[Federal Register Volume 61, Number 24 (Monday, February 5, 1996)]
[Proposed Rules]
[Pages 4249-4252]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-2330]



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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

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

[Docket No. 95-95, Notice 1]


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

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

ACTION: Notice of public meeting; request for comments.

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SUMMARY: This notice announces a public meeting at which NHTSA will 
seek information from small volume manufacturers and the public on 
regulatory problems of such manufacturers. Previously, NHTSA announced 
that it is interested in developing a legislative package tailored to 
reduce the burden of its requirements 

[[Page 4250]]
on small businesses and manufacturers. NHTSA is requesting suggestions 
for actions with respect to NHTSA's Corporate Average Fuel Economy 
(CAFE) regulations, Theft Prevention Standard, Federal Motor Vehicle 
Safety Standards, and Bumper Standard, that govern the compliance and 
exemption of such vehicles. This notice also invites written comments 
on the same subjects.

DATES: The public meeting will be held on Wednesday, March 13, 1996, at 
9:00 a.m. An agenda for the meeting will be made based on the number of 
persons wishing to make oral presentations and will be available on the 
day of the meeting. Those wishing to make oral presentations at the 
meeting should contact Taylor Vinson, at the address or telephone 
number listed below, by the close of business Monday, February 26, 
1996. Written comments may be submitted at any time before or after the 
meeting, but not later than April 4, 1996.

ADDRESSES: Public meeting: The public meeting will be held in Rooms 
6244-6248, Nassif Building (DOT headquarters), 400 Seventh Street, SW, 
Washington, DC.
    Written comments: Written comments should be sent to the Docket 
Section, National Highway Traffic Safety Administration, Room 5109, 400 
7th Street, SW., Washington, DC 20590, ATTN: Docket No. 95-95; Notice 
1.

FOR FURTHER INFORMATION CONTACT: Taylor Vinson, Office of Chief 
Counsel, NHTSA, 400 7th Street, SW, Washington, DC 20590 (telephone 
202-366-5263).

SUPPLEMENTARY INFORMATION:

Regulatory Reform

    Calling for a new approach to the way Government regulates the 
private sector, President Clinton has asked Executive Branch agencies 
to improve the regulatory process. Specifically, the President 
requested that agencies (1) cut obsolete regulations; (2) create 
grassroots partnerships by meeting with those affected by regulations 
and other interested parties; and (3) make more frequent use of 
consensual rulemaking such as regulatory negotiation.
    This is the second of NHTSA's announced meetings to create 
grassroots partnerships with regulated industries that do not deal with 
NHTSA on a daily basis. By meeting with these groups, NHTSA believes 
that it can derive a better understanding of their needs and concerns. 
Other groups that the agency plans to meet with are manufacturers of 
school buses, heavy trucks, child seats, and lamps and reflectors. The 
agency met on December 12, 1995, with manufacturers of multistage 
vehicles.
    As part of its contribution towards regulatory reform to reduce 
unnecessary regulatory burdens, NHTSA has announced that it plans to 
develop a legislative package tailored to reduce the burden of its 
requirements on small manufacturers. Such a package could include 
longer leadtimes for small manufacturers and greater flexibility in 
granting small-manufacturer exemptions. NHTSA recognizes that small 
volume manufacturers are faced with somewhat different problems than 
manufacturers who produce in larger quantities. Therefore, the agency 
has decided to hold a public meeting to receive the comments of this 
group and the public on how the regulatory process might be improved 
without any diminution of regulatory goals.

Small-Volume Manufacturers

    Under the current statutes and regulations administered by NHTSA, 
there is no specific definition of ``small-volume manufacturer''. 
However, eligibility for application for exemption from average fuel 
economy standards and motor vehicle safety standards is statutorily 
predicated upon the volume of production. This statutory criterion is 
reflected in the agency's regulations. Under 49 CFR Part 525 Exemptions 
From Average Fuel Economy Standards, a manufacturer who produces fewer 
than 10,000 passenger automobiles may apply for an exemption. 
Similarly, under 49 CFR Part 555 Temporary Exemption From Motor Vehicle 
Safety Standards, a manufacturer whose total motor vehicle production 
(passenger cars and all other types) does not exceed 10,000 may apply 
for an exemption on grounds that compliance would cause it substantial 
economic hardship. Thus, at present, a manufacturer whose annual motor 
vehicle production does not reach 10,000 units can apply for regulatory 
relief that is not available to manufacturers whose yearly production 
is greater. NHTSA, therefore, considers any manufacturer of motor 
vehicles that which fabricates not more than 10,000 units a year to be 
a ``small-volume manufacturer'' within the meaning of its outreach 
program, regardless of whether it has petitioned for exemption under 
Part 525 or Part 555.
    Importers of vehicles for resale are statutorily treated as 
``manufacturers'' for most purposes and required to comply with 
obligations of fabricating manufacturers. Aside from factory-owned 
U.S.-based concerns importing certified vehicles, importers of vehicles 
for resale generally import vehicles originally intended for sale in a 
country other than the United States and thus not manufactured to 
conform to Federal requirements. Such importers are treated as 
``registered importers'' (RIs) in the agency's authorizing statute and 
under 49 CFR Part 592. None imports more than 10,000 units a year. The 
agency is well aware of the problems faced by RIs in qualifying 
nonconforming vehicles for entry and modifying them after entry. 
However, these problems are of a different nature than those faced by 
small manufacturers actually involved in fabrication. For this reason, 
the agency does not intend to include non-fabricating small-volume 
manufacturers in the agenda for this meeting.
    The following paragraphs briefly describe the existing statutory 
provisions regarding the establishing of standards and the NHTSA 
regulations implementing those provisions.

