[Federal Register Volume 63, Number 159 (Tuesday, August 18, 1998)]
[Rules and Regulations]
[Pages 44171-44173]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-21956]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 555

[Docket No. 98-NHTSA-4285]
RIN 2127-AH44


Temporary Exemption From Motor Vehicle Safety Standards

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

ACTION: Technical amendments; final rule.

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SUMMARY: This document amends Part 555 to clarify procedures for 
submitting confidential business information to accompany applications 
for temporary exemption from one or more of the Federal motor vehicle 
safety standards. The intent of the rule is to simplify the process for 
manufacturers who may wish to claim confidentiality for information in 
their applications.
    The agency is also amending the temporary exemption procedures to 
give examples of factors that may be relevant in preparing hardship 
applications, and in demonstrating that good faith efforts have been 
made to comply with standards for which an exemption may be sought.
    Finally, the agency is updating statutory references and the 
location of the docket room where public comments are available for 
inspection.

DATES: The final rule is effective August 18, 1998.

FOR FURTHER INFORMATION CONTACT: Taylor Vinson, Office of Chief 
Counsel, NHTSA (202-366-5263).

SUPPLEMENTARY INFORMATION: The primary purpose of this document is to 
clarify the agency's confidential business information procedures so 
that applicants for temporary exemption from the Federal motor vehicle 
safety standards may comply with NHTSA's procedural requirements 
without unnecessary delay.
    Manufacturers who apply for temporary exemptions from Federal motor 
vehicle safety standards are afforded an opportunity to ``specify any 
part of the information and data submitted which petitioner requests be 
withheld from public disclosure in accordance with part 512'' of 
Chapter V, Title 49, Code of Federal Regulations. Part 512, 
Confidential Business Information, is the agency's regulation setting 
forth the procedures under which NHTSA will consider claims that 
information submitted to the agency is confidential business 
information as described in 5 U.S.C. 552(b)(4).
    The agency has found that, when some manufacturers file their 
exemption applications, they assert a claim for confidentiality without 
submitting the documentation required by part 512, or otherwise 
substantiating their request. The absence of substantiation causes 
unnecessary delay while the Office of Chief Counsel contacts the 
applicant and explains the necessity of either submitting 
substantiation or withdrawing its request.
    NHTSA has also found that when some small manufacturers apply for 
the first time for a temporary exemption based on a claim that 
compliance would cause them substantial economic hardship, they do not 
request confidential information for the financial information they 
submit in support of their claim of hardship. They do not realize they 
must make a specific request for confidentiality to prevent the 
information from becoming a matter of public record. This omission by 
applicants had limited consequences when their applications were 
available only through inspection in NHTSA's docket room. However, the 
applications and their supporting information are now placed ``on 
line'' and may be

[[Page 44172]]

