>-UV DOCS
ITD8.6/2: 984
iPt.l
J y-w
' H--
4*''
mil*?"?":!
It.
■■-^ .^
.►r^t
<» :%
'<^^ :j^
.f.^'-fi
,S<P-
.^VTf'
.. V
:^
:i!^:
Effacllv*: Novambtr 4, 1975
curate descriptions jtnd environmental con-
siderations, site visits sliould he iniido wlioi-e
appropriate.
(3) The statement should identify, as
appropriate, population and <rrowti» ciiar-
acteristics of tiie affected area and any
population and prowth assumptions used to
justify the project or pro<rraiu or to deter-
iiiine secondary population and <:rowth
impacts resultinfj from the proposed action
and its alternatives (see paragraph 3c(2)).
In discussinjr these population aspects, the
statement should give consideration to usinp
the rates of jrrowth in the refrion of the
project contained in the projection compiled
for the Water Resources Council by the
Bureau of Economic Analysis of the Depart-
ment of Commerce and the Economic Re-
search Service of the Department of Apri-
cuture (the OBERS projection).
(4) The sources of data used to identify,
quantifj-. or evaluate any or all environ-
mental consequences must be expressly noted.
b. The relationship of the proposed action
and how it may conform to or conflict with
adopted or proposed land use plans, policies,
controls, and goals and objectives as have been
promulgated by affected communities. "\Miere
a conflict or inconsistency exists, the statement
should describe the extent of reconciliation and
the reasons for proceeding notwithstanding the
absence of full reconciliation.
c. The probable impact of the proposed
action on the environment. (1) This requires
assessment of the positive and negative effects
of the proposed action as it affects both na-
tional and international human environment.
The attention given to different environmental
factors will vary according to the nature, scale.
and location of proposed actions. Among
factors to be considered should be the poten-
ial effect of the action on such aspects of the
en^^ronment as those listed in Attachment 2.
and in section r,20.5(b). supra. Primary atten-
tion should be given in the statement to discus-
sing those factors most evidently impacted by
the proposed action.
(2) Secondare- and other foreseeable ef-
fects, as well as primary consequences for the
onvironment, should be included in the anal-
ysis. Secondary effects, such as the impact
on fuel consumption, emissions, or noise
levels of automobiles or in the use of toxic
or scarce materials, may be more substantial
than the |)rinuiry effects of the original ac-
tion.
d. Alternatives to the proposed action, in-
cluding, where relevant, those not within the
existing authority of the responsible preparing
office. Section 102(2) (D) of NEPA requires
the responsible agency to "study, develop, and
describe appropriate alteniatives to recommend
courses concerning alternative uses of available
resources.." A rigorous exploration and an ob-
jective evaluation of the environmental impacts
of all reasonable alternative actions, particu-
larly those that might enhance environmental
quality or avoid some or all of the adverse
environmental effect.s, are essential. Sufficient
analysis of such alternatives and their environ-
mental benefits, costs, and risks should accom-
pany the proposed action through the review
process in order not to foreclose prematurely
options which might enhance environmental
([uality or have less detrimental effects. Ex-
amples of sucli alternatives include: the al-
ternative of not taking action or of postponing
action pending further study; altematives re-
quiring actions of a significantly different
nature which would provide similar benefits
with different environmental impacts, e.g., low
capital intensive improvements, mass tran.sit
altematives to highway construction; alterna-
tives related to different locations or designs
or details of the proposed action which would
present different environmental impacts. In
each case, the analysis should l>e sufficiently
detailed to reveal comparative evaluation of
the enviromental benefits, costs, and risks of
the proposed action and each rea.sonable al-
ternative. Where an existing impact statement
already contains such an analysis its treatment
of alternatives may l)e incorporated, provided
such treatment is current and relevant to the
precise purpose of the proposed action.
e. Any probable adverse environmental ef-
fects which cannot Iw avoided (such as water
or air pollution, noise, undesirable land use
PART 520-13
Effective: November 4, 1975
patterns, or impacts on public parks and recrea-
tion areas, wildlife and waterfowl refuj^es, or
on historic sites, daniape to life systems, traffic
congestion, threats to health, or other conse-
quences adverse to the environmental jroals set
out in section 101(b) of NEPA). This should
be a brief section summarizing in one place
those effects discussed in paragraph 3c tliat are
adverse and unavoidable under the proposed
action. Included for purposes of contrast
should be a clear statement of how all adverse
effects will be mitigated. Wliere mitigating
steps are included in the statement, the respon-
sible official shall see that they are carried out.
f. The relationship between local short-term
uses of man's environment and the maintenance
and enhancement of long-term productivity.
This section should contain a brief discussion
of the extent to which the proposed action in-
volves tradeoffs between short-term environ-
mental gains at the expense of long-term losses,
or \-ice versa, and a discussion of the extent to
which the proposed action forecloses future
options.
g. Any irreversible and irretrievable commit-
ments of resources that would be involved in
the proposed action should it be implemented.
This requires identification of unavoidable im-
pacts and the extent to which the action irre-
versibly curtails the range of potential uses of
the environment. "Resources" means not only
the labor snd materials devoted to an action
but also the natural and cultural resources lost
or destroyed.
h. An indication of what other interests and
considerations of Federal policy are thought
to offset the adverse environmental effects of
the proposed action identified pursuant to sub-
paragraphs (c) and (e) of this paragraph.
The statement should also indicate the extent
to which these stated countervailing benefits
could be realized by following reasonable al-
ternatives to tlie proposed action (as identified
in subparagraph (d) of this paragraph) that
would avoid some or all of the adverse environ-
mental effects. In this connection if a cost-
benefit analysis of the proposed action has been
prepared, it, or a summary, should be attached
to the environmental impact statement, and ^
should clearly indicate the extent to which en- ■
vironmental costs have not been reflected in ~
such analysis.
i. A discussion of problems and objections
raised by other Federal agencies. State and
local entities, and citizens in the review process,
and the disposition of the issues involved and
the reasons therefor. (This section shall be
added to the final environmental statement at
the end of the review process.)
(1) The draft and final statements should
document issues raised through consultations
with Federal, State, and local agencies with
jurisdiction or special expertise and with
citizens, of actions taken in response to com-
ments, public hearings, and other citizens
involvement proceedings.
(2) Any unresolved environmental issues
and efforts to resolve them, through further
consultations or otherwise, should be iden-
tified in the final statement. For instance,
where an agency comments that the state-
ment has inadequate analysis or that the
agency has reservations concerning the im- a
pacts, or believes that the impacts are too ^
adverse for approval, either the issue should
be resolved or the final statement should re-
flect efforts to resolve the issue and set forth
any action that will result.
(3) The statement should reflect that every
effort was made to discover and discuss all
major points of view on the enviromnental
effects of the proposed action and alterna-
tives in the draft statement. However, where
opposing professional views and responsible
opinion have been overlooked in the draft
statement and are raised through the com-
menting process, the en\aronmental effects of
' the action should be reviewed in light of
those views. A meaningful reference should
be made in the final statement to the ex-
istence of any responsible opposing view not
adequately discussed in the draft statement
indicating responses to the issues raised.
(4) All substantive comments received on
the draft (or summaries of responses from
the public which have been exceptionally
PART 520-14
Effective: November 4, 1975
voluminious) should be attached to the final
statement, whether or not such comment is
thou<rht to merit individual discussion in the
text of the statement.
j. Draft statements should indicate at appro-
priate points in the text any imderlyinjj studies,
reports, and other information obtained and
considered in piTparinp the statement, inolud-
inp any cost-benefit analyses prepared. In the
case of documents not likely to be easily acces-
sible (such as internal studies or reports), the
statement should indicate how such informa-
tion may lie obtained. If such information is
attached to the statement, care should be taken
to insure that the statement remains an essen-
tially self-contained instrument, capable of
l>ein<r understood by the reader without the
need for undue cross reference.
4. Publicly owned parklands, recreational
areas, wildlife and waterfowl refu<i;es and historic
sites. The following points are to be covered:
a. Description of "any publicly owned land
from a public park, recreational area of wild-
life and waterfowl refuge" or "any land from
an liistoric site" affected or taken by the project.
This includes its size, available activities, use,
patronage, unique or irreplaceable qualities,
relationship to other similarly used lands in
the vicinity of the project, maps, plans, slides,
photographs, and drawings showing a sufficient
scale and detail the project. This also includes
its impact on park, recreation, wildlife, or his-
toric areas, and changes in vehicular or pedes-
trian access.
b. Statement of the "national. State or local
significance" of the entire park, recreational
area, refuge, or historic site "as determined by
the Federal, State or local officials having juris-
diction thereof."
(1) In the absence of such a statement
lands will be presumed to be significant.
Any statement of "insignificance" by the
official having jurisdiction is subject to re-
view by the Department as to whether such
statement is capricious.
(2) "\^Tiere Federal lands are administered
for multiple uses, the Federal official having
jurisdiction over the lands shall determine
whether the subject lands are in fact being
used for park, recreation, wildlife, waterfowl,
or historic purposes.
c. Similar data, as appropriate, for alterna-
tive designs and locations, including detailed
cost estimates (with figures showing percentage
differences in total project costs) and technical
feasibility, and appropriate analyses of the al-
ternatives, including any unique problems
present and evidence that the cost or com-
munity disruptions resulting from alternative
routes reach extra-ordinary magnitudes. This
portion of the statement should demonstrate
compliance with the Supreme Court's statement
in the Overton Park case, as follows:
[The] very existence of tlie statute indicates
that protection of parkland was to be given para-
mount importance. The few green havens that
are public parks were not to be lost unless there
were truly unusual factors present in a particular
case or the cost or community disruption result-
ing from alternative routes reached extraordinary
magnitudes. If the statutes are to have any
meaning, the Secretary cannot approve the de-
struction of parkland unless he finds that alterna-
tive routes present unique problems. 401 U.S.
402, 412 (1971).
d. If there is no feasible and prudent alterna-
tive, a description of all planning undertaken to
minimize harm to the protected area and state-
ment of actions taken or to be taken to imple-
ment this planning, including measures to main-
tain or enhance the natural beauty of the lands
traversed.
(1) Measures to minimize harm may in-
clude replacement of land and facilities, pro-
viding land or facilities, provnsions for func-
tional replacement of the facility (see 49
CFR 25.267).
(2) Design measures to minimize harm;
e.g., tunneling, cut and cover, cut and fill,
treatment of embankments, planting, screen-
ing, maintenance of pedestrian or bicycle
paths and noise mitigation measures all re-
flecting utilization of appropriate interdis-
ciplinary design personnel.
e. Evidence of concurrence or description of
efforts to obtain concurrence of Federal, State
or local officials having jurisdiction over the
PART 520-15
Effective: November 4, 1975
section 4(f) property regardinfr the action
proposed and tlie measures planned to minimize
harm.
f. If Federally-owned properties are in-
volved in hi<rhway projects, the final statement
shall include tJic action taken or an indication
of the expected action after filinfj; a map of
the proposed use of the land or other appro-
priate documentation with the Secretary of the
Department supervising the land (23 U.S.C.
317).
g. If land acquired with Federal grant
money (Department of Housing and Urban
Development open space or Bureau of Outdoor
Recreation land and water conservation funds)
is involved, the final statement shall include
appropriate communications with the grantor
agency.
h. TGC will determine application of sec-
tion 4(f) to public interests in lands, such as
easements, reversions, etc.
i. A specific finding by the Administrator
that there is no feasible and prudent alterna-
tive and that the proposal includes all possible
planning to minimize harm to the "4(f) area"
involved.
5. Properties and sites of historic and cultural
significance. The statement should document ac-
tions taken to preserve and enhance districts, sites,
buildings, structures, and objects of historical,
architectural, archeological, or cultural signifi-
cance affected by the action.
a. Draft environmental statements should in-
clude identification, through consulting the
National Register and applying the National
Register Criteria (36 CFR Part 800), of prop-
erties that are included in or eligible for inclu-
sion in the National Register of Historic Places
that may be affected by the project. The Na-
tional Register is published in its entirety each
Febiniarj' in the Federal Register. Monthly
additions and listings of eligible properties are
published in the Federal Register the first
Tuesday of each month. The Secretary of the
Interior will advise, upon request, whether
properties are eligible for the National Reg-
ister.
b. If application of the Advisory Council on
Historic Preservation's (ACHP) Criteria of ^
Effect (36 CFR Part 800) indicates that the ^
project will have an effect upon a property in-
cluded in or eligible for inclusion in the Na-
tional Register of Historic Places, the draft
environmental statement should document the
effect. Evaluation of the effect should be made
in consultation with the State Historic Preser-
vation Officer (SHPO) and in accordance with
the ACHP's criteria of Adverse Effect (36
CFR Part 800).
c. Determinations of no adverse effect should
be documented in the draft statement with
evidence of the application of the ACHP's
Criteria of Adverse. Effect, the views of the
appropriate State Historic Preservation Officer,
and submission of the determination to the
ACHP for review.
d. If the project will have an adverse effect
upon a property included in or eligible for in-
clusion in the National Register of Historic
Places, the final environmental statement
should include either an executed Memorandum
of Agreement or comments from the Council
after consideration of the project at a meeting
of the ACHP and an account of actions to be ^
taken in response to the comments of the
ACHP. Procedures for obtaining a Memo-
randmn of Agreement and the comments of the
Council are found in 36 CFR Pail 800.
e. To determine whether the project will
have an effect on properties of State or local
historical, architectural, archaeological, or cul-
tural significance not included in or eligible for
inclusion in the National Register, the respon-
sible official should consult with the State His-
toric Preservation Officer, with the local official
having jurisdiction of the property, and where
appropriate, with historical societies, museums,
or academic institutions having expertise with
regard to the property. Use of land from his-
toric properties of Federal, State and local sig-
nificance as determined by the official having
jurisdiction th reof involves section 4(f) of
the DOT Act and documentation should in-
clude information necessary to consider a 4(f)
determination (see paragraph 4).
PART 520-16
Effective: Model Yeors 1981-1984
TIic Department has no basis at tliis time to
project tiie existence of any otlier motor vehicle
standards at a specific level. If these projections
are proven erroneous by future events, and if tlie
impact of tiiosc future standards would sulistan-
tially reduce the safety inarpin provided in this
notice, it may be necessary to reconsider the
standards promuljjated herein.
D. The need of the Natlot\ to eotisenie energy.
As discussed in section II. B of this notice, this
final consideration in establisliin<r maximum
feasible average fuel economy levels requires the
establishment of fuel economy standards at the
hifrhest level consistent witli the other statutory
considerations.
Wlien the four statutory considerations are
considered together, the fuel economy levels
achievable by the four domestic manufacturers,
as derived from the abo\e analyses, are as set
forth in Table 2 below. These numbers are based
on a percent emissions penalty. For the
reasons discussed in section III.E below, includ-
injr consideration of the emissions standards, an
adjustment is made in that section to Table 2.
ManufartMrer
American Motors
Chrysler
Ford
General Motors
TABLE 2
1981 1982 1983 1984
22.2 22.6 23.1 24.7
23.8 25.1 26.3 28.1
23.4 24.5 26.1 27.0
23.3 24.2 26.5 28.8
E. Establishing the maximum feasible average
fuel economy level.
In determining maximum feasible averajre fuel
economy, the Department cannot simply select
the level achievable by the least capable manu-
facturer in each model year. Instead, an analysis
alonjr the lines of that set forth in pages 154-5 of
the Conference Report must be carried out.
That Report states:
Such detennination should therefore take
industry-wide considerations into account. For
example, a determination of maximum feasible
avera<re fuel economy should not l>e keyed to
the sinple manufacturer which mifrht have the
most difficulty achieving a priven level of aver-
age fuel economy. Rather, the Secretary must
»»
weigh the benefits to the nation of a higher
average fuel economy standard against the
difficulties of individual automobile manufac-
turers. Such difficulties, however, should be
given appropriate weight in setting the stand-
ard in light of the small number of domestic
automobile manufacturers that cui-rently exist,
and the possible implications for the national
economy and for reduced competition asso-
ciated with a severe strain on any manuf.ac-
turer. However, it should also be noted that
provision has been made for granting relief
from penalties under Section 508(b) in situa-
tions where competition will suffer significantly
if penalties are imposed.
It is clear from this admonition that in certain
circumstances the standards must not be set at
levels which every manufacturer will be able to
achieve in every year. Rather, they should be
set at some point above those levels. "Wliether
and how far standards should be set above those
levels depends on a balancing of the burdens
placed on the manufacturers with lower achiev-
able average fuel economy on one hand against
the benefits of a higher standard on the other.
This in turn requires an analysis of the impacts
of civil penalties imposed on the manufacturers
at a given standard level. Implicit in this anal-
ysis is consideration of the ability of a manufac-
turer to apply civil penalty "credits" from other
years to reduce or eliminate a penalty and of the
ability of the Department to compromise penal-
ties where insolvency, bankruptcy, or substantial
lessening of competition may occur. See section
508 of the Act. The latter possibility is es-
pecially significant in the case of American
Motors, which has reported no taxable income
over the past ten years and has suffered serious
declines in its sales in the past year, DN-14, p. 6
and Attachments, and whose projected maximum
achievable fuel economy is substantially less than
its domestic competitors. See Table 2.
AVhen this clarifying language in the Confer-
ence Report is applied to the projected maximum
feasible fuel economy values for each manufac-
turer as set forth in Table 2, it becomes clear that
in establishing these standards the "least capable"
manufacturer should not be the limiting con-
straint in determining maximum feasible average
fuel economy. From that table, it appears that
PART 531— PRE 29
Effective: Model Years 1981-1984
the projected maximum feasible level for AMC
in the years 1981-84 ranges from approximately
one to three miles per p;allon less than that of the
least capable of the "Bio: Three" in each of those
years. In terms of the nation's petroleum import
bill, the cost to consumers of setting the fuel
economy standards at the level attainable by
AMC as opposed to basing it on that attainable
by the "Big Three" could be nearly half a billion
dollars in 1983 alone. Against the benefit of
avoiding that substantial cost through establish-
ing higher standards, the Department must bal-
ance the potential civil penalty liability which
AMC could be subject to, which could be up to
$145 per automobile sold in 1983. Further, the
Department must consider AMC's present small
market share of under 3 percent of the domestic
market and its resulting relatively small impact
on industry employment, and the possibility dis-
cussed in the previous paragraph that any civil
penalty liability might be mitigated by the De-
partment. In view of these considerations, the
Department nmst not base its determination of
maximum feasible average fuel economy on the
single domestic manufacturer with the lowest
projected fuel economy capability.
While the Department believes that the pre-
vious paragraph correctly applies the statutory
criteria, it may paint a misleading picture of
AMC's ability to meet fuel economy standards.
First, as previously discussed, the projected fuel
economy values in Table 2 are based on a limited
class of available fuel economy improvement
methods. AMC could adopt additional measures
to improve fuel economy. Second, a number of
further measures are available to relatively small
manufacturers such as AMC to achieve major
improvements in average fuel economy in a short
time period. Among these are the discontinuance
of sale of poor fuel economy model types and the
purchase of high efficiency engines and other
technology from outside sources. Both of these
options require minimal capital investment and
are readily implementable. The Department has
no information on AMC's precise product plans
over the next several years, but it appears that
some significant initiatives is planned whicii
would result in major fuel economy improve-
ments for that company's automotive fleet. Re-
cently, AMC's president predicted that their
corporate fuel economy average would achieve
27.5 mpg by the early I980's. "Ward's Auto
World," June 1977, p. 30, Docket Number FE-
76-01-GR-16. AMC officers also testified that
they expect the average fuel economy of their
passenger automobiles to remain competitive
with that of the other domestic manufacturers,
and not fall significantly below that level, as the
Table 2 numbers might indicate. Tr-II, p. 220.
Thus, it appears that AMC's future average fuel
economy levels may be significantly understated
in the DOT analysis, and the resulting civil
penalty impact correspondingly overstated.
The Conference Report clarification of the
"maximum feasible" requirement also has impli-
cations for the "Big Three" manufacturers.
Although the fuel economy improvement poten-
tials of those three companies were found to be
relatively close numerically, some significant fuel
savings benefit could be achieved by setting the
fuel economy standard at a level higher than that
found to be achievable for the least capable of
the three. The harm suffered by those companies
as a result of a higher standard is measured by
the magnitude of the civil penalties generated. i
If the calculation of manufacturer-specific fuel '
economy improvements in Table 2 is correct, and
if each manufacturer improved its average fuel
economy up to those levels in each year, no net
civil penalty liability would result for the "Big
Three" if the maxinuim feasible average fuel
economy levels were established as follows: 23.3
mpg for 1981, 24.6 mpg for 1982, 26.1 mpg for
1983, and 27.4 mpg for 1984. At those levels, any
civil penalty liability for those companies in one
of the affected years would be offset by credits
obtained for overachievement in prior or subse-
([uent years. The onlj' obvious adverse impact
from adopting this approach would be possible
bad publicity resulting from the failure to meet
standards. In view of the fact that the Act's
sanctions are monetary civil penalties, which can
be offset from year to year, no major stigma
would attach to single year noncompliance. In
fact, the Act's unique enforcement scheme ap-
pears to be designed to create economic incentives
for encouraging compliance rather than harsh
sanctions for noncompliance. Therefore, the
Department has concluded that any harm to the
individual manufacturers from single year non-
PART 531— PRE 30
EfFecHve: Model Years 1981-1984
petroleum consumption could result in a cumula-
tive national savings of approximately 25 billion
dollars by the year 1095. at an assumed petroleum
price of $13.50 per barrel. See RSP Table 6.7.
VIII. Economic impact of the standards.
The economic impact of these standards was
independently evaluated in accordance with In-
ternal Re<:ulatory Procedures by the NHTSA
Office of Planninp: and Evaluation. This assess-
ment utilizes the assumptions set forth in the
RSP and exi)ands upon the analyses in that
document. That is, the RSP shows cumulative
impacts from 1977 for all fuel economy improve-
ments while the Economic Impact Assessment
i-eflects changes from MY 1980 vehicles due solely
to improvements necessary to meet the rule.
To summarize the Economic Impact Assess-
ment, the total chanpe for the Domestic Auto
Industry for model years 1981-84 (from a base
of MY 1980 and 20 mpp) due to the rule are
estimated as follows:
Gasoline consumption for the average vehicle
manufactured in MY's 1981-84 will be reduced
!)}• approximately 1100 gallons for a total life-
time savings of 1.2 billion barrels; consumer
lifetime gasoline costs (at 65 cents per gallon)
will be reduced by $640 per car, retail prices
will increase by about 3 percent or $175 per
car: total consumer costs (that is, retail prices,
maintenance costs, and gasoline costs) are
anticipated to decrease by about $450 per car
or $20 billion nationally. The domestic indus-
try extraordinary capital requirements are
anticipated to increase by $3 billion, new car
sales may decrease by about .4 percent or a
total of 155.000 vehicles, and total industry
employment is estimated to ri.se by 77.000 jobs
due to extraordinary capital expenditures.
Most of these impacts can be considered in-
significant with the exception of the reduction
in gasoline consumption and possibly the in-
crease in industry capital requirements, should
sales decline for several years due to unfore-
seen events.
Sensitivity analyses performed on several of
the variables used in tlie analysis show little
change in results. Thus, these results are good
approximations of the impacts to be expected
\ from the rule.
It is recognized that the economic projections
made in the Department's various economic
analyses are subject to possible changes in the
national economy and in the structure of the
industry, which no one is presently able to pre-
dict with perfect accuracy.
IX. Environmental Impact.
A detailed analysis of the environmental im-
pacts associated with various alternative fuel
economy standard schedules for the 1981-84
period was conducted, consistent with the re-
quirements of the National Environmental Policy
Act, 42 U.S.C. 4321, et seq. The analysis con-
cluded that the national goals of a better environ-
ment and of energy conservation are generally
compatible, in that measures which tend to con-
serve energy also tend to be beneficial to the
environment. The most obvious environmental
benefits associated with these standards are the
conservation of scarce resources such as petroleum
and the various metals which presently go into
the automobiles, and the reduction of pollution
associated with the extraction and processing of
those materials. Most areas of possible adverse
environmental impacts, such as the pollution
associated with the increased use of lightweight
materials, are offset by reductions in pollution
associated with the items replaced. The most
significant possible exception to this is the still
unresolved issue of the generation and potential
for control of presently unregulated pollutants
from diesel and other alternative engines. The
Department has not based its standards on the
use of alternative engines at this time primarily
for that reason. However, the issue of the en-
vironmental impacts associated with the various
alternative engines is of major importance, and
the EPA is pursuing the matter now.
X. Safety impact.
The NPRM raised a question regarding the
impact of occupant safety of downsizing pas-
senger automobiles as a result of the fuel economy
standards. Depending upon the assumptions
made, reasonable conclusions can be made that
there will be little net safety impact or, alter-
natively, that there will be a significant adverse
safety impact.
PART 531— PRE 35
Effective: Model Years 1981-1964
A major reason for suggesting that downsizing
might have a significant adverse safety impact
is the physical law of conservation of momentum,
which indicates that when objects of different
mass collide, the smaller object will experience
a greater change in velocity than the larger one.
DN-18, Att. VII, p. 4 (GM). There, in a col-
lision between a small automobile and a large
one, the occupants of the smaller one may collide
with the vehicle interior with a greater velocity
than would be the case for the occupants of the
larger automobile, assuming that seat belts were
not used. A further advantage which large auto-
mobiles may have is that their additional size
may provide for additional energy-absorbing
crush space outside the occupant compartment,
which may allow the energy- of a crash to be
dissipated in a manner less injurious to the
occupants.
On the other hand, accident information ap-
pears to indicate that the change of injury in
single car crashes is not appreciably greater in a
small car than in a large car. The reduction in
vehicle weight and size will apparently be offset
to a substantial degree by the reduction in the
range of passenger automobile weights which is
projected to occur as the larger automobiles are
downsized. Further, smaller automobiles may
have certain advantages in terms of accident
avoidance which tend to offset their possible dis-
advantages. One suoh advantage is related to the
"target-projectile" effect. See Docket \o. FE-
76-01-GE-7, pp. 40-2 (Mr. Stanley Hart). This
effect results from the fact that the larger an
automobile is in relationship to a road lane, the
more likely it is to hit or be hit by anything else
within that lane, and the more likely it is to veer
outside its assigned lane because of the reduced
margin for error. A corollary to this is the
increased ability of a small automobile to ma-
neuver within its lane to avoid other automobiles.
Docket No. FE-76-01-GR-8, p. 9 (Prof. P. L.
Yu, et al.). Furthermore, although the shielding
effect of vehicular weight may be an indicator
of an automobile's protective ability, that same
weight also serves as a weapon with respect to
other automobiles and pedestrians. Thus, addi-
tional weight in vehicles may be a benefit to the
occupant of that particular vehicle but a detri-
ment to other drivers and pedestrians.
Available technology provides the means to
argue that the downsized automobile fleet of the
1980's will be as safe, or safer, than the fleet of
today. The Department has statutory responsi-
bility under the National Traffic and Motor Ve-
hicle Safety Act to issue motor vehicle safety
standards that meet the need for motor vehicle
safety. The estimates of fuel economy penalties
due to Federal motor vehicle safety standards
presume the existence of standards that will
yield safety improvements which more than off-
set any net safety impacts due to reduced vehicle
size or weight (see RSP).
The above conclusions should not be construed
to mean that passenger automobiles are or will
be as safe as possible. Among the actions that
could be taken to improve the safety character-
istics of future automobiles are techniques de-
scribed in Volvo's response to the May 10, 1977,
special order, such as the use of energj'-absorbing
structural designs. DX-28-02, p. 11 and Attach-
ment. These techniques could be implemented
concurrently with the vehicle redesign which oc-
curs as part of the downsizing process. When
representatives of the two largest domestic manu-
facturers were asked at the fuel economy hearing
whether their companies planned to incorporate
such techniques as part of the redesign process,
they responded that they would do whatever was
necessary to comply with applicable safety
standards, but presumably no more. Tr-II, p. 86
(Ford) and 187 (GM). The Department en-
courages the various automakers to consider
techniques such as those described by Volvo when
present passenger automobiles are redesigned.
XI. 1981-1984 Passenger Automobiles.
The passenger automobiles produced during
the 1981-84 period will differ significantly from
those presently produced. These differences will
result not only from the requirements of the
Motor Vehicle Information and Cost Savings
Act, but also from requirements in the areas of
safety and emission control and from market and
other forces. It is therefore appropriate to dis-
cuss in general terms the implications of all these
requirements for the driving public, with par-
ticular emphasis on the energy-related changes.
PART 531— PRE 36
The final reason suggested by the commenters
for denying Excalibur's petition for exemption
was that the agency should exercise its discretion
to deny the petition on the grounds that it is
contrary to the general goal of energy conserva-
tion and that an exemption would erode public
support for the fuel economy program. This
agency believes that the language in section
502(c) specifying that the agency may exempt
low volume manufacturers indicates that Con-
gress intended this agency to apply a test of
whether granting an exemption would be gen-
erally consistent with the purposes of the Act.
The main purpose of the Act is conserving
energy. Establishing standards above the max-
imum feasible average fuel economy for Excali-
bur would not conserve any energy, since the
alternative standard is based on the premise that
it is not possible for Excalibur to achieve better
fuel economy than its maximum feasible level.
As to the comments stating that an exemption
for Excalibur would endanger public support for
the program, this agency does not agree that re-
quiring verj' small manufacturers like Excalibur
to comply with standards set at their maximum
feasible level instead of the maximum feasible
level for larger manufacturers will necessarily
erode public support for the program. Instead,
the agency believes that the process of exempting
the very small manufacturers will be viewed as
equitably adjusting the generally applicable fuel
economy standards to the lesser capabilities of
these manufacturers.
For these reasons the agency has determined
that the maximum feasible average fuel economy
for Excalibur in the 1978 model year is 11.5 mpg.
Therefore, this agency is exempting Excalibur
from the generally applicable standard of 18.0
mpg for the 1978 model year and is establishing
an alternative standard for' Excalibur at 11.5
mpg for the 1978 model year.
Accordingly, 49 CFK Part 531 is amended. . . .
AUTHORITY: Sec. 9, Pub. 89-670, 80 Stat.
931 (49 U.S.C. 1657); sec. 301, Pub. 94-163, 89
Stat. 901 (15 U.S.C. 2002) ; delegation of author-
ity at 41 FR 25015, June 22, 1976.
The program official and attorney principally
responsible for the development of this decision
are Douglas Pritchard and Stephen Kratzke,
respectively.
Issued on January 11, 1979.
Joan Claybrook
Administrator
44 F.R. 3708-3709
January 18, 1979
PART 531-PRE 41-42
I
PREAMBLE TO AMENDMENT TO PART 531— AVERAGE FUEL ECONOMY STANDARDS
FOR PASSENGER AUTOMOBILES
(Docket No. LVM 77-02; Notice 3)
Action: Final decision to grant exemption from
average fuel economy standards.
Surmn<iry : This notice exempting Rolls-Royce
Motors Inc. (Rolls-Royce) from the generally
applicable average fuel economy standard of
18.0 miles per gallon (mpg) for 1978 model year
passenger automobiles and establishing an alter-
native standard is issued in response to a petition
by Rolls-Royce. The alternative standard is 10.7
mpg.
Date: The exemption and alternative standard
apply in the 1978 model year.
F&r further information contact :
Douglas Pritchard, Office of Automotive
Fuel Economy Standards, National Highway
Traffic Safety Administration, Washington,
D.C. 20590 (202-755-9384).
SupfUmentary information:
The National Highway Traffic Safety Admin-
istration (NHTSA) is exempting Rolls-Royce
from the generally applicable passenger automo-
bile average fuel economy standard for the 1978
model year and establishing an alternative
standard.
This exemption is issued under the authority
of section 502(c) of Title V of the Act. Section
502(c) provides that a manufacturer of passenger
automobiles that manufactures fewer than 10,000
vehicles annually may be exempted from the gen-
erally applicable average fuel economy standard
if that generally applicable standard is greater
than the low volume manufacturer's maximum
feasiole average fuel economy and if the NHTSA
establishes an alternative standard applicable to
that manufacturer at the manufacturer's maxi-
mum feasible average fuel economy. In deter-
mining the manufacturer's maximum feasible
average fuel economy, section 502(e) of the Act
requires the NHTSA to consider :
(1) Technological feasibility;
(2) Economic practicability;
(3) The effect of other Federal motor vehicle
standards on fuel economy ; and
(4) The need of the Nation to conserve energy.
This final rule was preceded by a notice an-
nouncing the receipt of a petition for exemption
from the 1978 standard (42 FR 64171 ; December
22, 1977) and a proposed decision to grant an
exemption to Rolls-Royce for the 1978 model year
(43 FR 30081; July 13, 1978). Only one com-
ment on the notice of receipt was submitted.
That commenter urged that Rolls-Royce be
exempted "in the name of common sense".
Eleven comments were received in response to
the proposed decision, all of which opposed the
proposed exemption. These comments raised
three main points: Congress never intended that
Rolls-Royce receive an exemption; the agency
had incorrectly determined the maximum feasible
average fuel economy for Rolls-Royce; and even
if Rolls-Royce were eligible and had a maximum
feasible average fuel economy of less than the
generally applicable standard of 18.0 miles per
gallon (mpg), NHTSA should use its discretion
to deny the Rolls-Royce petition.
With respect to the first point, several com-
menters stated that it was unfair for some manu-
facturers to be forced to comply with a standard
of 18 mpg, while others were exempted from that
requirement. Gongi-ess determined, however,
through section 502(c) of the Act, to authorize
this agency to exempt low volume manufacturers
from the generally applicable standard and estab-
lish a standard for those manufacturers at the
level of their maximum feasible average fuel
PART 531-PRE 43
economy. Congress took this action in recogni-
tion of a variety of factors, including the limited
engineering staff and financial resources of these
manufacturers. Low volume manufacturers can
be exempted from the generally applicable stand-
ards only if they cannot comply with those
standards, and if alternative standards are set.
Other commenters said that the agency should
require fuel economy improvements by all manu-
facturers, not permit certain manufacturers to
ignore the generally applicable fuel economy
standards. The agency is requiring all exempted
manufacturers to comply with an alternative
standard set at their maximum feasible average
fuel economy. A requirement that these manu-
facturers achieve some higher fuel economy level
would not save any additional fuel, since the
alternative standard is based on the premise that
it is not possible for a manufacturer to achieve
a higher fuel economy level. Hence, exempting
low volume manufacturers from the generally
applicable standards and establishing an alterna-
tive standard at their maximum feasible level
does not result in any additional use of fuel.
In this vein, one other commenter suggested
that Congress had intended that the low volume
exemptions only be available to manufacturers
of moderately priced cars, and not to manufac-
turers of very expensive cars. In this comment-
er's view, the manufacturer of very expensive cars
can pass on any civil penalties to its customers
in the form of a price increase. Given the price
of these cars, this commenter concluded that the
increase would not cause any noticeable decrease
in sales, while an exemption would only serve to
keep prices down for the purchasers of these
expensive vehicles.
No legislative history supporting this conten-
tion regarding Congressional intent is cited by
the commenter or known to this agency. Congress
did give the agency discretionary authority to
grant or deny petitions. However, Congress did
not direct the agency to use that discretion to
deny exemption petitions by manufacturers of
high-priced automobiles or to use it in any other
particular manner.
Other comments suggested that it was imfair
to grant exemptions only to foreign companies,
while requiring all domestic companies to comply
with the generally applicable standard. Both
domestic and foreign low volume manufacturers
are eligible for exemptions. Indeed, the first two
low volume manufacturere to receive exemptions
were domestic manufacturers, Avanti and
Checker.
The second major objection raised by the com-
menters concerned this agency's determination of
the maximum feasible average fuel economy for
Rolls-Royce. No commenters suggested that the
consideration of technological feasibility or the
effect of other Federal motor vehicle standards
on fuel economy had been in error. In this con-
nection, it should be emphasized that the time for
improving the fuel economy of 1978 Rolls-Royces
has passed. However, several commenters stated
that this agency had not properly considered the
economic practicability or the need of the Nation
to conserve energy.
One commenter argued that this agency had
not considered the ability of Rolls-Royce to pay
the civil penalty which would be assessed if
Rolls-Royce failed to comply with the higher
generally applicable standard. The agency agiees
that it has confined itself under Section 502(c)
to an analysis of the financial capabilities of the
petitioner to improve fuel economy by using
smaller engines, lighter components, and the like,
and does not consider the ability to absorb any
potential civil penalties.
The reason for so limiting the analysis of eco-
nomic practicability in setting alternative stand-
ards for individual manufacturers is that the
agency believes that Congress intended the maxi-
mum feasible concept to result in an alternative
set at the highest average fuel economy level a
manufacturer could reasonably be expected to
achieve in a given model year. If the ability to
pay any civil penalty is considered as a' part of
economic practicability for an individual manu-
facturer, the resulting standard would be higher
than the highest fuel economy level the manu-
facturer could achieve in that model year, and
thus would impose an unavoidable civil penalty.
This would not conserve any additional fuel
since it would not cause that manufacturer to
achieve higher fuel economy and would not apply
to other manufacturers whose fuel economy could
exceed the fuel economy of that manufacturer.
Accordingly, the agency does not believe that
PART 531-PRE 44
(
PREAMBLE TO AN AMENDMENT TO PART 531— AVERAGE FUEL ECONOMY
STANDARDS FOR PASSENGER AUTOMOBILES
(Docket No. LVM 82-01; Notice 2)
ACTION: Final Rule.
SUMMARY: This notice grants petitions by Aston
Martin Lagonda, Ltd. (Aston Martin), Avanti
Motor Corporation (Avanti), Checker Motor Cor-
poration (Checker), Excalibur Automobile Cor-
poration (Excalibur), and Rolls-Royce Motors, Ltd.
(Rolls-Royce), requesting that they be exempted
from the generally applicable average fuel
economy standards for 1981-1985 passenger
automobiles, and that lower alternative standards
be established for those companies. This notice,
which was preceded by a proposal requesting
public comments, establishes those exemptions
and alternative standards under the authority of
the Motor Vehicle Informaton and Cost Saving
Act. The alternative standards are the same as
those proposed except in the case of Checker.
Checker has stopped production of all its
passenger automobiles. Accordingly, its petition
for the 1983-85 model years is treated as moot.
DATE: These exemptions are effective for model
years 1981-1985.
SUPPLEMENTARY INFORMATION: The NHTSA is
exempting Aston Martin, Avanti, Excalibur, and
Rolls-Royce from the generally applicable average
fuel economy standards for passenger automobiles
manufactured in the 1981-1985 model years and
establishing alternative standards applicable to
those companies in those model years. Checker is
granted exemptions and subject to alternative
standards for the 1981 and 1982 model years.
These exemptions are issued under the authority
of section 502(c) of the Motor Vehicle Information
and Cost Savings Act, as amended ("the Act") (15
I'.S.C. 2002(c)). Section 502(c) provides that a
nanufacturer of passenger automobiles which
nanufacture fewer than 10,000 vehicles annually
may be exempted from the generally applicable
average fuel economy standard for a particular
model year if that standard is greater than the low
volume manufacturer's maximum feasible average
fuel economy and if the NHTSA establishes an
alternative standard applicable to that manufac-
turer at the maximum feasible average fuel
economy. In determining the manufacturer's max-
imum feasible average fuel economy, section 502(e)
of the Act (15 U.S.C. 2002(e)) requires the NHTSA
to consider:
(1) Technological feasibility;
(2) Economic practicability;
(3) The effect of other Federal motor vehicle
standards on fuel economy; and
(4) The need of the Nation to conserve energy.
This final rule was preceded by a notice announc-
ing the NHTSA's proposed decision to grant an ex-
emption to all five of these companies for all five
model years (47 FR 20639; May 13, 1982). NHTSA
received only one comment during the 45-day com-
ment period. The comment was from Checker.
Checker stated that its financial condition would
not permit it to carry out its plans to improve fuel
economy for its 1983-1985 model year vehicles,
and requested lower alternative standards for each
of those model years. On July 9, 1982, Checker
ended production of its passenger automobiles
with no plans to resume that production. Accord-
ingly, NHTSA is dismissing Checker's petition for
exemption during the 1983-1985 model years as
moot. Exemptions and alternative standards are
established for the 1981 and 1982 model years, the
years in which Checker was producing automo-
biles. No other comments were received.
Based on its conclusions that the maximum feasi-
ble average fuel economy levels for each of the
petitions during the 1981-1985 model years would
be as shown below, that other Federal motor
I
PART 531; PRE 59
vehicle standards would not affect achievable fuel
economy beyond the extent considered in this
analysis, and that the national effort to conserve
energy will not be affected by the granting of these
requested exemptions, NHTSA hereby exempts
the five petitioners from the generally applicable
average fuel economy standards and establishes
alternative standards for the petitioners at the
levels shown below.
Part 531— [Amended]
In consideration of the foregoing, 49 CFR Part
531 is amended by revising § 531.5 to read as
follows:
§ 531.5 Fuel economy standards.
*****
(b) The following manufacturers shall comply
with the standards indicated below for the
specified model years:
(1) Avanti Motor Corporation.
Average Fuel Economy Standard
Model year
Miles per
gallon
1978 16.1
1979 14.5
1980 15.8
1981 18.2
1982 18.2
1983 16.9
1984 16.9
1985 16.9
(2) Rolls-Royce Motors, Inc.
Average Fuel Economy Standard
(3) Checker Motors Corporation.
Average Fuel Economy Standard
Model year
Miles per
gallon
1978 17.6
1979 16.5
1980 18.5
1981 18.3
1982 18.4
(4) Aston Martin Lagonda, Inc.
Average Fuel Economy Standard
Model year
Miles per
gallon
1979 11.5
1980 12.1
1981 12.2
1982 12.2
1983 11.3
1984 11.3
1985 11.4
(5) Excalibur Automobile Corporation.
Average Fuel Economy Standard
Model year
Miles per
gallon
1978 11.5
1979 11.5
1980 16.2
1981 17.9
1982 17.9
1983 16.6
1984 16.6
1985 16.6
Model year
Miles per
gallon
1978 10.7
1979 10.8
1980 11.1
1981 10.7
1982 10.6
1983 9.9
1984 10.0
1985 10.0
Issued on December 3, 1982.
Raymond A. Peck, Jr.,
Administrator.
47 F.R. 55684
December 13, 1982
PART 531; PRE 60
PART 531— AVERAGE FUEL ECONOMY STANDARDS
FOR PASSENGER AUTOMOBILES
Sec.
531.1
Scope.
531.2
Purpose.
531.3
Applicability.
531.4
Definitions.
531.5
Fuel economy standards.
531.6
Measurement and calculation procedures
5531.1 Scope.
This part establishes average fuel economy
standards pursuant to section 502(a) of the Motor
Vehicle Information and Cost Savings Act, as
amended, for passenger automobiles.
5531.2 Purpose.
The purpose of this part is to increase the fuel
economy of passenger automobiles by establishing
minimum levels of average fuel economy for those
vehicles.
3531 .3 Applicability.
This part applies to manufacturers of passenger
automobiles.
5531.4 Definitions.
(a) Statutary terms. (1) The terms "average
fuel economy," "manufacture," "manufacturer,"
and "model year" are used as defined in section
501 of the Act.
(2) The terms "automobile" and "passenger
automobile" are used as defined in section 501 of
the Act and in accordance with the determination
in part 523 of this chapter.
(b) Other terms. As used in this part, unless
otherwise required by the context—
(1) "Act" means the Motor Vehicle Informa-
tion and Cost Savings Act, as amended by Pub. L.
94-163.
mobiles shall comply with the following standards
in the model years specified:
Average fuel economy
standard (miles
Model Year per gallon)
1978 18.0
1979 19.0
1980 20.0
1981 22.0
1982 24.0
1983 26.0
1984 27.0
1985 and thereafter 27.5
(b) The following manufacturers shall comply
with the standards indicated below for the
specified model years:
1(1) Avanti Motor Corporation.
Average Fuel Economy Standard
Model year
Miles per
gallon
1978 16.1
1979 14.5
1980 15.8
1981 18.2
1982 18.2
1983 16.9
1984 16.9
1985 16.9
(2) Rolls-Royce Motors, Inc.
Average Fuel Economy Standard
Model year
Miles per
gallon
'1
S531.5 Fuel economy standards.
(a) Except as provided in paragraph (b) of this
section each manufacturer of passenger auto-
(Rev. 12/13/82) PART 531-1
1978 10.7
1979 10.8
1980 11.1
1981 10.7
1982 10.6
1983 9.9
1984 10.0
1985 10.0
(3) Checker Motors Corporation.
Average Fuel Economy Standard
Model year
Miles per
gallon
1978 17.6
1979 16.5
1980 18.5
1981 18.3
1982 18.4
(4) Aston Martin Lagonda, Inc.
Average Fuel Economy Standard
Model year
Miles per
gallon
1979 11.5
1980 12.1
1981 12.2
1982 12.2
1983 11.3
1984 11.3
1985 11.4
(5) Excalibur Automobile Corporation.
Average Fuel Economy Standard
Model year
Miles per
gallon
1978 11.5
1979 11.5
1980 16.2
1981 17.9
1982 17.9
1983 16.6
1984 16.6
1985 16.6
(6) Reserved
(7) Officine Alfieri Maserati, S.p.A.
Average Fuel Economy Standard
Model year
Miles per
gallon
1978
12.5
1979
12.5
1980
09 5
(47 F.R. 55685-December 13, 1982. Effective: For
model years 1981-1985)1
S531.6 Measurement and calculation procedures.
(a) The average fuel economy of all passenger
automobiles that are manufactured by a manufac-
turer in a model year shall be determined in
accordance with procedures established by the Ad-
ministrator of the Environmental Protection
Agency under section 502(a) (1) of the Act and set
forth in 40 CFR Part 600.
42 F.R. 33534
June 30, 1977
(Rev. 12/13/82)
PART 531-2
PREAMBLE TO PART 533— AVERAGE FUEL ECONOMY STANDARD FOR NON-
PASSENGER AUTOMOBILES
(Docket No. FE 76-3; Notice 3)
This notice establishes average fuel economy
standards for nonpassenger automobiles which
are rated at 6,000 pounds gross vehicle weight or
less and are manufactured in model year 1979.
Vehicles affected by these standards include
pickup trucks, vans, and four-wheel drive, jeep-
type vehicles which are rated within that weight
range. The standard for four-wheel drive non-
passenger automobiles which are jeep-type ve-
hicles is 15.8 mpg. The standard for all other
nonpassenger automobiles is 17.2 mpg. The pur-
pose of these standards is to conserve gasoline
by improving the fuel economy of the Nation's
fleet of nonpassenger automobiles. The agency
estimates that 102,500,000 gallons of gasoline will
be saved annually by the 1979 nonpassenger
automobile fleet, over 1976 levels. The decreas-
I ing world petroleum supply and the uncertain
availability to this Nation of existing foreign
petroleum, combined with the importance of
petroleum to the national economy and standard
of living, have made these fuel economy standards
necessary.
Dates: These standards will apply to the 1979
model year.
For further information, contact :
Stephen P. Wood
Office of Chief Counsel
National Highway Traffic Safety
Administ ration
Department of Transportation
Washington, D.C. 20590
(202-426-9511)
Supplementary Information:
\ The National Highway Traffic Safety Admin-
istration (NHTSA) is establishing average fuel
economy standards for nonpassenger automobiles
manufactured in model year 1979. These stand-
ards will appear in a new Part 533, added to
NHTSA regulations by this action. The average
fuel economy standards are issued pursuant to
section 502(b) of Title V of the Motor Vehicle
Information and Cost Savings Act, as amended.
This final rule was preceded by a questionnaire
last summer and a notice of proposed rulemaking
(NPRM), 41 FR 52087, November 26, 1976. The
rule proposed in the NPRM placed all nonpas-
senger automobiles 6,000 pounds gross vehicle
weight rating (GVWR) or less in a single class,
and established an average fuel economy stand-
ard of 18.7 mpg for that class. The NPRM
specified that this proposed standard would be
reduced in light of any effects of 1979 emissions
standards and testing procedures established by
the EPA.
Comments to the NPRM were received by
NHTSA and were carefully evaluated in the
process of developing the final rule. Most of the
comments were submitted by automobile manu-
facturers. There were no comments received
from consumer groups, or other public interest
organizations.
A number of issues were raised by the com-
ments received in response to the NPRM. The
resolution of several of those issues has resulted
in changes to the final rule. The major issues
which have been raised, and their resolution,
along with specific changes to the final rule, are
described in the following discussion.
Sunwiary of changes in the rule and its ra-
tionale. The final rule, which is still limited to
nonpassenger automobiles 6,000 pounds GVWR
or less, provides for two classes of nonpassenger
automobiles, and a separate average fuel economy
standard for nonpassenger automobiles in each
class. The average fuel economy standard for
four-wheel drive, jeep-type vehicles is 15.8 mpg.
The average fuel economy standard for all other
nonpassenger automobiles is 17.2 mpg.
PART 533— PRE 1
Comments received from the manufacturers
indicated that a separate class of nonpassenger
automobiles, with a separate average fuel econ-
omy standard, was appropriate for four-wheel
drive jeep-type vehicles. Therefore, the agency
is establishing two average fuel economy stand-
ards for nonpassenger automobiles manufactured
in model year 1979, one for the jeep-type ve-
hicles, and one for the remainder of nonpassenger
automobiles. However, manufacturers of jeep-
type vehicles will have the option of counting
their vehicles in the special class for those ve-
hicles, or in the general class of other nonpas-
senger automobiles.
As described fully in the NPRM, the proposed
standard was based primarily on the domestic
manufacturers' production plans for 1979. In
brief, this approach was taken to avoid market
shifts to heavier, less fuel economical vehicles,
which could be be precipitated or aggravated by
requiring manufacturers to take drastic measures
to improve fuel economy on short notice. Also,
the agency believes that the short leadtime before
model year 1979 precluded major changes from
current 1979 product plans. Both final stand-
ards are based primarily on the manufacturer's
product plans for 1979. The agency continues to
believe that the approach taken in the NPRM is
appropriate, for the reasons stated therein.
For the general class of nonpassenger automo-
biles that excludes four-wheel drive jeep-type
vehicles, the domestic manufacturers indicated in
their comments to the NPRM that an average
fuel economy in the range of 18.7 mpg to 19.0
mpg was attainable for model year 1979, assum-
ing both 1976 Federal emissions standards and
testing procedures. Chrysler projected an aver-
age fuel economy of 16.5 mpg for 1979, assuming
1979 Federal testing procedures and the 1979
emissions standards; if Chrysler's estimated fuel
economy reduction of 13 percent for emissions
and testing procedures is taken out of the 16.5
projection, Chrysler in effect projected an aver-
age fuel economy of 19 mpg under 1976 emissions
standards and testing procedures.
As described below, the agency does not believe
that the manufacturers' fleets of 1979 nonpassen-
ger automobiles will experience a fuel economy
penalty from the 1979 Federal emissions stand-
ards. However, based on its own analysis and
the comments received, the agency concludes that
the change in the fuel economy testing procedures
in model year 1979 will result in a reduction in
measured fuel economy of 8 percent. Therefore,
in the final rule, the proposed standard of 18.7
mpg is lowered to 17.2 mpg.
The standard for four-wheel drive jeep-type
nonpassenger automobiles, like the standard for
the balance of nonpassenger automobiles, is based
on the projected fuel economy of the manufac-
turers, on an industry or marketwide basis.
American Motors Corporation (AMC), Toyota
and Chrysler are the only manufacturers of ve-
liicles in this subclassification of nonpassenger
automobiles. Tlie agency's analysis of Toyota's
fuel economy potential indicates an average fuel
economy for Toyota approximately 15 percent
lower than AMC. Chrysler has been achieving
higher fuel economy than Toyota, but not as
high as AMC. Because AMC is the major manu-
facturer of the vehicles and is projecting the
highest fuel economy, the standard was based on
the fuel economy projections of AMC. AMC
indicated in their comments that 17 mpg was an
attainable average fuel economy for model year
1979. Based on its consideration of AMC's
product plans, the agency believes that AMC can
make some additional improvement in fuel econ-
omy by model year 1979. Therefore, the agency
has concluded that a level of 17.2 mpg is attain-
able for AMC under 1976 emissions standards
and fuel economy testing procedures. By apply-
ing the reduction in measured fuel economy re-
sulting from changes in the testing procedures,
the final 1979 standard for general utility, jeep-
type vehicles is 15.8 mpg.
A number of comments criticized NHTSA's
consideration of technology available to improve
fuel economy. Notwithstanding their criticisms
all manufacturers indicated that 18.7 mpg to 19.0
mpg, assuming 1976 Federal emissions and test-
ing procedures, was acliievable for model year
1979. Therefore, the agency does not believe a
full discussion of the criticisms of its technologi-
cal assessment is necessary at this time, but will i
consider those criticisms in future rulemaking.
PART 533— PRE 2
Scope of the average juel economy standard.
International Harvester commented that, al-
though the preamble to the NPRM indicated
that only vehicles 6,000 pounds or less, GVWE,
were intended to be subject to the standard, the
proposed standard as drafted includes in its scope
vehicles less than 10,000 pounds GVWR. Inter-
national Harvester bases its comment on its
interpretation of proposed Part 523, Vehicle
Classification, which was published in the Federal
Register on December 20, 1976 (41 FR 55371).
The agency believes that International Har-
vester has misinterpreted proposed Part 523.
Under that proposed regulation, the only vehicles
with a GV^VR in excess of 6,000 pounds which
would be determined to be "automobiles" within
the meaning of Title V are vehicles which are
manufactured primarily for use in transporting
not more than 10 individuals, and which do not
meet the criteria for automobiles capable of off-
highway operation. If International Harvester's
vehicles with a GVWR in excess of 6,000 pounds
are not manufactured primarily for that use,
those vehicles are not automobiles and, therefore,
cannot be nonpassenger automobiles under the
Vehicle Classification NPRM. If those vehicles
are primarily manufactured for this use, but do
not meet those criteria, the vehicles are passenger
automobiles.
O-ff-road vehicles. AMC contends in its com-
ment to the NPRM that its Jeep CJ vehicle is
not an automobile within the meaning of section
501(1) of Title V. AMC contends that the Jeep
CJ is designed, manufactured, and marketed
primarily for off-highway operation. Under sec-
tion 501(1), only vehicles which are "manufac-
tured primarily for use on the public streets,
roads, and highways" can be "automobiles."
Since the Title authorizes the setting of average
fuel economy standards only for "automobiles,"
AMC is in effect contending that its Jeep CJ
vehicle cannot be subject to a fuel economy
standard under the Title.
Although AMC in its comment to the NPRM
for nonpassenger automobiles did not indicate
why it believes that its Jeep CJ vehicle is manu-
factured primarily for off-road use, AMC did
submit a fuller expression of its views on that
subject in a comment to the Vehicle Classification
NPRM. In addition, the Ford Motor Company
submitted a comment to the Vehicle Classification
NPRM which made a similar argument to the
one made by AMC, that is, that certain vehicles,
because of features making them capable of off-
highway operation, are not automobiles within
the meaning of Title V because they are not
manufactured primarily for use on the highways.
AMC stated that Jeeps are manufactured pri-
marily for off-road use because they are "built
with low and medium speed capability and
accommodate many off-road work-performing
equipment accessories." Ford indicated that ve-
hicles characterized by all five of the following
features are not manufactured primarily for use
on the highways: (1) four-wheel drive, (2) high
ground clearance in terms of approach, break-
over, and departure angles, and running and axle
clearance, (3) engine oil systems capable of op-
eration at inclines up to a 60 percent grade, (4)
relatively high axle ratios and heavy duty axle
and suspension components, and (5) relatively
high frontal area.
NHTSA has concluded that there is no merit
in the claims of AMC and Ford that vehicles
with the characteristics set out above are not
subject to fuel economy standards because their
off-road characteristics place them outside the
scope of Title V. The characteristics set out by
the manufacturers are merely characteristics of
vehicles which are capable of off-highway opera-
tion. Neither manufacturer claimed that the
vehicles referred to were not intended, or ex-
pected, to spend a substantial portion of their
operating lives on the public streets, roads, or
highways. Therefore, NHTSA believes that
Congress intended these vehicles to be automo-
biles within the meaning of section 501 of Title
V, and subject to fuel economy standards as non-
passenger automobiles. NHTSA bases its per-
ception of Congressional intent upon the plain
language of section 501, the use of language
identical to that used in other statutes where the
vehicles referred to by Ford and AMC are clearly
within the scope of those statutes, the legislative
history of Title V, and the purpose for which the
Title was enacted.
ll
PART 533— PRE 3
Congress clearly intended that vehicles capable
of off-highway operation be subject to fuel econ-
omy standards as nonpassenger automobiles. The
term "automobile capable of off-highway opera-
tion" is defined in section 501(3) of Title V.
Wliile such automobiles cannot be passenger
automobiles, they can be subject to an average
fuel economy standard under section 502(b) as
"automobiles which are not passenger automo-
biles." Thus, a manufacturer must show more
than an off-highway capability in order to show
that a vehicle is beyond the scope of Title V.
In addition, a vehicle may be manufactured
for more than one "primary" use. This inter-
pretation of "primarily" is supported by the
Supreme Court in Board of Governors of the
Federal Reserve System v. Agnew 329 U.S. 441
(1947). In Agnew, the Supreme Court had to
decide whether a securities firm which eai-ned
approximately two thirds of its revenue from
brokerage, and less than one third from under-
writing was "primarily engaged" in underwriting
under the Banking Act of 1933. The Court be-
lieved that "primary" does not always mean
"first," and stated, "An activity may be primary
... if it is substantial." 329 U.S. at 426. Thus,
under Agnew, even if a vehicle was manufac-
tured primarily for off-highway use, if highway
use was a substantial use of the vehicle, it would
be manufactured primarily for highway use also,
and would therefore be subject to Title V.
The phrase "manufactured primarily for use
on the public streets, roads, and highways,"
which is found in the definition of "automobile"
in section 501(1) of Title V, and which is the
key to the claims of Ford and AMC, is also
found in the definitions of "motor vehicle" in
section 102(1) of the National Traffic and Motor
Vehicle Safety Act of 1966 (15 U.S.C. 1391(1))
and section 2(15) of the Motor Vehicle Informa-
tion and Cost Savings Act (15 U.S.C. 1901(15)).
"Automobile" under Title V, and "motor vehicle"
imder both the Vehicle Safety Act and the Cost
Savings Act, do not completely overlap (for in-
stance, "automobiles" are limited to four wheeled
vehicles, while "motor vehicles" are not so lim-
ited). However, with respect to a vehicle's
identity as an on-road or an off-road vehicle, tlie
terms "motor vehicle" and "automobile" seem to
refer to the same vehicles. Looking at the ex-
perience with these vehicles under the Motor
Vehicle Safety Act and the Cost Savings Act, it
is clear that the vehicles referred to by AMC
and Ford ai-e on-road vehicles, with a capability
for off-highway operation.
After more than a decade of I'egulation under
the Vehicle Safety Act, both Ford and AMC
have acted consistently with the view that ve-
hicles referred to here were "motor vehicles."
Indeed, AMC admits that the vehicles are de-
signed to meet the Federal safety standards ap-
plicable to motor vehicles. Moreover, the
legislative history of the Cost Savings Act spe-
cifically contemplates that jeeps are subject to
that Act. S.Rept. No. 92-413, 92d Cong., 1st
Sess., at 20. Congress must be assumed to have
been aware of this long, unchallenged regulatory
practice which covered the vehicles at issue here
when drafting the language found in section 501
of Title V.
NHTSA also notes that these vehicles are con-
sidered by the Environmental Protection Agency
(EPA) to be subject to the emissions standards,
under the Clean Air Act, which apply only to
vehicles "designed for transporting persons or
property on a street or highway."
There is nothing in the legislative histoi-y of I
Title V which indicates that the intent of Con-
gress was that the Title have a more narrow
scope than that given by the NHTSA's interpre-
tation. In its comment to the Vehicle Classifica-
tion NPRM, Ford quotes the following passage
from the legislative history of Title V, in sup-
port of its claim that vehicles with all the features
which Foi'd discussed are not manufactured
primarily for on-road use:
The effect of the definitional scheme of the
bill is to exclude entirely vehicles not manu-
factured primarily for highway use (e.g.,
agricultural and construction equipment, and
vehicles manufactured prinmrily for off-roa/l
rather than highway use). (Emphasis sup-
plied by Ford.)
The quoted language adds nothing to Ford's
argument. Although this language gives some
examples of the kinds of vehicles which Congiess
intended not to be subject to fuel economy stand-
ards under the Title, e.g., agricultural equipment
and construction equipment, those vehicles are
PAET 533— PRE 4
not characterized bj' the features which are
claimed by the manufacturers to establish that a
vehicle was not manufactured for highway use.
Furthermore, the languajre which Ford imder-
scored by no means referred necessarily to the
vehicles which Ford seeks to have excluded from
the Title. Other vehicles, such as racing cars,
fork-lifts, and airport fire apparatus are just
some of the other vehicles which are not manu-
factured primarily for on-road use.
Indeed, if anything, the quoted language sup-
ports NHTSA's position that its interpretation
of the "manufactured primarily" language is
correct, since the two examples of vehicles which
were given have long been considered by the
NHTSA to be off-road vehicles. Therefore,
Congress seems to be adopting the NHTSA
interpretation. Moreover, it should be noted that
the quoted material referred to the definitional
scheme as it existed in HR 7014. In that earlier
version of Title V, there was no specific recogni-
tion of automobiles which are capable of off-road
operation. Tlierefore, the House report referred
to a definitional scheme that less clearly included
off-road vehicles than the scheme enacted into
law.
¥ Moreover, Ford did not discuss the legislative
history of Title V in the Senatei. The bill orig-
inally passed by the Senate dealing with auto-
motive fuel economy standards was S.1883.
Section 503(7) of S.1883 read:
"light duty truck" means any motor vehicle
rated at 6,000 pounds gross vehicle weight
or less which (A) is designed primarily for
purpose of transportation of property in-
cluding a derivative of such a vehicle, or
(B) has special features modifying such
vehicle for predominant offstreet or off-
highicay operation and use. (Emphasis
added.)
Hence, the vehicles AMC and Ford seek to have
excluded from the title were specifically included
in the original Senate bill.
The text of S.1883 was incorporated verbatim
into the Senate version of S.622; 41 Cong. Rec.
S-169.57 (daily ed., September 26, 1975). The
conference report for S.622 states that "average
fuel economy standards shall apply to all new
4-wheeled motor vehicles (referred to as "auto-
mobiles") manufactured or imported into the
United States which are rated at 6,000 pounds
gross vehicle weight (GVW) or less" S.Rep.
94^516, at 153. In light of the express provisions
of the Senate bill and the broadly inclusive state-
ment in the conference report, the agency believes
that the legislative history supports the NHTSA
interpretation of the scope of Title V.
Finally, the purpose of the Title dictates that
its provisions, especially regarding the scope of
its applicability, be given a liberal constniction.
Congress enacted Title V in response to the
energy shortage and the pressing national need
to reduce the consumption of gasoline. In light
of the importance of energy conservation to the
Nation's economic health and standard of living,
NHTSA believes that Congress intended the
Title to have broad application, and that any
interpretation of the Title that would have the
effect of exempting an entire class of vehicles
from regulation under the Title must be firmly
based in the language of the Title or its legisla-
tive history. Neither AMC nor Ford has shown
a clear expression of Congressional intent that
the vehicles with the characteristics they de-
scribed, making them suitable for off-road oper-
ation, should be exempt from fuel economy
standards established under the Title. Indeed,
as has been demonstrated, the intent of Congress
would have those vehicles subject to the Title.
The agency realizes that the term "primarily,"
as used in the definition of passenger automobile
in section 501(2) ("manufactured primarily for
use in the transportation of not more than 10
individuals") is given a different meaning than
when it is used in section 501(1) ("manufactured
primarily for use on the public streets, roads and
highways"). However, the agency believes that
Congress did not intend that the word be used
in the same sense in those two definitional sec-
tions. As discussed above, the use of the term
"primarily" in the definition of "automobile"
must be considered against a legislative backdrop
of other statutes using the identical phrase, and
the remedial purposes of Title V justifying a
broad interpretation of those definitions which
delineate the scope of its applicability. How-
ever, the use of the term "primarily" in the
definition of "passenger automobile" brings other
PART 533— PRE 5
considerations into play. First, the need to give
the term so broad a meaning is less compelling
when the effect is not to include a vehicle in the
scope of the Title, but only to place a vehicle
into one of the categories clearly within the
scope of the Title. Second, the definition of
"passenger automobile," unlike the definition of
"automobile," is not identical to existing defini-
tions in other statutes with established interpre-
tations. Third, since all automobiles carry at
least one passenger, interpreting primarily to
mean "substantial" would result in no automobile
being classified as a nonpassenger automobile.
Since Congress clearly intended that nonpas-
senger automobiles be considered apart from
passenger automobiles, such an interpretation
would defeat a clear Congressional intent.
Captive Imports. In the NPRM, the NHTSA
indicated its tentative intent to calculate a single
average fuel economy figure for domestic manu-
facturers which have captive imports by combin-
ing the captive imports with the domestically
produced vehicles of those manufacturers. Cap-
tive imports are vehicles, such as the Chevrolet
LUV and the Ford Courier pickup trucks, which
are marketed by a domestic manufacturer but
fabricated by a foreign manufacturer. It is
anticipated that approximately 50,000 1979
LUV's and 50,000 1979 Couriers will be imported
into this country. The agency noted that there
were some questions about the propriety of this
inclusion, including one relating to the meaning
of the term "control" as used in section 503(c)
of Title V and whether General Motors and Ford
import these vehicles within the meaning of sec-
tion 501(9) of Title V. Comments and informa-
tion were requested from interested parties.
Comments were received from Chrysler, Gen-
eral Motors and Ford supporting the inclusion
of the captive imports, and from the Unit«d
Auto Workers (UAW) and AMC opposing the
inclusion. Chrysler supported the inclusion of
the captive imports because it believed this would
allow the manufacturer to adopt the most cost-
effective strategy for maximizing fleet fuel econ-
omy. General Motors supported the inclusion of
the captive imports because it believed its owner-
ship of 34 percent of the common stock of Isuzu
(the producer of the LUV) plus its contractual
control over the design, manufacture, and im-
porting of the LUV vehicles makes General
Motors the manufacturer under section 503(c) of
Title V. Ford supported the inclusion of the
captive imports because it believed Title V re-
quires the separation of domestic and imported
vehicles only for passenger automobiles, and be-
cause it believes its contractual arrangements
with Toyo-Kogyo (the producer of the Courier)
make Ford the importer of the Courier and
hence the manufacturer under section 501(9).
Ford also believes its contractual control over the
design and manufacture of the Courier consti-
tutes sufficient control to make it the manufac-
turer under section 503(c) of Title V. The
UAWs opposition was based on its belief that
the intent of the Title is to treat all imported
and domestic vehicles separately, although it con-
ceded that the language of the Title mandates
this separate treatment only for passenger auto-
mobiles. AMC objected because it believes that
the net effect of the inclusion of the captive im-
ports would be to discriminate against non-
importers and stimulate foreign production at
the expense of domestic production.
The NHTSA has concluded that the inclusion
of the captive imports in the model year (MY)
1979 fleet is proper. First, it is clear that Ford
and General Motors are the statutory manufac-
turers of their captive imports. Under section
503(c), the term "manufacturer" includes anyone
who "controls" the manufacture of the vehicle.
The NHTSA believes that control is not limited
to majority stock ownership. Rather, control
may consist of either the ownersliip of a large
enough block of common stock in a producer to
constitute effective voting control of the firm, as
we believe is true of General Motors' ownership
of Isuzu stock, or contractual restrictions on the
design and manufacture of the vehicle which
essentially eliminate the producer's freedom to
alter the production of the vehicle, which we
believe is true of the contracts between General
Motors and Isuzu and between Ford and Toyo-
Kogyo. Therefore, we believe that General
Motors' and Ford's relationships with the Japa-
nese producers of these vehicles is sufficient to
make General Motors and Ford the statutory
manufacturers of these vehicles.
PART 533— PRE 6
In addition, section 501(9) defines the im-
) porter of a vehicle to be its manufacturer. The
NHTSA believes that acceptance of delivery in
the foreign country and assumption of full re-
sponsibility for tlie shipment and import duties
on the vehicles by a domestic firm, as is the case
for Ford, is sufficient to make the domestic firm
the importer of the vehicle, and hence its manu-
facturer.
Further, the NHTSA believes that separate
treatment of domestic and imported NPA's is not
required by the Title. Section 503(b)(1) of
Title V requires the separate treatment of do-
mestic and captive import vehicles for passenger
automobiles only. Section 503(a) (2) leaves open
the question of whether to establish administra-
tive requirements for separate treatment of do-
mestic and captive import nonpassenger automo-
biles. The House report provides that procedures
for calculating nonpassenger automobile average
fuel economy are to be similar, although not
necessarily identical to the procedures used for
passenger automobiles. See H. Kept. No. 340,
94th Cong., 1st Sess. 91 (1975).
The provision in section 503(b)(1) for count-
. ing most captive import passenger automobiles
Ij together with the domestically produced pas-
^ senger automobiles in model years 1978 and 1979
pro%ndes the affected manufacturers with an
opportunity to adjust to the separate treatment
requirement. Most domestic manufacturers
which have captive import passenger automobiles
have comparable domestically produced passen-
ger automobiles also. The agency believes that
if there is to be complete separate treatment of
captive import and domestically producetl non-
passenger automobiles, there should be a similar
adjustment period first. One factor in determin-
ing the nature of such an adjustment period is
the absence of any domestically produced non-
passenger automobiles that are comparable to the
captive import nonpassenger automobiles.
The practical effect of not placing a limitation
on counting the captive import nonpassenger
automobiles in 1979 should be very small. The
small, imported pickup truck market in this
country, and Font's and General Motors' share
of it, have been fairlj' stable over the past several
years. The agency believes that this stability
will continue through 1979. Therefore, the
chances seem minimal of there being any signifi-
cant increase in the number of captive import
nonpassenger automobiles that could be attrib-
uted to the absence of a limitation. However,
since the manufacturers believe that inclusion of
captive imports will help them market a more
fuel economical fleet of nonpassenger automobiles,
the agency is willing to allow inclusion for model
year 1979. Allowing such inclusion may result
in some small fuel economy benefits. If it can be
demonstrated in a petition for reconsideration
that the absence of a limitation on the inclusion
of captive imports would have a significant effect
on the captive import market, the agency would
consider amending the standard.
As to AMC's discrimination argument, it
should be noted that while the inclusion of the
imports may give a manufacturer importing
nonpassenger automobiles with high fuel economy
some added flexibility in achieving the standard,
this flexibility is no greater than the flexibility
that would be enjoyed by a manufacturer which
domestically manufactures a number of nonpas-
senger automobiles with high fuel economy.
Finally, the agency wishes to emphasize again
that the decision to include all captive import
nonpassenger automobiles in the fleets of the do-
mestic manufacturers which import them applies
to model year 1979 only. As part of the rule-
making to begin this summer regarding nonpas-
senger automobile standards for after 1979, the
agency is considering establishing a limitation
similar to the one for captive import passenger
automobiles in 1978 and 1979 and providing for
completely separate treatment beginning in the
early 1980's. In this connection, the agency will
be gathering information regarding the desir-
ability of this approach, and an appropriate base
period, similar to the one specified in section
503(b)(2)(B) of the Act, for the purpose of
calculating the limitation.
Classes of nonpassenger automobiles. In the
NPRM, the agency proposed establishing a stand-
ard for nonpassenger automobiles as a single
class. The agency stated that it did not have
sufficient information to assess the desirability or
other implications of a multiple class system, nor
had it fully assessed the potential criteria for
PART 533— PRE 7
diflferentiating between or among classes, or the
eflFect that a multiple classification system would
have on the ability of a manufacturer to balance
vehicles with high and low fuel economy.
Several comments discussed the classification
issues which were raised in the NPRM. General
Motors favored a single class for all nonpassenger
automobiles, because such a system would allow
a manufacturer maximum flexibility in meeting
a standard. General Motors pointed out that a
single class would enable the manufacturer to
concentrate efforts for fuel economy improvement
on its high volume products, while still being
able to produce low volume, low fuel economy
vehicles. General Motors indicated that a manu-
facturer might stop producing low volume, low
fuel economy nonpassenger automobiles if those
nonpassenger automobiles could not be balanced
against other, more fuel economical nonpassenger
automobiles. AMC argued that a single classi-
fication system favored large volume manufac-
turers with a broad product line which could
balance low fuel economy vehicles against high
fuel economy veliicles. AMC also argued that
the vehicles which it produces, four-wheel drive,
general utility jeep-type vehicles should be placed
in a separate class because these vehicles were
inherently less fuel economical than nonpassenger
automobiles in general.
After considering these comments, as well as
comments from International Harvester and
Ford relating to separate classification, the
agency has decided to establish a separate class
for four-wheel drive, jeep-type vehicles. Because
the agency intends that only four-wheel drive
jeep-type vehicles, and not other four-wheel
drive vehicles, such as some pickup trucks, be
eligible for the separate class, the agency will
allow only vehicles with wheelbases less than 110
inches to be eligible for the separate class. Each
manufacturer of jeep-type vehicles will have the
option of including those vehicles in the separate
class, or including those vehicles in the general
class of nonpassenger automobiles. In this way,
the problems of both the manufacturer with a
broad product line and the manufacturer with a
narrow product line can be accommodated con-
sistent with the purposes of Title V.
The basis for this decision is described below.
The agency wishes to emphasize that the ap-
proach taken to the classification issue in this
instance will not necessarily be used in the future
when considering other manifestations of the
classification issue.
Considering whether to establish a separate
class for four-wheel drive, jeep-type vehicles
brought into focus a problem in the analytical
basis of the nonpassenger automobile fuel econ-
omy program. On the one hand, section 502(b)
clearly gives the agency the authority to estab-
lish separate classes of nonpassenger automobiles
with each class having a separate standard. This
grant of authority recognizes that there are some
vehicles which have characteristics in some way
related to fuel economy making them either very
fuel economical or very fuel imeconomical, which
may justify their being subject to a special stand-
ard. On the other hand, the fact that standards
must be average fuel economy standards indicates
that the manufacturers should be given some op-
portunity to balance vehicles with differing fuel
economies to ensure, consistent with the need to
conserve energy, that a reasonable variety of
vehicle types can be produced to satisfy con-
sumer demand.
In consideration of this problem, the agency
made the following analysis. In the case of four-
wheel drive, jeep-type vehicles, the agency con-
sidered whether the vehicles were necessarily low
performers (in terms of fuel economy) as com-
pared to nonpassenger automobiles as a group.
After considering the relevant comments and
other information concerning these vehicles, the
agency determined that these vehicles were in-
herently low fuel performing vehicles in com-
parison with nonpassenger automobiles in general,
due to characteristics such as four-wheel drive
and high drive ratios.
After determining that the general utility ve-
hicles had special characteristics relating to fuel
economy which could justify a separate standard,
the agency next considered the manufacturers of
the vehicles to determine whether all nonpas-
senger automobile manufacturers produce vehicles
against which the low performing vehicles could
be balanced. A single average fuel economy
standard based on the performance of a variety
PART 533— PRE
of nonpassenger automobiles of both inherently
high and inherently low fuel economy may not
be feasible for a manufacturer of only the inher-
ently low fuel economy nonpassenger automobiles.
The manufacturer of only inherently low fuel
economy vehicles would not be able to perform
the balancing that was assumed in developing
the standard, and would therefore be unable to
meet the standard. The conference report ad-
monishes the Administrator to weigh the benefits
to the Nation of a given fuel economy standard
against the difficulties of individual manufactur-
ers in meeting the standard. In doing so, he is
cautioned to consider the competitive and national
economic implications of the standards that
might severe Ij' strain any manufacturer. (S.
Kept. No. 516, 94th Cong., 1st 8ess. 154-155
(1975)).
AMC is a manufacturer of four-wheel drive,
jeep-type vehicles, which does not produce a sig-
nificant number of high fuel economy vehicles
against which its Jeep CJ could be balanced.
Therefore, in light of the considerations discussed
above, the agency deems the four-wheel drive,
jeep-type vehicle to be an appropriate candidate
for separate classification.
The agency also considered the effect of a
separate classification on Toyota, another manu-
facturer of a general utility, jeep-type vehicle.
Toj'ota produces mostly very high fuel economy
nonpassenger automobiles, against which their
Land Cruiser, which makes up approximately 17
percent of their total nonpassenger automobile
production, can be balanced. In addition, the
Land Cruiser is much heavier and has substan-
tially lower fuel economy than the AMC Jeep
CJ. Because the Jeep CJ represents a much
larger part of the four-wheel drive, jeep-type
vehicle market, the maximum feasible level of
fuel economj' would be influenced more by the
Jeep CJ than the Land Cruiser. The agency
believes that Toyota would be unlikely to spend
substantial resources to improve the fuel economy
of the Land Cruiser to the level where it could
comply with the standard because that vehicle
represents such a small portion of the Toyota
fleet. Therefore, the agency believes it likely
that Toyota would abandon the general utility,
jeep-type vehicle market in this country rather
than improve the fuel economy of the Land
Cruiser, or pay a substantial civil penalty. The
effect of Toyota's leaving the market would be
to improve total average fuel economy of the
nonpassenger automobile industry only slightly,
but i-educe competition in the general utility,
jeep-type market under 6000 G^^VR from two
significant competitors to one. (Although
Chrysler produces a four-wheel drive, general
utility vehicle, Chrysler is not considered a sig-
nificant competitive force since only 1700 of their
vehicles were sold in model year 1976. Moreover,
Chrysler's response to a standard for jeep-type
vehicles is very difficult to gauge. Chrysler
would have to improve fuel economy less than
Toyota, but the Chrysler fleet of jeep-type ve-
hicles is very small.) The agency believes that
this lessening of competition should be avoided
if possible, consistent with the need to conserve
energy.
Therefore, the agency has given the manufac-
turers the option of including their four-wheel
drive, jeep-type vehicles in the special class for
such vehicles, or in the overall nonpassenger
automobile class. In this way, AMC could meet
a standard that was appropriate for its Jeep CJ,
and Toyota would be able to balance the fuel
economy of its Land Cruiser against the fuel
economies of its highly fuel economical other
nonpassenger automobiles if it chose to do so.
By so doing, Toyota would be more likely to
stay in the market.
The agency wishes to point out that the anal-
ysis leading to the decision to treat four-wheel
drive, jeep-type vehicles as a separate class is
closely tied to the language and purpose of Title
V. Thus, the agency expresses no opinion as to
whether such vehicles should be treated separately
for other regulatory purposes, such as safety or
emissions control.
A final point nmst be made. Although the
agency has determined that certain character-
istics of four-wheel drive, jeep-type vehicles re-
sult in those vehicles having an inherently lower
fuel economy and therefore a lower fuel economy
standard than more numerous nonpassenger auto-
mobiles, such as pickup trucks and vans, the
jeep-type vehicles will still be expected to have
improved fuel economy. The agency believes
that these vehicles can improve fuel economy
PART 533— PRE 9
through weight reduction, technological improve-
ments, and performance reductions consistent
with their intended use.
RespoDsibiliiy for com.plian^e. Each manu-
facturer is responsible for the fuel economy of
the complete automobiles that it produces in a
single stage. With respect to automobiles manu-
factured by two or more manufacturers, the
agency has issued a proposed rule that would, in
most circumstances, place the responsibility for
their fuel economy on the manufacturer of the
incomplete automobile (frame and chassis struc-
ture, power train, steering system, suspension
system, and braking system). (Notice of Pro-
posed Rulemaking, Manufacture of Multistage
Automobiles, 42 FR 9040, February 14, 1977.)
Under the contemplated scheme, such a manu-
facturer must determine the fuel economy of the
automobiles it manufactures and include those
automobiles in its fleet in calculating its average
fuel economy. The incomplete vehicle manufac-
turer must also specify a maximum curb weight
and a maximum frontal area with which the
vehicle is to be completed. If the final stage
manufacturer completes the automobile so as to
exceed either maximum or if it sells the automo-
bile as one manufactured in a model year subse-
quent to the model year during which the
incomplete vehicle manufacturer produced the
incomplete vehicle, that final stage manufacturer
would then become the manufacturer of the
automobile for purposes of Title V.
Measures to Improve Fuel Economy. In the
NPRM, the NHTSA discussed several methods
which could be used by manufacturers of non-
passenger automobiles to improve the average
fuel economy of their nonpassenger automobile
fleets. These methods included such techniques
as technological improvements, weight reduction,
and performance reductions. Many comments
directed at these discussions of fuel economy
improvement techniques were received from
manufacturers of nonpassenger automobiles.
Virtually all these comments made the point that
the NHTSA, in one way or another, had over-
stated the potential for fuel economy improve-
ment in nonpassenger automobiles.
It is important to put the assessment of fuel
economy improvement contained in the NPRM
in the proper perspective. The NPRM proposed
an average fuel economy standard of 18.7 mpg.
This proposed standard was intended to be set at
a level that all manufacturers could meet without
substantially modifying their product plans for
model year 1979. The 18.7 mpg standard also
assumed that there would be no adverse fuel
economy effects resulting from the emissions
standard and fuel economy testing procedures
established by the EPA for model year 1979.
In developing the proposed standard, NHTSA
performed an engineering analysis to determine
the appropriate level at which to set the standard
consistent with that intention and assumption.
This engineering analysis, which contained the
discussion of the fuel economy improvement
measures that were criticized by the commenters,
concluded that those manufacturers that did not
indicate a planned level of fuel economy of 18.7
mpg for model year 1979 could achieve that
level without a substantial modification of their
product plans (41 FR 52092). The NPRM made
it clear that the NHTSA analysis of fuel econ-
omy potential did not depend on manufacturers'
employing any particular method or methods of
fuel economy improvement. The NPRM clearly
stated:
The agency wishes to emphasize that the
proposed standard is a performance standard
and, therefore, that the raanufacturei-s would
not be required to take any particular step
discussed below. It is anticipated, however,
that each manufacturer would take one or
more of the steps and place its own unique
emphasis on each of those steps. Thus, the
fuel economy improvements derived from
those steps by a particular manufacturer
would vary from the percentage fuel econ-
omy improvements as calculated by the
agency.
Thus, the discussion of methods by which fuel
economj^ could be improved was only a general
discussion of how some manufacturers of non-
passenger automobiles could modify their product
plans slightly to achieve an average fuel economy
of 18.7 mpg by model year 1979. Although, in
general, weight reduction, performance reduc-
tion, technological improvements, and aerody-
namic improvements are the basic methods to
PART 533— PRE 10
improve automotive fuel economy, the discussion
in the NPRM was clearly not an exhaustive list
of the details of fuel economy improvement pos-
sibilities, nor a directive to manufacturers in-
structing them on how to improve fuel economy.
The agency anticipated that each manufacturer
would achieve 18.7 mpg as it determined was
best for itself.
The comments by the manufacturers to the
NPRM indicate that the manufacturers will be
able to achieve an average fuel economy of at
least 18.7 mpg, assuming no fuel economy conse-
quences due to emissions standards and testing
procedures. Ford and General Motors each rec-
ommended a standard which they derived by
reducing the proposed 18.7 mpg standard by the
claimed effects of EPA's actions regarding emis-
sions and testing procedures for model year 1979.
Thus, both Ford and General Motors appear to
assume that they will be able to achieve an aver-
age fuel economy of at least 18.7 mpg, excluding
the possible effects of the 1979 emissions standard
and test procedures. An analysis of Chrysler's
comments leads to the same apparent assumption
that at least 18.7 mpg is achievable by 1979.
Chrysler projected an average fuel economy
standard for model year 1979 of 16.5 mpg, as-
suming 1979 emissions standards and testing
procedures. Chrysler stated that the change in
emissions standards from 1976 to 1979 would
result in a fuel economy loss of approximately
5 percent, and the change in testing procedures
would result in a measured fuel economy loss of
8 percent. If those fuel economy losses, totalling
13 percent, are taken out of the Chrysler projec-
tion, their projection would be 19 mpg in 1979,
under 1976 emissions standards and test proce-
dures.
Thus, although Ford, General Motors, and
Chrysler all criticized the NHTSA analysis of
fuel economy improvement potential, those com-
panies did not claim that they were incapable of
reaching at least 18.7 mpg. Indeed, they tacitly
agreed that 18.7 mpg, under 1976 emissions
standards and test procedures, is achievable.
Therefore, there is no need for the XHTSA to
change the final standard for model year 1979
in light of those comments. The proper level of
the standard will depend on whether changes in
the emissions standards or testing procedures re-
sult in reductions in fuel economy, not whether
the NHTSA has correctly evaluated the fuel
economy improvement potential through a par-
ticular combination of a variety of specified
measures. However, the agency still believes,
based on its analysis and considering the com-
ments, that an average fuel economy level of
18.7 mpg, under 1976 emissions standards and
testing procedures, is achievable without signifi-
cant changes in product plans.
It is important to note that many of the com-
ments received in this area are relevant to fuel
economy standards for model years beyond 1979.
They will be considered in connection with the
development of those standards.
Effect of Federal Emissions Standards and
Testing Procedures. EPA has established more
stringent emission standards for model year 1979.
EPA has also modified the testing procedures for
measuring emissions for nonpassenger automo-
biles in model year 1979 (December 28, 1976,
Federal Register 56316). The test procedure
changes establish a higher road load horsepower
requirement for test vehicles than the previous
year. On the basis of various studies, EPA has
concluded that the revised road load horsepower
requirement is a more accurate description of
conditions which an in-use vehicle experiences.
Aside from a small increase in NOx any effect
that the test procedure change has on fuel econ-
omy is a measured effect only; it has no impact
on real, in-use fuel consumption of a vehicle.
The standard proposed by the NHTSA was
based on the assumption that changes made by
the EPA in the MY 1979 emissions standard and
testing procedures applicable to nonpassenger
automobiles would impose no fuel economy pen-
alty or testing effect on vehicles of the manufac-
turers. NHTSA recognized, however, that this
assumption was subject to some doubt, and indi-
cated a willingness to revise the standard to ta,ke
into account any such penalty or effect actually
shown to exist. Comments and information on
the existence and magnitude of these penalties
were requested from all interested parties.
PART 533— PRE 11
Comments were received from General Motors,
Ford, Chrysler, AMC and International Har-
vester. Every manufacturer challenged the as-
sumption that the revised EPA emissions
standard and testing procedures would have no
effect on average fuel economy. International
Harvester believes the penalty due to the emis-
sion standard will be 10-15 percent. AMC esti-
mated the combined penalty to be greater than
10 percent. The estimated fuel economy penalty
due to the emission standard, including the effect
of increased NOx emissions resulting from
higher engine loading due to the revised test
procedures, was 5 percent for General Motors,
3 percent for Ford, and 7 percent for Chrysler.
General Motors estimates the fuel economy effect
for revised testing to be 6.2 percent. Ford esti-
mates the testing effect to be 9 percent. Chrysler
estimates the testing effect at 6 percent. General
Motors, Ford and Chrysler also submitted to the
NHTSA the data upon which these estimates
were made.
After a consideration of technology that will
be available in model year 1979, and the ability
to optimize engine calibration, and a careful
analysis of tlie data supplied by the manufactur-
ers, the NHTSA has concluded that the manu-
facturers have failed to sliow that there will be
any penalty due to the tighter emissions stand-
ard. However, they have shown an effect of 8
percent due to the revised testing procedures.
Tlie change in the EPA emissions standard
that affects fuel economy is the lowering of the
standard for NOx from 3.1 grams per mile
(gpm) to 2.3 gpm. It is not disputed that meet-
ing a more stringent NOx standard can result in
taking product actions that would cause a degra-
dation of fuel economy from levels achieved by a
vehicle meeting a less stringent standard. How-
ever, it is also true that a number of product ac-
tions related to emissions control can be taken to
restore the lost fuel economy. For example, where
NOx is reduced through engine recalibration,
which can result in lost fuel economy, the re-
calibration can be optimized to eliminate, or at
least reduce, the fuel economy penalty. This
optimization, or fine tuning, has occurred in the
past as manufacturers have accumulated experi-
ence with the engine recalibration. Also, emis-
sions control systems improve as the manufac-
turers gain experience with them, which can
result in improved NOx control without a loss
of fuel economy. Moreover, the use of existing
emissions control systems, such as back pressure
or proportional exhaust gas recirculation (EGR)
systems, can be expanded for nonpassenger auto-
mobiles. Finally, advance emission control sys-
tems, such as three-way catalysts or electronic
EGR, exist and could be used for nonpassenger
automobiles, althougli the agency recognizes that
such advanced systems may not be cost effective
in controlling NOx to meet a standard of 2.3
gpm.
In light of these possibilities for achieving in-
creased emissions control while maintaining fuel
economy, the agency assumed that by model year
1979 manufacturers woidd be able to meet the 2.3
gpm NOx standard without a degradation in fuel
economy from the level achievable when the NOx
standard was 3.1 gpm. The NPRM solicited
comments on this assumption of no fuel economy
loss due to a tightened NOx standard. Although
manufacturers submitted a significant amount of
information on the issue, the manufacturei"s
failed to sliow tliat a NOx standard of 2.3 gpm
would necessarily result in a loss of fuel economy.
General Motors tested five different vehicles to
establish the magnitude of the fuel economy
penalty due to the revised emission standard.
The vehicles were tested before and after recali-
bration to reduce NOx fi'om the level required to
meet the 3.1 gpm NOx standard to the level re-
quired to meet the 2.3 gpm NOx standard. The
recalibration consisted of increased I^GR flow
rates and/or spark retard. General Motors' test
data is inconsistent with regard to the relation-
ship between reduction in NOx and fuel economy.
One vehicle met the new NOx standard as de-
livered and was not recalibrated from the cali-
brations used to meet the 3.1 gpm standard. Two
vehicles of tlie same engine family showed small
reductions in fiiel economy and one vehicle
showed a large reduction in fuel economy. Gen-
eral Motors averaged the data with no weighting
to reflect sales mix and extrapolated the results
to the percent NOx reduction for the MY 1979
emission standard level since the arithmetic av-
eraged NOx reductions in their test did not meet
a level required for the 2.3 gpm standard. The
General Motors testing methodology was unsat-
PART 533— PRE 12
isfactory because the sample tested did not ade-
quately represent General Motors' fleet and no
replicate tests and only one replicate vehicle con-
figuration were included. Additionally, using a
non-weighted average is improper unless the re-
sults from one engine family are representative
of all engine families. This was not shown to be
the case for General Motors data, which indicated
a wide range of results. In addition to the in-
consistency of the test results, and the flaws in
methodology, the other serious deficiencies in the
General Motors test program were that it con-
sidered no improved emission control technology,
especially improved EGR systems, and the re-
calibrations were not optimized.
Ford tested five nonpassenger automobiles in
three engine families with one replicate vehicle
configuration in two of the engine families. Ford
data were the best submitted by a manufacturer
since they had replicate vehicles and repeat tests
(from two to four of each). Again, however,
not all vehicle configurations were represented.
Ford's vehicle recalibration was successful in
meeting target emission levels although one ve-
hicle met the revised emission standard by a
sufficient margin without recalibration. How-
ever, the recalibrations were performed on cur-
rent emission control systems and no mention was
made of improved EGR systems. Also, there
was no evidence that the calibrations were opti-
mized. For the replicate vehicles, there was
considerable variability in the effect of the re-
calibrations. It was concluded that Ford data,
like the GM data, demonstrated an inconsistent
effect on fuel economy of meeting a NOx stand-
ard of 2.3 gpm and demonstrated wide vehicle
variability. It was also noted that in one case a
recalibration to reduce XOx emissions improved
fuel economy. This is evidence that other cali-
brations were not optimized. Ford arrived at its
claimed fuel economy penalty by arithmetically
averaging the results of its tests. This is im-
proper unless the same results are expected for
each engine family. In addition to its test data.
Ford supplied supplemental data on the effects
of the tighter California emission standard on
fuel economy. The XHTSA believes the data
are of limited usefulness because they rely on
existing emission control technology for the
California fleet, which is a small portion of the
total fleet. Needs of the California fleet may not
justify major changes in control techniques from
those applied to the 49-state fleet. Moreover, the
Ford data regarding California vehicles is in-
consistent. Ford indicated that going from an
engineering goal to meet a NOx standard of 3.1
gpm to a goal to meet a standard of 2.0 gpm in
California resulted in a 10 percent reduction in
fuel economy. However, Ford stated that the
penalty from going from 3.1 to 2.3 for the 49-
state fleet would result in a penalty of only 2
percent. In light of this discrepancy, the agency
believes that comparisons with California vehicles
are not particularly compelling.
Chrysler recalibrated three MY 1979 passenger
cars from a 2.0 gpm NOx standard level to a 3.1
gpm NOx standard level and interpolated the
resulting fuel economy penalty for a reduction
in NOx from 3.1 gpm to 2.3 gpm. All vehicles
were tested twice, but no identical vehicles or
additional configurations were included. The
results showed considerable variability in the
claimed effect on fuel economy of the MY 1979
emission standard. The most serious deficiency,
in NHTSA's opinion, is the fact that they tested
passenger automobiles rather than nonpassenger
automobiles. Besides the differences in attributes
such as axle ratios between nonpassenger auto-
mobiles and passenger automobiles, the recalibra-
tion of model year 1977 vehicles ignores the
improvements in the emission control systems and
calibrations between MY 1976 and MY 1977 for
passenger automobiles. Also, no allowance is
made for similar improvements in nonpassenger
automobiles emission control systems and calibra-
tion optimization by MY 1979. Chrysler also
supplied a comparison of 49-state and California
fleets of nonpassenger automobiles. This com-
parison is subject to the same criticism as for
that of Ford.
NHTSA performed a statistical analysis of
the data submitted by the manufacturers to
assess the reliability of the data for estimating
the level of penalty they claimed. A 95 percent
confidence interval (i.e., the range of values
within which the true level of any penalty lies
with a 0.95 probability) was calculated for the
claimed fuel economy penalty for each manufac-
turer and for the total fleet. The results of this
analysis showed that even if the analysis consid-
PART 533— PRE 13
ered improvements in emissions control technol-
ogy and optimization of recalibration, and even
if the vehicles tested were representative of the
manufacturers' fleets, the claims of the manufac-
turers are not supported by the data because of
the wide range of the confidence interval.
In conclusion, NHTSA considers the manufac-
turers' claims of a fuel economy penalty resulting
from the need to reduce NOx emissions in MY
1979 to be unsupported by their submissions.
NHTSA considers the results of a proper recali-
bration program more compelling than any other
means of supporting a claim. The recalibration
programs undertaken by the manufacturers were
in some cases unsuccessful in reducing NOx
emission to the levels desired. More importantly,
the recalibrations performed neither demonstrate
nor anticipate optimization of calibration nor
new technology. Given the fact that the recali-
bration programs were inconsistent and incon-
clusive, NHTSA must rely on recognizing past
accomplishments and on anticipating new tech-
nology. EPA has stated in their rulemaking
action for the MY 1979 emission standard that
there does not have to be a fuel economy penalty
associated with its standard if the manufacturers
have enough lead time to optimize calibrations
and control system designs. NHTSA agrees that
there doesn't have to be a penalty if leadtime
exists for recalibration optimization. Past per-
formance indicates sufficient leadtime exists.
However, NHTSA does not say there will be no
penalty. Rather, the agency believes that the
manufacturers have not demonstrated a penalty.
The average fuel economy standard for model
year 1979 has been set with no reduction in-
cluded for the MY 1979 emission standard.
However, the agency is open to submissions of
further test data and leadtime information that
will support the manufacturers' claims.
Unlike the situation with the change in emis-
sions standards, the change in testing procedures,
which includes an increase in the roadload horse-
power setting of approximately 30 percent, will
definitely result in a decrease in measured fuel
economy. Manufacturers submitted data to show
the effect of the revised testing procedure on
measured fuel economy. The agency performed
an analysis of the data submitted by the manu-
facturers.
The agency believes that the data submitted
by Ford are the most meaningful because of the
large number of vehicles tested (96 vehicles) in
550 separate tests, the testing of many identical
vehicles, and because many of the tests were re-
peated. This amount of data enabled the NHTSA
to use a statistical analysis procedure to show
that if a 95 percent confidence interval for the
effect on fuel economy for the entire fleet of Ford
nonpassenger automobiles was computed, tliis
fleet average effect would have a narrow confi-
dence interval range, and would be considered
to be highly reliable. The General Motors data
are considered less reliable because of the fewer
number of vehicles tested, the fact that there
were no tests on identical vehicles, no tests were
duplicated, and the data are highly variable.
Chrysler's data are considered less reliable than
Ford's because only 2 of 3 engine families were
tested, and there were no tests of all vehicle con-
figurations or duplicate tests. After a careful
analysis of these results, the NHTSA believes
the manufacturers have demonstrated an 8 per-
cent fuel economy effect and the average fuel
economy standard has been reduced to reflect this
effect. This effect reflects primarily the results of
the Ford analysis. However, for use on an in-
dustrywide basis, the effect demonstrated by
Ford has been reduced slightly in light of dif-
ferences between the Ford fleet and the industry
fleet. For example, Ford produces a greater
percentage of 6-cylinder engines than the industry
average. In addition. Ford's average frontal
area is larger than the industry average, which
would cause a higher percentage of increase in
road load. Both of tliese facts would result in a
greater fuel economy effect. Also Ford produces
a higher percentage of 4,000 pound inertia weight
nonpassenger automobiles than the industry as a
whole does. The percent increase in road load
horsepower is greater for tliese lighter vehicles.
Thus, the effect of the testing procedures on the
industry average fuel economy would be slightly
less than on Ford's average fuel economy.
Although the NHTSA is applying this correc-
tion for model year 1979, it will be revised in
future model years if further data or analysis
indicate that is appropriate.
PART 533— PRE 14
Effect of California emissions standards. Ford
stated that the 1979 emissions standards for
California, wliich arc more strin<rent than the
1979 Federal standards, will result in its Cali-
fornia fleet of nonpassengjer automobiles having
an average fuel economy approximately 6 per-
cent lower than its Federal fleet. Ford stated
that the effect of the California fleet would be to
lower the average fuel economy of its 50-state
fleet by 0.1 mpg. Chrysler provided information
showing that its California fleet will lower the
average fuel economy of its 50-state fleet by 0.3
mpg. The NHTSA recognizes that emissions
requirements for vehicles sold in California and
the dirt'erent mix of vehicles sold in California
may have the efl'ect of lowering the 50-state
average fuel economy of a manufacturer of non-
passenger automobiles. However, neither Ford
nor Chrysler made an adequate case for lowering
the proposed standard liecause of the effect of
the California vehicles. Ford, in information
provided to the NHTSA in response to the
agency's questionnaire circulated last summer,
projected an average fuel economy for its non-
passenger automobiles manufactured in model
year 1979 in excess of 19 mpg, without consid-
ering the effects of the 1979 Federal emissions
standards and testing procedures. Although
Ford's California vehicles may lower its 50-state
average fuel economy by 0.1 mpg. Ford will still
h& capable of achieving a level of fuel economy
under 1976 Federal emissions standards and test-
ing procedures that is higher than the 18.7 pro-
posed in the NPRM. Likewise, although
Chrysler indicated some effect of the California
standards on its average fuel economy, Chrysler
still projected an average fuel economy for 1979
of 16.5 mpg, based on 1979 Federal testing pro-
cedures and emissions standards. If the fuel
economy penalty and testing penalty estimated
by Chrysler for emissions and testing procedures
of 13 percent is taken out, Chrysler in efl'ect
projects a fuel economy of 19.0 mpg for 1979.
Therefore, although California standards may
make achievement of the level of 18.7 mpg, under
1976 Federal emissions standards and testing
procedures, more difficult, there is no showing by
Chrysler or Ford that the California standards
make achievement of the level of 18.7 mpg in-
feasible.
Comparison of proposed standard for nonpas-
senger automobiles with standard established for
passenger automohiles. In section 502(a)(1) of
Title V, Congress established an average fuel
economy standard for passenger automobiles
manufactured in model year 1979 of 19.0 mpg.
Congress established no standards for nonpas-
senger automobiles. Several commenters have
argued that the proposed average fuel economy
standard for nonpassenger automobiles of 18.7
mpg was too high, based on a comparison be-
tween the proposed nonpassenger automobile
standard and the passenger automobile standard
established by Congress. General Motors stated
that there was an average difference in inertia
weight of 500 pounds between passenger auto-
mobiles and nonpassenger automobiles and if the
fuel economy costs of the extra 500 pounds were
considered, the fuel economy standard for non-
passenger automobiles should be no more than
16.9 mpg to be consistent with the standard for
passenger automobiles. Chrysler argued that an
average fuel economy standard for nonpassenger
automobiles which was only 0.3 mpg below that
set for passenger automobiles failed to take into
account the difference between passenger and
nonpassenger automobiles. In particular, Chrys-
ler stated that if the nonpassenger automobile
standard remained at 18.7 mpg, after considering
the effect of emissions standards and testing pro-
cedures that will be in effect in model year 1979,
that standard would be equivalent to a standard
of 21 mpg calculated under the emissions stand-
ards and testing procedures which Chrysler
stated were used by Congress in establishing the
passenger automobile standard of 19.0 mpg.
The NHTSA believes that these comments do
not contain a legitimate reason for lowering the
proposed fuel economy standaid for nonpas-
senger automobiles. Title V does not require, or
even hint, that the fuel economy standard which
the agency establishes for nonpassenger automo-
biles must be comparable to the standard which
Congress set for passenger automobiles. Wliat
Title V requires is that average fuel economy
standards established by the agency for nonpas-
senger automobiles be set at the level of maximum
feasible fuel economy. This is what the agency
has done. In addition, because the agency is
analyzing fuel economy potential on the basis of
PART 53a— PRE 15
data that are current now, rather than data that
were current in 1975 when Title V was drafted,
the agency believes that its own analysis of the
proper level of fuel economy is deserving of
greater weight tlian the earlier analysis of
Congress.
Cost and Benefit Analysis. The NPRM con-
tained a summary of costs and benefits concern-
ing the proposed average fuel economy standard
for nonpassenger automobiles. Ford stated that
the NHTSA overstated the benefits and under-
stated the costs of the proposed standard. Spe-
cifically, Ford stated that (1) the value of the
gasoline saved was overstated because the price
of gasoline assumed by NHTSA, $.65 per gallon,
included an excise tax of $.13 per gallon, (2) the
mileage used for calculating fuel savings should
reflect the fact tliat annual vehicle mileage de-
creases as the vehicle grows older, and that the
assumed vehicle life should reflect vehicle mor-
tality statistics rather than an average life of ten
years, (3) performance reductions in vehicles are
not "virtually cost free," as stated in the NPRM,
but have increased costs to consumers through
reduced carrying capacity and increased trip
time, (4) the cost of meeting the standard, if the
proposed standard of 18.7 mpg is not reduced
because of the penalties from 1979 emissions
standards and testing procedures, will be at least
$100.00, rather than the $12.00 assumed by
NHTSA, (5) the cost increase due to meeting
the 1979 emission standards is higher than as-
sumed by the NHTSA, and (6) the weight re-
duction which NHTSA speculated might be
necessary for General Motors to meet the stand-
ard can not necessarily be achieved for the cost
estimated by NHTSA ($10.00-15.00 variable cost
per vehicle and $500,000 investment), and that
there is little correlation among particular weight
reduction, variable costs, and investment levels
associated with different components.
With respect to Ford's comment on the proper
value of gasoline, it should be noted that the
benefit and cost summary that was contained in
the NPRM related to benefits and costs to con-
sumers. Therefore, since consumers pay the ex-
cise tax on gasoline, it is proper to include that
tax in a computation of the value of saved gaso-
line to the consumer. It is also important to
note that the NHTSA considers $.65 per gallon
to be a conservative estimate of the value of
gasoline. The diminishing gasoline resources,
and the uncertainty of the availability of pe-
troleum for manufacturing gasoline, which led
Congress to establish the mandatoi-y fuel econ-
omy program, give the agency reason to believe
that the current pump price of gasoline is not
an adequate indicator of its true social value.
The annual mileage figure used by the agency
to calculate fuel savings was found in the Census
of Transportation, 1972 Truck Inventory and
Use Survey, published by the United States
Bureau of the Census. Although annual vehicle
mileage decreases with the age of the vehicle,
assuming constant 11,000 miles per year for the
vehicles' life does not result in an inaccurate
evaluation of total costs. It is the consideration
of the total costs of the standard which the
agency must consider.
The summary of costs and benefits of the pro-
posed standard considered only quantifiable ex-
penditures and savings related to the standard.
Although Ford is correct that there may be some
additional costs of the improved fuel economy
in terms of reduced utility, these nonquantifiable
costs were not contained in the summary of costs i
and benefits. Since the final rule, like the pro- '
posed rule, is based upon the manufacturers'
product plans for model year 1979, these per-
formance costs are not expected to be great.
Ford contended that meeting the average fuel
economy standards would result in an average
retail price equivalent increase of at least $100.00
per vehicle, if the proposed standard of 18.7 mpg
were not reduced for emissions and testing pen-
alties. Since the final standard reflects a sub-
stantial reduction from the proposed standard of
8 percent, due to the change in the fuel economy
testing procedures, the agency assumes that the
estimated price increase of $100.00 is no longer
applicable. Although some price increase may
be likely to meet the final standard, there is
nothing in the Ford comment to indicate that the
NHTSA estimate of $24.00 per vehicle retail
price increase ($12 cost to the manufacturer,
with a markup of 100 percent) is an incorrect
estimate of that increase.
