[Federal Register Volume 61, Number 3 (Thursday, January 4, 1996)]
[Rules and Regulations]
[Pages 274-279]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31583]



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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration

49 CFR Parts 573, 576, and 577

[Docket No. 93-68; Notice 8]
RIN 2127-AG15


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

AGENCY: National Highway Traffic Safety Administration, DOT.

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

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SUMMARY: In this document, the National Highway Traffic Safety 
Administration (NHTSA) is granting in part petitions for 
reconsideration of an April 5, 1995 final rule that, among other 
things, amended 49 CFR Parts 573, 576, and 577 (60 FR 17254). On 
reconsideration, the agency is amending provisions of that final rule 
concerning submission by manufacturers of schedules for recall 
campaigns, recordkeeping regarding recalls of leased vehicles, record 
retention period, and notification to lessees of recall campaigns. 
NHTSA has concluded that these changes will reduce manufacturer burdens 
without adversely affecting the agency's recall program.

DATES: Effective date: The amendments made by this final rule are 
effective on January 4, 1996.
    Any petitions for reconsideration must be received by NHTSA no 
later than February 5, 1996.

ADDRESSES: Any petitions for reconsideration should refer to the docket 
and notice number of this notice and be submitted to: Docket Section, 
Room 5109, National Highway Traffic Safety Administration, 400 Seventh 
Street SW., Washington, DC 20590. (Docket Room hours are 9:30 a.m. to 4 
p.m., Monday through Friday.)

FOR FURTHER INFORMATION CONTACT:
Jonathan D. White, Office of Defects Investigation, National Highway 
Traffic Safety Administration, 400 Seventh Street SW., Room 5319, 
Washington, DC 20590; (202) 366-5227.

SUPPLEMENTARY INFORMATION: 

Background

    This final rule amends several sections of 49 CFR Parts 573, 576, 
and 577, as those parts were recently amended on April 5, 1995. These 
changes are being adopted by NHTSA in response to four petitions for 
reconsideration of the April 5 final rule that were submitted by the 
Association of International Automobile Manufacturers (AIAM), Chrysler 
Corporation (Chrysler), Ford Motor Company (Ford), and General Motors 
Corporation (GM).
    In addition to seeking substantive changes, the petitions asked for 
an extension of the original May 5, 1995 effective date of the April 5 
amendments on the ground that it would be difficult to achieve 
compliance by that date. On May 16, 1995, the agency published a notice 
in the Federal Register setting a new effective date of July 7, 1995 
for the April 5 amendments. 60 FR 26002. Subsequently, on July 7, 1995, 
NHTSA suspended until further notice the effective date of four of the 
provisions for which the petitioners had sought reconsideration. 60 FR 
35458. That notice also confirmed that all other provisions of the 
April 5 final rule would go into effect on July 7, 1995.
    In September 1995, the Office of the Federal Register informed 
NHTSA that it could not leave the effective date of a regulation 
indefinite, as it had done in the July 7 Federal Register notice. 
Accordingly, NHTSA published another notice setting January 2, 1996, as 
the effective date of those four provisions, pending the decision on 
reconsideration. 60 FR 50476 (Sept. 29, 1995).
    Based on its review of the petitions for reconsideration, NHTSA 
also decided that it would be advisable to obtain further information 
from the public on four of the issues raised in the petitions. 
Accordingly, the agency announced that it would hold a public meeting 
in Detroit, Michigan to receive oral presentations on those issues and 
to ask questions of those present, and that it would also receive 
written comments on those issues. 60 FR 35459 (July 7, 1995).
    The following five entities made presentations at the Detroit 
meeting, which took place on July 24, 1995: AIAM, Chrysler, Ford, GM, 
and the R. L. Polk Company (Polk). The following ten entities submitted 
written comments to the public docket: Advocates for Highway and Auto 
Safety (Advocates), American Automotive Leasing Association (AALA), 
American Honda Motor Company, Inc. (Honda), Association of Consumer 
Vehicle Lessors (ACVL), Ford, GM, Institute of International Container 
Lessors (IICL), National Automobile Dealers Association (NADA), 
National Vehicle Leasing Association (NVLA), and Truck Renting and 
Leasing Association (TRALA). In addition, NHTSA placed a written 
transcript of the Detroit meeting in the public docket for this 
rulemaking. 

