[Federal Register Volume 67, Number 234 (Thursday, December 5, 2002)]
[Rules and Regulations]
[Pages 72384-72393]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-30523]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Parts 573 and 577

[Docket No. NHTSA-2001-11108, Notice 2]
RIN 2127-AI27


Motor Vehicle Safety; Acceleration of Manufacturer's Remedy 
Program

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

ACTION: Final rule.

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SUMMARY: This document adopts a regulation implementing Section 6(a) of 
the Transportation Recall Enhancement, Accountability, and 
Documentation (TREAD) Act. Under this rule, motor vehicle and motor 
vehicle equipment manufacturers will be required to accelerate their 
programs to remedy a defect related to motor vehicle safety or a 
noncompliance with a Federal motor vehicle safety standard if directed 
to do so by NHTSA. The agency will impose this requirement if it 
determines that the manufacturer's remedy program is not likely to be 
capable of completion within a reasonable time and finds: that there is 
a risk of serious injury or death if the remedy program is not 
accelerated; and that acceleration of the remedy program can be 
reasonably achieved by expanding the sources of replacement parts, 
expanding the number of authorized repair facilities, or both.

DATES: Effective Date: The effective date of the final rule is January 
6, 2003. Petitions for Reconsideration: Petitions for reconsideration 
of the final rule must be received not later than January 21, 2003.

ADDRESSES: Petitions for reconsideration of the final rule should refer 
to the docket and notice number set forth above and be submitted to 
Administrator, National Highway Traffic Safety Administration, 400 
Seventh Street, SW., Washington, DC 20590, with a copy to Docket 
Management, Room PL-401, 400 Seventh Street, SW., Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: For non-legal issues, contact George 
Person, Office of Defects Investigation, NHTSA, (202) 366-5210. For 
legal issues, contact Coleman Sachs, Office of Chief Counsel, NHTSA, 
(202) 366-5238.

SUPPLEMENTARY INFORMATION:

I. Background

    On November 1, 2000, the TREAD Act, Public Law 106-414, was 
enacted. The statute was an outgrowth, in part, of Congressional 
concerns over manufacturers' delays in repairing or replacing motor 
vehicles or motor vehicle equipment items that contain a safety-related 
defect or fail to comply with a Federal motor vehicle safety standard 
(FMVSS).
    Under 49 U.S.C. 30118(b), the agency may make a final decision that 
a motor vehicle or item of replacement motor vehicle equipment contains 
a defect related to motor vehicle safety or does not comply with an 
applicable FMVSS. In addition, under section 30118(c), a manufacturer 
of a motor vehicle or replacement equipment item is required to notify 
the agency when it determines, or should determine, that the vehicle or 
equipment item contains a defect that is related to motor vehicle 
safety or does not comply with an applicable safety standard.
    Under both circumstances, the manufacturer is required to provide 
notification of the defect or noncompliance to owners, purchasers, and 
dealers of the affected vehicle or equipment item, and remedy the 
defect or noncompliance without charge. Section 30119 sets forth 
statutory requirements for owner notification and requires the 
manufacturer to give such notice within a reasonable time. See also 49 
CFR Part 577. However, if the agency makes a final decision under 
section 30118(b) that a motor vehicle or equipment item contains a 
safety-related defect or noncompliance, then it prescribes under 
section 30119(c)(1) the date by which the manufacturer must provide 
notification to the affected owners, purchasers, and dealers.
    49 U.S.C. 30120 further provides that a manufacturer of a defective 
or noncompliant motor vehicle or replacement equipment item must repair 
it or replace it with an identical or reasonably equivalent vehicle or 
equipment item or, in the case of a

[[Page 72385]]

vehicle, refund the purchase price less depreciation. Under section 
30120(c), if a manufacturer decides to repair a defective or 
noncomplying motor vehicle or replacement equipment item and the repair 
is not done adequately within a reasonable time, the manufacturer is 
required to replace the vehicle or equipment item without charge or, 
for a vehicle, refund the purchase price. Failure to repair within 60 
days after the vehicle or equipment item is presented to a dealer in 
accordance with the manufacturer's notification is prima facie evidence 
of failure to repair within a reasonable time. The agency can extend 
the 60-day period if good cause for the extension is shown and the 
reason is published in the Federal Register before the period ends.
    Section 30120(d) requires the manufacturer to submit its program 
for remedying a defect or noncompliance to the agency. Manufacturers 
fulfill this requirement by submitting defect and noncompliance 
information reports to NHTSA in accordance with procedures set forth in 
49 CFR Part 573. Section 573.6(c)(8) of these regulations requires a 
manufacturer, as part of its report, to provide a description of the 
manufacturer's program for remedying the defect or noncompliance. In 
1995, NHTSA amended that section (then 573.5(c)(8)) to require a 
manufacturer to advise NHTSA of the estimated date on which it will 
begin sending notifications to owners that there is a safety-related 
defect or noncompliance and that a remedy without charge will be 
available, and the estimated date on which the notification campaign 
will be completed. See Section 573.6(c)(8)(ii). In the preamble of the 
proposed rule that led to the 1995 amendment, NHTSA explained that 
there had been an increase in the number of recalls in which there was 
a significant delay in the commencement of the remedy campaign, and, in 
some instances, an inordinate extension in the duration of the 
campaign. NHTSA further explained that the amendment was necessary for 
the agency to assure that the timing and duration of remedy campaigns 
were appropriate, and to enable it to respond more completely to public 
questions concerning the timing of recall campaigns. 58 FR 30817, 
September 27, 1993.
    Section 6(a) of the TREAD Act added a new paragraph (3) to 49 
U.S.C. 30120(c), which provides that if the Secretary determines that a 
manufacturer's remedy program is not likely to be capable of completion 
within a reasonable time, the Secretary may require the manufacturer to 
accelerate the remedy program if the Secretary finds: (A) There is a 
risk of serious injury or death if the remedy program is not 
accelerated; and (B) acceleration of the remedy program can be 
reasonably achieved by expanding the sources of replacement parts, 
expanding the number of authorized repair facilities, or both. Although 
section 30120(c)(3) is self-executing in the absence of implementing 
regulations, the statute provides that the Secretary may prescribe 
regulations to carry out its purposes. This authority has been 
delegated to NHTSA's Administrator pursuant to 49 CFR 1.50.
    On December 11, 2001, we issued a notice of proposed rulemaking 
(NPRM) at 66 FR 64897 that would implement this provision, in which we 
solicited comments on how we could best approach this task. We received 
11 comments in response to the NRPM. These were submitted by the 
Alliance of Automobile Manufacturers (Alliance), Bendix Commercial 
Vehicle Systems LLC (Bendix), Delphi Automotive Systems LLC (Delphi), 
Ford Motor Company (Ford), the Juvenile Products Manufacturers 
Association, Inc. (JPMA), the National Automobile Dealers Association 
(NADA), the Rubber Manufacturers Association (RMA), the Truck 
Manufacturers Association (TMA), Volkswagen of America, Inc., on its 
own behalf, as well as that of Volkswagen AG and Audi AG (Volkswagen), 
and Wenda A. Wacker, who commented both as a private citizen and as an 
employee of the California Department of Motor Vehicles (DMV). In 
addition, a comment was submitted by Attorney Lawrence Henneberger on 
behalf of the Motor and Equipment Manufacturers Association (MEMA) and 
the Original Equipment Suppliers Association (OESA). These comments 
have provided us with a variety of insights in developing this final 
rule.