PART 533— PRE 16
With respect to the costs of fuel economy test-
ing and compliance with emissions requirements,
the figures assumed were supplied to NHTSA by
the EPA, and represent its estimate of the aver-
age industry costs. The EPA estimate includes
allowances for reuse of the vehicle. The Ford
comment does not seem to recognize tliat an en-
tirely new vehicle is not necessary to test each
base level. Changes in recalibration and axle
ratios can be made to veliicles, and allow some
of the testing costs to be spread over a number
of tests. Therefore, Ford's estimate of testing
costs seems high. However, even assuming that
Ford's estimates of the cost of testing are cor-
rect, tliat higher testing cost is not a basis for
modifying the standard, or deciding not to estab-
lish a standard. The agency is required by sec-
tion 502 (b) of Title V to establish an average
fuel economy standard for nonpassenger auto-
mobiles manufactured in model year 1979. There-
fore, even assuming that Ford's estimate of
testing costs represents a legitimate upper limit
of the range of reasonable estimates of testing
costs, the agency would not modify its decisions
on the basis of the Ford cost figures.
With respect to Ford's contention that there is
little correlation between particular weight re-
duction, variable cost, and investment level, the
agency realized that some ways of taking weight
out of a nonpassenger automobile are more ex-
pensive than others. In evaluating the cost of
weight reduction, the agency assumed that the
manufacturer would attempt to use less expen-
sive techniques of weight reduction.
In light of the foregoing, Title 49, Code of
Federal Regulations, is amended by adding a
new Part 533, Average Fuel Economy Standards
for Nanpa^senger Automohiles. . . .
(Sec. 9, Pub. L. 89-670, 80 Stat. 931 (49 U.S.C.
1657) ; Sec. 301, Pub. L. 94-163, 89 Stat. 901 (15
U.S.C. 2002) ; delegation of authority at 41 FR
25015, June 22, 1976.)
Issued on March 8, 1977.
John W. Snow
Administrator
National Highway Traffic
Safety Administration
42 F.R. 13807
March 14, 1977
PART 533— PRE 17-18
^
PREAMBLE TO PART 533— LIGHT TRUCK FUEL ECONOMY STANDARDS
(Docket No. FE 77-05: Notice 5)
This notice amends the definition of "basic en-
gine," as it appears in the light truck fuel econ-
omy standards of the National Highway Traffic
Safety Administration. The amendment is in-
tended to clarify the applicability of various
light truck fuel economy standards for the 1980
and 1981 model years.
Date: This amendment is effective October 10,
1978.
For further information contact :
Roger Fairchild, Office of Chief Counsel,
National Highway Traffic Safety Adminis-
tration, 400 Seventh Street, S.W., Washing-
ton, D.C. 20590 (202^426-2992).
Supplementary information: On March 23,
1978, the agency published a definition of "basic
engine" as part of its fuel economy standards for
1980-81 model year light trucks. See 43 F.R.
11995, 49 CFR 533.4. That defiinition is relevant
solely to the determination of which light trucks
are "limited product line light trucks," and
therefore subject to less stringent fuel economy
standards. The latter definition was intended to
identify the class of light trucks manufactured
by companies which had not had experience de-
signing and applying the advanced emission con-
trol systems necessary to meet current and
near-term future passenger automobile emission
standards. Those systems will be required for
many light trucks for the first time beginning in
model year 1979. The agency had International
Harvester primarily in mind, given the company's
unique problems resulting from its limited sales
volume, restricted product line, and the fact that
its engines are derivatives of medium duty truck
(above 10,000 pounds GVWR) engines. See 43
F.R. 11998.
The original "basic engine" definition incor-
porates th«^ definition appearing in the Environ-
mental Protection Agency's regulation, 40 CFR
600.002-80(21), which defines that term as "a
unique combination of manufacturer, engine dis-
placement, number of cylinders, fuel system (as
distinguished by number of carburetor barrels or
use of fuel injection), catalyst usage, and other
engine and emission control system characteristics
specified by the Administrator." "Limited
product line light truck" is in turn defined by
NHTSA as "a light truck manufactured by a
manufacturer whose light truck fleet is powered
exclusively by basic engines which are not also
used in passenger automobiles." See 49 CFR
533.4.
Although the EPA regulation defining "basic
engine" does not on its face present any problem
in NHTSA's definitional scheme, it grants EPA
the authority to designate additional criteria to
distinguish "basic engines". EPA has exercised
this authority to classify otherwise identical en-
gines used in both cars and trucks as two separate
"basic engines," one for passenger cars, and the
other for trucks. The effect of this administra-
tive interpretation of the EPA regulation is
arguably to cause virtually all light trucks to be
"limited product line light trucks" under
NHTSA's definitions, contrary to NHTSA's ex-
pressed limited intent. Therefore, NHTSA is
revising the "basic engine" definition to exclude
the additional characteristics specified by the
EPA Administrator in that agency's advisory
circular.
Since this amendment is in the nature of tech-
nical correction and makes the regulations con-
form to NHTSA's originally expressed intent,,
and because of the need to immediately clarify
any ambiguity in the regulation, it is determined
that a notice of proposed rulemaking is unneces-
sary and contrarj' to the public interest, within
the meaning of 5 U.S.C. 553(b). Therefore, this
amendment will be effective immediately.
PART 533— PRE 19
The National Highway Traffic Safety Admin-
istration has determined that this document does
not contain a significant regulation requiring a
regulatory analysis under Executive Order 12044.
Furthennore, this action does not require an en-
vironmental impact statement under the National
Environmental Policy Act (49 U.S.C. 4321 et
seq).
In consideration of the foregoing, 49 CFR
Chapter V is amended. . . .
Authority : Sec. 9, Pub. L. 89-670, 80 Stat. 931
(49 U.S.C. 1657) ; sec. 301, Pub. L. 94-163, 89
Stat. 901 (15 U.S.C. 2002) ; delegation of au-
thority at 41 FR 25015, June 22, 1976.
The principal drafter of this document is
Roger C. Fairchild.
Issued on October 2, 1978.
Joan Claybrook
Administrator
43 F.R. 46546
October 10, 1978
PART 533— PRE 20
PREAMBLE TO PART 533— LIGHT TRUCK FUEL ECONOMY STANDARDS
(Docket No. FE 77-5; Notice 7)
Action: Final rule.
Summary: This notice reduces the average fuel
economy standards applicable to two wheel drive
light trucks manufactured in model year 1981.
This action is taken in response to a petition
from Chrysler Corporation providing new in-
formation which indicates that their capability
to improve the fud economy of those trucks is
less than had been determined in the earlier rule-
making. This notice also denies Chrysler's re-
quest to reduce the fuel economy standards
applicable to four wheel drive light trucks. The
reduction of the two wheel drive standard is in-
tended to produce standards which are still at
the maximum feasible levels achievable by the
manufacturers taking the new information into
account.
Dates: These standards are applicable for the
1981 model year.
For further infm'ma,tion contact:
Mr. Francis J. Turpin, Office of Automotive
Fuel Economy Standards (NRM-21),
National Highway Traffic Safety Adminis-
tration, 400 Seventh Street, S.W., Washing-
ton, B.C. 20590 (202-472-6902).
Supplementary information :
BACKGROUND
On March 23, 1978, in 43 FR 11995, NHTSA
established fuel economy standards for light
trucks manufactured in the 1980-81 model years.
The 1981 standards were established at levels of
18.0 mpg for two-wheel drive (4X2) light trucks
and 15.5 mpg for four-wheel drive (4X4) light
trucks. Vehicles subject to the standards in-
clude pick-up trucks, vans, and utility vehicles
with gross vehicle weight ratings (GVWR) of
up to and including 8500 pounds. The estab-
lishment of these standards is authorized by sec-
tion 502(b) of the Motor Vehicle Information
and Cost Savings Act ("the Act"), 15 U.S.C.
2002(b). The Act requires that standards be
established for each model year at the "maxi-
mum feasible average fuel economy level," con-
sidering technological feasibility, economic prac-
ticability, the effects of other Federal motor
vehicle standards on fuel economy, and the need
of the Nation to conserve energy.
The fuel economy standards were largely based
on the plans of the manufacturers to make
specified improvements to increase the fuel
economy of their trucks. They were set under
the presumption that the Environmental Protec-
tion Agency (EPA) would approve by January
1, 1980, the use of low friction lubricants in fuel
economy testing under its procedures. The final
rule provided that if approval were not given
by that date, the standards would each be 0.5
mpg less, i.e., 17.5 mpg for 4X2's and 15.0 mpg
for 4X4's. This reduction in the fuel economy
standards would be made to account for the
manufacturers' diminished fuel economy improve-
ment capability should they not be permitted to
obtain credit for the benefits associated with use
of these lubricants.
On September 20, 1978, Chrysler requested
that these standards be reduced to 16.5 and 14.5
mpg for 4X2's and 4X4's respectively. Chrysler
claimed that without such a reduction, it would
be required to either violate the standards or
drastically curtail its sales of larger, less fuel
efficient trucks. After ascertaining that Chrysler
intended this request to be treated as a formal
petition for rulemaking under the agency's pro-
cedures, the agency requested that specific in-
formation supporting the petition be submitted.
Some of this information was submitted on
November 24, 1978, and the agency initiated rule-
making on the petition on December 18, 1978.
See 43 FR 58840. The notice did not propose
any specific change in the standards. Rather, it
PART 533— PRE 21
mentioned the reductions by Chrysler and in-
vited comment on issues raised by that company's
petition.
The agency also contacted the other vehicle
manufacturers to determine whether they were
having similar difficulties in working toward
compliance with the 1981 standards. Ford
projected being able to achieve 17.6 mpg for its
4X2 fleet by 1981, thereby complying with the
standard only if the lubricant-related standard
reduction occurred. That company projected be-
ing capable of obtaining only a 0.1 mpg benefit
from the use of improved engine lubricants,
rather than the 0.5 mpg projected by the agency.
GM projected its "free market" improvement
capability for 1981 to be only 16.2 mpg, despite
the fact that it projected compliance with the
18 mpg standard a year ago. The main factors
in the lower GM capability projection are its
changed position on the feasibility of certain
marketing actions to improve its fuel economy
by 0.8 mpg by 1981 and a complete (and only
partially explained) reversal of position on its
ability to offset the effects of changes in light
truck emission standards. In the case of the
4X4 standard, American Motors and Ford pro-
ject compliance with the 15.5 mpg standard,
while GM projected only 14.2 mpg, for the same
reasons as in the case of the 4X2 standard.
SUMMARY OF DECISION
The 1981 4X2 standard is being reduced by
0.8 mpg to 17.2 and Chrysler's request for a
reduction of the 4X4 standard is being denied.
The agency agrees with the arguments presented
by Chrysler and the other companies in most
respects, the main exception being the issue of
whether the use of improved lubricants could
provide a fuel economy benefit for 1981 model
year light trucks. In that case, the impact on
the standards of the agency's disagreement is
contingent upon whether the EPA permits the
use of these lubricants in fuel economy testing
by January 1, 1980. If EPA does not approve
the lubricants, each of the standards would be
0.5 mpg less, i.e., the standards would be 16.7
mpg for 4X2's and 15.0 mpg for 4X4's.
The major differences between the basis for
this decision and that for the prior rulemaking
are (in order of magnitude of fuel economy
effect for Chrysler) : reductions in expected fuel
economy benefits from engine displacement or
drive ratio reductions, engine efficiency improve-
ments and weight reduction; errors in the
agency's prior baseline or larger than anticipated
effects of emission standards and test procedure
changes; reduced benefits from aerodynamic and
rolling resistance changes; changes in product
mix; and changes in EPA fuel economy test
procedures. Each of these areas resulted in a
reduction in the agency's fuel economy improve-
ment projections for Chrysler of from 0.1 mpg
to 0.5 mpg, with the magnitude of the effect
varying for the 4X2 and 4X4 fleets. Chrysler
also provided information on certain fuel
economy improvements which it plans to imple-
ment for the 1981 model year but which were
not included in the agency's original standard-
setting analysis. These items have been included
in the agency's analysis of the Chrysler peti-
tion, and partially offset the effects of the pre-
viously mentioned reductions in fuel economy
improvement potential. For the other manu-
facturers, the main factor causing their lowered
projected capabilities is (in addition to the
factors previously discussed) the agency's
changed position on the effect of 1979 model /
year emission standards. While in the 1980-81 \
rulemaking, the agency concluded that the more
stringent emission standards need not reduce
fuel economy below pre-1979 levels, the agency
now believes that a fuel economy impact of the
more stringent 1979 emission standards exists
and cannot be offset by 1981.
In deciding whether the standards should be
reduced, the agency balanced the difficulties of
the manufacturers in meeting the previously
established standards against the benefits to the
nation of compliance with the higher standards.
In this case, it was decided that the marketing
risks associated with meeting the higher 4X2
standard outweighed the potential energy sav-
ings.
The agency's analysis of the more significant
areas of disagreement between the Chrysler peti-
tion and the conclusions drawn in the previous
rulemaking to establish the 1981 standards fol- '
lows. In conducting this analysis, the agency
viewed the Chrysler petition as a continuation
of the original rulemaking. If any changes were
PART 53&— PRE 22
to be made in the existing standards, the peti-
tioner would have to demonstrate to the agency's
satisfaction that the agency had erred in its
original analysis of the maximum feasible level
of average fuel economy achievable within the
leadtime available from the issuance of the origi-
nal final rule. A complete discussion of the
technical basis for this decision is contained in
the agency's Rulemaking Support Paper, copies
of which are available from the individual listexl
as the "infonnation contact" at the beginning
of this notice.
EXPLANATION OF DECISION
(a) Reducfion in engine displacement and
drive ratios. In establishing 1980 and 1981
standards in March 1978. the agency projected
that the manufacturers could make reductions
in the product of average engine displacement
and final drive ratio (CID x N/V) of approxi-
mately 10 percent, in addition to an amount
made possible as vehicle weight is reduced (keep-
ing vehicle performance relatively constant). In
Chrysler's case, such a change was estimated to
amoimt to a 16 percent reduction in CID x N/V,
producing a fuel economy gain of about 1.1 mpg
for 4X2's. In the case of 4X4's, a 16.4 percent
reduction was projected, for a 0.92 mpg benefit
in fuel economy. These reductions were greater
than those projected by Chrysler in the last rule-
making by a large amount, but the agency con-
cluded that there was no reason to believe that
Chrjsler could not achieve performance levels
commensurate with those of the other manufac-
turers. See Rulemaking Support Paper Supple-
ment (RSPS) for the 1980-81 rulemaking, page
III-163-6.
In its petition and related submissions,
Chrjsler has provided information from which
the agency calculated Chrysler's planned re-
ductions in CID X N/V for model year 1981.
These reductions appear to closelj' approximate
the reductions projected by the agency in the
last rulemaking (within about 1 percent). How-
ever, the agency's previous projections of CID
X N/V levels for Chrysler in 1981 and Chry-
sler's current planned levels are not directly
comparable, since Chrysler's planned values in-
clude the effect of rerating about 10 percent
of its truck fleet (principally those with the
highest CID and axle ratios) over the 8500-
pound GVWR dividing line, an effect not con-
sidered in the 1980-81 rulemaking. Therefore,
the agency attempted to determine whether
Chrysler's planned reductions in CID x N/V
for 1981 were in fact the maximum feasible re-
ductions, as required by the Act. In the 1980-81
rulemaking, the extent to which reductions in
engine displacement or drive ratios could be
implemented! were determined to be limited by
(a) minimum truck performance criteria (e.g.,
ability to pull a load up a steep grade), (b) emis-
sion problems with extremely low performance
levels, (c) technical factors, which may produce
diminishing fuel economy returns beyond some
level of CID x N/V reductions, and (d) market
acceptability of trucks with lower acceleration
characteristics, notwithstanding the ability of the
truck to meet minimum functional requirements.
See, e.g., DN-82. Att. II (GM).
A comparison of Chrysler's planned 1981 levels
to those of the other manufacturers indicates
that GM and Ford project CID x N/V levels
approximately o percent lower than Chrysler for
both 4X2's and 4X4's, even though Chrysler's
trucks are lighter than their competitors'. The
Center for Auto Safety argues that Chrysler
should be able to offset this discrepancy between
their perfonnance levels and their competitors.
DN-90, p. 6.' The agency asked Chrysler why
such reductions could not be made, and Chrysler
responded that, according to their marketing ex-
perts, severe marketing problems would be en-
countered at lower CID x N/V levels than those
planned. DN-190. For each manufacturer, the
CID X N/V product is governed by the avail-
able engines, transmissions (e.g., overdrive) and
axle ratios. Given the mix of engines produced
by Chrysler, the agency believes that they face
a greater marketing risk from performance re-
duction than do their competitors. The Chrysler
' The abbreviation "DX" followed by a number refers
to the (locket nunihor of material in NHTSA docket
FE-77-05-N06. This docket is located in Room 5108
of the Nasslf Building, 400 .Seventh Street, S.W., Wash-
ington, D.C., and is open to the public during normal
business hours. References to the materials in the
docket and other materials are intended as an aid to
persons dealing with the voluminous materials In this
rulemaking, and may not be exhaustive.
PART 533— PRE 23
fleet is powered by 360, 318, and 225 cubic inch
engines. Given the very large gap between the
318 and the 225, Chrysler's ability to shift con-
sumers to the 225 from the 318, the key to any
performance reduction, faces them with the verj-
distinct possibility of losing customers to com-
petitors with a more complete range of engines
or, to competitors with engines smaller than their
318 but larger than their 225.
Although the agency (or anyone else for that
matter) cannot quantify with certainty the mag-
nitude of the marketing risk faced by Chrysler
in attempting to make CID x N/V reductions
greater than those it now plans, the agency is
particularly concerned about the potential im-
pacts on Chrysler's economic position of taking
such marketing actions. At a time when its
competitors are earning record profits, Chrysler
has faced steady financial losses. Further,
Chrysler's truck sales (particularly vans and
other two-wheel drive light trucks) have Ijeen
one of its more profitable operations, and erosion
of its competitive position in that market seg-
ment could be especially harmful to that com-
pany. While GM and Ford face marketing risks
in reducing the average CID x N/V of their
truck fleets, the impacts of an erroneous market-
ing judgment by those companies on their long
term financial viability is certainly far less than
in the case of Chrysler. Therefore, the agency
has adopted Chrysler's planned reductions in
CID X N/V for its two-wheel drive fleet for
this rulemaking.
The case for Chrysler's 4X4 fleet is somewhat
different; however, Chrysler's own projection of
its CID X N/V reductions for 1981 indicate that
it expected to encounter a shift in its engine
offerings (either through its own marketing
efforts or through other changes in customer pre-
ference) resulting in an increase in the sales of
its largest engine at the expense of its inter-
mediate displacement engine. The agency recog-
nizes that this projection was made prior to
recent gasoline shortages, which has resulted in
a serious drop in the demand for large trucks
and engines. Now, the agency doubts that
Chrysler could effectuate this adverse mix shift
without encountering sales resistance, even if the
promotion of the sale of fuel inefficient trucks
were consistent with the law. Faced with tlie
current trend in the automobile and light truck
market, the agency cannot accept Chrysler's un-
suppoited projection of an engine mix shift
toward larger displacement engines. By holding
its engine mix constant for 4X4 's (which may
prove to be a conservative assumption) and by
making minor axle ratio reductions consistent
with those planned by the larger manufacturers,
Chrysler sliould be able to make fuel economy
improvements beyond those it projected in its
petition and equivalent to those projected by the
agency in the original 1980-81 nilemaking.
Chrysler also objected to the agency's pro-
jected benefit from a given level of CID x N/V
reduction. DN-93, p. 12. Chrysler projected a
lesser benefit for these reductions, based on an
analysis of specific axle ratio changes or engine
substitutions. The agency attempted to resolve
this issue through a variety of methods, includ-
ing an assessment of the effect of different axle
ratios and engines on Chrysler's current fleet.
These analyses indicate that the higher benefit
for CID X N/V reductions projected by NHTSA
in the original lulemaking on the 1980-81 stand-
ards is valid or even conservative. EPA's
analysis showed a higher benefit for engine dis-
placement reductions than did NHTSA's but a
lower benefit for axle ratio reductions. The
agency did not rely on EPA's analysis of the
effect of N/V reductions on fuel economy, since
that analysis was based solely on passenger car
data (reflecting generally lower N/V values).
DN-169. GM information also supports the
agency's conclusion on this point. DN-81, p. 4.
Therefore, the agency has used the same rela-
tionship between CID x N/V reductions and
fuel economy improvements for the analysis of
the Chrysler petition that it used in the original
rulemaking. However, because of the lower
CID X N/V reductions now projected, the agency
is reducing its projected fuel economy gain for
Chrysler in this area by 0.4 mpg for 4X2's and is
retaining its projection for 4X4's, for the reasons
mentioned above.
The agency has also reduced its projection for
fuel economy gains from CID x N/V reductions
in the case of AM's 4X4 fleet (the bulk of that
company's production). In the 1980-81 rule-
making, the agency projected that AM could
improve its fuel economy by 0.7 mpg through
PART 533— PRE 24
making reductions in the same range of relative
magnitude as the other manufacturers, but AM
now indicates that it plans no reductions. Al-
though AM indicated in August 1977 that it
planned to make CID x N/V reductions of
approximately the magnitude projected by the
agency in the last rulemaking, it now indicates
that such reductions should be made over the
course of 3 to 4 years, to permit truck purchasers
to become acclimated to the resulting decrease in
vehicle acceleration capability. Even accepting
AM's argimient for the need of a phase-in period,
making no CID x N/V reductions between 1979
and 1981 could not be justified as the maximum
feasible fuel economy improvement on their part.
If AM makes only "half the CID x N/V reduc-
tions the agency projected (and AM previously
planned) in the 1980-81 rulemaking, it could still
comply with the existing 4X4 standard for 1981.
AM in fact expects to be able to comply with
that standard. AM's zero CID x N/V reduction
estimate is also well out of line with the esti-
mates of the rest of the manufacturers. There-
fore, the agency concludes that AM can make
fuel economy improvements of at least 0.3 mpg
through reducing average engine displacement
or drive ratios for its 4X4 light trucks, enough
to permit it to reach the current standard for
1981.
(b) Engine efficiency improveinents. In pre-
vious rulemakings, the agency has, for analytical
purposes, considered the related areas of efficiency
improvements (i.e.. mechanical improvements),
optimization of engine calibrations (i.e., those
controlling spark advance, exhaust gas recircu-
lation rate, air-to-fuel ratio) and improvements
in emission control systems as a single class of
technological improvements. In the case of
Chrysler in the last rulemaking proceeding, the
agency projected that through a combination
of the.se measures, any adverse impacts associated
with more stringent emission standards for 1979
could be offset, and a net improvement of 2.4
percent for 4X2's and 1.4 percent for 4X4's
could result. This conclusion was based upon
earlier development testing of 1979 vehicles
which showed a 3 percent emission standard re-
lated fuel economy penalty and Chrj-sler's own
projection that it could achieve fuel economy
gains of 5.4 and 4.4 percent for 4X2's and
4X4's respectively through a combination of
engine efficiency improvements. Prior to the
proposal of the 1981 standards in December 1977,
Chrysler had provided even more optimistic pro-
jections of engine efficiency improvements, which
the agency relied upon in proposing standards.
See 43 FR 12001. Chrysler's most recent esti-
mates indicate that it is continuing to pursue
the same engine efficiency improvements iden-
tified in the last rulemaking proceeding, but is
not obtaining the expected benefits because of
unanticipated development problems with the
various individual changes.
Much of Chrysler's currently projected engine
improvement is categorized as undefined task,
i.e., no specific means are identified for achiev-
ing the projected gain. The agency is adopting
Chrysler's revised estimate of engine efficiency
improvements, since it appears to reflect the maxi-
mum feasible gains in fuel economy.
The agency is also revising downward its esti-
mates of feasible engine efficiency improvements
for the other manufacturers. In the previous
rulemaking, NHTSA projected that American
Motors (AM) and Ford could offset the effect
of more stringent emission standards through a
combination of engine efficiency improvements,
changes to emission control systems and calibra-
tion optimization, and that GM could offset the
penalty and obtain a net improvement of 2 per-
cent for both 4X2's and 4X4's. The projection
for GM was based on their submission in the
prior rulemaking, and was confirmed by GM on
two separate occasions, most recently in December
1978. DX-29, p. 3. GM now claims that it was
necessary to incorporate the above-mentioned
improvements to achieve MY 1979 emissions
certification and that a penalty still exists. The
projection for AM was based upon their sub-
mission in the original rulemaking which stated
that their estimate of the maximum engine
efficiency improvements available would be 4 to
5.5 percent for their 4X4's. AM claims that they
never intended to imply that the improvement
could be obtained by 1981, only that it could
eventually be achieved. In the case of Ford,
that company's submission in the last rulemaking
showed through "engine mapping" analyses that
the emission penalty could be reduced to approxi-
mately 1 percent with optimal engine calibra-
PART 533— PRE 25
tions (which may require electronic controls)
and that certain additional engine efficiency im-
provements were possible. See 43 FR 12001.
The agency found that electronic controls might
not be feasible for light trucks by MY 1981 due
to inadequate leadtime to implement the full
development and production of the required soft-
ware.
In its January 17, 1979, submission on the
Chrysler petition, GM indicated that the agency
should revise its position on the question of en-
gine efficiency/optimization changes. DX-82,
p. 2. GM subsequently clarified their position,
indicating that they were revising their earlier
statements that the emission standards penalty
could be offset. DN-207. GM indicated that the
change in position was due to the fact that their
1979 trucks suffered more than they had antici-
pated due to the change in emission standards.
However, GM had already obtained data on their
1979 truck fleet at the time they confirmed their
original position on this question in December
1978. The agency also notes that GM apparently
had significant difficulty certifying their 1979
truck fleet for emission compliance, and "last-
minute" changes to those trucks were required
to permit certification. Ford stated that its
engine calibrations are much closer to optimal
than in previous years when emission standards
changed, due to improvements in Ford's technical
capability, but that approximately 1 percent
fuel economy improvement is projected by 1981
due to calibration optimization. DN-91, p. 7.
Based on this information, the agency is pro-
jecting that GM can achieve a 2 percent fuel
economy improvement (from its 1979 levels) due
to calibration improvements, engine efficiency
improvements, and improvements in emission
control systems. This improvement is based on
the fact that other manufacturers are project-
ing fuel economy improvements for engine im-
provement programs like the ones GM is engag-
ing in (see Rulemaking Support Paper (RSP),
section III. A), the difficulties GM had in cer-
tifying their trucks for emission purposes in
1979, and the historical trend for improved en-
gine efficiency after the first year in which emis-
sion standards are made more stringent (see,
e,g., Chrysler's comment on this point, DN-93,
p. 5). In the case of Ford, the agency is adopt-
ing a 0.2 mpg improvement based on the above
Ford reference and other confidential informa-
tion. These results are 0.3 to 0.4 mpg lower
than the projections in the 1980-81 rulemaking
for both GM and Ford. The agency is also
adopting Chrysler's reduced estimate of engine
efficiency improvements, reducing their fuel
economy improvement capability by 0.2 to 0.3
mpg. In the case of AM, the agency is eliminat-
ing the previously projected .5 percent improve-
ment in fuel economy due to engine modifications
(resulting in a 0.7 mpg decrease in average fuel
economy). Although the agency is still of the
view that a substantial potential for engine
efficiency improvements exists for AM's engines,
it is not clear that AM possesses the technical
capability to implement these improvements by
1981. Wliile the larger domestic manufacturers
have either already implemented improvements
in this category or plan to do so by 1981, AM's
technical resources to make these improvements
are quite small in comparison to GM, Ford, and
even Chrysler. It should also be noted that
giving AM the benefit of the doubt on this ques-
tion has no effect on the level established for
the 1981 4X4 standard, since AM projects being
able to meet the current standard.
(c) Weight reduction. In the 1980-81 rule-
making, the agency projected that the light truck
manufacturers could reduce the weights of their
vehicles by amounts ranging from approximately
225 to 450 pounds. These conclusions were based
upon the agency's own analysis of light-weight
material substitution opportunities available to
the vehicle manufacturers, responses to special
orders issued to numerous suppliers of vehicle
components and materials, and the manufac-
turers' own weight reduction plans.
Based on their responses to the notice on the
Chrysler petition, it appears that the manufac-
turers are currently projecting slightly less
weight reduction than did the agency in the
1980-81 rulemaking. Chrysler submitted infor-
mation explaining why it had reduced its weight
reduction projections from those provided in the
earlier rulemaking. AM has effected weight
reduction since the existing standards were estab-
lished. This has improved the fuel economy of
their 4X4 fleet as reflected in the MY 79 data.
Beyond MY 79, the new EPA procedures, i.e..
PART 533— PRE 26
new test weights and new truckline definition,
offset the weight reduction benefits expected be-
tween MY 79-81, according to AM. Conse-
quently, AM expects no fuel economy benefit
from weight reduction between 1979 and 1981
for its 4X4 fleet (all its commercially available
trucks). Ford projects test weight reduction
of under 150 pounds by 1981, despite the fact
that it will be introducing a new pickup truck
in 1980. GM provided information on its new
1981 model year pickup truck, but the agency is
unable to determine the exact magnitude of the
weight reduction achieved. GM did provide
information on the fuel economy improvement
the new truck could be expected to achieve, but
that improvement was due to several factors in
addition to lower weight.
The agency is projecting reduced benefits for
weight reduction for Chrysler. In the case of
Chrysler's 4X2 fleet, the largest part of the re-
duction is due to the change in the agency's
regression equation. In particular, the agency
has determined that, for purposes of predicting
fuel economy for light trucks, revisions should
be made to the regression equation used by the
agency to determine the effect on fuel economy
of changes in axle or gear ratios, engine dis-
placement, and weight. The new regression
equation is based on more extensive fuel economy
data for light trucks, which became available
for the first time in 1979. It predicts lesser
benefits for a given degree of weight reduction
than did the previously used equation, and
greater benefits for axle ratio and/or engine
displacement reductions. In addition, the new
equation includes a factor for changes in aero-
dynamic/rolling resistance characteristics. The
inclusion of this factor makes the new equation
more consistent with current fuel economy test
procedures, which base certain dynamometer set-
tings on these characteristics, while the previous
procedures relied solely on vehicle weight. In
this analysis of the Chrj'sler petition, the new
equation's reduced benefit for weight reduction
has been used, accounting for a portion of the
reduction in standard established in this notice.
A further description of the new regression
equation is contained in the agency's Rulemak-
ing Support Paper on this proceeding. The final
projected weight reduction benefit for 4X2's
agrees with the benefit projected by Chrysler
when adjusted for changes in EPA test proce-
dures.
In the case of 4X4's, the situation for Chrysler
is essentially the same as in the 4X2 case. The
projected weight reduction is slightly less than
estimated by the agency in the 80-81 rulemak-
ing; however, the benefits are reduced signifi-
cantly (by 0.3 mpg) primarily because of changes
in the agency's regression equation.
For both GM and Ford, the agency is project-
ing reduced fuel economy benefits (of about 0.3
mpg) from weight reduction for MY 1981, com-
pared to the last rulemaking. While Ford and
GM are reducing weight to levels approximating
those projected by the agency in the original
rulemaking, the use of the agency's new regres-
sion equation results in reduced fuel economy
benefits. In addition, refinements to the weight
simulation used by EPA for fuel economy test-
ing are now expected to reduce previously pro-
jected improvements in measured fuel economy
(naturally, on-the-road improvements are un-
affected). Although these refinements make test-
ing more accurate, their effect on measured fuel
economy must be accounted for. The agency
has also adopted AM's weight reduction plan,
reducing their fuel economy improvement capa-
bility by 0.3 mpg.
(d) Possible errors in NHTSA baseline or
larger than anticipated effects of changes to
emission standards and test procedures. When
the original 1980-81 standards were established,
the agency lacked substantial fuel economy data
for light trucks in the 6001-8500 pound GVWR
range. The reason for the absence of these data
was that those trucks were not yet tested for
emissions by EPA in a manner which yields fuel
economy data. Therefore, the agency used avail-
able data (primarily for trucks imder 6000
pounds GVWR) and its regression equation to
project fuel economy data for the entire 0-8500
pound GVIVR fleet. This extrapolation per-
mitted the agency to develop a starting point
or "baseline" from which to project future fuel
economy improvements for standard-setting pur-
poses. A more complete description of this
methodology is contained in Section II of the
Rulemaking Support Paper for this petition.
PART 533— PRE 27
The agency now has EPA-approved MY 1979
fuel economy data for light trucks in the 6001-
8500 pound GVWR range. Using this data, the
agency has attempted to determine the accuracy
of the baseline used to set the existing stand-
ards. The first step in that process was to
account for known changes that occurred be-
tween MY 1977 and MY 1979. Thus, the final
NHTSA model year 1977 baseline fuel economy
for each manufacturer (see RSP-S, Page III-
19) must be reduced by 3 percent, the agency's
estimate of the fuel economy penalty due to the
stricter MY 1979 emission standards. Also,
those baselines must then be increased by the
known improvements which have been made since
MY 1977. Finally, an adjustment must be made
for differences between the 1977 and 1979 pro-
duction mixes of the manufacturers. As a
result, given no other changes, the adjusted final
MY 1977 baseline should be identical to the MY
1979 baseline derived from the MY 1979 certifi-
cation data. This is, however, not the case.
The 1977 and 1979 baselines, when adjusted as
described above, are not consistent for a com-
bination of reasons. One factor is that the
trucks in the 6001-8500 pound GVAVR range
(for which fuel economy data were extrapolated
from the under-6000 pound GV^VR fleet) are
inherently somewhat different from the lighter
trucks and that the agency's extrapolation pro-
cedure therefore produced small errors. Another
factor is that changes in the 1979 emissions
standards and test procedures produced effects on
individual manufacturers' fleets which were
slightly different in magnitude than the agency-
predicted effects. Another factor is random
error, due to variation in results produced by the
fuel economy test procedures and the relatively
small number (statistically speaking) of actual
tests conducted for 1979.
The agency has decided to use the 1979 cer-
tification data to construct a baseline to deter-
mine the fuel economy benefits that will be
achieved through the manufacturers implement-
ing the balance of their fuel economy improve-
ments for MY 1981. This decision was based on
the availability of actual fuel economy data in-
stead of the partially estimated data used in the
last rulemaking and on the shift in agency
position on the question of whether the emissions
standards penalty would be completely offset by
MY 1981. In the 1980-81 rulemaking, the agency
used a baseline that did not include such a
penalty and assumed that any emission standards-
related penalty encountered subsequent to MY
1977 could be overcome by MY 1981. The
agency now believes that the penalty will not
be overcome totally by the 1981 model year.
Therefore, the agency is using the new 1979
baseline which reflects that penalty.
The effect of switching t« the 1979 baseline
is to alter the baselines for the manufacturers.
In the case of AM's 4X4 fleet, the use of the
1979 baseline increases the agency's projection
of that company's ability to improve fuel econ-
omy by 0.2 mpg. In the case of Chrysler's
4X2 fleet and GM's 4X4 fleet, the effect on fuel
economy of this decision is negligible. In all
other cases, the decision to use the 1979 base-
line for this analysis reduces the agency's fuel
economy estimates. This effect is in the range
of a 0.3 to 0.4 mpg decrease in fuel economy
for Chrysler's 4X4 fleet and GM's 4X2 fleet, and
approximately a full mpg decrease for both
Ford's 4X2 and 4X4 fleet.
(e) Aerodynamic and rolling resistance reduc-
tions. The agency projected a 0.35 mpg fuel
economy improvement for Chrysler's 4x4 trucks
in 1981 due to improvements in aerodynamic
characteristics and the use of radial tires. This
improvement was based on Chrysler's own esti-
mate submitted in the 1980-81 rulemaking. In
its petition, Chrysler claims that this improve-
ment is no longer attainable. Chrysler is of
the view that the physical improvements can
be made, but that the changes will not be re-
flected on current EPA test procedures. These
improvements would show up on the EPA test
only if Chrysler could use the optional "coast-
down" procedure for determining dynamometer
roadload horsepower. The coast -down procedure
would be used by Chi-ysler if its 4X4 trucks
could achieve aerodynamic and rolling resistance
characteristics superior to the tabulated values
established by EPA.
Chrysler indicates that many of the 4x4's sold
will be equipped with off-road tires and that the
EPA will require testing with such tires. Unless
radial tires are used on the test, the improve-
ments attributable to both aerodynamics and
PART 533— PRE 28
reduced rolling resistance do not show up, ac-
cording to Chrysler. However, the agency notes
that Chrysler's largest competitors project being
able to sell a high enough percentage of radial
tires on their 4X4 light trucks to permit all 4X4
fuel economy test vehicles to employ radial tires.
Recognizing that the use of radial tires on ve-
hicles intended for off-road use may involve
some compromises in vehicle utility, the agency
nevertheless concludes that Chrysler's difficulties
in promoting the sale of radial tires on 4X4
trucks should be no greater than their larger
competitors and that the fuel economy benefits
warrant such sale. Therefore, the agency pro-
jects that Chrysler can sell enough radial tires
on its 4X4 trucks in 1981 to obtain the fuel
econom}' benefit it and the agency projected in
the 1980-81 rulemaking for aerodynamic and
rolling resistance improvements.
(f) Mix shifts. The Center for Auto Safety
has argued that Chrysler could use marketing
strategies to shift its sales mix toward more
eflScient vehicles, and thereby improve its aver-
age fuel economy. DX-90, p. 7. The Center
concludes that such a shift is consistent with the
law and with the trend toward greater use of
trucks for personal (i.e., non-commercial) rea-
sons. The Automobile Owner's Action Council
conducted a survey of Chrysler's truck adver-
tising and concluded that the advertising was
oriented toward the sale of powerful trucks and
toward the sale of trucks as "toys" and as car
substitutes. DX-106, p. 3 and attachment. The
agency agrees that basing fuel economy stand-
ards on the maximum feasible use of marketing
measures to promote the sale of fuel efficient
vehicles is entirely consistent with the law, at
least to the extent such shifts can be accom-
plished without causing major reductions in
sales.
In the case of Chrysler's 4X2 trucks, the orig-
inal 1981 standard-setting analysis was based
on an apparent adverse mix shift from the 1976
.sales mix used in the NPRM, to the projected
1979 mix supplied by Chrysler, in early 1978.
(An adverse mix shift is one which reduces fuel
economy.) The effect of this as,sumption was
to reduce Chrysler's projected average fuel
economy by 0.2 mpg. In its petition, Chrysler
provided sales mix information which the agency
concludes reflects a further adverse mix shift
between 1976 and 1979 having a fuel economy
effect of about the same magnitude.
The agency is using Chrysler's latest mix pro-
jection for 1979 as the basis for the revised 1981
standard. This has the effect of reducing Chrys-
ler's projected capability to increase fuel econ-
omy of 4X2's by 0.2 mpg.
The adverse mix shift impact is not neces-
sarily like shifting from a large vehicle to a
small vehicle. The impact here results in part
because more Chrysler trucks are being sold with
options like air conditioners, step bumpers, etc.
These come in a package with a large engine,
i.e., the 360 rather than the 318 or the 318
rather than the 225. Although Chrysler did
eliminate the two largest engines it had avail-
able, the 400 and the 440, the net result of all
these changes is a slight reduction in fuel econ-
omy. It is important to note that the relative
proportion of Chrysler tracks sold with various
accessories is still below the general level of
accessory sales by the industry. Manufacturers'
limits on sales of options such as step bumpers
do not help fuel efficiency to a great extent be-
cause the resultant weight reductions and attend-
ant fuel economy benefits are relatively small.
The major option is air conditioning, and its
control in a fleet where air conditioning is not
as prevalent as it is in the fleets of other manu-
facturers might tend to drive customers to the
competition. As noted in section (a) of this
notice, the agency is very reluctant to place
Chrysler in a position where it might be com-
pelled to face major marketing risks in order
to comply witli the light truck fuel economy
standards.
(g) Revision to EPA''s '■'■car line^^ defnition for
light trucks. Under EPA's fuel economy test
procedures, test vehicles must be equipped with
all optional equipment which is expected to
appear on more than 33 percent of the trucks
within that "car line." A car line was pre-
viously defined by EPA very broadly, with all
vans constituting a single car line, for example.
Thus, many vehicles equipped with options in
production were not represented in fuel econ-
omy testing by test vehicles having those op-
tions. For the 1980 model year, EPA proposes
PART 533— PRE 29
to revise the definition of "car line" to narrow
that definition to better assure that vehicles are
tested with the options they will have when sold.
The proposal is supported by this agency.
Chrysler argues that this change will result in
reduced fuel economy caused by additional
equipment being applied to more of its fleet,
thereby reducing average fuel economy.
In the original 1980-81 rulemaking, the agency
rejected the manufacturers' arguments claiming
that this penalty was unavoidable and perma-
nent, on the ground that the manufacturers
could reallocate their offerings (i.e., sell more
options on car lines which already exceed the 33
percent criterion and restrict options on the
other car lines to less than 33 percent) to offset
this penalty. In this rulemaking, this conclu-
sion was universally disputed. Industry sales
data indicate that a long-term trend toward
higher sales of optional equipment is continuing,
making option restriction quite difficult. Ford
claimed to know of no method to restrict the
option sales, and indicated that attempting to
restrict those sales might even produce an ad-
verse fuel economy impact. DN-91, p. 11.
Ford provided a breakdown of its option sales
by truck line, which showed that the vast ma-
jority of the newly created truck lines would
be tested at higher weights than the previous
truck lines. EPA conceded that due to the op-
tion equipment sales trends, option restriction
was not a viable alternative for counteracting
the effect of the new definition. DN-169, p. 2.
The "penalty" appears to be as much a symptom
of the trend toward higher sales of optional
equipment as it is a result of changes in EPA's
regulations, and is, therefore, permanent.^ Thus,
the agency is adopting the manufacturers' pro-
jected impacts of the 1980 test procedure change.
' The EPA procedures change would not actually re-
duce fuel economy. It would correct the error caused by
using data from vehicles tested without options to
represent trucks that actually are sold with options.
This causes a decrease in measured fuel economy, not
on-the-road fuel economy, since the new procedure will
apply data with options to more of the manufacturer's
product line. Increasing the number of production ve-
hicles equipped with options naturally decreases both
on-the-road and measured fuel economy. Both effects
must be considered in the agency's analysis.
(h) Lubricants. In the 1980-81 rulemaking,
the Agency projected that a fuel economy im-
provement of 3 percent is achievable through
the use of improved lubricants (i.e., friction
modified, lower viscosity, synthetic base, or some
combination of these methods). Two percent
of this improvement was attributed to the use
of advanced crankcase lubricants, such as ver-
sions of the recently marketed ARCO Graphite,
Exxon Uniflo, Mobil, and other similar lubri-
cants. The remaining 1 percent of the im-
provement was attributed to changes in rear axle
lubricants. However, the use of the improved
crankcase lubricants is not currently permitted
by EPA in that agency's fuel economy testing.
That agency has indicated that, before approval
is granted for the use of these lubricants in fuel
economy testing, it must have evidence indi-
cating that consumers will actually purchase and
use these oils in the replacement market. The
type of eWdence EPA seeks includes information
showing that the selling price of the new oils
will be competitive with regular lubricants, that
the oils will have widespread availability in the
marketplace, and that a generic definition of
the oils is developed, so that the vehicle manu-
facturers can specify in owner's manuals that
the new oils must be used.
The basis for the agency's conclusion as to
the magnitude of the fuel economy benefit re-
sulting from use of the improved crankcase
lubricants is set forth in the preamble to the
final rule in the 1980-81 rulemaking. 43 FR
12004-5. Data submitted by Exxon, ARCO, and
Mobil Oil companies tended to support an im-
provement figure in the 4 to 5 percent range.
More limited data from the vehicle manufac-
turers generally tended to support fuel economy
improvements of 1 to 3 percent. Data from
Mobil and GM tended to support a fuel econ-
omy improvement in the range of 1 percent for
improved axle lubricants. Ford's data tended
to support a fuel economy improvement in the
range of 1 percent for manual transmission lu-
bricants. All told, the agency concluded that
an improvement of 2 percent for crankcase oils
and 1 percent for axle/transmission lubricants
is reasonable. However, to encourage further
testing of these lubricants and to avoid the neces-
sity of attempting to predict how EPA would
PART 533— PRE 30
ultimately decide the approval question discussed
in the previous paragraph, the 1981 standards
were established at alternate levels, contingent
on this approval.
Only limited additional information was sub-
mitted on the lubricants issue in this proceed-
ing. Chrysler's recommendation tliat the lubri-
cant improvement be deleted from NHTSA's
analysis was based on Chrysler's conclusion that
EPA would not approve the use of the lubricants
(DN-10. P. 2) and tests of four cars using the
Exxon oil. which showed fuel economy benefit
from that oil declining with increasing vehicle
mileage. DN-13, Att.L. All Chrysler's earlier
data showed an improvement for the advanced
oils of about 1 to 3 percent. Ford echoed the
concern over the likelihood of EPA approval
of the lubricants, and noted that its own test
program showed only 0.5 percent improvement
for these lubricants (DN-91, p. 8), down from
the 12 percent projected in the 1980-81 rule-
making. GM has apparently not changed its
plan to delay use of friction modified oils until
after 1981, and continues to rely on lower oil
viscosity to improve fuel economy. Problems
were reported by GM in the areas of increased
oil consumption and catalyst deterioration, due
to the use of low viscosity lubricants. DN-82,
p. 3.
The oil companies expressed a range of
opinions on this issue, but no additional data.
Texaco noted that the percent fuel economy im-
provement achievable with the new lubricants
will vary depending on the friction character-
istics of the oil currently used by the vehicle
manufacturer, and asserted that their currently
sold crankcase oil provides just as good fuel
economy as at least one of the advanced lubri-
cants, in on-the-road testing. DN 25. Chevron
stated that the agency's projected 2 percent bene-
fit for new crankcase oils is "on the high side,"
and projected a leaser benefit of 1 to 1.5 percent.
Chevron also found a 1 percent fuel economy
benefit for axle lubricants, but anticipated that
these lubricants would not be widely available
by 1981. Cities Service measured a 2.6 percent
benefit for their advanced crankcase oil, but also
noted that the benefit obtained depends on the
ba.se oil used. That company also indicated that
it would begin marketing their advanced oil by
1980, and predicted that the necessary approval
criteria for fuel economy testing could be met
by the January 1, 1980, deadline. DN-149. Sun
Oil Company projected an improvement of 2-3
percent for the crankca.se oils (DN-150), while
Shell's testing of other company's products led
it to estimate a 0-2 percent improvement. DN-
176. Shell predicted that the EPA approval
process and all necessary oil company certifica-
tion of the oils would not be completed prior to
1982. ARCO reaffirmed its prior statements to
the agency, that "significant improvements" in
fuel economy are possible with these oils. DN-
151.
Against this background (including the more
voluminous information submitted as part of the
1980-81 rulemaking), the agency has concluded
that the estimated fuel economy benefit for im-
proved lubricants should not be revised. The
vast majority of data submitted by the oil com-
panies support the 2 percent crankcase oil im-
provement or a greater improvement. Most of
the data submitted by the manufacturers prior
to the consideration of Chrysler's petition tended
to support that figure. Limited additional sup-
port for the axle lubricant improvement pro-
jected was received from the oil companies, as
well. Recent information submitted by the ve-
hicle manufacturers (principally Chrysler and
Ford) is relatively limited. The decision to
maintain the original lubricant projection is also
supported by a contract study performed for
NHTSA bv the Coordinating Research Council.
See DN-187.
With respect to the question of whether all
necessary criteria for EPA approval of the
lubricants can be satisfied, NHTSA notes that
progress is being made toward ultimate approval,
and it is premature to speculate that the process
cannot be completed in a timely manner. In
the NPRM on the Chrysler petition, the agency
stated that it was strongly inclined to wait until
the January 1, 1980, deadline for EPA approval
of these lubricants for fuel economy testing
rather than concluding that use of the lubricants
will not be approved and removing the lubricant
projection from its standard setting analysis
now. See 43 FR 58841. The manufacturers
should base their fuel economy planning on the
assumption that the standards for 1981 will be
PART 533— PRE 31
in effect at the levels which reflect the inclusion
of lubricants; those are the standards in effect
with the publication of this rule, and those
standards will remain in effect unless EPA's
approval is not granted.
(i) Other reductions. Another problem which
Chrysler argues has reduced its 4X2 fuel economy
improvement capability relates to reduced auto-
matic transmission parasitic losses. The use of
a light duty, more efficient transmission to ac-
complish this improvement was not included in
the agency's projections which formed the basis
for the original 1981 standard, but was included
in Chrysler's petition. Although Chrysler was
apparently confident that this item could be
applied by the 1981 model year at the time it
filed its petition, it no longer is sure of success.
On April 9, 1979, Chrysler, citing manufacturing
and durability problems encountered in testing
of the more eflScient transmission, stated :
Presently, there is approximately a 50 per-
cent probability that we will be successful
in meeting the production date. If we are
successful, we are confident the estimated
improvement will be realized on the fleet.
DN-188, p. 2. In its December 6, 1978, submis-
sion Chrysler had projected a 1981 introduction
of this technology, producing a 0.16 mpg fuel
economy benefit.
The contradictory information places the
agency in a difficult position to determine maxi-
mum feasible fuel economy improvements. Here,
as elsewhere, Chrysler has reported development
problems of one sort or another. However, the
substantiation of those problems is often sketchy.
Nevertheless, the current substantial uncertainty
about the prospects for success leads the agency
to be conservative. Therefore, the agency is not
including this transmission improvement in pro-
jecting Chrysler's capability for MY 1981.
The agency has deleted its projection in the
1980-81 rulemaking that AM could employ a
new, 4X4 transfer case in its fleet. This deletion
lowers the agency's projection of AM's fuel
economy improvement capability for 1981 by
0.2 mpg. NHTSA has deleted this item because
of uncertainty as to whether the resulting gain
from the use of a new transfer case would show
up on fuel economy tests.
The agency's projection of Ford's fuel econ-
omy improvement capability has decreased by
about .2 mpg for 4X2's and .5 mpg for 4X4 's due
to our changed assessment of Ford's ability to
make improvements to automatic transmissions.
All of the 4X2 reduction and about half of the
4X4 reduction is due to the elimination of the
projected use of lock-up torque converters by
1981. The agency projected that the leadtime
was adequate to accomplish this improvement by
the 1981 model year, but Ford indicates that it
plans to implement lockup torque converters
after that date. The remainder of the 4X4 re-
duction is due to changes in Ford's planned
usage of overdrive automatic transmissions in
that portion of its fleet.
Selecting the Stamdards
On the basis of the above-described informa-
tion from AM, Chrysler, Ford and GM, the
agency has reassessed their fuel economy im-
provement potential for the 1981 model year as
follows :
AM 25.6 15.5
Chrysler 17.2 15.5
Ford 17.4' 15.5
GM 17.2 15.8
The agency has not reassessed the capabilities
of the other manufacturers (e.g., Nissan, Toyo
Kogyo, Volkswagen, etc.) since only Toyota
commented on the proposal. The absence of
comments from most foi-eign manufacturers has
been typical of all of the agency's other fuel
economy rulemaking and results from those
manufacturer's capabilities being well above the
standard. The same is true in this rulemaking.
See 43 FR 12012.
The values in the above table reflect the
agency's judgment of the maximum levels of
average fuel economy that the major domestic
manufacturers can achieve without having to
undertake measures involving substantial mar-
keting risk. As indicated below, the agency
concluded in this case that the additional diffi-
culties involved with these measures would out-
' Ford's own projection is 17.6 mpg, with minimal
benefits from lubricant.
PART 533— PRE 32
weigh the slight additional fuel economy im-
provements they would make possible.
The agency also notes that there are often
substantial uncertainties present in any rule-
making like the present one in which the govern-
ment must project future capabilities in an in-
dustry to develop and implement technological
innovations. For example, the agency projec-
tions of technological improvements 'or MY 81
include undefined spark ignition engine improve-
ments for Chrysler and GM, benefits from im-
proved manual transmissions for GM although
they project none, and greater benefits from the
use of automatic overdrive transmissions than
Ford projects. Improvements beyond those pro-
jected by the agency may be possible in such
areas as automatic transmissions parasitic loss
reduction, engine eflSciency improvements, mix
shifts, and engine displacement/axle ratio reduc-
tions. The agency is imable to quantify the un-
certainty associated with these improvements. In
this type of situation, agencies are required to
compare the harm which is likely to result from
erring either on the side of too stringent or too
lenient standards. International Harvester Co.
V. Rwkelshaus, 478 F.2d 615 (D.C. Cir 1973).
The same type of balancing is required under
the Act to determine at which point within the
range of fuel economy improvement capabilities
of the various manufacturers standards should
be set. See Senate Report 94-516, at pages
154—5. The potential hann from setting too
stringent 4X2 standards was found to be the
liability of the manufacturers for civil penalties
(as high as $40 per truck produced in the case
of Chrysler in the current rulemaking, i.e.,
achieving a CAFE of 17.2 mpg instead of 18.0)
or the possibility of a decline in sales if a manu-
facturer attempts to restrict product availability
while his competitors can sell a more complete
line of vehicles. The amount of any civil
penalty liability could be reduced by the Secre-
tary of Transportation in a variety of circum-
stances, such as when the liability is due to
certain circumstances outside the manufacturer's
control or where payment of the full penalty
would produce insolvency, bankruptcy, or a sub-
stantial lessening of competition within the truck
market. In the case of the 4X4 standard, all
the manufacturers are projected to be capable of
achieving compliance with the existing 15.5 mpg
standard with relatively low risk (although the
risk for Chrysler may well be greater than for
GM and Ford), so these concerns do not apply
to the same extent to 4X4 vehicles.
In the case of the 4X2 standard, the risks
associated with maintaining the standard at 18
mpg are substantially greater and are faced by
all the companies. The 0.8 mpg shortfalls faced
by Chrysler and GM could be offset only through
significant market restrictions, based on the
agency's analysis. Given the magnitude of the
risk involved, those companies might well decide
to simply pay the resulting $40 per truck civil
penalties. In that case, maintaining the 18 mpg
standard would not produce any additional pe-
troleum conservation.
The benefits to the nation for Chrysler and
the other manufacturers to meet the existing
4X2 standard of 18 mpg rather than a standard
of 17.2 mpg are the approximately 710 million
additional gallons of gasoline saved over the
lifetime (128,000 miles) of the 1981 model year
trucks. The agency considers that potential
energy savings to be significant. However, the
risks associated with maintaining the previously
established standard has led the agency to decide
to reduce the 4X2 standard to 17.2 mpg, the max-
imum achievable levels projected for GM and
Chrysler. Since we project none of the major
domestic 4X2 manufacturers to be able to meet
the 18 mpg standard with only moderate risk,
the agency cannot conclude that maintaining
that standard would necessarily produce any
additional energy savings. Should the manu-
facturers attempt to meet the 18 mpg standard
through product restrictions, those actions would
appear to involve substantial risk, due to the
substantial fuel economy shortfalls involved. Be-
cause of the commercial uses for which many of
these vehicles are applied, any marketing action
which affected the trucks' utility in a substan-
tially adverse manner could directly affect sales
levels, and thereby industry profitability and
employment.
A point made by the Department of Energy,
and supported by EPA (DN-169) and the
Center for Auto Safety (DN-90), is that stand-
ards should not be keyed to the "least capable"
manufacturer, given the civil penalty/credit
PART 533— PRE 33
mechanism in the law and Conference Report
language which indicates that "industry-wide"
considerations must be taken into account. See
43 FR 58841, December 18, 1978 (the proposed
rule in this proceeding). GM, on the other hand,
argues that fuel economy standards must be set
at levels achievable by all. DN-82, Att. III.
Chrysler argues that the issue of the "least ca-
pable manufacturer" is irrelevant, since the
problems raised by that company are industry-
wide, not just a problem facing one company.
DN-93, p. 1. The agency has repeatedly stated
in past rulemaking economy standards need not
be set at the maximum achievable fuel economy
level of the "least capable" manufacturer. In
the case of the 4X2 standard, the agency's
analysis demonstrated no single "least capable"
manufacturer, with all the major domestic man-
ufacturers falling within a very narrow fuel
economy range and a majority of the domestic
fleet (GM and Chrysler) being projected at the
same level, 17.2 mpg. Thus, the "least capable"
manufacturer issue is not implicated with re-
spect to the 4X2 standard. Nor is the issue
implicated with respect to the 4X4 standard,
since that standard could not be set at a higher
level at this time, due to the 18-month leadtime
rule of section 502(f) of the Act.
Therefore, the agency is reducing the 1981
model year light truck fuel economy standard
for 4X2's to 17.2 mpg, but is denying Chrysler's
request to lower the 4X4 standard.
Other comments and impacts of this decision
The comments of the Department of Energy
are of special significance in NHTSA's fuel
economy rulemaking, given its statutory role.
Under sections 502(h) and (i) of the Act,
NHTSA must consult with DOE in carrying out
fuel economy related responsibilities, and must
provide DOE with advance notice and an op-
portunity to comment prior to issuing any pro-
posed or final standards. In the case of
proposed standards, NHTSA is required to dis-
cuss any "unaccommodated" comments of DOE
in the Federal Register notice. Since NHTSA
did not propose specific standards in this pro-
ceeding, but rather issued a "description of the
subject and issues involved" within the mean-
ing of 5 U.S.C. 533(b)(3), it is appropriate to
address DOE's comments in this notice.
DOE is concerned that a decision to reduce
the light truck fuel economy standards consti-
tutes a very unfortunate lost energy conserva-
tion opportunity, the significance of which is
magnified by the "large and growing demand
for light duty trucks, increasing cost of imported
oil and pressure that a revision of the 1981
standards could also lead to lower standards in
later years." DN-95, p. 1. NHTSA believes
that the energy loss resulting from this decision
is outweighed by the risks faced by the vehicle
manufacturers, consistent with the statutory re-
quirements that standards be set at the maximum
feasible level.
In particular, DOE is concerned that this
decision may establish a precedent that stand-
ards will be reduced every time a manufacturer's
technology development program encounters a
problem, thereby eliminating "any effective for-
ward looking standard setting activity by DOT."
Supra, p. 2. Several of the agency's reduced
fuel economy improvement projections have
been revised to conform with manufacturers'
plans, but only to reflect more recent information
about capability. To the extent these develop-
ment problems cannot be overcome by the model
year in which the standards will apply, these
problems limit the fuel economy improvement
capability of the manufacturers, and, therefore,
limit the levels at which standards can be set.
These levels reflect the agency's current assess-
ment of the maximum feasible fuel economy for
each manufacturer, based on the leadtime from
the issuance of the original 1981 standards. The
agency does not intend to allow every minor de-
velopment program problem encountered by the
manufacturers to trigger a favorable considera-
tion of a petition to reduce fuel economy stand-
ards, but that is not the case here as the prob-
lems are industry-wide.
DOE also argues that a revision to the fuel
economy standards at this late date will penalize
those manufacturei*s which have made plans and
expended resources to meet the previous stand-
ards. The record of this proceeding indicates
a similarity of capability of the various major
domestic manufacturers. Judging by the com-
ments of Ford and GM, those companies are
facing the same type of problems that Chrysler
confronts and will not be able to achieve fuel
PART 533— PRE 34
economy levels significantly higher than Chry-
sler's. Indeed, Ford and GM support a reduc-
tion in the standards.
The Notice published by the agency con-
cerning this petition (43 FR 58840) raised the
question of the effect of a reassessment of the
model year 1981 standards on the standard for
limited product line light trucks. In the re-
sponse to that notice, the only manufacturer
subject to that standard, International Har-
vester, said that its 1979 projected corporate
average fuel economy is 12.6 mpg or 1.4 mpg
below the MY 1980 standard. DN-86. IH
added that it expected "a considerable increase
in fuel economj' due to exhaust emission calibra-
tions optimization in MY 1980." Since MY
1979 is the first year since the early 1970's that
IH has had to comply with light duty truck
emissions standards, the agency agrees with IH
that substantial improvements are likely. IH
has testified before Congress that it expects to
meet the current 1980 and 1981 fuel economy
standards. Therefore, the agency has not re-
vised the limited product line standard.
Manufacturers have informed the agency that
one of the methods they plan to use to improve
h the fuel economy of the currently regulated fleet
of 0-8500 pounds G^^WR is the rerating of ve-
hicles above 8500 pounds GV1\''R. These ac-
tions do not contribute to fuel savings for the
Nation. For this reason, the agency intends to
monitor closely the manufacturers' production
and marketing plans to determine the actual ex-
tent of this shifting beyond 8500 GVWR. These
activities may lead to a determination by the
agency to set fuel economy standards for such
vehicles after model year 1981.
The environmental impacts of this decision
are discussed in the Environmental Impact State-
ment prepared in conjunction with the establish-
ment of the original 1981 standards. Copies of
that document are available from the individual
listed as the "information contact" at the be-
ginning of this notice. The agency has con-
cluded that a complete revised environmental
impact statement need not be prepared for this
proceeding, since the original document con-
sidered the impacts of a range of standards
which encompasses both the original decision and
the decision announced herein. The most sig-
nificant environmental impact associated with
this decision is the additional petroleum con-
sumption, with attendant increases in petroleum
production, transportation, refining, and trans-
fer related environmental impacts. If the exist-
ing model year 1981 standards are not changed,
the agency projects a savings of 2.85 billion
gallons of gasoline, compared to the 1980 stand-
ard. The standards established herein will save
2.14 billion gallons.
In consideration of the foregoing, 49 CFR
Chapter V is amended by changing the title of
Part 533 to "Light Truck Fuel Economy Stand-
ards" and by revising the 1981 model year stand-
ards set forth in the table in section 533.5(a)
as follows:
5.33.5 Requirements
(a) ♦ * *
Model 2-wheel drive
Year light trucks
Captive
Imports Other
If-wheel drive
light trucks
Captive
Imports Other
Limited
product line
light trucks
1979
—
17.2
—
15.8
—
1980
16.0
16.0
14.0
14.0
14.0
1981
17.2*
17.2*
15.5*
15.5*
15.0*
* These standards are 0.5 mile per gallon less If, by
.January 1, 1980, the Environmental Protection Agency
has not fully approved improved lubricants for use in
fuel economy testing.
A Final Regulatory Analysis of the economic
consequences of this decision has been prepared
in accordance with section lO.f of the Depart-
ment's Procedures for Improving Government
Regulations, 44 FR 11034 et seq. This analysis
considered a range of fuel economy standards
between the existing standards and those re-
quested by Chrysler. The establishment of 17.2
mpg as the fuel economy standards for 4X2
vehicles decreases gasoline savings by 0.7 billion
gallons over the life of the 1981 fleet. Compared
to the 1980 standards, the revised 1981 standards
will save about 2 billion gallons of gasoline, at
a cost of $153 million in capital investment and
$49 per vehicle retail price increase. Consumers
will achieve a net savings of $255 per vehicle
as a result of the 1981 standards (compared to
the 1980 standards). Copies of this analysis
are available from NHTSA's Office of Plans
I
PART 533— PRE 35
and Programs, Koom 5212 of the Nassif Build-
ing, Washington, D.C. 20590.
(Sec. 9, Pub. L. 89-670, 80 Stat. 931 (49 U.S.C.
1657); Sec. 301, Pub. L. 94-163, 89 Stat. 901
(15 U.S.C. 2002) ; delegation of authority at 41
FE 25015, June 22, 1976 and 43 FR 8525, March
2, 1978)
Issued on June 20, 1979.
Joan Claybrook
Administrator
44 F.R. 36975
June 25, 1979
i
PART 533— PRE 36
PREAMBLE TO AN AMENDMENT TO PART 533— LIGHT TRUCK AVERAGE FUEL
ECONOMY STANDARDS
Standards for 1982 Model Year
(Docket No. FE 78-01; Notice 2)
ACTION: Final Rule.
SUMMARY: This notice establishes fuel economy
standards for model year 1982 light trucks. The
establishment of these standards is required by
section 502(b) of the Motor Vehicle Information
and Cost Savings Act. These standards are intended
to result in the savings of 1.2 billion gallons of
gasoline over the life of the 1982 light truck fleet,
compared to the consumption which would have
occurred if fuel economy remained at the levels of
the 1981 standards.
DATES: These standards are applicable for the
1982 model year.
FOR FURTHER INFORMATION CONTACT:
Mr. Francis J. Turpin, Office of Automotive
Fuel Economy Standards (NRM-21), National
Highway Traffic Safety Administration, 400
Seventh Street, S.W., Washington, D.C. 20590
(202-472-6902)
SUPPLEMENTARY INFORMATION: In December
1975, following the Arab oil embargo of 1973,
substantial increases in the price of imported
petroleum, and a recognition of the nation's
vulnerability to interruptions of supply and rapid
increases in the price of foreign oil, the Congress
passed the Energy Policy and Conservation Act.
That law added a new Title V to the Motor Vehicle
Information and Cost Savings Act ("the Act"),
authorizing a number of federal initiatives to
improve automotive fuel efficiency.
Section 502(b) of the Act requires the Secretary
of Transportation to issue average fuel economy
standards for light trucks beginning with the 1979
model year. That provision requires that standards
be set at the maximum feasible average fuel
economy level, considering technological
feasibility, economic practicability, the effects of
other federal standards on fuel economy, and the
need of the nation to conserve energy. That
provision also requires that standards be
established at least 18 months prior to the start of
the model year to which they apply. To date,
standards have been established through the 1981
model year. On December 31, 1979, in 44 FR
77199, the National Highway Traffic Safety
Administration ("NHTSA" or "the agency"),
which was delegated authority to administer the
fuel economy program, proposed the issuance of
light truck standards for model years 1982-85.
These standards would apply to light trucks with
gross vehicle weight ratings (GVWR) of up to 8500
pounds, curb weights of less than 6000 pounds, and
frontal areas less than 45 square feet. This class of
vehicles includes most standard pickup trucks,
vans, and utility vehicles which are used for
personal or light duty commercial applications.
This notice establishes standards for the 1982
model year only. Due to the imminence of the date
specified in the law for establishment of the 1982
standards and to the complexity of the marketing
and other issues involved in the later model years,
standards for the 1983-85 model years will be
established at a later date. The 1982 standards are
18 mpg for two-wheel drive light trucks and 16
mpg for four-wheel drive light trucks.
The basis for the proposed standards is set forth
in the preamble to the December 31 notice of
proposed rulemaking (NPRM), the agency's
rulemaking support paper (RSP), and the agency's
regulatory analysis, copies of which are available
from the individual listed as the "information
contact" at the beginning of this notice. These
PART 533; PRE 37
standards are based upon information obtained in
past rulemakings, the Department's own research
activities, information submitted by the
manufacturers in response to a July 1978 NHTSA
questionnaire and a July 1979 special order, and
other information. In general, the proposed 1982
standards are based primarily on the projected use
of "add-on" technology such as radial tires,
improved accessories, automatic transmissions
with lock-up torque converters, and overdrive
manual transmissions. Items requiring longer lead
times, such as the introduction of compact pickup
truck models and new engines were not included in
the proposal for 1982 for most manufacturers, but
were considered in three alternative analyses
discussed in the agency's rulemaking support
paper.
The fuel economy levels of 17.4 mpg for two-
wheel drive (4x2) light trucks and 15.6 mpg for
four-wheel drive (4 x 4) light trucks set forth in the
NPRM were determined to be achievable by the
"least capable manufacturer" with relatively
minor difficulty, and were based on the agency's
then current assessment of that manufacturer's
capability. The NPRM noted that the final 1982
standards might be established at other higher or
lower levels, depending on the comments received
and the degree to which standards would be keyed
to the least capable manufacturer. The proposed
standards were generally consistent with levels of
fuel economy which the manufacturers planned to
meet, due to market demands and the anticipated
establishment of fuel economy standards for that
year. However, in most cases the proposed
standards did not reflect such fuel economy
improvement actions as reduction of average
engine displacement or axle ratio below 1981
levels, or some feasible new model introductions.
The only comments received on the NPRM with
respect to the 1982 standards came from the five
domestic manufacturers of light trucks, the Center
for Auto Safety, and Purolator Courier
Corporation. With one exception, Chrysler
Corporation, none of the manufacturers claimed to
be unable to meet the proposed 1982 standards,
and several apparently plan to exceed them by
substantial margins. (As noted in greater detail
later in this notice, the plans of the manufacturers
and confidential information available to the
agency place all of the manufacturers, except
Chrysler, above the final standards too.) Since
filing its comments on the proposal, Chrysler's
position has changed. In its March 1980 special
order response, that company revised its
projections upward and indicated that it now plans
to exceed the proposed 4x2 standard and to
closely approach the 4x4 proposal. In general, the
manufacturers took exception to certain of the
details of the agency's analysis for 1982, but did
not claim that the agency had overstated
substantially their achievable fuel economy levels
for that year.
It should be noted that the levels of fuel economy
projected in the proposal understated the actual
fuel economy improvement capability for some
companies due to limitations discussed above and
the agency's policy of not including the fuel
economy benefits from usage of diesel engines
until the questions relating to the possible adverse
health effects of diesel engine emissions are more
fully resolved. The EPA has recently issued diesel
particulate standards, and they will not preclude
the use of diesel engines in light trucks for the 1982
model year. However, only two manufacturers
plan to rely significantly on diesel engine usage for
1982, GM and IH, and the increased fuel economy
levels which the agency would project based on
those plans would not change the balancing
process by which the agency arrives at final
standards. Therefore, the agency has not included
diesel engines in its 1982 fuel economy analysis,
but may do so for the 1983-85 final rule, as
mentioned in the NPRM. See 44 FR 77204.
The main issues raised in the comments on the
1982 standards involve the applicability of the
standards, and in particular whether captive
import light trucks may be included in average fuel
economy calculations and whether the agency can
and should establish a separate class of light trucks
and a separate fuel economy standard to
accommodate manufacturers such as Chrysler and
IH, which claim to need special consideration. The
latter issue will be discussed at the end of this
notice, in conjunction with selecting the levels of
the 1982 standards.
A. Inclitsion of captive imports. Section 503(bXl)
of the Act provides that when a manufacturer both
produces passenger automobiles in the United
States and imports passenger automobiles, those
two groups of vehicles are to be treated as if
manufactured by separate manufacturers for fuel
economy standards compliance purposes. The
PART 533; PRE-38
purpose of this provision is to remove any incentive
the domestic manufacturers might have to comply
with fuel economy standards by merely importing
more small foreign-produced automobiles, thereby
decreasing employment in the U.S. industry. See
Congressional Record, p. H5383 (daily edition,
June 12, 1975). Although the law does not specify
procedures for calculating light truck average fuel
economy, the legislative history states that a
similar computation (including "special rules for
imports") should be established as was done in the
statute for passenger automobiles. See House
Report 94-340 (94th Cong., 1st Sess. (1975), 91). In
establishing standards for 1980-81 model year
light trucks, the agency used its classification
authority under section 502(b) to require separate
compliance of captive import and other light trucks
after the 1979 model year. See 43 FR 11995, March
23, 1978.
Four of the domestic manufacturers commented
on the issue of inclusion of captive import light
trucks in model years after 1981. GM argued that
the law compels NHTSA to require separate
compliance of domestic and captive import light
trucks. This position is based upon the language in
the House Report relating to a "similar
computation" for light truck average fuel economy
as was done statutorily for passenger automobiles.
GM argues that this position is further supported
by Congress' making the definition of the term
"domestically manufactured" in section
503(bX2XE) apply to both passenger automobiles
and light trucks. That term is the key definition for
purposes of requiring separate compliance of
imported and domestic vehicles, and could have
been limited in application to passenger
automobiles had Congress so intended. Ford also
favored requiring separate compliance for import
and domestic light trucks, but argued that if
imports are permitted to be included in the
average fuel economy calculation for some
manufacturers, they must be includable for all.
International Harvester favored permitting the
inclusion of captive imports, but only if a higher
fuel economy standard were set for companies
which did so. Chrysler favored permitting the
inclusion of up to 80,000 captive import light
trucks in a manufacturer's average fuel economy
calculation, and argued that the agency has
authority to permit this.
One argument raised by Chrysler to support the
inclusion of captive imports is that this step would
raise the average fuel economy of its domestic fleet
relative to the levels achieved by Ford's and GM's
domestic fleets. (Inclusion of the captive imports
would also increase the agency's assessment of
Chrysler's ability to improve its domestic average
fuel economy and might lead to the setting of
higher standards than would be set were the
captive imports excluded. Chrysler would still have
the lowest projected fuel economy of all
companies, however.) However, the agency
remains of the view that the separate compliance
requirement for domestic and captive import light
trucks has a countervailing positive impact, in
encouraging the domestic manufacturers to
produce small trucks in the U.S. and thereby
increase U.S. industry employment. Once this
investment is made, the companies will have a
stronger incentive to promote the sale of these
more fuel efficient vehicles, thereby reducing
gasoline consumption. Domestic production of
small trucks will also improve the U.S. trade
balance by capturing sales which would otherwise
go to the importers.
Chrysler also argued that permitting it to include
captive imports in its CAFE would enable it to
"test the market" for smaller, more fuel efficient
types of vehicles. The agency's original decision to
require separate comphance of captive import and
other light trucks does not preclude Chrysler or
other manufacturers from continuing to test the
small truck market with imports, to determine if
demand for such vehicles is adequate to support
minimum feasible domestic production volumes.
However, the agency doubts that additional
evidence is needed to convince a manufacturer that
a market exists for these vehicles. In fact,
Chrysler, in an October 17, 1979, submission to the
Treasury Department relating to its loan
guarantee, projects that small pickup trucks will
account for 23 percent of the light truck market in
the early 1980's. Sales of compact Japanese pickup
trucks increased 39 percent from 1978 to 1979, to
465,000 units, despite a general decline of over 15
percent in total light truck sales. The compact
pickup trucks were the only segment of the truck
market to register a sales increase. Given the
nearly universally accepted predictions of future
gas price increases and possible shortages, the
market for compact, fuel efficient light trucks
PART 533; PRE 39
seems assured. The other domestic light truck
manufacturers apparently agree with the agency's
conclusion that the market is sufficient to support
the sale of these trucks, given their plans to begin
production in the next few model years.
The agency remains convinced that the separate
treatment of captive import and domestic light
trucks is the position most consistent with the
legislative mandate to develop similar average fuel
economy calculation procedures for light trucks as
for passenger automobiles. Therefore, this final
rule makes no change in the current requirement
for separation of foreign and domestic light truck
fleets.
B. Technical issues. Several rather minor
objections were raised with respect to the agency's
technical analysis of 1982 fuel economy
improvement capability. All issues are discussed in
greater detail in the agency's rulemaking support
paper, copies of which are available from the
individual listed as the "information contact" at
the beginning of this notice.
The first issue involves the baseline used to
project 1982 fuel economy levels. For the NPRM,
the agency used as the baseline its prior analysis of
achievable 1981 fuel economy levels from the
rulemaking proceeding to reconsider that year's
standards (44 FR 36975, June 25, 1979). That
analysis was in turn based upon 1979 sales mix and
fuel economy test data. Only IH commented on the
question of whether 1980 mix and test data should
be used as a baseline to the extent that information
becomes available. IH supported the use of 1980
test data, but cautioned that the 1980 sales data
might be unrepresentative due to market
fluctuations. A shift in the light truck mix
apparently occurred between early 1979 and the
present time, with lighter trucks and smaller
engines accounting for a larger portion of total
sales. Although the agency is not revising its
baseline estimates of average fuel economy, the
standards established herein do reflect the changes
in the truck market which occurred after the start
of the 1979 model year, as discussed below.
Both AM and IH argued that the 1981 standards
should be the baseline for projecting 1982 fuel
economy levels, and that the only additional
technology which should be considered by the
agency is that which could be added for the 1982
model year. This approach would ignore any
technology which was used by manufacturers to
voluntarily exceed the 1981 standards, and would
therefore inaccurately measure 1982 maximum
feasible fuel economy levels. For the NPRM, the
agency did include improvements by two
manufacturers (Ford and GM) which raised their
capabilities beyond the 1981 standards. Thus, the
agency has rejected this suggestion, due to its
inconsistency with the legal requirements that
standards be established at maximum feasible
levels.
The agency also requested comment on its
current policy of not including in standard-setting
analyses the fuel economy benefits from diesel
engines, pending resolution of various diesel-
emission-related questions by EPA. All the
manufacturers (but for AM, which did not address
the issue) supported the continuation of this policy,
which has the potential effect of reducing the level
of standards which are set. Ford also suggested
that the policy be extended to its planned PROCO
engine. With respect to the diesel issue, the agency
is continuing its current policy for the reasons
discussed above. The PROCO issue has no direct
bearing on the 1982 standards in any case, since
the PROCO engine would not be available until
some later model year. Ford's comment will be
addressed in the 1983-85 final rule.
IH also objected to the agency's methodology of
assuming that if diesels were not available to that
company, consumers would purchase the most
efficient alternative gasoline engine available, a
four-cylinder engine in IH's case. In fact, the
agency substituted a combination of 4- and
8-cylinder engines for the diesels, not solely the
4-cylinder engines. However, the agency is of the
view that the 4-cylinder engine is the closest
substitute to the diesel in terms of acceleration
performance and fuel economy, as discussed in the
rulemaking support paper.
Several objections were raised with respect to
the agency's projections of various transmission
improvements. However, none of these objections
were accompanied by test data or supporting
analysis. Therefore, the agency has not revised its
analysis with respect to potential transmission
usage. Additional discussion on transmission
improvements is contained in the agency's
rulemaking support paper.
Ford objected to the fuel economy benefit from
improved accessories projected by the agency.
PART 533; PRE-40
I
}
However, since Ford's statement did not indicate
that such improvements were not feasible or
provide any supporting data, the agency has not
revised its projection used in the NPRM. Chrysler
also differed with the agency's projection (and its
own past estimates) of accessory improvements.
No substantiating data for this change of position
was provided, and the agency sees no reason why
at least a portion of the originally projected
improvement cannot be achieved by Chrysler.
Although Chrysler pointed out that tests of one
proposed technique provided no benefit, the
agency considers it likely that other techniques
may still provide a portion of the benefit.
Chrysler also objected to the agency's estimate
and reduced its own previous estimate of the fuel
economy benefit it could obtain from aerodynamic
improvements for 4x2 light trucks. However,
Chrysler provided no data or analysis in support of
its claim, beyond stating that only one previously
proposed improvement had proven acceptable
within the constraints of cost, engineering and
styling. Also, Chrysler's current estimate of the
relationship between reductions in aerodynamic
drag and fuel economy improvements is much
lower than both the agency's estimates and those
of the other manufacturers. Accordingly, the
agency cannot accept Chrysler's unsupported
assertion in this area.
Chrysler has also changed its position on feasible
weight reduction for 1982. The agency had
previously projected a very small improvement in
this area (a reduction from projections made in the
original 1981 standard-setting proceeding). Since
Chrysler provided no basis to conclude that
NHTSA's projected weight reduction is not
feasible, the agency is retaining its original
estimate.
Ford, GM, and Chrysler all objected to the
agency's projection of a 1 percent fuel economy
benefit from improved axle and manual
transmission lubricants for 1982. GM and Ford
projected lower benefits than did the agency, and
GM and Chrysler indicated that additional time
would be needed to complete the necessary
durability testing. The agency recognizes that the
precise level of benefits has not been finally
established, but believes that its projections are
substantially correct. The agency recognizes too
that durability is a matter that the manufacturers
must address. However, except for Chrysler, the
manufacturers' arguments were not supported by
any new information and are the same arguments
considered and rejected by the agency in the past
proceedings on 1980-81 light truck standards and
the reconsideration of the 1981 standards. GM's
and Chrysler's comments discuss lower viscosity
rear axle lubricants only and do not discuss the
benefits from the use of synthetic base or friction
modified axle lubricants. Ford has tested the
friction modified lubricants and apparently has not
encountered any durability problems. In the
absence of data or information in support of these
arguments, the agency is retaining its 1 percent
axle lubricant projection, but not including this
benefit for Chrysler until 1983.
The manufacturers also objected to the agency's
projection of a 3 percent fuel economy
improvement for 1982 from the use of electronic
engine control systems. Some manufacturers
apparently assumed that the agency's projections
were limited to systems for fully interactive
electronic control of spark advance, air-to-fuel
ratio, and exhaust gas recirculation rate. This was
not the case, since, as was pointed out in the
Support Paper for the NPRM, the agency was
projecting the use of a variety of electronic
controls which differ in sophistication. The
primary basis for this projection was that
electronic controls (not necessarily fully-
interactive electronic controls) would be used on
1981 model year passenger cars. In the 1980-81
proposal on light trucks (42 FR 63184; December
15, 1977), the agency projected that these controls
could be applied to 1981 model year light trucks.
The agency did not assume the use of controls in
setting the final 1981 standards due to possible
lead time problems in fully developing and
reproducing the necessary software. Now some
manufacturers are arguing that lead time does not
-exist to apply electronic controls to the 1982 light
truck fleet, and even if it were done, no fuel
economy benefit would result. Again, those
arguments are based primarily on 3-way catalyst
systems.
The agency rejects the lead time argument put
forth by GM because the agency did not restrict its
MY 1982 projections to 3-way catalyst systems and
there has been sufficient lead time for large
manufacturers such as GM and Ford to develop
electronic control systems. Indeed, GM is
intending to use a Knock Limiter System. Further,
PART 533; PRE 41
both Chrysler and Ford will be using some form of
electronic controls on certain applications in MY
1982. Several sources in the Support Paper for the
NPRM substantiate the agency's position of
average fuel economy benefits of from 3 to 5
percent for electronic controls in various forms as
does later information submitted by one
manufacturer. Although some data submitted by
the manufacturers showed no fuel economy
improvement from specific electronic subsystems
in particular applications, the agency is retaining
its original estimate of 3 percent as a reasonable
estimate of the average improvement in fuel
economy.
Ford and Chrysler objected to the agency's
estimate of fuel economy benefits available from
reducing engine displacement or total drive ratio
(CID X N/V). Ford objected to the CID x N/V
reductions projected in one alternative case in the
rulemaking support paper, but that was not the
reduction upon which the 1982 proposal was based.
The agency believes that Ford can meet the
standards established herein without making CID
X N/V reductions beyond those planned. Chrysler,
however, projects that for 1981 it will sell engines
with larger average displacement, and
consequently poorer fuel economy, than in 1980.
The mix gets even worse for 1982. The agency
cannot accept Chrysler's 1982 projection for
purposes of setting standards. Against a
background of current rapid gas price increases,
uncertainties over Mideast oil supplies, and record
sales of small imported automobiles, neither the
agency nor Chrysler's domestic competitors views
the market as being consistent with Chrysler's
*■ .ecasts. Even if Chrysler were correct in its
forecast, that company provided no information
bearing on its ability to use marketing measures to
promote the sale of smaller engines. However, the
agency is accepting Chrysler's projected shift for
1980-81, which is based on certain sales dislocations
being carried over from 1979. Overall, the agency
is retaining its original estimate of CID x N/V
reductions for Chrysler.
In the NPRM, the agency discussed a base case
for making fuel economy improvements in
1982-85. It also set forth three alternative cases
for achieving higher fuel economy levels, by
introducing additional compact truck models.
major performance reductions, and eliminating
many of the higher payload trucks. With respect to
the "new model" case, the Center for Auto Safety
objected to the fuel economy values projected by
the agency for compact pickup truck and van
models. Specifically, the Center argues that the
new domestic models projected by the agency
would still be larger than and have poorer fuel
economy than imported light trucks, and would be
unable to successfully compete with the imports in
these times of increased demand for high fuel
efficiency. According to the Center, the result of
producing such vehicles would be further loss of
sales to the imports, increased unemployment in
the domestic industry, and a waste of capital due to
the need to downsize these trucks again. The
agency is concerned about the issue of new model
attributes, but the issue raised relates to the
1983-85 standards because of the inadequate lead
time to change 1982 designs. The agency will
consider this question more fully for the final rule
on 1983-85 standards.
C. Economic practicability. None of the
manufacturers raised any specific objections with
respect to the agency's analysis of the costs
associated with compliance with the 1982
standards. Since the agency's projections of 1982
fuel economy improvements are no more stringent
than the actions planned by the manufacturers to
meet current market demand for greater fuel
efficiency, the additional costs imposed by the 1982
standards are speculative. For that reason, the
agency has continued to determine the costs and
benefits of improving fuel economy to the levels
required by our standards, regardless of the
motivation for making those improvements.
IH raised two general economic issues. First, it
requested that the agency conduct cash flow
analyses for AM and IH as had been done for the
larger domestic manufacturers. The 1982 model
year capital investment required of these two
companies, which rely extensively on suppliers for
major components, is quite small. This makes cash
flow a much less critical consideration for those
companies than for the "Big Three." Further, IH's
light truck production is a very small portion of
that company's business. Thus, IH's light truck
expenditures have a relatively small impact on its
PART 533; PRE 42
cash flow. Second, IH agrued that the agency
consider the costs associated with fuel economy
standards compliance, but which do not involve
product changes. Apparently, IH is referring to
the costs associated with commenting on proposed
standards, responding to questionnaires and
special orders for NHTSA, and submitting reports
to the government. IH states that these costs are
insignificant for the larger manufacturers, but
important for companies having a much smaller
share of the market, like IH. However, IH
provided no cost information to support their
argument.
D. Effects of other federal standards. Two
manufacturers addressed the issue of the effect of
1982 safety standard amendments on fuel
economy. GM argued that the changes to Standard
204 (relating to steering column rearward
displacement) would require structural
reinforcement to its vans, adding 40 pounds
additional weight. IH, on the other hand,
estimated no adverse impact for its light truck
fleet due to changes in safety requirements. The
agency estimates that 40 pounds added to GM
vans, if actually required, would have a negligibly
small impact on measured fuel economy and no
\ effect on its compliance with the 1982 standards.
E. Need of the nation to conserve energy.
None of the manufacturers took exception to the
agency's discussion of the need of the nation to
conserve energy, as set forth in the NPRM,
rulemaking support paper, and preliminary
regulatory analysis. Events continue to bear out
the conclusion expressed by the agency in each
standard-setting proceeding to date, that the need
of the nation to conserve energy is so great as to
require the establishment of the most stringent
feasible fuel economy standards.
F. Setting the 1982 standards. Based on
comments received on the agency's NPRM, no
significant revisions are required to the detailed
technology usage projections which formed the
basis for the proposed standards. However, due to
rapid shifts in the light truck market and to
corresponding changes in manufacturers' product
plans, the estimates made by the agency in
December no longer appear valid. For example,
Chrysler recently submitted a response to an
agency special order which projected 1982 fuel
economy levels of 17.7 mpg for 4 x 2's and 15.3
mpg for 4 X 4's 0.5 to 0.6 mpg above the levels it
told NHTSA were its maximum feasible levels less
than two months ago. Based on the plans of the
various manufacturers to substantially change
current trucks and on other information available
to the agency, the fuel economy levels achievable
with no more than moderate risk for the 1982
model year are as follows:
4x2 4x4
American Motors — 16-17
Chrysler 17.7 15.3
Ford 18-19 16-17
General Motors 18-19 16-17
International Harvester .. . — 17.1
The precise planned fuel economy levels of some of
the manufacturers have been claimed to be
confidential by some of the companies.
The reason for these higher levels is that some
manufacturers plan (in response to the rapidly
shifting market) to take certain actions to improve
fuel economy beyond those actions projected by
the agency for the proposed standards. Also, some
of these numbers include the benefits of diesel
engines, which the agency did not include in its
analysis. These additional actions either became
more firmly established after the issuance of the
NPRM, or were discussed in manufacturers'
special order responses but were not fully
integrated into the agency's proposal due to the
short period of time between the receipt of special
order responses and issuance of the NPRM.
Because of the rapid changes in the truck
market, with fuel efficiency playing a much
greater role in consumers' purchasing decisions, it
appears that the manufacturers' fuel economy
improvement plans for 1982 are a more accurate
indicator of the "maximum feasible average fuel
economy" for that year than are the agency's
projections in the NPRM. Given the limited lead
time remaining until the beginning of the 1982
model year and the substantial economic
uncertainties facing the manufacturers and the
national economy, the agency is relying primarily
on the manufacturers' planned fuel economy levels
in setting final 1982 standards. The final standards
are also quite consistent with the fuel economy
levels projected in the alternative cases in the
agency's rulemaking support paper.
The Act's legislative history provides guidance
on the establishment of fuel economy standards in
a situation like this one, in which one manufacturer
has lower projected fuel economy than the rest of
PART 533; PRE 43
the industry. The Conference Report on the Act
provides guidance in this regard as follows:
The conference substitute lists a number of
factors the Secretary shall consider in determining
maximum feasible average fuel economy .... Such
determination should .... take industrywide
considerations into account. For example, a
determination of maximum feasible average fuel
economy should not be keyed to the single
manufacturer which might have the most difficulty
achieving a given level of average fuel economy.
Rather, the Secretary must weigh the benefits to
the nation of a higher average fuel economy
standard against the difficulties of individual
automobile manufacturers. Such difficulties,
however, should be given appropriate weight in
setting the standard in light of the small number of
domestic automobile manufacturers that currently
exist, and the possible implications for the national
economy and for reduced competition association
(sic) with a severe strain on any manufacturer.
However, it should also be noted that provision
has been made for granting relief from penalties
under Section 508(b) in situations where
competition will suffer significantly if penalties
are imposed.
Senate Report 94-340, 94th Cong., 1st Sess. (1975),
at 154-5. Thus, the Secretary is required to balance
the benefits to the nation of setting fuel economy
standards at some level above that projected to be
achievable with minimal risk by the "least capable"
manufacturer against the resulting harm to that
manufacturer and to industry competition.
The main benefit from setting higher fuel economy
standards is the additional petroleum savings which
would result, or at least the greater certainty that
these savings will be realized. This benefit is limited
by feasibility constraints, since some levels of fuel
economy either cannot be achieved or, more likely,
could be achieved only at a risk perceived by the
manufacturers to be so great that they would elect to
pay civil penalties for failing to meet the standards
rather than comply. This possibility of setting fuel
economy standards which do not produce the
anticipated savings is remote (but for Chrysler) if
standards are set at levels at least up to 18 mpg for 4
X 2's and 16 mpg for 4 x 4's. Over the fuel economy
ranges which the manufacturers are able to achieve
for 1982, each 0.1 mpg of additional average fuel
economy for the industry (including both classes of
trucks) produces additional gas savings of
approximately 130 million gallons over the life of the
affected vehicles.
Setting standards at levels which can more
readily be achieved by the least capable
manufacturer could result in the loss of gasoline
savings which a higher standard would produce. In
other words, standards set at a level which
Chrysler can readily achieve would be below the
maximum level which the other manufacturers can
meet, and the other manufacturers could choose to
just meet the lower standards instead of achieving
the higher fuel economy levels they are capable of
meeting. It has been argued by some
manufacturers that market forces would not
permit any manufacturer to produce vehicles of
less than maximum fuel economy. However, the
concept of "maximum fuel economy" is one upon
which the agency and some of the manufacturers
would disagree. There is no certainty that the
manufacturers would maintain their planned 1982
fuel economy improvements if the fuel economy
standards provided that latitude. In the unlikely
event that setting 1982 standards well below GM's
and Ford's capability (and below that of AM and
IH in the case of 4 x 4's) did not result in lower
energy conservation in 1982, it could have that
effect in a later year. The setting of such standards
would enable those companies to earn large 1982
credits and thus possibly reduce the incentive for
additional fuel economy improvements in a later
year. The fact that Ford, in its comments on the
NPRM, stated that its 1982 planned fuel economy
levels had been reduced from levels reported to the
agency in September 1979 is evidence that current
plans are not absolutely fixed, and that lower fuel
economy levels are a definite possibility.
The agency is also directed to consider the possible
competitive harm which would occur if standards
were set at a level above which a manufacturer could
meet with low risk. This harm could result from
either the payment of civil penalties (and any
resulting adverse publicity) or the taking of drastic
actions to comply with the standards. With respect to
the payment of civil penalties, the Secretary may
waive penalties if the Federal Trade Commission
certified that the payment of such penalties would
produce a "substantial lessening of competition."
Given Chrysler's situation as one of the three major
domestic light truck producers and its current
financial troubles, it is likely that such a finding
would be made and potential penalties waived. More
to the point, Chrysler will earn enough credits in
1981 to eliminate any civil penalties for the majority
of its trucks, the 4 x 2's. Credits carried over for its 4
X 4 fleet would reduce the maximum civil penalty
PART 533; PRE 44
liability to about 2 million dollars. Given the
public's awareness of Chrysler's problems, the
small magnitude of the potential penalties, and the
possibility that Chrysler might meet the standards,
the agency discounts the adverse publicity factor.
The remaining risk to be considered is the
potential harm resulting from a manufacturer
taking extraordinary actions to meet the standard
and either producing vehicles which are not
accepted in the market or incurring expenses
which it cannot meet. Given the magnitude of the
potential civil penalty liability for Chrysler of $35
per 4x4 truck and the possibility that any penalty
would be waived, it is inconceivable that company
would take any actions to comply with the
standards which might have serious adverse
economic consequences for it.
Further, the possibility remains that Chrysler
may be able to achieve 1982 average fuel economy
levels of 1 8 mpg for 4 x 2'sand 16mpgfor 4 x 4's.
If Chrysler took such actions as further increasing
the efficiency of its engines, reducing its average
engine displacement by changing the mix of the
vehicles sold, or instituting additional lightweight
material substitutions, it may be able to comply
with these standards.
The agency concludes that the energy savings
benefits associated with setting standards at levels
of 18 mpg for 4 x 2's and 16 mpg for 4 x 4's
outweigh the rather speculative harm to Chrysler
of such standards. Therefore, after balancing the
factors required by the law, the agency is
establishing final standards of 18 mpg for 4 x 2's
and 16 mpg for 4 x 4's.
Commenters on the NPRM raised two issues
which directly relate to the balancing process and
selection of final standards. First, IH and Chrysler
both argued that standards should be set at levels,
readily achievable by the least capable
manufacturer, and the Center for Auto Safety
opposed such a process. IH argued that the
adverse publicity associated with violating the
standards would be very damaging to the "least
capable manufacturer." The standards established
herein can be met by IH, based on that company's
current product plan, as described in its response
to the agency's July 1979 special order. In Chrysler's
case, the public is already aware of that company's
current financial difficulties and should not draw
additional adverse conclusions based on its possible
failure to comply, particularly if civil penalties are
offset by credits or waived. In any case, the
potential loss in fuel savings resulting from setting
standards at a level which Chrysler readily could
meet outweighs any of the speculative effects on
that company.
The second argument, which was also supported
by IH and Chrysler but opposed by GM, Ford, and
the Center for Auto Safety, involves the use of the
agency's authority under section 502(b) of the Act
to set separate class fuel economy standards for
companies with particular problems. IH argued
that it needs such special treatment. However,
based on its own plan and the agency's projections,
it can comply with the standards established
herein. With respect to the Chrysler situation, both
GM and Ford argue that the agency lacks the
authority to establish such a classification. Both
manufacturers argue that the Act requires that
standards apply equally to all manufacturers, and
that the agency's authority to set standards for
different classes applies to classes of vehicles, not
of manufacturers. The Center for Auto Safety
argues that the mechanism in the law for payment
of moderate civil penalties for noncompliance and
for reduction or elimination of those penalties in
cases of need should be the sole method for dealing
with the problems of the least capable
manufacturer. Ford also argues that separate
standards for different companies competing in
the same market segment provides a competitive
advantage to the company subject to the less
stringent standard.
The agency has in the past used its classification
authority to promote maximum fuel savings while
still not placing undue burdens on particular
manufacturers. For example, the separate 4x4
standard was established to account for American
Motors, whose fleet is predominantly the less fuel
efficient four wheel drive vehicles. The "limited
product line" standard was established to provide
a two year transition period for IH to gain
experience with complying with more stringent
emission standards, which were applied to that
company's light trucks for the first time in 1979.
With respect to IH, the two year period expires
in 1981, and all indications are that IH has been
able to improve its ability to meet more stringent
emission standards without loss of fuel economy.
The fuel economy of IH's 4x4 fleet for 1982 is on
a par with that of the other manufacturers' 4x4
fleets, so the agency is not granting IH's request to
PART 533; PRE 45
extend the applicability of that company's special
class. IH argued that a separate class is needed to
allow for the possibility that it might offer 4x2
versions of its Scout vehicle in 1982. In recent
years, the sales of these 4x2 derivatives of the
standard 4x4 Scout have been at very low levels,
dropping to under 300 units in 1979. In a
September 13, 1979, letter to the agency, IH
indicated that the Scout is available "only in four-
wheel drive." In any case, given the low volumes
involved, the availability of diesel engines to raise 4
x 2 fuel economy, and the existence of carry-over
credits if 4 x 2 Scouts continue to be sold, the
agency sees no need to perpetuate the special class
for IH. However, since IH and AM will still have
fleets which are at least predominantly four wheel
drive, the agency deems it necessary to extend the
separate class for that type of vehicle. See 42 FR
63192-3, December 19, 1977.
Without deciding the question of whether the
agency has the authority to set a separate standard
for Chrysler but recognizing that serious questions
exist in that regard, the agency deems it
appropriate to employ other statutory mechanisms
in dealing with that company's problems. Chrysler
competes in the same market segments as GM and
Ford, and the various truck models offered by
those three companies are remarkably similar.
There is no inherent technical reason why
Chrysler's light trucks cannot achieve the same
levels of fuel economy as the other companies. The
agency does not seek to minimize the magnitude of
the economic difficulties which confront Chrysler.
However, the agency is concerned that the
establishment of differential fuel economy
standards for fleets of vehicles which are nearly
identical on a model-for-model basis could have an
anticompetitive effect. Congress considered the
conflict between standards which require
maximum fuel economy improvements and the
inevitable differences in capabilities of the affected
manufacturers, and developed the enforcement
mechanism in section 508 of the Act (involving
modest civil penalties for noncompliance,
offsetting monetary credits, and waivers of
penalties in certain instances) to deal with the
situation. Therefore, the agency is not establishing
a separate class and fuel economy standard for
Chrysler.
G. Miscellaneous comments. AM raised two
procedural issues in regard to the 1982 standards.
First, it argued that the agency failed to comply
with the requirement in section 502 (b) of the Act
that standards be issued 18 months prior to the
start of the model year to which they apply. In
AM's case, its 1982 production period will begin in
July 1981, and 18 months prior to that date would
be January 1980. As the agency noted in response
to the same comment made by AM with respect to
the 1980 standard, there is no single start of a
model year for all companies in the industry (43 FR
11995; March 23, 1978). Production begins as early
as July (or even earlier in some cases such as with
the GM X-body cars) and as late as December for
some foreign manufacturers. However, the agency
has endeavored to provide approximately 18
months leadtime for the industry as a whole. Even
for domestic companies with early-starting model
years, these standards are established 18 months
prior to the introduction for sale of the 1982
models. Further, lead time should not be a problem
for AM with respect to the 1982 standard, since its
current product plan would lead it to exceed the
standards promulgated herein.
AM also objected to the brief 30 day comment
period provided with respect to the 1982 standard.
This short comment period was necessitated by the
statutory deadline for issuance of that standard
and by delays in issuing the NPRM resulting from
requests from the industry to reduce the 1981
standards. Although the agency seeks to provide
more than 30 days to comment on proposed rules,
NHTSA views the 30 day period as reasonable in
this case, due to the relatively narrow issues
involved. More time has been provided to comment
on the 1983-85 standards, where the issues
involved are much more complex.
Purolator Courier Corporation argued for a
more gradual increase in stringency in fuel
economy standards to accommodate fleet truck
operators like itself. It argued that much of the
technology needed to comply with fuel economy
standards is not fully proven, and that downsizing
of light trucks would make those trucks less useful
to commercial purchasers. Purolator also
requested that a public hearing be held on the
standards. The agency recognizes that changes to
light trucks might result in some inconvenience to
commercial users, e.g., from the need to train
mechanics to repair new types of technology.
PART 533; PRE 46
However, the Act specifies that the agency must
establish fuel economy standards at the maximum
feasible level for each model year, necessarily
producing changes in the truck fleet. The
technology projected by the agency, particularly
for the 1982 model year, is well proven and in most
cases already in use on some vehicles. Further, the
agency's standards do not necessitate the
elimination of standard-size trucks with V-8
engines, which Purolator claims to need. The
agency does not see a need for a public hearing on
these fuel economy standards, since the
opportunity to submit written information is an
effective means of addressing the primarily
technical issues in a detailed fashion.
H. Economic and energy impacts of the 1982
standards.
The agency considered the economic impacts of
the 1982 standards, in accordance with Executive
Order 12044 and the Department's regulations for
implementing that order. See 44 FR 11034. Also
considered were the "Urban and Community
Impacts" of the standard, as specified in Executive
Order 12074. These impacts are discussed in a
Regulatory Analysis, copies of which are available
from the agency's Office of Plans and Programs.
The major conclusions of that document are that
the standards will produce gasoline savings of 1.2
billion gallons over the life of the 1982 model year
light truck fleet. The investment requirement
associated with making that improvement would
be approximately $900 million, part of which would
be assimilated in normal business as usual capital
spending. The average retail price increase
resulting from the standards is approximately $95,
but this initial cost is more than offset by the
operating cost savings over the life of the vehicle of
about $470. No significant adverse "urban or
community" impacts should result from the
standards.
I. Environmental impacts of the standards.
The agency also considered the environmental
impacts associated with the 1982 light truck
standards, in accordance with the National
Environmental Policy Act, 42 U.S. C. 4321, e( seq.
As has been the case with all of the agency's fuel
economy standards, the main environmental
impacts are positive ones associated with the
reduction of petroleum consumption. Copies of the
Environmental Impact Analysis are available from
the individual listed as the "information contact"
at the beginning of this notice.
J. Standards for 1983-85. As stated previously,
the agency proposed standards for 1983-85 at the
same time it proposed the 1982 standards.
However, standards for the later 3 years are not
being established now, due to the legal
requirement for establishment of the 1982
standards by this March and the much more
complex issues involved in setting standards for
1983-85. Comments on the 1983-85 standards are
due by March 31, 1980, although the agency will
consider late comments to the extent possible. It is
NHTSA's intent to promulgate these standards
this year, to provide ample leadtime for the
manufacturers to develop compliance strategies.
In consideration of the foregoing, 49 CFR
Chapter V is amended as follows:
1. By deleting the footnote to the table in section
533.5 (a) and by revising the table to read as
follows:
Model
year
2-wheel drive
light trucks
i
l-wheel drive
light trucks
Limited
Captive
imports
Other
Captive
imports
Other
light trucks
1979 .
17.2
16.0
16.7
18.0
14.0
15.0
16.0
15.8
14.0
15.0
16.0
1980 .
16.0
14.0
1981 .
16.7
14.5
1982 .
18.0
Issued on March 27, 1980.
Joan Claybrook
Administrator
45 F.R. 20871
March 31, 1980
PART 533; PRE 47-48
extend the applicability of that company's special
class. IH argued that a separate class is needed to
allow for the possibility that it might offer 4x2
versions of its Scout vehicle in 1982. In recent
years, the sales of these 4x2 derivatives of the
standard 4x4 Scout have been at very low levels,
dropping to under 300 units in 1979. In a
September 13, 1979, letter to the agency, IH
indicated that the Scout is available "only in four-
wheel drive." In any case, given the low volumes
involved, the availability of diesel engines to raise 4
X 2 fuel economy, and the existence of carry-over
credits if 4 x 2 Scouts continue to be sold, the
agency sees no need to perpetuate the special class
for IH. However, since IH and AM will still have
fleets which are at least predominantly four wheel
drive, the agency deems it necessary to extend the
separate class for that type of vehicle. See 42 FR
63192-3, December 19, 1977.
Without deciding the question of whether the
agency has the authority to set a separate standard
for Chrysler but recognizing that serious questions
exist in that regard, the agency deems it
appropriate to employ other statutory mechanisms
in dealing with that company's problems. Chrysler
competes in the same market segments as GM and
Ford, and the various truck models offered by
those three companies are remarkably similar.
There is no inherent technical reason why
Chrysler's light trucks cannot achieve the same
levels of fuel economy as the other companies. The
agency does not seek to minimize the magnitude of
the economic difficulties which confront Chrysler.
However, the agency is concerned that the
establishment of differential fuel economy
standards for fleets of vehicles which are nearly
identical on a model-for-model basis could have an
anticompetitive effect. Congress considered the
conflict between standards which require
maximum fuel economy improvements and the
inevitable differences in capabilities of the affected
manufacturers, and developed the enforcement
mechanism in section 508 of the Act (involving
modest civil penalties for noncompliance,
offsetting monetary credits, and waivers of
penalties in certain instances) to deal with the
situation. Therefore, the agency is not establishing
a separate class and fuel economy standard for
Chrysler.
G. Miscellaneous comments. AM raised two
procedural issues in regard to the 1982 standards.