accessed through the internet, making possible a much wider exposure. 
This problem is readily avoidable through making the necessary request 
for withholding information from public disclosure. It has been NHTSA's 
practice to grant confidentiality, when requested, to such information, 
and to deny it only with respect to the information absolutely required 
to explain or justify a hardship decision, which must be shared with 
the public as the basis for NHTSA's decision. For example, the agency 
must make public the company's net losses in the three years 
immediately preceding the filing of its application.
    NHTSA is therefore amending Sec. 555.5(b)(6) to add subparagraphs 
(i) and (ii). Under Sec. 555.5(b)(6)(i), a manufacturer's specification 
of withholding must be submitted in accordance with 49 CFR 512.4, 
Asserting a claim for confidential information. Under 
Sec. 555.5(b)(6)(ii), the manufacturer's request for withholding must 
be accompanied by a certification in support as set forth in Appendix A 
to 49 CFR Part 512. NHTSA believes that these reminders will ensure 
timely compliance with the confidential business information, to the 
advantage of both the applicant and NHTSA.
    In a related issue, in 1996, the agency received a petition for 
rulemaking from the Coalition of Small Vehicle Manufacturers (COSVAM) 
to amend Parts 555 and Part 571. Although no formal action has been 
taken on this petition, the agency is amenable to two of the requests 
relating to Sec. 555.6(a), the provisions under which the Administrator 
may temporarily relieve a manufacturer from compliance upon finding 
that ``compliance would cause substantial economic hardship to a 
manufacturer that has tried to comply with the standard in good 
faith.'' 49 U.S.C. 30113(b)(3)(B)(I).
    Under Sec. 555.6(a)(1)(vi), an applicant is invited to discuss 
``any other hardships (e.g., loss of market) that the petitioner 
desires the agency to consider.'' COSVAM asked that the agency consider 
``factors such as the difficulty in obtaining suppliers * * *.'' It is 
a common refrain of small volume manufacturers that it is difficult for 
them to interest outside suppliers in engineering air bags or antilock 
brake systems for limited production vehicles. NHTSA has taken this 
claim into account when the issue has been raised, and considered it in 
formulating a decision. Accordingly, NHTSA is codifying this practice 
by adding ``difficulty in obtaining suppliers'' to loss of market as an 
example of a hardship whose existence may be argued when it is relevant 
to do so.
    COSVAM also argued that the agency should be specific about factors 
it takes into consideration in determining whether an applicant has 
tried in good faith to comply. Two of these factors cited as relevant 
by COSVAM are the resources available to the applicant, and its 
inability to procure goods and services necessary for compliance 
following a timely request. The agency has also considered these 
factors in its deliberations without necessarily discussing them in 
each relevant case. NHTSA is also amenable to codifying this practice 
by expressly citing these factors in part 555 as relevant to the 
hardship argument. Accordingly, it is adding a new 
Sec. 555.6(a)(2)(iii) to implement COSVAM's request.
    Finally, NHTSA is adopting several technical amendments. The 
National Traffic and Motor Vehicle Safety Act (15 U.S.C. 1381 et seq.) 
was repealed on July 5, 1994, and reenacted without substantive change 
as 49 U.S.C. Chapter 301-Motor Vehicle Safety. References to the former 
statute have been changed to reflect the new references in Sec. 555.1 
and Sec. 555.10(b). Since the location of the NHTSA Docket Room was 
changed in 1997, Sec. 555.10(a) has been revised to substitute the new 
location.

Effective Date

    Since the amendment relates to internal procedures, prior notice 
and comment on it are not required under the Administrative Procedure 
Act. Since the rule imposes no additional burden upon any party, the 
agency hereby finds that an effective date earlier than 180 days after 
issuance is in the public interest, and the final rule is effective 
upon its publication in the Federal Register.

Rulemaking Analyses

A. Executive Order 12866 (Federal Regulation) and DOT Regulatory 
Policies and Procedures

    This notice has not been reviewed under E.O. 12866. After 
considering the impacts of this rulemaking action, NHTSA has determined 
that the action is not significant within the meaning of the Department 
of Transportation regulatory policies and procedures. The final rule 
makes no substantive changes. The impacts are so minimal as not to 
warrant the preparation of a full regulatory evaluation.

B. Regulatory Flexibility Act

    The agency has also considered the effects of this action in 
relation to the Regulatory Flexibility Act. For the reasons discussed 
above, I certify that this action would not have a significant economic 
impact upon ``a substantial number of small entities.'' The amendment 
is intended to assist potential applicants for temporary exemptions, 
including small businesses, to understand agency procedures so that, if 
a request for confidentiality is made, the documentation will be 
complete at the time the request is made. It is also designed to 
provide guidance as to arguments the agency considers relevant in 
making decisions upon exemption applications. Governmental 
jurisdictions will not be affected at all since they are generally 
neither importers nor purchasers of nonconforming imported motor 
vehicles.

C. Executive Order 12612 (Federalism)

    The agency has analyzed this action in accordance with the 
principles and criteria contained in Executive Order 12612 
``Federalism'' and determined that the action does not have sufficient 
federalism implications to warrant the preparation of a Federalism 
Assessment.