II. Discussion

A. Application

    In the NPRM, we proposed that the acceleration of remedy rule apply 
to manufacturers of motor vehicles and replacement equipment items 
whose products have been determined to contain a safety-related defect 
or a noncompliance with a FMVSS. The manufacturing entities that are 
subject to these requirements are listed in 49 CFR 573.3(a)-(f). We did 
not receive any comments on the proposed application of this rule. We 
are adopting this aspect of the rule as proposed.

B. Circumstances Under Which the Administrator May Require a 
Manufacturer To Accelerate Its Remedy Program

1. Risk of Serious Injury or Death
    In the NPRM, we noted that under 49 U.S.C. 30120(c)(3), the 
decision to require a manufacturer to accelerate its remedy program is 
to be exercised at the discretion of the Administrator. We proposed 
that the Administrator be required to make two findings and one 
determination to invoke this provision. One of the proposed findings, 
adopted from the statute, was that there is a risk of serious injury or 
death if the remedy program is not accelerated. See proposed section 
573.14(b)(1). We observed that for the Administrator to make this 
finding, there need only be a risk of serious injury or death, and not 
necessarily a high probability.
    We received several comments with regard to this proposed finding. 
The Alliance, Ford, JPMA, Delphi, TMA, and NADA all took exception to 
the statements in the preamble that there need only be a risk of 
serious injury or death, and not necessarily a high probability, for a 
manufacturer to be required to provide an accelerated remedy, and that 
most safety recall campaigns address circumstances where a serious risk 
of injury or death can be found. The Alliance observed that under such 
a premise, the agency could find that virtually every recall meets the 
first test for requiring an accelerated remedy. Contending that 
Congress believed that an accelerated remedy would only be necessary in 
rare instances, the Alliance recommended that the text of proposed 
section 573.14(b)(1) be changed to require the Administrator to find, 
before requiring an accelerated remedy, ``that there is an imminent 
risk of serious injury or death if the remedy program is not 
accelerated.'' Ford, an Alliance member, concurred with the Alliance's 
comments in this regard. TMA expressed a similar opinion regarding the 
authorizing language in the TREAD Act.
    JPMA asserted that there must be an existing risk of serious injury 
or death, and not a mere possibility, before the agency could require 
an accelerated remedy. In its view, this would have the benefit of 
filtering out recalls that address only minor injuries and those that 
address injury risks that could arise in the future, but are not 
present as yet. JPMA asserted that in neither of these circumstances 
would an accelerated remedy be warranted under the TREAD Act. Likewise, 
NADA proposed that an accelerated remedy be required only in recalls 
involving an ``unacceptable'' risk

[[Page 72386]]

of serious injury or death and where acceleration can be reasonably and 
safely achieved by expanding the sources of remedy parts, repair 
centers, or both.
    Delphi contended that because Congress gave NHTSA discretionary 
authority to require an accelerated remedy, it could not have intended 
for these to be a definitive requirement for exercising that authority. 
Despite this observation, Delphi requested clarification on the level 
of risk that would be necessary before NHTSA would require an 
accelerated remedy.
    The agency disagrees with many of these comments. The standard is 
stated in the statute and it is appropriate to graft that standard into 
these regulations. We reject comments that may be viewed as raising the 
bar with regard to when the agency may act. We may consider 
probabilities and consequences or, put another way, risk and harm. 
While we agree that accelerated remedies would not be required to 
address defects that present a risk only of minor injuries, we disagree 
with JPMA's observation that an accelerated remedy should not be 
required in circumstances where the risk of injury is low. Similarly, 
we disagree with the Alliance's proposal that we add the adjective 
``imminent'' before ``risk of serious injury.'' The term ``imminent'' 
is not used in the statute and might be subject to varying 
interpretations. See Megrig v. KFC Western, Inc., 516 U.S. 479, 486 
(1996). The agency's 35 years of experience in investigating suspected 
safety-related defects and noncompliances, and monitoring recall 
campaigns, have given it sensitivity to the assessment of circumstances 
involving the nature, extent, and timing of risk. We intend to assess 
the circumstances before requiring a manufacturer to provide an 
accelerated remedy. As noted in the NPRM, we do not foresee a need for 
the agency to exercise this authority frequently.
2. Expanding Sources of Replacement Parts or Number of Repair 
Facilities
    As proposed in the NPRM, the second finding the Administrator would 
need to make before requiring a manufacturer to accelerate a remedy 
program, also adopted from the statute, was that ``acceleration of the 
remedy program can be reasonably achieved by expanding the sources of 
replacement parts, expanding the number of authorized repair 
facilities, or both.'' See proposed section 574.14 (b)(2). We noted 
that if warranted under the circumstances, we could require a 
manufacturer to add additional suppliers and/or production lines and/or 
production shifts in order to increase the number of available remedy 
parts. We further noted that in those cases in which the manufacturer 
identified supplemental repair facilities, it would have to assure that 
the facility had the parts and expertise needed to adequately perform 
the remedy.
a. Sources of Replacement Parts
    With regard to expansion of the sources of replacement parts, we 
noted that this finding is most likely to be made when there is a 
substantial aftermarket supply of the parts necessary to effect the 
remedy, such as exists for tires, brake rotors, steering and suspension 
components, and ignition components. We observed, on the other hand, 
that it is less likely that this finding would be made where there is 
little or no aftermarket supply, as might be the case for air bags and 
anti-lock brake system (ABS) control units, since the particular 
specifications of the remedy part is generally unique to the particular 
vehicle or supplier involved. Even in the absence of an aftermarket 
supply, we noted that manufacturers might be able to expand the sources 
of replacement parts, either by contracting with additional suppliers, 
or by adding assembly lines or production shifts within their own 
plants.
    Several commenters took issue with our observation that 
manufacturers could be required to expand the supply of replacement 
parts needed for a recall by adding assembly lines or production shifts 
within their own plants. The Alliance contended that it is nearly 
impossible to add assembly lines or additional work shifts to existing 
production at affected plants on short notice. First, the Alliance 
believes that such excess capacity, both in terms of machinery and 
labor, does not exist. Second, the Alliance observed that diverting a 
component production line that is dedicated to normal production 
requirements to the production of components needed for a recall remedy 
would have a ripple effect that would curtail or stop current 
production, perhaps even for other manufacturers if the component 
supplier ships to other vehicle manufacturers. Third, the Alliance 
stated that existing labor agreements may prohibit the hiring of extra 
temporary employees, or the purchasing of parts from outside sources 
not under contract, referred to as ``outsourcing,'' or limit the amount 
of overtime. Finally, the Alliance contended that there would be 
international legal implications to any requirement that could affect a 
manufacturer's production in foreign plants.
    Volkswagen, which is a member of the Alliance, added that any 
extraterritorial directive by NHTSA might trigger a foreign country to 
respond by passing ``claw back'' or ``blocking'' legislation. 
Volkswagen described such legislation as mandating that domestic 
companies overseas not comply with U.S. law, and cited its view of the 
British Protection of Trading Interests Act of 1980. Volkswagen stated 
that it is possible that the foreign county could also respond by 
passing ``copy-cat'' legislation, which would mimic the applicable 
provisions of U.S. law with respect to U.S.-manufactured vehicles sold 
in that country. Volkswagen, which does not have production facilities 
in the United States, recommended that the rule be redrafted to specify 
that it applies only to production line or shifts located in the United 
States. Anticipating that NHTSA would not accept this position, 
Volkswagen suggested, in the alternative, that if the agency does not 
incorporate this limitation into the rule, that it consult with the 
U.S. Trade Representative and the State Department before requiring a 
foreign manufacturer to accelerate a remedy program so that the 
consequential implications and responses from the foreign government 
can be explored.
    Volkswagen also contended that the need to increase production to 
assure a supply of recall remedy components could violate labor 
agreements in foreign countries. It stated, for example, that in 
Germany, some labor agreements restrict the hiring of temporary 
employees, preclude purchasing parts from outside sources, limit the 
amount of overtime, and require pre-approval of the union to add shifts 
or change a worker's duties. Volkswagen also cited many of the 
practical problems associated with adding production lines or shifts 
that were raised by the Alliance. Additionally, Volkswagen cited the 
economic consequences of shutting down a production line that is used 
for normal production.
    JPMA expressed concern that child restraint manufacturers do not 
have excess tooling or trained labor that could be used to provide 
additional production lines or work shifts. The comment urged NHTSA to 
take these factors into account in recalls affecting these 
manufacturers.
    We do not agree with the premises of many these comments. For 
example, there is overcapacity in many segments of the global 
automotive industry. Moreover, if a vehicle manufacturer has greater 
than expected sales and calls