First, it argued that the agency failed to comply
with the requirement in section 502 (b) of the Act
that standards be issued 18 months prior to the
start of the model year to which they apply. In
AM's case, its 1982 production period will begin in
July 1981, and 18 months prior to that date would
be January 1980. As the agency noted in response
to the same comment made by AM with respect to
the 1980 standard, there is no single start of a
model year for all companies in the industry (43 FR
11995; March 23, 1978). Production begins as early
as July (or even earlier in some cases such as with
the GM X-body cars) and as late as December for
some foreign manufacturers. However, the agency
has endeavored to provide approximately 18
months leadtime for the industry as a whole. Even
for domestic companies with early-starting model
years, these standards are established 18 months
prior to the introduction for sale of the 1982
models. Further, lead time should not be a problem
for AM with respect to the 1982 standard, since its
current product plan would lead it to exceed the
standards promulgated herein.
AM also objected to the brief 30 day comment
period provided with respect to the 1982 standard.
This short comment period was necessitated by the
statutory deadline for issuance of that standard
and by delays in issuing the NPRM resulting from
requests from the industry to reduce the 1981
standards. Although the agency seeks to provide
more than 30 days to comment on proposed rules,
NHTSA views the 30 day period as reasonable in
this case, due to the relatively narrow issues
involved. More time has been provided to comment
on the 1983-85 standards, where the issues
involved are much more complex.
Purolator Courier Corporation argued for a
more gradual increase in stringency in fuel
economy standards to accommodate fleet truck
operators like itself. It argued that much of the
technology needed to comply with fuel economy
standards is not fully proven, and that downsizing
of light trucks would make those trucks less useful
to commercial purchasers. Purolator also
requested that a public hearing be held on the
standards. The agency recognizes that changes to
light trucks might result in some inconvenience to
commercial users, e.g., from the need to train
mechanics to repair new types of technology.
PART 533; PRE 46
However, the Act specifies that the agency must
establish fuel economy standards at the maximum
feasible level for each model year, necessarily
producing changes in the truck fleet. The
technology projected by the agency, particularly
for the 1982 model year, is well proven and in most
cases already in use on some vehicles. Further, the
agency's standards do not necessitate the
elimination of standard-size trucks with V-8
engines, which Purolator claims to need. The
agency does not see a need for a public hearing on
these fuel economy standards, since the
opportunity to submit written information is an
effective means of addressing the primarily
technical issues in a detailed fashion.
H. Economic and energy impacts of the 1982
standards.
The agency considered the economic impacts of
the 1982 standards, in accordance with Executive
Order 12044 and the Department's regulations for
implementing that order. See 44 FR 11034. Also
considered were the "Urban and Community
Impacts" of the standard, as specified in Executive
Order 12074. These impacts are discussed in a
Regulatory Analysis, copies of which are available
from the agency's Office of Plans and Programs.
The major conclusions of that document are that
the standards will produce gasoline savings of 1.2
billion gallons over the life of the 1982 model year
light truck fleet. The investment requirement
associated with making that improvement would
be approximately $900 million, part of which would
be assimilated in normal business as usual capital
spending. The average retail price increase
resulting from the standards is approximately $95,
but this initial cost is more than offset by the
operating cost savings over the life of the vehicle of
about $470. No significant adverse "urban or
community" impacts should result from the
standards.
I. Environmental impacts of the standards.
The agency also considered the environmental
impacts associated with the 1982 light truck
standards, in accordance with the National
Environmental Policy Act, 42 U.S.C. 4321, et seq.
As has been the case with all of the agency's fuel
economy standards, the main environmental
impacts are positive ones associated with the
reduction of petroleum consumption. Copies of the
Environmental Impact Analysis are available from
the individual listed as the "information contact"
at the beginning of this notice.
J. Standards for 1983-85. As stated previously,
the agency proposed standards for 1983-85 at the
same time it proposed the 1982 standards.
However, standards for the later 3 years are not
being established now, due to the legal
requirement for establishment of the 1982
standards by this March and the much more
complex issues involved in setting standards for
1983-85. Comments on the 1983-85 standards are
due by March 31, 1980, although the agency will
consider late comments to the extent possible. It is
NHTSA's intent to promulgate these standards
this year, to provide ample leadtime for the
manufacturers to develop compliance strategies.
In consideration of the foregoing, 49 CFR
Chapter V is amended as follows:
1. By deleting the footnote to the table in section
533.5 (a) and by revising the table to read as
follows:
Model
year
2-wheel drive
light trucks
4
-wheel drive
light trucks
Limited
product line
Captive
imports
Other
Captive
imports
Other
light trucks
1979 .
17.2
16.0
16.7
18.0
14.0
15.0
16.0
15.8
14.0
15.0
16.0
1980 -
16.0
14.0
1981 -
16.7
14.5
1982 .
18.0
Issued on March 27, 1980.
Joan Claybrook
Administrator
45 F.R. 20871
March 31, 1980
i
1
PART 533; PRE 47-48
extend the applicability of that company's special
class. IH argued that a separate class is needed to
allow for the possibility that it might offer 4x2
versions of its Scout vehicle in 1982. In recent
years, the sales of these 4x2 derivatives of the
standard 4x4 Scout have been at very low levels,
dropping to under 300 units in 1979. In a
September 13, 1979, letter to the agency, IH
indicated that the Scout is available "only in four-
wheel drive." In any case, given the low volumes
involved, the availability of diesel engines to raise 4
X 2 fuel economy, and the existence of carry-over
credits if 4 x 2 Scouts continue to be sold, the
agency sees no need to perpetuate the special class
for IH. However, since IH and AM will still have
fleets which are at least predominantly four wheel
drive, the agency deems it necessary to extend the
separate class for that type of vehicle. See 42 FR
63192-3, December 19, 1977.
Without deciding the question of whether the
agency has the authority to set a separate standard
for Chrysler but recognizing that serious questions
exist in that regard, the agency deems it
appropriate to employ other statutory mechanisms
in dealing with that company's problems. Chrysler
competes in the same market segments as GM and
Ford, and the various truck models offered by
those three companies are remarkably similar.
There is no inherent technical reason why
Chrysler's light trucks cannot achieve the same
levels of fuel economy as the other companies. The
agency does not seek to minimize the magnitude of
the economic difficulties which confront Chrysler.
However, the agency is concerned that the
establishment of differential fuel economy
standards for fleets of vehicles which are nearly
identical on a model-for-model basis could have an
anticompetitive effect. Congress considered the
conflict between standards which require
maximum fuel economy improvements and the
inevitable differences in capabilities of the affected
manufacturers, and developed the enforcement
mechanism in section 508 of the Act (involving
modest civil penalties for noncompliance,
offsetting monetary credits, and waivers of
penalties in certain instances) to deal with the
situation. Therefore, the agency is not establishing
a separate class and fuel economy standard for
Chrysler.
G. Miscellaneoits comments. AM raised two
procedural issues in regard to the 1982 standards.
First, it argued that the agency failed to comply
with the requirement in section 502 (b) of the Act
that standards be issued 18 months prior to the
start of the model year to which they apply. In
AM's case, its 1982 production period will begin in
July 1981, and 18 months prior to that date would
be January 1980. As the agency noted in response
to the same comment made by AM with respect to
the 1980 standard, there is no single start of a
model year for all companies in the industry (43 FR
11995; March 23, 1978). Production begins as early
as July (or even earlier in some cases such as with
the GM X-body cars) and as late as December for
some foreign manufacturers. However, the agency
has endeavored to provide approximately 18
months leadtime for the industry as a whole. Even
for domestic companies with early-starting model
years, these standards are established 18 months
prior to the introduction for sale of the 1982
models. Further, lead time should not be a problem
for AM with respect to the 1982 standard, since its
current product plan would lead it to exceed the
standards promulgated herein.
AM also objected to the brief 30 day comment
period provided with respect to the 1982 standard.
This short comment period was necessitated by the
statutory deadline for issuance of that standard
and by delays in issuing the NPRM resulting from
requests from the industry to reduce the 1981
standards. Although the agency seeks to provide
more than 30 days to comment on proposed rules,
NHTSA views the 30 day period as reasonable in
this case, due to the relatively narrow issues
involved. More time has been provided to comment
on the 1983-85 standards, where the issues
involved are much more complex.
Purolator Courier Corporation argued for a
more gradual increase in stringency in fuel
economy standards to accommodate fleet truck
operators like itself. It argued that much of the
technology needed to comply with fuel economy
standards is not fully proven, and that downsizing
of light trucks would make those trucks less useful
to commercial purchasers. Purolator also
requested that a public hearing be held on the
standards. The agency recognizes that changes to
light trucks might result in some inconvenience to
commercial users, e.g., from the need to train
mechanics to repair new types of technology.
PART 533; PRE 46
However, the Act specifies that the agency must
establish fuel economy standards at the maximum
feasible level for each model year, necessarily
producing changes in the truck fleet. The
technology projected by the agency, particularly
for the 1982 model year, is well proven and in most
cases already in use on some vehicles. Further, the
agency's standards do not necessitate the
elimination of standard-size trucks with V-8
engines, which Purolator claims to need. The
agency does not see a need for a public hearing on
these fuel economy standards, since the
opportunity to submit written information is an
effective means of addressing the primarily
technical issues in a detailed fashion.
H. Economic and energy impacts of the 1982
standards.
The agency considered the economic impacts of
the 1982 standards, in accordance with Executive
Order 12044 and the Department's regulations for
implementing that order. See 44 FR 11034. Also
considered were the "Urban and Community
Impacts" of the standard, as specified in Executive
Order 12074. These impacts are discussed in a
Regulatory Analysis, copies of which are available
from the agency's Office of Plans and Programs.
The major conclusions of that document are that
the standards will produce gasoline savings of 1.2
billion gallons over the life of the 1982 model year
light truck fleet. The investment requirement
associated with making that improvement would
be approximately $900 million, part of which would
be assimilated in normal business as usual capital
spending. The average retail price increase
resulting from the standards is approximately $95,
but this initial cost is more than offset by the
operating cost savings over the life of the vehicle of
about $470. No significant adverse "urban or
community" impacts should result from the
standards.
I. Environmental impacts of the standards.
The agency also considered the environmental
impacts associated with the 1982 light truck
standards, in accordance with the National
Environmental Policy Act, 42 U.S.C. 4321, et seq.
As has been the case with all of the agency's fuel
economy standards, the main environmental
impacts are positive ones associated with the
reduction of petroleum consumption. Copies of the
Environmental Impact Analysis are available from
the individual listed as the "information contact"
at the beginning of this notice.
J. Standards for 1983-85. As stated previously,
the agency proposed standards for 1983-85 at the
same time it proposed the 1982 standards.
However, standards for the later 3 years are not
being established now, due to the legal
requirement for establishment of the 1982
standards by this March and the much more
complex issues involved in setting standards for
1983-85. Comments on the 1983-85 standards are
due by March 31, 1980, although the agency will
consider late comments to the extent possible. It is
NHTSA's intent to promulgate these standards
this year, to provide ample leadtime for the
manufacturers to develop compliance strategies.
In consideration of the foregoing, 49 CFR
Chapter V is amended as follows:
1. By deleting the footnote to the table in section
533.5 (a) and by revising the table to read as
follows:
Model
year
2-wheel drive
light trucks
I
l-wheel drive
light trucks
Limited
product line
Captive
imports
Other
Captive
imports
Other
light trucks
1979
17.2
16.0
16.7
18.0
14.0
15.0
16.0
15.8
14.0
15.0
16.0
1980
16.0
14.0
1981
16.7
14.5
1982
18.0
Issued on March 27, 1980.
Joan Claybrook
Administrator
45 F.R. 20871
March 31, 1980
PART 533; PRE 47-48
4
i
PREAMBLE TO AN AMENDMENT TO PART 533
Light Truck Average Fuel Economy Standards; Model Years 1983-85
(Docket No. FE 78-01; Notice 4)
ACTION: Final rule.
SUMMARY: This notice establishes average fuel
economy standards for light trucks manufactured
in model years 1983-85. Section 502(b) of the Motor
Vehicle Information and Cost Savings Act ("the
Act") requires that standards be established for
each model year at the maximum feasible level.
Model year 1983-85 light trucks complying with
these standards are expected to consume approx-
imately 10 billion less gallons of gasoline over their
lifetime, than would have been consumed if light
truck average fuel economy were to remain at the
levels of the 1982 standards.
FOR FURTHER INFORMATION CONTACT:
Mr. Philip W. Davis, Office of Automotive
Fuel Economy Standards (NRM-21), 400
Seventh Street, S.W., Washington, D.C.
20590 (202-472-6902)
SUPPLEMENTARY INFORMATION: This notice
establishes average fuel economy standards for
light trucks manufactured in model years
1983-1985. On December 31, 1979, the agency
published proposed standards for light trucks
manufactured in model years 1982-85, in 44 FR
77199. Due to the requirement in section 502(b) of
the Act that standards be established at least 18
months prior to the start of the affected model
year and due to the many complex issues involved
in setting standards for the later model years, the
agency separately established final standards for
the 1982 model year on March 31, 1980. See 45 FR
20871. Previously, the agency established stand-
ards for light trucks manufactured in 1979 (42 FR
13807, March 14, 1977), and 1980-81 (43 FR 11995,
March 23. 1978, and 44 FR 36975, June 25, 1979).
Passenger automobile standards were established
in the Act for model years 1978-80 and 1985 and
thereafter (15 U.S.C. 2002 (a)), and administra-
atively by NHTSA for model years 1981-84 (42 FR
33534, June 30, 1977).
Section 502(b) of the Act requires that average
fuel economy standards for light trucks be
established for each model year at the "maximum
feasible average fuel economy level." In determin-
ing that level, the agency is directed to consider
technological feasibility, economic practicability,
the need of the nation to conserve energy, and the
effects of other Federal motor vehicle standards
on fuel economy. A discussion of how the agency
interprets these requirements is set forth in the
preamble to the notice establishing the 1981-84
passenger automobUe standards, cited in the
previous paragraph.
In its proposal the agency invited comment upon
a range of possible fuel economy standards for
1983-85. The use of a range of fuel economy values
rather than a single value for each model year
reflected uncertainty at the time of the proposal
with respect to such issues as demand for new,
compact truck models, the acceptability to con-
sumers of light trucks with smaller displacement
engines (with corresponding higher fuel economy
but reduced acceleration and grade-climbing
capability), and the existence and magnitude of a
claimed fuel economy penalty resulting from emis-
sion standards applicable to light trucks beginning
with the 1983 model year. Specifically, the ranges
of fuel economy values cited in the proposal for
2-wheel drive (4x2) and 4-wheel drive (4x4) light
trucks were as follows:
1983
1984
1985
4x2 (mpg)
18.0-20.0
18.8-21.4
19.7-22.4
4x4 (mpg)
15.6-18.0
16.1-19.3
16.2-19.9
PART 533 -PRE 49
The vehicles covered by these standards include
the pickup trucks, vans, and utility vehicles typi-
cally used for personal or mixed personal/commer-
cial purposes, i.e., those with gross vehicle weight
ratings (GVWR's) up to and including 8,500
pounds.
Comments on the proposed 1983-85 light truck
standards were received from the domestic light
truck manufacturers, Toyota, the U.S. Department
of Energy (DOE) and the Regulatory Analysis
Review Group (RARG). Because of the significance
of certain issues raised by DOE and RARG, a
notice was published in the Federal Register invit-
ing public comments on those issues. See 45 FR
35403, May 27, 1980. The comments received on
various issues in the rulemaking are summarized
below, along with the agency's response to those
comments and a summary of the basis for the final
standards.
Many of the comments received in this rulemak-
ing and many of the details of the agency's analysis
contain confidential information. The confidentiali-
ty of this information (typically involving future
product plans of the domestic manufacturers, espe-
cially for new models which have the greatest
effect on fuel economy) prevents the agency from
presenting in this notice a detailed description of
the comments received and the agency's response
to those comments. Nevertheless, the agency has
attempted to describe the basis for the final stand-
ards by providing a general overview of these mat-
ters and an approximation of a "typical" future
product plan for compliance with the standards
established herein. This approach has been
adopted after balancing the public's need to know
the basis for the agency's actions against the
manufacturers' needs to maintain the confiden-
tiality of their future product plans. The agency in
this case has tended to tip the balance in favor of
preserving confidentiality. Comment is invited on
how the agency could better resolve this conflict
between the public's need to know and the manu-
facturers' need to maintain confidentiality of cer-
tain information.
Structure of the Standard
In all the light truck standard-setting to date,
the agency has provided some form of separate
treatment for 4-wheel drive vehicles. In 1979, the
manufacturers were given the option of combining
all their Ught trucks into one fleet and complying
with the 4x2 numerical level. In 1980-82, no alter-
native single standard was provided. Separate
standards were provided (under the authority of
section 502(b) of the Act to establish separate
standards for different classes of light trucks) due
to the lower fuel economy of 4x4's and the fact that
two companies, American Motors and Interna-
tional Harvester, offered fleets comprised almost
exclusively of 4x4 vehicles. Given the lower
average fuel economy of those vehicles, any single
standard would have had to be set low enough to
accommodate those companies (giving no incentive
for the other companies to achieve higher fuel
economy) or above their capability (possibly penal-
izing those companies). Separate standards
avoided this problem.
While establishing separate standards for each
of several vehicle classes reduces inequities for
companies with less fuel efficient fleet mixes, it
also has certain disadvantages. Separate class
standards reduce manufacturers' flexibility in
complying with standards, by requiring improve-
ments to each class of vehicles subject to stand-
ards rather than permitting the option of making a
major improvement to only one class of vehicle.
For example, under the classification system used
for the model year 1980-82 standards, making a
major improvement in the fuel economy of a manu-
facturer's vans (which are 4x2's) would not assist
that company's efforts to meet the 4x4 standard.
RARG requested that NHTSA consider the
establishment of a "composite" fuel economy
standard as a means of providing varying levels of
fuel economy standards based on differences in
mix of 4x2 and 4x4 vehicles, or other more narrow
classes, without the offsetting disadvantages of
separate class standards. Each manufacturer's
composite standard, for example could be based
upon a projected mix of 4x2 and 4x4 vehicles, with
a production-weighted average fuel economy
standard being calculated from separate 4x2 and
4x4 targets developed as the agency had devel-
oped separate standards in the past. Thus, each
company would have a different numerical fuel
economy standard, depending on its projected pro-
duction mix. A manufacturer with a high propor-
tion of 4x2 vehicles would have a higher standard
than a manufacturer with a lower proportion of
them.
All the major domestic manufacturers com-
mented on the RARG proposal, with Chrysler sup-
P ART 533 -PRE 50
porting it and Ford supporting it as an option (to
be used at the manufacturer's election) to comply-
ing with separate standards. General Motors (GM)
supported the concept of a composite standard but
opposed separate standards for different com-
panies. American Motors also opposed different
standards for each company.
The agency agrees with RARG's goals in pro-
posing the composite standard, but, like some of
the manufacturers, doubts the existence of any
authority to set different standards for different
companies based solely on mix projections. How-
ever, the advantages of the composite standard
can be achieved in the 1983-85 model years
through the addition of an optional single average
fuel economy standard applicable to all companies.
The use of a single standard (other than one set at
a very low level which would sacrifice fuel econ-
omy) is possible because of projected substantial
improvements in the AM fleet fuel economy (see
following sections of this notice) and because Inter-
national Harvester has decided to stop producing
the Scout vehicle. This leaves the average fuel
economy levels projected for all the domestic man-
ufacturers within a narrow enough range to make
the establishment of a single fuel economy stand-
ard for all an effective means of promoting conser-
vation while providing the manufacturers with
substantial flexibility in achieving compliance.
The combined standard is established as an op-
tion to the separate 4x2 and 4x4 standards which
the agency has issued beginning with the 1980
model year. This action is being taken to permit
manufacturers seeking greater investment flexi-
bility to opt for the combined standard and to per-
mit manufacturers seeking to increase sales of 4x4
vehicles to opt for the separate standards. Fur-
ther, this approach will provide some stability in
the year-to-year structure of the agency's light
truck standards and would provide relief in the
post-1985 period should manufacturers such as
American Motors not be able to make further fuel
economy improvements in their exclusively 4x4
fleets.
Basic Methodology
Several comments were received, principally
from DOE, with regard to the methodology used
by the agency to project future model year aver-
age fuel economy. DOE objected that the baseline
used by NHTSA to project future years' fuel econ-
omy was inappropriate. The baseline used to
develop the proposed fuel economy ranges for
1983-85 was the 1981 standards, which were in
turn based upon pre-1979 product mix estimates
and 1979 fuel economy test results. More recent
mix and fuel economy information was not avail-
able at the time the agency proposed the 1983-85
standards. In particular, DOE suggested that
changes be made in the baseline to reflect the shift
in light truck production mix for 1980. Included in
this shift are a rerating of certain trucks with
large engines above the 8,500 pound GVWR upper
limit of the scope of these standards and a shift in
the relative proportion of smaller and larger
trucks, precipitated by the rapid increase in gaso-
line prices in 1979-80.
The agency determined that, to meet DOE's con-
cern about the significant change which the domes-
tic light truck fleets and market have undergone
and will undergo by 1985, a different projection
methodology would be used to set the 1983-85
standards than has been used in the past. That
methodology is described in detail in the agency's
rulemaking support paper (RSP), copies of which
are available from the individual listed as the "in-
formation contact" at the beginning of this notice.
Generally, future light truck offerings were
grouped in seven classes. These classes provide
distinctions between various types of vehicles
which have clearly different market attributes.
The potential characteristics of each group were
analyzed (based primarily on the manufacturers'
future product plans, particularly where lead time
was a controlling factor) and fuel economy value
derived. Sales projections for each group of
vehicles were also developed based upon informa-
tion available to the agency, including the manu-
facturer's own estimates. Once group fuel economy
and sales projections are derived, average fuel
economy values for each of the model years
1983-85 were calculated.
DOE also suggested revisions to NHTSA's
mathematical model used to predict the effect on
fuel economy of small changes in vehicle weight,
engine displacement, or axle ratio. DOE developed
an alternate model which it believes provides a
more accurate prediction of the effect of changes
in these vehicles' attributes. Because of the DOE
analysis, NHTSA reviewed its fuel economy model
and has developed a new model which predicts fuel
economy levels more accurately than the original
PART 533 -PRE 51
one and, in some cases, the alternative one
developed by DOE. Both models provide fuel econ-
omy estimates within 5 percent of EPA test data.
The major area of concern expressed by DOE was
an apparent misunderstanding of the limited man-
ner in which the agency actually used its previous
model. This area is described fully in the RSP.
Technological Feasibility.
The agency received a number of comments on
its analysis of the various methods available to
improve light truck fuel economy in the 1983-85
model years, including a comprehensive analysis
by the Department of Energy. The DOE analysis
concluded that fuel economy levels approximately
IV2 mpg above the upper end of the range of fuel
economy levels proposed by the agency are
achievable by 1985. However, DOE deferred to
NHTSA on the manufacturers' capability to
finance product changes. On the other hand, the
vehicle manufacturers generally recommended
that standards be established at the lower end of
that range. These overall disagreements resulted
from differences in the detailed fuel economy pro-
jections for individual truck models, technology,
and sales mix made by NHTSA, DOE, and the
manufacturers.
For the final rule, the agency is using fuel
economy projections for individual new light truck
models which tend to exceed those which formed
the basis for the proposed standards. While the
individual projections used in the proposal were
composites reflecting information from a variety
of sources (i.e., the same fuel economy value was
used for all manufacturers' models of a particular
type), final rule projections are manufacturer-
specific. This change was made because the agen-
cy received information about manufacturers'
plans after the issuance of the proposal, because
in many instances individual manufacturer plans
could not readily be changed at this late date in
the product introduction process for the 1981-85
model years (particularly for the earlier years),
and because in some cases the manufacturers" own
estimates exceeded those of the agency.
The agency's analysis is based on 12 major light
truck types being offered in 1983-85 in seven basic
market groups. The types include 4x2 and 4x4
versions of the standard size pickup trucks, stand-
ard size utility truck, compact pickup trucks
(slightly larger than current imported trucks), and
compact utility trucks, along with standard size
vans, compact vans (slightly larger than the Volks-
wagen Vanagon, but smaller than current domes-
tic vans), and a small, front-wheel drive passenger
car-derived pickup truck which would be approx-
imately the size of current imports. The precise
attributes projected for each manufacturer's light
trucks were derived from confidential submis-
sions from those companies and from independent
agency analyses. The approximate fuel economy
value (in miles per gallon) projected by the agency
for each truck type are as follows:
4x2
4x4
Full size pickup
19-22
16-19
Compact pickup
27-28
23-26
Small pickup (car-
based)
27-30
-
Full size van
17-20
-
Compact van
22-26
-
Full size utility
16-18
16-21
Compact utility
25-27
21-24
The above fuel economy values were derived by
NHTSA from submissions from the manufacturers
and from the agency's independent analysis. The
manufacturer's estimates were verified by com-
paring their planned new models with similar
existing models (adjusting for weight or other dif-
ferences) and by projecting the addition of all
available fuel economy improving technology. This
technology typically includes a 1 percent fuel
economy benefit for accessory improvements, a 3
percent improvement for engine and rear axle
lubricants, a 1 percent benefit for tire improve-
ments, and transmission improvements of from 3.5
to 10 percent, depending on the type of transmis-
sion involved. In most cases, the agency's inde-
pendent assessment closely coincided with or was
slightly more conservative than that of the
manufacturers, in which case the agency used the
manufacturer's estimate in the analysis. Where
the manufacturer's estimate appeared to be undu-
ly conservative, the agency used its own estimate.
Sales projections for the various models were
developed principally from the manufacturers'
own estimates, estimates of Data Resources
Incorporated, and the agency's own judgment of
future light truck demand. The agency made two
separate sales estimates of future light truck
market conditions, which are described in detail
PART 533 -PRE 52
in the agency's Final Regulatory Analysis, copies
of which are available from NHTSA's Office of
Plans and Programs. The cases were developed to
cover the probable range of light truck sales mixes
in 1983-85. In general, Case A assumes that
manufacturers undertake an aggressive program
of introduction of new, fuel-efficient light truck
models and that strong consumer demand for
these models will exist. This case represents the
agency's estimate of the largest number of new
model introductions each manufacturer would like-
ly be able to undertake, considering its financial
position, lead time, and competitive pressures.
Case B assumes that demand for compact light
trucks is less than in Case A, but still significantly
higher than in the past when no domestic compact
trucks were produced. In the latter scenario, the
introduction of new, fuel-efficient models is
delayed one or more years compared to Case A
due to lack of financial capability, need to invest
in passenger car programs, and more limited
demand for those trucks. The projected sales frac-
tions for new light truck models for the various
manufacturers and in the various model years are
as follows:
Case A Case B
Case A Case B
25%
10%
Compact 4x2 pickup
25-35%
15-25%
Compact 4x4
pickup/utility
10-15%
10%
Compact van
15-25%
0-10%
Small car-based
pickup
0-20%
0-10%
It should be noted that not every manufacturer is
projected to offer all of these new models, and
that current standard size truck models would
still account for a substantial portion of light truck
sales through 1985 under the agency's projections.
A typical composite light truck fleet for 1985
under the agency's analysis would contain roughly
the following fleet mix:
Case A Case B
Standard 4x2 pickup
20%
40%
Standard 4x4
pickup/utility
10%
15%
Standard van
5%
15%
Compact 4x2 pickup
20%
15%
Compact 4x4
pickup/utility
15%
5%
Compact van
Small car-based
pickup 5% 0%
Using these approximate fuel economy values
and sales fractions, one can calculate average fuel
economy values of about 22 mpg for Case A and 20
mpg for Case B. However, such averages are only
approximations (used here because of the confiden-
tial nature of much of the specific fuel economy
values and sales projections) and do not reflect the
problems which individual manufacturers face in
financing new models.
With respect to the 1983 and 1984 model years,
the agency projected a fairly even rate of introduc-
tion of these new models, given the major invest-
ments required for production of a new vehicle and
the current financial difficulties of the domestic
manufacturers. This projection leads to average
fuel economy levels increasing about 1.5 to 2 mpg
per year over the level of the 1982 standards
(about 17.5 mpg) for Case A or about 1 mpg per
year for Case B, on a total domestic light truck
fleet basis.
As previously stated, the agency has chosen to
set final standards for 1983-85 relying heavily on
the domestic manufacturers' estimates of new
model fuel economy values and market shares.
This was done because the agency recognized the
current financial difficulties of the domestic
manufacturers (see discussion below) and inde-
pendently verified the new model fuel economy
values provided by the manufacturers.
DOE's main objectives to NHTSA's new model
projections were that the new compact pickup
trucks should be projected to be the same size as
current imports or smaller (rather than slightly
larger as NHTSA projects), that the engines pro-
jected for those vehicles should be all 4-cylinder
(rather than a mix of 4 and 6-cylinder engines as
NHTSA projects), and that redesigned standard
pickup trucks should be projected to have lower
weights than NHTSA had estimated.
To a great extent DOE's disagreement with
NHTSA with respect to the fuel economy levels
projected for new models was phrased in terms of
DOE's view of the domestic manufacturers' plans
to offer new models. Based on numerous submis-
sions to NHTSA, DOE's understanding of those
plans is incorrect. Apparently the domestic manu-
PART533-PRE53
facturers have determined that new compact
models slightly larger than those now offered by
the foreign companies will be an attractive alter-
native for consumers, providing more utility to the
truck user at only about a 2 mpg sacrifice in fuel
economy. The recent trend for the foreign manu-
facturers has been to slightly increase the size of
their trucks. The domestic companies apparently
feel that their planned small trucks have the
potential to draw some purchasers who might
otherwise consider full size trucks, and that offer-
ing new models identical to the imports might be
less effective in attracting those purchasers and
thereby result in less overall energy savings. In
any case, the question of whether the domestic
companies could offer smaller new models than
they now plan is largely irrelevant, due to the ad-
vanced stage of their product introduction process
(trade press reports indicate manufacturers will
begin to introduce these models in the 1982 model
year).
The agency received several comments on tech-
nological improvements projected for the 1983-85
model years. One area of comment involved the 1
percent fuel economy benefit projected for im-
proved engine accessories. DOE commented that a
2 percent improvement is feasible, and some manu-
facturers indicated that a lesser improvement is
the most which could be accomplished through
1985. The agency has retained its original projec-
tion (based on several research studies and manu-
facturer submissions) for the final rule, with the
exception that accessory improvements were not
projected for carry-over standard size trucks. No
improvement was projected for the latter vehicles,
due to limitations on manufacturer resources
given the planned major product actions and the
inefficiency associated with devoting resources to
vehicles which would account for steadily dimin-
ishing portions of total sales and which would be
replaced by new models in the near future. The
agency's original 1 percent benefit was retained
due to the absence of any data or analysis sub-
mitted by the commenters to support any other
position.
With respect to the agency's projection of a 1
percent fuel economy benefit for reduced rolling
resistance, none of the manufacturers presented
data or engineering analyses supporting their
claims that no such benefit is feasible. DOE argued
that an additional 0.5 percent benefit should be
provided for reduced brake drag, but submitted no
data to support that claim. Here again, in the
absence of supporting data or analysis for any con-
trary position, the agency retained its original
position.
DOE also suggested that aerodynamic drag and
weight reduction improvements should be pro-
jected for the carry-over standard size vans and
weight reduction improvements alone for stand-
ard pickup trucks. DOE would apply these im-
provements only where a manufacturer did not
plan to replace these models in the near future.
NHTSA did not adopt this suggestion for vans
because of limited manufacture resources and
because the cost associated with such changes
could not be justified given the small potential fuel
economy benefit and the relatively small market
share (about 5 percent for Case A). With respect to
the weight reduction comment for carryover pick-
up trucks, the agency believes that meaningful
weight reduction can be obtained only through ma-
jor redesigns. The agency's basis for projecting no
further major redesigns for the domestic manufac-
turers is discussed in the "economic practicability"
section of this notice. Due to the economic dif-
ficulties of the domestic manufacturers and the
large number of lay-offs of technical personnel in
those companies (as prominently reported in the
press), resources will likely be hard-pressed simply
to introduce the planned new models.
In the agency's proposal, an alternative set of
assumptions (Case 4) was developed to obtain com-
ment on the extent to which engine downsizing
could be accomplished as a means of improving
light truck fuel economy. The Case 4 scenario in-
volved a major shift to the smallest displacement
engines currently offered. DOE projected that a
lesser reduction in engine displacement could be
accomplished to provide about a 5 percent fuel
economy improvement. According to DOE, this im-
provement could be accomplished without degrad-
ing vehicle performance, through improvements in
engine power efficiency. The manufacturers gen-
erally argued that only slight engine downsizing
could be accomplished, with Ford stating that a 2
percent fuel economy benefit could be obtained
and GM stating that the feasibility of any engine
downsizing in the future is "questionable."
For the final rule, the agency is projecting major
engine downsizing through the introduction of
new, compact truck models. Given current low
PART 533 -PRE 54
sales of domestic trucks and the strong competi-
tion being encountered from the imports, the agen-
cy cannot project any further reductions in engine
size (with probable reductions in vehicle accelera-
tion capability) which might further jeopardize the
marketability of these vehicles. DOE provided no
data or analysis and NHTSA knows of none to sup-
port its claim that further engine downsizing could
be accomplished without sacrificing performance
capability or durability.
The final technological area addressed by com-
menters is transmission improvements. The agen-
cy is retaining its original projections of a 5 to 7
percent improvement from 4-speed wide ratio
manual transmissions (whether overdrive or direct
drive), a 3.5 percent improvement when adding a
lock-up clutch to a 3-speed automatic transmission,
and a 10 percent improvement for automatic over-
drive transmissions with lockup clutch. Several
manufacturers argued that lower improvements
should be projected, but they either did not sup-
port their claims with data or, in one case, submit-
ted data (after the agency requested it) which was
more supportive of the agency's position than the
manufacturer's.
Ford argued that only a 0.5 percent improve-
ment in fuel economy is available for its light
trucks through the use of improved engine
lubricants. Ford supported its position with data
generated by the ASTM Fuel Efficient Oils Task
Force, which indicates that Ford's current factory
fill oil has superior fuel efficiency characteristics
than the oils used by other manufacturers. In
other words, it appears that Ford has already
achieved part of the benefit available through the
use of improved lubricants, leaving a small benefit
remaining for the future. Therefore, the agency
adopted Ford's projected improvement for our
analysis of that manufacturer's capability. The
agency continued to use 2 percent for the other
manufacturers.
The manufacturers unanimously suggested that
the agency continue its policy of excluding diesel
engines in standard-setting analyses until the
health related questions associated with the
widespread use of those engines are settled. DOE,
on the other hand, argued that the agency's
analysis should reflect the inclusion of this
technology, which represents one of the most
significant methods available for improving light
truck fuel economy. Although EPA has estab-
lished diesel particulate standards, the health
effect issue remains open. Therefore, the agency's
analysis reflects the plans of manufacturers to
offer diesel engines in 1983-85 model year light
trucks, but does not project any use of diesels
beyond those plans. The agency is reluctant to pro-
ject further dieselization while substantial health
questions remain to be answered. The levels of the
final standards do not require the use of diesels for
compliance, since all companies can meet the
standards without any diesel light trucks being
offered.
Ford commented that the agency should not pro-
ject the use of PROCO ("programmed combus-
tion") engines in 1983-85 model year light trucks.
Ford recently announced the cancellation of its
V-8 PROCO engine program due to a variety of
economic and technical problems. Therefore, the
agency will delete those engines from its analysis.
Economic Practicability
The current depressed condition of the domestic
auto industry has had a major impact on the agen-
cy's standard-setting process. Although the low
fuel efficiency of current domestic vehicles was ini-
tially a major contributing factor to that condition,
the agency recognizes that major improvements in
light truck fuel economy must be financed mainly
through revenues generated from the sale of cur-
rent vehicles. The recent downturn in the national
economy has severely limited the resources avail-
able to the manufacturers to improve light truck
fuel economy.
The agency performed cash flow analyses for
Ford and General Motors, to assess their capabili-
ty to finance fuel economy improvements. For
Chrysler, the agency has relied on the more de-
tailed analyses of the Chrysler Loan Guarantee
Board. No analysis was conducted for American
Motors, pending the completion of its financial
arrangement with Renault. The agency's analysis
for General Motors' U.S. and Canadian automotive
operations in the 1980-85 period shows a loss of
about $500 million for 1980, but a return to profit-
ability for the remainder of the period. Due to the
heavy capital investment plan announced by GM
through 1985, net cash flow would be negative for
GM through 1983, and would turn positive there-
after. With respect to Ford, the agency's projec-
tions are more pessimistic. The agency's analysis
shows losses of over $2.5 billion for Ford's
PART 533 -PRE 55
domestic automotive operations in 1980, with an-
nual but smaller losses through 1982. Thereafter,
Ford would return to profitability. Even though
Ford has recently announced reductions in its
planned capital expenditures, its cash flow would
remain negative until 1985, with a cumulative
negative cash flow in 1980-84 of over $7 billion.
This large projected negative cash flow led the
agency to project no major capital expenditures
beyond those planned by Ford for purposes of this
rulemaking. (See section h of this notice.)
The Effects of Other Federal
Standards on Fuel Economy
The manufacturers all argued that their ability
to improve fuel economy in model years 1983-85
would be impaired by changes in the stringency of
light duty truck emission standards and related
requirements. Those changes, which EPA had pro-
posed to make effective beginning with the 1983
model year but which were recently delayed until
1984 to provide additional leadtime, would, in the
manufacturers' view, result in fuel economy penal-
ties ranging from 3 to 7 percent. General Motors
has recently submitted 1981 model year data to
both NHTSA and EPA which purports to show
that the penalty could range as high as 13 percent
for some light trucks.
The manufacturers have based their claims on
comparisons of 1980 49-state fuel economy and the
fuel economy of light trucks meeting the more
stringent California standards. The manufacturers
believe that the stringency of the 1980 California
standards approximates that of the 1984 Federal
emission standards for light duty trucks. Both
NHTSA and EPA have been wary in past rulemak-
ings of relying on Federal-California fuel economy
comparisons in predicting future model year ef-
fects because of the additional leadtime available
prior to the nationwide application of more strin-
gent standards, questions about emission control
technology used, and limitations on manufacturer
resources available for developing and refining
emission control technology to be used on vehicles
sold only in one state.
The most advanced emission control technology
currently available is a system employing a 3-way
catalyst with interactive electronic control of air-
to-fuel ratio, spark advance, exhaust gas recircula-
tion, and other parameters, and other emission-
related hardware. This type of technology is being
used to meet 1981 passenger automobile emission
standards with little or no fuel economy penalty
compared to automobiles meeting prior years' \
standards. Some of the manufacturers' projections
of 1984 light truck fuel economy penalties are
based on the use of this type of technology, but
others do not include it, apparently due to cost con-
siderations. In some cases, the manufacturers have
based their projections of penalties on the use of
simple oxidation catalyst systems, possibly incor-
porating less sophisticated electronics. NHTSA's
analysis of limited data from 1981 certification
trucks which used some form of electronic controls
showed no appreciable difference in fuel economy
between California and Federal versions.
EPA, in establishing the 1984 standards, con-
cluded that the 1984 emission levels can be met
without fuel economy penalty by using electronic
engine control systems, improved oxidation cata-
lysts, and air injection. Three-way catalysts would
not be needed in most cases. EPA concluded,
based upon a comparison of 1980 California and
Federal light duty trucks, that with no improve-
ment over the current California technology, a
penalty of 5.2 percent on average would result.
Since EPA concluded that California emission re-
quirements for 1980 are more stringent than the
1984 Federal standards and adjusting for future d
engine mix changes, the fuel economy penalty "
associated with the 1984 standards would be only 4
percent if no technology improvements were
implemented. Based on EPA's review of published
technical literature, that agency concluded that
through the use of "moderately complex" elec-
tronics (controlling spark advance and exhaust gas
recirculation rate) together with improved oxida-
tion catalysts and air injection, the 1984 emission
standards could be met without fuel economy
penalty. Compliance with the standards was pro-
jected by EPA to add $95 to the price of 1984 light
trucks. The EPA analysis appears to be the most
complete and detailed analysis of the emission
penalty issue now available. Therefore, the agency
projects for purposes of this final rule that the
1984 emission levels can be met without fuel econ-
omy penalty, consistent with the position taken by
the agency in setting the 1981-84 passenger auto-
mobile fuel economy standards.
Ford projected an additional fuel economy
penalty for a change in stringency in the light duty
truck emission standards for oxides of nitrogen in
PART 533 -PRE 56
the 1985 model year. Such a change has not been
proposed at this point. Therefore, NHTSA deems
it premature to attempt to estimate the magnitude
of any fuel economy penalty which might result
from such changes.
The manufacturers also estimated that adverse
fuel economy effects would result from future
changes in safety standards applicable to light
trucks. These changes would result in slight in-
creases in vehicle weight. Since the agency
adopted the manufacturers' own weight estimates
for future vehicles, their claims of safety-related
weight additions have been adopted.
The Need of the Nation to Conserve Energy
The United States imported only 15% of its oil
needs at a cost of $1.1 billion in 1955. In 1970, im-
ported oil accounted for 31% of total consumption
and cost the nation $3 billion. But by 1975, 49% of
the domestic demand for oil had to be imported at
a cost of $26.3 billion. This eight-fold increase in
the cost of imported oil over five years was the
result of huge OPEC price increases, falling
domestic crude oil production, and continued in-
crease in domestic demand. This trend has con-
tinued. By 1979, imported oil, constituting 58% of
petroleum consumed, cost the nation about $60
billion; comparable import cost estimates for 1980
are $82 billion, and at 51 percent of domestic
petroleum consumption.
The nation has become increasingly dependent
for its oil supplies on the actions and decisions
of a few foreign governments. This dependence
has been demonstrated in the aftermath of the
revolution in Iran when that country's oil pro-
duction was stopped entirely in December 1978
and, once resumed, only returned to about one-
half of its former level. Although the U.S. no
longer imports oil from Iran, this reduction was
felt by all importers because it represented the
difference between satisfying current world oil
demand and a shortage of supply. OPEC, which
supplied 83% of the U.S.'s imported oil in 1978,
has taken advantage of the tight world oil mar-
ket by more than doubling prices from $12.70 per
barrel in December 1978, to more than $30 per bar-
rel as of July 1980. Currently, prices on the
world "spot" market are about $35 per barrel.
An increase of this magnitude has severe adverse
impacts on our trade balance, inflation, eco-
nomic growth, unemployment, and confidence in
the dollar as an international reserve currency.
The rapid transition from a condition of ap-
parent worldwide surplus in 1978 to one of short-
age in 1979 has shown the instability of the world
oil market. Now the Iran-Iraq war may again bring
worldwide shortages. Thus, the nation's economic
growth and national security are being heavily
constrained by the decisions of a few foreign
countries which control world oil prices and
production.
The U.S. can change this situation by increasing
its domestic energy production and by reducing
demand. The fuel economy standards program
helps to reduce demand by motor vehicles. Light
trucks account for about 7% of our total oil
consumption (20% of automobile consumption) and
an improvement in their fuel efficiency, beyond
the level scheduled to be achieved through the MY
1982 standards, is considered an integral part of
the nation's total effort to conserve energy.
Increased light truck fuel economy efficiency
would contribute directly to reduced U.S. depend-
ence on foreign oU and help limit foreign oU im-
ports to a level no greater than the amount im-
ported in 1978 — in accordance with the President's
pledge.
Selection of Final Standards
Based on the analysis described above, the agen-
cy projects that the following combined fuel
economy levels can be achieved for model years
1983-85:
Case A
Case B
1983
1984
1985
1983
1984
1985
AM
20.3
21.7
22.3
20.2
21.2
21.5
Chrysler
20.6
23.9
27.0
20.3
20.4
25.7
Ford
20.4
21.8
21.8
19.0
19.3
19.4
GM
22.7
23.2
23.5
21.1
21.2
22.0
No separate analysis was conducted for the
foreign manufacturers, which project exceeding
these fuel economy levels by wide margins.
The legal requirements for establishing the
maximum feasible average fuel economy level for a
particular model year, and thereby the levels of
fuel economy standards for that year, are dis-
cussed in the preamble to the agency's final rule
establishing the 1982 light truck standards. See 45
FR 20875-6, March 31, 1980. In general, the agency
is directed to take "industry-wide considerations"
into account in establishing standards, and should
PART 533 -PRE 57
not necessarily key the standards to the level of
the least capable manufacturer. However, the
agency must weigh the benefits to the nation of
setting standards above such a manufacturer's
level against the difficulties of individual com-
panies. The agency must also consider the possible
competitive harm associated with placing a severe
strain on any company, given the small number of
domestic manufacturers. In this proceeding, the
agency is considering not only the range of
capabilities among the various manufacturers but
also the ranges of capability for individual com-
panies, given the uncertainties associated with
their abilities to finance new models and the
ultimate market acceptance of those models.
The agency has determined that standards re-
quiring the high rates of model introduction and
high sales levels of compact trucks inherent in
Case A should be gradually phased in. Therefore,
the standards established for 1983 are based on
the Case B set of assumptions. Even this less ag-
gressive scenario results in an increase in fuel
economy of about 1.5 mpg over the 1982 standards,
comparable to the rate of increase in the pas-
senger automobile standards over the 1980-85
period. As discussed previously in this notice, the
Case B levels would permit deferral of new model
introductions for some manufacturers and reduce
the risk associated with only modest market
acceptance of the new truck models. Relying on
Case B for the 1983 model year reflects uncer-
tainty regarding the national economy, the ability
of the manufacturers to finance major new pro-
grams in the near future, and the recent reduced
overall consumer demand for cars and trucks.
For 1984 and 1985, the agency has relied to a
greater extent on the Case A scenario, with 1984
projections falling between Case A and Case B and
1985 projections more closely approaching Case A.
This gradual increase in relative stringency of the
agency's projections is due in part to the greater
leadtime available for developing new programs
and for generating the capital necessary to finance
the required new products. Also reflected is
greater long term certainty that, as gasoline prices
increase, market demand for compact, fuel-effi-
cient truck models will also increase. Although the
past seven years have brought brief gasoline sup-
ply gluts or price reductions, it is virtually certain
that in the long run the trend toward reduced
gasoline supplies and higher prices will continue.
With respect to the range of fuel economy
capabilities among manufacturers, the agency has
determined that it is appropriate in this pro-
ceeding to set the 1983-85 light truck fuel economy
standards at levels achievable by the "least
capable manufacturer." As stated by Ford in its
comments on the 1983-85 standards, the reason-
ableness of a decision to set standards above the
level of the least capable manufacturer depends
upon factors such as economic conditions and the
degree of burden placed upon the individual com-
panies.
The severe economic problems facing the
manufacturers (and in particular Ford, the least
capable manufacturer for 1983-85 based on the
agency's analysis) were discussed in prior sections
of this notice. Setting standards above the levels
projected for Ford in this proceeding could result
in Ford attempting to introduce additional com-
pact truck models or major new technology pro-
grams such as diesel engines. While such actions, if
successfully completed, might benefit Ford and
the nation in the long run, the agency recognizes
the uncertain availability of financial resources to
take such actions. Setting standards above Ford's
level might also result in product restrictions by
Ford (e.g., limiting the sale of larger trucks and
engines). Such actions could further erode Ford's
economic situation. Finally, Ford could elect to pay
civil penalties rather than attempting to meet the
higher standards. Penalties could amount to as
much as $75 million per year. While even a penalty
that large might not result in insolvency for a com-
pany as large as Ford or a "substantial lessening of
competition" in the truck market (thereby permit-
ting a reduction of penalties under section 508 of
the Act), it is certainly substantial enough to make
future fuel economy improvements even more dif-
ficult to finance.
The harm resulting from establishing fuel
economy standards at Ford's level is the lost fuel
savings. Considering the nation's serious energy
problem (see discussion of "need of the nation to
conserve energy," infra), the agency does not
lightly dismiss this potential loss. However, given
the seriousness of the industry's current financial
problems, this potential loss in fuel savings is, in
the agency's view, outweighed by the potential
harm to Ford in setting standards above the level
it can reasonably achieve.
The situation faced by the agency in setting the
PART 533 -PRE 58
1983-85 standards differs from that for the 1982
final rule, in which the agency set standards above
the level of the least capable manufacturer. The
most important difference between the two situa-
tions is that the 1982 proceeding involved setting
the fuel economy standards above the level of a
much smaller portion of the light truck fleet.
Chrysler, whose trucks represent 10-15 percent of
domestic sales, had the lowest fuel economy pro-
jection in that proceeding. Ford accounts for about
35 percent of domestic sales. Further, Chrysler
was projected to have sufficient monetary credits
to avoid paying penalties for its 4x2 trucks, and to
partially offset penalties for its much smaller 4x4
fleet. The maximum total penalty should be under
$1 million.
By setting standards at the level of the least
capable manufacturer and gradually shifting from
the Case B scenario in 1983 toward the Case A
scenario in 1985, fuel economy standards of 19 mpg
in 1983, 20 mpg in 1984, and 21 mpg in 1985 result.
The agency also calculated separate 4x2 and 4x4
fuel economy levels. This was done by projecting a
compliance strategy product plan for the least
capable manufacturer to just meet the combined
fuel economy standards and disaggregating that
company's fleet into separate 4x2 and 4x4 sub-
fleets. The resulting 4x2 and 4x4 standards are as
follows: 19.5, 20.3, and 21.6 mpg for 4x2's in
1983-85, respectively, and 17.5, 18.5, and 19.0 mpg
for 4x4's in those same years.
Other Comments Received
RARG proposed that an alternative method-
ology be used to set the 1983-85 fuel economy
standards. This methodology would require that
standards be based on available technological im-
provements which provide fuel savings greater
than their cost. The costs and benefits which go in-
to this determination would include not only the
relatively straightforward gasoline pump prices
and technology costs but also some quantification
of national security, balance of payments and
related benefits as well as truck utility degrada-
tion (e.g., smaller payload, reduced acceleration
capability) costs. The manufacturers supported
this approach in their comments.
The RARG methodology is a slight variation of
the cost-benefit test previously proposed by the
Council on Wage and Price Stability and rejected
by the agency as being inconsistent with the Act.
Title V of the Cost Savings Act requires that
standards be set at "maximum feasible" levels,
which necessarily implies that all possible fuel
economy improvements should be implemented.
Given the historical background of the Act, passed
as a response to the 1973 Oil Embargo, it appears
that national security considerations, not con-
sumer cost savings, are the primary focus of the
legislation. Further, RARG concedes that setting a
precise value for the national security benefits and
vehicle utility changes would be quite difficult. It
is the agency's view that Congress did not intend
that the agency in the rulemaking process be re-
quired to place a dollar value on factors (particu-
larly the national security benefits) which are not
quantifiable, and to use these numbers as the basis
for setting standards. Nevertheless, the agency's
fuel economy rulemaking has to date produced
standards which produce substantial net benefits
for consumers, and the standards established
herein are no exception.
GM argued that in valuing gasoline savings, a 20
percent discount rate should be used. The agency
has used a 10 percent discount rate, which is stand-
ard for government programs, and constant dol-
lars to account for inflation. GM bases its argu-
ment on its claim that light truck purchases are
generally a "producer capital investment" and that
the opportunity cost for capital, together with a
"risk premium" to account for risks associated
with truck investments, would justify the 20 per-
cent rate. However, the agency has presented data
in its various light truck rulemaking proceedings
which shows that light trucks are principally used
for personal, agricultural, or small commercial
operations. In those situations, a 10 percent dis-
count rate is a more accurate representation of the
opportunity cost.
GM also argued for a change to the agency's
classification regulations to permit redesigned
versions of 4x2 utility vehicles to continue to be
classified as light trucks even if their GVWR were
to be reduced below 6,000 pounds. Under the
agency's current regulations in 49 CFR Part 523
such a change in the vehicles' GVWR would result
in their being classified as passenger auto
mobiles. GM argues that manufacturers should
not be penalized (including these vehicles ir
passenger automobile fleets might lower both cat
and truck CAFE's) for reducing the weight ol
their trucks. If adopted, such an amendment
PART 533 -PRE 59
would presumably apply to future compact 4x2
utility vehicles as well.
Chrysler also requested a revision to the vehicle
classification regulations to assure that future
compact passenger vans would be classified as
light trucks, rather than as passenger automobiles.
Current regulations classify large passenger vans
as light trucks based on the ability of passenger
van users to readily remove the rear seats to pro-
duce a flat, floor level cargo-carrying space. Future
compact passenger vans might not be able to sat-
isfy that requirement. The agency's technical
analysis for this rulemaking treats 4x2 utility
vehicles and passenger vans as light trucks,
consistent with the classification of current
vehicles. However, this treatment should not be
interpreted as a statement by the agency that all
future designs of 4x2 utility vehicles and compact
vans will continue to be classified as light trucks.
The agency will in the near future issue a notice
inviting comment on the proper classification of
these vehicles, and what revisions, if any, should
be made to current vehicle classification regula-
tions. Based on all information now available to the
agency, the levels of fuel economy standards estab-
lished herein would not change if the vehicles in
question were classified as passenger automobiles.
AM again argued for the inclusion of captive
import light trucks in a domestic manufacturer's
CAFE. This issue has been fully dealt with in prior
rulemakings and, in the absence of any new argu-
ments, the agency will not modify its requirement
that captive import light trucks must com-
ply separately with light truck fuel economy
standards.
Impacts of the Standards
The economic consequences and other impacts
of the 1983-85 standards were considered by the
agency in accordance with Executive Order 12221
and the Department's implementing regulations.
See 44 FR 11034. The agency also considered the
"Urban and Community Impacts" of the regula-
tions, as required by Executive Order 12074. The
results of this are discussed in the agency's
Regulatory Analysis, copies of which are available
from the agency's Office of Plans and Programs.
That document states that capital investments of
approximately $3.8 billion will be required to raise
the fuel economy of the domestic light truck fleet
from the level of the 1982 standards to the level of
the 1985 standards. This investment would reduce
expenditures for imported petroleum by $7 billion
over the life of the 1983-85 light truck fleet.
Operating cost savings result from the increased
fuel efficiency of the 1983-85 fleets. On a dis-
counted basis, they amount to $1,250 per vehicle
over its 128,000 mile life. Net consumer sav-
ings—operating cost savings less retail price in-
creases—are nearly $1,200 per vehicle. On a bene-
fit to cost basis, these standards would have a ratio
of 19 to 1. Or, the purchaser of a 1985 truck would
be paying, through higher purchase prices, about 5
cents for each of the 1,200 gallons that vehicle
would save over its life— 5 cents to save each of
1,200 gallons that would otherwise have cost the
purchaser about $1.50 per gallon. These standards
result in a 20 percent reduction in operating costs
for a MY 1985 light truck.
The environmental impacts of the 1983-85 stand-
ards were also considered, as required by the Na-
tional Environmental Policy Act, 42 U.S.C. 4321, et
seq. The major environmental impacts associated
with the standards were found to be positive, such
as reductions of petroleum consumption and
material usage (less iron and steel). No major
adverse impacts were projected.
Issued on December 8, 1980.
Joan Claybrook
Administrator
45 FR 81593
December 11, 1980
PART 533 -PRE 60
PREAMBLE TO AN AMENDMENT PART 533
Light Truck Average Fuel Economy Standards
Model Years 1985-86
[Docket No. FE 78-01; Notice 6 and No. FE-84-01; Notice 2]
ACTION: Final rule.
SUMMARY: This notice amends the light truck
average fuel economy standard for model year
1985 and establishes a new standard for model
year 1986. These standards are required to be
established at the maximum feasible level, under
section 502(b) of the Motor Vehicle Information
and Cost Savings Act. It is anticipated that there
will not be any loss of potential fuel savings
associated with the revised 1985 standards. The
1986 light truck fleet will consume 510 million
gallons less than that which would have occurred if
fuel economy levels remained at those now pro-
jected for 1985. Light truck fuel economy stan-
dards for model year 1987, proposed at the same
time as the model year 1986 standards, will be
issued at a later date.
EFFECTIVE DATE: These standards are effective
for the 1985 and 1986 model years.
Background
On March 8. 1984, NHTSA published a notice of
proposed rulemaking (NPRM) on the establish-
ment of light truck average fuel economy stan-
dards for model years 1986 and 1987. See 49 FR
8637. The issuance of the 1986 standard 18 months
before model year 1986 is required by section
502(b) of the Motor Vehicle Information and Cost
Savings Act, 15 U.S.C. 2002(b). That provision re-
quires the Secretary of Transportation to set light
truck standards at the "maximum feasible average
fuel economy level" for each model year after 1978.
In determining the "maximum feasible" level, the
Secretary is directed to consider four factors:
technological feasibility, economic practicability,
the need of the nation to conserve energy, and the
effects of other Federal motor vehicle standard on
fuel economy. See 15 U.S.C. 2002(e).
The agency's March NPRM proposed ranges of
possible standards for all types of light trucks,
with the 1986 composite standard to be set within
the range of 20.0 to 21.5 mpg and the 1987 com-
posite standard to be set within the range of 20.0
to 22.5 mpg. Ranges of standards were also pro-
posed for two-wheel drive light trucks. These
separate standards were proposed as optional
means of compliance, consistent with the agency's
practice in previous proceedings, and are intended
to account for the fact that different manufac-
turers' fleets contain significantly different pro-
portions of four-wheel drive trucks, which tend to
have lower fuel economy.
Due to a continuing shift in consumer demand
for light trucks, the agency anticipated that down-
ward revisions to the standards would be neces-
sary. The demand shifts, which are due primarily
to the recent trend of stable and diminishing gaso-
line prices, are manifested in higher levels of sales
of larger light trucks and larger displacement
engines than were previously anticipated by
either the manufacturers or the agency.
The market trends toward larger light trucks
and larger displacement engines led Ford Motor
Company to petition the agency on November 21,
1983, to reduce the existing 1984 and 1985 light
truck standards. Ford also argued that changes in
light duty truck emissions standards and related
procedures had led to a loss in fuel economy for
those years. Ford requested that NHTSA reduce
PART 533 -PRE 61
the 1984 composite light truck fuel economy stan-
dard from 20.0 to 19.0 mpg and the 1985 composite
standard from 21.0 to 19.5 mpg, with correspond-
ing changes to the optional two and four-wheel
drive standards. On May 30, 1984, in 49 FR 22516,
the agency proposed to grant Ford's request for
the 1985 model year. However, the agency also
proposed at that time to deny Ford's request for
the 1984 model year, based on the agency's conclu-
sion that the petition had not been timely filed for
that model year. In its comments on this notice,
Ford indicated that it would not pursue the issue
of the 1984 standards since it had succeeded in as-
suring compliance with the standards for that
year.
Summary of Decision
Based on the agency's analysis of sales data for
the 1984 model year and the manufacturers' most
recent projections for future sales, market trends
toward large vehicles and engines have continued
and are likely to continue through at least 1986.
Projected fuel economy levels for 1985 domestic
light truck fleets have declined on the order of 1.5
mpg since establishment of the standard, due
almost entirely to mix shifts in vehicle size and
engine displacement. These market trends are ex-
pected to continue through at least the 1986 model
year. Our analysis leads us to establish composite
average fuel economy standards of 19.5 mpg for
light trucks manufactured in the 1985 model year
and 20.0 mpg for 1986 model year light trucks.
Equivalent separate standards for two-wheel
drive and four wheel drive light trucks are also
established. A decision has not yet been reached
with respect to the proposed 1987 model year stan-
dards. The agency has concentrated its efforts on
analyzing issues relating to the 1985-86 standards,
which must be issued at this time. There is a con-
siderable period of time before the agency is re-
quired to issue 1987 model year standards. The
agency needs additional time to complete its
analysis of issues relating to such standards. Some
of these issues, particularly those relating to
market trends, are characterized by uncertainty
and complexity.
Basis for the Final Standards
a. 1985 Standards. The basis for the agency's
original 1985 standards is summarized at 45 FR
81593, December 11, 1980.
The fuel economy gains projected by the agency
in that notice were due primarily to the introduc-
tion of new compact pickup, utility, and van models
and progressively higher sales levels for these
models. The new models were projected to employ
smaller, more efficient engines and other fuel
economy-improving technology. However, in its
May 30, 1984 notice, the agency indicated that a
number of its projections had not been borne out in
terms of current consumer preferences in the
marketplace. In particular, the agency's May 30
notice stated that market demand for light truck
performance as reflected in engine mix and axle
ratio usage, did not materialize as anticipated
when the agency initially established the 1985
standards. These and certain other less significant
effects produced a 1.5 mpg loss in Ford's 1985 light
truck average fuel economy. The original 1985
standards were based primarily upon Ford's max-
imum fuel economy capability, since that company
had the lowest projected fuel economy, accounted
for a substantial share of light truck sales, and
faced serious risk of economic harm if standards
were set at levels above its capability to achieve
with a product mix reflecting market demand. As
the agency has consistently stated in the past, the
agency has a responsibility to set standards at a
level that can be achieved by manufacturers
having a substantial share of light truck sales.
The agency has refined its analysis of Ford's
1985 fuel economy capability for purposes of this
final rule, and has performed analyses of the
capability of Chrysler and General Motors as well.
Other light truck manufacturers have significantly
higher average fuel economy capabilities than the
three large domestic manufacturers and account
for a minority share of light truck sales. These
other fleets have not been analyzed for this pro-
ceeding, since it is clear that because of their small
size they would not influence ultimate standards
levels. The agency has concluded that there has
been a market related 1.5 mpg loss in Ford's model
year 1985 fuel economy capability.
Increases in demand for larger displacement
engines compared to levels anticipated at the time
the 1985 standards were originally established
caused 0.9 mpg of the drop in Ford's model year
1985 capability. Increases in average vehicle
weight principally resulting from higher than an-
ticipated demand for larger vehicles produced a
0.5 mpg drop, while a drop in demand for diesel
engines caused a further 0.1 mpg loss. Several
PART 533 -PRE 62
I
minor effects combined to produce an additional
0.2 mpg loss, but were more than offset by a 0.4
mpg fuel economy gain due to the use of fuel injec-
tion in certain light truck engines.
A 0.2 mpg loss in fuel economy was experienced
by Ford coincident with the imposition of more
stringent emission regulations. Although the
agency has concluded that a 0.2 mpg fuel economy
loss will occur for Ford in 1985, EPA has advised
the agency that, in their opinion, this loss is due to
efforts to improve engine performance through
engine calibration and is not an inherent effect of
the emissions standards. However, NHTSA has
treated this effect as equivalent to the engine mix
change effects described above since it appears to
result from market demand for increased vehicle
performance at a time of stable gasoline prices.
A decline in General Motors 1985 fuel economy
is also projected by the agency to a level of 20.0
mpg. The magnitude of this reduction is similar to
that experienced by Ford, and is also due to
market demand factors. The major factors causing
the decline in GM's 1985 fuel economy were found
to be an increase in average vehicle weight and
engine displacement due to higher than antici-
pated demand for larger vehicles and engines, a
decline in demand for diesel engines, reduced de-
mand for manual transmissions, and increased de-
mand for vehicles with four-wheel drive capability.
Chrysler's 1985 fuel economy is estimated to be
20.3 mpg. The other domestic and foreign manufac-
turers were not assessed in detail in this analysis,
for the reasons noted above.
b. 1986 Standards. Based primarily on technol-
ogy, the agency anticipates that Ford can achieve
a fuel economy gain of 0.9 mpg over the 1985 stan-
dard of 19.5 mpg. This fuel economy gain is due
predominantly to the introduction of engines using
more efficient lean burn/fast burn technologies (0.5
mpg) and also to the elimination of the engine
calibration/emissions effect described above (0.2
mpg) and gradual growth in demand for new small
vans (0.2 mpg). However, the agency believes
these gains will be somewhat offset by continued
market shifts, as discussed below. The emissions
standards effects are also discussed below.
The agency also projects that GM can achieve
fuel economy gains of the same magnitude through
engine efficiency improvements as projected for
Ford (0.5 mpg). Through a variety of other minor
improvements, the agency projects that GM can
achieve an additional 0.1 mpg improvement. Taken
together, these improvements will enable GM to
achieve a composite average fuel economy of 20.6
mpg in 1986.
Chrysler is capable of achieving the highest
1986 fuel economy levels of the "Big 3" domestic
manufacturers, 21.5 mpg. This gain primarily
results from the introduction of fuel efficient
engine technology and the introduction of certain
new light weight truck models.
For each of the two model years covered by this
rule, the agency concluded that fuel economy im-
provements beyond those previously discussed
are not feasible.
d. Economic practicability.
Economic factors have been of significance in
the agency's standard-seting analysis, particularly
the potential costs incurred by manufacturers
should standards necessitate the sale of a "non-
free market" model mix. As noted in the discussion
of fleet technology above, virtually the entire fuel
economy difference between the original 1985
standard and the lower standards promulgated
herein reflects a change in anticipated market de-
mand for larger light trucks and engines, resulting
from lower than anticipated gasoline prices. The
mix of vehicles and engines projected in this notice
for the 1985-86 model years is an estimate of free
market demand for light trucks under current
market conditions.
It is possible that higher levels of fuel economy
could be achieved by domestic manufacturers
should they restrict their product offerings. For
example, sales of particular larger light truck
models and larger displacement engines could be
limited or eliminated entirely. In its petition to
reduce the 1984-85 light truck standards. Ford sub-
mitted an analysis of the potential effects of
restricting product offerings in this manner. This
analysis showed that to achieve a 1.5 mpg average
fuel economy benefit, sales reductions of 100,000 to
180,000 units at Ford could occur, with resulting
employment losses of 12,000 to 23,000 positions at
Ford, its dealers and suppliers. To the extent that
these sales restrictions merely shifted purchasers
of larger trucks to other manufacturers, no net
fuel economy benefit would be achieved. No com-
menter in the proceeding directly took issue with
the Ford analysis. The agency believes this analy-
sis to be a reasonable projection of the impacts of
restricting the availability of larger trucks and en-
gines in the current market. Impacts of this mag-
nitude would go beyond the realm of "economic
PART 533 -PRE 63
practicability" as contemplated in the Act, par-
ticularly in view of the uncertain energy benefits.
The agency has analyzed the economic impacts
associated with the manufacturers' efforts to im-
prove the fuel economy of individual light truck
models in the 1985-86 time period. This analysis is
set forth in a Regulatory Impact Analysis, copies
of which are available in the agency's Docket Sec-
tion. The agency projects an average retail price
increase of $35 to result from these improvements.
This price increase would be offset by operating
cost savings of $176 for the average 1986 light
truck, due to reduced lifetime gasoline consump-
tion. Overall, the agency projects the domestic
manufacturers' automotive operations to remain
highly profitable over the 1985-86 period, based on
current market trends.
e. Effects of other Federal Standards on fuel
economy. Three new light truck exhaust emission
requirements were cited by several commenters
as having possible adverse impacts on fuel econ-
omy. The first requirement is a change in strin-
gency in hydrocarbon and carbon monoxide emis-
sions standards, which took effect in the 1984
model year. The second requirement extends the
useful life period for which manufacturers must
certify compliance with emissions standards begin-
ning with the 1985 model year. The third require-
ment is an anticipated increase in stringency of
light duty truck emission standards for oxides of
nitrogen.
The agency has concluded that none of these
regulatory changes will impact 1985-86 light truck
fuel economy levels. With regard to 1984 emissions
standards changes and the extended useful life
regulation, the agency concurs in a technical analy-
sis provided by the Environmental Protection
Agency (EPA) which indicates that there is no cau-
sal link between these regulations and any loss in
fuel economy experienced by the manufacturers. A
Department of Transportation assessment of the
1984-85 emissions regulations supported the EPA
conclusions. In the case of the possible change in
the emission standards for oxides of nitrogen,
EPA has yet to issue proposed standards. Given
the need for EPA to conduct a rulemaking pro-
ceeding and provide adequate lead time, NHTSA
concludes that it is unlikely that any change in
stringency of that standard would occur by 1986. If
this judgment turns out to be incorrect, the agency
will reassess the impact of such a change on light
truck fuel economy.
General Motors argued that future light truck
diesel particulate emission standards could effec-
tively ban diesel engines in such vehicles, reducing
fuel economy levels accordingly. EPA has indi-
cated that these standards can be met with avaU-
able technology. However for certain vehicles
EPA concedes that the standards may require the
use of particulate traps which could produce a fuel
economy penalty of approximately 2 percent per
affected vehicle. NHTSA is accepting the EPA
analysis. Should the anticipated fuel economy
penalty occur, the impact on the domestic manu-
facturers' average fuel economy levels would be
much less than 0.1 mpg, and would therefore not
impact fuel economy standards levels.
American Motors argued that changes in EPA
test procedures will result in a fuel economy loss.
American Motors did not provide an analysis of
the quantitative impact of the proposed rule on
American Motors' average fuel economy levels,
and none of the other manufacturers argued for
the existence of such an impact. In its comments,
American Motors noted that the potential impact
of the change in EPA procedures could be offset
through testing additional vehicles, but pointed
out that such testing might be too expensive for a
smaller manufacturer. Should American Motors
experience a fuel economy less, its average fuel
economy levels will still be high enough to easily
comply with the standards promulgated herein.
Therefore, the agency is not making a specific
adjustment in the standards to account for this
potential effect.
f. Need of the nation to conserve energy.
The United States imported 15 percent of
its oil needs at a cost of $1.1 billion in 1955. By
1977, the import share peaked at 46.4 percent at a
cost of $42 billion. While the import share of total
petroleum demand has been steadily declining
since 1977 to 1983 level of 28 percent, the cost con-
tinued to rise to a 1981 peak level of $75.8 billion.
Iii 1983, the percentage of imported petroleum was
the lowest it had been during the prior decade, and
the cost was lower than in 1979. During most of
this period price controls on petroleum were in
effect, sending the wrong economic signals to con-
sumers. It is during such a period that fuel econ-
omy standards are most effective.
The rapid transition from apparent worldwide
surplus in 1978 to shortage in 1979, to surplus
again today points out the instability of the world
oil market. The U.S. is now dependent for about
PART 533 -PRE 64
a third of its oil supplies on the actions and deci-
sions of a few foreign governments. Although the
concern over dependence on imported petroleum
has lessened in the past few years, it is necessary
to continue conservation efforts due to the uncer-
tainty, especially in regard to the Middle East, of
the future availability of petroleum.
g. Determining the maximum feasible average
fuel economy level In determining the level at
which standards are to be set, the agency must
take industrywide considerations into account.
The Conference Report on Title V of the Motor
Vehicle Information and Cost Saving Act provides
in this regard as follows:
...a determination of maximum feasible
average fuel economy should not be keyed to
the single manufacturer which might have the
most difficulty achieving a given level of aver-
age fuel economy. Rather, the Secretary must
weigh the benefits to the nation of a higher
average fuel economy standard against the
difficulties of individual automobile manufac-
turers. Such difficulties, however, should be
given appropriate weight in setting the stan-
dard in light of the small number of domestic
automobile manufacturers that currently ex-
ist, and the possible implications for the na-
tional economy and for reduced competition
association (sic) with a severe strain on any
manufacturer. However, it should also be
noted that provision has been made for grant-
ing relief from penalties under Section 508(b)
in situations where competition will suffer
significantly if penalties are imposed.
Senate Report 94-516, 94th Cong. 1st Sess.
(1975), at 154-5.
As in the proposals, NHTSA's analysis concludes
for both years that Ford is the "least capable"
manufacturer in regard to improving the average
fuel efficiency of its light trucks. For the 1985
model year, the agency projects that Ford can
achieve 19.5 mpg, while GM could achieve 20.0 mpg
and Chrysler 20.3 mpg. Production of 1985 model
year vehicles has begun, so there is little that the
manufacturers can do at this point to change their
1985 average fuel economy through use of addi-
tional technology. Setting the 1985 standards sig-
nificantly above Ford's level would not likely in-
crease that company's fuel economy performance
through greater use of technology, but might re-
quire drastic product restriction actions which
would adversely affect employment at Ford. Such
actions by Ford might also result in the shifting of
sales of larger light trucks with large engines to
other manufacturers, thereby achieving no net
fuel economy improvement for the industry as a
whole. On the other hand, setting standards below
the level attainable by GM and Chrysler would not
likely cause those companies to reduce their fuel
economy performance, since the agency's pro-
jected levels for those companies is based on the
product mixes they plan to sell. Further, GM indi-
cated in its comments that setting standards at a
level below its planned levels would not cause GM
to revise its plans. Therefore, the agency con-
cludes that the risks associated with setting stan-
dards above Ford's maximum feasible level and
possibly forcing that company to adopt severe
product restrictions outweigh the potential
benefits from setting standards at a higher level.
For the 1986 model year, the agency projects
the maximum fuel economy Ford could achieve is
20.4 mpg, GM 20.6 mpg, and Chrysler 21.5 mpg.
Data provided by Ford indicate that Ford's 1986
fuel economy could be as low as 19.6 mpg if con-
sumers maintain a strong demand for larger
vehicles. The agency also found that GM faces a
number of technological risks involving certain
engine efficiency improvements for 1986. If these
technological actions became infeasible, NHTSA
estimates the company's 1986 fuel economy would
decline to 20.0 mpg.
There are additional factors to be considered
selecting the 1986 standards. Major technological
changes can not be made in manufacturers' prod-
uct plans for that year. New programs cannot be
developed to compensate for market shifts or tech-
nological problems. Futhermore, as noted in the
NPRM, manufacturers' projections (and NHTSA's
analyses) of their fuel economy improvement capa-
bilities have declined over the past 1-1/2 years due
to market changes. For all the above reasons, the
agency has decided to set the 1986 composite stan-
dard at 20.0 mpg. The agency believes the risks of
reduced sales and employment resulting from at-
tempts to achieve a higher level for MY 1986 out-
weigh the potential fuel savings.
The agency has decided to continue setting 4x2
and 4x4 standards for each year as an alternative
to the composite standard. Separate 4x2/4x4
standards allow manufacturers greater flexibility
PART 533 -PRE 65
in planning their fuel economy improvements and
do not discriminate against firms with truck fleets
heavily weighted toward four-wheel drive or two-
wheel drive models.
The final standards are:
Model
Year
1985
1986
Composite
Standard
MPG
19.5
20.0
4x2
Standard
MPG
19.7
20.5
4x4
Standard
MPG
18.9
19.5
Other Comments on the NPRM
In its March 1984 NPRM, the agency raised the
possibility of changing the structure and scope of
the current standards in several ways, including
establishing a number of additional standards for
subclasses of the light truck fleet and limiting the
scope of the standards with regard to vehicles in
the 6001-8500 pound gross vehicle weight range.
Those commenters taking a position on the merits
of this issue generally argued in favor of retaining
the present structure of standards, at least for this
rulemaking, citing the additional complexity
resulting from multiple standards. Ford pointed
out that addressing the issue at this time could
delay the rulemaking, which is subject to stringent
time constraints. Therefore, the agency is making
no changes in this area at the current time.
GM and Ford argued that the agency should
revise the manner in which it evaluates the eco-
nomic practicability of standards. Both companies
argued that cost/benefit considerations should
play a greater role in the agency's standard-
setting, and Ford suggested a variety of additional
factors the agency should consider. However, in
this proceeding, none of the additional criteria sug-
gested by Ford would affect the level at which the
standards are set in this rule. Furthermore, the
agency has always considered costA)enefit analysis
results in setting fuel economy standards; indeed,
the most stringent economic criterion for this rule
has been the one the agency has traditionally
relied upon: the risk of any substantial adverse
economic impacts on the industry or the national
economy. The standards are being set at the levels
discussed above to avoid the risk of significant
adverse employment impacts which could result if
the manufacturers (and Ford in particular)
restricted product offerings to comply with overly
stringent standards.
A coalition of public interest organization op-
posed the agency's proposed 1986 standard level,
arguing that it was based on an assumption of the
continuation of the current favorable energy sup-
ply and cost situation. The coalition recommended
a standard of 22.5 mpg for model year 1986. No
technical or economic analysis was provided to
support the feasibility of a standard at this level.
The agency agrees that the need of the nation to
conserve energy remains strong and that the na-
tion still faces the risk of energy problems in the
future. However, section 502 of the Act requires
the agency to set standards at the maximum feasi-
ble average fuel economy level, considering not
just energy conservation needs but also technical
and economic factors. As discussed above, the
agency believes that requiring compliance with
more stringent standards than provided herein
would create a risk of serious adverse economic
repercussions such as losses in employment in the
automobile and related industries, without neces-
sarily producing the contemplated fuel economy
gains.
In its NPRM concerning the MY 1984-1985 stan-
dards, the agency concluded that Ford's petition to
amend the 1984 light truck standards was not
timely filed due to legal time constraints for
amending standards. The agency presented its
tentative conclusion that amendments reducing
the stringency of standards for a particular model
year may be made up until the beginning of the
model year but not after that time. Several vehicle
manufacturers disagreed with this conclusion.
Ford, GM and Volkswagen argued that amend-
ments reducing the stringency of standards may
be made at any time, including during a model
year. Chrysler, on the other hand, argued that
amendments reducing the stringency of standards
must be made 18 months prior to the beginning of
a model year. As discussed below, the agency has
decided that its tentative conclusion was correct.
The following paragraphs provide a complete dis-
cussion of this issue both for purposes of this rule-
making and to provide a complete discussion of
this issue both for purposes of this rulemaking and
to provide future guidance to manufacturers as to
the correct timing of petitions.
A model year is presumed to begin in the
autumn of the preceding calendar year (see Center
for Auto Safety v. NHTSA, 710 F.2d 842 (D.C. Cir.
1983).) Ford's petition to reduce the existing 1984
and 1985 light truck standards was filed on
PART 533 -PRE 66
November 21, 1983, and amended on January 20,
1984. Since model year 1984 began in the fall of
1983, it is clear that the 1984 light truck standards
could not have been amended in response to the
Ford petition prior to the start of that model year.
Section 502(b) of the Motor Vehicle Information
and Cost Savings Act (15 U.S.C. 2002(b) requires
that the Secretary of Transportation "shall, by
rule, prescribe average fuel economy standards"
for light trucks for each model year beginning with
1979. These standards must be prescribed at least
"18 months prior to the beginning of the model
year to which they apply. Id.
Section 502(f)(1) of the Act provides that the
"Secretary may, by rule, from time to time,
amend" any light truck fuel economy standard "so
long as such standard, as amended, meets the
requirements" of section 502(b). Section 502(f)(2)
provides that any amendment which makes stan-
dards more stringent must be promulgated "at
least 18 months prior to the beginning of the model
year to which such amendment will apply."
The Conference Report on the Energy Policy
and Conservation act (the statute which added the
fuel economy provisions to the Motor Vehicle In-
formation and Cost Savings Act) contains the
following discussion:
Average fuel economy standards prescribed
by the ST (Secretary of Transportation) for
passenger automobiles in model years after
1980, for nonpassenger automobiles, and for
passenger automobiles manufactured by
manufacturers of fewer than 10,000 passenger
automobiles may amended from time to time
as long as each such amendment satisfies the
18 month rule — i.e., any amendment which
has the effect of making an average fuel econ-
omy standard more stringent must be promul-
gated at least 18 months prior to the begin-
ning of the model year to which such amend-
ment will apply. An amendment which has the
effect of making an average fuel economy
standard less stringent can be promulgated at
any time prior to the beginning of the model
year in question.
See Sen. Rep. 94-516, 94th Cong., 1st Sess.
(1975) at 157. [Emphasis added.]
I
As noted above, Ford, General Motors and
Volkswagen argued that there is not time limita-
tion on amendments reducing the stringency of
standards and that such amendments may be
made in mid-model year. GM read section 502(f)(1)
and section 502(f)(2) to together imply that Con-
gress concluded that it was not necessary or
appropriate to set time limits on standards reduc-
tion rulemaking. GM argued that the statutory
structure is unambiguous, citing Sands, Suther-
land Statutory Construction Section 46.01 (Fourth
Ed. 1973), for the plain meaning rule of statutory
construction. Ford stated that the purpose of the
leadtime provisions included in the Act is to pro-
tect manufacturers from not being given sufficient
time to plan and implement compliance with a
more stringent standard and that the provisions
should not be construed to operate to manufac-
turers' detriment. Ford stated that as a general
rule of statutory construction, a distinction must
be made between utilizing legislative history for
purposes of illuminating Congressional intent with
respect to express statutory language and using
such history to write into the law that which is not
otherwise there. Ford also argued that the
language of the Conference Report was intended
to emphasize the fact that, in contrast to the situa-
tion in which more stringent standards are estab-
lished, there is no leadtime requirement with
respect to less stringent standards.
Chrysler, however, argued that amendments
reducing the stringency of standards must be
made at least 18 months prior to the beginning of
the model year and that, therefore. Ford's petition
was too late with respect to both the 1984 and 1985
model years. Chrysler argued that section 502(b)
calls for 18 months leadtime for any standards be-
ing prescribed and that changes in standards come
within that requirement. Chrysler contended that
this specific language of the law takes precedence
over the Conference Report. Chrysler stated that
the 18 month requirement of section 502(f)(2) is also
applicable since granting Ford's request would in
effect make the standards more stringent for
Chrysler.
As suggested by the two very different views
advanced by the commenters, the timing require-
ments applicable to amendments which make stan-
dards less stringent are not clear on the face of the
statute. The language in section 502(f)(1) authoriz-
ing amendments "from time to time" could be
interpreted to permit amendments at any time.
Alternatively, the language in that paragraph re-
quiring that amendments to standards must comply
PART 533 -PRE 67
with requirements applicable to their original
enactment could be interpreted to impose the 18
month rule, one of the requirements of section
502(b) on amendments to reduce standards.
Where a statutory provision is ambiguous on its
face, rules of statutory construction dictate that
the legislative history of the provision must be
considered. See Sutherland, "Statutory Construc-
tion," 4th Ed., section 48.01. An Act's Conference
Report has been considered the "most persuasive
evidence of congressional intent" in this regard.
Demby v. Schweiker,671 F.2d 507, 510 (D.C. Cir.
1981).
The agency believes the language of the Con-
ference Report is clear on this point. As indicated
above, the Conference Report includes a state-
ment that "(a)n amendment which has the effect of
making an average fuel economy standard less strin-
gent can be promulgated at any time prior to the
beginning of the model year in question." While
the discussion in the Conference Report does not
expressly prohibit amendments after the start of a
model year, the quoted sentence certainly implies
that result. If no limit on the timing of relaxatory
amendments had been intended, the sentence
would been ended after the words "... promul-
gated at any time.. . ." The agency believes that
Congress intended to provide certainty and finally
for all parties concerned with regard to the levels
of standards, to permit planning by the manufac-
turers and the agency through cutting off amend-
ments once a model year has begun.
Ford has argued that a failure to permit amend-
ments to fuel economy standards after the start of
a model year places manufacturers in a difficult
position, since unanticipated sales trends during
the model year might impair its ability to comply.
However, the agency is also concerned that
amendments made after production has begun
have some characteristics of ex post facto law.
On this point, the agency notes that, as quoted
above, section 502(b) and 502(f)(1) require that fuel
economy standards and amendments to such stan-
dards be prescribed "by rule". The term "rule" or-
dinarily refers to prospective agency action. The
Administrative Procedure Act's definition of rule
incorporates the concept of "agency statement of
general or particular applicability and future ef-
fect." See 5 U.S.C. §551(4) (emphasis added). Since
an average fuel economy standard regulates over-
all production over an entire model year, a change
to such a standard during the model year would
represent, in part, retrospective agency action,
with retroactive effect. On the issue of retroactive
rules, Kenneth Culp Davis states that "... agencies
have no powers except those conferred and courts
are reluctant to imply power to issue retroactive
rules.. . . " Davis, Administrative Law Treatise, 2d
ed., §7.23. The agency does not believe that a court
imply such authority in this instance, particularly
given the statement in the legislative history
implying that Congress intended the opposite
result.
The agency believes that Congress intended
standards to be established before production
begins, to encourage the achievement of particular
fuel economy levels rather than imply ratifying
past conduct. As noted above, Chrysler expressed
similar concerns in its comments, noting that late
changes in standards levels could adversely affect
manufacturers who planned to meet the original
levels. Therefore, the agency must reaffirm its
previous position that petitions to amend fuel
economy standards must be submitted in time to
permit necessary rulemaking to be completed
prior to the start of the model year.
With respect to Chrysler's suggested construc-
tion of section 502(f)(2), the agency sees no basis in
the Act or its legislative history for construing
"more stringent" amendments to mean anything
other than its common meaning, i.e., numerically
higher. Adopting Chrysler's proposed construc-
tion would mean that all amendments make stan-
dards "more stringent" regardless of the direction
of the change, since any particular standards level
will impact manufacturers unequally. In that case,
the "more stringent" language of the Act would be
rendered meaningless, a result to be avoided
under normal rules of statutory construction. The
agency rejects this argument.
The agency recognizes the general concern
raised by Chrysler that standards reductions may
adversely affect manufacturers which made good
faith efforts to achieve the initially established
standards level. However, the agency must con-
sider the feasibility of its standards for the in-
dustry as a whole, as noted above. With regard to
the 1985 standards, it appears that none of the
domestic manufacturers, including Chrysler, will
be able to meet the original standards. Therefore,
the agency concludes that reducing the 1985 stan-
dards is necessary.
Ford has also requested that the agency specify
the precise date by which petitions to amend fuel
PART 533 -PRE 68
economy standards must be filed. As noted above,
the single court to address the issue has stated
only that a given model year begins in the fall of
the preceding calendar year (e.g., fall 1984 is the
beginning of the 1985 model year). In its final rule
establishing fuel economy reporting requirements,
the agency took the position that, in the absence of
any single "annual production period," the model
year would be deemed to coincide with the calen-
dar year, e.g., the 1985 model year would begin
January 1, 1985. See 19 U.S.C. 2001(12) and 42 FR
62374 (December 12, 1977). Since any amendments
to standards must be promulgated prior to the
start of the model year, petitions must be filed in
time to permit the agency to complete a rulemak-
ing proceeding on the petition prior to the start of
the model year. The time necessary for such a
proceeding will vary greatly depending on the
complexity and controversiality of the issues in-
volved. A proceeding would involve agency
analysis of the petition, preparation and publica-
tion of the necessary supporting documentation, a
minimum public comment period, analysis of com-
ents, and preparation and publication of the docu-
mentation necessary to accompany the final deci-
sion. The various uncertainties affecting the dura-
tion of a proceeding make it impossible for the
agency to specify a precise date after which peti-
tions will not be accepted. However, it is clear that
the Ford petition, which was filed in November of
the preceding calendar year, was not timely. As a
general matter, petitions regarding a particular
model year's standards should be submitted no
later than the early part of the preceding calendar
year, and preferably before that time.
In accordance with section 502(j) of the Act, the
agency has submitted this rule to the Department
of Energy for review. The Department of Energy
indicated that it had no comment on the rule.
In consideration of the foregoing, 49 CFR
Chapter V is amended by revising Table II in
S533.5(a) to read as follows:
S533.5 Requirements.
(a) * * *
TABLE II
Combined 2-wheel drive
■••"-''"-'' light trucks
4-wheel drive
light trucks
standard light ti
Model Year ~Z ~. ;; '. ~ :
Captive _ , Captive _., Captive _,,
. '^ , Other . "^ ^ Other . *^ ^ Others
imports imports imports
1982
1983
1984
1985
1986
17.5 17.5
19.0 19.0
20.0 20.0
19.5 19.5
20.0 20.0
18.0
19.5
20.3
19.7
20.5
18.0
19.5
20.3
19.7
20.5
16.0 16.0
17.5 17.5
18.5 18.5
18.9 18.9
19.5 19.5
Issued on October 16, 1984.
Diane K. Steed
Administrator
49 FR 41250
October 22, 1984
PART 533 -PRE 69-70
economy standards must be filed. As noted above,
the single court to address the issue has stated
only that a given model year begins in the fall of
the preceding calendar year (e.g., fall 1984 is the
beginning of the 1985 model year). In its final rule
establishing fuel economy reporting requirements,
the agency took the position that, in the absence of
any single "annual production period," the model
year would be deemed to coincide with the calen-
dar year, e.g., the 1985 model year would begin
January 1, 1985. See 19 U.S.C. 2001(12) and 42 FR
62374 (December 12, 1977). Since any amendments
to standards must be promulgated prior to the
start of the model year, petitions must be filed in
time to permit the agency to complete a rulemak-
ing proceeding on the petition prior to the start of
the model year. The time necessary for such a
proceeding will vary greatly depending on the
complexity and controversiality of the issues in-
volved. A proceeding would involve agency
analysis of the petition, preparation and publica-
tion of the necessary supporting documentation, a
minimum public comment period, analysis of com-
ents, and preparation and publication of the docu-
mentation necessary to accompany the final deci-
sion. The various uncertainties affecting the dura-
tion of a proceeding make it impossible for the
agency to specify a precise date after which peti-
tions will not be accepted. However, it is clear that
the Ford petition, which was filed in November of
the preceding calendar year, was not timely. As a
general matter, petitions regarding a particular
model year's standards should be submitted no
later than the early part of the preceding calendar
year, and preferably before that time.
In accordance with section 502(j) of the Act, the
agency has submitted this rule to the Department
of Energy for review. The Department of Energy
indicated that it had no comment on the rule.
In consideration of the foregoing, 49 CFR
Chapter V is amended by revising Table II in
S533.5(a) to read as follows:
S533.5 Requirements.
(a)
TABLE II
Combined
2-wheel drive
4-wheel drive
standard
light trucks
light trucks
Model Year _ ,.
Captive
imports
Other
C^P''7 Other
imports
Captive „,,
. '^ ^ Others
imports
1982 ..
. . 17.5
17.5
18.0 18.0
16.0 16.0
1983 ..
. . 19.0
19.0
19.5 19.5
17.5 17.5
1984 ..
. . 20.0
20.0
20.3 20.3
18.5 18.5
1985 . .
. . 19.5
19.5
19.7 19.7
18.9 18.9
1986 ..
. . 20.0
20.0
20.5 20.5
19.5 19.5
Issued on October 16, 1984.
Diane K. Steed
Administrator
49 FR 41250
October 22, 1984
PART 533 -PRE 69-70
Sec.
533.1 Scope
PART 533— LIGHT TRUCK FUEL ECONOMY STANDARDS
(Docket No. FE 77-05; Notice 5)
(3) The term "domestically manufactured"
is used as defined in section 503(b) (2) (E) of the
Act.
533.2 Purpose
533.3 Applicability
533.4 Definitions
533.5 Requirements
533.6 Measurement and calculation procedures
5533.1 Scope. This part establishes average
fuel economy standards pursuant to section 502(b)
of the Motor Vehicle Information and Cost Savings
Act, as amended, for light trucks.
5533.2 Purpose. The purpose of this part is to
increase the fuel economy of light trucks by
establishing minimum levels of average fuel
economy for those vehicles.
5533.3 Applicability. This part applies to
manufacturers of light trucks.
5533.4 Definitions.
(a) Statutory terms.
(1) The terms "average fuel economy,"
"average fuel economy standard," "fuel
economy," "import," "manufacture," "manufac-
turer," and "model year" are used as defined in
section 501 of the Act.
(2) The term "automobile" is used as defined
in section 501 of the Act and in accordance with
the determinations in 49 CFR 523.
(b) Other terms. As used in this part, unless
otherwise required by the context—
"Act" means the Motor Vehicle Information
Cost Savings Act, as amended by Pub.L. 94-163.
"Light truck" is used in accordance with the
determinations in 49 CFR Part 523.
"Captive import" means, with respect to a
light truck, one which is not domestically manu-
factured but which is imported in the 1980 model
year or thereafter by a manufacturer whose prin-
cipal place of business is in the United States.
"4-wheel drive, general utility vehicle" means
a 4-wheel drive, general purpose automobile
capable of off-highway operation that has a
wheelbase of not more than 110 inches, and that
has a body shape similar to 1977 Jeep CJ-5 or
CJ-7, or the 1977 Toyota Land Cruiser.
"Limited product line light truck" means a
light truck manufactured by a manufacturer
whose light truck fleet is powered exclusively
by basic engines which are not also used in pas-
senger automobiles.
"Basic engine" means a unique combination
of manufacturer, engine displacement, number of
cylinders, fuel system (as distinguished by num-
ber of carburetor barrels or use of fuel injection),
and catalyst usage.
S533.5 Requirements
(a) Each manufacturer of light trucks shall
comply with the following average fuel economy
I
PART 533-1
Model year
2-wheel drive
light trucks
4-wheel drive
light trucks
Captive
imports
Other
Captive
imports
Other
Limited
product line
light trucks
1979
17.2
15.8
1980
16.0
16.0
14.0
14.0
14.0
1981
16.7
16.7
15.0
15.0
14.5
1982
18.0
18.0
16.0
16.0
—
Combined 2-wheel drive 4-wheel drive
Standard light trucks light trucks
Model year
Captive „ , Captive „ , Captive
. ^ , Others . ^ _^ Others . ^ _^ Others
imports imports imports
[1982 17^5 rU) 18^0 18^0 16^0 16^0
1983 19.0 19.0 19.5 19.5 17.5 17.5
1984 20.0 20.0 20.3 20.3 18.5 18.5
1985 19.5 19.5 19.7 19.7 18.9 18.9
1986 20.0 20.0 20.5 20.5 19.5 19.51
(49 F.R. 41250-October 22, 1984. Effective: For 1985 and 1986 model years).]
standards, expressed in miles per gallon, in the (2) Comply separately with the 2-wheel drive
model year specified as applicable: standards and the 4-wheel drive standards
(b) (1) For model year 1979, each manufacturer (segregating captive import and other light trucks)
specified in paragraph (a) of this section.
(i) Combine its 2- and 4-wheel drive light
trucks and comply with the average fuel S533.6 Measurement and calculation procedures.
economy standard in paragraph (a) for 2- (a) Any reference to a class of light trucks
wheel dnve light trucks; or manufactured by a manufacturer shall be deemed:
(ii) Comply separately with the two stand- .,^ m ■ i , n ■• i . . i • ^i . i
A -f A ■ V, / ^ (1) To include aU light trucks m that class
ards specified in paragraph (a). i ^ ■,, , ^, .^„j
,„^ ■" , r ^r,^ 1 ,1 manufactured by persons who control, are controlled
(2) For model year 1979, the standard by, or are under common control with, such manufec-
specified in paragraph (a) for 4-wheel dnve light turer- and
trucks applies only to 4-wheel drive general utility
vehicles. All other 4-wheel drive light trucks in (2) To exclude all light trucks in that class
that model year shall be included in the 2-wheel manufactured (within the meaning of paragraph
drive category for compliance purposes. (a) (1) of this section) during a model year by such
, . _i 11 ,r^o/^ J ir.r.i £ manufacturer which are exported prior to the ex-
(c) For model years 1980 and 1981, manufac- . ^ ^on j e u ■ t-u At u a ^
^^ ' .ff 1- -.L J J .. 1- 1- i_.L X piration of 30 days following the end of such model
turers of limited product line light trucks may:
(1) Comply with the separate standard for ^ , mi <• i i- n i- w ^ i
limited product line light trucks, or J^} ^^e average fiiel economy of all light trucks
,„. „ , •, , ., X, .11 -n- ■, that are manufactured by a manufacturer and are
• .?L?.T ^ with the other standards specified ^^^.^^^ ^^ 5333 ^^^ ^^ ^^ 3333 3^^^ ^j^^,j ^^ ^^^^.
in ^ l)Oo. Old,), 3,S 3,PpllC3,DlG. • j ■ i 'ii. j j. i_t i_ j
^ ^ ' ^^ mined in accordance with procedures established
(d) For model years 1983-85, each manufacturer by the Administrator of the Environmental Protec-
may: tion Agency under section 503(a) (2) of the Act.
(1) Combine its 2- and 4-wheel drive light
trucks (segregating captive import and other light
trucks) and comply with the combined average fuel 42 F.R. 1 3807
economy standard specified in paragraph (a); or March 14, 1977
(Rev. 10/22/84)
PART 533-2
Sec.
533.1 Scope
PART 533— LIGHT TRUCK FUEL ECONOMY STANDARDS
(Docket No. FE 77-05; Notice 5)
(3) The term "domestically manufactured"
is used as defined in section 503(b) (2) (E) of the
Act.
533.2 Purpose
533.3 Applicability
533.4 Definitions
533.5 Requirements
533.6 Measurement and calculation procedures
5533.1 Scope. This part establishes average
fuel economy standards pursuant to section 502(b)
of the Motor Vehicle Information and Cost Savings
Act, as amended, for light trucks.
5533.2 Purpose. The purpose of this part is to
increase the fuel economy of light trucks by
establishing minimum levels of average fuel
economy for those vehicles.
5533.3 Applicability. This part applies to
manufacturers of light trucks.
5533.4 Definitions.
(a) Statutory terms.
(1) The terms "average fuel economy,"
"average fuel economy standard," "fuel
economy," "import," "manufacture," "manufac-
turer," and "model year" are used as defined in
section 501 of the Act.
(2) The term "automobile" is used as defined
in section 501 of the Act and in accordance with
the determinations in 49 CFR 523.
(b) Other terms. As used in this part, unless
otherwise required by the context—
"Act" means the Motor Vehicle Information
Cost Savings Act, as amended by Pub.L. 94-163.
"Light truck" is used in accordance with the
determinations in 49 CFR Part 523.
"Captive import" means, with respect to a
light truck, one which is not domestically manu-
factured but which is imported in the 1980 model
year or thereafter by a manufacturer whose prin-
cipal place of business is in the United States.
"4-wheel drive, general utility vehicle" means
a 4-wheel drive, general purpose automobile
capable of off-highway operation that has a
wheelbase of not more than 110 inches, and that
has a body shape similar to 1977 Jeep CJ-5 or
CJ-7, or the 1977 Toyota Land Cruiser.
"Limited product line light truck" means a
light truck manufactured by a manufacturer
whose light truck fleet is powered exclusively
by basic engines which are not also used in pas-
senger automobiles.
"Basic engine" means a unique combination
of manufacturer, engine displacement, number of
cylinders, fuel system (as distinguished by num-
ber of carburetor barrels or use of fuel injection),
and catalyst usage.
S533.5 Requirements
(a) Each manufacturer of light trucks shall
comply with the following average fuel economy
PART 533-1
Model year
2-wheel drive
light trucks
4-wheel drive
light trucks
Captive
imports
Other
Captive
imports
Other
Limited
product line
light trucks
1979
17.2
15.8
1980
16.0
16.0
14.0
14.0
14.0
1981
16.7
16.7
15.0
15.0
14.5
1982
18.0
18.0
16.0
16.0
—
Combined 2-wheel drive 4-wheel drive
Standard light trucks light trucks
Model year
Captive „ . Captive ^ , Captive ^ ,
. ^ Others . _^ Others . _^ Others
imports imports imports
[1982 17^5 17\5 18^^ 18^0 leio 16^0
1983 19.0 19.0 19.5 19.5 17.5 17.5
1984 20.0 20.0 20.3 20.3 18.5 18.5
1985 19.5 19.5 19.7 19.7 18.9 18.9
1986 20.0 20.0 20.5 20.5 19.5 19.51
(49 F.R. 41250-October 22. 1984. Effective: For 1985 and 1986 model years).)
standards, expressed in miles per gallon, in the (2) Comply separately with the 2-wheel drive
model year specified as applicable: standards and the 4-wheel drive standards
(b) (1) For model year 1979, each manufacturer (segregating captive import and other light trucks)
specified in paragraph (a) of this section.
(i) Combine its 2- and 4-wheel drive light
trucks and comply with the average fuel S533.6 Measurement and calculation procedures.
economy standard in paragraph (a) for 2- (^^ ^^y reference to a class of light trucks
wheel drive light trucks; or manufactured by a manufacturer shall be deemed:
(ii) Comply separately with the two stand- ,,, _, . , , „ ,. w ^ ■ • ^i ^ i
ards specified in paragraph (a). ^^} To include all light trucks m that ckss
■■ , , r. .^ , , , manufactured by persons who control, are controlled
(2) For model year 1979, the standard by, or are under common control with, such manufac-
specified in paragraph (a) for 4-wheel drive light turer- and
trucks applies only to 4-wheel drive general utility
vehicles. All other 4-wheel drive light trucks in (2) To exclude all light trucks in that class
that model year shall be included in the 2-wheel manufactured (within the meaning of paragraph
drive category for compliance purposes. (a) (1) of this section) during a model year by such
,, „ J , ,„„^ , ,„„, J. manufacturer which are exported prior to the ex-
(c) For model years 1980 and 1981, manufac- ... ^onj j? n • i.u j t u j i
^^ i-i- -^ J J ^1- 1- . ^ ^ piration of 30 days following the end of such model
turers oi limited product line light trucks may:
(1) Comply with the separate standard for „ , mi i. i /• i, ,• w ^ ,
limited product line light trucks, or (^^ ^^e average fuel economy of all light trucks
,„, „ , •■ , ,, ^, X J J •£: J that are manufactured by a manufacturer and are
(2) Comply with the other standards specified ^^^.^^^ ^^ g^gg 3^^ ^^ ^^ 3333 5^^^ ^j^^j, ^^ ^^^^^.
■* ^ ' ^^ mined in accordance with procedures established
(d) For model years 1983-85, each manufacturer by the Administrator of the Environmental Protec-
may: tion Agency under section 503(a) (2) of the Act.
(1) Combine its 2- and 4-wheel drive light
trucks (segregating captive import and other light
trucks) and comply with the combined average fuel 42 F.R. 1 3807
economy standard specified in paragraph (a); or March 14, 1977
(Rev. 10/22fS4)
PART 533-2
Notice of Interpretation
(Docket No. FE 79-01; Notice 1)
Summary: This notice announces the agency's
interpretation of the extent to which the law
permits, with respect to 1979 and 1980, monetary
credits earned by manufacturers of light trucks for
exceeding fuel economy standards in one year to
be applied to civil penalty liabilities for violating
those standards in the other year. This interpreta-
tion is being issued at the request of several
manufacturers to assist them in planning com-
pliance with light truck fuel economy standards.
For further information contact:
Mr. Theodore Bayler, National Highway
Traffic Safety Administration, 400 Seventh
Street, S.W., Washington, D.C. 20590, 202-
755-9384.
Supplementary information: Section 502(b) of the
Motor Vehicle Information and Cost Savings Act
("the Act"), 15 U.S.C. 2002(b), requires the
Secretary of Transportation to establish average
fuel economy standards for light trucks manufac-
tured in each model year beginning with 1979.
That provision also authorizes the Secretary to
establish separate fuel economy standards for dif-
ferent classes of light trucks. The Secretary used
this authority to establish separate 1979 standards
for "4-wheel general utility vehicles" with a gross
vehicle weight rating (GVWR) not greater than
6,000 lbs. and for "all other" light trucks in the
same GVWR range. Manufacturers were,
however, given the option of having all of their
6,000 lbs and under GVWR light trucks comply
with the more stringent standard for "all other"
light trucks, rather than complying separately with
the two standards.
Different classes were established by the agency
beginning with the 1980 model year. Separate
standards were established for two- and four-wheel
drive light trucks, and subclasses were established
within those classes for captive import (i.e., trucks
manufactured abroad and sold through a domestic
manufacturer's dealer network) and domestic light
trucks. A separate standard was also established
for "limited product line light trucks," i.e., those
produced by companies whose light trucks employ
exclusively engines which are not also used in
passenger cars. The change in the light truck
classification was made because of the
simultaneous change in the applicability of the fuel
economy standards to cover light trucks up to
8,500 pounds GVWR. The new classification
system reflects the makeup of the larger fleets
regulated in 1980 and the differences in the fuel
economy improvement potential of the principal
types of light trucks in that fleet. See discussion of
this classification system in 42 FR 63185-7,
December 15, 1977.
Compliance with fuel economy standards is
determined on the basis of the production-
weighted average of the fuel economy ratings of all
the vehicles subject to a standard in a given model
year. The enforcement provisions of the Act ex-
tend this averaging concept to compliance deter-
minations for different model years. Civil penalties
for violating a standard applicable to a class of
light trucks in a model year are assessed at the rate
of five dollars per vehicle for each tenth of a mile-
per-gallon by which the average fuel economy of a
manufacturer's vehicles subject to the standard
falls short of that standard. Monetary credits for
exceeding a standard are earned at the same rate.
These credits may be applied to offset civil
penalties which are assessed either in the
immediately preceding or following model year.
See section 508 of the Act.
A key limitation with respect to the carrying
backward or forward of credits is that "any credit
. . . may only be applied to automobiles of the same
class for which the credit was earned." See Con-
ference Report on the Act, H.R. Rep. No. 94-700,
94th cong., 1st Sess. 159 (1975), and section
PART 533-3
508(aX3) of the Act. It appears that this require-
ment is intended to prevent manufacturers from
defeating the purpose of a classification system by
applymg credits earned for trucks in one class
against penalties for violating the standard in
another class; rather, each class of trucks is ex-
pected to comply with standards (at least on
average over a period of years) or be penalized.
However, the requirements of section 508, as
elaborated in the Conference Report, could be read
to prohibit the manufacturers from using earned
credits simply because the agency decides to
change the boundaries of existing classes.
Therefore, the agency sought comment on how the
requirement that credits be transferred only
within classes should be applied where the agency
changed truck classifications, as it did between
1979 and 1980. See the agency's notice of proposed
rulemaking on the 1980-81 light truck fuel
economy standards, 42 FR 63194, December 15,
1977.
