[Federal Register Volume 61, Number 171 (Tuesday, September 3, 1996)]
[Rules and Regulations]
[Pages 46385-46390]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22409]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 583

[Docket No. 92-64; Notice 9]
RIN 2127-AG46


Motor Vehicle Content Labeling

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

ACTION: Temporary final rule; Request for comments.

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SUMMARY: Under NHTSA's content labeling program, passenger motor 
vehicles (passenger cars and other light vehicles) are required to be 
labeled with

[[Page 46386]]

information about their domestic and foreign parts content. In response 
to petitions for rulemaking submitted by the American Automobile 
Manufacturers Association and General Motors, the agency is making a 
limited, temporary amendment to its content calculation procedures to 
provide vehicle manufacturers added flexibility in making content 
determinations where outside suppliers have not responded to requests 
for content information. This flexibility will only be available for up 
to 10 percent, by value, of a carline's total parts content from 
outside suppliers, and only for carlines offered for sale prior to 
January 1, 1997. It will also only be available where manufacturers or 
allied suppliers have made a good faith effort to obtain the 
information. The agency is requesting comments on whether to provide 
this or similar added flexibility for a longer period of time.

DATES: Effective date: The amendments made by this temporary rule are 
effective September 3, 1996.
    Comments: Comments must be received on or before October 3, 1996.

ADDRESSES: Comments 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.-4 p.m., Monday 
through Friday.)

FOR FURTHER INFORMATION CONTACT: For non-legal issues: Mr. Orron Kee, 
Office of Planning and Consumer Programs, National Highway Traffic 
Safety Administration, 400 Seventh Street, SW., Washington, DC 20590 
(202-366-0846).
    For legal issues: Mr. J. Edward Glancy, Office of Chief Counsel, 
National Highway Traffic Safety Administration, 400 Seventh Street, 
SW., Washington, DC 20590 (202-366-2992).

SUPPLEMENTARY INFORMATION:

Background

    On July 21, 1994, NHTSA published in the Federal Register (59 FR 
37294) a new regulation, 49 CFR Part 583, Automobile Parts Content 
Labeling, to implement the American Automobile Labeling Act (Labeling 
Act). That Act, which is codified at 49 U.S.C. 32304, requires 
passenger motor vehicles to be labeled with information about their 
domestic and foreign parts content. Interested persons are encouraged 
to read the July 1994 notice for a detailed explanation of this 
program.
    NHTSA received several petitions for reconsideration of the July 
1994 final rule, and has subsequently published three notices 
addressing issues raised in those or subsequent petitions. In a final 
rule published in the Federal Register (60 FR 14228) on March 16, 1995, 
NHTSA partially responded to the petitions for reconsideration by 
extending, for an additional year, a temporary alternative approach for 
data collection and calculations. This option, which ceased to be 
available effective June 1, 1996, permitted manufacturers and suppliers 
to use procedures that are expected to yield similar results to the 
full procedures set forth in Part 583. NHTSA provided this temporary 
alternative approach in the 1994 final rule because there was 
insufficient remaining time, before the statutory date for beginning to 
provide labeling information, for manufacturers to complete the full 
procedures. The agency provided the one-year extension of the temporary 
approach in light of a substantial number of complex issues raised 
about the full procedures in the petitions for reconsideration and the 
time needed by the agency to address those issues.
    The agency completed its response to the initial set of petitions 
in a final rule published in the Federal Register (60 FR 47878) on 
September 15, 1995. The agency made a number of changes to reduce the 
burdens associated with making content calculations and to produce more 
accurate information.
    NHTSA received one petition for reconsideration of the September 
1995 final rule, from the American Automobile Manufacturers Association 
(AAMA). That organization re-raised an issue that it had raised in its 
first petition, concerning a provision in Part 583 which specifies that 
the U.S./Canadian content of components is defaulted to zero if outside 
suppliers fail to respond to a manufacturer's or allied supplier's 
request for content information.
    On April 19, 1996, NHTSA published in the Federal Register (61 FR 
17253) a notice denying AAMA's petition. The agency explained that it 
believes that the ability to obtain the necessary content information 
from suppliers is within the control of the vehicle manufacturers.