[[Page 275]]

    The notice published today grants the petitions for reconsideration 
with respect to the four provisions specified above and denies the 
petitions insofar as they sought amendments to other provisions of the 
April 5 final rule. The four provisions pertain to the enforcement of 
the provisions of Chapter 301 of Title 49 of the United States Code (49 
U.S.C. Sec. Sec. 30101-30169) that set forth the obligations of 
manufacturers of motor vehicles and motor vehicle equipment to provide 
notification that motor vehicles or items of motor vehicle equipment 
contain a safety-related defect or do not comply with a Federal motor 
vehicle safety standard and to remedy the defect or noncompliance 
without charge. 49 U.S.C. 30116-30121. The provisions of the final rule 
regarding notification of defects and noncompliances in leased vehicles 
implement a provision of the Intermodal Surface Transportation 
Efficiency Act of 1991 (ISTEA) that requires vehicle lessors to send 
their lessees a copy of notifications received from manufacturers 
regarding a safety-related defect or noncompliance in the lessees' 
vehicles. 49 U.S.C. 30119(f).

Amendments to Part 573--Defect and Noncompliance Reports

    NHTSA is amending two sections of 49 CFR Part 573, one that sets 
forth requirements regarding the submittal by manufacturers of 
schedules for owner notification and remedy campaigns (recalls) under 
certain circumstances (section 573.5(c)(8)), and one that specifies 
recordkeeping requirements for manufacturers in connection with recalls 
of leased vehicles (section 573.7(d) and (e)).

Schedule for Recall Campaigns

    In order to address an increase in the number of recalls in which 
there has been a significant delay between the manufacturer's decision 
that a defect or noncompliance exists and the commencement and 
conclusion of the manufacturer's recall campaign, NHTSA included in the 
April 5 final rule a requirement that manufacturers include in their 
defect/noncompliance reports submitted to NHTSA pursuant to 49 U.S.C. 
30119 and 49 CFR Part 573 (Part 573 Report) a detailed schedule for 
those notification campaigns that would not begin within thirty days of 
the Part 573 Report or end within 75 days of that Report. Several 
petitioners objected to this requirement as unnecessary and unduly 
burdensome. In oral statements at the public meeting and in their 
written comments, manufacturers indicated that the time periods 
specified in the final rule would mean that detailed schedules would be 
required in most recalls, because most notification campaigns are 
either begun more than 30 days after the Part 573 Report or not 
completed within 75 days of that Report. In addition, they asserted 
that the need to file detailed scheduling information with NHTSA at the 
outset of most recalls would have the effect of delaying implementation 
of recalls, because personnel and resources would have to be taken away 
from other aspects of recall implementation to ensure compliance with 
the added reporting requirements.
    Pursuant to 49 U.S.C. 30119(c), manufacturers must notify owners, 
purchasers, and dealers of safety defects and noncompliances ``within a 
reasonable time'' after the decision that the defect or noncompliance 
exists. NHTSA continues to believe strongly that safety recalls should 
be implemented as soon as reasonably possible. However, it also 
recognizes that the concerns raised by the manufacturers are serious 
and need to be considered.
    In order to make the rule more responsive both to the 
manufacturers' concerns and to the public safety interest in prompt 
notification of safety-related defects and noncompliances, NHTSA has 
decided to modify the burdensome aspects of the recall schedule 