Corporate Average Fuel Economy (CAFE)

    The CAFE standards originate in 49 U.S.C. Chapter 329--Automobile 
Fuel Economy. This chapter requires passenger automobiles to meet a 
CAFE standard of 27.5 miles per gallon for each model year. Under 49 
U.S.C. 32902(d)(1), a manufacturer may apply for a CAFE exemption if it 
produced less than 10,000 passenger automobiles in the model year 2 
years before the model year for which application is made. An exemption 
for the model year may be granted if the agency finds that the 
applicable CAFE standard is more stringent than the maximum feasible 
average fuel economy level that the manufacturer can achieve, and then 
prescribes an alternative standard that is based upon the finding.
    The exemption provisions of Chapter 329 have been implemented by 49 
C.F.R. Part 525 Exemptions From Average Fuel Economy Standards. This 
regulation sets out the contents of applications and the application 
procedures. Exempted manufacturers and their individual CAFE standards 
are listed at 49 C.F.R. 531.5(b).

Theft Prevention Standard

    The agency's efforts to reduce the theft of motor vehicles are 
governed by 49 U.S.C. Chapter 331--Theft Prevention. Under Sec. 33102, 
NHTSA is required to issue a theft prevention standard that applies to 
parts of vehicles that have been designated high theft lines. Sec. 
33103 requires NHTSA to extend the standard to vehicle lines that have 
not been designated high theft. Sec. 33106 allows manufacturers to 
apply for exemption for passenger motor vehicles equipped with 
antitheft 

[[Page 4251]]
devices. However, the right to apply is independent of the quantity of 
vehicles produced by the applicant. Sec. 33114 prohibits the 
importation of either a motor vehicle or replacement part covered by a 
theft standard unless it conforms to the standard. The prohibition is 
absolute and does not provide for importing noncomplying vehicles or 
parts and subsequently bringing them into compliance with the theft 
prevention standard.
    Chapter 331 has been implemented in pertinent part by 49 C.F.R. 
Part 541 Federal Motor Vehicle Theft Prevention Standard and Part 543 
Exemption From Vehicle Theft Prevention Standard. Part 541 requires the 
marking of parts in the manner prescribed. Part 543 contains the 
procedures for applying for theft prevention standard exemptions. 
Vehicles with antitheft devices that are exempted in their entirety 
from the standard are listed in Appendix A of Part 541. Some of them 
are produced by small-volume manufacturers within the meaning of this 
notice.

Federal Motor Vehicle Safety Standards

    49 U.S.C. Chapter 301--Motor Vehicle Safety is the authority for 
the regulations published under 49 C.F.R. Part 571 Federal Motor 
Vehicle Safety Standards. Every motor vehicle must meet all applicable 
Federal motor vehicle safety standards by virtue of Sec. 30112(a), 
except as provided elsewhere in Sec. 30112, and in Secs. 30113 and 
30114. Sec. 30113(d) provides that a manufacturer whose annual motor 
vehicle production is 10,000 units or less is eligible to apply for an 
exemption under Sec. 30113(b)(3)(B)(i), on the basis that compliance 
would cause substantial economic hardship to a manufacturer that has 
tried to comply with the standard in good faith.
    Some small-volume manufacturers have petitioned for temporary 
exemption from the safety standards on grounds other than substantial 
economic hardship, principally electric vehicle manufacturers who argue 
that an exemption would facilitate the development and field evaluation 
of a low-emission vehicle, a basis allowed by Sec. 30113(b)(3)(B)(iii). 
Eligibility to apply is not predicated upon limited production volume. 
This and the remaining categories of exemptions (innovative safety 
devices, equivalent overall level of safety) are available to all 
manufacturers regardless of production (though only 2,500 vehicles per 
year can be exempted). Nevertheless, the agency intends to include all 
four categories of statutory exemption in this review, even though they 
affect all manufacturers and not just those whose volume is limited.
    Sec. 30113 General exemptions has been implemented by 49 C.F.R. 
Part 555 Temporary Exemption From Motor Vehicle Safety Standards. Under 
the authority of this regulation, in effect since 1973, over 100 
applications have been considered, and the greater part of them 
granted.
    Sec. 30114 Special exemptions provides NHTSA with the authority to 
exempt a motor vehicle or an item of motor vehicle equipment on terms 
that the agency decides are necessary ``for research, investigations, 
demonstrations, training, or competitive racing events.'' Since its 
original enactment in P.L. 100-562, The Imported Vehicle Safety Act of 
1988, Sec. 30114 has been implemented solely with respect to the 
importation of vehicles and equipment, in 49 C.F.R. Sec. 591.5(j)(i). 
However, that statutory provision appears to have other applications as 
well, such as permitting manufacturers to operate non-conforming 
prototype vehicles on the public roads.

