[Federal Register Volume 64, Number 96 (Wednesday, May 19, 1999)]
[Proposed Rules]
[Pages 27227-27231]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-12616]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Parts 573 and 577
[Docket No. NHTSA-1998-3430; Notice 10] (formerly Docket 93-68)
RIN 2127-AG27
Defect and Noncompliance Reports; Defect and Noncompliance
Notification
May 12, 1999.
AGENCY: National Highway Traffic Safety Administration, DOT.
ACTION: Supplemental notice of proposed rulemaking.
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SUMMARY: The National Highway Traffic Safety Administration (NHTSA) is
seeking additional public comment with respect to its ongoing
rulemaking to implement the provisions of Chapter 301 of Title 49 of
the United States Code (U.S.C.) that require manufacturers of motor
vehicles and items of motor vehicle equipment to notify their dealers
when they or NHTSA decide that vehicles or items of equipment contain a
defect related to motor vehicle safety or do not comply with a Federal
motor vehicle safety standard. The amendment proposed herein would
require a manufacturer to furnish dealers with notification of a
safety-related defect or noncompliance in accordance with a schedule
that is to be submitted to the agency with the manufacturer's defect or
noncompliance report. The notification would have to be within a
reasonable time after the manufacturer decides that the defect or
noncompliance exists. However, if the agency finds that the public
interest requires dealers to be notified at an earlier date than that
proposed by the manufacturer, the manufacturer would be required to
notify its dealers in accordance with the agency's order. The proposed
amendment also sets forth the required content of the dealer
notification and the manner in which such notification is to be
accomplished.
DATES: Comments must be received on or before June 18, 1999.
ADDRESSES: Comments must refer to the docket notice numbers cited at
the beginning of this notice and be submitted to Docket Management,
Room PL-401, 400 Seventh Street, SW, Washington, DC 20590. Please
identify the proposed collection of information for which a comment is
provided, by referencing its OMB clearance number. It is requested, but
not required, that 2 copies of the comment be provided. The Docket
Section is open on weekdays from 10 a.m. to 5 p.m.
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. Telephone: (202)
366-5226; FAX: (202) 366-7882.
SUPPLEMENTARY INFORMATION:
Background
On September 27, 1993, NHTSA published in the Federal Register a
Notice of Proposed Rulemaking (NPRM) proposing several amendments to
its regulations implementing the provisions of 49 U.S.C. Chapter 301
concerning manufacturers' obligations to provide notification and
remedy without charge for motor vehicles and items of motor vehicle
equipment found to contain a defect related to motor vehicle safety or
a noncompliance with a Federal motor vehicle safety standard (58 FR
50314). On April 5, 1995, the agency issued a final rule addressing
most aspects of that NPRM (60 FR 17254), and on January 4, 1996, it
amended several provisions of that final rule after receiving petitions
for reconsideration (61 FR 274). However, NHTSA decided to delay
issuance of the final rule on the subject of dealer notification
because it had not resolved all the issues raised by the comments on
that subject that had been submitted in response to the NPRM.
The agency has now fully considered those issues. However, because
it has tentatively decided to revise its original proposal
significantly, the agency has decided to issue a supplemental notice of
proposed rulemaking to obtain comments on the new proposal.
Statutory Framework
Under 49 U.S.C. 30118(c), a manufacturer of motor vehicles or
replacement equipment for motor vehicles must notify NHTSA and owners,
purchasers, and dealers if it decides in good faith that a safety-
related defect or noncompliance exists in its vehicles or items of
equipment. This notification must be accomplished within a reasonable
time after the manufacturer decides that the defect or noncompliance
exists. 49 U.S.C. 30119(c)(2). Similarly, if NHTSA decides, pursuant to
49 U.S.C. 30118(b), that vehicles or equipment items contain a safety-
related defect or noncompliance, the agency must order the manufacturer
to notify owners, purchasers, and dealers of the defect or
noncompliance by a date prescribed by NHTSA. 49 U.S.C. 30119(c)(1).
Section 30119(d)(4) of Title 49 specifies that manufacturers are to
notify their dealers ``by certified mail or quicker means if
available.''
These statutory provisions were originally enacted in 1974. Soon
afterwards, NHTSA promulgated regulations addressing the duty to notify
the agency and to notify owners and purchasers. 49 CFR Parts 573 and
577. However, the agency did not issue regulations addressing dealer
notification.