provisions of the April 5 final rule. Thus, the agency is deleting the 
requirement that extensive scheduling information and explanatory 
material be provided in the manufacturer's Part 573 Report in instances 
where notification would begin more than 30 days after the Part 573 
Report is submitted or end more than 75 days after the Report. Instead, 
under the rule adopted today, manufacturers will only be required to 
include in their Part 573 Reports the estimated date when owners will 
first be notified that a remedy for the defect or noncompliance is 
available and the estimated date when all owners will have been so 
notified.
    No additional scheduling information will be required under the 
regulation. In those relatively rare instances where the agency wishes 
to further examine whether the manufacturer's time frame for the recall 
is reasonable under the circumstances, it may request more detailed 
information from the manufacturer on a case-by-case basis.
    As NHTSA noted in the preamble to the April 5 final rule, in most 
cases, manufacturers develop a recall implementation schedule for their 
own internal use at the time they decide that a defect or noncompliance 
exists, or promptly thereafter. The final rule adopted today simply 
requires manufacturers to provide the agency with the two most basic 
elements of this scheduling information when they file their Part 573 
Reports. Under this revision, manufacturers will have flexibility to 
tailor the recall notification schedule to the circumstances of the 
particular recall, with far less of a reporting burden, while NHTSA 
will retain the ability, on a case-by-case basis, to ensure that the 
timing of recall notification is reasonable. The agency is retaining 
its authority, as set forth in new section 577.7(a)(1), to order a 
manufacturer to notify owners on a specific date when it finds, after 
consideration of available information and the views of the 
manufacturer, that such notification is in the public interest.
    NHTSA recognizes that in some cases a manufacturer may not have any 
scheduling information at the time it submits its Part 573 Report 
(e.g., where the remedy has not been developed or tested, or where the 
scope of the recall is uncertain). In such instances, the manufacturer 
should indicate in the Report that the information is not available. 
Thereafter, in accordance with section 573.5(b), the required 
information ``shall be submitted as it becomes available.''
    On reconsideration, NHTSA has also decided to rescind new section 
573.5(c)(8)(iii), which would have required a manufacturer to describe 
all factors that it anticipated could interfere with its ability to 
adhere to the proposed recall schedule and to describe with specificity 
the likely effect of each of those factors. The agency believes that 
the burden of requiring advance information about events which might 
never actually have any effect on the recall significantly outweighs 
whatever safety benefit might be derived from it. In addition, the 
agency believes that the purpose of that requirement can as readily be 
served by the requirement, retained in today's final rule, that a 
manufacturer must promptly advise NHTSA if circumstances arise that can 
result in unanticipated delays of two weeks or more in recall campaign 
implementation. This requirement, formerly included in section 
573.5(c)(8)(iv), is now renumbered as Sec. 573.5(c)(8)(ii).
    This final rule renumbers sections 573.5(c)(8) (v) and (vi) as 
sections 573.5(c)(8) (iii) and (iv), respectively, and makes minor 
changes in those paragraphs to reflect the changes to this section 
described above, but makes no substantive changes. These provisions are 
concerned with the effect on the requirement to file a notification 