[[Page 72387]]

upon suppliers to provide more parts than originally projected, 
suppliers make adjustments and increase the number of parts delivered. 
We wish to point out that legitimate production issues will be taken 
into consideration by the agency in determining, under section 
573.14(b)(2), whether an acceleration of remedy program can be 
``reasonably achieved'' by expanding the sources of replacement parts. 
If there are legal or practical limitations to a manufacturer's ability 
to comply with an acceleration of remedy directive, these can be 
identified by the manufacturer in providing the agency with information 
under section 573.14(c).
    Turning to the international law implications of this rule that 
were raised by Volkswagen, NHTSA wishes to observe that if a foreign-
based manufacturer produces vehicles for sale in the United States, 
that manufacturer is legally obligated to comply with all laws 
administered by NHTSA that apply to the manufacturers of vehicles sold 
in this county, including laws governing remedies for safety-related 
defects and noncompliances. There is nothing in the TREAD Act, or in 
any other statute administered by the agency, that would exempt foreign 
manufacturers from meeting these obligations. As discussed previously, 
NHTSA anticipates that it will only rarely have the need to require a 
manufacturer to accelerate a remedy program. Foreign-based 
manufacturers may raise particular issues regarding the expansion of 
the sources of replacement parts. They should be aware that our primary 
concern will be to have the problem corrected as quickly as possible, 
and that we will expect them to surmount difficulties to the fullest 
extent possible.
b. Number of Repair Facilities
    With regard to the expansion of the number of authorized repair 
facilities, we noted in the NPRM that major vehicle manufacturers have 
large networks of dealers to perform repairs. As a consequence, we 
stated that we would ordinarily not expect to find a need for these 
major manufacturers to expand the number of authorized repair 
facilities. We observed that other vehicle manufacturers, such as 
importers of limited-production vehicles and multistage vehicle 
manufacturers, and most manufacturers of equipment items, do not have 
established networks of repair facilities. Noting that the need to 
travel a long distance may discourage vehicle owners from having remedy 
repairs performed, we stated that we could require such manufacturers 
to expand the number of repair facilities in order to assure that the 
campaign is completed in a reasonable time.
    The Alliance commented on this aspect of the proposal. While not 
challenging the agency's assumption that its members \1\ should have a 
sufficient dealer networks to conduct any recall, the Alliance took 
exception to the notion that its members might be required to provide 
additional facilities ``if an owner would have to travel a large 
distance to obtain the remedy repair directly from the manufacturer or 
one of its dealers.'' The Alliance contended that the TREAD Act was not 
intended to address the issue of convenience to a vehicle owner and 
asserted that owners have already factored inconvenience into their 
purchase decision. The Alliance further noted that if recall parts were 
to be provided to a repair facility unrelated to the manufacturer that 
is subject to the acceleration of remedy directive, no infrastructure 
would be in place to provide those parts and problems could occur in 
communicating to the unrelated facility the vehicle identification 
numbers (VINs) of the vehicles to be remedied, verifying the VINs as a 
basis for authorizing the recall repairs, or recording the recall 
status of the vehicles involved. The Alliance also noted that its 
members would not be able to prevent an unrelated facility from 
``overcharging'' for the recall work or charging for additional work on 
the basis that it is required to remedy a defect.
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    \1\ BMW, DaimlerChrysler, Fiat, Ford, GM, Isuzu, Mazda, 
Mitsubishi, Nissan, Porsche, Toyota, Volkswagen, Volvo.
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    The agency continues to believe that the proximity of authorized 
service facilities, or the lack thereof, would be an appropriate 
consideration in requiring an expansion in the number of repair 
facilities. We expect that the issue would arise less often in the case 
of major light vehicle manufacturers than special purpose vehicle 
manufacturers such as ambulance or school bus manufacturers. In any 
event, the agency does not believe that it is necessary to address 
these issues within the text of the final rule. If circumstances should 
dictate the use of repair facilities unrelated to the manufacturer 
conducting the recall, it will be up to the manufacturer to work out, 
by contract or otherwise, the processes necessary to supply required 
parts and perform required repairs, and to verify that vehicles covered 
by the recall receive the remedy, as well as to arrange appropriate 
reimbursement so that owners would not have to pay for the work 
performed.
3. Capability of Completion Within Reasonable Time
    The NPRM also proposed that before requiring a manufacturer to 
accelerate its remedy program, the Administrator must also determine 
that the program is not likely to be capable of completion within a 
reasonable time. See proposed section 573.14(b)(3). We proposed to 
decide the issue of reasonableness in light of all of the 
circumstances, including the efforts that the manufacturer has made to 
complete the remedy program, as well as the safety risks associated 
with the defect or noncompliance.
    We noted that the statute is silent with respect to when we can 
require a manufacturer to accelerate its program under section 6(a). We 
expressed the belief that in the interests of motor vehicle safety, it 
would be appropriate for us to impose such a requirement at any time 
that the statutory conditions are found to exist.
    No comments were submitted regarding this issue. Section 
573.14(b)(3) is therefore adopted as proposed.
4. Consultation With Manufacturer
    In the NPRM, we stated that we anticipated that there would be 
consultation between NHTSA and the manufacturer before a manufacturer 
would be formally required to accelerate the remedy program, but noted 
that such consultation is not required by the statute. We stated our 
expectation that in most cases in which we believed that acceleration 
was appropriate, the manufacturer would take action without being 
directed to do so by the agency.
    There were several comments regarding the issue of agency 
consultation with affected manufacturers. The Alliance expressed the 
belief that NHTSA is required under the Administrative Procedure Act to 
consult with the affected manufacturer before an acceleration of remedy 
directive is issued and to give the manufacturer an opportunity to be 
heard on the questions of whether there is a risk of serious injury or 
death if the remedy program is not accelerated and whether acceleration 
of the remedy program can be reasonably achieved. RMA also commented 
that the agency should be obliged to consult with any affected 
manufacturer before issuing an acceleration of remedy directive. TMA 
expressed concern over the adequacy of the consultation provisions in 
the proposed rule and the absence of a provision for the appeal of an