Bumper Standards

    Reduction of damage from motor vehicle accidents is the purpose of 
49 U.S.C. Chapter 325--Bumper Standards. Sec. 32502 requires NHTSA to 
promulgate bumper standards for passenger motor vehicles as defined by 
the statute. A limited exemption authority is provided to NHTSA by Sec. 
32502(c) to exempt from any part of a standard a multipurpose passenger 
vehicle or a make, model, or class of a passenger motor vehicle 
manufactured for a special use, if the standard would interfere 
unreasonably with the special use of the vehicle. However, this 
exemption authority is silent as to the right of a manufacturer to 
petition for relief. At the most, a manufacturer could petition only 
for relief of a class and not for relief on an individual basis, no 
matter what the volume of the manufacturer's production.
    The statutory requirement for a standard has been implemented by 49 
C.F.R. Part 581--Bumper Standard. The regulation is silent on exemption 
procedures.

Comments

    The agency believes that it would be helpful to have comments on 
the following topics, with respect to the statutory authority and 
regulations discussed above--
     Expansion or addition of exemption authority.
     Administrative/compliance burdens.
     Deferred compliance until end of phase-in period for 
phased-in regulations.
     Cost effectiveness.
     Costs to consumers of the existing regulation and the 
changes suggested by the commenter.
     Costs to regulated parties of testing or certification.
     Effects on fuel economy, theft prevention, safety, or 
property damage.
     Effects on small business.
     Enforceability.
     Whether the statute or regulation reflects a ``common 
sense'' approach to solving the problem.

Written statements should be arranged by the CFR Part numbers 
addressed, be as specific as possible and provide the best available 
supporting information. Suggestions should be accompanied by a 
rationale for the suggested action and a forecast of the expected 
consequences of that action. Statements also should specify whether any 
change recommended in the regulatory process would require a 
legislative change in NHTSA's authority.

Procedural Matters

    The agency intends to conduct the meeting informally so as to allow 
for maximum participation by all who attend. Interested persons may ask 
questions or provide comments during any period after a person has 
completed his or her presentation on a time allowed basis, as 
determined by the presiding official. If time permits, persons who did 
not ask prior to the meeting for an opportunity to speak, but would 
like to make a statement, will be afforded an opportunity to do so.
    Those speaking at the public meeting should limit their 
presentations to 20 minutes. If the presentation will include slides, 
motion pictures, or other visual aids, please so inform the contact 
person identified above so that the proper equipment may be made 
available. Presenters should bring at least one copy of their 
presentation to the meeting so that NHTSA can readily include the 
material in the public record.
    A schedule of participants making oral presentations will be 
available in the designated meeting room before the beginning of the 
meeting. NHTSA will place a copy of any written statement in Docket No. 
95-95; Notice 1. The public may inspect the Docket for comments and 
statements which may be received before or after the meeting. A 
verbatim transcript of the meeting will be prepared and also placed in 
the NHTSA docket as soon as possible after the meeting. 

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    Participation in the meeting is not a prerequisite for the 
submission of written comments. NHTSA invites written comments from all 
interested parties. It is requested but not required that 10 copies be 
submitted.
    If a commenter wishes to submit certain information under a claim 
of confidentiality, three copies of the complete submission, including 
purportedly confidential business information, should be submitted to 
the Chief Counsel, NHTSA, Room 5219, at the street address given above, 
and copies from which the purportedly confidential information has been 
deleted should be submitted to the Docket Section. A request for 
confidentiality should be accompanied by a cover letter setting forth 
the information specified in the agency's confidential business 
information regulation (49 CFR Part 512.)
    All comments received before the close of business on March 21, 
1996, will be considered in formulating a decision on the issues 
raised. After the closing date, NHTSA will continue to file relevant 
comments and information in the docket as it becomes available. It is 
therefore recommended that interested persons continue to examine the 
docket for new material.

    Issued: January 30, 1996.
Barry Felrice,
Associate Administrator for Safety Performance Standards.
[FR Doc. 96-2330 Filed 2-2-96; 8:45 am]
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