that conversation, as a
    result of discussions with members of this committee, we made
    the decision to go forward with the best practices. And NIST
    will be part of the framework that we evaluate as we move
    forward.
        Mr. Guthrie. Mr. Bozzella?
        Mr. Bozzella. Yes, I will just simply build on Mr.
    Bainwol's comment by simply saying the NIST framework is going
    to be part of obviously our discussion as an industry. And I
    think it is important to recognize that, though we have had
    ongoing conversations with NHTSA, that we can't afford to wait.
        It is really important that we make sure that our customers
    have the confidence and the trust in these products so that
    they can take advantage of the benefits, the lifesaving
    benefits of these technologies. And so we have moved forward.
    We are going to continue to consult not only within the
    industry but with a broad number of stakeholders, and certainly
    the NIST framework will be part of those discussions.
        Mr. Guthrie. And then I have another question for you, too.
    How are car companies currently dealing with the security of
    aftermarket or third-party devices that are typically being
    plugged into the vehicle through the OBD-II port?
        Mr. Bozzella. This is a really important question. As you
    know, Congressman, the industry has voluntarily adopted a set
    of privacy principles that treat sensitive personally
    identifiable information really as sacrosanct. We care deeply
    about making sure that our customers know that we are treating
    geolocation data--where the vehicle has been or other personal
    data, maybe biometric data if the car is able to collect that
    type of data, or driver behavior data--differently than other
    kinds of data. And we think it is very important that we
    continue to work with a broad set of stakeholders to understand
    the implications of what might happen if an aftermarket device
    is plugged into the OBD port.
        And we think also consumer education is important in this
    area. It is a very important question to understand. Is the
    manufacturer of that device, do they have the same types of
    privacy policies? How they established the same cyber best
    practices that the automakers have or are doing? And so that
    actual entrance into the vehicle sort of represents a very
    important question about how we think about cybersecurity.
        Mr. Bainwol. And I simply add that, by way of example, I
    have a Progressive device. It is actually an Allstate device
    that I plug in for insurance purposes. That doesn't run, in
    terms of the privacy question, through the manufacturer. That
    is a relationship with the insurance company. And I derive a
    value from that because I derive cheaper insurance and an
    ability to understand better the driving behavior of my
    children, which is something we all, I think, aspire to.
        So this does get complicated, and the point of the example
    is whether it is insurance or whether it is Google or Apple or
    carriers, there are relationships here that now really compel
    us to work with suppliers and other folks that we have not
    traditionally worked with. And so on privacy and on cyber, we
    are going to have to reach out, and we have started that
    process.
        Mr. Guthrie. Do you have a comment, Ms. Wilson?
        Ms. Ann Wilson. Congressman, I represent also aftermarket
    manufacturers, and we have been working with vehicle
    manufacturers to create an ISO standard----
        Mr. Guthrie. OK.
        Ms. Ann Wilson [continuing]. So that you can do exactly
    that, take a look at aftermarket products and make sure that
    when they are plugged into the OBD port, they meet some kind of
    standards that are known throughout the industry.
        Mr. Guthrie. All right. Thank you. And thank you. We have
    talked on fuel-efficient standards and safety, and I want a
    fuel-efficient car that is safe. I think all of us want that,
    but they are not unrelated because if you are going to go for
    more fuel efficiency--I know this area pretty well--automotive
    companies will try to take weight out of the car and try to
    keep it safe. I mean that is how you get more fuel efficient.
    So they are interrelated.
        So if you are going to incentivize--and automotive
    companies, they are spending an enormous amount of money trying
    to get to the new CAF AE1E standards. An enormous amount of
    investments come from automotive companies, which does add to
    the expense of the car. And the security issues and safety
    issues are expensive. So if you can give some relief in one
    area to get safety and security first, I think that is
    important. And then you move to more fuel-efficient cars. I
    think that is the number one priority is safety. And they are
    interdependent. They are not unrelated to each other.
        Mr. Bainwol. In my testimony, Congressman, I use the phrase
    ``safety equals green.'' This is a change paradigm. When these
    technologies like accident-avoidance technologies yield better
    safety outcomes, the yield is more fuel-efficient cars, better
    emissions records, and certainly a more productive economy.
        Mr. Burgess. The gentleman's time has expired.
        The chair recognizes the gentleman from Massachusetts 5
    minutes for your questions, please.
