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Full text of "Federal motor vehicle safety standards and regulations, with amendments and interpretations"

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BOSTON 

PUBLIC 

LIBRARY 



Q Federal Motor Vehicle 

Safety Standards 
and Regulations 



US- Department 
of Transportation 

National Highway 
Traffic Safety 
Administration 



-t-rp^ With Amendments and 

I JJ) Interpretations Issued through 

I / December 1986 










Foreword 

This reference volume contains Federal Motor Vehicle Safety Standards and 
Regulations, including amendments and interpretations, issued through 
December 1986. 

The volume is divided into three sections. The first section contains 
procedural rules and regulations. The second section contains the standards. The 
third section contains rulings and additional regulations. 

Each section is sub-divided into Parts which correspond to the Part numbers 
appearing in the United States Code of Federal Regulations, as shown in the 
following examples: 

Part 551— Procedural Rules 

Part 567— Certification 

Part 571— Motor Vehicle Safety Standards 

Part 575— Consumer Information 

The arrangement of the Parts within a section consists of preamble material, 
followed by the applicable standard or regulation. To simplify the incorporation 
of amended material into the text, amendments are issued as full replacement 
pages, with each page having the same page number as the page it replaces. 

The page numbering system is designed to keep related materials together, 
while permitting expansion of the material within a section. Each page number 
identifies: the Part to which it belongs, the standard or regulation with which it 
is concerned, and the page number. For example, page one of Standard No. 108 
is listed as PART 571; S 108-1. Preamble material (which is not amended) has 
the same numbering system, except that the abbreviation PRE precedes the 
page number (e.g. PART 571; S 108-PRE 1). 

New standards, amendments, interpretations and other changes are issued 
periodically as supplements to this document. These are loose leaf, pre-punched 
and distributed automatically to subscribers to this publication. A sample layout 
of a changed page with explanatory annotations appears on page iii. 



For sale by the Superintendent of Documents, U.S. Government Printing Office 
Wasliington, D.C. 20402 



Material enclosed in 
brackets represents 
amendment to 
standard 



SAMPLE PAGE 



MOTOR VEHICLE SAFETY STANDARD NO. 203 
Impact Protection for the Driver from the Steering Control System— Passenger Cars 



51. Purpose ^nd scope. This standard speci- 
fies requirementsYor steering control systems that 
will minimize cheU, neck, and facial injuries to 
the driver as a result of impact. 

52. Application. [This standard applies to 
passenger cars. However, it does not apply to 
vehicles that conform to the frontal barrier crash 
requirements (S5.1) of Standard No. 208 
(§ 571.208) by means of other than seat belt as- 
semblies. (40 F.R. 17992— April 24, 1987. Ef- 
fective: 5/27/87 )1 " ' 

53. Definitions. "Steering control system' 
means the basic steeri/g mechanism and its as- 
sociateq trim hardwa/re, including any portion 
of a steering colurmi assembly that provides 
energy absorption uyon impact. 

54. RequirementE 

S4.1 Except af provided in S4.2, when the 
steering Icontrol System is impacted by a body 
block in kccordamce with Society of Automotive 
Engineer* Recommended Practice J944, "Steer- 
ing WheAl i^sembly Laboratory Test Proce- 
dure," De^em^er 1965 or an approved equivalent. 



at a relative velocity of 15 miles per hour, the 
impact force developed on the chest of the body 
block transmitted to the steering control system 
shall not exceed 2,500 pounds. 

54.2 A Type 2 seat belt assembly that con- 
forms to Motor Vehicle Safety Standard No. 209 
shall be installed for the driver of any vehicle 
with forward control configuration that does not 
meet the requirements of S4.1. 

54.3 The steering control system shall be so 
constructed that no components or attachments, 
including horn actuating mechanisms and trim 
hardware, can catch the driver's clothing or 
jewelry during normal driving maneuvers. 

Interpretation 

The term "Jewelry" in paragraph S4.3 refers 
to watches, rings, and bracelets without loosely 
attached or dangling members. 



32 F.R. 2414 
February 3, 1987 



Issue of Federal Register 
in which amendment was 
issued and effective date 
of amendment 



Issue of Federal Register 

in which Standard was 

originally issued 




Part of Code ol Federal Regulations 
in which Standard appears 



I Date of latest revision 




Standard number 



Page number 



PART 571; S203-1 



Section One 

Part 510 — Information Gathering Powers 

Part 511 — Adjudicative Procedures 

Part 512 — Confidential Business Information 

Part 520 — Procedures for Considering Environmental Impacts 

Part 523— Vehicle Classification 

Part 525 — Exemptions From Average Fuel Economy Standards 

Part 527 — Reduction of Passenger Automobile Average Fuel Economy 

Standards 
Part 529 — Manufacturers of Multistage Automobiles 
Part 531 — Passenger Automobile Average Fuel Economy Standards 
Part 533— Light Truck Average Fuel Economy Standards— Model Years 

1985-86 
Part 535 — 3-year Carryforward and Carryback of Fuel Economy Credits for 

Manufacturers of Light Trucks 
Part 537 — Automotive Fuel Economy Reports 
Part 541 —Federal Motor Vehicle Theft Prevention Standard 
Part 542 — Procedures for Selecting Lines to be Covered by the Theft 

Prevention Standard 
Part 544 — Insurer Reporting Requirements 
Part 551 —Procedural Rules 

Part 552 — Petitions for Rulemaking, Defect, and Non-Compliance Orders 
Part 553 — Rulemaking Procedures 

Part 554 — Standards Enforcement and Defect Investigation 
Part 555 — Temporary Exemption From Motor Vehicle Safety Standards 
Part 556 — Exemption for Inconsequential Defect or Non-CompUance 
Part 557 — Petitions for Hearings on Notification and Remedy of Defects 
Part 565 — Vehicle Identification Number— Content Requirements 
Part 566 — Manufacturer Identification 
Part 567 — Certification 

Part 568 — Vehicles Manufactured in Two or More Stages 
Part 569— Regrooved Tires 
Part 570 — Vehicle-in-Use Inspection Standard 



PREAMBLE TO PART 510— INFORMATION GATHERING POWERS 

(Docket No. 78-01; Notice 3) 



ACTION: Final rule. 

SUMMARY: This notice establishes a final rule 
governing the issuance and use of compulsory 
process by the National Highway Traffic Safety 
Administration (NHTSA) in carrying out its duties 
under the National Traffic and Motor Vehicle 
Safety Act of 1966, as amended, (the Safety Act), 
and the Motor Vehicle Information and Cost 
Savings Act, as amended, (the Cost Savings Act). 
This final rule was preceded by an interim final 
rule, which set forth the procedures the agency 
would use in exercising its information gathering 
powers, and solicited comments on those 
procedures. This rule informs the public of those 
procedures, and of the rights which the public has 
with respect to those procedures. 

EFFECTIVE DATE: This rule will become effective 
(45 days after publication in the Federal Register). 

FOR FURTHER INFORMATION CONTACT: 

Mr. Steve Kratzke, 

Office of Chief Counsel, 

National Highway Traffic Safety Administration 

400 Seventh Street, S.W., 

Washington, D.C. 20590 (202-426-2992) 

SUPPLEMENTARY INFORMATION: 

A. Background. At 42 FR 64628, December 27, 
1977, NHTSA published an interim final rule 
establishing 49 CFR Part 510, Information 
gathering powers. That regulation set forth the 
procedures to be followed by NHTSA in exercising 
its information gathering powers. It was issued as 
an interim final rule without prior notice or 
opportunity for comment. This is permitted by 5 
U.S.C. 553 (b) (3) (A), which allows rules which are 
strictly procedural to be issued without the 
normally required notice and opportunity for 
comment. However, because of this agency's 



policy of encouraging public participation in all 
agency activities, Part 510 was issued as an 
interim rule, and comments from interested 
members of the public were solicited. On February 
2, 1978, the comment period was extended for an 
additional 20 days in response to a petition 
requesting such an extension; see 43 FR 5516, 
February 9, 1978. The agency received many 
comments on Part 510 from members of the 
automotive industry, automotive associations both 
large and small, associations of automobile users 
and consumers, and at least one private citizen 
who did not indicate any affiliation. All comments 
were considered and the most significant ones are 
addressed below. 

In response to the comments received, several 
changes have been made to the interim rule. 
However, most of these changes are for the 
purpose of clarification or to make explicit what 
had been implicit in the interim rule. The most 
significant changes are outlined below. 

B. Most significant changes. The following are 
the most significant differences between the 
interim rule and this final rule: 

1. The final rule reorganizes the category of 
"investigational hearing" contained in the interim 
rule into two smaller categories. The first 
reorganized category is the "information 
gathering hearing", in which the agency can 
compel a witness to appear and answer questions 
under oath. The agency's rulemaking meetings are 
the most common example of this type of 
proceeding. Generally, these hearings will be 
public, and questioning of the witness will be 
limited to the presiding officer and any other 
members of a panel. The other reorganized 
category, which is derived from the interim rule's 
investigational hearing, is the "administrative 
deposition". This is used in investigations and is 
modeled after a deposition under the Federal Rules 
of Civil Procedure. 



PART 510; PRE 1 



2. The final rule requires that any process issued 
under it recite the statutory authority under which 
the process is issued. 

3. The final rule requires that any process issued 
under it contain a brief description of the 
investigation or inquiry in connection with which it 
is being issued. 

4. The final rule adds a form of compulsory 
process, the written request for the production of 
documents and things. This was implicit in the 
concept of the general or special order established 
in the interim rule, but has been made explicit in 
this final rule to avoid any confusion as to the 
availability and proper uses of this form of process. 

5. The final rule expands the right to counsel by 
deleting the authority for the agency to exclude a 
person as counsel if such person were counsel for a 
number of other witnesses in the same 
investigation or if such person had personally been 
subpoenaed to testify. 

6. The interim rule had not specifed any time 
limitations on the duty to supplement responses to 
compulsory process. This final rule includes the 
following limitations: with respect to process 
issued in connection with a rulemaking action, the 
duty to supplement terminates when a final rule is 
issued or the action is otherwise ended. With 
respect to process issued in connection with an 
enforcement investigation, the duty to supplement 
responses terminates when the defect 
investigation is closed. Finally, with respect to 
process not issued in connection with a specific 
rulemaking action or enforcement investigation, 
the duty to supplement terminates 18 months after 
the date of the original response to the process. 

C. Discussion of comments. 

1. Comments on the procedure followed for 
issuing this rule. One commenter suggested that 
the interim rule may be void because it was issued 
without a prior notice of proposed rulemaking and 
opportunity for public comment. Moreover, this 
defect might not be cured by the publication of a 
final rule after consideration of comments 
received, according to this commenter, in which 
case the final rule would also be void. 

The commenter asserted that any rule which 
substantially affects the rights of persons subject 
to the authority of an agency must be promulgated 
with notice and opportunity for comment, no 
matter whether the rule is labeled substantive or 
procedural. However, the authority cited by the 
commenter does not support that assertion. 



Instead, the cases suggest that when it is difficult 
to determine whether a rule is substantive or 
procedural, the court will consider the impact on 
the regulated parties. If that impact is significant, 
it is likely that the rule is substantive. Thus, in 
Pickus V. United States Board of Parole, 507 F.2d 
1107 (D.C. Cir. 1974), the board of parole argued 
that its regulation was procedural, but the 
regulation also established some criteria for parole 
eligibility. In Pharmaceutical Manufacturers 
Association v. Finch, 307 F. Supp. 858 (D. 
Delaware 1970), the FDA established procedural 
regulations which also set up the requirements 
with which drug manufacturers would have to 
comply to establish that a new drug was safe and 
effective. And in National Motor Freight Traffic 
Association v. United States, 268 F. Supp. 90 
(D.D.C. 1967), affd, 393 U.S. 18 (1968), the 
Interstate Commerce Commission's procedural 
regulations also established a remedy for the 
recovery of overcharges. In none of these cases did 
the court find the regulation to be purely 
procedural. 

Numerous cases have upheld the validity of 
procedural rules issued without notice and 
opportunity for comments, even when the rules 
had a major impact on the parties. See Eastern 
Kentucky Welfare Rights Organization v. Simon, 
506 F2d 1278 (D.C. Cir. 1974) vacated on other 
grounds, 436 U.S. 26 (1976); Shell Oil Co. v. 
Federal Power Commission, 491 F.2d 82 (5th Cir. 
1974); Buckeye Cahlevision, Inc. v. United States, 
438 F.2d 948 (6th Cir. 1971). The agency believes 
that Part 510 is purely procedural, since it does not 
even arguably establish any criteria for obtaining 
favorable consideration by the agency, nor does it 
establish any remedies for violations of substantive 
agency rules. Indeed, it appears to NHTSA that 
the regulation does not substantially affect the 
rights of any parties, since Part 510 only 
implements information gathering powers and 
remedies for violations of those powers granted to 
NHTSA in various statutes, without adding to or 
deleting from those powers and remedies in any way. 

Furthermore, even if NHTSA accepts arguendo 
the commenter's claim that the interim rule should 
have been preceded by notice and opportunity for 
comment, that failure would be cured by the 
agency's solicitation of comments on the interim 
rule and the issuance of this final rule in response 
to the comments received. The commenter's 
position that no "cure" is possible is based on four 



PART 510; PRE 2 



cited cases. Three of those cases involved a 
situation where the agency involved never issued a 
notice indicating that there had been any 
consideration of the comments received and no 
modifications of the rule were ever made. Hence, 
the courts in Community Nutrition Institute v. 
Butz, 420 F. Supp. 751 (D.D.C. 1976), NLRB v. 
Wyman-Gordon Co.. 394 U.S. 759 (1969), and 
National Motor Freight Traffic Association v. 
United States, sup7-a, were not presented with the 
issue of whether a defectively issued rule can be 
cured by soliciting and considering comments. 

The other case cited by the commenter for the 
position that no cure is possible was City of New 
York V. Diamond, 379 F. Supp. 503 (S.D.N.Y. 
1974). In that case, the Department of Labor 
published a rule as final without any prior notice or 
opportunity for comment. There was a statement 
in the rule that any comments received in response 
thereto would be acted upon as though the rule 
were a notice of proposed rulemaking. No final 
rule showing some consideration of comments was 
ever published. 

The court held that this rule was void for failure 
to comply with the requirements of the 
Administrative Procedure Act. The rationale for 
the decision is explained at 379 F. Supp. 517, 
where the court said, "Permitting the submission 
of views after the effective date is no substitute for 
the right of interested persons to make their views 
known in time to influence the rulemaking process 
in a meaningful way." The court expressed doubts 
that an after-the-fact opportunity to comment 
would be meaningful since people would be 
unlikely to submit comments and the agency would 
be unlikely to consider changes after a fait 
accompli. 

This reasoning is inapposite in the instant 
situation. There has been no claim by this or any 
other commenter that they were not allowed to 
make their views known in time to influence the 
rulemaking process. The doubts that comments 
would be submitted can be allayed with regard to 
this interim rule. A total of 26 written comments 
were submitted in response to the invitation for 
comments in the interim rule, and many of these 
were long and detailed. The comments have been 
considered at length. Changes outlined above have 
been made to the interim rule in response to the 
comments received. 



Further, the remedy for a defectively issued rule 
is that the invalidly issued rule is void and the 
agency must follow the notice and comment 
procedures before promulgating any new rule on 
the subject. In this case, voiding the permanent 
rule and requiring the agency to solicit comments 
is unnecessary. Detailed comments have already 
been submitted by representatives of many 
different segments of the interested public. 
Reissuance of a proposal identical to the interim 
rule would serve no useful purpose. 

2. General comments. Several commenters 
expressed concern that the issuance of Part 510 
signalled an end to a relatively cooperative 
relationship concerning the agency's information 
gathering needs, and a beginning of a new, more 
adversarial relationship. NHTSA believes this 
concern is unfounded. The agency has always had 
the power to compel the production of information, 
and has in fact made numerous mandatory 
requests for information before the issuance of 
Part 510. Part 510 is simply an effort by the 
agency to state its authority with regard to 
information gathering, and set forth the 
procedures it will follow in exercising that 
authority, as well as setting forth the rights parties 
have when confronted with compulsory process by 
this agency. 

The existence of this rule will not change the 
agency's general reliance on the voluntary 
submission of information. For its part, the agency 
will continue where feasible to rely on persons and 
entities to voluntarily provide the agency with 
information if the party will do so. NHTSA 
believes that most parties will continue to do so, 
since it is in the interest of those persons, as well as 
that of the agency and the public, for NHTSA to be 
well informed in its activities. 

There were also repeated concerns that the 
information gathering powers in Part 510 are 
potentially oppressive, and could violate the right 
to privacy. The information gathering authority of 
this agency has been used and will continue to be 
used in a responsible manner. 

Persons subject to the agency's information 
gathering powers have protections more secure 
than this agency's assurances of good intent. 
Under the provision of Part 510, persons may 
informally protest the exercise of the information 
gathering powers and seek to informally negotiate 
terms of compliance that would not be oppressive. 
If the party chooses, there are more formal ways of 



PART 510; PRE 3 



protesting at the administrative level, such as 
filing motions to quash or modify the process 
before the Deputy Administrator. Finally, a person 
who has been served with compulsory process and 
exhausted the available administrative remedies 
may raise any available defense in an action 
brought by NHTSA to enforce the process in the 
appropriate United States District Court. 

A number of commenters, particularly those 
representing small businesses, stated that 
additional Federal paperwork requirements would 
be unbearable. This agency is aware of the 
problems caused business, especially smaller 
businesses, by requirements which cause the 
business to prepare more paperwork. As explained 
above, issuance of this rule will not lead to a 
significant change in the information gathering 
practices of this agency. 

One commenter inquired whether the agency 
would seek out differing opinions in the 
information gathering process. NHTSA has 
always tried to obtain a variety of views in its 
information gathering activities, particularly in 
the area of rulemaking, where the policy issues 
involved are best considered in the light of 
contrasting opinion. The agency has in the past 
sought information and views from various 
persons and entities. Typically, voluntary requests 
and compulsory process are sent to manufacturers, 
since they are most likely to possess the type of 
information needed by the agency. To inform the 
public of these information gathering efforts, 
copies of the process and requests are placed in the 
dockets. This information gathering has been 
supplemented at the notice and comment stage of 
rulemaking by such means as inviting public 
participation to ensure that a wide range of views 
is represented. 

Several commenters expressed the view that the 
information gathering powers discussed in Part 
510 were unnecessary, duplicative of the authority 
of the National Transportation Safety Board, and 
not contemplated by Congress. It is clear that 
Congress has given the agency broad information 
gathering powers. Before, the 1974 amendments to 
the Safety Act, NHTSA's investigative and 
information gathering authority under that Act 
was relatively circumscribed. In 1974, the 
Congress amended the Safety Act to give the 
agency broad authority similar to the authority it 
already possessed under Title I of the Cost Savings 



Act. With respect to the 1974 amendments, the 
House Committee stated that the amendments 
authorize: 
the Secretary to conduct informational hearings 
and to obtain evidence from any person who has 
information relevant to the implementation of 
the Act. Despite the vital importance of 
information gathering to successful 
implementation of the Act, the Secretary does not 
possess general authority for this purpose. This 
lack is anomalous in view of the extensive 
information gathering authority in the property 
damage reduction provisions of the Motor 
Vehicle Information and Cost Savings Act. This 
paragraph would give the Secretary similar 
broad authority in the more important pursuit of 
preventing highway deaths and injuries. 
(emphasis added) H. Rep. 93-1191, 93rd Cong., 
2d Sess. at 36-37. 

In connection with the agency's duties under 
Title V of the Cost Savings Act, dealing with 
automotive fuel economy, Congress granted 
similar broad information gathering authority in 
section 505. To assist NHTSA in its duties to 
prevent odometer fraud. Congress also granted 
the agency broad information gathering powers in 
Title IV of the Cost Savings Act at section 414. 

NHTSA's information gathering powers 
complement, but do not duplicate those of the 
National Transportation Safety Board (NTSB). 
The functions and information needs of the two 
agencies, even in the safety area, differ 
significantly. The function of the NTSB is to 
investigate significant transportation accidents, 
whether on the highways, rails, sea, or air, to 
determine the cause of those accidents. NTSB then 
publicly reports the results of these investigations. 
It also issues general recommendations for 
reducing the risks of accidents and publishes 
reports on the general transportation safety 
consciousness of other government agencies. 

The functions of NHTSA include issuing specific 
rules to prevent highway deaths and injuries, 
reduce property damage in the event of an 
accident, increase the average fuel economy of 
automobiles, and prevent odometer fraud. Any 
validly issued rule which is violated subjects the 
violator to civil penalties. These differing functions 
illustrate why the two agencies have differing 
information needs. Further NTSB does not obtain 



PART 510; PRE 4 



any information which could be used to assist 
NHTSA in its fuel economy, damageability, or 
odometer fraud activities. With respect to 
NHTSA's safety activities, this agency is 
concerned with more than just the cause of an 
accident. NHTSA must also obtain information 
which could support the establishment of safety 
standards in the area, establish that there has been 
some noncompliance with such standards, or show 
the existence of a safety-related defect. 

3. Specific comments. 

a. Recitation of authority. A commenter 
suggested that Part 510 require that any process 
issued thereunder indicate the statute that 
authorizes the particular process. The agency 
agrees that this is a reasonable requirement, and 
§510.3(b) (2) of the final rule includes this 
requirement. The agency would like to note that 
the practice under the interim rule has been to 
indicate the statutory basis for the process issued 
thereunder, although the interim rule did not 
require this. 

b. State77ient of purpose. There were also a 
number of comments suggesting that Part 510 
should be amended to require that any compulsory 
process contain a brief description of the purpose 
and scope of the investigation in connection with 
which the process is issued, so that a respondent or 
a reviewing court would have a basis for 
determining whether the process is reasonably 
relevant to that investigation. This agency agrees 
to change the interim rule to add a requirement in 
S 510.3 (b) (4) of the final rule that compulsory 
process contain a brief description of the purpose 
and scope of the agency's investigation. Again, the 
agency notes that process issued under the interim 
rule has routinely carried a brief description of the 
purpose of the agency's investigation. 

It must be kept firmly in mind that the agency 

need not and will not go into a detailed and specific 

discourse about any investigation to support 

compulsory process. As stated by the Court of 

Appeals for the District of Columbia Circuit in 

Federal Trade Commission v. Texaco, 555 F.2d 864 

(D.C. Cir.); cert, den., 431 U.S. 974 (1977): 

... an investigating agency is under no 

obligation to propound a narrowly focused 

theorj' of a possible future case. Accordingly, the 

relevance of the agency's subpoena requests may 

be measured only against the general purposes 

of its investigation. 555 F. 2d at 874 (emphasis in 

original) 



More recently, the District Court for the District 

of Columbia decided a case dealing specifically 

with the information gathering powers of NHTSA 

in^lJyited States v. Firestone Tire and Rubber Co., 

455 F. Supp. 1072 (D.D.C 1978). The court there 

addressed this issue saying: 

The agency need not narrow its focus from the 

beginning, and it is not for this court to 

determine whether the information sought is 

relevant to whatever eventual action the agency 

might take. This court may look only to the 

general purpose of the investigation and 

determine if the information sought, however 

broad, is relevant to that purpose. 455 F. Supp. 

at 1083 (emphasis in original) 

One commenter suggested that Part 510 be 

amended to require that compulsory process 

inform the respondent of the identity of the person 

or entity under investigation. In most enforcement 

investigations the agency now identifies the 

persons subject to the investigation in its 

information requests and compulsory process. The 

agency must be free, however, to gather 

information relevant to the general purpose of 

investigations which are not yet focused on 

potential violations and violators. There may also 

be investigations in which nondisclosure of the 

identity of those under investigation will be 

necessary to prevent harm to the outcome of the 

investigations or harm to informants. The 

Supreme Court has said that it is a proper purpose 

for an administrative subpoena "to discover and 

procure evidence, not to prove a pending charge or 

complaint, but upon which to make one if, in the 

Administrator's judgment, the facts thus 

discovered should justify doing so." Oklahoma 

Press Publishing Co. v. Walling. 327 U.S. 186, at 

201 (1946). In other words, agency investigations 

and compulsory process issued in connection with 

those investigations need not be focused on a 

limited number of persons or entities, but can be 

intended simply to determine if there are violations 

of any standards; United States v. Morton Salt Co., 

338 U.S. 632 (1950). Adoption of the requirement 

urged by this commenter in all cases would unduly 

hamper NHTSA's ability to conduct these 

authorized and proper types of investigations and 

the comment is, therefore, rejected. 

c. Production of documents. Interim Part 510 
listed a subpoena duces tecum as the only form of 
compulsory process through which this agency 



PART 510; PRE 5 



could compel the production of documents. 
Although it was not specifically identified as such, 
the authority to issue general or special orders 
includes the authority to compel the production of 
documents. 

The agency's authority to issue a type of 

compulsory process that required the production of 

documents outside the context of a hearing, in 

which a subpoena would be issued, was upheld in 

United States v. Firestone Tire and Rubber Co., 

supra. In that case, NHTSA issued a special order 

to Firestone commanding the company to produce 

and provide information about a group of 

documents. Firestone specifically challenged the 

agency's authority to compel the production of 

documents outside the context of a hearing. 

NHTSA argued that section 112 (c) (2) of the 

Safety Act (15 U.S.C. 1401 (c) (2)) gave the agency 

this authority . The court analyzed the legislative 

history of this section and found that Congress had 

intended to give the agency broad investigatory 

powers. In conclusion, the court said: 

Following Firestone's argument would 

emasculate these newly-granted investigatory 

powers. As such, the court must read the 

requirements of this Act within the context of 

Congressional intent. The Secretary's 

investigative power is broad enough to compel 

the production of documents and the analysis 

thereof. 455 F. Supp. at 1082. 

It is clear from this analysis that NHTSA has the 

power to compel the production of documents by 

the use of general or special orders under the 

Safety Act. Sections 104 (a)(2), 204(b), 414 (c) (2), 

and 505 (b) (1) (B) of the Cost Savings Act (15 

U.S.C. 1914 (a) (2), 1944 (b), 1990d (c) (2), and 2005 

(b) (1) (B)) use language identical to that used in 

section 112 (c) (2) of the Safety Act. The use of 

identical language shows the same intent to give 

NHTSA broad authority and necessarily grants 

that broad authority. 

To make it explicit in this final rule that the 
agency may exercise this authority, a form of 
compulsory process not specifically set forth in the 
interim rule has been added to this rule. The 
process is called a written request for the 
production of documents and things. This process 
may be issued alone or as a part of a general or 
special order. A written request for the production 
of documents and things is the functional 
equivalent of a subpoena deces tecum. 

d. Service of process; when and where retu7~nable. 
One commenter argued that service of compulsory 



process should be effected only by personal 
service, rather than allowing the agency the option 
of mail service, as is permitted by section 510.3(c). 
The reason offered for this requested change is 
that personal service is the only permissible service 
for process issued by the courts of the United 
States in civil matters, as set forth in Rule 45 (c) of 
the Federal Rules of Civil Procedure. Personal 
service, of course, offers the greatest certainty 
that the person named in the process received 
actual notice thereof. However, a requirement of 
personal service would add a great deal of cost, 
time, and burden for the agency in connection with 
the issuance of compulsory process. 

The commenter cited no authority which would 
prohibit the agency from effecting service by mail, 
nor is the agency aware of any such authority. In 
fact, many Federal agencies use mail service for 
their compulsory process. See, e.g., 16 CFR §4.4 (a) 
(Federal Trade Commission); 17 CFR § 201.4(b) (3) 
(Securities and Exchange Commission). The 
judgment made by these agencies is that the 
possibility of a party not receiving notice by mail 
service is so slight that the additional expenditure 
of taxpayers' money required to effect personal 
service would not be justified. This agency concurs 
with that determination and will, therefore, permit 
service by registered or certified mail. If the 
respondent does not receive the process when it is 
served by mail, NHTSA will give that fact due 
consideration when determining the appropriate 
action to be taken in response to the respondent's 
failure to comply. 

The same commenter raised the question of 
issuing compulsory process to foreign citizens or 
nationals of foreign countries residing abroad who 
are not served with process in the United States, 
or who have not appointed an agent for the service 
of process in the United States. The commenter 
argued that subpoenas to such persons would have 
to be considered requests, rather than commands, 
because such persons would be beyond the 
jurisdiction of the United States. The agency's 
compulsory process is bounded by the 
jurisdictional limits of the United States courts 
where the process is enforceable. The agency has 
no doubt, however, that a corporation or perosn 
amenable to service can be required to produce 
records located outside the territorial limits of the 
United States. 



PART 510; PRE 6 



Several commenters suggested that when 
service is effected by mail, the date of service 
should be the date the respondent receives the 
process, rather than the date on which the service 
is mailed, with three additional days allowed to 
perform the required act, as is required by 
§ 510.3(d). One commenter urged that the agency 
could easily determine the date of receipt by using 
return receipt mailing methods. The provision in 
the interim rule was adopted directly from Rule 6 
(e) of the Federal Rules of Civil Procedure. This 
provision has not led to any difficulties or 
unfairness in the Federal courts such as some 
commenters suggested would result from this 
provision in Part 510. 

Return receipt mail would add costs for the 
agency and could add delay and cause other 
difficulties in delivering process. These burdens 
would not be outweighed by being able to ensure 
absolutely that the respondents actually had 
available to them the period to respond to the 
process which was stated in the process. The 
agency will always entertain motions to extend the 
return date of its process, if the respondent can 
show that the period available to it was inadequate. 
Since these motions can be filed for all process 
issued by the agency, the benefit of using return 
receipt mailing would be insubstantial. 

One commenter suggested that Part 510 should 
allow service of compulsory process to a business 
to be made upon an agent designated to receive 
service, as an alternative to the agent-in-charge. 
NHTSA agrees with this suggestion, and the rule 
has been modified to reflect this new provision. 

Many commenters addressed the issue of the 
amount of time which should be permitted to 
respond to compulsory process. Generally, the 
commenters indicated that compulsory process 
should be returnable in a reasonable amount of 
time. Although this was not specifically required 
by the interim rule, NHTSA intends to continue its 
policy of requiring that process be returnable in a 
reasonable amount of time. Further, NHTSA 
believes that the requirement for reasonable 
amount of time to respond to compulsory process 
is so fundamental that it need not be explicitly 
stated in the final rule. 

Some commenters suggested that a certain 
period of time, such as 30 days, be presumed by the 
agency to be a minimum reasonable time. Other 
commenters noted special factors which should 



lengthen the amount of time that could be 
considered reasonable. Examples of these special 
factors were language differences and the size of 
the companies to which the process was directed. 

NHTSA concurs with the implicit statement in 
these latter comments that the determination of 
what is a reasonable period of time to respond 
must necessarily be an ad hoc one, which will of 
necessity consider the facts involved in each 
individual case. The agency notes that, in addition 
to the burden imposed on the respondents, the 
determination of what is a reasonable time period 
in which to respond must also consider the 
agency's need for the information so that it can 
perform its functions in a timely manner. 
However, the fact that a determination of what is a 
reasonable period of time must, almost by 
definition, be made on a case-by-case basis leads 
the agency to conclude that the establishment of 
even a presumptively reasonable amount of time in 
which to respond would unnecessarily limit the 
ability to consider the particular facts of each case. 
In the past, NHTSA has been willing to grant 
extensions of time for responses to compulsory 
process where it appeared that such extensions 
were necessary and consistent with the public 
interest. No departure from that policy is 
contemplated. 

One commenter inquired where NHTSA's 
compulsory process would be returnable. Although 
most compulsory process will be returnable at the 
offices of NHTSA, situations may arise where the 
process would be returned at some other place. 
This question of where process must be returned 
should also be considered on a case-by-case basis. 

e. Investigational hearings. The interim rule set 
forth one section which was intended to cover all 
agency hearings and which referred to all hearings 
as investigational hearings. These hearings were 
structured to be a mechanism with which to gather 
facts, opinions or other data relevant to an agency 
investigation, inquiry or rulemaking and were not 
adjudicative or quasi-adjudicative procedures. The 
presiding officer at these hearings would have had 
the authority to rule on objections, "unless an 
immediate ruling would be unwarranted, and 
except where a refusal to answer was based upon 
the privilege against self-incrimination." This 
limitation was necessary because the presiding 
officer would not be a judicial officer, and so would 
not rule on any legal points. 



PART 510; PRE 7 



The problem which became apparent with this 
formulation was that the differences between 
hearings in connection with rulemaking and 
hearings in connection with enforcement 
proceedings make it impossible to decribe both 
hearings in one section. Although the section in the 
interim rule dealing with investigational hearings 
did set forth all fundamental points of the two 
types of hearings which the agency will hold, it was 
not an entirely accurate description of either 
hearing. 

In this final rule, § 510.5 sets forth the 
procedures for hearings in connection with 
rulemaking, which are called "information 
gathering hearings." Section 510.6 sets forth the 
procedures for hearings held in connection with 
enforcement investigations, and these are now 
called "administrative depositions." By separating 
these types of hearings, this final rule provides a 
more accurate description of each. 

The information gathering hearings will 
generally be open to the pubhc. Information 
gathering hearings include hearings in connection 
with pending rulemaking actions, hearings on an 
initial determination by the agency of a safety- 
related defect or noncompliance with an applicable 
Federal motor vehicle safety standard, held 
pursuant to the authority of section 152 of the 
Safety Act (15 U.S.C. 1412), and hearings on 
whether a manufacturer has reasonably met its 
obligation to notify and remedy a defect or failure 
to comply, which hearings are held pursuant to the 
authority of section 156 of the Safety Act (15 
U.S.C. 1416). In addition to the presiding officer, 
one or more other persons may be designated as 
members of the panel. The members of the panel 
may question any witness. If any person not a 
member of the panel wishes to pose a question to a 
witness, that person may write down the question 
and submit it to the panel. Any member of the 
panel may then pose the question if that member 
feels it appropriate to do so. The presiding officer 
at an information gathering hearing runs the 
hearing, and ensures that it proceeds in an orderly 
fashion. 

The administrative deposition, which is held in 
connection with enforcement investigations, will 
generally be closed to the public. This proceeding 
has been adapted from the procedures for 
deposition procedures set forth in the Federal 



Rules of Civil Procedure. An officer authorized to 
administer oaths will put the deponent under oath 
and record the person's testimony. NHTSA wUl 
examine the witness first and then the witness's 
attorney may examine the witness. 

A number of commenters argued that the right 
to counsel provided in interim Part 510 was too 
restrictive. One commenter stated that the 
provisions of the interim rule, which allowed any 
witness at an investigational hearing to be 
accompanied by counsel, to confer with counsel, 
and to allow counsel to raise and explain any 
objections to any question asked of the witness was 
a limitation on the right to counsel guaranteed in 
the Administrative Procedure Act at 5 U.S.C. 555, 
where a person compelled to appear in person 
before an agency is entitled to be "accompanied, 
represented and advised" by counsel. This 
commenter stated that the words "accompanied", 
"represented, " and "advised" have different 
shades of meaning signifying varying rights under 
the law. NHTSA agrees with this latter statement. 
It is not clear to this agency, however, what the 
words "accompanied, represented and advised" 
mean in addition to the rights to have counsel 
present, to confer with that counsel, and to have 
that counsel raise and explain objections, which 
were granted in the interim rule. Notwithstanding 
this point, NHTSA has no objections to modifying 
the language of Part 510 in this final rule to track 
the language of the Administrative Procedure Act. 

Another commenter suggested that the rights of 
counsel to state and argue objections should be 
expanded. The interim rule provided that counsel 
could object to any quetion and state the basis for 
that objection on the record. This commenter 
believes that the right to counsel consists of, at a 
minimum, the right to make objections on the 
record and argue briefly the basis for the 
objections. NHTSA does not believe that it would 
be appropriate to modify the final rule to permit 
counsel to argue objections. In the information 
gathering hearings, the presiding officer will not 
be ruling on legal points, so no useful purpose 
would be served by airing legal points at length 
during the course of the hearing. With respect to 
the administrative depositions, the presiding 
officer as set forth in the interim rule has been 
replaced in this final rule by an officer authorized 
to administer oaths, and this officer will not rule on 
any objections. Accordingly, once the objection has 



PART 510; PRE 8 



been stated and the basis therefor explained, no 
purpose, other than delaying the deposition, would 
be served by arguing the objection. 

Several commenters urged that the final rule 
should allow cross-examination of witnesses at 
investigational hearings. Since the investigational 
hearings in the interim rule have been divided into 
information gathering hearings and administrative 
depositions in this final rule, the comment has been 
considered with respect to both forms of hearings. 
At an information gathering hearing, there will be 
more than one witness, and these witnesses will be 
expressing differing views and opinions. If each of 
these witnesses could be cross-examined the 
hearing would be lengthened considerably. 
Especially since interested persons may submit 
questions to be asked by the presiding panel and 
are typically permitted a chance to supplement 
their comments after these hearings, the agency 
concludes that the rule should not be amended to 
permit cross-examination of witnesses. 

Administrative depositions will focus on one 
witness, and the testimony of that witness will be 
considered by NHTSA in determining whether an 
enforcement action is necessary. If the agency 
decides to pursue an enforcement action it will be 
important that the testimony of the witness be as 
probative and accurate as possible. In this context, 
examination of the witnesses will generally be 
more administratively workable, because there will 
be only a single witness. The final rule has been 
accordingly modified to allow the witness's 
attorney or representative to examine the witness 
after NHTSA finishes its examination of the 
witness. Following this examination, NHTSA may 
reexamine the witness, and the witness's attorney 
may then reexamine the witness, and so forth, as 
appropriate. 

Many objections were raised to the provision in 
the interim rule which excluded persons who were 
subpoenaed to testify at an investigational hearing 
from acting as counsel or representative for any 
other witnesses at that investigational hearing. 
One commenter argues that this provision could 
easily be abused by NHTSA to improperly exclude 
a counsel or representative. After a consideration 
of these comments and a reexamination of the 
exclusion, the agency has determined that the final 
rule should be modified. 

The reason for including this authority was to 
prevent a situation where a counsel or 



representative advising a number of persons in the 
same proceeding could interfere with the 
investigation by, either consciously or 
subconsciously, tailoring testimony to conform 
with testimony already given. Several courts have 
stated that this general purpose is legitimate, and 
could support a decision to exclude a counsel or 
representative in these circumstances. SEC v. 
Csapo, 553 F.2d 7 (D.C. Cir. 1976); SEC v. Higashi, 
359 F.2d 550 (9th Cir 1966). However, both these 
cases indicate that authority to exclude counsel 
must be kept within permissible limits. The 
automatic exclusion of counsel has been deleted for 
both the information gathering hearings and the 
administrative depositions. For information 
gathering hearings § 510.5 (e) of this final rule 
retains authority for the Administrator to take 
appropriate action if a counsel or representative 
refuses to comply with the presiding officer's 
directions or to adhere to reasonable standards of 
orderly and ethical conduct. Appropriate actions 
could include the exclusion of that counsel or 
representative from the hearing. 

For an administrative deposition, the rule does 
not specifically provide for any exclusion, 
regardless of the behavior or conduct of a counsel 
or representative. In the event that it becomes 
necessary to prevent annoyance, embarrassment, 
oppression, or undue expense or delay to the 
witness or the agency, NHTSA will file an action in 
a United States District Court to seek an order to 
enforce the subpoena and to end the annoyance, 
embarrassment, oppression, or undue expense or 
delay, pursuant to the provision of § 510.6 (c) (5). 
This motion would be analogous to a motion for a 
protective order, which could be filed under Rule 
26 (c) of the Federal Rules of Civil Procedure. 

As an adjunct to this modification, the agency is 
changing the requirements of § 510.6(f) to provide 
that NHTSA may, in a nonpublic investigation and 
for good cause shown, decline to provide a copy of 
the transcript of his or her testimony to the 
witness. In those cases, the witness will be limited 
to an inspection of the transcript of the deposition. 
Such a limitation is explicitly authorized by the 
Administrative Procedure Act; 5 U.S.C. 555 (c). 
The purpose of this change is to prevent witnesses 
from tailoring their testimony to conform to 
testimony given by previous witnesses. 

One commenter suggested that the provision in 
Part 510 regarding the time in which a witness is 
allowed to sign the transcript of his or her 
testimony be made more flexible. The 30-day 



PART 510; PRE 9 



period included in the interim rule was drawn 
directly from Rule 30(e) of the Federal Rules of 
Civil Procedure, where experience has not shown 
it to be inadequate. Nonetheless, the language in 
§ 510.6 (d) has been modified to allow the agency to 
designate some period other than 30 days as the 
period by which the testimony must be signed. The 
agency will allow a longer or shorter period as 
appropriate in particular circumstances. 

A section has been added to the final rule which 
would also permit the agency to correct errors in 
the transcript of the deposition. Upon receiving a 
copy of the testimony given at the deposition, 
NHTSA would note any errors it believed had 
occurred in the transcription of the deposition, and 
forward notice of the alleged errors to the witness 
at the deposition, along with the transcript of the 
deposition. This notice would ask the witness to 
stipulate that the errors had occurred and agree to 
the corrections. If the witness would not make this 
stipulation, NHTSA would ask the presiding 
officer to have the record of the testimony reflect 
the dispute and show the NHTSA's version of the 
testimony as well as the version signed by the 
witness. The parties could then attempt to get an 
affidavit from the stenographer as to which 
version was most accurate, or take other steps to 
try to verify their version as the most accurate. 

f. Subsequent use of testimony. Several 
commenters objected to the interim rule insofar as 
it provided that testimony obtained pursuant to 
NHTSA's information gathering authority may be 
"used in any investigation or administrative or 
judicial adjudicative proceeding." It was claimed 
that that agency could not and should not attempt 
to control what a Federal judge or an 
administrative law judge would admit into 
evidence in a proceeding before the judge. It was 
further stated that the absence of certain 
procedural rights in the investigational hearings, 
such as the right to cross-examine witnesses, 
would automatically preclude the use of the 
testimony in a subsequent adjudicative proceeding. 

NHTSA obviously cannot control, nor did it seek 
to control, what a presiding judge will admit into 
the record of the proceeding over which he or she 
presides. The reason that this language appeared 
in the interim rule was to put respondents on 
notice that any information obtained under Part 
510 could be considered and used by NHTSA in the 



manner it deems most appropriate, including 
offering such information into the record of an 
administrative or judicial proceeding. Whether 
such information would be allowed into the record 
is, of course, a decision which must be made by the 
presiding judge, in accordance with the applicable 
rules of evidence. 

g. Motions to modify, limit, or quash process. A 
number of comments were received addressing 
motions to quash compulsory process. After a 
review of these comments, the agency has 
determined that the interim rule's provisions 
should be retained almost in their entirety. 

Many commenters argued that the agency 
should expand the availability of these motions, so 
that a recipient of a general or special order could 
file a motion to modify, limit, or quash that 
process. Some of these commenters argued that 
NHTSA was required to permit these motions for 
general and special orders, if it chose to permit 
them for subpoenas. This issue was before the 
court in United States v. Firestone Tire and Rubber 
Co., supra, and the court held that the interim 
rule's provisions allowing motions to modify, limit, 
or quash subpoenas, but not allowing such motions 
for general or special orders, were legally 
acceptable. 455 F. Supp. at 1080. 

As a practical matter, NHTSA issues general 
and special orders and written requests for the 
production of documents and things far more 
frequently than it does subpoenas. To require the 
Deputy Administrator to consider all of the 
possible objections to each of these forms of 
compulsory process would place an overwhelming 
burden on that office. Furthermore, the practice 
under interim Part 510 and before of not allowing 
formal objections to be filed to these types of 
compulsory process has worked very satisfactorily 
for both the agency and the respondents to its 
compulsory process. Given the acceptability of the 
present procedures and the fact that expansion of 
motions to quash to include all forms of compulsory 
process could readily be abused to delay 
compliance for frivolous and insubstantial reasons, 
the agency has determined that only subpoenas 
should be the subject of motions to modify, limit, or 
quash. 

One commenter stated that respondents to the 
agency's compulsory process should be permitted 
to informally negotiate the terms of comphance 



PART 510; PRE 10 



with that process. NHTSA believed that the 
opportunity for informal negotiation of the terms 
of compliance with process was implicit in the 
interim rule. However, the agency has no objection 
to modifying the final rule to state explicitly that 
informal negotiations as to the terms of 
compliance are permissible, so § 510.3 (f) now 
states that the Chief Counsel is authorized to 
negotiate the terms of compliance with any 
process issued under Part 510. 

As set forth in this final rule, motions requesting 
some change to the terms of process will be 
decided by the Deputy Administrator. If the 
Deputy Administrator is not available, these 
motions will be decided by the Associate 
Administrator for Administration. In response to a 
comment, the final rule makes explicit what the 
agency had considered to be implicit in the interim 
rule; i.e., the Deputy Administrator is free to 
structure relief, through modifications or 
limitations of the subpoena, to achieve the 
resolution he or she believes is most appropriate. 
The final rule has also been modified to require 
that any motions to modify, limit, or quash process 
be filed not later than 15 days after service of the 
process or five days before the return date of that 
process, whichever is earlier, except in the rare 
event that the return date is less than five days 
after the service of the process. This requirement, 
similar to time limitations on these motions 
suggested in several comments, will eliminate last 
minute filings of these motions. The elimination of 
last minute filings will serve two important 
purposes. First, these motions will not be subject 
to abuse as a means of delaying compliance. 
Second, the prompt filing of these motions will 
facilitate more reasoned responses by the NHTSA 
to such motions. 

It was suggested by many commenters that the 
filing of a motion to modify, limit, or quash should 
automatically toll the return date of the process. 
NHTSA has not adopted that suggestion, since any 
automatic tolling provision would be easily subject 
to abuse as a dilatory tactic. However, the agency 
will entertain requests to extend the return date of 
any process, and will consider such requests on the 
basis of the individual set of circumstances. The 
pendency of a good faith objection would be given 
due consideration. 

One commenter suggested that the agency 
catalog the grounds upon which process can be 



modified, limited, or quashed. The rule has not 
been changed in this way, since the agency does 
not wish to foreclose any legitimate grounds for 
protesting some process. NHTSA will state that it 
believes that most objections will be based upon the 
alleged burdensomeness of the process, some 
assertion of privilege, or a question of the 
relevance of the information. However, this is not 
an exhaustive list of the possible objections, and 
any objections will be considered on their merits. 

Many commenters objected to the provision that 
would have the Deputy Administrator deciding 
motions to quash. These commenters believed that 
the Deputy Administrator could not impartially 
decide these motions, because the process would 
have been issued by that individual, or with the 
concurrence of that individual or a superior, such 
as the Administrator. This situation was said to 
establish an institutional bias in favor of the 
validity of the process which, according to those 
commenters, violates the due process 
requirements of the Fifth Amendment. 

NHTSA believes that this comment reflects a 
serious misunderstanding of the purpose of this 
agency level mechanism for considering objections 
to the compulsory process. This mechanism will 
not be and is not intended to be an adjudication of 
the rights of the affected parties. The due process 
rights to an impartial decisionmaker do not apply 
outside the context of a determination of the rights 
of the affected parties. The sole purpose of having 
an agency review of any objections is to provide a 
respondent with a means which guarantees that 
senior agency officials will consider any objections 
raised by respondents to compulsory process 
issued by this agency. This ensures that any 
position taken on the motion or objection is the 
final agency position. Given this purpose, it is 
perfectly proper to have an official as senior as the 
Deputy Administrator personally consider the 
respondent's objections and decide the validity 
thereof. Any respondent desiring a hearing which 
comports with the due process requirements and 
determines the rights of the respective parties can 
obtain this by resisting compulsory process and 
raising its objections in an enforcement action in a 
United States District Court. 

h. Duty to supplement responses to process. 
Several comments were received relating to the 
duty to supplement responses to compulsory 



PART 510; PRE 11 



process based on after-acquired information. The 
language in the interim rule which imposed the 
duty to supplement responses was taken almost 
verbatim from Rule 26 (e) of the Federal Rules of 
Civil Procedure, which requires that a response be 
supplemented when after-acquired information 
shows that the response was incorrect when made 
or the response, though correct when made, is no 
longer correct, and the failure to amend the 
response is a knowing concealment. Two basic 
objections were raised to this requirement. First, it 
was asserted that the duty to supplement was not 
limited by any time period, and would therefore 
impose a perpetual duty to provide the agency with 
information. The commenters stated that this 
result would be extremely burdensome to 
respondents while yielding minimal benefits to the 
agency, since much of the amended information 
would concern investigations which had been 
ended. These commenters pointed out that the 
duty imposed by the Federal Rules ends when the 
litigation ends. 

NHTSA agrees with the commenters that the 
duty to supplement should not be open-ended. 
Accordingly, the final rule has modified the 
requirements of the interim rule to specify a 
limitation on the duty to supplement. If process is 
issued in connection with a rulemaking action or 
enforcement investigation, the duty to supplement 
terminates with the issuance of a final rule or 
termination of the rulemaking or with the closing 
of the investigation, respectively. In the case of 
process not issued in connection with a specific 
rulemaking action or enforcement investigation, 
the duty to supplement expires 18 months after the 
date of the response. 

It should be noted that this amendment does not 
in any way diminish the agency's authority to 
specifically require a respondent to update some 
response after the duty under this part to 
supplement has expired. Further, the authority of 
the agency to require specific supplementation of 
responses while the general duty to supplement is 
in effect is not limited by that general duty. 

The second basic objection to the duty to 
supplement as set forth in the interim rule 
concerned the burden imposed on respondents to 
correct "trivial" or "minor" errors. One 
commenter urged that the duty to supplement 
should be limited to instances where there is a 
"significant" change in the information originally 



given to NHTSA. The agency has not adopted this 
suggestion. Respondents are under a duty to give 
accurate responses to compulsory process. Errors 
which appear to be trivial or minor to a respondent 
exercising the utmost good faith may not be so 
judged by the agency in the context of all the 
information gathered by the agency. NHTSA 
believes that it must determine whether a change 
is trivial. This requirement does impose any 
significant added burden on respondents, because 
it should typically be easier for a respondent to 
write down the changed information and send it to 
NHTSA than to inform a responsible agency 
official of the change and have him or her examine 
the change to determine whether it can properly be 
deemed trivial. Since there is little additional 
burden imposed in requiring the change to be 
submitted to the agency and the information is 
necessary for NHTSA to properly perform its 
function of evaluating the significance of the 
change, the final rule does not limit the duty to 
supplement as suggested. 