Petitions for Rulemaking

    NHTSA has received petitions for rulemaking from AAMA (on behalf of 
some of its members) and General Motors (GM) which again raise concerns 
about the provision in Part 583 which specifies that the U.S./Canadian 
content of components is defaulted to zero if suppliers fail to respond 
to a manufacturer's or allied supplier's request for content 
information. According to the petitioners, although a great deal of 
effort has been put forth to obtain certificates from suppliers, some 
vehicle manufacturers continue to have difficulty with non-responsive 
suppliers. The petitioners requested that the agency immediately extend 
for an additional six months the temporary procedures that have been in 
place for the last two years. The petitioners also requested again that 
NHTSA permit vehicle manufacturers and allied suppliers to make good-
faith content determinations when their outside suppliers fail to do 
so.
    AAMA and GM made several arguments in support of their petitions. 
First, the petitioners stated that NHTSA took six months to respond to 
the earlier petition for reconsideration, leaving only six weeks for 
manufacturers to calculate U.S./Canadian content for 1997 model year 
vehicles under new rules. They argued that it is unreasonable to expect 
compliance with this provision of the rule when the agency took so long 
to respond to the earlier petition.
    Second, AAMA and GM stated that while NHTSA has concluded that 
automakers can easily cause supplier compliance by contract, the 
supplier relationship is much more complex than whether the supplier 
provides one piece of data to the purchaser. They argued that to expect 
a shift in production from one supplier to another for not supplying 
AALA data is not realistic. The petitioners also argued that even if a 
non-responsive supplier is penalized under the contract, the penalty 
paid to the manufacturer is not compensatory because the ``damages'' 
that result are not financial but result in an understated U.S./
Canadian content value for the manufacturer's vehicles.
    Third, AAMA and GM argued that any procedure that requires 100 
percent compliance and does not provide alternative approaches to 
determine the result will understate the U.S./Canadian value and 
provide false information to the consumer. Finally, AAMA and GM stated 
that NHTSA permits outside suppliers to make certain ``best effort'' 
determinations of where value was added, and argued that it is 
inequitable not to permit allied suppliers and vehicle manufacturers 
this same flexibility.
    Representatives of GM met with NHTSA staff on June 12 to provide 
additional information in support of that company's petition. Among 
other things, they discussed a letter which Chrysler had sent to NHTSA 
Deputy Administrator Philip R. Recht on May 9 concerning Chrysler's 
success in

[[Page 46387]]

obtaining information from suppliers. Chrysler's letter, from Vice 
Chairman and Chief Administrative Officer T. G. Denomme, read as 
follows:

    At our recent meeting with Secretary Pena, I mentioned that we 
were not experiencing much success with our suppliers on submitting 
information required under labeling legislation. You asked if we had 
leveraged our suppliers on this issue.
    After our meeting, I got into the issue in more detail. As it 
turns out, you were correct on this one. We had not pushed the 
suppliers hard enough. On April 25, only 46% of our suppliers had 
returned the labeling forms (873 suppliers out of 1,924 total). With 
a renewed effort on our part, by May 7 we had pushed that figure to 
81% response with an expectation of getting well into the 90% level 
by this summer.
    I send you this because I did not want to leave you with the 
wrong impression on this issue. It now appears Chrysler should be in 
position to not only comply with the terms of the legislation, but 
also to have virtually all of our suppliers reporting as well.

    The GM representatives stated that GM's situation is different than 
Chrysler's because of several factors. GM said it has more than 13,000 
suppliers, while Chrysler has 1,924. GM is highly vertically 
integrated; Chrysler is not. Because of vertical integration, GM must 
trace parts through multiple tiers internally and externally. Finally, 
the GM representatives stated that their company's multiplicity of 
carlines makes the determination of domestic content more complex.
    The GM representatives also discussed their efforts to obtain 
certificates from outside suppliers. A number of GM employees have been 
working full-time for the past several weeks to obtain certificates 
from outside suppliers who have not responded to previous requests.
    The GM representatives indicated that, despite these efforts, the 
stated domestic content of some of GM's cars will fall by about 10 
percentage points (e.g., from 95% in model year 1996 to 85% in model 
year 1997), solely as a result of defaulting non-reporting supplier 
content to zero domestic content. They also discussed, by way of 
example, a vehicle for which GM has had particular difficulty ``getting 
the last 9% [of content] identified.''
    The GM representatives argued that, unless the agency provides 
immediate relief, consumers will receive information about that 
company's vehicles which is inaccurate. The need for immediate relief 
arises from the fact that the vehicle manufacturers are in the final 
stages of making content calculations for their model year 1997 
vehicles. Under the content labeling program, these calculations are 
made only once per model year for a carline. Subsequent to the meeting, 
GM sent the agency a list of its 1997 model year startup dates. Most of 
the startup dates were between late June and very early August, with 
many in the middle of July.