Only the Center for Auto Safety and Ford Motor
Company commented on the issue in response to
the agency's request. The Center for Auto Safety
argued that the requirement in the Act that credits
must be applied only within a class is absolute, and
only when a manufacturer's product offerings
happen to coincide with the agency's new and old
classes, so that the classes are in effect identical,
could credits be transferred. Ford, on the other
hand, argued that credits earned for vehicles in
one class should be applicable to penalties in any
class (in the prior or subsequent year) which
overlaps with the former class. American Motors
Corporation provided comments on the issue after
the completion of the 1980-81 rulemaking. That
company suggested that the 1979 "general utility
vehicle" class and the 1980 four wheel drive class
be treated as identical for purposes of applying
credits; the same would be true for the 1979
standard for "all other" trucks and the 1980 two-
wheel drive standard. American Motors proposed
that credits be transferable only within these pairs
of standards.
The agency interprets section 508 of the Act to
require as much commonality as possible between
classes in transferring credits, but not absolute
identity. The intent of the Act is clearly to grant
credits for "over achievement" in a particular
model year by a manufacturer, and it would
frustrate that intent if there were to be a forfeiture
of credits when NHTSA decides to change the
scope of classes.
In transferring credits earned in the 1979-80
model years, the agency will attempt to assure that
those credits are applied to offset civil penalties on
the same types of vehicles as those which
generated the credits. This result will be pursued by
pro-rating the earned credits according to the
number of vehicles in the credit-earning class which
would fall in the class subject to a civil penalty in the
prior or subsequent year.
For example, in applying 1979 credits to 1980,
credits earned by four-wheel drive general utility
vehicles in 1979 would be applicable to any
penalties assessed against domestic four-wheel
drive light trucks or captive import four-wheel
drive light trucks in 1980, with the amount
applicable to each 1980 four-wheel drive class to be
determined based on the portion of the 1979 utility
vehicles which is captive imports and the portion which is
domestic. If all 1979 utility vehicles were domestic,
1979 credits for that class of light truck would be
applicable only to domestic four-wheel drive light
trucks in 1980.
Similarly, in applying 1980 credits to 1979, credits
earned by 1980 four-wheel drive captive import
trucks would be divided according to the proportion
of those trucks which meet the definition of 4-wheel
drive general utility vehicle and credits would be
assigned on a pro-rata basis to the two 1979 truck
classes, if either 1979 standard were violated. If the
manufacturer elected to comply with the single,
combined 1979 standard, then all credits earned by
1980 trucks would be applicable to 1979 civil
penalties. These assignments of credits would be
made without regard to the gross vehicle weight
ratings of affected vehicles, since none of the
affected truck classifications depend on GVWR.
Issued on November 1, 1979.
Frank Berndt
Chief Counsel
44 F.R. 64943
November 8, 1979
PART 533-4
Notice of Interpretation
(Docl(et No. FE 79-01; Notice 1)
Summary: This notice announces the agency's
interpretation of the extent to which the law
permits, with respect to 1979 and 1980, monetary
credits earned by manufacturers of light trucks for
exceeding fuel economy standards in one year to
be applied to civil penalty liabilities for violating
those standards in the other year. This interpreta-
tion is being issued at the request of several
manufacturers to assist them in planning com-
pliance with light truck fuel economy standards.
For further information contact:
Mr. Theodore Bayler, National Highway
Traffic Safety Administration, 400 Seventh
Street, S.W., Washington, D.C. 20590, 202-
755-9384.
Supplementary information: Section 502(b) of the
Motor Vehicle Information and Cost Savings Act
("the Act"), 15 U.S.C. 2002(b), requires the
Secretary of Transportation to establish average
fuel economy standards for light trucks manufac-
tured in each model year beginning with 1979.
That provision also authorizes the Secretary to
establish separate fuel economy standards for dif-
ferent classes of light trucks. The Secretary used
this authority to establish separate 1979 standards
for "4-wheel general utility vehicles" with a gross
vehicle weight rating (GVWR) not greater than
6,000 lbs. and for "all other" light trucks in the
same GVWR range. Manufacturers were,
however, given the option of having all of their
6,000 lbs and under GVWR light trucks comply
with the more stringent standard for "all other"
light trucks, rather than complying separately with
the two standards.
Different classes were established by the agency
beginning with the 1980 model year. Separate
standards were established for two- and four-wheel
drive light trucks, and subclasses were established
within those classes for captive import (i.e., trucks
manufactured abroad and sold through a domestic
manufacturer's dealer network) and domestic light
trucks. A separate standard was also established
for "limited product line light trucks," i.e., those
produced by companies whose light trucks employ
exclusively engines which are not also used in
passenger cars. The change in the light truck
classification was made because of the
simultaneous change in the applicability of the fuel
economy standards to cover light trucks up to
8,500 pounds GVWR. The new classification
system reflects the makeup of the larger fleets
regulated in 1980 and the differences in the fuel
economy improvement potential of the principal
types of light trucks in that fleet. See discussion of
this classification system in 42 FR 63185-7,
December 15, 1977.
Compliance with fuel economy standards is
determined on the basis of the production-
weighted average of the fuel economy ratings of all
the vehicles subject to a standard in a given model
year. The enforcement provisions of the Act ex-
tend this averaging concept to compliance deter-
minations for different model years. Civil penalties
for violating a standard applicable to a class of
light trucks in a model year are assessed at the rate
of five dollars per vehicle for each tenth of a mile-
per-gallon by which the average fuel economy of a
manufacturer's vehicles subject to the standard
falls short of that standard. Monetary credits for
exceeding a standard are earned at the same rate.
These credits may be applied to offset civil
penalties which are assessed either in the
immediately preceding or following model year.
See section 508 of the Act.
A key limitation with respect to the carrying
backward or forward of credits is that "any credit
. . . may only be applied to automobiles of the same
class for which the credit was earned." See Con-
ference Report on the Act, H.R. Rep. No. 94-700,
94th cong., 1st Sess. 159 (1975), and section
I
PART 533-3
508(aX3) of the Act. It appears that this require-
ment is intended to prevent manufacturers from
defeating the purpose of a classification system by
applying credits earned for trucks in one class
against penalties for violating the standard in
another class; rather, each class of trucks is ex-
pected to comply with standards (at least on
average over a period of years) or be penalized.
However, the requirements of section 508, as
elaborated in the Conference Report, could be read
to prohibit the manufacturers from using earned
credits simply because the agency decides to
change the boundaries of existing classes.
Therefore, the agency sought comment on how the
requirement that credits be transferred only
within classes should be applied where the agency
changed truck classifications, as it did between
1979 and 1980. See the agency's notice of proposed
rulemaking on the 1980-81 light truck fuel
economy standards, 42 FR 63194, December 15,
1977.
Only the Center for Auto Safety and Ford Motor
Company commented on the issue in response to
the agency's request. The Center for Auto Safety
argued that the requirement in the Act that credits
must be applied only within a class is absolute, and
only when a manufacturer's product offerings
happen to coincide with the agency's new and old
classes, so that the classes are in effect identical,
could credits be transferred. Ford, on the other
hand, argued that credits earned for vehicles in
one class should be applicable to penalties in any
class (in the prior or subsequent year) which
overlaps with the former class. American Motors
Corporation provided comments on the issue after
the completion of the 1980-81 rulemaking. That
company suggested that the 1979 "general utility
vehicle" class and the 1980 four wheel drive class
be treated as identical for purposes of applying
credits; the same would be true for the 1979
standard for "all other" trucks and the 1980 two-
wheel drive standard. American Motors proposed
that credits be transferable only within these pairs
of standards.
The agency interprets section 508 of the Act to
require as much commonality as possible between
classes in transferring credits, but not absolute
identity. The intent of the Act is clearly to grant
credits for "over achievement" in a particular
model year by a manufacturer, and it would
frustrate that intent if there were to be a forfeiture
of credits when NHTSA decides to change the
scope of classes.
In transferring credits earned in the 1979-80
model years, the agency will attempt to assure that
those credits are applied to offset civil penalties on
the same types of vehicles as those which
generated the credits. This result will be pursued by
pro-rating the earned credits according to the
number of vehicles in the credit-earning class which
would fall in the class subject to a civil penalty in the
prior or subsequent year.
For example, in applying 1979 credits to 1980,
credits earned by four-wheel drive general utility
vehicles in 1979 would be applicable to any
penalties assessed against domestic four-wheel
drive light trucks or captive import four-wheel
drive light trucks in 1980, with the amount
applicable to each 1980 four-wheel drive class to be
determined based on the portion of the 1979 utility
vehicles which is captive imports and the portion which is
domestic. If all 1979 utility vehicles were domestic,
1979 credits for that class of light truck would be
applicable only to domestic four-wheel drive light
trucks in 1980.
Similarly, in applying 1980 credits to 1979, credits
earned by 1980 four-wheel drive captive import
trucks would be divided according to the proportion
of those trucks which meet the definition of 4-wheel
drive general utility vehicle and credits would be
assigned on a pro-rata basis to the two 1979 truck
classes, if either 1979 standard were violated. If the
manufacturer elected to comply with the single,
combined 1979 standard, then all credits earned by
1980 trucks would be applicable to 1979 civil
penalties. These assignments of credits would be
made without regard to the gross vehicle weight
ratings of affected vehicles, since none of the
affected truck classifications depend on GVWR.
Issued on November 1, 1979.
Frank Berndt
Chief Counsel
44 F.R. 64943
November 8, 1979
PART 533-4
[(■
PREAMBLE TO PART 535-TH REE-YEAR CARRY FORWARD
AND CARRYBACK FOR MANUFACTURERS OF LIGHT TRUCKS
(Docket No. FE 80-02; Notice 1)
ACTION: Final rule.
SUMMARY: This notice establishes regulations
governing the transfer between model years of
monetary credits earned by motor vehicle manu-
facturers for exceeding the average fuel economy
standards for light trucks. Manufacturers have
previously been able to apply credits to the year
immediately preceding and to the year immedi-
ately following the year in which they are earned.
Section 6(b) of the Automobile Fuel Efficiency Act
of 1980 amended section 502 of the Motor Vehicle
Information and Cost Savings Act to extend the
number of years over which manufacturers can
carry back or forward credits from one to three
years. These regulations are promulgated pur-
suant to the Efficiency Act's direction that im-
plementing regulations be issued not later than 60
days after the date of enactment. The provisions in
these regulations are in almost all respects iden-
tical to the provisions in the statute for passenger
automobile credits.
DATES: These regulations are effective upon
publication in the Federal Register.
FOR FURTHER INFORMATION CONTACT:
Mr. Edward Clancy, Office of Chief Counsel,
National Highway Traffic Safety
Administration, 400 Seventh Street, S.W.,
Washington, D.C. 20590 (202-426-2992)
SUPPLEMENTARY INFORMATION: Title V of the
Motor Vehicle Information and Cost Savings Act
establishes a program to improve automotive effi-
ciency and conserve energy. Under that title,
average (i.e., fleet) fuel economy standards are
established for passenger automobiles and for
light trucks. To discourage noncompliance with
the standards and encourage exceeding the
standards, the title provides a system of penalties
and credits. Penalties are assessed against manu-
facturers which fail to comply with applicable fuel
economy standards. The penalties are assessed at
a rate of $5 per vehicle for each tenth of a mile-per-
gallon by which the average fuel economy of a
manufacturer's vehicles subject to a standard falls
short of that standard. Monetary credits for ex-
ceeding the standards are earned at the same rate.
This rate may be increased to up to $10 per tenth
of a mile per gallon if the agency makes certain
findings about the existence of substantial energy
savings resulting from the change and the absence
of any resulting adverse impacts. See section
508(d) of the Act. Under the law as originally
enacted, credits earned in one year may be used to
offset civil penalties in the immediately prior year,
and, if excess credits remain, in the immediately
subsequent year.
The Automobile Fuel Efficiency Act of 1980,
signed into law on October 12, 1980, amended title
V to make several changes relating to the earning
and application of credits. One amendment in-
creased the number of years that credits may be
carried backward or forward to offset penalties
from one to three years. That and another amend-
ment provided that a manufacturer which fails to
meet a fuel economy standard in a particular year
will not be regarded as having engaged in unlawful
conduct or be subject to civil penalties under
either of two circumstances. The first circum-
stance occurs if the manufacturer had previously
earned sufficient credits to offset the penalty. Sec-
ond, a manufacturer could achieve the same result
if it submits to the agency an acceptable plan for
earning in the subsequent three years sufficient
credits to offset the penalty and if the manufac-
turer actually earns those credits.
While section 502 of the Act, as amended, sets
forth detailed provisions for the three-year carry-
back and carryforward of credits by passenger
PART 535-PRE 1
automobile manufacturers, that section simply
provides with respect to light trucks that credits
for light truck manufacturers are to be earned and
available to be taken into account "to the same ex-
tent and in the same manner" as provided for
passenger automobile manufacturers. Section
502(1)(2) requires that regulations governing light
truck credits be promulgated not later than 60
days after the enactment of the Efficiency Act.
Thus, the regulations must be issued by December
9, 1980.
With one exception discussed below, the provi-
sions in these regulations are essentially identical
to the provisions in the statute regarding
passenger automobile credits. As in the case of
passenger automobile credits, the light truck
credits are available first to be applied to the three
years immediately preceding the year in which
they are earned. Any residual amount of credits is
then available to be applied to the three model
years immediately following the year in which the
credits are earned. In any year in which a manufac-
turer believes that its average fuel economy will
not meet an applicable light truck fuel economy
standard, the manufacturer may submit a plan
demonstrating that it will earn sufficient credits in
the next three years which when taken into ac-
count would allow the manufacturer to meet that
standard. The NHTSA Administrator will approve
any such plan unless the Administrator finds that
it is unlikely that the plan will result in the
manufacturer's earning sufficient credits to allow
the manufacturer to meet the standard for the
model year involved.
The difference mentioned above between the
provisions for passenger automobile credits and
those for light truck credits arises from dif-
ferences in the way in which the statute treats
passenger automobiles and light trucks. Special
provision must be made for light truck credits
since light truck fuel economy standards may be
set for all light trucks together or for classes of
light trucks while class standards cannot be set for
passenger automobiles. Title V and its history pro-
vide that credits may not be applied across classes
of light trucks. That is, credits earned for one class
of light trucks may not be applied to offset
penalties incurred for another class of light trucks.
(See Conference Report on the Energy Policy and
Conservation Act, H.R. Rep. No. 94-700, 94th
Cong., 1st Sess. 159 (1975).) The prohibition against
cross-class application of credits was previously
discussed in a notice of interpretation published by
the agency on November 8, 1979 (44 FR 64943).
This notice also reaffirms the policy set forth in
the November 1979 notice of interpretation
regarding transfer of credits by a manufacturer
between a year in which the manufacturer com-
plies with a single fuel economy standard ap-
plicable to all light trucks and a year in which it
complies with several standards for different
classes of light trucks. After seeking comments on
the issue, the agency stated in its November 1979
notice that its policy would be to attempt to assure
that credits are applied to offset civil penalties on
the same types of light trucks as those which
generated the credits. The notice stated that
credits would be prorated according to the number
of light trucks in the credit-earning class which
would fall in the class subject to a civil penalty.
The several examples given in that notice to il-
lustrate the application of this procedure are still
appropriate. Additional examples are set forth
below to illustrate how this procedure will be ap-
plied in light of the manufacturers' choice in model
years 1983-85 to comply with either a single stand-
ard for all light trucks or with optional separate
standards for two-wheel drive (4x2) and four-wheel
drive (4x4) light trucks.
For model years 1980-82, the agency established
separate standards for 4x2 and 4x4 light trucks.
Manufacturers are required to comply with those
separate standards and do not have the choice of
complying with a single standard. For model years
1983-85, however, the agency established a single
combined standard for 4x2 and 4x4 light trucks,
while giving manufacturers the choice of comply-
ing with optional separate standards.
If a manufacturer elects to comply with the op-
tional separate standards for model year 1983, no
prorating will be necessary since the classes for
model years 1980-82 are identical to those in model
years 1983-85 (except for limited product line
manufacturers). Thus, credits earned by exceeding
the 4x2 standard for model year 1982 could be fully
applied against a failure to comply with the model
year 1983 standard for those vehicles.
If a manufacturer elects to comply with the
single, combined standard for 1983 and earns
credits by exceeding that standard, application of
those credits for failure to meet a standard in any
of model years 1980-82 would require prorating.
PART 535-PRE 2
PREAMBLE TO PART 535— THREE-YEAR CARRY FORWARD
AND CARRYBACK FOR MANUFACTURERS OF LIGHT TRUCKS
(Docket No. FE 8002; Notice 1)
ACTION: Final rule.
SUMMARY: This notice establishes regulations
governing the transfer between model years of
monetary credits earned by motor vehicle manu-
facturers for exceeding the average fuel economy
standards for light trucks. Manufacturers have
previously been able to apply credits to the year
immediately preceding and to the year immedi-
ately following the year in which they are earned.
Section 6(b) of the Automobile Fuel Efficiency Act
of 1980 amended section 502 of the Motor Vehicle
Information and Cost Savings Act to extend the
number of years over which manufacturers can
carry back or forward credits from one to three
years. These regulations are promulgated pur-
suant to the Efficiency Act's direction that im-
plementing regulations be issued not later than 60
days after the date of enactment. The provisions in
these regulations are in almost all respects iden-
tical to the provisions in the statute for passenger
automobile credits.
DATES: These regulations are effective upon
publication in the Federal Register.
FOR FURTHER INFORMATION CONTACT:
Mr. Edward Glancy, Office of Chief Counsel,
National Highway Traffic Safety
Administration, 400 Seventh Street, S.W.,
Washington. D.C. 20590 (202-426-2992)
SUPPLEMENTARY INFORMATION: Title V of the
Motor Vehicle Information and Cost Savings Act
establishes a program to improve automotive effi-
ciency and conserve energy. Under that title,
average (i.e., fleet) fuel economy standards are
established for passenger automobiles and for
light trucks. To discourage noncompliance with
the standards and encourage exceeding the
standards, the title provides a system of penalties
and credits. Penalties are assessed against manu-
facturers which fail to comply with applicable fuel
economy standards. The penalties are assessed at
a rate of $5 per vehicle for each tenth of a mile-per-
gallon by which the average fuel economy of a
manufacturer's vehicles subject to a standard falls
short of that standard. Monetary credits for ex-
ceeding the standards are earned at the same rate.
This rate may be increased to up to $10 per tenth
of a mile per gallon if the agency makes certain
findings about the existence of substantial energy
savings resulting from the change and the absence
of any resulting adverse impacts. See section
508(d) of the Act. Under the law as originally
enacted, credits earned in one year may be used to
offset civil penalties in the immediately prior year,
and, if excess credits remain, in the immediately
subsequent year.
The Automobile Fuel Efficiency Act of 1980,
signed into law on October 12, 1980, amended title
V to make several changes relating to the earning
and application of credits. One amendment in-
creased the number of years that credits may be
carried backward or forward to offset penalties
from one to three years. That and another amend-
ment provided that a manufacturer which fails to
meet a fuel economy standard in a particular year
will not be regarded as having engaged in unlawful
conduct or be subject to civil penalties under
either of two circumstances. The first circum-
stance occurs if the manufacturer had previously
earned sufficient credits to offset the penalty. Sec-
ond, a manufacturer could achieve the same result
if it submits to the agency an acceptable plan for
earning in the subsequent three years sufficient
credits to offset the penalty and if the manufac-
turer actually earns those credits.
While section 502 of the Act, as amended, sets
forth detailed provisions for the three-year carry-
back and carryforward of credits by passenger
PART 535-PRE 1
automobile manufacturers, that section simply
provides with respect to light trucks that credits
for light truck manufacturers are to be earned and
available to be taken into account "to the same ex-
tent and in the same manner" as provided for
passenger automobile manufacturers. Section
502(1)(2) requires that regulations governing light
truck credits be promulgated not later than 60
days after the enactment of the Efficiency Act.
Thus, the regulations must be issued by December
9, 1980.
With one exception discussed below, the provi-
sions in these regulations are essentially identical
to the provisions in the statute regarding
passenger automobile credits. As in the case of
passenger automobile credits, the light truck
credits are available first to be applied to the three
years immediately preceding the year in which
they are earned. Any residual amount of credits is
then available to be applied to the three model
years immediately following the year in which the
credits are earned. In any year in which a manufac-
turer believes that its average fuel economy will
not meet an applicable light truck fuel economy
standard, the manufacturer may submit a plan
demonstrating that it will earn sufficient credits in
the next three years which when taken into ac-
count would allow the manufacturer to meet that
standard. The NHTSA Administrator will approve
any such plan unless the Administrator finds that
it is unlikely that the plan will result in the
manufacturer's earning sufficient credits to allow
the manufacturer to meet the standard for the
model year involved.
The difference mentioned above between the
provisions for passenger automobile credits and
those for light truck credits arises from dif-
ferences in the way in which the statute treats
passenger automobiles and light trucks. Special
provision must be made for light truck credits
since light truck fuel economy standards may be
set for all light trucks together or for classes of
light trucks while class standards cannot be set for
passenger automobiles. Title V and its history pro-
vide that credits may not be applied across classes
of light trucks. That is, credits earned for one class
of light trucks may not be applied to offset
penalties incurred for another class of light trucks.
(See Conference Report on the Energy Policy and
Conservation Act, H.R. Rep. No. 94-700, 94th
Cong., 1st Sess. 159 (1975).) The prohibition against
cross-class application of credits was previously
discussed in a notice of interpretation published by
the agency on November 8, 1979 (44 FR 64943).
This notice also reaffirms the policy set forth in
the November 1979 notice of interpretation
regarding transfer of credits by a manufacturer
between a year in which the manufacturer com-
plies with a single fuel economy standard ap-
plicable to all light trucks and a year in which it
complies with several standards for different
classes of light trucks. After seeking comments on
the issue, the agency stated in its November 1979
notice that its policy would be to attempt to assure
that credits are applied to offset civil penalties on
the same types of light trucks as those which
generated the credits. The notice stated that
credits would be prorated according to the number
of light trucks in the credit-earning class which
would fall in the class subject to a civil penalty.
The several examples given in that notice to il-
lustrate the application of this procedure are still
appropriate. Additional examples are set forth
below to illustrate how this procedure will be ap-
plied in light of the manufacturers' choice in model
years 1983-85 to comply with either a single stand-
ard for all light trucks or with optional separate
standards for two-wheel drive (4x2) and four-wheel
drive (4x4) light trucks.
For model years 1980-82, the agency established
separate standards for 4x2 and 4x4 light trucks.
Manufacturers are required to comply with those
separate standards and do not have the choice of
complying with a single standard. For model years
1983-85, however, the agency established a single
combined standard for 4x2 and 4x4 light trucks,
while giving manufacturers the choice of comply-
ing with optional separate standards.
If a manufacturer elects to comply with the op-
tional separate standards for model year 1983, no
prorating will be necessary since the classes for
model years 1980-82 are identical to those in model
years 1983-85 (except for limited product line
manufacturers). Thus, credits earned by exceeding
the 4x2 standard for model year 1982 could be fully
applied against a failure to comply with the model
year 1983 standard for those vehicles.
If a manufacturer elects to comply with the
single, combined standard for 1983 and earns
credits by exceeding that standard, application of
those credits for failure to meet a standard in any
of model years 1980-82 would require prorating.
PART 535- PRE 2
The agency would prorate the model year 1983
credits according to the proportion of model year
1983 light trucks that are of the same type as the
class whose standard was not met. Thus, if the
manufacturer did not comply with the model year
1982 standard for 4x2 light trucks and 70 percent
of the model year 1983 light trucks were 4x2, then
70 percent of the credits earned in model year 1983
could be applied against the penalty for that non-
compliance.
Finally, if a manufacturer earns credits for ex-
ceeding any of the model year 1980-82 class stand-
ards and the manufacturer elects to comply with
the single, combined standard for 1983, all credits
earned by exceeding either or both of the separate
standards for model years 1980-82 would be ap-
plicable to penalties incurred in model year 1983.
This notice is being issued without notice and
comment for a variety of reasons. The requirement
that the regulations be issued by December 9
made it impracticable in the agency's judgment to
provide notice and opportunity for comment. The
agency also finds that making such provision is un-
necessary since the regulations are in almost all
respects identical to the statute. Finally, this rule
is exempted as an interpretative rule from the
statutory requirements for notice and comment.
This final rule is being made effective upon
publication in the Federal Register. The usual re-
quirement for a 30-day delay in the effective date
is not applicable as this is an interpretative rule.
In consideration of the foregoing, Part 535 is
added to 49 CFR Chapter V.
Issued on December 9, 1980.
Joan Claybrook
Administrator
45 FR 83233
December 18, 1980
PART 535-PRE 3-4
The agency would prorate the model year 1983
credits according to the proportion of model year
1983 light trucks that are of the same type as the
class whose standard was not met. Thus, if the
manufacturer did not comply with the model year
1982 standard for 4x2 light trucks and 70 percent
of the model year 1983 light trucks were 4x2, then
70 percent of the credits earned in model year 1983
could be applied against the penalty for that non-
compliance.
Finally, if a manufacturer earns credits for ex-
ceeding any of the model year 1980-82 class stand-
ards and the manufacturer elects to comply with
the single, combined standard for 1983, all credits
earned by exceeding either or both of the separate
standards for model years 1980-82 would be ap-
plicable to penalties incurred in model year 1983.
This notice is being issued without notice and
comment for a variety of reasons. The requirement
that the regulations be issued by December 9
made it impracticable in the agency's judgment to
provide notice and opportunity for comment. The
agency also finds that making such provision is un-
necessary since the regulations are in almost all
respects identical to the statute. Finally, this rule
is exempted as an interpretative rule from the
statutory requirements for notice and comment.
This final rule is being made effective upon
publication in the Federal Register. The usual re-
quirement for a 30-day delay in the effective date
is not applicable as this is an interpretative rule.
In consideration of the foregoing. Part 535 is
added to 49 CFR Chapter V.
Issued on December 9, 1980.
Joan Claybrook
Administrator
45 FR 83233
December 18, 1980
PART 535-PRE 3-4
I
PART 535— THREE-YEAR CARRYFORWARD AND CARRYBACK OF
CREDITS FOR LIGHT TRUCKS
Section
535.1 Scope.
535.2 Applicability.
535.3 Definitions.
535.4 3-year carryforward and carrybacl( of credits.
AUTHORITY: Sec. 9, Pub. L. 89-670, 80 Stat.
931 (49 U.S.C. 1657); Sec. 301, Pub. L. 94-163, 89
Stat. 901 (15 U.S.C. 2001); Sec. 6, Pub. L. 96-425,
Stat (15 U.S.C. 2002); delegation of
authority at 49 CFR 1.50.
§ 535.1 Scope.
This part establishes requirements for governing
3-year carryforward and carryback of credits for
manufacturers of light trucks.
§ 535.2 Applicability.
This part applies to manufacturers of light
trucks.
§ 535.3 Definitions.
(a) Statutory terms. The terms "average fuel
economy," "average fuel economy standard,"
"fuel economy," "manufacture," "manufacturer,"
and "model year" are used as defined in section
501 of the Act.
(b) Other terms. (1) "Act" means the Motor
Vehicle Information and Cost Savings Act, as
amended by Pub. L. 94-163 and 96-425.
(2) "Administrator" means the Administrator
of the National Highway Traffic Safety
Administration.
(3) The term "light truck" is used in accord-
ance vvith the determinations in Parts 523 and 533
of this chapter.
(4) The term "class of light trucks" is used in
accordance with the determinations in Part 533 of
this chapter.
§ 535.4 3-year carryforward and carrybacit of credits.
(a) For purposes of this part, credits under this
section shall be considered to be available to any
manufacturer upon the completion of the model
year which such credits are earned under para-
graph (b) unless under paragraph (c) the credits are
made available for use at a time prior to the model
year in which earned.
(b) Whenever the average fuel economy for a
class of light trucks manufactured by a manufac-
turer in a particular model year exceeds an appli-
cable average fuel economy standard established in
Part 533 of this chapter, such manufacturer shall be
entitled to credit, calculated under paragraph (c),
which—
(1) Shall be available to be taken into account
with respect to the average fuel economy for the
same class of light trucks of that manufacturer for
any of the 3 consecutive model years immediately
prior to the model year in which such manufacturer
exceeds such applicable average fuel economy
standard, and
(2) To the extent that such credit is not so taken
into account pursuant to paragraph (bXl) of this sec-
tion, shall be available to be taken into account with
respect to the average fuel economy standard.
(c)(1) At any time prior to the end of any model
year, a manufacturer which has reason to believe
that its average fuel economy for a class of light
trucks will be below such applicable standard for
the model year may submit a plan demonstrating
that such manufacturer will earn sufficient credits
under paragraph (b) within the next 3 model years
which when taken into account would allow the
manufacturer to meet that standard for the model
year involved.
(2) Such credits shall be available for the
model year involved subject to—
(i) the Administrator approving such plan;
and
(ii) the manufacturer earning credits in
accordance with such plan.
PART 535-1
(3) The Administrator approves any such plan
unless the Administrator finds that it is unlikely
that the plan will result in the manufacturer earning
sufficient credits to allow the manufacturer to meet
the standard for the model year involved.
(4) The Administrator provides notice to any
manufacturer in any case in which the average fuel
economy of that manufacturer is below the appli-
cable standard under Part 533 of this chapter, after
taking into account credits available under
paragraph (bXl), and affords the manufacturer a
reasonable period (of not less than 60 days) in which
to submit a plan under this paragraph.
(d) The amount of credit to which a manufacturer
is entitled under this section shall be equal to—
(1) the number of tenths of a mile per gallon by
which the average fuel economy for a class of light
trucks manufactured by such manufacturer in the
model year in which the credit is earned pursuant to
this section exceeds the applicable average fuel
economy standard established in Part 533 of this
Chapter, multiplied by
(2) the total number of light trucks in that class
manufactured by such manufacturer during such
model year.
(e) The Administrator takes credits into account
for any model year on the basis of the number of
tenths of a mile per gallon by which the manufac-
turer involved was below an applicable average fuel
economy standard for a class of light trucks for the
model year and the volume of that class of light
trucks manufactured that model year by the
manufacturer. Credits may not be applied between
classes of light trucks, except as determined by the
Administrator to account for changes made in the
definitions of classes between model years. Credits
once taken into account for any model year shall not
thereafter be available for any other model year.
Prior to taking any credit into account, the Ad-
ministrator provides the manufacturer involved
with written notice and reasonable opportunity to
comment thereon.
45 F.R. 83233
December 18, 1980
PART 535-2
(
PART 535— THREE-YEAR CARRYFORWARD AND CARRYBACK OF
CREDITS FOR LIGHT TRUCKS
Section
535.1 Scope.
535.2 Applicability.
535.3 Definitions.
535.4 3-year carryforward and carryback of credits.
AUTHORITY: Sec. 9, Pub. L. 89-670, 80 Stat.
931 (49 U.S.C. 1657); Sec. 301, Pub. L. 94-163, 89
Stat. 901 (15 U.S.C. 2001); Sec. 6, Pub. L. 96-425,
Stat (15 U.S.C. 2002); delegation of
authority at 49 CFR 1.50.
§ 535.1 Scope.
This part establishes requirements for governing
3-year carryforward and carryback of credits for
manufacturers of light trucks.
§ 535.2 Applicability.
This part applies to manufacturers of light
trucks.
§ 535.3 Definitions.
(a) Statutory terms. The terms "average fuel
economy," "average fuel economy standard,"
"fuel economy," "manufacture," "manufacturer,"
and "model year" are used as defined in section
501 of the Act.
(b) Other terms. (1) "Act" means the Motor
Vehicle Information and Cost Savings Act, as
amended by Pub. L. 94-163 and 96-425.
(2) "Administrator" means the Administrator
of the National Highway Traffic Safety
Administration.
(3) The term "light truck" is used in accord-
ance vvith the determinations in Parts 523 and 533
of this chapter.
(4) The term "class of light trucks" is used in
accordance with the determinations in Part 533 of
this chapter.
§ 535.4 3-year carryforward and carryback of credits.
(a) For purposes of this part, credits under this
section shall be considered to be available to any
manufacturer upon the completion of the model
year which such credits are earned under para-
graph (b) unless under paragraph (c) the credits are
made available for use at a time prior to the model
year in which earned.
(b) Whenever the average fuel economy for a
class of light trucks manufactured by a manufac-
turer in a particular model year exceeds an appli-
cable average fuel economy standard established in
Part 533 of this chapter, such manufacturer shall be
entitled to credit, calculated under paragraph (c),
which—
(1) Shall be available to be taken into account
with respect to the average fuel economy for the
same class of light trucks of that manufacturer for
any of the 3 consecutive model years immediately
prior to the model year in which such manufacturer
exceeds such applicable average fuel economy
standard, and
(2) To the extent that such credit is not so taken
into account pursuant to paragraph (bXl) of this sec-
tion, shall be available to be taken into account with
respect to the average fuel economy standard.
(c)(1) At any time prior to the end of any model
year, a manufacturer which has reason to believe
that its average fuel economy for a class of light
trucks will be below such applicable standard for
the model year may submit a plan demonstrating
that such manufacturer will earn sufficient credits
under paragraph (b) within the next 3 model years
which when taken into account would allow the
manufacturer to meet that standard for the model
year involved.
(2) Such credits shall be available for the
model year involved subject to—
(i) the Administrator approving such plan;
and
(ii) the manufacturer earning credits in
accordance with such plan.
PART 535-1
(3) The Administrator approves any sucii plan
unless the Administrator finds that it is unlikely
that the plan will result in the manufacturer earning
sufficient credits to allow the manufacturer to meet
the standard for the model year involved.
(4) The Administrator provides notice to any
manufacturer in any case in which the average fuel
economy of that manufacturer is below the appli-
cable standard under Part 533 of this chapter, after
taking into account credits available under
paragraph (bXl), and affords the manufacturer a
reasonable period (of not less than 60 days) in which
to submit a plan under this paragraph.
(d) The amount of credit to which a manufacturer
is entitled under this section shall be equal to—
(1) the number of tenths of a mile per gallon by
which the average fuel economy for a class of light
trucks manufactured by such manufacturer in the
model year in which the credit is earned pursuant to
this section exceeds the applicable average fuel
economy standard established in Part 533 of this
Chapter, multiplied by
(2) the total number of light trucks in that class
manufactured by such manufacturer during such
model year.
(e) The Administrator takes credits into account
for any model year on the basis of the number of
tenths of a mile per gallon by which the manufac-
turer involved was below an applicable average fuel
economy standard for a class of light trucks for the
model year and the volume of that class of light
trucks manufactured that model year by the
manufacturer. Credits may not be applied between
classes of light trucks, except as determined by the
Administrator to account for changes made in the
definitions of classes between model years. Credits
once taken into account for any model year shall not
thereafter be available for any other model year.
Prior to taking any credit into account, the Ad-
ministrator provides the manufacturer involved
with written notice and reasonable opportunity to
comment thereon.
45 F.R. 83233
December 18, 1980
PART 535-2
Effective: December 12, 1977
PREAMBLE TO PART 537— AUTOMOTIVE FUEL ECONOMY REPORTS
(Docket No. FE 77-03; Notice 2)
This rule establishes the format and content
requirements for semiannual reports on fuel econ-
omy to be submitted to the National Highway
Traffic Safety Administration by automobile
manufacturers. Section .50.") of the Motor Vehicle
Information and Cost Savings Act requires manu-
facturers to submit semiannual reports on whether
and how they will comply with applicable aver-
age fuel economy standards and requires the
Secretary of Transportation to promulgate rules
governing those reports. Section .505 also author-
izes the Secretary to require such reports as are
necessary to enable him to implement the fuel
economy provisions of the Act. This rule is in-
tended primarily to satisfy the requirement for
semiannual compliance reports. The reports are
also necessary to enable the agency to prepare
certain aspects of a statutorily required annual
report to Congress regarding tlie fuel economy
standards.
Effective date : December 12, 1977.
For further information contact:
Steve Kratzke
Office of Chief Counsel
National Highway Traffic Safety
Administration
Washington, D.C. 20590
202-426-2992
Supplementary information :
Background information.
The National Highway Traffic Safety Admin-
istration (NHTSA) is establishing the format
and content requirements for the semiannual
automotive fuel economy reports to be submitted
by all manufacturers of automobiles beginning
with the 1978 model year. The reciuirements for
these reports will appear in a new Part 537,
added to NHTSA regulations in Title 49 of the
Code of Federal Regulations by this action. This
rule is issued pursuant to section 505(a) and (c)
of Title V of the Motor Vehicle Information and
Cost Savings Act, as amended ("the Act").
Authority to implement Title V was delegated
by the Secretary of Transportation to the Ad-
ministrator of NHTSA in a notice published on
June 22, 1976, 41 FR 25015.
This final rule was preceded by a notice of
proposed rulemaking ("NPRM") published April
11, 1977, at 42 FR 18867. The proposed rule
would have required the manufacturers to report
information on their automobiles produced in the
current model year and on their automobiles that
the manufacturers plan to produce in future
model years, i.e., the five model years following
the current model year. Most of the current
model year information was intended to meet the
requirement in section 505(a) for the manufac-
turers to submit semiannual compliance reports
to the agency. The future model year data were
intended to be used by the NHTSA primarily in
establishing and amending future average fuel
economy standards to meet the urgent national
need for enei'gy conservation and secondarily in
evaluating future fuel economy standards for the
purposes of preparing the annual reviews which
section 502(a) (2) of the Act requires to be sub-
mitted to Congress. These data would offset the
incompleteness of the manufacturers' voluntary
submissions to the agency. A typical shortcoming
is that the manufacturers tend to discuss their
plans instead of their capabilities.
All comments to the NPRM were considered in
developing this final rule. The major issues
whicii have been raised, and their resolution, are
described in the following discussion.
PART 537— PRE 1
Effective: December 12, 1977
Su?nmary of major differences behveen the
])ropose<l and fnal ndes.
The portion of the proposed rules adopted by
this notice is ahnost unchanged except for clari-
fying and narrowing changes. The major dif-
ferences between the proposed and final rules are
stated below.
(1) Tiie 1978 pre-model year report is required
to contain only the following information relating
to passenger automobiles: the manufacturer's
projected average fuel economy and views on the
representativeness of the projection; model type
fuel economy information; certain vehicle con-
figuration technical information; and a general
discussion of the manufacturer's marketing
measures.
(2) The final rule does not adopt the proposed
requirements for submitting current model year
information regarding vehicle acceleration
graphs, reduction of total drive ratio, impact of
other Federal standards on fuel economy, impacts
of efforts to comply with average fuel economy
standards on automobile performance, material
composition, additional compliance efforts, costs,
gross income and market share, and engine sys-
tem combinations and fuel systems.
(3) The final rule does not adopt the proposed
requirements for submitting future model year
information. Under those requirements, the
manufacturer would have submitted information
regarding projected average fuel economy, model
type fuel economy and technological information,
current fuel economy technology, future fuel
economy technology, automobile technology and
sales mix changes, weight reduction, reduction of
total drive ratio, technological differences between
passenger and nonpassenger automobiles, market-
ing measures, additional compliance efforts, im-
pact of other Federal automobile standards on
fuel economy, impacts of efforts to comply with
average fuel economy standards on automobile
performance, availability of capital, manufactur-
ing costs, shifts in consumer demand, and gross
income and market share.
(4) Supplementary reports are required only
from manufacturers which previously reported
in a semiannual report that they would comply
witli the applicable average fuel economy stand-
ards and then find that they will fail to comply.
As proposed, the nile also required supplemen-
tary reports to be filed by manufacturers which
previously reported that they would not comply
with the standards and then find that the extent
of their noncompliance will be greater than that
reported and by manufacturers whose average
fuel economy was just slightly above the stand-
ards and declining.
(5) The reporting responsibility for multistage
automobiles has been assigned exclusively to the
incomplete automobile manufacturers. The
NPRM had proposed that the incomplete auto-
mobile manufacturer would always be required
to report on its incomplete automobiles. It
would have also required a report to be filed by
an intermediate or final-stage manufacturer that
exceeded certain maximum specifications for
those multistage automobiles.
Scope and purpose of the reports.
Section 505(a) of the Act provides as follows:
(1) Each manufacturer shall submit a re-
port to the Secretary during the 30-day
period preceding the beginning of each
model year after model year 1977, and dur-
ing the 30-day period beginning on the 180th
day of each model year. Each such report
shall contain (A) a statement as to whether
such manufacturer will comply with average
fuel economy standards under section 502
applicable to the model year for which such
report is made; (B) a plan which describes
the steps the manufacturer has taken or in-
tends to take in order to comply with such
standards; and (C) such other information
as the Secretary may require.
(2) Whenever a manufacturer determines
that a plan submitted under paragraph (1)
• which he stated was sufficient to insure com-
pliance with applicable average fuel economy
standards is not sufficient to insure such com-
pliance, he shall submit a report to the
Secretary containing a revised plan which
specifies any additional measures which such
manufacturer intends to take in order to
comply with such standards, and a statement
as to whether such revised plan is sufficient
to insure such compliance.
PART 537— PRE 2
!■!
EfFecHve: December 12, 1977
PREAMBLE TO PART 537— AUTOMOTIVE FUEL ECONOMY REPORTS
(Docket No. FE 77-03; Notice 2)
This rule establishes the format and content
requirements for semiannual reports on fuel econ-
omy to be submitted to the National Highway
Traffic Safety Administration by automobile
uianufacturers. Section 505 of the Motor Vehicle
Information and Cost Savings Act requires manu-
facturers to submit semiannual reports on whether
and how they will comply with applicable aver-
age fuel economy standards and requires the
Secretary of Transportation to promulgate rules
governing those reports. Section 505 also author-
izes the Secretary to re(iuire such reports as are
necessary to enable him to implement the fuel
economy provisions of the Act. This rule is in-
tended primarily to satisfy the requirement for
semiannual compliance reports. The reports are
also necessary to enable the agency to prepare
certain aspects of a statutorily required annual
report to Congress regarding the fuel economy
standards.
Effective date: December 12, 1977.
For further information contact :
Steve Kratzke
Office of Chief Counsel
National Highway Traffic Safety
Administration
Washington, D.C. 20590
202-426-2992
Supplementary information :
Background hifoi-mation.
The National Highway Traffic Safety Admin-
istration (NHTSA) is establishing the format
and content re(iuirements for the semiannual
automotive fuel economy reports to be submitted
l)y all manufacturers of automobiles beginning
with tlie 1078 model year. The requirements for
these reports will appear in a new Part 537,
added to NHTSA regulations in Title 49 of the
Code of Federal Regulations by this action. This
rule is issued pursuant to section 505(a) and (c)
of Title V of the Motor Vehicle Information and
Cost Savings Act, as amended ("the Act").
Authority to implement Title V was delegated
by the Secretary of Transportation to the Ad-
ministrator of NHTSA in a notice published on
June 22, 1976, 41 FR 25015.
This final rule was preceded by a notice of
proposed rulemaking ("NPRM") published April
11, 1977, at 42 FR 18867. The proposed rule
would have required the manufacturers to report
information on their automobiles produced in the
current model year and on their automobiles that
the manufacturers plan to produce in future
model years, i.e., the five model years following
the current model year. Most of the current
model year information was intended to meet the
requirement in section 505(a) for the manufac-
turers to submit semiannual compliance reports
to the agency. The future model year data were
intended to be used by the NHTSA primarily in
establishing and amending future average fuel
economy standards to meet the urgent national
need for energy conservation and secondarily in
evaluating future fuel economy standards for the
purposes of preparing the annual reviews which
section 502(a) (2) of the Act requires to be sub-
mitted to Congress. These data would offset the
incompleteness of the manufacturers' voluntary
submissions to the agency. A typical shortcoming
is that the manufacturers tend to discuss their
plans instead of their capabilities.
All connnents to the NPRM were considered in
developing this final rule. The major issues
which have been raised, and their resolution, are
described in the following discussion.
PART 537— PRE 1
Effective: December 12, 1977
Summai'y of major differences between the
•proposed and final niles.
The portion of the proposed rules adopted by
this notice is ahnost unchanged except for clari-
fying anil narrowing changes. The major dif-
ferences between the proposed and final rules are
stated below.
(1) Tlie 1978 pre-inodel year report is required
to contain only the following information relating
to passenger automobiles: the manufacturer's
projected average fuel economy and views on the
representativeness of the projection; model type
fuel economy information; certain vehicle con-
figuration technical information; and a general
discussion of the manufacturer's marketing
measures.
(2) The final rule does not adopt the proposed
requirements for submitting current model year
information regarding vehicle acceleration
graphs, reduction of total drive ratio, impact of
other Federal standards on fuel economy, impacts
of efforts to comply with average fuel economy
standards on automobile performance, material
composition, additional compliance efforts, costs,
gross income and market share, and engine sys-
tem combinations and fuel systems.
(3) The final rule does not adopt the proposed
requirements for submitting future model year
information. Under those requirements, the
manufacturer would have submitted information
regarding projected average fuel economy, model
type fuel economy and technological information,
current fuel economy technology, future fuel
economy technology, automobile technology and
sales mix changes, weight reduction, reduction of
total drive ratio, technological differences between
passenger and nonpassenger automobiles, market-
ing measures, additional compliance efforts, im-
pact of other Federal automobile standards on
fuel economy, impacts of efforts to comply with
average fuel economy standards on automobile
performance, availability of capital, manufactur-
ing costs, shifts in consumer demand, and gross
income and market share.
(4) Supplementary reports are required only
from manufacturers which previously reported
in a semiannual report that they would comply
witii the applicable average fuel economy stand-
ards and then find that they will fail to comply.
As proposed, the rule also required supplemen-
tary reports to be filed by manufacturers which
previously reported that they would not comply
with the standards and then find tliat the extent
of their noncompliance will be greater than that
reported and by manufacturers whose average
fuel economy was just slightly above the stand-
ards and declining.
(5) The reporting responsibility for multistage
automobiles has been assigned exclusively to the
incomplete automobile manufacturers. The
NPRM had proposed that the incomplete auto-
mobile manufacturer would always be required
to report on its incomplete automobiles. It
would have also required a report to be filed by
an intermediate or final-stage manufacturer that
exceeded certain maximum specifications for
those multistage automobiles.
Scope and purpose of the reports.
Section 505(a) of the Act provides as follows:
(1) Each manufacturer shall submit a re-
port to the Secretary during the 30-day
period preceding the beginning of each
model year after model year 1977, and dur-
ing the 30-day period beginning on the 180th
day of each model year. Each such report
shall contain (A) a statement as to whether
such manufacturer will comply with average
fuel economy standards under section 502
applicable to the model year for which such
report is made; (B) a plan which describes
the steps the manufacturer has taken or in-
tends to take in order to comply with such
standards; and (C) such other information
as the Secretary may require.
(2) Whenever a manufacturer determines
that a plan submitted under paragraph (1)
which he stated was sufficient to insure com-
pliance with applicable average fuel economy
standards is not sufficient to insure such com-
pliance, he shall submit a report to the
Secretary containing a revised plan which
specifies any additional measures which such
manufacturer intends to take in order to
comply with such standards, and a statement
as to whether such revised plan is sufficient
to insure such compliance.
PART 537— PRE 2
i
Efftcllva: D«c*mb*r 12, 1977
(3) The Secretary shall prescribe rules
setting forth the form and content of the
reports required under paragraphs (1) and
(2).
Section 505(c)(1) of the Act requires ever}'
manufacturer to establish and maintain such
records, make such reports, conduct such tests,
and provide such items and information as the
NHTSA may, by rule, reasonably require to
carry out its duties imder Title V. Section
r)02(a)(2) requires the NHTSA to transmit to
the Congress not later than January 15 of each
year a review of the average fuel economy stand-
ards; section r)02(a)(3), (b) and (c) requires the
NHTSA to establish average fuel economy stand-
ards; and section 502(a)(4) and (f) gives the
NHTSA the authority to amend average fuel
economy standards.
Several commenters urged that the rule require
reports with a limited scope and purpose. Volks-
wagen of America, Inc. ("Volkswagen"), com-
mented that any manufacturer projecting
compliance with the currently applicable average
fuel economy standards should be exempted from
providing any business or technological data in
its reports. Chrysler Corporation ("Chrysler")
and Ford Motor Company ("Ford") made essen-
tially the same point, commenting that a manu-
facturer projecting compliance with the average
fuel economy standards should only be required
to report its projected average fuel economy and
the fuel economy levels and projected production
level for each model type.
These suggestions are inconsistent with the
plain meaning of the language of section 505(a).
Apparently, Chrysler and Ford believe that the
fuel economy values and projected production
levels for each base level constitute the manufac-
turer's plans for achieving compliance. The
agency disagrees. The fuel economy infonuation
and projected production levels describe only the
result the manufacturer liopes to achieve. Section
505(a) (1) (B) specifically requires that tiie report
also include a description of the steps that the
manufacturer has taken or will take to achieve
tiiat result. The "steps" that can be taken to
impi-ove a\erage fuel economy and acliieve com-
pliance generally fall into two categories: (1)
lechnologj- iiuproxements and (2) shifts in tiie
mix of models and options offered for sale. The
latter category includes the marketing measures
undertaken to promote particular mix goals.
Further, the effective implementation of the
fuel economy program requires that these semi-
annual reports should also enable the Agency to
monitor the degree of effort being made by the
various manufacturers to improve their average
fuel economy. This information is necessary for
the agency and Congress to judge the sufficiency
of the standards and statutory enforcement
scheme, including the civil penalty formula, for
obtaining improvements in average fuel economy.
This information will also permit a comparison
of the approaches being taken by the manufac-
turers to improve average fuel economy.
Applicability.
Mr. Andrew Pickens commented that the re-
porting requirements should only apply to manu-
facturers producing vehicles that use petroleum-
based fuel.
This rule is applicable to only those manufac-
turers. Section 501(1) of the Act defines an
"automobile" as "any 4-wheeled vehicle propelled
by fuel . . ." Section 501(5) of the Act specifies:
The term "fuel" means gasoline and diesel
oil. The Secretary may, by rule, include any
other liquid fuel or any gaseous fuel within
the meaning of the term "fuel" if he deter-
mines that such inclusion is consistent with
the need of the Nation to conserve energy.
Since the NHTSA has not included any fuel
other than gasoline or diesel oil within the defi-
nition of fuel, no change is necessary in the pro-
posed applicability provision to accommodate
Mr. Pickens' concern.
Three low-volume manufacturers, Rolls Royce
Motors International ("Rolls Royce"), Avanti
Motor Corporation ("Avanti"), and Checker
Motors Corporation ("Checker"), all indicated
that, because of their limited staffs and resources,
and their small impact on industry average fuel
economy, their reports should be limited in scope.
A low-volume manufacturer is one that produces
fewer than 10,000 passenger automobiles world-
wide annually. See section 502(c) of the Act and
42 FR 38374, establishing 49 CFR 525. Only
Checker made specific suggestions. It suggested
that low-volume manufacturers not be required
to provide data on marketing measures or addi-
PART 537— PRE 3
Effective: December 12, 1977
tional compliance efforts, since low-volume manu-
factineis generally produce specialized vehicles
with a limited number of vehicle configurations.
This agency has no authority to apply selec-
tively the explicit reporting requirements of
section 505(a)(1)(A) and (B) ; that is, (A) a
statement whether that manufacturer will comply
with the applicable average fuel economy stand-
ards and (B) that manufacturer's plan describ-
ing the steps it has taken or will take to comply
with the standard. The statute expressly requires
each manufacturer to comply with those require-
ments. Based on appropriate distinctions be-
tween different groups of manufacturers, NHTSA
may selectively apply reporting requirements
adopted under the authority of section 505(a)
(1)(C) and (c).
As stated above, marketing measures are one of
the steps that the manufacturer can take to im-
prove its average fuel economy level. As such,
they are required by section 505(a) (1) (B) to be
described in each semiannual report filed under
section 505(a). The agency notes further that
the fewer configurations that a manufacturer has,
the simpler that reporting the manufacturer's
marketing plans will, in all likelihood, be.
The information on additional compliance ef-
forts and costs is not required to be included in
the reports of any manufacturer. Therefore,
there is no need to consider whether low volume
manufacturers should be afforded special treat-
ment in providing such information.
The NPEM proposed to allocate reporting re-
sponsibilities among multistage automobile manu-
lacturers depending upon which manufacturer of
a multistage automobile had become the manu-
facturer for standards compliance purposes under
Part 529. See 42 FR 38369, July 28, 1977, for
the text of Part 529. There are three types of
multistage automobile manufacturers. The in-
complete automobile manufacturer is the manu-
facturer that assembles the frame and chassis
structure, power train, steering system, suspension
system, and braking system. An intermediate
manufacturer is a manufacturer, other than the
incomplete automobile manufacturer or final-
stage manufacturer, which performs manufactur-
ing operations on an incomplete automobile. The
final-stage manufacturer is the manufacturer that
completes the production of the imiltistage auto-
mobile except for addition of readily attachable
components and minor finishing operations. Part
529 generally treats the incomplete automobile
manufacturer as the manufacturer of the nmlti-
stage automobile. However, in certain circum-
stances specified in Part 529, the intermediate or
final-stage manufacturer can become the manu-
facturer for purposes of certain Title V require-
ments.
The NPRM proposed that when an inter-
mediate or final-stage manufacturer became the
manufacturer of a multistage automobile for
standards compliance purposes, that manufac-
turer would shai'e the reporting responsibilities
with the incomplete automobile manufacturer.
It was proposed further that the report by the
intermediate or final-stage manufacturers be lim-
ited to the same information as low-volume manu-
facturers are required to provide. The reasoning
behind the latter proposal was that, compared to
the incomplete automobile manufacturer, the
intermediate or final-stage manufacturer would
have less knowledge about the specifications of
the technological aspects of the incomplete auto-
mobile that most significantly affect fuel economy.
Additionally, an intermediate or final-stage manu-
facturer would have a negligible engineering staff
because of the small size and less technical nature
of its manufacturing operation. Most of these
manufacturers are small enough to be low volume
manufacturers. Xo comments were received on
this subject.
Upon further reflection, the NHTSA has de-
termined that the reports filed by intermediate
and final-stage manufacturers would be of very
limited value to this agency. Exceeding the
specifications would typically cause the fuel econ-
omy data and technological information in their
I'eports to differ only slightly from the data and
information already submitted for these automo-
biles by the incomplete automobile manufacturers.
Further, the reports would cover a very small
number of automobiles, i.e., only those incomplete
automobiles for which the intermediate and final-
stage manufacturers had exceeded the maximimi
specifications. It is anticipated that these maxi-
mum specifications will very rarely be exceeded
by the intermediate and final-stage manufactur-
ers, since doing so would require these manufac-
turers to recertify the automobiles for compliance
PART 537— PRE 4
Effective: December 12, 1977
(3) The Secretary shall prescribe rules
setting forth the form and content of the
reports required under paragraphs (1) and
(2).
Section 505(c)(1) of the Act requires every
manufacturer to establish and maintain such
records, make such reports, conduct such tests,
and provide such items and information as the
NHTSA may, by rule, reasonably require to
carry out its diitics imder Title V. Section
r)02(a)(2) requires the XHTSA to transmit to
the Congress not later than January 15 of each
year a review of the average fuel economy stand-
ards; section r)02(a)(3), (b) and (c) requires the
NHTSA to establish average fuel economy stand-
ards; and section 502(a)(4) and (f) gives the
XHTSA the authority to amend average fuel
economy standards.
Several commenteis urged that the rule require
reports with a limited scope and purpose. Volks-
wagen of America, Inc. ("Volkswagen"), com-
mented that any manufacturer projecting
compliance with the currently applicable average
fuel economy standards should be exempted from
providing any business or technological data in
its reports. Chrysler Corporation ("Chrysler")
and Ford Motor Company ("Ford") made essen-
tially the same point, commenting that a manu-
facturer projecting compliance with the average
fuel economy standards should only be required
to report its projected average fuel economy and
the fuel economy levels and projected production
level for each model type.
These suggestions are inconsistent with the
plain meaning of the language of section 505(a).
Apparently, Chrysler and Ford believe that the
fuel economy values and projected production
levels for each base level constitute the manufac-
turer's plans for achieving compliance. The
agency disagrees. The fuel economy infonnation
and projected production levels de.scribe only the
result the manufacturer hopes to achieve. Section
505(a) (1) (B) specifically requires that the report
also include a description of the steps that the
manufacturer has taken or will take to acliieve
that result. The "steps" that can be taken to
improve average fuel economy and acliieve com-
pliance generally fall into two categories: (1)
technology impr()\einents and (2) shifts in the
mix of models and options offered for sale. The
latter category includes the marketing measures
undertaken to promote particular mix goals.
Further, the effective implementation of the
fuel economy program requires that these semi-
annual reports should also enable the Agency to
monitor the degree of effort being made by the
various manufacturers to improve their average
fuel economy. This information is necessary for
the agency and Congress to judge the sufficiency
of the standards and statutory enforcement
scheme, including the civil penalty formula, for
obtaining improvements in average fuel economy.
This information will also permit a comparison
of the approaches being taken by the manufac-
turers to improve average fuel economy.
Applicability.
Mr. Andrew Pickens commented that the re-
porting requirements should only apply to manu-
facturers producing vehicles that use petroleum-
based fuel.
This rule is applicable to only those manufac-
turers. Section 501(1) of the Act defines an
"automobile" as "any 4-wheeled vehicle propelled
by fuel . . ." Section 501(5) of the Act specifies:
The term "fuel" means gasoline and diesel
oil. The Secretary may, by rule, include any
other liquid fuel or any gaseous fUel within
the meaning of the term "fuel" if he deter-
mines that such inclusion is consistent with
the need of the Nation to conserve energy.
Since the XHTSA has not included any fuel
other than gasoline or diesel oil within the defi-
nition of fuel, no change is necessary in the pro-
posed applicability provision to accommodate
Mr. Pickens' concern.
Three low-volume manufacturers, Rolls Royce
Motors International ("Rolls Royce"), Avanti
Motor Corporation ("Avanti"), and Checker
Motors Corporation ("Checker"), all indicated
that, because of their limited staffs and resources,
and their small impact on industry average fuel
economy, their reports should be limited in scope.
A low-volume manufacturer is one that produces
fewer than 10,000 passenger automobiles world-
wide annually. See section 502(c) of the Act and
42 FR 38374, establishing 49 CFR 525. Only
Checker made specific suggestions. It suggested
that low-volume manufacturers not be required
to provide data on marketing measures or addi-
PART 537— PRE 3
EfFeclive: December 12, 1977
tional compliance efforts, since low-volume manu-
facturers f;:enerally produce specialized vehicles
with a limited number of vehicle configurations.
This agency lias no authority to apply selec-
tively the explicit reporting requirements of
section 505 (a) (1) (A) and (B) ; that is, (A) a
statement whether that nuinufacturer will comply
with the applicable average fuel economy stand-
ards and (B) that manufacturer's plan describ-
ing the steps it has taken or will take to comply
with the standard. The statute expressly requires
each manufacturer to comply with those require-
ments. Based on appropriate distinctions be-
tween different groups of manufacturers, NHTSA
may selectively apply reporting requirements
adopted under the authority of section 505(a)
(1)(C) and (c).
As stated above, marketing measures are one of
the steps that the manufacturer can take to im-
prove its average fuel economy level. As such,
they are required by section 505(a) (1) (B) to be
described in each semiannual report filed under
section 505(a). The agency notes further that
the fewer configurations that a manufacturer has,
the simpler that reporting the manufacturer's
marketing plans will, in all likelihood, be.
The information on additional compliance ef-
forts and costs is not required to be included in
the reports of any manufacturer. Therefore,
there is no need to consider whether low volume
manufacturers should be afforded special treat-
ment in providing such information.
The NPRM proposed to allocate reporting re-
snonsibilities among multistage automobile manu-
lacturers depending upon which manufacturer of
a multistage automobile had become the manu-
facturer for standards compliance purposes under
Part 529. See 42 FR 38369, July 28, 1977, for
the text of Part 529. There are three types of
multistage automobile manufacturers. The in-
complete automobile manufacturer is the nianu-
facturer that assembles the frame and chassis
.structure, power train, steering system, suspension
system, and braking system. An intermediate
manufacturer is a manufacturer, other than the
incomplete automobile manufacturer or final-
stage manufacturer, which performs manufactur-
ing operations on an incomplete automobile. The
linal-stage manufacturer is the manufacturer that
completes the production of the multistage auto-
mobile except for addition of readily attachable
components and minor finishing operations. Part
529 generally treats the incomplete automobile
manufacturer as the manufacturer of the nmlti-
stage automobile. However, in certain circum-
stances specified in Part 529. the intermediate or
final-stage manufacturer can become the manu-
facturer for purposes of certain Title V require-
ments.
The NPRM proposed that when an inter-
mediate or final-stage manufacturer became the
manufacturer of a multistage automobile for
standards compliance purposes, that manufac-
turer would share the reporting responsibilities
with the incomplete automobile manufacturer.
It was proposed further that the report by the
intermediate or final-stage manufacturers be lim-
ited to the same information as low-volume manu-
facturers are required to provide. The reasoning
behind the latter proposal was that, compared to
the incomplete automobile manufacturer, the
intermediate or final-stage manufacturer would
have less knowledge about the specifications of
the technological aspects of the incomplete auto-
mobile that most significantly affect fuel economy.
Additionally, an intermediate or final-stage manu-
facturer would have a negligible engineering staff
because of the small size and less technical nature
of its manufacturing operation. Most of these
manufacturers are small enough to be low volume
manufacturers. No comments were received on
this subject.
Upon further reflection, the NHTSA has de-
termined that the reports filed by intermediate
and final-stage manufacturers would be of very
limited value to this agency. Exceeding the
specifications would typically cause the fuel econ-
omy data and technological information in their
I'eports to differ only slightly from the data and
information already submitted for these automo-
biles by the incomplete automobile manufacturers.
Further, the reports would cover a very small
number of automobiles, i.e., only those incomplete
automobiles for which the intermediate and final-
stage manufacturers had exceeded the maximum
specifications. It is anticipated that these maxi-
mum specifications will very rarely be exceeded
by the intermediate and final-stage manufactur-
ers, since doing so would require these manufac-
turers to recertify the automobiles for compliance
PART 537— PRE 4
Effective: December 12, 1977
witli tlic C'lean Air Act and icdetennine tlie fuel
economy of tlie aiitoniohiles. Tliese inannfactur-
ei-s would also he retiuired to determine whether
rxeeediiifr tiie weight maximum afl'ected the auto-
mohiles" compliance with the Federal Motor
Veiiicle Safety Standards. This testing would
he a relatively expensive process, particularly
considerinj:; that these manufacturers would not
have their own testin<r facilities available.
The ajrency is also mindful that the burden
that would be imposed on the intermediate and
final-staj^re manufacturers if they were required
to prepare these reports would be greater relative
to that imposed on lar<rer manufacturers. As
stated above, these manufacturers have a minimal
en<rineerin<r staff, if any.
After a reconsideration of all these factors, the
NIITSA has determined under section 501(9) of
tiie Act and Part r)2!) that the incomplete auto-
mobile manufacturer of a multistajje automobile
will always be considered its manufacturer for
purposes of the Act's reportinjr requirements.
This rule has been chan<re(l to provide that inter-
mediate and final-stajie manufacturers are not
required to file reports.
The a<rency's re-examination of the implemen-
tation of this rule by multistage manufacturers
lias also resulted in several changes in the rule to
facilitate the reports by the incomplete automo-
bile manufacturer. The data in § 537.7(c) is
generally required to be i)rovided by model type.
IIowe\er, the incomplete automobile manufac-
lurer does not always know what the model type
of the multistage automobile will be when com-
pleted. Accordingly, the incomplete automobile
manufacturer is recjuired to provide the fuel
economy information in § 537.7(c) and (e) by
base level, rather than by model type. Further,
the technical information in § 537.7(c) (4)
(xviii)-(xxii) and (c)(5) requires knowledge of
how tlie automobile will be completed, and, there-
fore, is not re(|uired to be pro\ided by incomplete
automobile manufacturers with respect to multi-
stage automobiles.
Timing of the reports.
Section 505(a) (1) of the Act specifies the time
periods during which semiannual reports for a
model year must lie submitted. The first report,
called tiie "prc-inodel year report" in this rule.
must be submitted during the 30-day period im-
mediately preceding the model year. The second
report, the "mid-model year report," must be
submitted during the 30-day period beginning on
the 180th day of the model year.
Ford commented that the EPA has designated
the date on which comparable class fuel economy
ranges become available as the beginning of the
model year in a notice published November 10,
1976, 4i FR 49752, at 49756. Ford did not clearly
indicate the basis for its belief that that notice,
which dealt with fuel economy labeling require-
ments, contained any designation of the model
year. Nowhere in the preamble to that notice
did the EPA give any indication that it was
making a determination of the model year.
Further, the language of the rule itself shows
that the EPA was not making any determination
of the model year. 40 CFR § 600.314(d) (1)
reads: "The range will be made available on a
date that coincides as closely as possible to the
date of the general model year introduction for
the industry." Rather than indicating that the
beginning of the model year occurs on the date
on which the EPA announces the comparable
class ranges, this language indicates that the EPA
recognized that the beginning of the model year
is not dependent on and does not coincide with
the announcement of the ranges. The EPA
merely stated that the two dates should occur as
close together as possible. After a review of
EPA's November 10 notice, this agency has con-
cluded that nowhere therein did the EPA make
any determination of the model yeai'. The EPA
concurs with that conclusion.
Volvo of America, Inc. ("Volvo"), stated that
its interpretation of the term "model year" as
applied to foreign manufacturers was that the
model year begins on the date when the first
vehicle of the current model year is publicly
offered for sale in the United States.
Section 501(12) of the Act defines "model
year" as a manufacturer's annual production
period which includes January 1 of the calendar
year, and gives the EPA Administrator the
authority to determine the manufacturer's an-
nual production period. If a manufacturer has
no annual production period or if the EPA does
not determine wiien that period occurs, the manu-
facturer's model year is the calendar year.
PART 537— PRE 5
Effective: December 12, 1977
To date, no determination of the "model year"
has been made specifically for the purposes of
section 505 (a). In the rule specifying the 1978
model year fuel economy testing and calculation
procedures (41 FR 38674, September 10, 1976).
the EPA stated that the 1978 model year for
domestic manufacturers would begin no earlier
than August, 1977. This determination, however,
was made without regard to section 505(a).
Rather, it was made to provide all parties with
12 months advance notice of the applicable test-
ing and calculation procedures, in accordance
with the provisions of section 503(d) of the Act.
Based on its consultation with the EPA, this
agency has come to the following conclusions in
which EPA concurs. Since the EPA has not yet
determined any annual production period for do-
mestic or foreign automobile manufacturers ap-
plicable to section 505(a), the manufacturers have
no annual production period for the purposes of
section 505(a). Accordingly, under the terms of
section 501(12), the section 505(a) model year
for these manufacturers is the calendar year.
Therefore, the pre-model year reports for 1978
must be submitted to this agency not earlier than
December 2, 1977, and not later than December
31, 1977.
The use of the calendar year as the model year
for the manufacturers puts both commenting
manufacturers in a position at least as favorable
as the ones they had requested. Ford will now
have a period in which to prepare its 1978 pre-
model year report that is several months longer
than the one it would have had if its comment
had been adopted. Since Volvo has generally
introduced its new automobiles on January 1, this
rule will, in effect, treat Volvo as it had requested.
The EPA has indicated to this agency that it
will take appropriate action under Title V re-
garding the definition of model year to be used
with respect to the submission of reports for the
1979 and subsequent model years.
This agency recognizes that some confusion
may result from the use of one definition of model
year to determine when the reports must be sub-
mitted and another definition to determine which
automobiles are to be discussed in the reports. It
should be emphasized that this determination of
the model year is applicable only to the timing
provisions of section 505(a) of the Act. The
determination is made only to inform the manu-
facturers and the public precisely when these
semiannual fuel economy reports must be sub-
mitted.
This determination does not mean that the
manufacturers' reports must contain information
on every automobile produced between January 1
and December 31 of each year. Section 505
specifies that the reports must indicate whether
the manufacturer will comply with the average
fuel economy standards applicable under section
502 to the model year for which the report is
made, and the manufacturer's plan for achieving
that compliance. Thus, the reports are to contain
information only on automobiles produced during
that model year. To determine the beginning of
the model year to which a standard applies, the
manufacturers must look to the relevant EPA
determination of the model year for the purposes
of section 502. Under the relevant EPA deter-
mination, the 1978 model year for the domestic
manufacturers will run from approximately
August 1977 to July 1978.
Based on its assumption that the pre-model ■
year reports might be due in early September, V
Ford expressed concern that the NPRM would
require it to submit one preliminary fuel economy
average in its pre-model year report to the
NHTSA and a different, second preliminary
average to the EPA a short time later. The
EPA currently requires all manufacturers to
submit a preliminary average fuel economy cal-
culation to that agency not later than 10 days
after the manufacturer's public introduction date.
40 CFR 600.506-78. Ford stated that the sub-
mission of two different averages would be bur-
densome and that the first average would be less
representative than the second. In the case of
domestic manufacturers, the problem of being
required to submit two different preliminary
averages is obviated by the discussion above re- j
garding the beginning of a model year for re-
porting purposes. Instead of having to submit '
their pre-model year reports perhaps several
weeks before the submission of their preliminary
average to the EPA, the domestic manufacturers
will not have to submit those reports until several
months after that submission to the EPA. There ^
will not be any significant burden since the aver- ,^
PART 537— PRE 6
Effective: December 12, 1977
witli tlie Clean Air Act and redetermine the fuel
economy of tiie automohiles. Tliese manufactur-
ers would also he re(|uiie(l to determine whether
exceedinfi the weijjht maximum atl'ected the auto-
mohiles' compliance with the Federal Motor
Vehicle Safety Standards. This testing; would
he a relatively expensive process, particularly
considerinji^ that tlicse manufacturers would not
have their own testinff facilities available.
The ajrency is also mindful that the burden
that would he imposed on the intermediate and
final-stafre manufacturers if they were required
to prepare these reports would be greater relative
to that imposed on laiger manufacturers. As
stated above, these manufacturers have a minimal
en<rineerin<r staff, if any.
After a reconsideration of all these factors, the
XHTSA has determined under section 501(9) of
the Act and Part '}29 that the incomplete auto-
mobile manufacture!' of a multistage automobile
will always be considered its manufacturer for
purposes of the Act's reporting requirements.
This rule has been changed to provide that inter-
mediate and final-stage manufacturers are not
required to file reports.
The agency's re-examinarion of the implemen-
tation of this rule bj- multistage manufacturers
has also resulted in several changes in the rule to
facilitate the reports by the incomplete automo-
bile manufacturer. The data in § 537.7(c) is
generally required to be provided by model type.
However, the incomplete automobile manufac-
turer does not alwaj's know what the model type
of the multistage automobile will be when com-
pleted. Accordingly, the incomplete automobile
manufacturer is re<iuired to provide the fuel
economy information in § 537.7(c) and (e) by
base level, rather than by model type. Further,
the technical information in §537.7 (c)(4)
(xviii)-(xxii) and (c)(5) requires knowledge of
how the automobile will be completed, and, there-
fore, is not required to be piovided by incomplete
automobile manufacturers with respect to nndti-
stage automobiles.
Timing of the reports.
Section 505(a) (1) of the Act specifies the time
periods during which semiannual reports for a
nifxlel year must be submitted. The first report,
called the "pie-model year report" in this rule,
must be submitted during the 30-day period im-
mediately preceding the model year. The second
report, the "mid-model year report," must be
submitted during the 30-day period beginning on
the 180th day of the model year.
Ford commented that the EPA has designated
the date on which comparable class fuel economy
ranges become available as the beginning of the
model year in a notice published November 10,
1976, 4i FR 49752, at 49756. Ford did not clearly
indicate the basis for its belief that that notice,
which dealt with fuel economy labeling require-
ments, contained any designation of the model
year. Nowhere in the preamble to that notice
did the EPA give any indication that it was
making a determination of the model year.
Further, the language of the rule itself shows
that the EPA was not making any determination
of the model year. 40 CFR § 600.314(d) (1)
reads: "The range will be made available on a
date that coincides as closely as possible to the
date of the general model year introduction for
the industry." Rather than indicating that the
beginning of the model year occurs on the date
on which the EPA announces the comparable
class ranges, this language indicates that the EPA
recognized that the beginning of the model year
is not dependent on and does not coincide with
the announcement of the ranges. The EPA
merely stated that the two dates should occur as
close together as possible. After a review of
EPA's November 10 notice, this agency has con-
cluded that nowhere therein did the EPA make
any determination of the model year. The EPA
concurs with that conclusion.
Volvo of Ameiica, Inc. ("Volvo"), stated that
its interpretation of the term "model year" as
applied to foreign manufacturers was that the
model year begins on the date when the first
vehicle of the current model year is publicly
offered for sale in the United States.
Section 501(12) of the Act defines "model
year" as a manufacturer's annual production
period which includes January 1 of the calendar
year, and gives the EPA Administrator the
authority to determine the manufacturer's an-
nual production period. If a manufacturer has
no annual production period or if the EPA does
not determine when that period occurs, the manu-
facturer's model year is the calendar year.
PART 537— PRE 5
Effective: December 12, 1977
To date, no determination of the "model year"
has been made specifically for the purposes of
section 505(a). In the rule specifying the 1978
model year fuel economy testing and calculation
procedures (41 FR 38674, September 10, 1976),
the EPA stated that the 1978 model year for
domestic manufacturers would begin no earlier
than August, 1977. This determination, however,
was made without regard to section 505(a).
Rather, it was made to provide all parties with
12 months advance notice of the applicable test-
ing and calculation procedures, in accordance
with the provisions of section 503(d) of the Act.
Based on its consultation with the EPA, this
agency has come to the following conclusions in
which EPA concurs. Since the EPA has not yet
determined any annual production period for do-
mestic or foreign automobile manufacturers ap-
plicable to section 505(a), the manufacturers have
no annual production period for the purposes of
section 505(a). Accordingly, under the terms of
section 501(12), the section 505(a) model year
for these manufacturers is the calendar year.
Therefore, the pre-model year reports for 1978
must be submitted to this agency not earlier than
December 2, 1977, and not later than December
31, 1977.
The use of the calendar year as the model year
for the manufacturers puts both commenting
manufacturers in a position at least as favorable
as the ones they had requested. Ford will now
have a period in which to prepare its 1978 pre-
model year report that is several months longer
than the one it would have had if its comment
had been adopted. Since Volvo has generally
introduced its new automobiles on January 1, this
rule will, in effect, treat Volvo as it had requested.
The EPA has indicated to this agency that it
will take appropriate action under Title V re-
garding the definition of model year to be used
with respect to the submission of reports for the
1979 and subsequent model years.
This agency recognizes that some confusion
may result from the use of one definition of model
year to determine when the reports must be sub-
mitted and another definition to determine which
automobiles are to be discussed in the reports. It
should be emphasized that this determination of
the model year is applicable only to the timing
provisions of section 505(a) of the Act. The
determination is made only to inform the manu-
facturers and the public precisely when these
semiannual fuel economy reports must be sub-
mitted.
This determination does not mean that the
manufacturers' reports must contain information
on every automobile produced between January 1
and December 31 of each year. Section 505
specifies that the reports must indicate whether
the manufacturer will comply with the average
fuel economy standards applicable under section
502 to the model year for which the report is
made, and the manufacturer's plan for achieving
that compliance. Thus, the reports are to contain
information only on automobiles produced during
that model year. To determine the beginning of
the model year to which a standard applies, the
manufacturers must look to the relevant EPA
determination of the model year for the purposes
of section 502. Under the relevant EPA deter-
mination, the 1978 model year for the domestic
manufacturers will run from approximately
August 1977 to July 1978.
Based on its assumption that the pre-model fl
year reports might be due in early September,
Ford expressed concern that the NPRM would
require it to submit one preliminary fuel economy
average in its pre-model year report to the
XHTSA and a different, second preliminary
average to the EPA a short time later. The
EPA currently requires all manufacturers to
submit a preliminary average fuel economy cal-
culation to that agency not later than 10 days
after the manufacturer's public introduction date.
40 CFR 600.506-78. Ford stated that the sub-
mission of two different averages would be bur-
densome and that the first average would be less
representative than the second. In the case of
domestic manufacturers, the problem of being
required to submit two different preliminary
averages is obviated by the discussion above re-
garding the beginning of a model year for re-
porting purposes. Instead of having to submit
their pre-model year reports perhaps several
weeks before the submission of their preliminary
average to the EPA, the domestic manufacturers
will not have to submit those reports until several
months after that submission to the EPA. There
will not be any significant burden since the aver-
PART 537— PRE 6
1
Effective: December 12, 1977
age submitted in tlie pre-model year report will
be the same as the preliminary average submitted
to the EPA, except as modified to reflect nmning
changes and new model introductions made since
the submission of that average to the EPA. Based
on this agency's participation in EPA's 1977
model year pilot program for calculating the
manufacturers' average fuel economies, NHTSA
lielieves that all four of the major domestic manu-
facturers will have programmed computers to
calculate their average fuel economy levels for
1978 and later model years, so that these manu-
facturers can quickly and at little cost determine
the effects of changes in fuel economy or produc-
tion data on their overall average.
Foreign manufactui'ei"s might still face the
problem of being recpiired to subnut two separate
calculations of their preliminary average fuel
economy. If a manufacturer had its introduction
date on January 1, as many foreign manufac-
turers do, the manufacturer would not be required
to submit its preliminary average fuel economy
calculation to the EPA until January 11. How-
ever, that manufacturer would be required to
submit a preliminary average fuel economy in its
report to the XHT8A, due not later than De-
cember 31. This agency would thus be faced
with the prospect of receiving a preliminary
average less representative than the one to be
subsequently submitted to EPA.
To avoid this problem, this rule has been
changed from what was proposed in the NPRM.
Under this rule, a manufacturer is not required
to include the fuel economy data required for the
pre-model year repoit by § r).37.7(b), (c)(1) and
(2), and (c)(4) (xiv)-(xvi) and (xxiv), if that
report is due to be submitted before the fifth day
after the date l)v which the manufacturer is re-
quired to submit the preliminary determination
of average fuel economy to the EPA under 40
CFR 6fl0.r)06. Any )iianufacturer taking ad-
vantage of this oppoitunity is required to submit
a supjilementary report to this agency not later
tiian tile fiftii day after the date by which tliat
manufacturer nmst subnut the preliminary de-
termination. This supplementary report must
contain all tlie information the manufacturer
omitted from its semiannual report, pursuant to
tiie above provision, and any revisions of the
information previously submitted in the semi-
annual report as are necessary to reflect this new
information.
Semiannual reports.
The short time remaining for the manufac-
turers to submit their 1978 pre-model year reports
lias necessitated a substantial reduction of the
information required in that report. Under this
rule, the report would cover passenger automo-
biles only. AVith respect to those automobiles,
the manufacturer would provide its projected
average fuel economy and views on the repre-
sentativeness of the projection, its model type
fuel economy information, certain vehicle con-
figuration technical information, and a general
discussion of the manufacturer's marketing
measures. None of this information requires any
new analytical work to prepare and, thus, should
be readily available to the manufacturers for
inclusion in a report to this agency.
Further, to alleviate the time pressures on the
manufacturers and ensure the submission of full
reports, the agency will not take enforcement ac-
tion on timeliness grounds against any manufac-
turer which submits its pre-model year report by
January 31, 1978.
Many commenters complained that the report-
ing requirements proposed in the NPRM would
impose unreasonable and excessive additional
testing costs. These complaints were primarily
applicable to the proposed future model year re-
porting requirements. To the extent that the
complaints were directed to the current model
year reporting requirements, they appear to apply
largely to items not adopted in this rule.
In the NPRM, the agency discussed its con-
sideration of possible ways of avoiding the im-
position of any new testing costs, and requested
comments on the desirability of permitting a
manufacturer to submit responses that were an
estimate or a set or range of alternatives. To
avoid abuse of that opportunity and ensure the
usefulness of the estimates, the agency further
proposed that any manufactiirer submitting esti-
mates or alternatives would be required to state
the basis for each estimate or alternative, the
major uncertainties associated with it, and the
most likely value in the case of an estimate and
the most likely alternative in the case of a set or
range of alternatives. Despite the request for
PART 537— PRE 7
Effective: December 12, 1977
comments on this proposed method, only one
manufacturer addressed this issue. Volvo stated
that permitting estimates would give the NHTSxV
more representative data, and make the manu-
facturers task less burdensome.
To place the smallest burden on the industry
consistent vvitli the XHTSA's need for informa-
tion, this rule permits manufacturers to submit
estimates in response to requirements for data on
marketing. A manufacturer may not provide
estimates in response to the requirement for fuel
economy data or technical specifications data.
One of the primary purposes of the fuel economy
data is to calculate average fuel economy. Gross
estimates of fuel economy are unsuitable for mak-
ing such an important and sensitive calculation.
The rule accordingly requires the manufacturer
to submit fuel economy values which have been
approved by the EPA for specified vehicle con-
figurations, if values have been approved. If a
value has not been approved for a configuration,
the manufacturer must submit any available un-
approved fuel economy value developed through
the use of EPA's test procedures or through
analytical methods approved by the EPA. If
none of the above types of values are available,
the manufacturer is required to submit a fuel
economy value based on tests or analyses com-
parable to the tests or analyses requii-ed by the
EPA, and a description of the tests or analyses
conducted by the manufacturer. The technical
specifications can be easily determined at little or
no expense. Further, almost all of that informa-
tion nuist already be generated for purposes other
than this rule.
Projected average fuel economy.
Commenters generally agreed that this was a
necessary piece of information. As explained in
the preamble to the XPRM, the XHTSA believes
that submission of this information would be
equivalent to a statement whether the manufac-
turer would comply with the applicable average
fuel economy standards, as required to be included
in the reports by section 50o(a)(l)(A) of the
Act.
P'ord challenged the inclusion of a requirement
that nuinufacturers state wliether tlieir projected
average fuel economy is a sufficiently accurate
representation for the purposes of assessing pen-
alties and awarding credits under the Act. If it
were not a sufficiently representative figure, the
manufacturer would be required to explain how
and why the insufficiency resulted, and what ad-
ditional fuel economy data is necessaiy to correct
the insufficiency. The need, if any, might be to
develop fuel economy values for vehicle config-
urations for which no values are required to be
provided. The manufacturer must also state any
plans that it has to undertake the testing or
analysis necessary to develop the data and to
submit it to EPA under 40 CFR 600.509-78.
Section 600.509-78 permits manufacturers to
supplement voluntarily the fuel economy data
that EPA requires from each manufacturer. As
noted by EPA in its notice establishing section
600.509-78, that section's purpose is to accom-
modate the manufacturer who does not believe
that the testing required by EPA provides a
reasonable basis for making compliance determi-
nations (41 FR 38674, at 38678; September 10,
1976).
The disclosure requirement is included in this
rule because it is essential for the efficient func-
tioning of the fuel economy program. It is in
the interests of both the government and the in-
dustry that the manufacturers' calculated average
fuel economies must be as truly representative of
the manufacturers" average fuel economies as
practicable. If the calculated average are too
low, the manufacturers could have an undue
financial burden imposed on them in the form of
large, unwarranted penalties. To avoid an un-
warranted penalty, a manufacturer might under-
take costly and unwarranted vehicle modifications
or unnecessary production shifts. If, on the other
hand, the calculated averages are too high, the
nation would be deprived of the total fuel savings
envisioned by the Act and the manufacturers
would be given an undue credit.
The EPA was aware of the importance of en-
suring repi'esentative calculated average fuel
economies and discussed the issue at length in its
notice establisliing tlie fuel economy testing and
calculation procedures (41 FR 38674, at 38676,
September 10, 1976). The disclosure requirement
in this I'ule will supplement the EPA's efforts in
40 CFR 600.509-78 to ensure the representative-
ness of tlie calculated averages.
PART 537— PRE 8
Effective: December 12, 1977
ago, submitted in the pre-model year report will
l)e tlie Haine as tiie preliminary average submitted
to the EPA, except as modified to reflect running
changes and new model introductions made since
tiie submission of tliat average to the EPA. Based
on this agency's participation in EPA's 1977
model year pilot program for calculating the
manufacturers' average fuel economies, NHTSA
believes that all four of the major domestic manu-
facturers will liave programmed computers to
calculate their average fuel economy levels for
1978 and later model years, so that these manu-
facturers can quiclvly and at little cost determine
tlie effects of changes in fuel economy or produc-
tion data on their overall average.
Foreign manufacturere might still face the
problem of being required to submit two separate
calculations of their preliminary average fuel
economy. If a manufacturer had its introduction
date on January 1, as many foreign manufac-
turers do, tiie manufacturer would not be required
to submit its preliminary average fuel economy
calculation to the EPA until January 11. How-
ever, that manufacturer would be required to
submit a preliminary average fuel economy in its
report to the NHTSA, due not later than De-
cember 31. This agency would thus be faced
with the prospect of receiving a preliminary
average less representative than the one to be
subsequently submitted to EPA.
To avoid this problem, this rule has been
changed from what was proposed in the NPRM.
Under tliis rule, a manufacturer is not required
to include the fuel economy data required for the
pre-model year report by §;j37.7(b), (c)(1) and
(2), and (c)(4) (xiv)-(xvi) and (xxiv), if that
report is due to be submitted before the fifth day
after tiie date by which the manufacturer is re-
quired to submit tlie preliminary determination
of average fuel economy to the EPA under 40
CFR 600.506. Any manufacturer taking ad-
vantage of this opportunity is required to submit
a supplementary report to tiiis agency not later
tliaii the fiftli day after tlie date by which that
mamifactuiei' must submit tlie preliminary de-
teniiination. This supplementary report must
contain all the information the manufacturer
omitted from its seiiiiannual report, pursuant to
tlie above jiiovision, and any revisions of the
infoiiiiatioii previously submitted in the semi-
annual report as are necessary to reflect this new
information.
Semianmud reports.
The short time remaining for the manufac-
turers to submit their 1978 pre-model year reports
has necessitated a substantial reduction of the
information required in that report. Under this
rule, the report would cover passenger automo-
biles only. With respect to those automobiles,
the manufacturer would provide its projected
average fuel economy and views on the repre-
sentativeness of the projection, its model type
fuel economy information, certain vehicle con-
figuration technical information, and a general
discussion of the manufacturer's marketing
measures. None of this information requires any
new analytical work to prepare and, thus, should
be readily available to the manufacturers for
inclusion in a report to this agency.
Further, to alleviate the time pressures on the
manufacturers and ensure the submission of full
reports, the agency will not take enforcement ac-
tion on timeliness grounds against any manufac-
turer which submits its pre-model year report by
January 31, 1978.
Many commenters complained that the report-
ing requirements proposed in the NPRM would
impose unreasonable and excessive additional
testing costs. These complaints were primarily
applicable to the proposed future model year re-
porting requirements. To the extent that the
complaints were directed to the current model
year reporting requirements, they appear to apply
largely to items not adopted in this rule.
In the NPRM, the agency discussed its con-
sideration of possible ways of avoiding the im-
position of any new testing costs, and requested
comments on the desirability of permitting a
manufacturer to submit responses that were an
estimate or a set or range of alternatives. To
avoid abuse of tliat opportunity and ensure the
usefulness of the estimates, the agency further
proposed that any manufacturer submitting esti-
mates or alternatives would be required to state
the basis for each estimate or alternative, the
major uncertainties associated with it, and the
most likely value in the case of an estimate and
the most likely alternative in the case of a set or
range of alternatives. Despite the request for
PART 537— PRE 7
Effective: December 12, 1977
comments on tliis proposed method, only one
manufacturer addressed this issue. Volvo stated
that permitting estimates would give the NHTSA
more representative data, and make the manu-
facturer's task less burdensome.
To place the smallest burden on the industry
consistent with the NHTSA's need for informa-
tion, tliis rule permits manufacturers to submit
estimates in response to requirements for data on
marketing. A manufacturer may not provide
estimates in response to the requirement for fuel
economy data or technical specifications data.
One of the primary purposes of the fuel economy
data is to calculate average fuel economy. Gross
estimates of fuel economy are unsuitable for mak-
ing sucli an important and sensitive calculation.
The rule accordingly requires the manufacturer
to submit fuel economy values which have been
approved by the EPA for specified vehicle con-
figurations, if values have been approved. If a
value has not been approved for a configuration,
the manufacturer must submit any available un-
approved fuel economy value developed through
the use of EPA's test procedures or through
analytical methods approved by the EPA. If
none of the above types of values are available,
the manufacturer is required to submit a fuel
economy value based on tests or analyses com-
parable to the tests or analyses required by the
EPA, and a description of the tests or analyses
conducted by the manufacturer. The technical
specifications can be easily determined at little or
no expense. Further, almost all of tliat informa-
tion must already be generated for purposes other
than this rule.
Projected average fuel economy.
Commenters generally agreed tliat this was a
necessary piece of information. As explained in
the preamble to the XPRM, the NHTSA believes
that submission of this information would be
equivalent to a statement whether the manufac-
turer would comply with the applicable average
fuel economy standards, as required to be included
in the reports by section 505(a)(1)(A) of the
Act.
Ford challenged the inclusion of a requirement
that manufacturers state whether their projected
average fuel economy is a sufficiently accurate
representation for the puiposes of assessing pen-
alties and awarding credits under the Act. If it
were not a sufficiently representative figure, the
manufacturer would be required to explain how
and why the insufficiency resulted, and what ad-
ditional fuel economy data is necessary to correct
the insufficiency. The need, if any, might be to
develop fuel economy values for vehicle config-
urations for which no values are required to be
provided. The manufacturer nmst also state any
plans that it has to undertake the testing or
analysis necessary to develop the data and to
submit it to EPA under 40 CFR 600.509-78.
Section 600.50f)-78 permits manufacturers to
supplement voluntarily the fuel economy data
that EPA requires from each manufacturer. As
noted by EPA in its notice establishing section
600.509-78, that section's purpose is to accom-
modate the manufacturer who does not believe
that the testing requii'ed by EPA provides a
reasonable basis for making compliance determi-
nations (41 FR 38674, at 38678; September 10,
1976).
The disclosure reqiurement is included in this
rule because it is essential for the efficient func-
tioning of the fuel economy program. It is in
the interests of both the government and the in-
dustry that the manufacturers' calculated average
fuel economies must be as truly representative of
the manufacturers' average fuel economies as
practicable. If the calculated average are too
low, the manufacturers could have an undue
financial burden imposed on them in the form of
large, unwarranted penalties. To avoid an un-
warranted penalty, a manufacturer might under-
take costly and unwarranted vehicle modifications
or unnecessary production shifts. If, on the other
hand, the calculated averages are too high, the
nation would be deprived of the total fuel savings
envisioned by the Act and the manufacturers
would be given an undue credit.
The EPA was aware of the importance of en-
suring representative calculated average fuel
economies and discussed the issue at length in its
notice establisliing the fuel economy testing and
calculation procedures (41 FR 38674, at 38676,
September 10, 1976). The disclosure requirement
in this rule will supplement the I^PA's efforts in
40 CFR 600.509-78 to ensure the representative-
ness of the calculated averages.
PART 537— PRE 8
t
Effective: December 12, 1977
Refiiiirin<r inaniifaoturers to disclose deficien-
cies wliich tliey lielieve exist in tlie projected
avera^^e and to disclose their plans for fjeneratin<r
additional fuel economy data would enable the
jrovernment to avoid duplicatin<f the manufac-
turers' efforts to jrenei'ate that data and tiie waste
of public resources resultin<r from such duplica-
tion. It would also inform tlie jrovernment about
tlie extent to wiiicli the manufacturers were not
<roin<; to <ienerate the additional data. The gov-
ernment could then decide whether to undertake
any of tlie testin<r and analysis itself. Timinof
would be critical to the ability of the government
to undertake any additional testing. The prob-
ability of the go\ernineiit"s being able to locate
readily the precise vehicle configurations needed
will steadily decline as the end of a model year
ai)proaches. Further, the demand on the govern-
ment's test facilities for emissions and fuel econ-
omy testing purposes requiies that the goveinment
have some flexibility in scheduling any additional
testing.
By requiring that apparent deficiencies in the
projected average fuel economy be disclosed, the
reporting regulation would aid in ensuring the
steady and orderly implementation of tiie fuel
economy program l)v resolving problems before
the end of tlie model year wlien corrective actions
miglit still l)e taken. The entire fuel economy
l)rogram. which constitutes the primary element
of the national etl'ort to conserve gasoline, might
1)€ disrupted if deficiencies exist and are not re-
vealed until it is too late to take any corrective
action.
The establishment of an orderly procedure for
identifying and reporting apparent deficiencies
in projected average fuel economies sliould also
aid in promoting pul)lic confidence in the fuel
economy program. The success of the program
depends in part on the faith of the public and
the manufacturers in the fuel economy averages
calculated for the manufacturers.
The burden imposed on the manufacturers by
the disclosure rei|uirement should be fairly small.
If a manufacturer has not identified any deficien-
] cies in its projected u\crage fuel economy, it
simply reports that fact. If. on the other hand.
information available to tiie manufactuier leads
, it to believe that there are deficiencies, if simply
reports the nature and cause of the deficiencies as
well as any plans for reducing or correcting them.
After considering the benefits to be gained
from the disclosure requirement and the minimal
resulting burdens, the agency has determined that
the requirement is both a necessary and a reason-
able means for ensuring the smooth functioning
of the fuel economy program.
Ford characterized this requirement as "an un-
fortunate effort to force manufacturers to waive
their right to challenge the manner in which
EPA, in consultation with DOT, developed fuel
economy testing procedures and calculations un-
der section .503 of the Act." The agency believes
that Ford may not have understood the I'equire-
ment and its purpose fully.
This disclosure requirement does not require
that any manufacturer waive the opportunity to
make such a challenge. A waiver is "the volun-
tary and intentional relinquishment of a known
right, claim, or privilege." 28 Am. Jur. Estoppel
and Waiver §154 (1966). Without considering
the other elements of a waiver, it may be seen
from the absence of any relinquishment that no
waiver is imposed by this requirement. If a
manufacturer states and explains its beliefs re-
garding the representativeness of the projected
average, it is not thereby precluded from restat-
ing tliose beliefs at a later time, such as when the
final average is calculated. Alternatively, if a
manufactuier states in one of its reports that,
based on current information and analyses, there
do not appear to be any deficiencies in the pro-
jection, the manufacturer is not precluded from
subsequently stating that new information and
analysis have revealed previously undiscovered
deficiencies.
Model type fuel economy aiid technical injor-
mation.
To provide tlie agency with the basis for a
manufacturer's projected average fuel economy,
the rule icfiuires the manufacturer to provide fuel
economy values for each model type of its auto-
mobiles and describe the fuel economy related
technical infoiinatioii and specifications of each
\eliicle configuration on which the model type
fuel economv values were ba.sed.
PART 537— PRE 9
Effective: December 12, 1977
Ford commented that it was unlikely that the
XHTSA could make use of the approach anjrle.
departure anjjle, and breakover angle for all the
passenger cars sold by Ford. These data, and
the requiied axle clearance, ininimuni running
clearance, and any other features which the
manufacturer believes make an automobile ca-
pable of off-highway operation, were included in
the NPRM to permit the NHTSA to determine
whether the classification scheme of Part 523 was
adequately differentiating automobiles capable of
off-highway operation from other automobiles.
The NHTSA now believes this purpose will be
adequately served if the features that make an
automobile capable of off-highway operation are
provided only with respect to those automobiles
claimed to be capable of off-highway operation
as determined under Part 523. If the category
"automobiles capable of off-highway operation'"
fails to include automobiles that the manufac-
turers believe should be included, the manufac-
turers will presumably inform the NHTSA of
that belief.
Both Ford and Chrysler indicated that this
fuel economy information should be required by
base level, rather than model type. Neither
manufacturer explained why the information
should be provided in that fashion. Further,
neither indicated that providing the information
by model type would pose any significant prob-
lem for them. EPA procedures that the manu-
facturers are to follow to calculate their
preliminary average fuel economies provide for
determining fuel economy values for vehicle con-
figurations, then base levels, and finally model
types. The model type fuel economies are then
used to calculate the average fuel economy. Con-
version of base level fuel economies to model type
fuel economies requires that the manufacturers
simply follow the calculation procedure in 40
CFR 600.207-77 (b). The manufacturers must
perform these calculations in any event at essen-
tially the same time to satisfy the EPA require-
ment for the preliminary average. NHTSA
could not" calculate the average since it would
lack the necessary sales data to make the conver-
sion from base level values to model type values.
The agency has decided, therefore, to require the
fuel economy information by model type.
Chrysler objected to providing the road load
power at 50 miles per hour, stating that this
would dramatically increase their testing costs.
This requirement was not intended to impose any
isdditional testing costs. To clarify that inten-
tion, the requirement has been reworded to pro-
vide that road load power information must be
provided for an automobile only if a manufac-
turer has detennined, for whatever purpose, that
it differs from the road load setting prescribed
for that automobile in 40 CFR 86.177-11 (d).
There is no requirement that the setting be deter-
mined for the purposes of preparing the fuel
economy reports.
Both Chrysler and Toyota Motor Sales, U.S.A.,
Inc. ("Toyota"), objected to the proposed re-
quirement that each manufacturer provide a
graph of acceleration and velocity versus time
from to 60 miles per hour for each configura-
tion. Toyota indicated that it does not plan
models according to this index, and that this
requirement would impose additional testing.
Chrysler concurred in this latter statement.
This information was proposed to be required
to show any effects of complying with increas-
ingly more stringent fuel economy standai'ds on
the acceleration capabilities of the manufacturer's
automobiles over a wide range of speeds. The
NHTSA expects that these effects will be felt
more at some speed ranges than at others. How-
ever, the NHTSA is uncertain of how accurately
this acceleration data could be provided without
any additional acceleration testing. If manufac-
turers like Toyota perform limited acceleration
testing, e.g., test the acceleration of only certain
models, those manufacturers might need to per-
form tests on the untested models so that they
would have a reliable basis for estimating the
acceleration for all the configurations listed in
the report. To avoid imposing any additional
testing, the agency has deleted the requirement
for acceleration and velocity data from this rule.
Automobile technology and sales mix changes.
Avanti and Checker stated that they would be
dependent upon their engine suppliers for infor-
mation regarding changes in the technology used
in their engines. The agency believes that by the
time the pre-model year report is filed for a
model year by one of these manufacturers, the
PART 537— PRE 10
EfFective: December 12, 1977
ReqiiiriiifT manufacturers to disclose deficien-
cies wliich they believe exist in the projected
avera^re and to disclose their plans for pencratinf:
additional fuel economy data would enalile the
irovernnient to avoid duplicatinjr the manufac-
turers" ert'orts to generate that data and the waste
of public resources resultinij: from sucli duplica-
tion. It would also inform the government about
the extent to wliicli the manufactuiers were not
•joinfT to fienerate the tidditional data. The <rov-
cmment could then decide whether to undertake
any of the testiii<r and analysis it.self. Timing
would be critical to the ability of the (government
to undertake any additional testing. The prob-
ability of the government's being able to locate
readily the precise vehicle configurations needed
will steadily decline as the end of a model year
approaches. Further, the demand on the govern-
ment's test facilities for emissions and fuel econ-
omy testing purposes requires that the government
have some flexibility in scheduling any additional
testing.
By requiring that apparent deficiencies in the
projected average fuel economy be disclosed, the
reporting regulation would aid in ensuring the
steady and orderly implementation of the fuel
economy i)rogram by resolving problems before
the end of the model year wlien corrective actions
might still be taken. The entire fuel economy
program, wliich constitutes the prinuiry element
of the national effort to conserve gasoline, might
\ie disrupted if deficiencies exist and are not re-
veale<l until it is too late to take any corrective
action.
The establishment of an orderly procedure for
identifying and reporting ajjparent deficiencies
in projected average fuel economies should also
aid in promoting public confidence in the fuel
economy program. The success of the program
dei)ends in part on the faith of the public and
the manufactuiers in tiie fuel economy averages
calculated for the manufacturers.
The burden imi)o.sed on tiip manufacturers by
the disclosure reciuirement should be fairly small.
If a manufacturer has not identified any deficien-
cies in its projected average fuel economy, it
simply reports that fact. If. on tiie other hand,
information available to the manufacturer leads
it to believe that there are deficiencies, it simply
reports the nature and cause of the deficiencies as
well as any plans for reducing or correcting them.
After considering the benefits to be gained
from the disclosure requirement and the minimal
resulting burdens, the agency has determined that
the requirement is both a necessary and a reason-
able means for ensuring the smooth functioning
of the fuel economy program.
Ford characterized this requirement as "an un-
fortunate effort to force manufacturers to waive
their right to challenge the manner in which
EPA, in consultation with DOT, developed fuel
economy testing procedures and calculations un-
der section ,^03 of the Act.'' The agency believes
that Ford may not have understood the require-
ment and its purpose fullj'.
This disclosure requirement does not require
that any manufacturer waive the opportunity to
make such a challenge. A waiver is "the volun-
tary and intentional relinquishment of a known
right, claim, or privilege." 28 Am. Jur. Estoppel
and Waive)' §154 (1966). Without considering
the other elements of a waiver, it may be seen
from the absence of any relinquishment that no
waiver is imposed by this requirement. If a
manufacturer states and explains its beliefs re-
garding the representativeness of the projected
average, it is not thereby precluded from restat-
ing those beliefs at a later time, such as when the
final average is calculated. Alternatively, if a
manufacturer states in one of its reports that,
based on current information and analyses, there
do not appear to be any deficiencies in the pro-
jection, the manufacturer is not precluded from
subsequently stating that new information and
analysis have revealed previously undiscovered
deficiencies.
Model type fuel economy and technical infor-
mation.
To i)rovide the agency with the basis for a
manufacturer's projected average fuel economy,
the I'ule requires the manufacturer to provide fuel
economy values for each model type of its auto-
mobiles and desciibe tlie fuel economy related
technical infcnination and specifications of each
vehicle configuration on wliich the model typte
fuel economv values wei'e based.
PART 537— PRE 9
Effective: December 12, 1977
Ford commented that it was unlikely that the
XHTSA could make use of the approach angle,
departure angle, and breakover angle for all the
passenger cars sold by Ford. These data, and
the required axle clearance, minimum running
clearance, and any other features which the
manufacturer believes make an automobile ca-
pable of otf-highway operation, were included in
the NPRM to permit the NHTSA to determine
whether the classification scheme of Part 523 was
adequately differentiating automobiles capable of
off-highway operation fi-om other automobiles.
The NHTSA now believes this purpose will be
adequately served if the features that make an
automobile capable of off-highway operation are
provided only with respect to those automobiles
claimed to be capable of off-highway operation
as determined under Part 523. If the category
"automobiles capable of off-highway operation"
fails to include automobiles that the manufac-
turers believe should be included, the manufac-
turers will presumably inform the NHTSA of
that belief.
Both Ford and Chrysler indicated that this
fuel economy information should be required by
base level, rather than model type. Neithe*'
manufacturer explained why the information
should be provided in that fashion. Further,
neither indicated that providing the information
by model type would pose any significant prob-
lem for them. EPA procedures that the manu-
facturers are to follow to calculate their
preliminary average fuel economies provide for
determining fuel economy values for vehicle con-
figurations, then base levels, and finally model
types. The model type fuel economies are then
used to calculate the average fuel economy. Con-
version of base level fuel economies to model type
fuel economies requires that the manufacturers
simply follow the calculation procedure in 40
CFR 600.207-77 (b). The manufacturers must
perform these calculations in any event at essen-
tially the same time to satisfy the EPA require-
ment for the preliminary average. NHTSA
could not calculate the average since it would
lack the necessary sales data to make the conver-
sion from base level values to model type values.
The agency has decided, therefore, to require the
fuel economy information by model type.
Chrysler objected to providing the road load
power at 50 miles per hour, stating that this
would dramatically increase their testing costs.
This requirement was not intended to impose any
additional testing costs. To clarify that inten-
tion, the requirement has been reworded to pro-
vide that road load power information must be
provided for an automobile only if a manufac-
turer has deteniiined, for whatever purpose, that
it differs from the road load setting prescribed
for that automobile in 40 CFR 86.177-11 (d).
There is no requirement that the setting be deter-
mined for the purposes of preparing the fuel
economy reports.
Both Chrysler and Toyota Motor Sales, U.S.A.,
Inc. ("Toyota"), objected to the proposed re-
quirement that each manufacturer provide a
graph of acceleration and velocity versus time
from to 60 miles per houi- for each configura-
tion. Toyota indicated that it does not plan
models according to this index, and that this
requirement would impose additional testing.
Chrysler concurred in this latter statement.
This information was proposed to be required
to show any effects of complying with increas-
ingly more stringent fuel economy standards on
the acceleration capabilities of the manufacturer's
automobiles over a wide range of speeds. The
NHTSA expects that these effects will be felt
more at some speed ranges than at others. How-
ever, the NHTSA is uncertain of how accurately
this acceleration data could be provided without
any additional acceleration testing. If manufac-
turers like Toyota perform limited acceleration
testing, e.g., test the acceleration of only certain
models, those manufacturers might need to per-
form tests on the untested models so that they
would have a I'eliable basis for estimating the
acceleration for all the configurations listed in
the report. To avoid imposing any additional
testing, the agency has deleted the requirement
for acceleration and velocity data from this rule.
Automobile technology and sales mix changes.
Avanti and Checker stated that they would be
dependent upon their engine suppliers for infor-
mation regarding changes in the technology used
in their engines. The agency believes that by the
time the pre-model year report is filed for a
model year by one of these manufacturers, the
PART 537— PRE 10
Effective: December 12, )977
manufacturer should have been able to determine
for itself or learn from the suppliers the differ-
ences in specifications between their engines for
the current model year and those for previous
model years. The agency expects the suppliers
to cooperate to the extent necessary to enable
these low-volume manufacturers to provide the
required data.