One frequent comment of the duty to supplement 
was that it would be extremely burdensome for the 
respondents to constantly check their responses 
for accuracy, even if the requirement were not 
open-ended. NHTSA disagrees with this assertion. 
The duty to supplement can be wholly satisfied by 
checking on a periodic basis with the sources 
within respondent having knowledge of the area to 
determine whether any new facts or information 
have arisen which might trigger a duty to 
supplement. If there are such new facts or 
information the respondent promptly informs the 
agency about them. NHTSA agrees that this 
creates some burden for respondents, but does not 
agree that the burden is excessive or substantial. 
Moreover, NHTSA notes that much of the factual 
information which is subject to change, such as 
reports of warranty claims, is compiled for the 
respondents' own purposes on a regular basis. In 
those cases, the duty to supplement will be readily 
satisfied by making the update promptly available 
to the agency. 

i. Confidentiality of information. Great concern 
was expressed over the confidentiality of alleged 
trade secret and confidential business information 
obtained by the agency by using its information 
gathering powers. NHTSA has published a notice 
of proposed rulemaking on this general subject 
entitled Part 512, Confidential business 



PART 510; PRE 12 



information; 43 FR 22412, May 25, 1978. That 
notice proposes a detailed scheme for the 
treatment of confidential business information 
received by NHTSA. The agency anticipates that 
the final rule on this subject will soon be published. 
When Part 512 is published, its requirements will 
supersede those set forth in § 510.3 (e). Until that 
time, however, NHTSA will follow the procedures 
set forth in § 510.3 (e) for handling and evaluating 
allegedly confidential information obtained by the 
use of compulsory process. That paragraph 
provides that any claims for confidentiality must 
be made in writing, that information for which 
confidential treatment is requested will be kept 
confidential until the confidentiality claim is 
evaluated, and that the agency will afford 
reasonable advance notice to the submitter of the 
information of the contemplated release of any 
information for which the submitter requested 
confidential treatment. 

j. Fees. Several comments were received 
addressing the issue of compensation by NHTSA 
of persons or entities for expenses incurred in 
connection with the responses to the agency's 
compulsory process. One commenter suggested 
that the agency make explicit that the term 
"person", as used in the section which provides 
reimbursement for the travel expenses of 
"persons" subpoenaed to testify at hearings, 
includes officers, agents, and employees of 
corporations. NHTSA has amended the rule to 
state that the term "person" as used in this and all 
other sections of the rule includes agents, officers, 
and employees of corporations in their individual 
capacities. 

One commenter stated that a witness compelled 
to testify orally before the agency should not be 
required to pay for a copy of his or her testimony. 
The agency still finds it reasonable to require a 
person who wishes to retain a copy of his or her 
testimony at either an information gathering 
hearing or an administrative deposition to pay for 
that copy in most circumstances. 

Copies of transcripts will be furnished without 
charge or at a reduced charge if the Associate 
Administrator for Administration determines that 
a waiver or reduction of the fee is in the public 
interest because furnishing the information can be 
considered as primarily benefitting the general 
public. 



Any witness has the right to inspect the 
transcript of his or her testimony at no charge, and 
a provision is made in connection with 
administrative depositions for the submission of a 
copy of the witness's testimony to that witness for 
his or her signature. Hence, NHTSA does not 
believe that there is any financial barrier to the 
opportunity of any witness to thoroughly review 
his or her testimony. 

Several commenters stated that respondents to 
compulsory process should be reimbursed 
completely for their expenses incurred in 
complying with the process. The agency does not 
believe that complete reimbursement is 
appropriate. First, it must be noted that the 
provision for reimbursement contained in 
NHTSA's authorizing statutes allows the agency 
to pay witnesses the same mileage and fees that 
can be paid witnesses in the courts of the United 
States. See section 112 (c) (5) of the Safety Act, 15 
U.S.C. 1401 (c) (5) and sections 104(a) (5), 204 (e), 
414 (c) (5), and 505 (b) (3) of the Cost Savings Act, 
15 U.S.C. 1914 (a) (5), 1944 (e), 1990d (c) (5), and 
2005(b) (3). Part 510.11 of this rule expressly 
authorizes the payment of these fees. 

NHTSA recognizes that the expense associated 
with complying with compulsory process is a major 
component of the burdensomeness of that process. 
The question, however, is whether an undue 
burden is imposed. If respondents believe the 
burden to be undue, they can file a motion with 
NHTSA to quash the process and can litigate this 
issue if the agency does not resolve it to their 
satisfaction. 

k. Remedies for failure to comply with 
compulsory process. Several commenters made 
strenuous objection to the provision of the interim 
rale which allows the agency to seek civil penalties 
against a respondent which fails to comply with 
NHTSA's compulsory process. The arguments 
made were basically that the availability of civil 
penalties for failure to comply was not 
contemplated or authorized by the Cost Savings 
Act or the Safety Act, and that if the penalties 
were authorized, that authorization would be 
unconstitutional. NHTSA rejects these 
contentions for the reasons set forth below. 

There were two primary arguments raised to 
support the view that the agency does not have the 
authority to seek the imposition of civil penalties 



PART 510; PRE 13 



for a failure to comply with compulsory process. 
First, it was asserted that the authorizing statutes 
provide judicial enforcement of compulsory 
process in a United States District Court as an 
exclusive remedy for the failure to comply with 
compulsory process. With respect to Titles I, II, 
and IV of the Cost Savings Act, this assertion is 
plainly inaccurate. Sections 106 (a) (3), 206(1), and 
416 of the Cost Savings Act (15 U.S.C. 1916(a) (3), 
1946 (1), and 1990 (f) state that no person shall fail 
to provide the information requested by the 
agency. A violation of this prohibition subjects the 
violator to civil penalties, which shall be assessed 
by the agency. Sections 107 (a), 208 (a), and 412 (a) 
^f the Cost Savings Act; 15 U.S.C. 1917 (a) 1948 (a) 
and 1990b (a). 

The commenters specifically pointed to the fact 
that the Safety Act at section 112 (c) (4), 15 U.S.C. 
1401 (c) (4), and Title V of the Cost Savings Act at 
section 505 (c) (2), 15 U.S.C. 2005 (c) (2), provide 
that the agency may seek judicial enforcement in 
the case of a failure to respond to compulsory 
process. However, the commenters did not point 
out that the respective Acts also authorize the 
agency to impose civil penalties for a failure to 
comply with any "rule, regulation, or order" 
issued under the information gathering authority 
contained in that title; section 108 (a) (1) (E) and 
109 (a) of the Safety Act, 15 U.S.C. 1397 (a) (4) and 
1398 (a), and section 507 (3) and 508 of the Cost 
Savings Act, 15 U.S.C. 2007 (3) and 2008. No 
commenter cited any language in the statutes 
themselves or the relevant legislative history 
which states that judicial enforcement was 
intended to be the exclusive remedy for a failure to 
comply. 

NHTSA believes that the availablity of civil 
penalties for a failure to comply with compulsory 
process is a necessary complement to judicial 
enforcement. If judicial enforcement were the sole 
remedy for failure to comply with the agency's 
compulsory process, a respondent could always fail 
to comply with the agency's compulsory process 
until such time as the agency began a judicial 
enforcement proceeding. Then, at any time before 
the court entered its order compelling compliance 
with agency process, the respondent could comply 
with the order, thereby mooting the enforcement 
action. Any respondent would have available to it a 
penalty-free mechanism for delaying compliance 
with NHTSA's compulsory process. There is no 



indication that Congress intended or sanctioned 
such a mechanism. Considering "the vital 
importance of information gathering to the 
successful implementation of the Act," H.R. Rep. 
93-1191, 93 Cong., 2d Sess. at 37, and the absence 
of any indication whatsoever that judicial 
enforcement was to be the sole remedy, NHTSA is 
not persuaded by this argument. 

The second argument raised to support the view 
that the agency lacks authority to impose civil 
penalties was that subpoenas and general and 
special orders were not "orders" within the 
meaning of section 108 (a) (1) (E) of the Safety Act 
and section 507 (3) of the Cost Savings Act, the 
violation of which can give rise to civil penalties. 
The argument is that subpoenas are not "orders", 
because both statutes discuss "order" and 
"subpoena" in the disjunctive. Since a subpoena is 
not an order, the argument concludes that general 
and special orders are not "orders" either, because 
general and special orders are the functional 
equivalent of subpoenas. 

This argument is not convincing. It is a well 
established and accepted rule of statutory 
construction that the words of a statute are to be 
given their common meaning, absent some 
indication of a contrary legislative intent. 2A 
Sutherland, Statutory Construction, § 47.28 and 
the cases cited therein (4th ed. 1973). The word 
"order" is defined in Webster's Second 
International Dictionary as "a rule or regulation 
made by competent authority; also a command; 
mandate; precept; direction". The Oxford English 
Dictionary defines "order" as "an authoritative 
direction, injunction, mandate; a command, oral or 
written; an instruction." It is obvious that both 
subpoenas and general and special orders fall 
within this common meaning of the word "order", 
and that the Acts must be construed in that 
manner unless there is a contrary legislative 
intent. 

The only authority which has been cited by a 
commenter to show a contrary intent is the 
language in Section 112 (c) (4) of the Safety Act, 
and section 505 (b) (2) of the Cost Savings (called 
"the judicial enforcement sections" for the rest of 
this discussion) giving the district court of the 
United States authority to compel compliance with 
any subpoena or order issued by NHTSA. General 
and special orders are specifically referred to as 
"orders" in these judicial enforcement sections. 



PART 510; PRE 14 



Sections 108 (a) (1) (E) and 109 of the Safety Act 
and 507 (3) and 508 of the Cost Savings Act (called 
the civil penalty sections for the rest of this 
discussion) give NHTSA authority to impose civil 
penalties for the violation of any "rule, regulation, 
or order". There is no reason to believe that the 
"order" referred to in the civil penalty sections 
does not include the forms of process included 
within the meaning of "order" in the judicial 
enforcement sections. Congress has shown its 
intent that the violation of general and special 
orders issued by NHTSA would subject the 
violator to possible civil penalties. 

The reference to subpoenas and orders in the 
disjunctive occurs in the judicial enforcement 
sections, which provide that compliance with a 
subpoena or an order can be mandated by a court. 
NHTSA's authority to issue subpoenas and general 
and special orders comes from two different grants 
of authority, and so it is grammatically necessary 
to use the disjunctive to indicate that compliance 
with either can be mandated by a court. There is, 
however, no indication in the Acts or the 
legislative history that Congress intended for 
subpoenas and general and special orders to be 
enforced differently. Indeed, the judicial 
enforcement sections treat these forms of process 
identically for enforcement purposes. Accordingly, 
the agency concludes that the use of the disjunctive 
in the judicial enforcement sections is not by itself 
a sufficient showing of a Congressional intent that 
subpoenas not be included within the meaning of 
"order" as that term is used in the civil penalty 
section, and so Congress intended that the word 
"order" as used in the civil penalty sections have 
its common meaning. The common meaning 
embraces all compulsory process issued by 
NHTSA, whether general or special orders, 
subpoenas, or written requests for the production 
of documents and things. 

The commenters raised two Constitutional 
arguments in support of the position that the civil 
penalties could not be imposed for failure to 
comply with the agency's compulsory process. The 
first argument was that the agency could not 
constitutionally impose civil penalties, since this 
self-enforcement would give judicial power to 
NHTSA, a grant Congress could not make. One 
commenter was concerned that NHTSA was 



trying to set up a procedure where the agency 
could hold a respondent in contempt. NHTSA has 
never intended to hold a non-complying 
respondent in contempt of the agency, and the 
interim rule contained no such provision. To 
enforce and collect any civil penalty will require 
the agency to bring an action in a United States 
District Court, requesting the court to enforce the 
penalty. No question of self-enforcement arises in 
connection with this procedure. 

A more complex issue was raised by commenters 
in the second Constitutional argument, which was 
that a party desiring to mount a good faith 
challenge to the validity of compulsory process 
issued by the agency could do so only by refusing to 
comply with that process. If the agency were to 
impose a penalty for this refusal, the argument 
runs, the respondent would have had a penalty 
imposed on it for exercising its right to have a 
judicial review of the validity of the process. 

NHTSA agrees with the commenters' assertion 
that there is a due process right to contest the 
validity of a legislative or administrative order 
without having to pay substantial penalties if the 
suit is lost. However, this right does not mean that 
penalties begin to accrue only upon a final 
judgment in NHTSA's favor. In St. Regis Paper 
Co. V. United States, 368 U.S. 208 (1961), the FTC 
had ordered a company to file special reports with 
that agency. Section 10 of the Federal Trade 
Commission Act, 15 U.S.C. 50, specified a penalty 
of $100 for each day a special report was overdue. 
The company challenged this provision of the Act, 
alleging that it had been denied its day in court to 
challenge the validity of the underlying order to 
file special reports. 'The company alleged that, in 
effect, the order was not judicially reviewable 
except if the company paid the civil penalty, and 
that this scheme violated the due process 
requirements. 

The Supreme Court found this penalty scheme to 
be consistent with due process, because the 
petitioner had an opportunity for judicial review 
without having to pay the penalty. Specifically, the 
Court found that the company could have filed an 
action for declaratory judgment and a concurrent 
motion to stay the effective date of the FTC order 
pending a ruling by the court on the validity of the 
order. This opportunity for review is sufficient to 
satisfy the requirements of due process. 368 U.S. at 
225-227. 



PART 510; PRE 15 



This reasoning has been applied to the civil 
penalty provisions for failure to comply with a 
NHTSA order requiring a manufacturer to furnish 
notification of a defect to owners, purchasers, and 
dealers, and to remedy the defect without charge, 
as specified in section 152 of the Safety Act (15 
U.S.C. 1412). In Ford Motor Co. v. Coleman, 402 F. 
Supp. 475 (D.D.C. 1975) affdA2.5 U.S. 927 (1976); 
it was asserted that this statutory provision 
violated the due process rights of the manufacturer 
by forcing the manufacturer to either comply with 
an erroneous order or risk a substantial civil 
penalty if it lost its challenge to the order. The 
court stated that this statutory provision did not 
offend due process rights, since a manufacturer 
which could present a substantial, nonfrivolous 
challenge to the validity of NHTSA's 
determination could obtain a preliminary 
injunction against the enforcement of the order. 
The court would have jurisdiction to issue a 
temporary order restraining the imposition of the 
penalties pending its determination of the motion 
for preliminary injunction, and to issue a 
preliminary injunction that would stay the accrual 
of penalties until the completion of the de. novo 
enforcement proceedings in district court on the 
underlying order. The civil penalties would begin 
accumulating against the manufacturer only if the 
manufacturer could not convince the court to issue 
a preliminary injunction, i.e., if the manufacturer 
could not show that it had reasonable and 
substantial grounds for contesting the order. 
According to the opinion, the due process right to a 
judicial determination of the validity of the order 
does not require that a manufacturer be permitted 
to press a frivolous or insubstantial objection 
without risk of a penalty. 

Several commenters cited Reisman v. Caplin, 
375 U.S. 440 (1964) as authority for the proposition 
that the civil penalty scheme as set forth in the 
interim rule would violate due process rights. That 



case involved an order by the Commissioner of 
Internal Revenue to a taxpayer to furnish certain 
documents. The taxpayer contended that since he 
had to risk a large fine and imprisonment for not 
complying with the order, he had been effectively 
denied the due process right to a judicial review of 
the validity of the order. The Court disagreed with 
this contention, stating that the statute 
authorizing civil and criminal penalties for failure 
to comply with an order must be read so as not to 
apply while a respondent is making a good faith 
challenge to the validity of the order. In this 
agency's opinion, this reasoning is identical to that 
used in St. Regis, supra, and Ford Motor Co. v. 
Coleman, supra. The civil penalty provisions in the 
interim rule do not restrict the right of a 
respondent to process to obtain a judicial review of 
the validity of that process without a civil penalty, 
if the challenge is not insubstantial. Since this 
complies with the requirements of due process, no 
change has been made to the civil penalty section 
of this rule from what was set forth in the interim 
rule. 

In consideration of the foregoing. Chapter V of 
Title 49, Code of Federal Regulations is amended 
by adding a new Part 510, Information Gathering 
Powers, to read as set forth below. 

The attorney principally responsible for the 
development of this final rule is Stephen Kratzke. 

Issued on April 28, 1980. 



Joan Claybrook 
Administrator 



45 F.R. 29032 
May 1, 1980 



PART 510; PRE 16 



PART 510— INFORMATION GATHERING POWERS 



§ 510.1 Scope and purpose. 

§ 510.2 Definitions. 

§ 510.3 Compulsory process, the service thereof, 

claims for confidential treatment, and 

terms of compliance. 
§ 510.4 Subpoenas generally. 
§ 510.5 Information gathering hearings. 
§ 510.6 Administrative depositions. 
§ 510.7 General or special orders. 
§ 510.8 Written requests for the production of 

documents and things 
§ 510.9 Motions to modify, limit, or quash process. 
§ 510.10 Supplementation of responses to process. 
§510.11 Fees. 
§ 510.12 Remedies for failure to comply with 

compulsory process. 

§ 510.1 Scope and purpose. 

This rule governs the use of the information 
gathering powers of the National Highway Traffic 
Safety Administration contained in section 112 of 
the National Traffic and Motor Vehicle Safety Act 
of 1966, as amended 15 U.S.C. 1401, and sections 
104, 204, 414, and 505 of the Motor Vehicle 
Information and Cost Savings Act, as amended 15 
U.S.C. 1914, 1944, 1990d, and 2005. 

§ 510.2 Definitions. 

(a) "NHTSA" means the National Highway 
Traffic Safety Administration. 

(b) "Administrator" means the Administrator of 
the National Highway Traffic Safety Administration. 

(c) "Chief Counsel" means the Chief Counsel of 
the National Highway Traffic Safety Administration. 

(d) "Deputy Administrator" means the Deputy 
Administrator of the National Highway Traffic 
Safety Adminstration. 

(e) "Person" includes agents, officers, and 
employees of sole proprietorships, partnerships, 
corporations, and other entities. 

§ 510.3 Compulsory process, the service thereof, 
claims for confidential treatment, and 
terms of compliance. 

(a) NHTSA may use any of the following means 
to conduct investigations, inspections, or inquiries 



to obtain information to carry out its functions 
under the National Traffic and Motor Vehicle Safety 
Act of 1966, as amended, 15 U.S.C. 1381 et seq., and 
the Motor Vehicle Information and Cost Savings Act, 
as amended, 15 U.S.C. 1901 et seq.: 

(1) Subpoenas; 

(2) Information gathering hearings; 

(3) Administrative depositions; 

(4) General or special orders; and 

(5) Written requests for the production of 
documents and things. 

(b) A person, sole proprietorship, partnership, 
corporation, or other entity served with compulsory 
process under this part shall be provided with the 
following information at the time of the service— 

(1) The name of the person, sole proprietorship, 
partnership, corporation, or other entity to which 
the process is addressed; 

(2) The statutory provision under which the 
compulsory process is issued; 

(3) The date, time, and place of return; 

(4) A brief statement of the subject matter of the 
investigation, inspection, or inquiry; and 

(5) In the case of a subpoena duces tecum or a 
written request for the production of documents 
and things, a reasonably specific description of the 
documents or things to be produced. 

(c) Service of the compulsory processes specified 
in paragraph (a) of this section is effected: 

(1) By personal service upon the person, agent- 
in-charge, or agent designated to receive process 
under 15 U.S.C. 1399 (e) of the sole proprietorship, 
partnership, corporation or other entity being 
investigated, inspected, or inquired of; or 

(2) By mail (registered or certified) or delivery to 
the last known residence or business address of 
such person or agent. 

(d) The date of service of any compulsory process 
specified in paragraph (a) of this section is the date 
on which the process is mailed by the agency, or 
delivered in person, as the case may be. Whenever a 
period is prescribed for compliance with compulsory 
process, and the process is served upon the party by 
mail, 3 days are added to the period. 



PART 510-1 



(e)(1) Any person, sole proprietorship, 
partnership, corporation, or other entity 
submitting information or producing documents or 
things in response to any compulsory process 
issued under this part may request confidential 
treatment for all or part of that information or for 
those documents or things. 

(2)(A) Except as provided in paragraph (e)(2)(B) 
of this section, requests for confidentiality shall be 
in writing, and addressed to the Chief Counsel. 

(B) Requests for confidentiality made during an 
information gathering hearing or an 
administrative deposition may be made orally to 
the presiding officer. Any oral request for 
confidentiality shall be supplemented by a written 
request, and this written request must be 
addressed to the Chief Counsel and received by 
NHTSA within five days of the date of the oral 
request. 

(C) A written request for confidentiality under 
paragraph (e) of this section shall specify the 
information, documents, or things which are to be 
kept confidential, specify the grounds upon which 
the claim is based, provide such information as 
may be necessary to permit the NHTSA to 
determine whether the claim is valid, and specify 
the period of time for which confidential treatment 
is requested. 

(f) The Chief Counsel, or his or her delegate, is 
authorized to negotiate and approve the terms of 
satisfactory compliance with any compulsory 
process issued under this part. 

§ 510.4 Subpoenas, generally. 

NHTSA may issue to any person, sole 
proprietorship, partnership, corporation, or other 
entity a subpoena requiring the production of 
documents or things (subpoena duces tecum) the 
testimony of witnesses (subpoena ad 
testificandum), or both, relating to any matter 
under investigation or the subject of an inquiry. 
Subpoenas are issued by the Executive Secretary. 
When a person, sole proprietorship, partnership, 
corporation, or other entity is served with a 
subpoena ad testificandum under this part, the 
subpoena will describe with reasonable 
particularity the matters on which the testimony is 
required. In response to a subpoena ad 
testificandum, the sole proprietorship, 
partnership, corporation, or other entity so named 
shall designate one or more officers, directors, or 
managing agents, or other persons who consent to 



testify on its behalf, and set forth, for each person 
designated, the matters on which he or she will 
testify. The person so designated shall testify as to 
matters known or reasonably available to the entity. 

§ 510.5 Information gathering hearings. 

(a) NHTSA may issue a subpoena to compel any 
person, sole proprietorship, partnership, 
corporation, or other entity to provide information 
at an information gathering hearing. The 
subpoenas are used for the purpose of obtaining 
testimony from a witness under oath and obtaining 
relevant documents and things. The 
Administrator, or a NHTSA employee designated 
by the Administrator, presides at the hearing. 
Information gathering hearings are open to the 
public unless the presiding officer rules otherwise, 
and the hearings are stenographically reported. 

(b) In addition to the presiding officer, one or 
more other persons may comprise the panel. Each 
member of the panel may question any witness at 
the hearing. No person who is not a member of the 
panel may ask questions of a witness. However, 
any person may submit to the panel, in writing, 
proposed questions to be asked of a witness. A 
member of the panel may pose these questions to 
the witness if that member deems the questions 
useful and appropriate. Proposed questions may be 
submitted to the panel at any time before or during 
the course of the hearing. 

(c) The stenographic record of each witness's 
testimony will be available to the public, unless the 
testimony was not given publicly and the witness 
requests confidential treatment for some or all of 
his or her testimony. When an oral request for 
confidential treatment is made during the course 
of a witness's testimony, the presiding officer may 
order the hearing closed to the public at that point 
and continue the questioning of the witness, or 
may note the request for confidentiality and direct 
the witness not to answer the question at that 
time, but require the witness to answer the 
question in writing within some specified period, or 
take such other action as the presiding officer 
deems appropriate. If a request for confidential 
treatment is made, the release of the record is 
governed by the applicable laws or regulations 
relating to the handling of allegedly confidential 
information. To the extent that some or all of a 
witness's testimony is not publicly available, that 
witness may procure a copy of his or her testimony 
as recorded upon payment of lawfully prescribed 
costs. 



PART 510-2 



(dXl) Any person who is required by subpoena 
or designated by an entity that is required by 
subpoena to provide information at an information 
gathering hearing conducted under this section 
may be accompanied, represented, and advised by 
counsel. Any member of the bar of a Federal court 
or the courts of any State or Territory of the 
United States, the Commonwealth of Puerto Rico, 
or the District of Columbia, and any 
representative, official, or employee of the sole 
proprietorship, partnership, corporation or other 
entity under subpoena may act as counsel. 

(2) A witness appearing in response to a 
subpoena my confer in confidence with his or her 
counsel or representative concerning any 
questions asked of the witness. If such witness, 
counsel, or representative objects to a question, 
her or she shall state the objection and basis 
therefor on the record 

(e) The presiding officer at an information 
gathering hearing takes all necessary action to 
regulate the course of the hearing, to avoid delay, 
and to assure that reasonable standards of orderly 
and ethical conduct are maintained. In any case in 
which counsel for or a representative of a witness 
has refused to comply with the presiding officer's 
directions, or to adhere to reasonable standards of 
orderly and ethical conduct in the course of a 
hearing, the presiding officer states on the record 
the reasons given, if any, for the refusal and, if the 
presiding officer is someone other than the 
Administrator, immediately reports the refusal to 
the Administrator. The Administrator thereupon 
takes such action as the circumstances warrant. 

(f) Where appropriate, the procedures 
established in this subsection may be utilized in 
informal hearings conducted by NHTSA pursuant 
to its authority under sections 152 and 156 of the 
Safety Act (15 U.S.C. 1412, 1416) to receive data, 
views and arguments concerning alleged safety- 
related defects. The rights accorded to witnesses 
in this subsection may also be accorded to 
witnesses who appear voluntarily at such hearings. 

§ 510.6 Administrative depositions. 

(a) NHTSA may issue a subpoena to compel any 
person, sole proprietorship, partnership, 
corporation or other entity to provide information 
as a witness at an administrative deposition. These 
depositions are for the purpose of obtaining 
information from the witness under oath and 



receiving documents and things relevant to an 
agency investigation. These depositions shall be 
taken before an officer authorized to administer 
oaths by the laws of the United States or of the 
place where the deposition is taken. Unless 
otherwise ordered by the Administrator, 
administrative depositions are closed to the public. 

(b) Any person who is required by subpoena or 
designated by an entity that is required by 
subpoena to produce documents or things or to 
give testimony as a witness at an administrative 
depostion conducted under this section may be 
accompanied, represented, and advised by counsel. 
Any member of the bar or a Federal court or the 
courts of any State or Territory of the United 
States, the Commonwealth of Puerto Rico, or the 
District of Columbia and any representative, 
official, or employee of the person, sole 
proprietorship, partnership, corporation, or other 
entity under subpoena may act as counsel. 

(c) During an administrative deposition: 

(1) The presiding officer before whom the 
deposition is to be taken puts the witness on oath 
and personally, or by someone acting under his or 
her direction and in his or her presence, records 
the testimony of the witness. The testimony is 
stenographically reported. 

(2) After NHTSA has examined the witness at 
the deposition, that witness's counsel or 
representative may examine the witness. NHTSA 
may then reexamine the witness and the 
witnesses' counsel or representative may 
reexamine the witness and so forth, as 
appropriate. 

(3) A witness appearing in response to a 
subpoena may confer in confidence with his or her 
counsel or representative concerning any 
questions asked of the witness. If such witness, 
counsel, or representative objects to a question, he 
or she shall state the objection and the basis 
therefor on the record. 

(4) Objections to the qualifications of the officer 
taking the deposition, or to the manner of taking 
it, or to the evidence presented, and any other 
objection to the proceedings shall be noted by the 
officer on the record, and shall be treated as 
continuing. Evidence objected to shall be taken 
subject to the objections. Errors and irregularities 
occurring at a deposition in the manner of the 
taking of the deposition, in the form of questions or 



PART 510-3 



answers, or in the oath or affirmation, and errors 
of any i<ind which might be obviated, removed, or 
cured if promptly presented shall be deemed to be 
waived unless reasonable objection is made thereto 
at the taking of the deposition. 

(5) If the witness refuses to answer any question 
or answers evasively, or if the witness or his or her 
counsel engages in conduct likely to delay or 
obstruct the administrative deposition, such 
refusal, evasive answer or conduct shall be a 
failure to comply with the subpoena issued to the 
witness. 

(6) Upon completion of the examination of a 
witness, the witness may clarify on the record any 
of his or her answers. 

(d) The transcript of the testimony of a witness 
who testified in response to a subpoena at an 
administrative deposition is submitted to the 
witness for signature, unless the witness waives 
the right to sign the transcript. If a witness desires 
to make any changes in the form or substance 
contained in the transcript, the witness shall 
submit, together with the transcript, a separate 
document setting forth the changes and stating the 
reasons for such changes. If the deposition is not 
signed by the witness within 30 days of its 
submission to the witness, or such other period as 
the NHTSA may designate, the officer before 
whom the deposition was taken or a NHTSA 
employee signs the transcript and states on the 
record the fact of the waiver of the right to sign or 
the fact of the witness's unavailability or inability 
or refusal to sign together with the reasons, if any, 
given therefor. 

(e) The transcript of the testimony of a witness 
will be inspected by NHTSA to determine if there 
are any errors in the transcription of the questions 
posed to the witness and the testimony in response 
to those questions. If NHTSA discovers any 
errors, it notes that fact and forwards the notation 
of errors together with the transcript to the 
witness, requesting the witness to stipulate that 
the transcript is in error and that the corrections 
made by NHTSA are accurate. If the witness will 
not make this stipulation, NHTSA may make a 
motion to the presiding officer to include its 
notation of error and its corrections in the record 
along with the version of the testimony signed by 
the witness. 

(f)(1) Upon payment of lawfully precribed costs, 
any person who is required by subpoena or 
designated by a sole proprietorship, partnership, 



corporation, or other entity that is required by 
subpoena to appear as a witness at an 
administrative deposition may procure a copy of 
the deposition as recorded, except that in a 
nonpublic investigatory proceeding, the witness 
may, for good cause, be limited to an inspection of 
the record of the deposition. 

(fX2) A copy of the record of the deposition may 
be furnished to the witness without charge or at a 
reduced charge if the Associate Administrator for 
Administration determines that waiver of the fee 
is in the public interest because furnishing the copy 
can be considered as primarily benefitting the 
general public. Any witness who seeks a waiver of 
the copying charge may apply in writing to the 
Associate Administrator for Administration, and 
shall state the reasons justifying waiver of the fee 
in the application. 

(g) The testimony obtained in an administrative 
deposition may be used or considered by the 
NHTSA in any of its activities, and may be used or 
offered into evidence in any administrative 
proceeding in accordance with the provisions of 5 
U.S.C. 554, or in any judicial proceeding. 

§ 510.7 General or special orders. 

The NHTSA may require by the issuance of 
general or special orders any person, sole 
proprietorship, partnership, corporation, or other 
entity to file with the NHTSA, in such form as 
NHTSA may prescribe, periodic or special reports 
or answers in writing to specific questions. The 
responses to general or special orders will provide 
NHTSA with such information as it may require, 
including, but not limited to, information relating 
to the organization of that person, sole 
proprietorship, partnership, corporation, or other 
entity, its business, conduct, practices, 
management, and relation to any other person or 
entity. General or special orders which are 
required to be answered under oath are issued by 
the Chief Counsel. Any general or special order 
issued under this section contains the information 
specified in section 510.3 (b). Reports and answers 
filed in response to general or special orders must 
be made under oath, or otherwise, as NHTSA may 
prescribe. 

§ 510.8 Written requests for the production of 
documents and things. 

The NHTSA may, by the issuance of a written 
request for the production of documents and 



PART 510-4 



things, require any person, sole proprietorship, 
partnership, corporation, or other entity to 
produce documents or things. A written request 
for the production of documents and things may be 
issued alone, or as a part of a general or special 
order issued under section 510.7. Written requests 
for the production of documents and things are 
issued by the Chief Counsel. Any written request 
for the production of documents and things issued 
under this section shall contain the information 
specified in section 510.3(b). 

§ 510.9 Motions to modify, limit, or quash process. 

(a)(1) Any person, sole proprietorship, 
partnership, corporation, or other entity served 
with a subpoena issued under section 510.4 may 
file with the Deputy Administrator a motion to 
modify, limit, or quash that subpoena. If there is no 
Deputy Administrator, or the Deputy 
Administrator is not available, such motions shall 
be filed with and decided by the Associate 
Administrator for Administration. A motion to 
modify, limit, or quash must be filed not later than 
15 days after the service of the process or five days 
before the return date specified in the process, 
whichever is earlier, except that, if the process is 
served within five days of its return date, such 
motion may be filed at any time before the return 
date. Any motion must set forth the grounds and 
theories of why and how the party believes the 
process should be modified, limited, or quashed 
and must contain all facts and arguments which 
support those grounds and theories. 

(2) The Deputy Administrator may, upon 
receiving a motion filed pursuant to paragraph 
(aXl) of this section— 

(A) Deny the motion; 

(B) Modify the return date of the subpoena; 

(C) Modify, limit or quash the subpoena; 

(D) Condition granting the motion upon certain 
requirements; or 

(E) Take any other action he or she believes to 
be appropriate in the circumstances. 

(3) The Office of the Deputy Administrator 
serves the decision on the motion on the moving 
party or the counsel or representative of the 
moving party. This service may be made by 
personal service, by registered or certified mail, or 
by reading a copy of the decision to the moving 
party or the counsel or representative of the 
moving party. 



(4) A denial of any motion properly filed under 
this section shall be in writing, and shall contain a 
brief statement of the facts involved and the 
conclusions drawn from those facts by the Deputy 
Administrator. 

(b) The Deputy Administrator's decision on the 
motion to modify, limit, or quash, filed under 
paragraph (a) of this section is not subject to 
reconsideration by NHTSA. 

§ 510.10 Supplementation of responses to process. 

(a) A person, sole proprietorship, partnership, 
corporation, or other entity which has provided 
NHTSA with information under this part, which 
information was complete and accurate at the time 
the information was given to NHTSA, is not 
required to supplement that information in the 
light of after acquired information, except: 

(1) The person or entity to whom the process is 
addressed shall supplement the response with 
respect to any question directly addressed to the 
identity and location of persons having knowledge 
of information obtainable under this part. 

(2) The person or entity to whom the process is 
addressed shall seasonably amend a prior response 
if that person or entity obtains information upon 
the basis of which the person or entity knows that 
response was incorrect when made or the person 
or entity knows that the response, though correct 
when made, is no longer true and the 
circumstances are such that a failure to amend the 
response is in substance a knowing concealment. 

(b) The requirement to supplement information 
set forth in paragraph (a) of this section terminates 
when: 

(1) The compulsory process stated that it was 
issued in connection with a contemplated 
rulemaking action, and a final rule is issued on that 
subject or a notice is issued announcing that the 
rulemaking action has been suspended or 
terminated. 

(2) The compulsory process stated that it was 
issued in connection with an enforcement 
investigation, and the investigation is closed. 

(3) The compulsory process does not state that it 
is issued in connection with a specific rulemaking 
action or enforcement investigation, and 18 
months have passed since the date of the original 
response. 



PART 510-5 



(c) This section in no way limits NHTSA's 
authority to obtain supplemental information by 
specific demands through the means specified in 
section 510.3. 

§510.11 Fees. 

Any person compelled to appear in person in 
response to a subpoena issued under this part at an 
information gathering hearing or an 
administrative deposition is paid the same 
attendance and mileage fees as are paid witnesses 
in the courts of the United States, in accordance 
with Title 28, United States Code, Section 1821. 



§510.12 Remedies for failure to comply with 
compulsory process. 

Any failure to comply with compulsory process 
authorized by law and issued under this part is a 
violation of this part. In the event of such failure to 
comply, NHTSA may take appropriate action 
pursuant to the authority conferred by the 
National Traffic and Motor Vehicle Safety Act or 
the Motor Vehicle Information and Cost Savings 
Act, as appropriate, including institution of judicial 
proceedings to enforce the order and to collect civil 
penalties. 

45 F.R. 29032 
May 1, 1980 



PART 510-6 



PREAMBLE TO PART 511— ADJUDICATIVE PROCEDURES 

(Docket No. 78-15; Notice 2) 



ACTION: Final rule. 

SUMMARY: This rule establishes procedures that 
will be followed in adjudications to enforce Title V 
of the Motor Vehicle Information and Cost Savings 
Act (dealing with automotive fuel economy). These 
regulations supersede interim regulations estab- 
lished in 1978. They are necessary to carry out 
the authority vested in the Secretary of Transpor- 
tation to enforce the automotive fuel economy 
standards, gas mileage guide availability, report- 
ing, and other requirements of that title and 
regulations established thereunder. These regula- 
tions are intended to enable a full, fair, and ex- 
peditious hearing in all cases of alleged violations 
of these requirements. 

DATE: This regulation is effective 30 days after its 
publication in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: 

Roger Fairchild, Office of Chief Counsel, 

National Highway Traffic Safety 

Administration, 

400 Seventh Street, S.W., Washington, D.C. 

20590, (202) 426-2992. 

SUPPLEMENTARY INFORMATION: On October 6, 
1978, in 43 PR 47507, the National Highway Traffic 
Safety Administration (NHTSA) established in- 
terim procedures for conducting enforcement pro- 
ceedings under Title V of the Motor Vehicle Infor- 
mation and Cost Savings Act, 15 U.S.C. 2001 et 
seq. Because of the anticipated need to have en- 
forcement procedures in place as soon as possible 
and because of the procedural nature of the rules, 
the interim procedures were made effective 30 
days after their publication. See 5 U.S.C. 553(b). 
Although the use of notice and comment rulemak- 
ing procedures was not legally required to estab- 



lish these rules, the agency deemed it desirable to 
obtain the views of interested individuals and 
organizations on the procedures. Therefore, 
NHTSA included an invitation in the preamble to 
the interim procedures for the public to comment 
on those procedures while they were in effect to 
assist in developing a final rule. 

Only limited comment was received on the inter- 
im procedures. The only detailed comments sub- 
mitted were those of the Motor Vehicle Manufac- 
turers' Assocation (MVMA). Ford Motor Company 
and General Motors submitted brief comments 
which incorporated and reiterated the comments 
of MVMA. No automobile dealers (who are poten- 
tially subject to the regulations), dealer organiza- 
tions, public interest groups, or other individuals 
or organizations commented on the interim pro- 
cedures. The comments received expressed 
general approval for the interim procedures, sug- 
gesting only relatively minor revisions. 

Therefore, the agency is establishing final ad- 
judicative procedures for fuel economy-related 
cases, with only minor differences from the inter- 
im procedures. A detailed discussion of the fea- 
tures of the selected procedures is contained in the 
preamble to the interim procedures and will not be 
repeated here. Generally, the rule established full, 
trial-type procedures in accordance with sections 
554, 556, and 557 of Title V of the United States 
Code (the Administrative Procedure Act), due to 
the requirement in section 508(a) (2) of the Cost 
Savings Act for a hearing "on the record" in fuel 
economy enforcement cases. The specific pro- 
cedures adopted were based largely on those 
employed by the Consumer Product Safety Com- 
mission (16 CFR Part 1025) and the Federal Rules 
of Civil Procedure. Departures from those models 
have been made in certain instances to accom- 
modate specific requirements under the Cost Sav- 
ings Act. 



PART 511 -PRE 1 



Most Significant Ctianges 
to the Interim Procedures 

The most significant change to the interim pro- 
cedures is the deletion of a "two-tier" system (in- 
terveners and non-party participants) for partici- 
pation in enforcement hearings by individuals or 
organizations other than the agency and the 
respondent, in favor of a single "participant" 
status. Also, some changes are made to the 
language used in certain areas of the regulation 
(particularly with respect to discovery) to make 
the language more consistent with the Federal 
Rules of Civil Procedure. The final procedures also 
recognize the privileged status of attorney's "work 
product" with respect to the discovery process. 

Comments Received 

on the Interim Procedures 

The first point raised by MVMA and GM relates 
to the issue of whether the assessment of civil 
penalties for each day of violations of section 507(3) 
of the Act should run from the time of the alleged 
illegal conduct or from the end of the required 
hearing on the alleged violation. This issue was not 
addressed in the interim procedures. In the case of 
a refusal by a manufacturer to respond to a special 
order issued under section 505(b) of the Act, for 
example, the commenters would argue that civil 
penalties of up to the authorized $10,000 per day 
should not begin accruing until after the comple- 
tion of a hearing, rather than from the date on 
which the response to the order was due. MVMA 
bases its argument on its interpretation of the 
relevant statutory language and on constitutional 
due process guarantees. Specifically, MVMA ar- 
gues that, under the Act, no violation has occurred 
until there has been a complete adjudication. 

The agency cannot accept these arguments. 
MVMA strains the meaning of the term "violation" 
by attempting to make the completion of an adjudi- 
cation an element of the unlawful conduct. Section 
507(3) specifies the conduct which is to be con- 
sidered unlawful as "the failure of any person (A) 
to comply with any provision of this part appli- 
cable to such person. . . ." The requirement for a 
public hearing established in section 508(a)(2) is a 
prerequisite to the assessment of civil penalties, 
but if, after the completion of the hearing, the 
agency's view that a violation has occurred is vin- 
dicated, then penalties may properly be assessed 
for each day since the violation (i.e., unlawful con- 



duct) first occurred. Any other reading of the 
statute would encourage those subject to the re- 
quirements of the Act to delay in complying with 
those requirements. 

MVMA's argument is essentially identical to the 
one it made with respect to the agency's interim 
rule on Information Gathering Powers, 42 FR 
64628, December 27, 1977, and rejected at the time 
a final rule on that subject was established. See 45 
FR 29032. The preamble to that rule discusses 
cases decided under statutes with statutory 
language similar to Title V of the Act. That discus- 
sion concludes that penalties should accrue from 
the date of the actual unlawful conduct, and that 
legal remedies exist to prevent penalties from add- 
ing up during the course of a non-frivolous 
challenge to the enforcement action. However, to 
remove any ambiguity in the regulations, the time 
when civil penalties begin accruing has been 
clarified in the final procedures, as requested by 
MVMA. 

MVMA also raises several objections about the 
provisions in the interim procedures for interven- 
tion. These objections are generally based on the 
concern that interveners might cause "un- 
necessary confusion and delay" and thereby 
adversely affect the rights of respondents. The 
Act permits "any interested person" to participate 
in enforcement proceedings, but does not specify 
the nature of that "participation" right. 

A number of authorities apparently support 
limiting the extent of the participation in these en- 
forcement proceedings to the "non-intervener" 
status established in the interim procedures. 
According to the Administrative Conference of the 
United States, 

Intervention or other participation in enforce- 
ment or license revocation proceedings should 
be permitted when a significant objective of the 
adjudication is to develop and test a new policy 
or remedy in a precise factual setting or when 
the prospective intervener is the de facto charg- 
ing party. Public participation in enforcement 
proceedings, license revocations or other adjudi- 
cations where the issue is whether the charged 
respondent has violated a settled law or policy 
should be permitted only after close scrutiny of 
the effect of intervention or other participation 
on existing parties. 
Recommendations of the Administrative Conference 
of the United States 1 CFR 301.71-6. Support for this 



PART 511 -PRE 2 



view is contained in Cramton, "The Why, Where, 
and How of Broadened Public Participation in the 
Administrative Process," 60 Georgetown Law 
Journal 525 (1972) and Gellhorn, "Public Participa- 
tion in Administrative Proceedings," 81 Yale Law 
Journal 159 (1972). The scope of participation 
should depend on "the nature of the issues, the in- 
tervener's interests, its ability to present relevant 
evidence and arguments, and the number, inter- 
ests and capacities of the other parties." Adminis- 
trative Conference, id. 

The agency concurs with these authorities and 
believes that the rights accorded "non-interven- 
ers" under the interim procedures are sufficient 
for all public participants. The non-interveners 
were authorized to make a written or oral state- 
ment of position, file proposed findings of fact, con- 
clusions of law and a post hearing brief, and file an 
appellate brief if an appeal is taken. Typical of the 
issues which are likely to be raised in an enforce- 
ment proceeding under the Act are questions 
relating to the agency's authority to compel the 
submission of information. Issues of this type 
would likely be resolved on the basis of written 
briefs and oral arguments by all parties in the pro- 
ceeding, and all participants have the right to 
make this type of submission. Issues involving 
EPA test procedures and data are expected to be 
resolved before that agency, and results of hear- 
ings on those issues before EPA would be accepted 
by NHTSA. For hearings involving purely factual 
disputes, such as whether an automobile dealer 
properly displayed gas mileage booklets, it is 
unlikely that there will be any great interest in 
participation in any capacity, much less as a full 
party. 

Therefore, the agency is limiting participation in 
enforcement proceedings by individuals and 
organizations other than the agency and the 
respondent to the rights given "participants" 
under the interim procedures. .4 n?/one who desires 
to participate in these proceedings may do so in 
this manner. 

MVMA also raises several issues relating to set- 
tlement of cases involving alleged violations of the 
requirements of Title V. Their first objection 
relates to the extent to which NHTSA may com- 
promise or settle cases involving violations of fuel 
economy standards. MVMA interprets the regula- 
tions to prohibit settlements even where, after 
commencement of a proceeding, a clear error is 



discovered in the basis for the action. In such 
cases, the agency agrees that completion of the 
proceeding on the basis of erroneous information 
would be inappropriate. The regulations permit 
"confession of error" type settlements through an 
amended complaint. See section 511.13. 

MVMA also suggests that criteria be added to 
section 511.26 of the regulations to provide 
guidance about the manner in which the agency 
would exercise its discretion to settle non-stand- 
ard cases. MVMA suggests that such factors as the 
gravity of a violation and any good faith efforts to 
comply be considered. The agency agrees that 
these are relevant factors to be considered in set- 
tling such a case, and the regulations have been 
amended accordingly. 

MVMA objects to NHTSA's characterization of 
the authority to compromise standards-enforce- 
ment cases as "discretionary," suggesting rather 
that when any of the situations specified in section 
508(bK3) exists (bankruptcy, strike, fire, etc.), an 
offset in the amount of the assessed civil penalty 
should be automatic. MVMA fails to explain Con- 
gress' use of discretionary, rather than mandatory, 
language in that provision, however. Therefore, 
the agency remains of the view that, when the 
public interest so requires, the agency may not ac- 
cept an offer of settlement based on one of the 
enumerated criteria. In attempting to determine 
whether the public interest requires the agency to 
accept a particular offer of compromise, the agen- 
cy needs, contrary to MVMA's assertion, informa- 
tion on any steps a manufacturer has taken to 
mitigate the effect of factors such as a fire or a 
strike, financial documents assessing the manufac- 
turer's ability to pay civil penalties, and the basis 
for any FTC certification that payment of penal- 
ties would result in a "substantial lessening of 
competition." This information would be used by 
NHTSA to assess the good faith of the manufactur- 
er in seeking the compromise and the probability 
that harm would result from payment of penalties. 
Similarly, the imposition of conditions on a settle- 
ment is specifically authorized by section 508(b)(3), 
and the agency has elected to require conditions 
(usually some not otherwise specifically required 
action to promote improved automotive fuel econ- 
omy) in most cases. This is done to help assure that 
the settlement is in the public interest and that the 
manufacturer has in fact acted in good faith by tak- 
ing all reasonable actions to increase the average 



PART 511 -PRE 3 



fuel economy of its fleet of automobiles. Also, sec- 
tion 511.26(e) is revised to clarify that the 
Presiding Officer is to transmit all settlement 
proposals to the Administrator. 

MVMA argues that the interim procedures 
should be amended to require that the Admin- 
istrator provide a discussion of the basis for any 
denial of a settlement offer. The regulations cur- 
rently require such a discussion whenever a set- 
tlement is allowed. The agency agrees that such a 
requirement is appropriate to provide the public 
with an explanation of the basis for the agency's 
refusal to exercise its discretionary authority to 
reduce civil penalties. 

MVMA raises two points with respect to the 
application of earned monetary credits to civil 
penalties assessed for violations of fuel economy 
standards. First, it is noted that the regulations 
fail to acknowledge the existence of the credit 
scheme established in section 508 of the Act, and 
it is recommended that the regulations be amend- 
ed to do so. NHTSA has no objection to making 
such an addition to the current procedures. 

MVMA and GM also argue that the reduction of 
civil penalty liabilities in cases where one of the 
events specified in section 508(b)(3)(B) occurs (fire, 
strike, act of God) should be made without cor- 
responding reduction of a monetary credit which 
may exist for that manufacturer in another model 
year. The Act authorizes the Secretary of 
Transportation to reduce a civil penalty for a par- 
ticular model year if that penalty was due in 
whole or part to one of the specified fortuitous 
events which affected that year's fleet of vehicles. 
Nothing in the statute requires that another 
year's earned credits would be affected by such a 
reduction, and the agency does not contemplate 
requiring that credits be used in such a situation. 

MVMA's final major objection relates to the 
manner in which test related issues will be raised 
in enforcement hearings. That organization notes 
in its comments that the preamble to the interim 
procedures indicated that official notice might be 
taken of EPA fuel economy test results in some 
circumstances. It was not the agency's intention 
to imply that test related issues would not be 
challengeable by a manufacturer. Indeed, the 
agency recognizes that the main factual questions 
involved in a standards-enforcement case may 
involve the acceptance or rejection of manufac- 
turer-supplied fuel economy data, and other 



issues such as the comparability of results of test 
procedures used for measuring fuel economy to 
results obtained under 1975 test procedures (see 
section 503(d) of the Act). However, the agency 
anticipates that issues involving aspects of the 
fuel economy program which are administered by 
EPA will be raised before that agency, not 
NHTSA. MVMA suggests that NHTSA adopt 
some form of compulsory joinder provision in the 
regulations, whereby EPA would be made a party 
in any hearing in which test related issues are 
implicated. However, NHTSA knows of no prece- 
dent for such a provision, and has doubt about the 
existence of any authority for one Federal agency 
to compel the participation of another agency in 
the former's proceedings. 

Although the agency is not at this time making 
any changes in the regulations dealing with pro- 
cedures for resolving test procedure related ques- 
tions, it is considering seeking public comment on 
an amendment to these rules which would require 
that those issues be raised before EPA. EPA cur- 
rently has a procedure for resolving disputes on 
these matters (see 40 CFR 600.009) which should 
satisfy the requirements of the Act for deter- 
mination "on the record" of violations of fuel 
economy requirements. Further, that agency is 
best equipped by reason of its expertise to 
resolve these technical issues under the statutory 
division of responsibilities within the govern- 
ment. Ideally, test related issues would be re- 
solved solely before the EPA, with the results of 
EPA's hearings being accepted by NHTSA as res 
judicata. This approach would avoid any duplica- 
tion of effort resulting from hearings on the same 
issues before two different agencies. 

Also suggested by MVMA are a number of 
technical amendments to the regulations, which 
are intended to make the language used more con- 
sistent with that used in the Federal Rules of 
Civil Procedure (FRCP) and the Federal Rules of 
Evidence. The main advantage of relying on the 
language used in these judicial rules is that 
reference can be made to a body of a case law con- 
struing that language where it is ambiguous, 
while interpreting new language might involve 
dealing with a series of cases of first impression. 
It was mainly for that reason that the agency 
relied in part on the Federal Rules of Civil Pro- 
cedure as a model for certain provisions in the 
interim procedures. See 49 FR 47508. 



PART 511 -PRE 4 



First, MVMA suggests changing the criterion 
for permitting joinder of proceedings from the 
"similar issues" requirement of the interim pro- 
cedures, to a requirement of a "common question 
of law or fact," as specified in Rule 42(a) of the 
FRCP. Also, MVMA suggests permitting joinder 
where to do so would "tend to avoid unnecessary 
costs or delay" as required under Rule 42(a), 
rather than "to such extent and upon such terms 
as may be deemed proper," as the interim pro- 
cedures permitted. In addition, MVMA recom- 
mends the addition of a provision like that in Rule 
42(b) which would permit separate hearings where 
doing so would promote economy or convenience 
or would avoid prejudice to a party. Since adopting 
these suggestions would help clarify the pro- 
cedures, the final rule has been amended accord- 
ingly. 