Response to Petitions

    NHTSA notes that the AAMA and GM petitions re-raise many issues 
which the agency has addressed at length in responding to previous 
petitions. Since the petitions did not provide any new arguments 
significantly different from the ones previously offered by the 
petitioners, the agency is not changing its views with respect to those 
basic issues.
    However, based on the new information provided by AAMA and GM, 
NHTSA has decided that a very narrow, temporary change should be made 
in the content calculation procedures. The agency is amending Part 583 
to provide that, in limited situations where outside suppliers have not 
responded to requests for content information, allied suppliers and 
manufacturers are permitted to make those content calculations. This 
flexibility will only be available if the allied supplier or 
manufacturer has a good faith basis for making the calculation. 
Moreover, this flexibility will only be available for up to 10 percent, 
by value, of a carline's total parts content from outside suppliers. 
Finally, the flexibility will only be available where manufacturers or 
allied suppliers have made a good faith effort to obtain the 
information.
    Today's amendment applies only to carlines offered for sale before 
January 1, 1997. The agency has not decided whether the applicability 
of the amendment, or a similar one, should be extended past that date. 
However, the agency is requesting comments on that issue.
    NHTSA is issuing today's amendment in light of several factors. On 
the one hand, NHTSA believes that Chrysler's experience demonstrates 
that the ability to obtain the necessary content information from 
suppliers is within the control of the vehicle manufacturers. However, 
the agency also agrees that there are differences between Chrysler and 
GM, related to number of suppliers and degree of vertical integration, 
which make efforts by GM to obtain content information from its 
suppliers considerably more complex.
    The agency has previously recognized that a certain amount of 
confusion is likely during the time period when a new program, such as 
content labeling, is implemented. The content labeling program is still 
a relatively new program. Indeed, model year 1997 is the first year for 
which the full content calculation procedures of Part 583 are required, 
i.e., the temporary alternative procedures are not available.
    The agency believes that GM has demonstrated that it has been 
making significant efforts in recent months to obtain content 
information from non-responsive suppliers. Moreover, GM has shown that, 
despite those efforts, it is having difficulty obtaining information 
for the last portion of a carline's content.
    Finally, NHTSA believes that, all other things being equal, a good 
faith content determination by a vehicle manufacturer or allied 
supplier of equipment it receives is likely to be more accurate than 
simply applying a ``default-to-zero'' provision. Thus, adoption of 
today's amendment should result in more accurate information for 
consumers.
    The agency recognizes, of course, that the most accurate 
determinations are those provided by the outside suppliers themselves, 
since they obviously have much more complete information about the 
content of the equipment they manufacture than the purchaser. 
Therefore, the agency must consider whether its actions would have the 
effect of reducing the incentives for outside suppliers to provide the 
required information, or for the vehicle manufacturers to make efforts 
to obtain the information.
    NHTSA has concluded that adoption of today's temporary amendment 
will not reduce incentives for outside suppliers or vehicle 
manufacturers for model year 1997. Given that the vehicle manufacturers 
are already in the final stages of making content calculations for 
these vehicles, today's amendment should not have any effect on whether 
outside suppliers provide, or do not provide, the required information 
for model year 1997. However, the agency will consider this issue 
further in deciding whether to extend the applicability of today's 
temporary amendment. NHTSA also emphasizes that today's amendment does 
not excuse outside suppliers for failure to comply with Part 583.
    The agency notes that today's temporary amendment is much narrower 
than the temporary one requested by AAMA and GM. The petitioners 
requested a six-month extension of the temporary procedures that have 
been in place for the last two years. However, they raised concerns 
about only one of Part 583's provisions, the one concerning non-
responsive outside suppliers. AAMA and GM did not give any reasons why 
the agency