Both Rolls Royce and Toyota indicated that
they could not improve their fuel economy by
chanfjinp the sales mix. However, the combined
fuel economy of Toyota's subcompacts for the
1977 model year ranjres between 24 and 41 miles
per gallon, according to the Second Edition of
the 1977 EPA/FEA Gas Mileage Guide. Shifts
in its mix could enable Toyota to achieve a higher
or lower average fuel economy. If a manufac-
turer produces only one model type, and that
model type is in the same inertia weight class in
both the current model year and immediately
preceding model year, the manufacturer would
have no sales mix changes to rejjort. Xo burden
is imposed on that manufactui'er.
Marketing measures.
The XPRM contained a proposal that the
manufacturer be required to state and describe
its marketing measures for each model type of
its automobiles. The rationale for requiring a
description not only of marketing measures de-
signed to aid a manufacturer in improving its
average fuel economy, but also of those measures
that would tend to have the opposite effect, was
to provide tlie agency with the full context in
which to evaluate the former set of measures.
As noted above, many of the manufacturers
commented that the reports should not be re-
quired to include marketing information. This
comment could not be adopted because section
505(a) requires inclusion of tliat information.
Toyota commented that it makes no special
marketing efforts to improve its average fuel
economy, since it produces only subcompacts.
whicli Toyota characterized as very fuel efficient.
Tiiis agency notes tliat the marketing efforts of
certain manufactureis will not affect whether
they achieve compliance with tlie fuel economy
standards. If the lowest fuel economy for any
model type produced by a manufacturer for the
current model year equals or exceeds the appli-
cable average fuel economy standard, the manu-
facturer's marketing efforts have no bearing on
compliance and are not one of the steps the manu-
facturer has taken to achieve compliance. Such
manufacturer cannot fail to comply with the
standard, regradless of its marketing efforts, since
any production mix will comply. Therefore, a
manufacturer whose sales mix includes only
models with fuel economy levels equal to or
greater than the applicable average fuel economy
standard is not required to include in its reports
for that model year any discussion of its market-
ing measures.
Further, the agency has decided to reduce sub-
stantially the extent to which manufacturers
must report marketing measures that will not aid
the manufacturer in improving its average fuel
economy. The final rule does not require a gen-
eral description of all of the manufacturer's ad-
vertising, pricing, and dealer incentive programs.
The proposed requirement that the manufac-
turer describe how its use of advertising, pricing,
and dealer incentives was designed to aid the
manufacturer in improving its average fuel econ-
omy is adopted in this rule substantially as pro-
posed in the NPRM. Both the pre- and
mid-model year reports are required to include a
description of the manufacturer's dealer incentive
programs that will be implemented and a descrip-
tion of the manufacturer's advertising and pric-
ing that will tend to aid the manufacturer in
improving its average fuel economy during the
current model year. Advertising and pricing
programs that will tend to aid the manufacturer
in improving its average fuel economy include
all programs to promote the sales of model types
whose average fuel economy equals or exceeds
the applicable standards, and any programs to
promote the sales of a model type below the
standard in lieu of sales of a model type further
below the standard. As a quantification of the
manufacturer's advertising efforts, the final rule
requires that each report state the amount to be
spent to advertise each carline, with additional
information to l)e provided regarding model
types, if available. Additionally, the mid-model
year reports must include a discussion of the
marketing efforts actually made by the manufac-
PART 537— PRE 11
EfFecllve: December 12, 1977
turer during the first half of tlie model year. No
retrospective reporting of marketing eft'orts made
during tlie second half of the model year is re-
quired by tliis rule. Accordingly, tliis agency is
considering further rulemaking to require the re-
porting of marketing efforts made during the
second half of a model year in the pre-model
year report for the following model year.
AMC was the only commenter that agreed that
marketing information should be required in the
report, and indicated its willingness to provide
this information.
The NPRM proposed that the marketing infor-
mation be provided by model type. However,
Ford and Chrysler both indicated that the mar-
keting information was not available by model
type. Neither indicated how it was available,
however. Most advertising appears to be by car
line, with perhaps one model type or vehicle
configuration being highlighted. Based on this
pattern, the NHTSA believes that the informa-
tion is available by car line to all manufacturers.
Therefore, this rule has been changed to provide
that the marketing infonnation be provided by
car line and, when available, by model type too.
Concerns were expressed by two manufacturers
about their ability to provide the marketing data
within the period specified in the NPRM.
Chrysler stated that it would be very difficult to
provide tliis information before tlie start of the
model year, since the marketing measui'es change
during the model year in response to the eco-
nomic conditions and the competitive environ-
ment. Further, according to Chrysler, the data
is not available in detail at the time required.
Ford agreed with this assertion, and indicated
that dealer incentives are approved during the
model year.
None of these comments took into consideration
the provision in the proposal for submitting esti-
mates wlien precise answers cannot be given.
Under this provision, whicli has been adopted in
this rule, manufacturers may submit information
about their planned advertising as estimates or
as sets or ranges of alternatives. If no incentives
are planned, then there would be none to report.
Thus, these manufacturers should not encounter
the types of problems they suggested.
Chrysler, Ford, and General Motors all indi- '
cated that if their marketing plans were disclosed,
there would be severe anti-competitive effects.
In view of this concern, this agency assumes that
the manufacturers will request confidential treat-
ment of this information. The NHTSA pro-
cedures for dealing with material claimed to be
confidential are discussed below, in the section of
this preamble on confidential information.
General Motors suggested that the NHTSA
had incorrectly assumed that marketing measures
control consumer demand. The NHTSA made
no such assumption. The agency does believe
that marketing measures can influence the con-
sumer demand. The substantial advertising
budgets, rebate programs and dealer incentives
of the manufacturers indicate that they share this
belief.
Reduction of (CID) (N/V), Impact of other
Federal standards on fuel economy, Impacts of
efforts to comply with average fuel economy
standards an automobile performaiice, Material
composition, and Engine system combinations
and fuel systems.
These five items were proposed to be included I
in the current model year section of the proposed ^
report primarily to verify predictions made by
the manufacturers in the future model year sec-
tion of previously submitted semiannual reports.
Since the manufacturers are not required by this
rule to provide future model year information,
this current model year information would not
serve its primary intended purpose, and the re-
quirement for its submission is therefore deleted.
Additional compliance efforts. This item was
proposed to be included in the reports to aid this
agency in determining the feasibility of addi-
tional compliance efforts by a manufacturer
projecting noncompliance with a standard. Sec-
tion 505(a) does not require inclusion of this
requirement in the rule. Upon a re-examination
of this requirement, the NHTSA has determined
that it could meets its information need better by
exercising its authority under section 505(c) of
the Act to send out a special order requiring
specific, detailed infosnation from a manufac-
turer which projects noncompliance. Accord-
ingly, this rule does not include the requirement,
for this item. a
PART 537— PRE 12
EfFactlva: December 12, 1977
manufacturer should have been able to determine
for itself or learn from the suppliers the differ-
ences in specifications between their engines for
the current model year and those for previous
model years. The agency expects the suppliers
to cooperate to the extent necessary to enable
these low-volume manufacturers to provide the
required data.
Both Rolls Royce and Toyota indicated that
they could not improve their fuel economy by
chanofinfj the sales mix. However, the combined
fuel economy of Toyota's subcompacts for the
1977 model year randies between 24 and 41 miles
per fjallon, accordinjr to the Second Edition of
the 1077 EPA/FEA Gas Mileage Guide. Shifts
in its mix could enable Toyota to achieve a higher
or lower average fuel economy. If a manufac-
turer produces only one model type, and that
model type is in the same inertia weight class in
both the current model year and immediately
preceding model year, the manufacturer would
have no sales mix changes to report. Xo burden
is imposed on that manufacturer.
Marketing measures.
The NPRM contained a proposal that the
manufacturer be required to state and describe
its marketing measures for each model type of
its automobiles. The rationale for requiring a
description not only of marketing measures de-
signed to aid a manufacturer in improving its
average fuel economy, but also of those measures
that would tend to have the opposite effect, was
to provide the agency with the full context in
which to evaluate the former set of measures.
As noted above, many of the manufacturers
commented that the reports should not be re-
quired to include marketing information. This
conunent could not be adopted because section
505 (a) requires inclusion of that information.
Toyota commented that it makes no special
marketing efforts to improve its average fuel
economy, since it produces only subcompacts.
which Toyota characterized as very fuel efficient.
This agency notes that the marketing efforts of
certain manufacturers will not affect whether
they achieve compliance with the fuel economy
standards. If the lowest fuel economy for any
model type produced by a manufacturer for the
current model year equals or exceeds the appli-
cable average fuel economy standard, the manu-
facturer's marketing efforts have no bearing on
compliance and are not one of the steps the manu-
facturer has taken to achieve compliance. Such
manufacturer cannot fail to comply with the
standard, regradless of its marketing efforts, since
any production mix will comply. Therefore, a
manufacturer whose sales mix includes only
models with fuel economy levels equal to or
greater than the applicable average fuel economy
standard is not required to include in its reports
for that model year any discussion of its market-
ing measures.
Further, the agency has decided to reduce sub-
stantially the extent to which manufacturers
must report marketing measures that will not aid
the manufacturer in improving its average fuel
economy. The final rule does not require a gen-
eral description of all of the manufacturer's ad-
vertising, pricing, and dealer incentive programs.
The proposed requirement that the manufac-
turer describe how its use of advertising, pricing,
and dealer incentives was designed to aid the
manufacturer in improving its average fuel econ-
omy is adopted in this rule substantially as pro-
posed in the NPRM. Both the pre- and
mid-model year reports are required to include a
description of the manufacturer's dealer incentive
programs that will be implemented and a descrip-
tion of the manufacturer's advertising and pric-
ing that will tend to aid the manufacturer in
improving its average fuel economy during the
current model year. Advertising and pricing
programs that will tend to aid the manufacturer
in improving its average fuel economy include
all programs to promote the sales of model types
whose average fuel economy equals or exceeds
the applicable standards, and any programs to
promote the sales of a model type below the
standard in lieu of sales of a model type further
below the standard. As a quantification of the
manufacturer's advertising efforts, the final rule
requires that each report state the amount to be
spent to advertise each carline, with additional
information to be provided regarding model
types, if available. Additionally, the mid-model
year I'eports must include a discussion of the
marketing efforts actually made by the manufac-
PART 537— PRE 11
Effective: December 12, 1977
turer during the first half of the model year. No
retrospective reporting of marketing efl'orts made
during the second half of the model year is re-
quired by this rule. Accordingly, this agency is
considering further rulemaking to require the re-
porting of marketing efforts made during the
second half of a model year in the pre-model
year report for the following model year.
AMC was the only commenter that agreed that
marketing information should be required in the
report, and indicated its willingness to provide
this information.
The NPRM proposed that the marketing infor-
mation be provided by model type. However,
Ford and Chrysler both indicated that the mar-
keting information was not available by model
type. Neither indicated how it was available,
however. Most advertising appears to be by car
line, with perhaps one model type or vehicle
configuration being highlighted. Based on this
pattern, the NHTSA believes that the informa-
tion is available by car line to all manufacturers.
Therefore, this rule has been changed to provide
that the marketing infonnation be provided by
car line and, when available, by model type too.
Concerns were expressed by two manufacturers
about their ability to provide the marketing data
within the period specified in the NPRM.
Chrysler stated that it would be very difficult to
provide this information before the start of the
model year, since the marketing measures change
during the model year in response to the eco-
nomic conditions and the competitive environ-
ment. Further, according to Chrysler, the data
is not available in detail at the time required.
Ford agreed with this assertion, and indicated
that dealer incentives are approved during the
model year.
None of these comments took into consideration
the provision in the proposal for submitting esti-
mates when precise answers cannot be given.
Under this provision, which has been adopted in
this rule, manufacturers may submit information
about their planned advertising as estimates or
as sets or ranges of alternatives. If no incentives
are planned, then there would be none to report.
Thus, these manufacturers should not encounter
the types of problems they suggested.
Chrysler, Ford, and General Motors all indi-
cated that if their marketing plans were disclosed,
there would be severe anti-competitive effects.
In view of this concern, this agency assumes that
the manufacturers will request confidential treat-
ment of this information. The NHTSA pro-
cedures for dealing with material claimed to be
confidential are discussed below, in the section of
this preamble on confidential information.
General Motors suggested that the NHTSA
had incorrectly assumed that marketing measures
control consumer demand. The NHTSA made
no such assumption. The agency does believe
that marketing measures can influence the con-
sumer demand. The substantial advertising
budgets, rebate programs and dealer incentives
of the manufacturers indicate that they share this
belief.
Reduction of (CID) (N/V), Impact of other
Federal standards mi fuel economy, Impacts of
efforts to comply with average fuel economy
standards on automobile performance. Material
composition, and Engine system combinations
and fuel systems.
These five items were proposed to be included |
in the current model year section of the proposed
report primarily to verify predictions made by
the manufacturers in the future model year sec-
tion of previously submitted semiannual reports.
Since the manufacturers are not required by this
rule to provide future model year information,
this current model year information would not
serve its primary intended purpose, and the re-
quirement for its submission is therefore deleted.
Additional compliance efforts. This item was
proposed to be included in the reports to aid this
agency in determining the feasibility of addi-
tional compliance efforts by a manufacturer
projecting noncompliance with a standard. Sec-
tion. 505 (a) does not require inclusion of this
requirement in the rule. Upon a re-examination
of this requirement, the NHTSA has determined
that it could meets its information need better by
exercising its authority under section 505(c) of
the Act to send out a special order requiring
specific, detailed information from a manufac-
turer which projects noncompliance. Accord-
ingly, this rule does not include the requirement,
for this item. -
PART 537— PRE 12
EfFecHve: December 12, 1977
Costs and Gross income awl market share.
Data on these subjects were proposed to be re-
quired in the reports so that the XHTSA could
compare the effectiveness and costs of the dif-
ferent manufacturers' compliance strategies and
assess the impacts of complying with the average
fuel economy standards on the manufacturers in-
dividually and as an industry and on consumers.
Requirements for these data have been deleted
in view of tlie agency's decision to limit the scope
of the rei)ort to compliance related purposes.
When necessary to obtain information to enable
NIITSA to make the assessments of the impacts
of compliance on the manufacturers and consum-
ers, it can use special orders.
Fufrire model year data. The XPRM proposed
that the manufacturei's be required to include in
their semiannual reports, beginning with the 1978
model year, information concerning their ability
to improve future average fuel economy and the
costs and other impacts that would result from
making improvements. Ford commented that
the proi)osal for reporting future model year in-
formation was very extensive and presented
k miique and troublesome problems for the industry
in view of the scope of the information required,
the ability of the industry to comply with the
reporting I'equirements, and the potential effects
of the reporting requirements on competition
within the industry. Ford also questioned the
usefulness of the information since much of the
information is, according to that company, sub-
ject to cliange. To allow time for a more thor-
ough consideration of these (]uestions, Ford
requested that the NHTSA publish a final rule
on current model year information, and treat the
section of the XPRM on future model year data
as an advance notice of proposed rulemaking.
Ford suggested that a new 60-day comment
period on the future model year data be allowed,
followed by a public hearing. Since section
.■)().") (a) does not lequire futtiie model year report-
ing. Ford believes that XHTSA has no statutoiy
deadline for promulgation of tlie future model
year re|)orting requirement. AMC expressed
substantially tlie same views.
Other manufacturers made tiie same point, al-
though they expressed it in terms of the scope of
^ the proposal and the purposes to be served by the
information. Chrysler stated that the scope of
the X'PRM was excessive, and that the reporting
requirements for current and future model years
should be considered separately. According to
Chrysler, the reporting rule should be used only
to permit the XHTSA to determine whether the
manufacturer will comply with the applicable
average fuel economy standards. Chrysler also
suggested that special orders be used to obtain
any needed future model year information.
Rolls Royce, AMC, and British Leyland Motors
Inc. ("British Leyland") all indicated that the
scope of the proposed report was so broad that
members of their engineering staffs would have
to be withdrawn from their fuel economy im-
provement programs to collect and analyze the
data required to comply with the proposed re-
porting requirements. To avoid this situation,
British Leyland suggested that the purpose of
the reports should be limited to obtaining data
to evaluate the manufacturers' plans for compli-
ance. Toyota and Peugeot also commented that
the purpose of the reports should be limited to
obtaining information sufficient to evaluate the
manufacturers' plans for compliance.
With respect to the leadtime allowed. General
Motors recommended that future model year data
not be required to be reported in the 1978 model
year, because of the short leadtime. Chrysler
indicated that it would need at least twelve
months after publication of the final rule to sub-
mit all the future model year data proposed in
the X'^PRM. Volvo, on the other hand, indicated
that it could thoroughly prepare this information
in time for submission with the 1978 mid-model
year report.
After considering these comments, the NHTSA
has decided not to include any requirements for
future model year information in the final rule.
The agency agrees that the timing on establishing
the reporting requirements for current model
year information is more critical, given the pro-
visions of section 50.5(a) of the Act, than the
timing on establishing requirements for future
model year information. The agency will con-
tinue to consider the various options open to it
for obtaining future model year information, in-
cluding issuing a new proposal or special orders.
PART 537— PRE 13
Effective: December 1 2, 1 977
Supplementary reports. Section 505(a) (2) re-
quires tliat if a manufacturer indicated in its
recent semiannual! report that it would comply
with a fuel economy standard and then deter-
mines that its compliance plan is not sufficient to
enable it to achieve compliance, the manufacturer
must submit a revised plan specifying any addi-
tional measures that it will take to achieve com-
pliance. Information on compliance plans and
potential noncompliances would enable the agency
to determine whether the manufacturers were
making good faith efforts to comply with the
standards. Using its authority under section
505(a) and (c), the agency intentionally went
beyond this requirement in the NPRM.
The first case in which a supplementary report
was proposed to be required was when a manu-
facturer's projected average fuel economy had
decreased by 0.1 mile per gallon or more from its
most recently reported average, and the resultant
average was below the standard or less than 0.4
miles per gallon above the standard. This re-
quirement was intended to alert this agency
either that a manufacturer that had projected
compliance might be in imminent danger of non-
compliance, or that a manufacturer that had
projected noncompliance had experienced a fur-
ther decrease in its average fuel economy. The
purpose of this requirement was to provide this
agency with information explaining the declining
average fuel economy and the steps that the
manufacturer intended to take to minimize the
decrease.
Both Ford and Chrysler objected to this pro-
posal as burdensome and stated that it was their
interpretation of section 505(a)(2) that supple-
mentary' reports were required only when a manu-
facturer's plans, as reported to the NHTSA, were
no longer sufficient to ensure compliance with an
applicable average fuel economy standard.
After a reconsideration of the proposed re-
quirements and the comments received, the
NHTSA has determined to narrow the rule so
that it requires a supplementary report to be filed
only in the circumstances specified in section
505(a)(2). As in the case of the future model
year information, the agency desires to consider
further the value and burden of requiring this
information which is outside the nominal scope
of section 502(a) (2). The XHTSA will monitor
the reports filed under the standards, and con-
sider whether supplemental reporting in addition
to the minimum required by section 502(a)(2)
of the Act should be required. Accordingly, this
rule requires a supplementary report to be filed
only if the manufacturers average fuel economy
for a particular model year in its most recent
semi-annual report was equal to or greater than
an applicable average fuel economy standard, and
the manufacturer subsequently projects that its
average fuel economy for that model year has
fallen below that standard.
Ford and Chrysler expressed the fear that the
NPRM would require overly frequent supple-
mental reporting. To reduce the frequency of
supplemental reports, Ford and Chrysler sug-
gested that a greater decrease than 0.1 mile per
gallon be required to trigger the necessity for a
supplementary report. No threshold is specified
in this rule because none is necessary to accom-
modate the manufacturers' concerns about fre-
quent supplementary reports. Under this rule, a
manufacturer is not required to file more than
one supplementary report to each semiannual re-
port as a result of lower average fuel economy
projections.
The second case in which a supplementary re-
port was proposed to be required in the NPRM
was when a manufacturer's statement concerning
the representativeness of its average fuel economy
is no longer an accurate statement of the manu-
facturer's views regarding that matter. This
supplementary reporting requirement was in-
tended to ensure that a manufacturer promptly
raised and explained any concerns about the rep-
lesentativeness of the average and the possible
need for additional fuel economy values.
Ford objected to this proposed supplementary
reporting requirement based on Ford's interpre-
tation that the NPRM would have required a
supplementary report to be filed "whenever any
statement with respect to the projected average
fuel economy becomes partially or wholly inac-
curate or incomplete." Ford stated that this
would require daily reporting, and that the stand-
ard was so subjective as to be meaningless.
Ford apparently misinterpreted the proposed
requirement. The NPRM proposed that a sup-
plementary report be required when a manufac-
PART 537— PRE 14
Effective: December 12, 1977
Costs and Gross income and market share.
Data on these subjects were proposed to be re-
quired in the reports so that the NHTSA could
compare tlie effectiveness and costs of the dif-
ferent manufacturers' compliance strategies and
assess the impacts of complyin"; with the average
fuel economy standards on the manufacturers in-
dividually and as an industry and on consumers.
Ketiuirements for these data have been deleted
in view of the agency's decision to limit the scope
of the report to compliance related purposes.
When necessary to obtain information to enable
NHTSA to make the assessments of the impacts
of compliance on the manufacturers and consum-
ei's, it can use special orders.
Future model year data.-. The XPRM proposed
tliat the manufacturers be required to include in
their semiannual reports, beginning with the 1978
model year, information concerning their ability
to improve future average fuel economy and the
costs and other impacts that would result from
making improvements. Ford commented that
the proposal for reporting future model year in-
formation was very extensive and presented
unicjue and troublesome problems for the industry
in view of the scope of the information required,
the ability of the industry to comply with the
reporting requirements, and the potential effects
of the reporting requirements on competition
within the industry. Ford also questioned the
usefulness of the information since much of the
information is, according to that company, sub-
ject to change. To allow time for a more thor-
ougii consideration of these (juestions. Ford
requested that the NHTSA publish a final rule
on current model year information, and treat the
section of the XPRM on future model year data
as an advance notice of proposed rulemaking.
Ford suggested that a hew 60-day comment
period on the future model year data be allowed,
followed by a public hearing. Since section
r)Or)(a) does not require future model year report-
ing. Ford believes that XHTSA has no statutoiy
deadline for pronnilgation of tlie future model
year reporting requirement. AMC expressed
.substantially the same view!«.
Other manufacturers made the same jjoint. al-
tiiough they expressed it in terms of the scope of
(the proposal and the purposes to be served by the
J
PART 537
information. Chrysler stated that the scope of
the XPRM was excessive, and that the reporting
requirements for current and future model years
should be considered separately. According to
Chrysler, the reporting rule should be used only
to permit the X'^HTSA to determine whether the
manufacturer will comply with the applicable
average fuel economy standards. Chrysler also
suggested that special orders be used to obtain
any needed future model year information.
Rolls Royce, AMC, and British Leyland Motors
Inc. ("British Leyland") all indicated that the
scope of the proposed report was so broad that
members of their engineering staffs would have
to be withdrawn from their fuel economy im-
provement programs to collect and analyze the
data required to comply with the proposed re-
porting requirements. To avoid this situation,
British Leyland suggested that the purpose of
the reports should be limited to obtaining data
to evaluate the manufacturers' plans for compli-
ance. Toyota and Peugeot also commented that
the purpose of the reports should be limited to
obtaining information sufficient to evaluate the
manufacturers' plans for compliance.
With respect to the leadtime allowed, General
Motors recommended that future model year data
not be required to be reported in the 1978 model
year, because of the short leadtime. Chrysler
indicated that it would need at least twelve
months after publication of the final rule to sub-
mit all the future model year data proposed in
the XPR]\L Volvo, on the other hand, indicated
that it could thoroughly prepare this information
in time for submission with the 1978 mid-model
year report.
After considering these comments, the NHTSA
has decided not to include any requirements for
future model year information in the final rule.
The agency agrees that the timing on establishing
file reporting requirements for current model
year information is more critical, given the pro-
visions of section 505(a) of the Act, than the
timing on establishing requirements for future
model year information. The agency will con-
tinue to consider the various options open to it
for obtaining future model year infoi'mation, in-
cluding issuing a new proposal or special orders.
—PRE 13
Effective: December 12, 1977
Sufplementary reports. Section 50.5(a) (2) re-
quires that if a manufacturer indicated in its
recent semiannual! report that it would comply •
with a fuel economy standard and then deter-
mines that its compliance plan is not sufficient to
enable it to achieve compliance, the manufacturer
must submit a revised plan specifying any addi-
tional measures that it will take to achieve com-
pliance. Information on compliance plans and
potential noncompliances would enable the agency
to determine whether the manufacturers were
making good faith efforts to comply with the
standards. Using its authority under section
505(a) and (c), the agency intentionally went
beyond this requirement in the XPRM.
The first case in which a supplementary report
was proposed to be required was when a manu-
facturer's projected average fuel economy had
decreased by 0.1 mile per gallon or more from its
most recently reported average, and the resultant
average was below the standard or less than 0.4
miles per gallon above the standard. This re-
quirement was intended to alert this agency
either that a manufacturer that had projected
compliance might be in imminent danger of non-
compliance, or that a manufacturer that had
projected noncompliance had experienced a fur-
ther decrease in its average fuel economy. The
purpose of this requirement was to provide this
agency with information explaining the declining
average fuel economy and the steps that the
manufacturer intended to take to minimize the
decrease.
Both Ford and Chrysler objected to this pro-
posal as burdensome and stated that it was their
interpretation of section 505(a)(2) that supple-
mentarj' reports were required onlj- when a manu-
facturer's plans, as reported to the XHTSA, were
no longer sufficient to ensure compliance with an
applicable average fuel economy standard.
After a reconsideration of the proposed re-
quirements and the comments received, the
NHTSA has determined to narrow the rule so
that it requires a supplementary report to be filed
only in the circumstances specified in section
505(a)(2). As in the case of the future model
year information, the agency desires to consider
further the value and burden of requiring this
information which is outside the nominal scope
of section 502(a) (2). The NHTSA will monitor
the reports filed under the standards, and con-
sider whether supplemental reporting in addition
to the minimum required by section 502(a)(2)
of the Act should be required. Accordingly, this
rule requires a supplementary report to be filed
only if the manufacturer's average fuel economy
for a particular model year in its most recent
semi-annual report was equal to or greater than
an applicable average fuel economy standard, and
the manufacturer subsequently projects that its
average fuel economy for that model year has
fallen below that standard.
Ford and Chrysler expressed the fear that the
XPRM would require overly frequent supple-
mental reporting. To reduce the frequency of
supplemental reports, Ford and Chrysler sug-
gested that a greater decrease than 0.1 mile per
gallon be required to trigger the necessity for a
supplementary report. Xo threshold is specified
in this rule because none is necessary to accom-
modate the manufacturers' concerns about fre-
quent supplementary reports. Under this rule, a
manufacturer is not required to file more than
one supplementary report to each semiannual re-
port as a result of lower average fuel economy
projections.
The second case in which a supplementary re-
port was proposed to be required in the NPRM
was when a manufacturer's statement concerning
the representativeness of its average fuel economy
is no longer an accurate statement of the manu-
facturer's views regarding that matter. This
supplementary reporting requirement was in-
tended to ensure that a manufacturer promptly
raised and explained any concerns about the rep-
resentativeness of the average and the possible
need for additional fuel economy values.
Ford objected to this proposed supplementary
reporting requirement based on Ford's interpre-
tation that the XPRM would have required a
supplementary report to be filed "whenever any
statement with respect to the projected average
fuel economy becomes partially or wholly inac-
curate or incomplete." Ford stated that this
would require daily reporting, and that the stand-
ard was so subjective as to be meaningless.
Ford apparently misinterpreted the proposed
requirement. The XPRM proposed that a sup-
plementary report be required when a manufac-
PART 537— PRE 14
Effective: December 12, 1977
turer deteiiiiined tliat its previous statements
under § r)37.7(b) (3) re<rardin<r tlie representative-
ness of an averajre do not accurately reflect its
current views. This re(|uirenu'nt is narrower
tlian Ford understood it tf) he. A manufacturer's
views about the representativeness will presum-
ably chan<ie only after some analysis of these
procedures by the manufacturers. Even if a
manufacturer were to perform a new analysis
every day, it seems implausible that each new
analysis would yield a diHerent result than the
immediately pi'ecedinjr analysis. Since Ford did
not explain why different results were likely, the
XHTSA assumes that Ford's statement about
daily repoitinjr was based on some misinterpre-
tation of this section.
In response to Ford's conmient that the stand-
ard was too subjective, the language in the rule
has been clarified. The rule requires a supple-
mentary report to be filed when a manufacturer
determines that its projected average fuel econ-
omy as reported to the NHTSA is less represen-
tative than the manufacturer previously reported
it to be.
Supplementary information on the manufac-
turer's views about the representativeness of its
projected average fuel ec;pnomy is needed so that
the XHTSA will be promptly informed about
the possible need to determine fuel economy
values for additional base levels or vehicle con-
figurations. The information would be used to
promote efficient, non-duplicative use of resources
and to avoid the disruption of the fuel economy
program, as explained above in the section of this
preamble on semiannual reports. This supple-
mentary reporting requirement imposes no burden
on the manufacturer other than to record and
submit the results of analyses it has already made.
Mercedes commented that manufacturers which
profluce for sale in the United States not more
than 100.000 automobiles in a given model year
should not be required to comply with the sup-
plementary reporting requirements. The XHTSA
has no authority to exempt such manufacturers
from submitting a supplementai-y report when
it no longer piojects compliance since those sup-
plementary reports are required from all manu-
facturei-s by section 502(a) (-2). The agency
continues to believe that supplementary reporting
, regarding the representativeness of a manufac-
turer's projected average fuel economy should be
requii'ed from all manufacturers. It is important
to. ensure the compliance of all manufacturers,
large and small, with the average fuel economy
standards. Further, this reporting requirement
should impose no significant burden on even the
smallest of manufacturers. If a manufacturer
has conducted some analysis and concludes that
its average is not sufficiently representative, it
simply reports that conclusion and the reasons
therefor. Otherwise, the manufacturer submits no
supplementary information regarding representa-
tiveness.
Toyota commented that the requirement that
supplementary reports be filed within 30 days of
the date when the manufacturer determines or
should have determined that a supplementary
report is required is too short a period for foreign
manufacturers, particularly considering the time
losses inherent in the language differences and
communication problems confronting those manu-
facturers in non-English speaking coimtries.
Toyota did not, however, suggest an alternative
period. This agency has determined Toyota's
comments have some merit and that a slightly
longer time period to file the supplementary re-
ports should be permitted. Accordingly, this rule
requires the supplementary report to be received
by the XHTSA not later than 45 days from the
date on which the manufacturer determined, or
with reasonable diligence could have determined,
that a supplementary report was required. This
45-day period should be ample time to generate
the material, draft and translate the report, and
send it air mail to this agency.
X'one of the comments received by this agency
were directed to the proposed content of the
supplementary reports. This rule essentially fol-
lows the proposal in requiring that the manufac-
turer state the revised average fuel economy
projection or the previously unreported element
of unrepresentativeness of the projected average
fuel economy, as appropriate, explain the new
projection or element of representativeness, and
show any changes to the previously submitted
report which must be made in light of this newly
reported information. To clarify the types of
Vervisions that must be included in the supple-
mentary reports, this rule specifies that the manu-
facturer no longer projecting compliance shall
PART 537— PRE 15
EfFecllve: December 12, 1977
include any additional technological improve-
ments, sales mix changes, and marketing efforts
it intends to make. If the manufacturer does not
intend to attempt to take additional steps to
achieve compliance, it must describe the steps it
could take imder § 537.7(f), relating to additional
compliance efforts. In the case of a manufacturer
that no longer believes its average fuel economy
figure is as representative as it previously stated,
the rule requires a statement of the reasons for
the insufficient representativeness, the additional
testing or analysis necessary to eliminate the in-
sufficiency, and any plans of the manufacturer to
undertake the additional testing or analysis.
Treatment of information claimed to he confi-
dential business information. The NPRM set out
format and content requirements for asserting
and supporting a claim that certain information
be withheld from public disclosure as confidential
business information. In addition, the NPRM
indicated a procedure by which the agency would
consider and act upon claims for confidentiality.
Since the publication of the NPRM, it has be-
come clear to the agency that comprehensive
regulations governing confidential business infor-
mation, and information which is claimed to be
confidential, are necessary. Such regulations are
in preparation. The procedures and requirements
in the final reporting regulation will be followed
in the interim.
Several comments were received relating to the
treatment of information which is claimed to be
confidential business information. Chrysler stated
that it did not "believe that a requirement of a
showing of significant competitive damage is
authorized by the Motor Vehicle Information and
Cost Savings Act (as amended), but only that a
showing of competitive damage is enough to re-
quire confidential treatment." The requirement
of "significant" competitive damage proposed in
the NPRM is drawn from the express terms of
section 505 (d) (1) of the Act. That section pro-
vides that the agency may withhold information
from the public on the grounds that the informa-
tion is confidential business information '■'■only if
the [Administrator] . . . determines that such
information, if disclosed would result in signifi-
cant competitive damage." (Emphasis added.)
Chrysler provided no information, legislative
history, or other argument in support of its be-
lief tliat the Act, notwithstanding the terms of
section 505(d) (1), does not I'equire a showing of
significant competitive damage to support a
manufacturer's claim of confidentiality. More-
over, no other manufacturer made an argument
similar to Chrysler's argument. Because of the
express terms of section 505(d)(1), and the
mandatory nature of its directive, the agency
must reject Chrysler's argument.
Chrysler also claimed that certain categories or
types of information, which Chrysler identified
in its comments, should be entitled to "prima
facie" confidential treatment when submitted.
The agency agrees with Chrysler that some sort
of class treatment of information claimed to be
confidential business information would be ex-
tremely beneficial. Class determination will re-
duce the burdens on manufacturers asserting
claims for confidentiality, as well as the agency's
burden of evaluating claims for confidential treat-
ment of information. Moreover, class determina-
tions will also help to ensure evenhanded
treatment of claims for confidentiality.
The agency also agrees with Chrysler that
classes should provide for "prima facie" cate- j
gorization, rather than "per se" categorization.
The prima facie approach, by establishing a re-
buttable presumption of confidentiality, or non-
confidentiality, will allow the agency the
flexibility to give special consideration to special
cases that may arise.
The agency, however, cannot agree with the
categories of information which Chrysler claims
should be afforded prima facie confidential treat-
ment. The categories enumerated by Chrysler
would include information that might be too
general to be considered confidential business in-
formation, within the meaning of section 505(d)
(1) of the Act. Moreover, the agency is unwill-
ing to, make a class determination of the con-
fidentiality of certain kinds of information
without providing the opportunity for comment
from intei'ested persons on the appropriateness
of the class. Therefore, the agency will defer
establishing classes of information for the pur-
poses of determining business confidentiality un-
til the rulemaking establishing procedures for
the treatment of confidential information men-
tioned above is completed. The agency believes ^
that the continued use of case-by-case determina- (
PART 537— PRE 16
Effective: December 12, 1977
I
turcr (letennincd that its prc\'ious statements
under § r)37.7(b) (3) repardinfr the representative-
ness of an avcrajre do not afcnrately reflect its
current views. This re(iuireinent is narrower
tlian Ford understood it to he. A manufacturer's
views ahoiit the representativeness will presuni-
ahly chanjre only after some analysis of these
procedures by the manufacturers. Even if a
manufacturer were to perforin a new analysis
every day, it seems implausible that each new
analysis would yield a different result than the
immediately precedinfi analysis. Since Ford did
not explain why different results were likely, the
N'HTSA assumes tiiat Ford's statement about
daily reportinjr was based on some misinterpre-
tation of this section.
In response to Ford's comment that the stand-
ard was too subjective, the lanf^uage in the rule
lias been clarifie<l. The rule requires a supple-
mentary report to he filed when a manufacturer
determines that its projected average fuel econ-
omy as repoi'ted to the NUTS A is less represen-
tative than the manufacturer previously reported
it to be.
Supplementary information on the manufac-
turer's \iews about the representativeness of its
projected average fuel e(;pnomy is needed so that
the NHTSA will be promptly informed about
the possible need to determine fuel economy
values for additional base levels or vehicle con-
ti<ru rat ions. The information would be used to
promote efficient, non-duplicative use of resources
and to avoid the disruption of the fuel economy
program, as explained above in the section of this
preamble on semiannual reports. This supple-
mentary reporting requirement imposes no burden
on the manufacturer other than to record and
submit the results of analyses it has already made.
Mercedes commented that manufacturers which
produce for sale in the United States not more
than 100,000 automobiles in a given model year
should not be required to comply with the sup-
plementary reporting requirements. The NHTSA
has no authority to exempt such manufacturers
from submitting a supplementary report when
it no longer projects compliance since those sup-
plementary reports are required from all manu-
factuiei-s by section 502(a)(2). The agency
continues to t>elieve that supplementary reporting
, regarding the representativene.ss of a manufac-
turer's projected average fuel economy should be
required from all manufacturers. It is important
to ensure the compliance of all manufacturers,
large and small, with the average fuel economy
standards. Further, this reporting requirement
should impose no significant burden on even the
smallest of manufacturers. If a manufacturer
has conducted some analj'sis and concludes that
its average is not sufficiently representative, it
simply reports that conclusion and the reasons
therefor. Otherwise, the manufacturer submits no
supplementary information regarding representa-
tiveness.
Toyota commented that the requirement that
supplementary reports be filed within 30 days of
the date when the manufacturer determines or
should have determined that a supplementary
report is required is too short a period for foreign
manufacturers, particularly considering the time
losses inherent in the language differences and
communication problems confronting those manu-
facturers in non-English speaking countries.
Toyota did not, however, suggest an alternative
period. This agency has determined Toyota's
comments have some merit and that a slightly
longer time period to file the supplementary re-
ports should be permitted. Accordingly, this rule
requires the supplementary report to be received
by the NHTSA not later than 45 days from the
date on which the manufacturer determined, or
with reasonable diligence could have determined,
that a supplementary report was required. This
45-day period should be ample time to generate
the material, draft and translate the report, and
send it air mail to this agency.
None of the comments received by this agency
were directed to the proposed content of the
supplementary reports. This rule essentially fol-
lows the proposal in requiring that the manufac-
turer state the revised average fuel economy
projection or the previously unreported element
of unrepresentativeness of the projected average
fuel economy, as appropriate, explain the new
projection or element of representativeness, and
show any changes to the previously submitted
report which must be made in light of this newly
reported information. To clarify the types of
revisions that must be included in the supple-
mentary reports, this rule specifies that the manu-
facturer no longer projecting compliance shall
PART 537— PRE 15
Effective: December 12, 1977
include any additional technological improve-
ments, sales mix changes, and marketing elforts
it intends to make. If the manufacturer does not
intend to attempt to take additional steps to
achieve compliance, it must describe the steps it
could take under § 537.7(f), relating to additional
compliance efforts. In the case of a manufacturer
that no longer believes its average fuel economy
figure is as representative as it previously stated,
the rule requires a statement of the reasons for
the insufficient representativeness, the additional
testing or analysis necessary to eliminate the in-
sufficiency, and any plans of the manufacturer to
undertake the additional testing or analysis.
Treatment of information claimed to he confi-
dential business information. The NPRM set out
format and content requirements for asserting
and supporting a claim that certain information
be withheld from public disclosure as confidential
business information. In addition, tlie NPRM
indicated a procedure by which the agency would
consider and act upon claims for confidentiality.
Since the publication of the NPRM, it has be-
come clear to the agency that comprehensive
regulations governing confidential business infor-
mation, and information which is claimed to be
confidential, are necessary. Such regulations are
in preparation. The procedures and requirements
in the final reporting regulation will be followed
in the interim.
Several comments were received relating to the
treatment of information which is claimed to be
confidential business information. Chrysler stated
that it did not "believe that a requirement of a
showing of significant competitive damage is
authorized by the Motor Vehicle Information and
Cost Savings Act (as amended), but only that a
showing of competitive damage is enough to re-
quire confidential treatment." The requirement
of "significant" competitive damage proposed in
the NPRM is drawn from the e.xpress terms of
section 50o(d) (1) of the Act. That section pro-
vides that the agency may withhold information
from the public on the grounds that the informa-
tion is confidential business information "on/y if
the [Administrator] . . . determines that such
information, if disclosed would result in signifi-
cant competitive damage." (Emphasis added.)
Chrysler provided no information, legislative
history, or other argument in support of its be-
lief that the Act, notwithstanding the terms of
section 50.5(d) (1), does not require a showing of
significant competitive damage to support a
manufacturer's claim of confidentiality. More-
over, no other manufacturer made an argument
similar to Chrysler's argument. Because of the
expi'ess terms of section 505(d)(1), and the
mandatory nature of its directive, the agency
must reject Chrysler's argument.
Chrysler also claimed that certain categories or
types of information, which Chrysler identified
in its comments, should be entitled to "prima
facie" confidential treatment when submitted.
The agency agrees with Chrysler that some sort
of class treatment of information claimed to be
confidential business information would be ex-
tremely beneficial. Class determination will re-
duce the burdens on manufacturers asserting
claims for confidentiality, as well as the agency's
burden of evaluating claims for confidential treat-
ment of information. Moreover, class determina-
tions will also help to ensure evenhanded
treatment of claims for confidentiality.
The agency also agrees with Chrysler that ■
classes should provide for "prima facie" cate- ^^
gorization, rather than "per se" categorization.
The prima facie approach, by establishing a re-
buttable presumption of confidentiality, or non-
confidentiality, will allow the agency the
flexibility to give special consideration to special
cases that may arise.
The agency, however, cannot agree with the
categories of information which Chrysler claims
should be afforded prima facie confidential treat-
ment. The categories enumerated by Chrysler
would include information that might be too
general to be considered confidential business in-
formation, within the meaning of section 505(d)
(1) of. the Act. Moreover, the agency is unwill-
ing to make a class determination of the con-
fidentiality of certain kinds of information
without providing the opportunity for comment
from interested persons on the appropriateness
of the class. Therefore, the agency will defer
establishing classes of information for the pur-
poses of determining business confidentiality un-
til the rulemaking establishing procedures for
the treatment of confidential information men-
tioned above is completed. The agency believes gBl
that the continued use of case-by-case determina- I *
PART 537— PRE 16
Effective: December 12, 1977
tions of confidentiality for the interim period
siiould not be unduly burdensome on the manu-
facturers or the a<rency.
Chrysler also commented that when a deter-
mination is made that certain information is
confidential, that information should not be dis-
closed unless a "requester is able to make a sub-
stantial (as opposed to a casual [sic]) showinfr
of need to review this information." Althou<i'h
Chrysler did not specifically reference it. this
comment is presumably directed at the Admin-
istrator's power under section 505(d)(1) to re-
lease confidential business information when
relevant to a proceedin<j under Title V of the
Act. The ajrency has interpreted section 505(d)
(1) as jjivinf;: it the power to release confidential
business information in a proceeding when it is
in the public interest to do so. Tlie determina-
tion of whether the release of confidential busi-
ness information is in the public interest will
usually entail a balancinj;: of benefits and harms,
both public and pri\ate, that may result from the
release of information which has been determined
to be confidential business information. Certainly.
^ the need for the information may be an important
' factor in this balancinfr, as would other factors,
such as the effect on competition resulting from
the release of confidential business information.
The agency agrees with Chrysler that these,
as well as other factors, should be carefully
considered before the exercise of the power to
release admittedly confidential information. How-
ever, tlie agency cannot now assign weight to, or
even identify, all the factors that should be con-
sidered prior to the release of confidential busi-
ness information. The exercise of the 505(d) (1)
power nuist proceed on a case-by-case basis.
Chrysler .stated in its comments that a sub-
mitter of information should have ample oppor-
tunity to object to the proposed lelease of
confidential business information, or to withdraw
tiiat information. The agency agrees that sub-
mitters of confidential infoiniation. or infoiiua-
tion claimed to be confidential, should liave notice
of, and opportunity to object to, tlie proposed
release of that information. Tiie XPRM and the
final rule provide for such notice, as will tiie
rule governing the treatment of confidential in-
fonnation. The submitter will have at least ten
'(Bdavs, when feasible, between notice of intention
to disclose and actual disclosure, during which
time the manufacturer may make any objections
or take any other action that it regards as ap-
propriate.
The agency does not agree that the submitter
of information should have, in any circimistances,
the right to withdraw information which it has
been lawfully required to submit. Such a right
would give to the submitter of the information,
rather than the agency, the power to determine
what information should be made publicly avail-
able. Since Congress clearly gave this power to
the agency in section 505(d) (1), Chrysler's com-
ment must be rejected.
Although Ford, General Motors, and AMC
made no comments specifically relating to the
procedures for treating confidential business in-
formation, those manufacturers did express some
concern about the harmful effects, especially harm
to competition, that would result from disclosure
of some of the information which the agency is
requiring. Those comments did not explain how
disclosure may occur. Presumably, there is no
issue of accidental disclosure of information. The
agency knows of no instance where confidential
business information in the agency's pos-session
was inadvertently or negligently disclosed to the
public. The agency takes precautions to ensure
that confidential information in its possession is
not inadvertently released. Those precautions
have been effective in the past, and there is no
reason to believe that they will not continue to be
effective.
To the extent that confidential information may
be released under the power contained in section
505(d)(1). the statements made with respect to
the Chrysler comments are applicable here. The
agency will consider all the interests, including
the interests of the competitive structure of the
automobile industry, before releasing any confi-
dential business information. The agency will
not release any information or, indeed, take any
action at all, unless the agency believes that its
actions will be in the public interest.
lioth Ford and Oeneral Motors were concerned
that confidential business information may be in-
cluded in the agency's report to the Congress.
The agency "s report to Congress will be a public
clocuiiKMit. Therefore, the agency would have to
(Un'ide to disclose any confidential information
PART 537— PRE 17
EffacHva: December 12, 1977
before placing it in the report. Given the nature
of the report to the Congress, the agency believes
it is unlikely that disclosure of confidential busi-
ness information would be necessary for an in-
formative and complete report to the Congress,
and that there are no grounds for the manufac-
turers' concern in this regard.
A minor change has been made with respect to
the NPRM's provisions for incorporation by
reference of information in these reports. The
NPRM had proposed that, when a document was
incorporated by reference in this report, the
manufacturer would be required to append a
copy of the incorporated document to the report.
The NHTSA has determined that this provision
is unnecessary in the case of documents which
have previously been submitted to NHTSA. With
respect to documents incorporated by reference
which have previously been submitted to the
NHTSA, the manufacturer is required to clearly
identify the document and indicate the date on
which and by whom the document was submitted
to the NHTSA.
Implementation costs. In accordance with De-
partment of Transportation policy encouraging
adequate analysis of the consequences of regula-
tory action (41 FR 16200, April 16, 1976), the
agency has summarized below its evaluation of
the economic and other consequences of this ac-
tion on the public and private sectors. The total
annual cost of implementing this final rule is
expected to be less than $775,000 for the manu-
facturers and the Federal government. The
share of the manufacturers would be $650,000,
and that of the Federal government would be
$125,000. The costs to the manufacturers will
consist primarily of the additional administrative
costs incurred to gather, tabulate, and submit the
required information. The total costs for a manu-
facturer's semiannual and supplementary reports
for a model year will range between $160,000 for
a large manufacturer and $5,000 for a low volume
manufacturer exempted under section 502(c) of
Title V.
In light of the foregoing, Title 49, Code of
Federal Regulations, is amended by adding a
new Part 537, Automotive Fvsl Economy Reports.
The program official and attorney principally
responsible for the development of this rule are
Anees Adil and Stephen Kratzke, respectively.
Issued December 7, 1977.
Joan Claybrook
Administrator
42 F.R. 62374
December 12, 1977
f
PART 537— PRE 18
(€*?
Effective: December 12, 1977
tions of confidentiality for tlio intoiiin period
sliould not he unduly hui'd(>nsoine on the manu-
facturers or the a<:ency.
Chrysler also commented that wlien a deter-
mination is made that certain information is
confidential, that information should not be dis-
closed unless a "requester is able to make a sub-
stantial (as opposed to a casual [sic] ) showing
of need to review this information." Althou<rh
Ciirysler did not specifically reference it, this
comment is presumably directed at the Admin-
istrator's power imder section 505(d)(1) to re-
lease confidential business information when
relevant to a proceedinp under Title V of the
Act. The ajrency has interpreted section 505(d)
(1) as <rivin<r it the power to release confidential
business information in a proceeding when it is
in the public interest to do so. Tlie determina-
tion of whether the release of confidential busi-
ness information is in the public interest will
usually entail a balancinjj: of benefits and harms,
both public and private, that may result from the
release of information wliicli has been determined
to be confidential business information. Certainly,
k tiie need for the information may he an important
" factor in tliis balancinfr. as would other factors,
such as tlie effect on competition resultin<j; from
the release of confidential business information.
The agency agrees with Chrysler that these,
as well as other factors, should be carefully
considered before the e.xercise of the power to
release admittedly confidential information. How-
ever, tlie agency cannot now assign weight to, or
even identify, all the factors that should be con-
sidered prior to the release of confidential busi-
ness information. The exercise of the 505(d) (1)
power must proceed on a case-by-case basis.
Chrysler stated in its comments that a sub-
mitter of information should have ample oppor-
tunity to object to the proposed release of
confidential business information, or to witlidraw
that information. The agency agrees tliat sub-
mitters of confidential infornuition, or infoiinn-
tion claimed to be confidential, sliould lia\e notice
of, and opportunity to object to. the proposed
lelease of that information. The XPRM and the
final rule provide for sucii notice, as will the
rule governing the treatment of confidential in-
fonnation. The submitter will haxc at least ten
^ days, when feasible, between notice of intention
to disclose and actual disclosure, during which
time the manufacturer may make any objections
or take any other action that it regards as ap-
propriate.
The agency does not agree that the submitter
of information should have, in any circumstances,
the right to withdraw information which it has
been lawfully required to submit. Such a right
would give to the submitter of the information,
rather than the agency, the power to determine
what information should be made publicly avail-
able. Since Congress clearly gave this power to
the .agency in section 505(d) (1), Chrysler's com-
ment must be rejected.
Although Ford, General Motors, and AMC
made no comments specifically relating to the
procedures for treating confidential business in-
formation, those manufacturers did express some
concern about the harmful effects, especially harm
to competition, that would result from disclosure
of some of the information which the agency is
requiring. Those comments did not explain how
disclosure may occur. Presumably, there is no
issue of accidental disclosure of information. The
agency knows of no instance where confidential
business information in the agency's possession
was inadvertently or negligently disclosed to the
public. The agency takes precautions to ensure
that confidential information in its possession is
not inadvertently released. Those precautions
have been effective in the past, and there is no
reason to believe that they will not continue to be
effective.
To the extent that confidential information may
be released under the power contained in section
505(d)(1), the statements made with respect to
the Chrysler comments are applicable here. The
agency will consider all the interests, including
the interests of the competitive structure of the
automobile industry, before releasing any confi-
dential business information. The agency will
not release any information or. indeed, take any
action at all, unless the agency believes that its
actions will be in the public interest.
Both Ford and General Motors were concerned
that confidential business information may be in-
cluded in the agency's rei)ort to the Congress.
The agency's report to Congress will be a public
docuiiieiit. Therefore, the agency would have to
decide to disclose anv confidential information
PART 537— PRE IT
Effective: December 12, 1977
before placinjr it in the report. Given the nature
of tlie report to the Confrress, the agency believes
it is unlikely that disclosure of confidential busi-
ness information would be necessary for an in-
formative and complete report to the Congress,
and that there are no grounds for the manufac-
turers' concern in this regard.
A minor change has been made with respect to
the XPKM's provisions for incorporation by
reference of information in these reports. The
NPRM had proposed that, when a document was
incorporated by reference in this report, the
manufacturer would be required to append a
copy of the incorporated document to the report.
The NHTSA has determined that this provision
is unnecessary in the case of documents which
have previously been submitted to NHTSA. With
respect to documents incorporated by reference
which have previously been submitted to the
NHTSA, the manufacturer is required to clearly
identify the document and indicate the date on
which and by whom the document was submitted
to the NHTSA.
Implementation costs. In accordance with De-
partment of Transportation policy encouraging
adequate analysis of the consequences of regula-
tory action (41 FR 16200, April 16, 1976), the
agency has summarized below its evaluation of
the economic and other consequences of this ac-
tion on the public and private sectors. The total
annual cost of implementing this final rule is
expected to be less than $775,000 for the manu-
facturers and the Federal government. The
share of the manufacturers would be $650,000,
and that of the Federal government would be
$125,000. The costs to the manufacturers will
consist primarily of the additional administrative
costs incurred to gather, tabulate, and submit the
required information. The total costs for a manu-
facturer's semiannual and supplementary reports
for a model year will range between $160,000 for
a large manufacturer and $5,000 for a low volume
manufacturer exempted under section 502(c) of
Title V.
In light of the foregoing, Title 49, Code of
Federal Regulations, is amended by adding a
new Part 537, Automotive Fuel Economy Reports.
The program official and attorney principally
lesponsible for the development of this rule are
Anees Adil and Stephen Kratzke, respectively.
Issued December 7, 1977.
Joan Claybrook
Administrator
42 F.R. 62374
December 12, 1977
PART 537— PRE 18
PREAMBLE TO AN AMENDMENT TO PART 537-AUTOMOTIVE FUEL
ECONOMY REPORTS
(Docket Nos. FE 76-04; Notice 5;
FE 77-03, Notice 4; 80-21, Notice 1)
ACTION: Final Rule.
SUMMARY: This notice makes conforming
amendments to several of the agency's regulations
deleting specific requirements for confidentiality
determinations. These conforming amendments
are needed as a result of the publication today of a
new agency regulation governing requests for con-
fidentiality determinations (Part 512). Since that
new regulation supercedes the confidentiality pro-
visions existing in several of the agency's other
regulations, these conforming amendments are
being made without notice and opportunity for
comment.
EFFECTIVE DATE:
tive April 9, 1981.
These amendments are effec-
FOR FURTHER INFORMATION CONTACT:
Roger Tilton, Office of Chief Counsel,
National Highway Traffic Safety Adminis-
tration, 400 Seventh Street, S.W.,
Washington, D.C. 20590 (202-426-9511).
SUPPLEMENTARY INFORMATION: In accordance
with the above. Title 49 of the Code of Federal
Regulations is amended as follows.
Part 525, Exemptions From Average Fuel
Economy Standards, is revised as follows:
(1) Section 525.6(g) (1) and (2) are deleted and
replaced with the following:
(g) Specify and segregate any part of the infor-
mation and data submitted under this part that the
petitioner wishes to have withheld from public
disclosure in accordance with Part 512 of this
Chapter.
(2) Section 525.13 is deleted and section
525.12 is revised to read:
§ 525.12 Public Inspection of Information.
(a) Except as provided in paragraph (b), any per-
son may inspect available information relevant to a
petition under this Part, including the petition and
any supporting data, memoranda of informal
meetings with the petitioner or any other in-
terested persons, and the notices regarding the
petition, in the Docket Section of the National
Highway Traffic Safety Administration. Any per-
son may obtain copies of the information available
for inspection under this paragraph in accordance
with Part 7 of the regulations of the Office of the
Secretary of Transportation (49 CFR Part 7).
(b) Except for the release of confidential infor-
mation authorized by section 505 of the Act and
Part 512 of this Chapter, information made
available for public inspection does not include in-
formation for which confidentiality is requested
under § 525.6(g) and is granted in accordance with
Part 512 and sections 502 and 505 of the Act and
section 552(b) of Title 5 of the United States Code.
Part 537, Automotive Fuel Economy Reports, is
revised as follows:
(1) Section 537.5(c) (7) (i) and (ii) are deleted
and replaced with the following:
(7) Specify any part of the information or data
in the report that the manufacturer believes
should be withheld from public disclosure as
trade secret or other confidential business infor-
mation in accordance with Part 512 of this
Chapter.
(2) Section 537.12 is deleted and section
537.11 is revised to read:
§ 537.11 Public Inspection of Information.
(a) Except as provided in paragraph (b), any per-
son may inspect the information and data submit-
PART 537; PRE 19
ted by a manufacturer under this part in the docket
section of the National Highway Traffic Safety Ad-
ministration. Any person may obtain copies of the
information available for inspection under this sec-
tion in accordance with the regulations of the
Secretary of Transportation in Part 7 of this title.
(b) Except for the release of confidential infor-
mation authorized by section 505 of the Act and
Part 512 of this Chapter, information made
available under paragraph (a) for public inspection
does not include information for which confiden-
tiality is requested under § 537.5(c) (7) and is
granted in accordance with Part 512 of this
Chapter, section 505 of the Act, and section 552(b)
of Title 5 of the United States Code.
Part 555, Temporary Exemption From Motor
Vehicle Safety Standards, is revised as follows:
(1) Section 555.5(b) (6) is revised to read:
(6) Specify any part of the information and
data submitted which petitioner requests be
withheld from public disclosure in accordance
with Part 512 of this Chapter.
(2) Section 555.10(b) is revised to read:
(b) Except for the release of confidential infor-
mation authorized by Part 512 of this Chapter, in-
formation made available for inspection under
paragraph (a) shall not include materials not rele-
vant to the petition for which confidentiality is re-
quested and granted in accordance with sections
112, 113, and 158 of the Act (15 U.S.C. 1401, 1402,
and 1418) and section 552(b) of Title 5 of the
United States Code.
Issued on December 30, 1980.
Joan Claybrook
Administrator
46 F.R. 2063
January 8, 1981
i
PART 537; PRE 20
PREAMBLE TO AN AMENDMENT TO PART 537-AUTOMOTIVE FUEL
ECONOMY REPORTS
(Docket Nos. FE 76-04; Notice 5;
FE 77-03, Notice 4; 80-21, Notice 1)
ACTION: Final Rule.
SUMMARY: This notice makes conforming
amendments to several of the agency's regulations
deleting specific requirements for confidentiality
determinations. These conforming amendments
are needed as a result of the publication today of a
new agency regulation governing requests for con-
fidentiality determinations (Part 512). Since that
new regulation supercedes the confidentiality pro-
visions existing in several of the agency's other
regulations, these conforming amendments are
being made without notice and opportunity for
comment.
. EFFECTIVE DATE:
f tive April 9, 1981.
These amendments are effec-
FOR FURTHER INFORMATION CONTACT:
Roger Tilton, Office of Chief Counsel,
National Highway Traffic Safety Adminis-
tration, 400 Seventh Street, S.W.,
Washington, D.C. 20590 (202-426-9511).
SUPPLEMENTARY INFORMATION: In accordance
with the above. Title 49 of the Code of Federal
Regulations is amended as follows.
Part 525, Exemptions From Average Fuel
Ewnomy Standards, is revised as follows:
(1) Section 525.6(g) (1) and (2) are deleted and
replaced with the following:
(g) Specify and segregate any part of the infor-
mation and data submitted under this part that the
petitioner wishes to have withheld from public
disclosure in accordance with Part 512 of this
Chapter.
(2) Section 525.13 is deleted and section
525.12 is revised to read:
§ 525.12 Public Inspection of Information.
(a) Except as provided in paragraph (b), any per-
son may inspect available information relevant to a
petition under this Part, including the petition and
any supporting data, memoranda of informal
meetings with the petitioner or any other in-
terested persons, and the notices regarding the
petition, in the Docket Section of the National
Highway Traffic Safety Administration. Any per-
son may obtain copies of the information available
for inspection under this paragraph in accordance
with Part 7 of the regulations of the Office of the
Secretary of Transportation (49 CFR Part 7).
(b) Except for the release of confidential infor-
mation authorized by section 505 of the Act and
Part 512 of this Chapter, information made
available for public inspection does not include in-
formation for which confidentiality is requested
under § 525.6(g) and is granted in accordance with
Part 512 and sections 502 and 505 of the Act and
section 552(b) of Title 5 of the United States Code.
Part 537, Automotive Fv£l Economy Reports, is
revised as follows:
(1) Section 537.5(c) (7) (i) and (ii) are deleted
and replaced with the following:
(7) Specify any part of the information or data
in the report that the manufacturer believes
should be withheld from public disclosure as
trade secret or other confidential business infor-
mation in accordance with Part 512 of this
Chapter.
(2) Section 537.12 is deleted and section
537.11 is revised to read:
§ 537.11 Public Inspection of Information.
(a) Except as provided in paragraph (b), any per-
son may inspect the information and data submit-
PART 537; PRE 19
ted by a manufacturer under this part in the docket
section of the National Highway Traffic Safety Ad-
ministration. Any person may obtain copies of the
information available for inspection under this sec-
tion in accordance with the regulations of the
Secretary of Transportation in Part 7 of this title.
(b) Except for the release of confidential infor-
mation authorized by section 505 of the Act and
Part 512 of this Chapter, information made
available under paragraph (a) for public inspection
does not include information for which confiden-
tiality is requested under § 537.5(c) (7) and is
granted in accordance with Part 512 of this
Chapter, section 505 of the Act, and section 552(b)
of Title 5 of the United States Code.
Part 555, Temporary Exemption From Motor
Vehicle Safety Standards, is revised as follows:
(1) Section 555.5(b) (6) is revised to read:
(6) Specify any part of the information and
data submitted which petitioner requests be
withheld from public disclosure in accordance
with Part 512 of this Chapter.
(2) Section 555.10(b) is revised to read:
(b) Except for the release of confidential infor-
mation authorized by Part 512 of this Chapter, in-
formation made available for inspection under
paragraph (a) shall not include materials not rele-
vant to the petition for which confidentiality is re-
quested and granted in accordance with sections
112, 113, and 158 of the Act (15 U.S.C. 1401, 1402,
and 1418) and section 552(b) of Title 5 of the
United States Code.
Issued on December 30, 1980.
Joan Claybrook
Administrator
46 F.R. 2063
January 8, 1981
^
PART 537; PRE 20
PREAMBLE TO AN AMENDMENT TO PART 537
Automotive Fuel Economy; Semi-annual Reports
(Docket No. FE 77-03; Notice 7)
ACTION: Final rule.
SUMMARY: This notice amends the agency's
automotive fuel economy reporting requirements
by deleting certain information submission
requirements. The deleted requirements applied
to information the agency has determined to be
no longer necessary for it to monitor the
automotive industry's progress in achieving
higher levels of average fuel economy. The agency
is adopting this amendment as proposed, to permit
the vehicle manufacturers to take advantage of
the reduced requirements in the next reports
required to be submitted. However, the agency
will continue to evaluate comments responding to
the request in its proposal regarding suggestions
for further reductions in the requirements.
DATE: This action is effective on August 12,
1982.
SUPPLEMENTARY INFORMATION: Section 505
of the Motor Vehicle Information and Cost Savings
Act requires each automobile manufacturer
(other than those small manufacturers which have
been granted an alternative fuel economy standard
under section 502(c) of the Act) to submit to the
agency semi-annual reports relating to that
manufacturer's efforts to comply with average
fuel economy standards. The Act specifies that
each report must contain a statement as to
whether the manufacturer will comply with
average fuel economy standards for that year, a
plan describing the steps the manufacturer has
taken or will take to comply, and any other
information the agency may require. Whenever a
manufacturer determines that a plan it submitted
in one of its reports is no longer adequate to
assure compliance, it must submit a revised plan.
Section 505(c) of the Act also authorizes the
agency to require further reports to be submitted,
as necessary for the agency to carry out its
responsibilities under the Act. The Act requires
the agency to issue rules establishing the form
and content of all reports.
On December 12, 1977, in 42 F.R. 62374, the
agency established form and content requirements
for fuel economy reports. Those requirements
were designed to elicit information necessary to
monitor compliance with standards and to assist
the agency in its standard-setting activities for
passenger automobiles and light trucks. However,
in light of the agency's determination that, for the
foreseeable future, market forces appear to
provide adequate incentive for the production of
and demand for fuel efficient vehicles (see 46 F.R.
22243, April 16, 1981) and that the establishment
of additional passenger automobile fuel economy
standards is therefore unnecessary, some of the
information required to be submitted in fuel
economy reports was found to be no longer needed
by the agency. Therefore, on February 22, 1982,
the agency proposed deleting portions of its fuel
economy reporting requirements which were
originally established principally to assist future
rulemaking. See 47 F.R. 7706.
The agency's December 1977 rule required the
submission of five general categories of
information: (1) the manufacturer's projected
average fuel economy; (2) the projected fuel
economy and sales for each model type; (3) a
variety of technical and sales data for each
vehicle configuration; (4) a description of
technology and sales changes from the preceding
model year which increase the manufacturer's
average fuel economy, and of changes made
during the model year which will affect average
fuel economy; and (5) a description of marketing
measures the manufacturer expects to use to
improve average fuel economy. The proposed
PART 537; PRE 21
revisions to the reporting requirements would
have required the submission of the detailed
configuration data only once per year, instead of
requiring it for each semi-annual report, and
would have deleted the requirements for
submission of sales and technology change
information and information on marketing
measures.
The agency received ten comments on the
proposed changes, eight from vehicle
manufacturers and two from consumer
organizations. The vehicle manufacturers
generally supported the proposed reductions and
suggested additional areas where information
submission requirements might be reduced. The
consumer organizations opposed the reductions,
arguing that the agency should continue to
establish fuel economy standards for each model
year and that even if the agency merely monitors
the need for future standards, much of the no-
longer-required information would still be highly
useful.
For the reasons set forth below, the agency
disagrees with the arguments set forth by the
two consumer groups. As an immediate measure,
the agency is promulgating an amended reporting
rule identical to the proposed amendment. This
step was suggested by Ford Motor Company in
its NPRM comments. Taking that action will
permit a less stringent rule to be in effect in time
for the preparation and submission of future
reports. The agency will review the comments by
the vehicle manufacturers to determine whether
additional reductions in the reporting
requirements are appropriate and consistent
with the agency's statutory obligations.
The Environmental Policy Institute and the
Center for Auto Safety both argued that the
agency should not adopt the proposed modifications
to the reporting rule because the agency should
proceed to establish fuel economy standards for
model years after 1985. Under section 502(a)(1) of
the Act, Congress established an average fuel
economy standard of 27.5 miles per gallon for
passenger automobiles manufactured in the 1985
model year and thereafter. However, under
section 502(a)(4) of the Act, the agency is
authorized to amend the standard for 1985 or any
model year thereafter to a level determined to be
the maximum feasible average fuel economy level.
The agency's April 16 notice announced the
agency's determination that it is not now
necessary to exercise the discretionary authority
granted under section 502(a)(4) of the Act to issue
additional passenger automobile standards, given
current high gasoline prices and demand for fuel
efficient vehicles and announced plans of the
vehicle manufacturers to produce efficient
vehicles. The agency reaffirmed that position in
denying a petition from the Center for Auto
Safety to commence rulemaking on such standards
(see 46 F.R. 48383, October 1, 1981) and still
remains of that view.
The standards-related information previously
required to be submitted in the semi-annual
reports and now being deleted was useful when
the agency engaged in major fuel economy
standard setting proceedings virtually every
year, as it did from 1976-1980. However, even for
those proceedings, it was necessary to supplement
those reports with some detailed information
obtained through the use of questionnaires and
special orders to the manufacturers. The agency
simply sees no need for the continued submission
of certain information semi-annually. If changed
circumstances create a need in the future for the
issuance of additional passenger car standards,
for example, the agency could obtain the necessary
information in the same manner as in the earlier
proceedings, i.e., through the use of
questionnaires and special orders.
The Center for Auto Safety also argued that
the fuel economy reporting rule should not be
modified, since the agency still needs all the
previously required data to fulfill its stated intent
of monitoring the actions of the manufacturers in
producing and marketing fuel efficient vehicles,
as well as consumer demand for such vehicles.
The agency disagrees. Long term trends in
automotive fuel efficiency can be ascertained
with less detailed and less frequently submitted
information than is necessary to establish
standards which must be enforced to the nearest
0.1 mile per gallon. Information on vehicle model
types, along with the annual updates of more
detailed configuration data, provides adequate
information to assess such trends. Marketing
measure information was more useful in times
when manufacturers might have needed to use
such measures to raise their average fuel
economy levels enough to comply with applicable
fuel economy standards. In the current market
PART 537; PRE 22
PREAMBLE TO AN AMENDMENT TO PART 537
Automotive Fuel Economy; Semi-annual Reports
(Docket No. FE 77-03; Notice 7)
ACTION: Final rule.
SUMMARY: This notice amends the agency's
automotive fuel economy reporting requirements
by deleting certain information submission
requirements. The deleted requirements applied
to information the agency has determined to be
no longer necessary for it to monitor the
automotive industry's progress in achieving
higher levels of average fuel economy. The agency
is adopting this amendment as proposed, to permit
the vehicle manufacturers to take advantage of
the reduced requirements in the next reports
required to be submitted. However, the agency
will continue to evaluate comments responding to
the request in its proposal regarding suggestions
for further reductions in the requirements.
DATE: This action is effective on August 12,
1982.
SUPPLEMENTARY INFORMATION: Section 505
of the Motor Vehicle Information and Cost Savings
Act requires each automobile manufacturer
(other than those small manufacturers which have
been granted an alternative fuel economy standard
under section 502(c) of the Act) to submit to the
agency semi-annual reports relating to that
manufacturer's efforts to comply with average
fuel economy standards. The Act specifies that
each report must contain a statement as to
whether the manufacturer will comply with
average fuel economy standards for that year, a
plan describing the steps the manufacturer has
taken or will take to comply, and any other
information the agency may require. Whenever a
manufacturer determines that a plan it submitted
in one of its reports is no longer adequate to
assure compliance, it must submit a revised plan.
Section 505(c) of the Act also authorizes the
agency to require further reports to be submitted,
as necessary for the agency to carry out its
responsibilities under the Act. The Act requires
the agency to issue rules establishing the form
and content of all reports.
On December 12, 1977, in 42 F.R. 62374, the
agency established form and content requirements
for fuel economy reports. Those requirements
were designed to elicit information necessary to
monitor compliance with standards and to assist
the agency in its standard-setting activities for
passenger automobiles and light trucks. However,
in light of the agency's determination that, for the
foreseeable future, market forces appear to
provide adequate incentive for the production of
and demand for fuel efficient vehicles (see 46 F.R.
22243, April 16, 1981) and that the establishment
of additional passenger automobile fuel economy
standards is therefore unnecessary, some of the
information required to be submitted in fuel
economy reports was found to be no longer needed
by the agency. Therefore, on February 22, 1982,
the agency proposed deleting portions of its fuel
economy reporting requirements which were
originally established principally to assist future
rulemaking. See 47 F.R. 7706.
The agency's December 1977 rule required the
submission of five general categories of
information: (1) the manufacturer's projected
average fuel economy; (2) the projected fuel
economy and sales for each model type; (3) a
variety of technical and sales data for each
vehicle configuration; (4) a description of
technology and sales changes from the preceding
model year which increase the manufacturer's
average fuel economy, and of changes made
during the model year which will affect average
fuel economy; and (5) a description of marketing
measures the manufacturer expects to use to
improve average fuel economy. The proposed
PART 537; PRE 21
revisions to the reporting requirements would
have required the submission of the detailed
configuration data only once per year, instead of
requiring it for each semi-annual report, and
would have deleted the requirements for
submission of sales and technology change
information and information on marketing
measures.
The agency received ten comments on the
proposed changes, eight from vehicle
manufacturers and two from consumer
organizations. The vehicle manufacturers
generally supported the proposed reductions and
suggested additional areas where information
submission requirements might be reduced. The
consumer organizations opposed the reductions,
arguing that the agency should continue to
establish fuel economy standards for each model
year and that even if the agency merely monitors
the need for future standards, much of the no-
longer-required information would still be highly
useful.
For the reasons set forth below, the agency
disagrees with the arguments set forth by the
two consumer groups. As an immediate measure,
the agency is promulgating an amended reporting
rule identical to the proposed amendment. This
step was suggested by Ford Motor Company in
its NPRM comments. Taking that action will
permit a less stringent rule to be in effect in time
for the preparation and submission of future
reports. The agency will review the comments by
the vehicle manufacturers to determine whether
additional reductions in the reporting
requirements are appropriate and consistent
with the agency's statutory obligations.
The Environmental Policy Institute and the
Center for Auto Safety both argued that the
agency should not adopt the proposed modifications
to the reporting rule because the agency should
proceed to establish fuel economy standards for
model years after 1985. Under section 502(a)(1) of
the Act, Congress established an average fuel
economy standard of 27.5 miles per gallon for
passenger automobiles manufactured in the 1985
model year and thereafter. However, under
section 502(a)(4) of the Act, the agency is
authorized to amend the standard for 1985 or any
model year thereafter to a level determined to be
the maximum feasible average fuel economy level.
The agency's April 16 notice announced the
agency's determination that it is not now
necessary to exercise the discretionary authority
granted under section 502(a)(4) of the Act to issue
additional passenger automobile standards, given
current high gasoline prices and demand for fuel
efficient vehicles and announced plans of the
vehicle manufacturers to produce efficient
vehicles. The agency reaffirmed that position in
denying a petition from the Center for Auto
Safety to commence rulemaking on such standards
(see 46 F.R. 48383, October 1, 1981) and still
remains of that view.
The standards-related information previously
required to be submitted in the semi-annual
reports and now being deleted was useful when
the agency engaged in major fuel economy
standard setting proceedings virtually every
year, as it did from 1976-1980. However, even for
those proceedings, it was necessary to supplement
those reports with some detailed information
obtained through the use of questionnaires and
special orders to the manufacturers. The agency
simply sees no need for the continued submission
of certain information semi-annually. If changed
circumstances create a need in the future for the
issuance of additional passenger car standards,
for example, the agency could obtain the necessary
information in the same manner as in the earlier
proceedings, i.e., through the use of
questionnaires and special orders.
The Center for Auto Safety also argued that
the fuel economy reporting rule should not be
modified, since the agency still needs all the
previously required data to fulfill its stated intent
of monitoring the actions of the manufacturers in
producing and marketing fuel efficient vehicles,
as well as consumer demand for such vehicles.
The agency disagrees. Long term trends in
automotive fuel efficiency can be ascertained
with less detailed and less frequently submitted
information than is necessary to establish
standards which must be enforced to the nearest
0.1 mile per gallon. Information on vehicle model
types, along with the annual updates of more
detailed configuration data, provides adequate
information to assess such trends. Marketing
measure information was more useful in times
when manufacturers might have needed to use
such measures to raise their average fuel
economy levels enough to comply with applicable
fuel economy standards. In the current market
PART 537; PRE 22
situation, compliance with standards is typically
assured by comfortable margins. Thus, marketing
measures are targeted to problems associated
with inventories of over-stocked vehicles. With
regard to technological change information, this
material is typically available to the agency in the
trade press. It can also be derived from the
configuration and model type data in many cases.
Finally, running changes are generally minor,
unplanned product revisions caused by parts
shortages or driveability complaints by consumers,
such as a change in tire type or in carburetor
calibration. Major actions which could significantly
affect fuel economy are rarely implemented as
running changes.
The agency finds good cause for making this
amendment effective immediately, since it would
permit the manufacturers to avoid devoting
resources to the preparation of information which
the agency has determined to be of little value in
carrying out its responsibilities. The immediate
effective date is authorized under the
Administrative Procedure Act for that reason
and, since this rulemaking "relieves a restriction,"
within the meaning of 5 U.S.C. 553(d).
NHTSA has determined that this proceeding
does not involve a major rule within the meaning
of section 1, paragraph (b), of Executive Order
12291 because it is not likely to have an effect on
the economy of $100 million or more, to result in a
major increase in costs or prices, or to have a
significant adverse effect on competition,
employment, investment, productivity, innovation,
or the ability of United States firms to meet
foreign competition. This action is also not
significant for purposes of Department of
Transportation procedures for internal review of
regulatory actions. A regulatory evaluation of
this action has been prepared and has been placed
in the rulemaking docket for this notice. Copies of
that document can be obtained from the agency's
Docket Section at the address stated above.
Pursuant to the Regulatory Flexibility Act, the
agency has considered the impact of this
rulemaking action on small entities. The agency
certifies that this action will not have a
significant economic impact on a substantial
number of small entities. Therefore, a regulatory
flexibility analysis will not be required for this
action. The agency has concluded that few, if any,
manufacturers of passenger cars are small
entities and that, in any event, any effect on such
manufacturers will be positive in terms of
reduced costs. NHTSA has also concluded that
the environmental consequences of this action
will be of such limited scope that they clearly will
not have a significant effect on the quality of the
human environment.
Issued on August 5, 1982.
Raymond A. Peck, Jr.
Administrator
47 F.R. 34985
August 12, 1982
PART 537: PRE 23-24
^
i
situation, compliance with standards is typically
assured by comfortable margins. Thus, marketing
measures are targeted to problems associated
with inventories of over-stocked vehicles. With
regard to technological change information, this
material is typically available to the agency in the
trade press. It can also be derived from the
configuration and model type data in many cases.
Finally, running changes are generally minor,
unplanned product revisions caused by parts
shortages or driveability complaints by consumers,
such as a change in tire type or in carburetor
calibration. Major actions which could significantly
affect fuel economy are rarely implemented as
running changes.
The agency finds good cause for making this
amendment effective immediately, since it would
permit the manufacturers to avoid devoting
resources to the preparation of information which
the agency has determined to be of little value in
carrying out its responsibilities. The immediate
effective date is authorized under the
Administrative Procedure Act for that reason
and, since this rulemaking "relieves a restriction,"
within the meaning of 5 U.S.C. 553(d).
NHTSA has determined that this proceeding
does not involve a major rule within the meaning
of section 1, paragraph (b), of Executive Order
12291 because it is not likely to have an effect on
the economy of $100 million or more, to result in a
major increase in costs or prices, or to have a
significant adverse effect on competition,
employment, investment, productivity, innovation,
or the ability of United States firms to meet
foreign competition. This action is also not
significant for purposes of Department of
Transportation procedures for internal review of
regulatory actions. A regulatory evaluation of
this action has been prepared and has been placed
in the rulemaking docket for this notice. Copies of
that document can be obtained from the agency's
Docket Section at the address stated above.
Pursuant to the Regulatory Flexibility Act, the
agency has considered the impact of this
rulemaking action on small entities. The agency
certifies that this action will not have a
significant economic impact on a substantial
number of small entities. Therefore, a regulatory
flexibility analysis will not be required for this
action. The agency has concluded that few, if any,
manufacturers of passenger cars are small
entities and that, in any event, any effect on such
manufacturers will be positive in terms of
reduced costs. NHTSA has also concluded that
the environmental consequences of this action
will be of such limited scope that they clearly will
not have a significant effect on the quality of the
human environment.
Issued on August 5, 1982.
Raymond A. Peck, Jr.
Administrator
47 F.R. 34985
August 12, 1982
PART 537; PRE 23-24
(f
PART 537— AUTOMOTIVE FUEL ECONOMY REPORTS
Section
537.1 Scope.
537.2 Purpose.
537.3 Applicability.
537.4 Definitions.
537.5 General requirements for reports.
537.6 General content of reports.
537.7 Pre-model year and mid-model year re-
ports.
537.8 Supplementary reports.
537.9 Determination of fuel economy values and
average fuel economy.
537.10 Incorporation by reference.
537.11 Public inspection of information.
537.12 Confidential information.
AUTHORITY: Section 9, Pub. L. 89-670, 80
Stat. 931 (49 U.S.C. 1657); Section 301, Pub. L.
94-163, 89 Stat. 901 (15 U.S.C. 2005); delegation
of authority at 41 FR 25015, June 22, 1976.
§ 537.1 Scope.
This part estabHshes requirements for automo-
bile manufacturers to submit reports to the Na-
tional Highway Traffic Safety Administration
regarding their efforts to improve automotive fuel
economy.
§ 537.2 Purpose.
The purpose of this part is to obtain informa-
tion to aid the National Highway Traffic Safety
Administration in evaluating automobile manu-
facturers' plans for complying with average fuel
economy standards and in preparing an annual
review of the average fuel economy standards.
§ 537.3 Applicability.
This part applies to automobile manufacturers.
§ 537.4 Definitions.
(a) Statutory terms. (1) The terms "average
fuel economy standard," "fuel," "manufacture,"
and "model year" are used as defined in section
501 of the Act.
(2) The term "manufacturer" is used as de-
fined in section 501 of the Act and in accord-
ance with Part 529 of this chapter.
(3) The terms "average fuel economy," "fuel
economy," and "model type" are used as de-
fined in Subpart A of 40 CFR Part 600.
(4) The terms "automobile," "automobile
capable of off-highway operation" and "passen-
ger automobile" are used as defined in section
501 of the Act and in accordance with the
determinations in Part 523 of this chapter.
(b) Other terms. (1) The term "loaded ve-
hicle weight" is used as defined in Subpart A of
40 CFR Part 86.
(2) The terms "axle ratio," "base level,"
"body style," "car line," "city fuel economy,"
"combined fuel economy," "engine code,"
"gross vehicle weight," "highway fuel econ-
omy," "inertia weight," "transmission class,"
and "vehicle configuration" are used as defined
in Subpart A of 40 CFR Part 600.
(3) The term "nonpassenger automobile" is
used as defined in Part 523 of this chapter and
in accordance with determinations in that part.
(4) The terms "approach angle," "axle
clearance," "breakover angle," "cargo carrying
volume," "departure angle," "passenger carry-
ing volume," "running clearance," and "tempo-
rary living quarters" are used as defined in
Part 523 of this chapter.
(5) The term "incomplete automobile manu-
facturer" is used as defined in Part 529 of
this chapter.
(6) The term "designated seating position"
is used as defined in § 571.3 of this chapter.
PART 537-1
(7) As used in this part, unless otherwise
required by the context:
(i) "Act means the Motor Vehicle Infor-
mation and Cost Savings Act (Pub. L. 92-
513), as amended by the Energy Policy and
Conservation Act (Pub. L. 94-163).
(ii) "Administrator" means the Adminis-
trator of the National Highway Traffic
Safety Administration or the Administrator's
delegate.
(iii) "Current model year" means:
(A) In the case of a pre-model year re-
port, the full model year immediately
following the period during which that
report is required by § 537.5(b) to be sub-
mitted.
(B) In the case of a mid-model year
report, the model year during which that
report is required by § 537.5(b) to be sub-
mitted.
(iv) "Average" means a production-
weighted average.
(v) "Sales mix" means the number of
automobiles, and the percentage of a manu-
facturer's annual total production of auto-
mobiles, in each inertia weight class, which
the manufacturer plans to produce in a
specified model year.
(vi) "Total drive ratio" means the ratio
of an automobile's engine rotational speed
(in revolutions per minute) to the auto-
mobile's forward speed (in miles per
hour).
§ 537.5 General requirements for reports.
(a) For each current model year, each manu-
facturer shall submit a pre-model year report, a
mid-model year report, and, as required by § 537.8,
supplementary reports.
(b) (1) The pre-model year report required by
this part for each current model year must be
submitted not more than 30 days and not less
than 1 day before the 1st day of that model
year.
(2) The mid-model year report required by this
part for each current model year must be submit-
ted not earlier than the 180th day and not later
than the 209th day of that model year.
(3) Each supplementary report must be sub-
mitted in accordance with § 537.8(c).
(c) Each report required by this part must:
(1) Identify the report as a pre-model year
report, mid-model year report, or supplementary
report, as appropriate;
(2) Identify the manufacturer submitting the
report;
(3) State the full name, title, and address of
the official responsible for preparing the report;
(4) Be submitted in 10 copies to: Ad-
ministrator, National Highway Traffic Safety
Administration, 400 Seventh Street, S.W.,
Washington, D.C. 20590;
(5) Identify the current model year;
(6) Be written in the English language; and
1(7) Specify any part of the information or
data in the report that the manufacturer believes
should be withheld from public disclosure as
trade secret or other confidential business infor-
mation in accordance with Part 512 of this
Chapter. (46 F.R. 2063- January 8, 1981. Effec-
tive: April 9, 1981)1
(d) Each report required by this part must be
based upon all information and data available to
the manufacturer 30 days before the report is sub-
mitted to the Administrator.
(e) (1) Any manufacturer may provide any item
of information or data required by § 537.7 (e) as an
estimate, or as a set or range of alternatives.
(2) Any manufacturer submitting estimates,
or sets or ranges of alternatives as permitted
by paragraph (e) (1) of this section, shall state:
(i) The method for determining them;
(ii) The major uncertainties associated
with them; and
(Rev. 1/8/81)
PART 537-2
PART 537— AUTOMOTIVE FUEL ECONOMY REPORTS
Section
537.1 Scope.
537.2 Purpose.
537.3 Applicability.
537.4 Definitions.
537.5 General requirements for reports.
537.6 General content of reports.
537.7 Pre-model year and mid-model year re-
ports.
537.8 Supplementary reports.
537.9 Determination of fuel economy values and
average fuel economy.
537.10 Incorporation by reference.
537.11 Public inspection of information.
537.12 Confidential information.
AUTHORITY: Section 9, Pub. L. 89-670, 80
Stat. 931 (49 U.S.C. 1657); Section 301, Pub. L.
94-163, 89 Stat. 901 (15 U.S.C. 2005); delegation
of authority at 41 FR 25015, June 22, 1976.
§ 537.1 Scope.
This part establishes requirements for automo-
bile manufacturers to submit reports to the Na-
tional Highway Traffic Safety Administration
regarding their efforts to improve automotive fuel
economy.
§ 537.2 Purpose.
The purpose of this part is to obtain informa-
tion to aid the National Highway Traffic Safety
Administration in evaluating automobile manu-
facturers' plans for complying with average fuel
economy standards and in preparing an annual
review of the average fuel economy standards.
§ 537.3 Applicability.
This part applies to automobile manufacturers.
§ 537.4 Definitions.
(a) Statutory terms. (1) The terms "average
fuel economy standard," "fuel," "manufacture,"
and "model year" are used as defined in section
501 of the Act.
(2) The term "manufacturer" is used as de-
fined in section 501 of the Act and in accord-
ance with Part 529 of this chapter.
(3) The terms "average fuel economy," "fuel
economy," and "model type" are used as de-
fined in Subpart A of 40 CFR Part 600.
(4) The terms "automobile," "automobile
capable of off-highway operation" and "passen-
ger automobile" are used as defined in section
501 of the Act and in accordance with the
determinations in Part 523 of this chapter.
(b) Other terms. (1) The term "loaded ve-
hicle weight" is used as defined in Subpart A of
40 CFR Part 86.
(2) The terms "axle ratio," "base level,"
"body style," "car line," "city fuel economy,"
"combined fuel economy," "engine code,"
"gross vehicle weight," "highway fuel econ-
omy," "inertia weight," "transmission class,"
and "vehicle configuration" are used as defined
in Subpart A of 40 CFR Part 600.
(3) The term "nonpassenger automobile" is
used as defined in Part 523 of this chapter and
in accordance with determinations in that part.
(4) The terms "approach angle," "axle
clearance," "breakover angle," "cargo carrying
volume," "departure angle," "passenger carry-
ing volume," "running clearance," and "tempo-
rary Hving quarters" are used as defined in
Part 523 of this chapter.
(5) The term "incomplete automobile manu-
facturer" is used as defined in Part 529 of
this chapter.
(6) The term "designated seating position"
is used as defined in § 571.3 of this chapter.
PART 537-1
(7) As used in this part, unless otherwise
required by the context:
(i) "Act means the Motor Vehicle Infor-
mation and Cost Savings Act (Pub. L. 92-
513), as amended by the Energy Policy and
Conservation Act (Pub. L. 94-163).
(ii) "Administrator" means the Adminis-
trator of the National Highway Traffic
Safety Administration or the Administrator's
delegate.
(iii) "Current model year" means:
(A) In the case of a pre-model year re-
port, the full model year immediately
following the period during which that
report is required by § 537.5(b) to be sub-
mitted.
(B) In the case of a mid-model year
report, the model year during which that
report is required by § 537.5(b) to be sub-
mitted.
(iv) "Average" means a production-
weighted average.
(v) "Sales mix" means the number of
automobiles, and the percentage of a manu-
facturer's annual total production of auto-
mobiles, in each inertia weight class, which
the manufacturer plans to produce in a
specified model year.
(vi) "Total drive ratio" means the ratio
of an automobile's engine rotational speed
(in revolutions per minute) to the auto-
mobile's forward speed (in miles per
hour).
§ 537.5 General requirements for reports.
(a) For each current model year, each manu-
facturer shall submit a pre-model year report, a
mid-model year report, and, as required by § 537.8,
supplementary reports.
(b) (1) The pre-model year report required by
this part for each current model year must be
submitted not more than 30 days and not less
than 1 day before the 1st day of that model
year.
(2) The mid-model year report required by this
part for each current model year must be submit-
ted not earlier than the 180th day and not later
than the 209th day of that model year.
(3) Each supplementary report must be sub-
mitted in accordance with § 537.8(c).
(c) Each report required by this part must:
(1) Identify the report as a pre-model year
report, mid-model year report, or supplementary
report, as appropriate;
(2) Identify the manufacturer submitting the
report;
(3) State the full name, title, and address of
the official responsible for preparing the report;
(4) Be submitted in 10 copies to: Ad-
ministrator, National Highway Traffic Safety
Administration, 400 Seventh Street, S.W.,
Washington, D.C. 20590;
(5) Identify the current model year;
(6) Be written in the English language; and
[(7) Specify any part of the information or
data in the report that the manufacturer believes
should be withheld from public disclosure as
trade secret or other confidential business infor-
mation in accordance with Part 512 of this
Chapter. (46 F.R. 2063-January 8, 1981. Effec-
tive: April 9, 1981)1
(d) Each report required by this part must be
based upon all information and data available to
the manufacturer 30 days before the report is sub-
mitted to the Administrator.
(e)(1) Any manufacturer may provide any item
of information or data required by § 537.7 (e) as an
estimate, or as a set or range of alternatives.
(2) Any manufacturer submitting estimates,
or sets or ranges of alternatives as permitted
by paragraph (e) (1) of this section, shall state:
(i) The method for determining them;
(ii) The major uncertainties associated
with them; and
(Rev. 1/8/S1)
PART 537-2
(iii) The most likely value in the case of
an estimate and the most likely alternative
in the case of a set or range of alternatives.
§ 537.6 General content of reports.
(a) Pre-modet year and mid-model year re-
ports. Except as provided in paragraph (c) of
this section, the pre-model year report and the
mid-model year report for model year 1978 and
each model year thereafter must contain the in-
formation required by § 537.7(a).
(b) Supplementary report. Each supplemen-
tary report must contain the information required
by S537.8(b) (1), (2), or (3), as appropriate.
(c) Exceptions.
(1) The pre-model year report for model
year 1978 is required to contain only the infor-
mation specified in § 537.7(b) and (c)(l)-(4)
for passenger automobiles and a description of
how the manufacturer will use marketing
measures to aid in achieving the sales mix of
passenger automobiles projected for that model
year.
(2) The mid-model year report for model
year 1978 is required to contain only the infor-
mation specified in § 537.7(b)-(e) for passen-
ger automobiles.
(3) The pre-model year report is not re-
quired to contain the information specified in
§ 537.7(b), (c) (1) and (2), or (c) (4) (xiv)-
(xvi) and (xxiv) if that report is required to
be submitted before the fifth day after the date
by which the manufacturer must submit the
preliminary determination of its average fuel
economy for the current model year to the
Environmental Protection Agency under 40
CFR 600.506. Each manufacturer that does
not include information under the exception in
the immediately preceding sentence shall indi-
cate in its report the date by which it must
submit that preliminary determination.
(4) The pre-model year report and the mid-
model year report submitted by an incomplete
automobile manufacturer for any model year
are not required to contain the information
specified in § 537.7(c) (4) (xviii)-(xxii) and
(c) (5). The information provided by the in-
complete automobile manufacturer under
§ 537.7(c) and (e) shall be according to base
level instead of model type or carline.
§ 537.7 Pre-model year and mid-model year
reports.
(a) (1) Provide the information required by
paragraphs (b)-(e) of this section for the manu-
facturer's passenger automobiles for the current
model year.
(2) After providing the information re-
quired by paragraph (a) (1) of this section,
provide the information required by para-
graphs (b)-(e) of this section for each class,
as specified in Part 533 of this chapter, of the
manufacturer's non-passenger automobiles for
the current model year.
(b) (1) Projected average fuel economy. State
the projected average fuel economy for the manu-
facturer's automobiles determined in accordance
with § 537.9 and based upon the fuel economy
values and projected sales figures provided under
paragraph (c) (2) of this section.
(2) State the projected final average fuel
economy that the manufacturer anticipates
having if the changes described under para-
graph (d)(1) (ii) will cause that average to be
different from the average fuel economy pro-
jected under paragraph (b) (1) of this section.
(3) State whether the manufacturer believes
that the projection it provides under paragraph
(b) (2) of this section, or if it does not provide
an average under that paragraph, the projec-
tion it provides under paragraph (b) (1) of
this section, sufficiently represents the manufac-
turer's average fuel economy for the current
model year for the purposes of the Act. In
the case of a manufacturer that believes that
the projection is not sufficiently representative
for those purposes, state the specific nature of
and reason for the insufficiency and the specific
additional testing for derivation of fuel econ-
omy values by analytical methods believed by
the manufacturer necessary to eliminate the
insufficiency and any plans of the manufacturer
to undertake that testing or derivation volun-
tarily and submit the resulting data to the
Environmental Protection Agency under 40
CFR 600.509.
PART 537-3
(c) Model type fuel economy and technical in-
formation. (1) For each model type of the
manufacturer's automobiles, provide the informa-
tion specified in paragraph (c) (2) of this section
in tabular form. List the model types in order
of increasing average inertia weight from top to
bottom down the left side of the table and list the
information categories in the order specified in
paragraph (c) (2) of this section from left to
right across the top of the table.
(2) (i) City fuel economy;
(ii) Highway fuel economy;
(iii) Combined fuel economy; and
(iv) Projected sales for the current model
year.
(3) For each vehicle configuration whose
fuel economy was used to calculate the fuel
economy values for a model type under para-
graph (c) (2) of this section, provide the infor-
mation specified in paragraph (c) (4) of this
section in tabular form. List the vehicle con-
figurations, by model type in the order listed
under paragraph (c) (2) of this section, from
top to bottom down the left of the table and
list the information categories across the top
of the table from left to right in the order
specified in paragraph (c) (4) of this section.
(4) (i) Loaded vehicle weight;
(ii) Inertia weight;
(iii) Cubic inch displacement of engine;
(iv) Number of engine cylinders;
(v) SAE net horsepower;
(vi) Engine code;
(vii) Fuel system (number of carburetor
barrels or, if fuel injection is used, so indi-
cate);
(viii) Emission control system;
(ix) Transmission class;
(x) Number of forward speeds;
(xi) Existence of overdrive (indicate yes
or no);
(xii) Total drive ratio;
(xiii) Axle ratio;
(xiv) City fuel economy;
(xv) Highway fuel economy;
(xvi) Combined fuel economy;
(xvii) Projected sales for the current
model year;
(xviii) (A) In the case of passenger auto-
mobiles, interior volume index, determined
in accordance with Subpart D of 40 CFR
Part 600;
(B) In the case of nonpassenger auto-
mobiles:
(1) Passenger-carrying volume, and
(2) Cargo-carrying volume;
(xix) Number of designated seating posi-
tions;
(xx) Performance of the function described
in S 523.5(a) (5) of this chapter (indicate yes
or no);
(xxi) Existence of temporary living quar-
ters (indicate yes or no);
(xxii) Body style;
(xxiii) Frontal area;
(xxiv) Road load power at 50 miles per
hour, if determined by the manufacturer for
purposes other than compliance with this
Part to differ from the road load setting
prescribed in 40 CFR § 86.177-ll(d);
(xxv) Optional equipment which the
manufacturer is required under 40 CFR
Parts 86 and 600 to have actually installed
on the vehicle configuration, or the weight
of which must be included in the curb weight
computation for the vehicle configuration, for
fuel economy testing purposes.
(5) For each model type of automobile
which is classified as an automobile capable of
off-highway operation under Part 523 of this
chapter, provide the following data:
(i) Approach angle;
(ii) Departure angle;
(iii) Breakover angle;
(iv) Axle clearance;
(v) Minimum running clearance; and
(vi) Existence of 4-wheel drive (indicate
yes or no).
(6) The fuel economy values provided under
paragraphs (c) (2) and (4) of this section shall
be determined in accordance with § 537.9.
(d) Automobile technology and sales mix
changes. (1) For each inertia weight class of the
manufacturer's automobiles—
(i) Describe the differences between the
technology of its automobiles for the current
model year and of its automobiles for the
immediately preceding model year that result
in its automobiles for the current model year
PART 537-4
(iii) The most likely value in the case of
an estimate and the most likely alternative
in the case of a set or range of alternatives.
§ 537.6 General content of reports.
(a) Pre-model year and mid-model year re-
ports. Except as provided in paragraph (c) of
this section, the pre-model year report and the
mid-model year report for model year 1978 and
each model year thereafter must contain the in-
formation required by § 537.7(a).
(b) Supplementary report. Each supplemen-
tary report must contain the information required
by S537.8(b) (1), (2), or (3). as appropriate.
(c) Exceptions.
(1) The pre-model year report for model
year 1978 is required to contain only the infor-
mation specified in § 537.7(b) and (c)(l)-(4)
for passenger automobiles and a description of
how the manufacturer will use marketing
measures to aid in achieving the sales mix of
passenger automobiles projected for that model
year.
(2) The mid-model year report for model
year 1978 is required to contain only the infor-
mation specified in § 537.7(b)-(e) for passen-
ger automobiles.
(3) The pre-model year report is not re-
quired to contain the information specified in
S 537.7(b), (c)(1) and (2), or (c)(4) (xiv)-
(xvi) and (xxiv) if that report is required to
be submitted before the fifth day after the date
by which the manufacturer must submit the
preliminary determination of its average fuel
economy for the current model year to the
Environmental Protection Agency under 40
CFR 600.506. Each manufacturer that does
not include information under the exception in
the immediately preceding sentence shall indi-
cate in its report the date by which it must
submit that preliminary determination.
(4) The pre-model year report and the mid-
model year report submitted by an incomplete
automobile manufacturer for any model year
are not required to contain the information
specified in % 537.7(c) (4) (xviii)-(xxii) and
(c) (5). The information provided by the in-
complete automobile manufacturer under
§ 537.7(c) and (e) shall be according to base
level instead of model type or carline.
§ 537.7 Pre-model year and mid-model year
reports.
(a) (1) Provide the information required by
paragraphs (b)-(e) of this section for the manu-
facturer's passenger automobiles for the current
model year.
(2) After providing the information re-
quired by paragraph (a)(1) of this section,
provide the information required by para-
graphs (b)-(e) of this section for each class,
as specified in Part 533 of this chapter, of the
manufacturer's non-passenger automobiles for
the current model year.
(b) (1) Projected average fuel economy. State
the projected average fuel economy for the manu-
facturer's automobiles determined in accordance
with § 537.9 and based upon the fuel economy
values and projected sales figures provided under
paragraph (c) (2) of this section.
(2) State the projected final average fuel
economy that the manufacturer anticipates
having if the changes described under para-
graph (d) (1) (ii) will cause that average to be
different from the average fuel economy pro-
jected under paragraph (b) (1) of this section.
(3) State whether the manufacturer believes
that the projection it provides under paragraph
(b) (2) of this section, or if it does not provide
an average under that paragraph, the projec-
tion it provides under paragraph (b) (1) of
this section, sufficiently represents the manufac-
turer's average fuel economy for the current
model year for the purposes of the Act. In
the case of a manufacturer that believes that
the projection is not sufficiently representative
for those purposes, state the specific nature of
and reason for the insufficiency and the specific
additional testing for derivation of fuel econ-
omy values by analytical methods believed by
the manufacturer necessary to eliminate the
insufficiency and any plans of the manufacturer
to undertake that testing or derivation volun-
tarily and submit the resulting data to the
Environmental Protection Agency under 40
CFR 600.509.
PART 537-3
(c) Model type fuel economy and technical in-
formation. (1) For each model type of the
manufacturer's automobiles, provide the informa-
tion specified in paragraph (c) (2) of this section
in tabular form. List the model types in order
of increasing average inertia weight from top to
bottom down the left side of the table and list the
information categories in the order specified in
paragraph (c) (2) of this section from left to
right across the top of the table.
(2) (i) City fuel economy;
(ii) Highway fuel economy;
(iii) Combined fuel economy; and
(iv) Projected sales for the current model
year.
(3) For each vehicle configuration whose
fuel economy was used to calculate the fuel
economy values for a model type under para-
graph (c) (2) of this section, provide the infor-
mation specified in paragraph (c) (4) of this
section in tabular form. List the vehicle con-
figurations, by model type in the order listed
under paragraph (c) (2) of this section, from
top to bottom down the left of the table and
list the information categories across the top
of the table from left to right in the order
specified in paragraph (c) (4) of this section.
(4) (i) Loaded vehicle weight;
(ii) Inertia weight;
(iii) Cubic inch displacement of engine;
(iv) Number of engine cylinders;
(v) SAE net horsepower;
(vi) Engine code;
(vii) Fuel system (number of carburetor
barrels or, if fuel injection is used, so indi-
cate);
(viii) Emission control system;
(ix) Transmission class;
(x) Number of forward speeds;
(xi) Existence of overdrive (indicate yes
or no);
(xii) Total drive ratio;
(xiii) Axle ratio;
(xiv) City fuel economy;
(xv) Highway fuel economy;
(xvi) Combined fuel economy;
(xvii) Projected sales for the current
model year;
(xviii) (A) In the case of passenger auto-
mobiles, interior volume index, determined
in accordance with Subpart D of 40 CFR
Part 600;
(B) In the case of nonpassenger auto-
mobiles:
(1) Passenger-carrying volume, and
(2) Cargo-carrying volume;
(xix) Number of designated seating posi-
tions;
(xx) Performance of the function described
in § 523.5(a) (5) of this chapter (indicate yes
or no);
(xxi) Existence of temporary living quar-
ters (indicate yes or no);
(xxii) Body style;
(xxiii) Frontal area;
(xxiv) Road load power at 50 miles per
hour, if determined by the manufacturer for
purposes other than compliance with this
Part to differ from the road load setting
prescribed in 40 CFR § 86.177-ll(d);
(xxv) Optional equipment which the
manufacturer is required under 40 CFR
Parts 86 and 600 to have actually installed
on the vehicle configuration, or the weight
of which must be included in the curb weight
computation for the vehicle configuration, for
fuel economy testing purposes.
(5) For each model type of automobile
which is classified as an automobile capable of
off-highway operation under Part 523 of this
chapter, provide the following data:
(i) Approach angle;
(ii) Departure angle;
(iii) Breakover angle;
(iv) Axle clearance;
(v) Minimum running clearance; and
(vi) Existence of 4-wheel drive (indicate
yes or no).
(6) The fuel economy values provided under
paragraphs (c) (2) and (4) of this section shall
be determined in accordance with § 537.9.
(d) Automobile technology and sales mix
changes. (1) For each inertia weight class of the
manufacturer's automobiles—
(i) Describe the differences between the
technology of its automobiles for the current
model year and of its automobiles for the
immediately preceding model year that result
in its automobiles for the current model year
PART 537-4
having higher fuel economy than its auto-
mobiles for the immediately preceding model
year.
(ii) Describe any running changes that the
manufacturer intends to make on its automo-
biles for the current model year that will
affect the fuel economy of those automobiles.
(2) Describe any differences in the projected
sales mixes of the inertia weight classes of the
manufacturer's automobiles for the current
model year and of the manufacturer's automo-
biles for the immediately preceding model year
that result in its automobiles for the current
model year having higher average fuel economy
than its automobiles for the immediately pre-
ceding model year.
(e) Marketing measures. (1) Describe and
quantify the rrianufacturer's advertising and auto-
mobile base price and equipment option pricing
that will tend to aid the manufacturer in improv-
ing the average fuel economy of its automobiles
for the current model year.
(2) Describe and quantify the manufactur-
er's dealer incentive programs that have been
or will be implemented during the current
model year foi- each carline of the manufac-
turer's automobiles.
(3) State the total number of dollars spent
and to be spent on advertising for the current
model year for each carline of the manufac-
turer's automobiles and, to the extent available,
for each model type in that carline.
§ 537.8 Supplementary reports.
(a)(1) Except as provided in paragraph (d)
of this section, each manufacturer whose most
recently submitted semiannual report contained
an average fuel economy projection under § 537.7
(b) (2) or, if no average fuel economy was pro-
jected under that section, under § 537.7(b) (1),
that was not less than the applicable average fuel
economy standard and who now projects an av-
erage fuel economy which is less than the ap-
plicable standard, shall file a supplementary
report containing the information specified in
paragraph (b) (1) of this section.
(2) Except as provided in paragraph (d)
of this section, each manufacturer that deter-
mines that its average fuel economy for the
current model year as projected under § 537.7
(b) (2) or, if no average fuel economy was
projected under that section, as projected under
§ 537.7(b) (1), is less representative than the
manufacturer previously reported it to be under
§ 537.7(b) (3), this section, or both, shall file a
supplementary report containing the informa-
tion specified in paragraph (b) (2) of this
section.