[[Page 72388]]

acceleration of remedy directive short of filing a Federal court 
action. In their joint comment, MEMA and OESA observed that ``if the 
process is to be an informed one for the agency and one of fairness to 
affected manufacturers while serving the public interest in avoidance 
of safety risk, NHTSA should closely consult with a manufacturer before 
proceeding with an accelerated [remedy] program.'' Those commenters 
stated that the need for consultation between an affected manufacturer 
and NHTSA should be incorporated into the regulatory text and not 
merely alluded to in the preamble.
    The agency does not agree that a manufacturer has a statutory right 
to consultation. Nonetheless, we have added language to the text of 
section 573.14(c) to provide for consultation with the affected 
manufacturer before the agency requires the acceleration of a remedy 
program. This may enhance the agency's understanding of what is 
reasonably achievable. Addressing the TMA's comment, we have decided 
not to provide an opportunity for an administrative appeal of a 
directive for a manufacturer to accelerate a remedy program. On a 
practical level, the agency will have consulted with the affected 
manufacturer before requiring the manufacturer to accelerate a remedy 
program. Hopefully, this consultation will produce consent to implement 
an accelerated remedy, and minimize the conflicts that could be the 
subject of an administrative appeal. In addition, allowing an 
administrative appeal would introduce delay that would undermine the 
purpose of the accelerated remedy program.

C. Effect of Acceleration on the Nature and Quality of the Remedy

1. Equivalency of Replacement Parts and Repair Facilities
    We stated in the NPRM that we would require manufacturers to assure 
that replacement parts from additional suppliers used under accelerated 
remedy programs are equivalent to the remedy parts supplied by the 
manufacturer, so that there will be no difference in the quality of the 
remedy received by owners. We noted, however, that in those instances 
where parts are purchased from manufacturers other than those who would 
ordinarily supply parts for the vehicle in question, it might be 
difficult to determine whether or not the part is equivalent. As a 
consequence, we proposed that the agency would, in appropriate cases, 
require manufacturers to provide information to owners with respect to 
any differences among different brands of replacement parts. We also 
stated that the service procedures must be ``reasonably equivalent'' to 
those that would have been used if the remedy program were not 
accelerated. See proposed Section 573.14(e).
    Several comments were received concerning the need for equivalency 
of replacement parts and repair procedures. The Alliance complained 
that the proposed rule provided no clarification on who would make the 
determination of equivalency and the basis on which it would be made. 
The Alliance asked, for instance, whether the determination would be 
based on the engineering performance of the remedy or whether warranty 
and post-recall service availability would also be considered. The 
Alliance surmised that while aftermarket parts might be readily 
available for use as replacement components in a recall remedy, the 
matter of establishing that those parts perform in an equivalent manner 
to original equipment might be extremely complex and controversial. The 
Alliance further expressed the belief that the untested and unverified 
substitution of aftermarket parts may not result in equivalence, and 
may cause the manufacturer, dealer, and vehicle owner to bear certain 
additional secondary costs. The Alliance contended that this is 
particularly true if the aftermarket product is warranted, as these 
products typically are, by the product manufacturer and not the vehicle 
manufacturer. The Alliance conjectured that if the aftermarket product 
should fail, the vehicle owner would be obliged to seek remedy from the 
product manufacturer as opposed to the vehicle manufacturer. Because 
the performance of the aftermarket part would in this circumstance be 
unknown to the vehicle manufacturer, and because equipment 
manufacturers are, in most respects, not covered by NHTSA's recently 
issued early warning reporting (EWR) rules, the Alliance contended that 
any problems in the performance of aftermarket replacement parts might 
not be reported to the agency. As a consequence, the Alliance asserted 
that NHTSA must make the determination of equivalence when directing a 
manufacturer to obtain parts from an alternative source, and must also 
take responsibility for that determination and its consequences, in 
place of the vehicle manufacturer.
    Ford stated that it concurs in the Alliance's position on the issue 
of equivalency. In addition, Ford stated that the proposal for the 
Administrator to find, before requiring a manufacturer to accelerate a 
remedy program, that acceleration of the program can be reasonably 
achieved by expanding the sources of replacement parts, expanding the 
number of authorized repair facilities, or both, ``imposes on the 
agency a responsibility to gather information necessary to decide 
whether these extraordinary remedies are appropriate.'' The comment 
contended, without support, that the agency is also obligated to ensure 
that the remedies ``do not compromise vehicle safety or interfere with 
the intellectual property rights of the various parties.''
    In their joint comment, MEMA and OESA asked who is to make, and 
take responsibility for, a determination that a replacement part or 
service facility is ``reasonably equivalent,'' and who is to oversee 
the testing of alternative parts or the evaluation of additional 
service facilities. The comment contended that if the agency proceeds 
with a final rule, it ``must articulate standards or baselines'' for 
the term ``reasonably equivalent,'' and ``take responsibility for any 
such determinations made with respect both to additional sources of 
parts and service facilities.'' The organizations indicated concern 
over the involvement of additional suppliers and third party service 
outlets for which their members will be held accountable, particularly 
in the context of a safety recall campaign. The comment stated that 
manufacturers would be reluctant to be part of such a program because 
of concern over potential product liability exposure for deficiencies 
in the products and services of others, the negative competitive impact 
of having to recommend other suppliers' parts and identify them as 
equivalent to the manufacturer's own, and future recall responsibility 
if a competitor's product or third party service facility is deficient.
    In its comment, Bendix contended that the proposed rule places an 
undue burden on the affected manufacturer to assure that replacement 
parts from other sources are compatible and will perform properly as a 
substitute for the manufacturer's own product. Bendix also asserted 
that a manufacturer could suffer competitive harm if it were forced to 
use a competitor's product to accelerate a recall, especially if it was 
obliged to provide consumers with specific product comparisons. Like 
MEMA and OESA, Bendix expressed concern over legal issues such as who 
would take responsibility for the equivalence of the replacement part, 
and who would be responsible for defective substitute components, 
particularly if a crash should result or an additional recall should be 
necessary.