[[Page 276]]
schedule of a manufacturer's intent to submit a petition for an 
exemption from the recall requirements of the statute on the ground 
that the defect or noncompliance is inconsequential.

Recordkeeping Regarding Recalls of Leased Vehicles

    After reviewing the petitions for reconsideration and the oral and 
written comments, NHTSA has decided to revise 49 CFR Sec. 573.7 (d) and 
(e), which imposed requirements on manufacturers and lessors to 
maintain lists of the names and addresses of ``known'' lessees of 
vehicles covered by recall campaigns.
    All of the manufactures that participated in the reconsideration 
process stated that the divisions of the company that deal with recalls 
and maintain owner lists do not know whether a particular vehicle is 
leased. However, the manufacturers were concerned that they could be 
held responsible under the rule for ``knowing'' that a vehicle was 
leased because that information is contained in records maintained 
elsewhere in the organization, such as corporate offices or 
subsidiaries involved with fleet operations or consumer credit matters.
    These manufacturers stated that it would be extremely costly and 
time-consuming to integrate their leased vehicle records with the 
vehicle owner lists prepared in connection with recall campaigns. Such 
records are generally maintained in separate databases in separate 
parts of the company and integrating the databases and reprogramming 
the systems to generate the information in the manner required by 
section 573.7(d) would require many months of work and substantial 
additional financial cost. Similarly, Polk, which is the principal 
source of vehicle registration information used by manufacturers in 
recall mailings, stated at the public meeting that it could not 
specifically identify for their manufacturer clients which vehicles on 
a given list of registered vehicles were leased. Finally, even apart 
from cost considerations, the manufacturers contended that they should 
not have to bear the burden of maintaining records reflecting lessee 
notification, since that should be the responsibility of the vehicle 
lessors.
    On the basis of the foregoing information, NHTSA has concluded that 
any benefit to be gained by requiring manufacturers to identify those 
vehicles on its recall notification lists that are leased and the 
person or entity to whom notification was sent as the lessor or lessee 
is far outweighed by the cost and time burdens that manufacturers would 
incur to implement such a system. Moreover, the agency agrees that it 
is not appropriate to require manufacturers to bear the burdens 
associated with keeping records regarding the notification of lessees, 
when Congress imposed the responsibility for such notification on the 
lessors.
    Accordingly, NHTSA has decided to rescind in its entirety section 
573.7(d) of the April 5 final rule. The agency will monitor lessor 
compliance with notification requirements of section 30119(f) through 
direct contact with lessors rather than by reviewing manufacturer 
records. To identify such lessors, NHTSA plans to obtain information 
from manufacturers and lessor organizations.
    For similar reasons, the agency is also amending section 573.7(e), 
which primarily sets forth recordkeeping requirements applicable to 
lessors, by deleting language in the last two sentences that are 
applicable to record retention by manufacturers who send out recall 
notifications directly to lessees pursuant to agreements with lessors. 
Such lessees are, in effect, being notified as if they were owners, 
without any lessor involvement, so there is no need to apply additional 
recordkeeping burdens on the manufacturers to assure compliance 
requirements of section 30119(f).
    Two commenters, AALA and TRALA, representing lessors, contended 
that the recordkeeping requirements for lessors set forth in section 
573.7(e) are overly burdensome and time consuming because they require 
them to establish new systems for keeping these records. In addition, 
AALA questioned the utility of requiring lessors to maintain these 
records in light of the fact that, once the lease has expired, the 
vehicle generally undergoes one or more rapid changes of ownership. 
AALA questioned the purpose behind the requirement to maintain records 
on ``vehicles whose future ownership the lessor would be unable to 
verify.''
    The purpose of this recordkeeping requirement is not to verify 
``future ownership'' of vehicles; it is to give NHTSA a means of 
verifying that lessors are complying with their duty to provide their 
lessees with copies of safety recall notifications. This is analogous 
to the requirement that manufacturers must keep a record of recall 
notifications sent to registered owners.
    The agency has made every effort to ensure that the recordkeeping 
requirements impose as little burden as possible on lessors. The 
information required is minimal (less than what is required of 
manufacturers), and it should not entail great expenditure of resources 
to develop and maintain a record retention system. For these reasons, 
NHTSA is retaining the substantive requirements of section 573.7(e) as 
they apply to the lists that must be maintained by lessors.

Amendments to Part 576--Record Retention

    Prior to the April 5 final rule, 49 CFR Sec. 576.5 required vehicle 
manufacturers to retain relevant records for five years from the date 
they are generated or acquired. The April 5 rule amended section 576.5 
to require such records to be maintained for eight years from the last 
date of the model year in which the vehicle to which the records relate 
was produced. After considering the petitions for reconsiderations and 
the oral and written comments submitted on this subject, NHTSA has 
decided to rescind the amendment to section 576.5 and reinstate the 
preexisting requirement.
    The primary reason for this decision is the time and cost burdens 
that the amendment would have placed upon vehicle manufacturers. 
Several manufacturers stated that it would be highly costly and 
extremely time consuming to change their computerized record keeping 
systems to comply with the new record retention requirements. The 
agency has concluded that the safety benefit that would be derived from 
revising the record retention period requirements would be far 
outweighed by costs and other burdens on resources that would be 
incurred by manufacturers in order to make the change.
    The agency is also making a technical amendment to 49 CFR 
Sec. 576.6, which defines the records that must be retained by 
manufacturers under Part 576. Ford pointed out that in the text of the 
April 5 amendment, the word ``such'' does not appear as a modifier to 
the term ``malfunctions'' the second time that word appears (in the 
second sentence of the section). Ford expressed concern that the 
removal of the word ``such'' could be construed to broaden the scope of 
the section to cover additional types of records beyond those related 
to motor vehicle safety.
    The agency does not agree that the slight change in the wording of 
this phrase would have had a substantive affect on the record retention 
requirements, since the revised language specified that the requirement 
only applied to records of ``malfunctions that may be related to motor 
vehicle safety.'' Nevertheless, to prevent any possible 
misunderstanding, NHTSA is making a 

[[Page 277]]
technical amendment to this section to reinstate the preexisting 
wording. The agency wishes to emphasize that the April 5 amendment to 
section 576.6 that clarified that the record retention requirements 
apply to records made on electronic media has not changed, and remains 
in effect.