(3) Each manufacturer whose pre-model
year report omits any of the information speci-
fied in § 537.7(b), (c)(1) and (2), or (c)(4)
(xiv)-(xvi) and (xxiv) shall file a supplemen-
tary report containing the information speci-
fied in paragraph (b) (3) of this section.
(b) (1) The supplementary report required by
paragraph (a) (1) of this section must contain:
(i) Such revisions of and additions to the
information previously submitted by the
manufacturer under this part regarding the
automobiles whose projected average fuel
economy has decreased as specified in para-
graph (a) (1) of this section as are neces-
sary—
(A) To reflect the decrease and its
cause;
(B) To describe any expanded use or
introduction of technological improve-
ments, production mix changes and mar-
keting measures that the manufacturer
intends to make to comply with the ap-
plicable average fuel economy standard;
and
(C) To indicate a new projected average
fuel economy based upon these additional
measures.
(ii) An explanation of the cause of the
decrease in average fuel economy that led to
the manufacturer's having to submit the
supplementary report required by paragraph
(a) (1) of this section.
(2) The supplementary report required by
paragraph (a) (2) of this section must con-
tain—
(i) A statement of the specific nature of
and reason for the insufficiency in the repre-
sentativeness of the projected average fuel
economy;
PART 537-5
(ii) A statement of specific additional
testing or derivation of fuel economy values
by analytical methods believed by the manu-
facturer necessary to eliminate the insuf-
ficiency; and
(iii) A description of any plans of the
manufacturer to undertake that testing or
derivation voluntarily and submit the result-
ing data to the Environmental Protection
Agency under 40 CFR 600.509.
(3) The supplementary report required by
paragraph (a)(3) of this section must contain:
(i) All of the information omitted from
the pre-model year report under § 537.6(c)
(2); and
(ii) Such revisions of and additions to the
information submitted by the manufacturer
in its pre-model year report regarding the
automobiles produced during the current
model year as are necessary to reflect the
information provided under paragraph (b)
(3) (i) of this section.
(c) (1) Each report required by paragraph
(a) (1) or (2) of this section must be submitted
in accordance with § 537.5(c) not more than 45
days after the date on which the manufacturer
determined, or could have determined with rea-
sonable diligence, that a report is required under
paragraph (a) (1) or (2) of this section.
(2) Each report required by paragraph
(a) (3) of this section must be submitted in ac-
cordance with § 537.(c) not later than five days
after the day by which the manufacturer is
required to submit a preliminary calculation
of its average fuel economy for the current
model year to the Environmental Protection
Agency under 40 CFR 600.506
(d) A supplementary report is not required
to be submitted by the manufacturer under para-
graphs (a) (1) or (2) of this section:
(1) With respect to information submitted
under this Part before the most recent semi-
annual report submitted by the manufacturer
under this Part, or
(2) When the date specified in paragraph
(c) of this section occurs:
(i) During the 60-day period immediately
preceding the day by which the mid-model
year report for the current model year must
be submitted by the manufacturer under this
Part, or
(ii) After the day by which the pre-model
year report for the model year immediately
following the current model year must be
submitted by the manufacturer under this
Part.
§ 537.9 Determination of fuel economy values
and average fuel economy.
(a) Vehicle configuration fuel economy values.
(1) For each vehicle configuration for which
a fuel economy value is required under para-
graph (c) of this section and has been deter-
mined and approved under 40 CFR Part 600,
the manufacturer shall submit that fuel econ-
omy value.
(2) For each vehicle configuration specified
in paragraph (a) (1) of this section for which
a fuel economy value approved under 40 CFR
600 does not exist, but for which a fuel econ-
omy value determined under that Part exists,
the manufacturer shall submit that fuel econ-
omy value.
(3) For each vehicle configuration specified
in paragraph (a) (1) of this section for which
a fuel economy value has been neither deter-
mined nor approved under 40 CFR Part 600,
the manufacturer shall submit a fuel economy
value based on tests or analyses comparable to
those prescribed or permitted under 40 CFR
Part 600 and a description of the test proce-
dures or analytical methods used.
(b) Base level and model type fuel economy
values.
For each base level and model type, the manu-
facturer shall submit a fuel economy value based
on values submitted under paragraph (a) of
this section and calculated in the same manner as
base level and model type fuel economy values
are calculated for use under Subpart F of 40
CFR Part 600.
(c) Average fuel economy.
Average fuel economy must be based upon fuel
economy values calculated under paragraph (b)
of this section for each model type and must be
calculated in accordance with 40 CFR 600.506,
using the configuration specified in 40 CFR
600.506(a) (2), except that fuel economy values
PART 537-6
having higher fuel economy than its auto-
mobiles for the immediately preceding model
year.
(ii) Describe any running changes that the
manufacturer intends to make on its automo-
biles for the current model year that will
affect the fuel economy of those automobiles.
(2) Describe any differences in the projected
sales mixes of the inertia weight classes of the
manufacturer's automobiles for the current
model year and of the manufacturer's automo-
biles for the immediately preceding model year
that result in its automobiles for the current
model year having higher average fuel economy
than its automobiles for the immediately pre-
ceding model year.
(e) Marketing measures. (1) Describe and
quantify the manufacturer's advertising and auto-
mobile base price and equipment option pricing
that will tend to aid the manufacturer in improv-
ing the average fuel economy of its automobiles
for the current model year.
(2) Describe and quantify the manufactur-
er's dealer incentive programs that have been
or will be implemented during the current
model year for each carline of the manufac-
turer's automobiles.
(3) State the total number of dollars spent
and to be spent on advertising for the current
model year for each carline of the manufac-
turer's automobiles and, to the extent available,
for each model type in that carline.
§ 537.8 Supplementary reports.
(a)(1) Except as provided in paragraph (d)
of this section, each manufacturer whose most
recently submitted semiannual report contained
an average fuel economy projection under § 537.7
(b) (2) or, if no average fuel economy was pro-
jected under that section, under § 537.7(b) (1),
that was not less than the applicable average fuel
economy standard and who now projects an av-
erage fuel economy which is less than the ap-
plicable standard, shall file a supplementary
report containing the information specified in
paragraph (b) (1) of this section.
(2) Except as provided in paragraph (d)
of this section, each manufacturer that deter-
mines that its average fuel economy for the
current model year as projected under § 537.7
(b) (2) or, if no average fuel economy was
projected under that section, as projected under
§ 537.7(b) (1), is less representative than the
manufacturer previously reported it to be under
§ 537.7(b) (3), this section, or both, shall file a
supplementary report containing the informa-
tion specified in paragraph (b) (2) of this
section.
(3) Each manufacturer whose pre-model
year report omits any of the information speci-
fied in § 537.7(b), (c)(1) and (2), or (c)(4)
(xiv)-(xvi) and (xxiv) shall file a supplemen-
tary report containing the information speci-
fied in paragraph (b) (3) of this section.
(b) (1) The supplementary report required by
paragraph (a) (1) of this section must contain:
(i) Such revisions of and additions to the
information previously submitted by the
manufacturer under this part regarding the
automobiles whose projected average fuel
economy has decreased as specified in para-
graph (a) (1) of this section as are neces-
sary—
(A) To reflect the decrease and its
cause;
(B) To describe any expanded use or
introduction of technological improve-
ments, production mix changes and mar-
keting measures that the manufacturer
intends to make to comply with the ap-
plicable average fuel economy standard;
and
(C) To indicate a new projected average
fuel economy based upon these additional
measures.
(ii) An explanation of the cause of the
decrease in average fuel economy that led to
the manufacturer's having to submit the
supplementary report required by paragraph
(a) (1) of this section.
(2) The supplementary report required by
paragraph (a) (2) of this section must con-
tain—
(i) A statement of the specific nature of
and reason for the insufficiency in the repre-
sentativeness of the projected average fuel
economy;
PART 537-5
(ii) A statement of specific additional
testing or derivation of fuel economy values
by analytical methods believed by the manu-
facturer necessary to eliminate the insuf-
ficiency; and
(iii) A description of any plans of the
manufacturer to undertake that testing or
derivation voluntarily and submit the result-
ing data to the Environmental Protection
Agency under 40 CFR 600.509.
(3) The supplementary report required by
paragraph (a)(3) of this section must contain:
(i) All of the information omitted from
the pre-model year report under § 537.6(c)
(2); and
(ii) Such revisions of and additions to the
information submitted by the manufacturer
in its pre-model year report regarding the
automobiles produced during the current
model year as are necessary to reflect the
information provided under paragraph (b)
(3) (i) of this section.
(c)(1) Each report required by paragraph
(a)(1) or (2) of this section must be submitted
in accordance with § 537.5(c) not more than 45
days after the date on which the manufacturer
determined, or could have determined with rea-
sonable diligence, that a report is required under
paragraph (a) (1) or (2) of this section.
(2) Each report required by paragraph
(a) (3) of this section must be submitted in ac-
cordance with § 537.(c) not later than five days
after the day by which the manufacturer is
required to submit a preliminary calculation
of its average fuel economy for the current
model year to the Environmental Protection
Agency under 40 CFR 600.506
(d) A supplementary report is not required
to be submitted by the manufacturer under para-
graphs (a) (1) or (2) of this section:
(1) With respect to information submitted
under this Part before the most recent semi-
annual report submitted by the manufacturer
under this Part, or
(2) When the date specified in paragraph
(c) of this section occurs:
(i) During the 60-day period immediately
preceding the day by which the mid-model
year report for the current model year must
be submitted by the manufacturer under this
Part, or
(ii) After the day by which the pre-model
year report for the model year immediately
following the current model year must be
submitted by the manufacturer under this
Part.
§ 537.9 Determination of fuel economy values
and average fuel economy.
(a) Vehicle configuration fuel economy values.
(1) For each vehicle configuration for which
a fuel economy value is required under para-
graph (c) of this section and has been deter-
mined and approved under 40 CFR Part 600,
the manufacturer shall submit that fuel econ-
omy value.
(2) For each vehicle configuration specified
in paragraph (a) (1) of this section for which
a fuel economy value approved under 40 CFR
600 does not exist, but for which a fuel econ-
omy value determined under that Part exists,
the manufacturer shall submit that fuel econ-
omy value.
(3) For each vehicle configuration specified
in paragraph (a) (1) of this section for which
a fuel economy value has been neither deter-
mined nor approved under 40 CFR Part 600,
the manufacturer shall submit a fuel economy
value based on tests or analyses comparable to
those prescribed or permitted under 40 CFR
Part 600 and a description of the test proce-
dures or analytical methods used.
(b) Base level and model type fuel economy
values.
For each base level and model type, the manu-
facturer shall submit a fuel economy value based
on values submitted under paragraph (a) of
this section and calculated in the same manner as
base level and model type fuel economy values
are calculated for use under Subpart F of 40
CFR Part 600.
(c) Average fuel econom,y.
Average fuel economy must be based upon fuel
economy values calculated under paragraph (b)
of this section for each model type and must be
calculated in accordance with 40 CFR 600.506,
using the configuration specified in 40 CFR
600.506(a) (2), except that fuel economy values
PART 537-6
for running changes and for new base levels are
required only for those changes made or base
levels added before the average fuel economy is
required to be submitted under this Part.
§ 537.10 Incorporation by reference.
(a) A manufacturer may incorporate by ref-
erence in a report required by this Part any docu-
ment other than a report, petition, or application,
or portion thereof submitted to any Federal de-
partment or agency more than two model years
before the current model year.
(b) A manufacturer that incorporates by ref-
erence a document not previously submitted to
the National Highway Traffic Safety Adminis-
tration shall append that document to the report.
(c) A manufacturer that incorporates by ref-
erence a document shall clearly identify the docu-
ment, and, in the case of a document previously
submitted to the National Highway Traffic Safety
Administration, indicate the date on which, and
the person by whom, the document was submitted
to this agency.
§ 537.1 1 Public Inspection of Information.
[(a) Except as provided in paragraph (b), any per-
son may inspect the information and data submitted
by a manufacturer under this part in the docket sec-
tion of the National Highway Traffic Safety
Administration. Any person may obtain copies of
the information available for inspection under this
section in accordance with the regulations of the
Secretary of Transportation in Part 7 of this title.
(b) Except for the release of confidential infor-
mation authorized by section 505 of the Act and
Part 512 of this Chapter, information made
available under paragraph (a) for public inspection
does not include information for which confiden-
tiality is requested under S 537.5(c)(7) and is
granted in accordance with Part 512 of this
Chapter, section 505 of the Act, and section 552(b)
of Title 5 of the United States Code. (46 F.R.
2063- January 8, 1981. Effective: April 9, 1981)1
(R«v. 1/B'81)
PART 537-7-8
f
1
u
for running changes and for new base levels are
required only for those changes made or base
levels added before the average fuel economy is
required to be submitted under this Part.
§ 537.10 Incorporation by reference.
(a) A manufacturer may incorporate by ref-
erence in a report required by this Part any docu-
ment other than a report, petition, or application,
or portion thereof submitted to any Federal de-
partment or agency more than two model years
before the current model year.
(b) A manufacturer that incorporates by ref-
erence a document not previously submitted to
the National Highway Traffic Safety Adminis-
tration shall append that document to the report.
(c) A manufacturer that incorporates by ref-
erence a document shall clearly identify the docu-
ment, and, in the case of a document previously
submitted to the National Highway Traffic Safety
Administration, indicate the date on which, and
the person by whom, the document was submitted
to this agency.
§ 537.1 1 Public Inspection of Information.
[(a) Except as provided in paragraph (b), any per-
son may inspect the information and data submitted
by a manufacturer under this part in the docket sec-
tion of the National Highway Traffic Safety
Administration. Any person may obtain copies of
the information available for inspection under this
section in accordance with the regulations of the
Secretary of Transportation in Part 7 of this title.
(b) Except for the release of confidential infor-
mation authorized by section 505 of the Act and
Part 512 of this Chapter, information made
available under paragraph (a) for public inspection
does not include information for which confiden-
tiality is requested under $ 537.5(c)(7) and is
granted in accordance with Part 512 of this
Chapter, section 505 of the Act, and section 552(b)
of Title 5 of the United States Code. (46 F.R.
2063- January 8, 1981. Effective: April 9, 1981)1
(R«v. 1/8/81)
PART 537-7-8
PREAMBLE TO PART 551— PROCEDURAL RULES
(Docket No. 4)
The purpose of this rule-making action is to
adopt new Part 351 — General Procedural Rules.
The new part will eventually contain the rules
on those matters that are common to all proce-
dures. At this time only the rules governing
submittals in writing, and governing service of
process on designated agents of foreign manu-
facturers, are being adopted.
The rules governing submittals in writing are
those considered necessary for the efficient han-
dling of business. These rules apply, of course,
to written comments on notices of proposed rule-
making. Designation of agents by foreign manu-
facturers to receive service of process is required
by section 110(e) of the National Traffic and
Motor Vehicle Safety Act of 1966, and the rules
implement this provision. Both groups of rules
are self-explanatory. Since these rules are pro-
cedural in character, notice of proposed rule-
making is not required (5 U.S.C. 553(b)).
In consideration of the foregoing, Chapter II
of Title 49 of the Code of Federal Regulations
is amended by inserting, in Subchapter B, a new
part as set forth below. This action is taken
under the authority of sections 110(e) and 119
of the National Traffic and Motor Vehicle Safety
Act of 1966 (80 Stat. 718) ; 23 U.S.C. section 315
and chapter 4; and the delegation of authority
of October 20, 1966 (31 F.R. 13952) .
These rules become effective December 20, 1966.
Issued in Washington, D.C., on December 15,
1966.
Alan S. Boyd,
Under Secretary of Commorce
for Transportation
SUBPART A— GENERAL
Sec.
351.1
Scope.
SUBPART B— [RESERVED]
351.31 Form of communications.
351.33 Address of communications.
351.35 Subscription of communications.
351.37 Language of communications.
SUBPART D— SERVICE OF PROCESS; AGENTS
351.41 [Reserved]
351.43 [Reserved]
351.45 Service of process on foreign manufac-
turers and importers
AUTHORITY: The provisions of this Part
351 issued under sees. 110(e), 119, 80 Stat. 719,
728; 15 U.S.C. 1399, 1407, 23 U.S.C. 315, 401-
404; Delegation of Authority, 31 F.R. 13952,
32 F.R. 5606.
31 F.R. 16267
December 20, 1966
PART 551— PRE 1-2
PREAMBLE TO PART 551— PROCEDURAL RULES
(Docket No. 4)
The purpose of this rule-making action is to
adopt new Part 351 — General Procedural Rules.
The new part will eventually contain the rules
on those matters that are common to all proce-
dures. At this time only the rules governing
submittals in writing, and governing service of
process on designated agents of foreign manu-
facturers, are being adopted.
The rules governing submittals in writing are
those considered necessary for the efficient han-
dling of business. These rules apply, of course,
to written comments on notices of proposed rule-
making. Designation of agents by foreign manu-
facturers to receive service of process is required
by section 110(e) of the National Traffic and
Motor Vehicle Safety Act of 1966, and the rules
implement this provision. Both groups of rules
are self-explanatory. Since these rules are pro-
cedural in character, notice of proposed rule-
making is not required (5 U.S.C. 553(b)).
In consideration of the foregoing, Chapter II
of Title 49 of the Code of Federal Regulations
is amended by inserting, in Subchapter B, a new
part as set forth below. This action is taken
under the authority of sections 110(e) and 119
of the National Traffic and Motor Vehicle Safety
Act of 1966 (80 Stat. 718) ; 23 U.S.C. section 315
and chapter 4; and the delegation of authority
of October 20, 1966 (31 F.R. 13952).
These rules become effective December 20, 1966.
Issued in Washington, D.C., on December 15,
1966.
Alan S. Boyd,
Under Secretary of Commerce
for Transportation
SUBPART A— GENERAL
Sec.
351.1
351.31
351.33
351.35
351.37
Scope.
SUBPART B— [RESERVED]
Form of communications.
Address of communications.
Subscription of communications.
Language of communications.
SUBPART D— SERVICE OF PROCESS; AGENTS
351.41 [Reserved!
351.43 [Reserved]
351.45 Service of process on foreign manufac-
turers and importers
AUTHORITY: The provisions of this Part
351 issued under sees. 110(e), 119, 80 Stat. 719,
728; 15 U.S.C. 1399, 1407, 23 U.S.C. 315, 401-
404; Delegation of Authority, 31 F.R. 13952,
32 F.R. 5606.
31 F.R. 16267
December 20, 1966
PART 551— PRE 1-2
V
'd
Efftctiv*: July 27, 1973
PREAMBLE TO AMENDMENT TO PART 551— PROCEDURAL RULES
Parts 501, 551, and 553 of Title 49, Code of
Federal Regulations, currently detail the dele-
gated powers, general procedures, and rulemak-
ing procedures utilized by the National Highway
Traffic Safety Administration (NHTSA) to
implement the National Traffic and Motor
Vehicle Safety Act of 1966, Public Law 89-563.
The Motor Vehicle Information and Cost
Savings Act, Public Law 92-513, vests addi-
tional authority in the NHTSA. This amend-
ment extends the applicability of Parts 501, 551,
and 553 to the Cost Savings Act to establish
uniform rulemaking procedures for both Acts.
Accordingly, amendments are made to 49 CFR,
Part 501, "Organization and delegation of
powers and duties". Part 551, "Procedural rules",
and Part 553, "Rulemaking procedures: motor
vehicle safety standards". . . .
Since this amendment relates to NHTSA
organization, procedures, and practices, it is
found that notice and public procedure thereon
are unnecessary.
Effective date: July 27, 1973. Because this
notice is only an extension of existing procedures
to new areas of jurisdiction, it is found that an
immediate effective date is in the public interest.
(Sees. 9, Pub. L. 89-670, 80 Stat. 944, 49 U.S.C.
1657; 103, 119, Pub. L. 89-563, 80 Stat. 718, 15
U.S.C. 1392, 1407; 102, 105, 201, 205, 302, and
408, Pub. L. 92-513, 86 Stat. 947, 15 U.S.C. 1912,
1915, 1941, 1945, 1962, and 1988; delegation of
authority at 38 FR 12147).
Issued on July 23, 1973.
James E. Wilson
Associate Administrator
Traffic Safety Programs
38 F.R. 20086
July 27, 1973
PART 551— PRE 3-4
Efhctiv*: July 27, 1973
PREAMBLE TO AMENDMENT TO PART 551— PROCEDURAL RULES
Parts 501, 551, and 553 of Title 49, Code of
Federal Kegulations, currently detail the dele-
gated powers, general procedures, and rulemak-
ing procedures utilized by the National Highway
Traffic Safety Administration (NHTSA) to
implement the National Traffic and Motor
Vehicle Safety Act of 1966, Public Law 89-563.
The Motor Vehicle Information and Cost
Savings Act, Public Law 92-513, vests addi-
tional authority in the NHTSA. This amend-
ment extends the applicability of Parts 501, 551,
and 553 to the Cost Savings Act to establish
uniform rulemaking procedures for both Acts.
Accordingly, amendments are made to 49 CFR,
Part 501, "Organization and delegation of
powers and duties". Part 551, "Procedural rules",
and Part 553, "Rulemaking procedures: motor
vehicle safety standards". . . .
Since this amendment relates to NHTSA
organization, procedures, and practices, it is
found that notice and public procedure thereon
are unnecessary.
Effective date: July 27, 1973. Because this
notice is only an extension of existing procedures
to new areas of jurisdiction, it is found that an
immediate effective date is in the public interest.
(Sees. 9, Pub. L. 89-670, 80 Stat. 944, 49 U.S.C.
1657; 103, 119, Pub. L. 89-563, 80 Stat. 718, 15
U.S.C. 1392, 1407; 102, 105, 201, 205, 302, and
408, Pub. L. 92-513, 86 Stat. 947, 15 U.S.C. 1912,
1915, 1941, 1945, 1962, and 1988; delegation of
authority at 38 FR 12147).
Issued on July 23, 1973.
James E. Wilson
Associate Administrator
Traffic Safety Programs
38 F.R. 20086
July 27, 1973
PART 551— PRE 3-4
PART 551— PROCEDURAL RULES
SUBPART A— GENERAL
§551.1. Scope.
This part contains rule of procedure generally
applicable to the transaction of official business
under the National Traffic and Motor Vehicle
Safety Act of 1966, the Motor Vehicle Informa-
tion and Cost Savings Act, and the Highway
Safety Act of 1966. These rules apply in
addition to the rules governing specific proceed-
ings. In case of inconsistency with these general
rules, the specific rules prevail.
SUBPART B— [RESERVED]
SUBPART C— SUBMITTALS IN WRITING
§ 551.31 Form of Communications.
Any communication in writing relating to of-
ficial business (including formal documents)
shall be on opaque and durable paper not larger
than 9 by 14 inches in size. Tables, charts, or
originals of other documents that are attached
to communications shall be folded to this size,
if possible. The left margin of communications
shall be at least IV2 inches wide, and if a com-
munication is bound, it shall be bound on the
left side. All copies submitted shall be legible.
§551.33
Unless otherwise specified, communications
shall be addressed to the Administrator, National
Highway Traffic Safety Administration, U.S.
Department of Transportation, 400 Seventh
Street, S.W., Washington, D.C. 20590. Com-
munications may not be addressed to a staff
member's private address.
§ 551.35 Subscription of communications.
Each communication shall be signed in ink and
shall disclose the full legal name and address of
the person signing it and, if he is an agent, of
his principal.
§ 551.37 Language of communications.
Communications and attachments thereto shall
be in English. Any matter written in a foreign
language will be considered only if accompanied
by a translation into English. A translation
shall bear a certificate by the translator certi-
fying that he is qualified to make the translation;
that the translation is complete except as other-
wise clearly indicated; and that it is accurate to
the best of the translator's knowledge and belief.
The translator shall sign the certificate in ink
and state his full, legal name, occupation and
address.
SUBPART D— SERVICE OF PROCESS; AGENTS
§551.41 [Reserved]
§551.43 [Reserved]
§551.45 Service of process on foreign manu-
facturers and importers.
(a) Designation of agent for service. Any
manufacturer, assembler or importer of motor
vehicles or motor vehicle equipment (hereinafter
called manufacturer) before offering a motor
vehicle or item of motor vehicle equipment for
importation into the United States, shall desig-
nate a permanent resident of the United States
as his agent upon whom service of all processes,
notices, orders, decisions, and requirements may
be made for him and on his behalf as provided
in section 110(e) of the National Traffic and
Motor Vehicle Safety Act of 1966 (80 Stat. 718)
and in this section. The agent may be an indi-
vidual, a firm, or a domestic corporation. Any
number of manufacturers may designate the
same person as agent.
(b) Form and contents of designation. The
designation shall be addressed to the
Administrator, National Highway Traffic Safety
Administration, U.S. Department of Transporta-
tion, 400 Seventh Street, S.W., Washington, D.C.
20590. It shall be in writing and dated; all
PART 551-1
signatures shall be in ink. The designation shall be
made in legal form required to make it valid, and
binding on the laws, or other requirements govern-
ing the making of the designation by the manufac-
turer at the place and time where it is made, and
the person or persons signing the designation shall
certify that it is so made. The designation shall
disclose the full legal name, principal place of
business, and mailing address of the manufacturer.
If any of the products of the manufacturer do not
bear his legal name, the marks, trade names, or
other designations of origin which these products
bear shall be stated in the designation. The
designation of agent shall provide that it remains
in effect until withdrawn or replaced by the
manufacturer. The designation shall bear a
declaration of acceptance duly signed by the
designated agent. The full legal name and mailing
address of the agent shall be stated. Designations
are binding on the manufacturer even when not in
compliance with all requirements of this section
until rejected by the Administrator. The
designated agent may not assign performance of
his functions under the designation to another
person.
(c) Method of service. Service of any process,
notice, order, requirement, or decision specified in
section 110(e) of the National Traffic and Motor
Vehicle Safety Act of 1966 may be made by
registered or certified mail addressed to the agent,
with return receipt requested, or in any other
manner authorized by law. If service cannot be
effected because the agent has died (or, if a firm or
a corporation ceased to exist) or moved, or other-
wise does not receive correctly addressed mail,
service may be made by posting as provided in
section 110(e).
31 F.R. 16267-8
December 20, 1966
PART 551-2
PART 551 — PROCEDURAL RULES
SUBPART A— GENERAL
§551.1. Scope.
This part contains rule of procedure generally
applicable to the transaction of official business
under the National Traffic and Motor Vehicle
Safety Act of 1966, the Motor Vehicle Informa-
tion and Cost Savings Act, and the Highway
Safety Act of 1966. These rules apply in
addition to the rules governing specific proceed-
ings. In case of inconsistency with these general
rules, the specific rules prevail.
SUBPART B— [RESERVEDl
SUBPART C-SUBMITTALS IN WRITING
§ 551.31 Form of Communications.
Any communication in writing relating to of-
ficial business (including formal documents)
shall be on opaque and durable paper not larger
than 9 by 14 inches in size. Tables, charts, or
originals of other documents that are attached
to communications shall be folded to this size,
if possible. The left margin of communications
shall be at least IV2 inches wide, and if a com-
munication is bound, it shall be bound on the
left side. All copies submitted shall be legible.
§551.33
Unless otherwise specified, communications
shall be addressed to the Administrator, National
Highway Traffic Safety Administration, U.S.
Department of Transportation, 400 Seventh
Street, S.W., Washington, D.C. 20590. Com-
munications may not be addressed to a staff
member's private address.
§ 551.35 Subscription of communications.
Each communication shall be signed in ink and
shall disclose the full legal name and address of
the person signing it and, if he is an agent, of
his principal.
§ 551.37 Language of communications.
Communications and attachments thereto shall
be in English. Any matter written in a foreign
language will be considered only if accompanied
by a translation into English. A translation
shall bear a certificate by the translator certi-
fying that he is qualified to make the translation;
that the translation is complete except as other-
wise clearly indicated; and that it is accurate to
the best of the translator's knowledge and belief
The translator shall sign the certificate in ink
and state his full, legal name, occupation and
address.
SUBPART D— SERVICE OF PROCESS; AGENTS
§551.41 [Reserved]
§551.43 (Reserved]
§551.45 Service of process on foreign manu-
facturers and importers.
(a) Designation of agent for service. Any
manufacturer, assembler or importer of motor
vehicles or motor vehicle equipment (hereinafter
called manufacturer) before offering a motor
vehicle or item of motor vehicle equipment for
importation into the United States, shall desig-
nate a permanent resident of the United States
as his agent upon whom service of all processes,
notices, orders, decisions, and requirements may
be made for him and on his behalf as provided
in section 110(e) of the National Traffic and
Motor Vehicle Safety Act of 1966 (80 Stat. 718)
and in this section. The agent may be an indi-
vidual, a firm, or a domestic corporation. Any
number of manufacturers may designate the
same person as agent.
(b) Form and contents of designation. The
designation shall be addressed to the
Administrator, National Highway Traffic Safety
Administration, U.S. Department of Transporta-
tion, 400 Seventh Street, S.W., Washington, D.C.
20590. It shall be in writing and dated; all
PART 551-1
signatures shall be in ink. The designation shall be
made in legal form required to make it valid, and
binding on the laws, or other requirements govern-
ing the making of the designation by the manufac-
turer at the place and time where it is made, and
the person or persons signing the designation shall
certify that it is so made. The designation shall
disclose the full legal name, principal place of
business, and mailing address of the manufacturer.
If any of the products of the manufacturer do not
bear his legal name, the marks, trade names, or
other designations of origin which these products
bear shall be stated in the designation. The
designation of agent shall provide that it remains
in effect until withdrawn or replaced by the
manufacturer. The designation shall bear a
declaration of acceptance duly signed by the
designated agent. The full legal name and mailing
address of the agent shall be stated. Designations
are binding on the manufacturer even when not in
compliance with all requirements of this section
until rejected by the Administrator. The
designated agent may not assign performance of
his functions under the designation to another
person.
(c) Method of service. Service of any process,
notice, order, requirement, or decision specified in
section 110(e) of the National Traffic and Motor
Vehicle Safety Act of 1966 may be made by
registered or certified mail addressed to the agent,
with return receipt requested, or in any other
manner authorized by law. If service cannot be
effected because the agent has died (or, if a firm or
a corporation ceased to exist) or moved, or other-
wise does not receive correctly addressed mail,
service may be made by posting as provided in
section 110(e).
31 F.R. 16267-8
December 20, 1966
PART 551-2
Effodiv*: S«pl«nlMr 4, I97S
PREAMBLE TO PART 552— PETITIONS FOR RULEMAKING, DEFEa, AND
NONCOMPLIANCE ORDERS
(Docket No. 75-12; NoHca 2)
This notice establishes a new regulation speci-
fying the requirements for submission of peti-
tions for rulemaking, and petitions for the
commencement of defect or non-compliance pro-
ceedings in accordance with section 124 of the
National Traffic and Motor Vehicle Safety Act,
15 U.S.C. 1410a. It also describes the pro-
cedures the NHTSA will follow in acting upon
such petitions.
The notice of proposed rulemaking on which
this issuance is based was issued on May 16, 1975
(40 CFR 21486), in response to which eight com-
ments were received. After careful consideration
of those comments, the NHTSA has determined
that no substantial change from the proposal is
called for in the language of the rule.
Most of the comments received in response to
the proposed resolution supported the establish-
ment of some kind of regulation with respect to
petitions for rulemaking. American Motors sup-
ported the proposal without qualification, while
the other commenters suggested changes of vary-
ing import.
The Center for Auto Safety argued that the
proposed rule was too narrow, as it did not deal
with petitions to close defect investigations.
Section 124 of the Act, upon which Part 552 is
based, establishes formal requirements for peti-
tions in the major areas of agency activity imder
the Act: petitions to "commence proceedings"
concerning the issuance, amendment, or revoca-
tion of a motor vehicle safety standard, and
petitions to "commence proceedings" concerning
the issuance of an order with respect to the fail-
ure to comply with a safety standard or the
existence of a safety-related defect. These are
in fact the main areas in which petitions have
been received by the agency in the past. Section
124 indicates an intent of Congress to provide.
and at the same time to limit, formal "petition
treatment" to these areas. This treatment in-
cludes a statutory deadline for action, and Fed-
eral Register publication of reasons for denial.
A corollary of this Congressional intent is that
an informal response by the agency to other types
of requests for action is satisfactory. Accord-
ingly, such other requests will not be treated as
petitions, but will be handled informally (as in
the past) under existing correspondence or other
appropriate NHTSA procedures.
The Center for Auto Safety also urged that,
upon denial of a petition, the NHTSA should
be required to provide the reasons for the denial
in specific detail. This suggestion is outside the
intent of the statutory provision, and without
merit. A full discussion of the agency's reasons
for denial of a petition is provided to the peti-
tioner, and copies of such a denial letter are
(except for confidential matter) generally avail-
able to any person upon request. This agency
does not find any intent of Congress to require
the full text of denial letters to be printed in the
Federal Register. The NHTSA practice of pub-
lishing a summary of its reasons for a denial
appears to satisfy both the letter and the spirit
of section 124. The reason for the provision is
to make the agency publicly accountable and
"responsible" (from the title of the section) for
its negative decisions, as it naturally is for its
positive ones. A person who, put on notice by
the Federal Register publication, wishes to delve
more deeply into the background of the matter
may readily do so by requesting further informa-
tion from the agency.
Greneral Motors objected to the use of the
"reasonable possibility" standard in determining
whether to grant or deny a petition because it
would allow for the granting of virtually any
PABT 552— PRE 1
Effective: September 4, 1975
petition. The NHTSA does not agree. It should
be remembered that the grant of a petition under
this part leads only to the commencement of
agency action to gather information necessary
to make a decision. The use of the modifier
"reasonable" limits the discretion of the Admin-
istrator t« grant only a petition for an order or
rule that has a reasonable chance of being issued,
not a petition for any order or rule that may
conceivably be issued. The substitution of the
term "reasonable probability," as urged by GM,
would tend to transform a threshold decision as
to whether or not the rule or order might issue
into a determination of whether or not it should
issue. Such a result would dilute the intent of
both section 124 and Part 552 to provide means
for interested parties, without access to complete
data, to seek remedial action regarding what
they consider to be defective or unsafe char-
acteristics of motor vehicles.
GM also urged that a petitioner be required to
verify the facts alleged in the petition before
any information requests are made to the manu-
facturer. Such a requirement would preclude
the granting of a petition submitted by an in-
dividual or organization with limited resources.
The technical review conducted by the Associate
Administrator necessarily includes an analysis
of the facts alleged in the petition. If he de-
termines that the facts need verification by the
petitioner, he has the discretion to request that
the petitioner submit additional information.
However, to require such information as a condi-
tion precedent to granting the petition would
not only unduly burden the petitioner, but also
would exceed the statutory requirement that the
petition merely set forth the facts which it is
claimed establish the necessity of an order, not
that it prove those facts.
The Recreation Vehicle Industry Association
(RVIA) objected to the provision denying cross
examination of witnesses at hearings held on
petitions under Part 552. It is well established
that the NHTSA may hold informal hearings
under the Traffic Safety Act, in cases such as
Automotive Parts & Accessories Ass^n, Inc. v.
Boyd, 407 F.2d 330, 334 (D.C. Cir. 1968). The
purpose of an informal hearing is to permit the
NHTSA to determine whether or not a petitioner
has a valid complaint or request for rulemaking.
This purpose is best served by allowing both
sides to present information and arguments
without the necessity for conforming to strict
evidentiary rules. In addition, the drafters of
section 124 intended to encourage the free use
of the petition procedure in alerting the NHTSA
to vehicle safety problems. The possibility of
having to submit to rigorous cross-examination
might deter many potential petitioners from uti-
lizing this procedure. Accordingly, the provi-
sion allowing for an informal hearing has been
retained intact.
The RVIA also argued that the manufacturer
be allowed to respond to the petition before the
Administrator decided whether to grant or deny
it. Such a proposal misapprehends the purpose
of the petition and ignores the opportunities a
manufacturer has to respond to adverse informa-
tion submitted in a petition. If the NHTSA
denies the petition, there is no need for response
as there is no action adverse to the manufacturer.
If the petition is granted, the applicable
rulemaking and investigatory procedures are
commenced, with full opportunity for the manu-
facturer to present data and arguments against
the proposed rule or order. As noted above, the
purpose of the technical review is to facilitate
a threshold decision as to whether an order or
rule might issue, not whether it will. Thus it
is not necessary to consider the comments of the
manufacturer before deciding whether to grant
or deny.
The proposed time for Federal Register pub-
lication of notice of a denial of a petition was
30 days. In order to allow time to prepare a
monthly publication of a notice of denials, in the
interest of efficieny and conservation of Federal
Register space, this period is set at 45 days.
In light of the foregoing. Title 49, Code of
Federal Regulation, is amended by the addition
of a new Part 552, Petitions for Rulemaking,
Defect, and Noncompliance Orders. . . .
Effective date: September 4, 1975.
Issued on September 4, 1975.
James B. Gregory
Administrator
40 F.R. 42013
September 10, 1975
PART 552— PRE 2
EfFcdiv*: Scptambtr 4, I97S
PREAMBLE TO PART 552— PETITIONS FOR RULEMAKING, DEFEa, AND
NONCOMPLIANCE ORDERS
(Docket No. 75-12; Notice 2)
This notice establishes a new regulation speci-
fying the requirements for submission of peti-
tions for rulemaking, and petitions for the
commencement of defect or non-compliance pro-
ceedings in accordance with section 124 of the
National Traffic and Motor Vehicle Safety Act,
15 U.S.C. 1410a. It also describes the pro-
cedures the NHTSA will follow in acting upon
such petitions.
The notice of proposed rulemaking on which
this issuance is based was issued on May 16, 1975
(40 CFR 21486), in response to which eight com-
ments were received. After careful consideration
of those comments, the NHTSA has determined
that no substantial change from the proposal is
called for in the language of the rule.
Most of the comments received in response to
the proposed resolution supported the establish-
ment of some kind of regulation with respect to
petitions for rulemaking. American Motors sup-
ported the proposal without qualification, while
the other commenters suggested changes of vary-
ing import.
The Center for Auto Safety argued that the
proposed rule was too narrow, as it did not deal
with petitions to close defect investigations.
Section 124 of the Act, upon which Part 552 is
based, establishes formal requirements for peti-
tions in the major areas of agency activity under
the Act: petitions to "commence proceedings"
concerning the issuance, amendment, or revoca-
tion of a motor vehicle safety standard, and
petitions to "commence proceedings" concerning
the issuance of an order with respect to the fail-
ure to comply with a safety standard or the
existence of a safety-related defect. These are
in fact the main areas in which petitions have
been received by the agency in the past. Section
124 indicates an intent of Congress to provide,
and at the same time to limit, formal "petition
treatment" to these areas. This treatment in-
cludes a statutory deadline for action, and Fed-
eral Register publication of reasons for denial.
A corollary of this Congressional intent is that
an informal response by the agency to other types
of requests for action is satisfactory. Accord-
ingly, such other requests will not be treated as
petitions, but will be handled informally (as in
the past) under existing correspondence or other
appropriate NHTSA procedures.
The Center for Auto Safety also urged that,
upon denial of a petition, the NHTSA should
be required to provide the reasons for the denial
in specific detail. This suggestion is outside the
intent of the statutory provision, and without
merit. A full discussion of the agency's reasons
for denial of a petition is provided to the peti-
tioner, and copies of such a denial letter are
(except for confidential matter) generally avail-
able to any person upon request. This agency
does not find any intent of Congress to require
the full text of denial letters to be printed in the
Federal Register. The NHTSA practice of pub-
lishing a summary of its reasons for a denial
appears to satisfy both the letter and the spirit
of section 124. The reason for the provision is
to make the agency publicly accountable and
"responsible" (from the title of the section) for
its negative decisions, as it naturally is for its
positive ones. A person who, put on notice by
the Federal Register publication, wishes to delve
more deeply into the background of the matter
may readily do so by requesting further informa-
tion from the agency.
Greneral Motors objected to the use of the
"reasonable possibility" standard in determining
whether to grant or deny a petition because it
would allow for the granting of virtually any
PART 552— PRE 1
Effective: September 4, 1975
petition. The NHTSA does not agree. It should
be remembered that the grant of a petition under
this part leads only to the commencement of
agency action to gather information necessary
to make a decision. The use of the modifier
"reasonable" limits the discretion of the Admin-
istrator to grant only a petition for an order or
rule that has a reasonable chance of being issued,
not a petition for any order or rule that may
conceivably be issued. The substitution of the
term "reasonable probability," as urged by GM,
would tend to transform a threshold decision as
to whether or not the rule or order tnight issue
into a determination of whether or not it should
issue. Such a result would dilute the intent of
both section 124 and Part 552 to provide means
for interested parties, without access to complete
data, to seek remedial action regarding what
they consider to be defective or unsafe char-
acteristics of motor vehicles.
GM also urged that a petitioner be required to
verify the facts alleged in the petition before
any information requests are made to the manu-
facturer. Such a requirement would preclude
the granting of a petition submitted by an in-
dividual or organization with limited resources.
The technical review conducted by the Associate
Administrator necessarily includes an analysis
of the facts alleged in the petition. If he de-
termines that the facts need verification by the
petitioner, he has the discretion to request that
the petitioner submit additional information.
However, to require such information as a condi-
tion precedent to granting the petition would
not only unduly burden the petitioner, but also
would exceed the statutory requirement that the
petition merely set forth the facts which it is
claimed establish the necessity of an order, not
that it prove those facts.
The Recreation Vehicle Industry Association
(RVIA) objected to the provision denying cross
examination of witnesses at hearings held on
petitions under Part 552. It is well established
that the NHTSA may hold informal hearings
under the Traffic Safety Act, in cases such as
Automotive Parts <& Accessories Ass^n, Inc. v.
Boyd, 407 F.2d 330, 334 (D.C. Cir. 1968). The
purpose of an informal hearing is to permit the
NHTSA to determine whether or not a petitioner
has a valid complaint or request for rulemaking. ,
This purpose is best served by allowing both
sides to present information and arguments
without the necessity for conforming to strict
evidentiary rules. In addition, the drafters of
section 124 intended to encourage the free use
of the petition procedure in alerting the NHTSA
to vehicle safety problems. The possibility of
having to submit to rigorous cross-examination
might deter many potential petitioners from uti-
lizing this procedure. Accordingly, the provi-
sion allowing for an informal hearing has been
retained intact.
The RVIA also argued that the manufacturer
be allowed to respond to the petition before the
Administrator decided whether to grant or deny
it. Such a proposal misapprehends the purpose
of the petition and ignores the opportunities a
manufacturer has to respond to adverse informa-
tion submitted in a petition. If the NHTSA
denies the petition, there is no need for response
as there is no action adverse to the manufacturer.
If the petition is granted, the applicable
rulemaking and investigatory procedures are
commenced, with full opportunity for the manu-
facturer to present data and arguments against
the proposed rule or order. As noted above, the \,
purpose of the technical review is to facilitate
a threshold decision as to whether an order or
rule might issue, not whether it will. Thus it
is not necessary to consider the comments of the
manufacturer before deciding whether to grant
or deny.
The proposed time for Federal Register pub-
lication of notice of a denial of a petition was
30 days. In order to allow time to prepare a
monthly publication of a notice of denials, in the
interest of efficieny and conservation of Federal
Register space, this period is set at 45 days.
In light of the foregoing. Title 49, Code of
Federal Regulation, is amended by the addition
of a new Part 552, Petitions for Rulemaking,
Defect, and Noncompliance Orders. . . .
Effective date; September 4, 1975.
Issued on September 4, 1975.
James B. Gregory
Administrator
40 F.R. 42013
September 10, 1975
PART 552— PRE 2
PART 552— PETITIONS FOR RULEMAKING, DEFECT, AND
NONCOMPLIANCE ORDERS
Sec.
552.1 Scope.
552.2 Purpose.
552.3 General.
552.4 Requirements for Petition.
552.5 Improperly filed petitions.
552.6 Technical review.
552.7 Public hearing.
552.8 Determination whether to commence a
proceeding.
552.9 Grant of petition.
552.10 Denial of petition.
Authority: Sec. 103, 119, Pub. L. 89-563, 80
Stat. 718, (15 U.S.C. 1392, 1407); Sec. 124, 152
Pub. L. 93-492, 88 Stat. 1470, (15 U.S.C. 1410a,
1412); delegation of authority at 49 CFR 1.51.
§ 552.1 Scope. This part establishes pro-
cedures for the submission and disposition of
petitions filed by interested persons pursuant to
the National Traffic and Motor Vehicle Safety
Act and the Motor Vehicle Information and Cost
Savings Act, to initiate rulemaking or to make
a determination that a motor vehicle or item of
replacement equipment does not comply with an
applicable Federal motor vehicle safety standard
or contains a defect which relates to motor ve-
hicle safety.
§ 552.2 Purpose. The purpose of this part is
to enable the National Highway Traffic Safety
Administration to identify and respond on a
timely basis to petitions for rulemaking or de-
fect or noncompliance determinations, and to
inform the public of the procedures following
in response to such petitions.
§ 552.3 General. Any interested person may
file with the Administrator a petition requesting
him (1) to commence a proceeding respecting
the issuance, amendment, or revocation of a
motor vehicle safety standard, or (2) to com-
mence a proceeding to determine whether to
issue an order concerning the notification and
remedy of a failure of a motor vehicle or item
of replacement equipment to comply with an
applicable motor vehicle safety standard or a
defect in such vehicle or equipment that relates
to motor vehicle safety.
§ 552.4 Requirements for petition. A petition
filed under this part should be addressed and
submitted to: Administrator, National Highway
Traffic Safety Administration, 400 Seventh
Street, S.W., Washington, D.C. 20590. Each
petition filed under this part must—
(a) Be written in the English language;
(b) Have, preceding its text, a heading that
includes the word "Petition";
(c) Set forth facts which it is claimed estab-
lish that an order is necessary;
(d) Set forth a brief description of the sub-
stance of the order which it is claimed should
be issued; and
(e) Contain the name and address of the
petitioner.
§ 552.5 Improperly filed petitions, (a) A peti-
tion that is not addressed as specified in § 552.4,
but that meets the other requirements of that
section, will be treated as a properly filed peti-
tion, received as of the time it is discovered and
identified.
(b) A document that fails to conform to one
or more of the requirements of 552.4(a) through
(e) will not be treated as a petition under this
part. Such a document will be treated according
PART 552-1
to the existing correspondence or other appro-
priate procedures of the NHTSA, and any sug-
gestions contained in it will be considered at the
discretion of the Administrator or his delegate.
§ 552.6 Technical review. The appropriate
Associate Administrator conducts a technical re-
view of the petition, to determine whether there
is a reasonable possibility that the requested
order will be issued at the conclusion of the
appropriate proceeding. The technical review
may consist of an analysis of the material sub-
mitted, together with information already in the
possession of the agency, or it may also include
the collection of additional information, or a
public meeting in accordance with § 552.7.
§ 552.7 Public meeting. If the Associate Ad-
ministrator decides that a public meeting on the
subject of the petition would contribute to the
determination whether to commence a proceeding,
he issues a notice of public meeting for publica-
tion in the Federal Register to advise interested
persons of the time, place, and subject matter
of the public meeting and invite their participa-
tion. Interested persons may submit their views
and evidence through oral or written presenta-
tions, or both. There is no cross examination of
witnesses. A transcript of the meeting is kept
and exhibits may be accepted as part of the tran-
script. Sections 556 and 557 of Title 5, United
States Code, do not apply to meetings held under
this part. The Chief Counsel designates a mem-
ber of his staff to serve as legal officer at the
meeting.
§ 552.8 Determination whether to commence
a proceeding. At the conclusion of the technical
review, the Administrator or his delegate deter-
mines whether there is a reasonable possibility
that the order requested in the petition will be
issued at the conclusion of the appropriate pro-
ceeding. If such a reasonable possibility is
found, the petition is granted. If it is not found,
the petition is denied. In either event, the peti-
tioner is notified of the grant or denial not more
than 120 days after receipt of the petition by
the NHTSA.
§ 551.9 Grant of petition, (a) If a petition
for rulemaking with respect to a motor vehicle
safety standard is granted, a rulemaking pro-
ceeding is promptly commenced in accordance
with applicable NHTSA and statutory proce-
dures. The granting of such a petition and the
commencement of a rulemaking proceeding does
not signify, however, that the rule in question
will be issued. A decision as to the issuance of
the rule is made on the basis of all available
information developed in the course of the rule-
making proceeding, in accordance with statutory
criteria.
(b) If a petition with respect to a noncom-
pliance or a defect is granted, a proceeding to
determine the existence of the noncompliance or
defect is promptly commenced by the initiation
of an investigation by the Office of Standards
Enforcement or the Office of Defects Investiga-
tion, as appropriate.
§ 552.10 Denial of petition. If a petition is
denied, a Federal Register notice of the denial is
issued within 45 days of the denial, setting forth
the reasons for denial of the petition.
40 F.R. 42013
September 10, 1975
PART 552-2
PART 552— PETITIONS FOR RULEMAKING, DEFECT, AND
NONCOMPLIANCE ORDERS
Sec.
552.1 Scope.
552.2 Purpose.
552.3 General.
552.4 Requirements for Petition.
552.5 Improperly filed petitions.
552.6 Technical review.
552.7 Public hearing.
552.8 Determination whether to commence a
proceeding.
552.9 Grant of petition.
552.10 Denial of petition.
Authority: Sec. 103, 119, Pub. L. 89-563, 80
Stat. 718, (15 U.S.C. 1392, 1407); Sec. 124, 152
Pub. L. 93-492, 88 Stat. 1470, (15 U.S.C. 1410a,
1412); delegation of authority at 49 CFR 1.51.
§ 552.1 Scope. This part establishes pro-
cedures for the submission and disposition of
petitions filed by interested persons pursuant to
the National Traffic and Motor Vehicle Safety
Act and the Motor Vehicle Information and Cost
Savings Act, to initiate rulemaking or to make
a determination that a motor vehicle or item of
replacement equipment does not comply with an
applicable Federal motor vehicle safety standard
or contains a defect which relates to motor ve-
hicle safety.
§ 552.2 Purpose. The purpose of this part is
to enable the National Highway Traffic Safety
Administration to identify and respond on a
timely basis to petitions for rulemaking or de-
fect or noncompliance determinations, and to
inform the public of the procedures following
in response to such petitions.
§ 552.3 General. Any interested person may
file with the Administrator a petition requesting
him (1) to commence a proceeding respecting
the issuance, amendment, or revocation of a
motor vehicle safety standard, or (2) to com-
mence a proceeding to determine whether to
issue an order concerning the notification and
remedy of a failure of a motor vehicle or item
of replacement equipment to comply with an
applicable motor vehicle safety standard or a
defect in such vehicle or equipment that relates
to motor vehicle safety.
§ 552.4 Requirements for petition. A petition
filed under this part should be addressed and
submitted to: Administrator, National Highway
Traffic Safety Administration, 400 Seventh
Street, S.W., Washington, D.C. 20590. Each
petition filed under this part must—
(a) Be written in the English language;
(b) Have, preceding its text, a heading that
includes the word "Petition";
(c) Set forth facts which it is claimed estab-
lish that an order is necessary;
(d) Set forth a brief description of the sub-
stance of the order which it is claimed should
be issued; and
(e) Contain the name and address of the
petitioner.
§ 552.5 Improperly filed petitions, (a) A peti-
tion that is not addressed as specified in S 552.4,
but that meets the other requirements of that
section, will be treated as a properly filed peti-
tion, received as of the time it is discovered and
identified.
(b) A document that fails to conform to one
or more of the requirements of 552.4(a) through
(e) will not be treated as a petition under this
part. Such a document will be treated according
PART 552-1
to the existing correspondence or other appro-
priate procedures of the NHTSA, and any sug-
gestions contained in it will be considered at the
discretion of the Administrator or his delegate.
§ 552.6 Technical review. The appropriate
Associate Administrator conducts a technical re-
view of the petition, to determine whether there
is a reasonable possibility that the requested
order will be issued at the conclusion of the
appropriate proceeding. The technical review
may consist of an analysis of the material sub-
mitted, together with information already in the
possession of the agency, or it may also include
the collection of additional information, or a
public meeting in accordance with § 552.7.
§ 552.7 Public meeting. If the Associate Ad-
ministrator decides that a public meeting on the
subject of the petition would contribute to the
determination whether to commence a proceeding,
he issues a notice of public meeting for publica-
tion in the Federal Register to advise interested
persons of the time, place, and subject matter
of the public meeting and invite their participa-
tion. Interested persons may submit their views
and evidence through oral or written presenta-
tions, or both. There is no cross examination of
witnesses. A transcript of the meeting is kept
and exhibits may be accepted as part of the tran-
script. Sections 556 and 557 of Title 5, United
States Code, do not apply to meetings held under
this part. The Chief Counsel designates a mem-
ber of his staff to serve as legal officer at the
meeting.
§ 552.8 Determination whether to commence
a proceeding. At the conclusion of the technical
review, the Administrator or his delegate deter-
mines whether there is a reasonable possibility
that the order requested in the petition will be
issued at the conclusion of the appropriate pro-
ceeding. If such a reasonable possibility is
found, the petition is granted. If it is not found,
the petition is denied. In either event, the peti-
tioner is notified of the grant or denial not more
than 120 days after receipt of the petition by
the NHTSA.
§ 551.9 Grant of petition, (a) If a petition
for rulemaking with respect to a motor vehicle
safety standard is granted, a rulemaking pro-
ceeding is promptly commenced in accordance
with applicable NHTSA and statutory proce-
dures. The granting of such a petition and the
commencement of a rulemaking proceeding does
not signify, however, that the rule in question
will be issued. A decision as to the issuance of
the rule is made on the basis of all available
information developed in the course of the rule-
making proceeding, in accordance with statutory
criteria.
(b) If a petition with respect to a noncom-
pliance or a defect is granted, a proceeding to
determine the existence of the noncompliance or
defect is promptly commenced by the initiation
of an investigation by the Office of Standards
Enforcement or the Office of Defects Investiga-
tion, as appropriate.
§ 552.10 Denial of petition. If a petition is
denied, a Federal Register notice of the denial is
issued within 45 days of the denial, setting forth
the reasons for denial of the petition.
40 F.R. 42013
September 10, 1975
PART 552-2
iff*«tlv«: Nev«mb«r 17, 1««7
PREAMBLE TO PART 553— RULEMAKING PROCEDURES: MOTOR VEHICLE SAFETY
STANDARDS
This amendment revokes "Part 215 — Rule-
Making; Initial Safety Standards," 31 F.R.
13127, as amended, in 31 F.R. 15197, 32 F.R.
976, 32 F.R. 5832, and 32 F.R. 13000, and adds
a new Part 353 — "Rule-Making Procedures:
Motor Vehicle Safety Standards" to the regula-
tions of the Federal Highway Administration.
The purpose of this part is to describe the
procedures applicable to the Federal Highway
Administration in prescribing public rules for
motor vehicle safety standards and to provide
for appropriate participation by interested per-
sons.
The new part provides for general notices of
proposed rule making, to be published in the
Federal Begister, except in cases where the Ad-
ministration finds that notice is impractical, un-
necessary or contrary to the public interest. The
new part also provides for petitions for extension
of time to comment on notices of proposed rule
making, petitions for reconsideration, and peti-
tions for proposed rule making.
Sections 556 and 557 of Title 5, United States
Code (formerly sections 7 and 8 of the Admin-
istrative Procedure Act), do not apply to rule
making under this part. Consequently, hearings
are not a required part of the rule-making pro-
cedure. However, hearings may be held, when-
ever it is considered necessary and desirable.
Unless otherwise specified, any hearing held
would be nonadversary, with no formal pleadings
and no adverse party. A rule issued after such
hearing would not necessarily be based exclu-
sively on the record of the hearing.
All final rules will be published in the Federal
Register, unless, in accordance with section
552(a) of Title 5, United States Code, actual
and timely notice has been given to all persons
subject to it.
Since this amendment relates to Federal High-
way Administration organization, procedures.
and practices, notice and public procedure hereon
is not necessary and it may be made effective in
less than thirty (30) days after publication in
the Federal Register.
This amendment is made under the authority
of sections 103 and 119 of the National Traffic
and Motor Vehicle Safety Act of 1966 (15 U.S.C.
1407), and the delegation of authority of October
14, 1967 (32 F.R. 14277).
In consideration of the foregoing. Title 49 [23]
of the Code of Federal Regulations is amended
by deleting Part 215 and adding the following
new Part 353 — "Rule-Making Procedures: Motor
Vehicle Safety Standards" effective November
17, 1967.
Issued in Washington, D.C., on November 9,
1967.
Lowell K. Bridwell,
Federal Highway Administrator
SUBPART A— GENERAL
Sec.
353.1
Applicability.
353.3
Daflnitiont.
353.5
Regulatory dockets.
353.7
Rocords.
SUBPART B— PROCEDURES FOR ADOPTION OF
RULES UNDER SECTIONS 103 AND 109
OF THE ACT
353.1 1 Gonoral.
353.13 Initiation of ruU making.
353.15 Contontt of noticot of propoiod nil*
making.
353,17 Participation of intorosttd ptrsont.
353.19 Potitiont for oxtontion of timo to eom-
mont.
353.21 Contents of written commonlt.
353.23 Centidoration of comments received.
PART 553— PRE 1
IffMllv*: Novambtr 17, 1967
353.25 Additional rule-making proceedings.
353.27 Hearings.
353.29 Adoption of final rules.
353.31 Petitions for rule making.
353.33 Processing of petitions.
353.35 Petitions for reconsideration.
353.37 Proceedings on petitions for reconsid-
eration.
AUTHORITY: The provisions of this Part
353 issued under sees. 103 and 119, 80 Stat. 728;
15 U.S.C. 1407 ; Delegation of Authority of Oct.
14, 1967 (32 F.R. 14277).
32 F.R. 15818
November 17, 1967
PART 553— PRE 2
<l
Ilh«tiv«: Novambar 17, 1967
PREAMBLE TO PART 553— RULEMAKING PROCEDURES: MOTOR VEHICLE SAFETY
STANDARDS
This amendment revokes "Part 215 — Rule-
Making; Initial Safety Standards," 31 F.R.
13127, as amended, in 31 F.R. 15197, 32 F.R.
976, 32 F.R. 5832, and 32 F.R. 13000, and adds
a new Part 353 — "Rule-Making Procedures:
Motor Vehicle Safety Standards" to the regula-
tions of the Federal Highway Administration.
The purpose of this part is to describe the
procedures applicable to the Federal Highway
Administration in prescribing public rules for
motor vehicle safety standards and to provide
for appropriate participation by interested per-
sons.
The new part provides for general notices of
proposed rule making, to be published in the
Federal Register, except in cases where the Ad-
ministration finds that notice is impractical, un-
necessary or contrary to the public interest. The
new part also provides for petitions for extension
of time to comment on notices of proposed rule
making, petitions for reconsideration, and peti-
tions for proposed rule making.
Sections 556 and 557 of Title 5, United States
Code (formerly sections 7 and 8 of the Admin-
istrative Procedure Act), do not apply to rule
making under this part. Consequently, hearings
are not a required part of the rule-making pro-
cedure. However, hearings may be held, when-
ever it is considered necessary and desirable.
Unless otherwise specified, any hearing held
would be nonadversary, with no formal pleadings
and no adverse party. A rule issued after such
hearing would not necessarily be based exclu-
sively on the record of the hearing.
All final rules will be published in the Federal
Register, unless, in accordance with section
552(a) of Title 5, United States Code, actual
and timely notice has been given to all persons
subject to it.
Since this amendment relates to Federal High-
way Administration organization, procedures,
and practices, notice and public procedure hereon
is not necessary and it may be made effective in
less than thirty (30) days after publication in
the Federal Register.
This amendment is made under the authority
of sections 103 and 119 of the National Traffic
and Motor Vehicle Safety Act of 1966 (16 U.S.C.
1407), and the delegation of authority of October
14,1967 (32 F.R. 14277).
In consideration of the foregoing, Title 49 [23]
of the Code of Federal Regulations is amended
by deleting Part 215 and adding the following
new Part 353 — "Rule-Making Procedures: Motor
Vehicle Safety Standards" effective November
17, 1967.
Issued in Washington, D.C., on November 9,
1967.
Lowell K. Bridwell,
Federal Highway Administrator
SUBPART A— GENERAL
Sec.
353.1
Applicability.
353.3
Definitions.
353.5
Regulatory dockots.
353.7
Records.
SUBPART B— PROCEDURES FOR ADOPTION OF
RULES UNDER SECTIONS 103 AND 109
OF THE Aa
353.1 1 General.
353.13 Initiation of rule making.
353.15 Contents of notices of proposed rule
making.
353.17 Participation of interested persons.
353.19 Petitions for extension of time to cem'
ment.
353.21 Contents of written comments.
353.23 Consideration of comments received.
PART 553— PRE 1
Iffcctiv*: Nevtmbcr 17, 1967
353.25 Additional rule-making proceedings.
353.27 Hearings.
353.29 Adoption of final rules.
353.31 Petitions for rule making.
353.33 Processing of petitions.
353.35 Petitions for reconsideration.
353.37 Proceedings on petitions for reconsid-
eration.
AUTHORITY: The provisions of this Part
353 issued under sees. 103 and 119, 80 Stat. 728;
15 U.S.C. 1407; Delegation of Authority of Oct.
14, 1967 (32 F.R. 14277).
32 F.R. 15818
November 17, 1967
PART 553— PRE 2
i
PREAMBLE TO AMENDMENT TO PART 553— RULEMAKING PROCEDURES: MOTOR
VEHICLE SAFETY STANDARDS
Effect of Petition for Reconsideration
Sections 553.35 and 553.37 of Title 49, Code
of Federal Regulations, provide procedural rules
for submission of, and action u^on, petitions for
reconsideration of rules issued under the Na-
tional Traffic and Motor Vehicle Safety Act (15
U.S.C. 1381 et seq.). The purpose of this notice
is to establisli a new section in Part 553, to make
clear the National Highway Safety Bureau's in-
terpretation of the effect of the filing of a peti-
tion for reconsideration upon the running of the
60-day period for judicial review of orders issued
under the Act (16 U.S.C. 1394).
The Bureau's position is that the 60-day period
for judicial review is stayed by a timely petition
for reconsideration of an order, and that the re-
view period does not expire until 60 days after
the Director's disposition of the petition by
notice in the Federal Register. A party ad-
versely affected by the order may, however, seek
judicial review before the petition is disposed of.
The staying of the expiration of the review
period while action is being taken on petitions
for reconsideration is manifestly in the interest
both of affected parties and orderly administra-
tion by the Bureau. Original orders are often
amended on reconsideration. If the expiration
of the judicial review period is not stayed,
affected parties will be forced to file their appeal
in court within 30 days after filing a petition
for reconsideration, regarding an issue that may
subsequently be mooted by Bureau action on the
petition. There would be corresponding pressure
on the Bureau to take hasty action on the peti-
tion. It appears that the intent of the statute
would be best carried out by allowing an appeal
at any time between the original Bureau order
and 60 days after final action on petitions.
The language of the statute can support this
interpretation. The key language is that a per-
son may seek judicial review "at any time prior
to the 60th day after such order is issued" (15
U.S.C. 1394(a)(1)). Where a rule is promul-
gated, and then action is taken on a petition for
reconsideration, actually both actions can rea-
sonably be viewed as the issuance of an order.
A party may accordingly wait until the last
"order" in the rulemaking process to prepare
his court action, with 60 days to do so. Alterna-
tively, he may appeal immediately after the rule
is first issued, as, for example, where the effective
date is soon enough that he considers it im-
portant to obtain an immediate resolution of the
issues.
In light of the foregoing. Part 553, Rule-
making Procedures: Motor Vehicle Safety
Standards, of Title 49, Code of Federal Regula-
tions is amended by adding a new § 553.39, Effect
of petition for reconsideration on time for seek-
ing judicial review, to read as set forth below.
Since this rule is interpretative in nature, notice
and public procedure thereon are unnecessary,
and it is effective upon publication in the Fed-
eral Register.
Issued on December 17, 1970.
Douglas W. Toms,
Director.
December 19, 1970
35 F.R. 19268
PART 663— PRE 3-4
PREAMBLE TO AMENDMENT TO PART 553— RULEMAKING PROCEDURES: MOTOR
VEHICLE SAFETY STANDARDS
Effect of Petition for Reconsideration
Sections 553.35 and 553.37 of Title 49, Code
of Federal Regulations, provide procedural rules
for submission of, and action u^on, petitions for
reconsideration of rules issued under the Na-
tional TraflSc and Motor Vehicle Safety Act (15
U.S.C. 1381 et seq.). The purpose of this notice
is to establish a new section in Part 553, to make
clear the National Highway Safety Bureau's in-
terpretation of the effect of the filing of a peti-
tion for reconsideration upon the running of the
60-day period for judicial review of orders issued
under the Act (15 U.S.C. 1394).
The Bureau's position is that the 60-day period
for judicial review is stayed by a timely petition
for reconsideration of an order, and that the re-
view period does not expire until 60 days after
the Director's disposition of the petition by
notice in the Federal Register. A party ad-
versely affected by the order may, however, seek
judicial review before the petition is disposed of.
The staying of the expiration of the review
period while action is being taken on petitions
for reconsideration is manifestly in the interest
both of affected parties and orderly administra-
tion by the Bureau. Original orders are often
amended on reconsideration. If the expiration
of the judicial review period is not stayed,
affected parties will be forced to file their appeal
in court within 30 days after filing a petition
for reconsideration, regarding an issue that may
subsequently be mooted by Bureau action on the
petition. There would be corresponding pressure
on the Bureau to take hasty action on the peti-
tion. It appears that the intent of the statute
would be best carried out by allowing an appeal
at any time between the original Bureau order
and 60 days after final action on petitions.
The language of the statute can support this
interpretation. The key language is that a per-
son may seek judicial review "at any time prior
to the 60th day after such order is issued" (15
U.S.C. 1394(a)(1)). Where a rule is promul-
gated, and then action is taken on a petition for
reconsideration, actually both actions can rea-
sonably be viewed as the issuance of an order.
A party may accordingly wait until the last
"order" in the rulemaking process to prepare
his court action, with 60 days to do so. Alterna-
tively, he may appeal immediately after the rule
is first issued, as, for example, where the effective
date is soon enough that he considers it im-
portant to obtain an immediate resolution of the
issues.
In light of the foregoing. Part 553, Rule-
making Procedures: Motor Vehicle Safety
Standards, of Title 49, Code of Federal Regula-
tions is amended by adding a new § 553.39, Effect
of petition for reconsideration on time for seek-
ing judicial review, to read as set forth below.
Since this rule is interpretative in nature, notice
and public procedure thereon are unnecessary,
and it is effective upon publication in the Fed-
eral Register.
Issued on December 17, 1970.
Douglas W. Toms,
Director.
December 19,
35 F.R. 19268
1970
PART 653— PRE 3-4
EffMtIv*: February S, 1971
PREAMBLE TO AMENDMENT TO PART 553— RULEMAKING PROCEDURES: MOTOR
VEHICLE SAFETY STANDARDS
Petitions for Extension of Time to Comment
Section 553.19, rulemaking procedures, in
Chapter 5 of Title 49, Code of Federal Regula-
tions, currently requires that a petition for exten-
tion of time to comment on a rulemaking notice
be received not later than 3 days before the
expiration of the comment period specified in the
notice. The 3-day requirement has proven un-
satisfactory in situations where the petition is
received close to the deadline, and the agency
determines that it should be denied. The 3-day
period does not allow sufficient time for the
agency to process the petition, notify the peti-
tioner of its determination, and leave time in the
comment period for the petitioner to submit
comments.
To remedy this problem, § 553.19 is hereby
amended to require that petitions for extensions
of time be submitted not later than 10 days be-
fore the expiration of the comment period. This
will provide time for agency action within the
comment period, and for petitioners whose peti-
tions are denied to submit comments, if they
wish, before the comment period expires.
Since this amendment concerns agency pro-
cedure, notice and public procedure thereon are
unnecessary, and it is effective upon publication
in the Federal Register (2-5-71), with respect
to all rulemaking notices issued subsequent to
its publication.
Issued on February 2, 1971.
Douglas W. Toms,
Acting Administrator.
36 F.R. 2511
February 5, 1971
>
PIlRT 668— pre 6-6
EffMllv*: February S, 1971
PREAAWLE TO AMENDMENT TO PART 553— RULEMAKING PROCEDURES: MOTOR
VEHICLE SAFETY STANDARDS
Petitions for Extension of Time to Comment
Section 553.19, rulemaking procedures, in
Chapter 5 of Title 49, Oxie of Federal Regula-
tions, currently requires that a petition for exten-
tion of time to comment on a rulemaking notice
be received not later than 3 days before the
expiration of the comment period specified in the
notice. The 3-day requirement has proven un-
satisfactory in situations where the petition is
received close to the deadline, and the agency
determines that it should be denied. The 3-day
period does not allow sufficient time for the
agency to process the petition, notify the peti-
tioner of its determination, and leave time in the
comment period for the petitioner to submit
comments.
To remedy this problem, § 553.19 is hereby
amended to require that petitions for extensions
of time be submitted not later than 10 days be-
fore the expiration of the comment period. This
will provide time for agency action within the
comment period, and for petitioners whose peti-
tions are denied to submit comments, if they
wish, before the comment period expires.
Since this amendment concerns agency pro-
cedure, notice and public procedure thereon are
unnecessary, and it is effective upon publication
in the Federal Register (2-5-71), with respect
to all rulemaking notices issued subsequent to
its publication.
Issued on February 2, 1971.
Douglas W. Toms,
Acting Administrator.
36 F.R. 2511
February 5, 1971
PAET 658— PRE 6-6
n
I
PREAMBLE TO AMENDMENT TO PART 553— RULEMAKING PROCEDURES:
MOTOR VEHICLE SAFETY STANDARDS
Statement of Policy: Action on Petitions for Reconsideration
The Center for Auto Safety has submitted a
petition for rulemaking requesting that the
NHTSA amend 49 CFR Part 553, Rulemaking
Procedures, to provide that NHTSA must re-
si>ond to petitions for reconsideration within 60
days of the date the rule in question is published
in the Federal Register. The Center cited the
interval of 5 months and 19 days that elapsed
before issuance of the recent action on petitions
concerning Standard No. 208, Occupant Crash
Protection, as an illustration of the need for such
a rule.
The NHTSA does not agree that the elapsed
interval in that case, in view of the complexity
of the issues raised and the hundreds of pages of
highly technical material submitted in the peti-
tions, was unjustified. This agency does, how-
ever, recognize that the period of reconsideration
is one of considerable uncertainty to interested
parties, since the rule in question has been issued,
the effective date is approaching, and active prep-
aration for compliance presumably is underway.
It has been determined, therefore, that a state-
ment of policy on this subject will be appropriate,
for the guidance of all parties concerned. A
period of 90 days from issuance of the rule will
be the normal period for action on reconsidera-
tion. This period will allow only 60 days for
agency action, which is considered the shortest
practicable period for the necessary steps: de-
tailed review of the petitions, gathering of sup-
plementary information as necessary, making
basic technical and policy decisions, drafting of
the action document, and review by responsible
officials. Where that period is found insufficient,
a Federal Register notice will be issued stating
the date by which action is expected to be com-
pleted.
Accordingly, an Appendix is hereby added to
49 CFR Part 553, ....
Effective date : March 1, 1972. This statement
is issued in the interest of orderly administration
and public information. It shall not aflFect the
validity of any rules hereafter issued by the Na-
tional Highway Traffic Safety Administration, or
the legal rights, duties, or liabilities of any per-
sons pursuant to those rules.
This notice is issued under the authority of
section 119 of the National Traffic and Motor
Vehicle Safety Act, 15 U.S.C. 1407, and the dele-
gation of authority at 49 CFR 1.51.
Issued on February 14, 1972.
Douglas W. Toms
Administrator
37 F.R. 3632
February 18, 1972
PART 553— PRE 7-8
(I
C{
I
PREAMBLE TO AMENDMENT TO PART 553— RULEMAKING PROCEDURES:
MOTOR VEHICLE SAFETY STANDARDS
Statement of Policy: Action en Petitions for Reconsideration
The Center for Auto Safety has submitted a
petition for rulemaking requesting that the
NHTSA amend 49 CFR Part 553, Rulemaking
Procedures, to provide that NHTSA must re-
sjwnd to petitions for reconsideration within 60
days of the date the rule in question is published
in the Federal Register. The Center cited the
interval of 5 months and 19 days that elapsed
before issuance of the recent action on petitions
concerning Standard No. 208, Occupant Crash
Protection, as an illustration of the need for such
a rule.
The NHTSA does not agree that the elapsed
interval in that case, in view of the complexity
of the issues raised and the hundreds of pages of
iiighly technical material submitted in the peti-
tions, was unjustified. This agency does, how-
ever, recognize that the iJeriod of reconsideration
is one of considerable uncertainty to interested
parties, since the rule in question has been issued,
the effective date is approaching, and active prep-
aration for compliance presumably is underway.
It has been determined, therefore, that a state-
ment of policy on this subject will be appropriate,
for the guidance of all parties concerned. A
period of 90 days from issuance of the rule will
be the normal period for action on reconsidera-
tion. This period will allow only 60 days for
agency action, which is considered the shortest
practicable i^eriod for the necessary steps: de-
tailed review of the petitions, gathering of sup-
plementary information as necessary, making
basic technical and policy decisions, drafting of
the action document, and review by responsible
officials. A^^lere that i>eriod is found insufficient,
a Federal Register notice will be issued stating
the date by which action is expected to be com-
pleted.
Accordingly, an Appendix is hereby added to
49 CFR Part 553, ....
Eifective date: March 1, 1972. This statement
is issued in the interest of orderly administration
and public information. It shall not affect the
validity of any rules hereafter issued by the Na-
tional Highway Traffic Safety Administration, or
the legal rights, duties, or liabilities of any per-
sons pursuant to those rules.
This notice is issued under the authority of
section 119 of the National Traffic and Motor
Vehicle Safety Act, 15 U.S.C. 1407, and the dele-
gation of authority at 49 CFR 1.51.
Issued on February 14, 1972.
Douglas W. Toms
Administrator
37 F.R. 3632
February 18, 1972
PART 553— PRE 7-8
(f
i<
I Dtay M, If7>
PREAMBLE TO AMENDMENT TO PART 553~«ULEMAKIN6 PROCEDURES
Sections 553.81 and 553.86 of Title 49, Code
of Federal Regulations, currently specify that
petitions for rulemaking and for reconsideration
of rules should be addressed to the Docket Room
of the National Highway Traffic Safety Admin-
istration. To conform to internal NHTSA cor-
respondence procedures, §§ 558.31 and 553.85 are
hereby amended by changing the submission ad-
dress to the general mailing address specified in
§ 551.83. For public information, the same ad-
dress is added to § 553.19, Petitions for extension
of time to comment.
The requirement of § 563.31(b)(1) that peti-
tions for rulemaking be submitted in duplicate
is unnecessary and inconsistent with agency
policy with respect to other submissions, and is
being deleted. As in the case of other' petitions
and comments, it is requested but not required
that 10 copies be submitted.
Accordingly, amendments are made to 49 CFR
Part 668, Rulemaking Prooedwret: Motor Ve-
hicle Safety Standarde. . . .
Since this amendment concerns internal agency
procedure, it is found that notice and public
procedure thereon are unnecessary.
Effective date: May 28, 1978.
(Sec. 119, Pub. L. 89-668, 80 Stat. 718, 16
U.S.C. 1407; delegation of authority at 49 CFR
1.61)
Issued on April 18, 1978.
James E. Wilson
Acting Administrator
3S P.R. 9124
April 20, 1973.
^^
PART 568— PRE 9-10
^
d
MmNmi NUir 1*. I*7>
PREAMBLE TO AMENDMENT TO PART 553— RULEMAKING PROCEDURES
Sections 553.31 and 563.85 of Title 49, Code
of Federal Regulations, currently specify that
petitions for rulemaking and for reconsideration
of rules should be addressed to the Docket Boom
of the National Highway TraflSc Safety Admin-
istration. To conform to internal NHTSA cor-
respondence procedures, §§ 553.31 and 553.85 are
hereby amended by changing the submission ad-
dress to the general mailing address specified in
§ 551.33. For public information, the same ad-
dress is added to § 553.19, Petitiont for extension
of time to comment.
The requirement of § 553.81(b)(1) that peti-
tions for rulemaking be submitted in duplicate
is unnecessary and inconsistent with agency
policy with respect to other submissions, and is
being deleted. As in the case of other petitions
and comments, it is requested but not required
that 10 copies be submitted.
Accordingly, amendments are made to 49 CFR
Part 668, Rulemaking Procedures: Motor Ve-
hicle Safety Standards. . . .
Since this amendment concerns internal agency
procedure, it is found that notice and public
procedure thereon are unnecessary.
Effective date: May 28, 1978.
(Sec. 119, Pub. L. 89-663, 80 Stat. 718, 16
U.S.C. 1407; delegation of authority at 49 CFR
1.61)
Issued on April 18, 1978.
James E. Wilson
Acting Administretor
38 FJ. 9t24
April 20, 1973.
PART 668— PRE 9-10
EffKHva: July 27, 1973
PREAMBLE TO AMENDMENT TO PART 553— RULEA/UKING PROCEDURES
Parts 501, 551, and 553 of Title 49, Code of
Federal Regulations, currently detail the dele-
gated powers, general procedures, and rulemak-
ing procedures utilized by the National Highway
Traffic Safety Administration (NHTSA) to
implement the National Traffic and Motor
Vehicle Safety Act of 1966, Public Law 89-563.
The Motor Vehicle Information and Cost
Savings Act, Public Law 92-513, vests addi-
tional authority in the NHTSA. This amend-
ment extends the applicability of Parts 501, 551,
and 553 to the Cost Savings Act to establish
imiform rulemaking procedures for both Acts.
Accordingly, amendments are made to 49 CFR,
Part 501, "Organization and delegation of
powers and duties", Part 551, "Procedural rules",
and Part 553, "Rulemaking procedures: motor
vehicle safety standards". . . .
Since this amendment relates to NHTSA
organization, procedures, and practices, it is
found that notice and public procedure thereon
are unnecessary.
Effective date: July 27, 1973. Because this
notice is only an extension of existing procedures
to new areas of jurisdiction, it is found that an
immediate effective dat« is in the public interest.
(Sees. 9, Pub. L. 89-670, 80 Stat. 944, 49 U.S.C.
1657; 103, 119, Pub. L. 89-563, 80 Stat. 718, 15
U.S.C. 1392, 1407; 102, 105, 201, 205, 302, and
408, Pub L. 92-513, 86 Stat. 947, 15 U.S.C. 1912,
1915, 1941, 1945, 1962, and 1988; delegation of
authority at 38 FR 12147).
Issued on July 23, 1973.
James E. Wilson
Associate Administrator
Traffic Safety Programs
38 F.R. 20086
July 27, 1973
PART 553— PRE 11-12
((
Efhctivs: July 37, 1973
PREAMBLE TO AMENDMENT TO PART 553— RULEMAKING PROCEDURES
Parts 501, 551, and 553 of Title 49, Code of
Federal Regulations, currently detail the dele-
gated powers, general procedures, and rulemak-
ing procedures utilized by the National Highway
Traffic Safety Administration (NHTSA) to
implement the National Traffic and Motor
Vehicle Safety Act of 1966, Public Law 89-563.
The Motor Vehicle Information and Cost
Savings Act, Public Law 92-513, vests addi-
tional authority in the NHTSA. This amend-
ment extends the applicability of Parts 501, 551,
and 553 to the Cost Savings Act to establish
imiform rulemaking procedures for both Acts.
Accordingly, amendments are made to 49 CFR,
Part 501, "Organization and delegation of
powers and duties", Part 551, "Procedural rules",
and Part 553, "Rulemaking procedures: motor
vehicle safety standards". . . .
Since this amendment relates to NHTSA
organization, procedures, and practices, it is
found that notice and public procedure thereon
are unnecessary.
Effective date: July 27, 1973. Because this
notice is only an extension of existing procedures
to new areas of jurisdiction, it is found that an
immediate effective date is in the public interest.
(Sees. 9, Pub. L. 89-670, 80 Stat. 944, 49 U.S.C.
1657; 103, 119, Pub. L. 89-563, 80 Stat. 718, 15
U.S.C. 1392, 1407; 102, 105, 201, 205, 302, and
408, Pub L. 92-513, 86 Stat. 947, 15 U.S.C. 1912,
1915, 1941, 1945, 1962, and 1988; delegation of
authority at 38 FR 12147).
Issued on July 23, 1973.
James E. Wilson
Associate Administrator
Traffic Safety Programs
38 F.R. 20086
July 27, 1973
PART 553— PRE 11-12
PREAMBLE TO AMENDMENT TO PART 553 — RULEMAKING PROCEDURES
The purpose of this notice is to change the
time specified, as an agency jwlicy, for the
NHTSA to act on petitions for reconsideration
to 90 days from the closing date for tlie petitions.
On February 18. 1972, the NHTSA published
a notice (37 FR 3632) adding an appendix to 49
CFR Part 553 that established an agency policy
of responding to petitions for reconsideration
within 90 days from publication of the final nile.
The policy was instituted in order to remove some
uncertaintly as to the time when the agency
would act on petitions following the issuance of
a rule.
Since a period of 30 days from the issuance of
a rule is allowed for the submission of petitions
for reconsideration, the present policy allows only
60 days for the NHTSA to analyze the petitions
and decide on, draft and have reviewed the ap-
propriate response. It has become apparent that
60 days are not adequate time to complete this
process. In conformance with the NHTSA's aim
to specify a normal period for action on petitions
for reconsideration, the period is being extended
to 90 days from the closing date for petitions.
It has been determined that this is necessary to
afford sufficient time for consideration of the peti-
tions and the issuance of a response to the issues
they raise.
As provided in the February 18, 1972 notice
(37 FR 3632), where this period is foimd in-
sufficient, a Federal Register notice will be issued
stating the date by which action is expected to be
completed.
Accordingly, the appendix to 49 CFR Part 553
is revised:
Effective date: April 25, 1974.
(Sec. 119, Pub. L. 89-563, 80 Stat. 718 (15
U.S.C. 1407) ; delegation of authority at 49 CFR
1.51)
Issued on April 22, 1974.
James B. Gregory
Administrator
39 F.R. 14593
April 25, 1974
PART 553— PRE 13-14
PREAMBLE TO AMENDMENT TO PART 553— RULEMAKING PROCEDURES
The purpose of this notice is to change the
time specified, as an agency policy, for the
NHTSA to act on petitions for reconsideration
to 90 days from the closing date for the petitions.
On February 18, 1972, the NHTSA published
a notice (37 FR 3632) adding an appendix to 49
CFR Part 553 that established an agency policy
of responding to petitions for reconsideration
within 90 days from publication of the final nile.
The policy was instituted in order to remove some
uncertaintly as to tiie time when the agency
would act on petitions following the issuance of
a rule.
Since a period of 30 days from the issuance of
a rule is allowed for the submission of petitions
for reconsideration, the present policy allows only
60 days for the NHTSA to analyze the petitions
and decide on, draft and have reviewed the ap-
propriate response. It has become apparent that
60 days are not adequate time to complete this
process. In conformance with the NHTSA's aim
to specify a normal period for action on petitions
for reconsideration, the period is being extended
to 90 days from the closing date for petitions.
It has been determined that this is necessary to
afford sufficient time for consideration of the peti-
tions and the issuance of a response to the issues
they raise.
As provided in the February 18, 1972 notice
(37 FR 3632), where this period is found in-
sufficient, a Federal Register notice will be issued
stating the date by which action is expected to be
completed.
Accordingly, the appendix to 49 CFR Part 553
is revised:
Effective date: April 25, 1974.
(Sec. 119, Pub. L. 89-563, 80 Stat. 718 (15
U.S.C. 1407) ; delegation of authority at 49 CFR
1.51)
Issued on April 22, 1974.
James B. Gregory
Administrator
39 F.R. 14593
April 25, 1974
PART 553— PRE 13-14
i
EffacHve: October 13, 1975
PREAMBLE TO AMENDMENT TO PART 553— RULEMAKING PROCEDURES
(Docket No. 75-17; Notice 2)
This notice amends title 49, Code of Federal
Regulations, Part 553, Rulemaking Procedures,
by deleting those sections of the part which set
out procedures by which interested persons may
petition the NHTSA to undertake rulemaking.
These procedures have been incorporated in a
new Part 552, Petitions for Rulemaking, Defect,
and Noncompliance Orders, of Title 49, Code of
Federal Regulations, published today in a sepa-
rate notice.
The amendments provide that the National
Highway Traffic Safety Administrator may ini-
tiate rulemaking on his own motion, on the rec-
ommendation of other agencies of the Federal
Government, or on petition by any interested
person after a determination in accordance with
Part 552 that grant of the petition is advisable
(§553.11).
The amendment also reverses the order of sec-
tions dealing with initiation of rulemaking and
notice of proposed rulemaking, presently set out
in section^! 553.13 and 553.11, respectively, to
more closely follow the chronology of the rule-
making process.
Only one comment, from American Motors
Corporation, was received in response to the
notice proposing these amendments (40 F.R.
25480, June 16, 1975). AMC asserted that the
language of the new section 553.11 could be mis-
interpreted to mean that recommendations from
other Federal agencies would be treated as an-
other form of petition for rulemaking, rather
than as input to the Administrator in making a
determination whether or not to commence rule-
making on his own motion. The NHTSA does
not agree that the language of section 553.11 is
subject to such an interpretation, as it neither
expressly nor impliedly directs the Administrator
to treat recommendations from other agencies as
petitions. It merely continues the intent of the
previous section 533.13 that the recommendations
of other agencies may be considered by the Ad-
ministrator in determining whether to initiate
rulemaking proceedings in response to a petition
from an interested paity or on his own motion.
In light of the foregoing, 49 CFR Part 553,
Rulemaking Procedures, is amended as follows:
Effective date : October 13, 1975.
(Sec. 119, Pub. L. 89-563, 80 Stat. 718 (15
U.S.C. 1407) ; delegation of authority at 49 CFR
1.51.)
Issued on September 4, 1975.
James B. Gregory
Administrator
40 F.R. 42015
September 10, 1975
PART 553— PRE 15-16
^
EfFective: October 13, 1975
PREAMBLE TO AMENDMENT TO PART 553— RULEMAKING PROCEDURES
(Docket No. 75-17; Notice 2)
This notice amends title 49, Code of Federal
Reflations, Part 553, Rvlemaking Procedures,
by deleting those sections of the part which set
out procedures by which interested persons may
petition the NHTSA to undertake rulemaking.
These procedures have been incorporated in a
new Part 552, Petitions for Rulemaking, Defect,
and Noncompliance Orders, of Title 49, Code of
Federal Regulations, published today in a sepa-
rate notice.
The amendments provide that the National
Highway Traffic Safety Administrator may ini-
tiate rulemaking on his own motion, on the rec-
ommendation of other agencies of the Federal
Government, or on petition by any interested
person after a determination in accordance with
Part 552 that grant of the petition is advisable
(§553.11).
The amendment also reverses the order of sec-
tions dealing with initiation of rulemaking and
notice of proposed rulemaking, presently set out
in sections 553.13 and 553.11, respectively, to
more closely follow the chronology of the rule-
making process.
Only one comment, from American Motors
Corporation, was received in response to the
notice proposing these amendments (40 F.R.
25480, June 16, 1975). AMC asserted that the
language of the new section 553.11 could be mis-
interpreted to mean that recommendations from
other Federal agencies would be treated as an-
other form of petition for rulemaking, rather
than as input to the Administrator in making a
determination whether or not to comuience rule-
making on his own motion. The NHTSA does
not agree that the language of section 553.11 is
subject to such an interpretation, as it neither
expressly nor impliedly directs the Administrator
to treat recommendations from other agencies as
petitions. It merely continues the intent of the
previous section 533.13 that the recommendations
of other agencies may be considered by the Ad-
ministrator in determining whether to initiate
rulemaking proceedings in response to a petition
from an interested party or on his own motion.
In light of the foregoing, 49 CFR Part 553,
Rulemaking Procedures, is amended as follows:
Effective date : October 13, 1975.
(Sec. 119, Pub. L. 89-563, 80 Stat. 718 (15
U.S.C. 1407) ; delegation of authority at 49 CFR
1.51.)
Issued on September 4, 1975.
James B. Gregory
Administrator
40 F.R. 42015
September 10, 1975
PART 553— PRE 15-16
i
IffKllv*: Nov*mb«r 14, 197S
PREAMBLE TO AMENDMENT TO PART 553— RULEMAKING PROCEDURES
(Dockat No. 75-17; NoNc* 1)
On September 10, 1976, a notice was published
amending 49 CFR Part 553, Rulemaking Pro-
cedures, to delete certain provisions of the regula-
tion incorporated in a new Part 552, Petitions for
Rulemaking, Defect, and Noncompliance Orders,
published the same day (40 F.R. 42015). Sec-
tion 553.35(a) refers to "petitions filed under
§ 553.31." However, the provisions of § 553.31
are now incorporated in 49 CFR Part 552. As
a result, the notice amending Part 553 should
have included an amendment to § 553.35(a) re-
flecting this change.
Accordingly, the phrase "petitions filed under
§553.31" in paragraph (a) of section 553.35 is
changed to read "petitions filed under Part 552
of this chapter."
Effective date: November 14, 1975. Because
this amendment clarifies a previous notice and
imposes no additional burden on any person, it
is foimd for good cause shown that an immediate
effective date is in the public interest.
(Sec. 119, Pub. L. 89-563, 80 Stat. 718 (16
U.S.C. 1407) ; delegation of authority at 49 CFR
1.51.)
Issued on November 10, 1975.
James B. Gregory
Administrator
40 F.R. 53032
Nov«mb«r 14, 1975
PART 653— PRE 17-18
BhcHva: November 14, 197S
PREAMBLE TO AMENDMENT TO PART 553— RULEMAKING PROCEDURES
(Docket No. 75-17; Notice 1)
On September 10, 1975, a notice was published
amending 49 CFR Part 553, Rulemaking Pro-
cedures, to delete certain provisions of the regula-
tion incorporated in a new Part 552, Petition.8 for
Rulemaking, Defect, and Noncompliance Orders,
published the same day (40 F.R. 42015). Sec-
tion 553.35(a) refers to "petitions filed under
§ 553.31." However, the provisions of § 553.31
are now incorporated in 49 CFR Part 552. As
a result, the notice amending Part 553 should
have included an amendment to § 553.35(a) re-
flecting this change.
Accordingly, the phrase "petitions filed under
§ 553.31" in paragraph (a) of section 553.35 is
changed to read "petitions filed under Part 552
of this chapter."
Effective date: November 14, 1975. Because
this amendment clarifies a previous notice and
imposes no additional burden on any person, it
is found for good cause shown that an immediate
eflFective date is in the public interest.
(Sec. 119, Pub. L. 89-563, 80 Stat. 718 (15
U.S.C. 1407) ; delegation of authority at 49 CFR
1.51.)
Issued on November 10, 1975.
James B. Gregory
Administrator
40 F.R. 53032
November 14, 1975
PART 553— PRE 17-18
Effective: November 14, 1977
PREAMBLE TO AMENDMENT TO PART 553— RULEMAKING PROCEDURES
(Docket No. 77-07; Notice 1)
This notice requires persons who comment on
Advance Notices of Proposed Rulemaking or
Notices of Proposed Rulemaking and pereons
who submit Petitions for Reconsideration to limit
the length of their written submissions to 15
pages. The 15-page limit will facilitate evalua-
tion of submissions and encourage persons mak-
ing submissions to detail their primary argu-
ments in a succinct and concise manner.
Effective Date: November 14, 1977.
For Further Information Contact:
Bernard P. Klein
Office of Chief Counsel
National Highway Safety Administration
400 Seventh Street, S.W.
Washington, D.C. 20590
(202-426-1840)
Supplementary Information : 49 CFR 553.21
sets forth the requirements for the contents of
written comments which are submitted in re-
sponse to Advance Notices of Proposed Rule-
making (ANPRM) and Notices of Proposed
Rulemaking (NPRM). 49 CFR 553.35 sets
forth the requirements for the contents of writ-
ten statements accompanying Petitions for Re-
consideration. The National Highway Traffic
Safety Administration (NHTSA) hereby adopts
a procedure, effective immediately, requiring the
above submissions to be limited to 15 pages in
length. Necessary attachments to the submis-
sions may be appended without regard to the
15-page limit.
It has been the experience of NHTSA that
submissions significantly longer than 15 pages
generally contain repetitious and even extraneous
sections, as well as sections more appropriately
drafted in an appendix than in the body of the
argument. Such drafting detracts from the logic
and clarity of a submission, with the result that
NHTSA has encountered difficulties in ascer-
taining the precise import of a comment or
statement as well as difficulties in separating
arguments from alleged facts. Administrative
time is lost and the risk is created that valuable
insight which could be provided by a submission
escapes notice. It is expected that a clearer
statement of the primary argument will aid the
public in reviewing the docket. Additionally,
it is reasonable to assume that the 15-page limit,
by encouraging commenters and petitioners to
detail their primary arguments in a succinct and
concise fashion, will aid persons making sub-
missions to NHTSA in identifying and express-
ing the more significant aspects of their com-
munications.
It should be noted that this amendment does
not limit the relevant data or supporting argu-
ments that may be submitted by comment or
petition for reconsideration, since necessary at-
taclunents may be appended to the submission
without regard to the 15-page limit. Addi-
tionally, it is recognized that there may be in-
stances where, because of the complexity of the
subject matter, the 15-page limit would be an
inappropriate restriction. The NHTSA may
waive the 15-page limit or establish a different
limit for a particular Federal Register notice.
The waiver will be published in the notice to
which it applies.
In consideration of the foregoing, 49 CFR
553 is amended to read as follows . . .
(Sees. 103, 119, Pub. L. 89-563, 80 Stat. 718,
15 U.S.C. 1392, 1407; sees. 102, 201, 408, 501,
Pub. L. 92-513, 86 Stat. 947, 15 U.S.C. 1912,
1941, 1988, 2001; delegation of authority at 49
CFR 1.50)
Issued on November 4, 1977.
Joan Claybrook
Administrator
42 F.R. 58949
November 14, 1977
PART 553— PRE 19-20
Effective: November 14, 1977
PREAMBLE TO AMENDMENT TO PART 553— RULEMAKING PROCEDURES
(Docket No. 77-07; Notice 1)
This notice requires persons who comment on
Advance Notices of Proposed Rulemaking or
Notices of Proposed Rulemakin<r and persons
wlio submit Petitions for Reconsideration to limit
the length of their written submissions to 15
pages. The IS-page limit will facilitate evalua-
tion of submissions and encourage persons mak-
ing submissions to detail their primary argu-
ments in a succinct and concise manner.
Effective Date: November 14, 1977.
For Further Information Contact:
Bernard P. Klein
Office of Chief Counsel
National Higliway Safety Administration
400 Seventh Street, S.W.
Washington, D.C. 20590
(202-426-1840)
Supplementary Information: 49 CFR 553.21
sets forth the requirements for the contents of
written comments which are submitted in re-
sponse to Advance Notices of Proposed Rule-
making (ANPRM) and Notices of Proposed
Rulemaking (NPRM). 49 CFR 553.35 sets
forth the requirements for the contents of writ-
ten statements accompanying Petitions for Re-
consideration. The National Highway Traffic
Safety Administration (NHTSA) hereby adopts
a procedure, effective immediately, requiring the
above submissions to be limited to 15 pages in
length. Necessary attachments to the submis-
sions may be appended without regard to the
15-page limit.
It has been the experience of NHTSA that
submissions significantly longer than 15 pages
generally contain repetitious and even extraneous
sections, as well as sections more appropriately
drafted in an appendix than in the body of the
argument. Such drafting detracts from the logic
and clarity of a submission, with the result that
NHT.SA has encountered difficulties in ascer-
taining the precise import of a comment or
statement as well as difficulties in separating
arguments from alleged facts. Administrative
time is lost and the risk is created that valuable
insight which could be provided by a submission
escapes notice. It is expected that a clearer
statement of the primary argument will aid the
public in reviewing the docket. Additionally,
it is reasonable to assume that the 15-page limit,
by encouraging commenters and petitioners to
detail their primary arguments in a succinct and
concise fashion, will aid persons making sub-
missions to NHTSA in identifying and express-
ing the more significant aspects of their com-
munications.
It should be noted that this amendment does
not limit the relevant data or supporting argu-
ments that may be submitted by comment or
petition for reconsideration, since necessary at-
taclunents may be appended to the submission
without regard to the 15-page limit. Addi-
tionally, it is recognized that there may be in-
stances where, because of the complexity of the
subject matter, the 15-page limit would be an
inappropriate restriction. The NHTSA may
waive the 15-page limit or establish a different
limit for a particular Federal Register notice.
The waiver will be published in the notice to
which it applies.
In consideration of the foregoing, 49 CFR
553 is amended to read as follows . . .
(Sees. 103, 119, Pub. L. 89-563, 80 Stat. 718,
15 U.S.C. 1392, 1407; sees. 102, 201, 408, 501,
Pub. L. 92-513, 86 Stat. 947, 15 U.S.C. 1912,
1941, 1988, 2001; delegation of authority at 49
CFR 1.50)
Issued on November 4, 1977.
Joan Claybrook
Administrator
42 F.R. 58949
November 14, 1977
PART 553— PRE 19-20
f
^
PART 553— RULEMAKING PROCEDURES
SUBPART A— GENERAL
§ 553.1 Applicability.
This part prescribes rulemaking procedures that
apply to the issuance, amendment, and revocation
of rules pursuant to the National Traffic and Motor
Vehicle Safety Act of 1966 and the Motor Vehicle
Information and Cost Savings Act.
§ 553.3 Definitions.
"Acts" means the National Traffic and Motor
Vehicle Safety Act of 1966, Public Law 89-563, 15
U.S.C. 1391, et seq., and the Motor Vehicle
Information and Cost Savings Act, Public Law
92-513, 15 U.S.C. 1901, et seq.
"Administrator" means the Administrator of
the National Highway Traffic Safety
Administration or a person to whom he has
delegated final authority in the matter concerned.
"Rule" includes any order, regulation, or
Federal motor vehicle safety standard issued
under the Acts.
§ 553.5 Regulatory docket.
(a) Information and data deemed relevant by
the Administrator relating to rulemaking actions,
including notices of proposed rulemaking;
comments received in response to notices:
petitions for rulemaking and reconsideration;
denials of petitions for rulemaking and
reconsideration; records of additional rulemaking
proceedings under $ 553.25: and final rules are
maintained in the Docket Room, National Highway
Traffic Safety Administration, 400 Seventh Street,
S.W., Washington, D.C. 20590.
(b) Any person may examine any docketed
material at the Docket Room at any time during
regular business hours after the docket is established,
except material ordered withheld fi^om the public
under applicable provisions of the Acts and section
552(b) of Title 5 of the United States Code, and
may obtain a copy of it upon payment of a fee.
§ 553.7 Records.
Records of the National Highway Traffic Safety
Administration relating to rulemaking
proceedings are available for inspection as
provided in section 552(b) of Title 5 of the United
States Code and Part 7 of the Regulations of the
Secretary of Transportation (49 CFR Part 7; 32
F.R. 9284 et seq.).
SUBPART B-PROCEDURES FOR ADOPTION OF
RULES
§553.11 Initiation of rulemaking.
The Administrator may initiate rulemaking
either on his own motion or on petition by any
interested person after a determination in
accordance with Part 552 of this title that grant of
the petition is advisable. The Administrator may,
in his discretion, also consider the
recommendations of other agencies of the United
States.
§ 553.1 3 Notice of proposed rulemaking.
Unless the Administrator, for good cause, finds
that notice is impracticable, unnecessary, or
contrary to the public interest, and incorporates
that finding and a brief statement of the reasons
for it in the rule, a notice of proposed rulemaking is
issued and interested persons are invited to
participate in the rulemaking proceedings under
applicable provisions of the Acts.
PART 553-1
§ 553.15 Contents of notices of proposed
rulemaking.
(a) Each notice of proposed rulemaking is
published in the Federal Register, unless all per-
sons subject to it are named and are personally
served with a copy of it.
(b) Each notice, whether published in the
Federal Register or personally served, includes—
(1) A statement of the time, place, and na-
ture of the proposed rulemaking proceedings;
(2) A reference to the authority under which
it is issued;
(3) A description of the subjects and issues
involved or the substance and terms of the
proposed rule;
(4) A statement of the time within which
written comments must be submitted; and
(5) A statement of how and to what extent
interested persons may participate in the pro-
ceeding.
§ 553.17 Participation by interested persons.
(a) Any interested person may participate in
rulemaking proceeding by submitting comments
in writing containing information, views or
arguments.
(b) In his discretion, the Administrator may
invite any interested person to participate in the
rulemaking procedures described in § 553.25.
§553.19 Petitions for extension of time to
comment.
A petition for extension of the time to sub-
mit comments must be received not later than 10
days before expiration of the time stated in the
notice. The petitions must be submitted to: Ad-
ministrator, National Highway Traffic Safety
Administration, U.S. Department of Transpor-
tation, 400 Seventh Street, S.W., Washington,
D. C. 20590. It is requested, but not required,
that 10 copies be submitted. The filing of the
petition does not automatically extend the time
for petitioner's comments. Such a petition is
granted only if the petitioner shows good cause
for the extension, and if the extension is con-
sistent with the public interest. If an extension
is granted, it is granted to all persons, and it is
published in the Federal Register.
§ 553.21 Contents of written comments.
[All written comments shall be in English. Unless
otherwise specified in a notice requesting comments,
comments may not exceed 15 pages in length, but
necessary attachments may be appended to the
submission wdthout regard to the 15-page limit. Any
interested person shall submit as a part of his written
comments all material that he considers relevant to
any statement of fact made by him. Incorporation by
reference should be avoided. However, if incorpora-
tion by reference is necessary, the incorporated
material shall be identified with respect to document
and page. It is requested, but not required, that 10
copies of the comments and attachments, if any, be
submitted. (42 F.R. 58949-November 14, 1977.
Effective: 11/14/77)]
§ 553.23 Consideration of comments received.
All timely comments are considered before
final action is taken on a rulemaking proposal.
Late filed comments may be considered as far as
practicable.
§ 553.25 Additional rulemaking proceedings.
The Administrator may initiate any further
rulemaking proceedings that he finds necessary
or desirable. For example, interested persons
may be invited to make oral arguments, to par-
ticipate in conferences between the Administrator
or his representative and interested persons at
which minutes of the conference are kept, to
appear at informal hearings presided over by
officials designated by the Administrator at which
a transcript or minutes are kept, or participate
in any other proceeding to assure informed ad-
ministrative action and to protect the public
interest.
§ 553.27 Hearings.
(a) Sections 556 and 557 of Title 5, United
States Code, do not apply to hearings held under
this part. Unless otherwise specified, hearings
held under this part are informal, nonadversary,
fact-finding proceedings, at which there are no
formal pleadings or adverse parties. Any rule
issued in a case in which an informal hearing
is held is not necessarily based exclusively on
the record of the hearing.
(Rev. 11(14/77)
PART 553-2
PART S53-RULEMAKING PROCEDURES
SUBPART A— GENERAL
§ 553.1 Applicability.
This part prescribes rulemaking procedures that
apply to the issuance, amendment, and revocation
of rules pursuant to the National Traffic and Motor
Vehicle Safety Act of 1966 and the Motor Vehicle
Information and Cost Savings Act.
§ 553.3 Definitions.
"Acts" means the National Traffic and Motor
Vehicle Safety Act of 1966, Public Law 89-563, 15
U.S.C. 1391, et seq., and the Motor Vehicle
Information and Cost Savings Act, Public Law
92-513, 15 U.S.C. 1901, et seq.
"Administrator" means the Administrator of
the National Highway Traffic Safety
Administration or a person to whom he has
delegated final authority in the matter concerned.
"Rule" includes any order, regulation, or
Federal motor vehicle safety standard issued
under the Acts.
§ 553.5 Regulatory docket.
(a) Information and data deemed relevant by
the Administrator relating to rulemaking actions,
including notices of proposed rulemaking;
comments received in response to notices:
petitions for rulemaking and reconsideration;
denials of petitions for rulemaking and
reconsideration; records of additional rulemaking
proceedings under S 553.25: and final rules are
maintained in the Docket Room, National Highway
Traffic Safety Administration, 400 Seventh Street,
S.W., Washington, D.C. 20590.
(b) Any person may examine any docketed
material at the Docket Room at any time during
r^ular business hours after the docket is established.
except material ordered withheld from the public
under applicable provisions of the Acts and section
552(b) of Title 5 of the United States Code, and
may obtain a copy of it upon payment of a fee.
§ 553.7 Records.
Records of the National Highway Traffic Safety
Administration relating to rulemaking
proceedings are available for inspection as
provided in section 552(b) of Title 5 of the United
States Code and Part 7 of the Regulations of the
Secretary of Transportation (49 CFR Part 7; 32
F.R. 9284 et seq.).
SUBPART B— PROCEDURES FOR ADOPTION OF
RULES
§553.11 Initiation of rulemaking.
The Administrator may initiate rulemaking
either on his own motion or on petition by any
interested person after a determination in
accordance with Part 552 of this title that grant of
the petition is advisable. The Administrator may,
in his discretion, also consider the
recommendations of other agencies of the United
States.
§553.13 Notice of proposed rulemaking.