Under 49 U.S.C. 30120(i), which was enacted as part of the
Intermodal Surface Transportation Efficiency Act of 1991, if a
manufacturer has provided notification to a motor vehicle dealer that a
new motor vehicle or new item of replacement equipment in the dealer's
possession contains a safety-related defect or noncompliance, the
dealer may sell or lease the vehicle or equipment item only if the
defect or noncompliance has been remedied before delivery under the
sale or lease. This section was recently amended to clarify that this
requirement also applies to equipment dealers. See section 7106(a) of
the Transportation Equity Act for the 21st Century, Pub. L. 105-178
(June 9, 1998).
Under 49 U.S.C. 30116, motor vehicle manufacturers and distributors
who do not provide dealers with the parts to remedy a safety-related
defect or noncompliance, and all manufacturers of motor vehicle
equipment items that have been determined to contain such a defect or
noncompliance, must offer to repurchase all such vehicles and equipment
items that remain in distributor or dealer inventory at the price paid,
plus transportation and other charges.
Heretofore, NHTSA has not adopted regulations addressing the
provisions of section 30120(i) or section 30116.
Dealer Notification in the NPRM
With respect to dealer notification, the September 1993 NPRM
proposed that manufacturers conducting a safety recall provide their
dealers with a document that contained the information set forth in the
report submitted to the agency pursuant to 49 CFR Part 573, ``Defect
and Noncompliance Reports,'' within five working days after submitting
the report to NHTSA. If any of the required information was not known
at the time of the original notification, it would have to be sent to
the dealers as soon as possible after it became known by the
manufacturer. The NPRM also proposed recordkeeping requirements.
NHTSA received comments on the dealer notification proposals in
that
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NPRM from manufacturer and dealer associations, individual
manufacturers, and Advocates for Highway and Auto Safety. After
considering those comments, NHTSA prepared a draft of a final rule.
Pursuant to the Paperwork Reduction Act, the agency published a Federal
Register notice requesting public comment on the potential paperwork
burdens associated with the proposed final rule. 62 FR 63598 (December
1, 1997). Although that notice did not set out the anticipated
regulatory language, it described the general approach that the agency
was planning to adopt in the final rule. Comments objecting to the
paperwork burdens and criticizing the agency's approach were submitted
by manufacturer and dealer associations. In addition, representatives
of those associations met with agency officials during March 1998 to
discuss these issues. Memoranda summarizing those meetings have been
placed in the docket for this rulemaking.
NHTSA's Revised Proposal
After considering the information presented in all of the comments
and at those meetings, the agency is now proposing a different
regulatory approach. In lieu of the fixed five-day period for dealer
notification contemplated in the NPRM, the agency is now proposing to
require manufacturers to notify their dealers of safety defects and
noncompliances in accordance with a schedule submitted to the agency
with the manufacturer's Part 573 report. Such a schedule will be
reviewable by NHTSA to assure that the notification will be within a
reasonable time.
This decision to permit greater flexibility than originally
proposed is based on NHTSA's recognition that the process of dealer
notification has worked well for over 20 years, notwithstanding the
absence of formal regulatory requirements. In conformity with the
statutory duty to notify dealers within a ``reasonable time'' (49
U.S.C. 30119(c)(2)), manufacturers have generally notified their
dealers of defects and noncompliances in a manner that has allowed
repairs to be performed promptly, with minimal disruption of the
dealers' operations.
Where manufacturers have concluded that a defect or noncompliance
presented an immediate safety risk, they have notified their dealers as
soon as the defect or noncompliance determination was made, and have
directed the dealers to stop sales (and leases) until the problem is
corrected. On occasion, however, NHTSA and a manufacturer have
disagreed about when notification should occur or whether immediate
notification and immediate cessation of sales is appropriate. For this
reason, the agency needs to know the manufacturer's proposed schedule
for dealer notification so it can assess the safety implications of
that schedule. Therefore, NHTSA is proposing a new section
573.5(c)(8)(iii), which would require the manufacturer to include the
estimated date of its dealer notification in its Part 573 defect or
noncompliance report, in the same manner as section 573.5(c)(8)(ii)
currently requires the submission of the manufacturer's proposed
schedule for its owner notification and remedy campaign. In addition,
to eliminate the possibility that any disagreements between NHTSA and
the manufacturers concerning the notification date of dealers, NHTSA is
proposing a new section 577.7(c)(1), requires manufacturers to comply
with a NHTSA order to notify their dealers on a specific date, if the
agency has found that notification at that time is in the public
interest. In making such determinations, the agency will consider such
factors as the severity of the safety risk; the likelihood of
occurrence of the defect or noncompliance; availability of an interim
remedial action by the owner; whether an initial dealer inspection
would identify suspect vehicles or equipment items; the time frame in
which the defect will manifest itself; whether there will be a delay in
the availability of the remedy from the manufacturer; and, in those
recalls where a delay is expected, the anticipated length of such
delay.