Amendments to Part 577--Defect and Noncompliance Notification

    In its September 1993 notice of proposed rulemaking (NPRM) to 
implement the ISTEA requirement that vehicle lessors furnish their 
lessees with copies of notifications of safety-related defects and 
noncompliances in leased vehicles, NHTSA proposed to require 
manufacturers to include language in all recall notification letters to 
lessors that would remind them of their statutory obligations. Several 
comments submitted in response to the NPRM pointed out that it would be 
very difficult for manufacturers to identify which owners were lessors. 
On the basis of those comments, the April 5 final rule added a new 
section 577.5(h), which required manufacturers to include language 
describing a lessor's obligation to notify lessees of safety recalls in 
all owner notification letters.
    During the reconsideration process, this requirement was vigorously 
challenged. Most commenters stated that the inclusion of lessor/lessee 
language in all owner notification letters would add clutter to the 
letter and could confuse the recipients of the owner notification 
letter who are not lessors/lessees. In addition, commenters 
representing various elements of the leased vehicle industry generally 
expressed the view that requiring manufacturers to notify lessors of 
their obligations is unnecessary for several alternative reasons: (1) 
Many lessors have an arrangement with manufacturers in which the latter 
mails recall letters directly to individuals on a list furnished by the 
lessor; (2) many individual lessees receive notification letters 
directly from manufacturers because the name of the lessee appears on 
the title as the owner; and (3) many lessors are already aware of their 
obligations and are complying with them.
    These commenters also argued that the rule as written failed to 
take into account several features of the leased vehicle market: e.g., 
the fact that in consumer leasing, the lessee is likely to be the 
driver, whereas in commercial leasing, the vehicles will be driven by 
individuals who are not the lessee of record; and the fact that some 
lessors regard their lists of lessees as trade secrets and do not 
disclose them to manufacturers (which are often perceived as 
competitors).
    On reconsideration, the agency has concluded that section 577.5(h) 
should be rescinded. The likely confusion resulting from the inclusion 
of this information in all owner notification letters will outweigh any 
potential safety benefit associated with reminding lessors of their 
obligations, particularly since there is reason to believe that most 
lessors are already aware of those obligations. However, since it is 
likely that not all lessors are aware of the duty to notify their 
lessees of recalls, the agency believes that further steps are 
appropriate to maximize the number of lessors that are informed of 
their obligations under the statute and regulations. To that end, NHTSA 
plans to send a notice to vehicle lessors informing them of their 
statutory and regulatory obligations with respect to recall 
notification of their lessees. The agency will also monitor the 
performance of such lessors through periodic compliance reviews. The 
agency plans to identify vehicle lessors from several sources, 
including manufacturers, lessor associations, and commercial 
publications.