[[Page 72389]]

    Delphi also took issue with the requirement in the proposed rule 
for the recalling manufacturer to assure the equivalence of replacement 
parts. Noting that many of the parts installed on motor vehicles meet 
QS-9000 and/or ISO-9000 certification, the comment asserted that an 
alternate supplier must have its parts certified to ensure that this 
level of quality is maintained. Delphi expressed concern that the 
recalling manufacturer might have to divulge ordinarily protected 
intellectual property in assisting an alternate supplier in the 
production of remedial parts.
    The agency has carefully considered each of these comments. We 
start from the premise that in an accelerated remedy context, a 
manufacturer will generally need to engage in the procurement of parts 
in a manner and on a schedule different from its ordinary practices. 
While exceptional efforts may be required, there are limits. Because 
the statute authorizes us to require a manufacturer to accelerate its 
remedy program only if such acceleration ``can reasonably be 
achieved,'' by definition the burden on the manufacturer will not be 
insurmountable. We expect to consider the types of issues raised in 
these comments as part of the consultative process under section 
573.14(c).
    Finally, the agency will not assume any legal responsibility for 
determining the equivalency of replacement parts or repair facilities, 
or for any consequences that result from the use of replacement parts 
or the service actions under an accelerated remedy. Nothing in the 
TREAD Act acceleration of remedy provision places liability on the 
Federal government for its actions or authorizes us to adopt any form 
of indemnity program.
2. Equivalency of Tires
    With regard to passenger car tires, we noted that guidelines are 
available to assure that tires from alternative sources are at least 
equivalent to those being replaced. These guidelines, found in the 
Uniform Tire Quality Grading System (UTQGS), set forth three criteria 
that buyers can use to make relative comparisons among passenger car 
tires. See 49 CFR 575.104. We proposed that the manufacturer be 
required to provide tires of a size and type that are suitable for the 
owner's vehicle and of the same or better UTQGS rating in each 
category. Alternatively, we observed that a manufacturer could do what 
Bridgestone/Firestone, Inc. (Firestone) did in connection with its 
recall of Firestone Radial ATX and Wilderness AT tires. There, 
Firestone authorized owners to obtain replacement tires of their choice 
from any tire manufacturer, and agreed to reimburse the owner up to a 
specified amount per tire. We noted that for the purpose of the 
acceleration of remedy program, the reimbursement amount would have to 
be sufficient to allow for the purchase of a tire that is reasonably 
equivalent to the defective or noncompliant tire.
    Two comments were received concerning the equivalency of remedy 
issue as it pertains to tires. One of these comments, from RMA, 
recommended that the text of proposed section 573.14(e) be changed to 
specify that the replacement tire have the same or higher load index 
and speed rating as the defective or noncompliant tire it is to 
replace. The second comment, from the Alliance, cited circumstances in 
which an alternative tire identical in size, type, and Uniform Tire 
Quality Grading to a tire furnished as original equipment on a vehicle 
may not in fact be equivalent in terms of ``tire ply, steer, noise, 
rolling resistance, and tire uniformity.''
    We agree with the RMA suggestion and are including appropriate 
language in the final rule. Although we recognize the validity of the 
Alliance's comment, we believe that it would not be practical to 
specify in the rule that all replacement tires must be equivalent to 
the recalled tires in every possible respect. Therefore, we will not 
add the parameters identified by the Alliance to the text of section 
573.14(e). However, an agency decision requiring acceleration may 
specify particular features that must be present to ensure equivalency 
under the circumstances of a given recall.
3. Equivalency of Child Restraint Systems
    We proposed to require that all replacement child restraint systems 
provided under an accelerated remedy program be of the same type and 
the same overall quality as the recalled restraints. Examples of the 
``types'' of child restraint systems for purposes of this rule are 
rear-facing infant seats with a base, rear-facing infant seats without 
a base, convertible seats (designed for use in both rear- and forward-
facing modes), forward-facing only seats, high back booster seats with 
a five-point harness and belt positioning booster seats. These examples 
are described in a NHTSA brochure, DOT HS 809 230 (May 2002). These 
types are listed as examples; if in the future another type of seat is 
marketed, it can be referenced in any agency decision under this rule.

D. Obligations of a Manufacturer That Is Required To Accelerate Its 
Remedy Program

    Under the proposal in the NPRM, a manufacturer who is required to 
accelerate its remedy campaign would be required to implement the 
accelerated remedy program as directed by the agency. We noted that the 
level of detail and direction provided by the agency might vary, and 
that it could include expanding the sources of replacement parts 
provided to the manufacturer's franchised dealers, expanding the number 
of authorized repair facilities to include facilities not owned or 
franchised by the manufacturer that have repair or replacement 
capabilities, or other provisions. We further noted that the agency 
might require the submission of implementation plans and schedules, and 
might also require the reimbursement of consumers, particularly where 
facilities that are not owned or franchised by the manufacturer are 
involved.
    One comment was received regarding these implementation issues. 
That comment, from TMA, observed that there was nothing in the proposed 
rule that identified how much lead time the agency would allow a 
manufacturer to implement an accelerated remedy program. Rather than 
specifying, within the text of the rule, the amount of lead-time that a 
manufacturer will be allowed, the agency believes that this matter can 
be best addressed on a case-by-case basis, after consultation with the 
manufacturer. This will permit the agency to take a reasoned approach 
to the implementation of the accelerated remedy program, taking account 
of the unique circumstances that can exist within any given recall.

E. Manufacturer's Notice to Vehicle or Equipment Owners

    In the NPRM, we observed that the notice that a manufacturer who is 
required to accelerate a remedy campaign would be required to send to 
owners of the vehicles or equipment items involved would vary, 
depending on the circumstances. We stated that if the manufacturer has 
not sent an initial notification to owners under 49 CFR Part 577, 
relevant information about alternative parts or authorized repair 
facilities could be included in the initial notification letter. If the 
manufacturer has already sent an initial notification to owners under 
49 CFR Part 577, the manufacturer would in most circumstances be 
required to send a supplemental letter to all owners except those who 
have had the remedy

[[Page 72390]]