A number of changes to the interim procedures 
in the area of discovery are also suggested by 
MVMA. First, MVMA suggests that the discovery 
procedures be modeled more closely after Rule 26 
of the FRCP, for reasons of ease of application (as 
discussed earlier) and fairness. The interim pro- 
cedures provided that all relevant material is 
discoverable, with the only stated exception being 
documents accompanying the agency staffs 
recommendation as to whether a complaint should 
issue. The Rule 26 procedure would exclude at- 
torney's work product, the mental impressions, 
conclusions, and opinions of a party's attorney, 
and would permit discovery of materials prepared 
in anticipation of litigation only on a showing of 
need and the inability to obtain the same material 
in some other manner. Considerations of fairness 
militate in favor of making this change. The factual 
portions of documents accompanying the agency 
staffs recommendations on a complaint would be 
made available to all parties, as part of the com- 
plaint, and the opinion portions of that material 
would be protected under Rule 26-type procedure. 
Further, the privileged status of attorney's work 
product is well established in both judicial and ad- 
ministrative contexts. Therefore, the final pro- 
cedures adopt this recommendation. 

MVMA also recommends that only those ex- 
perts who may be called to testify should be sub- 
ject to discovery. The agency cannot accept this 
suggestion. It may be that certain experts within a 
corporation may hold opinions which are highly 
relevant to a proceeding, but those experts may 



not be called as witnesses by the corporation. 
Without the opportunity for opposing parties to 
obtain information on the identity and views of 
these individuals through discovery, it would be 
impossible for those parties to determine whether 
the experts should be called as witnesses, and 
relevant information and qualified opinions could 
be lost. Therefore, the provision in the interim 
procedures is retained in the final procedures. 

The interim procedures could be interpreted to 
require that the person who answered each in- 
dividual written interrogatory must sign that 
answer and MVMA recommends clarifying this 
point to permit a single representative of a cor- 
porate party to sign. The agency is adopting this 
suggestion. MVMA also suggests that the 20 day 
period for responding to a request for production 
of documents be extended to 30 days. However, 
the interim procedures already permit the 20 day 
period to be extended, when necessary. Therefore, 
in the interest of expediting proceedings, this 
recommendation was not adopted in the final pro- 
cedures. MVMA's recommendation that testimony 
of any party or its representatives be permitted as 
soon as an answer is filed has been adopted, to 
make that provision consistent with the rest of the 
discovery provisions in the regulation. The interim 
procedures vested substantial control over such 
testimony in the Presiding Officer, and this control 
is retained in the final procedures. The Presiding 
Officer can assure that parties do not abuse the 
right to have such testimony taken to create delay, 
or where written forms of discovery would be 
more appropriate. The interim procedures have 
also been amended to permit parties to preserve 
the testimony of any witness, not just the parties' 
own witnesses. However, the reference in the 
MVMA comments to perpetuation of testimony 
pursuant to Rule 27 of the FRCP is not applicable 
to the provision found in section 511.35(h). This 
provision is intended to permit the taking and 
preservation of testimony from a witness who is 
expected to be unable to attend the hearing, but 
not prior to the commencement of the proceeding 
as is permitted by Rule 27. Because administrative 
law judges will not ordinarily be appointed until 
after proceedings begin, it will be impracticable to 
obtain leave of the Presiding Officer to perpetuate 
testimony in anticipation of a complaint not yet 
issued. Moreover, adjudicative proceedings under 
the Act are unlikely to present issues of fact deter- 



PART511-PRE 5 



minable exclusively upon the testimony of unique 
witnesses who might be available to testify only 
at times before the commencement of proceed- 
ings. Therefore the agency does not perceive a 
need for proving a procedure for perpetuation of 
testimony fully analogous to that found in Rule 27 
of the FRCP. 

Also in accord with the decision to conform as 
much as practicable with the language of the 
FRCP where a similar procedure is intended, the 
prescribed uses of deposition testimony found in 
511.35(i) are amended to parallel Rule 32 of the 
FRCP. 

MVMA also argues that some of the sanctions 
specified in the interim procedures for failure to 
comply with a discovery order are too extreme, 
have no counterpart in the FRCP, and should be 
eliminated. The cited sanction, excluding all mat- 
ter obtained in discovery or excluding the 
recalcitrant party, does in fact have a counterpart 
in the FRCP (see Rule 37(b)(1)(B) and (C) which 
permit prohibitions on introducing "designated 
matters in evidence" and "rendering a judgment 
by default against the disobedient party") and 
would only be applied where "just," as in the 
FRCP. Therefore, no change to the interim pro- 
cedures is made with respect to this point. Nor 
has the agency adopted MVMA's suggestion that 
sanctions be imposed immediately or not at all. 
The significance of a failure to comply with a 
discovery order may not become fully apparent 
until well after the failure to comply. 

Modifications to the procedure for motions to 
quash or limit subpoenas were also suggested by 
MVMA. MVMA suggests that provision be made 
for extending the time to respond to the subpoena 
or the motion to quash, that an appeal procedure 
be added, that denials of motions to quash be 
made on the record, and that the Presiding Of- 
ficer be permitted to modify subpoenas. Section 
511.15 of the interim procedures already provides 
for time extensions, when necessary. Interlocu- 
tory appeals are permitted on these matters 
where confidential information is involved or 
where compliance with the subpoena somehow in- 
volves a controlling question of law or policy. The 
time limit for the filing of an application for in- 
terlocutory appeal has been clarified to make it 
applicable to all such applications and not just 
those advancing one of the grounds set forth in 
section 511.24(b)(1). Appeals are also permitted 



after a final decision under the interim pro- 
cedures. Allowing appeals in other cases would 
unnecessarily delay the proceeding. The agency 
has adopted suggestions by MVMA that reasons 
for denials of motions to quash be provided on the 
record and that "modifications" of a subpoena be 
authorized. 

MVMA further suggests elimination of "confu- 
sion of issues" as grounds for excluding evidence. 
As MVMA notes, this factor appears in the 
Federal Rules of Evidence primarily to apply to 
jury trials, where jurors might be unable to deal 
with certain complex issues. This factor is deleted 
in the final procedures since it is not fully rele- 
vant and tends to duplicate the criteria of rele- 
vance, undue delay, and the needless presenta- 
tion of cumulative evidence. 

The final group of objections raised by MVMA 
involve the handling of in camera or confidential 
materials. First, it is argued that certain informa- 
tion beyond that protected under the Freedom of 
Information Act 5 U.S.C. 552, should be entitled 
to in camera treatment in an enforcement hear- 
ing. Among this type of material would be 
material which might be embarrassing or other- 
wise sensitive, but which would not qualify as a 
trade secret or fall within any of the other 
exempt classes of information in the Freedom of 
Information Act. The agency cannot accept this 
contention since section 505(d)(1) of the Cost 
Savings Act requires the agency to disclose any 
fuel economy related information to the public, 
except in the case of trade secret information. 

The procedures have been clarified to permit 
interlocutory appeals of a ruling of the Presiding 
Officer denying in camera treatment for infor- 
mation claimed to be confidential. The interim 
procedures permitted an immediate appeal on 
rulings requiring the production of documents 
claimed to be confidential, but not explicitly in 
the similar situation involving a denial of in 
camera treatment. All such rulings are auto- 
matically stayed for 10 days, permitting the ag- 
grieved party to appeal. 

MVMA has suggested that advance determina- 
tions of confidentiality be made by the agency 
(i.e., a submitter of information would be permit- 
ted to withdraw that information if a request for 
in camera treatment is denied). The agency will 
address this question in detail in its forthcoming 
final rule on Confidential Business Information. 



PART 511 -PRE 6 



Until that rule is issued, the agency will abide by 
its proposed procedures which do not provide for 
advance determinations (due to concerns about 
consistency with the Freedom of Information 
Act). See 43 FR 22412 (May 25, 1978). 

MVMA requests that criteria and procedures 
be established for denying requests for in camera 
treatment. The interim procedures specified that 
the criteria and procedures to be used are those 
for determining whether information is entitled 
to confidential treatment under the Freedom of 
Information Act, as noted above. Those criteria 
and procedures are spelled out in that Act, in the 
case law under that Act, and in the agency's pro- 
posed confidentiality regulations cited in the 
previous paragraph. Therefore, no change to the 
interim procedures is being made in this area. 

MVMA also argues that reference must be 
made in the regulations to 44 U.S.C. 3508, which 
provides generally that when an agency receives 
confidential information from another govern- 
ment agency, employees of the receiving agency 
are fully liable for any unauthorized release of 
that information. In this regard, MVMA claims 
that the provisions of 44 U.S.C. 3508 govern and 
"take precedence over" any decision by the agen- 
cy to release the information. If the implication of 
this comment is that NHTSA is bound by the 
determination of the agency that provides the in- 
formation that the information is confidential, or 
that NHTSA's discretionary authority to release 
confidential information does not apply to infor- 
mation obtained from another agency, then 
NHTSA cannot agree that 44 U.S.C. 3508 compels 
that result. NHTSA agrees that the statutory 
provision in question applies to an unauthorized 
release of confidential information obtained from 
another agency, but no conflict between that pro- 
vision and the current procedures is apparent. 
Therefore, no change to the regulation is required 
on this point. 

At the request of MVMA, the interim proce- 
dures have been clarified to assure that the grant- 
ing of motions for access to in camera materials 
will be done on the record. This was implicit in 
the regulation, since the granting of such a 
motion must be accompanied by a protective 
order preventing unnecessary disclosure of the 
information. 

MVMA also recommends that sanctions be 



specified in the regulations for the unauthorized 
release by a party of in camera materials. Sug- 
gested sanctions include denial of the right to con- 
tinue as a party of participant and the denial of 
access to other in camera materials. Section 
511.76 of the interim procedures permits the ex- 
clusion of a party, participant, or one of their rep- 
resentatives in such a case. The agency agrees 
that it is appropriate to add the second sanction 
mentioned above to the regulations, and will do so 
in the final procedures. However, the agency fails 
to see how MVMA's recommendation that per- 
sons seeking access to confidential information be 
required to agree in writing and in advance to 
comply with the terms of a protective order will 
have any added impact on a party or other person 
who is unwilling to comply with the order. 

MVMA's final comment notes that the agency 
should not lightly use its discretionary authority 
to release confidential information. To date, the 
agency has rarely used this authority under sec- 
tion 505(d)(1) of the Cost Savings Act, and has 
taken steps to minimize the impact of such a 
release on the submitter of the information when 
the authority has been used. This policy will 
continue. 

A small number of further minor changes have 
been made to the regulations in the interest of 
reducing unnecessary burdens on parties or par- 
ticipants in proceedings and on the agency itself. 
First, the interim procedures imply that a full 
scale hearing is held each time a complaint is 
issued, whether the respondent wants the full 
hearing or not. The final procedures permit 
respondents to request a full hearing (and such 
requests will always be honored) or permits the 
respondent to make its case solely on written sub- 
missions or otherwise, if it desires. Also, some 
requirements as to the size of paper on which 
documents are printed, the size of margins, and 
the type of print to be used have been deleted. 
Finally, the requirement that a copy of the entire 
complaint in every enforcement case (including 
dealer-mileage guide cases) be printed in the 
Federal Register has been deleted in favor of a 
more limited requirement that a notice be pub- 
lished generally describing the proceeding and 
providing information on public participation in 
the proceeding. 

The agency has determined that the establish- 



PART511-PRE 7 



ment of these procedures does not constitute a Issued on December 3, 1980 
"major Federal Action significantly affecting the 
environment," and therefore, an environmental 
impact statement is not required. Nor should 
these procedures establish any additional costs 



beyond those imposed by the Cost Savings Act •^*'^" Claybrook 

itself. Therefore, no Regulatory Analysis is re- Administrator 

quired to be prepared under Executive Order 45 fR 81574 

^2^^^- December 11, 1980 



PART 511 -PRE 8 



MOTOR VEHICLE SAFETY STANDARD NO. 511 
Adjudicative Procedures 



Subpart A— Scope of Ruies; Nature of 

Adjudicative Proceedings, 

Definitions 

Sec. 

511.1 Scope of the rules. 

511.2 Nature of adjudicative proceedings. 

511.3 Definitions. 

Subpart B— Pleadings; Form; Execution; 
Service of Documents 

511.11 Commencement of proceedings. 

511.12 Answer. 

511.13 Amendments and supplemental pleadings. 

511.14 Form and filing of documents. 

511.15 Time. 

511.16 Service. 

511.17 Public participation. 

511.18 Joinder of proceedings. 

Subpart 0— Prehearing Procedures; Motions: 

Interlocutory Appeals; Summary 

Judgment; Settlement 

511.21 Prehearing conferences. 

511.22 Prehearings briefs. 

511.23 Motions. 

511.24 Interlocutory appeals. 

511.25 Summary decision and order. 

511.26 Settlement. 

Subpart D— Discovery; Compulsory Process 

511.31 General provisions governing discovery. 

511.32 Written interrogatories to parties. 

511.33 Production of documents and things. 

511.34 Requests for admission. 

511.35 Testimony upon oral examination. 

511.36 Motions to compel discovery. 



51 1.37 Sanctions for failure to comply with order. 

511.38 Subpenas. 

511.39 Orders requiring witnesses to testify or 
provide other information and granting 
immunity. 

Subpart E— Hearings 

511.41 General rules. 

511.42 Powers and duties of presiding officer. 

511.43 Evidence. 

511.44 Expert witnesses. 

511.45 In camera materials. 

511.46 Proposed findings, conclusions, and order. 

511.47 Record. 

511.48 Official docket. 

511.49 Fees. 

Subpart F— Decision 

511.51 Initial decision. 

511.52 Adoption of initial decision. 

511.53 Appeal from initial decision. 

511.54 Review of initial decision in absence of 
appeal. 

511.55 Final decision on appeal or review. 

511.56 Effective date of order. 

511.57 Effective date of order. 

Subpart G— Settlement Procedure in Cases 

of Violation of Average Fuel 

Economy Standards 

511.61 Purpose. 

511.62 Definitions. 

511.63 Criteria for settlement. 

511.64 Petitions for settlement; timing; contents. 

511.65 Public comment. 

511.66 Confidential business information. 

511.67 Settlement order. 



PART 511-1 



Subpart H— Appearances; Standards 
of Conduct 

511.71 Who may make appearances. 

511.72 Authority for representation. 

511.73 Written appearances. 

511.74 Attorneys. 

511.75 Persons not attorneys. 

511.76 QuaHfications and standards of conduct. 

511.77 Restrictions as to former members and 
employees. 

511.78 Prohibited communications. 
Appendix I— Final Prehearing Order. 

Authority: Sec. 9, Pub. L. 89-670, 80 Stat. 981 (49 
U.S.C. 1657); Sec. 301, Pub. L. 94-163, 89 Stat. 901 
(15 U.S.C. 20002); delegation of authority at 41 FR 
25015, June 22, 1976. 

Subpart A— Scope of Rules; Nature of 
Adjudicative Proceedings, Definitions 

§511.1 Scope of the rules. 

This part establishes rules of practice and pro- 
cedure for adjudicative proceedings conducted pur- 
suant to section 508(a)(2) of the Motor Vehicle 
Information and Cost Savings Act (15 U.S.C. Pub. 
L. 94-163, 89 Stat. 911, Sec. 2008(a)(2)), which are 
required by statute to be determined on the record 
after opportunity for a public hearing. 

§ 511.2 Nature of adjudicative proceedings. 

Adjudicative proceedings shall be conducted in 
accordance with title 5, United States Code, sec- 
tions 551 through 559 and this part. It is the policy 
of the agency that adjudicative proceedings shall 
be conducted expeditiously and with due regard to 
the rights and interests of all persons affected, and 
to the public interest. Therefore, the presiding 
officer and all parties shall make every effort at 
each stage of a proceeding to avoid unnecessary 
delay. 

§ 511.3 Definitions. 

As used in this part: 

(1) The term "application" means an ex parte 
request by a party for an order that may be 
granted or denied without opportunity for 
response by any other part. 

(2) The term "NHTSA" means the National 
Highway Safety Administration. 



(3) The term "Administrator" means the 
Administrator of the National Highway Safety 
Administration. 

(4) The term "Complaint Counsel" means 
prosecuting for the NHTSA. 

(5) The term "motion" means a request by a 
party for a ruling or order that may be granted or 
denied only after opportunity for response by each 
affected party. 

(6) The term "party" means the NHTSA, and 
any person named as a respondent in a proceeding 
governed by this part. 

(7) The term "person" means any individual, 
partnership, corporation, association, public or 
private organization, or Federal, State or 
municipal governmental entity. 

(8) The term "petition" means a written re- 
quest, made by a person or a party and addressed 
to the Presiding Officer or the Administrator, that 
the addressee take some action. 

(9) The term "Presiding Officer" means the 
person who conducts an adjudicative hearing 
under this part, who shall be an administrative law 
judge qualified under title 5, United States Code, 
section 3105 and assigned by the Director, Office 
of Administrative Law Judges, Office of Personnel 
Management. 

(10) The term "Respondent" means any per- 
son against whom a complaint has been issued. 

(11) The term "Executive Secretary" means 
the Executive Secretary of the National Highway 
Traffic Safety Administration. 

(12) The term "staff means the staff of the 
National Highway Traffic Safety Administration. 

Subpart B— Pleadings; Form; Execution; 
Service of Documents 

§ 511.11 Commencement of proceedings. 

(a) Notice of institution of an enforcement pro- 
ceeding. An adjudicative proceeding under this 
part is commenced by the issuance of a complaint 
by the NHTSA. 

(b) Form and content of complaint. The com- 
plaint shall be signed by the Complaint Counsel 
and shall contain the following: 

(1) Recital of the legal authority for instituting 
the proceeding, with specific designation of the 
statutory provisions involved in each allegation. 



PART 511-2 



(2) Identification of each respondent. 

(3) A clear and concise statement of the 
charges, sufficient to inform each respondent with 
reasonable definiteness of ihe factural basis of the 
allegations of violation. A list and summary of 
documentary evidence supporting the charges 
shall be attached. 

(4) A statement of the civil penalty which the 
Complaint Counsel believes is in the public in- 
terest, or which is required by law. In the case of 
civil penalties assessed for violations of section 
507(3) of the Motor Vehicle Information and Cost 
Savings Act (15 U.S.C. 2007(3)), the amount of 
such penalty shall be calculated from the time of 
the alleged violation. In the case of civil penalties 
assessed for violations of section 507(1) and (2) of 
that Act, any monetary credits available to offset 
those civil penalties shall be specified. 

(5) The right of the respondent to a hearing on 
the alleged violations. 

(c) Notice to the Public. Once a complaint is 
issued, notice of it shall be immediately submitted 
to the Federal Register for publication. The notice 
in the Federal Register shall briefly describe the 
nature of the proceeding and state that permits to 
participate in the proceeding must be filed no later 
than the first prehearing conference. 

§ 511.12 Answer. 

(a) Time for filing. A respondent shall have 
twenty (20) days after service of a complaint within 
which to file an answer. 

(b) Content of answer. An answer shall conform 
to the following: 

(1) Request for hearing. Respondent shall 
state whether it requests a full, adjudicatory hear- 
ing or whether it desires to proceed on the basis of 
written submissions. If a hearing is requested, 
respondent shall specify those issues on which a 
hearing is desired. 

(2) Contested allegations. An answer in which 
the allegations of a complaint are contested shall 
contain: 

(i) Specific admission or denial of each 
allegation in the complaint. If the respondent 
is without knowledge or information sufficient 
to form a belief as to the truth of an allegation, 
respondent shall so state. Such a statement 
shall have the effect of a denial. Denials shall 



fairly meet the substance of the allegations 

denied. Allegations not thus answered shall be 

deemed to have been admitted, 
(ii) A concise statement of the factual and/ 

or legal defenses to each allegation of the 

complaint. 

(3) Admitted allegations. If the respondent 
admits or fails to deny any factual allegation, he or 
she shall be deemed to have waived a hearing as to 
such allegation. 

(c) Default. Failure of the respondent to file an 
answer within the time provided (or within an 
extended time, if provided), shall be deemed to con- 
stitute a waiver of the right to appear and contest 
the allegations set forth in the complaint and to 
authorize the Presiding Officer to make such 
findings of fact, as are reasonable under the 
circumstances. 

§ 511.13 Amendments and supplemental pleadings. 

Whenever determination of a controversy on the 
merits will be facilitated thereby, the Presiding Of- 
ficer upon motion, may allow appropriate amend- 
ments and supplemental pleadings which do not 
unduly broaden the issues in the proceeding or 
cause undue delay. 

§ 511.14 Form and filing of documents. 

(a) Filing. Except as otherwise provided, all 
documents submitted to the Administrator or a 
Presiding Officer shall be addressed to and filed 
with the Executive Secretary. Documents may be 
filed in person or by mail and shall be deemed filed 
on the day of filing or mailing. 

(b) Caption. Every document shall contain a 
caption setting forth the name of the action in con- 
nection with which it is filed, the docket number, 
and the title of the document. 

(c) Copies. An original and nine (9) copies of all 
documents shall be filed. Documents may be 
reproduced by printing or any other process, pro- 
vided that all copies filed are clear and legible. 

(d) Signature. (1) The original of each docu- 
ment filed shall be signed by a representative of 
record for the party; or in the case of parties not 
represented, by the party; or by a partner, officer, 
or regular employee of any corporation, partner- 
ship, or association, who files an appearance on 
behalf of the party. 



PART 511-3 



(2) The act of signing a document constitutes a 
representation by the signer that the signer has 
read it; that to the best of the signer's knowledge, 
information and belief, the statements made in it 
are true; and that it is not filed for purposes of 
delay. 

§ 511.15 Time. 

(a) Computation. In computing any period of 
time prescribed or allowed by the rules in this part, 
the day of the act, event, or default from which the 
designated period of time begins to run shall not be 
included. The last day of the period so computed 
shall be included, unless it is a Saturday, a Sunday, 
or a legal holiday, in which event the period runs 
until the end of the next day which is not a Satur- 
day, a Sunday, or a legal holiday. When the period 
of time prescribed or allowed is less that 7 days, 
intermediate Saturdays, Sundays, and legal 
holidays shall be excluded in the computation. As 
used in this part, "legal holiday" includes New 
Year's Day, Washington's Birthday, Memorial 
Day, Independence Day, Labor Day, Columbus 
Day, Veteran's Day, Thanksgiving Day, Christmas 
Day, and any other day appointed as a holiday by 
the President or the Congress of the United 
States. 

(b) Additional Time After Service by Mail. 
Whenever a party is required or permitted to do an 
act within a prescribed period after service of a 
document and the document is served by mail, 
three (3) days shall be added to the prescribed 
period. 

(c) Extensions. For good cause shown, the 
Presiding Officer may extend any time limit 
prescribed or allowed under this part or by order of 
the Administrator or the Presiding Officer, except 
those governing the filing of interlocutory appeals 
and appeals from Initial Decisions and those 
expressly requiring the Administrator's action. 
Except as otherwise provided by law, the Ad- 
ministrator, for good cause shown, may extend any 
time limit prescribed under this part, or by order of 
the Administrator or the Presiding Officer. A 
party or participant may petition the Presiding 
Officer or the Administrator, as appropriate, for 
an extension under this paragraph. Such a petition 
shall be filed prior to the occurrence of the time 
limit which is the subject of the petition. 



§ 511.16 Service. 

(a) Mandatory service. Every document filed 
with the Executive Secretary shall be served upon 
all parties and participants to a proceeding, i.e.. 
Complaint Counsel, respondent(s), and par- 
ticipants, and upon the Presiding Officer. 

(b) Service of complaint, ruling, order, decision, 
or subpena. Service of a complaint, ruling, order, 
decision, or subpena may be effected as follows: 

(1) By registered or certified mail. A copy of 
the document shall be addressed to the person, 
partnership, corporation or unincorporated 
association to be served at his or its residence or 
principal office or place of business; registered or 
certified; and mailed; or 

(2) By delivery to an individual. A copy of 
the document may be delivered to the person to be 
served; or to a member of the partnership to be 
served; or to the president, secretary, or other ex- 
ecutive officer, or a director of the corporation or 
unincorporated association to be served; or to an 
agent authorized by appointment or by law to 
receive service; or 

(3) By delivery to an address. A copy of the 
document may be left at the principal office or 
place of business of the person, partnership, cor- 
poration, unincorporated association, or author- 
ized agent with an officer, a managing or general 
agent; or it may be left with a person of suitable 
age and discretion residing therein, at the 
residence of the person or of a member of the part- 
nership or of an executive officer, director, or 
agent of the corporation or unincorporated 
association to be served. 

(c) Service of documents with prescribed response 
periods. When service of a document starts the 
running of a prescribed period of time for the sub- 
mission of a responsive document or the occur- 
rence of an event, the document shall be served as 
provided in paragraph (b) of this section. 

(d) Service of other documents. All documents 
other than those specified in paragraph (c) of this 
section may be served as provided in paragraph (b) 
of this section, or by ordinary first-class mail, 
properly addressed, postage prepaid. 

(e) Service on a representative. When a party 
has appeared by an attorney or other represen- 
tative, service upon that attorney or other represen- 
tative shall constitute service on the party. 



PART 511-4 



(f) Certificate of service. The original of every 
document filed with the agency and required to be 
served upon all parties to a proceeding shall be 
accompanied by a certificate of service signed by 
the party making service, stating that such service 
has been made upon each party to the proceeding. 
Certificates of service may be in substantially the 
following form: 

Dated at this 

day of , 19 

(Signature) 

For 

(g) Date of Service. The date of service of a 
document shall be the date on which the document 
is deposited in the United States mail or is 
delivered in person. 

§511.17 Public participation. 

Participant Status. Any person interested in a 
proceeding commenced pursuant to § 511.11 who 
desires to participate in the proceeding, shall file 
with the Executive Secretary a notice of intention 
to participate in the proceeding and shall serve a 
copy of such notice on each party to the pro- 
ceeding. A notice of intention to participate shall 
be filed not later than the commencement of the 
hearing. Untimely filings will not be accepted 
absent a determination by the Presiding Officer 
that the person making the request has made a 
substantial showing of good cause for failure to file 
on time. Any person who files a notice to par- 
ticipate in the proceeding as a nonparty shall be 
known as a "participant" and shall have the rights 
specified in § 511.41(d). 

§ 511.18 Joinder of proceedings. 

Two or more matters which have been scheduled 
for adjudicative proceedings, and which involve 
one or more common questions of law or fact, may 
be consolidated for the purpose of hearing, appeal 
or the Administrator's review. A motion for con- 
solidation for purpose of hearing may be filed with 
the Presiding Officer by any party to such pro- 
ceedings not later than thirty (30) days prior to the 
hearing. A motion for consolidation for the pur- 
pose of appeal may be filed by any party to such 
proceedings within 10 days after issuance of the 
Initial Decision. A motion to consolidate shall be 
served upon all parties to all proceedings whose 
joinder is contemplated. The proceedings may be 
consolidated where to do so would tend to avoid 



unnecessary costs or delay. Such consolidation 
may also be ordered upon the initiative of the 
Presiding Officer or the Administrator, as 
appropriate. The Presiding Officer may order 
separate hearings on any issue where to do so 
would promote economy or convenience or would 
avoid prejudice to a party. 

Subpart C— Prehearing Procedures; 
Motions; interlocutory Appeals; 
Summary Judgment; Settlement 

§511.21 Prehearing conferences. 

(a) When held. (1) A prehearing conference 
shall be held in person or by conference telephone 
call, except in unusual circumstances, approxi- 
mately fifty (50) days after publication in the 
Federal Register of the complaint, upon ten (10) 
days notice to all parties and participants, to con- 
sider any or all the following: 

(i) Motions for consolidation of proceedings; 
(ii) Identification, simplification and 
clarification of the issues; 

(iii) Necessity or desirability of amending 
the pleadings; 

(iv) Stipulations and admissions of fact and 

of the content and authenticity of documents; 

(v) Oppositions to notices of oral examination; 

(vi) Motions for protective orders to limit or 

modify discovery; 

(vii) Issuance of subpenas to compel the 
appearance of witnesses and the production of 
documents; 

(viii) Limitation of the number of witnesses, 
particularly the avoidance of duplicate expert 
witnesses; 

(ix) Matter of which official notice will be 
taken and matters which may be resolved by 
reliance upon findings of other Federal agen- 
cies; and 

(x) Other matters which may expedite the 
conduct of the hearing. 

§511.22 Prehearing briefs. 

Not later ten (10) days prior to the hearing, the 
parties shall, except when ordered otherwise by 
the Presiding Officer in unusual circumstances, 
simultaneously serve and file prehearing briefs, 
which shall set forth (a) a statement of the facts 



PART 511-5 



expected to be proved, and of the anticipated order 
of proof; (b) a statement of the issues and the legal 
argument in support of the party's contentions 
with respect to each issue; and (c) a table of 
authorities with a designation by asterisk of the 
principal authorities relied upon. 

§ 511.23 Motions. 

(a) Presentations and dispositions. During the 
time a proceeding is before a Presiding Officer, all 
motions, whether oral or written, except those filed 
under § 511.42(e), shall be addressed to the Pre- 
siding Officer, who shall rule upon them promptly 
after affording an opportunity for response. 

(b) Written motions. All written motions shall 
state the particular order, ruling, or action desired 
and the grounds therefore. If a motion is supported 
by memoranda, affidavits or other documents, 
they shall be served and filed with the motion. All 
motions shall contain a proposed order setting 
forth the relief sought. All written motions shall be 
filed with the Executive Secretary and served on 
all parties, and all motions addressed to the 
Administrator shall be in writing. 

(c) Responses. Within ten (10) days after serv- 
ice of any written motion or petition or within such 
longer or shorter time as may be designated by 
these Rules or by the Presiding Officer or the 
Administrator, the opposing party or parties shall 
file a written response to such motion. Where a 
motion would affect only a single party, or an iden- 
tifiable group of parties, the Presiding Officer or 
Administrator may limit the response to the 
motion to the affected party or parties. Failure to 
respond to a written motion may, in the discretion 
of the Presiding Officer be deemed as consent to 
the granting of the relief sought in the motion. The 
moving party shall have no right to reply, except as 
permitted by the Presiding Officer or the 
Administrator. 

(d) Rulings on motions for dismissal. When a 
motion to dismiss a complaint or motion for other 
rehef is granted with the result that the proceeding 
before the Presiding Qfficer is terminated, the 
Presiding Officer shall issue an Initial Decision and 
Order thereon in accordance with the provisions of 
§ 511.51. If such a motion is granted as to all issues 
alleged in the complaint in regard to some, but not 
all, the respondents, or is granted as to any part of 
the allegations in regard to any or all the 



respondents, the Presiding Officer shall enter an 
order on the record and consider the remaining 
issues in the Initial Decision. The Presiding Officer 
may elect to defer ruling on a motion to dismiss 
until the close of the case. 

§511.24 Interlocutory appeals. 

(a) General. Rulings of the Presiding Officer 
may not be appealed to the Administrator prior to 
the Initial Decision, except as provided herein. 

(b) Exceptions— {1) Interlocutory appeals to 
Administrator. The Administrator may, in his or 
her discretion, entertain interlocutory appeals 
where a ruling of the Presiding Officer: 

(i) Requires the production or disclosure of 
records claimed to be confidential; 

(ii) Requires the testimony of a supervisory 
official of the agency other than one especially 
cognizant of the facts of the matter in 
adjudication; 

(iii) Excludes an attorney from participation 
in a proceeding pursuant to § 511.42(b). 

(2) Procedures for interlocutory appeals. Within 
ten (10) days of issuance of a ruling, any party may 
petition the Administrator to entertain an in- 
terlocutory appeal on a ruling in the categories 
enumerated above. The petition shall not exceed 
fifteen (15) pages. Any other party may file a 
response to the petition within ten (10) days of its 
service. The response shall not exceed fifteen (15) 
pages. The Administrator shall thereupon act upon 
the petition, or the Administrator shall request 
such further briefing or oral presentation as he 
may deem necessary. 

(3) Interlocutory appeals from all other rul- 
ings— (i) Grounds. Interlocutory appeals from 

all other rulings by the Presiding Officer may 
proceed only upon motion to the Presiding 
Officer and a determination by the Presiding 
Officer in writing, with justification in support 
thereof, that the ruling involves a controlling 
question of law or policy as to which there is 
substantial ground for differences of opinion 
and that an immediate appeal from the ruling 
may materially advance the ultimate termina- 
tion of the litigation, or that subsequent review 
will be an inadequate remedy. 

(ii) Form.. If the Presiding Officer deter- 
mines, in accordance with paragraph (bX3)(i) of 
this section that an interlocutory appeal may 



PART 511-6 



proceed a petition for interlocutory appeal may 
be filed with and acted upon by the 
Administrator in accordance with paragraph 
(bX2) of this section. 

(c) Proceedings not stayed. A petition for in- 
terlocutory appeal under this part shall not stay 
the proceedings before the Presiding Officer unless 
the Presiding Officer shall so order, except that a 
ruling of the Presiding Officer requiring the pro- 
duction of records claimed to be confidential shall 
be automatically stayed for a period of (10) days 
following the issuance of such ruling to allow an 
affected party the opportunity to file a petition for 
an interlocutory appeal pursuant to § 511.24(bX2). 
The filing of such a petition shall automatically 
extend the stay of such a ruling pending the 
Administrator's action on such petition. 

§511.25 Summary decision and order. 

(a) Motion. Any party may move, with a sup- 
porting memorandum, for a Summary Decision 
and Order in its favor upon all or any of the issues 
in controversy. Complaint Counsel may so move at 
any time after thirty (30) days following issuance 
of a complaint, and any other party may so move at 
any time after issuance of a complaint. Any such 
motion by any party shall be filed at least twenty 
(20) days before the date fixed for the adjudicatory 
hearing. 

(b) Response to motion. Any other party may, 
within ten (10) days after service of the motion, file 
a response thereto with a supporting memorandum. 

(c) Grounds. A Summary Decision and Order 
shall be granted if the pleadings and any testimony 
upon oral examination, answers to interrogatories, 
admissions, and /or affidavits show that there is no 
genuine issue as to any material fact and that the 
moving party is entitled to a Summary Decision 
and Order as a matter of law. 

(d) Legal effect. A Summary Decision and 
Order upon all the issues being adjudicated shall 
constitute the Initial Decision of the Presiding 
Officer, and may be appealed to the Administrator 
in accordance with § 511.53. A Summary Decision, 
interlocutory in character, may be rendered on 
fewer than all issues and may not be appealed prior 
to issuance of the Initial Decision, except in accord- 
ance with § 511.24. 



(e) Case not fully adjudicated on motion. A 
Summary Decision and Order that does not dispose 
of the whole case shall include a statement of those 
material facts as to which there is no substantial 
controversy, and of those material facts that are 
actually and in good faith controverted. The Sum- 
mary Order shall direct such further proceedings 
as are just. 

§ 511.26 Settlement. 

(a) Applicability. This section applies only to 
cases of alleged violations of section 507(3) of the 
Motor Vehicle Information and Cost Savings Act, 
Pub. L. 94-163, 89 Stat. 911 (15 U.S.C. Section 
2007(3)). Settlement in other cases may be made 
only in accordance with Subpart G of this part. 

(b) Availability. Any party shall have the 
opportunity to submit an offer of settlement to the 
Presiding Officer. 

(c) Form. Offers of settlement shall be in the 
form of a consent agreement and order, shall be 
signed by the party submitting the offer or his 
representative, and may be signed by any other 
party. Each offer of settlement shall be accom- 
panied by a motion to transmit to the Administrator 
the proposed agreement and order, outlining the 
substantive provisions of the agreement, and the 
reasons why it should be accepted. 

(d) Contents. The proposed consent agreement 
and order which constitute the offer of settlement 
shall contain the following: 

(1) An admission of all jurisdictional facts; 

(2) An express waiver of further procedural 
steps, and of all rights to seek judicial review or 
otherwise to contest the validity of the order: 

(3) A description of the alleged non- 
compliance, or violation; 

(4) Provisions to the effect that the allegations 
of the complaint are resolved by the proposed con- 
sent agreement and order; 

(5) A listing of the acts or practices from 
which the respondent shall refrain; 

(6) A detailed statement of the corrective ac- 
tion(s) which the respondent shall execute and the 
civil penalty, if any, that respondent shall pay. 

(e) Transmittal. The Presiding Officer shall 
transmit to the Administrator for decision all offers 
of settlement and accompanying memoranda that 
meet the requirements enumerated in paragraph 



PART 511-7 



(d) of this section. The Presiding Officer may, but 
need not, recommend acceptance or rejection of such 
offers. Any party or participant, may object to a pro- 
posed consent agreement by filing a motion and sup- 
porting memorandum with the Administrator. 

(f) Stay of proceedings. When an offer of settle- 
ment has been agreed to by the parties and has 
been transmitted to the Administrator, the pro- 
ceedings shall be stayed until the Administrator 
has ruled on the offer. When an offer of settlement 
has been made and transmitted to the Administra- 
tor but has not been agreed to by all parties, the 
proceedings shall not be stayed pending the 
Administrator's decision on the offer. 

(g) Administrator's ruling. The Administrator 
will rule upon all transmitted offers of settlement. If 
the Administrator accepts the offer, the Adminis- 
trator shall issue an appropriate order. The order 
shall become effective upon issuance. In deter- 
mining whether to accept an offer of settlement, the 
Administrator wOl consider the gravity of the al- 
leged violation, and any good faith efforts by the 
respondent to comply with applicable requirements. 

(h) Rejection. If the Administrator rejects an 
offer of settlement, the Executive Secretary shall 
give written notice of that decision and the reasons 
therefor to the parties and the Presiding Officer. 
Promptly thereafter, the Presiding Officer shall 
issue an order notifying the parties of the resump- 
tion of the proceedings, including any modifica- 
tions to the schedule resulting from the stay of the 
proceedings. 

(i) Effect of rejected offer. Rejected offers of set- 
tlement shall not be admissible in evidence over the 
objection of any signatory, nor shall the fact of the 
proposal of the offer be admissible in evidence. 



Subpart D— Discovery; Compulsory Process 

§ 511.31 General provisions governing discovery. 

(a) Applicabilty. The discovery rules established 
in this subpart are applicable to the discovery of 
information among the parties to a proceeding. Par- 
ties seeking information from persons not parties 
may do so by subpena in accordance with § 511.38. 

(b) Discovery methods. Parties may obtain 
discovery by one or more of the following methods: 
(1) Written interrogatories; (2) requests for pro- 



duction of documents or things; (3) requests for 
admissions; (4) testimony upon oral examination. 
Unless the Presiding Officer otherwise orders 
under paragraph (d) of this section, the frequency 
of use of these methods is not limited. 

(c) Scope of discovery. The scope of discovery is 
as follows: 

(1) In general. Parties may obtain discovery 
regarding any matter not privileged, which is rele- 
vant to the subject matter involved in the pro- 
ceedings, whether it relates to the claim or defense 
of the party seeking discovery or to the claim or 
defense of any other party. It is not ground for 
objection that the information sought will be inad- 
missible at the hearing if the information sought 
appears reasonably calculated to lead to the 
discovery of admissible evidence. 

(2) Exception. Parties may not obtain 
discovery of documents which accompanied the 
staffs recommendation as to whether a complaint 
should issue or of documents or portions thereof 
which would be exempt from discovery under Rule 
26(b)(3) of the Federal Rules of Civil Procedure. 

(3) Hearing preparation: Experts. A party 
may obtain discovery of facts known and opinions 
held by experts, regardless of whether they are 
acquired or developed in anticipation of or for 
litigation. Such discovery may be had by any of the 
methods provided in paragraph (b) of this section. 

(d) Protective orders. Upon motion by a party 
or person and for good cause shown, the Presiding 
Officer may make an order which justice requires 
to protect such party or person from annoyance, 
embarrassment, competitive disadvantage, 
oppression or undue burden or expense, including 
one or more of the following: (1) That the discovery 
shall not be had; (2) that the discovery may be had 
only on specified terms and conditions, including a 
designation of the time and /or place; (3) that the 
discovery shall be had only by a method of 
discovery other than that selected by the party 
seeking discovery; (4) that certain matters shall 
not be inquired into, or that the scope of discovery 
shall be limited to certain matters; (5) that 
discovery shall be conducted with no one present 
except persons designated by the Presiding 



PART 511-8 



Officer; (6) that a trade secret or other confidential 
research, development, or commercial information 
shall not be disclosed or shall be disclosed only in a 
designated way or only to designated parties; and 
(7) that responses to discovery shall be placed in 
camera in accordance with § 511.45. 

If a motion for a protective order is denied in 
whole or in part, the Presiding Officer may, on 
such terms or conditions as are just, order that any 
party provide or permit discovery. 

(e) Sequence and timing of discovery. Discovery 
may commence at any time after filing of the 
answer. Unless otherwise provided in these Rules 
or by order of the Presiding Officer, methods of 
discovery may be used in any sequence and the fact 
that a party is conducting discovery shall not 
operate to delay any other party's discovery. 

(f) Supplementation of responses. A party who 
has responded to a request for discovery shall sup- 
plement the response with information thereafter 
acquired. 

(g) Completion of discovery. All discovery shall 
be completed as soon as practical but in no case 
longer than one hundred fifty (150) days after 
issuance of a complaint unless otherwise ordered 
by the Presiding Officer in exceptional cir- 
cumstances and for good cause shown. All 
discovery shall be served by a date which affords 
the party from whom discovery is sought the full 
response period provided by these Rules. 

(h) Service and filing of discovery. All discovery 
requests and written responses, and all notices of 
the taking of testimony, shall be filed with the 
Executive Secretary and served on all parties and 
the Presiding Officer. 

(i) Control of discovery. The use of these 
discovery procedures is subject to the control of 
the Presiding Officer, who may issue any just and 
appropriate order for the purpose of ensuring their 
timely completion. 

§ 511.32 Written interrogatories to parties. 

(a) Availability; procedures for use. Any party 
may serve upon any other party written inter- 
rogatories to be answered by the party served or, if 
the party served is a public or private corporation 
or a partnership or association or governmental 
agency, by any officer or agent, who shall furnish 
such information as is available to the party. Inter- 



rogatories may, without leave of the Presiding 
Officer, be served upon any party after filing of the 
answer. 

(b) Procedures for response. Each interrogatory 
shall be answered separately and fully in writing 
under oath, unless it is objected to, in which event 
the reasons for objection shall be stated in lieu of an 
answer. The answers are to be signed by a responsi- 
ble representative of the respondent and the objec- 
tions signed by the respresentative making them. 
The party upon whom the interrogatories have been 
served shall serve a copy of the answers, and objec- 
tions if any, within 30 days after service of the inter- 
rogatories. The Presiding Officer may allow a 
shorter or longer time for response. The party sub- 
mitting the interrogatories may move for an order 
under § 511.36 with respect to any objection to or 
other failure to answer an interrogatory. 

(c) Scope of interrogatories. Interrogatories may 
relate to any matters which can be inquired into 
under § 511.31(c)(1), and the answers may be used 
to the extent permitted under this part. An inter- 
rogatory otherwise proper is not objectionable 
merely because an answer to the interrogatory 
would involve an opinion or contention that relates 
to fact or to the application of law to fact, but the 
Presiding Officer may order that such an inter- 
rogatory need not be answered until a later time. 

(d) Option to produce business records. Where 
the answer to an interrogatory may be derived or 
ascertained from the business records of the party 
upon whom the interrogatory has been served, or 
from an examination, audit or inspection of such 
business records, or from a compilation, abstract or 
summary based thereon, and the burden of deriving 
the answer is substantially the same for the party 
serving the interrogatory as for the party served, it 
is a sufficient answer to the interrogatory to specify 
the records from which the answer may be derived 
or ascertained and to afford to the party serving the 
interrogatory reasonable opportunity to examine, 
audit or inspect such records and to make copies, 
comphcations, abstracts, or summaries. 

§ 511.33 Production of documents and things. 

(a) Scope. Any party may serve upon any other 
party a request (1) to produce and permit the party 
making the request, or someone acting on behalf of 
the party, to inspect and copy any designated 
documents (including writings, drawings, graphs, 



PART 511-9 



charts, photographs, phono-records, and any other 
data-compilation from which information can be 
obtained, translated, if necessary, by the party in 
possession into reasonably usable form), or (2) to 
inspect and copy, test or sample tangible things 
which constitute or contain matters within the 
scope of § 511.31(c)(1) and which are in the posses- 
sion, custody or control of the party upon whom 
the request is served. 

(b) Procedure for request. The request may be 
served at any time after the filing of the answer 
without leave of the Presiding Officer. The request 
shall set forth the items to be inspected either by 
individual item or by category, and shall describe 
each item or category with reasonable particularity. 
The request shall specify a reasonable time, place 
and manner for making the inspection and 
performing the related acts. 

(c) Procedure for response. The party upon 
whom the request is served shall serve a written 
response within twenty (20) days after service of 
the request. The Presiding Officer may allow a 
shorter or longer time for response. The response 
shall state, with respect to each item or category 
requested, that inspection and related activities 
will be permitted as requested, unless the request 
is objected to, in which event the reasons for objec- 
tion shall be stated. If objection is made to only 
part of an item or category, that part shall be so 
specified. The party submitting the request may 
move for an order under § 511.36 with respect to 
any objection to or other failure to respond to the 
request or any part thereof, or to any failure to 
permit inspection as requested. 

§511.34 Requests for admission. 

(a) Procedure for reqv£st. A party may serve 
upon any other party a written request for the ad- 
mission, for the purposes of the pending proceeding 
only, of the truth of any matters within the scope of 
§ 511.31(c)(1) set forth in the request that relate to 
statements or opinions of fact or if the application of 
law to fact, including the genuineness of documents 
described in the request. Copies of documents shall 
be served with the request unless they have been, or 
are otherwise, furnished or made available for 
inspection and copying. The request may, without 
leave of the Presiding Officer, be served upon any 
party after filing of the answer. Each matter as to 
which an admission is requested shall be separately 
set forth. 



(b) Procedure for response. The matter as to 
which an admission is requested is deemed 
admitted unless within thirty (30) days after 
service of the request, or within such shorter or 
longer time as the Presiding Officer may allow, the 
party to whom the request is directed serves upon 
the party requesting the admission a written 
answer or objection addressed to the matter, 
signed by the party or the party's representatives. 
If objection is made, the reasons therefore shall be 
stated. 

The answer shall specifically admit or deny the 
matter or set forth in detail the reasons why the 
answering party cannot truthfully admit or deny 
the matter. A denial shall fairly meet the substance 
of the requested admission. When good faith 
requires that a party qualify an answer or deny 
only a part of the matter as to which an admission 
is requested, the party shall specify the portion 
that is true and qualify or deny the remainder. An 
answering party may not give lack of information 
or knowledge as a reason for failure to admit or 
deny, unless the party states that he or she has 
made reasonable inquiry and that the information 
known or readily available to him or her is insuffi- 
cient to enable him or her to admit or deny. A party 
who considers that a matter as to which an admis- 
sion has been requested presents a genuine issue 
for hearing may not, on that ground alone, object 
to the request but may deny the matter or set forth 
reasons why the party cannot admit or deny it. The 
party who has requested an admission may move 
to determine the sufficiency of the answer or objec- 
tion thereto in accordance with § 511.36. If the 
Presiding Officer determines that an answer does 
not comply with the requirements of this section, 
he or she may order that the matter be deemed 
admitted or that an amended answer be served. 

(c) Effect of admission. Any matter admitted 
under this section is conclusively established unless 
the Presiding Officer on motion permits 
withdrawal or amendment of such admission. The 
Presiding Officer may permit withdrawal or 
amendment when the presentation of the merits of 
the action will be served thereby and the party that 
obtained the admission fails to .satisfy the 
Presiding Officer that withdrawal or amendment 
will prejudice that party in maintaining an action 
or defense on the merits. 



PART 511-10 



§ 511.35 Testimony upon oral examination. 

(a) Wlien testiviony may he taken. At any time 
after the answer is filed under § 511.12, upon leave 
of the Presiding Officer and under such terms and 
conditions as the Presiding Officer may prescribe, 
any party may take the testimony of any other 
party, including the agents, employees, con- 
sultants or prospective witnesses of that party at a 
place convenient to the witness. The attendance of 
witnesses and the production of documents and 
things at the examination may be compelled by 
subpena as provided in § 511.38. 

(b) Notice of oral examination.— (1) Examina- 
tion of a party. A party desiring to examine 
another party to the proceeding shall, after obtain- 
ing leave from the Presiding Officer, serve written 
notice of the examination on all other parties and 
the Presiding Officer at least ten (10) days before 
the date of the examination. The notice shall state 
(i) the time and place for making the examination; 
(ii) the name and address of each person to be 
examined, if known, or if the name is not known, a 
general description sufficient to identify him; and 
(iii) the subject matter of the expected testimony. 
If a subpena ditces tecum is to be served on the 
person to be examined, the designation of the 
materials to be produced, as set forth in the 
subpena, shall be attached to or included in the 
notice of examination. 

(2) Examination of a nonparty. A party 
desiring to examine a person who is not a party to 
the proceeding shall make application for a 
subpena, in accordance with § 511.38, to compel 
the attendance, testimony and /or production of 
documents by such person who is not a party. The 
party desiring such examination shall serve 
wTitten notice of the examination on all other 
parties to the proceeding, after issuance of the 
subpena by the Presiding Officer of a designated 
alternate. 

(3) Opposition to notice. A person served 
with a notice of examination may, within 3 days of 
the date of service, oppose, in writing, the 
examination. The Presiding Officer shall rule on 
the notice and any opposition and may order the 
taking of all noticed examinations, upon a showing 
of good cause therefore. The Presiding Officer 
may, for good cause shown, enlarge or shorten the 
time for the taking of an examination. 



(c) Persons before whom examinations may be 
taken. Examinations may be taken before any 
person authorized to administer oaths by the laws 
of the United States or of the place where the ex- 
amination is held. No examination shall be taken 
before a person who is a relative or employee or 
attorney or representative of any party, or who is a 
relative or employee of such attorney or represen- 
tative, or who is financially interested in the action. 

(d) Procedure.— (!) Examination. Each 
witness shall be duly sworn, and all testimony shall 
be duly recorded. All parties or their represen- 
tatives may be present and participate in the 
examination. Examination and cross-examination 
of witnesses may proceed as permitted at the hear- 
ing. Questions objected to shall be answered sub- 
ject to the objections. Objections shall be in short 
form, and shall state the grounds relied upon. The 
questions propounded and the answers thereto, 
together with all objections made, shall be 
recorded by the official reporter before whom the 
examination is made. The original or a verified 
copy of all documents and things produced for 
inspection during the examination of the witness 
shall, upon a request of any party present, be 
marked for identification and annexed to the 
record of the examination. 