D. National Environmental Policy Act

    NHTSA has analyzed this action for purposes of the National 
Environmental Policy Act and concludes that the action will not have a 
significant effect upon the environment because it is anticipated that 
the annual volume of motor vehicles produced or imported will not vary 
from that existing before promulgation of the rule.

E. Civil Justice Reform

    This final rule will not have any retroactive effect. Under 49 
U.S.C. 30103), whenever a Federal motor vehicle safety standard is in 
effect, a state may not adopt or maintain a safety standard applicable 
to the same aspect of performance which is not identical to the Federal 
standard. A procedure is set forth in 49 U.S.C. 30161 for judicial 
review of final rules establishing, amending or revoking Federal motor 
vehicle safety standards. That section does not require submission of a 
petition for reconsideration or other administrative proceedings before 
parties may file suit in court.

F. Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires 
agencies to prepare a written assessment of the cost, benefits and 
other effects of proposed or final rules that include a Federal mandate 
likely to result in the expenditure by State, local, or tribal 
governments, in the aggregate, or by the

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private sector, of more than $100 million annually. Since this final 
rule will not have a $100 million effect, no Unfunded Mandates 
assessment has been prepared.

List of Subjects in 49 CFR Part 555

    Imports, Motor vehicle safety, Motor vehicles.

    In consideration of the foregoing, 49 CFR part 555 is amended as 
follows:

PART 555--TEMPORARY EXEMPTION FROM MOTOR VEHICLE SAFETY STANDARDS

    1. The authority citation for part 555 continues to read as 
follows:

    Authority: 49 U.S.C. 30113; delegation of authority at 49 CFR 
1.50.


Sec. 555.1  [Amended]

    2. Section 555.1 is amended by removing ``section 123 of the 
National Traffic and Motor Vehicle Safety Act of 1966, 15 U.S.C. 1410'' 
and adding in its place ``49 U.S.C. 30113.''
    3. New Sec. 555.5(b)(6)(i) and (ii) are added to read as follows:


Sec. 555.5  Petition for exemption.

* * * * *
    (b) * * *
    (6) * * *
    (i) The information and data which petitioner requests be withheld 
from public disclosure must be submitted in accordance with Sec. 512.4 
Asserting a claim for confidential information of this chapter.
    (ii) The petitioner's request for withholding from public 
disclosure must be accompanied by a certification in support as set 
forth in appendix A to part 512 of this chapter.
* * * * *
    4. a. Section 555.6(a)(1)(vi) is revised to read as follows;
    b. Section 555.6(a)(2)(iii) and (iv) are redesignated as (a)(2)(iv) 
and (v) respectively; and
    c. New Sec. 555.6(a)(2)(iii) is added to read as follows:


Sec. 555.6  Basis for petition.

    (a) * * *
    (1) * * *
    (vi) A discussion of any other hardships (e.g., loss of market, 
difficulty of obtaining goods and services for compliance) that the 
petitioner desires the agency to consider.
    (2) * * *
    (iii) A discussion of any other factors (e.g., the resources 
available to the petitioner, inability to procure goods and services 
necessary for compliance following a timely request) that the 
petitioner desires the NHTSA to consider in deciding whether the 
petitioner tried in good faith to comply with the standard;
* * * * *


Sec. 555.10  [Amended]

    5. The first sentence of Sec. 555.10(a) is amended by removing 
``Docket Section, Room 5109, National Highway Traffic Safety 
Administration,'' and by adding in its place ``Docket Management, Room 
PL-401.''
    6. Section 555.10(b) is amended by removing ``sections 112, 113, 
and 158 of the Act (15 U.S.C. 1401, 1402, and 1418)'' and adding in its 
place ``49 U.S.C. 30166 and 30167.''

    Issued on: August 11, 1998.
L. Robert Shelton,
Associate Administrator for Safety Performance Standards.
[FR Doc. 98-21956 Filed 8-17-98; 8:45 am]
BILLING CODE 4910-59-P