performed. Proposed section 577.12 included provisions regarding the 
scope, timing, form, and content of the notice to be sent by the 
manufacturer.
    The Alliance submitted the only comment on the owner notification 
aspects of the proposed rule. The Alliance recommended that a 
manufacturer affected by an acceleration of remedy directive be allowed 
to place within the owner notification letter a statement that parts or 
services are being provided by suppliers or facilities other than its 
own, that those parts or services would not be guaranteed by the 
manufacturer conducting the recall, and that the owner should inquire 
with the part or service provider to learn whether any warranties are 
being provided. The agency disagrees with this suggestion, because we 
are concerned that this sort of language could discourage owners from 
having defects or noncompliances remedied with the alternate parts or 
at the alternate facilities, and thus would undermine the purpose of 
requiring acceleration. However, if a manufacturer believes that the 
circumstances of a particular recall warrant the inclusion of caveats 
in the owner notification letter, it may bring those circumstances to 
our attention during the consultation process.
    The Alliance also commented on the specific language to be included 
in the owner notification letter that was set out in proposed section 
577.12(c)(6). That language was intended to alert owners that if they 
paid for a remedy from a service facility not affiliated with the 
manufacturer, or for replacement parts from sources other than the 
manufacturer, those expenses would be eligible for reimbursement. The 
proposed language would further direct the owner to a website, toll-
free telephone number, or mailing address where the owner could obtain 
information on the costs that are eligible for reimbursement and on the 
procedures for obtaining reimbursement. The Alliance stated that this 
language had the potential to confuse consumers. While acknowledging 
that a manufacturer should be obligated to explain the costs that will 
be covered, how to obtain reimbursement, and how to obtain additional 
information from the manufacturer, the Alliance asserted that ``NHTSA 
should not attempt to prescribe the exact wording of the notification, 
in order to permit manufacturers to conform the style and readability 
of the language to the rest of the notification letter.''
    We recently addressed a variety of issues related to reimbursement 
of costs associated with remedying defects and noncompliances in a 
separate regulation implementing Section 6(b) of the TREAD Act, 
``Reimbursement Prior to Recall.'' See 67 FR 64049 (October 17, 2002). 
In that rule, we decided not to specify exact wording for manufacturer 
notifications about the possible availability of reimbursement. Rather, 
we described what needed to be in the owner notification and stated 
that we would review the manufacturer's proposed language regarding 
reimbursement as part of our general review of owner notifications 
under 49 CFR 573.6(c)(10). See 67 FR at 64061. We will take the same 
approach here. To permit manufacturers reasonable flexibility in the 
wording of the owner notification letter, we have eliminated proposed 
section 577.12(c)(6).
    The Alliance also recommended that proposed section 577.12(c)(2) be 
changed to reflect that its requirements will not apply if the 
manufacturer, after consultation with the agency, agrees to take steps 
voluntarily to accelerate the remedy, rather than pursuant to a 
directive. The Alliance pointed out that in this circumstance the 
specific requirements of section 577.12 would not be triggered, because 
paragraph (a) of that section explains that the notification 
requirements only apply when the Administrator requires acceleration.
    The agency believes that the owner notification requirements in 
proposed section 577.12 should apply whenever a remedy program is 
accelerated at the suggestion of the agency, regardless of whether the 
affected manufacturer agrees ``voluntarily'' to take steps to 
accelerate the program following consultation with the agency or is 
directed to do so. Accordingly, it would not be appropriate to waive 
the notification requirements altogether for manufacturers who agree to 
accelerate their remedy program in advance of receiving a formal 
directive to do so from the agency. To reflect this, we have changed 
the text of section 577.12(a) to require notification, in accordance 
section 577.12, ``[w]hen the Administrator requires a manufacturer to 
accelerate its remedy program under section 573.14 of this chapter, or 
when a manufacturer agrees with a request from the Administrator that 
it accelerate its remedy program in advance of being required to do 
so.'' We have made a corresponding change to proposed section 
577.12(c)(2) to emphasize that the statement ``that the National 
Highway Traffic Safety Administration has required the manufacturer to 
accelerate its remedy program'' need only be included in the owner 
notification letter when the Administrator has directed that the remedy 
program be accelerated.

F. Accelerated Remedy Programs Involving Reimbursement

    We noted in the NPRM that in some circumstances, a remedy campaign 
could be accelerated without any out-of-pocket expense to the owners of 
the vehicles or equipment items involved, precluding the need for those 
owners to be reimbursed by the manufacturer. We observed that in these 
instances, appropriate financial arrangements could be made between the 
manufacturer and the dealer or repair facility. For example, when a 
vehicle is repaired at a dealer who is franchised or authorized by the 
vehicle manufacturer or when the parts in question (such as a tire) are 
provided by a facility owned or franchised by the manufacturer, the 
manufacturer would reimburse the dealer for the cost of the parts as 
well as the labor, and the owner would not have any out-of-pocket 
expense. We noted, however, that in other circumstances, the 
accelerated remedy program might be structured to allow an owner to 
obtain the remedy from independent third-party parts suppliers and/or 
repair facilities, pay that independent entity, and then be reimbursed 
by the manufacturer.
    We stated that reimbursement under an accelerated remedy program 
would be similar in most respects to the applicable provisions of our 
regulation implementing section 6(b) of the TREAD Act, codified as the 
third and fourth sentences of 49 U.S.C. 30120(d) (``pre-notification 
remedy''), with two obvious differences. For one, the periods covered 
by the respective programs would be different. Under the pre-
notification remedy program, reimbursement would be available for 
expenditures made by vehicle or equipment owners before they receive 
notification of a defect or noncompliance from the manufacturer. Under 
an acceleration of remedy program, reimbursement would be available for 
owner expenditures made after notification from the manufacturer, as 
provided in the program. Second, under the pre-notification remedy 
program, reimbursement would be available for a range of remedies 
addressing the underlying problem. In contrast, under an acceleration 
of remedy program, reimbursement may not be available at all, or when 
it is, may be conditioned on the use of a specific remedy. In addition, 
owners could be limited to obtaining the remedy at specific service 
facilities under an acceleration of remedy program.

[[Page 72391]]

    We noted in the NPRM that despite these substantive differences, 
the general procedures for obtaining reimbursement in the two programs 
would be very similar. The provisions specifying the documentation a 
manufacturer may require a claimant to submit to obtain reimbursement 
would be identical in the two programs, as would the provisions 
relating to the amount of reimbursement and the time frame for seeking 
reimbursement, and the method for owners to obtain information about 
reimbursement availability.
    Since the process governing reimbursement under the two programs 
would virtually be the same, we stated in the NPRM that there was no 
need for us to repeat those provisions or discuss them in the context 
of this rulemaking. Instead, we referred interested persons to our 
discussion of the reimbursement provisions in the preamble to the pre-
notification remedy NPRM, and stated that to the extent that we modify 
the proposal in that NPRM following public comment, we would make 
corresponding changes to the applicable provisions of the accelerated 
remedy rule. We published a final rule on pre-notification remedies on 
October 17, 2002 at 67 FR 64049. In that final rule we made a number of 
relatively minor substantive changes to the provisions proposed in the 
NPRM, but these changes would not have a significant effect upon 
acceleration of remedy programs. As a consequence, there is no need to 
make corresponding revisions to section 573.14. In the preceding 
section of this document, we discussed changes that we have made in the 
text of proposed section 577.12 concerning notification to owners when 
reimbursement is to be provided as part of an accelerated remedy 
program.

G. Termination of an Accelerated Remedy Program

    In the NPRM, we expressed the belief that a manufacturer should be 
able to terminate an accelerated remedy program when the conditions 
that gave rise to the need for an accelerated program no longer exist. 
We noted that we should not require a manufacturer to authorize the use 
of alternative replacement parts or to reimburse an owner who purchased 
such parts if the manufacturer is able to provide the recall remedy 
promptly. Thus, we proposed to allow a manufacturer that believes that 
it can meet all future demand for the remedy in a prompt manner through 
its own normal mechanisms (e.g., its dealers) to request authorization 
to terminate an accelerated remedy program.
    Under section 573.14(g) of the proposed rule, if NHTSA agreed with 
the manufacturer's request, the manufacturer could terminate the 
program, provided that notice is given to all owners of unremedied 
vehicles or equipment items at least 30 days in advance of the 
termination date of the accelerated remedy program. We invited comment 
with regard to how such notice should be given. No comments regarding 
this issue were submitted, and we are not addressing it within the text 
of this final rule.