(2) Motion to terminate or limit examination. 
At any time during the e.xamination, upon motion 
of any party or of the witness, and upon showing 
that the examination is being conducted in bad 
faith or in such manner as unreasonably to annoy, 
embarrass or oppress the witness or party, the 
Presiding Officer may, upon motion, order the party 
conducting the examination to terminate the ex- 
amination, or may limit the scope and manner of 
the examination as provided in § 511.31(d). 

(3) Participation by parties not present. In 
lieu of attending an examination, any party m.ay 
serve written questions in a sealed envelope on the 
party conducting the examination. That party shall 
transmit the envelope to the official reporter, who 
shall unseal it and propound the questions con- 
tained therein to the witness. 

(e) Transcription and filing of testimony.— (\) 
Transcription. Upon request by any party, the 
testimony recorded at an examination shall be tran- 
scribed. When the testimony is fully transcribed, 
the transcript shall be submitted to the witness for 
examination and signing, and shall be read to or 



PART 511-11 



by the witness, unless such examination and 
signature are waived by the witness. Any change 
in form or substance which the witness desires to 
make shall be entered upon the transcript of the 
official reporter with a statement of the reasons 
given by the witness for making them. The 
transcript shall then be signed by the witness, 
unless the parties by stipulation waive the signing, 
or the witness is ill or cannot be found or refuses to 
sign. If the transcript is not signed by the witness 
within thirty (30) days of its submission to him, the 
official reporter shall sign it and state on the 
record the fact of the waiver of signature or of the 
illness or absence of the witness or the fact of the 
refusal to sign, together with a statement of the 
reasons therefor. The testimony may then be used 
as fully as though signed, in accordance with 
paragraph (i) of this section. 

(2) Certification and filing. The official 
reporter shall certify on the transcript that the 
witness was duly sworn and that the transcript is a 
true record of the testimony given and corrections 
made by the witness. The official reporter shall 
then seal the transcript in an envelope endorsed 
with the title and docket number of the action and 
marked "Testimony of (name of witness)" and 
shall promptly file the transcript with the 
Executive Secretary. The Executive Secretary 
shall notify all parties of the filing of the transcript 
and shall furnish a copy of the transcript to any 
party or to the witness upon payment of 
reasonable charges therefor. 

(f) Costs of examination. The party who notices 
the examination shall pay for the examination. The 
party who requests transcription of the examina- 
tion shall pay for the transcription. 

(g) Failure to attend or to serve subpena; 
expenses. If a party who notices an examination 
fails to attend and proceed therewith and another 
party attends in person or by a representative pur- 
suant to the notice, the Presiding Officer may 
order the party who gave the notice to pay the 
attending party the reasonable expenses incurred. 
If a party who notices an examination fails to serve 
a subpena upon the witness and as a result the 
witness does not attend, and if another party 
attends in person or by a representative because 
that party expects the examination to be made, the 
Presiding Officer may order the party who gave 
notice to pay the attending party the reasonable 
expenses incurred. 



(h) Examination to preserve testimony— 
(1) When available. By leave of the Presiding 
Officer, a party may examine a witness for the 
purpose of perpetuating the testimony of that 
witness. A party who wishes to conduct such an ex- 
amination shall obtain prior leave of the Presiding 
Officer by filing a motion. The motion shall include 
a showing of substantial reason to believe that the 
testimony could not be presented at the hearing. If 
the Presiding Officer is satisfied that the perpetua- 
tion of the testimony may prevent a failure of 
justice or is otherwise reasonably necessary, he or 
she shall order that the deposition be taken. 

(2) Procedure. Notice of an examination to 
preserve testimony shall be served at least fifteen 
(15) days prior to the examination. The examina- 
tion shall be taken in accordance with the provi- 
sions of paragraph (d) of this section. Any 
examination taken to preserve testimony shall be 
fully transcribed and filed in accordance with 
paragraph (e) of this section. 

(i) Use of testimony obtained under this 
section. At the hearing or upon a motion or an 
interlocutory proceeding, any part or all of a 
deposition, so far as admissible under the rules of 
evidence applied as though the witness were then 
present and testifying, may be used against any 
party who was present or represented at the 
taking of the deposition or who had reasonable 
Notice thereof, in accordance with any of the 
following provisions: 

(1) Any deposition may be used by any party 
for the purpose of contradicting or impeaching the 
testimony of deponent as a witness. 

(2) The deposition of a party or of a person 
who at the time of the taking of his testimony was 
an officer, director or managing agent of a party 
may be used against that party for any purpose. 

(3) The deposition of a witness, whether or not a 
party, may be used by any party for any purpose if the 
Presiding Officer finds: (i) that the witness is dead; or 
(ii) that the witness is at a greater distance than 100 
miles from the place or the hearing, or is out of the 
United States, unless it appears that the absence of 
the witness was procured by the party offering the 
deposition; or (iii) that the witness is unable to attend 
or testify because of age, illness, infirmity. 



PART 511-12 



or imprisonment; or (iv) that the party offering the 
deposition has been unable to procure the attend- 
ance of the witness by subponea; or (v) upon 
application and notice, that such exceptional cir- 
cumstances exist as to make it desirable, in the 
interest of justice and with due regard to the 
importance of presenting the testimony of 
witnesses orally in open court, to allow the deposi- 
tion to be used. 

(4) If only part of a deposition is offered in 
evidence by a party, an adverse party may require 
him to introduce any other part which ought in 
fairness to be considered with the part introduced, 
and any party may introduce any other parts. 

§511.36 Motions to compel discovery. 

If a party fails to respond to discovery, in whole 
or in part, the party seeking discovery may move 
within twenty (20) days for an order compelling an 
answer, or compelling inspection or production of 
documents, or otherwise compelling discovery. For 
purposes of this subsection, an evasive or in- 
complete response is to be treated as a failure to 
respond. If the motion is granted, the Presiding 
Officer shall issue an order compelling discovery. 
If the motion is denied in whole or in part, the 
Presiding Officer may make such protective order 
as it would have been empowered to make on a 
motion pursuant to § 511.31(d). When making oral 
examinations, the discovery party shall continue 
the examination to the extent possible with respect 
to other areas of inquiry before moving to compel 
discovery. 

§ 511.37 Sanctions for failure to comply with order. 

If a party fails to obey an order to provide or 
permit discovery, the Presiding Officer may take 
such action as is just, including but not limited to 
the following: 

(a) Infer that the admission, testimony, docu- 
ment of other evidence would have been adverse to 
the party; 

(b) Order that for the purposes of the pro- 
ceeding, the matters regarding which the order 
was made or any other designated facts shall be 
taken to be established in accordance with the 
claim of the party obtaining the order; 



(c) Order that the party withholding discovery 
not introduce into evidence or otherwise rely, in 
support of any claim or defense, upon the 
documents or other evidence withheld; 

(d) Order that the party withholding discovery 
not introduce into evidence or otherwise use at the 
hearing, information obtained in discovery; 

(e) Order that the party withholding discovery 
not be heard to object to introduction and use of 
secondary evidence to show what the withheld ad- 
mission, testimony documents, or other evidence 
would have shown; 

(f) Order that a pleading, or part of a pleading, 
or a motion or other submission by the party, con- 
cerning which the order was issued, be stricken, or 
that decision on the pleadings be rendered against 
the party, or both; and 

(g) Exclude the party or representative from 
proceedings, in accordance with § 511.42(b). 

Any such action may be taken by order at any 
point in the proceedings. 

§ 511.38 Subpenas. 

(a) Availability. A subpena shall be addressed 
to any party or any person not a party for the 
purpose of compelling attendance, testimony and 
production of documents at a hearing or oral 
examination. 

(b) Form. A subpena shall identify the action 
with which it is connected; shall specify the person 
to whom it is addressed and the date, time and 
place for compliance with its provisions; and shall 
be issued by order of the Presiding Officer and 
signed by the Executive Secretary or by the 
Presiding Officer. A subpena duces tecum shall 
specify the books, papers, documents, or other 
materials or data-compilation to be produced. 

(c) How obtained— (1) Content of application. 
An application for the issuance of a subpena 
stating reasons shall be submitted in triplicate to 
the Presiding Officer. 

(2) Procedure of application. The original 
and two copies of the subpena, marked "original," 
"duphcate" and "triplicate," shall accompany the 
application. The Presiding Officer shall rule upon 
an application for a subpena ex parte, by issuing 
the subpena or by issuing an order denying the 
application. 



PART 511-13 



(d) Issuance of a subpena. The Presiding 
Officer siiall issue a subpena by signing and dating, 
or ordering the Executive Secretary to sign and 
date, each copy in the lower right-hand comer of 
the document. The "duplicate" and "triplicate" 
copies of the subpena shall be transmitted to the 
applicant for service in accordance with these 
Rules; the "original" copy shall be retained by or 
be forwarded to the Executive Secretary for reten- 
tion in the docket of the proceeding. 

(e) Service of a subpena. A subpena may be 
served in person or by certified mail, return receipt 
requested, as provided in § 511.16(b). Service shall 
be made by delivery of the signed "duplicate" copy 
to the person named therein. 

(f) Return of service. A person serving a 
subpena shall promptly execute a return of service, 
stating the date, time and manner of service, if 
service is effected by mail, the signed return 
receipt shall accompany the return of service. In 
case of failure to make service, a statement of the 
reasons for the failure shall be made. The 
"triphcate" of the subpena, bearing or accom- 
panied by the return of service, shall be returned 
forthwith to the Executive Secretary after service 
has been completed. 

(g) Motion to quash or limit subpena. Within 
five (5) days of receipt of a subpena, the person 
against whom it is directed may file with the 
Presiding Officer a motion to quash, modify, or 
limit the subpena, setting forth the reasons why 
the subpena should be withdrawn or why it should 
be modified or limited in scope. Any such motion 
shall be answered within five (5) days of service, 
and shall be ruled on immediately thereafter. The 
order shall specify the date, if any, for compliance 
with the specifications of the subpena and the 
reasons for the decision. 

(h) Consequences of failure to comply. In the 
event of failure to comply with a subpena, the 
Presiding Officer may take any of the actions 
enumerated in § 511.37 or may order any other 
appropriate relief to Compensate for the withheld 
testimony, documents, or other materials. If in the 
opinion of the Presiding Officer such relief is in- 
sufficient, the Presiding Officer shall certify to the 
Administrator a request for judicial enforcement 
of the subpena. 



§ 511.39 Orders requiring witnesses to testify or 
provide other information and granting 
Immunity. 

(a) A party who desires the issuance of an order 
requiring a witness to testify or provide other 
information upon being granted immunity from 
prosecution under title 18, United States Code, 
section 6002, may make a motion to that effect. 
The motion shall be made and ruled on in accord- 
ance with § 511.22, and shall include a showing: 

(1) That the testimony or other information 
sought from a witness or prospective witness may 
be necessary to the public interest; and 

(2) That such individual has refused or is likely 
to refuse to testify or provide such information on 
the basis of that individual's privilege against self- 
incrimination. 

(b) If the Presiding Officer determines that the 
witness' testimony appears necessary and that the 
privilege against self-incrimination may be 
invoked, he or she may certify to the 
Administrator a request that he or she obtain the 
approval of the Attorney General of the United 
States for the issuance of an order granting 
immunity. 

(c) Upon application to and approval of the 
Attorney General of the United States, and after 
the witness has invoked the privilege against self- 
incrimination, the Presiding Officer shall issue the 
order granting immunity unless he or she deter- 
mines that the privilege was improperly invoked. 

(d) Failure of a witness to testify after a grant of 
immunity or after a denial of the issuance of an 
order granting immunity shall result in the imposi- 
tion of appropriate sanctions as provided in 
§ 511.37. 



Subpart E— Hearings 

§ 511.41 General rules. 

(a) Public hearings. All hearings pursuant to 
this Part shall be public unless otherwise ordered 
by the Presiding Officer. Notice of the time and 
location of the hearing shall be served on each 
party and participant, and published in the Federal 
Register. 



PART 511-14 



(b) Expedition. Hearings shall proceed with all 
reasonable speed, and insofar as practicable and 
with due regard to the convenience of the parties 
and shall continue without suspension until con- 
cluded, except in unusual circumstances. 

(c) Rights of parties. Every party shall have the 
right of timely notice and all other rights essential 
to a fair hearing, including, but not limited to, the 
rights to present evidence, to conduct such cross- 
examination as may be necessary in the judgment 
of the Presiding Officer for a full and complete 
disclosure of the facts, and to be heard by objec- 
tion, motion, brief, and argument. 

(d) Rights of participants. Every participant 
shall have the right to make a written or oral state- 
ment of position, file proposed findings of fact, 
conclusions of law and a posthearing brief, in 
accordance with § 511.17(b). 

(e) Rights of witnesses. Any person compelled 
to testify in a proceeding in response to a subpena 
may be accompanied, represented, and advised by 
counsel or other representative, and may obtain a 
transcript of his or her testimony at no cost. 

§ 511.42 Powers and duties of Presiding Officer. 

(a) General. A Presiding Officer shall have the 
duty to conduct full, fair, and impartial hearings, 
to take appropriate action to avoid unnecessary 
delay in the disposition of proceedings, and to 
maintain order. He or she shall have all powers 
necessary to that end, including the following 
powers: 

(1) To administer oaths and affirmations; 

(2) To compel discovery and to impose 
appropriate sanctions for failure to make 
discovery; 

(3) To issue subpenas; 

(4) To rule upon offers of proof and receive 
relevant and probative evidence; 

(5) To regulate the course of the hearings and 
the conduct of the parties and their represen- 
tatives therein; 

(6) To hold conferences for simplification of 
the issues, settlement of the proceedings, or any 
other proper purposes; 

(7) To consider and rule, orally or in writing, 
upon all procedural and order motions appropriate 
in an adjudicative proceeding; 



(8) To issue initial decisions, rulings, and 
orders, as appropriate; 

(9) To certify questions to the Administrator 
for determination; and 

(10) To take any action authorized in this Part 
or in conformance with the provisions of title 5, 
United States Code, sections 551 through 559. 

(b) Exclusion of parties by Presiding Officer. A 
Presiding Officer shall have the authority, for good 
cause stated on the record, to exclude from 
participation in a proceeding any party, partici- 
pant, and /or representative who shall violate 
requirements of § 511.76. Any party, participant 
and/ or representative so excluded may appeal to 
the Administrator in accordance with the provi- 
sions of § 511.23. If the representative of a party 
or participant is excluded, the hearing shall be 
suspended for a reasonable time so that the party 
or participant may obtain another representative. 

(c) Svbstitution of Presiding Officer. In the 
event of the substitution of a new Presiding Officer 
for the one originally designated, any motion 
predicated upon such substitution shall be made 
within five (5) days of the substitution. 

(d) Interference. In the performance of 
adjudicative functions, a Presiding Officer shall 
not be responsible to or subject to the supervision 
or direction of the Administrator or of any officer, 
employee, or agent engaged in the performance of 
investigative or prosecuting functions for NHTSA. 
All directions by the Administrator to a Presiding 
Officer concerning any adjudicative proceeding 
shall appear on and be made a part of the record. 

(e) Disqualification of Presiding Officer. (1) 
When a Presiding Officer deems himself or herself 
disqualified to preside in a particular proceeding, 
he or she shall withdraw by notice on the record 
and shall notify the Director of the Office of 
Administrative Law Judges and the Executive 
Secretary of the withdrawal. 

(2) Whenever, for any reason, any party 
shall deem the Presiding Officer to be disquali- 
fied to preside, or to continue to preside, in a 
particular proceeding, that party may file with 
the Executive Secretary a motion to disqualify 
and remove, supported by affidavit(s) setting 
forth the alleged grounds for disqualification. A 
copy of the motion and supporting affidavits) 



PART 511-15 



shall be served by the Executive Secretary on the 
Presiding Officer whose removal is sought. The 
Presiding Officer shall have ten (10) days from 
service to reply in writing. Such motion shall not 
stay the proceeding unless otherwise ordered by 
the Presiding Officer or the Administrator. If the 
Presiding Officer does not disqualify himself or 
herself, the Administrator will determine the 
validity of the grounds alleged, either directly or 
on the report of another Presiding Officer 
appointed to conduct a hearing for that purpose, 
and shall in the event of disqualification take 
appropriate action, by assigning another Presiding 
Officer or requesting loan of another Admin- 
l.=i,rative Law Judge through the Office of Person- 
nel Management. 

§ 511.43 Evidence. 

(a) Applicability of Federal Rules of 
Evidence. The Federal Rules of Evidence shall 
apply to proceedings held under this part only as a 
general guide. The Presiding Officer may admit 
any relevent and probative evidence. 

(b) Burden of proof. (1) Complaint counsel shall 
have the burden of sustaining the allegations of 
any complaint. 

(2) Any party who is the proponent of a legal 
and /or factual proposition shall have the burden of 
sustaining the proposition. 

(c) Presumptions. A presumption imposes on 
the party against whom it is directed the burden of 
going forward with evidence to rebut or meet the 
presumption, but does not shift to such party the 
burden of proof in the sense of the risk of nonper- 
suasion, which remains throughout the hearing 
upon the party on whom it was originally cast. 

(d) Admissibility. All relevant and reliable 
evidence is admissible, but may be excluded if its 
probative value is substantially outweighed by 
unfair prejudice or by considerations of undue 
delay, waste of time, immateriality, or needless 
presentation of cumulative evidence. 

(e) Official notice— (1) Definition. Official 
notice means use by the Presiding Officer of extra- 
record facts and local conclusions drawn from 
those facts. An officially noticed fact or legal con- 
clusion must be one not subject to reasonable 
dispute in that it is either (i) generally known 



within the jurisdiction of the Presiding Officer or 
(ii) known by the Presiding Officer in areas of his 
or her expertise; or (iii) capable of accurate and 
ready determination by resort to sources whose 
accuracy cannot reasonably be questioned. 

(2) Method of taking official notice. The 
Presiding Officer may at any time take official 
notice upon motion of any party or upon its own 
initiative. The record shall reflect the facts and 
conclusions which have been officially noticed. 

(3) Opportunity to challenge. Any party may 
upon application in writing rebut officially noticed 
facts and conclusions by supplementing the record. 
The Presiding Officer shall determine the permis- 
sible extent of this challenge; that is, whether to 
limit the party to presentation of written materials, 
whether to allow presentation of testimony, 
whether to allow cross-examination, or whether to 
allow oral argument. The Presiding Officer shall 
grant or deny the application on the record. 

(f) Objections and exceptions. Objections to 
evidence shall be timely interposed, shall appear on 
the record, and shall contain the grounds upon 
which they are based. Rulings on all objections, 
and the bases therefore, shall appear on the record. 
Formal exception to an adverse ruling is not 
required to preserve the question for appeal. 

(g) Offer of proof . When an objection to prof- 
fered testimony or documentary evidence is 
sustained, the sponsoring party may make a 
specific offer, either in writing or orally, of what 
the party expects to prove by the testimony or the 
document. When an offer of proof is made, any 
other party may make a specific offer, either in 
writing or orally, of what the party expects to 
present to rebut or contradict the offer of proof. 
Written offers of proof or of rebuttal, adequately 
marked for identification, shall accompany the 
record and be available for consideration by any 
reviewing authority. 

§ 511.44 Expert witnesses. 

(a) Definition. An expert witness is one who, 
by reason of education, training, experience, or 
profession, has peculiar knowledge concerning the 
matter of science or skill to which his or her 
testimony relates and from which he or she may 
draw inferences based upon hypothetically stated 
facts or from facts involving scientific or technical 
knowledge. 



PART 511-16 



(b) Method of presenting testimony of expert 
witness. Except as may be otherwise ordered by 
the Presiding Officer, a detailed written statement 
of the elements of the direct testimony of an expert 
witness shall be filed on the record and exchanged 
between the parties no later than 10 days 
preceding the commencement of the hearing. The 
statement must contain a full explanation of the 
methodology underlying any analysis, and a full 
disclosure of the basis of any opinion. The direct 
testimony of an expert witness shall not include 
points not contained in the written statement. A 
party may waive direct examination of an expert 
witness by indicating that the written statement be 
considered the testimony of the witness. In such a 
case, the written testimony shall be incorporated 
into the record and shall constitute the testimony 
of the witness. 

(c) Cross-examination and redirect examination 
of expert witness. Cross-examination, redirect ex- 
amination, and re-cross-examination of an expert 
witness will proceed in due course based upon the 
written testimony and any amplifying oral 
testimony. 

(d) Failure to file and/ or to exchange written 
statement. Failure to file and/ or to exchange the 
written statement of an expert witness as provided 
in this section shall deprive the sponsoring party of 
the use of the expert witness and of the conclusions 
which that witness would have presented. 



§ 511.45 In camera materials. 

(a) Definition. In camera materials are 
documents, testimony, or other data which by 
order of the Presiding Officer or the Ad- 
ministrator, as appropriate under this Part, are 
kept confidential and excluded from the public 
record. Only materials exempt under the Freedom 
of Information Act may be kept confidential and 
excluded from the, public record. Pursuant to 49 
CFR Part 512, the Chief Counsel of the NHTSA is 
responsible for determining whether an alleged 
confidential business record is exempt from the 
Freedom of Information Act. The right of the 
Presiding Officer, the Administrator and re- 
viewing courts to order disclosure of in camera 
materials is specifically reserved. 



(b) In Camera Treatment of documents and 
testimony. The Presiding Officer or the Admin- 
istrator, as appropriate under this part, shall have 
authority, when good cause is found on the record, 
to order documents or testimony offered in 
evidence, whether admitted or rejected, to be 
received and preserved in camera. The order shaU 
specify the length of time for in camera treatment 
and shall include: 

(1) A description of the documents and/or 
testimony; 

(2) The reasons for granting in camera treat- 
ment for the specified length of time. 

(c) Access and disclosure to parties. (1) The 
Administrator and Presiding Officer, and their im- 
mediate advisory staffs shall have complete access 
to all in camera materials. All other parties shall 
also have complete access to all in camera 
materials, except that these parties may seek access 
only in accordance with paragraph (c)(2) of this sec- 
tion when: 

(i) The in camera materials consist of infor- 
mation obtained by the government from per- 
sons not parties to the proceeding; or 

(ii) The in camera materials consist of 
information provided by one of the parties to 
the proceeding which is confidential as to the 
other parties to the proceeding. 
(2) Any party desiring access to and/or disclosure 
of the in camera materials specified in paragraph 
(c)(1) (i) and (ii) of this section for the preparation 
and presentation of that party's case shall make a 
motion which sets forth the justification therefore. 
The Presiding Officer or the Administrator, as 
appropriate under this part, may grant such motion 
on the record for substantial good cause shown and 
shaU enter a protective order prohibiting un- 
necessary disclosure and requiring other necessary 
safeguards. The Presiding Officer or the Admin- 
istrator, as appropriate, may examine the in cam£ra 
materials and excise portions thereof before dis- 
closing the materials to the moving party. 

(d) Segregation of in camera materials. In 
camera materials shall be segregated from the 
public record and protected from public view. 

(e) Public release of in camera materials. In 
Camera materials constitute a part of the confi- 
dential records of the NHTSA and shall not be 
released to the public until the expiration of in 
camera treatment. 



PART 511-17 



(f) Reference to in camera materials. In the sub- 
mission of proposed findings, conclusions, briefs, 
or other documents, all parties shall refrain from 
disclosing specific details of in camera materials. 
Such refraining shall not preclude general 
references to such materials. To the extent that 
parties consider it necessary to include specific 
details of in camera materials, the references shall 
be incorporated into separate proposed findings, 
briefs, or other documents marked "CONFIDEN- 
TIAL, CONTAINS IN CAMERA MATERIAL," 
which shall be placed in camera and become part of 
the in camera record. These documents shall be 
served only on parties accorded access to the in 
camera materials in accordance with paragraph 
(c)(2) of this section. 

§ 511.46 Proposed findings, conclusions, and 
order. 

Within a reasonable time after the closing of the 
record and receipt of the transcript, all parties and 
participants may, simultaneously, file post-hearing 
briefs, including proposed findings of facts, conclu- 
sions of law and a proposed order, together with 
reasons therefore. The Presiding Officer shall 
establish a date certain for the filing of the briefs, 
which shall not exceed 45 days after the close of 
the record except in unusual circumstances. The 
briefs shall be in writing, shall be served upon all 
parties, and shall contain adequate references to 
the record and authorities relied on. Replies shall 
be filed within fifteen (15) days of the date for the 
filing of briefs unless otherwise established by the 
Presiding Officer. The parties and participants 
may waive either or both submissions. 

§ 511.47 Record. 

(a) Reporting and transcription. Hearings 
shall be recorded and transcribed under the super- 
vision of the Presiding Officer by a reporter ap- 
pointed by the Administrator. The original 
transcript shall be a part of the record and the of- 
ficial transcript. Copies of transcripts are available 
from the reporter at a cost not to exceed the max- 
imum rates fixed by contract between the NHTSA 
and the reporter. 

(b) Corrections. Corrections of the official 
transcript may be made only when they involve 
errors affecting substance and then only in the 
manner herein provided. The Presiding Officer 
may order corrections, either on his or her own 



motion or on motion of any party. The Presiding 
Officer shall determine the corrections to be made 
and so order. Corrections shall be interlineated or 
otherwise inserted in the official transcript so as 
not to obliterate the original text. 

§ 511.48 Official docket. 

(a) The official docket in adjudicatory pro- 
ceedings will be maintained in the Docket Section, 
Room 5109, 400 Seventh Street S.W., 
Washington, D.C. and will be available for public 
inspection during normal working hours (7:45 
a.m.-4:15 p.m.) Monday through Friday. 

(b) Fees for production or disclosure of records 
contained in the official docket shall be levied as 
prescribed in the NHTSA' s Procedures for 
Disclosure or Production of Information under the 
Freedom of Information Act. 

§ 511.49 Fees. 

(a) Witnesses. Any person compelled to appear 
in person in response to a subpena or notice of oral 
examination shall be paid at least the same attend- 
ance and mileage fees as are paid witnesses in the 
courts of the United States, in accordance with 
Title 28, United States Code, Section 1821. 

(b) Responsibility. The fees and mileage 
referred to in this section shall be paid by the party 
at whose instance witnesses appear. 

Subpart F— Decision 
§ 511.51 Initial decision. 

(a) When filed. The Presiding Officer shall 
endeavor to file an Initial Decision with the 
Administrator within sixty (60) days of the close of 
the record, the filing of post-hearing briefs, or the 
filing of replies thereto, whichever is latest. 

(b) Content. The Initial Decision shall be based 
upon a consideration of the entire record and it 
shall be supported by reliable, probative, and 
substantial evidence. It shall include: 

(1) Findings and conclusions, as well as the 
reasons or bases therefore, upon the material ques- 
tions of fact, material issues of law, or discretion 
presented on the record, and should, where prac- 
ticable, be accompanied by specific page citations 
to the record and to legal and other materials 
relied upon. 

(2) An appropriate order. 



PART 511-18 



(c) By whom made. The Initial Decision shall be 
made and filed by the Presiding Officer who pre- 
sided over the hearing, unless otherwise ordered 
by the Administrator. 

(d) Reopening of proceeding by presiding officer; 
termination of jurisdiction. (1) At any time prior 
to or concomitant with the filing of the Initial Deci- 
sion, the Presiding Officer may reopen the pro- 
ceedings for the reception of further evidence. 

(2) Except for the correction of clerical errors, 
the jurisdiction of the Presiding Officer is ter- 
minated upon the filing of the Initial Decision, 
unless and until the proceeding is remanded to the 
Presiding Officer by the Administrator. 

§ 511.52 Adoption of initial decision. 

The Initial Decision and Order shall become the 
Final Decision and Order of the Administrator forty 
(40) days after issuance unless an appeal is noted 
and perfected or unless review is ordered by the 
Administrator. Upon the expiration of the fortieth 
day, the Executive Secretary shall prepare, sign 
and enter an order adopting the Initial Decision and 
Order. 

§ 511.53 Appeal from initial decision. 

(a) HTio may file notice of intention. Any party 
may appeal an Initial Decision to the Adminis- 
trator provided that within ten (10) days after 
issuance of the Initial Decision such party files and 
serves a notice of intention to appeal. 

(b) Appeal brief The appeal shall be in the form 
of a brief, filed within forty (40) days after service 
of the Initial Decision, duly served upon all parties 
and participants. The appeal brief shall contain, in 
the order indicated, the following: 

(1) A subject index of the matters in the brief, 
with page references, and a table of cases 
(alphabetically arranged), textbooks, statutes, and 
other material cited, with page references thereto; 

(2) A concise statement of the case; 

(3) A specification of the position urged; 

(4) The arguments, presenting clearly the 
points of fact and law relied upon in support of the 
position on each question, with specific page 
references to the record and the legal or other 
material relied upon; and 

(5) A proposed form of order for the Adminis- 
trator's consideration in lieu of the order contained 
in the Initial Decision. 



(c) Answering brief. Within thirty (30) days 
after service of the appeal brief upon all parties 
and participants, any party may file an answering 
brief which shall also contain a subject index, with 
page references, and a table of cases (alphabetically 
arranged), textbooks, statutes, and other material 
cited, with page references thereto. Such brief 
shall present clearly the points of fact and law 
relied upon in support of the position taken on each 
question, with specific page references to the 
record and legal or other material relied upon. 

(d) Participant's brief. Within thirty (30) days 
after service of the appeal brief upon all parties 
and participants, any participant may file an 
appeal brief which should contain a subject index, 
with page references, and a table of authorities 
being relied upon. Such brief shall present clearly 
the position taken by the participant on each ques- 
tion raised by the appellant(s). 

(e) Cross appeal. If a timely notice of appeal is 
filed by a party, any other party may file a notice of 
cross-appeal within ten (10) days of the date on 
which the first notice of appeal was filed. Cross- 
appeals shall be included in the answering brief 
and shall conform to the requirements for forms, 
content and filing specified in paragraph (c) of this 
section. If an appeal is noticed but not perfected, 
no cross-appeal shall be permitted and notice of 
cross-appeal shall be deemed void. 

(f) Reply brief. A reply brief shall be limited to 
rebuttal of matters in answering briefs, including 
matters raised in cross-appeals. A reply brief shall 
be filed and within fourteen (14) days after service 
of an answering brief, or on the day preceding the 
oral argument, whichever comes first. 

(g) Oral argument. The purpose of an oral 
argument is to emphasize and clarify the issues. 
Any party may request oral argument. The Admin- 
istrator may order oral argument upon request or 
upon his or her own initiative. All oral arguments 
shall be reported and transcribed. 

§ 511.54 Review of initial decision in absence of 
appeal. 

The Administrator may, by order, review a case 
not otherwise appealed by a party. Thereupon the 
parties shall and participants may file briefs in ac- 
cordance with § 511.53(b), (c), (d), (e), and (f) except 
that the Administrator may, in his or her discretion. 



PART 511-19 



establish a different briefing schedule in his or her 
order. Any such order shall issue within forty (40) 
days of issuance of the Initial Decision. The order 
shall set forth the issues which the Administrator 
will review. 

§ 511.55 Final decision on appeal or review. 

(a) Upon appeal from or review of an Initial Deci- 
sion, the Administrator shall consider such parts of 
the record as are cited or as may be necessary to 
resolve the issues presented and, in addition, shall, 
to the extent necessary or desirable, exercise aU the 
powers which it could have exercised if he or she 
had made the Initial Decision. 

(b) In rendering his or her decision, the Admin- 
istrator shall adopt, modify, or set aside the find- 
ings, conclusions, and order contained in the Initial 
Decision, and shall include in his or her Final Deci- 
sion a statement of the reasons or bases for his or 
her action. The Administrator shall issue an order 
reflecting his or her Final Decision. 

§ 511.56 Reconsideration. 

Within twenty (20) days after issuance of a Final 
Decision and Order, any party may file with the 
Administrator a petition for reconsideration of 
such decision or order, setting forth the relief 
desired and the grounds in support thereof. Any 
party desiring to oppose such a petition shall file an 
answer thereto within ten (10) days after service of 
the petition. The filing of a petition for recon- 
sideration shall not stay the effective date of the 
Decision and Order or toll the running of any 
statutory time period affecting the decision or 
order unless specifically so ordered by the 
Administrator. 

§511.57 Effective date of order. 

(a) Consent orders. An order which has been 
issued following acceptance of an offer of settle- 
ment in accordance with § 511.26 becomes effec- 
tive upon issuance. 

(b) Litigated orders. All other orders become 
effective upon the expiration of the statutory 
period for court review specified in Section 
508(c)(1) of the Motor Vehicle Information and 
Cost Savings Act, Title 15, United States Code 
Section 2008(c)(1), Pub. L. 94-163, 89 Stat. 911, 
or, if a petition for review has been filed, upon 
court affirmance of the Administrator's order. 



Subpart G— Settlement Procedure in Cases 

of Violation of Average Fuel 

Economy Standards 

§ 511.61 Purpose. 

This subpart establishes the procedures and 
requirements necessary to obtain a settlement of a 
case of violation of section 507 (1) and (2) of the 
Motor Vehicle Information and Cost Savings Act, 
as amended. Pub. L. 94-163, 89 Stat. 911 (15 
U.S.C. Section 2007(1)(2)). No settlement of such 
cases may be had except as in accordance with this 
subpart. 

§ 511.62 Definitions. 

"Average fuel economy standard" means an 
average fuel economy standard established by or 
pursuant to the Motor Vehicle Information and 
Cost Savings Act. 

"Insolvency" means the inability to meet ex- 
penses when due. 

"Settlement" means a compromise, modifica- 
tion, or remission of a civil penalty assessed under 
this Part for a violation of an average fuel economy 
standard. 

§511.63 Criteria for settlement. 

Settlement of a case of violation of an average 
fuel economy standard is discretionary with the 
Administrator. The Administrator will consider 
settlement only to the extent— 

(a) Necessary to prevent the insolvency or 
bankruptcy of the person seeking settlement, or 

(b) That the violation of the average fuel economy 
standard resulted, as shown by the person seeking 
settlement, from an act of God, a strike, or fire, or 

(c) That modification of a civil penalty assessed 
under this part is necessary to prevent lessening of 
competition, as determined and as certified by the 
Federal Trade Commission under section 508(b)(4) 
of the Motor Vehicle Information and Cost Savings 
Act, Pub. L. 94-163, 89 Stat. 911 (15 U.S.C. sec. 
2008(b)(4)). 

§ Petitions for settlement; timing, contents. 

(a) A petition seeking settlement under this sub- 
part must be filed within 30 days after the issuance 
of a final order assessing a civil penalty for a viola- 
tion of an average fuel economy standard. 



PART 511-20 



(b)(1) A petition for settlement should be suffi- 
cient to allow the Administrator to determine that 
at least one of the criteria set out in § 511.63 is 
satisfied, and that the public interest would be 
served by settlement. 

(2) A petition asserting that settlement is 
necessary to prevent bankruptcy or insolvency 
must include: 

(i) Copies of all pertinent financial records, 
auditors reports, and documents that show 
that the imposition of a civil penalty would 
cause insolvency, or would cause a company to 
do an act of bankruptcy, and 

(ii) A payment schedule that would allow the 
petitioner to pay a civil penalty without 
resulting in insolvency or an act of bankruptcy. 

(3) A petition asserting that the violation of 
the average fuel economy standard was caused by 
an act of God, fire, or strike must describe correc- 
tive and ameliorative steps taken to mitigate the 
effects of the act of God, fire, or strike. 

(4) A petition based on a certification by the 
Federal Trade Commission that modification of the 
civil penalty assessed is necessary to prevent a 
substantial lessening of competition must include a 
certified copy of: 

(i) The application to the Federal Trade 
Commission for a certification under section 
508(b)(4) of the Motor Vehicle Information and 
Cost Savings Act, Pub. L. 94-163, 89 Stat. 911 
(15 U.S.C. Sec. 2008(b)(4)), and materials sup- 
porting the application. 

(ii) The administrative record of any Federal 
Trade Commission proceeding held in regard 
to the application, and 

(iii) The certification by the Federal Trade 
Commission. 

(c) It is the policy of the National Highway 
Traffic Safety Administration that unconditional 
settlements of violations of average fuel economy 
standards are not in the public interest, and absent 
special and extraordinary circumstances, will not 
be allowed. All petitions for settlement shall con- 
tain a section proposing conditions for settlement. 
Conditions for settlement can be specific acts 
designed to lead to the reduction of automotive 
fuel consumption, which the petitioner is not other- 
wise required to perform pursuant to any statute. 



regulation, or administrative or judicial order, such 
as sponsoring public education programs, 
advertising, accelerating commercial application 
of technology, accelerating technology develop- 
ment programs, or making public the results of 
privately performed studies, surveys, or research 
activities. 

§ 511.65 Public comment. 

Notice and opportunity for comment are pro- 
vided to the public in regard to settlements under 
this part. Subject to § 511.66, notice of receipt of a 
petition for settlement is published in the Federal 
Register, and a copy of such petitions and any 
supporting information is placed in a public docket. 
Any settlement agreed to by the Administrator 
shall be placed in the public docket for 30 days so 
that interested persons may comment thereon. No 
settlement is binding until the completion of that 
thirty day period. 

§ 511.66 Confidential business information. 

The Administrator shall have authority to 
segregate from the public docket and to protect 
from public view information in support of a peti- 
tion for settlement which has been determined to 
be confidential business information. The provi- 
sions of 15 U.S.C. 2005(d) pertaining to discre- 
tionary release by the Administrator of and to 
limited disclosure of information determined to be 
confidential business information shall apply to 
this section. 

§511.67 Settlement order. 

If, in accordance with this subpart, the 
Administrator allows a settlement of a case of 
violation of an average fuel economy standard, an 
order of settlement shall be issued, setting out the 
terms of the settlement, and containing a brief 
discussion of the factors underlying the exercise of 
the Administrator's discretion in allowing the 
settlement, including a discussion of comments 
received under § 511.65. If the Administrator 
rejects a petition for settlement, the Executive 
Secretary shall give written notice of the rejection 
and the reasons for the rejection to the parties and 
the Presiding Officer. 



PART 511-21 



Subpart H— Appearances; Standards 
of Conduct 

§ 511.71 Who may make appearances. 

A party or participant may appear in person, or 
by a duly authorized officer, partner, regular 
employee, or other agent of this party or partici- 
pant, or by or with counsel or other duly qualified 
representative, in any proceeding under the part. 

§ 511.72 Authority for representation. 

Any individual acting in a representative capacity 
in any adjudicative proceeding may be required by 
the Presiding Officer or the Administrator to show 
his or her authority to act in such capacity. A 
regular employee of a party who appears on behalf 
of the party shall be required by the Presiding 
Officer or the Administrator to show his or her 
authority to so appear. 

§511.73 Written appearances. 

(a) Any person who appears in a proceeding 
shall file a written notice of appearance with the 
Executive Secretary or deliver a written notice of 
appearance to the reporter at the hearing, stating 
for whom the appearance is made and the name, 
address, and telephone number (including area 
code) of the person making the appearance and the 
date of the commencement of the appearance. The 
written appearance shall be made a part of the 
record. 

(b) Any person who has previously appeared in a 
proceeding may withdraw his or her appearance by 
filing a written notice of withdrawal of appearance 
with the Executive Secretary. The notice of 
withdrawal of appearance shall state the name, 
address, and telephone number (including area 
code) of the person withdrawing the appearance, 
for whom the appearance was made, and the effec- 
tive date of the withdrawal of the appearance, and 
such notice of withdrawal shall be filed within five 
(5) days of the effective date of the withdrawal of 
the appearance. 

§ 511.74 Attorneys. 

An attorney at law who is admitted to practice 
before the Federal courts or before the highest 
court of any State, the District of Columbia, or any 
territory or Commonwealth of the United States, 
may practice before the NHTSA. An attorney's 



own representation that he or she is in good 
standing before any of such courts shall be suffi- 
cient proof thereof, unless otherwise ordered by 
the Presiding Officer or the Administrator. 

§ 511.75 Persons not attorneys. 

(a) Any person who is not an attorney at law 
may be admitted to appear in an adjudicative pro- 
ceeding if that person files proof to the satisfaction 
of the Presiding Officer that he or she possesses 
the necessary legal, technical, or other qualifica- 
tions to render valuable service in the proceeding 
and is otherwise competent to advise and assist in 
the proceedings. An application by a person not an 
attorney at law for admission to appear in a pro- 
ceeding shall be submitted in writing to the 
Executive Secretary, not later than thirty (30) 
days prior to the hearing in the proceedings. The 
application shall set forth in detail the applicant's 
qualifications to appear in the proceedings. 

(b) No person who is not an attorney at law and 
whose application has not been approved shall be 
permitted to appear in the Administration's 
proceedings. However, this provision shall not 
apply to any person who appears before the 
NHTSA on his or her own behalf or on behalf of 
any corporation, partnership, or association of 
which the person is a partner, officer, or regular 
employee. 

§ 511.76 Qualifications and standards of conduct. 

(a) The NHTSA expects all persons appearing in 
proceedings before it to act with integrity, with 
respect, and in an ethical manner. Business trans- 
acted before and with the NHTSA shall be in good 
faith. 

(b) To maintain orderly proceedings, the 
Presiding Officer or the Administrator, as appro- 
priate under this part, may exclude parties, par- 
ticipants, and their representatives for refusal to 
comply with directions, continued use of dilatory 
tactics, refusal to adhere to reasonable standards 
of orderly and ethical conduct, failure to act in 
good faith, or violation of the prohibition against 
certain ex parte communications. The Presiding 
Officer may, in addition to the above sanctions, 
deny access to additional in camera materials 
when a party or participant publicly releases such 
materials without authorization. 



PART 511-22 



(c) An excluded party, participant, or represen- 
tative thereof may petition the Administrator to 
entertain an interlocutory appeal in accordance 
with § 511.24. If, after such appeal, the represen- 
tative of a party or participant, is excluded, the 
hearing shall, at the request of the party or partici- 
pant, be suspended for a reasonable time so that 
the party or participant may obtain another 
representative. 

§ 511.77 Restrictions as to former members and 
employees. 

The postemployee restrictions applicable to 
former Administrators and NHTSA employees, as 
set forth in 18 U.S.C. 207, shall govern the 
activities of former Administrators and NHTSA 
employees in matters connected with their former 
duties and responsibilities. 

§ 511.78 Prohibited communications. 

(a) Applicabiiity. This section is applicable 
during the period commencing with the date of 
issuance of a complaint and ending upon final 
NHTSA action in the matter. 

(b) Definitions. (1) "Decision-maker" means 
those NHTSA personnel who render decisions in 
adjudicative proceedings under this part, or who 
advise officials who render such decisions, 
including: 

(i) The Administrator, 

(ii) The Administrative Law Judges; 
(2) "Ex parte communications" means: 

(i) Any written communication other than a 
request for a status report on the proceeding 
made to a decisionmaker by any person other 
than a decisionmaker which is not served on all 
parties. 

(ii) Any oral communication other than a re- 
quest for a status report on the proceeding 
made to a decisionmaker by any person other 
than a decisionmaker without advance notice 
to the parties to the proceeding and opportunity 
for them to be persent. 

(c) Prohibited ex parte communications. Any 
oral or written ex parte communication relative to 
the merits of a proceeding under this part is a pro- 
hibited ex parte communication, except as provided 
in paragraph (d) of this section. 



(d) Permissible ex parte communications. The 
following communications shall not be prohibited 
under this section: 

(1) Ex parte communications authorized by 
statute or by this part. 

(2) Any staff communication concerning 
judicial review or judicial enforcement in any matter 
pending before or decided by the Administrator. 

(e) Procedures for handling prohibited ex parte 
communication. (1) Prohibited written ex parte 
communication. To the extent possible, a pro- 
hibited written ex parte communication received 
by any NHTSA employee shall be forwarded to the 
Executive Secretary rather than to a decision- 
maker. A prohibited written ex parte communica- 
tion which reaches a decisionmaker shall be 
forwarded by the decisionmaker to the Executive 
Secretary. If the circumstances in which a pro- 
hibited ex parte written communication was made 
are not apparent from the communication itself, a 
statement describing those circumstances shall be 
forwarded with the communication. 

(2) Prohibited oral ex parte communication. 

(i) If a prohibited oral ex parte communica- 
tion is made to a decisionmaker, he or she shall 
advise the person making the communication 
that the communication is prohibited and shall 
terminate the discussion. 

(ii) In the event of a prohibited oral ex parte 
communication, the decisionmaker shall for- 
ward to the Executive Secretary a dated state- 
ment containing such of the following informa- 
tion as is known to him/her: 

(A) The title and docket number of the 
proceeding; 

(B) The name and address of the person 
making the communication and his/her 
relationship (if any) to the parties to the 
proceeding; 

(C) The date and time of the communica- 
tion, its duration, and the circumstances 
(telephone call, personal interview, etc.) under 
which it was made; 

(D) A brief statement of the substance of 
the matters discussed; 

(E) Wnether the person making the com- 
munication persisted in doing so after being 
advised that the communication was prohibited. 



PART 511-23 



(3) Filing. All communications and state- 
ments forwarded to the Executive Secretary under 
this section shall be placed in a public file which 
shall be associated with, but not made a part of, the 
record of the proceedings, to which the com- 
munication or statement pertains. 

(4) Service on parties. The Executive 
Secretary shall serve a copy of each communica- 
tion and statement forwarded under this section 
on all parties to the proceedings. However, if the 
parties are numerous, or if other circumstances 
satisfy the Executive Secretary that service of the 
communication or statement would be unduly 
burdensome, he or she may, in lieu of service, 
notify all parties in writing that the communication 
or statement has been made and filed and that it is 
available for inspection and copying. 



(5) Service on maker. The Executive 
Secretary shall forward to the person who made 
the prohibited ex parte communication a copy of 
each communication and /or statement filed under 
this section. 

(f) Effect of ex parte communications. No pro- 
hibited ex parte communication shall be considered 
as part of the record for decision unless introduced 
into evidence by a party to the proceedings. 

(g) Sanctions. A party or participant who 
makes a prohibited ex parte communication, or 
who encourages or solicits another to make any 
such communication, may be subject to any 
appropriate sanction or sanctions, including but 
not limited to, exclusion from the proceeding and 
adverse rulings on the issues which are the subject 
of the prohibited communication. 



PART 511-24 



APPENDIX I— Final Prehearing Order 



Case Caption 



Final Prehearing Order 

A prehearing conference was held in this matter 
pursuant to Rule 21 of the Administration's Rules 
of Practice for Adjudicative Proceedings, on the 

day of , 19 , 

at o'clock — M. 



Counsel appeared as follows: 
For the Administration staff: 
For the Respondent(s): 
Others: 

1. NATURE OF ACTION AND JURISDICTION. 
This is an action for 



and the jurisdiction of the Administration is involved 

under Section of Title 

U.S.C. The jurisdiction of the Administration is 
(not) disputed. The questions of jurisdiction was 
decided as follows: 

2. STIPULATIONS AND STATEMENTS. 

The following stipulations and statements were 
submitted, attached to, and made a part of this 
order: 

(a) A comprehensive written stipulation or 
statement of all uncontested facts; 

(b) A concise summary of the ultimate facts as 
claimed by each party. (Complaint Counsel must 
set forth the claimed facts, specifically; for 
example, if violation is claimed. Complaint Counsel 
must assert specifically the acts of violation com- 
plained of; each respondent must reply with equal 
clarity and detail.) 

(c) Written stipulations or statements setting 
forth the qualifications of the expert witnesses to 
be called by each party; 



(d) A written list or lists of the witnesses whom 
each party will call, a written list or lists of the 
additional witnesses whom each party may call, 
and a statement of the subject on which each 
witness will testify; 

(e) An agreed statement of the contested issues 
of fact and of law, and /or separate statements by 
each party or any contested issues of fact and law 
not agreed to; 

(f) A list of all depositions to be read into 
evidence and statements of any objections thereto; 

(g) A list and brief description of any charts, 
graphs, models, schematic diagrams, and similar 
objects that will be used in opening statements or 
closing arguments, but will not be offered in 
evidence. If any other such objects are to be used 
by any party, they will be submitted to opposing 
counsel at least three days prior to hearing. If 
there is then any objection to ilieir use, the dispute 
will be submitted to the Presiding Officer at least 
one day prior to hearing; 

(h) Written waivers of claims or defenses which 
have been abandoned by the parties. 
The foregoing were modified, at the pretrial con- 
ference as follows: 

(To be completed at the conference itself. If none, 
recite "none") 



3. COMPLAINT COUNSEL'S EVIDENCE. 

3.1 The following exhibits were offered by Com- 
plaint Counsel, received in evidence, and marked 
as follows: 

(Identification number and brief description of 
each exhibit) 

The authenticity of these exhibits has been 
stipulated. 



PART 511-25 



3.2 The following exhibits were offered by the 
Complaint Counsel and marked for identification. 
There was reserved to the respondent(s) and party 
interveners, if any, the right to object to their 
receipt in evidence on the grounds stated: 

(Identification number and brief description of 
each exhibit. State briefly ground of objection, 
e.g., competency, relevancy, materiahty) 

4. RESPONDENT'S EVIDENCE. 

4.1 The following exhibits were offered by the 
respondent(s), received in evidence, and marked as 
herein indicated: 

(Identification number and brief description of 

each exhibit) 

The authenticity of these exhibits has been 

stipulated. 

4.2 The following exhibits were offered by the 
respondent(s) and marked for identification. There 
was reserved to Complaint Counsel and party 
interveners, if any, the right to object to their 
receipt in evidence on the grounds stated: 

(Identification number and brief description of 
each exhibit. State briefly ground of objection, 
e.g., competency, relevancy, materiality) 

5. ADDITIONAL ACTIONS. 

The following additional action was taken: 

(Amendments to pleadings, agreements of the 
parties, disposition of motions, separation of issues 
of liabOity and remedy, etc., if necessary) 

6. LIMITATIONS AND RESERVATIONS. 



6.1 Each of the parties has the right to further 
supplement the list of witnesses not later than ten 
(10) days prior to trial by furnishing opposing 
counsel with the name and address of the witness 
and general subject matter of his or her testimony 
and filing a supplement to this pretrial order. 
Thereafter additional witnesses may be added only 
after application to the Presiding Officer, for good 
cause shown. 

6.2 Rebuttal witnesses not listed in the exhibits to 
this order may be called only if the necessity of their 
testimony could not reasonably be foreseen ten (10) 
days prior to trial. If it appears to counsel at any 
time before trial that such rebuttal witnesses will be 
called, notice will immediately be given to opposing 
counsel and the Presiding Officer. 

6.3 The probable length of hearing is days. 

The hearings will be commenced on the day of 

, 19 , at o'clock — M. at 

(location) 

6.4 Prehearing briefs will be filed not later than 

5:00 p.m. on (Insert date not later than 

ten (10) days prior to hearing.) All anticipated legal 
questions, including those relating to the ad- 
missibility of evidence, must be covered by 
prehearing briefs. 