        Mr. Kennedy. Thank you, Mr. Chairman. Thank you to the
    panelists and the witnesses here for their testimony.
        I wanted to touch on Section 202 of the draft bill, which
    requires NHTSA to draft recall notices in coordination with
    auto manufacturers before making recalls public. And recall
    notices would not be published until all vehicle identification
    numbers for affected vehicles are made available to NHTSA by
    the auto manufacturer. I believe the first panel touched on
    this a little bit as well.
        So, Ms. Claybrook, if you can, in some of the recent major
    recalls we have heard concerns that the recalls were made
    public before any information about whether a specific vehicle
    was included in the recall, which led to some customer
    confusion. At the same time, you have noted in your testimony
    that a delayed notice can actually have deadly consequences.
        So I just wanted to get you to kind of expand on that
    dichotomy if you could. Why is prompt notice so crucial in your
    mind, and how would you navigate through those tensions?
        Ms. Claybrook. Well, first of all, I think that at the
    bottom line the public, the consumers, the people who are
    driving these cars, they are entitled to know that there is a
    problem with the vehicle. And they can maybe do something on
    their own to avoid the problem while they are waiting for the
    recall to occur. So any delay in announcing that recall I think
    is disadvantageous, and I would actually urge the administrator
    of NHTSA, as I did when I was administrator, to put out a
    consumer alert and allow the public to be informed about what
    is going on.
        This provision in this bill suggests that they could not do
    that, that the administrator would be limited in the way that
    they could communicate to the public and then have to wait for
    the manufacturer to say OK. I think that that is completely
    back-assward----
        Mr. Kennedy. I got what you meant.
        Ms. Claybrook. Backwards. And so the administrator's hands
    should not be tied that way.
        Mr. Kennedy. My words not his, but I believe Dr. Rosekind
    this morning echoed those statements about if the government
    was in fact sitting on the fact that they knew there was a
    problem yet was not time divulging that information to
    consumers and an accident were to take place, that is not a
    position that I think any administrator would want to be in.
        So instead of delaying notice of recalls to consumers, the
    Vehicle Safety Improvement Act would give NHTSA imminent hazard
    authority to expedite a recall when the agency determines that
    a defect or noncompliance, as I understand it, substantially
    increases the likelihood of serious injury or death if not
    remedied immediately.
        So, Ms. Claybrook, how do you think this imminent-hazard
    authority would be beneficial to NHTSA in reducing deaths and
    injuries resulting from those crashes?
        Ms. Claybrook. Oh, absolutely, because there are occasions
    where the car is so hazardous that that recall ought to be
    handled immediately.
        And I would say also that this provision that is in the
    bill was in an earlier bill about 15 years ago, and consumers
    were extremely upset about it, and it was taken out of the bill
    because a committee came to realize that it was really totally
    unfair, that the administrator would not be able to inform the
    public.
        Mr. Kennedy. VSIA would also eliminate, as my
    understanding, regional recalls, an issue that the majority's
    draft bill does not address. Americans are much more mobile
    than they have ever been in the past, and just because a
    vehicle is registered in a particular region does not mean that
    the vehicle will only be driven in that region. Under VSIA, all
    recalls would be carried out on a national basis. It would also
    allow NHTSA to prioritize certain parts of the country when the
    quantity of replacement parts is limited.
        So, Ms. Claybrook, once again, could you explain how the
    elimination of the regional recall aspect would improve safety?
        Ms. Claybrook. Well, first of all, regional recalls are not
    in the statute. It is completely an informal thing that the
    manufacturers about 25, 30 years ago came to the agency and
    say, well, we would just like to do a regional recall on this
    for these reasons. And the agency said all right. And then it
    became so standard operating procedure because it is much
    cheaper for the manufacturers only to recall a small number of
    vehicles rather than nationwide.
        Of course, vehicles don't stay stationary. That is the
    silly thing about the whole regional recall because they go all
    over the country. And if your car has only been fixed because
    you bought it and lived with Florida for a while and then you
    moved to Minnesota, it just doesn't make any sense.
        So I think that the agency could prioritize. I think they
    have the discretion under the law to prioritize and say if you
    are doing the recall and it is more likely to happen in a
    particular area because of the weather, then we would prefer
    that you do it that way. I am sure the manufacturers would
    agree.