Other Issues

    The agency has also considered issues raised by petitioners and 
commenters concerning other aspects of the April 5 final rule. Several 
entities asserted that NHTSA should have allowed more time to comply 
with the April 5 amendments. The agency recognized that the original 
30-day period may not have allowed sufficient time for those affected 
by the changes to come into compliance. However, NHTSA remains 
convinced that the extension of the effective date for the provisions 
not affected by the petitions for reconsideration to July 7 (providing 
a total of over 90 days) was sufficient.
    Most of the concerns about the time centered on the provisions 
regarding manufacturer recordkeeping for leased car notifications 
(section 573.7) and the changes in the duration of the record retention 
requirements of section 576.5. However, those concerns are now moot due 
to the substantive changes made to those sections on reconsideration.
    The other issues raised by the petitions for reconsideration were 
essentially restatements of arguments made during the comment period 
prior to issuance of the final rule. The agency has concluded that no 
change of those provisions is warranted.
    Advocates objected to the fact that NHTSA postponed the effective 
date of several provisions of the final rule while it was considering 
the merits of the petitions for reconsideration. It noted that the 
agency had recently failed to stay a regulatory action when Advocates 
filed a petition for reconsideration.
    Under 49 CFR Sec. 553.35(d), a petition for reconsideration does 
not stay the effectiveness of a rule ``unless the Administrator so 
provides.'' Thus, a decision whether or not to stay the effective date 
of a rule pending consideration of petitions for reconsideration is 
within the discretion of the Administrator.
    In the Federal Register notice that first extended the effective 
date of all provisions of the April 5 rule from May 5 to July 7, 1995 
(60 FR 26002), the agency noted, ``The [petitioners] have presented 
NHTSA with information that makes a credible showing that they are not 
able to achieve compliance with at least some provisions of the final 
rule by May 5, and that it will be some months before they are able to 
do so.'' In addition, NHTSA noted that the short time between the 
filing of the petitions for reconsideration and original effective date 
precluded it from sorting through all of the provisions of this 
multifaceted rule and the arguments in the petitions in order to 
identify particular provisions whose effective date should have been 
extended. Id.
    The agency extended the effective date of four specified provisions 
of the final rule beyond July 7, because it had decided that it needed 
to gather further information on those issues. See 60 FR 35458 (July 7, 
1995). The agency believes that this decision was reasonable under the 
circumstances, and was adequately explained at the time.
    The fact that the agency did not stay a rule for which Advocates 
sought reconsideration is not material. Unlike the manufacturers, 
Advocates did not risk noncompliance with Federal law if the agency had 
not stayed its action.
    Advocates also contended that NHTSA should not have considered the 
merits of the arguments raised in the petitions for reconsideration 
because the manufacturers did not present any new information that 
could not have been presented prior to the issuance of the final rule. 
While it may be true that the information was previously available, 
there were relatively significant changes made to each of the four 
provisions between the NPRM and the April 5 final rule. The 
manufacturers could not have known exactly what the agency would 
require in those provisions. Thus, it was appropriate to consider the 
additional information and arguments presented in the reconsideration 
petitions and in the subsequent comments.

[[Page 278]]


Rule Making Analyses and Notices

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

    NHTSA has analyzed the changes made by this revised final rule and 
determined that it is not ``significant'' within the meaning of the 
Department of Transportation regulatory policies and procedures. OMB 
has also determined that it is not significant within the meaning of 
Executive Order 12866. These changes will not impose any costs on the 
regulated parties and are likely to reduce such costs.

2. Regulatory Flexibility Act

    The agency has also considered the effects of this rulemaking 
action under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). I 
certify that this proposed rule will not, if promulgated, have a 
significant economic impact on a substantial number of small entities.

3. National Environmental Policy Act

    In accordance with the National Environmental Policy Act of 1969, 
the agency has analyzed the environmental impacts of this rulemaking 
action and determined that implementation of this action will not have 
a significant impact on the quality of the human environment.

4. Paperwork Reduction Act

    The amendments made by this final rule on reconsideration will not 
impose any new recordkeeping burdens and are likely to reduce such 
burdens.

5. Executive Order 12612 (Federalism)

    This action has been analyzed in accordance with the principles and 
criteria contained in Executive Order 12612, and it has been determined 
that the rule making does not have sufficient federalism implications 
to warrant the preparation of a Federalism Assessment.

6. Civil Justice Reform Act

    This final rule does not have a retroactive or preemptive effect. 
Judicial review of this rule may be obtained pursuant to 5 U.S.C. 
section 702. That section does not require that a petition for 
reconsideration be filed prior to seeking judicial review.

List of Subjects

49 CFR Part 573

    Imports; Motor vehicle safety; Motor vehicles; Reporting and record 
keeping requirements; Tires.

49 CFR Part 576

    Motor vehicle safety; Reporting and recordkeeping requirements.

49 CFR Part 577

    Motor vehicle safety.

    In consideration of the foregoing, Parts 573, 576, and 577 of Title 
49 of the Code of Federal Regulations are amended as follows:

PART 573--DEFECT AND NONCOMPLIANCE REPORTS

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

    Authority: 49 U.S.C. 30102-30103, 30112, 30117-30121, 30166-
30167; delegation of authority at 49 CFR 1.50

    2. Section 573.5 is amended by removing paragraphs (c)(8) (ii), 
(iii), and (iv), redesignating paragraphs (c)(8) (v) and (vi) as 
paragraphs (c)(8) (iii) and (iv) and revising them, and by adding a new 
paragraph (c)(8)(ii) to read as follows:


Sec. 573.5  Defect and noncompliance information report.