[[Page 46388]]

should provide flexibility for other aspects of the content labeling 
calculation procedures. Therefore, the agency declines to provide 
relief related to other sections.
    In addition, as noted above, the added flexibility is limited to no 
more than 10 percent, by value, of a carline's total parts content from 
outside suppliers. The relief is thus tailored to the fact that the 
problem faced by the vehicle manufacturers is in obtaining the last 
portion of outside content value for particular carlines. Also, the 
amendment ensures that the added flexibility can only be used for a 
very small portion of a carline's total outside content, and that the 
vast majority of U.S./Canadian content determinations will be based on 
supplier certificates.
    This flexibility will also only be available where manufacturers or 
allied suppliers have made a good faith effort to obtain the 
information. NHTSA is not including a specific definition of what 
constitutes ``good faith effort'' in today's final rule. However, the 
agency intends the term to mean at least some effort beyond the request 
for information and certificates that is required by Part 583, e.g., 
some kind of follow-up effort.
    NHTSA will not provide specific responses to all of the other 
issues raised by AAMA and GM in their petitions, because the agency has 
responded to many of those issues in previous notices. The agency 
specifically incorporates by reference its responses to these issues 
set forth in the September 15, 1995 and April 19, 1996 notices 
referenced earlier in this document.
    However, the agency will address two issues. First, NHTSA rejects 
the suggestion that it should amend Part 583 because it took six months 
to respond to AAMA's earlier petition for reconsideration. NHTSA's 
regulations clearly specify that the filing of a petition for 
reconsideration does not mean that a rule does not take effect. See 49 
CFR 553.35(d).
    Second, the agency does not believe there is anything inequitable 
about providing different procedures for outside and allied suppliers. 
The Labeling Act establishes vastly different procedures for outside 
and allied suppliers. For example, in making domestic content 
calculations, outside suppliers need determine only whether an item of 
equipment has at least 70 percent U.S./Canadian content, while allied 
suppliers must make precise calculations based on certificates from 
outside suppliers. The differences in Part 583's procedures for outside 
and allied suppliers reflect the specific statutory differences for 
these two groups and/or the agency's efforts to limit the regulatory 
burdens associated with the content labeling program. For example, a 
significant reason why the agency permits outside suppliers to make 
good faith estimates of the U.S./Canadian content of the materials they 
purchase is that, unlike the situation for allied suppliers, suppliers 
to outside suppliers are not required, by statute or regulation, to 
provide certificates of content.
    NHTSA finds that the issuance of this final rule without prior 
opportunity for comment is necessary in view of the immediate 
difficulties that some manufacturers, including GM, are having 
obtaining content information from a number of outside suppliers, and 
the fact that the manufacturers are necessarily in the final stages of 
making content determinations for their model year 1997 vehicles. 
Unless the agency amends the standard on an immediate basis, consumers 
will receive less accurate content information for model year 1997 
vehicles. NHTSA also finds good cause to establish an immediate 
effective date for this final rule. In the absence of an immediate 
effective date, the manufacturers could not avail themselves of the 
added flexibility in making content determinations for their model year 
1997 vehicles. The final rule does not impose any new requirements but 
instead provides additional flexibility to manufacturers in making 
content determinations.
    NHTSA notes that, since model year 1997 production has begun for 
some carlines, some vehicles have probably already been labeled. Given 
the circumstances of today's final rule, the agency believes it would 
be appropriate for manufacturers to re-label these vehicles, should 
they wish to do so.1 In such an instance, however, NHTSA urges 
manufacturers to take steps to prevent confusion when consumers compare 
the labels of vehicles within the same carline manufactured at 
different times. For example, manufacturers could take steps to re-
label all of the vehicles within a carline that have not yet been sold 
to a consumer. Alternatively, the revised label could include a note 
indicating that the carline percentages have been revised during the 
model year.
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    \1\ While content percentages are ordinarily calculated only 
once for a carline for a particular model year, NHTSA has previously 
concluded that, under special circumstances, manufacturers may 
revise the carline percentages. See interpretation letter to Diamond 
Star Motors dated February 10, 1995.
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    The second issue to be considered is whether the applicability of 
today's amendment, or a similar one, should be extended for a longer 
period of time. The agency believes that the guiding principle for 
making this decision should be the statutory direction specifying that 
regulations promulgated under the Labeling Act are to provide the 
ultimate purchaser of a new passenger motor vehicle with the best and 
most understandable information possible about the foreign and U.S./
Canadian origin of the equipment of the vehicles without imposing 
costly and unnecessary burdens on the manufacturers. 49 U.S.C. 
32304(e).
    There is no question that the ``best'' determinations of the 
content of equipment provided by outside suppliers are those provided 
by the suppliers themselves, since they obviously have much more 
complete information about the content of the equipment they 
manufacture than the purchaser. There is also no question that the 
Labeling Act contemplates the vehicle manufacturers basing their 
content calculations on certificates provided by the outside suppliers, 
and that outside suppliers are statutorily required to provide this 
information. See 49 U.S.C. 32304(e). Thus, the only question is the 
extent, if any, to which the agency should provide alternatives to 
address situations where outside suppliers fail to provide the required 
information despite being asked to do so by the vehicle manufacturers.
    As indicated above, an important consideration is whether such 
alternatives would have the effect of reducing the incentives for 
outside suppliers to provide the required information, or for the 
vehicle manufacturers to make efforts to obtain the information. It is 
clear that the ``default-to-zero'' provision does provide significant 
incentives in this regard. Therefore, the agency will not simply drop 
that provision.
    To the extent that the non-responsive supplier problem experienced 
by GM is likely to continue, it could be argued that, at some point, 
the costs of obtaining the last portion of outside supplier content 
value for a particular carline become unreasonable. This argument could 
be used to support extending the temporary amendment. The length of 
such extension would depend on how long the problem was likely to 
continue.
    On the other hand, NHTSA is not convinced that the vehicle 
manufacturers cannot ultimately obtain the necessary content 
information from essentially 100 percent of their suppliers, without 
costly efforts. The agency included the following discussion in its 
March 16, 1996 notice