        Mr. Kennedy. And just briefly--unfortunately, I have just a
    few seconds left--but in your experience, would eliminating
    those regional recalls, as you touched on, but allowing NHTSA
    to prioritize the allocation of replacement parts by region
    when necessary--essentially, the prioritization you just spoke
    about--have an effect on NHTSA's ability to execute a recall?
        Ms. Claybrook. No. No, it absolutely would not. And I think
    that the experience that we have with the misbehavior of
    manufacturers over the last 5 years, as we have seen, in
    covering up recalls, delaying them, not doing them for years
    and years, and all the rest means that NHTSA has to take a
    stronger role and they should be the decision-makers on this,
    not the manufacturers.
        Mr. Kennedy. Thank you, ma'am. I yield back.
        Mr. Burgess. The chair thanks the gentleman. The gentleman
    yields back.
         The chair recognizes the ranking member of the full
    committee, Mr. Pallone, 5 minutes for your questions, please.
        Mr. Pallone. Thank you, Mr. Chairman.
        My questions are to Mr. Dotson. Section 502 of the
    discussion draft would amend the Clean Air Act by interfering
    with the national program that EPA and NHTSA have developed to
    reduce greenhouse gas emissions and improve fuel economy for
    passenger cars and trucks. Mr. Dotson, can you briefly explain
    this national program and what are its goals?
        Mr. Dotson. Certainly. The purpose of the program is
    essentially to control carbon pollution from light-duty
    vehicles, and the program is remarkably successful. It will
    essentially have the effect of doubling fuel economy or
    reducing the emissions of cars and trucks by half, reducing
    emissions by half by 2025.
        Mr. Pallone. All right. So why is it so important to
    establish standards for greenhouse gas emissions for vehicles,
    and how will changing these commonsense requirements impact our
    ability to avoid or prevent the worst impacts of climate
    change?
        Mr. Dotson. Well, it is now I think a consensus amongst
    scientific community, business, and even the faith community
    that climate change is a very serious threat. Last year, the
    Intergovernmental Panel on Climate Change said that they have
    high confidence that unmitigated warming will be high to very
    high risk of severe, widespread, and irreversible impacts
    globally, so things like food shortages----
        Mr. Pallone. You don't have to talk about climate change.
    You don't have to convince me, and you are not going to
    convince my colleagues on the other side. Why is it important
    to establish these standards for gas emissions for vehicles?
        Mr. Dotson. Well, the standards are very important, but
    they are important because they provide the industry clear
    direction on where they need to go over time.
        Mr. Pallone. OK.
        Mr. Dotson. And the erosion that occurs in this bill, while
    it might sound small, is actually very significant. If you were
    to award a 3-gram credit for cars that have in-dash GPS or
    emergency auto braking, in the first year--last year, there
    were 16.5 million cars sold in the United States. You assume
    those cars drive 13,000 miles a year or so. You are talking
    about over 700,000 tons of additional pollution in year 1.
        Mr. Pallone. OK.
        Mr. Dotson. In year 2, it is over a million, in year 3 it
    is over 2 million tons.
        Mr. Pallone. All right. Now, there are flexibilities built
    into the national program such as the ability to generate
    credits for over-compliance with the standards, that is,
    credits that can be banked or traded. And there are also air-
    conditioning improvement credits and other types of credits
    known as off-cycle credits. Can you explain briefly what are
    the off-cycle credits?
        Mr. Dotson. Certainly. Off-cycle credits essentially allow
    the manufacturers to take credit for efficiencies they gain
    that are unrelated to the power train of the vehicle. So, for
    example, if an auto manufacturer uses high-efficiency lighting
    or high-efficiency air-conditioning, they may be able to
    recognize those benefits in off-cycle credits.
        The EPA and the Department of Transportation looked at this
    issue with regard to congestion mitigation or crash avoidance,
    and they found that there is ``no consistent established
    methods or supporting data to determine the appropriate level
    of the credit.'' And that is really the problem with awarding
    credits for these kinds of technologies.
        Mr. Pallone. But in other words, these credits such as air-
    conditioning that don't readily appear to contribute to
    improved vehicle mileage or reduced greenhouse gas emissions,
    they must have had a positive effect, right?