This prehearing order has been formulated after a 
conference at which counsel for the respective 
parties appeared. Reasonable opportunity has been 
afforded counsel for corrections or additions prior 
to signing. It will control the course of the hearing, 
and it may not be amended except by consent of the 
parties and the Presiding Officer, or by order of the 
Presiding Officer to prevent manifest injustice. 



(Presiding Officer's Name) 



45 F.R. 81574 
December 11, 1980 



PART 511-26 



PREAMBLE TO AMENDMENT TO PART 512 

Confidential Business Information 
(Docket No. 78-10; Notice 3) 



ACTION: Final rule. 

SUMMARY: This notice establishes the procedures 
by which the National Highway Traffic Safety Ad- 
ministration (NHTSA) considers claims for the 
confidential treatment of business information. 
Proposed procedures were published May 25, 
1978. This notice sets forth the procedures for 
asserting a claim for confidentiality and specifies 
the circumstances under which the agency may 
disclose information which is claimed to be con- 
fidential. The notice further establishes several 
presumptive class determinations relating to con- 
fidentiality. This notice clarifies and expedites the 
processing of confidentiality determinations and 
responds to the problems posed by the increasing 
number of confidentiality requests. 

DATE: The regulation becomes effective April 9, 
1981. 

FOR FURTHER INFORMATION CONTACT: 
Roger Tilton, Office of Chief Counsel, 
National Highway Traffic Safety 
Administration, 400 Seventh Street, S.W., 
Washington, D.C. 20590, (202-426-9511) 

SUPPLEMENTARY INFORMATION: The NHTSA has 
determined that the increasing number of re- 
quests for confidentiality necessitate the publica- 
tion of the procedures under which the agency will 
determine the confidentiality of business informa- 
tion. This regulation responds to that need by mak- 
ing public procedures for submitting requests for 
confidential treatment of business information. 
The regulation also details the content of the sub- 
missions that are required to substantiate a con- 
fidentiality request. This regulation imposes re- 
quirements upon the submitters of the information 
and upon the agency to respond to those requests 



in the time and manner established herein. Fur- 
ther, the regulation explains those limited in- 
stances in which confidential information will be 
released. Through this regulation, submitters of 
information will be better able to ensure that their 
confidentiality requests are properly substan- 
tiated, thus facilitating confidentiality determina- 
tions. This improvement of the existing handling 
of the requests will benefit both the agency and 
the submitter. 

The notice proposing the confidential informa- 
tion regulation was published May 25, 1978 (43 FR 
22412). In response to that notice, the agency 
received many comments from vehicle and equip- 
ment manufacturers, their representatives, and 
public interest groups. 

General Comments 

Several commenters objected to the provision in 
the confidentiality procedures requiring initial 
determinations relating to confidentiality to be 
made prior to an actual Freedom of Information 
Act (FOIA) request. These commenters alleged 
that the agency would be overburdened by the 
necessary review of material to ascertain its con- 
fidentiality when, in fact, the information might 
never be required to be released. Commenters 
pointed with approval to the confidentiality regu- 
lations of the Environmental Protection Agency 
(EPA) which allow the determination of confiden- 
tiality to be made at the time of an FOIA request 
(40 CFR 2.205). These same commenters also cited 
the Congressional Report of the Committee on 
Government Operations concerning FOIA re- 
quests (FOIA Report) (H. Rept. No. 95-1382) as 
discouraging advance determinations of confiden- 
tiality. In summation, it was suggested that the 
agency assume the confidentiahty of information 
submitted to it, when a claim for confidentiality is 
concurrently submitted, until such time as release 



PART 512 -PRE 1 



of the information is requested or required for 
agency purposes. 

The NHTSA disagrees with arguments indi- 
cating that the issuance of immediate determina- 
tions of confidentiality are burdensome and con- 
trary to existing procedures in other agencies. In 
fact, the agency considers immediate determina- 
tions of confidentiality to be within accepted 
governmental practice and to be beneficial to both 
the submitter of the information and the agency. 
The commenters cited EPA regulations as in- 
dicative of a governmental reluctance toward the 
use of immediate determinations of confidentiality. 
However, the Securities and Exchange Commis- 
sion (17 CFR 250.24b-2) and the Nuclear 
Regulatory Commission (10 CFR 2.790) both have 
procedures for the immediate determination of 
confidentiality. Therefore, government agencies 
have developed and are continuing to implement 
different approaches to the treatment of confiden- 
tial information dependent upon the nature of the 
individual agency and its programs. The NHTSA 
considers the immediate determination approach 
to be, for the most part, the approach best suited 
to this agency given its function and need for infor- 
mation. 

The submitter of confidential information will 
be aided by the policy of immediate determina- 
tions. A determination of confidentiality made 
upon receipt of information will automatically 
result in the protection of the confidential informa- 
tion. Confidential information will be clearly iden- 
tified within the agency and will be accorded treat- 
ment designed to preserve its confidentiality. The 
agency believes that this should improve the abili- 
ty of the NHTSA to maintain the confidentiality of 
information that merits such treatment. Without 
making an immediate determination, the agency 
might be deluged with information for which con- 
fidentiality determinations have been requested 
and which the submitter would have the NHTSA 
presume confidential. Such massive quantities of 
information are difficult to control and are more 
susceptible to accidental disclosure. The NHTSA 
is confident that the immediate determination pro- 
cedure will reduce the amount of confidential in- 
formation. With this more manageable amount of 
information, the agency can better ensure its 
protection. 

The public is also benefited by immediate deter- 
minations of confidentiality. These determinations 



result in immediate public access to information 
that is not confidential. The public should not be 
denied access to information that is "presumed 
confidential," but which is in fact not confidential. 

Commenters citing the FOIA Report have mis- 
interpreted the recommendations of that report as 
it pertains to the immediate determination of con- 
fidential information. The Report indicates that it 
is the opinion of the Committee that immediate 
determinations of confidentiality might not be the 
most efficient way to handle confidential informa- 
tion. However, the FOIA Report at page 38 with- 
holds comment on any recommendation with 
respect to this aspect of confidentiality pro- 
cedures. In reviewing the proposed regulations of 
the FTC, the Committee indicated their intention 
to await the outcome of those new regulations 
before reaching a definitive recommendation with 
respect to the issue. 

The FOIA Report should also be considered in 
its proper perspective. This Report is the prelimi- 
nary thinking of the Congressional Committee. As 
such, the agency considers it a useful tool in the 
development of confidentiality regulations. How- 
ever, this report is very preliminary and some of 
its recommendations could change before legisla- 
tion, if any, can be produced affecting the status of 
confidential information. Therefore, the agency 
cannot rely entirely upon the Committee state- 
ments in this report for the development of con- 
fidentiality regulations and must exercise its own 
judgment given the statutory mandates under 
which it operates. 

The allegations that immediate review will 
overload the agency with unnecessary work are 
unfounded. There are compelling reasons for mak- 
ing determinations upon receipt of information 
beyond those mentioned above. For the most part, 
information is submitted to the agency in connec- 
tion with rulemaking or investigations, or is sub- 
mitted under a reporting requirement. With 
respect to information furnished pursuant to 
rulemaking, the Administrative Procedure Act (5 
U.S.C. 101 et seq.) requires that informal rulemak- 
ing be conducted in the notice and comment for- 
mat. To provide adequate information upon which 
comments can be based, the agency must make 
public the information upon which a decision is 
made unless that information comes under some 
confidentiality provision. Accordingly, rulemaking 
is facilitated by making confidentiality determina- 



PART512-PRE2 



tions upon receipt of the information. This pro- 
cedure has been used in the past, and this regula- 
tion merely incorporates an ongoing procedure. As 
such, it will not increase the workload of the 
agency. 

Information submitted pursuant to an investiga- 
tion or through required reports to the agency also 
can have confidential determinations made upon 
submission without overtaxing the resources of 
the agency. Information gathered pursuant to 
either of these devices is usually made public at 
some point. Accordingly, a confidentiality determi- 
nation will be required at that time. This regula- 
tion merely requires that the determination be 
made upon receipt of the information. 

The instances when immediate determinations 
are to be made were carefully selected on the basis 
of the eventual likelihood that the information 
would customarily be made public if not deter- 
mined to be confidential. The agency concluded 
that it is received. Further, immediate determina- 
tions result in early public access to information 
that is rightfully in the public domain. Information 
that is not likely to be made public in the future 
will not have an immediate determination made 
concerning its confidentiality (§512.6(d)). Accord- 
ingly, the agency concludes that the comments in- 
dicating that the NHTSA will be overburdened by 
confidentiality determinations are without merit 
and that the agency will, in fact, be making approx- 
imately the same number of determinations as are 
made under existing practices. 

The Freedom of Information Clearinghouse 
stated that they supported the regulation but in- 
dicated that they considered it necessary to 
review information again when a FOIA request is 
submitted to ensure that information previously 
determined to be confidential still falls within the 
parameters defining confidential information. The 
agency agrees that it will be necessary to briefly 
review the information at the time a FOIA request 
is submitted, but this review should be made sig- 
nificantly easier by the earlier confidentiality 
determination and would merely require updating 
a previous determination. 

Several commenters disagreed with the 
NHTSA's policy relating to the use of confidential 
information. Volkwagen indicated that the 
agency's statutes require the agency to protect 
confidential information more than this regulation 
contemplates. Other commenters recommended 



that the agency return confidential information 
when it is through with it and return all voluntari- 
ly submitted information if the agency determines 
that it is not confidential. 

In response to Volkswagen's comments on the 
statutory protection of confidential information, 
the agency agrees that the statutes do provide 
protection for confidential business information. 
The agency has recognized that protection in this 
regulation and intends by this regulation to 
achieve that statutory mandate. The statutes also 
provide, however, for limited disclosure of con- 
fidential information when such disclosure is in the 
public interest. This regulation balances a submit- 
ter's interest in the confidentiality of its informa- 
tion with the public's need for the information. It 
should be remembered that the agency has 
historically had the right to make confidentiality 
determinations, and to release confidential infor- 
mation as allowed by the National Traffic and 
Motor Vehicle Safety Act (15 U.S.C. 1381 et seq.) 
and Titles I and V of the Motor Vehicle and Cost 
Savings Act (15 U.S.C. 1901 et seq.) (the Acts). The 
agency has exercised both of these rights in the 
past. 

The NHTSA has not routinely released confi- 
dential information. Release has occurred only 
when the public interest so demanded. This policy 
is unchanged by this regulation. The NHTSA fully 
intends to honor the confidentiality of appropriate 
information unless circumstances compel its dis- 
closure. In such disclosure instances, all efforts 
will be made to make disclosure in a manner to 
minimize any adverse effects while still serving 
the public interest. The commenters who sug- 
gested the return of confidential information after 
its use and the return of voluntarily submitted con- 
fidential information base this approach on the 
practices of some other agencies. The NHTSA con- 
siders it inappropriate to return information upon 
which agency decisions may have been based even 
if the agency is otherwise finished with that infor- 
mation. Agency decisions are subject to challenge 
and change as time passes, and frequently it is 
necessary to have all of the information upon 
which the initial decision was based either to sup- 
port that decision or to aid in the justification of its 
change. 

The suggested return of voluntarily submitted 
information that is determined not to be confiden- 
tial presents another question. The NHTSA 



PART 512 -PRE 3 



realizes that some agencies, the EPA is one, 
return such voluntarily submitted information 
after an adverse confidentiality determination. 
The agency notes, however, that the FOIA Report 
was skeptical about the advisability of this prac- 
tice. That Report indicated that denial of FOIA re- 
quests for this information during presubmission 
review may be illegal. The NHTSA is concerned 
about the potential legal problems involved with 
presubmission review and concludes that this ap- 
proach is not appropriate for the NHTSA. 

Several commenters indicated that the agency 
would be hindered in obtaining voluntary informa- 
tion if it refuses to return it when the agency 
determines that it is not confidential. The NHTSA 
disagrees. Information is voluntarily submitted 
frequently because the submitter has something to 
gain through its submission. For example, a sub- 
mitter might be requesting an exemption from a 
requirement or might be attempting to alter 
rulemaking in its favor by its submission. The 
agency has always received such information even 
though the NHTSA has never returned it. The ex- 
isting procedure had a negligible effect upon the 
ability of the agency to secure voluntary informa- 
tion. Moreover, the ability of the agency to secure 
much information through compulsory process 
acts as a final encouragement to the voluntary sub- 
mission of information. Accordingly, the agency 
disagrees with arguments indicating that volun- 
tarily submitted information should be returned to 
the submitter and will continue to retain this infor- 
mation. 

Volkswagen indicated that the agency should 
consider the issuance of this regulation with the 
promulgation of the regulation on compulsory 
process. Their major argument was that the com- 
pulsory process regulation imposes very short 
time limits on the production of information pur- 
suant to a subpoena or special order. The problems 
with a short response time, they argued, would be 
further exacerbated by requiring elaborate sub- 
stantiation of confidentiality requests. 

The agency acknowledges that its compulsory 
process devices are usually issued with a limited 
response time. Time limits may sometimes be 
short because the agency has an immediate need 
for information. The NHTSA concludes that there 
is sufficient time, however, to substantiate a confi- 
dentiality request. The amount of information re- 
quired for that substantiation is significant, but 



not overwhelming as some commenters have 
argued. The specific requirements for substantiat- 
ing confidentiality requests are discussed later in 
this preamble. In establishing the reasonable time 
period for responding to compulsory process 
orders, the agency considers the amount of time 
necessary to substantiate confidentiality requests. 

The Motor and Equipment Manufacturers 
Association (MEMA) commented that the agency 
had not done a sufficient analysis of the costs 
resulting from this regulation. The agency has con- 
sidered the potential costs of the regulation and 
concluded that they are so minimal as not to war- 
rant a full evaluation. 

Several equipment manufacturers indicated 
that the regulation does not address the problems 
of the equipment manufacturer. They indicated, 
for example, that the regulation developed classes 
of information that are presumed confidential but 
that those classes applied only to vehicle manufac- 
turers. It is true that the existing classes of 
presumed confidential information do not apply to 
equipment manufacturers. This does not mean 
that as time goes by that such classes will not be 
developed. It simply means that at this time the 
agency has insufficient information upon which to 
base specific classes applicable to equipment 
manufacturers. Equipment manufacturers, none- 
theless, can avail themselves of the processes 
existing in the remainder of the rule for confiden- 
tiality determinations. Further, equipment manu- 
facturers are free to suggest additional classes 
they regard to be appropriate. 

In a final general comment, it was suggested 
that the agency wait until the outcome of the 
Supreme Court decision in Chrysler Corp. v. 
Scklesinger, 565 F.2d 1172 (3rd Cir. 1977), which 
was being argued this term. The Supreme Court 
decided the Chrysler case on April 18, 1979 
(Chrysler v. Brown). That decision has little impact 
upon the procedures established by the regulation, 
and to the extent it does affect this regulation, it 
confirms the agency's positions. 

Information Supporting a 
Claim for Confidentiality 

Several commenters complained generally 
about the amount of information that the agency 
requires to be filed in support of a request for con- 
fidential treatment of information. These com- 
menters argued that the NHTSA's requirements 



PART 512 -PRE 4 



go beyond the regulations of other agencies that 
require support for confidentiaHty requests and go 
beyond existing case law with respect to proving 
the confidentiality of information. 

Suggestions were made that the NHTSA pat- 
tern its regulation after that of the U.S. Inter- 
national Trade Commission (USITC) (19 CFR 
201.6(bK3)). That regulation provides for the sub- 
stantiation of confidentiality by specifying the pro- 
vision of three pieces of information: (1) description 
of the confidential information, (2) justification for 
confidential treatment, and (3) a written certifica- 
tion under oath that the information is not avail- 
able to the public. Although this regulation is less 
detailed than the NHTSA's, it essentially requires 
similar submissions. The NHTSA's regulation 
merely states in more detail the information that 
is required to justify confidential treatment. The 
agency has incorporated into its regulation the 
latest court test for substantiating confidentiality. 
Although the USITC regulation does not spe- 
cifically refer to this test, the NHTSA believes 
that it would be necessary for a submitter to make 
a similar showing to them in support of confiden- 
tial treatment of information. 

The Motor Vehicle Manufacturers Association 
(MVMA) alleged that the agency's regulation ex- 
ceeded the requirement of existing judicial preced- 
ent that governs this area. It suggested that the 
information required by section 512.4(b) para- 
graphs (2), (3), and (4) requiring submitters to sup- 
port the fact that they have not released informa- 
tion goes beyond the test in National Parks and 
Conservation Association v. Morton, 498 F.2d 765 
(D.C. Cir. 1974). National Parks requires, in part, 
that confidential information be that which is not 
customarOy released. MVMA alleges that this 
does not require NHTSA to mandate by regulation 
that a company check every possible source of pub- 
lication of information claimed to be confidential. 

Although quoted in National Parks, the "cus- 
tomarily not released to the public" language is 
not the only test imposed by the court in National 
Parks. That language is an excerpt of the Senate 
Report on the Freedom of Information Act (5 
U.S.C. 552) (S. Rep. No. 813, 89th Cong. 1st. Sess. 9 
(1965)). The courts have attempted to use and fur- 
ther refine this Congressional language. The A^o- 
tional Parks case in particular illustrates the 
court's dissatisfaction with the "customarily not 
released" test when it stated that a finding that 



information is not customarily released would not 
alone justify confidential treatment. Rather, the 
court imposed a two-pronged test that measures 
the substantial competitive harm resulting from 
disclosure of information or the impairment of the 
Government's ability to obtain future information 
if similar information is released. 

It is axiomatic that the "customarily not re- 
leased" test in and of itself could never be con- 
clusive of information's confidentiality absent 
other considerations. The fact that information is 
customarily not made public does not mean that 
the specific information for which confidentiality is 
requested has not been made public. If that infor- 
mation has in fact been made public, it does not 
merit confidential status under the National Parks 
test. Accordingly, some showing that information 
for which confidential treatment is requested has 
not been previously made public is a prerequisite 
to determining confidentiality. 

Assuming the validity of the above re- 
quirements, the MVMA and others argue, 
nonetheless, that it is too burdensome, because it 
requires companies to investigate all possible in- 
stances where information may have been made 
public. They suggest that a submitter will be re- 
quired to interview every employee to ensure that 
information has not been leaked. 

The agency has imposed a reasonable burden 
upon a manufacturer to take some limited steps to 
check that its so-called confidential information 
has not been disclosed. As the preamble to the 
notice of proposed rulemaking indicated, it is not 
the intention of the agency that submitters ensure 
that information has never been accidentally 
disclosed. Rather, the agency demands that a sub- 
mitter ensure that to its knowledge there have 
been no accidental or purposeful disclosures of the 
information. This requires only that a diligent ef- 
fort be made by the submitter to take minimal 
steps ensuring that its information is actually con- 
fidential. The agency concludes that this is not a 
major burden upon a submitter of information. 

With respect to the requirements of paragraphs 
(2) and (3) of section 512.4 (b), Wagner Electric Co. 
suggested that disclosures of information to par- 
ent companies or to wholly owned subsidiaries not 
fall within those groups to whom disclosures must 
be reported to the agency. The NHTSA disagrees 
with this position. The agency wants to know of 
such a disclosure, but a disclosure to a parent or 



PART 512 -PRE 5 



wholly owned subsidiary does not necessarily 
mean that the information has been made public, 
which might deny the information confidential 
treatment. A submitter can explain, under the pro- 
visions of paragraph (3), that disclosure to a parent 
or subsidiary does not compromise the confidential 
nature of the information. 

General Motors (GM) indicated that it consid- 
ered overly burdensome the requirement that it 
indicate what steps had been taken to assure the 
confidentiality of the submitted information in its 
possession (512.4(b) (2)). It argued that this require- 
ment would require it to detail its plant security 
system or other security measures that could in 
turn jeopardize its future security. 

The NHTSA has no interest in the specific inter- 
nal security devices of any manufacturer's facili- 
ties. The NHTSA simply wants the manufacturer 
to briefly indicate, pursuant to paragraph (2), that 
proper precautions were taken to preserve the 
confidentiality of this information. The objective of 
this paragraph is to make sure that the submitter 
has treated this information differently from the 
ordinary information in its possession. If, on the 
other hand, the submitter has taken no measures 
to safeguard its own information, its claim for con- 
fidential treatment by the Government is some- 
what diminished. 

The MVMA asserted that the requirement of 
documenting every possible authorized and 
unauthorized disclosure of information would be 
burdensome. Such documentation, it argued, 
would require submitters to interview every per- 
son that might have access to the information to 
ascertain possible disclosures as well as monitor 
the press for possible unauthorized leaks. 

The NHTSA does not consider it unreasonable 
to ask the submitter of information to Hst all of the 
recipients of information other than the submitter. 
In most instances, truly confidential information 
will not have been supplied to excessive numbers 
of individuals or entities beyond the submitter. 
The NHTSA concludes that information that is 
really confidential will be protected by the submit- 
ter. The agency is confident that any submitter 
with such information would know to whom, out- 
side its organization, it has given that information. 
In fact, most submitters should have this informa- 
tion readily available. Any submitter that is 
unaware of outside organizations in possession of 
its confidential information may have to do more 



extensive research, but the need for such research 
itself may be indicative of meager internal controls 
of so-called confidential information and may imply 
that the information is really not confidential. 

As to the allegations that submitters must 
monitor all trade newspapers to discover possible 
unauthorized disclosures, these are exaggerations 
of the effects of this rule. Paragraph (4) of Part 
512.4(b) requires notification to the agency of 
known authorized and unauthorized public 
disclosures. Submitters are under no obligation to 
ensure that there have been no unauthorized 
releases of their information. Their duty is simply 
to report those instances of disclosure of which 
they are aware. The NHTSA believes that most 
unauthorized disclosures of confidential informa- 
tion that are subsequently reported in trade 
papers or newspapers are likely to be brought to 
the submitter's attention. 

Several commenters complained about the re- 
quirement in paragraph (5) of section 512.4(b). 
That paragrraph requires submitters of informa- 
tion to notify the agency of existing confidentiality 
determinations made by the NHTSA, other agen- 
cies, or the courts relating to the confidentiality of 
the information or similar information. Submitters 
of information complained that the NHTSA was in 
better position to canvass court decisions relating 
to confidentiahty and to review all of the decisions 
of other agencies. They argued that it was overly 
burdensome for submitters to do all of this 
research. 

These comments indicate a misunderstanding of 
the requirements of this section. The agency does 
not intend that the submitter of information pro- 
vide the agency with the latest judicial and agency 
opinions regarding the confidentiality of similar in- 
formation of other submitters. This paragraph 
simply requires the submitter of information to 
supply the NHTSA with determinations respect- 
ing the confidentiality of its own similar or identi- 
cal information. A submitter of information should 
be aware of these determinations without need to 
do any research whatsoever. Accordingly, the 
burden of this requirement upon the submitter of 
information is minimal. To clarify the agency's 
intention with respect to this paragraph, the 
NHTSA is modifying the language somewhat to 
make it clear that a submitter is responsible only 
for determinations relating to its own information. 

The Motor Vehicle Equipment Manufacturers 



PART 512- PRE 6 



Association (MEMA) suggested that paragraph (8) 
was unnecessary. That paragraph requires infor- 
mation as to the effect of a disclosure of voluntari- 
ly submitted confidential information upon the 
ability of the NHTSA to obtain future voluntary 
information. The MEMA indicated that it could see 
no reason to raise this inquiry since it is the 
manufacturers' interests in confidentiality that 
will be harmed by disclosure not necessarily the 
agency's. The paragraph (8) requirement was in- 
cluded to provide information as to the potential 
harm that disclosure might impose upon the abili- 
ty of the NHTSA to obtain information through 
voluntary means. This inquiry is one of the two 
pronged tests employed in National Parks, supra. 
and is frequently cited as being the appropriate 
test for confidentiality of voluntarily submitted 
information. Therefore, the agency does not ag^ee 
with the MEMA's comments that this information 
is unnecessary. 

Paragraph (9) requires a submitter of informa- 
tion to indicate the amount of time for which con- 
fidentiality is requested. The MEMA complained 
that in the instance of trade secrets no time limit is 
appropriate. The agency does not agree that trade 
secrets are always permanently confidential. Some 
trade secrets may become common knowledge 
within a certain amount of time. Nonetheless, 
paragraph (9) permits a submitter of information 
to request and justify an indefinite time period for 
maintaining the confidentiality of its information. 

Many commenters suggested that the informa- 
tion submitted in support of their confidentiality 
requests would in turn be confidential and, if 
released, could cause them competitive harm. 
They suggested that submitters might fear to sup- 
port their claims for confidentiality since the sup- 
port information could in some instances be even 
more harmful, if disclosed, than would the disclo- 
sure of the originally submitted information. Com- 
menters, therefore, argued that the agency should 
at least return any information submitted in sup- 
port of a confidentiality request if that request is 
subsequently denied. 

The agency intends by this regulation to 
establish a procedure where specious requests for 
confidentiality are discouraged while those re- 
quests that are meritorious can be handled effi- 
ciently. The agency concludes that a submitter of 
information who believes that disclosure of its in- 
formation will result in competitive harm will sup- 



port its request with necessary information. Infor- 
mation submitted in support of a claim of confiden- 
tiality can also be requested for confidential treat- 
ment. Consequently, the agency does not expect 
that this provision will discourage appropriate 
confidentiality requests. For the reasons stated 
earlier in this preamble, the agency disagrees with 
arguments favoring the return of information sub- 
mitted to the NHTSA and will not undertake such 
an approach. 

Paragraph (h) of Part 512.4 requires submitters 
to update their confidentiality requests if inter- 
vening events would change the confidentiality 
determination. Commenters objected to this re- 
quirement as being unnecessary and costly. For 
example, they argued that since decisions are 
made immediately with respect to confidentiality, 
updating the information is unnecessary. 

Not all decisions respecting confidentiality are 
made immediately. As stated earlier, most con- 
fidential information that would otherwise subse- 
quently be made public will have an immediate 
determination of confidentiality. However, infor- 
mation that is not customarily made public by the 
agency pursuant to one of the agency's established 
procedures will not have a confidentiality deter- 
mination made with respect to it until such time as 
a FOIA request is received. For this reason, it is 
necessary that information submitted by manufac- 
turers for which confidentiality is requested be up- 
dated when circumstances change that request. If, 
for example, a company voluntarily disclosed infor- 
mation in the interim before the agency deter- 
mined confidentiality, the NHTSA should be made 
aware of this fact since the disclosure would make 
the confidentiality determination moot. 

Updating of previous confidentiality requests 
also applies even after confidentiality has been 
gpranted. In certain instances, termination of con- 
fidentiality is conditioned upon the occurrence of a 
particular event. In such cases, the agency should 
be informed that the event has occurred so that 
the confidential status of the information can be 
discontinued. Moreover, there are times when in- 
formation will become disclosed or other events 
will make its continued confidentiality unnec- 
essary. In these instances, the agency should be 
informed of the disclosure in order to correct its 
determination. In conclusion, the agency does not 
agree that the updating provision is unnecessary. 

The agency concludes that the updating provi- 



PART512-PRE 7 



sion will not be costly. The requirement merely 
states that a company shall inform the agency of 
any changes pertaining to the information. The up- 
dating responsibility is triggered when the submit- 
ter knows that the initial submission is incorrect 
or the information given in that submission has 
changed. It is not required that a submitter con- 
stantly monitor all information submitted pursu- 
ant to a confidentiahty determination as suggested 
by GM. A submitter is only charged with the 
responsibility of an update when it knows that the 
information previously submitted was erroneous. 
If by accident or mistake, the submitter does not 
know or realize the initial error or changed cir- 
cumstances, there is no duty upon it to make the 
amendment. Therefore, the agency concludes that 
this is a reasonable burden to place upon the sub- 
mitter of information. 

Commenters objected to paragraph (i) of Part 
512.4 which states that a submitter may lose its 
claim of confidentiality through failure to comply 
with the requirements of paragraph (b). Paragraph 
(i) establishes times when a noncompliance may be 
deemed a waiver of the confidentiality claim and 
times when a noncompliance will waive the con- 
fidentiality request. The times when confidentiali- 
ty will be lost are few: (1) failure to file the re- 
quired certificate, (2) failure to request confidential 
treatment, and (3) failure to establish the necessity 
for confidentiality. These failures will result in the 
loss of confidential treatment for the information. 
In other instances where technical insufficiencies 
in the required submissions exist, the agency may 
deem a claim of confidentiality to have been 
waived. On the other hand, the agency may allow 
the submitter to perfect its submission. 

The discretionary waiver aspect of paragraph (i) 
allows the agency the necessary latitude to deal 
with all possible circumstances. For example, if a 
submitter is knowingly delaying or otherwise in- 
terfering with the determination process by fail- 
ure to supply complete information, and the agen- 
cy needs that information immediately, the 
NHTSA must have the authority to deny the claim 
of confidentiality. To do otherwise would jeopard- 
ize the public welfare while permitting submitters 
to avoid the agency's regulations. In most in- 
stances, however, where a submitter merely 
neglects to include a minor part of the required 
material and the oversight is not deemed to be 
intentional, the agency would normally grant the 



submitter additional time to substantiate its claim. 
The agency will exercise reasonable discretion in 
determining whether a submitter's confidentiality 
request has been waived. 

Commenters disagreed with the regulation in 
section 512.4(i) to the extent that it allows the use 
of criminal and civil penalties for failure to amend 
confidentiality requests when the initial informa- 
tion has changed or an error has been discovered 
in the initial filing. These commenters challenged 
the authority and the wisdom of invoking either of 
these penalties. 

The NHTSA has the authority to enforce its 
regulations through civil penalties (15 U.S.C, 
1917, 1948, 1989, and 2008). This authority is nec- 
essary to encourage adherence to the agency's 
regulations. The NHTSA will retain the civil pen- 
alty provision of this paragraph. However, the 
agency has considered the comments submitted to 
it and concludes that the imposition of criminal 
penalties is unnecessary in the enforcement of this 
requirement. 

Determining Confidentiality 

The Automobile Importers Association (AIA) 
complained that Part 512.5 was very complex and 
should be clarified. For example, the AIA indi- 
cated that the lengthy set of phrases connected by 
disjunctives and conjunctives was beyond easy 
comprehension. Further, the AIA indicated that 
the definition of "voluntarily submitted informa- 
tion" in this section should be amended. Currently, 
the section defines "voluntarily submitted infor- 
mation" as that information that could not be com- 
pelled by compulsory process. The AIA would 
have the agency define voluntarily submitted in- 
formation as all information submitted to the agen- 
cy voluntarily regardless of the fact the informa- 
tion could have been compelled by the NHTSA. 

Responding first to the comment that the 
language is confusing, the agency has concluded 
that the language of this provision is somewhat 
unclear. Proposed paragraphs (1) through (4) state 
that information is accorded confidential treat- 
ment if it is a trade secret or commercial or finan- 
cial information that has not been previously 
disclosed and whose disclosure would likely result 
in substantial competitive harm to the submitter. 
Proposed paragraph (5) establishes a somewhat 
different test for voluntarily submitted informa- 
tion that is a trade secret or confidential business 



PART 512 -PRE 8 



information. These two tests conform to the 
guidelines established by the National Parks case. 
The agency is amending this section by con- 
solidating several of the paragraphs to clarify the 
tests for determining confidentiality. 

The AIA also recommended that the agency 
adopt a different definition of "voluntarily submit- 
ted information." The purpose of proposed para- 
graph (a) (5) was to establish a test for preserv- 
ing the confidentiality of information that the 
agency could not compel by compulsory process. If 
the agency were to release such information and 
such release were to discourage the submission of 
information that the agency could not otherwise 
obtain, then the NHTSA might be hindered in 
fulfilling its mandate. Accordingly, the agency 
needs to be sure that it does not discourage the 
flow of this information. The AIA suggestion 
would expand the category of voluntarily submit- 
ted information to include even that which could 
be produced by compulsory process but which a 
submitter has decided to submit voluntarily. The 
NHTSA disagrees with the AIA's suggestion. 
Since the NHTSA can compel much of the informa- 
tion currently submitted voluntarily, the real 
distinction in information submitted to the agency 
is whether or not it can be compelled. The agency 
continues to believe that information that can be 
compelled by it should not be subject to the same 
standards as that information which is freely given 
to the agency and which the agency could not 
compel. 

The AIA objected to the requirements of section 
512.6(d) that allow the NHTSA to delay confiden- 
tiality determinations for some information until 
10 days after the receipt of a FOIA request. The 
AIA believed that this requirement would overly 
burden submitters of information since they would 
be required under Part 512.4(h) to update their 
confidentiality requests if changes occur even 
though in these instances confidentiality deter- 
minations would not be made upon receipt of the 
information, but upon the receipt of a FOIA re- 
quest. Earlier in this preamble, the agency stated 
that the burden of updating information for which 
confidentiality was requested is reasonable and 
necessary, particularly when responding to FOIA 
requests. It would be improper under the FOIA for 
the agency to withhold information that should be 
made available. If information previously deter- 
mined to be confidential subsequently loses its con- 



fidentiality, that information might be subject to 
release under FOIA. Accordingly, the agency must 
require that submitters update this information 
when necessary to ensure full compliance with ex- 
isting laws relating to the release of information. 
With respect to the other time periods for deter- 
mining confidentiality, the agency is increasing 
them from 10 to 30 days as a result of the increased 
volume of confidentiality requests. 

The AIA complained that the provision in sec- 
tion 512.6(e) that permits the agency to extend the 
time periods applicable to making determinations 
under various sections of the regulation render 
those time limits meaningless. It suggested that 
the NHTSA only has to prove good cause to itself 
that an extension is warranted. 

The purpose of this provision is to provide for 
those instances in which a determination cannot 
occur within the normally established time frame. 
It is the intention of the agency to conform to the 
time requirements imposed upon it unless unusual 
circumstances prohibit timely determinations. For 
example, in certain rulemaking actions manufac- 
turers wait until the last day before submitting 
comments. If many comments arrived simultane- 
ously with confidentiality requests, the agency 
might be unable to make all the determinations 
with the specified time limits. Therefore, the agen- 
cy needs some discretion to extend time limits. 
Paragraph (e) places a burden upon the agency to 
establish "good cause" for an extension. These 
reasons must be set out in writing and provided to 
the submitter. Therefore, the submitter will have 
the opportunity of contesting the agency's "good 
cause" determination. As a further safeguard 
against abuse of the extension provision, the agen- 
cy has indicated in this section that the extension 
as it applies to FOIA requests will be done in com- 
pliance with 5 U.S.C. 552. The NHTSA has deter- 
mined that these procedures will preserve the 
necessary latitude required by the agency to deal 
with all possible contingencies while preventing 
routine abuse of the extension provision. 

Several commenters objected to paragfraph (f) of 
section 512.6 which specifies that the NHTSA will 
notify a submitter of the determination respecting 
its confidentiality request. The regulation in- 
dicates that this notification will provide, in the 
case of denials, that the information will be made 
public not less than 10 working days after the sub- 
mitter of the information has received notice. The 



PART 512 -PRE 9 



provision further states that the 10-working day 
requirement can be modified if it is in the public 
interest that the information be made available 
earlier. Commenters objected to the lO-working 
day requirement some indicating that foreign sub- 
mitters are particularly disadvantaged by such a 
short time period. 

The time periods provided for the release of in- 
formation are short for a number of reasons. First, 
in the cases of FOIA requests, the agency must 
respond to the request within a relatively short 
time frame. The agency cannot, as some com- 
menters suggest, permit submitters of information 
extensive periods of time to react to the agency's 
determinations in FOIA cases. Second, informa- 
tion frequently will be needed for rulemaking or 
other agency needs that would otherwise be 
delayed by a lengthy interval between a confiden- 
tiality determination and release of the informa- 
tion. The agency also must have the authority to 
reduce the time periods even further if the cir- 
cumstances indicate that the public interest 
demands the immediate release of this informa- 
tion. Even under emergency release conditions, 
however, a submitter will be given some notifica- 
tion of the pending release of its information even 
though such notice might be short. Within even an 
abbreviated time frame, a submitter would have 
the opportunity to seek whatever judicial remedy 
is available to it. Accordingly, the agency con- 
cludes that the time provisions of this section meet 
the needs of the agency for making information 
available in the shortest possible time while still 
permitting the submitter of the information to 
seek whatever recourse it chooses when its con- 
fidentiality request has been denied. 

The AIA pointed out that nothing in paragraph 
(f) indicates that the notification of the determina- 
tion will be made immediately. They were con- 
cerned that the NHTSA might make a determina- 
tion in some instances and not notify a submitter 
for some time. To prevent this from occurring, the 
AIA suggested some modification in the language 
of the provision to ensure that the agency is re- 
quired to give immediate notification of a deter- 
mination. Since this has always been the intention 
of the NHTSA, the agency agrees with the modifi- 
cation suggested by the AIA and changes this pro- 
vision accordingly. 

General Motors stated that section 512.6(f) (2) 
was insufficient because, although it indicates that 



a submitter of information will receive notice of 
some sort, it does not indicate that the notice of 
denial will state the reasons for such a denial. The 
section states that the submitter will be notified in 
writing of the denial of its confidentiality request. 
The agency intends that this written notice will 
state the reasons for the denial. To clarify this, the 
NHTSA is modifying this section to indicate that a 
statement of the reasons for denial will be part of 
the written notice. 

A few commenters were troubled by paragraph 
(g) of section 512.6. This paragraph allows submit- 
ters whose requests for confidentiality have been 
denied to petition for a reconsideration of that 
denial. Dunlop Tire and Rubber Co. indicated that 
a petition for reconsideration was a waste of effort 
since the same office would be making a deter- 
mination of the reconsideration petition as had 
made the initial denial. Accordingly, Dunlop pro- 
posed that a submitter be permitted to go directly 
to court without recourse to the reconsideration 
process. 

The NHTSA disagrees with the Dunlop position 
that reconsideration is a futile effort. A petition 
for reconsideration allows a submitter of informa- 
tion to further emphasize a portion of its request 
that it may feel has been insufficiently considered 
by the agency. The reconsideration process allows 
all parties the opportunity to discover and rectify 
possible errors without recourse to costly and 
time-consuming litigation. The agency notes that it 
has used petitions for reconsideration in the area 
of rulemaking for many years and those petitions 
have frequently resulted in amendments of agency 
rulemaking actions. Therefore, the NHTSA con- 
cludes that the reconsideration process is a mean- 
ingful check upon the agency's actions and will con- 
tinue to allow it when making confidentiality 
determinations. However, the regulation states 
that a submitter may petition for reconsideration. 
A submitter is not required to file such a petition 
and may instead seek judicial review. 

Volkswagen argued that the petition for recon- 
sideration process was rendered meaningless 
since it was possible that the information for which 
confidentiality was claimed could be released 
pending a determination on the petition for recon- 
sideration. The paragraph states that the Chief 
Counsel may postpone the release of information 
pending a decision on the petition for reconsidera- 
tion. This implies, however, that release may not 



PART 512 -PRE 10 



be postponed in some cases. It is contemplated 
that in the majority of instances material will not 
be released until a final determination on the issue 
of confidentiality is made. Therefore, material 
generally will not be made public during the recon- 
sideration process. In exigent circumstances, how- 
ever, the agency does retain the discretion to 
release information if the public interest so dic- 
tates. Even in these unusual circumstances, a sub- 
mitter of the information would be informed of the 
pending release of the information and would be 
able to then seek an immediate judicial interven- 
tion prior to the release of the information. 

The AIA suggested that the agency adopt a 
review procedure for the denials of requests for 
confidentiality that would allow a submitter to 
petition someone in the Office of the Secretary of 
the Department of Transportation for a review of 
the confidentiality request. The NHTSA has estab- 
lished its own internal review of denials through 
the petition for reconsideration process. A sub- 
mitter that is still dissatisfied with the agency's 
action can seek a judicial remedy. Although the 
Secretary of the Department has authority over 
agency functions, that office does not review 
routine agency decisionmaking and does not have 
sufficient resources to act as a review board for 
every agency action. The NHTSA notes that the 
need for Secretarial review of these decisions is 
not apparent. Accordingly, the agency declines to 
adopt AIA's suggested modification. 

General Motors objected to section 512.7(a) (2) 
which indicates that a confidentiality determina- 
tion remains in effect until, among other things, a 
change occurs in applicable law. GM suggested 
that this was impermissibly vague. It stated that 
some remote lower court might make an adverse 
ruling on an issue of confidentiality while the 
Supreme Court may have decided otherwise in 
another case. It feared the NHTSA would follow 
the rule of the lower court. 

The agency disagrees with GM that this provi- 
sion is impermissibly vague. A change in applica- 
ble law might include a statutory change or a 
change in judicial interpretation of existing 
statutes. However, as GM must well know, the 
Supreme Court is the ultimate authority with 
respect to judicial interpretation of statutes. 
Accordingly, the agency would not terminate a 
confidentiality determination when a lower court 
issued a decision that might be in conflict with 



existing pronouncements from the Supreme 
Court. The agency does not consider every lower 
court decision to indicate a change in the appli- 
cable law, but it does consider the pronouncements 
of major courts as indicative of changes in the 
status of the law and may review confidentiality 
determinations in the light of those pronounce- 
ments. In any event, if the agency responded to a 
change in law by determining to reverse a previ- 
ous finding of confidentiality, it would provide 
notice of that determination and the reason there- 
for before releasing the information in question. 

Disclosure of Confidential Information 

Sections 512.8 and 512.10 of this regulation 
elicited many comments that were for the most 
part opposed to the release of information that has 
been determined to be confidential. Many com- 
menters suggested that these two provisions be 
deleted entirely or, in the alternative, modified to 
limit severely the right of the agency to release 
confidential information. Commenters expressed 
the erroneous belief that these provisions would 
combine to undermine the confidentiality of infor- 
mation that is normally classified as confidential. 
The comments indicate a need for explanation of 
the agency's intentions, its statutory powers and 
limitations, and the judicial precedents that gov- 
ern the area of discretionary release of informa- 
tion determined to be confidential. 

In section 512.8, the agency established separate 
criteria for the release of different types of confi- 
dential information. These criteria are recitations 
of the various statutory sections which permit the 
agency to disclose such information. Section 113 of 
the National Traffic and Motor Vehicle Safety Act 
of 1966 (the Act) (15 U.S.C. 1401) states that "in- 
formation received pursuant to Title I of the Act 
relating to trade secrets or other matters referred 
to in 18 U.S.C. 1905 shall be confidential but may 
be disclosed when relevant in any proceeding 
under this title." This statutory language is incor- 
porated into section 512.8 (a) (1). 

Section 158(a) (2) (B) of the Act (15 U.S.C. 1419) 
specifies that confidential information obtained 
under Part B of the Act may be released if "nec- 
essary to carry out the purposes of this title." 
This language is adopted in section 512.8(a) (2). 
Finally, section 512.8(a) (3) permits the release of 
confidential information obtained under Parts I 
and V of the Motor Vehicle and Cost Savings Act 



PART 512 -PRE 11 



(15 U.S.C. 1901 et seq.) if the information is rele- 
vant to any proceeding under the title under which 
the information was obtained. The authority for 
this release is found in 15 U.S.C. 1914 and 2005. 
Accordingly, comments to the agency that any 
release of confidential information is contrary to 
the agency's statutory authority are entirely 
without merit. 

Commenters argued that regardless of any pos- 
sible statutory authority granted to the agency in 
its various Acts to release confidential informa- 
tion, 18 U.S.C. 1905 states that information 
relating to trade secrets and other areas of 
business confidentiality cannot be released. This 
comment indicates a misunderstanding of section 
1905. Section 1905 states that certain information 
should be confidential and not released. However, 
section 1905 further states that the information 
outlined in that section shall not be released 
"except as provided by law." Any release of con- 
fidential information made pursuant to the 
agency's validly enacted enabling Acts is a release 
provided by law and, therefore, permissible under 
section 1905. Therefore, the agency declines to 
delete the discretionary release provisions of the 
regulation that permit the release of information 
under the tests established by the Act and incor- 
porated in Part 512.8. 

Some commenters argued that although the 
release of confidential information might be per- 
missible under existing legal authority, the agency 
should not release the information. They sug- 
gested that such release will jeopardize future 
cooperation between the agency and the industry. 
Further, they argued release will invite Utigation 
increasing the adversarial relationship between 
the agency and the industry. 

When considering the consequences of the 
release of confidential information, the submitters 
of that information should examine existing 
agency practice. The agency for years has been 
operating under the statutory provisions permit- 
ting release of confidential information. This 
regulation simply formalizes the release proce- 
dures used by the agency but does not increase the 
existing authority of the agency to release infor- 
mation. During the time that the agency has ope- 
rated with this authority, some releases of con- 
fidential information have been made when the 
agency determined such releases to fall within the 
parameters prescribed by the applicable statutory 



authority. However, for the most part, confidential 
information has not been released. The NHTSA 
does not intend by this regulation to alter this 
practice. The agency realizes the importance to 
the competitive process of maintaining the con- 
fidentiality of business information. Accordingly, 
the agency will not release confidential informa- 
tion unless the release of such information meets 
all of the statutory requirements for release and is 
deemed to be in the public interest. 

Commenters suggested that when the release of 
confidential information is necessary it should be 
made in the least offensive form. For example, 
they suggested that aggregate information or 
unidentified information might sometimes meet 
the need for public release. The agency agrees 
with these comments and will try to release as 
little information as is necessary and will attempt 
to do it in an inoffensive manner. The NHTSA 
believes that such an approach reflects existing 
judicial decisions such as Pennzoil v. FPC, 534 F.2d 
627 (5th Cir. 1976) which indicated that agencies 
should examine alternative, less damaging meth- 
ods of public disclosure. 

Most commenters suggested that the 10-work- 
ingday discretionary release requirement was un- 
necessarily short. Many suggested longer time 
periods prior to release to permit the submitter 
time to take action to preserve the confidentiality 
of its information. Further, commenters objected 
to the provision that allows the administrator to 
waive the 10-day notice requirement if the public 
interest will be served by such waiver. At the 
least, they argued, a 10-day minimum is required. 
Some even suggested that any time period less 
than 10 days would violate due process. 

The existing notice provision is in accordance 
with other notification provisions in this regula- 
tion. As stated earlier in this preamble, the agency 
has concluded that this time period provides an 
adequate opportunity for submitters of informa- 
tion to seek whatever recourse they feel may be 
necessary to preserve their rights. Accordingly, to 
prevent the possibility of delay in the release of in- 
formation that the agency considers necessary to 
its functions, the NHTSA will not amend the 
10-day notification provision. 

With respect to the Administrator's discretion 
to waive the notification provision when the public 
interest demands, the agency concludes that this 
discretion is necessary. The exigencies of the 



PART 512 -PRE 12 



agency's reg^ulatory activities may, on rare occa- 
sions, necessitate such waiver. For example, the 
Acts under which the agency operates grant the 
agency broad powers to protect the public safety. 
These powers include the right to act quickly to 
save lives. If the agency were to establish an in- 
flexible minimum 10-day notice provision, it would 
be restricting its validly granted statutory 
authority. This would undesirably limit our ability 
to meet our responsibilities to the public as stated 
in the Acts, and in their legislative histories. 
Accordingly, the agency wOl not limit the Ad- 
ministrator's discretionary powers to respond to 
emergencies. Further, the agency notes that the 
courts and the FOIA Report substantiate the 
agency's position that minimum time limits must 
be flexible. The agency concludes that allegations 
of a due process violation when minimum time 
limits are not established are without merit and do 
not reflect current judicial thinking. The agency 
will always seek to provide 10-working days 
notification to the submitter of information. In 
those instances where this notice is not practicable 
the agency will provide sufficient time for the sub- 
mitter to seek judicial recourse if it so desires. 

The MVMA went so far as to suggest that prior 
to the release of confidential information the 
agency is required to have a formal adversarial 
hearing. For their support, they cited Mathews v. 
Eldridge, 424 U.S. 319 (1976). This case held only 
that some form of reasonable opportunity to be 
heard must be g^ranted prior to the deprivation of a 
property right. The court, however, stated that 
full adversarial proceeding was unnecessary and 
that "[t]he judicial model of an evidentiary hearing 
is neither a required, nor even the most effective 
method of decisionmaking in all circumstances" 
(424 U.S. at 348). In fact, only in the rarest of cir- 
cumstances have the courts required a full adver- 
sarial hearing prior to the termination of property 
rights. Goldberg v. Kelly, (397 U.S. 254 (1970)). In 
that case, the court required a hearing prior to the 
termination of welfare benefits since to do other- 
wise would impose an undue hardship upon the 
recipient which might, in fact, endanger the recip- 
ient's life. In many similar cases that are less life- 
threatening courts have not required formal pre- 
termination hearings. Certainly the release of con- 
fidential information does not pose the danger to 
life itself that warranted the Goldberg approach, 
and accordingly, its release does not require 



formal hearings. The NHTSA concludes that its 
provision allowing the opportunity to comment 
prior to any release provides ample opportunity to 
be heard in compliance with existing judicial deter- 
minations. 

The MVMA further argued that if the agency 
intends to continue with its informal procedures 
as outlined above it should at least indicate that it 
will consider the comments received and a writ- 
ten determination as to why the release is being 
made and upon what grounds the public interest 
is served. As stated earlier, the reasons for the 
release will be supplied in the first notice to the 
submitter. Responding to the MVMA's concern 
that the comments received may not be con- 
sidered, all timely submitted comments will be 
considered prior to release of the information. 

Volkswagen and several other commenters 
suggested that the agency better define the term 
"public interest." They suggested that the agency 
adopt a definition similar to that of the EPA (40 
CFR 2.205(g)) which permits the EPA to act ex- 
peditiously when it determines that it "would be 
helpful in alleviating a situation posing an immi- 
nent danger to public health or safety. . . " 

The NHTSA considers that the existing 
wording of the regulation adequately details the 
necessary findings of the agency that permit the 
immediate disclosure of confidential information 
when it is in the public interest. The agency con- 
siders it unnecessary to further define by regula- 
tion what constitutes the public interest. At- 
tempts to define terms such as public interest are 
usually unsuccessful, because these terms em- 
brace very broad, diverse, and often-changing 
concepts. Public interest is something than can 
only be determined in the context of specific facts 
and their potential ramifications. 

Although the agency will not define "public in- 
terest" in the regulation, submitters can be 
assured that the agency will release information 
only after making some showing that such release 
truly benefits the public. Existing case law 
clearly reflects the fact that certain findings must 
be made by an agency more than the mere recita- 
tion that the release of information is in the 
public interest. For example, in Pennzoil v. FPC, 
534 F.2d 627 (5th Cir. 1976), the Court did not in- 
validate the public interest test, but stated that 
the FPC had not examined all of the relevant 
criteria that should go into the making of the 



PART 512 -PRE 13 



public interest determination. The court sug- 
gested that the agency consider whether: (1) the 
disclosure would aid the agency, (2) the disclosure 
would harm the public, and (3) there are alter- 
natives to disclosure that will work equally well 
(i.e., disclosure of aggregated or summarized infor- 
mation). Agency discretion exercised pursuant to a 
general public interest authority has been upheld 
in many other instances. Administrator, FAA et 
al V. Robertson, 422 U.S. 255 (1975); Westinghouse 
Electric Corp. v. NRC, 555 F.2d 82 (3rd Cir. 1977). 