* * * * *
    (c) * * *
    (8) * * *
    (ii) The estimated date on which it will begin sending 
notifications to owners that there is a safety-related defect or 
noncompliance and that a remedy without charge will be available, and 
the estimated date on which it will have completed such notification. 
If a manufacturer subsequently becomes aware that either the beginning 
or the completion date reported to the agency will be delayed by more 
than two weeks, it shall promptly advise the agency of the delay and 
the reasons therefor, and furnish a revised estimate.
    (iii) If a manufacturer intends to file a petition for an exemption 
from the recall requirements of the Act on the basis that a defect or 
noncompliance is inconsequential as it relates to motor vehicle safety, 
it shall notify NHTSA of that intention in its report to NHTSA of the 
defect or noncompliance under this section. If such a petition is filed 
and subsequently denied, the manufacturer shall provide the information 
required by paragraph (c)(8)(ii) of this section within five Federal 
government business days from the date the petition denial is published 
in the Federal Register.
    (iv) If a manufacturer advises NHTSA that it intends to file such a 
petition for exemption from the notification and remedy requirements on 
the grounds that the defect or noncompliance is inconsequential as it 
relates to motor vehicle safety, and does not do so within the 30-day 
period established by 49 CFR 556.4(c), the manufacturer must submit the 
information required by paragraph (c)(8)(ii) of this section no later 
than the end of that 30-day period.
    3. Section 573.7 is amended by removing paragraph (d), 
redesignating paragraph (e) as paragraph (d), and revising new 
paragraph (d) to read as follows:


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

* * * * *
    (d) Each lessor of leased motor vehicles that receives a 
notification from the manufacturer of such vehicles that the vehicle 
contains a safety-related defect or fails to comply with a Federal 
motor vehicle safety standard shall maintain, in a form suitable for 
inspection, such as computer information storage devices or card files, 
a list of the names and addresses of all lessees to which the lessor 
has provided notification of a defect or noncompliance pursuant to 49 
CFR 577.5(h). The list shall also include the make, model, model year, 
and vehicle identification number of each such leased vehicle, and the 
date on which the lessor mailed notification of the defect or 
noncompliance to the lessee. The information required by this paragraph 
must be retained by the lessor for one calendar year from the date the 
vehicle lease expires.

PART 576--RECORD RETENTION

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

    Authority: 49 U.S.C. 30112, 30115, 30117-30121, 30166-30167; 
delegation of authority at 49 CFR 1.50.

    5. Section 576.5 is revised to read as follows:


Sec. 576.5  Basic requirements.

    Each manufacturer of motor vehicles shall retain as specified in 
Sec. 576.7 all records described in Sec. 576.6 for a period of five 
years from the date on which they were generated or acquired by the 
manufacturer.
    6. Section 576.6 is revised to read as follows:


Sec. 576.6  Records.

    Records to be retained by manufacturers under this part include all 
documentary materials, films, tapes, and other information-storing 
media that contain information concerning malfunctions that may be 
related to motor vehicle safety. Such records include, but are not 
limited to, communications from vehicle users and memoranda of user 
complaints; reports and other documents, including material generated 
or communicated by computer, telefax or other electronic means, that 
are related to work 

[[Page 279]]
performed under, or claims made under, warranties; service reports or 
similar documents, including electronic transmissions, from dealers or 
manufacturer's field personnel; and any lists, compilations, analyses, 
or discussions of such malfunctions contained in internal or external 
correspondence of the manufacturer, including communications 
transmitted electronically.

PART 577--DEFECT AND NONCOMPLIANCE NOTIFICATION

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

    Authority: 49 U.S.C. 30102-30103, 30112, 30115, 30117-30121, 
30166-30167; delegations of authority at 49 CFR 1.50 and 49 CFR 
501.8.


Sec. 577.5  [Amended]

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

    Issued on: December 21, 1995.
Ricardo Martinez,
Administrator.
[FR Doc. 95-31583 Filed 12-29-95; 10:49 am] 
BILLING CODE 4910-59-M