The foregoing applies to recalls following defect and noncompliance
determinations by the manufacturer, pursuant to 49 U.S.C. 30118(c).
Consistent with 49 U.S.C. 30119(c)(1), NHTSA has proposed in section
577.7(d) that where a recall is ordered by the Administrator pursuant
to 49 U.S.C. 30118(b), the notification to dealers must be given on or
before the date prescribed in the Administrator's order.
NHTSA is aware that this proposal could be construed by some as a
step back from the proposal in the NPRM, which would have required
manufacturers to notify dealers of all recalls within five working days
of notifying NHTSA. However, the agency now believes that such a
requirement could have several perverse effects. First, it could
encourage manufactures to delay notifying NHTSA of a defect or
noncompliance determination until the remedy was developed and a
sufficient number of repair parts stockpiled. This would be
particularly prejudicial in cases where owners could take steps to
minimize the safety risk associated with the defect during the time the
remedy was being developed.
Second, the proposal in the NPRM could encourage dealers to create
their own inspection and remedy procedures in order to be able to sell
otherwise embargoed vehicles quickly if the manufacturer's remedy were
not available. The agency believes that dealers would be less likely to
do this if embargoes were only required in those recalls that involved
serious, imminent safety problems, because of the obvious safety risk
and potential financial liability.
Finally, the agency notes that in many recalls, the safety
consequences of the defect are unlikely to arise until the vehicle has
been in service for an extended period of time; e.g., where the problem
is caused by corrosion or metal fatigue. In such recalls, where repair
parts are scarce, the proposal in the NPRM could encourage dealers to
use those parts to fix vehicles in inventory rather than vehicles in
service, even though the vehicles in service would be more likely to
experience a safety problem as a result of the defect.
Another proposed change from the original NPRM is that
manufacturers would not be required to include in the notification to
dealers all of the information required to be submitted to NHTSA in the
manufacturer's Part 573 report. See 49 CFR 573.5(c). Rather, as set out
in new proposed section 577.11(a), the notice to dealers would only
have to include the following: a statement that identifies the
notification as being part of a safety recall campaign, an
identification of the vehicles or items of equipment covered by the
recall, a description of the defect or noncompliance, and a brief
evaluation of the risk to motor vehicle safety related to the defect or
noncompliance. The notification would also have to include a complete
description of the recall remedy and the estimated date on which the
remedy will be available. Information required by this paragraph that
is not available at the time of the dealer notification would have to
be provided to dealers as it becomes available.
To help effectuate 49 U.S.C. 30120(i), new section 577.11(b)
provides that the dealer notification would have to contain an advisory
stating that dealers are prohibited by Federal law from selling or
leasing a new motor vehicle or new item of replacement equipment
covered by the notification until the defect or noncompliance is
remedied. Similarly, to assist in the implementation of 49 U.S.C.
30116, new
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section 577.11 (c) provides that, for equipment items, the notification
must also inform the dealer of the manufacturer's offer to repurchase
the defective or noncomplying equipment that remain in the dealer's
inventory at the price paid plus transportation and other charges.
NHTSA has tentatively concluded that such language is not necessary
with respect to notifications regarding defects and noncompliances in
vehicles, since vehicle manufacturers generally provide their dealers
with parts needed to remedy the defect or noncompliance, thus obviating
the duty to repurchase.
The NPRM did not propose to require manufacturers to include these
advisories in the notification sent to dealers. However, the statutory
provisions were referenced in the NPRM, and the proposed advisories
were alluded to in the Paperwork Reduction Act notice. All interested
persons will now have the opportunity to comment on these provisions.
The NPRM would have required manufacturers to maintain records to
confirm that they notified their dealers of the defect or noncompliance
and that the dealers received the notification. The agency has decided
that it would be unduly burdensome, and perhaps impracticable, to
require manufacturers to keep records reflecting that each dealer
received the notification. Therefore, proposed new section 577.11(d)
requires only that the manufacturer be able to verify that it has sent
the notification to its dealers and the date of such notification.