Unless the Administrator, for good cause, finds
that notice is impracticable, unnecessary, or
contrary to the public interest, and incorporates
that finding and a brief statement of the reasons
for it in the rule, a notice of proposed rulemaking is
issued and interested persons are invited to
participate in the rulemaking proceedings under
applicable provisions of the Acts.
PART 553-1
§ 553.15 Contents of notices of proposed
rulemaking.
(a) Each notice of proposed rulemaking is
published in the Federal Register, unless all per-
sons subject to it are named and are personally
served with a copy of it.
(b) Each notice, whether published in the
Federal Register or personally served, includes—
(1) A statement of the time, place, and na-
ture of the proposed rulemaking proceedings;
(2) A reference to the authority under which
it is issued;
(3) A description of the subjects and issues
involved or the substance and terms of the
proposed rule;
(4) A statement of the time within which
written comments must be submitted; and
(5) A statement of how and to what extent
interested persons may participate in the pro-
ceeding.
§ 553.17 Participation by Interested persons.
(a) Any interested person may participate in
rulemaking proceeding by submitting comments
in writing containing information, views or
arguments.
(b) In his discretion, the Administrator may
invite any interested person to participate in the
rulemaking procedures described in § 553.25.
§553.19 Petitions for extension of time to
comment.
A petition for extension of the time to sub-
mit comments must be received not later than 10
days before expiration of the time stated in the
notice. The petitions must be submitted to: Ad-
ministrator, National Highway Traffic Safety
Administration, U.S. Department of Transpor-
tation, 400 Seventh Street, S.W., Washington,
D. C. 20590. It is requested, but not required,
that 10 copies be submitted. The filing of the
petition does not automatically extend the time
for petitioner's comments. Such a petition is
granted only if the petitioner shows good cause
for the extension, and if the extension is con-
sistent with the public interest. If an extension
is granted, it is granted to all persons, and it is
published in the Federal Register.
§ 553.21 Contents of written comments.
(All written comments shall be in English. Unless
otherwise specified in a notice requesting comments,
comments may not exceed 15 pages in length, but
necessary attachments may be appended to the
submission without regard to the 15-page limit. Any
interested person shall submit as a part of his written
comments all material that he considers relevant to
any statement of fact made by him. Incorporation by
reference should be avoided. However, if incorpora-
tion by reference is necessary, the incorporated
material shall be identified with respect to document
and page. It is requested, but not required, that 10
copies of the comments and attachments, if any, be
submitted. (42 F.R. 58949-November 14, 1977.
Effective: 11/14/77)1
§ 553.23 Consideration of comments received.
All timely comments are considered before
final action is taken on a rulemaking proposal.
Late filed comments may be considered as far as
practicable.
§ 553.25 Additional rulemaking proceedings.
The Administrator may initiate any further
rulemaking proceedings that he finds necessary
or desirable. For example, interested persons
may be invited to make oral arguments, to par-
ticipate in conferences between the Administrator
or his representative and interested persons at
which minutes of the conference are kept, to
appear at informal hearings presided over by
officials designated by the Administrator at which
a transcript or minutes are kept, or participate
in any other proceeding to assure informed ad-
ministrative action and to protect the public
interest.
§ 553.27 Hearings.
(a) Sections 556 and 557 of Title 5, United
States, Code, do not apply to hearings held under
this part. Unless otherwise specified, hearings
held under this part are informal, nonadversary,
fact-finding proceedings, at which there are no
formal pleadings or adverse parties. Any rule
issued in a case in which an informal hearing
is held is not necessarily based exclusively on
the record of the hearing.
(Rev. 11/14/77)
PART 553-2
(b) The Administrator designates a represen-
tative to conduct any hearing held under this
part. The Chief Counsel designates a member of
his staff to serve as legal officer at the hearing.
§ 553.29 Adoption of final rules.
F'inal rules are prepared by representatives
of the office concerned and the Office of the Chief
Counsel. The rule is then submitted to the
Administrator for his consideration. If the
Administrator adopts the rule, it is published in the
Federal Register, unless all persons subject to it
are named and are personally served with a
copy of it.
§ 553.31 Reserved.
§ 553.33 Reserved.
§ 553.35 Petitions for reconsideration.
[(a) Any interested person may petition the
Administrator for reconsideration of any rule
issued under this part. The petition shall be
submitted to: Administrator, National Highway
Traffic Safety Administration, 400 Seventh
Street, S.W., Washington, D.C. 20590. It is
requested, but not required, that 10 copies be
submitted. The petition must be received not
later than 30 days after publication of the rule
in the Federal Register. Petitions filed after
that time will be considered as petitions filed
under Part 552 of this chapter. The petition
must contain a brief statement of the complaint
and an explanation as to why compliance with
the rule is not practicable, is unreasonable, or
is not in the public interest. Unless otherwise
specified in the final rule, the statement and
explanation together may not exceed 15 pages
in length, but necessary attachments may be ap-
pended to the submission without regard to the
15- page limit.
(b) If the petitioner requests the consideration
of additional facts, he must state the reason they
were not presented to the Administrator within
the prescribed time.
(c) The Administrator does not consider
repetitious petitions.
(d) Unless the Administrator otherwise pro-
vides, the filing of a petition under this section
does not stay the effectiveness of the rule. (42 F.R.
58949-November 14, 1977. Effective: 11/14/77)1
§ 553.37 Proceedings on petitions for recon-
sideration.
The Administrator may grant or deny, in
whole or in part, any petition for reconsideration
without further proceedings. In the event he
determines to reconsider any rule, he may issue
a final decision on reconsideration without fur-
ther proceedings, or he may provide such oppor-
tunity to submit comment or information and
data as he deems appropriate. Whenever the
Administrator determines that a petition should
be granted or denied, he prepares a notice of the
grant or denial of a petition for reconsideration,
for issuance to the petitioner and issues it to the
petitioner. The Administrator may consolidate
petitions relating to the same rule.
§ 553.39 Effect of petition for reconsideration
on time for seeidng judicial review.
The filing of a timely petition for reconsidera-
tion of any rule issued under this part postpones
the expiration of the 60-day period in which to seek
judicial review of that rule, as to every person
adversely affected by the rule. Such a person may
file a petition for judicial review at any time from
the issuance of the rule in question until 60 days
after publication in the Federal Register of the Ad-
ministrator's disposition of any timely petitions for
reconsideration.
APPENDIX
Statement of Policy: Action on Petitions for
Reconsideration
It is the policy of National Highway Traffic
Safety Administration to issue notice of the
action taken on a petition for reconsideration
within 90 days after the closing date for receipt
(Rȴ. 11/14/77)
PART 553-3
of such petitions, unless it is found impracticable to the date by which ,t « expected that action will be
take action within that time. In cases where it is taken, wUl be published m the Federa Register,
so found and the delay beyond that period is i^KLViT iq«7
expected to be substantial, notice of that fact, and NovemDer 17, iwf
PART 553-4
(b) The Administrator designates a represen-
tative to conduct any hearing held under this
part. The Chief Counsel designates a member of
his staff to serve as legal officer at the hearing.
§ 553.29 Adoption of final ruies.
Final rules are prepared by representatives
of the office concerned and the Office of the Chief
Counsel. The rule is then submitted to the
Administrator for his consideration. If the
Administrator adopts the rule, it is published in the
Federal Register, unless all persons subject to it
are named and are personally served with a
copy of it.
§ 553.31 Reserved.
§ 553.33 Reserved.
§ 553.35 Petitions for reconsideration.
[(a) Any interested person may petition the
Administrator for reconsideration of any rule
issued under this part. The petition shall be
submitted to: Administrator, National Highway
Traffic Safety Administration, 400 Seventh
Street, S.W., Washington, D.C. 20590. It is
requested, but not required, that 10 copies be
submitted. The petition must be received not
later than 30 days after publication of the rule
in the Federal Register. Petitions filed after
that time will be considered as petitions filed
under Part 552 of this chapter. The petition
must contain a brief statement of the complaint
and an explanation as to why compliance with
the rule is not practicable, is unreasonable, or
is not in the public interest. Unless otherwise
specified in the final rule, the statement and
explanation together may not exceed 15 pages
in length, but necessary attachments may be ap-
pended to the submission without regard to the
15-page limit.
(b) If the petitioner requests the consideration
of additional facts, he must state the reason they
were not presented to the Administrator within
the prescribed time.
(c) The Administrator does not consider
repetitious petitions.
(d) Unless the Administrator otherwise pro-
vides, the filing of a petition under this section
does not stay the effectiveness of the rule. (42 F.R.
58949-November 14, 1977. Effective: 11/14/77)1
§ 553.37 Proceedings on petitions for recon-
sideration.
The Administrator may grant or deny, in
whole or in part, any petition for reconsideration
without further proceedings. In the event he
determines to reconsider any rule, he may issue
a final decision on reconsideration without fur-
ther proceedings, or he may provide such oppor-
tunity to submit comment or information and
data as he deems appropriate. Whenever the
Administrator determines that a petition should
be granted or denied, he prepares a notice of the
grant or denial of a petition for reconsideration,
for issuance to the petitioner and issues it to the
petitioner. The Administrator may consolidate
petitions relating to the same rule.
§ 553.39 Effect of petition for reconsideration
on time for seeking judicial review.
The filing of a timely petition for reconsidera-
tion of any rule issued under this part postpones
the expiration of the 60-day period in which to seek
judicial review of that rule, as to every person
adversely affected by the rule. Such a person may
file a petition for judicial review at any time from
the issuance of the rule in question until 60 days
after publication in the Federal Register of the Ad-
ministrator's disposition of any timely petitions for
reconsideration.
APPENDIX
Statement of Policy: Action on Petitions for
Reconsideration
It is the policy of National Highway Traffic
Safety Administration to issue notice of the
action taken on a petition for reconsideration
within 90 days after the closing date for receipt
(Rev. 11/14/77)
PART 553-3
of such petitions, unless it is found impracticable to the date by which it is expected that action will be
take action within that time. In cases where it is taken, will be published in the Federal Register.
80 found and the delay beyond that period is 32 F.R. 15818
expected to be substantial, notice of that fact, and November 17, 1967
PART 553-4
PREAMBLE TO PART 554— STANDARDS ENFORCEMENT AND
DEFECTS INVESTIGATION
(Docket No. 75-26; Notice 2)
ACTION: Final Rule.
SUMMARY: This notice amends Title 49 of the
Code of Federal Regulations by the addition of a
new Part 554, "Standards Enforcement and
Defects Investigation," to codify existing agency
procedures with respect to noncompliance and
defect investigations.
EFFECTIVE DATE: March 20, 1980.
FOR FURTHER INFORMATION CONTACT:
Roger Tilton, Office of Chief Counsel,
National Highway Traffic Safety Adminis-
tration, 400 Seventh Street, S.W.,
Washington, D.C. 20590 (202-426-2993)
SUPPLEMENTARY INFORMATION:
A notice of proposed rulemaking to establish
Part 554 was published in the Federal Register on
September 30, 1975, (40 FR 44842). Ten comments
were received from vehicle manufacturers and
consumer groups. The National Motor Vehicle
Safety Advisory Council did not take a position on
the proposal. The Vehicle Equipment Safety
Commission did not submit comments.
The NHTSA is adding Part 554 to Title 49 to
combine and condense previously published policy
directives (39 FR 1373, January 8, 1974; 38 FR
31460, November 14, 1973) and to modify its
procedures somewhat, as contemplated by the
Motor Vehicle and Schoolbus Safety Amendments
of 1974 (Pub. L. 93-492, 88 Stat. 1470). This
codification is intended to better inform interested
persons of the agency's procedures.
The comments submitted in resonse to the notice
of proposed rulemaking were generally in favor of
this codification. Most commenters suggested
minor changes, and many of the changes have been
incorporated into the wording of the final rule.
American Motors Corporation (AMC), Grove
Manufacturing Company, and International
Harvester (IH) recommended that the scope of the
investigatory powers described in section 554.4 be
limited to protect the privacy of manufacturers.
Section 112 of the Act prescribes the extent of the
agency's powers of investigation, and these
powers are not expanded, and cannot be, by virtue
of this regulation. The purpose of Part 554 is merely
to make public the procedures that the agency has
employed in the past as authorized by section 112.
In view of this limited role, a recitation of limits
found in the statute is unnecessary.
The Center for Auto Safety requested that the
agency change section 554.4 to amplify the fact
that the five investigatory techniques detailed in
that section are not the exclusive means available
to the agency for pursuing an investigation. The
agency agrees with this suggested modification.
The enumerated investigatory techniques are only
the major methods employed by the agency to
pursue investigations. The agency modifies the
language of the section to indicate that other
investigatory means will be used where necessary.
IH and Recreation Vehicle Industry Association
(RVIA) suggested changes to section 554.6. IH
recommended written notification of a compliance
test failure to an "appropriate designated
contact." RVIA requested notification of the
commencement of defect investigations as well as
compliance test failures.
The notification provided in paragraph (b) is
made only upon the finding of a compliance test
failure. The NHTSA agrees with RVIA that
manufacturers should be notified at the beginning
of a defect investigation as well. Additionally, the
agency understands the need for timely notifica-
tion of noncompliance investigations. It has been
the policy of the NHTSA to issue written notifica-
PART 554; PRE 1
tion of the commencement of both defect and non-
compliance investigations. The NHTSA, therefore,
amends paragraph (b) of section 554.6 to provide
for timely written notification to the manufacturer
of defect and noncompliance investigations.
The agency always attempts to notify an
appropriate official within the company. To require
notification of an "appropriate designated
contact" as suggested by IH would mean that each
manufacturer would be required to file with the
NHTSA the name of an individual to whom
notification could be sent. Additionally, the
manufacturer would need to update this filing
whenever necessary. The agency concludes that
this would be unnecessarily burdensome and,
therefore, reserves the right to contact any person
with the apparent authority to receive this notifica-
tion. There has been no indication that notices to
date have gone astray.
The Center for Auto Safety argued that
paragraph (b) of section 554.7 should provide more
specific criteria for the opening of a formal defects
investigation. The NHTSA deems it unnecessary
to be more specific about the pertinent criteria that
warrant the commencement of an investigation.
The decision to proceed with a defects investiga-
tion is based upon a careful analysis of a variety of
data. These data differ from case to case. Offices
within the agency exercise their collective judg-
ment as to the necessity for an investigation, given
the particular facts of any case. For this reason,
the NHTSA concludes that modification of
paragraph (b) is unnecessary.
IH and Ford suggested that the agency define
the term "exempt material" in section 554.9 to
avoid confusion. Additionally, they both
recommended that the NHTSA clarify the section
to indicate that the disclosure of exempt com-
munications as well as all other exempt material
would be prohibited.
The NHTSA utilizes a two-step approach to the
disclosure of confidential material pertaining to
safety-related defects and noncompliances. The
agency first determines whether the information
qualifies for confidential treatment under any
statutory authority. Second, the agency exercises
its discretion under paragraph (e) of section 112 of
the National Traffic and Motor Vehicle Safety Act
(the Act) whereby the NHTSA may disclose con-
fidential material if relevent to any proceeding
undertaken pursuant to the Act. After determin-
ing relevance, the agency, under the authority
granted in section 158 (a) (2) (B) of the Act,
releases confidential information pertaining to
safety-related defects and noncompliances only
when deemed necessary by the agency. The agency
is amending section 554.9, therefore, to indicate
that any communication or part of a file pertaining
to a safety-related defect or noncompliance that is
considered confidential will not be disclosed unless
that disclosure is deemed necessary.
Many commenters suggested changes to section
554.10. Rohr Industries and AMC recommended
that the phrase "preliminary determination" be
changed to "initial determination" to make it
consistent with Part 556. The NHTSA agrees with
this suggestion and amends the language
accordingly to reflect this change.
IH and General Motors Corporation (GM)
suggested that the proposed 30-day time limit
would be insufficient to prepare for the hearing
that follows an initial determination. The language
of this section indicates that any time period is only
an approximation of the date upon which a hearing
normally would be scheduled. The NHTSA has
decided that 30 days allows sufficient time to
prepare for the hearing, since manufacturers are
forewarned of an investigation at its initiation and
can, at that time, commence planning to dispute
agency findings. The agency will, however, amend
section 554.10 to show that hearings are normally
scheduled within 30 days of the initial determina-
tion but that the 30-day requirement can be
extended by the Administrator for good cause
shown.
Most commenters argued that section 554.10
should allow for cross-examination at the hearings
as well as other more formal procedures. The
NHTSA has carefully considered these and similar
comments for this part and in other contexts in our
regulations and concludes that the informal pro-
cedures, as authorized by Congress, do provide
adequate opportunity for comment and presenta-
tion of facts.
AMC suggested that paragraph (e) of section
554.10 be deleted. They believe that the file should
be closed once the Administrator finds that there is
no noncompliance or safety-related defect. The
Center for Auto Safety, on the other hand,
requested that the agency amend paragraph (e) to
allow any interested person to demand a public
hearing once the Administrator has made his
finding.
PART 554; PRE 2
PREAMBLE TO PART 554— STANDARDS ENFORCEMENT AND
DEFECTS INVESTIGATION
(Docket No. 75-26; Notice 2)
ACTION: Final Rule.
SUMMARY: This notice amends Title 49 of the
Code of Federal Regulations by the addition of a
new Part 554, "Standards Enforcement and
Defects Investigation," to codify existing agency
procedures with respect to noncompliance and
defect investigations.
EFFECTIVE DATE: March 20, 1980.
FOR FURTHER INFORMATION CONTACT:
Roger Til ton. Office of Chief Counsel,
National Highway Traffic Safety Adminis-
tration, 400 Seventh Street, S.W.,
Washington, D.C. 20590 (202-426-2993)
SUPPLEMENTARY INFORMATION:
A notice of proposed rulemaking to establish
Part 554 was published in the Federal Register on
September 30, 1975, (40 FR 44842). Ten comments
were received from vehicle manufacturers and
consumer groups. The National Motor Vehicle
Safety Advisory Council did not take a position on
the proposal. The Vehicle Equipment Safety
Commission did not submit comments.
The NHTSA is adding Part 554 to Title 49 to
combine and condense previously published policy
directives (39 FR 1373, January 8, 1974; 38 FR
31460, November 14, 1973) and to modify its
procedures somewhat, as contemplated by the
Motor Vehicle and Schoolbus Safety Amendments
of 1974 (Pub. L. 93-492, 88 Stat. 1470). This
codification is intended to better inform interested
persons of the agency's procedures.
The comments submitted in resonse to the notice
of proposed rulemaking were generally in favor of
this codification. Most commenters suggested
minor changes, and many of the changes have been
incorporated into the wording of the final rule.
American Motors Corporation (AMC), Grove
Manufacturing Company, and International
Harvester (IH) recommended that the scope of the
investigatory powers described in section 554.4 be
limited to protect the privacy of manufacturers.
Section 112 of the Act prescribes the extent of the
agency's powers of investigation, and these
powers are not expanded, and cannot be, by virtue
of this regulation. The purpose of Part 554 is merely
to make public the procedures that the agency has
employed in the past as authorized by section 112.
In view of this limited role, a recitation of limits
found in the statute is unnecessary.
The Center for Auto Safety requested that the
agency change section 554.4 to amplify the fact
that the five investigatory techniques detailed in
that section are not the exclusive means available
to the agency for pursuing an investigation. The
agency agrees with this suggested modification.
The enumerated investigatory techniques are only
the major methods employed by the agency to
pursue investigations. The agency modifies the
language of the section to indicate that other
investigatory means will be used where necessary.
IH and Recreation Vehicle Industry Association
(RVIA) suggested changes to section 554.6. IH
recommended written notification of a compliance
test failure to an "appropriate designated
contact." RVIA requested notification of the
commencement of defect investigations as well as
compliance test failures.
The notification provided in paragraph (b) is
made only upon the finding of a compliance test
failure. The NHTSA agrees with RVIA that
manufacturers should be notified at the beginning
of a defect investigation as well. Additionally, the
agency understands the need for timely notifica-
tion of noncompliance investigations. It has been
the policy of the NHTSA to issue written notifica-
PART 554; PRE 1
tion of the commencement of both defect and non-
compliance investigations. The NHTSA, therefore,
amends paragraph (b) of section 554.6 to provide
for timely written notification to the manufacturer
of defect and noncompliance investigations.
The agency always attempts to notify an
appropriate official within the company. To require
notification of an "appropriate designated
contact" as suggested by IH would mean that each
manufacturer would be required to file with the
NHTSA the name of an individual to whom
notification could be sent. Additionally, the
manufacturer would need to update this filing
whenever necessary. The agency concludes that
this would be unnecessarily burdensome and,
therefore, reserves the right to contact any person
with the apparent authority to receive this notifica-
tion. There has been no indication that notices to
date have gone astray.
The Center for Auto Safety argued that
paragraph (b) of section 554.7 should provide more
specific criteria for the opening of a formal defects
investigation. The NHTSA deems it unnecessary
to be more specific about the pertinent criteria that
warrant the commencement of an investigation.
The decision to proceed with a defects investiga-
tion is based upon a careful analysis of a variety of
data. These data differ from case to case. Offices
within the agency exercise their collective judg-
ment as to the necessity for an investigation, given
the particular facts of any case. For this reason,
the NHTSA concludes that modification of
paragraph (b) is unnecessary.
IH and Ford suggested that the agency define
the term "exempt material" in section 554.9 to
avoid confusion. Additionally, they both
recommended that the NHTSA clarify the section
to indicate that the disclosure of exempt com-
munications as well as all other exempt material
would be prohibited.
The NHTSA utilizes a two-step approach to the
disclosure of confidential material pertaining to
safety-related defects and noncompliances. The
agency first determines whether the information
qualifies for confidential treatment under any
statutory authority. Second, the agency exercises
its discretion under paragraph (e) of section 112 of
the National Traffic and Motor Vehicle Safety Act
(the Act) whereby the NHTSA may disclose con-
fidential material if relevent to any proceeding
undertaken pursuant to the Act. After determin-
ing relevance, the agency, under the authority
granted in section 158 (a) (2) (B) of the Act,
releases confidential information pertaining to
safety-related defects and noncompliances only
when deemed necessary by the agency. The agency
is amending section 554.9, therefore, to indicate
that any communication or part of a file pertaining
to a safety-related defect or noncompliance that is
considered confidential will not be disclosed unless
that disclosure is deemed necessary.
Many commenters suggested changes to section
554.10. Rohr Industries and AMC recommended
that the phrase "preliminary determination" be
changed to "initial determination" to make it
consistent with Part 556. The NHTSA agrees with
this suggestion and amends the language
accordingly to reflect this change.
IH and General Motors Corporation (GM)
suggested that the proposed 30-day time limit
would be insufficient to prepare for the hearing
that follows an initial determination. The language
of this section indicates that any time period is only
an approximation of the date upon which a hearing
normally would be scheduled. The NHTSA has
decided that 30 days allows sufficient time to
prepare for the hearing, since manufacturers are
forewarned of an investigation at its initiation and
can, at that time, commence planning to dispute
agency findings. The agency will, however, amend
section 554.10 to show that hearings are normally
scheduled within 30 days of the initial determina-
tion but that the 30-day requirement can be
extended by the Administrator for good cause
shown.
Most commenters argued that section 554.10
should allow for cross-examination at the hearings
as well as other more formal procedures. The
NHTSA has carefully considered these and similar
comments for this part and in other contexts in our
regulations and concludes that the informal pro-
cedures, as authorized by Congress, do provide
adequate opportunity for comment and presenta-
tion of facts.
AMC suggested that paragraph (e) of section
554.10 be deleted. They believe that the file should
be closed once the Administrator finds that there is
no noncompliance or safety-related defect. The
Center for Auto Safety, on the other hand,
requested that the agency amend paragraph (e) to
allow any interested person to demand a public
hearing once the Administrator has made his
finding.
PART 554; PRE 2
The purpose of paragraph (e) is to allow the
Administrator to seek further public comments in
those rare cases where further comment might add
significant new data. Normally, the public meeting
held prior to the determination will provide ample
opportunity to comment. On those occasions when
a public meeting is not held prior to a finding that a
noncompliance or safety-related defect does not
exist, the Administrator should be permitted, not
required, to seek further information by way of a
public meeting where, in his opinion, additional
information would be useful. To preserve this
discretion, the agency retains the paragraph as
written and declines to adopt the suggested
changes.
GM requested that section 554.11 be modified to
state that a manufacturer can proceed to a district
court to obtain a trial de novo of the
Administrator's determination. Judicial review of
agency decisions is granted by Congress. The
National Traffic and Motor Vehicle Safety Act
specifically enumerates the procedures available to
manufacturers to review the agency's decisions.
Regulations promulgated by the NHTSA can in no
way expand or restrict the manufacturer's right to
seek judicial review. Since judicial review is a
Constitutional guarantee with limited Congres-
sional discretion to allocate it among the several
courts, it would be inappropriate for the agency to
proffer rules concerning this review.
Rohr Industries requested that the NHTSA
change section 554.11 to require publication in the
FEDERAL REGISTER of a finding that a defect or
noncompliance does not exist. The agency agrees
with Rohr's suggestion to publish the
Administrator's finding and section 554.11 has
been modified accordingly.
In consideration of the foregoing, Title 49, Code
of Federal Regulations, is amended by the addition
of a new Part 554 titled "Standards Enforcement
and Defects Investigation," as set forth below.
Issued on February 11, 1980.
Joan Claybrook
Administrator
45 F.R. 10796
Febniary 19, 1980
PART 554; PRE 3-4
The purpose of paragraph (e) is to allow the
Administrator to seek further public comments in
those rare cases where further comment might add
significant new data. Normally, the public meeting
held prior to the determination will provide ample
opportunity to comment. On those occasions when
a public meeting is not held prior to a finding that a
noncompliance or safety-related defect does not
exist, the Administrator should be permitted, not
required, to seek further information by way of a
public meeting where, in his opinion, additional
information would be useful. To preserve this
discretion, the agency retains the paragraph as
written and declines to adopt the suggested
changes.
GM requested that section 554.11 be modified to
state that a manufacturer can proceed to a district
court to obtain a trial de novo of the
Administrator's determination. Judicial review of
agency decisions is granted by Congress. The
National Traffic and Motor Vehicle Safety Act
specifically enumerates the procedures available to
manufacturers to review the agency's decisions.
Regulations promulgated by the NH'TSA can in no
way expand or restrict the manufacturer's right to
seek judicial review. Since judicial review is a
Constitutional guarantee with limited Congres-
sional discretion to allocate it among the several
courts, it would be inappropriate for the agency to
proffer rules concerning this review.
Rohr Industries requested that the NHTSA
change section 554.11 to require publication in the
FEDERAL REGISTER of a finding that a defect or
noncompliance does not exist. The agency agrees
with Rohr's suggestion to publish the
Administrator's finding and section 554.11 has
been modified accordingly.
In consideration of the foregoing, Title 49, Code
of Federal Regulations, is amended by the addition
of a new Part 554 titled "Standards Enforcement
and Defects Investigation," as set forth below.
Issued on February 11, 1980.
Joan Claybrook
Administrator
45 F.R. 10796
February 19, 1980
PART 554; PRE 3-4
(I
PART 554— STANDARDS ENFORCEMENT AND DEFECTS INVESTIGATION
(Docket No. 75-26; Notice 2)
Sec.
554.1 Scope.
554.2 Purpose.
554.3 Application.
554.4 Office of vehicle safety compliance.
554.5 Office of defects investigation.
554.6 Opening an investigation.
554.7 Investigation priorities.
554.8 Monthly reports.
554.9 Availability of files.
554.10 Preliminary determinations and public
meetings.
554.11 Final determinations.
S 554.1 Scope.
This part establishes procedures for enforcing
Federal motor vehicle safety standards, and
associated regulations investigating possible
safety-related defects, and making non-compliance
and defect determinations.
§ 554.2 Purpose.
The purpose of this part is to inform interested
persons of the procedures followed by the National
Highway Traffic Safety Administration in order
more fairly and effectively to implement National
Traffic and Motor Vehicle Safety Act (the Act).
S 554.3 Application.
This pjirt applies to actions, investigations, and
defect and non-compliance determinations of the
National Highway Traffic Safety Administration
under sections 109, 112, 124, 152, 156, 157, and
158 of the Act (15 U.S.C. 1398, 1401, 1411, 1412,
1416, 1417, 1418).
$ 554.4 Office of Vehicle Safety Compliance.
The Office of Vehicle Safety Compliance
investigates compliance with Federal motor vehi-
cle safety standards and associated regulations,
and to this end may—
(a) Verify that manufacturers certify com-
pliance with all applicable safety standards;
(b) Collect field reports from all sources;
(c) Inspect manufacturers' certification test
data and other supporting evidence, including
dealer communications;
(d) Inspect vehicles and equipment already in
use or new vehicles and equipment at any stage of
the manufacturing, distribution and sales chain;
(e) Conduct selective compliance tests; and
(f) Utilize other means necessary to conduct
investigations.
§ 554.5 Office of Defects Investigation.
The Office of Defects Investigation conducts
investigations to implement the provisions of the
Act concerning the identification and correction of
safety-related defects in motor vehicles and motor
vehicle equipment. It elicits from every available
source and evaluates on a continuing basis any
information suggesting the existence of a safety-
related defect.
§ 554.6 Opening an Investigation.
(a) A compliance or defect investigation is
opened either on the motion of the Administrator
or his delegate or on the granting of a petition of
an interested party under Part 552 of this chapter.
(b) A manufacturer is notified immediately by
telephone of any compliance test failure in order to
enable the manufacturer to begin his own
investigation. Notification is sent by mail at the
beginning of any defect or non-compliance
investigation.
§ 554.7 Investigation priorities.
(a) Compliance investigation priorities are
reviewed annually and are set according to the
following criteria:
(1) Prior compliance test data;
PART 554-1
(2) Accident data;
(3) Engineering analysis of vehicle and equip-
ment designs;
(4) Consumer complaints; and
(5) Market share.
(b) Defects inputs are reviewed periodically by
an appropriate panel of engineers in consultation
with the Office of Chief Counsel to determine
whether a formal investigation should be opened
by the Office of Defects Investigation.
§ 554.8 Monthly reports.
(a) Compliance. A monthly compliance report is
issued which lists investigations opened, closed,
and pending during that month, identifies
compliance test reports accepted, and indicates
how individual reports may be obtained.
(b) Defects. A monthly defects report is issued
which lists investigations opened, closed, pending,
and suspended during that month. An investiga-
tion may be designated "suspended" where the in-
formation available is insufficient to warrant fur-
ther investigation. Suspended cases are
automatically closed 60 days after appearing in a
monthly report unless new information is received
which justifies a different disposition.
§ 554.9 Availability of files.
All files of closed or suspended investigations are
available for public inspection in the NHTSA
Technical Reference Library. Communications
between the agency and a manufacturer with
respect to ongoing investigations are also
available. Such files and communications may con-
tain material which is considered confidential but
.as been determined to be necessary to the subject
proceeding. Material which is considered confiden-
tial but has not been determined to be necessary to
the subject proceeding will not be disclosed.
Reproduction of entire public files or of individual
documents can be arranged.
§ 554.10 Initial detenminations and public meetings.
(a) An initial determination of failure to comply
with safety standards or of a safety-related defect
is made by the Administrator or his delegate based
on the completed investigative file compiled by the
appropriate office.
(b) The determination is communicated to the
manufacturer in a letter which makes available all
information on which the decision is based. The letter
advises the nmnufacturer of his right to present data, 4
views and arguments to establish that there is no '
defect or failure to comply or that the alleged defect
does not affect motor vehicle safety. The letter also
specifies the time and place of a public meeting for
the presentation of arguments or sets a date by
which written comments must be submitted. Submis-
sion of all information, whether at a public hearing or
in written form, is normally scheduled about 30 days
after the initial determination. The deadline for
submission of information can be extended by the
Administrator for good cause shovra.
(c) Public notice of an initial determination is
made in a FEDERAL Register notice that—
(1) Identifies the motor vehicle or item of
equipment and its manufacturer;
(2) Summarizes the information upon which
the determination is based;
(3) Gives the location of all information
available for public examination; and
(4) States the time and place of a public
meeting or the deadline for written submissions in
which the manufacturer and interested persons
may present data, views, and arguments re-
specting the determination. ,
(d) A transcript of the public meeting is kept and \\
exhibits may be offered. There is no cross-
examination of witnesses.
(e) If the Administrator makes a determination
that a failure to comply or a safety-related defect
does not exist he may, at his discretion in a
particular case, within 60 days of the determina-
tion, invite interested persons to submit their
views on the NHTSA investigation in a public
meeting. Notice and procedures for such a meeting
are as specified in paragraphs (c) and (d) of this
section.
§554.11 Final determinations.
(a) The Administrator bases his final determina-
tion on the completed investigatory file and the
data, views, and arguments submitted at the public
meeting.
(b) If the Administrator determines that a
failure to comply or a safety-related defect exists,
he orders the manufacturer to furnish the notifica-
tion specified in the Act and to remedy the defect
or failure to comply.
PART 554-2
PART 554— STANDARDS ENFORCEMENT AND DEFECTS INVESTIGATION
(Dock«t No. 75-26; Notic* 2)
Sec.
554.1 Scope.
554.2 Purpose.
554.3 Application.
554.4 Office of vehicle safety compliance.
554.5 Office of defects investigation.
554.6 Opening an investigation.
554.7 Investigation priorities.
554.8 Monthly reports.
554.9 Availability of files.
554.10 Preliminary determinations and public
meetings.
554.11 Final determinations.
I 554.1 Scope.
This part establishes procedures for enforcing
Federal motor vehicle safety standards, and
associated regulations investigating possible
safety-related defects, and making non-compliance
and defect determinations.
f 554.2 Purpose.
The purpose of this part is to inform interested
persons of the procedures followed by the National
Highway Traffic Safety Administration in order
more fairly and effectively to implement National
Traffic and Motor Vehicle Safety Act (the Act).
I 554.3 Application.
This part applies to actions, investigations, and
defect and non-compliance determinations of the
National Highway Traffic Safety Administration
under sections 109, 112, 124, 152, 156, 157, and
158 of the Act (15 U.S.C. 1398, 1401, 1411, 1412,
1416, 1417, 1418).
f 554.4 Office of Vehicle Safety Compliance.
The Office of Vehicle Safety Compliance
investigates compliance with Federal motor vehi-
cle safety standards and aissociated regulations,
and to this end may—
(a) Verify that manufacturers certify com-
pliance with all applicable safety standards;
(b) Collect field reports from all sources;
(c) Inspect manufacturers' certification test
data and other supporting evidence, including
dealer communications;
(d) Inspect vehicles and equipment already in
use or new vehicles and equipment at any stage of
the manufacturing, distribution and sales chain;
(e) Conduct selective compliance tests; and
(f) UtUize other means necessary to conduct
investigations.
S 554.5 Office of Defects investigation.
The Office of Defects Investigation conducts
investigations to implement the provisions of the
Act concerning the identification and correction of
safety-related defects in motor vehicles and motor
vehicle equipment. It elicits from every available
source and evaluates on a continuing basis any
information suggesting the existence of a safety-
related defect.
§ 554.6 Opening an investigation.
(a) A compliance or defect investigation is
opened either on the motion of the Administrator
or his delegate or on the granting of a p)etition of
an interested, party under Part 552 of this chapter.
(b) A manufacturer is notified immediately by
telephone of any compliance test failure in order to
enable the manufacturer to begin his own
investigation. Notification is sent by mail at the
beginning of any defect or non-compliance
investigation.
§ 554.7 Investigation priorities.
(a) Compliance investigation priorities are
reviewed annually and are set according to the
following criteria:
(1) Prior compliance test data;
PART 554-1
(2) Accident data;
(3) Engineering analysis of vehicle and equip-
ment designs;
(4) Consumer complaints; and
(5) Market share.
(b) Defects inputs are reviewed periodically by
an appropriate panel of engineers in consultation
with the Office of Chief Counsel to determine
whether a formal investigation should be opened
by the Office of Defects Investigation.
§ 554.8 Monthly reports.
(a) Compliance. A monthly compliance report is
issued which lists investigations opened, closed,
and pending during that month, identifies
compliance test reports accepted, and indicates
how individual reports may be obtained.
(b) Defects. A monthly defects report is issued
which lists investigations opened, closed, pending,
and suspended during that month. An investiga-
tion may be designated "suspended" where the in-
formation available is insufficient to warrant fur-
ther investigation. Suspended cases are
automatically closed 60 days after appearing in a
monthly report unless new information is received
which justifies a different disposition.
§ 554.9 Availability of files.
All files of closed or suspended investigations are
available for public inspection in the NHTSA
Technical Reference Library. Communications
between the agency and a manufacturer with
respect to ongoing investigations are also
available. Such files and communications may con-
tain material which is considered confidential but
.as been determined to be necessary to the subject
proceeding. Material which is considered confiden-
tial but has not been determined to be necessary to
the subject proceeding will not be disclosed.
Reproduction of entire public files or of individual
documents can be arranged.
§ 554.10 Initial determinations and public meetings.
(a) An initial determination of failure to comply
with safety standards or of a safety-related defect
is made by the Administrator or his delegate based
on the completed investigative file compiled by the
appropriate office.
(b) The determination is communicated to the
manufacturer in a letter which makes available all
information on which the decision is based. The letter
advises the manufacturer of his right to present data,
views and arguments to establish that there is no
defect or failure to comply or that the alleged defect
does not affect motor vehicle safety. The letter also
specifies the time and place of a public meeting for
the presentation of arguments or sets a date by
which written comments must be submitted. Submis-
sion of all information, whether at a public hearing or
in written form, is normally scheduled about 30 days
after the initial determination. The deadline for
submission of information can be extended by the
Administrator for good cause shovra.
(c) Public notice of an initial determination is
made in a Federal Register notice that—
(1) Identifies the motor vehicle or item of
equipment and its manufacturer;
(2) Summarizes the information upon which
the determination is based;
(3) Gives the location of all information
available for public examination; and
(4) States the time and place of a public
meeting or the deadline for written submissions in
which the manufacturer and interested persons
may present data, views, and arguments re-
specting the determination.
(d) A transcript of the public meeting is kept and
exhibits may be offered. There is no cross-
examination of witnesses.
(e) If the Administrator makes a determination
that a failure to comply or a safety-related defect
does not exist he may, at his discretion in a
particular case, within 60 days of the determina-
tion, invite interested persons to submit their
views on the NHTSA investigation in a public
meeting. Notice and procedures for such a meeting
are as specified in paragraphs (c) and (d) of this
section.
§ 554.11 Final determinations.
(a) The Administrator bases his final determina-
tion on the completed investigatory file and the
data, views, and arguments submitted at the public
meeting.
(b) If the Administrator determines that a
failure to comply or a safety-related defect exists,
he orders the manufacturer to furnish the notifica-
tion specified in the Act and to remedy the defect
or failure to comply.
PART 554-2
I
(c) If the Administrator determines that a determination and the reasons for it appears in
failure to comply or a safety-related defect does each completed public file.
not exist, he so notifies the manufacturer and
publishes this finding in the Federal Register. 45 F R 10796
(d) A statement of the Administrator's final February 19, 1980
I
I PART 554-3-4
(
I
(c) If the Administrator determines that a determination and the reasons for it appears in
failure to comply or a safety-related defect does each completed public file.
not exist, he so notifies the manufacturer and
publishes this finding in the Federal Register. 45 p p 10796
(d) A statement of the Administrator's final February 19, 1980
I
PART 564-3-4
EfhcNvti January 39, 1973
PREAMBLE TO PART 555— TEMPORARY EXEMPTION FROM MOTOR
VEHICLE SAFETY STANDARDS
(Docket No. 72-30; Notice 2)
This notice amends Title 49 of the Code of
Federal Regulations by adding a new Part 555,
"Temporary Exemption from Motor Vehicle
Safety Standards," effective January 29, 1973. A
notice of proposed rulemaking on this subject was
published December 1, 1972 (37 F.R. 25533),
and opportunity afforded for comment.
On October 25, 1972 P.L. 92-548 was enacted,
amending section 123 of the National Traffic
and Motor Vehicle Safety Act of 1966 to pro-
vide four bases upon which a manufacturer of
motor vehicles might apply for a temporary ex-
emption from one or more Federal motor vehicle
safety standards. The legislative intent is clearly
expressed as to the information required to sub-
stantiate an application on each basis. A discus-
sion follows of each basis, the required informa-
tion and the principal issues raised in response
to the proposal.
1. Substantial Economic Hardship. A manufac-
turer whose total motor vehicle production in his
most recent year of manufacture did not exceed
10,000 may petition for relief on grounds that
compliance would cause him substantial economic
hardship and that he has, in good faith, attempted
to comply with the standards. Hardship exemp-
tions are granted for periods not to exceed three
years. Section 123 of the Act and the proposed
regulations require an applicant to include in his
petition a complete financial statement showing
the basis of the economic hardship and a com-
plete description of his good faith effort to com-
ply with the standards. Although it was not
required by the Act, the NHTSA also proposed
to require a description of the steps a manufac-
turer proposes to take during the exemption
period to achieve full compliance and the esti-
mated date by which full compliance is to be
achieved.
Submissions on the issue of economic hardship
were received from Senator Warren Magnuson,
Chairman of the Senate Committee on Commerce,
the Public Interest Research Group, the Center
for Auto Safety, Freightliner Corporation, and
Lotus Cars, Ltd. Senator Magnuson and the
Research Group have suggested that the NHTSA
should adopt application guidelines modeled af-
ter those of the Environmental Protection Agency
for requests for suspension of the effective date
of motor vehicle emission standards. The Re-
search Group has drafted a model application
form using the EPA guidelines as a departure
point. Senator Magnuson also suggested that
cost data concerning the affected component
should be required, as well as a chronological an-
alysis by the petitioner of its efforts to comply
with the standard following issuance of the notice
of proposed rulemaking. Finally, he urged that
a company be required to submit an analysis of
the effects on its economic stability of the ab-
sence of an exemption. The Center for Auto
Safety believes that all financial data should
be presented in dollar figures. Lotus Cars, Ltd.
suggested that, if a manufacturer has no plans
to achieve conformity because the production run
of a model is nearing its end, the regulations
should specifically permit him to so state.
Freightliner Corporation commented that hard-
ship should be considered in relation to the total
economic picture "including the purchaser" and
the particular job a vehicle is intended to per-
form. It expressed fear that the legislation was
not enacted with multi-stage manufacturers in
mind. Freightliner appears to be concerned
about hardship situations that may occur to man-
ufacturers whose total annual volume exceeds
10,000 units and who are called upon to provide
costly custom equipment.
PART 555— PRE 1
Effactiva: January 29, 1973
In formulating the regulations for hardship
applications the NHTSA has adopted many of
the suggestions of Senator Magnuson and the
Public Interest Research Group. Engineering
and financial data that must be submitted with
the application will include a list or description
of each component that would have to be modified
in order to achieve compliance, together with an
itemization of the estimated cost to the petitioner
to modify each such component if required to do
so on an emergency basis, or at the end of one-,
two-, and three-year periods. The manufacturer
will also include what it estimates as the price
increase per vehicle to balance the total costs in-
curred were it to achieve compliance, and a state-
ment of the anticipated effect of the price increase.
Corporate balance sheets for the three fiiscal years
immediately preceding the application must be
submitted, as well as a projected balance sheet
for the fiscal year following any denial of the
petition. The financial data must be in dollar
figures, as the Center for Auto Safety suggested.
The manufacturer would also be allowed to dis-
cuss other hardship factors that a denial would
cause, such as loss of market. In its description
of compliance efforts a manufacturer will be
required to submit a chronological analysis show-
ing the relationship of those efforts to the rule-
making history of the standard, and to discuss
alternate means of compliance that may have been
considered, and the reasons for the rejection of
each. As proposed, a manufacturer must also
describe the steps to be taken while the exemp-
tion is in effect to achieve full compliance, and
the estimated date by which full compliance will
be achieved.
The NHTSA did not adopt the format and in-
formational content of the EPA guidelines for
several reasons. There is a basic difference in
the Clean Air Act and the Traffic Safety Act.
Under the former, the public health is para-
mount. All motor vehicles must meet certain
emission standards by the 1975 model year. A
one-year suspension is possible, but only upon
technological grounds, and not for economic
hardship. Suspensions are granted on the basis
of fulfilling four criteria — (1) that it is essential
to the public interest and public health of the
United States, (2) that all good faith efforts have
been made to meet the established standards, (3)
that effective emission control technology is not
available, or has not been available for a sufficient
time to achieve compliance prior to the effective
date of such standard and (4) that the study and
investigation of the National Academy of Sci-
ences and other available information has not
indicated that technology or other alternatives
are available to meet the emission standards. By
the 1976 model year all vehicles will comply and
no further suspension is possible. The proof to
support an emission standard suspension thus
differs substantially from that required for hard-
ship. On the other hand, under the Traffic
Safety Act, motor vehicle safety must be balanced
with other factors of the public interest including
the desirability of affording a continuing and
wide choice of vehicles to meet differing needs,
and encouraging the continuation of relatively
small manufacturers. In some instances, the
safety exemption sought may be limited in time
and scope, and extensively detailed informa-
tion such as EPA requires may be unnecessary
to document the request.
With reference to the comments by Freight-
liner, the NHTSA does take into account the I
vehicle purchaser, in that it is concerned with
the effect of a denial upon the availability of
vehicles and their retail prices. Moreover,
throughout its existence this agency has been
aware of the problems of custom-truck manu-
facturers and has tried to accommodate them,
consistent with considerations of motor vehicle
safety.
2. Other Bases for Exemption. A manufac-
turer may apply for an exemption for a period
not to exceed two years and covering up to 2,500
vehicles for any 12-month period that the ex-
emption is in effect on any one of three additional
bases: that it would assist in the development
or field evaluation of new motor vehicle safety
features, that it would assist in the development
or field evaluation of a low-emission vehicle, or
that, in the absence of an exemption, it would be
imable to sell a motor vehicle whose overall level
of safety is equivalent to or exceeds the overall
level of safety of non-exempted motor vehicles.
To substantiate the development of safety fea-
tures, it was proposed that the applicant estab-
lish the innovational nature of the safety feature
and that it would provide a level of safety at
PART 555— PRE 2
MkHvci Jamranr 39, 1979
PREAMBLE TO PART 555— TEMPORARY EXEMPTION FROM MOTOR
VEHICLE SAFETY STANDARDS
(Docket No. 72-30; NoNco 2)
This notice amends Title 49 of the Code of
Federal Regulations by adding a new Part 555,
"Temporary Exemption from Motor Vehicle
Safety Standards," effective January 29, 1973. A
notice of proposed rulemaking on this subject was
published December 1, 1972 (37 F.R. 25533),
and opportunity afforded for comment.
On October 25, 1972 P.L. 92-548 was enacted,
amending section 123 of the National Traffic
and Motor Vehicle Safety Act of 1966 to pro-
vide four bases upon which a manufacturer of
motor vehicles might apply for a temporary ex-
emption from one or more Federal motor vehicle
safety standards. The legislative intent is clearly
expressed as to the information required to sub-
stantiate an application on each basis. A discus-
sion follows of each basis, the required informa-
tion and the principal issues raised in response
to the proposal.
1. Substantial Economic Hardship. A manufac-
turer whose total motor vehicle production in his
most recent year of manufacture did not exceed
10,000 may petition for relief on grounds that
compliance would cause him substantial economic
hardship and that he has, in good faith, attempted
to comply with the standards. Hardship exemp-
tions are granted for periods not to exceed three
years. Section 123 of the Act and the proposed
regulations require an applicant to include in his
petition a complete financial statement showing
the basis of the economic hardship and a com-
plete description of his good faith effort to com-
ply with the standards. Although it was not
required by the Act, the NHTSA also proposed
to require a description of the steps a manufac-
turer proposes to take during the exemption
period to achieve full compliance and the esti-
mated date by which full compliance is to be
achieved.
Submissions on the issue of economic hardship
were received from Senator Warren Magnuson,
Chairman of the Senate Committee on Commerce,
the Public Interest Research Group, the Center
for Auto Safety, Freightliner Corporation, and
Lotus Cars, Ltd. Senator Magnuson and the
Research Group have suggested that the NHTSA
should adopt application guidelines modeled af-
ter those of the Environmental Protection Agency
for requests for suspension of the effective date
of motor vehicle emission standards. The Re-
search Group has drafted a model application
form using the EPA guidelines as a departure
point. Senator Magnuson also suggested that
cost data concerning the affected component
should be required, as well as a chronological an-
alysis by the petitioner of its efforts to comply
with the standard following issuance of the notice
of proposed rulemaking. Finally, he urged that
a company be required to submit an analysis of
the effects on its economic stability of the ab-
sence of an exemption. The Center for Auto
Safety believes that all financial data should
be presented in dollar figures. Lotus Cars, Ltd.
suggested that, if a manufacturer has no plans
to achieve conformity because the production run
of a model is nearing its end, the regulations
should specifically permit him to so state.
Freightliner Corporation commented that hard-
ship should be considered in relation to the total
economic picture "including the purchaser" and
the particular job a vehicle is intended to per-
form. It expressed fear that the legislation was
not enacted with multi-stage manufacturers in
mind. Freightliner appears to be concerned
about hardship situations that may occur to man-
ufacturers whose total annual volume exceeds
10,000 units and who are called upon to provide
costly custom equipment.
PART 555— PRE 1
EffKllv*: January 29, 1973
In formulating the regulations for hardship
applications the NHTSA has adopted many of
the suggestions of Senator Magnuson and the
Public Interest Research Group. Engineering
and financial data that must be submitted with
the application will include a list or description
of each component that would have to be modified
in order to achieve compliance, together with an
itemization of the estimated cost to the petitioner
to modify each such component if required to do
so on an emergency basis, or at the end of one-,
two-, and three-year periods. The manufacturer
will also include what it estimates as the price
increase per vehicle to balance the total costs in-
curred were it to achieve compliance, and a state-
ment of the anticipated effect of the price increase.
Corporate balance sheets for the three fiscal years
immediately preceding the application must be
submitted, as well as a projected balance sheet
for the fiscal year following any denial of the
petition. The financial data must be in dollar
figures, as the Center for Auto Safety suggested.
The manufacturer would also be allowed to dis-
cuss other hardship factors that a denial would
cause, such as loss of market. In its description
of compliance efforts a manufacturer will be
required to submit a chronological analysis show-
ing the relationship of those efforts to the rule-
making history of the standard, and to discuss
alternate means of compliance that may have been
considered, and the reasons for the rejection of
each. As proposed, a manufacturer must also
describe the steps to be taken while the exemp-
tion is in effect to achieve full compliance, and
the estimated date by which full compliance will
be achieved.
The NHTSA did not adopt the format and in-
formational content of the EPA guidelines for
several reasons. There is a basic difference in
the Clean Air Act and the TraflSc Safety Act.
Under the former, the public health is para-
mount. All motor vehicles must meet certain
emission standards by the 1975 model year. A
one-year suspension is possible, but only upon
technological grounds, and not for economic
hardship. Suspensions are granted on the basis
of fulfilling four criteria — (1) that it is essential
to the public interest and public health of the
United States, (2) that all good faith ^orts have
been made to meet the established standards, (3)
that effective emission control technology is not
available, or has not been available for a sufficient
time to achieve compliance prior to the effective
date of such standard and (4) that the study and
investigation of the National Academy of Sci-
ences and other available information has not
indicated that technology or other alternatives
are available to meet the emission standards. By
the 1976 model year all vehicles will comply and
no further suspension is possible. The proof to
support an emission standard suspension thus
differs substantially from that required for hard-
ship. On the other hand, under the Traffic
Safety Act, motor vehicle safety must be balanced
with other factors of the public interest including
the desirability of affording a continuing and
wide choice of vehicles to meet differing needs,
and encouraging the continuation of relatively
small manufacturers. In some instances, the
safety exemption sought may be limited in time
and scope, and extensively detailed informa-
tion such as EPA requires may be unnecessary
to document the request.
With reference to the comments by Freight-
liner, the NHTSA does take into account the |
vehicle purchaser, in that it is concerned with
the effect of a denial upon the availability of
vehicles and their retail prices. Moreover,
throughout its existence this agency has been
aware of the problems of custom-truck manu-
facturers and has tried to accommodate them,
consistent with considerations of motor vehicle
safety.
2. Other Bases for Exemption. A manufac-
turer may apply for an exemption for a period
not to exceed two years and covering up to 2,500
vehicles for any 12-month period that the ex-
emption is in effect on any one of three additional
bases: that it would assist in the development
or field evaluation of new motor vehicle safety
features, that It would assist in the development
or field evaluation of a low-emission vehicle, or
that, in the absence of an exemption, it would be
unable to sell a motor vehicle whose overall level
of safety is equivalent to or exceeds the overall
level of safety of non-exempted motor vehicles.
To substantiate the development of safety fea-
tures, it was proposed that the applicant estab-
lish the innovational nature of the safety feature
and that it would provide a level of safety at /
PART 555— PRE 2
EfFadlva: January 29, 1973
1%
least equivalent to the level of safety established
in the standard from which exemption is sought.
To substantiate the development of a low-emis-
sion vehicle, it was proposed that the applicant
establish the emission feature of his vehicle and
that an exemption would aid in its development
as well as evidence that a temporary exeYnption
would not unreasonably degrade the safety of
the vehicle. Finally, to substantiate that failure
to provide an exemption would prevent the sale
of an otherwise safe vehicle, it was proposed that
an applicant submit evidence that the vehicle
could not otherwise be sold, and provide an anal-
ysis of how the vehicle provides an overall level
of safety equal to or exceeding the overall level
of safety of non-exempted vehicles.
The Public Interest Research Group again
suggested that the proposal be amplified to pro-
vide guidelines similar to those of EPA, and
supplied formats for each of the three bases.
The NHTSA concurs with the Research Group
to the extent that it has expanded the proposal
so that the regulation includes some of the in-
formation and data suggested, but it has not
adopted the format in detail, for the reasons
previously discussed.
A manufacturer who wishes to develop or
evaluate new safety features must document the
innovational nature of the features. He must
also submit an analysis establishing that the
safety level provided by the feature equals or
exceeds the level of safety established in the
standard from which exemption is sought, includ-
ing a description of how complying and non-
complying vehicles differ, the results of tests
that demonstrate performance which meets or
exceeds the safety levels of the standard, and
substantiation that a temporary exemption would
facilitate the development or field evaluation of
the vehicle. The manufacturer is also required
to indicate his intent at the end of the exemp-
tion period to conform to the standard, or to
petition for rulemaking to amend the standard
80 that the feature might be incorporated into it.
Somewhat similar information is required of a
manufacturer who wishes to develop or evaluate
a low-emission vehicle, although in this instance
the NHTSA is also interested in a manufac-
turer's test results showing how far the vehicle
deviates from the standard, as part of the manu-
facturer's showing that the exemption would not
unreasonably degrade the safety of the vehicle.
A manufacturer who petitions on the basis that
the overall level of safety is equivalent to or ex-
ceeds the overall level of non-exempted vehicles
must describe how exempted and non-exempted
vehicles differ, describe safety features that the
vehicle offers as standard equipment that are
not required by the Federal standards, and sub-
mit both comparative test results showing how
far the vehicle deviates from the standard, and
the results of any tests showing that the vehicle
exceeds the minimum requirements of any Fed-
eral standard. The manufacturer must also state
wliether he intends to comply at the end of the
exemption period. Petitions for renewal of an
exemption under each of these three bases are
required to state the number of exempted vehicles
sold in the United States under the prior ex-
emption.
3. Miscellaneous Comments. The Public In-
terest Research Group and the Center for Auto
Safety requested that § 555.7, Processing of peti-
tions., be rewritten to include a provision for
informal public hearings to be held at the discre-
tion of the Administrator. Such a provision, in
the opinion of the Research Group, "might well
preclude protracted litigation by fully addressing
issues in an informal public hearing." The re-
quested provision has not been included in the
final rule as it is considered unnecessary. Such
a power is inherent in the Administrator's gen-
eral powers and may be invoked in any appro-
priate occasions. It is not specifically required
by the legislation, which deems notice and an
opportunity to comment in writing a sufficient
forum and means of assuring informed admin-
istrative action and of protecting the public
interest.
The Center for Auto Safety requested that
§ 555.8, Termination of tem,porary exemptions, in-
clude a provision that the Administrator will en-
tertain petitions for termination from interested
persons. Although such a provision is not neces-
sarj' since the agency would consider any in-
formation brought to its attention that is relevant
(o its regulatory functions, a section to this effect
lias been added for public information. It pro-
PART 565— PRE 3
MfccHvai January 29, 1973
vides that petitions for termination of an ex-
emption will be handled in accordance with the
procedures of §§ 553.31 and .33 on petitions for
rulemaking. The Center also asked whether
the civil penalty provisions of section 109 could
apply in the event it was determined that an
exemption had been granted on the basis of
fraudulent information. The NHTSA believes
that civil penalties could apply in this instance,
through the application of sections 108, 109, and
li2. In addition, the general fraud provisions
of 18 XJ.S.C. 1001 provide both criminal and civil
penalties for submission of false information.
Senator Magnuson, Lotus, and the Research
Group commented that the temporary exemp-
tion labels (i§ 555.9) should include the title of
the standard as a matter of clearer public dis-
closure. The comments have merit and the labels,
both windshield and certification, must state
the title of any exempted standard. The Re-
search Group has further commented that the
NHTSA has ignored the provision of Section
123(b) that written notification of the exemp-
tion be delivered to the dealer and first pur-
chaser. The agency does not agree with the
Research Group and believes that the windshield
label constitutes written notification, fulfilling
this discretionary requirement.
Finally, comments were addressed to the ade-
quacy of § 555.10, Availability for public inspec-
tion. The NHTSA has adopted the Center for
Auto Safety's comment that subsection (a) should
be revised to provide availability of memoranda
of all metings held pursuant to § 555.7(a). How-
ever, the NHTSA has not agreed with the
Center's suggestion that the agency commit itself
to make such memoranda available within a spec-
ified time limit "such as five working days".
The agency will use its best efforts to place memo-
randa of this nature in the dockets as soon as
practicable. The Center, Senator Magnuson, and
the Research Group pointed out that Section
123(b) of the Act authorizes the Secretary to
withhold only information "not relevant to the
application for exemption". This agency concurs
and minor rewording of § 555.10(b) clarifies this.
Senator Magnuson encourages the agency "as a
general policy, to release information contained
in applications for exemptions on the basis that
all such information is relevant to the application
or it would not have been included by the manu-
facturer". The NHTSA agrees with this general
policy. It will carefully scrutinize requests for
confidential treatment of information and lib-
erally interpret the relevancy of that information
to the petition.
In consideration of the foregoing, Title 49
Code of Federal Regulations is amended by add-
ing Part 555, Temporary Exemption from Fed-
eral Motor Vehicle Safety Standards, as set
forth below.
Effective date: January 29, 1973.
(Sec. 3, Pub. L. 92-548, 86 Stat. 1159; Sec.
119, Pub. L. 89-563 (15 U.S.C. 1410, 1407), 80
Stat. 718; delegation of authority at 49 CFR
1.51)
Issued on January 22, 1973.
Douglas W. Toms
Administrator
38 F.R. 2693
January 29, 1973
PART 665— PRE 4
7 least equivalent to the level of safety established
in the standard from which exemption is sought.
To substantiate the development of a low-emis-
sion vehicle, it was proposed that the applicant
establish the emission feature of his vehicle and
that an exemption would aid in its development
as well as evidence that a temporary exemption
would not unreasonably degrade the safety of
the vehicle. Finally, to substantiate that failure
to provide an exemption would prevent the sale
of an otherwise safe vehicle, it was proposed that
an applicant submit evidence that the vehicle
could not otherwise be sold, and provide an anal-
ysis of how the vehicle provides an overall level
of safety equal to or exceeding the overall level
of safety of non-exempted vehicles.
The Public Interest Research Group again
suggested that the proposal be amplified to pro-
vide guidelines similar to those of EPA, and
supplied formats for each of the three bases.
The NHTSA concurs with the Research Group
to the extent that it has expanded the proposal
so that the regxilation includes some of the in-
formation and data suggested, but it has not
^ adopted the format in detail, for the reasons
^ previously discussed.
A manufacturer who wishes to develop or
evaluate new safety features must document the
innovational nature of the features. He must
also submit an analysis establishing that the
safety level provided by the feature equals or
exceeds the level of safety established in the
standard from which exemption is sought, includ-
ing a description of how complying and non-
complying vehicles diiTer, the results of tests
that demonstrate performance which meets or
exceeds the safety levels of the standard, and
substantiation that a temporary exemption would
facilitate the development or field evaluation of
the vehicle. The manufacturer is also required
to indicate his intent at the end of the exemp-
tion period to conform to the standard, or to
petition for rulemaking to amend the standard
so that the feature might be incorporated into it.
Somewhat similar information is required of a
manufacturer who wishes to develop or evaluate
a low-emission vehicle, although in this instance
the NHTSA is also interested in a manufac-
1^ turer's test results showing how far the vehicle
EffKtIv*: January 29, 1973
deviates from the standard, as part of the manu-
facturer's showing that the exemption would not
unreasonably degrade the safety of the vehicle.
A manufacturer who petitions on the basis that
the overall level of safety is equivalent to or ex-
ceeds the overall level of non-exempted vehicles
must describe how exempted and non-exempted
vehicles differ, describe safety features that the
vehicle offers as standard equipment that are
not required by the Federal standards, and sub-
mit both comparative test results showing how
far the vehicle deviates from the standard, and
the results of any tests showing that the vehicle
exceeds the minimum requirements of any Fed-
eral standard. The manufacturer must also state
whether he intends to comply at the end of the
exemption period. Petitions for renewal of an
exemption under each of these three bases are
required to state the number of exempted vehicles
sold in the United States under the prior ex-
emption.
3. MisceUaneotts Comments. The Public In-
terest Research Group and the Center for Auto
Safety requested that § 555.7, Processing of peti-
tions, be rewritten to include a provision for
informal public hearings to be held at the discre-
tion of the Administrator. Such a provision, in
the opinion of the Research Group, "might well
preclude protracted litigation by fully addressing
issues in an informal public hearing." The re-
quested provision has not been included in the
final rule as it is considered unnecessary. Such
a power is inherent in the Administrator's gen-
eral powers and may be invoked in any appro-
priate occasions. It is not specifically required
by the legislation, which deems notice and an
opportunity to comment in writing a sufficient
forum and means of assuring informed admin-
istrative action and of protecting the public
interest.
The Center for Auto Safety requested that
§ 555.8, Termination of temporary exem,ption8, in-
clude a provision that the Administrator will en-
tertain petitions for termination from interested
persons. Although such a provision is not neces-
sary since the agency would consider any in-
formation brought to its attention that is relevant
to its regulatory functions, a section to this effect
has been added for public information. It pro-
PART 555— PRE 3
I January 39, 1973
vides that petitions for termination of an ex-
emption will be handled in accordance with the
procedures of §§ 553.31 and .33 on petitions for
rulemaking. The Center also asked whether
the civil penalty provisions of section 109 could
apply in the event it was determined that an
exemption had been granted on the basis of
fraudulent information. The NHTSA believes
that civil penalties could apply in this instance,
through the application of sections 108, 109, and
li2. In addition, the general fraud provisions
of 18 U.S.C. 1001 provide both criminal and civil
penalties for submission of false information.
Senator Magnuson, Lotus, and the Research
Group commented that the temporary exemp-
tion labels (>§ 555.9) should include the title of
the standard as a matter of clearer public dis-
closure. The comments have merit and the labels,
both windshield and certification, must state
the title of any exempted standard. The Ee-
search Group has further commented that the
NHTSA has ignored the provision of Section
123(b) that written notification of the exemp-
tion be delivered to the dealer and first pur-
chaser. The agency does not agree with the
Research Group and believes that the windshield
label constitutes written notification, fulfilling
this discretionary requirement.
Finally, comments were addressed to the ade-
quacy of § 555.10, Availability for public inspec-
tion. The NHTSA has adopted the Center for
Auto Safety's comment that subsection (a) should
be revised to provide availability of memoranda
of all metings held pursuant to § 555.7(a). How-
ever, the NHTSA has not agreed with the
Center's suggestion that the agency conmiit itself
to make such memoranda available within a spec-
ified time limit "such as five working days".
The agency will use its best efforts to place memo-
randa of this nature in the dockets as soon as
practicable. The Center, Senator Magnuson, and
the Research Group pointed out that Section
123(b) of the Act authorizes the Secretary to
withhold only information "not relevant to the
application for exemption". This agency concurs
and minor rewording of § 555.10(b) clarifies this.
Senator Magnuson encourages the agency "as a
general policy, to release information contained
in applications for exemptions on the basis that
all such information is relevant to the application
or it would not have been included by the manu-
facturer". The NHTSA agrees with this general
policy. It will carefully scrutinize requests for
confidential treatment of information and lib-
erally interpret the relevancy of that information
to the petition.
In consideration of the foregoing. Title 49
Code of Federal Regulations is amended by add-
ing Part 555, Temporary Exemption from Fed-
eral Motor Vehicle Safety Standards, as set
forth below.
Effective date: January 29, 1973.
(Sec. 3, Pub. L. 92-548, 86 Stat. 1159; Sec.
119, Pub. L. 89-563 (15 U.S.C. 1410, 1407), 80
Stat. 718; delegation of authority at 49 CFR
1.51)
Issued on January 22, 1973.
Douglas W. Toms
Administrator
38 F.R. 2693
January 29, 1973
PART 665— PRE 4
E«h<Nv«: March IS, 1974
PREAMBLE TO AMENDMENT TO PART 555— TEMPORARY EXEMPTION FROM
MOTOR VEHICLE SAFETY STANDARDS
(Docket No. 72-30; Notico 4)
This notice amends 49 CFR Part 55ft to specify
that the NHTSA will notify i^etitioners directly
when their petitions are found not to contain
required information, and timt income statements
must be included in support of hardship i)eti-
tions.
The NHTSA projjosed these amendments on
October 29, 1973 (38 F.R. 29817). Interested
persons have been offered an opj)ortunity to i)ar-
ticipate in the making of the amendments and
due consideration has been given to tlie two com-
ments that were received in resjjonse to the notice.
A comment by H. E. Waterman of Howie,
Maryland, suggests that the agency adojjt the
essence of Federal Aviation Regulation § 11.25
Petition for rulemaking or exemptions to em-
phasize public interest factors, rather than the
"private interests" of the petitioner. Mr. AVater-
man commented that "If an applicant considers
his finances to be of interest relative to his peti-
tion, he should be given an opiwrtunity to state
his financial condition, but that should not be
emphasized by establisliment of such a require-
ment".
Mr. Waterman's comment is inapix)site. The
exemption authority of the Federal Aviation
Administration is broader than that provided
the NHTSA, and grant of exemption under FAR
§ 11.25 is not based specifically ujwn factors of
substantial economic hardship. The NHTSA haS
concluded that it must request detailed financial
data from hardship petitioners to assist it and
the public in evaluating the merits of hardship
claims, and it does not request such information
of petitioners who file for exemption on other
grounds.
Mr. Waterman's conunent on public interest
factors however is in ^wint. In addition to find-
ing that one of the four appropriate statutory
bases for exemption is present, the Administrator
must also make a finding that the exem])ti(m is
in the public mterest and consistent with the
objectives of the National Traffic and Motor
Vehicle Safety Act. The regulation currently
does not siiecifically require th*^ petitioner to sub-
mit public interest arguments, and the NHTSA
believes that it should be amended to so provide.
Accordingly § 555.5 Petition for exemption is be-
ing amended to require the i^etition to "contain
any information, views, or arguments available
to the petitioner as to why the granting of the
petition would be in the public interest and con-
sistent with the objectives of the Act".
American Motors commented that income state-
ments and balance sheets are generally only part
of a larger overall picture of the financial impact
of compliance, and that to specifically require
them might exclude the submission of other docu-
ments which could similarly describe the impact.
It suggests amending the regulation to require
only that the basis for an exemption for sub-
stantial economic hardship be fully documented.
The NHTSA does not consider its informa-
tional requirements restrictive and has not
adopted the comments of American Motors. Sec-
tion 556. (a)(1) contains a broad request for
"engineering and financial information demon-
strating in detail how compliance or failure to
obtain an exemption would cause substantial
economic hardship" which includes but is not
limited to five specific categories of information,
plus "(vi) A discussion of other hardships (e.g.
PART 565— PRE 6
Efhctiv*: March 15, 1974
loss of market) that the petitioner desires the U.S.C. 1407; delegation of authority at 49 CFR
agency to consider". 1.51.)
In consideration of the foregoing, 49 CFR Issued on February 7, 1974.
Part 555 is amended t n r^
James B. Gregory
Effective date: March 15, 1974. Administrator
(Sec. 3, Pub. L. 92-548, 86 Stat 1159, 15 U.S.C. 39 F.R. 5489
1410; sec. 119, Pub. L. 89-563, 80 Stat. 718. 15 February 13, 1974
PART 555— PRE 6
ElhcMv*: March 15, 1974
PREAMBLE TO AMENDMENT TO PART 555— TEMPORARY EXEMPTION FROM
MOTOR VEHICLE SAFETY STANDARDS
(Dockat No. 72-30; Notice 4)
This notice amends 49 CFR Part 555 to si^ecify
that the NHTSA will notify {petitioners directly
when their jietitions are found not to contain
required information, and that income statements
must be included in supiwrt of hardship i)eti-
tions.
The NHTSA proi)osed these amendments on
October 29, 1973 (38 F.R. 29817). Interested
l^ersons liave l^een oHered an opportiuiity to par-
ticipate in the making of tlie amendments and
due consideration has been given to the two com-
ments that were received in resiwnse to the notice.
A comment by H. E. Waterman of Howie,
Maryland, suggests that the agency adopt tiie
essence of Federal Aviation Regulation § 11.25
Petition for rulemaking or exempfionx to em-
phasize public interest factors, rather than the
"private interests" of the petitioner. Mr. Water-
man commented that "If an applicant considers
his finances to be of interest relative to his peti-
tion, he should be given an opi)ortnnity to state
his financial condition, but that should not be
emphasized by establishment of such a require-
ment".
Mr. Waterman's comment is inapjwsite. The
exemption authority of the Federal Aviation
Administration is broader than that provided
the NHTSA, and grant of exemption under FAR
§ 11.25 is not based specifically ui)on factors of
substantial economic hardship. The NHTSA ha&
concluded that it must request detailed financial
data from hardship petitioners to assist it and
the public in evaluating the merits of hardship
claims, and it does not request such information
of petitioners who file for exemption on otlier
grounds.
Mr. Waterman's comment on public interest
factors however is in jwint. In addition to find-
ing that one of the four appropriate statutory
bases for exemption is present, the Administrator
must also make a finding that the exemption is
in the public interest and ('(msistent with tlu^
objectives of the National Traffic and Motor
Vehicle Safety Act. The regulation currently
does not specifically require the petitioner to sub-
mit public interest arguments, and the NHTSA
belie \es that it should be amended to so provide.
Accordingly § 555.5 Petition for exemption is be-
ing amended to require the j^etition to "contain
any information, views, or argiunents available
to the petitioner as to why the granting of the
petition would be in the public interest and con-
sistent with the objectives of the Act".
American Motors commented that income state-
ments and balance sheets are generally only part
of a larger overall picture of the financial impact
of compliance, and that to specifically require
them might exclude the submission of other docu-
ments which could similarly describe the impact.
It suggests amending the regulation to require
only that the basis for an exemption for sub-
stantial economic hardship be fully documented.
The NHTSA does not consider its informa-
tional requirements restrictive and has not
adopted the comments of American Motors. Sec-
tion 556.(a)(l) contains a broad request for
"engineering and financial information demon-
strating in detail how compliance or failure to
obtain an exemption would cause substantial
economic hardship" which includes but is not
limited to five specific categories of information,
plus "(vi) A discussion of other hardships (e.g.
PART 555— PRE 5
MmMv*) March IS, 1974
loss of market) that the petitioner desires the U.S.C. 1407; delegation of authority at 49 CFR
agency to consider". 1.61.)
In consideration of the foregoing, 49 CFR Issued on February 7, 1974.
Part 555 is amended .... t r> /-<
James B. Gregory
Effective date: March 15, 1974. Administrator
(Sec. 3, Pub. L. 92-548, 86 Stat 1159, 15 U.S.C. 39 F.R. 5489
1410; sec. 119, Pub. L. 89-563, 80 Stat. 718. 15 Fabruary 13, 1974
PART 655— PRE 6
(!
Effacllve: Novembar 24, 1974
PREAMBLE TO AMENDMENT TO PART 555— TEMPORARY EXEMPTION FROM
MOTOR VEHICLE SAFETY STANDARDS
(Docket No. 72-30; Notice 5)
This notice amends 49 CFR Part 555 to specify
that denials as well as grants are published in
the Federal Register, and to clarify that the
effective date of a temporary exemption is its date
of publication in the Federal Register unless a
later effective date is specified. The amendments
also specify that an expiring exemption does not
terminate during consideration of a petition for
its renewal.
These amendments pertain to agencj' practice
and are interpretative in nature. Accordingly,
pursuant to 5 U.S.C. § 553(b), it has been found
that no notice of proposed rulemaking is called
for.
Section 555.7(a) is amended to specify that
when the Administrator determines that a peti-
tion does not contain adequate justification and is
denied, the petitioner is notified in writing and a
notice of the denial is published in the Federal
Register. Publication of denials has been an
agency practice and the regulation is amended to
reflect it.
A new subparagraph (f) is added to 49 CFR
555.7 to specify that the effective date of a tem-
porary exemption is the date of publication of
the notice of grant in the Federal Register unless
a later effective date is specified. Interested per-
sons have asked whether exemptions can be made
effective as of the date of the filng of a petition
for relief, or can include the total production of
a model year that begins before the date an ex-
emption is granted. This amendment is intended
to clarify the agency's policy that exemptions
should not have a retroactive effect which could
serve to excuse manufacture of nonconforming
vehicles in violation of section 108(a)(1) of the
National Traffic and Motor Vehicle Safety Act.
In section 555.8 the references to paragraph
(c) in paragraphs (a) and (b) are changed to
paragraph (d), to indicate that the cause of an
early termination of an exemption by the Ad-
ministrator is through administrative action
(paragraph (d)), rather than through petition
by interested persons (paragraph (c)). A new
paragraph (c) is added to § 555.8, implementing
the Administrative Procedure Act provision at
5 U.S.C. § 558(c), stating in effect that when a
timely and sufficient application for renewal of
a temporary exemption has been received before
the exemption's termination date, the exemption
does not expire until the Administrator grants
or denies the petition for renewal. A timely
application is one that is received not later than
60 days before the expiration of an exemption.
A sufficient application is one that contains in-
formation required by § 555.5.
In consideration of the foregoing, 49 CFR
Part 555 is amended. . . .
Effective date: November 24, 1974.
(Sec. 3, Pub. L. 92-548, 86 Stat. 1159, 15 U.S.C.
1410; sec. 119, Pub. L. 89-563, 80 Stat. 718, 15
U.S.C. 1407 ; delegation of authority at 49 CFR
1.51).
Issued on October 21, 1974.
James B. Gregory
Administrator
39 F.R. 37988
October 25, 1974
PART 555— PRE 7-8
Effective: November 24, 1974
PREAMBLE TO AMENDMENT TO PART 555— TEMPORARY EXEMPTION FROM
MOTOR VEHICLE SAFETY STANDARDS
(Docket No. 72-30; Notice 5)
This notice amends 49 CFR Part 555 to specify
that denials as well as grants are published in
the Federal Register, and to clarify that the
eflFective dat« of a temporary exemption is its date
of publication in the Federal Register imless a
later effective date is specified. The amendments
also specify that an expiring exemption does not
terminate during consideration of a petition for
its renewal.
These amendments pertain to agency practice
and are interpretative in nature. Accordingly.
pursuant to 5 U.S.C. § 553(b), it has been found
that no notice of proposed rulemaking is called
for.
Section 555.7(a) is amended to specify that
when the Administrator determines that a peti-
tion does not contain adequate justification and is
denied, the petitioner is notified in writing and a
notice of the denial is published in the Federal
Register. Publication of denials has been an
agency practice and the regulation is amended to
reflect it.
A new subparagraph (f) is added to 49 CFR
655.7 to specify that the effective date of a tem-
porary exemption is the date of publication of
the notice of grant in the Federal Register unless
a later effective date is specified. Interested per-
sons have asked whether exemptions can be made
effective as of the date of the filng of a petition
for relief, or can include the total production of
a model year that begins before the date an ex-
emption is granted. This amendment is intended
to clarify the agency's policy that exemptions
should not have a retroactive effect which could
serve to excuse manufacture of nonconforming
vehicles in violation of section 108(a)(1) of the
National Traffic and Motor Vehicle Safety Act.
In section 555.8 the references to paragraph
(c) in paragraphs (a) and (b) are changed to
paragraph (d), to indicate that the cause of an
early termination of an exemption by the Ad-
ministrator is through administrative action
(paragraph (d)), rather than through petition
by interested persons (paragraph (c)). A new
paragraph (c) is added to § 555.8, implementing
the Administrative Procedure Act provision at
5 U.S.C. § 558(c), stating in effect that when a
timely and sufficient application for renewal of
a temporary exemption has been received before
the exemption's termination date, the exemption
does not expire until the Administrator grants
or denies the petition for renewal. A timely
application is one that is received not later than
60 days before the expiration of an exemption.
A sufficient application is one that contains in-
formation required by § 555.5.
In consideration of the foregoing, 49 CFR
Part. 555 is amended. . . .
Effective date : November 24, 1974.
(Sec. 3, Pub. L. 92-548, 86 Stat. 1159, 15 U.S.C.
1410; sec. 119, Pub. L. 89-563, 80 Stat. 718, 15
U.S.C. 1407 ; delegation of authority at 49 CFR
1.51).
Issued on October 21, 1974.
James B. Gregory
Administrator
39 F.R. 37988
October 25, 1974
PART 555— PRE 7-8
Effective: May 30, 1975
PREAMBLE TO AMENDMENT TO PART 555— TEMPORARY EXEMPTION FROM MOTOR
VEHICLE SAFETY STANDARDS
(Docket No. 73-20; Notice 6)
This notice amends 49 CFR § 555.10(b) to
clarify that information made available for pub-
lic inspection shall include all submitted ma-
terials that are specifically required by § 555.6.
The amendment is effective 30 days after publi-
cation in the Federal Register.
This amendment pertains to a^ncy practice
and is clarifying and interpretative in nature.
Accordingly, pui-suant to 5 U.S.C. 553(b), it is
found that notice of proposed rulemaking is un-
necessary.
Currently § 555.10(b) states that "Information
made available for inspection shall not include
materials not relevant to the petition that are to
be withheld from the public in accordance with
sections 112 and 113 of the Act (15 U.S.C. 1401,
1402) and section 552(b) of Title 5 of the United
States Code."
Some petitioners for temporary exemptions on
hardship grounds have requested that confidential
treatment be given such items as estimated price
increases that would be caused by compliance,
projected balance sheets and income statements
for the fiscal year following denial of a petition,
or the efforts to be taken to achieve compliance
while the exemption is in effect. The usual
reason given is that the information could be
harmful to the petitioner in the hands of its
competitors. The NHTSA has uniformly denied
such requests if they involve materials that the
regulation specifically requires to be submitted.
These materials are necessary for a determination
by the NHTSA of whether the statutory basis
for exemption exists. This agency finds that all
materials it requests pursuant to the regulation,
and which are used in its own decisions, should
be available for inspection in the docket by mem-
bers of the public who wish to reach their own
conclusion on the merits of the petition. Ma-
terials submitted gratuitously will, of course, be
withheld from availability for inspection, if the
petitioner requests it and if it is a matter that
may be withheld in accordance with sections 112,
113, and 158 of the National Traffic and Motor
Vehicle Safety Act.
In consideration of the foregoing, 49 CFR
§ 555.10(b) is amended. . . .
Ejfective date : May 30, 1975.
(Sec. 3, Pub. L. 92-548, 86 Stat. 1159, 15
U.S.C. 1410, sec. 119, Pub. L. 89-563, 80 Stat.
718, 15 U.S.C. 1407; delegation of authority at
49 CFR 1.51.)
Issued on April 24, 1975.
James B. Gregory
Administrator
40 F.R. 18789
April 30, 1975
PART 555— PRE 9-10
JSI-MS 0-77-8
Effective: May 30, 1975
PREAMBLE TO AMENDMENT TO PART 555— TEMPORARY EXEMPTION FROM MOTOR
VEHICLE SAFETY STANDARDS
(Docket No. 73-20; Notice 6)
This notice amends 49 CFR § 555.10(b) to
clarify that information made available for pub-
lic inspection shall include all submitted ma-
terials that are specifically required by § 555.6.
The amendment is effective 30 days after publi-
cation in the Federal Register.
This amendment pertains to agency practice
and is clarifying and interpretative in nature.
Accordingly, pursuant to 5 U.S.C. 553(b), it is
found that notice of proposed rulemaking is un-
necessary.
Currently § 555.10(b) states that "Information
made available for inspection shall not include
materials not relevant to the petition that are to
be withheld from the public in accordance with
sections 112 and 113 of the Act (15 U.S.C. 1401,
1402) and section 552(b) of Title 5 of the United
States Code."
Some petitioners for temporary' exemptions on
hardship grounds have requested that confidential
treatment be given such items as estimated price
increases that would be caused bj- compliance,
projected balance sheets and income statements
for the fiscal year following denial of a petition,
or the efforts to be taken to achieve compliance
while the exemption is in effect. The usual
reason given is that the information could be
harmful to the petitioner in the hands of its
competitors. The NHTSA has uniformly denied
such requests if they involve materials that the
regulation specifically requires to be submitted.
These materials are necessary for a determination
by the NHTSA of whether the statutory basis
for exemption exists. This agency finds that all
materials it requests pursuant to the regulation,
and which are used in its own decisions, should
be available for inspection in the docket by mem-
bers of the public who wish to reach their own
conclusion on the merits of the petition. Ma-
terials submitted gratuitously will, of course, be
withheld from availability for inspection, if the
petitioner requests it and if it is a matter that
may be withheld in accordance with sections 112,
113, and 158 of the National Traffic and Motor
Vehicle Safety Act.
In consideration of the foregoing, 49 CFR
§ 555.10(b) is amended. . . .
Elective date : May 30, 1975.
{Sec. 3, Pub. L. 92-548, 86 Stat. 1159, 15
U.S.C. 1410, sec. 119, Pub. L. 89-563, 80 Stat.
718, 15 U.S.C. 1407; delegation of authority at
49 CFR 1.51.)
Issued on April 24, 1975.
James B. Gregory
Administrator
40 F.R. 18789
April 30, 1975
I
PART 555— PRE 9-10
iJI-OM O - 77 . «
(
Effacliv*: S«pl«mb«r 10, 1975
PREAMBLE TO AMENDMENT TO PART 555— TEMPORARY EXEMPTION FROM FEDERAL
MOTOR VEHICLE SAFETY STANDARDS
(Docket 73-20; Notice 7)
This notice amends 49 CFR Part 555 to reflect
the fact that the Administrator considers peti-
tions to modify exemptions.
On July 7, 1975, the Administrator published
notice (40 F.R. 28504) of a petition by General
Motors Corporation to modify the temporary
exemption previously granted Motor Coach In-
dustries, Inc. Under § 555.8(c) the Adminis-
trator may receive petitions to terminate tempo-
rary exemptions, and, under § 555.8(d), he may
terminate them. The Administrator's power
with respect to temporary exemptions necessar-
ily includes modification of an exemption when
to do so is in the public interest and consistent
with the objectives of the National TraflSc and
Motor Vehicle Safety Act, or when the exemp-
tion is based upon misrepresentations. Accord-
ingly, § 555.8(c) and § 555.8(d) are amended to
reflect this fact. In addition, the section refer-
ences to processing of petitions (§ 555.31,
§553.35) are changed to Part 552 to reflect recent
amendments (40 F.R. 42014). A new paragraph
is added to specify that notices of termination
or modification will appear in the Federal
Register.
In consideration of the foregoing, in § 555.8
of Title 49, Code of Federal Regulations, para-
graph (c) and the introductory phase of para-
graph (d) are revised, and paragraph (f) is
added. . . .
Effective date: September 10, 1975. Since the
amendment reflects internal policy and proce-
dure it may be made effective upon publication.
(Sec. 3, Pub. L. 92-548, 86 Stat 1159, 15 U.S.C.
1410, Sec. 119, Pub. L. 89-563, 80 Stat 718, 15
U.S.C. 1407 ; delegation of authority at 49 CFR
1.51.)
Issued on September 4, 1975.
James B. Gregory
Administrator
40 F.R. 42015
September 10, 1975
PART 555-PRE 11-12
EffocHv*: S«p*«mb«r 10, I97S
PREAMBLE TO AMENDMENT TO PART 555— TEMPORARY EXEMPTION FROM FEDERAL
MOTOR VEHICLE SAFETY STANDARDS
(Docket 73-20; Notice 7)
This notice amends 49 CFR Part 555 to reflect
the fact that the Administrator considers peti-
tions to modify exemptions.
On July 7, 1975, the Administrator published
notice (40 F.R. 28504) of a petition by General
Motors Corporation to modify the temporary
exemption previously granted Motor Coach In-
dustries, Inc. Under § 555.8(c) the Adminis-
trator may receive petitions to terminate tempo-
rary exemptions, and, under § 555.8(d), he may
terminate them. The Administrator's power
with respect to temporarj' exemptions necessar-
ily includes modification of an exemption when
to do so is in the public interest and consistent
with the objectives of the National Traffic and
Motor Vehicle Safety Act, or when the exemp-
tion is based upon misrepresentations. Accord-
ingly, § 555.8(c) and § 555.8(d) are amended to
reflect this fact. In addition, the section refer-
ences to processing of petitions (§ 555.31,
§553.35) are changed to Part 552 to reflect recent
amendments (40 F.R. 42014). A new paragraph
is added to specify that notices of termination
or modification will appear in the Federal
Register.
In consideration of the foregoing, in § 555.8
of Title 49, Code of Federal Regulations, para-
graph (c) and the introductory phase of para-
graph (d) are revised, and paragraph (f) is
added. . . .
Effective date: September 10, 1975. Since the
amendment reflects internal policy and proce-
dure it may be made effective upon publication.
(Sec. 3, Pub. L. 92-548, 86 Stat 1159, 15 U.S.C.
1410, Sec. 119, Pub. L. 89-563, 80 Stat 718, 15
U.S.C. 1407; delegation of authority at 49 CFR
1.51.)
Issued on September 4, 1975.
James B. Gregory
Administrator
40 F.R. 42015
September 10, 1975
PART 555-PRE 11-12
PREAMBLE TO AN AMENDMENT TO PART 555— TEMPORARY EXEMPTION
FROM MOTOR VEHICLE SAFETY STANDARDS
(Docket Nos. FE 76-04; Notice 5;
FE 77-03, Notice 4; 80-21, Notice 1)
ACTION: Final Rule.
SUMMARY: This notice makes conforming
amendments to several of the agency's regulations
deleting specific requirements for confidentiality
determinations. These conforming amendments
are needed as a result of the publication today of a
new agency regulation governing requests for con-
fidentiality determinations (Part 512). Since that
new regulation supercedes the confidentiality pro-
visions existing in several of the agency's other
regulations, these conforming amendments are
being made without notice and opportunity for
comment.
I EFFECTIVE DATE:
tive April 9, 1981.
These amendments are effec-
FOR FURTHER INFORMATION CONTACT:
Roger Tilton, Office of Chief Counsel,
National Highway Traffic Safety Adminis-
tration, 400 Seventh Street, S.W.,
Washington, D.C. 20590 (202-426-9511).
SUPPLEMENTARY INFORMATION: In accordance
with the above, Title 49 of the Code of Federal
Regulations is amended as follows.
Part 525, Exemptions From Average Fuel
EcoTuyrny Standards, is revised as follows:
(1) Section 525.6(g) (1) and (2) are deleted and
replaced with the following:
(g) Specify and segregate any part of the infor-
mation and data submitted under this part that the
petitioner wishes to have withheld from public
disclosure in accordance with Part 512 of this
Chapter.
(2) Section 525.13 is deleted and section
525.12 is revised to read:
§ 525.12 Public inspection of Information.
(a) Except as provided in paragraph (b), any per-
son may inspect available information relevant to a
petition under this Part, including the petition and
any supporting data, memoranda of informal
meetings with the petitioner or any other in-
terested persons, and the notices regarding the
petition, in the Docket Section of the National
Highway Traffic Safety Administration. Any per-
son may obtain copies of the information available
for inspection under this paragraph in accordance
with Part 7 of the regulations of the Office of the
Secretary of Transportation (49 CFR Part 7).
(b) Except for the release of confidential infor-
mation authorized by section 505 of the Act and
Part 512 of this Chapter, information made
available for public inspection does not include in-
formation for which confidentiality is requested
under § 525.6(g) and is granted in accordance with
Part 512 and sections 502 and 505 of the Act and
section 552(b) of Title 5 of the United States Code.
Part 537, Automotive Fuel Economy Reports, is
revised as follows:
(1) Section 537.5(c) (7) (i) and (ii) are deleted
and replaced with the following:
(7) Specify any part of the information or data
in the report that the manufacturer believes
should be withheld from public disclosure as
trade secret or other confidential business infor-
mation in accordance with Part 512 of this
Chapter.
(2) Section 537.12 is deleted and section
537.11 is revised to read:
§ 537.11 Public Inspection of Information.
(a) Except as provided in paragraph (b), any per-
son may inspect the information and data submit-
PART 555; PRE 13
ted by a manufacturer under this part in the docket
section of the National Highway Traffic Safety Ad-
ministration. Any person may obtain copies of the
information available for inspection under this sec-
tion in accordance with the regulations of the
Secretary of Transportation in Part 7 of this title.
(b) Except for the release of confidential infor-
mation authorized by section 505 of the Act and
Part 512 of this Chapter, information made
available under paragraph (a) for public inspection
does not include information for which confiden-
tiality is requested under § 537.5(c) (7) and is
granted in accordance with Part 512 of this
Chapter, section 505 of the Act, and section 552(b)
of Title 5 of the United States Code.
Part 555, Temporary Exemption From Motor
Vehicle Safety Standards, is revised as follows:
(1) Section 555.5(b) (6) is revised to read:
(6) Specify any part of the information and
data submitted which petitioner requests be
withheld from public disclosure in accordance
with Part 512 of this Chapter.
(2) Section 555.10(b) is revised to read:
(b) Except for the release of confidential infor-
mation authorized by Part 512 of this Chapter, in-
formation made available for inspection under
paragraph (a) shall not include materials not rele-
vant to the petition for which confidentiality is re-
quested and granted in accordance with sections
112, 113, and 158 of the Act (15 U.S.C. 1401, 1402,
and 1418) and section 552(b) of Title 5 of the
United States Code.
Issued on December 30, 1980.
Joan Claybrook
Administrator
46 F.R. 2063
January 8, 1981
PART 555; PRE 14
i
PREAMBLE TO AN AMENDMENT TO PART 555-TEMPORARY EXEMPTION
FROM MOTOR VEHICLE SAFETY STANDARDS
(Docket Nos. FE 76-04; Notice 5;
FE 77-03, Notice 4; 80-21, Notice 1)
ACTION: Final Rule.
SUMMARY: This notice makes conforming
amendments to several of the agency's regulations
deleting specific requirements for confidentiality
determinations. These conforming amendments
are needed as a result of the publication today of a
new agency regulation governing requests for con-
fidentiality determinations (Part 512). Since that
new regulation supercedes the confidentiality pro-
visions existing in several of the agency's other
regulations, these conforming amendments are
being made without notice and opportunity for
comment.
EFFECTIVE DATE:
tive April 9, 1981.
These amendments are effec-
FOR FURTHER INFORMATION CONTACT:
Roger Tilton, Office of Chief Counsel,
National Highway Traffic Safety Adminis-
tration, 400 Seventh Street, S.W.,
Washington, D.C. 20590 (202-426-9511).
SUPPLEMENTARY INFORMATION: In accordance
with the above. Title 49 of the Code of Federal
Regulations is amended as follows.
Part 525, Exemptions From Average Fuel
Economy Standards, is revised as follows:
(1) Section 525.6(g) (1) and (2) are deleted and
replaced with the following:
(g) Specify and segregate any part of the infor-
mation and data submitted under this part that the
petitioner wishes to have withheld from public
disclosure in accordance with Part 512 of this
Chapter.
(2) Section 525.13 is deleted and section
525.12 is revised to read:
§ 525.12 Public Inspection of Information.
(a) Except as provided in paragraph (b), any per-
son may inspect available information relevant to a
petition under this Part, including the petition and
any supporting data, memoranda of informal
meetings with the petitioner or any other in-
terested persons, and the notices regarding the
petition, in the Docket Section of the National
Highway Traffic Safety Administration. Any per-
son may obtain copies of the information available
for inspection under this paragraph in accordance
with Part 7 of the regulations of the Office of the
Secretary of Transportation (49 CFR Part 7).
(b) Except for the release of confidential infor-
mation authorized by section 505 of the Act and
Part 512 of this Chapter, information made
available for public inspection does not include in-
formation for which confidentiality is requested
under § 525.6(g) and is granted in accordance with
Part 512 and sections 502 and 505 of the Act and
section 552(b) of Title 5 of the United States Code.
Part 537, Automotive Fuel Economy Reports, is
revised as follows:
(1) Section 537.5(c) (7) (i) and (ii) are deleted
and replaced with the following:
(7) Specify any part of the information or data
in the report that the manufacturer believes
should be withheld from public disclosure as
trade secret or other confidential business infor-
mation in accordance with Part 512 of this
Chapter.
(2) Section 537.12 is deleted and section
537.11 is revised to read:
§ 537.11 Public Inspection of Information.
(a) Except as provided in paragraph (b), any per-
son may inspect the information and data submit-
PART 555; PRE 13
ted by a manufacturer under this part in the docket
section of the National Highway Traffic Safety Ad-
ministration. Any person may obtain copies of the
information available for inspection under this sec-
tion in accordance with the regulations of the
Secretary of Transportation in Part 7 of this title.
(b) Except for the release of confidential infor-
mation authorized by section 505 of the Act and
Part 512 of this Chapter, information made
available under paragraph (a) for public inspection
does not include information for which confiden-
tiality is requested under § 537.5(c) (7) and is
granted in accordance with Part 512 of this
Chapter, section 505 of the Act, and section 552(b)
of Title 5 of the United States Code.
Part 555, Temporary Exemption From Motor
Vehicle Safety Standards, is revised as follows:
(1) Section 555.5(b) (6) is revised to read:
(6) Specify any part of the information and
data submitted which petitioner requests be
withheld from public disclosure in accordance
with Part 512 of this Chapter.
(2) Section 555.10(b) is revised to read:
(b) Except for the release of confidential infor-
mation authorized by Part 512 of this Chapter, in-
formation made available for inspection under
paragraph (a) shall not include materials not rele-
vant to the petition for which confidentiality is re-
quested and granted in accordance with sections
112, 113, and 158 of the Act (15 U.S.C. 1401, 1402,
and 1418) and section 552(b) of Title 5 of the
United States Code.
Issued on December 30, 1980.
Joan Claybrook
Administrator
46 F.R. 2063
January 8, 1981
PART 555; PRE 14
(<
PART 555— TEMPORARY EXEMPTION FROM MOTOR VEHICLE SAFETY STANDARDS
§ 555.1 Scope. This part establishes
requirements for the temporary exemption, by the
National Highway Traffic Safety Administration
(NHTSA), of certain motor vehicles from
compliance with one or more Federal motor
vehicle safety standards in accordance with section
123 of the National Traffic and Motor Vehicle
Safety Act of 1966, 15 U.S.C. 1410.
§ 555.2 Purpose. The purpose of this part is to
provide a means by which manufacturers of motor
vehicles may obtain temporary exemptions from
Federal motor vehicle safety standards on the
bases of substantial economic hardship, facilitation
of the development of new motor vehicle safety or
low-emission engine features, or existence of an
equivalent overall level of motor vehicle safety.
§ 555.3 Application. This part applies to
manufacturers of motor vehicles.
§ 555.4 Definitions.
"Administrator" means the National Highway
Traffic Safety Administrator or his delegate.
"United States" means the several States, the
District of Columbia, the Commonwealth of Puerto
Rico, Guam, the Virgin Islands, the Canal Zone,
and American Samoa.
§ 555.5 Petition for exemption.
(a) A manufacturer of motor vehicles may
petition the NHTSA for a temporary exemption
from any Federal motor vehicle safety standard or
for a renewal of any exemption on the bases of
substantial economic hardship, facilitation of the
development of new motor vehicle safety or low-
emission engine features, or the existence of an
equivalent overall level of motor vehicle safety.
(b) Each petition filed under this part for an
exemption or its renewal must—
(1) Be written in the English language;
(2) Be submitted in three copies to:
Administrator, National Highway Traffic
Safety Administration, Washington, D.C.
20590;
(3) State the full name and address of the
applicant, the nature of its organization
(individual, partnership, corporation, etc.) and the
name of the State or country under the laws of
which it is organized;
(4) State the number and title, and the text or
substance of the standard or portion thereof from
which the temporary exemption is sought, and the
length of time desired for such exemption;
(5) Set forth the basis for the petition and the
information required by § 555.6(a), (b), (c), or (d)
as appropriate.
[(6) Specify any part of the information and
data submitted which petitioner requests be
withheld from public disclosure in accordance
with Part 512 of this Chapter.
(7) Set forth the reasons why the granting of
the exemption would be in the public interest and
consistent with the objectives of the National
Traffic and Motor Vehicle Safety Act.
(c) The knowing and willful submission of false,
fictitious or fraudulent information will subject the
petitioner to the civil and criminal penalties of 18
U.S.C. 1001. (46 F.R. 2063-January 8, 1981.
Effective: April 9, 1981)1
§ 555.6 Basis for petition.
(a) If the basis of the petition is substantial
economic hardship the petitioner shall provide the
following information.
(1) Engineering and financial information
demonstrating in detail how compliance or failure
to obtain an exemption would cause substantial
economic hardship, including—
(i) A list or description of each item of
motor vehicle equipment that would have to
be modified in order to achieve compliance;
(Rev. 1/Bf81)
PART 555-1
(ii) The itemized estimated cost to modify
each such item of motor vehicle equipment if
compliance were to be achieved—
(A) As soon as possible,
(B) At the end of a one-year exemption
period, (if the petition is for one year or
more)
(C) At the end of a two-year exemption
period, (if the petition is for two years or
more)
(D) At the end of a three-year exemp-
tion period, (if the petition is for three
years)
(iii) The estimated price increase per vehicle to
balance the total costs incurred pursuant to
subdivision (ii) of this subparagraph and a state-
ment of the anticipated effect of each such price
increase;
(iv) Corporate balance sheets and income
statements for the three fiscal years immediately
preceding the filing of the application;
(v) Projected balance sheet and income state-
ment for the fiscal year following a denial of the
petition; and
(vi) A discussion of any other hardships
(e.g., loss of market) that the petitioner desires
the agency to consider.
(2) A description of its efforts to comply
with the standards, including—
(i) A chronological analysis of such efforts
showing its relationship to the rulemaking
history of the standard from which exemption is
sought;
(ii) A discussion of alternate means of
compliance considered and the reasons for
rejection of each;
(iii) A description of the steps to be taken,
while the exemption is in effect, and the
estimated date by which full compliance will be
achieved either by design changes or termination
of production of nonconforming vehicles; and
(iv) The total number of motor vehicles pro-
duced by or on behalf of the petitioner in the
12-month period prior to filing the petition, and
the inclusive dates of the period. (Section 123
of the Act limits eligibility for exemption on
the basis of economic hardship to manufac-
turers whose total motor vehicle production
does not exceed 10,000.)
(b) If the basis of the petition is the development
or field evaluation of new motor vehicle safety
features, the petitioner shall provide the following
information:
(1) A description of the safety features, and
research, development, and testing documenta-
tion establishing the innovational nature of
such features.
(2) An analysis establishing that the level of
safety of the features is equivalent to or exceeds
the level of safety established in the standard
from which exemption is sought, including—
(i) A detailed description of how a motor
vehicle equipped with the safety features
differs from one that complies with the
standard;
(ii) If applicant is presently manufac-
turing a vehicle conforming to the standard,
the results of tests conducted to substantiate
certification to the standard; and
(iii) The results of tests conducted on the
safety features that demonstrate perform-
ance which meets or exceeds the requirements
of the standard.
(3) Substantiation that a temporary exemp-
tion would facilitate the development or field
evaluation of the vehicle.
(4) A statement whether, at the end of the
exemption period, the manufacturer intends to
conform to the standard, apply for a further
exemption, or petition for rulemaking to amend
the standard to incorporate the safety features.
(5) A statement that not more than 2,500
exempted vehicles will be sold in the United
States in any 12-month period for which an ex-
emption may be granted pursuant to this
paragraph. A petition for renewal of such an
exemption shall also include the total number of
exempted vehicles sold in the United States
under the existing exemption.
(c) If the basis of the petition is the development
or field evaluation of a low-emission vehicle, the
petitioner shall provide—
PART 555-2
PART 555— TEMPORARY EXEMPTION FROM MOTOR VEHICLE SAFETY STANDARDS
§ 555.1 Scope. This part establishes
requirements for the temporary exemption, by the
National Highway Traffic Safety Administration
(NHTSA), of certain motor vehicles from
compliance with one or more Federal motor
vehicle safety standards in accordance with section
123 of the National Traffic and Motor Vehicle
Safety Act of 1966, 15 U.S.C. 1410.
§ 555.2 Purpose. Thepurposeof thispart is to
provide a means by which manufacturers of motor
vehicles may obtain temporary exemptions from
Federal motor vehicle safety standards on the
bases of substantial economic hardship, facilitation
of the development of new motor vehicle safety or
low-emission engine features, or existence of an
equivalent overall level of motor vehicle safety.
§ 555.3 Application. This part applies to
manufacturers of motor vehicles.
§ 555.4 Definitions.
"Administrator" means the National Highway
Traffic Safety Administrator or his delegate.
"United States" means the several States, the
District of Columbia, the Commonwealth of Puerto
Rico, Guam, the Virgin Islands, the Canal Zone,
and American Samoa.
§ 555.5 Petition for exemption.
(a) A manufacturer of motor vehicles may
petition the NHTSA for a temporary exemption
from any Federal motor vehicle safety standard or
for a renewal of any exemption on the bases of
substantial economic hardship, facilitation of the
development of new motor vehicle safety or low-
emission engine features, or the existence of an
equivalent overall level of motor vehicle safety.
(b) Each petition filed under this part for an
exemption or its renewal must—
(1) Be written in the English language;
(2) Be submitted in three copies to:
Administrator, National Highway Traffic
Safety Administration, Washington, D.C.
20590;
(3) State the full name and address of the
applicant, the nature of its organization
(individual, partnership, corporation, etc.) and the
name of the State or country under the laws of
which it is organized;
(4) State the number and title, and the text or
substance of the standard or portion thereof from
which the temporary exemption is sought, and the
length of time desired for such exemption;
(5) Set forth the basis for the petition and the
information required by § 555.6(a), (b), (c), or (d)
as appropriate.
1(6) Specify any part of the information and
data submitted which petitioner requests be
withheld from public disclosure in accordance
with Part 512 of this Chapter.
(7) Set forth the reasons why the granting of
the exemption would be in the public interest and
consistent with the objectives of the National
Traffic and Motor Vehicle Safety Act.
(c) The knowing and willful submission of false,
fictitious or fraudulent information will subject the
petitioner to the civil and criminal penalties of 18
U.S.C. 1001. (46 F.R. 2063-January 8, 1981.
Effective: April 9, 1981)1
§ 555.6 Basis for petition.
(a) If the basis of the petition is substantial
economic hardship the petitioner shall provide the
following information.
(1) Engineering and financial information
demonstrating in detail how compliance or failure
to obtain an exemption would cause substantial
economic hardship, including—
(i) A list or description of each item of
motor vehicle equipment that would have to
be modified in order to achieve compliance;
(R«v. i/a/ai)
PART 555-1
(ii) The itemized estimated cost to modify
eacii such item of motor vehicle equipment if
comphance were to be achieved—
(A) As soon as possible,
(B) At the end of a one-year exemption
period, (if the petition is for one year or
more)
(C) At the end of a two-year exemption
period, (if the petition is for two years or
more)
(D) At the end of a three-year exemp-
tion period, (if the petition is for three
years)
(iii) The estimated price increase per vehicle to
balance the total costs incurred pursuant to
subdivision (ii) of this subparagraph and a state-
ment of the anticipated effect of each such price
increase;
(iv) Corporate balance sheets and income
statements for the three fiscal years immediately
preceding the filing of the application;
(v) Projected balance sheet and income state-
ment for the fiscal year following a denial of the
petition; and
(vi) A discussion of any other hardships
(e.g., loss of market) that the petitioner desires
the agency to consider.
(2) A description of its efforts to comply
with the standards, including—
(i) A chronological analysis of such efforts
showing its relationship to the rulemaking
history of the standard from which exemption is
sought;
(ii) A discussion of alternate means of
compliance considered and the reasons for
rejection of each;
(iii) A description of the steps to be taken,
while the exemption is in effect, and the
estimated date by which full compliance will be
achieved either by design changes or termination
of production of nonconforming vehicles; and
(iv) The total number of motor vehicles pro-
duced by or on behalf of the petitioner in the
12-month period prior to filing the petition, and
the inclusive dates of the period. (Section 123
of the Act limits eligibility for exemption on
the basis of economic hardship to manufac-
turers whose total motor vehicle production
does not exceed 10,000.)