[[Page 46389]]

denying AAMA's earlier petition on this subject:

    NHTSA notes that AAMA's petition did not discuss whether its 
member companies experienced difficulty in obtaining content 
information from suppliers in the presence or absence of specific 
contractual provisions intended to ensure the provision of content 
information by suppliers. As stated in the September 1995 notice, 
outside suppliers are dependent on the vehicle manufacturers for 
their business. Therefore, the agency believed, and continues to 
believe, that the ability to obtain the necessary content 
information is within the control of the vehicle manufacturers.
    The purpose of including any specific provision in a business 
contract is to make observance of the terms of that provision a 
required element of the business relationship. Just as such things 
as meeting material specifications, strength requirements and 
specified time of delivery are a necessary part of a supplier's 
doing business with a vehicle manufacturer and are ensured by 
provisions included in contractual agreements, the providing of 
content information can also be made a necessary part of that 
business relationship and be reflected in the purchase contract.
    Moreover, just as liquidated damages clauses can be inserted in 
a contract for failure to comply with any other part of the 
contract, so can such a provision be included for failure to provide 
timely content reports. If a supplier knows that it will be paid 
less money if it fails to provide content information, it will have 
a strong incentive to provide the information.
    The agency also notes that the supplier industry is highly 
competitive. If one supplier is unwilling to agree to provide 
content information (an agreement to do no more than comply with 
existing Federal law), other suppliers would step in to take 
advantage of the opportunity for new business.
    For the above reasons, including those presented in the 
September 1995 notice, NHTSA continues to believe that the vehicle 
manufacturers will be able to obtain the required content 
information from their suppliers.