In response to comments by an association of equipment
manufacturers, NHTSA is proposing two provisions to ease the burden on
those manufacturers. First, proposed section 577.7(c)(2)(ii) provides
that if a manufacturer of replacement equipment or tires sells its
products to a group of retailers or distributors through a central
office, notification to that central office will be deemed to be
notification to the entire group. Second, proposed section
577.7(c)(2)(iii) would allow manufacturers that provide their products
to retail outlets through independent distributors to use that
distribution network for dealer notification purposes, if the
distributors agree to transmit the notification to all applicable
retail dealers within five working days of their receipt of the
manufacturer's notification. However, the manufacturer would bear the
legal responsibility for ensuring that all of its dealers and retail
outlets receive the required notification in a timely manner.
Finally, NHTSA is also amending sections 577.1, ``Scope,'' and
577.2, ``Purpose,'' to reflect the new dealer notification requirements
added to Part 577.
Rulemaking Analyses and Notices
1. Executive Order 12866 (Federal Regulation) and DOT Regulatory
Policies and Procedures
NHTSA has considered the impact of this rulemaking under Executive
Order 12866 and the Department of Transportation's regulatory policies
and procedures, and determined that it is not a ``significant
regulatory action'' within the meaning of Sec. 3 of E.O. 12866 and is
not ``significant'' within the meaning of the Department of
Transportation regulatory policies and procedures.
Manufacturers are currently required by statute to notify their
dealers of safety defects and noncompliances. 49 U.S.C. 30118(b) and
(c). Such notification must be within a ``reasonable time.'' 49 U.S.C.
30119(c)(2). This final rule restates that requirement, adding only
that in the event that NHTSA disagrees with the manufacturer's
assessment of what time period is reasonable, the agency's
determination will control.
The agency anticipates, based on past experience, that there will
be few disagreements on this issue. In any event, an agency order
directing the manufacturer to accelerate its dealer notification will
not impose any additional costs directly on the manufacturer, since the
notification would eventually have to be made anyway.
NHTSA recognizes that an embargo on dealer sales of defective or
noncompliant vehicles and equipment imposes costs, and that these costs
could be relatively high if a large number of vehicles or equipment
items is affected or if there is a significant delay in developing and
implementing a remedy for the defect or noncompliance. In the first
instance, such costs would be borne by dealers, since they might have
to maintain inventory that could not be sold. However, the ultimate
burden would almost certainly be borne by the manufacturers, either
through contractual provisions or pursuant to 49 U.S.C. 30116, which
requires manufacturers to provide, among other things, ``reasonable
reimbursement of at least one percent a month of the price paid
prorated from the date of notice of noncompliance or defect . . . .''
To the extent that agency orders issued pursuant to this rule
impose additional costs, those costs would be outweighed by the safety
benefit of ensuring that dealers do not sell or lease new motor
vehicles or new items of replacement equipment containing safety-
related defects or noncompliances before the defect or noncompliance
has been remedied, as required by 49 U.S.C. 30120(i). Moreover, any
impacts are likely to be minimal, because manufacturers will have an
incentive to develop and provide a remedy as soon as possible.
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.
The proposed new regulatory requirements would apply directly only
to manufacturers of motor vehicles and items of motor vehicle
equipment, which for the most part are not small businesses. Moreover,
manufacturers are already required by statute to notify their dealers
of defects and noncompliances. The only effect of the regulation is to
require that, in relatively rare cases, manufacturers will be required
to send notification to dealers earlier than the manufacturer had
proposed in its Part 573 Report. Since manufacturers will generally
have all of the required information at the time the notification is
required, and can submit other required information as it becomes
available, there should be no additional direct burden on manufacturers
associated with this rule.
As noted above, a notification that required an embargo on sales
could have an adverse effect on dealers, which often are small
businesses, in that the dealers would be prohibited from selling or
leasing defective or noncompliant vehicles or equipment items that had
not been remedied. However, for the reasons described above, the costs
associated with such a delay would almost certainly be borne by the
manufacturer. In any case, such costs are the result of requirements
imposed by 49 U.S.C. 30120(i), not this rule. Moreover, any impacts are
likely to be minimal, because manufacturers will have an incentive to
develop and provide a remedy as soon as possible. Finally, any such
impacts would be offset by the safety benefits associated with
preventing the sale or lease of defective or noncompliant vehicles or
equipment items.
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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 would not have
a significant impact on the quality of the human environment. The new
notification requirements would not introduce any new or harmful matter
into the environment.