The AIA suggested that Part 512.8(b) should 
specify more than just the reasons for the need for 
release of confidential information. They sug- 
gested that the agency require more specific infor- 
mation to be stated in the Administrator's notice 
to the submitter. The agency realizes that releases 
of confidential information may be contested by 
the submitter. Accordingly, the NHTSA will en- 
sure that the record of the decisionmaking process 
and reasons for the final determination are fully 
established to facilitate judicial review. However, 
for purposes of this regulation, the agency con- 
cludes that it is sufficient to indicate that the Ad- 
ministrator will clearly establish all of the reasons 
for releasing information. 

Several commenters objected to the possible 
releases of information under section 512.10 of this 
regulation. As proposed, this section permitted 
the disclosure of confidential information (1) to the 
Congress or the Comptroller General, (2) pursuant 
to court order, (3) to the Office of Secretary of the 
Department of Transportation (DOT), (4) with the 
consent of the submitter, (5) to other Federal agen- 
cies in accordance with applicable law, and (6) to 
contractors if necessary. 

The agency does not fully understand the theory 
on which the objectors to this provision base their 
claims. Generally, NHTSA does not have authority 
to withhold information of any sort from the Con- 
gress, review or oversight offices within the Exec- 
utive branch, or the courts pursuant to a court 
order. Nor can the NHTSA deny information to 
the Secretary of the DOT, since the agency derives 
its authority from that official. Further, the 
agency is not at liberty to interfere with any other 
law that would expressly or impliedly require the 
agency to yield information to another Federal 
agency. The only provisions of this section that the 
agency can really affect are those relating to the 
release of information with the consent of the 



submitter, with which the agency assumes no one 
argues, and to the submission of information to 
contractors. In the latter case, the agency has in- 
dicated in the regulation that the contractors will 
be required to maintain the confidentiality of the 
information or be responsible to the parties for the 
consequences of its release. Therefore, in this sec- 
tion of the regulation, the agency has merely in- 
dicated the two instances when it will release in- 
formation and has indicated that there will be 
safeguards for the information in those instances. 
The other parts of this section indicate those occa- 
sions when the NHTSA is obliged to disclose infor- 
mation pursuant to higher authorities. With 
respect to the release of information to higher 
authorities, the NPRM neglected to include the 
release of information to offices in the Executive 
branch that have review or oversight authority. 
The regulation has been amended to correct this 
omission, and has been reorganized for clarity. 

The MEMA argued that any release of informa- 
tion under this section should only be made as re- 
quired by law. As stated previously, that is mostly 
what this section does. Further, the MEMA sug- 
gested that the agency impose regulations that 
would safeguard the secrecy of the information in 
the hand of another agency or the Cong^-ess that is 
the recipient of the information. 

The agency can not impose requirements upon 
the Congress or other administrative agencies. 
The NHTSA cannot require the Congress, for 
example, to promise to keep information confiden- 
tial. It is assumed that the Congress or any other 
agency will treat confidential information with the 
care that it deserves. The agency, however, at- 
tempts to safeguard the information to the extent 
possible by ensuring that the requests for con- 
fidential information are valid and authorized and 
by indicating to the recipient at the time the infor- 
mation is released that it is confidential and should 
be treated accordingly. Further, the agency 
typically obtains a written agreement from a re- 
questing agency that it will release the informa- 
tion only if required by law to do so and will con- 
sult with NHTSA regarding any FOIA requests 
that the requesting agency receives for the infor- 
mation. The agency has amended this section of 
the regulation to effect some of these practices. 

Some commenters criticized the provision in the 
regulation that permits the agency to supply con- 
fidential information obtained pursuant to the 



PART 512 -PRE 14 



agency's compulsory process devices to other 
agencies that do not have such powers to compel 
information. These commenters indicated that 
they thought that such a transfer of information 
would be contrary to the rights of a submitter. 

The NHTSA agrees that access by other agen- 
cies to such confidential information possessed by 
the agency should be limited. However, some ac- 
cess to confidential information by other agencies 
is legitimate and necessary. When the agency is 
expressly or impliedly required to provide infor- 
mation pursuant to applicable law, the NHTSA 
must supply the information. Other requests for 
information will be closely scrutinized by the 
NHTSA. The NHTSA will only release informa- 
tion that it has received through compulsory proc- 
ess to agencies that can compel the information 
directly from the submitter or that are otherwise 
authorized by law to obtain it. The agency con- 
cludes that such a transfer of information is in the 
best interest of the government and the submitter. 
Through this sharing of information, a submitter is 
spared the expense of compiling and submitting in- 
formation that is already available to the govern- 
ment. However, agencies that are not expressly or 
impliedly authorized to obtain information from 
the NHTSA and that cannot obtain information 
from the submitter directly will not be able to ob- 
tain information from the NHTSA that the agency 
has received through compulsory process. If Con- 
gress had intended those agencies to have the 
right to such information, it would have given 
them the right to receive it from other agencies or 
the power to obtain it. 

The MEMA requested that a submitter be given 
notice of the government's release of information 
pursuant to this section. The agency cannot always 
gfive advance notice of releases in these cir- 
cumstances because to do so could put the agency 
in the position of interfering with a valid and ex- 
igent investigation by the Congress, with a court 
proceeding, or with other Executive branch 
review or oversight of agency actions. The Con- 
gress has the autViority, for example, to demand 
some information immediately. Accordingly, the 
agency might not be able to provide advance 
notice to a submitter that its information is being 
disclosed. In a recent case, EXXON et aL v. FTC, 
589 F.2d 582 (D.C. Cir. 1978) the court indicated 
that a mandatory advance notice of release of con- 
fidential information to Congress was not required 



unless the agency promised to give such a notice. 
The agency concludes that this recent decision con- 
firms its position that releases of information in 
these instances that are required by law and which 
do not constitute the public disclosure of informa- 
tion are not the type of releases requiring advance 
notification. 

The NHTSA has reviewed the existing law with 
respect to the disclosure of information to other 
government agencies and contractors and con- 
cludes that the question of whether advance notice 
of such disclosures is required remains unsettled. 
The agency believes that providing advance notice 
to submitters in these cases is not presently re- 
quired by law nor always in the best interest of the 
agency, but will do so where appropriate. In the 
case of contractors, the agency notes that informa- 
tion will not be released to contractors if it would 
result in a conflict of interest for that contractor. 

The AIA in a general comment about the release 
of confidential information expressed their con- 
cern that such a release might be considered a tak- 
ing of private property for public use entitling the 
submitter of the information to compensation. 
They base this argument on the Constitution's 
Fifth Amendment protection of property rights 
from uncompensated public takings. In support of 
their argument, AIA cited two cases. Continental 
Oil Company v. FPC, 519 F.2d 31 (5th Cir. 1975), 
cert den'd sub nom. Superior Oil v. FPC, 425 U.S. 
971 (1976); and Westinghouse Electric Corp. v. 
Nuclear Regulatory Commission^ 555 F.2d 82 (3rd 
Cir. 1977), in which the issue of a compensable tak- 
ing has been mentioned involving the release of 
confidential information. Unfortunately, neither of 
these judicial pronouncements have yet clarified 
this area of the law. 

In Continental Oil the court never reached the 
question of compensation, deciding the case on 
other issues. In Westinghouse, the court reached 
the issues of taking but determined that a taking 
could not occur where the information had been 
voluntarily given to the government. In dictum, 
the court indicated that a compelled production of 
confidential information which was subsequently 
released might result in a compensable taking. 
This issue was before the courts again in Polaroid 
Corp. v. Costle (Civil Action No. 78-113-S) in the 
U.S. District Court of the District of Massachu- 
setts. However, that case was settled prior to 
reaching the merits of this issue. Therefore, there 



PART 512 -PRE 15 



is no legal precedent of which the NHTSA is aware 
indicating that such a release would constitute a 
taking, and the agency concludes that a taking will 
not occur as a result of such a release. 

Miscellaneous Comments 

A few commenters considered the affidavit 
requirement unnecessary. The MVMA alleged 
that it served no useful purpose and that its aim 
was to force people into compliance with the 
requirements. The MVMA further asserted that 
the requirement to state that the person has con- 
tacted those in authority to release confidential in- 
formation and ascertained that the information 
had not been released necessitated the person's 
giving hearsay. 

The above comments to this section are unwar- 
ranted by the relatively innocuous provisions of 
the affidavit. The affidavit simply requires a 
responsible official of the submitter of information 
to attest under oath to the accuracy of certain 
statements. First, the official attests to his 
authority. Second, the official attests to the 
confidentiality of the information. Since the sub- 
mitter is asking the agency to make a confidential- 
ity determination, it is proper to ask that the sub- 
mitter attest to the fact that the information is 
confidential. Third, the authorized official must at- 
test that he or she has contacted responsible of- 
ficials who in the normal course of business may 
release information to determine whether the in- 
formation has been released. This is the provision 
that the MVMA characterizes as requiring "use- 
less hearsay." The purpose of this provision is not 
to prove conclusively that information was never 
released. This provision simply requires that the 
official attest to the fact that he or she has checked 
with the officials to discover any such disclosure. 
Since the provision goes to proving that the official 
checked with responsible personnel not to the 
truth of the statements of those personnel, it does 
not require hearsay. When the previous require- 
ment is coupled with paragraph (4) of the affidavit, 
it is clear that the attesting official only attests to 
the fact that to the best of his knowledge informa- 
tion has not been released. In sum, the require- 
ments of this provision are minimal and simply 
assure that the official has complied with the in- 
quiry provisions of the regulation and has pro- 
vided the agency with the information acquired 
through the inquiry. 



The NHTSA received numerous comments sug- 
gesting additional classes of information that the 
industry would have the agency include within the 
classes of information presumed to be confidential. 
Almost every commenter suggested some classes 
for inclusion within the existing list. The effect of 
these comments, if adopted, would be to make 
almost every piece of information submitted to the 
agency presumptively confidential. Such an out- 
come would not serve the public interest nor 
would it comply with existing statutes granting 
the public access to governmental information. 

The agency chose the existing classes because 
they were narrow enough to include only the infor- 
mation that the agency customarily finds confiden- 
tial. The NHTSA concludes that such classes of 
information presumed to be confidential must be 
very limited and must not include information that 
is not normally considered confidential. 

The NHTSA concludes that the existing list of 
classes of presumptively confidential information 
is sufficient for the present. The agency is experi- 
menting with the class determination approach as 
a means to reduce the workload in making con- 
fidentiality determinations. At this time, however, 
the NHTSA does not have sufficient experience in 
the use of these classes to warrant an expansion of 
them. As soon as the agency becomes more famil- 
iar with this process, changes to the classes might 
be made increasing the information presumed to 
be confidential. This can only be done, however, 
after the agency evaluates the class determination 
procedure and further reviews the other types of 
information for which confidentiality is requested 
and which normally deserves confidential treat- 
ment. Accordingly, the agency declines to adopt 
the classes suggested by the manufacturers and 
other commenters at this time, but it will retain 
these comments for possible future inclusion 
within the regulation when experience indicates 
that such inclusion would be appropriate. 

This regulation was reviewed under Executive 
Order 12044 and determined to be significant 
based upon the anticipated public comments on the 
proposed version of the regulation. However, 
voluntary implementation of the regulation during 
the past two years has demonstrated that initial 
concerns about having to submit significantly 
increased justification to support confidentiality 
requests and about increases in the release of con- 
fidential information have not been borne out. 



PART 512 -PRE 16 



Further discussion of these issues is provided 1401); sec. 119, Pub. 89-563, 86 Stat. 950 (15 U.S.C. 

above in this notice. No regulatory analysis or 1914); sec. 204, Pub. 92-513, 86 Stat. 957; (15 U.S.C. 

evaluation has been prepared for this notice since 1944); sec. 408, Pub. L. 92-513 as added Pub. L. 

it imposes little or no additional cost on persons 94-364, 90 Stat. 985 (15 U.S.C. 1990d), sec. 505 Pub. 

making confidentiality claims. The primary effect L. 94-163, 89 Stat. 908 (15 U.S.C. 2005), delegation 

of the regulation is to codify existing agency prac- of authority at 49 CFR 1.50.) 
tices in implementing statutory and case law 

regarding confidential information. Issued on December 30, 1980. 

The principal author of this regulation is Roger 
Tilton of the Office of Chief Counsel. 

In consideration of the foregoing. Title 49 of the 

Code of Federal Regulations is amended by the ad- 

dition of a new Part 512, Confidential Business Joan Claybrook 

Information. Administrator 

(Sec. 9, Pub. L. 89-670, 80 Stat. 931 (49 U.S.C. 

1657); sec. 112, Pub. L. 89-563, 80 Stat. 725, amend- 46 FR 2049 

ed Pub. L. 91-265, 84 Stat. 262 (15 U.S.C. January 8, 1981 



PART 512-PRE 17-18 



PART 512-CONFIDENTIAL BUSINESS INFORMATION 
(Docket No. 78-10; Notice 3) 



Sec. 

512.1 Purpose and Scope 

512.2 Applicability. 

512.3 Definitions. 

512.4 Asserting a claim for confidential treatment 
of information. 

51 2.5 Substantive standards for affording confiden- 
tial treatment. 

512.6 Determination of confidential treatment. 

512.7 Modification of determinations. 

512.8 Discretionary release of confidential 
business information. 

512.9 Class determinations. 

512.10 Disclosure of information in certain 
circumstances. 

Authority: Sec 9, Pub. L. 89-670, 80 Stat. 931 
(49 U.S.C. 1657); sec. 112 Pub. L. 89-563, 80 Stat. 
725, amended Pub. L. 91-265, 84 Stat. 262 (15 
U.S.C. 1401); sec. 119, Pub. L. 89-563, 80 Stat. 
728, (15 U.S.C. 1407); sec. 104, Pub. L. 92-513, 86 
Stat. 950, (15 U.S.C. 1914); sec. 204, Pub. L. 
92-513, 86 Stat. 957, (15 U.S.C. 1944); sec. 408, 
Pub. L. 92-513 as added Pub. L. 94-364, 90 Stat. 
985(15 U.S.C. 1990d); sec. 505, Pub. L. 94-163,89 
Stat. 908 (15 U.S.C. 2005), delegation of authority 
at49CFR 1.50. 

§ 512.1 Purpose and Scope. 

The purpose of this part is to establish the pro- 
cedure by which the NHTSA will consider claims 
that information submitted to the NHTSA, or which 
the NHTSA otherwise obtains, is confidential 
business information, as described in 5 U.S.C. 
552(bX4). 



§512.2 Applicability. 

(a) This part applies, in accordance with its 
terms, to all information which is submitted to the 
NHTSA, or which the NHTSA otherwise obtains, 
except as provided in paragraph (b). 

(b) Information received as part of the procure- 
ment process, is subject to the Federal Procurement 
Regulations, 41 CFR, Chapter 1, as well as this 
part. In any case of conflict between the Federal 
Procurement Regulations and this part, the provi- 
sions of the Federal Procurement Regulations 
prevail. 



§512.3 Definitions. 

"NHTSA" means the National Highway Traffic 
Safety Administration. 

"Administrator" means the Administrator of the 
National Highway Traffic Safety Administration. 

"Chief Counsel" means the Chief Counsel of the 
National Highway Traffic Safety Administration. 

"Confidential business information" means in- 
formation described in 5 U.S.C. 552(b)(4). 



§512.4 Asserting a claim for confidential treat- 
ment of information. 

(a) Any person submitting information to the 
NHTSA and requesting that it be withheld from 
public disclosure as confidential business informa- 
tion shall— 

(1) Stamp or mark "confidential" or some 
other term which clearly indicates the presence of 
information claimed to be confidential, on the top 
of each page containing information claimed to be 
confidential. 



PART 512-1 



(2) Mark each item of information which is 
claimed to be confidential and which appears on a 
page marked in accordance with paragraph (aXl) 
of this section, with brackets "[]". 

(3) If an entire page is claimed to be confiden- 
tial, indicate clearly that the entire page is claimed 
to be confidential. 

(4) Submit the documents containing allegedly 
confidential information directly to the Office of 
Chief Counsel, National Highway Traffic Safety 
Administration, Room 5219, 400 Seventh Street 
S.W., Washington, D.C. 

(5) In the case of a document containing infor- 
mation which is claimed to be confidential submitted 
in connection with a NHTSA activity for which 
there is a public file or docket, simultaneously sub- 
mit to the NHTSA a copy of the document from 
which information claimed to be confidential is 
deleted, for placement in the public file or docket 
pending the determination of the claim for con- 
fidential treatment. 

(6) Simultaneously submit to the NHTSA in 
writing the name, address, and telephone number 
of a representative for receipt of notice under this 
part. 

(b) For each item of information marked con- 
fidential in accordance with paragraph (a) of this 
section, the submitter of the information shall sub- 
mit information supporting the claim for confiden- 
tial treatment to the NHTSA with the item. Such 
supporting information must show— 

(1) That the information claimed to be con- 
fidential is a trade secret, or commercial or finan- 
cial information. 

(2) Measures taken by the submitter of the in- 
formation has not been disclosed or otherwise made 
available to any person, company, or organization 
other than the submitter of the information. 

(3) Insofar as is known by the submitter of the 
information, the extent to which the information 
has been disclosed, or otherwise become available, 
to persons other than the submitter of the informa- 
tion, and why such disclosure or availability does 
not compromise the confidential nature of the 
information. 

(4) Insofar as is known by the submitter of the 
information, the extent to which the information 
has appeared publicly, regardless of whether the 
submitter has authorized that appearance or con- 



firmed the accuracy of the information (include cita- 
tions to such public appearances, and an explana- 
tion of why such appearances do not compromise 
the confidential nature of the information). 

(5) Prior determinations of the NHTSA or 
other Federal agencies or Federal courts relating to 
the confidentiality of the submitted information, or 
similar information possessed by the submitter, in- 
cluding class determinations under this part (in- 
clude any written notice or decision connected with 
any such prior determination, or a citation to any 
such notice or decision, if published in the Federal 
Register). 

(6) Except for information submitted to the 
agency in connection with the NHTSA's functions 
under Title V of the Motor Vehicle Information and 
Cost Savings Act, as amended, whether the submit- 
ter of the information asserts that disclosure would 
be likely to result in substantial competitive harm, 
what the harmful effects of disclosure would be, 
why the effects should be viewed as substantial, and 
the causal relationship between the effects and 
disclosure. 

(7) For information submitted to the agency in 
connection with the NHTSA's functions under Title 
V of the Motor Vehicle Information and Cost Sav- 
ings Act, whether the submitter of the information 
asserts that disclosure would result in significant 
competitive damage, what that damage would be, 
why that damage should be viewed as significant, 
and the causal relationship between the damage and 
disclosure. 

(8) If information is voluntarily submitted, 
within the meaning of section 512.5(aX2) of this 
part, why disclosure by the NHTSA would be likely 
to prevent the NHTSA from obtaining information 
in the future. 

(9) The period of time for which confidentiality 
is claimed (permanently or until a certain date or 
the occurrence of a certain event) and why earlier 
disclosure would result in the harms set out in 
paragraphs (b), (6), (7), or (8) of this section as the 
case may be. 

(c) (1) If any element of the showing to support a 
claim for confidentiality required under paragraph 
(b) of this section is presumptively established by a 
class determination affecting the information for 
which confidentiality is claimed, the submitter of 
information need not establish that element again 
under paragraph (b). 



PART 512-2 



(2) If the Chief Counsel believes that informa- 
tion which a submitter of information asserts to be 
within a class of information set out in Appendix B 
is not within that class, the Chief Counsel— 

(i) Notifies the submitter of the information 
that the information does not fall within the class 
as claimed, and briefly explains why the informa- 
tion does not fall within the class, and 

(ii) Affords the submitter of the information a 
reasonable amount of time, not less than 10 
working days, to comply fully with paragraph (b) 
of this section. 

(d) Information in support of a claim for con- 
fidentiality submitted to the NHTSA under 
paragraph (b) of this section must consist of objec- 
tive data to the maximum extent possible. To the 
extent that opinions are given in support of a claim 
for confidential treatment of information, the sub- 
mitter of the information shall submit in writing to 
the NHTSA the basis for the opinions, and the 
name, title, and credentials showing the expertise 
of the person supplying the opinion. 

(e) The submitter of information for which con- 
fidential treatment is requested shall submit to the 
NHTSA with the request a certification in the form 
set out in Appendix A from the submitter, or an 
agent of the submitter, that a diligent inquiry has 
been made to determine that the information has 
not been disclosed, or otherwise appeared publicly, 
except as indicated in accordance with paragraph 
(bX3) and (4) of this section. 

(f) A single showing in support for a claim that 
information is confidential, in accordance with 
paragraph (b) of this section, may be used to sup- 
port a claim for confidential treatment of more 
than one item of information claimed to be con- 
fidential. However, general or nonspecific asser- 
tions or analyses may be insufficient to form an 
adequate basis for the agency to find that informa- 
tion may be afforded confidential treatment, under 
section 512.3, and may result in the denial of a 
claim for confidentiality. 

(g) Where confidentiality is claimed for informa- 
tion obtained by the submitter from a third party, 
such as a supplier, the submitter of the information 
is responsible for obtaining all information or cer- 
tifications from the third party necessarj' to comply 
with paragraph (b). 



(h) A submitter of information shall promptly 
amend supporting information provided under 
paragraph (b) if the submitter obtains information 
upon the basis of which the submitter knows that 
the supporting information was incorrect when 
provided, or that the supporting information, 
though correct when provided, is no longer correct 
and the circumstances are such that a failure to 
amend the supporting information is in substance a 
knowing concealment. 

(i) Noncompliance with this section may result in 
a waiver or denial of a claim for confidential treat- 
ment of information. However, failure to provide 
the certification required in paragraph (e) of this 
section shall result in a denial of the claim. Non- 
compliance with paragraph (h) of this section may 
subject a submitter of information to civil penalties. 

(1) If the provisions of paragraph (a) of this 
section are not complied with at the time the infor- 
mation is submitted to the NHTSA so that the 
NHTSA is not aware of a claim for confidentiality, 
or the scope of a claim for confidentiality, the claim 
for confidentiality is waived unless the agency is 
notified of the claim before the information is 
disclosed to the public. Placing the information in a 
public docket or file is disclosure to the public 
within the meaning of this part, and any claim for 
confidential treatment of information so disclosed 
is precluded. 

(2) A request that information be afforded con- 
fidential treatment may be denied if the submitter 
of the information does not provide with the request 
all of the supporting information required in 
paragraph (b) of this section, and will be denied if 
the information provided is insufficient to establish 
that the information may be afforded confidential 
treatment under the substantive tests set out in sec- 
tion 512.2. The Chief Counsel may notify a submit- 
ter of information of inadequacies in the supporting 
information, and may allow the submitter additional 
time to supplement the showing, but is under no 
obligation to provide either notice or additional time 
to supplement the showing. 

(j) Information received that is identified as con- 
fidential and whose claim for confidentiality is sup- 
ported in accordance with this section will be kept 
confidential until a determination of its confiden- 
tiality is made under section 512.6 of this part. In- 
formation will not be publicly disclosed except in 
accordance with this part. 



PART 512-3 



§512.5 Substantive standards for affording 
information confidential treatment. 

(a) Information obtained by the NHTSA, except 
for information obtained by tlie NHTSA under 
Title V of the Motor Vehicle Information and Cost 
Savings Act, may be afforded confidential treat- 
ment if it is a trade secret, commercial, or financial 
information that is not already publicly available; 
and 

(1) Which if disclosed, would be likely to result 
in substantial competitive harm to the submitter of 
the information, or 

(2) Voluntarily submitted, and failure to afford 
the information confidential treatment would 
impair the ability of the NHTSA to obtain similar 
information in the future. Information whose 
production the NHTSA could not compel by com- 
pulsory process is voluntarily submitted informa- 
tion within the meaning of this part. 

(b) Information obtained by the NHTSA under 
Title V of the Motor Vehicle Information and Cost 
Savings Act may be afforded confidential treat- 
ment if it is a trade secret, commercial or financial 
information that is not already publicly available 
and which, if disclosed, would result in significant 
competitive damage. 

§ 512.6 Determination of confidentiality. 

(a) The decision of whether an item of informa- 
tion may be afforded confidential treatment under 
this part is made by the Office of Chief Counsel. 

(b) The determination of confidentiality is made 
within 30 working days of the Chief Counsel's 
receipt of the information and knowledge that the 
information is claimed to be confidential if— 

(1) The information relates to a rulemaking 
proceeding for which a public docket has been 
established. 

(2) The information relates to a petition before 
the NHTSA for which a public docket has been 
established. 

(3) The information relates to a proceeding 
under Part B of Subchapter I of the National Traf- 
fic and Motor Vehicle Safety Act. 

(4) The information relates to an investigation 
or proceeding by the NHTSA to enforce any 
regulation or standard, or 

(5) The information is received under a report- 
ing requirement established by the NHTSA. 



(c) If information does not come under 
paragraph (b) of this section when received by the 
NHTSA, but is later determined to be information 
described in paragraph (b), the determination of 
confidentiality is made within 30 working days 
after it is determined that the information is infor- 
mation described in paragraph (b). 

(d) For information not described under 
paragraph (b) of this section, the determination of 
confidentiality is made within ten working days 
after the NHTSA receives a request for that infor- 
mation under the Freedom of Information Act. 

(e) The timing requirements prescribed in 
paragraphs (b), (c), and (d) of this section may be 
extended by the Chief Counsel for good cause 
shown on the Chief Counsel's own motion, or on 
request from any person. An extension of the tim- 
ing requirement of paragraph (d) is made only in 
accordance with 5 U.S.C. 552. Any extension of 
time is accompanied by a written statement setting 
out the reasons for the extension. 

(f) A person submitting information to the 
NHTSA with a request that the information be 
withheld from public disclosure as confidential 
business information is given immediate notice of 
the Chief Counsel's determination regarding the 
request. 

(1) If a request for confidentiality is granted, 
the submitter of the information is notified in 
writing that the information is being kept con- 
fidential and the length of time during which the 
information will be kept confidential. 

(2) If a request for confidentiality is denied in 
whole or in part, the submitter of the information 
is notified in writing of that denial, and is informed 
that the information will be placed in a public 
docket on a specified date, which is no less than ten 
working days after the submitter of the informa- 
tion has received notice of the denial of the request 
for confidential treatment if practicable, or some 
earlier date if the Chief Counsel determines that 
the public interest requires that the information be 
placed in a public file on such earlier date. The 
written notification of a denial specifies the 
reasons for denying the request. 

(g) A submitter of information whose request 
for confidential treatment is denied may petition 
for reconsideration of that denial only on the basis 
of information or arguments that were not 
available at the time the original request for con- 



PART 512-4 



fidentiality was made. The Chief Counsel may 
postpone placing the information in a public file in 
order to allow additional time to consider the peti- 
tion for reconsideration. Petitions for reconsidera- 
tion under this section shall be addressed to the 
Chief Counsel. 

(h) If information which has been a subject of a 
confidentiality determination under this section is 
requested under the Freedom of Information Act, 
the Office of Chief Counsel advises the office pro- 
cessing that request whether the information has 
been determined to be confidential. 

§512.7 Modification of confidentiality determina- 
tions. 

(a) A determination that information is con- 
fidential business information remains in effect in 
accordance with its terms, unless modified by a 
later determination based upon— 

(1) Newly discovered or changed facts. 

(2) A change in the applicable law. 

(3) A class determination under section 512.9 
of this part, or 

(4) The initial determination's being clearly 
erroneous. 

(b) If the NHTSA believes that an earlier deter- 
mination of confidentiality should be reconsidered 
based on one or more of the factors listed in 
paragraphs (aXl)-(4) of this section, the submitter 
of the information is notified in writing of the 
NHTSA' s intention to reconsider that earlier 
determination, and the reasons for that recon- 
sideration, and is given an opportunity to comment 
which is not less than ten working days from the 
receipt of notice under this paragraph. 



(2) Information obtained under Part B, Sub- 
chapter I of the National Traffic and Motor Vehicle 
Safety Act, relating to defects relating to motor 
vehicle safety, and failures to comply with 
applicable motor vehicle safety standards, may be 
disclosed if the Administrator determines that 
disclosure is necessary to carry out the purposes of 
that Act. 

(3) Information obtained under Title I or V of 
the Motor Vehicle Information and Cost Savings 
Act may be disclosed when that information is rele- 
vant to a proceeding under the title under which 
the information was obtained. 

(b) No information is disclosed under this section 
unless the submitter of the information is given 
written notice of the Administrator's intention to 
disclose information under this section. Written 
notice is given at least ten working days before the 
day of intended release, although the 
Administrator may provide shorter notice if the 
Administrator finds that such shorter notice is in 
the public interest. The notice under this 
paragraph includes a statement of the 
Administrator's reasons for considering the 
disclosure of information under this section, and 
affords the submitter of the information an oppor- 
tunity to comment on the contemplated release of 
information. The Administration may also give 
notice of the contemplated release of information 
to other persons, and may allow such other persons 
the opportunity to comment. When a release of 
information is made pursuant to this section, the 
Administrator will consider ways to make the 
release with the least possible adverse effects to 
the submitter. 



§512.8 Discretionary release of confidential busi- 
ness information. 

(a) Information that has been determined or 
claimed to be confidential business information 
under § 512.6 of this part may be disclosed to the 
public by the Administrator notwithstanding such 
determination or claim if disclosure would be in the 
public interest as follows: 

(1) Information obtained under Part A, Sub- 
chapter I of the National Traffic and Motor Vehicle 
Safety Act, relating to the establishment, amend- 
ment, or modification of Federal motor vehicle 
safety standards, may be disclosed when relevant 
to a proceeding under that part. 



§512.9 Class determinations. 

(a) The Chief Counsel may issue a class deter- 
mination relating to confidentiality under this sec- 
tion if the Chief Counsel determines that one or 
more characteristics common to each item of infor- 
mation in that class will in most cases necessarily 
result in identical treatment of each item of infor- 
mation under this part, and that it is appropriate to 
treat all such items as a class for one or more pur- 
poses under this part. The Chief Counsel obtains 
the concurrence of the Office of the General 
Counsel, United States Department of Transporta- 
tion, for any class determination that has the effect 
of raising the presumption that all information in 



PART 512-5 



that class is eligible for confidential treatment. 
Class determinations are published in the Federal 
Register. 

(b) A class determination clearly identifies the 
class of information to which it pertains. 

(c) A class determination may state that all of 
the information in the class— 

(1) Is or is not governed by a particular section 
of this part, or by a particular set of substantive 
criteria under this part. 

(2) Fails to satisfy one or more of the 
applicable substantive criteria, and is therefore 
ineligible for confidential treatment. 

(3) Satisfies one or more of the applicable 
substantive criteria, or 

(4) Satisfies one of the substantive criteria 
during a certain period, but will be ineligible for 
confidential treatment thereafter. 

(d) Class determinations will have the effect of 
establishing rebuttable presumptions, and do not 
conclusively determine any of the factors set out in 
paragraph (c) of this section. 



§512.10 Disclosure of information in certain cir- 
cumstances. 

(a) Notwithstanding any other provision of this 
part, information which has been determined to be 
confidential business information, or which has 
been claimed to be confidential business informa- 
tion, may be disclosed pursuant to a valid request— 

(1) To Congress. 

(2) Pursuant to court order. 

(3) To the Office of the Secretary, United 
States Department of Transportation and other 
Executive branch offices or other Federal agencies 
in accordance with applicable laws. 

(4) With the consent of the submitter of the 
information. 

(5) To contractors, if necessary for the 
performance of a contract with the Administra- 
tion. In such instances, the contract limits further 
release of the information to named employees of 
the contractor with a need to know and provides 
that unauthorized release constitutes a breach of 
the contract for which the contractor may be liable 
to third parties. 



PART 512-6 



APPENDIX A 

Affidavit in Support of Request for 

Confidentiality 

I, , being duly sworn, 



depose and say: 

(1) That I am (official) and that I am author- 
ized by (company) to execute documents on behalf 
of (company). 

(2) That the information contained in (perti- 
nent document/s]) is confidential and proprietary 
data and is being submitted with the claim that it is 
entitled to confidential treatment under 5 U.S.C. 
552(b) (4) [as incorporated by reference in and 
modified by § 505(d)(1) of Title 5 of the Motor 
Vehicle Information and Cost Savings Act.] 

(3) That I have personally inquired of the 
responsible (company) personnel who have author- 
ity in the normal course of business to release the 
information for which a claim of confidentiality has 
been made to ascertain whether such information 
has ever been released outside (company). 

(4) That based upon such inquiries to the best 
of my knowledge the information for which (com- 
pany) has claimed confidential treatment has never 
been released or become available outside the 
(company) except as hereinafter specified. 

(5) That I make no representation beyond 
those contained in this affidavit and in particular I 
make no representations as to whether this infor- 
mation may become available outside (company) 
because of unauthorized or inadvertent disclosure 
except as stated in Paragraph 4; and 



(6) That the information contained in the 
enumerated paragraphs of this affidavit is true and 
accurate to the best of my information, knowledge 
and belief. 



(Official) 



APPENDIX B 
Class Determination 



The Administration has determined that the 
following types of information would presump- 
tively result in significant competitive damage or 
would be likely to result in substantial competitive 
harm if disclosed to the public— 

(1) Blueprints and engineering drawings con- 
taining process of production data before the 
public availability, or within five years of the pubHc 
availability, of the subject of the blueprints or 
engineering drawings, where the subject could not 
be manufactured without the blueprints or 
engineering drawings except after significant 
reverse engineering. 

(2) Future model specific product plans, pro- 
jected not more than three years into the future. 

(3) Model specific projections of future sales 
mix, projected not more than three years into the 
future. 

APPENDIX C 
0MB Clearance 

The 0MB clearance number for this regulation is 
2127-6025. 



PART 512-7-8 



PREAMBLE TO PART 520— PROCEDURES FOR CONSIDERING 
ENVIRONMENTAL IMPACTS 

[Docket No. 73-32; Notice 2] 



The purpose of this amendment to Title 49 of 
the Code of Federal Regulations is to add a new 
Part 520 establishing- procedures for considering 
environmental impacts. 

A notice of proposed procedures on this sub- 
ject was published on December 21, 1973 (38 
FR 35018). Two comments were received on the 
proposed procedures : one, from the United States 
Environmental Protection Agency, supported 
the proposal and considered it to be responsive 
to the National Environmental Policy Act of 
1969 (NEPA) and the NEPA guidelines pre- 
pared by the Council on Environmental Quality; 
the second, from General Motors Corporation, 
had some objections which have been carefully 
considered in this issuance of final procedures. 
In view of some of GM's comments, the issuance 
of the Department of Transportation (DOT) 
Order 5610.1B. "Procedures for Considering 
Environmental Impacts," (39 FR 35234), and 
further consideration within the NHTSA, the 
final procedures have been slightly modified. 

Definitions. In order to differentiate a written 
environmental analysis submitted to the agency 
by its grantees or contractors from that under- 
taken by the agency itself, the meaning of the 
term "environmental assessment" has been 
changed from an internal agency evaluation pro- 
cess to an evaluation process external to the 
agency, and the term "environmental review" has 
been added to denote the written environmental 
analysis undertaken by tlie agency. 

AppUcahility. "Consolidation of statements." 
se<?tion 520.4(f), allowing actions which have sub- 
stantially similar environmental impacts to be 
covered by a single impact statement or environ- 
mental review culminating in a negative declara- 
tion is included in this final issuance. 



GM commented that the increase in costs illus- 
tration used as an example for the project 
amendments exception in section 520.4(d)(5) 
(herein renumbered as 520.4(e) (5) ) is ambiguous 
and could also permit a circumvention of the 
initial environmental evaluation process. In re- 
sponse to this, the section has been revised to 
make it clear that only project amendments with 
no environmental consequences are excepted from 
the review process. The criteria for determining 
which project amendments are excepted is in- 
tended to match that for excepting minor agency 
actions (§ 520.4)e) (6) ). 

Section 520.4(d)(6) of the proposed proce- 
dures was erroneously included and is accord- 
ingly deleted. 

Guidelines. The general guidelines have been 
reworded, upon GM's request, to clarify that an 
environmental impact statement or negative de- 
claration is to be prepared for any of the three 
situations enumerated imder this general cate- 
gory. 

Section 520.5(b), Specif c guidelines, has been 
modified to reflect GM's comments, revised DOT 
Order 5640.1, and further determinations within 
the NHTSA. Subparagraphs (7)-(12) have 
been added and the original subparagraph (7) 
has been renumbered as (13). The agencj' has 
determined that these additional classes of actions 
sliould be enumerated in order to better identify 
those typical areas of environmental concern the 
NHTSA's activities may impact. 

Research activities. In accordance with section 
4 of final DOT Order 5610.1B, proposed imple- 
menting instructions for assessing the environ- 
mental consequences of research activities will be 
prepared by the Assistant Secretary of Systems 
Development and Technology, with the concur- 
rence of the XHTSA. Until these final proce- 



PART 520— PRE 1 



EffecHvc Nsvembar 4, 1975 



dures are promulgated, however, the guidelines 
set forth on this subject in the proposed proce- 
dures will be followed. 

Procedures. The procedures subpart includes 
a number of additions and modifications. With 
respect to certain actions enumerated in Subpart 
A which may have an environmental significance, 
the official responsible for the action will prepare 
reviews that are much more comprehensive than 
the assessments proposed by tlie previous notice. 
He will conclude his review with a brief written 
report, to be included in the proposed or ongo- 
ing action, in which he will either recommend 
that a draft environmental impact statement 
(DEIS) be prepared to determine the environ- 
mental impact involved, or declare that the action 
would not have a significant effect on the quality 
of the environment. A review report that 
concludes with a "negative declaration" is not 
required to go through the extensive comment 
and review process provided for the DEIS, but 
it will be retained by the agency and made avail- 
able to the public upon request. 

Once an Associate Administrator, the Chief 
Counsel, or a Regional Administrator (in con- 
sultation with his Governor's Representative) 
determines, that an agency action under his juris- 
diction requires the preparation of a DEIS, he 
will transmit a "notice of intent" to prepare the 
DEIS to the appropriate Federal, State, and 
local agencies and publish the notice in the 
Federal Register. In addition, a schedule of 
procedures and review will be developed in each 
case to assure completion of the DEIS before 
the first significant point of decision in the pro- 
gram or project development process. Once the 



DEIS is circulated for review and comment, not 
less than 45 days in any case will be allowed for 
comment. A public hearing on a DEIS will be 
held when appropriate, and notice of the hearing 
will be issued in the Federal Register at least 
30 days before the hearing. Final environmental 
impact statements (FEIS) will be prepared and 
distributed as soon as practicable after the ex- 
piration of the comment and hearing process. 

In accordance with the final DOT order 
5610.1B, a new section 520.34 has been added, 
establishing procedures for the review of environ- 
mental statements prepared by other agencies. 

Four attachments having a direct bearing on 
the preparation of impact statements have been 
added to this issuance of the final rule and will 
be followed by this agency. 

Effective date: November 4, 1975. 

In consideration of the foregoing, a new Part 
520, "Procedures for Considering Environmental 
Impacts," is added as § 520 of Title 49, Code of 
Federal Regulations. . . . 

(Sees. 102(2) (A), 102(2) (C), Public Law 91- 
190, 83 Stat. 853 (42 U.S.C. 4332); sees. 2(b), 
4(f), Public Law 89-670, 80 Stat. 931 (49 U.S.C. 
1651(b), 1653(f)); Executive Order 11514, 35 
FR 4247; 40 CFR Part 1500; DOT Order 
5610.1B, 39 FR 35234; delegations of authority 
at 49 CFR 1.45, 1.51.) 

Issued on Nov. 4, 1975. 

James B. Gregory 
Administrator 



40 F.R. 52395 
November 10, 



1975 



PART 520— PRE 2 



PART 520— PROCEDURES FOR CONSIDERING ENVIRONMENTAL IMPACTS 



SUBPART A-GENERAL 

Sec. 

520.1 Purpose and scope. 

520.2 Policy. 

520.3 Definitions. 

520.4 Applicability. 

520.5 Guidelines for identifying major actions 

significantly affecting the environment. 

SUBPART B— PROCEDURES 

520.21 Preparation of environmental reviews, 

negative declarations, and notices of 
intent. 

520.22 Maintenance of list of actions. 

520.23 Preparation of draft environmental Im- 

pact statements. 

520.24 Internal processing of draft environmental 

impact statements. 

520.25 External review of draft environmental 

impact statements. 

520.26 Public fiearings. 

520.27 Legislative actions. 

520.28 Preparation of final environmental impact 

statements. 

520.29 Internal review of final environmental 

impact statements. 

520.30 Availability of final environmental im- 

pact statements. 

520.31 Amendments or supplements. 

520.32 Emergency action procedures. 

520.33 Timing of proposed NHTSA actions. 

520.34 Review of environmental statements pre- 

pared by otfier agencies. 
Attachment 1 — Form and content of statement. 
Attachment 2— Areas of environmental impact 
and Federal agencies and Fed- 



eral-State agencies with jurisdic- 
tion by law or special expertise 
to comment thereon. 

Attachment 3— Offices within Federal Agencies 
and Federal-State agencies for in- 
formation regarding the agencies' 
NEPA activities and for receiving 
other agencies' impact statements 
for which comments are requested. 

Attachment 4— State and local agency review of 

impact statements. 

SUBPART A-GENERAL 

§ Purpose and scope. 

(a) Section 102(2) (C) of the National En- 
vironmental Policy Act of 1969 (83 Stat. 853; 
42 U.S.C. 4332(2) (O), as implemented by Ex- 
ecutive Order 11514 (3 CFR, 1966-1970 Comp., 
p. 902) and the Council on Environmental 
Quality's Guidelines of April 23, 1971 (36 F.R. 
7724), requires that all agencies of the Federal 
Government prepare detailed environmental 
statements on proposals for legislation and other 
major Federal actions significantly affecting the 
quality of the human environment. The purpose 
of the Act is to build into the agency decision- 
making process careful consideration of all en- 
vironmental aspects of proposed actions. 

(b) This part specifies National Highway 
Traffic Safety Administration (NHTSA) pro- 
cedures for conducting environmental assess- 
ments and reviews, and for the preparation of 
environmental impact statements on proposals 
for legislation and other major agency actions 
significantly affecting the quality of the human 
environment. 

§ 520.0 Policy. 

The agency will strive to carry out the full 
intent and purpose of the National Environ- 
mental Policy Act of 1969 and related orders and 
statutes, and take positive steps to avoid any 



PART 520-1 



action which could adversely affect the quality 
of the human environment. 

§ 520.3 Definitions. 

(a) "Environmental assessment" is a written 
analysis describing the environmental impact of 
a proposed or ongoing agency action, submitted 
to the agency either by its grantees or contractors, 
or by any person outside the agency as part of 
any program or project proposal within the scope 
of activities listed in § 520.4(b). 

(b) "Environmental review" is a formal evalu- 
ation undertaken by the agency, culminating in 
a brief document (the environmental review re- 
port), to determine whether a proposed or on- 
going NHTSA action may have a significant 
impact on the environment. The review docu- 
ment will be included in the proposed or ongoing 
agency action, and either support a negative de- 
claration or recommend the preparation of a 
draft environmental impact statement. 

(c) "Draft environmental impact statement" 
(DEIS) means a preliminary statement on the 
environmental impact of a proposed or ongoing 
NHTSA action which is circulated for comment 
and review within and outside NHTSA. 

(d) "Final environmental impact statement" 
(FEIS) means a detailed statement which, pur- 
suant to section 102(2) (C) of the National En- 
vironmental Policy Act, identifies and analyzes 
the anticipated environmental impact of a pro- 
posed or ongoing NHTSA action. 

(e) "Negative declaration" means a statement 
prepared subsequent to an environmental review, 
which states that a proposed or ongoing NHTSA 
action will have no significant environmental 
impact and therefore does not require a draft or 
final environmental impact statement. 

§ 520.4 Applicability. 

(a) Scope. This part applies to all elements 
of NHTSA, including the Regional Offices. 

(b) Actions covered. Except as provided in 
subparagraph (e) below, this part applies to the 
following agency actions and such actions and 
proposals as may be sponsored jointly with an- 
other agency: 

(1) New and continuing programs and proj- 
ects; budget proposals; legislative proposals 
by the agency; requests for appropriations; re- 



ports on legislation initiated elsewhere where 
the agency has primary responsibility for the 
subject matter involved; and any renewals or 
reapprovals of the foregoing; 

(2) Research, development, and demonstra- 
tion projects; formal approvals of work plans; 
and associated contracts; 

(3) Rulemaking and regulatory actions, in- 
cluding Notices of Proposed Rulemaking 
(NPRM); requests for procurement (RFP); 
requests for grants (Annual Work Programs); 
and contracts; 

(4) All grants, loans or other financial 
assistance for use in State and Community 
projects; 

(5) Annual State Highway Safety Work 
Programs; 

(6) Construction; leases; purchases; opera- 
tion of Federal facilities; and 

(7) Any other activity, project, or action 
likely to have a significant effect on the en- 
vironment. 

(c) Continuing actions. This part applies to 
any action enumerated in subsection (b) above, 
even though such action arise from a project or 
program initiated prior to enactment of the 
National Environmental Policy Act on January 
1, 1970. 

(d) Environmental assessments. Within the 
scope of activities listed in § 520.4(b), any 
person outside the agency submitting a program 
or project proposal may be requested to prepare 
an environmental assessement of such proposed 
action to be included in his submission to the 
agency. 

(e) Exceptions. 

(1) Assistance in the form of general reve- 
nue sharing funds, distributed under the State 
and Local Fiscal Assistance Act of 1972, 31 
U.S.C. 1221, with no control by the NHTSA 
over the subsequent use of such funds; 

(2) Personnel actions; 

(3) Administrative procurements (e.g., gen- 
eral supplies) and contracts for personal serv- 
ices; 

(4) Legislative proposals originating in 
another agency and relating to matters not 



PART 520-2 



within NHTSA's primary areas of responsi- 
bility; 

(5) Project amendments (e.g., increases in 
costs) which have no environmental signifi- 
cance; and 

(6) Minor agency actions that are deter- 
mined by the official responsible for the actions 
to be of such limited scope that they clearly 
will not have a significant effect on the quality 
of the human environment. 

(f) Consolidation of statements. Proposed 
actions (and alternatives thereto) having sub- 
tantially similar environmental impacts may be 
covered by a single environmental review and 
environmental impact statement or negative de- 
claration. 

§ 520.5 Guidelines for identifying major actions 
significantly affecting the environment. 

(a) General guidelines. The phrase, "major 
Federal actions significantly affecting the quality 
of the human environment," as used in this part, 
shall be construed with a view to the overall, 
cumulative impact of the actions, other Federal 
projects or actions in the area, and any further 
contemplated or anticipated actions. Therefore, 
an environmental impact statement should be pre- 
pared in any of the following situations: 

(1) Proposed actions which are localized in 
their impact but which have a potential for 
significantly affecting the environment; 

(2) Any proposed action which is likely to 
be controversial on environmental grounds; 

(3) Any proposed action which has unclear 
but potentially significant environmental con- 
sequences. 

(b) Specific guidelines. While a precise defini- 
tion of environmental significance that is valid 
in all contexts is not possible, any of the follow- 
ing actions should ordinarily be considered as 
significantly affecting the quality of the human 
environment: 

(1) Any matter falling under section 4(f) 
of the Department of Transportation Act (49 
U.S.C. 1653(f)) and section 138 of Federal- 
aid highway legislation (23 U.S.C. 138), re- 
quiring the use of any publicly owned land 
from a park, recreation area, or wildlife and 



waterfowl refuge of national. State, or local 
significance as determined by the Federal, State, 
or local officials having jurisdiction thereof, 
or any land from an historic site of national, 
State, or local significance; 

(2) Any matter falling under section 106 of 
the National Historic Preservation Act of 1966 
(16 U.S.C. 470(f)), requiring consideration of 
the effect of the proposed action on any build- 
ing included in the National Register of 
Historic Preservation to comment on such 
action; 

(3) Any action that is likely to affect the 
preservation and enhancement of sites of his- 
torical, architectural, or archaeological signifi- 
cance; 

(4) Any action that is likely to be highly 
controversial regarding relocation housing; 

(5) Any action that (i) divides or disrupts 
an established community, disrupts orderly, 
planned development, or is inconsistent with 
plans or goals that have been adopted by the 
community in which the project is located; or 
(ii) causes significantly increased congestion; 

(6) Any action that (i) involves inconsis- 
tency with any Federal, State, or local law or 
administrative determination relating to the en- 
vironmental; (ii) has a significantly detri- 
mental impact on air or water quality or on 
ambient noise levels for adjoining areas; (iii) 
involves a possibility of contamination of a 
public water supply system; or (iv) affects 
ground water, flooding, erosion, or sedimenta- 
tion; 

(7) Any action that may directly or indi- 
rectly result in a significant increase in noise 
levels, either within a motor vehicle's closed 
environment or upon nearby areas; 

(8) Any action that may directly or indi- 
rectly result in a significant increase in the 
energy or fuel necessary to operate a motor 
vehicle, including but not limited to the follow- 
ing: (i) actions which may directly or indi- 
rectly result in a significant increase in the 
weight of a motor vehicle; and (ii) actions 
which may directly or indirectly result in a 
significant adverse affect upon the aerodymanic 
drag of a motor vehicle; 



PART 520-3 



(9) Any action that may directly or indi- 
rectly result in a significant increase in the 
amount of harmful emissions resulting from 
the operation of a motor vehicle; 

(10) Any action that may directly or indi- 
rectly result in a significant increase in either 
the use of or the exposure to toxic or hazardous 
materials in the manufacture, operation, or 
disposal of motor vehicles or motor vehicle 
equipment. 

(11) Any action that may directly or indi- 
rectly result in a significant increase in the 
problem of solid waste, as in the disposal of 
motor vehicles or motor vehicle equipment; 

(12) Any action that may directly or indi- 
rectly result in a significant depletion of scarce 
natural resources associated with the manu- 
facture or operation of motor vehicles or motor 
vehicle equipment; and 

(13) Any other action that causes significant 
environment impact by directly or indirectly 
affecting human beings through adverse im- 
pacts on the environment. 

(c) Research activities. 

(1) In accordance with DOT Order 5610. IB, 
the Assistant Secretary for Systems Develop- 
ment and Technology (TST) will prepare, 
with the concurrence of the NHTSA, proposed 
procedures for assessing the emnronmental con- 
sequences of research activities. Until final 
procedures are promulgated, the following 
factors are to be considered for periodic evalua- 
tion to determine when an environmental state- 
ment is required for such programs: 

(i) The magnitude of Federal invest- 
ment in the program; 

(ii) The likelihood of widespread appli- 
cation of the technology; 

(iii) The degree of environmental impact 
which would occur if the technology were 
widely applied; and 

(iv) The extent to which continued invest- 
ment in the new technology is likely to 
restrict future alternatives. 

