[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
                           
                           
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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:]
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    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:]
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    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:]
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    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:]
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    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:]
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    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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