        Mr. Dotson. And those effects are demonstrated through data
    to the agencies. So essentially, if you are using very high-
    efficiency lighting, you will need less electricity. Your car
    will have to generate less electricity to power those
    headlights. And so it is a way of recognizing that even though
    it might not show up in the emissions testing, which is----
        Mr. Pallone. OK. But the difference, in contrast, is that
    Section 502 of this bill would expand the credits list to
    include the use of advanced automotive technologies, for
    example, adaptive brake-assist technology, connected-vehicle
    technology. I mean, automakers have argued that crash-avoidance
    technology will result in fewer crashes and therefore less
    traffic congestion, but less congestion, they argue, would
    result in less emissions and less fuel use? Is there any way to
    directly connect fuel savings for lower emissions to individual
    vehicles? I am just trying to make the contrast between, you
    know, the things that you are doing now versus what Section 502
    does. It doesn't seem to me that there is any real connection
    if you will.
        Mr. Dotson. You put your finger on exactly the issue, that
    there could be, there may be diffuse benefits to using these
    technologies and reducing emissions, but there also might not
    be. For example, there is an American car which is on the
    market today, and as an option, you can buy lane-departure
    warning technology. Well, the Highway Loss Data Institute
    looked at that technology and they compared claims against that
    car that either have the technology or don't, and what they
    found was there is no reduced claims on cars that have that
    technology. Therefore, it is not preventing accidents.
    Therefore, it is not reducing emissions. And so that is one
    concrete example where this bill would give credits to that car
    even though we have data to help us understand that there are
    not emissions benefits to it.
        Mr. Pallone. All right. Thanks so much.
        Thank you, Mr. Chairman.
        Mr. Burgess. The gentleman yields back. The chair thanks
    the gentleman.
        The chair recognizes the gentlelady from California, 5
    minutes for questions, please.
        Mrs. Capps. Thank you, Mr. Chairman, and to all our
    witnesses for your testimony today.
        Federal law prohibits car dealers from selling new cars
    subject to recall, but there is no similar law to stop rental
    car companies from renting or selling dangerous recalled cars
    that have not been fixed. Since the Houck sisters' death near
    my district in 2004, the major rental companies signed onto a
    voluntary pledge to not rent out recalled vehicles. While this
    was a good step forward, these standards are still not enough.
    Just last year, after the pledge was in place, Jewel Brangman
    was killed in her rental car when an unrepaired Takata airbag
    exploded.
        As we heard from NHTSA on the first panel, a change in
    federal law is needed, and that is why I have introduced H.R.
    2198 with my colleagues Ms. Schakowsky, Mr. Walter Jones, Mr.
    Butterfield to prohibit the rental of recalled vehicles. I am
    disappointed our bill was excluded from the draft we are
    considering today despite its broad support from the rental
    industry and consumer groups and that it has already passed the
    Senate.
        I also remain baffled that the Alliance of Automobile
    Manufacturers and National Automobile Dealers Association
    actively oppose H.R. 2198 despite years of ongoing discussions
    and efforts to find a compromise. For example, the alliance
    sites a concern about potential loss of use and other liability
    impacts as a reason for its opposition.
        To address this concern, we added a savings clause to the
    bill explicitly stating that nothing in the bill will impact
    manufacturers' liability or other contractual obligations.
    Because of this change, General Motors, one of the alliance's
    biggest members, now supports H.R. 2198. Honda has also
    expressed its support for the bill.
        Mr. Bainwol--and I would like a yes or no answer on this if
    you would--does the alliance still oppose H.R. 2198 despite
    General Motors' support for the bill? Yes or no?
        Mr. Bainwol. The alliance does not have consensus.
        Mrs. Capps. Thank you. So you can't say yes or no then
    because there is no consensus?
        Mr. Bainwol. We don't have consensus.
        Mrs. Capps. Thank you.
        Mr. Welch, your organization has expressed concerns about
    the impacts H.R. 2198 would have on dealers with small rental
    or loaner car operation. My question to you: when consumers
    bring their recalled cars to a dealer for repairs and they need
    a loaner car, do you think dealers should be able to loan them
    vehicles with unrepaired safety recalls? And again, I ask you
    for a yes or no answer.
        Mr. Welch. If the vehicle has been deemed to be unsafe to
    drive either by the OEMs or by NHTSA, we would not put one of
    those cars in the hands of the consumer.
        Mrs. Capps. So that is a no? You do not think dealers
    should be able to loan vehicles with unrepaired safety recalls?
        Mr. Welch. No, I said if they were unsafe to drive we
    wouldn't put them out there. If it involves----
        Mrs. Capps. You would not loan them, then, as loaner cars?