(2) The statement or environmental review 
culminating in a negative declaration must be 
written late enough in the development process 
to contain meaningful information, but early 



enough so that this information can practically 
serve as an input in the decision-making 
process. Where it is anticipated that an en- 
vironmental impact statement may ultimately 
be required but its preparation is still pre- 
mature, the office shall prepare a publicly avail- 
able record briefly setting forth the reasons 
for its determination that a statement is not 
yet necessary. This record shall be updated 
at least quarterly, or as may be necessary when 
siginificant new information becomes available 
concerning the potential environmental impact 
of the program. In any case, a statement or 
environmental review culminating in a nega- 
tive declaration must be prepared before 
research activities have reached a state of 
investment or commitment to implementation 
likely to determine subsequent development or 
restrict later alternatives. Statements on tech- 
nology research and development programs 
shall include an analysis not only of alterna- 
tive forms of the same technology that might 
reduce any adverse environmental impacts but 
also of alternative technologies that would 
serve the same function as the technology 
under consideration. Efforts shall be made to 
involve other Federal agencies and interested 
groups with relevant expertise in the prepara- 
tion of such statements because the impacts 
and alternatives to be considered are likely to 
be less well defined than in other types of 
statements. 



Subpart B— Procedures 



520.21 Preparation of environmental reviews, 
negative declarations, and notices of 
intent. 

(a) General responsibilities. 

(1) Associate Administrators and Chief 
Counsel. Each Associate Administrator and 
the Chief Counsel is responsible for determin- 
ing, in accordance with Subpart A, whether 
the projects and activities under his jurisdic- 
tion require an environmental review, and for 
preparing all such reviews, negative declara- 
tions, and notices of intent. 



PART 520-4 



(2) Regional Administrators. Each Re- 
gional Administrator, in consultation with the 
Governor's Representative, is responsible for 
determining, in accordance with Subpart A, 
whether proposed State activities in his Region, 
as stated in Annual Work Programs, require 
an environmental review, and for the prepa- 
ration of all such reviews, negative declara- 
tions, and notices of intent. 

(3) Associate Administrator for Planning 
and Evaluation. The Associate Administrator 
for Planning and Evaluation may request in 
accordance with the requirements of this order, 
that the appropriate Associate Administrator 
or Regional Administrator prepare an envi- 
ronmental review or environmental impact 
statement for any proposed or continuing 
NHTSA action, or comment on any environ- 
mental statement prepared by other agencies. 

(b) Coordination. Coordination with appro- 
priate local, State and Federal agencies should 
be accomplished during the early stages by the 
responsible official to assist in identifying areas 
of significance and concern. Existing procedures, 
including those established under the Office of 
Management and Budget (0MB) Revised Cir- 
cular A-95, should be used to the greatest extent 
practicable to accomplish this early coordination. 

(c) Applicants. 

(1) Each applicant for a grant, loan, or 
other financial assistance for use in State and 
community projects may be requested to sub- 
mit, with the original application, an environ- 
mental assessment of the proposed project. 

(2) Under 0MB Revised Circular A-95, 
"Evaluation, Review, and Coordination of 
Federal Assistance Programs and Projects," 
and DOT 4600.4B, "Evaluation, Review and 
Coordination of DOT Assistance Programs 
and Projects," dated February 27, 1974, a grant 
applicant must notify the clearinghouse of its 
intention to apply for Federal program assist- 
ance. The notification must solicit comments 
on the project and its impacts from appro- 
priate State and local agencies. Since it is the 
NHTSA's policy to assure that (i) interested 
parties and Federal, State, and local agencies 
receive early notification of the decision to pre- 
pare an environmental impact statement, and 



(ii) their comments on the environmental 
effects of the proposed Federal action are soli- 
cited at an early stage in the preparation of 
the draft impact statement, this early notifica- 
tion requirement may be met by a grant appli- 
cant by sending the notification to interested 
parties and agencies at the same time it is sent 
to the clearinghouse. 

(d) Consultants. Consultants may prepare 
background or preliminary material and assist 
in preparing a draft or final environmental state- 
ment for which the NHTSA takes responsibilty. 
Care should be exercised in selecting consultants, 
and in reviewing their work, to insure complete 
and objective consideration of all relevant project 
impacts and alternatives, particularly if the con- 
sultant may expect further contracts, based on 
the outcome of the environmental decision. 

(e) Environmental review report. The en- 
vironmental review shall culminate in a brief 
written report of the same title, which shall be 
included in the proposed or ongoing agency 
action, and which— 

(1) Describes the proposed or ongoing 
NHTSA action, the environment affected, and 
the anticipated benefits; 

(2) Evaluates the potential environmental 
impact, including those adverse impacts which 
cannot be avoided, should the proposal be im- 
plemented or the action continued; 

(3) Assesses the alternatives to the proposed 
or ongoing action and their potential environ- 
mental impact. 

(4) Evaluates the cumulative and long-term 
environmental effects of the proposed or on- 
going action; 

(5) Describes the irreversible and irretriev- 
able commitments of resources involved in the 
proposal's implementation or the action's con- 
tinuance; 

(6) Identifies any known or potential con- 
flicts with State, regional, or local plans and 
programs; 

(7) Weighs and analyzes the anticipated 
benefits against the environmental and other 
costs of the proposed or ongoing action in a 
manner which reflects similar comparisons of 
reasonably available alternatives; and 



PART 520-5 



(8) Concludes with a negative declaration 
or recommends the preparation of a DEIS. 

(f ) Negative declarations. 

(1) If the responsible official judges that 
the environmental impact of a proposed or on- 
going action under his jurisdiction will not 
significantly affect the quality of the human 
environment, the following declaration will be 
included in the environmental review report: 

"It is the judgment of this agency, based on 
available information, that no significant en- 
vironmental impact will result from execu- 
tion of this action." 

(2) A DEIS may be changed to a negative 
declaration if the public review process indi- 
cates that the proposal or ongoing action will 
not have a significant effect upon the environ- 
ment. 

(3) An index of all negative declarations 
and a copy of each environmental review re- 
port shall be retained by the responsible official 
under whose jurisdiction it was prepared and 
shall be made available for public inspection 
upon request. 

(g) Notice of intent to prepare a draft en- 
vironmental impact statement. If the responsible 
official under whose jurisdiction an environ- 
mental review is prepared determines that the 
proposed or ongoing action could have a poten- 
tially significant effect on the quality of the 
environment, he shall: coordinate with the Asso- 
ciate Administrator for Planning and Evaluation 
and the Chief Counsel, transmit to appropriate 
Federal, State and local agencies and have pub- 
lished in the Federal Register a notice of intent 
to prepare an environmental statement as soon 
as is practicable after the determination to pre- 
pare such a statement. 

§ 520.22 Maintenance of a list of actions. 

(a) The Associate Administrator for Planning 
and Evaluation shall 'be responsible for the prep- 
aration and maintenance of a list of actions for 
which draft or final environmental impact state- 
ments have been or are to be prepared. This 
list shall be on file with the Associate Admin- 
istrator for Planning and Evaluation and shall 
be available for public inspection in the Docket 



Section upon request. A copy of the initial list 
and its updatings at the end of each calendar 
quarter shall be transmitted by the Associate 
Administrator for Planning and Evaluation to 
the Assistant Secretary of Transportation for 
Environmental and Safety (TES) and to CEQ. 

(b) If a determination is made that an en- 
vironmental statement is not necessary for a pro- 
posed action (1) which has been identified as 
normally requiring preparation of a statement, 
(2) which is similar to actions for which a sig- 
nificant number of statements have been pre- 
pared, (3) which the agency has previously 
announced would be the subject of a statement, 
or (4) for which the official responsible for such 
proposal has made a negative determination in 
response to a request from the CEQ, a record 
briefly setting forth the decision and the reasons 
for that determination shall be prepared by the 
responsible official. Such a record of negative 
determinations and any evaluations made pur- 
suant to § 520.21 which conclude that preparation 
of a statement is not yet timely shall be prepared 
by the responsible official, submitted to the Asso- 
ciate Administrator for Planning and Evalua- 
tion, and made available by the Associate 
Administrator for Planning and Evaluation in 
the same manner as provided in paragraph (a) 
of this section for lists of statements under prep- 
aration. 

§ 520.23 Preparation of draft environmental im- 
pact statements. 

(a) Planning stage. 

(1) When a DEIS is to be prepared, the 
responsible official shall promptly initiate its 
preparation and develop a schedule in consulta- 
tion with the Associate Administrator for 
Planning and Evaluation, to assure completion 
prior to the first significant point of decision 
in the program or project development process. 

(2) The environmental impacts of proposed 
activities should be initially assessed concur- 
rently with the initial technical and economic 
studies. 

(3) Section 102(2) (A) of NEPA requires 
each Federal agency to utilize a "systematic, 
interdisciplinary approach" to plans and pro- 
gams affecting the environment. To assure 
that all environmental impacts are identified 



PART 520-6 



and assessed, all relevant disciplines should be 
represented. If the necessary disciplines are 
not represented on the staff of the applicant or 
NHTSA, it is appropriate to use professional 
services available in other Federal, State or 
local agencies, universities, or consulting firms. 
The use of the interdisciplinary approach 
should not be limited to the environmental 
statement. This approach should also be used 
in the early planning stages to help assure a 
systematic evaluation of reasonable alternative 
courses of action and their potential social, 
economic, and environmental consequences. 

(b) Form and content requirements. Attach- 
ment 1 of this order prescribes the form and con- 
tent requirements to be followed for each draft 
and final environmental impact statement. The 
DEIS must fulfill and satisfy, to the fullest ex- 
tent possible at the time it is prepared, the re- 
quirements established for final statements. 

(c) "Lead agency". CEQ guidelines provide 
that when more than one Federal agency (1) 
directly sponsors an action, or is directly in- 
volved in an action through funding, licenses, or 
permits, or (2) is involved in a group of actions 
directly related to each other because of their 
functional interdependence and geographical 
proximity, consideration should be given to pre- 
paring one statement for all the Federal actions 
involved. Agencies in such cases should consider 
the designation of a single "lead agency" to as- 
sume supervisory responsibility for preparation 
of a joint statement. Where a lead agency pre- 
pares the statement, the other agencies involved 
should provide assistance with respect to their 
areas of jurisdiction and expertise. The state- 
ment should contain an evaluation of the full 
range of Federal actions involved, should reflect 
the views of all participating agencies, and 
should be prepared before major or irreversible 
actions have been taken by any of the partici- 
pating agencies. Some relevant factors in deter- 
mining an appropriate lead agency are: the time 
sequence in which the agencies become involved, 
the magnitude of their respective involvement, 
and their relative expertise with respect to the 
project's environmental effects. 



Questions concerning "lead agency" decisions 
should be raised with CEQ through TES. For 
projects serving and primarily involving land 
owned by or under the jurisdiction of another 
Federal agency, that agency may be the appro- 
priate lead agency. 

(d) Applicants. Where the agency requests 
an applicant for financial assistance or other 
agency approval to submit an environmental 
assessment, the responsible official will (1) assist 
the applicant by outlining the information re- 
quired, and (2) in all cases make his own evalua- 
tion of the environmental issues involved and 
take responsibility for the scope and content of 
draft and final environmental statements. 

§ 520.24 Internal processing of draft environ- 
mental impact statements. Before circulating a 
DEIS for external review, the official responsible 
for the DEIS shall (1) receive the concurrence 
of the Associate Administrator for Planning and 
Evaluation and the Chief Counsel; and (2) pre- 
pare a memorandum for approval by the Admin- 
istrator which shall— 

(a) Set forth the basis on which is was deter- 
mined that a potentially significant environ- 
mental effect exists; 

(b) Attach the DEIS; 

(c) Identify the Federal, State, and local agen- 
cies and private sources from which comments 
on the DEIS are proposed to be solicited (see 
Attachment 2); and 

(d) Include a recommendation on whether a 
public hearing on the proposed action should be 
held. 

§ 520.25 External review of draft environmental 
Impact statements. 

(a) Requirements. The official responsible for 
the DEIS shall- 

(1) Transmit 5 copies of the DEIS to the 
CEQ and 2 copies to TES; 

(2) Solicit comments from all Federal, 
State, and local agencies which have jurisdic- 
tion by law or special expertise with respect 
to the possible environmental impact involved, 
and from the public (see Attachment 2); and 



PART 520-7 



(3) Inform the public and interested parties 
of the availability of the DEIS and provide 
copies as appropriate; and 

(4) Allow a comment period of not less than 
45 days from the Friday of the week follow- 
ing receipt of the draft impact statement by 
CEQ. Requests for extensions shall be granted 
whenever possible, and particularly when war- 
ranted by the magnitude and complexity of 
the statement or the extent of citizen interest. 

(b) Procedures. 

(1) Federal and Federal-State agency re- 
view. 

(i) The DEIS shall be circulated for re- 
view to the Federal and Federal-State 
agencies with special expertise or jurisdic- 
tion by law with regard to the potential 
environmental impact involved. These agen- 
cies and their relevant areas of expertise are 
identified in Attachment 2. 

(ii) For actions within the jurisdiction 
of the Environmental Protection Agency 
(air or water quality, solid wastes, pesticides, 
radiation standards, noise), the DEIS shall 
be sent to EPA. 

(iii) For actions which would affect any 
property that is included in the National 
Register of Historic Preservation, the DEIS 
should be sent to the Advisory Council on 
Historic preservation and the State Liaison 
Office for Historic Preservation. 

(2) State and local review. Where a review 
of the proposed action by State and local 
agencies authorized to develop and enforce en- 
vironmental standards is relevant, comments 
are to be solicited directly from such agencies 
with known responsibilities in environmental 
matters, and shall be obtained as follows: 

(i) Where review of direct Federal de- 
vevelopment projects, and of projects assisted 
under programs listed in Attachment D to 
revised 0MB Circular A-95 (as imple- 
mented by DOT 4600.4B "Evaluation, Re- 
view and Coordination of DOT Assistance 
Programs and Projects", dated February 27, 
1974), takes place prior to preparation of 
an environmental statement, comments of 
the reviewing agencies on the environmental 
effects of the proposed project are inputs to 



the environmental statement. These com- 
ments shall be attached to the draft state- 
ment when it is circulated for review and 
copies of the draft shall be sent to those 
who commented. A-95 clearinghouses or 
other agencies designated by the Governor 
may also secure comments on environmental 
statements. In all cases, copies of the draft 
environmental statements shall be sent to 
clearinghouses and to the applicant whose 
project is the subject of the statement. 

(ii) Comments shall be directly obtained 
from appropriate State and local agencies, 
except where review is secured by agreement 
through A-95 clearinghouses, unless the 
Governor of the appropriate State has des- 
ignated some other point for obtaining his 
review. Instructions for obtaining the views 
of such agencies are contained in the joint 
OMB-CEQ memorandum (see Attachment 
4). Comments shall be solicited from muni- 
cipalities and counties on all projects located 
therein. 

(iii) State and local review of NHTSA 
procedures, regulations, and policies for ad- 
ministering Federal progams of assistance 
to State and local governments shall be ob- 
tained pursuant to procedures established by 
0MB Circular No. A-85. 

(iv) Generally, environmental statements 
on legislative and budget proposals may be 
excluded from State and local review. 
(3) General public receive. 

At the time the DEIS is circulated to 
Federal, State, and local agencies, public 
availability of the DEIS for comment and 
review will be announced by the CEQ in the 
Federal Register. Copies of the DEIS 
should be sent to known interested parties, 
and press releases should be sent to local 
news media advising where the DEIS is 
available and how copies may be obtained. 
The Office of Public Affairs and Consumer 
Services shall maintain a list of groups, in- 
cluding conservation organizations and 
motor vehicle manufacturers, known to be 
interested in the agency's activities, and di- 
rectly notify such groups of the availability 
of the DEIS or send them a copy as soon 
as it has been prepared. 



PART 520-8 



(ii) A DEIS should be available to the 
public at least 30 days prior to the time of 
a public hearing on the DEIS. 

(iii) Copies of the DEIS will be made 
available at the NHTSA Docket Section, 
Room 5108, 400 Seventh Street, S.W., Wash- 
ington, D.C. 20590, and, where appropriate, 
NHTSA Regional Offices, at the offices of 
any applicants of grantees, at appropriate 
State, regional, and metropolitan clearing 
houses, and local public libraries, and fur- 
nished to public and private organizations 
and individuals with special expertise with 
respect to the potential environmental im- 
pact involved, and to those with an interest 
in the action who request an opportunity 
to comment. Copies to be made available to 
the public shall be provided without charge 
to the extent practicable, or at a fee which 
is not more than the actual cost of repro- 
ducing copies required to be sent to other 
Federal agencies, including the CEQ. 

(iv) A copy of the DEIS should in all 
cases be sent to any applicant whose project 
is the subject of the statement. 

(v) If a DEIS is changed to a negative 
declaration as a result of the public review 
process, all agencies and individuals that 
received copies and/or commented on the 
DEIS must be informed that a negative de- 
claration was substituted for the DEIS and 
given a brief explanation of the reason for 
such substitution, 
(c) Utilization of Comments. 
Comments received on the draft statement, and 
inputs (in summary form, if appropriate) from 
the processes for citizen participation, shall 
accompany the environmental statement through 
the normal internal project or program review 
process. 



hearing is appropriate, the responsible official 
should consider— 

(1) The magnitude of the proposal in terms 
of economic costs, the geographic area in- 
volved, and the uniqueness or size of the com- 
mitment of the resources involved. 

(2) The degree of interest in the proposal, 
as evidenced by requests from the public and 
from Federal, State, and local authorities that 
a hearing be held; 

(3) The likelihood that information will be 
presented at the hearing which will be of 
assistance to the agency in fulfilling its respon- 
siblities under the NEPA; 

(4) The extent to which public involvement 
already has been achieved through other means, 
such as earlier public hearings, meetings with 
citizen representatives, and/or written com- 
ments on the proposed action; and 

(5) The extent of potential environmental 
impact. 

(b) If it is determined that a public hearing 
is to be held in accordance with paragraph (a) 
of this section, the official responsible for the 
action shall both announce the hearing through 
newspaper articles, direct notification to inter- 
ested parties, and clearinghouses, and cause a 
notice to be issued in the Federal Register at 
least 30 days prior to the time of such hearing— 

(1) Identifying the subject matter of the 
hearing; 

(2) Announcing the date, time, and place of 
the hearing and the procedures to be followed; 
and 

(3) Announcing the availability of the 
DEIS and any other information, as appro- 
priate, for public inspection at one or more 
locations in the area affected by the action. 



§ 520.26 Public heaVings. 

(a) A public hearing on a proposed or on- 
going action covered by a DEIS shall be held 
upon the determination by the official responsible 
for such action, in consultation with the Associate 
Administrator for Planning and Evaluation, that 
a public hearing would be appropriate and in 
the public interest. In deciding whether a public 



§ 520.27 Legislative actions. 

(a) A DEIS on both legislative proposals and 
reports for which NHTSA either develops the 
Departmental position or originates the legis- 
lation will be cleared with TES, filed with CEQ, 
and submitted to the Office of Management and 
Budget through the normal DOT and NHTSA 
legislative process. 



PART 520-9 



Effective: November 4, 1975 



(b) The preparation, circulation, and filing of 
the environmental statement shall be in accord- 
ance with 0MB Bulletin 72-6, "Proposed Fed- 
eral Actions Affecting the Environment." 

(c) A DEIS and any comments that have been 
received should be available to the Congress and 
to the public for consideration in connection with 
the proposed legislation or report on proposed 
legislation. In cases where the scheduling of 
Congressional hearings on recommendations or 
reports on proposals for legislation which the 
Department has forwarded to the Congress does 
not allow adequate time for the completion of 
a FEIS, a DEIS may be furnished to the Con- 
gress and made available to the public pending 
transmittal of the comments as received and the 
final text. 

§ 520.28 Preparation of final environmentai 
impact statements. 

(a) If the action is to go forward and the 
DEIS has not been changed to a negative decla- 
ration, as soon as practicable after the expira- 
tion of the comment period and hearing process, 
if any, the official responsible for the action shall 
prepare a final environmental impact statement 
(FEIS), taking into account all comments re- 
ceived and issues raised during such period and 
process. 

(b) The FEIS shall conform to the guidelines 
for form and content in Attachment 1. 

(c) The FEIS shall then be submitted to the 
Chief Counsel by the official responsible for the 
action, for determination of legal sufficiency. 

§ 520.29 Internal review of final environmental 
impact statements. 

(a) Upon completion of the review for legal 
sufficiency of the FEIS, the Chief Counsel shall 
transmit 2 copies of the FEIS to TES for con- 
currence. Unless other notification is provided 
within 2 weeks after receipt in TES, the state- 
ment will be considered concurred in by TES. 

(b) After concurrence by TES, the FEIS 
will be transmitted by the Chief Counsel to the 
Administrator for approval. 



(c) If an action requires the personal approval 
of the Secretary or Deputy Secretary pursuant 
to a request by them or by TES, TGC, or the 
NHTSA office originating the action, the final 
environmental statement shall be accompanied 
by a brief cover memorandum requesting the 
Secretary's or Deputy Secretary's approval of the 
action. 

(1) The memorandum shall have signature 
lines for the concurrence of the Assistant Sec- 
retary for Environment, Safety, and Consumer 
Affairs, the General Counsel, and the Deputy 
Secretary, and for the approval of the Secre- 
tary or Deputy Secretary. 

(2) TES, in conjunction with the Executive 
Secretary, is responsble for informing the 
Assistant Secretary for Congressional and 
Intergovernmental Affairs and the Office of 
Public Affairs of the Secretary's decisions so 
that they, in coordination with the operating 
administrations or other Secretarial Offices in- 
volved, may take the appropriate actions. 

§ 520.30 Availability of final environmental 
impact statements. 

(a) Pending final approval and filing with 
CEQ, a proposed FEIS may be made available 
to the public and Federal, State, or local agencies 
if it carries a notation that it is not approved 
and filed. 

(b) After approval by the Administrator, the 
Associate Administrator for Planning and 
Evaluation will send 5 copies of the FEIS (to- 
gether with comments) to the CEQ; individual 
copies with comments attached to the EPA and 
all Federal, State, and local agencies and mem- 
bers of the public who submitted comments on 
the DEIS or requested copies of the FEIS. If 
the length of the statement or the number of 
comments make this distribution requirement 
highly impractical, TES should be consulted to 
consider an alternative arrangement. 

(c) Copies of the FEIS will be made avail- 
able in the NHTSA Docket Section, Room 5109, 
400 Seventh Street, S.W., Washington, D.C. 
20590, and, where appropriate, NHTSA Regional 
Offices, at the offices of any applicants or grantees, 
and at appropriate State, regional, and metro- 
politan clearinghouses and, where the impact is 
localized, public libraries. 



PART 520-10 



(d) The official responsible for the action 
shall, upon request, make available copies of the 
FEIS and substantive comments received on the 
DEIS without charge to the extent practicable, 
or at a fee which is not more than the actual cost 
or reproducing copies. 

§ 520.31 Amendments or supplements. A draft 
or final environmental impact statement may be 
amended or supplemented. Supplements or 
amendments should be considered when substan- 
tial changes are made in the proposed or ongoing 
action that will introduce a new or changed 
environmental effect of significance to the quality 
of the environment, or significant new informa- 
tion becomes available concerning its environ- 
mental aspects. In such cases, the supplement 
or amendment shall be processed in consultation 
with TES with respect to the need for, or desir- 
ability of, recirculating the statement for the 
appropriate period. TES concurrence must be 
secured before issuance. 

§ 520.32 Emergency action procedures. The 

CEQ Guidelines allow modification of require- 
ments in case of a national emergency, a disaster 
or similar great urgency. The processing times 
may be reduced, or if the emergency situation 
warrants, preparation and processing of a DEIS, 
FEIS, or negative declaration may be abbre- 
viated. Such procedural changes, however, 
should be requested only for those projects where 
the need for immediate action requires processing 
in other than the normal manner. 

§ 520.33 Trimming of proposed NHTSA actions. To 

the maximum extent practicable, no administra- 
tive action (i.e., any proposed action to be taken 
by the agency other than agency proposals for 
legislation to Congress, budget proposals, or 
agency reports on legislation) subject to this 
part and covered by an environmental impact 
statement shall be taken sooner than 90 days 
after a DEIS has been circulated for comment, 
furnished to the CEQ, and made public. Neither 
shall such administrative action be taken sooner 
than 30 days after the FEIS (together with 



comments) has been filed with CEQ, and made 
available to commenting agencies and t.ie public. 
If the FEIS is filed within 90 days after a DEIS 
has been circulated for comment, furnished to 
the CEQ and made public, the 30-day period 
and 90-day period may run concurrently to the 
extent that they overlap. The 90-day time period 
is measured from the date of publication in the 
Federal Register of the list of weekly filings of 
environmental impact statements with the CEQ, 
but the 30-day period is computed from the date 
of receipt by the CEQ. 

§ 520.34 Comments on environmental statements 
prepared by other agencies. 

(a) All requests for NHTSA's views on a 
DEIS or a proposed action undergoing environ- 
mental review by another agency will be trans- 
mitted to the Associate Administrator for 
Planning and Evaluation for action or referral 
to TES where appropriate. Offices within 
NHTSA may be requested by the Associate 
Administrator for Planning and Evaluation to 
supply any pertinent information and comments 
for a coordinated agency response. 

(b) NHTSA's comments and the comments of 
any offices responding to a request by the Asso- 
ciate Administrator for Planning and Evaluation 
should be organized in a manner consistent with 
the structure of an environmental review set out 
in § 520.21(e). NHTSA programs that are en- 
vironmentally related to the proposed action 
under review should be identified so interrela- 
tionships may receive due consideration. 

(c) Copies of NHTSA's comments on environ- 
mental statements prepared by other agencies 
shall be distributed as follows: 

(1) The original and 1 copy to the request- 
ing agency; 

(2) 1 copy to TES-70; and 

(3) 5 copies to CEQ. 

(d) Requests by the public for copies should 
be referred to the agency originating the state- 
ment. 



PART 520-11 



ATTACHMENT 1 

FORM AND CONTENT OF STATEMENT 

1. Form. a. Each statement will be headed as 
follows: 

DEPARTMENT OF 

TRANSPORTATION 

NATIONAL HIGHWAY TRAFFIC 

SAFETY ADMINISTRATION 

(Draft) Environmental Impact Statement 
Pursuant to section 102(2) (C), Pub. L. 91-190; 
83 Stat. 853; 42 U.S.C. 4332(2) (C). 

b. The heading specified above shall be modi- 
fied to indicate that the statement also covers 
sections 4(f) of the DOT Act or 106 of the 
National Historic Preservation Act, when 
appropriate. 

c. Each statement will, as a minimum, con- 
tain sections corresponding to paragraph 3 
herein, supplemented as necessary to cover 
other matters provided in this Attachment. 

d. The format for the summary to accom- 
pany draft and final environmental statements 
is as follows: 

SUMMARY 
(Check one) ( ) Draft ( ) Final 

Department of Transportation, National High- 
way Traffic Safety Administration. Name, 
address, and telephone number of individual 
who can be contacted for additional informa- 
tion about the proposed action or the statement. 
(Note: DOT Order 2100.2 prescribed proce- 
dure for reporting public contacts in rulemak- 
ing.) 

(1) Name of Action. (Check one) ( ) 
Administrative Action. ( ) Legislative 
Action. 

(2) Brief description of action indicating 
what States (and counties) are particularly 
affected. 

(3) Summary ,of environmental impact 
and adverse environmental effects. 

(4) List alternatives considered. 

(5) (a) (For draft statements) List all 
Federal, State, and local agencies from which 
comments have been requested. 



(b) (For final statements) List all Federal, 
State, and local agencies and other sources 
from which written comments have been re- 
ceived. 

(6) Dates the draft statement and the 
final statement, if issued, were made available 
to the Council on Environmental Quality 
and the public. 

2. Guidance as to content of statement. The 
following paragraphs of this Attachment are 
intended to be considered, where relevant, as 
guidance regarding the content of environmental 
statements. This guidance is expected to be sup- 
plemented by research reports, guidance on 
methodology, and other material from the litera- 
ture as may be pertinent to evaluation of relevant 
environmental factors. 

3. General content. The following points are 
to be covered: 

a. A description of the proposed Federal 
action (e.g., "The proposed Federal action is 
approval of a grant application to con- 
struct * * *"), a statement of its purpose, and 
a description of the environment affected, in- 
cluding information, summary technical data, 
and maps and diagrams where relevant, ade- 
quate to permit an assessment of potential 
environmental impact by commenting offices 
and the public. 

(1) Highly technical and specialized 
analyses and data should generally be 
avoided in the body of the draft impact 
statement. Such materials should be appro- 
priately summarized in the body of the en- 
vironmental statement and attached as 
appendices or footnoted with adequate biblio- 
graphic references. 

(2) The statement should succinctly de- 
scribe the environment of the area affected 
as it exists prior to a proposed action, includ- 
ing other related Federal activities in the 
area, their interrelationships, and cumulative 
environmental impact. The amount of de- 
tail provided in such descriptions should be 
commensurate with the extent and expected 
impact of the action, and with the amount 
of information required at the particular 
level of decision making (planning, feasi- 
bility, design, etc.). In order to insure ac- 



PART 520-12 



curate descriptions and environmental con- 
siderations, site visits should be made where 
appropriate. 

(3) The statement should identify, as 
appropriate, population and growth char- 
acteristics of the affected area and any 
population and growth assumptions used to 
justify the project or program or to deter- 
mine secondary population and growth 
impacts resulting from the proposed action 
and its alternatives (see paragraph 3c(2)). 
In discussing these population aspects, the 
statement should give consideration to using 
the rates of growth in the region 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 Agri- 
culture (the OBERS projection). 

(4) The sources of data used to identify, 
quantify, 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. Where 
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 
environment as those listed in Attachment 2, 
and in section 520.5(b), supra. Primary atten- 
tion should be given in the statement to discus- 
sing those factors most evidently impacted by 
the proposed action. 

(2) Secondary and other foreseeable ef- 
fects, as well as primary consequences for the 



environment, 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 primary 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 alternatives 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 effects, 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 
quality or have less detrimental effects. Ex- 
amples of such alternatives include: the al- 
ternative of not taking action or of postponing 
action pending further study; alternatives re- 
quiring actions of a significantly different 
nature which would provide similar benefits 
with different environmental impacts, e.g., low 
capital intensive improvements, mass transit 
alternatives 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 be sufficiently 
detailed to reveal comparative evaluation of 
the environmental benefits, costs, and risks of 
the proposed action and each reasonable al- 
ternative. Where an existing impact statement 
already contains such an analysis its treatment 
of alternatives may be 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 be avoided (such as water 
or air pollution, noise, undesirable land use 



PART 520-13 



>^ 



patterns, or impacts on public parks and recrea- 
tion areas, wildlife and waterfowl refuges, or 
on historic sites, damage to life systems, traffic 
congestion, threats to health, or other conse- 
quences adverse to the environmental goals set 
out in section 101(b) of NEPA). This should 
be a brief section summarizing in one place 
those effects discussed in paragraph 3c that are 
adverse and unavoidable under the proposed 
action. Included for purposes of contract 
should be a clear statement of how all adverse 
effects will be mitigated. Where 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 vice 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 and 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 the 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- 
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 environmental 
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 environmental 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 



voluminious) should be attached to the final 
statement, whether or not such comment is 
thought to merit individual discussion in the 
text of the statement. 

j. Draft statements should indicate at appro- 
priate points in the text any underlying studies, 
reports, and other information obtained and 
considered in preparing the statement, includ- 
ing 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 be 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 
being understood by the reader without the 
need for undue cross reference. 

4. Publicly owned parklands, recreational 
areas, wildlife and waterfowl refuges 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 historic 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) Where 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 the 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, provisions 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 



^ 



section 4(f) property regarding the action 
proposed and the measures planned to minimize 
harm. 

f. If Federally-owned properties are in- 
volved in highway projects, the final statement 
shall include the action taken or an indication 
of the expected action after filing 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 
February 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- 
randum of Agreement and the comments of the 
Council are found in 36 CFR Part 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 thereof 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 



6. Impacts of the proposed action on the hu- 
man environment involving community disrup- 
include a description. 

a. The statement should include a descrip- 
tion of probable impact sufficient to enable an 
understanding of the extent of the environ- 
mental and social impact of the project alter- 
natives and to consider whether relocation 
problems can be properly handled. This would 
include the following information obtainable 
by visual inspection of the proposed affected 
area and from secondary sources and commu- 
nity sources when available. 

(1) An estimate of the households to be 
displaced including the family characteristics 
(e.g., minorities, and income levels, tenure, 
the elderly, large families). 

(2) Impact on the human environment of 
an action which divides or disrupts an estab- 
lished community, including where pertinent, 
the effect of displacement on types of fam- 
ilies and individuals affected, effect of streets 
cut off, separation of residences from com- 
munity facilities, separation of residential 
areas. 

(3) Impact on the neighborhood and hous- 
ing to which relocation is likely to take place 
(e.g., lack of sufficient housing for large fam- 
ilies, doublings up). 

(4) An estimate of the businesses to be 
displaced, and the general effect of business 
dislocation on the economy of the community. 

(5) A discussion of relocation housing in 
the area and the ability to provide adequate 
relocation housing for the types of families 
to be displaced. If the resources are in- 
sufficient to meet the estimated displacement 
needs, a description of the actions proposed 
to remedy this situation including, if neces- 
sary, use of housing of last resort. 

(6) Results of consultation with local offi- 
cials and community groups regarding the 
impacts to the community affected. Reloca- 
tion agencies and staff and other social agen- 
cies can help to describe probable social 
impacts of this proposed action. 

(7) Where necessary, special relocation ad- 
visory services to be provided the elderly, 
handicapped and illiterate regarding inter- 



pretations of benefits, assistance in selecting 
replacement housing and consultation with 
respect to acquiring, leasing, and occupying 
replacement housing. 

b. This data should provide the preliminary 
basis for assurance of the availability of relo- 
cation housing as required by DOT 5620.1, Re- 
placement Housing Policy, dated June 24, 1970, 
and 49 CFR 25.53. 

7. Considerations relating to pedestrians and 
bicyclists. Where appropriate, the statement 
should discuss impacts on, and consideration to be 
given in the development of the project to pedes- 
trian and bicycle access, movement and safety 
within the affected area, particularly in medium 
and high density commercial and residential 
areas. 

8. Other social impacts. The general social 
groups specially benefitted or harmed by the pro- 
posed action should be identified in the statement 
including the following: 

a. Particular effects of a proposal on the 
elderly, handicapped, non-drivers, transit de- 
pendent, or minorities should be described to 
the extent reasonably predictable. 

b. How the proposal will facilitate or inhibit 
their access to jobs, educational facilities, re- 
ligious institutions, health and welfare services, 
recreational facilities, social and cultural fa- 
cilities, pedestrian movement facilities, and 
public transit services. 

9. Standards as to noise, air, and water pollu- 
tion. The statement shall reflect sufficient analysis 
of the effects of the proposed action on attain- 
ment and maintenance of any environmental 
standards established by law or administrative 
determination (e.g., noise, ambient air quality, 
water quality) including the following docu- 
mentation: 

a. With respect to water quality, there 
should be consultation with the agency respon- 
sible for the State water pollution control 
program as to conformity with standards and 
regulations regarding storm sewer discharge 
sedimentation control, and other non-point 
source discharges. 

b. The comments or determinations of the 
offices charged with administration of the 
State's implementation plan for air quality as 



PART 520-17 



M 



to the consistency of the project with State 
plans for the implementation of ambient air 
quality standards. 

c. Conformity to adopted noise standards, 
compatible if appropriate, with different land 
uses. 

10. Energy supply and natural resources de- 
velopment. Where applicable, the statement 
should reflect consideration of whether the project 
or program will have any effect on either the 
production or consumption of energy and other 
natural resources, and discuss such effects if they 
are significant. 

11. Flood hazard evaluation. When an alterna- 
tive under consideration encroaches on a flood 
plain, the statement should include evidence that 
studies have been made and evidence of consulta- 
tions with agencies with expertise have been 
carried out. Necessary measures to handle flood 
hazard problems should be described. In com- 
pliance with Executive Oder 11296, and Flood 
Hazard Guidelines for Federal Executive Agen- 
cies, promulgated by the Water Resources Coun- 
cil, or how such requirements can be met during 
project development. 

12. Considerations relating to wetlands or 
coastal zones. Where wetlands or coastal zones 
are involved, the statement should include: 

a. Information on location, types, and extent 
of wetlands areas which might be affected by 
the proposed action. 

b. An assessment of the impacts resulting 
from both construction and operation of the 
project on the wetlands and associated wild- 
life, and measures to minimize adverse impacts. 

c. A statement by the local representative of 
the Department of the Interior, and any other 



responsible officials with special expertise, set- 
ting forth his views on the impacts of the 
project on the wetlands, the worth of the 
particular wetlands areas involved to the com- 
munity and to the Nation, and recommendations 
as to whether the proposed action should pro- 
ceed, and, if applicable, along what alternative 
route. 

d. Where applicable, a discussion of how the 
proposed project relates to the State coastal 
zone management program for the particular 
State in which the project is to take place. 

13. Construction impacts. In general, adverse 
impacts during construction will be of less im- 
portance than long-term impacts of a proposal. 
Nonetheless, statements should appropriately ad- 
dress such matters as the following, identifying 
any special problem areas: 

a. Noise impacts from construction and any 
specifications setting maximum noise levels. 

b. Disposal of spoil and effect on borrow 
areas and disposal sites (include specifications 
where special problems are involved). 

c. Measures to minimize effects on traffic and 
pedestrians. 

14. Land use and urban growth. The state- 
ment should include, to the extent relevant and 
predictable: 

a. The effect of the project on land use, de- 
velopment patterns, and urban growth. 

b. Where significant land use and develop- 
ment impacts are anticipated, identify public 
facilities needed to serve the new development 
and any problems or issues which would arise 
in connection with these facilities, and the com- 
ments of agencies that would provide these 
facilities. 



PART 520-18 



ATTACHMENT 2 

AREAS OF ENVIRONMENTAL IMPACT AND FED- 
ERAL AGENCIES AND FEDERAL-STATE AGENCIES^ 
WITH JURISDICTION BY LAW OR SPECIAL EXPER- 
TISE TO COMMENT THEREON^ 



Air Quality 

Department of Agriculture- 
Forest Service (effects on vegetation) 

Atomic Energy Commission (radioactive sub- 
stances) 

Department of Health, Education, and Welfare 
Environmental Protection Agency 
Department of the Interior- 
Bureau of Mines (fossil and gaseous fuel com- 
bustion) 

Bureau of Sport Fisheries and Wildlife (effect 
on wildlife) 

Bureau of Outdoor Recreation (effect on recrea- 
tion) 

Bureau of Land Management (public lands) 

Bureau of Indian Affairs (Indian lands) 

National Aeronautics and Space Administration 
(remote sensing, aircraft emissions) 

Department of Transportation- 
Assistant Secretary for Systems Development 
and Technology (auto emissions) 

Coast Guard (vessel emissions) 

Federal Aviation Administration (aircraft 
emissions) 



' River Basin Commissions (Delaware. Great Lakes, 
Missouri, New England, Ohio, Pacific Northwest, Souris- 
Red-Rainy, Susquehanna, Upper Mississippi) and similar 
Federal-State agencies should be consulted on actions 
affecting the environment of their specific geographic 
jurisdictions. 

' In all cases where a proposed action will have sig- 
nificant international environmental effects, the Depart- 
ment of State should be consulted, and should be sent a 
copy of any draft and final impact statement which 
covers such action. 



Weather Modification 

Department of Agriculture- 
Forest Service 

Department of Commerce 
National Oceanic and Atmospheric Administra- 
tion 

Department of Defense- 
Department of the Air Force 

Department of the Interior 
Bureau of Reclamation 

Water Resources Council 

WATER 

Water Qiiality 

Department of Agriculture- 
Soil Conservation Service 
Forest Service 

Atomic Energy Commission (radioactive sub- 
stances) 

Department of the Interior- 
Bureau of Reclamation 
Bureau of Land Management (public lands) 
Bureau of Indian Affairs (Indian lands) 
Bureau of Sport Fisheries and Wildlife 
Bureau of Outdoor Recreation 
Geological Survey 
Office of Saline Water 

Environmental Protection Agency 

Department of Health, Education, and Welfare 

Department of Defense- 
Army Corps of Engineers 
Department of the Navy (ship pollution con- 
trol) 

National Aeronautics and Space Administration 
(remote sensing) 

Department of Transportation- 
Coast Guard (oil spills, ship sanitation) 

Department of Commerce- 
National Oceanic and Atmospheric Administra- 
tion 

Water Resources Council 

River Basin Commissions (as geographically ap- 
propriate) 



PART 520-19 



Marine Pollution, Commercial Fishery 
Conservation, and Shellfish Sanitation 

Department of Commerce- 
National Oceanic and Atmospheric Administra- 
tion 

Department of Defense- 
Army Corps of Engineers 
Office of the Oceanographer of the Navy 

Department of Health, Education, and Welfare 

Department of the Interior- 
Bureau of Sport Fisheries and Wildlife 
Bureau of Outdoor Recreation 
Bureau of Land Management (outer conti- 
nental shelf) 
Geological Survey (outer continental shelf) 

Department of Transportation- 
Coast Guard 

Environmental Protection Agency 

National Aeronautics and Space Administration 
(remote sensing) 

Water Resources Council 

River Basin Commissions (as geographically ap- 
propriate) 

Waterway Regulation and Stream 
Modification 

Department of Agriculture- 
Soil Conservation Service 

Department of Defense- 
Bureau of Reclamation 
Army Corps of Engineers 

Department of the Interior- 
Bureau of Sport Fisheries and Wildlife 
Bureau of Outdoor Recreation 
Geological Survey 

Department of Transportation- 
Coast Guard 

Environmental Protection Agency 

National Aeronautics and Space Administration 
(remote sensing) 

Water Resources Council 

River Basin Commissions (as geographically ap- 
propriate) 



FISH AND WILDLIFE 

Department of Agriculture 
Forest Service 
Soil Conservation Service 

Department of Commerce- 
National Oceanic and Atmospheric Administra- 
tion (marine species) 

Department of the Interior- 
Bureau of Sport Fisheries and Wildlife 
Bureau of Land Management 
Bureau of Outdoor Recreation 

Environmental Protection Agency 

SOLID WASTE 

Atomic Energy Commission (radioactive waste) 

Department of Defense- 
Army Corps of Engineers 

Department of Health, Education, and Welfare 

Department of the Interior— 
Bureau of Mines (mineral waste, mine acid 

waste, municipal solid waste, recycling) 
Bureau of Land Management (public lands) 
Bureau of Indian Affairs (Indian lands) 
Geological Survey (geologic and hydrologic 

effects 
Office of Saline Water (demineralization) 

Department of Transportation- 
Coast Guard (ship sanitation) 

Environmental Protection Agency 

River Basin Commissions (as geographically ap- 
propriate) 

Water Resources Council 



Department of Commerce- 
National Bureau of Standards 
Department of Health, Education, and Welfare 

Department of Housing and Urban Development 
(land use and building materials aspects) 

Department of Labor- 
Occupational Safety and Health Administra- 
tion 



PART 520-20 



Department of Transportation- 
Assistant Secretary for Systems Development 
and Technology 

Environmental Protection Agency 
Federal Aviation Administration, Office of 
Noise Abatement 

National Aeronautics and Space Administration 



Atomic Energy Commission 

Department of Commerce- 
National Bureau of Standards 

Department of Health, Education, and Welfare 

Department of the Interior- 
Bureau of Mines (uranium mines) 
Mining Enforcement and Safety Administra- 
tion (uranium mines) 

Environmental Protection Agency 

HAZARDOUS SUBSTANCES 
Toxic Materials 

Atomic Energy Commission (radioactive sub- 
stances) 

Department of Agriculture- 
Agricultural Research Service 
Consumer and Marketing Service 

Department of Commerce- 
National Oceanic and Atmospheric Administra- 
tion 

Department of Defense 

Department of Health, Education, and Welfare 

Environmental Protection Agency 

Food Additives, and Contamination of 
Foodstuffs 

Department of Agriculture- 
Consumer and Marketing Service (meat and 
poultry products) 

Department of Health, Education, and Welfare 

Environmental Protection Agency 



Pesticides 

Department of Agriculture- 
Agricultural Research Service (biological con- 
trols, food and fiber production) 
Consumer and Marketing Service 
Forest Service 

Department of Commerce- 
National Oceanic and Atmospheric Administra- 
tion 

Department of Health, Education, and Welfare 

Department of the Interior— 
Bureau of Sport Fisheries and Wildlife (fish 

and wildlife effects) 
Bureau of Land Management (public lands) 
Bureau of Indian Affairs (Indian lands) 
Bureau of Reclamation (irrigated lands) 

Environmental Protection Agency 



Transportation and Handling of Hazardous 

Materials 

Atomic Energy Commission (radioactive sub- 
stances) 

Department of Commerce- 
Maritime Administration 

National Oceanic and Atmospheric Administra- 
tion (effects on marine life and the coastal 
zone) 

Department of Defense- 
Armed Services Explosive Safety Board 
Army Corps of Engineers (navigable water- 
ways) 

Department of Transportation 
Federal Highway Administration, Bureau of 

Motor Carrier Safety 
Coast Guard 

Federal Railroad Administration 
Federal Aviation Administration 
Assistant Secretary for Systems Development 

and Technology 
Office of Hazardous Materials 
Office of Pipeline Safety 

Environmental Protection Agency 



PART 520-21 



ENERGY SUPPLY AND NATURAL RESOURCES 
DEVELOPMENT 

Ekctric Energy Development, Generation, 
and Transmission, and Use 

Atomic Energy Commission (nuclear) 

Department of Agriculture- 
Rural Electrification Administration (rural 
areas) 

Department of Defense- 
Army Corps of Engineers (hydro) 

Department of Health, Education, and Welfare 
(radiation effects) 

Department of Housing and Urban Development 
(urban areas) 

Department of the Interior- 
Bureau of Indian Affairs (Indian lands) 
Bureau of Land Management (public lands) 
Bureau of Reclamation 
Power Marketing Administrations 
Geological Survey 

Bureau of Sport Fisheries and Wildlife 
Bureau of Outdoor Recreation 
National Park Service 

Environmental Protection Agency 

Federal Power Commission (hydro, transmission, 
and supply) 

River Basin Commissions (as geographically ap- 
propriate) 

Tennessee Valley Authority 

Water Resources Council 

Petroleum Development, Extraction, 
Refining, Transport, and Use 

Department of the Interior- 
Office of Oil and Gas 
Bureau of Mines 
Geological Survey 
Bureau of Land Management (public lands 

and outer continental shelf) 
Bureau of Indian Affairs (Indian lands) 
Bureau of Sport Fisheries and Wildlife (effects 

on fish and wildlife) 
Bureau of Outdoor Recreation 
National Park Service 

Department of Transportation (Transport and 
Pipeline Safety) 

Environmental Protection Agency 

Interstate Commerce Commission 



Natural Gas Development, Production, 
Transmission, and Use 

Department of Housing and Urban Development 
(urban areas) 

Department of the Interior- 
Office of Oil and Gas 
Geological Survey 
Bureau of Mines 

Bureau of Land Management (public lands) 
Bureau of Indian Affairs (Indian lands) 
Bureau of Sport Fisheries and Wildlife 
Bureau of Outdoor Recreation 
National Park Service 

Department of Transportation (transport and 
safety) 

Environmental Protection Agency 

Federal Power Commission (production, trans- 
mission, and supply) 

Interstate Commerce Commission 

Coal and Minerals Development, Mining, 
Conversion, Processing, Transport, and Use 

Appalachian Regional Commission 

Department of Agriculture- 
Forest Service 

Department of Commerce 

Department of Interior- 
Office of Coal Research 

Mining Enforcement and Safety Administra- 
tion 
Bureau of Mines 
Geological Survey 

Bureau of Indian Affairs (Indian lands) 
Bureau of Land Management (public lands) 
Bureau of Sport Fisheries and Wildlife 
Bureau of Outdoor Recreation 
National Park Service 

Department of Labor- 
Occupational Safety and Health Administra- 
tion 

Department of Transportation 
Environmental Protection Agency 
Interstate Commerce Commission 
Tennessee Valley Authority 



PART 520-22 



Renewable Resource Development, Producticm, 
Management, Harvest, Transport, and Use 

Department of Agriculture- 
Forest Service 
Soil Conservation Service 

Department of Commerce 

Department of Housing and Urban Development 
(building materials) 

Department of the Interior- 
Geological Survey 

Bureau of Land Management (public lands) 
Bureau of Indian Affairs (Indian lands) 
Bureau of Sport Fisheries and Wildlife 
Bureau of Outdoor Recreation 
National Park Service 

Department of Transportation 

Environmental Protection Agency 

Interstate Commerce Commission (freight rates) 

Energy and Natural Resources Conservation 

Department of Agriculture- 
Forest Service 
Soil Conservation Service 

Department of Commerce- 
National Bureau of Standards (energy effi- 
ciency) 

Department of Housing and Urban Develop- 
ment- 
Federal Housing Administration (housing 
standards) 

Department of the Interior- 
Office of Energy Conservation 
Bureau of Mines 
Bureau of Reclamation 
Geological Survey 
Power Marketing Administration 

Department of Transportation 

Environmental Protection Agency 

Federal Power Commission 

General Services Administration (design and op- 
eration of buildings) 

Tennessee Valley Authority 

Federal Energy Administration 



LAND USE AND MANAGEMENT 

Land Use Changes, Planning and Regulation 
or Land Development 

Department of Agriculture- 
Forest Service (forest lands) 
Agricultural Research Service (agricultural 
lands) 

Department of Housing and Urban Development 

Department of the Interior- 
Office of Land Use and Water Planning 
Bureau of Land Management (public lands) 
Bureau of Indian Affairs (Indian lands) 
Bureau of Sport Fisheries and Wildlife (wild- 
life refuges) 
Bureau of Outdoor Recreation (recreation 

lands) 
National Park Service (NPS units) 

Department of Transportation 

Environmental Protection Agency (pollution 
effects) 

National Aeronautics and Space Administration 
(remote sensing) 

River Basins Commissions (as geographically ap- 
propriate) 

Public Land Management 

Department of Agriculture- 
Forest Service (forests) 

Department of Defense 

Department of the Interior- 
Bureau of Land Management 
Bureau of Indian Affairs (Indian lands) 
Bureau of Sport Fisheries and Wildlife (wild- 
life refuges) 
Bureau of Outdoor Recreation (recreation 

lands) 
National Park Service (NPS units) 

Federal Power Commission (project lands) 

General Services Administration 

National Aeronautics and Space Administration 
(remote sensing) 

Tennessee Valley Authority (project lands) 



PART 520-23 



Protection of Environmentally Critical Areas 

Dunes, Unstable Soils, Steep Slopes, 
Aquifer Recharge Areas, etc. 