    As indicated above, AAMA and GM argued in their new petitions that 
even if a non-responsive supplier is penalized under the contract, the 
penalty paid to the manufacturer is not compensatory because the 
``damages'' cannot offset the effects of understating the U.S./Canadian 
content value for the manufacturer's vehicles. NHTSA believes, in 
contrast, that the contractual provisions would help ensure that 
outside suppliers provide content information without the need to 
actually impose ``damages.'' The agency believes outside suppliers 
would not sign contracts that they planned to violate. Also, given that 
it is not very costly to provide content information, it would be 
irrational for outside suppliers to decide to pay damages instead of 
simply providing the information (information that they are, in any 
event, required by Federal law to provide).
    In addition to providing an extra incentive for outside suppliers, 
such contractual provisions would provide an educational function. AAMA 
stated in its petition that ``suppliers that deliberately do not 
respond cite the uncompensated cost to establish the information on 
content in their parts, the increased employees to calculate the data, 
and the burdens they already face in generating multiple content 
reports such as for NAFTA, AALA, CAFE and others each with its own 
rules.'' These sorts of explanations by suppliers suggest that they 
were unaware of the need to provide content information when they 
signed their contracts. The inclusion of a specific contract provision 
concerning the need to provide content information would make suppliers 
aware of this obligation. While the costs of providing content 
information may not be compensated directly, such costs are simply a 
necessary part of doing business. Assuming that suppliers are aware of 
these costs, they will presumably consider them in negotiating their 
contracts, just as they consider other costs of doing business.
    As indicated above, NHTSA has not decided whether to extend today's 
amendment beyond December 31 of this year, but is requesting comments 
on this issue. The agency requests commenters to address the following 
questions:
    1. Can the problems being experienced by some vehicle manufacturers 
with non-responsive suppliers be resolved by contractual provisions? 
Have the vehicle manufacturers experiencing these problems included 
specific provisions concerning content labeling in their contracts? If 
not, why? If such provisions are not included in contracts, how long 
would it take to add them? Are there other ways to resolve these 
problems, particularly without costly efforts by the vehicle 
manufacturers?
    2. If the agency were to extend the applicability of today's 
amendment beyond December 31 of this year, how long should the 
extension be? Should such an extension continue to provide the same 
type and degree of flexibility, i.e., flexibility for up to 10 percent, 
by value, of a carline's total parts content from outside suppliers? 
Would another value, or a somewhat different means for providing 
flexibility, be more appropriate?
    3. If the agency provides flexibility past December 31 of this 
year, should the flexibility be limited to situations where the vehicle 
manufacturers have made specified good-faith efforts to obtain the 
information from an outside supplier (beyond the initial request to the 
supplier)? If so, what good-faith efforts should be specified in the 
regulation, e.g., certain contractual provisions, follow-up letters 
and/or phone calls, etc.?
    NHTSA recognizes that, to the extent commenters argue that a 
somewhat different amendment should apply to models introduced after 
December 31 of this year, those arguments may bear also on the 
appropriateness of the relief provided up to that date. However, given 
the imminence of the introduction of most model year 1997 vehicles, it 
is not clear whether it would be feasible to consider amendments to the 
relief provided for models introduced before December 31. Nonetheless, 
the agency invites commenters to address this issue. Moreover, to 
accommodate the possibility of making such an amendment, the agency 
expediting the comment process by limiting the comment period to 30 
days.
    For the reasons discussed above, NHTSA is granting the AAMA and GM 
petitions to the extent reflected in today's final rule and request for 
comments. The petitions are otherwise denied.

Rulemaking Analyses and Notices

A. Executive Order 12866 (Regulatory Planning and Review) and DOT 
Regulatory Policies and Procedures

    This rulemaking document was not reviewed under Executive Order 
12866. NHTSA has considered the economic implications of this 
regulation and determined that it is not significant within the meaning 
of the DOT Regulatory Policies and Procedure. Today's amendments will 
not affect manufacturer or supplier costs. They simply provide 
additional flexibility to vehicle manufacturers and their allied 
suppliers in making content calculations.

B. Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act, NHTSA has 
evaluated the effects of this action on small entities. Based upon this 
evaluation, I certify that the final rule will not have a significant 
economic impact on a substantial number of small entities. Today's 
amendments simply provide additional flexibility to vehicle 
manufacturers and their allied suppliers in making content 
calculations. Therefore, a regulatory flexibility analysis is not 
required for this action.

[[Page 46390]]

C. 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 final rule did not have sufficient Federalism implications to 
warrant preparation of a Federalism Assessment. No state laws are 
affected.

D. Executive Order 12778 (Civil Justice Reform)

    This final rule does not have any retroactive effect. States are 
preempted from promulgating laws and regulations contrary to the 
provisions of this rule. The rule does not require submission of a 
petition for reconsideration or other administrative proceedings before 
parties may file suit in court.