III. Regulatory Analyses and Notices

A. Regulatory Policies and Procedures

    Executive Order 12866, ``Regulatory Planning and Review'' (58 FR 
51735, October 4, 1993) provides for making determination whether a 
regulatory action is ``significant'' and therefore subject to Office of 
Management and Budget (OMB) review and to the requirements of the 
Executive Order. The Order defies as ``significant action'' as one that 
is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or Tribal government or communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    We have considered the impact of this final rulemaking action under 
E.O. 12866 and the Department of Transportation's Regulatory Policies 
and Procedures. This rulemaking was not reviewed under the executive 
order and is not considered ``significant'' under the Department of 
Transportation's regulatory policies and procedures. The impacts of 
this rule are expected to be so minimal as not to warrant preparation 
of a full regulatory evaluation. We do not foresee substantially 
increased costs to a manufacturer because of an accelerated remedy 
program. First, a remedy program will already be in place at the time 
that a manufacturer is required by the agency to accelerate that 
program. The scope of the remedy program is not being expanded under 
this final rule. The only aspects that will be affected are the time 
for completion of the remedy and alternative sources of replacement 
parts or repair facilities needed to perform the remedy. Second, we 
expect this provision to be invoked infrequently, since in the large 
majority of cases, the manufacturer's original remedy program will 
fully address the defect or noncompliance in a timely fashion, or no 
accelerated remedy will be reasonably available.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) 
requires agencies to evaluate the potential effects of their proposed 
and final rules on small businesses, small organizations, and small 
governmental jurisdictions. Business entities are defined as small by 
standard industry classification for the purposes of receiving Small 
Business Administration (SBA) assistance.
    We have also considered the impacts of this final rule under the 
Regulatory Flexibility Act. For the reasons discussed above with regard 
to E.O. 12866 and the DOT Policies and Procedures, I certify that this 
final rule will not have significant economic impact on a substantial 
number of small entities. The impacts of this rule are expected to be 
so minimal as not to warrant preparation of a full regulatory 
evaluation because this provision only involves motor vehicle and 
equipment manufacturers that have submitted defect or noncompliance 
reports. The majority of recalls are not initiated by small entities. 
The primary impact of this rule will be on major motor vehicle 
manufacturers. Even this impact will be small because we anticipate 
that we will only rarely need to require a manufacturer to accelerate 
its remedy program.

C. National Environmental Policy Act

    We have analyzed this rule under the National Environmental Policy 
Act and determined that it will not have any significant impact on the 
quality of the human environment.

D. Paperwork Reduction Act

    In the NPRM, we stated that the proposed rule would impose new 
collection of information burdens within the meaning of the Paperwork 
Reduction Act of 1995 (PRA). See NPRM at 66 FR 64090. At that time, we 
had no experience under the TREAD Act acceleration provision, did not 
engage in an analysis, and simply assumed that the PRA would be 
applicable. We have since evaluated this issue, and concluded, for a 
number of reasons, that the final rule will not

[[Page 72392]]

impose a collection of information burden that would trigger the 
requirements of the PRA.
    First, in a recall, NHTSA may accelerate a remedy based on the 
statute alone, and the final rule itself provides no independent 
authority for the agency to require a manufacturer to undertake a 
collection of information. In any event, 49 CFR Part 573 already 
contains information collection requirements. To the extent needed, if 
at all, PRA authorization would be subsumed in periodic renewals of 
information collection authorizations with regard to Part 573.
    Second, even if the final rule could be construed as imposing a 
collection of information requirement, that requirement would be highly 
discrete in the context of an individual recall action, of limited 
extent, and would arise so infrequently as to call the need for PRA 
approval into question. As indicated in the preceding discussion, the 
agency does not foresee the need to require manufacturers to provide 
accelerated remedies with any significant frequency. In fact, the 
acceleration provision (which, as previously indicated, is self-
executing) has not been invoked in the two years since the TREAD Act 
was enacted.
    Third, there are substantial questions as to how many manufacturers 
would be subject to the final rule or when they would be so subject. As 
such, additional information collection requirements stemming from the 
rule, if any, will not affect a sufficient number of manufacturers, or 
a sufficient share of the manufacturers within each of the industries 
regulated by the agency, to require the agency to obtain authorization 
under the PRA. See 5 CFR 1320.7(c) and (s).
    Lastly, if there were any information collection requirements that 
result from the final rule, those requirements would arise in the 
context of agency actions to monitor manufacturers' recalls that either 
are influenced by agency investigations or are undertaken by a 
manufacturer exclusively on its own initiative. As such, these 
information collections appear to be exempt from the coverage of the 
PRA under OMB regulations at 5 CFR 1320.4(a)(2), which exempt 
collections of information ``during the conduct of an administrative 
action, investigation, or audit involving an agency against specific 
individuals or entities.''
    In any event, we are providing an opportunity for comment on the 
above by February 3, 2003. If a commenter suggests that there are PRA 
information collection burdens, the commenter should provide a detailed 
explanation of the basis for that suggestion in the context of this 
rule and estimates of the burden, with adequate support.

E. Executive Order 13132 (Federalism)

    Executive Order 13132 on ``Federalism'' requires us to develop an 
accountable process to ensure ``meaningful and timely input'' by State 
and local officials in the development of ``regulatory policies that 
have federalism implications.'' The E.O. defines this phrase to include 
regulations ``that have substantial direct effects on the States, on 
the relationship between the national government and the States, or on 
the distribution of power and responsibilities among the various levels 
of government.'' This rule, which is limited in its application to 
motor vehicle and motor vehicle equipment manufacturers, will not have 
substantial direct effect on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in E.O. 13132.

F. Civil Justice Reform

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

G. 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 costs, benefits, and 
other effects of proposed or final rules that include a Federal mandate 
likely to result in the expenditure by State, local or tribunal 
governments, in the aggregate, or by the private sector, of more than 
$100 million annually. Because this rule will not have a $100 million 
annual effect, no Unfunded Mandates assessment is necessary and one 
will not be prepared.

H. Plain Language

    Executive Order 12866 and the President's memorandum of June 1, 
1998, require each agency to write all rules in plain language. 
Application of the principles of plain language includes consideration 
of whether the material is organized to suit the public's needs, 
whether the requirements in the rule are clearly stated, whether the 
rule contains technical language or jargon that is not clear, and 
whether a different format would make the rule easier to understand. We 
have endeavored to meet these objectives in preparing this final rule.

List of Subjects

49 CFR Part 573

    Motor vehicle safety, Reporting and recordkeeping requirements, 
Tires.

49 CFR Part 577

    Motor vehicle safety.

    In consideration of the foregoing, NHTSA is amending 49 CFR Parts 
573 and 577 as set forth below.
    1. The authority citation for Part 573 continues to read as 
follows:

    Authority: 49 U.S.C. 30102-103, 30112, 30117-121, 30166-167; 
delegations of authority at 49 CFR 1.50; 501.2.


    2. Part 573 is amended by adding Sec.  573.14 to read as follows:


Sec.  573.14  Accelerated remedy program.