4. Paperwork Reduction Act
This proposal contains provisions which are considered to be
information collection requirements as that term is defined by the
Office of Management and Budget (OMB) in 5 CFR part 1320. The reporting
requirements associated with this proposed rule are subject to approval
by OMB in accordance with 44 U. S. C. Chapter 3500. The agency needs
this information in order to avoid unreasonable delays in dealers'
receiving notification that vehicles or equipment in their inventory
contain safety-related defects or noncompliances requiring a remedy.
The agency will use this information to take appropriate action in
those cases where the manufacturer's estimated dealer notification date
seems to be inappropriate in relation to the severity of the recalled
defect or noncompliance condition. Manufacturers will need to provide
the agency with the estimated dealer notification date for each recall
that they conduct. Manufacturers will only have to make the necessary
changes to the dealer notification letter one time, since these changes
will be replicated in all subsequent dealer notifications. The
respondents affected by this proposal are manufacturers of motor
vehicles and motor vehicle equipment. The respondents do not need to
complete any standardized forms in order to be in compliance with this
proposal. The agency estimates that the total number of burden hours
for all manufacturers affected by this proposal would be 250, with an
average burden hour for each of 500 involved respondents of \1/2\ hour.
The agency estimates that the total cost burden for all manufacturers
affected by this proposal would be $12,500 (250 burden hours x $50
per hour respondent labor cost), with an average cost burden for each
of 500 involved respondents of $25.
For further information contact Mr. Walter Culbreath, Office of
Information Resources Management, NAD-40, NHTSA, 400 Seventh Street,
SW, Washington, DC 20590 (Telephone: 202-366-1566). Individuals and
organizations may submit comments on the proposed information
collection requirements by June 18, 1999, and should direct them to:
Docket Management, Room PL-401, 400 Seventh Street, SW, Washington, DC
20590, referencing the docket notice numbers cited at the beginning of
this notice.
Pursuant to the Paperwork Reduction Act of 1995, and OMB's
regulation at 5 CFR 1320.5(b)(2), NHTSA informs the potential
individuals and organizations who are to respond to the collection of
information that they are not required to respond to the collection of
information unless it displays a currently valid OMB control number.
The proposed amendment requiring notification of NHTSA adds to an
information collection requirement in 49 CFR part 573 that has already
been approved by OMB. The OMB control number for that collection of
information is 2127-0004. The proposed amendment of 49 CFR part 577 to
require manufacturers to include certain information in the
notification of defect or noncompliance sent to dealers is a new
information collection requirement (since the Paperwork Reduction Act
did not apply to such third-party information collections prior to
1995). Accordingly, it does not have an OMB control number. The agency
intends to obtain a valid OMB control number prior to the promulgation
of the final rule.
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 rulemaking does not have sufficient federalism implications to
warrant the preparation of a Federalism Assessment.
6. Executive Order 13084 (Consultation/Coordination with Indian Tribal
Governments)
This action has been analyzed in accordance with the principles and
criteria contained in Executive Order 13084, and it has been determined
that the proposed rulemaking would not significantly or uniquely affect
Indian tribal governments.
7. Unfunded Mandates Reform
This proposed rule would not impose any unfunded mandates under the
Unfunded Mandates Reform Act of 1995 or under Executive Order 12875. It
does not result in costs of $100 million or more to either State, local
or tribal governments, in the aggregate, or to the private sector; and
is the least burdensome alternative that achieves the objective of the
proposed rule.
8. Civil Justice Reform Act
The proposed rule would not have a retroactive or preemptive
effect. Judicial review of the proposed rule would be obtainable under
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
Motor vehicle safety, Reporting and recordkeeping requirements.
49 CFR Part 577
Motor vehicle safety, Reporting and recordkeeping requirements.
In consideration of the foregoing, it is proposed that Parts 573
and 577 of Title 49 of the Code of Federal Regulations be amended as
follows:
PART 573--DEFECT AND NONCOMPLIANCE REPORTS
1. Section 573.5 would be amended by redesignating paragraphs
(c)(8)(iii) and (c)(8)(iv) as paragraphs (c)(8)(iv) and (c)(8)(v),
respectively, and by adding new paragraph (c)(8)(iii) to read as
follows:
Sec. 573.5 Defect and noncompliance information report.
* * * * *
(c) * * *
(8) * * *
(iii) The estimated date on which it will send notifications to
dealers that there is a safety-related defect or noncompliance. If a
manufacturer subsequently becomes aware that such notification 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.