        Mr. Welch. If it was unsafe to drive. If it had a door jamb
    sticker or a misprinted number----
        Mrs. Capps. OK. That is not quite what my question is, but
    I just go back to the first panel in which NHTSA said that
    every recall is a safety issue. There are no frivolous recalls.
    It is a simple question. The vast majority of rental companies
    have agreed to voluntarily stop renting rental cars. Why can't
    the dealers do the same?
        Mr. Welch. Well, again, I would like to draw a distinction
    between a recalled vehicle for a noncompliance that may not
    make it unsafe to drive.
        Mrs. Capps. May I ask you for a follow-up then? Who is
    going to determine that?
        Mr. Welch. Well, we rely on NHTSA and the OEMs to make that
    determination.
        Mrs. Capps. OK. NHTSA has said that every recall is a
    safety issue, that they don't put recalls out unless it is a
    safety issue.
        Mr. Welch. Well, NHTSA has the authority to issue stop-
    drives or make the manufacturers issue stop-drives, and if they
    believe that a vehicle is unsafe to drive or the manufacturer
    does it, they can issue that notice and we would certainly
    honor it, but that doesn't apply to all vehicles that are
    subject to recalls.
        Mrs. Capps. I didn't get an answer but my time is out.
    Thank you.
        Mr. Burgess. The chair thanks the gentlelady.
        I do just want to offer the observation, Ms. Schakowsky
    said that she drove a hybrid vehicle. I want you to know your
    chairman drives a hybrid also, but I have no problem at all if
    you want to make future hybrid vehicles safer. If you want to
    warn me as I depart a lane that there is a car, motorcycle,
    tricycle in the other lane, I would like to know that
    information, and I will give up a couple of carbon credits to
    be able to have that available in the next version of the car
    that I buy.
        Mrs. Capps. Mr. Chairman, I am sorry, may I add an
    addendum, not a question, but I would like to enter into the
    record some letters----
        Mr. Burgess. Does the gentlelady have a unanimous consent
    request?
        Mrs. Capps. Yes, please.
        Mr. Burgess. You are recognized for your unanimous consent
    request.
        Mrs. Capps. OK. I wanted to enter into the record a letter
    from Raechel and Jackie's mother, Cally Houck, urging passage
    of H.R. 2198, two letters from General Motors indicating the
    company's support for H.R. 2198, and also a letter on behalf of
    my colleague who needed to leave, Ms. Schakowsky.
        Mr. Burgess. Without objection, so ordered.
        [The information appears at the conclusion of the hearing.]
        Mrs. Capps. Thank you.
        Mr. Burgess. Seeing that there are no further Members
    wishing to ask questions, I would like to thank all of our
    witnesses for being here today.
        Before we conclude, I would like to include the following
    documents to be submitted for the record by unanimous consent:
    a written statement by the American Car Rental Association, a
    letter from the Auto Care Association, a letter from the
    American Chemistry Council, a letter from the American
    Association of Motor Vehicle Administrators, a report from the
    Motor & Equipment Manufacturers Association, \1\ a statement
    from the Environmental Protection Agency.
        [The information appears at the conclusion of the hearing.]
    ---------------------------------------------------------------------------
        \1\ The report has been retained in committee files and is also
    available athttp://docs.house.gov/meetings/if/if17/20151021/104070/
    hhrg-114-if17-20151021-sd006.pdf.
    ---------------------------------------------------------------------------
        Mr. Burgess. Pursuant to committee rules, I remind members
    that they have 10 business days to submit additional questions
    for the record. I ask the witnesses to submit their responses
    within 10 business days upon receipt of the questions. Without
    objection, the subcommittee will stand adjourned.
        Ms. Claybrook. Mr. Chairman, could I just ask that I make a
    correction in my testimony, unanimous consent to do that?
        Mr. Burgess. Yes, I would be happy to hear the correction
    of the testimony.
        Ms. Claybrook. Thank you very much.
        Mr. Burgess. Oh, you are not going to say it today?
        Ms. Claybrook. No, I won't bother you now. I will just
    submit it.
        Mr. Burgess. All right. We are left wondering about the
    correction.
        The committee stands adjourned.
        [Whereupon, at 12:51 p.m., the subcommittee was adjourned.]
        [Material submitted for inclusion in the record follows:]
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