    (a) An accelerated remedy program is one in which the manufacturer 
expands the sources of replacement parts needed to remedy the defect or 
noncompliance, or expands the number of authorized repair facilities 
beyond those facilities that usually and customarily provide remedy 
work for the manufacturer, or both.
    (b) The Administrator may require a manufacturer to accelerate its 
remedy program if:
    (1) The Administrator finds that there is a risk of serious injury 
or death if the remedy program is not accelerated;
    (2) The Administrator finds that acceleration of the remedy program 
can be reasonably achieved by expanding the sources of replacement 
parts, expanding the number of authorized repair facilities, or both; 
and
    (3) The Administrator determines that the manufacturer's remedy 
program is not likely to be capable of completion within a reasonable 
time.
    (c) The Administrator, in deciding whether to require the 
manufacturer to accelerate a remedy program and what to require the 
manufacturer to do, will consult with the manufacturer and may consider 
a wide range of information, including, but not limited to, the 
following: the manufacturer's initial or revised report submitted under 
Sec.  573.6(c), information from the manufacturer, information from 
other manufacturers and suppliers, information from any source related 
to the availability and implementation of the remedy, and the 
seriousness of the risk of injury or death associated with the defect 
or noncompliance.
    (d) As required by the Administrator, an accelerated remedy program 
shall include the manner of acceleration (expansion of the sources of

[[Page 72393]]

replacement parts, expansion of the number of authorized repair 
facilities, or both), may require submission of a plan, may identify 
the parts to be provided and/or the sources of those parts, may require 
the manufacturer to notify the agency and owners about any differences 
among different sources or brands of parts, may require the 
manufacturer to identify additional authorized repair facilities, and 
may specify additional owner notifications related to the program. The 
Administrator may also require the manufacturer to include a program to 
provide reimbursement to owners who incur costs to obtain the 
accelerated remedy.
    (e) Under an accelerated remedy program, the remedy that is 
provided shall be equivalent to the remedy that would have been 
provided if the manufacturer's remedy program had not been accelerated. 
The replacement parts used to remedy the defect or noncompliance shall 
be reasonably equivalent to those that would have been used if the 
remedy program were not accelerated. The service procedures shall be 
reasonably equivalent. In the case of tires, all replacement tires 
shall be the same size and type as the defective or noncompliant tire, 
shall be suitable for use on the owner's vehicle, shall have the same 
or higher load index and speed rating, and, for passenger car tires, 
shall have the same or better rating in each of the three categories 
enumerated in the Uniform Tire Quality Grading System. See 49 CFR 
575.104. In the case of child restraints systems, all replacements 
shall be of the same type (e.g., rear-facing infant seats with a base, 
rear-facing infant seats without a base, convertible seats (designed 
for use in both rear- and forward-facing modes), forward-facing only 
seats, high back booster seats with a five-point harness, and belt 
positioning booster seats) and the same overall quality.
    (f) In those instances where the accelerated remedy program 
provides that an owner may obtain the remedy from a source other than 
the manufacturer or its dealers or authorized facilities by paying for 
the remedy and/or its installation, the manufacturer shall reimburse 
the owner for the cost of obtaining the remedy as specified on 
paragraphs (f)(1) through (f)(3) of this section. Under these 
circumstances, the accelerated remedy program shall include, to the 
extent required by the Administrator:
    (1) A description of the remedy and costs that are eligible for 
reimbursement, including identification of the equipment and/or parts 
and labor for which reimbursement is available;
    (2) Identification, with specificity or as a class, of the 
alternative repair facilities at which reimbursable repairs may be 
performed, including an explanation of how to arrange for service at 
those facilities; and
    (3) Other provisions assuring appropriate reimbursement that are 
consistent with those set forth in Sec.  573.13, including, but not 
limited to, provisions regarding the procedures and needed 
documentation for making a claim for reimbursement, the amount of costs 
to be reimbursed, the office to which claims for reimbursement shall be 
submitted, the requirements on manufacturers for acting on claims for 
reimbursement, and the methods by which owners can obtain information 
about the program.
    (g) In response to a manufacturer's request, the Administrator may 
authorize a manufacturer to terminate its accelerated remedy program if 
the Administrator concludes that the manufacturer can meet all future 
demands for the remedy through its own sources in a prompt manner. If 
required by the Administrator, the manufacturer shall provide notice of 
the termination of the program to all owners of unremedied vehicles and 
equipment at least 30 days in advance of the termination date, in a 
form approved by the Administrator.
    (h) Each manufacturer shall implement any accelerated remedy 
program required by the Administrator according to the terms of that 
program.

    3. The authority citation for 49 CFR Part 577 continues to read as 
follows:

    Authority: 49 U.S.C. 30102-103, 30112, 30117-121, 30166-167; 
delegation of authority at 49 CFR 1.50.

    4. Part 577 is amended by adding Sec.  577.12 to read as follows:


Sec.  577.12  Notification pursuant to an accelerated remedy program.

    (a) When the Administrator requires a manufacturer to accelerate 
its remedy program under Sec.  573.14 of this chapter, or when a 
manufacturer agrees with a request from the Administrator that it 
accelerate its remedy program in advance of being required to do so, in 
addition to complying with other sections of this part, the 
manufacturer shall provide notification in accordance with this 
section.
    (b) Except as provided elsewhere in this section or when the 
Administrator determines otherwise, the notification under this section 
shall be sent to the same recipients as provided by Sec.  577.7. If no 
notification has been provided to owners pursuant to this part, the 
provisions required by this section may be combined with the 
notification under Sec. Sec.  577.5 or 577.6. A manufacturer need only 
provide a notification under this section to owners of vehicles or 
items of equipment for which the defect or noncompliance has not been 
remedied.
    (c) The manufacturer's notification shall include the following:
    (1) If there was a prior notification, a statement that identifies 
that notification and states that this notification supplements it;
    (2) When the accelerated remedy program has been required by the 
Administrator, a statement that the National Highway Traffic Safety 
Administration has required the manufacturer to accelerate its remedy 
program;
    (3) A statement of how the program has been accelerated (e.g., by 
expanding the sources of replacement parts and/or expanding the number 
of authorized repair facilities);
    (4) Where applicable, a statement that the owner may elect to 
obtain the recall remedy using designated service facilities other than 
those that are owned or franchised by the manufacturer or are the 
manufacturer's authorized dealers, and an explanation of how the owner 
may arrange for service at those other facilities;
    (5) Where applicable, a statement that the owner may elect to 
obtain the recall remedy using specified replacement parts or equipment 
from sources other than the manufacturer;
    (6) Where applicable, a statement indicating whether the owner will 
be required to pay an alternative facility and/or parts supplier, 
subject to reimbursement by the manufacturer; and
    (7) If an owner will be required to pay an alternative facility 
and/or parts supplier, a statement that the owner will be eligible to 
have those expenditures reimbursed by the manufacturer, and a 
description of how a consumer may obtain information about 
reimbursement from the manufacturer consistent with Sec.  577.11(b)(2), 
(c) and (d).

    Issued on: November 26, 2002.
Jeffrey W. Runge,
Administrator.
[FR Doc. 02-30523 Filed 12-4-02; 8:45 am]
BILLING CODE 4910-59-P