(b) If the basis of the petition is the development
or field evaluation of new motor vehicle safety
features, the petitioner shall provide the following
information:
(1) A description of the safety features, and
research, development, and testing documenta-
tion establishing the innovational nature of
such features.
(2) An analysis establishing that the level of
safety of the features is equivalent to or exceeds
the level of safety established in the standard
from which exemption is sought, including—
(i) A detailed description of how a motor
vehicle equipped with the safety features
differs from one that complies with the
standard;
(ii) If applicant is presently manufac-
turing a vehicle conforming to the standard,
the results of tests conducted to substantiate
certification to the standard; and
(iii) The results of tests conducted on the
safety features that demonstrate perform-
ance which meets or exceeds the requirements
of the standard.
(3) Substantiation that a temporary exemp-
tion would facilitate the development or field
evaluation of the vehicle.
(4) A statement whether, at the end of the
exemption period, the manufacturer intends to
conform to the standard, apply for a further
exemption, or petition for rulemaking to amend
the standard to incorporate the safety features.
(5) A statement that not more than 2,500
exempted vehicles will be sold in the United
States in any 12-month period for which an ex-
emption may be granted pursuant to this
paragraph. A petition for renewal of such an
exemption shall also include the total number of
exempted vehicles sold in the United States
under the existing exemption.
(c) If the basis of the petition is the development
or field evaluation of a low-emission vehicle, the
petitioner shall provide—
PART 555-2
(1) Substantiation that the motor vehicle is
a low-emission vehicle as defined by section
123(g) of the Act.
(2) Research, development, and testing doc-
umentation establishing that a temporary ex-
emption would not unreasonably degrade the
safety of the vehicle, including—
(i) A detailed description of how the
motor vehicle equipped with the low-emission
engine would, if exempted, differ from one
that complies with the standard;
(ii) If applicant is presently manufac-
turing a vehicle conforming to the standard,
the results of tests conducted to substantiate
certification to the standard;
(iii) The results of any tests conducted
on the vehicle that demonstrate its failure
to meet the standard, expressed as compara-
tive performance levels; and
(iv) Reasons why the failure to meet the
standard does not unreasonably degrade the
safety of the vehicle.
(3) Substantiation that a temporary exemp-
tion would facilitate the development or field
evaluation of the vehicle.
(4) A statement whether, at the end of the
exemption period, the manufacturer intends
to conform with the standard.
(5) A statement that not more than 2,500
exempted vehicles will be sold in the United
States in any 12-month period for which an
exemption may be granted pursuant to this
paragraph. A petition for renewal of an ex-
emption shall also include the total number
of exempted vehicles sold in the United States
under the existing exemption.
(d) If the basis of the petition is that the peti-
tioner is otherwise unable to sell a motor vehicle
whose overall level of safety is equivalent to or
exceeds the overall level of safety of non-
exempted motor vehicles, the petitioner shall
provide—
(1) A detailed analysis of how the vehicle
provides an overall level of safety equivalent
to or exceeding the overall safety of non-ex-
empted vehicles, including—
(i) A detailed description of how the
motor vehicle, if exempted, differs from one
that conforms to the standard;
(ii) A detailed description of any safety
features that the motor vehicle offers as
standard equipment that are not required by
the Federal motor vehicle safety standards;
(iii) The results of any tests conducted on
the vehicle demonstrating that it fails to
meet the standard, expressed as comparative
performance levels;
(iv) The results of any tests conducted
on the vehicle demonstrating that its overall
level of safety exceeds that which is achieved
by conformity to the standards.
(v) Other arguments that the overall level
of safety of the vehicle equals or exceeds the
level of safety of non-exempted vehicles.
(2) Substantiation that compliance would
prevent the sale of the vehicle.
(3) A statement whether, at the end of the
exemption period, the manufacturer intends to
comply with the standard.
(4) A statement that not more than 2,500
exempted vehicles will be sold in the United
States in any 12-month period for which an
exemption may be granted pursuant to this
paragraph. A petition for renewal of any ex-
emption shall also include the total number of
exempted vehicles sold in the United States
under the existing exemption.
§ 555.7 Processing of petitions.
(a) The NHTSA publishes in the Federal
Register, affording opportunity for comment, a
notice of each petition containing the informa-
tion required by this part. However, if the
NHTSA finds that a petition does not contain
the information required by this part, it so in-
forms the petitioner, pointing out the areas of
insufficiency and stating that the petition will not
receive further consideration until the required
information is submitted.
(b) No public hearing, argument or other for-
mal proceeding is held directly on a petition filed
under this part before its disposition under this
section.
(c) Any interested person may, upon written
request, appear informally before an appropriate
official of the NHTSA to discuss a petition for
PART 555-3
exemption or the action taken in response to a
petition.
(d) If the Administrator determines that the
petition does not contain adequate justification, he
denies it and notifes the petitioner in writing. He
also publishes in the Federal Register a notice of
the denial and the reasons for it.
(e) If the Administrator determines that the
petition contains adequate justification, he grants
it, and notifies the petitioner in writing. He also
publishes in the Federal Register a notice of the
grant and the reasons for it.
(f) Unless a later effective date is specified in the
notice of the grant, temporary exemption is effec-
tive upon publication of the notice in the Federal
Register and exempts vehicles manufactured on
and after the effective date.
§ 555.8 Termination of temporary exemptions.
(a) A temporary exemption from a standard
granted on the basis of substantial economic hard-
ship terminates according to its terms but not later
than 3 years after the date of issuance unless
terminated sooner pursuant to paragraph (d) of
this section.
(b) A temporary exemption from a standard
granted on a basis other than substantial economic
hardship terminates according to its terms but not
later than 2 years after the date of issuance unless
terminated sooner pursuant to subparagraph (d).
(c) Any interested person may petition for the
termination or modification of an exemption
granted under this part. The petition will be pro-
cessed in accordance with the procedures of Part
552 of this chapter.
(d) The Administrator terminates or modifies a
temporary exemption if he determines that—
(1) The temporary exemption is no longer con-
sistent with the public interest and the objectives
of the Act; or
(2) The temporary exemption was granted on
the basis of false, fraudulent, or misleading
representations or information.
(e) If a petition for renewal of a temporary
exemption that meets the requirements of § 555.5
has been filed not later than 60 days before the
termination date of an exemption, the exemption
does not terminate until the Administrator grants
or denies the petition for renewal.
(f) The Administrator publishes in the Federal
Register a notice of
(i) a petition for termination or modification of
an exemption and the action taken in response to
it; and
(ii) any termination or modification of an
exemption pursuant to the Administrator's own
motion.
§ 555.9 Temporary exemption iabels. A
manufacturer of an exempted vehicle shall—
(a) Submit to the Administrator, within 30 days
after receiving notification of the grant of an
exemption, a sample of the certification label
required by PART 567 of this chapter and
paragraph (c) of this section;
(b) Affix securely to the windshield or side
window of each exempted vehicle a label in the
English language containing the statement re-
quired by paragraph (c) (1) or (c) (2) of this section,
and with the words "SHOWN ABOVE" omitted.
(c) Meet all applicable requirements of Part 567
of this chapter, except that—
(1) Instead of the statement required by
S 567.4(g) (5) of this Chapter, the following state-
ment shall appear: "THIS VEHICLE CON-
FORMS TO ALL APPLICABLE FEDERAL
MOTOR VEHICLE SAFETY [AND BUMPER)
STANDARDS IN EFFECT ON THE DATE OF
MANUFACTURE SHOWN ABOVE EXCEPT
FOR STANDARDS NOS. [Listing the stand-
ards by number and title for which an exem.ption
has been granted]. EXEMPTED PURSUANT
TO NHTSA EXEMPTION NO
(2) Instead of the statement required by
§ 567..5(c) (7) (iii), the following statement shall
appear: THIS VEHICLE CONFORMS TO ALL
APPLICABLE FEDERAL MOTOR VEHICLE
SAFETY [AND BUMPER) STANDARDS IN
EFFECT IN [Month, Year] EXCEPT FOR
STANDARD NOS. [Listing the standards by
number and title for which an exemption has
been granted). EXEMPTED PURSUANT TO
NHTSA EXEMPTION NO
(Rev. 10/19/82)
PART 555-4
(1) Substantiation that the motor vehicle is
a low-emission vehicle as defined by section
123(g)of the Act.
(2) Research, development, and testing doc-
umentation establishing that a temporary ex-
emption would not unreasonably degrade the
safety of the vehicle, including—
(i) A detailed description of how the
motor vehicle equipped with the low-emission
engine would, if exempted, differ from one
that complies with the standard;
(ii) If applicant is presently manufac-
turing a vehicle conforming to the standard,
the results of tests conducted to substantiate
certification to the standard;
(iii) The results of any tests conducted
on the vehicle that demonstrate its failure
to meet the standard, expressed as compara-
tive performance levels; and
(iv) Reasons why the failure to meet the
standard does not unreasonably degrade the
safety of the vehicle.
(3) Substantiation that a temporary exemp-
tion would facilitate the development or field
evaluation of the vehicle.
(4) A statement whether, at the end of the
exemption period, the manufacturer intends
to conform with the standard.
(5) A statement that not more than 2,500
exempted vehicles will be sold in the United
States in any 12-month period for which an
exemption may be granted pursuant to this
paragraph. A petition for renewal of an ex-
emption shall also include the total number
of exempted vehicles sold in the United States
under the existing exemption.
(d) If the basis of the petition is that the peti-
tioner is otherwise unable to sell a motor vehicle
whose overall level of safety is equivalent to or
exceeds the overall level of safety of non-
exempted motor vehicles, the petitioner shall
provide—
(1) A detailed analysis of how the vehicle
provides an overall level of safety equivalent
to or exceeding the overall safety of non-ex-
empted vehicles, including—
(i) A detailed description of how the
motor vehicle, if exempted, differs from one
that conforms to the standard;
(ii) A detailed description of any safety
features that the motor vehicle offers as
standard equipment that are not required by
the Federal motor vehicle safety standards;
(iii) The results of any tests conducted on
the vehicle demonstrating that it fails to
meet the standard, expressed as comparative
performance levels;
(iv) The results of any tests conducted
on the vehicle demonstrating that its overall
level of safety exceeds that which is achieved
by conformity to the standards.
(v) Other arguments that the overall level
of safety of the vehicle equals or exceeds the
level of safety of non-exempted vehicles.
(2) Substantiation that compliance would
prevent the sale of the vehicle.
(3) A statement whether, at the end of the
exemption period, the manufacturer intends to
comply with the standard.
(4) A statement that not more than 2,500
exempted vehicles will be sold in the United
States in any 12-month period for which an
exemption may be granted pursuant to this
paragraph. A petition for renewal of any ex-
emption shall also include the total number of
exempted vehicles sold in the United States
under the existing exemption.
§ 555.7 Processing of petitions.
(a) The NHTSA publishes in the Federal
Register, affording opportunity for comment, a
notice of each petition containing the informa-
tion required by this part. However, if the
NHTSA finds that a petition does not contain
the information required by this part, it so in-
forms the petitioner, pointing out the areas of
insufficiency and stating that the petition will not
receive further consideration until the required
information is submitted.
(b) No public hearing, argument or other for-
mal proceeding is held directly on a petition filed
under this part before its disposition under this
section.
(c) Any interested person may, upon written
request, appear informally before an appropriate
official of the NHTSA to discuss a petition for
PART 555-3
exemption or the action taken in response to a
petition.
(d) If the Administrator determines that the
petition does not contain adequate justification, he
denies it and notifes the petitioner in writing. He
also publishes in the Federal Register a notice of
the denial and the reasons for it.
(e) If the Administrator determines that the
petition contains adequate justification, he grants
it, and notifies the petitioner in writing. He also
publishes in the Federal Register a notice of the
grant and the reasons for it.
(f) Unless a later effective date is specified in the
notice of the grant, temporary exemption is effec-
tive upon publication of the notice in the Federal
Register and exempts vehicles manufactured on
and after the effective date.
§ 555.8 Termination of temporary exemptions.
(a) A temporary exemption from a standard
granted on the basis of substantial economic hard-
ship terminates according to its terms but not later
than 3 years after the date of issuance unless
terminated sooner pursuant to paragraph (d) of
this section.
(b) A temporary exemption from a standard
granted on a basis other than substantial economic
hardship terminates according to its terms but not
later than 2 years after the date of issuance unless
terminated sooner pursuant to subparagraph (d).
(c) Any interested person may petition for the
termination or modification of an exemption
granted under this part. The petition will be pro-
cessed in accordance with the procedures of Part
552 of this chapter.
(d) The Administrator terminates or modifies a
temporary exemption if he determines that—
(1) The temporary exemption is no longer con-
sistent with the public interest and the objectives
of the Act; or
(2) The temporary exemption was granted on
the basis of false, fraudulent, or misleading
representations or information.
(e) If a petition for renewal of a temporary
exemption that meets the requirements of § 555.5
has been filed not later than 60 days before the
termination date of an exemption, the exemption
does not terminate until the Administrator grants
or denies the petition for renewal.
(f) The Administrator publishes in the Federal
Register a notice of
(i) a petition for termination or modification of
an exemption and the action taken in response to
it; and
(ii) any termination or modification of an
exemption pursuant to the Administrator's own
motion.
§ 555.9 Temporary exemption labels. A
manufacturer of an exempted vehicle shall—
(a) Submit to the Administrator, within 30 days
after receiving notification of the grant of an
exemption, a sample of the certification label
required by PART 567 of this chapter and
paragraph (c) of this section;
(b) Affix securely to the windshield or side
window of each exempted vehicle a label in the
English language containing the statement re-
quired by paragraph (c) (1) or (c) (2) of this section,
and with the words "SHOWN ABOVE" omitted.
(c) Meet all applicable requirements of Part 567
of this chapter, except that—
(1) Instead of the statement required by
§ 567.4(g) (5) of this Chapter, the following state-
ment shall appear: "THIS VEHICLE CON-
FORMS TO ALL APPLICABLE FEDERAL
MOTOR VEHICLE SAFETY (AND BUMPERJ
STANDARDS IN EFFECT ON THE DATE OF
MANUFACTURE SHOWN ABOVE EXCEPT
FOR STANDARDS NOS. [Listing the stand-
ards by number and title for which an exemption
has been granted]. EXEMPTED PURSUANT
TO NHTSA EXEMPTION NO.
(2) Instead of the statement required by
§ 567.5(c) (7) (iii), the following statement shall
appear: THIS VEHICLE CONFORMS TO ALL
APPLICABLE FEDERAL MOTOR VEHICLE
SAFETY [AND BUMPERl STANDARDS IN
EFFECT IN [Month, Year] EXCEPT FOR
STANDARD NOS. [Listing the standards by
number and title for which an exemption has
been granted). EXEMPTED PURSUANT TO
NHTSA EXEMPTION NO.
(Rev. 10/19/82)
PART 555-4
§ 555.10 Availability for public Inspection.
(a) Information relevant to a petition under this
part, including the petition and supporting data,
memoranda of informal meetings with the
petitioner or any other interested person, and the
grant or denial of the petition, is available for
public inspection, except as specified in paragraph
(b) of this section, in the Docket Section, Room
5109, National Highway Traffic Safety
Administration, 400 Seventh Street, S.W.,
Washington, D.C. 20590. Copies of available
information may be obtained, as provided in Part 7
of the regulations of the Office of the Secretary of
Transportation (49 CFR Part 7).
1(b) Except for the release of confidential
information authorized by Part 512 of this
Chapter, information made available for inspection
under paragraph (a) shall not include materials not
relevant to the petition for which confidentiality is
requested and granted in accordance with sections
112, 113, and 158 of the Act (15 U.S.C. 1401, 1402,
and 1418) and section 552(b) of Title 5 of the
United States Code. (46 F.R. 2063-January 8,
1981. Effective: April 9, 1981)1
38 F.R. 2693
January 29, 1973
(R«v. 1/8/81)
PART 555-5-6
§ 555.10 Availability for public Inspection.
(a) Information relevant to a petition under this
part, including the petition and supporting data,
memoranda of informal meetings with the
petitioner or any other interested person, and the
grant or denial of the petition, is available for
public inspection, except as specified in paragraph
(b) of this section, in the Docket Section, Room
5109, National Highway Traffic Safety
Administration, 400 Seventh Street, S.W.,
Washington, D.C. 20590. Copies of available
information may be obtained, as provided in Part 7
of the regulations of the Office of the Secretary of
Transportation (49 CFR Part 7).
[(b) Except for the release of confidential
information authorized by Part 512 of this
Chapter, information made available for inspection
under paragraph (a) shall not include materials not
relevant to the petition for which confidentiality is
requested and granted in accordance with sections
112, 113, and 158of the Act(15U.S.C. 1401, 1402,
and 1418) and section 552(b) of Title 5 of the
United States Code. (46 F.R. 2063- January 8,
1981. Effective: April 9, 1981)1
38 F.R. 2693
January 29, 1973
(Rev. 1/8/ai)
PART 555-5-6
Effective: March 9, 1977
PREAMBLE TO PART 556— EXEMPTION FOR INCONSEQUENTIAL DEFECT
OR NONCOMPLIANCE
(Docket No. 75-21; Notice 2)
This notice amends Title 49 of the Code of
Federal Reg:iilations to add Part r)56, "Exemp-
tion for Inconsequential Defect or Noncom-
pliance," which establishes procedures for
petitioning by manufacturers for exemption from
notice and remedy requirements of the National
Traffic and Motor Vehicle Safety Act on grounds
that a defect or noncompliance is inconsequential
as it relates to motor vehicle safety.
A notice of proposed rulemaking to establish
Part 556 was published in the FEDERAL REG-
ISTER on Au^ist 25, 1975 (40 FR 37047).
Fifteen comments were received from vehicle and
equipment manufacturers and trade associations
representing these groups. The National Motor
Vehicle Safety Advisory Council did not take a
position on the proposal. The Vehicle Equip-
ment Safety Commission did not comment on the
proposal.
The NHTSA is adding Part 556 to Title 49 to
establish procedures that will implement the leg-
islative mandate of section 157 of the National
Traffic and Motor Vehicle Safety Act (the Act)
(as amended by Pub. L. 93-492, 88 Stat. 1470,
October 27, 1974; 15 U.S.C. 1417). The new
regulation prescribes procedures for the submis-
sion of petitions, including filing time and peti-
tion content. Other provisions are included
concerning the processing and disposition of pe-
titions, meetings to present oral comments, and
the rescission of exemptions.
Conmients on the proposal were in agreement
with the intent of the legulation. Several com-
ment" suggested modification of certain sections
with respect to content and language.
International Harvester (IH) requested that
the proposed language of sections 556.1 and 556.2
of Part 556 be modified to ensure that the re-
quirements for notification and remedy would be
suspended pending a determination on the in-
consequentiality petition.
It is the agency's view that the modifications
recommended by IH are unnecessary. Wlien the
agency initially determines that a defect or non-
compliance has occurred, it notifies the manufac-
turer who is provided a 30-day period in which
to submit an inconsequentiality petition. The
manufacturer's duty to notify and remedy does
not become mandatory until tlie agency makes
two final determinations: the first, that a non-
compliance or defect in fact exists, and the second,
that it is not inconsequential. These determina-
tions are not made until after receipt of submis-
sions, written and oral, from the manufacturer
and other interested parties. Under Part 556,
the agency would dispose of the petition for in-
consequentiality concurrently with its final deter-
mination of a defect or noncompliance. Therefore,
the notification and remedy provisions would
never become effective until there has been a
final determination of the petition for inconse-
quentiality.
When a manufacturer determines that a defect
or noncompliance exists, on the other hand, he
will be exempted temporarily from notice and
remedy requirements until the NHTSA finally
disposes of his petition for exemption. The
agency interprets the requirement in the proposed
amendment to Part 577 that manufacturers pro-
vide notification of a defect or noncompliance
unless exempted by the Administrator pursuant
to section 157 of the Act to mean that notification
need not occur until after the disposition of an
inconsequentiality petition.
Association Peugeot-Renault suggested that the
phrase "has determined" in the first sentence of
paragraph 556.4(a) be changed to "has finally
PART 556— PRE 1
Effective: March 9. 1977
determined" for purposes of clarification. There
is no distinction between these phrases with re-
spect to manufacturer-initiated determinations of
a defect or noncompliance. The distinction be-
comes meaningful only when the NHTSA makes
an initial determination as opposed to a final
determination. Therefore, the agency has de-
cided to retain the language "has detennined,"
since it is not ambiguous, and it is consistent
with Parts 573 and 577.
Comments were received from American
Motors Corporation (AMC), Volkswagen, Chrys-
ler, General Motors (GM), and the Motor Vehicle
Manufacturers Association (MVMA) requesting
clarification of the use of the term "defect" in
the regulation. These connnents expressed the
opinion that the legislative history of section 157
of the Act as well as other provisions of the Act
clearly indicate that any defect requiring action
must be related to motor vehicle safety.
The NHTSA agrees that the Act and its under-
lying history are directed to manufacturer re-
sponsibility for defects that relate to motor
vehicle safety. In view of possible ambiguity in
the use of the word "defect" alone, the qualifying
words "related to motor vehicle safety" have been
added throughout tlie regulation where appro-
priate.
The agency is modifying paragraph (b) (4) of
section 556.4 to require submission of the number
of motor vehicles or replacement equipment and
the period in which they were produced for
which an exemption is sought. This infomiation
is considered necessary and falls within the ambit
of the proposal.
Several commenters suggested that the agency
delete paragraph (c) of section 556.4, because 18
U.S.C. 1001 applies to all willful submissions of
false information to any department or agency
from any source, thereby making paragraph (c)
redundant. Tlie agency agrees that the reference
to this criminal penalty is not necessary to the
purpose of the regulation, and it is, therefore,
deleted.
Many commenters requested a change in para-
graph (d) of section 556.4. AMC, Chrysler, GM,
and the MVMA all requested that the 15-day
time limit on petitions be deleted. They argued
that manufacturere should be able to petition
within a reasonable time after a defect is deter-
mined to exist as allowed in Part 577. This may
not occur until after the final determination is
made by the NHTSA.
The agency has concluded that the modification
described above would unduly delay remedy of
defects and noncompliances, as well as enforce-
ment and compliance actions. The requested
modification would allow a manufacturer to pro-
ceed through an agency-initiated defect determi-
nation, and tlien, within a reasonable time,
petition for a determination of inconsequentiality.
This sei-ial procedure would be time-consuming
and redundant, allowing potentially dangerous
vehicles to go unremedied longer than necessary.
It is true that Part 577 specifies notification of
the public within a "reasonable time" (conform-
ing to the requirements of § 153(b)(1) of the
Act) in the case of a manufacturer's determina-
tion. Reasonable time is appropriate in the
context of Part 577, since notification might need
to be made to thousands of individuals. Part 556
requires only the filing of a single petition and,
therefore, should be subject to a time limitation.
White Motor Company and IH proposed that
the NHTSA define 15 days to mean 15 working
days. Association Peugeot-Renault and Uni-
royal, on the other hand, suggested that the
agency extend the time limit to 30 days. Some
commenters pointed out that the proposed re-
quirement of receipt of the petition within 15
days might leave the manufacturer with only
four working days to conduct tests and draft the
petitions. After careful consideration, the
NHTSA has decided to require petitions to be
submitted within 30 days. This provides a reason-
able limit on the time for filing a petition for
exemption. Moreover, it assures that all submis-
sions will be received prior to the meeting au-
thorized under section 152(a) of the Act.
The MVMA and GM suggested that the lan-
guage in paragraph (3) (i) of section 556.5 be
changed for clarity. They argued that the word-
ing of that paragraph indicates that a public
meeting prior to the disposition of a petition for
exemption is mandatory. Their modification
would require someone to request a meeting be-
fore the NHTSA would establish a time and
place for it.
PART 556— PRE 2
EfFecHve: March 9, 1977
PREAMBLE TO PART 556— EXEMPTION FOR INCONSEQUENTIAL DEFECT
OR NONCOMPLIANCE
(Docket No. 75-21; Notice 2)
This notice amends Title 49 of the Code of
Federal Regulations to add Part 556, "Exemp-
tion for Inconsequential Defect or Noncom-
pliance," which establishes procedures for
petitioning by manufacturers for exemption from
notice and remedy requirements of the National
Traffic and Motor Vehicle Safety Act on grounds
that a defect or noncompliance is inconsequential
as it relates to motor vehicle safety.
A notice of proposed rulemaking to establish
Part 556 was published in the FEDERAL REG-
ISTER on August 25, 1975 (40 FR 37047).
Fifteen comments were received from vehicle and
equipment manufacturers and trade associations
representing these groups. The National Motor
Vehicle Safety Advisory Council did not take a
position on the proposal. The Vehicle Equip-
ment Safety Commission did not comment on the
proposal.
The NHTSA is adding Part 556 to Title 49 to
establish procedures that will implement the leg-
islative mandate of section 157 of the National
Traffic and Motor Vehicle Safety Act (the Act)
(as amended by Pub. L. 93-492, 88 Stat. 1470,
October 27, 1974; 15 U.S.C. 1417). The new
regulation prescribes procedures for the submis-
sion of petitions, including filing time and peti-
tion content. Other provisions are included
concerning the processing and disposition of pe-
titions, meetings to present oral comments, and
the rescission of exemptions.
Comments on the proposal were in agreement
with the intent of the regulation. Several com-
ments suggested modification of certain sections
with respect to content and language.
International Harvester (IH) requested that
the proposed language of sections 556.1 and 556.2
of Part 556 be modified to ensure that the re-
quirements for notification and remedy would be
suspended pending a determination on the in-
consequent iality petition.
It is the agency's view that the modifications
recommended by IH are unnecessary. When the
agency initially determines that a defect or non-
compliance has occurred, it notifies the manufac-
turer who is provided a 30-day period in which
to submit an inconsequentiality petition. The
manufacturer's duty to notify and remedy does
not become mandatory until the agency makes
two final determinations: the first, that a non-
compliance or defect in fact exists, and the second,
that it is not inconsequential. These determina-
tions are not made until after receipt of submis-
sions, written and oral, from the manufacturer
and other interested parties. Under Part 556,
the agency would dispose of the petition for in-
consequentiality concurrently with its final deter-
mination of a defect or noncompliance. Therefore,
the notification and remedy provisions would
never become effective until there has been a
final determination of the petition for inconse-
quentiality.
When a manufacturer determines that a defect
or noncompliance exists, on the other hand, he
will be exempted temporarily from notice and
remedy requirements until the NHTSA finally
disposes of his petition for exemption. The
agency interprets the requirement in the proposed
amendment to Part 577 that manufacturers pro-
vide notification of a defect or noncompliance
unless exempted by the Administrator pursuant
to section 157 of the Act to mean that notification
need not occur until after the disposition of an
inconsequentiality petition.
Association Peugeot-Renault suggested that the
phrase "has determined" in the first sentence of
paragraph 556.4(a) be changed to "has finally
PART 556— PRE 1
Effective: Morch 9, 1977
determined" for purposes of clarification. There
is no distinction between these phrases with re-
spect to manufacturer-initiated determinations of
a defect or noncompliance. The distinction be-
comes ineaninfjful only when the NHTSA makes
an initial determination as opposed to a final
determination. Therefore, the agency has de-
cided to retain the language "has detennined,"
since it is not ambiguous, and it is consistent
with Parts 573 and 577.
Comments were received from American
Motors Corporation (AMC), Volkswagen, Chrys-
ler, General Motors (GM), and the Motor Vehicle
Manufacturers Association (MVMA) requesting
clarification of the use of the term "defect" in
the regulation. These conunents expressed the
opinion that the legislative history of section 157
of the Act as well as other provisions of the Act
clearly indicate that any defect requiring action
must be related to motor vehicle safety.
The NHTSA agrees that the Act and its under-
lying history are directed to manufacturer re-
sponsibility for defects that relate to motor
vehicle safety. In view of possible ambiguity in
the use of the word "defect" alone, the qualifying
words "related to motor vehicle safety" have been
added throughout the regulation where appro-
priate.
The agency is modifying paragraph (b) (4) of
section 556.4 to require submission of the number
of motor vehicles or replacement equipment and
the period in which they were produced for
which an exemption is sought. This information
is considered necessary and falls within the ambit
of the proposal.
Several commenters suggested that the agency
delete paragi'aph (c) of section 556.4, because 18
U.S.C. 1001 applies to all willful submissions of
false information to any department or agency
from any source, thereby making paragraph (c)
redundant. The agency agrees that the reference
to this criminal penalty is not necessary to the
purpose of the regulation, and it is, therefore,
deleted.
Many commenters requested a change in para-
graph (d) of section 556.4. AMC, Chrysler, GM,
and the MVMA all requested that the 15-day
time limit on petitions be deleted. They argued
that manufactuiers should be able to petition
within a reasonable time after a defect is deter-
mined to exist as allowed in Part 577. This may
not occur until after the final determination is
made by the NHTSA.
The agency has concluded that the modification
described above would unduly delay remedy of
defects and noncompliances, as well as enforce-
ment and compliance actions. The requested
modification would allow a manufacturer to pro-
ceed through an agency-initiated defect determi-
nation, and then, within a reasonable time,
petition for a determination of inconsequentiality.
This serial procedure would be time-consuming
and redundant, allowing potentially dangerous
vehicles to go unremedied longer than necessary.
It is true that Part 577 specifies notification of
the public within a "reasonable time" (conform-
ing to the requirements of § 153(b)(1) of the
Act) in the case of a manufacturers determina-
tion. Reasonable time is appropriate in the
context of Part 577, since notification might need
to be made to thousands of individuals. Part 556
requires only the filing of a single petition and,
therefore, should be subject to a time limitation.
White Motor Company and IH proposed that
the NHTSA define 15 days to mean 15 working
days. Association Peugeot -Renault and Uni-
royal, on the other hand, suggested that the
agency extend the time limit to 30 days. Some
commenters pointed out that the proposed re-
quirement of receipt of the petition within 15
days might leave the manufacturer with only
four working days to conduct tests and draft the
petitions. After careful consideration, the
NHTSA has decided to require petitions to be
submitted within 30 days. This provides a reason-
able limit on the time for filing a petition for
exemption. Moreover, it assures that all submis-
sions will be received prior to the meeting au-
thorized under section 152(a) of the Act.
The MVMA and GM suggested that the lan-
guage in paragraph (3) (i) of section 556.5 be
changed for clarity. They argued that the word-
ing of that paragraph indicates that a public
meeting prior to the disposition of a petition for
exemption is mandatory. Their modification
would require someone to request a meeting be-
fore the NHTSA would establish a time and
place for it.
PART 556— PRE 2
Effective: March 9, 1977
This aspect of para<rraph (3) (i) was proposed
to allow the ajrency to publish the time and loca-
tion of a meetinsT concurrently with the publica-
tion in the FEDERAL REGISTER of the
manufacturer's petition for an inconsequentiality
determination. Since issuance of the proposal,
the airency has had more experience with section
IM petitions. To date meetin<js have not been
required for disposition of these petitions. There-
fore, the final rule incorporates the lanj^ua^e
suirpested by the MVMA and GM to establish
that public meetinjrs will be held "upon request
of the petitioner or interested persons."
^fany comnienters requested that parajrraph
(a)(3)(ii) of section .556.5 be amended to allow
the manufacturer to choose to have a meeting on
the inconsequentiality petition that is separate
from a ineetinjr held pursuant to section 152(a)
of the Act. These commenters believe that preju-
dice may result if they are required to ar^ie
simultaneously that no defect or noncompliance
exists and that any defect or noncompliance that
may be found is inconsequential.
The lansruape of section 556.4 paraofraph (d)
was intended to ensure that a petition for incon-
sequentiality would not constitute a concession of
the existence of a defect. Consideration of the
petition at the section 1.52(a) meeting is analogous
to the consideration of more formal alternative
pleadings in other lejral forums. Separate hear-
inps or meetings are not held merely because
there exist two alternative defenses. Therefore,
the agency does not agree that the consolidation
of the two arguments would result in prejudice.
Accordingly, the request for separate meetings is
denied.
Several comments were made concerning a
modification of section 556.6 to require formal
adversarial hearings. The meetings proposed by
the agency are fact-finding, not adversarial. The
purpose of the meetings is to yield further infor-
mation to facilitate the decision-making process.
The informal meeting process is less time-
consuming than advei-sarial proceedings and it
yields equally reliable factual information. Fur-
ther. Congress has authorized the agency in sec-
tion 157 of the Act to proceed informally. The
agency will retain, therefore, the informal meet-
ing procedure.
Association Peugeot -Renault would delete the
last sentence in paragraph (b) of section 556.6.
They believed that a decision made by the
NHTSA on an inconsequentiality petition should
be based entirely upon matters covered at a meet-
ing. The agency does not agree. These meetings
serve to gather information. They are a supple-
ment to other sources of information utilized by
the NHTSA. Decisions must be based upon
thorough consideration of all information re-
ceived from all sources.
The NHTSA in deciding section 157 petitions
has afforded an opportunity for manufacturers
to appeal the denial of an exemption based upon
inconsequentiality of defect or noncompliance.
The agency intends to continue this process and,
in addition, to allow any interested person to
appeal the grant or denial of an exemption by
submitting written data, views, or arguments.
To reflect this policy, the agency modifies the
proposed section 556.7 to allow an appeal proce-
dure within the agency.
Several commenters requested minor modifica-
tions of section 556.8. GM suggested that the
agency publish guidelines to establish procedures
for rescission of an exemption. The agency con-
cludes that the section provides sufficient guide-
lines for the rescission process. No rescission will
be made prior to the receipt of new data and
notice and opportunity to comment thereon. In
the unlikely circumstance that procedure proves
to be insufficient, future opportunity exists for a
revision of the procedures. A minor modification
of the wording of section 556.8 is made for
clarity.
AMC, MVMA, and GM suggested that the
agency amend section 556.9 to state that confi-
dential material would not be subject to public
inspection. The agency has determined that this
modification is unnecessary. Section 112 para-
graph (e) of the Act defines the limits for the
release of confidential matei'ial. A repetition of
this restriction in Part 556 would be redundant.
In accordance with recently enunciated Depart-
ment of Transportation policy encouraging ade-
([uate analysis of the consequences of regidatory
action (41 FR 16200; April 16, 1976), the agency
herewith summarizes its evaluation of the eco-
PART 556— PRE 3
Effective: March 9, 1977
nomic and other consequences of this action on
the public and private sectors, including possible
loss of safety benefits. Since this part is merely
procedural and fulfills the mandate of section 157
of the Act, there will be at most minimal costs
associated with its implementation and no loss of
safety benefits.
In consideration of the foregoing. Title 49,
Code of Federal Regulations, is amended by the
addition of a new Part 556 titled "Exemption
for Inconsequential Defect or Noncompliance."
Effective date : March 9, 1977.
(Sec. 102, Pub. L. 93-492, 88 Stat. 1470 (15
U.S.C. 1417) ; delegation of authority at 49 CFR
1.50.)
Issued on January 31, 1977.
John W. Snow
Administrator
42 F.R. 7145
February 7, 1977
PART 556— PRE 4
(
Effective: March 9, 1977
This aspect of paragrraph (3) (i) was proposed
to allow the agency to publish the time and loca-
tion of a meetinsr concurrently with the publica-
tion in the FEDERAL REGISTER of the
manufacturer's petition for an inconsequentiality
determination. Since issuance of the proposal,
the aironcy has had more experience with section
157 petitions. To date meeting have not been
required for disposition of these petitions. There-
fore, the final rule incorporates the lannfuafre
su<r<rested by the MVMA and GM to establish
that public meetin<rs will be held "upon request
of the petitioner or interested persons."
Many commenters requested that paragraph
(a) (3) (ii) of section 5.56.5 be amended to allow
the manufacturer to choose to have a meeting on
the inconsequentiality petition that is separate
from a meeting held pursuant to section 152(a)
of the Act. These commenters believe that preju-
dice may result if they are required to argue
simultaneously that no defect or noncompliance
exists and that any defect or noncompliance that
may be foimd is inconsequential.
The language of section 556.4 paragraph (d)
was intended to ensure that a petition for incon-
sequentiality would not constitute a concession of
the existence of a defect. Consideration of the
petition at the section 152(a) meeting is analogous
to the consideration of more formal alternative
pleadings in other legal forums. Separate hear-
ings or meetings are not held merely because
there exist two alternative defenses. Therefore,
the agency does not agree that the consolidation
of the two argimients would result in prejudice.
Accordingh", the request for separate meetings is
denied.
Several comments were made concerning a
modification of section 556.6 to require formal
adversarial hearings. The meetings proposed by
the agency are fact-finding, not adversarial. The
purpose of the meetings is to yield further infor-
mation to facilitate the decision-making process.
The informal meeting process is less time-
consumii\g than adversarial proceedings and it
yields equally reliable factual information. Fur-
ther, Congress has authorized the agency in sec-
tion 1.57 of the Act to proceed informally. The
agency will retain, therefore, the informal meet-
ing procedure.
Association Peugeot-Renault would delete the
last sentence in paragraph (b) of section 556.6.
They believed that a decision made by the
NHTSA on an inconsequentiality petition should
be based entirely upon matters covered at a meet-
ing. The agency does not agree. These meetings
serve to gather information. They are a supple-
ment to other sources of information utilized by
the NHTSA. Decisions must be based upon
thorough consideration of all information re-
ceived from all sources.
The NHTSA in deciding section 157 petitions
has afforded an opportunity for manufacturers
to appeal the denial of an exemption based upon
inconsequentiality of defect or noncompliance.
The agency intends to continue this process and,
in addition, to allow any interested person to
appeal the grant or denial of an exemption by
submitting written data, views, or argiunents.
To reflect this policy, the agency modifies the
proposed section 556.7 to allow an appeal proce-
dure within the agency.
Several commenters requested minor modifica-
tions of section 556.8. GM suggested that the
agency publish guidelines to establish procedures
for rescission of an exemption. The agency con-
cludes that the section provides sufficient guide-
lines for the re^scission process. No rescission will
be made prior to the receipt of new data and
notice and opportunity to comment thereon. In
the unlikely circumstance that procedure proves
to be insufficient, future opportunity exists for a
revision of the procedures. A minor modification
of the wording of section 556.8 is made for
clarity.
AMC, MVMA, and GM suggested that the
agency amend section 556.9 to state that confi-
dential material would not be subject to public
inspection. The agency has determined that this
modification is unnecessary. Section 112 para-
graph (e) of the Act defines the limits for the
release of confidential material. A repetition of
this restriction in Part 556 would be redundant.
In accordance with recently enunciated Depart-
ment of Transportation policy encouraging ade-
quate analysis of the consequences of regulatory
action (41 FR 16200; April 16, 1976), the agency
herewith sununarizes its evaluation of the eco-
PART 556— PRE 3
Effeclive: March 9, 1977
noinic and other consequences of this action on Effective date: March 9, 1977.
the public and private sectors, including possible (gee. 102, Pub. L. 93-492, 88 Stat. 1470 (15
loss of safety benefits. Since this part is merely U.S.C. 1417) ; delegation of authority at 49 CFR
procedural and fulfills the mandate of section 157 1.50.)
of the Act, there will be at most minimal costs jggyg^j ^^ January 31, 1977.
associated with its implementation and no loss of
safety benefits. John W. Snow
In consideration of the foregoing, Title 49, Administrator
Code of Federal Regulations, is amended by the
addition of a new Part 556 titled "Exemption 42 F.R. 7145
for Inconsequential Defect or Noncompliance." February 7, 1977
(
PART 556— PRE 4
k
PART 556— EXEMPTION FOR INCONSEQUENTIAL DEFECT OR NONCOMPLIANCE
Sec
556.1 Scope.
556.2 Purpose.
556.3 Application.
556.4 Petition for exemption.
556.5 Processing of petition.
556.6 Meetings.
556.7 Disposition of petition.
556.8 Rescission of exemption.
556.9 Public Inspection of relevant Information.
AUTHORITY: Sec. 157, Pub. L. 93-492, 88
Stat. 1470 (15 U.S.C. 1417), delegation of au-
thority at 49 CFR 1.50.
§ 556.1 Scope.
This part sets forth procedures, pursuant to
section 157 of the Act, for exempting manufac-
turers of motor vehicles and replacement equip-
ment from the Act's notice and remedy
requirements when a defect or noncompliance is
determined to be inconsequential as it relates to
motor vehicle safety.
§ 556.2 Purpose.
The purpose of this part is to enable manufac-
turers of motor vehicles and replacement equip-
ment to petition the NHTSA for exemption from
the notification and remedy requirements of the
Act due to the inconsequentiality of the defect or
noncompliance as it relates to motor vehicle
safety, and to give all interested persons an op-
portunity for presentation of data, views, and
arguments on the issue of inconsequentiality.
§ 556.3 Application.
This part applies to manufacturers of motor
vehicles and replacement equipment.
§ 556.4 Petition for exemption.
(a) A manufacturer who has determined the
existence, in a motor vehicle or item of replace-
ment equipment that he produces, of a defect
related to motor vehicle safety or a noncompli-
ance with an applicable Federal motor vehicle
safety standard, or who has received notice of an
initial determination by the NHTSA of the
existence of a defect related to motor vehicle
safety or a noncompliance, may petition for
exemption from the Act's notification and remedy
requirements on the grounds that the defect or
noncompliance is inconsequential as it relates to
motor vehicle safety.'
(b) Each petition submitted under this part
shall—
(1) Be written in the English language;
(2) Be submitted in three copies to: Admin-
istrator, National Highway Traffic Safety Ad-
ministration, Washington, D.C. 20590;
(3) State the full name and address of the
applicant, the nature of its organization (e.g.,
individual, partnership, or corporation) and the
name of the State or country under the laws of
which it is organized.
(4) Describe the motor vehicle or item of
replacement equipment, including the number in-
volved and the period of production, and the
defect or noncompliance concerning which an
exemption is sought; and
(5) Set forth all data, veiws, and arguments
of the petitioner supporting his petition.
(c) In the case of defects related to motor
vehicle safety or noncompliances determined to
exist by a manufacturer, petitions imder this part
must be submitted not later than 30 days after
such determination. In the case of defects re-
lated to motor vehicle safety or noncompliances
initially determined to exist by the NHTSA,
petitions must be submitted not later than 30 days
after notification of the determination has been
received by the manufacturer. Such a petition
will not constitute a concession by the manufac-
PART 556-1
Effective: March 9, 1977
turer of, nor will it be considered relevant to, the
existence of a defect related to motor vehicle
safety or a nonconformity.
§ 556.5 Processing of petition.
(a) The NHTSA publishes a notice of each
petition in the Federal Register. Such notice
includes:
(1) A brief summary of the petition;
(2) A statement of the availability of the
petition and other relevant information for pub-
lic inspection; and
(3) (i) In the case of a defect related to
motor vehicle safety or a noncompliance deter-
mined to exist by the manufacturer, an invitation
to interested persons to submit written data,
views, and arguments concerning the petition,
and, upon request by the petitioner or interested
persons, a statement of the time and place of a
public meeting at which such materials may be
presented orally if any person so desires.
(ii) In the case of a defect related to
motor vehicle safety or a noncompliance initially
determined to exist by the NHTSA, an invitation
to interested persons to submit written data,
views, and arguments concerning the petition or
to submit such data, views, and arguments orally
at the meeting held pursuant to section 152(a)
of the Act following the initial determination, or
at a separate meeting if deemed appropriate by
the agency.
§ 556.6 iMeetings.
(a) At a meeting held under this part, any
interested person may make oral (as well as
written) presentations of data, views, and argu-
ments on the question of whether the defect or
noncompliance described in the Federal Register
notice is inconsequential as it relates to motor
vehicle safety.
(b) Sections 556 and 557 of Title 5, United
States Code, do not apply to any meeting held
under this part. Unless otherwise specified, any
meeting held under this part is an informal,
nonadversary, fact-finding proceeding, at which
there are no formal pleadings or adverse parties.
A decision to grant or deny a petition, after a
meeting on such petition, is not necessarily based
exclusively on the record of the meeting.
(c) The Administrator designates a represen-
tative to conduct any meeting held under this
part. The Chief Counsel designates a member
of his staff to serve as legal officer at the meeting.
A transcript of the proceeding is kept and ex-
hibits may be kept as part of the transcript.
§ 556.7 Disposition of petition.
Notice of either a grant or denial of a petition
for exemption from the notice and remedy re-
quirements of the Act based upon the inconse-
quentiality of a defect or noncompliance is issued
to the petitioner and published in the Federal
Register. The effect of a grant of a petition is
to relieve the manufacturer from any further re-
sponsibility to provide notice and remedy of the
defect or noncompliance. The effect of a denial
is to continue in force, as against a manufacturer,
all duties contained in the Act relating to notice
and remedy of the defect or noncompliance. Any
interested person may appeal the grant or denial
of a petition by submitting written data, views,
or arguments to the Administrator.
§ 556.8 Rescission of decision.
The Administrator may rescind a grant or de-
nial of an exemption issued under this part any
time after the receipt of new data and notice and
opportunity for comment thereon, in accordance
with § 556.5 and § 556.7.
§ 556.9 Pubiic inspection of reievant information.
Information relevant to a petition under this
part, including the petition and supporting data,
memoranda of informal meetings with the peti-
tioner or any other interested person concerning
the petition, and the notice granting or denying
the petition, are available for public inspection
in the Docket Section, Room 5109, National
Highway Traffic Safety Administration, 400
Seventh Street, S.W., Washington, D.C. 20590.
Copies of available information may be obtained
in accordance with Part 7 of the regulations of
the Office of the Secretary of Transportation (49
CFR Part 7).
42 F.R. 7147
February 7, 1977
PART 556-2
PART 556-EXEMPTION FOR INCONSEQUENTIAL DEFECT OR NONCOMPLIANCE
Sec.
556.1 Scope.
556.2 Purpose.
556.3 Application.
556.4 Petition for exemption.
556.5 Processing of petition.
556.6 Meetings.
556.7 Disposition of petition.
556.8 Rescission of exemption.
556.9 Public Inspection of relevant Information.
AUTHORITY: Sec. 157, Pub. L. 93-492, 88
Stat. 1470 (15 U.S.C. 1417), delegation of au-
thority at 49 CFR 1.50.
§ 556.1 Scope.
This part sets forth procedures, pursuant to
section 157 of the Act, for exempting manufac-
turers of motor vehicles and replacement equip-
ment from the Act's notice and remedy
requirements when a defect or noncompliance is
determined to be inconsequential as it relates to
motor vehicle safety.
§ 556.2 Purpose.
The purpose of this part is to enable manufac-
turers of motor vehicles and replacement equip-
ment to petition the NHTSA for exemption from
the notification and remedy requirements of the
Act due to the inconsequentiality of the defect or
noncompliance as it relates to motor vehicle
safety, and to give all interested persons an op-
portunity for presentation of data, views, and
arguments on the issue of inconsequentiality.
§ 556.3 Application.
This part applies to manufacturers of motor
vehicles and replacement equipment.
§ 556.4 Petition for exemption.
(a) A manufacturer who has determined the
existence, in a motor vehicle or item of replace-
ment equipment that he produces, of a defect
related to motor vehicle safety or a noncompli-
ance with an applicable Federal motor vehicle
safety standard, or who has received notice of an
initial determination by the NHTSA of the
existence of a defect related to motor vehicle
safety or a noncompliance, may petition for
exemption from the Act's notification and remedy
requirements on the grounds that the defect or
noncompliance is inconsequential as it relates to
motor vehicle safety.'
(b) Each petition submitted under this part
shall-
(1) Be written in the English language;
(2) Be submitted in three copies to: Admin-
istrator, National Highway Traffic Safety Ad-
ministration, Washington, D.C. 20590;
(3) State the full name and address of the
applicant, the nature of its organization (e.g.,
individual, partnership, or corporation) and the
name of the State or country under the laws of
which it is organized.
(4) Describe the motor vehicle or item of
replacement equipment, including the number in-
volved and the period of production, and the
defect or noncompliance concerning which an
exemption is sought; and
(5) Set forth all data, veiws, and arguments
of the petitioner supporting his petition.
(c) In the case of defects related to motor
vehicle safety or noncompliances determined to
exist by a manufacturer, petitions under this part
must be submitted not later than 30 days after
such determination. In the case of defects re-
lated to motor vehicle safety or noncompliances
initially determined to exist by the NHTSA,
petitions must be submitted not later than 30 days
after notification of the determination has been
received by the manufacturer. Such a petition
will not constitute a concession by the manufac-
PART 556-1
Effective: March 9, 1977
turer of, nor will it be considered relevant to, the
existence of a defect related to motor vehicle
safety or a nonconformity.
§ 556.5 Processing of petition.
(a) The NHTSA publishes a notice of each
petition in the Federal Register. Such notice
includes:
(1) A brief summary of the petition;
(2) A statement of the availability of the
petition and other relevant information for pub-
lic inspection; and
(3) (i) In the case of a defect related to
motor vehicle safety or a noncompliance deter-
mined to exist by the manufacturer, an invitation
to interested persons to submit written data,
views, and arguments concerning the petition,
and, upon request by the petitioner or interested
persons, a statement of the time and place of a
public meeting at which such materials may be
presented orally if any person so desires.
(ii) In the case of a defect related to
motor vehicle safety or a noncompliance initially
determined to exist by the NHTSA, an invitation
to interested persons to submit written data,
views, and arguments concerning the petition or
to submit such data, views, and arguments orally
at the meeting held pursuant to section 152(a)
of the Act following the initial determination, or
at a separate meeting if deemed appropriate by
the agency.
§ 556.6 {Meetings.
(a) At a meeting held under this part, any
interested person may make oral (as well as
written) presentations of data, views, and argu-
ments on the question of whether the defect or
noncompliance described in the Federal Register
notice is inconsequential as it relates to motor
vehicle safety.
(b) Sections 556 and 557 of Title 5, United
States Code, do not apply to any meeting held
under this part. Unless otherwise specified, any
meeting held under this part is an informal,
nonadversary, fact-finding proceeding, at which
there are no formal pleadings or adverse parties.
A decision to grant or deny a petition, after a
meeting on such petition, is not necessarily based
exclusively on the record of the meeting.
(c) The Administrator designates a represen-
tative to conduct any meeting held under this
part. The Chief Counsel designates a member
of his staff to serve as legal officer at the meeting.
A transcript of the proceeding is kept and ex-
hibits may be kept as part of the transcript.
§ 556.7 Disposition of petition.
Notice of either a grant or denial of a petition
for exemption from the notice and remedy re-
quirements of the Act based upon the inconse-
quentiality of a defect or noncompliance is issued
to the petitioner and published in the Federal
Register. The effect of a grant of a petition is
to relieve the manufacturer from any further re-
sponsibility to provide notice and remedy of the
defect or noncompliance. The effect of a denial
is to continue in force, as against a manufacturer,
all duties contained in the Act relating to notice
and remedy of the defect or noncompliance. Any
interested person may appeal the grant or denial
of a petition by submitting written data, views,
or arguments to the Administrator.
§ 556.8 Rescission of decision.
The Administrator may rescind a grant or de-
nial of an exemption issued under this part any
time after the receipt of new data and notice and
opportunity for comment thereon, in accordance
with § 556.5 and § 556.7.
§ 556.9 Public inspection of reievant information.
Information relevant to a petition under this
part, including the petition and supporting data,
memoranda of informal meetings with the peti-
tioner or any other interested person concerning
the petition, and the notice granting or denying
the petition, are available for public inspection
in the Docket Section, Room 5109, National
Highway Traffic Safety Administration, 400
Seventh Street, S.W., Washington, D.C. 20590.
Copies of available information may be obtained
in accordance with Part 7 of the regulations of
the Office of the Secretary of Transportation (49
CFR Part 7).
42 F.R. 7147
February 7, 1977
PART 556-2
Effective: January 31, 1977
PREAMBLE TO PART 557— PETITIONS FOR HEARINGS ON NOTIFICATION
AND REMEDY OF DEFECTS
(Docket No. 75-31; Notice 2)
This notice amends Chapter V of Title 49 of
the Code of Federal Regulations by the addition
of a new Part 5iU, Petition.^ for Hearings on
Notifcat/'on and Remedy of Defects^ jrovemino;
petitions for hearinjrs on whether or not a manu-
facturer has reasonahly met its obligation to
notify owners, dealers, and purchasers of a safety-
related defect or noncompliance with a safety
standard, or to remedy the defect or noncom-
pliance. Tlie new part also specifies the pro-
cedures to be followed in holding such a hearing.
The XHT8A proposed the regulation (40 FR
569'26. December ;"i. 1975) to carry out a statu-
tory provision concerning the hearing. Section
156 of the National Traffic and Motor Vehicle
Safety Act (15 U.S.C. 1416) provides that
"[u]pon petition of any interested person or on
his own motion, the Secretary may hold a hear-
ing in whicli any interested person (including a
manufacturer) may make oral (as well as writ-
ten) presentations of data, views, and arguments
on the (piestion of whether a manufacturer has
reasonablj- met his obligation to notify under
section 151 or 152, and to remedy a defect or
failure to comply under section 154." Sections
151 and 152 require a manufacturer to notify
owners, dealere, and purchasers of a safety-re-
lated defect or failure to comply with an appli-
cable Federal motor vehicle safety standard in
any motor vhecile or item of equipment manu-
factured by him. Section 154 requires a manu-
facturer to remedy without charge such defects
or failures to comply. Section 156 also provides
that
[i]f the Secretary determines the manu-
facturer has not reasonably met such ob-
ligation, he shall order the manufacturer
to take specified action to comply with
such obligation; and in addition, the Sec-
retary may take other action authorized
by this title.
Five comments were received from private per-
sons, five comments were received from manu-
facturers and trade associations, and two com-
ments were received from consumer groups; the
Consumer Protection Division of the County
Manager's Office for Metropolitan Dade County;
and the Center for Auto Safety (the Center).
The National Motor Vehicle Safety Advisoiy
Council did not take a position on the proposal.
The Vehicle Equipment Safety Commission did
not comment on the proposal.
Four of the comments received from private
persons objected to the institution of hearings as
meaningless or a waste of money. The fifth pri-
vate party supported issuance of the regidation.
The four commenters appeared to be unaware of
the provision for these hearings mandated by
section 156 of the Act, independent of the promul-
gation of Part 557. The agency does believe that
the informal hearing minimizes the expense that
will be involved in fulfilling this statutory man-
date.
Walker Manufacturing objected that permit-
ting "[a|ny interested person" to file a petition
would invite spurious requests whose pursuit
would be a waste of time and money. The agency
conformed to the statutory language of section
156 that "any interested person" can petition for
this hearing, and concludes that a narrowing of
the language would be contrary to the intent of
Congress in establishing the right.
The Consumer Protection Division for Metro-
politan Dade County suggested that the Con-
sumer Product Safety Commission (CPSC)
would l>e a more suitable agency with which to
vest this hearing procedure, because of better
public identification with its consumer protection
role. However, the jurisdiction of the CPSC
PART 557— PRE 1
Effective: January 31, 1977
under the Consumer Product Safety Act (15
U.S.C. 2051, et seq.) does not include motor ve-
hicles or motor vehicle equipment (15 U.S.C.
2052), and the autliorit}' to carry out section 156
is vested in the Department of Transportation.
Firestone Tire and Rubber Company suo^pested
that the hearing procedure could be consolidated
with the hearing procedures set forth in Part 552
{Petitions for RvJemaking, Deject, and Non-
compliance Orders) of XHTSA regulations (49
CFR Part 552). Part 552 addresses the proce-
dures that arise from a request for the initiation
of agencj' action in a rulemaking defect, or non-
compliance area. Unlike those situations, Part
557 addresses the different and more limited con-
siderations of an evaluation of an ongoing action
undertaken by persons outside the agency. The
separation of these functions into different pro-
cedural regidations clarifies these distinct func-
tions. Accordingly, the agency declines to adopt
the Firestone suggestion.
The Center appeared to misunderstand why
minimum qualification requirements were estab-
lished for hearing petitions. The regulation
states that, to be considered as a petition, a docu-
ment must be written in English, have the word
"petition" preceding its text, request a hearing,
and contain a brief statement of the alleged
failure and a summary of the data, views, or
arguments that would be presented at the hear-
ing. Reasonable considerations underlie these
minimum qualification requirements. For ex-
ample, the agency undertakes to respond to such
petitions within 60 days, and the agency must
be able to recognize a document as a petition if
the writer wishes to have it treated as such. This
is the basis for requiring that the word "peti-
tion" appear. The Centers request that the spec-
ifications be relaxed to recognize as petitions
filings in Spanish as well as English from the
Commonwealth of Puerto Rico and the Canal
Zone does not detract from the intent of the
qualification requirements, and the final regula-
tion is accordingly modified.
The Center's more basic objection is that per-
sons effectively will not be on notice that a
request for a hearing must confonn to the re-
quirements of Part 557 to be treated as a petition.
^^Hiile it is true that it must so conform to achieve
petition status (entitling it to a reply within 60
days), it is not true that a non-conforming re- '\
quest would not result in the calling of a hearing.
Any complaint, request, or series of them, can
result in the calling of a hearing on the Admin-
istrator's own motion. The Administrator is not
precluded from deciding to hold a hearing simply
because a person's complaint does not qualify
as a petition. Thus, the agency disagrees with
the Center's conclusion that Part 557 "denies
an owner the right to a hearing unless he or she
follows the regulation in every detail."
For this reason, the agency does not consider
necessary the Center's request for an amendment
of the newly revised Part 557 (dealing with no-
tification of safety-related defects or noncompli-
ances) to include the detailed specifications for
the content of a Part 557 petition. It is noted
that the agency is unaware of any supplemental
submission by the Center to the docket on revi-
sion of Part 577, either at the time the comments
on that docket were evaluated, or as of this date.
"With regard to the Center's suggestion that each
complainant be advised by return mail to re-
submit any request for a hearing in the proper
format, it is just this sort of response the agency
intends to avoid by its flexible approach. , 1
In a related matter, the Dade County Man-
ager's office believed that a lawyer would be
required to draft the petition specified by § 557.4.
This is not the case. A normal letter format,
preceded by the word "petition" and containing
the petitioner's complaint and its reasons for the
complaint are all that is required. In response
to the point that every complaint should not
precipitate a hearing, it is simply noted that the
grant of a petition is within the discretion of the
Administrator under the statute, as set forth in
§ 557.6 of the new regulation.
Section 557.6 of the regidation sets forth the
factors considered by the Administrator in deter-
mining whether to hold a hearing. The factoids
listed are: the nature of the complaint; the seri-
ousness of the alleged breach of obligation to
remedy ; the existence of similar complaints ; and
the ability of the NHTSA to resolve the problem
without holding a hearing. The Center con-
sidered the first factor (the nature of the com-
plaint) to be meaningless, and suggested its
clarification or deletion.
PART 557— PRE 2
((
Effective: JanuofY 31, 1977
PREAMBLE TO PART 557— PETITIONS FOR HEARINGS ON NOTIFICATION
AND REMEDY OF DEFECTS
(Docket No. 75-31; Notice 2)
This notice amends Chapter V of Title 40 of
the Code of Federal Re<rulations by the addition
of a new Part 557, Petitions for Ilear/'ngs on
Notification and Remedy of Defects, fjoveminoj
petitions for hearings on wliether or not a manu-
facturer has reasonably met its oblifjation to
notify owners, dealers, and purchasers of a safety-
related defect or noncompliance with a safety
standard, or to remedy the defect or noncom-
pliance. The new part also specifies the pro-
cedures to be followed in holding such a hearino;'.
The NHTSA proposed the refrulation (40 FR
56926, December 5. 1975) to carry out a statu-
tory provision concerniufr the hearing. Section
156 of the National Traffic and Motor Vehicle
Safety Act (15 U.S.C. 1416) provides that
"[u]pon petition of any interested person or on
his own motion, the SecreiaiT may hold a hear-
ing in which any interested person (including a
manufacturer) may make oral (as well as writ-
ten) i)resentations of data, views, and arguments
on the question of wiiether a manufacturer has
reasonably met his obligation to notify under
section 151 or 152. and to remedy a defect or
failure to comply under section 154." Sections
151 and 152 require a manufacturer to notify
owners, dealei-s. and purchasers of a safety-re-
lated defect or failure to comply with an appli-
cable Federal motor vehicle safety standard in
any motor vhecile or item of equipment manu-
factured by him. Section 154 requires a manu-
facturer to remedy without charge such defects
or failures to comply. Section 156 also provides
that
[i]f the Secretary determines the manu-
facturer has not reasonably met such ob-
ligation, he shall order tlie manufacturer
to take specified action to comply with
such obligation : and in addition, the Sec-
retary may take other action authorized
by this title.
Five comments were received from private per-
sons, five comments were received from manu-
facturers and trade associations, and two com-
ments were received from consumer groups; the
Consumer Protection Division of the County
Manager's Office for Metropolitan Dade County;
and the Center for Auto Safety (the Center).
The National Motor Vehicle Safety Advisory
Council did not take a position on the proposal.
The Vehicle Equipment Safety Commission did
not comment on the proposal.
Four of the comments received from private
persons objected to the institution of hearings as
meaningless or a waste of money. The fifth pri-
vate party supported issuance of the regulation.
The four commenters appeared to be imaware of
the provision for these hearings mandated by
section 156 of the Act, independent of the promul-
gation of Part 557. The agency does believe that
the informal hearing minimizes the expense that
will be involved in fulfilling this statutory man-
date.
"Walker Manufacturing olijected that permit-
ting "[a|ny interested person" to file a petition
would invite spurious requests whose pursuit
would be a waste of time and money. The agency
conformed to the statutory langiiage of section
156 that "any interested person" can petition for
this hearing, and concludes that a narrowing of
the language would be contrary to the intent of
Congress in establishing the right.
The Consumer Protection Division for Metro-
politan Dade County suggested that the Con-
sumer Product Safety Commission (CPSC)
would be a more suitable agency with which to
vest this hearing procedure, because of better
public identification with its consumer protection
role. However, the jurisdiction of the CPSC
PART 557— PRE 1
EfFecHve: January 31, 1977
under the Consumer Product Safety Act (15
U.S.C. 2051, et seq.) does not include motor ve-
hicles or motor vehicle equipment (15 U.S.C.
2052), and the authority to carry out section 156
is vested in the Department of Transportation.
Firestone Tire and Rubber Company su^p:ested
that the hearing procedure could be consolidated
with the hearing procedures set forth in Part 552
{Petitions for Rulemaking^ Defect^ and Non-
coinpliance Orders) of NHTSA regulations (49
CFR Part 552). Part 552 addresses the proce-
dures that arise from a request for the initiation
of agency action in a rulemaking defect, or non-
compliance area. Unlike those situations, Part
557 addi-esses the different and more limited con-
siderations of an evaluation of an ongoing action
undertaken by persons outside the agency. The
separation of these functions into different pro-
cedural regulations clarifies these distinct func-
tions. Accordingly, the agency declines to adopt
the Firestone suggestion.
The Center appeared to misunderstand why
minimum qualification requirements were estab-
lished for hearing petitions. The regulation
states that, to be considered as a petition, a docu-
ment must be written in English, have the word
"petition" preceding its text, request a hearing,
and contain a brief statement of the alleged
failure and a summary of the data, views, or
arguments that would be presented at the hear-
ing. Reasonable considerations underlie these
minimum qualification requirements. For ex-
ample, the agency undertakes to respond to such
petitions within 60 days, and the agency must
be able to recognize a document as a petition if
the writer wishes to have it treated as such. This
is the basis for requiring that the word "peti-
tion" appear. The Center's request that the spec-
ifications be relaxed to recognize as petitions
filings in Spanish as well as English from the
Commonwealth of Puerto Rico and the Canal
Zone does not detract from the intent of the
qualification requirements, and the final regula-
tion is accordingly modified.
The Center's more basic objection is that per-
sons effectively will not be on notice that a
request for a hearing must conform to the re-
quirements of Part 557 to be treated as a petition.
"VAHiile it is true that it must so conform to achieve
petition status (entitling it to a reply within 60
days), it is not true that a non-conforming re- i
quest would not result in the calling of a hearing. '
Any complaint, request, or series of them, can
result in the calling of a hearing on the Admin-
istrator's own motion. The Administrator is not
precluded from deciding to hold a hearing simply
because a person's complaint does not qualify
as a petition. Thus, the agency disagrees with
the Center's conclusion that Part 557 "denies
an owner the right to a hearing unless he or she
follows the regulation in ev-ery detail."
For this reason, the agency does not consider
necessaiy the Center's request for an amendment
of the newly revised Part 557 (dealing with no-
tification of safety-related defects or noncompli-
ances) to include the detailed specifications for
the content of a Part 557 petition. It is noted
that the agency is unaware of any supplemental
submission by the Center to the docket on revi-
sion of Part 577, either at the time the comments
on that docket were evaluated, or as of this date.
With regard to the Center's suggestion that each
complainant be advised by return mail to re-
submit any request for a hearing in the proper
format, it is just this sort of response the agency
intends to avoid by its flexible approach. A
In a related matter, the Dade County Man- *
ager's office believed that a lawyer would be
required to draft the petition specified by § 557.4.
This is not the case. A normal letter format,
preceded by the word "petition" and containing
the petitioner's complaint and its reasons for the
complaint are all that is required. In response
to the point that every complaint should not
precipitate a hearing, it is simply noted that the
grant of a petition is within the discretion of the
Administrator under the statute, as set forth in
§ 557.6 of the new regulation.
Section 557.6 of the regulation sets forth the
factors considered by the Administrator in deter-
mining whether to hold a hearing. The factors
listed are : the nature of the complaint ; the seri-
ousness of the alleged breach of obligation to
remedy; the existence of similar complaints; and
the ability of the \HTSA to resolve the problem
without holding a hearing. The Center con-
sidered the first factor (the nature of the com-
plaint) to be meaningless, and suggested its
clarification or deletion.
PART 557— PRE 2
Effective: Januory 31, 1977
Stiitinjr tlie iiatiiro of tlic coniplaiiit is (lopinod
necessary fo allow NHTSA to jii(l<ro wliothpi- tlio
issues of fact or opinion are of a type tliat could
he i-esolved by a hearing. In those cases where
facts or eniriiieerin<r considerations are not at
issue and only a policy decision remains to be
made, the Administrator could make his finding
without holdiu'r a heai-inir. A related factor
(listed as § r)57.6(a) (4) ) is the NHTSA's ability
to resolve a particidar complaint without a hear-
ing. S)ich a case would he wlien factual issues
aiT in dispute, but the facts arc ah"eady gathered.
The ajrency therefore disa'rrees with the Center's
assessment of § r)5T.6(a) (1) and declines to
modify it or delete it.
The Center viewed the second factor listed in
§5.57.6 (the seriousness of the allored breach of
ohlifration to remedy) as impermissibly vasrue
also. The Center's submission implies that only
two types of "breach of oblifration" exist : failure
to i-epair and refusal to i-emedy without charge.
In fact, every conceivable type of "alle<ied breach
of oblitation" exists, all with differing levels of
seriousness. For example, in a recall to replace
seat belts, an owner could object that a shoi-tasre
of red seat belts resulted in installation of black
seat belts in place of what had been ori<rinally
fitted. Another example would be a failure of
a notification letter to list the correct address of
the dealei- that will undertake a particular re-
pair. The apency needs to exercise its discretion
in such cases to decide whether the o^ravity of the
objection merits a public hearing.
The Center also argued that §557.6(4) (the
ability of the XITTSA to resolve a problem with-
out holdinfr a hearin.<r) constitutes an impermis-
sible "escape hatch" from aTcncy responsibilities.
This comment isrnores the lan<rua<re of the Act.
Section 156 states that the Secretary "may hold
a hearinir." a statutory grant of discretion now
pn>pei'ly reflected in the implementing regulation,
and intended to expedite the agency's decisions
in the public interest, not avoid them.
The Recreation Vehicle Industry Association
(RVTA) requested that the information pre-
sented to the XIIT.SA in accordance with Part
573 (Defect Reports) lie listed as a specific factor
to be considered in deciding whether to hold a
public hearing. The RYIA appears to be re-
questing that a particular body of information
be singled out for review in reaching the deci-
sion. Of course, all information related to the
case will enter into the decision, but the agency
has sought to list in § 557.6 factoi-s other than
the information itself that would enter into the
decision whether or not a hearing is necessary.
This decision is separate from tlie decision of the
adequacy of the notification and remedy itself.
For this reason, the RVIA suggestion is not
adopted.
The RVIA asked that a manufacturer be ad-
vised to the receipt of a petition and its eventual
disposition. American Motors Corporation
(AMC) also reque.sted notification of receipt.
The agency considers these requests reasonable,
and will provide in its administrative practices
for a copy of the petition acknowledgment and
decision letters to be sent to the manufacturer
involved.
Section 557.6 provides that the Administrator
shall grant or deny the petition in time to notify
the petitioner within 60 days of receipt of the
petition. The Center argued for a 30-day limit,
arguing that a longer period would necessarily
have serious safety consequencies in evei-y case.
The agency does not agree with this view. First,
the decision on whether or not to hold a hearing
is not the fundamental question of whether or
not the manufacturer has taken the steps re-
quired of it by the statute. Also, the significance
of the alleged failure to adequately meet respon-
sibilities will vary from case to case, justifying
differing periods of time in which to reach a
decision. Finally, the 60-day period is a maxi-
mum, and a decision in situations in which signif-
icant safety gains are made by quick action can
be made sooner. For these reasons, the Center's
suggestion is not adopted.
The Center also believed that immediate publi-
cation of the reasons for denial of a petition
would be necessary and desirable. The agency
Imows no reason why this would be the case, but
rather concludes that notice to the petitioner
within the allotted period is the significant step
in the case of a denial. The publication only
serves as a record function. Experience with a
similar publication schedule for denial of rule-
making petitions has been satisfactory.
PART 557— PRE 3
Effective: Jonuary 31, 1977
The Center further sufjfjested that all hcarinjrs
be conducted within 30 days of the decision to
fjrant a hearinfj, and that a final decision on the
adequacy of notification or remedy be made with-
in 30 days of the heariiifr. The a<fency intends
to schedule hearinj2;s within a reasonable time
after the petition is ofranted, but is unable to
assure that a hearinji; can always be held within
a 30-day period. As for the request that a deci-
sion be reached within 30 days of the hearing,
the agency relies on information other tlian that
presented at the hearing and is not able to state
unequivocally that the hearing will produce the
information necessary to reach a decision within
30 days of holding the hearing. .Vccordingly.
the Center's suggestions are not adopted.
Section .557.7 of the regulation sets forth the
nature of the public hearing that is contemplated
by the regulation. The section provides for sub-
mission of views orally or in writing, the main-
tenance of a transcript and exhibits, and the
presence in some cases of a legal officer. Tlie
RVIA, AMC, and International Harvester Com-
pany (IH) asked that the informal non-adver-
sarial hearings be revised to permit cross-exami-
nation of those who appear by those who disagi'ee
with them. IH also asked that, upon agreement
of the petitioner and the manufacturer involved,
the hearing be modified to conform to the adjudi-
catory specifications of sections 556 and 557 of
the Administrative Procedures Act.
The agency will take into consideration these
requests for possible future action. At tliis time,
the NHTSA wishes to conform its regulation to
the scope expressed in the proposal. The matter
of ui)gi-ading hearings to a more adversarial level
will be treated therefore at a later date. AVith
regard to IH's request for the opportunity to
further develop views on newly developed ma-
terial, the agency will accept written supple-
mental views for attachment to the transcript of
the hearing. Revision of the regulation to pro-
vide for this practice is not necessary.
The RVIA concluded its comments with the
recommendation that, in the event of a finding
that a manufacturer has not reasonably met its
notification and remedy obligations, the finding
be accompanied by a statement of the grounds
upon which the Administrator based his deter-
mination. The agency does not contemplate the
issuance of such a finding without stating its
reasons, and therefore concludes that its con-
templated actions will confonn to the RVIA
recommendation.
In accordance with Department of Transpor-
tation policy encouraging adequate analysis of
the consequences of regulatory action (41 FR
16200, April 16, 1976), the agency herewith sum-
marizes its evaluation of the economic and other
consequencies of this action on the public and
XJrivate sectors, including possible loss of safety
benefits. In this case, the new regulation merely
establishes procedures to carry out the mandate
of section 156 of tlie Act to provide for a pos-
sible hearing on the adequacy of notification and
remedy in the case where any interested person
requests such a hearing. The informal nature
of the hearing should have minimal costs of those,
including manufacturers, who participate. While
minimum requirements for petitioning might re-
sidt in some increase in time for assessing the
adequacy of notificationand remedy in some cases,
it is believed that any consequent effect on high-
way safety was contemplated by Congress in
providing for the hearings.
In consideration of tlie foregoing, a new Part
557, Petitions for Hearings on Notif cation and
Remedy of Defects, is added to Title 49 of the
Code of Federal Regulations, as set forth below.
Effective date: January 31, 1977. Because the
regulation is procedural and does not create a
burden upon any regidated person, its found for
good cause shown that an effective date earlier
than 180 days following issuance is in the public
interest.
(Sec. 9, Pub. 89-670, 80 Stat. 931 (49 U.S.C.
16,57) ; Sec. 103, 119, Pub. L. 89-563, 80 Stat. 718
(15 U.S.C. 1392, 1407) ; Sec. 156, Pub. L. 93-192,
88 Stat. 1470 (15 U.S.C. 1416) ; delegation of
authority at 49 CFR 1.50)
Issued on December 22, 1976.
John AV. Snow
Administrator
41 F.R. 56810
December 30, 1976
PART 557— PRE 4
EfFecfive: January 31, 1977
Statin<r tlie natui-e of tlie complaint is deemed
necessary to allow XITTSA to jiid<re whotlier the
issues of fact or opinion are of a type that could
lie resolved by a heaiinp. In those cases where
facts 01' encineeriuiT considei'ations are not at
issue and only a policy decision remains to be
made, the Administrator could make his finding
without holding a hearin<r. A i-elated factor
(listed as § r)r)7.6(a) (4)) is the XHTSA's ability
to resolve a particular complaint without a hear-
ing. Such a case would be when factual issues
are in dispute, but the facts are already jrathered.
The ajrency therefore disa.<rrees with the Center's
assessment of § 5r)7.6(a) (1) and declines to
modify it or delete it.
The Center viewed the second factor listed in
§ .').57.6 (the seriousness of the alle.'red breach of
obliTation to remedy) as impermissibly vasrue
also. Tlie Center's submission imi)lies that only
two types of "breach of obligation" exist : failure
to repair and refusal to i"emedy without charge.
In fact, every conceivable type of "alleged breach
of oblinration" exists, all with difFerinq; levels of
seriousness. For example, in a recall to replace
seat belts, an owner could object that a shortage
of red seat belts resulted in installation of black
seat belts in place of what had been orifrinally
fitted. Anotlier example woidd be a failure of
a notification letter to list the correct address of
the dealer that will undertake a particidar re-
pair. The agency needs to exercise its discretion
in such cases to decide whetlier the gravity of the
objection merits a public hearing.
The Center also argued that g,5r)7.6(4) (the
ability of the XHTSA to resolve a problem with-
out holding a hearin.<r) constitutes an impermis-
sible "esca|>e liatch" from aTency responsibilities.
This comment ignores the language of the Act.
Section 1.56 states that the Secretary "may hold
a hearing." a statutory grant of discretion now
properly reflected in the implementing rcrulation,
and intended to expedite the agency's decisions
in the public interest, not avoid them.
The Recreation Vehicle Industry Association
(RVIA) ix'quested that the information pre-
sented to the XHTSA in accordance with Part
573 (Defect Reports) be listed as a specific factor
to be considered in deciding whether to hold a
public hearing. The RVIA appears to be re-
questing that a particular body of information
be singled out for review in reaching the deci-
sion. Of course, all information related to the
case will enter into the decision, but the agency
has sought to list in § ri.'")7.6 factoi-s other than
the information itself that would enter into the
decision whether or not a hearing is necessary.
This decision is separate from the decision of the
adequacy of the notification and remedy itself.
For this reason, the RVIA suggestion is not
adopted.
The RVIA asked that a manufacturer be ad-
vised to the receipt of a petition and its eventual
disposition. American Motors Corporation
(AMC) also requested notification of receipt.
The agency considers these requests reasonable,
and will provide in its administrative practices
for a copy of the petition acknowledgment and
decision letters to be sent to the manufacturer
involved.
Section 557.6 provides that the Administrator
shall grant or deny the petition in time to notify
the petitioner within 60 days of receipt of the
petition. The Center argued for a 30-day limit,
arguing that a longer period would necessarily
have serious safety consequencies in every case.
The agency does not agree with this view. First,
the decision on whether or not to hold a hearing
is not the fundamental qiiestion of whether or
not the manufacturer has taken the steps re-
quired of it by the statute. Also, the significance
of the alleged failure to adequately meet respon-
sibilities will vary from case to case, justifying
differing periods of time in which to reach a
decision. Finally, the 60-day period is a maxi-
mum, and a decision in situations in which signif-
icant safety gains are made by quick action can
be made sooner. For these reasons, the Center's
suggestion is not adopted.
The Center also believer! that immediate publi-
cation of the reasons for denial of a petition
would be necessary and desirable. The agency
laiows no reason why tliis would l>e the case, but
rather concludes that notice to the petitioner
within the allotted period is the significant step
in the case of a denial. The publication only
serves as a record function. Experience with a
similar publication schedule for denial of rule-
making petitions has been satisfactory.
PART 557— PRE 3
Effective: January 31, 1977
The Center further sufrs'ested tliat all hearin<;.s
be conducted within 30 days of the decision to
firant a hearinji, and that a final decision on the
adequacy of notification or remedy ])e made with-
in 30 days of the hearinjr. The ao^ency intends
to schedule hearings within a reasonable time
after the petition is granted, but is unable to
assure that a hearing can always be held witliin
a 30-day period. As for the request that a deci-
sion be reached within 30 days of the hearing,
the agency relies on information other tlian that
presented at the hearing and is not able to state
unequivocally tliat the hearing will prcnluce the
information necessary to reach a decision witliin
30 days of holding the hearing. Accordingly,
the Center's suggestions are not adopted.
Section 557.7 of the regulation sets forth the
nature of the public hearing that is contejnplateil
by the regulation. The section provides for sub-
mission of views orally or in writing, the main-
tenance of a transcript and exhibits, and the
presence in some cases of a legal officer. The
RVIA, AMC, and International Harvester Com-
pany (IH) asked that the informal non-adver-
sarial hearings be revised to permit cross-exami-
nation of those who appear by those who disagree
with them. IH also asked that, upon agreement
of the petitioner and the manufacturer involved,
the hearing be modified to conform to the adjudi-
catory specifications of sections 556 and 557 of
the Administrative Procedures Act.
The agency will take into consideration these
requests for possible future action. At this time,
the XHTSA wishes to conform its regulation to
the scope expressed in the proposal. The matter
of upgrading hearings to a more adversarial level
will be treated therefore at a later date. With
i-egard to IH's request for the opportunity to
further develop views on newly developed ma-
terial, the agency will accept written supple-
mental views for attachment to the transcript of
the hearing. Revision of the regulation to pro-
vide for this practice is not necessary.
The RVIA concluded its comments with the
recommendation that, in the event of a finding
that a manufacturer has not reasonably met its
notification and remedy obligations, the finding
be accompanied by a statement of the grounds
upon which the Administrator based his deter-
mination. The agencj' does not contemplate the
issuance of such a finding without stating its
reasons, and therefore concludes that its con-
templated actions will conform to the RVIA
recommendation.
In accordance with Department of Transpor-
tation policy encouraging adequate analysis of
the consequences of regulatory action (41 FR
16200, April 16, 1976), the agency herewith sum-
marizes its evaluation of the economic and other
consequencies of this action on the public and
private sectors, including possible loss of safety
benefits. In this case, the new regulation merely
establishes procedures to cari-y out the mandate
of section 156 of the Act to provide for a pos-
sible hearing on the adequacy of notification and
remedy in the case where any interested person
requests such a hearing. The informal nature
of the hearing should have minimal costs of those,
including manufacturers, who participate. "\Miile
minimum requirements for petitioning might re-
sult in some increase in time for assessing the
adequacy of notificationand remedy in some cases,
it is believed that any consequent effect on high-
way safety was contemplated by Congress in
providing for the hearings.
In consideration of the foregoing, a new Part
557, Petitions for Hearings on Notif cation and
Remedy of Defects, is added to Title 49 of the
Code of Federal Regulations, as set forth below.
Effective date: January 31, 1977. Because the
regulation is procedural and does not create a
burden upon any regidated person, its found for
good cause shown that an effective date earlier
than 180 days following issuance is in the public
interest.
(Sec. 9, Pub. 89-670, 80 Stat. 931 (49 U.S.C.
1657) ; Sec. 103, 119, Pub. L. 89-563, 80 Stat. 718
(15 U.S.C. 1392, 1407) ; Sec. 156, Pub. L. 93-492,
88 Stat. 1470 (15 U.S.C. 1416); delegation of
authority at 49 CFR 1.50)
Issued on December 22, 1976.
John AV. Snow
Administrator
41 F.R. 56810
December 30, 1976
PART 557— PRE 4
PART 557-PETITIONS FOR HEARINGS ON NOTIFICATION
AND REMEDY OF DEFECTS
Sec.
557.1 Scope.
557.2 Purpose.
557.3 General.
557.4 Requirements for petition.
557.5 Improperly filed petitions.
557.6 Determination whether to hold a public
hearing.
557.7 Public hearing.
557.8 Determination of manufacturer's obliga-
tion.
§ 557.1 Scope.
This part establishes procedures under section
156 of the National Traffic and Motor Vehicle
Safety Act of 1966, as amended (88 Stat. 1470,
15 U.S.C. 1416), for the submission and disposi-
tion of petitions filed by interested persons for
hearings on the question of whether a manufac-
turer has reasonably met his obligation to notify
owners, purchasers, and dealers of a safety-re-
lated defect or failure to comply with a Federal
motor vehicle safety standard, or to remedy such
defect or failure to comply. This part also
establishes procedures for holding a hearing on
these questions.
S 557.2 Purpose.
The purpose of this part is to enable the
National Highway Traffic Safety Administration
to identify and respond on a timely basis to peti-
tions for hearings on whether a manufacturer
has reasonably met his obligation to notify or
remedy, and to establish the procedures for such
hearings.
§ 557.3 General.
Any interested person may file with the Ad-
ministrator a petition requesting him to hold a
hearing on—
(a) Whether a manufacturer has reasonably
met his obligation to notify owners, purchasers,
and dealers of a safety-related defect in any
motor vehicle or item of replacement equipment
manufactured by him;
(b) Whether a manufacturer has reasonably
met his obligation to notify owners, purchasers,
and dealers of a failure to comply with an appli-
cable Federal motor vehicle safety standard in
any motor vehicle or item of replacement equip-
ment manufactured by him;
(c) Whether the manufacturer has reasonably
met his obligation to remedy a safety-related de-
fect in any motor vehicle or item of replacement
equipment manufactured by him; or
(d) Whether the manufacturer has reasonably
met his obligation to remedy a failure to comply
with an applicable Federal motor vehicle safety
standard in any motor vehicle or item of replace-
ment equipment manufactured by him.
§ 557.4 Requirements for petition.
A petition filed under this part should be
addressed and submitted to: Administrator,
National Highway Traffic Safety Administration,
400 Seventh Street SW., Washington, D.C. 20590.
Each petition filed under this part must—
(a) Be written in the English or Spanish
language;
(b) Have, preceding its text, the word "Peti-
tion";
(c) Contain a brief statement concerning the
alleged failure of a manufacturer to meet rea-
sonably his obligation to notify or remedy;
PART 557-1
(d) Contain a brief summary of the data,
views, or arguments that the petitioner wishes
to present in a hearing on whether or not a manu-
facturer has reasonably met his obUgations to
notify or remedy;
(e) Specifically request a hearing.
§ 557.5 Improperly filed petitions.
(a) A petition that is not addressed as specified
in S 557.4, but that meets the other requirements
of that section, will be treated as a properly filed
petition, received as of the time it is discovered
and identified.
(b) A document that fails to conform to one
or more of the requirements of paragraphs
S 557.4(a) (1) through (5) will not be treated
as a petition under this part. Such a document
will be treated according to the existing cor-
respondence and other procedures of the NHTSA,
and any information contained in it will be con-
sidered at the discretion of the Administrator.
§ 557.6 Determination whether to hold a public
hearing.
(a) The Administrator considers the following
factors in determining whether to hold a hearing:
(1) The nature of the complaint;
(2) The seriousness of the alleged breach of
obligation to remedy;
(3) The existence of similar complaints;
(4) The ability of the NHTSA to resolve the
problem without holding a hearing; and
(5) Other pertinent matters.
(b) If, after considering the above factors,
the Administrator determines that a hearing
should be held, the petition is granted. If it is
determined that a hearing should not be held, the
petition is denied. In either case, the petitioner
is notified of the grant or denial not more than
60 days after receipt of the petition by the
NHTSA.
(c) If a petition submitted under this part is
denied, a Federal Register notice of the denial /
is issued within 45 days of the denial, setting ^
forth the reasons for it.
(d) The Administrator may conduct a hearing
under this part on his own motion.
§ 557.7 Public hearing.
If the Administrator decides that a public
hearing under this part is necessary, he issues a
notice of public hearing in the Federal Register,
to advise interested persons of the time, place,
and subject matter of the public hearing and
invite their participation. Interested persons
may submit their views through oral or written
presentation, or both. There is no cross-examina-
tion of witnesses. A transcript of the hearing is
kept and exhibits may be accepted as part of the
transcript. Sections 556 and 557 of Title 5,
United States Code, do not apply to hearings
held under this part. When appropriate, the
Chief Counsel designates a member of his staff
to serve as legal officer at the hearing.
§ 557.8 Determination of manufacturer's obligation.
If the Administrator determines, on the basis ||
of the information presented at a hearing or any ^
other information that is available to him, that
the manufacturer has not reasonably met his
obligation to notify owners, dealers, and pur-
chasers of a safety-related defect or faUure to
comply with a Federal motor vehicle safety
standard or to remedy such defect or failure to
comply, he orders the manufacturer to take
specified action to comply with his obligation,
consistent with the authority granted the Admin-
istrator by the Act.
41 F.R. 56810
December 30, 1976
PART 557-2
PART 557-PETITIONS FOR HEARINGS ON NOTIFICATION
AND REMEDY OF DEFECTS
Sec.
557.1 Scope.
557.2 Purpose.
557.3 General.
557.4 Requirements for petition.
557.5 Improperly filed petitions.
557.6 Determination whether to hold a public
hearing.
557.7 Public hearing.
557.8 Determination of manufacturer's obliga-
tion.
§ 557.1 Scope.
This part establishes procedures under section
I 156 of the National Traffic and Motor Vehicle
Safety Act of 1966, as amended (88 Stat. 1470,
15 U.S.C. 1416), for the submission and disposi-
tion of petitions filed by interested persons for
hearings on the question of whether a manufac-
turer has reasonably met his obligation to notify
owners, purchasers, and dealers of a safety-re-
lated defect or failure to comply with a Federal
motor vehicle safety standard, or to remedy such
defect or failure to comply. This part also
establishes procedures for holding a hearing on
these questions.
§ 557.2 Purpose.
The purpose of this part is to enable the
National Highway Traffic Safety Administration
to identify and respond on a timely basis to peti-
tions for hearings on whether a manufacturer
has reasonably met his obligation to notify or
remedy, and to establish the procedures for such
hearings.
§ 557.3 General.
Any interested person may file with the Ad-
ministrator a petition requesting him to hold a
hearing on—
(a) Whether a manufacturer has reasonably
met his obligation to notify owners, purchasers,
and dealers of a safety-related defect in any
motor vehicle or item of replacement equipment
manufactured by him;
(b) Whether a manufacturer has reasonably
met his obligation to notify owners, purchasers,
and dealers of a failure to comply with an appli-
cable Federal motor vehicle safety standard in
any motor vehicle or item of replacement equip-
ment manufactured by him;
(c) Whether the manufacturer has reasonably
met his obligation to remedy a safety-related de-
fect in any motor vehicle or item of replacement
equipment manufactured by him; or
(d) Whether the manufacturer has reasonably
met his obligation to remedy a failure to comply
with an applicable Federal motor vehicle safety
standard in any motor vehicle or item of replace-
ment equipment manufactured by him.
§ 557.4 Requirements for petition.
A petition filed imder this part should be
addressed and submitted to: Administrator,
National Highway Traffic Safety Administration,
400 Seventh Street SW., Washington, D.C. 20590.
Each petition filed under this part must—
(a) Be written in the English or Spanish
language;
(b) Have, preceding its text, the word "Peti-
tion";
(c) Contain a brief statement concerning the
alleged failure of a manufacturer to meet rea-
sonably his obligation to notify or remedy;
PART 557-1
(d) Contain a brief summary of the data,
views, or arguments that the petitioner wishes
to present in a hearing on whether or not a manu-
facturer has reasonably met his obHgations to
notify or remedy;
(e) Specifically request a hearing.
§ 557.5 Improperly filed petitions.
(a) A petition that is not addressed as specified
in § 557.4, but that meets the other requirements
of that section, will be treated as a properly filed
petition, received as of the time it is discovered
and identified.
(b) A document that fails to conform to one
or more of the requirements of paragraphs
§ 557.4(a) (1) through (5) will not be treated
as a petition under this part. Such a document
will be treated according to the existing cor-
respondence and other procedures of the NHTSA,
and any information contained in it will be con-
sidered at the discretion of the Administrator.
§ 557.6 Determination whether to hold a public
hearing.
(a) The Administrator considers the following
factors in determining whether to hold a hearing:
(1) The nature of the complaint;
(2) The seriousness of the alleged breach of
obligation to remedy;
(3) The existence of similar complaints;
(4) The ability of the NHTSA to resolve the
problem without holding a hearing; and
(5) Other pertinent matters.
(b) If, after considering the above factors,
the Administrator determines that a hearing
should be held, the petition is granted. If it is
determined that a hearing should not be held, the
petition is denied. In either case, the petitioner
is notified of the grant or denial not more than
60 days after receipt of the petition by the
NHTSA.
(c) If a petition submitted under this part is
denied, a Federal Register notice of the denial
is issued within 45 days of the denial, setting
forth the reasons for it.
(d) The Administrator may conduct a hearing
under this part on his own motion.
§ 557.7 Public hearing.
If the Administrator decides that a public
hearing under this part is necessary, he issues a
notice of public hearing in the Federal Register,
to advise interested persons of the time, place,
and subject matter of the public hearing and
invite their participation. Interested persons
may submit their views through oral or written
presentation, or both. There is no cross-examina-
tion of witnesses. A transcript of the hearing is
kept and exhibits may be accepted as part of the
transcript. Sections 556 and 557 of Title 5,
United States Code, do not apply to hearings
held under this part. When appropriate, the
Chief Counsel designates a member of his staff
to serve as legal officer at the hearing.
§ 557.8 Determination of manufacturer's obligation.
If the Administrator determines, on the basis
of the information presented at a hearing or any
other information that is avaUable to him, that
the manufacturer has not reasonably met his
obligation to notify owners, dealers, and pur-
chasers of a safety-related defect or failure to
comply with a Federal motor vehicle safety
standard or to remedy such defect or failure to
comply, he orders the manufacturer to take
specified action to comply with his obligation,
consistent with the authority granted the Admin-
istrator by the Act.
41 F.R. 56810
December 30, 1976
PART 557-2
Vehicle Identification Number Content Requirements
(Docket No. 1-22; Notice 12)
ACTION: Final rule.
SUMMARY: This notice amends Federal Motor
Vehicle Safety Standard No. 115, Vehicle Iden-
tification Number, by deleting portions of that
standard and reissuing those portions as a general
agency regulation. This is being taken in response
to a petition from the Motor Vehicle Manufac-
turers Association (MVMA). It is intended to
assiu-e that the recall and remedy provisions of the
National Traffic and Motor Vehicle Safety Act
("the Act") do not apply to certain errors in vehicle
identification numbers (VIN's) which are minor
and have no safety consequences. The basic
substantive requirements of Standard 115 are un-
changed by this action.
DATES: This action is effective 30 days after
publication in the Federal Register.
SUPPLEMENTARY INFORMATION: The VIN is
that unique number assigned each vehicle during
production by the manufacturer for purposes of
identification and inventory control. The VIN has
other users. A variety of other organizations use
the VIN for such purposes as vehicle registration,
insurance rating, and theft investigation. NHTSA
uses the VIN in its safety research and investiga-
tion activities.
In 1968, Federal Motor Vehicle Safety Standard
(FMVSS) 115 was adopted, specifying that each
passenger car must be assigned a unique VIN. In
1979, FMVSS 115 was extended to cover motor
vehicles other than passenger cars. Also, a
uniform, 17-character format for VIN's was then
established, specifying coded information such as
the identity of the manufacturer, vehicle make,
type of vehicle, various vehicle attributes, model
year, plant of manufacture, and production se-
quence. The VIN also contains a check digit which
aids in the detection of errors in the transcription
of VIN's by the users of the numbers.
On June 13, 1980, MVMA petitioned this agency
to withdraw FMVSS 115 and re-issue its provi-
sions in the form of a general agency regulation.
The significance of this change stems from section
152 of the Act (15 U.S.C. 1412), which provides
that whenever the Secretary of Transportation
determines that a vehicle does not comply with a
FMVSS, the Secretary must require the vehicle's
manufacturer to notify the owners, purchasers,
and dealers of the vehicle of that noncompliance
and to remedy the noncompliance. However, in the
case of a noncompliance with a regulation other
than a FMVSS, the notification and remedy
requirements of the Act do not apply. For those
noncompliances, more flexible methods of enforce-
ment are permitted.
MVMA sought to assure through its requested
amendment that errors in the assignment of VIN's
would not trigger the recall and remedy provisions
of the Act. Requiring that errors in assigned VIN's
must be physically corrected would be undesirable
in most cases for two reasons. First, correcting the
errors would be an expensive and burdensome
process, whose possible benefits would be greatly
outweighed by the costs. These burdens and costs
are discussed in the NPRM. In most cases, simply
providing information on the nature of the error to
users of the VIN's would solve any problems
caused by the incorrect VIN. Second, changing a
previously assigned VIN could create anti-theft
problems. Law enforcement authorities consider
the presence of an altered VIN in a vehicle to be an
indication that the vehicle has been stolen. If VIN's
were frequently altered lawfully, it would be more
difficult for the police to detect stolen vehicles.
PART 565-PRE 1
Further, if the equipment necessary to alter VIN's
were widely available (such as at all auto dealers,
as might be necessary to conduct a recall and
remedy campaign), thieves' access to such equip-
ment would be greatly increased. Law enforce-
ment authorities have consistently recommended
to NHTSA that VIN numbers, once assigned,
should not be altered for any reason, even if the
original number was incorrect.
The only exception to the recall requirement is
contained in section 157 of the Act (15 U.S.C.
1417) which authorizes exemptions from these re-
quirements based on a demonstration that the
noncompliance is inconsequential as it relates to
safety. This authority could be used to relieve a
manufacturer of the necessity of conducting a
recall and remedy campaign to correct minor VIN
errors. Minor labeling errors were among the ex-
amples given in the legislative history of the provi-
sion for the sorts of errors that are inconsequen-
tial. While exemptions might well be given under
section 157 for minor VIN errors, the necessity of
conducting the exemption proceedings for such er-
rors imposes an excessive administrative burden.
The amendments made by this notice eliminate
that burden.
MVMA suggested that one possible consequence
of a change in the status of the VIN provisions
might be a loss or narrowing of Federal preemp-
tion. Under section 103(d) of the Act (15 U.S.C.
1392(d)), whenever a FMVSS is in effect, no State
may establish or maintain a requirement applicable
to the same aspect of performance unless the State
requirement is identical to the FMVSS. The
removal of various VIN requirements from
FMVSS 115 removes them also from the operation
of section 103(d). Recognizing this and the clear
undesirability of having differing VIN require-
ments established by the States, MVMA modified
its petition on April 18, 1982. In its modified peti-
tion, MVMA requested that only certain VIN pro-
visions be shifted from the standard to the regula-
tion. Requirements establishing the fundamental
characteristics of the VIN, such as its length, loca-
tion, and readability, would remain in the stand-
ard. Under the amended petition, the content of
the VIN would be specified in the VIN regulation.
The combined standard /regulation scheme is in-
tended to remove the threats of potentially costly
recall campaigns to correct minor VIN errors or of
inconsequentiality proceedings, while ensuring
that the preemptive effect of the FMVSS is still
maintained for the more significant requirements.
After reviewing the MVMA petition, the agency
tentatively concluded that MVMA's suggested j
regulatory changes have merit, and proposed to
adopt those changes. See 47 FR 42004, September
23, 1982. (The agency believes that general prin-
ciples of Federal preemption are sufficient to
assure that the VIN regulation will preempt any in-
consistent State requirements.) Based on further
review of that petition and the comments received
on the September notice of proposed rulemaking
(NPRM), the agency is herein adopting these
changes in final form.
Comments on the NPRM
Virtually all the comments received on the
September NPRM supported the proposed
changes to FMVSS 115. However, several com-
menters suggested slight changes or clarifications
to the proposed regulatory language. The most
controversial aspect of the proposal was the provi-
sion which would exempt from certain VIN re-
quirements vehicles imported into the United
States under bond, which do not meet U.S. stand-
ards, but which will subsequently be modified to
meet those standards. As a practical matter, this
provision applies to individuals or organizations
which import small numbers of vehicles. Several >
commenters expressed the fear that this provision m
could result in the importation of large numbers of ^
vehicles (such as by a foreign manufacturer) with
nonconforming VIN's. These commenters sug-
gested that the exemption be limited to a max-
imum of 5 vehicles per year per individual. While
the agency agrees that the exemption should not
be applied to an actual manufacturer, it cannot
justify selecting any particular arbitrary limit,
such as five vehicles, to exclude larger commercial
organizations. However, in response to these com-
ments, the agency is amending this provision to ex-
clude actual manufacturers of vehicles and their
subsidiaries.
Several commenters also suggested that infor-
mation on VIN errors should be provided to the
National Crime Information Center (NCIC, part of
the Federal Bureau of Investigation) and the Na-
tional Automobile Theft Bureau (NATB, a private
organization affiliated with the insurance
industry). These organizations could enter the in-
formation in their computer systems, thereby mak-
ing it available to State motor vehicle administra-
tions, law enforcement organizations, and other
PART 565-PRE 2
Vehicle Identification Number Content Requirements
(Docket No. 1-22; Notice 12)
ACTION: Final rule.
SUMMARY: This notice amends Federal Motor
Vehicle Safety Standard No. 115, Vehicle Iden-
tification Number, by deleting portions of that
standard and reissuing those portions as a general
agency regulation. This is being taken in response
to a petition from the Motor Vehicle Manufac-
turers Association (MVMA). It is intended to
assure that the recall and remedy provisions of the
National Traffic and Motor Vehicle Safety Act
("the Act") do not apply to certain errors in vehicle
identification numbers (VIN's) which are minor
and have no safety consequences. The basic
substantive requirements of Standard 115 are un-
changed by this action.
DATES: This action is effective 30 days after
publication in the Federal Register.
SUPPLEMENTARY INFORMATION: The VIN is
that unique number assigned each vehicle during
production by the manufacturer for purposes of
identification and inventory control. The VIN has
other users. A variety of other organizations use
the VIN for such purposes as vehicle registration,
insurance rating, and theft investigation. NHTSA
uses the VIN in its safety research and investiga-
tion activities.
In 1968, Federal Motor Vehicle Safety Standard
(FMVSS) 115 was adopted, specifying that each
passenger car must be assigned a unique VIN. In
1979, FMVSS 115 was extended to cover motor
vehicles other than passenger cars. Also, a
uniform, 17-character format for VIN's was then
established, specifying coded information such as
the identity of the manufacturer, vehicle make,
type of vehicle, various vehicle attributes, model
year, plant of manufacture, and production se-
quence. The VIN also contains a check digit which
aids in the detection of errors in the transcription
of VIN's by the users of the numbers.
On June 13, 1980, MVMA petitioned this agency
to withdraw FMVSS 115 and re-issue its provi-
sions in the form of a general agency regulation.
The significance of this change stems from section
152 of the Act (15 U.S.C. 1412), which provides
that whenever the Secretary of Transportation
determines that a vehicle does not comply with a
FMVSS, the Secretary must require the vehicle's
manufacturer to notify the owners, purchasers,
and dealers of the vehicle of that noncompliance
and to remedy the noncompliance. However, in the
case of a noncompliance with a regulation other
than a FMVSS, the notification and remedy
requirements of tiie Act do not apply. For those
noncompliances, more flexible methods of enforce-
ment are permitted.
MVMA sought to assure through its requested
amendment that errors in the assignment of VIN's
would not trigger the recall and remedy provisions
of the Act. Requiring that errors in assigned VIN's
must be physically corrected would be undesirable
in most cases for two reasons. First, correcting the
errors would be an expensive and burdensome
process, whose possible benefits would be greatly
outweighed by the costs. These burdens and costs
are discussed in the NPRM. In most cases, simply
providing information on the nature of the error to
users of the VIN's would solve any problems
caused by the incorrect VIN. Second, changing a
previously assigned VIN could create anti-theft
problems. Law enforcement authorities consider
the presence of an altered VIN in a vehicle to be an
indication that the vehicle has been stolen. If VIN's
were frequently altered lawfully, it would be more
difficult for the police to detect stolen vehicles.
PART 565-PRE 1
Further, if the equipment necessary to alter VIN's
were widely available (such as at all auto dealers,
as might be necessary to conduct a recall and
remedy campaign), thieves' access to such equip-
ment would be greatly increased. Law enforce-
ment authorities have consistently recommended
to NHTSA that VIN numbers, once assigned,
should not be altered for any reason, even if the
original number was incorrect.
The only exception to the recall requirement is
contained in section 157 of the Act (15 U.S.C.
1417) which authorizes exemptions from these re-
quirements based on a demonstration that the
noncompliance is inconsequential as it relates to
safety. This authority could be used to relieve a
manufacturer of the necessity of conducting a
recall and remedy campaign to correct minor VIN
errors. Minor labeling errors were among the ex-
amples given in the legislative history of the provi-
sion for the sorts of errors that are inconsequen-
tial. While exemptions might well be given under
section 157 for minor VIN errors, the necessity of
conducting the exemption proceedings for such er-
rors imposes an excessive administrative burden.
The amendments made by this notice eliminate
that burden.
MVMA suggested that one possible consequence
of a change in the status of the VIN provisions
might be a loss or narrowing of Federal preemp-
tion. Under section 103(d) of the Act (15 U.S.C.
1392(d)), whenever a FMVSS is in effect, no State
may establish or maintain a requirement applicable
to the same aspect of performance unless the State
requirement is identical to the FMVSS. The
removal of various VIN requirements from
FMVSS 115 removes them also from the operation
of section 103(d). Recognizing this and the clear
undesirability of having differing VIN require-
ments established by the States, MVMA modified
its petition on April 18, 1982. In its modified peti-
tion, MVMA requested that only certain VIN pro-
visions be shifted from the standard to the regula-
tion. Requirements establishing the fundamental
characteristics of the VIN, such as its length, loca-
tion, and readability, would remain in the stand-
ard. Under the amended petition, the content of
the VIN would be specified in the VIN regulation.
The combined standard /regulation scheme is in-
tended to remove the threats of potentially costly
recall campaigns to correct minor VIN errors or of
inconsequentiality proceedings, while ensuring
that the preemptive effect of the FMVSS is still
maintained for the more significant requirements.
After reviewing the MVMA petition, the agency
tentatively concluded that MVMA's suggested
regulatory changes have merit, and proposed to
adopt those changes. See 47 FR 42004, September
23, 1982. (The agency believes that general prin-
ciples of Federal preemption are sufficient to
assure that the VIN regulation wOl preempt any in-
consistent State requirements.) Based on further
review of that petition and the comments received
on the September notice of proposed rulemaking
(NPRM), the agency is herein adopting these
changes in final form.
Comments on the NPRM
Virtually all the comments received on the
September NPRM supported the proposed
changes to FMVSS 115. However, several com-
menters suggested slight changes or clarifications
to the proposed regulatory language. The most
controversial aspect of the proposal was the provi-
sion which would exempt from certain VIN re-
quirements vehicles imported into the United
States under bond, which do not meet U.S. stand-
ards, but which will subsequently be modified to
meet those standards. As a practical matter, this
provision applies to individuals or organizations
which import small numbers of vehicles. Several
commenters expressed the fear that this provision /
could result in the importation of large numbers of
vehicles (such as by a foreign manufacturer) with
nonconforming VIN's. These commenters sug-
gested that the exemption be limited to a max-
imum of 5 vehicles per year per individual. WhUe
the agency agrees that the exemption should not
be applied to an actual manufacturer, it cannot
justify selecting any particular arbitrary limit,
such as five vehicles, to exclude larger commercial
organizations. However, in response to these com-
ments, the agency is amending this provision to ex-
clude actual manufacturers of vehicles and their
subsidiaries.
Several commenters also suggested that infor-
mation on VIN errors should be provided to the
National Crime Information Center (NCIC, part of
the Federal Bureau of Investigation) and the Na-
tional Automobile Theft Bureau (N 
TVNews
OpenLibrary