E. National Environmental Policy Act

    The agency has considered the environmental implications of this 
rule in accordance with the National Environmental Policy Act of 1969 
and determined that this rule will not significantly affect the human 
environment.

Comments

    Interested persons are invited to submit comments on this document. 
It is requested but not required that 10 copies be submitted.
    All comments must not exceed 15 pages in length (49 CFR 553.21). 
Necessary attachments may be appended to these submissions without 
regard to the 15-page limit. This limitation is intended to encourage 
commenters to detail their primary arguments in a concise fashion.
    If a commenter wishes to submit certain information under a claim 
of confidentiality, three copies of the complete submission, including 
the purportedly confidential business information, should be submitted 
to the Chief Counsel, NHTSA, at the street address given above, and 
seven copies from which the purportedly confidential information has 
been deleted should be submitted to the NHTSA 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 by NHTSA before the close of business on the 
comment closing date indicated above will be considered, and will be 
available for examination in the docket at the above address both 
before and after that date. To the extent possible, comments filed 
after the closing date will also be considered. Comments received too 
late for consideration in regard to this rulemaking action will be 
considered as suggestions for further rulemaking action. Comments on 
the document will be available for inspection in the docket. The NHTSA 
will continue to file relevant information as it becomes available in 
the docket after the closing date, and recommends that interested 
persons continue to examine the docket for new material.
    Those persons desiring to be notified upon receipt of their 
comments in the rules docket should enclose a self-addressed, stamped 
postcard in the envelope with their comments. Upon receiving the 
comments, the docket supervisor will return the postcard by mail.

List of Subjects in 49 CFR Part 583

    Motor vehicles, Imports, Labeling, Reporting and recordkeeping 
requirements.

    In consideration of the foregoing, 49 CFR part 583 is amended as 
follows:

PART 583--AUTOMOBILE PARTS CONTENT LABELING

    1. The authority for part 583 continues to read as follows:

    Authority: 49 U.S.C. 32304, 49 CFR 1.50, 501.2(f).

    2. Section 583.6 is amended by revising paragraph (c)(5) and adding 
paragraph (c)(6) to read as follows:


Sec. 583.6  Procedure for determining U.S./Canadian parts content.

* * * * *
    (c) * * *
    (5) Except as provided in paragraph (c)(6) of this section, if a 
manufacturer or allied supplier does not receive information from one 
or more of its suppliers concerning the U.S./Canadian content of 
particular equipment, the U.S./Canadian content of that equipment is 
considered zero. This provision does not affect the obligation of 
manufacturers and allied suppliers to request this information from 
their suppliers or the obligation of the suppliers to provide the 
information.
    (6) For carlines which are first offered for sale to ultimate 
purchasers before January 1, 1997, if a manufacturer or allied supplier 
requests information in a timely manner from one or more of its outside 
suppliers concerning the U.S./Canadian content of particular equipment, 
but does not receive that information despite a good faith effort to 
obtain it, the manufacturer or allied supplier may make its own good 
faith value added determinations, subject to the following provisions:
    (i) The manufacturer or allied supplier shall make the same value 
added determinations as would be made by the outside supplier, i.e., 
whether 70 percent or more of the value of equipment is added in the 
United States and/or Canada;
    (ii) The manufacturer or allied supplier shall consider the amount 
of value added and the location in which the value was added for all of 
the stages that the outside supplier would be required to consider;
    (iii) The manufacturer or allied supplier may determine that the 
value added in the United States and/or Canada is 70 percent or more 
only if it has a good faith basis to make that determination;
    (iv) A manufacturer and its allied suppliers may, on a combined 
basis, make value added determinations for no more than 10 percent, by 
value, of a carline's total parts content from outside suppliers;
    (v) Value added determinations made by a manufacturer or allied 
supplier under this paragraph shall have the same effect as if they 
were made by the outside supplier;
    (vi) This provision does not affect the obligation of outside 
suppliers to provide the requested information.

    Issued on: August 28, 1996.
Ricardo Martinez,
Administrator.
[FR Doc. 96-22409 Filed 8-28-96; 5:08 pm]
BILLING CODE 4910-59-P