* * * * *
PART 577--DEFECT AND NONCOMPLIANCE NOTIFICATION
2. Section 577.1 would be revised to read as follows:
Sec. 577.1 Scope.
This part sets forth requirements for notification to owners and
dealers of motor vehicles and items of replacement equipment about a
defect that relates to motor vehicle safety or a noncompliance with a
Federal motor vehicle safety standard.
3. Section 577.2 would be amended by adding a new sentence at the
end to read as follows:
Sec. 577.2 Purpose.
* * * It is also to ensure that dealers of motor vehicles and items
of
[[Page 27231]]
replacement equipment are made aware of the existence of defects and
noncompliances and of their rights and responsibilities with regard
thereto.
4. Section 577.7 would be amended by adding new paragraphs (c) and
(d) to read as follows:
Sec. 577.7 Time and manner of notification.
* * * * *
(c) The dealer notification required by Sec. 577.11 shall--
(1) Be furnished within a reasonable time after the manufacturer
decides that a defect that relates to motor vehicle safety or a
noncompliance exists, in accordance with the schedule submitted to the
agency pursuant to 49 CFR 573.5(c)(8)(iii). The manufacturer's proposed
schedule may be reviewed by the Administrator. The Administrator may
order a manufacturer to send the notification to dealers on a specific
date where the Administrator finds, after consideration of available
information, that such notification is in the public interest. The
factors that the Administrator may consider include, but are not
limited to, the severity of the safety risk; the likelihood of
occurrence of the defect or noncompliance; whether a dealer inspection
would identify vehicles or equipment items that contain the defect or
noncompliance; whether there will be a delay in the availability of the
remedy from the manufacturer; and, in those recalls where a delay is
expected, the anticipated length of such delay.
(2) Be accomplished--
(i) In the case of a notification required to be sent by a motor
vehicle manufacturer, by certified mail, verifiable electronic means,
or other more expeditious and verifiable means to all dealers.
(ii) In the case of a notification required to be sent by a
manufacturer of replacement equipment or tires, by certified mail,
verifiable electronic means, or other more expeditious and verifiable
means to all retailers, dealers, and purchasers of such equipment for
purposes of re-sale. Where the manufacturer sold the recalled equipment
to a group of retailers or distributors through a central office,
notification to that central office will suffice for notification to
the group.
(iii) In those cases where a manufacturer uses independent
distributors to provide products and information to retail outlets, the
manufacturer may satisfy its dealer notification responsibilities by
providing the information required by this section to its distributors,
if those distributors agree to transmit it to all applicable retail
dealers within five additional working days. The manufacturer shall
retain the legal responsibility for ensuring that its dealers receive
the information in a timely manner.
(d) Notwithstanding paragraph (c)(1) of this section, where the
recall is being conducted pursuant to an order issued by the
Administrator under 49 U.S.C. 30118(b), the notification to dealers
shall be given on or before the date prescribed in the Administrator's
order.
5. A new section 577.11 would be added to read as follows:
Sec. 577.11 Dealer notification.
(a) The notification to dealers of a safety-related defect or
noncompliance with a Federal motor vehicle safety standard shall
contain a clear statement that identifies the notification as being
part of a safety recall campaign, an identification of the vehicles or
items of equipment covered by the recall, a description of the defect
or noncompliance, and a brief evaluation of the risk to motor vehicle
safety related to the defect or noncompliance. The notification shall
also include a complete description of the recall remedy, and the
estimated date on which the remedy will be available. Information
required by this paragraph that is not available at the time of the
dealer notification shall be provided to dealers as it becomes
available.
(b) The notification shall also include an advisory stating that it
is a violation of Federal law for a dealer to sell or lease new
vehicles or new items of replacement equipment covered by the
notification until the defect or noncompliance is remedied.
(c) For notifications of defects or noncompliances in items of
motor vehicle equipment, the notification shall contain the
manufacturer's offer to repurchase the items that remain in the
dealer's inventory at the price paid by the dealer, plus transportation
charges and reasonable reimbursement of at least one per cent a month
prorated from the date of notification to the date of repurchase.
(d) The manufacturer must be able to verify that it sent the
required notification to each of its dealers and the date of that
notification.
Kenneth N. Weinstein,
Associate Administrator for Safety Assurance.
[FR Doc. 99-12616 Filed 5-18-99; 8:45 am]
BILLING CODE 4910-59-P