Department of Agriculture- 
Agricultural Stabilization and Conservation 

Service 
Soil Conservation Service 
Forest Service 

Department of Commerce- 
National Oceanic and Atmospheric Admin- 
istration (coastal areas) 

Department of Defense- 
Army Corps of Engineers 

Department of Housing and Urban Development 
(urban and floodplain areas) 

Department of the Interior- 
Office of Land Use and Water Planning 
Bureau of Outdoor Recreation 
Bureau of Reclamation 
Bureau of Sport Fisheries and Wildlife 
Bureau of Land Management 
Geological Survey 

Environmental Protection Agency (pollution ef- 
fects) 

National Aeronautics and Space Administration 
(remote sensing) 

River Basins Commissions (as geographically ap- 
propriate) 

Water Resources Council 

Land Use in Coastal Areas 

Department of Agriculture- 
Forest Service 

Soil Conservation Service (soil stability, hy- 
drology) 

Department of Commerce- 
National Oceanic and Atmospheric Administra- 
tion (impact on marine life and coastal zone 
management) 

Department of Defense- 
Army Corps of Engineers (beaches, dredge and 
fill permits. Refuse Act permits) 

Department of Housing and Urban Develop- 
ment (urban areas) 



Department of the Interior- 
Office of Land Use and Water Planning 
Bureau of Sport Fisheries and Wildlife 
National Park Service 
Geological Survey 
Bureau of Outdoor Recreation 
Bureau of Land Management (public lands) 

Department of Transportation- 
Coast Guard (bridges, navigation) 

Environmental Protection Agency (pollution ef- 
fects) 

National Aeronautics and Space Administration 
(remote sensing) 

Redevelopment and Construction in 
Built-Up Areas 

Department of Commerce- 
Economic Development Administration (desig- 
nated areas) 

Department of Housing and Urban Development 

Department of the Interior- 
Office of Land Use and Water Planning 

Department of Transportation 

Environmental Protection Agency 

General Services Administration 

Office of Economic Opportunity 

Density and Congestion Mitigation 

Department of Health, Education, and Welfare 

Department of Housing and Urban Development 

Department of the Interior- 
Office of Land Use and Water Planning 
Bureau of Outdoor Recreation 

Department of Transportation 

Environmental Protection Agency 

Neighborhood Character and Continuity 
Department of Health, Education, and Welfare 
Department of Housing and Urban Development 
National Endowment for the Arts 
Office of Economic Opportunity 



PART 520-24 



Impacts on Low-Income Populations 

Department of Commerce- 
Economic Development Administration (desig- 
nated areas) 
Department of Health, Education, and Welfare 
Department of Housing and Urban Development 
Office of Economic Opportunity 

Historic, Architectural, and Archeological 
Preservation 

Advisory Council on Historic Preservation 

Department of Housing and Urban Development 

Department of the Interior- 
National Park Service 
Bureau of Land Management (public lands) 
Bureau of Indian Affairs (Indian lands) 

General Services Administration 

National Endowment for the Arts 

Soil and Plant Conservation and 
Hydrology 

Department of Agriculture- 
Soil Conservation Service 
Agriculture Service 
Forest Service 

Department of Commerce- 
National Oceanic and Atmospheric Administra- 
tion 

Department of Defense- 
Army Corps of Engineers (dredging, aquatic 
plants) 

Department of Health, Education, and Welfare 



Department of the Interior 
Bureau of Land Management 
Bureau of Sport Fisheries and Wildlife 
Geological Survey 
Bureau of Reclamation 

Environmental Protection Agency 

National Aeronautics and Space Administration 
(remote sensing) 

River Basin Commissions (as geographically ap- 
propriate) 

Water Resources Council 

OUTDOOR recreation 

Department of Agriculture 
Forest Service 
Soil Conservation Service 

Department of Defense- 
Army Corps of Engineers 

Department of Housing and Urban Development 
(urban areas) 

Department of the Interior- 
Bureau of Land Management 
National Park Service 
Bureau of Outdoor Recreation 
Bureau of Sport Fisheries and Wildlife 
Bureau of Indian Affairs 

Environmental Protection Agency 

National Aeronautics and Space Administration 
(remote sensing) 

River Basin Commissions (as geographically ap- 
propriate) 

Water Resources Council 



PART 520-25 



ATTACHMENT 3 



ENVIRONMENTAL PROTECTION AGENCY* 



OFFICES WITHIN FEDERAL AGENCIES AND FED- 
ERAL-STATE AGENCIES FOR INFORMATION RE- 
GARDING THE AGENCIES' NEPA ACTIVITIES 
AND FOR RECEIVING OTHER AGENCIES' IM- 
PACT STATEMENTS FOR WHICH COMMENTS 
ARE REQUESTED 

ADVISORY COUNCIL ON HISTORIC PRESERVATION 

Office of Architectural and Environmental Pres- 
ervation, Advisory Council on Historic Pres- 
ervation, Suite 430, 1522 K Street N.W., Wash- 
ington, D.C. 20005 254-3974. 

Kegional Administrator, I, U.S. Environmental 
Protection Agency, Room 2303, John F. Ken- 
nedy Federal Bldg., Boston, Mass. 02203 (617) 
223-7210. 

Regional Administrator, II, U.S. Environmental 
Protection Agency, Room 908, 26 Federal 
Plaza, New York, New York 10007 (212) 264- 
2525. 

Regional Administrator, III, U.S. Environ- 
mental Protection Agency, Curtis Bldg., 6th & 
Walnut Sts., Philadelphia, Pa. 19106 (215) 
597-9801. 

Regional Administrator, IV, U.S. Environmental 
Protection Agency, 1421 Peachtree Street, N.E., 
Atlanta, Ga. 30309 (404) 526-5727. 

Regional Administrator, V, U.S. Environmental 
Protection Agency, 1 N. Wacker Drive, Chi- 
cago, Illinois 60606 (312) 353-5250. 

Regional Administrator, VI, U.S. Environmental 
Protection Agency, 1600 Patterson Street, Suite 
1100, Dallas, Texas 75201 (214) 749-1962. 

Regional Administrator, VII, U.S. Environ- 
mental Protection Agency, 1735 Baltimore Ave- 
nue, Kansas City, Missouri 64108 (816) 374- 
5493. 

Regional Administrator, VIII, U.S. Environ- 
mental Protection Agency, Suite 900, Lincoln 
Tower, 1860 Lincoln Street, Denver, Colorado 
80203 (303) 837-3895. 

Regional Administrator, IX, U.S. Environmental 
Protection Agency, 100 California Street, San 
Francisco, California 94111 (415) 556-2320. 

Regional Administrator, X, U.S. Environmental 
Protection Agency, 1200 Sixth Avenue, Seattle, 
Washington 98101 (206) 442-1220. 



Connecticut, Maine, Massachusetts, New Hamp- 
shire, Rhode Island, Vermont 

New Jersey, New York, Puerto Rico, Virgin 
Islands 

Delaware, Maryland, Pennsylvania, Virginia, 
West Virginia, District of Columbia 

Alabama, Florida, Georgia, Kentucky, Missis- 
sippi, North Carolina, South Carolina, Ten- 
nessee 

Illinois, Indiana, Michigan, Minnesota, Ohio 
Wisconsin 

Arkansas, Louisiana, New Mexico, Texas, Okla- 
homa 

Iowa, Kansas, Missouri, Nebraska 

Colorado, Montana, North Dakota, South Dakota, 
Utah, Wyoming 

Arizona, California, Hawaii, Nevada, American 
Samoa, Guam, Trust Territories of Pacific Is- 
lands, Wake Island 

Alaska, Idaho, Oregon, Washington 



DEPARTMENT OF AGRICULTURE^ 

Office of the Secretary, Attn: Coordinator, En- 
vironmental Quality Activities, U.S. Depart- 
ment of Agriculture, Washington, D.C. 20250 
447-3965. 



' Contact the Office of Federal Activities for environ- 
mental statements concerning legislation, regulations, 
national program proposals, or other major policy issues. 

For all other EPA consultation, contact the Regional 
Administrator in whose area the proposed action (e.g., 
highway or water resource construction projects) will 
take place. The Regional Administrators will coordinate 
the EPA review. Addresses of the Regional Admin- 
istrators, and the areas covered by their regions are as 
follows: 

Director, Office of Federal Activities, Environmental 
Protection Agency, 401 M Street, S.W., Washington, 
D.C. 20460 755-0777. 

^ Requests for comments or information from indi- 
vidual units of the Department of Agriculture, e.g., Soil 
Conservation Service, Forest Service, etc. should be sent 
to the Office of the Secretary, Department of Agriculture, 
at the address given above. 



PART 520-26 



APPALACHIAN REGIONAL COMMISSION 

Office of the Alternate Federal Co-Chairman, 
Appalachian Regional Commission, 1666 Con- 
necticut Avenue, N.W., Washington, D.C. 20235 
967-4103. 

DEPARTMENT OF THE ARMY (CORPS OF ENGINEERS) 

Executive Director of Civil Works, Office of the 
Chief of Engineers, U.S. Army Corps of En- 
gineers, Washington, D.C. 20314 693-7168. 

ATOMIC ENERGY COMMISSION 

For nonregulatory matters: Office of Assistant 
General Manager for Biomedical and Environ- 
mental Research and Safety Programs, Atomic 
Energy Commission, Washington, D.C. 20345 
973-3208. 

For regulatory matters: Office of the Assistant 
Director for Environmental Projects, Atomic 
Energy Commission, Washington, D.C. 20545 
973-7531. 

DEPARTMENT OF COMMERCE 

Office of the Deputy Assistant Secretary for En- 
vironmental Affairs, U.S. Department of Com- 
merce, Washington, D.C. 20230 967-4335. 

DEPARTMENT OF DEFENSE 

Office of the Assistant Secretary for Defense 
(Health and Environment), U.S. Department 
of Defense, Room 3E172, The Pentagon, Wash- 
ington, D.C. 20301 697-2111. 

DELAWARE RIVER BASIN COMMISSION 
Office of the Secretary, Delaware River Basin 
Commission, Post Office Box 360, Trenton, N.J. 
08603 (609) 883-9500. 

FEDERAL POWER COMMISSION 
Commission's Advisor on Environmental Quality, 
Federal Power Commission, 825 N. Capitol 
Street, N.E. Washington, D.C. 20426 386-6084. 

GENERAL SERVICES ADMINISTRATION 

Office of Environmental Affairs, Office of the 
Deputy Administrator for Special Projects, 
General Services Administration, Washington, 
D.C. 20405 343-4161. 

GREAT LAKES BASIN COMMISSION 

Office of the Chairman, Great Lakes Basin Com- 
mission, 3475 Plymouth Road, P.O. Box 999, 
Ann Arbor, Michigan 48105 (313) 769-7431. 



DEPARTMENT OF HEALTH, EDUCATION 
AND WELFARE^ 

For information with respect to HEW actions 
occurring within the jurisdiction of the Depart- 
ments' Regional Directors, contact the appro- 
priate Regional Environmental Officer: 
Office of Environmental Affairs, Office of the As- 
sistant Secretary for Administration and Man- 
agement, Department of Health, Education 
and Welfare, Washington, D.C. 20202 963-4456. 
Region I, Regional Environmental Officer, U.S. 
Department of Health, Education and Welfare, 
Room 2007B, John F. Kennedy Center, Boston, 
Massachusetts 02203 (617) 223-6837. 
Region H, Regional Environmental Officer, U.S. 
Department of Health, Education and Welfare, 
Federal Building, 26 Federal Plaza, New York, 
New York 10007 (212) 264-1308. 
Region HI, Regional Environmental Officer, U.S. 
Department of Health, Education and Welfare, 
P.O. Box 13716, Philadelphia, Pennyslvania 
19101 (215) 597-6498. 
Region IV, Regional Environmental Officer, U.S. 
Department of Health, Education and Welfare, 
Room 404, 50 Seventh Street, N.E. Atlanta, 
Georgia 30323 (404) 526-5817. 
Region V, Regional Environmental Officer, U.S. 
Department of Health, Education and Welfare, 
433 West Van Buren Stret, Chicago, Illinois 
60607 (312) 353-1644. 

DEPARTMENT OF HOUSING AND URBAN 
DEVELOPMENT^ 

Regional Administrator II, Environmental Clear- 
ance Officer, U.S. Department of Housing and 
Urban Development, 26 Federal Plaza, New 
York, New York 10007 (212) 264-8068. 



^ Contact the Office of Environment Affairs for in- 
formation on HEW's environmental statements concern- 
ing legislation, regulations, national program proposals 
or other major policy issues, and for all requests for 
HEW comment on impact statements of other agencies. 
* Contact the Director with regard to environmental 
impacts of legislation, policy statements, program regula- 
tions and procedures, and precedent-making project deci- 
sions. For all other HUD consultation, contact the HUD 
Regional Administrator in whose jurisdiction the project 
lies, as follows: 

Regional Administrator I, Environmental Clearance Of- 
ficer, U.S. Department of Housing and Urban Develop- 



PART 520-27 



Regional Administrator III, Environmental 
Clearance Officer, U.S. Department of Housing 
and Urban Development, Curtis Building, 
Sixth and Walnut Street, Philadelphia, Penn- 
sylvania 19106 (215) 597-2560. 

Regional Administrator IV, Environmental 
Clearance Officer, U.S. Department of Housing 
and Urban Development, Peachtree-Seventh 
Building, Atlanta, Georgia 30323 (404) 526- 
5585. 

Regional Administrator V, Environmental Clear- 
ance Officer, U.S. Department of Housing and 
Urban Development, 360 North Michigan Ave- 
nue, Chicago, Illinois 60601 (312) 353-5680. 

Director, Office of Community and Environ- 
mental Standards, Department of Housing and 
Urban Development, Room 7206, Washington, 
D.C. 20410 755-5980. 

DEPARTMENT OF THE INTERIOR* 

Director, Office of Environmental Project Review, 
Department of the Interior, Interior Building, 
Washington, D.C. 20240 343-3891. 

INTERSTATE COMMERCE COMMISSION 

Office of Proceedings, Interstate Commerce Com- 
mission, Washington, D.C. 20423 343-6167. 

ment, Room 405, John F. Kennedy Federal Building, 
Boston, Mass 02203 (617) 223-4066. 
Region VI, Regional Environmental Officer, U.S. Depart- 
ment of Health, Education and Welfare, 1114 Com- 
merce Street, Dallas, Texas 75202 (214) 749-2236. 
Region VII, Regional Environmental Officer, U.S. De- 
partment of Health, Education and Welfare, 601 East 
12th Street, Kansas City, Missouri 64106 (816) 374- 
3584. 
Region VIII, Regional Environmental Officer, U.S. De- 
partment of Health, Education and Welfare, 9017 
Federal Building, 19th and Stout Streets, Denver. 
Colorado 80202 (303) 837-4178. 
Region IX, Regional Environmental Officer, U.S. De- 
partment of Health, Education and Welfare, 50 Fulton 
Street, San Francisco, California 94102 (415) 556-1970. 
Region X, Regional Environmental Officer, U.S. Depart- 
ment of Health, Education and Welfare, Arcade Plaza 
Building, 1321 Second Street, Seattle, Washington 
98101 (206) 442-0490. 

^ Requests for comments or information from indi- 
vidual units of the Department of the Interior should 
be sent to the Office of Environmental Project Review at 
the address given above. 



DEPARTMENT OF LABOR 

Assistant Secretary for Occupational Safety and 
Health, Department of Labor, Washington, 
D.C. 20210 961-3405. 

MISSOURI RIVER BASINS COMMISSION 

Office of the Chairman, Missouri River Basins 
Commission, 10050 Regency Circle, Omaha, 
Nebraska 68114 (402) 397-5714. 

NATIONAL AERONAUTICS AND 
SPACE ADMINISTRATION 

Office of the Comptroller, National Aeronautics 
and Space Administration, Washington, D.C. 
20546 755-8440. 

NATIONAL CAPITAL PLANNING COMMISSION 

Office of Environmental Affairs, Office of the 
Executive Director, National Capital Planning 
Commission, Washington, D.C. 20576 382-7200. 

NATIONAL ENDOWMENT FOR THE ARTS 

Office of Architecture and Environmental Arts 
Program, National Endowment for the Arts, 
Washington, D.C. 20506 382-5765. 

NEW ENGLAND RIVER BASINS COMMISSION 

Office of the Chairman, New England River 
Basins Commission, 55 Court Street, Boston, 
Mass. 02108 (617) 223-6244. 

Regional Administrator VI, Environmental 
Clearance Officer, U.S. Department of Housing 
and Urban Development, Federal Office Build- 
ing, 819 Taylor Street, Fort Worth, Texas 
76102 (817) 334-2867. 

Regional Administrator VII, Environmental 
Clearance Officer, U.S. Department of Housing 
and Urban Development, 911 Walnut Street, 
Kansas City, Missouri 64106 (816) 374-2661. 

Regional Administrator VIII, Environmental 
Clearance Officer, U.S. Department of Housing 
and Urban Development, Samsonite Building, 
1051 South Broadway, Denver Colorado 80209 
(303) 837-4061. 

Regional Administrator IX, Environmental 
Clearance Officer, U.S. Department of Housing 
and Urban Development, 450 Golden Gate 
Avenue, Post Office Box 36003, San Francisco, 
California 94102 (415) 556-4752. 



PART 520-28 



Regional Administrator X, Environmental 
Clearance Officer, U.S. Department of Housing 
and Urban Development, Room 226, Arcade 
Plaza Building, Seattle, Washington 98101 
(206) 583-5415. 

OFFICE OF ECONOMIC OPPORTUNITY 

Office of the Director, Office of Economic Oppor- 
tunity, 1200 19th Street, N.W., Washington, 
D.C. 20506 254-6000. 

OHIO RIVER BASIN COMMISSION 

Office of the Chairman, Ohio River Basin Com- 
mission, 36 East 4th Street, Suite 208-20, Cin- 
cinnati, Ohio 45202 (513) 684-3831. 

PACIFIC NORTHWEST RIVER BASINS 
COMMISSION 

Office of the Chairman, Pacific Northwest River 
Basins Commission, 1 Columbia River, Van- 
couver, Washington 98660 (206) 695-3606. 

SOURIS-RED-RAINY RIVER BASINS COMMISSION 

Office of the Chairman, Souris-Red-Rainy River 
Basins Commission, Suite 6, Professional 
Building, Holiday Mall, Moorhead, Minnesota 
56560 (701) 237-5227. 

DEPARTMENT OF STATE 

Office of the Special Assistant to the Secretary 
for Environmental Affairs, Department of 
State, Washington, D.C. 20520 632-7964. 

SUSQUEHANNA RIVER BASIN COMMISSION 

Office of the Executive Director, Susqhehanna 
River Basin Commission, 5012 Lenker Street, 
Mechanicsburg, Pa. 17055 (717) 737-0501. 

TENNESSEE VALLEY AUTHORITY 
Office of the Director of Environmental Re- 
search and Development, Tennessee Valley Au- 
thority, 720 Edney Building, Chattanooga, 
Tennessee 37401 (615) 755-2002. 

DEPARTMENT CF TRANSPORTATION^ 
Director, Office of Environmental Quality, Office 
of the Assistant Secretary for Environment, 



* Contact the Office of Environmental Quality, Depart- 
ment of Transportation, for information on DOT's en- 
vironental statements concerning legislation, regula- 
tions, national program proposals, or other major policy 
issues. 



Safety, and Consumer Affairs, Department of 
Transportation, Washington, D.C. 20590 426- 
4357. 

For information regarding the Department of 
Transportation's other environmental statements, 
contact the national office for the appropriate ad- 
ministration: 

U.S. Coast Guard 

Office of Marine Environment and Systems, U.S. 
Coast Guard, 400 7th Street, S.W., Washing- 
ton, D.C. 20590 426-2007. 

Federal Aviation Administration 

Office of Environmental Quality, Federal Avia- 
tion Administration, 800 Independence Avenue, 
S.W., Washington, D.C. 20591 426-8406. 

Federal Highway Administration 

Office of Environmental Policy, Federal High- 
way Administration, 400 7th Street, S.W., 
Washington, D.C. 20590 426-0351. 

Federal Railroad Administration 

Office of Policy and Plans, Federal Railroad 
Administration. 400 7th Street, S.W., Wash- 
ington, D.C. 20590 426-1567. 

Urban Mass Transportation Administration 

Office of Program Operations, Urban Mass Trans- 
portation Administration, 400 7th Street, S.W., 
Washington, D.C. 20590 426-4020. 
For other administration's not listed above, 
contact the Office of Environmental Quality, De- 
partment of Transportation, at the address given 
above. 

For comments on other agencies' environmental 
statements, contact the appropriate adminis- 
tration's regional office. If more than one 
administration within the Department of Trans- 
portation is to be requested to comment, contact 
the Secretarial Representative in the appropriate 
Regional Office for coordination of the Depart- 
ment's comments: 

SECRETARIAL REPRESENTATIVE 

Region I Secretarial Representative, U.S. De- 
partment of Transportation, Transportation 
Systems Center 55 Broadway, Cambridge, 
Massachusetts 02142 (617) 494-2709. 



PART 520-29 



Region II Secretarial Representative, U.S. De- 
partment of Transportation, 26 Federal Plaza, 
Room 1811, New York, New York 10007 (212) 
264-2672. 
Region III Secretarial Representative, U.S. De- 
partment of Transportation, Mall Building, 
Suite 1214, 325 Chestnut Street, Philadelphia, 
Pennsylvania 19106 (215) 597-0407. 

Region IV Secretarial Representative, U.S. De- 
partment of Transportation, Suite 515, 1720 
Peachtree Rd., N.W., Atlanta, Georgia 30309 
(404) 526-3738. 

Region V Secretarial Representative, U.S. De- 
partment of Transportation, 17th Floor, 300 S. 
Wacker Drive, Chicago, Illinois 60606 (312) 
353-4000. 

Region VI Secretarial Representative, U.S. De- 
partment of Transportation, 9-C-18 Federal 
Center, 1100 Commerce Street, Dallas, Texas 
75202 (214) 749-1851. 

Region VII Secretarial Representative, U.S. De- 
partment of Transportation, 601 E. 12th Street, 
Room 634, Kansas City, Missouri 64106 (816) 
374-2761. 

Region VIII Secretarial Representative, U.S. 
Department of Transportation, Prudential 
Plaza, Suite 1822, 1050 17th Street, Denver, 
Colorado 80225 (303) 837-3242. 

Region IX Secretarial Representative, U.S. De- 
partment of Transportation, 450 Golden Gate 
Avenue, Box 36133, San Francisco, California 
94102 (415) 556-5961. 

Region X Secretarial Representative, U.S. De- 
partment of Transportation, 1321 Second Ave- 
nue, Room 507, Seattle, Washington 98101 
(206) 442-0590. 

FEDERAL AVIATION ADMINISTRATION 

New England Region, Office of the Regional Di- 
rector, Federal Aviation Administration, 154 
Middlesex Street, Burlington, Massachusetts 
01803 (617) 272-2350. 

Eastern Region, Office of the Regional Director, 
Federal Aviation Administration, Federal 
Building, JFK International Airport, Jamaica, 
New York 11430 (212) 995-3333. 

Southern Region, Office of the Regional Director, 
Federal Aviation Administration, P.O. Box 
20636, Atlanta, Georgia 30320 (404) 526-7222. 



Great Lakes Region, Office of the Regional Di- 
rector, Federal Aviation Administration, 2300 
East Devon, Des Plaines, Illinois 60018 (312) 
694-4500. 

Southwest Region, Office of the Regional Di- 
rector, Federal Aviation Administration, P.O. 
Box 1689, Fort Worth Texas 76101 (817) 624- 
4911. 

Central Region, Office of the Regional Director, 
Federal Aviation Administration, 601 E. 12th 
Street, Kansas City, Missouri 64106 (816) 374- 
5626. 

Rocky Mountain Region, Office of the Regional 
Director, Federal Aviation Administration, 
Park Hill Station, P.O. Box 7213, Denver, 
Colorado 80207 (303) 837-3646. 

Western Region, Office of the Regional Director, 
Federal Aviation Administration, P.O. Box 
92007, World Way Postal Center, Los Angeles, 
California 90009 (213) 536-6427. 

Northwest Region, Office of the Regional Di- 
rector, Federal Aviation Administration, FAA 
Building, Boeing Field, Seattle, Washington 
98108 (206) 767-2780. 

FEDERAL HIGHWAY ADMINISTRATION 

Region 1, Regional Administrator, Federal High- 
way Administration, 4 Normanskill Boulevard, 
Delmar, New York 12054 (518) 472-6476. 

Region 3, Regional Administrator, Federal High- 
way Administration, Room 1621, George H. 
Fallon Federal Office Building, 31 Hopkins 
Plaza, Baltimore, Maryland 21201 (301) 962- 
2361. 

Region 4, Regional Administrator, Federal High- 
way Administration, Suite 200, 1720 Peachtee 
Road, N.W., Atlanta, Georgia 30309 (404) 526- 
5078. 

Region 5, Regional Administrator, Federal High- 
way Administration, Dixie Highway, Home- 
wood, Illinois 604030 (312) 799-6300. 

Region 6, Regional Administrator, Federal High- 
way Administration, 819 Taylor Street, Fort 
Worth, Texas 76102 (817) 334-3232. 

Region 7, Regional Administrator, Federal High- 
way Administration, P.O. Box 7186, Country 
Club Station, Kansas City, Missouri 64113 
(816) 361-7563. 



PART 520-30 



Region 8, Regional Administrator, Federal High- 
way Administration, Room 242, Building 40, 
Denver Federal Center, Denver, Colorado 
80225. 

Region 9, Regional Administrator, Federal High- 
way Administration, 450 Golden Gate Avenue, 
Box 36096, San Francisco, California 94102 
(415) 556-3895. 

Region 10, Regional Administrator, Federal 
Highway Administration, Room 412, Mohawk 
Building, 222 S.W. Morrison Street, Portland, 
Oregon 97204 (503) 221-2065. 

URBAN MASS TRANSPORTATION ADMINISTRATION 

Region I, Office of the UMTA Representative, 
Urban Mass Transportation Administration, 
Transportation Systems Center, Technology 
Building, Room 277, 55 Broadway, Boston, 
Massachusetts 02142 (617) 494-2055. 

Region II, Office of the UMTA Representative, 
Urban Mass Transportation Administration, 
26 Federal Plaza, Suite 1809, New York, New 
York 10007 (212) 264-8162. 

Region III, Office of the UMTA Representative, 
Urban Mass Transportation Administration, 
Mall Building, Suite 1214, 325 Chestnut Street, 
Philadelphia, Pennyslvania 19106 (215) 597- 
0407. 

Region IV, Office of the UMTA Representative, 
Urban Mass Transportation Administration, 
1720 Peachtree Road, Northwest Suite 501, 
Atlanta, Georgia 30309 (404) 526-3948. 

Region V, Office of the UMTA Representative, 
Urban Mass Transportation Administration, 
300 South Wacker Drive, Suite 700, Chicago, 
Illinois 60606 (312) 353-6005. 



Region VI, Office of the UMTA Representative, 
Urban Mass Transportation Administration, 
Federal Center, Suite 9E24, 1100 Commerce 
Street, Dallas, Texas 75202 (214) 749-7322. 

Region VII, Office of the UMTA Representative, 
Urban Mass Transportation Administration, 
c/o FAA Management Systems Division, Room 
1564D, 601 East 12th Street, Kansas City, 
Missouri 64106 (816) 374-5567. 

Region VIII, Office of the UMTA Representative, 
Urban Mass Transportation Administration, 
Prudential Plaza, Suite 1822, 1050 17th Street, 
Denver, Colorado 80202 (303) 837-3242. 

Region IX, Office of the UMTA Representative, 
Urban Mass Transportation Administration, 
450 Golden Gate Avenue, Box 36125, San Fran- 
cisco, California 94102 (415) 556-2884. 

Region X, Office of the UMTA Representative, 
Urban Mass Transportation Administration, 
1321 Second Avenue, Suite 5079, Seattle, Wash- 
ington (206) 442-0590. 

DEPARTMENT OF THE TREASURY 

Office of Assistant Secretary for Administration, 
Department of the Treasury, Washington, 
D.C. 20220 964-5391. 

UPPER MISSISSIPPI RIVER BASIN COMMISSION 

Office of the Chairman, Upper Mississippi River 
Basin Commission, Federal Office Building, 
Fort Snelling, Twin Cities, Minnesota 55111 
(612) 725-4690. 

WATER RESOURCES COUNCIL 

Office of the Associate Director, Water Resources 
Council, 2120 L Street, N.W., Suite 800, Wash- 
ington, D.C. 20037 254-6442. 



PART 520-31 



ATTACHMENT 4 

STATE AND LOCAL AGENCY REVIEW 
OF IMPACT STATEMENTS 

1. OBM Revised Circular No. A-95 through 
its system of clearinghouses provides a means for 
securing the views of State and local environ- 
mental agencies, which can assist in the prepara- 
tion of impact statements. Under A-95, review 
of the proposed project in the case of federally 
assisted projects (Part I of A-95) generally 
takes place prior to the preparation of the impact 
statement. Therefore, comments on the environ- 
mental eflFects of the proposed project that are 
secured during this stage of the A-95 process 
represent inputs to the environmental impact 
statement. 

2. In the case of direct Federal development 
(Part II of A-95), Federal agencies are required 
to consult with clearinghouse at the earliest 
practicable time in the planning of the project 
or activity. Where such consultation occurs 
prior to completion of the draft impact state- 
ment, comments relating to the environmental 
effects of the proposed action would also repre- 
sent inputs to the environmental impact state- 
ment. 

3. In either case, whatever comments are made 
on environmental effects of proposed Federal or 
federally assisted projects by clearinghouses, or 
by State and local environmental agencies 
through clearinghouses, in the course of the A-95 



review should be attached to the draft impact 
statement when it is circulated for review. Copies 
of the statement should be sent to the agencies 
making such comments. Whether those agencies 
then elect to comment again on the basis of the 
draft impact statement is a matter to be left 
to the discretion of the commenting agency de- 
pending on its resources, the significance of the 
project and the extent to which its earlier com- 
ments were considered in preparing the draft 
statement. 

4. The clearinghouses may also be used, by mu- 
tual agreement, for securing reviews of the draft 
environmental impact statement. However, the 
Federal agency may wish to deal directly with 
appropriate State or local agencies in the review 
of impact statements because the clearinghouses 
may be unwilling or unable to handle this phase 
of the process. In some cases, the Governor may 
have designated a specific agency, other than the 
clearinghouse, for securing reviews of impact 
statements. In any case, the clearinghouses 
should be sent copies of the impact statement. 

5. To aid clearinghouses in coordinating State 
and local comments, draft statements should in- 
clude copies of State and local agency comments 
made earlier under the A-95 process and should 
indicate on the summary sheet those other agen- 
cies from which comments have been requested, 
as specified in Attachment 1. 

40 F.R. 52395 
November 10, 1975 



PART 520-32 



EffecNv*: July 28, 1977 



PREAMBLE TO PART 523— VEHICLE CLASSIFICATION 

(Docket No. FE76-05; Notice 3) 



Title V of the Motor Vehicle Information and 
Cost Savings Act (the Act) specifies that certain 
vehicles with a gross vehicle weight rating 
(GVWR) of not more than 6,000 pounds are 
automobiles, and, therefore, subject to the fuel 
economy provisions of the Act. This rule adds 
passenger cars with a GVWR of more than 6,000 
pounds and less than 10,000 pounds to the auto- 
mobile category. The rule also specifies which 
automobiles are passenger automobiles and which 
are nonpassenger automobiles. Separate fuel 
economy .standards have been established under 
the Act for those automobile subcategories. 

Effective Date : July 28, 1977. 

For Further Information, Contact : 

Douglas Pritchard 

Office of Automotive Fuel Economy 

National Highway Traffic Safety 

Administration 
Department of Transportation 
Washington, D.C. 20.590 
(202) 7.')5-9384 

Supplementary Information : The essential fea- 
tures of this rule weie first outlined in the notice 
of proposed ndemaking issued by this agency on 
l)etitions for reduction of the average fuel econ- 
omy standards for model year 1978-1980 passen- 
ger automobiles (41 FR 46878. October 26, 1976). 
A notice of proposed rulemaking (XPRM) deal- 
ing directly with classification appeared at 41 FR 
.■m368 on December 20, 1976. The NPRM fol- 
lowed the outlines in the proposal for reduction 
petitions. The XPRM proposed classifying all 
passenger cars witli a gross vehicle weight rating 
(GVWR) of less than 10,000 pounds as pas.sen- 
ger automobiles. Pickup trucks, recreational ve- 
hicle.s. vans, general purpose vehicles, and otliei- 
similar vehicles with a GVAVR of not more than 
6,000 pounds were classified as nonpassenger auto- 



mobiles. All comments on that proposal have 
been considered and the most significant ones are 
discussed below. 

Summary of major diiferences between pro- 
poned and fnal rules. The only significant 
change in the rule is in the method for measuring 
the interior volume of certain automobiles for 
the purpose of determining whether those auto- 
mobiles have greater cargo-carrying volume than 
pa.ssenger-carrying volume. If they do, they are 
a type of nonpassenger automobile. The method 
proposed in the NPRM differed slightly from 
the method used by the Environmental Protection 
Agency (EPA) for determining comparable 
classes of passenger automobiles under its fuel 
economy labeling program. The final rule adopts 
the EPA method in all respects for passenger 
automobiles. 

Scope of rule. Under this rule, the passenger 
automobile and nonpassenger automobile sub- 
categories consist of the same types of vehicles 
proposed to be included in each category in the 
XPRM.. The only vehicles that are potentially 
subject to regulation under the Act and that are 
not classified as automobiles by this notice are 
pickup ti'ucks. recreational vehicles, vans, and 
general purpose vehicles with a GVAVR of more 
than 6,000 pounds and less than 10,000 pounds. 
The agency is contemplating initiating rulemak- 
ing late this summer to expand the nonpassenger 
automobile subcategory by raising the upper 
GVWR limit of the subcategory to at least 8,500 
pounds. That propo.sal would make the expan- 
sion effective for the 1980 model year. Thus, the 
vehicles brought into the nonpassenger automo- 
bile subcategory by that propo.sal would become 
subject to average fuel economy standards be- 
ginning in that model year. 



PART ,-)23— PRE 1 



■ffeetive: July 28, 1977 



International Harvester commented that, al- 
though the preamble to the classification NPRM 
ndicated that the nonpassenger automobile sub- 
category was intended to include only vehicles 
with a GVWR of not more than 6,000 pounds, 
:he proposed rule itself could be interpreted as 
classifying vehicles which have a GVWR of more 
than 6,000 pounds and less than 10,000 pounds 
and have 4 of the 5 ground clearance character- 
istics specified in the rule as automobiles capable 
of off-highway operation. Since an automobile 
capable of off-highway operation is a type of 
nonpassenger automobile, this commenter be- 
lieved that the rule would yield a result contrary 
to the stated intention of the preamble. 

This is a misinterpretation of the rule. The 
provisions in the rule relating to passenger auto- 
mobiles and nonpassenger automobiles, including 
automobiles capable of off-highway operation, 
have been drafted so that they set forth how any 
vehicle with a GVWR of less than 10,000 pounds 
be subcategorized if it were first categorized as 
an automobile. As noted above, this rule does 
not categorize as automobiles all vehicles that 
can potentially be so categorized. Under the 
statute, all such vehicles with a GVWR of not 
more than 6,000 pounds are automatically auto- 
mobiles. Section ,523.3 (b) of this rule adds pas- 
senger cars with a GVWR greater than 6,000 
pounds and less than 10,000 pounds to that cate- 
gory. The rule states how these automobiles are 
subcategorized. Yet to be included in the auto- 
mobile category are pickup trucks, vans, recrea- 
tional vehicles, general purpose vehicles and 
other similar vehicles with a GVWR greater than 
6,000 pounds and less than 10,000 pounds. The 
rule states how these vehicles would be subcate- 
gorized wlien and if they are first categorized as 
automobiles. Thus, the crucial point to l)ear in 
mind is that a vehicle cannot fall within some 
subcategory of automobiles, such as automobiles 
capable of off-highway operation, unless it first 
falls within the automobile category. Since no 
vehicle which has a GVWR greater than 6,000 
pounds and less than 10,000 pounds and has 4 
or 5 of the 5 ground clearance characteristics is 
an automobile under this rule, no such vehicle 
can be an automobile capable of off-highway op- 



eration under this rule. Such vehicles may be 
what one might call vehicles capable of off- 
highway operation, but they are not yet auto- 
mobiles capable of off-highway operation. 

In a related comment the General Services 
Administration (GSA) stated that it did not 
understand why this agency had proposed to list 
a GVWR of more than 6,000 pounds as one cri- 
terion for classification of an automobile as an 
automobile capable of off-highway operation. 
The proposed and final rules include in the auto- 
mobile category any vehicle that has a GVWR 
of less than 6,000 pounds and has 4 or 5 of the 
ground clearance characteristics specified in the 
rule. Any such automobile is an automobile 
capable of off-highway operation. GSA correctly 
interpreted the proposed rule as excluding, how- 
ever, a vehicle from the automobile category if the 
vehicle has a GVWR greater than 6,000 pounds 
and less than 10,000 pounds and 4 or 5 of the 5 
ground clearance characteristics. To clarify this 
exclusion, GSA suggested the deletion of having 
a GVWR of greater than 6,000 pounds as one 
criterion for classification of an automobile as 
one capable of off-highway operation. 

The confusion discussed by International Har- 
vester and GSA could be eliminated if having a 
GVWR of greater than 6,000 pounds and less 
than 10,000 pounds were not viewed as an indi- 
cation of a capability of off-highway operation 
in the same vein as 4-wheel drive or ground 
clearance. Section 501(3) of the Act might have 
been more clearly understood if it had been 
drafted to provide that automobiles with a 
GVWR of not more than 6,000 pounds had to 
have 4-wheel drive and another feature related 
to off-highway capability to be classified as an 
automobile capable of off-highway operation, and 
that automobiles with a GVWR greater than 
6,000 pounds and less than 10,000 pounds had to 
have only some feature, other than 4-wheel drive, 
related to off-highway capability to be so classi- 
fied. Since that section was not so drafted and 
since the agency deems it desirable to follow 
statutory language in drafting its criteria in the 
regulation, the agency has decided to adopt the 
criteria for classification as automobiles capable 
of off-highway operation as proposed. 



PART 523— PRE 2 



EffecHve, July 28, 1977 



Suhcla-ssifcatum of nonpassenger automobiles. 
Ford and InterriHtional Harvester urg^ed that the 
nonpassen<rer automobile siibcate<rory he subdi- 
vided. International Harvester ur<;ed the crea- 
tion of subcatefiories, one for automobiles capable 
of off-hitrhway operation and another for all 
other nonpassenjjer automobiles. Ford also pro- 
posed a subcatefiorv for automobiles capable of 
off-hiphway operation and ur<jed that the remain- 
ing nonpassenper automobiles be divided into 
those with a GVWR of not more than 6,000 
pounds and those with a GVWR prreater than 
6,000 pounds and less than 10,000 poimds. In 
its notice of proposed rulemaking (November 26, 
1976. 41 FR 5'2087) on the average fuel economy 
standard for 1979 nonpassenger automobiles, the 
agency stated that it was not prepared to ad- 
dress fidly the subclassification of nonpassenger 
automobiles. Based on comments by interested 
persons, a small subclass of nonpassenger auto- 
mobiles was created for general purpose vehicles 
stich as the AMC .leep. The question of further 
subclassification of nonpassenger automobiles will 
be considei'ed in connection with rulemaking to 
be initiated late this summer. 

Defnitions. The XPRM defined "axle clear- 
ance", one of the criteria for classifying automo- 
biles as automobiles capable of off-highway 
operation, as follows: 

"Axle clearance" means the distance from 
the level surface on which an automobile is 
standing to the lowest point on the axle 
differential of the automobile. 

International Harvester commented that this 
definition did not provide for the possibility that 
automobiles intended for off-highway operation 
might be equipped with independent suspension. 
To accommodate such automobiles, the company 
urged that the definition be rewritten to read as 
follows: 

'"Axle clearance" means the distance from 
the level surface on which an automobile is 
.standing to the lowest point on the axle 
differential or other component more than 
18 inches inboard of the wheels in either the 
front or rear of the automobile. 

The reason for this change would be that the 
differential on independently suspended automo- 
biles could be higher than portions of the axles 



on those automobiles. In contrast, the lowest 
portion of the differential on nonindependently 
suspended automobiles is typically lower than all 
portions of the axles of those automobiles. Thus, 
use of the differential as the reference point for 
measuring axle clearance could overstate the ob- 
stacle clearance capabilities of independently 
suspended automobiles. 

The XHTSA generally agrees with this obser- 
vation, but is unaware of any standardized 
ground clearance criteria which would consider 
all the factors involved in ground clearance. For 
instance, the definition proposed by International 
Harvester does not address the width of the ve- 
hicle being measured or the size and shape of the 
obstacle being negotiated. These factors are also 
important in determining a vehicle's obstacle 
clearance capabilities. 

Nevertheless, the important points to be noted 
are that the definition of axle clearance proposed 
in the NPRM is a measure of ground clearance 
recognized by the Society of Automotive i'^ngi- 
neers and presently reported by the Motor Ve- 
hicle Manufacturers Association and the indi- 
vidual manufacturers and that use of the proposed 
definition adequately serves its purpose and does 
not disadvantage any vehicle, regardless of its 
axle configuration or suspension system. Accord- 
ingly, in the interests of avoiding unnecessary 
complexity in this rule, the definition proposed 
in the NPRM is adopted. If a need arises in the 
future to amend this definition, the NHTSA will 
initiate rulemaking. 

A number of comments were addressed to the 
interior volume measurement technique used in 
determining whether an automobile had greater 
cargo-carrying volume than passenger-carrying 
• olume and fhus was a nonpassenger automobile. 
I hf N'^RaI proposed to use a technique that 
difiered slightly from that used by the fyPA in 
its fuel economy labeling regulation (40 CFR 
600.315: November 10, 1976, 41 FR 49752) with 
respect to station wagons and hatchbacks. Inter- 
national Harvester, Ford Motor Company, and 
Volkswagen of America all stated that this 
agency should use the EPA measurement tech- 
ni(iue to avoid the possibility of requiring the 
manufacturers to measure the interior volume of 
certain automobiles in two different ways. None 
of the I'ree companies commeni'd on whether 



PART 523— P^E 3 



EfFectlve: July 28, 1977 



different techniques were necessary. Ford com- 
mented also that publication of two different in- 
terior volume measurements for the same 
automobile would unnecessarily confuse consum- 
ers. Conversely, General Motors stated that the 
measurement techniques used by the two agencies 
need not be identical. 

In the NPEM, this agency stated that use of a 
single measuring technique that differed slightly 
from the techniques used by the EPA for various 
types of automobiles appeared to be necessary. 
The EPA has one technique for station wagons 
and a slightly different one for hatchbacks. 
There is no EPA technique for vans. 

After consideration of the comments and a 
reevaluation of the problem of differentiating 
between certain passenger automobiles and non- 
passenger automobiles, this agency has decided 
to use the EPA measuring techniques for station 
wagons and hatchbacks. The differences between 
the technique proposed in the NPRM and the 
techniques used by the EPA are minor and do 
not result in different classification of any auto- 
mobiles as passenger automobiles or nonpassenger 
automobiles. Since the results of the different 
techniques are the same, there appears to be no 
reason for burdening the manufacturers with the 
possibility of having to measure the interior 
space of the same automobile in two different 
manners. Further, use of the same techniques 
will avoid the possibility of consumers being 
confused by some advertisements about interior 
space based on one technique and other adver- 
tisements based on the other technique. 

The adoption of the EPA techniques for meas- 
uring interior volume of station wagons and 
hatchbacks meets a number of concerns that 
various manufacturers had raised about the pro- 
posed techniques for measuring the interior space 
of station wagons. Ford and Chrysler com- 
mented that the proposed technique was not 
suited to 3-seated .wagons whose third seat was 
side or rear facing. The adopted EPA tech- 
nique measures the third seat area with the seat 
down in the cargo-carrying position. 

Chrysler noted that the proposed definition of 
"passenger-carrying volume"' did not clearly pro- 
vide dimensions for measuring the volumes of 
third seats. This could be a problem in passen- 



ger vans. The reference in the proposed defini- 
tion to "rear seats" was intended to encompass 
all seats behind the front seat. The definition 
has been amended to provide that the dimensions 
for second seats be used for any seats to the rear 
of the second seats also. 

Ford urged that certain changes be made in 
the EPA technique for measuring interior width 
and front seat leg room and that under-fioor 
(hidden) storage space be included in determin- 
ing station wagon cargo volume. These com- 
ments should be addressed to the EPA, which has 
the responsibility under the Act for these tech- 
niques. 

The measurement technique proposed in the 
NPRM is adopted for use with respect to all 
automobiles, e.g., vans, for which the EPA does 
not specify a measurement technique. This pro- 
vision is necessary so that a measurement tech- 
nique will be specified for every type of 
automobile. 

Automobiles. Several commenters stated cer- 
tain vehicles with off-highway capability were 
not automobiles and thus were not subject to 
average fuel economy standards under the Act. 
AMC contended that its Jeep CJ is designed, 
manufactured, and marketed primarily for off- 
highway operation. AMC stated that Jeeps are 
"built with low and medium speed capability and 
accommodate many off-road work-performing 
equipment accessories". AMC concluded that the 
Jeep cannot be an automobile since it is not, in 
that company's view, "manufactured primarily 
for use on the public streets, roads, and high- 
ways." Ford made a similar argument. It stated 
that vehicles having all of the following features 
are not manufactured primarily for highway use: 
(1) 4-wheel drive, (2) high ground clearance as 
evidenced by certain approach, breakover, and 
departure angles and by certain running and axle 
clearances, (3) engine oil systems capable of op- 
eration on inclines having up to a 60 percent 
grade, (4) relatively high axle ratios and heavy 
duty axle and suspension components, and (5) 
relatively high frontal area. The GSA took no 
position on the treatment of vehicles capable of 
off-highway operation but noted what appeared 
to it as an inconsistency between a statement on 
p. 90 in the House report on the Act regarding 



PART 523— PRE 4 



Eff«Hve: July 28, 1977 



vehicles manufactured primarily for off-road use 
and the portion of the proposed rule relating to 
automobiles capable of ofT-hi<rhway operation. 

XHTSA cannot accept 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. These ar<ruments 
have already been considered by the NHTSA and 
rejected in the preamble to the rule establishing' 
average fuel economy standards for nonpassengei' 
automobiles produced during the 1979 model 
year: 42 FR 18807. .March 14, 1977. The discus- 
sion that follows is a shortened version of that 
earlier discussion. This discussion also demon- 
strates that the inconsistency peiceived by GSA 
does not exist. 

The characteristics identified by the comment- 
ers are merely characteristics of vehicles which 
are capable of off-hirrhway operation. There was 
no claim that the vehicles had characteristics 
that made them incapable of highway use. More 
importantly, neither manufacturer claimed that 
the vehicles were not intended or expected to 
spend a substantial portion of their operating 
lives on the public streets, roads, or highways. 
Therefore, XHTSA believes that Congress in- 
tended these vehicles to be automobiles within 
the meaning of Section .'iOl of Title V, and sub- 
ject to fuel economy standards as nonpassenger 
automobiles. 

This ride and section ofllfl) of the Act define 
an automobile as "any 4-wheeled vehicle pro- 
pelled by fuel which is manufactured primarily 
for use on public .streets, roads, and highways . . ." 
The manufacturers' claims rest on an interpreta- 
tion of the word "primarily" as meaning 'Vhiefly" 
in the above-quoted definition of "autonmbile". 

It is a common principle of statutory construc- 
tion that the words of a statute are to be given 
their ordinary, everyday meanings, unless there 
is evidence on the face of the statute that the 
ordinary, everyday meaning is not applicable and 
that api)lication of the ordinary, everyday mean- 
ing woidd frustrate the legislative intent. Malaf 
r. RJddcJ. 383 U.S. 569, .-)71-.-)7-2 (1966). How- 
ever, the word ''primarily" has two ordinary, 
everyday meanings in legal usage — "chiefly" and 
"substantially'". See Board of Governors of flu 



Federal Reserve System- v. Agneu\ 329 U.S. 441, 
446 (1947) ; 33A Words and Phrases 206 et seq. 
Hence, the XHTSA must determine which of 
these two meanings the Congress intended to be 
applicable in the definition of "automobile". 

The XHTSA interprets the word "primarily" 
as used in the definition of automobile to mean 
"substantially" for the reasons set forth below. 
Thus, even if a vehicle is manufactured chiefly 
for off-highway use, if highway use is a substan- 
tial use of the vehicle, it is manufactured pri- 
marily for both highway and off-highway use, 
and is therefore an automobile subject to Title V. 

Congress clearly intended that vehicles capable 
of off-highway operation be subject to fuel econ- 
omy standards as nonpassenger automobiles; 
S. Rep. Xo. 516. 94th Cong., 1st Sess. 153 (1975). 
Thus, a manufacturer must show more than an 
off-highway capability in order to establish that 
a vehicle is beyond the scope of Title V. 

The phrase "manufactured primarily for use 
on the public streets, roads, and highways" is 
also found in the definitions of "motor vehicle" 
in Section 102(1) of the Xational Traffic and 
Motor Vehicle Safety Act of 1966 (15 U.S.C. 
1391(1) ) and Section*2(15) of the Motor Vehicle 
Information and Cost Savings Act (15 U.S.C. 
1901(15)). "Automobile" under Title V, and 
"motor vehicle" under both the Vehicle Safety 
Act and the Cost Savings Act, do not completely 
overlap (for instance, "automobiles" are limited 
to four-wheeled vehicles, while "motor vehicles" 
are not so limited). However, with respect to a 
vehicle's identity as an on-road or an off-road 
vehicle, the terms "motor vehicle" and "automo- 
bile" seem to refer to the same vehicles. From 
the experience with regidating these vehicles un- 
der the Motor Vehicle Safety Act and the Cost 
Savings Act, it is clear that the vehicles referred 
to by AMC and Ford are on-road vehicles with a 
capability for off-highway operation. 

After more than a decade of regulation under 
the Vehicle Safety Act. both Ford and AMC 
have acted consistently with the view that ve- 
hicles referred to here are "motor vehicles". In- 
deed, AMC admits that the vehicles are designed 
to meet the Federal safety standards applicable 
to motor vehicles. Moreover, the legislative his- 
tory of the Cost Savings Act specifically con- 



PART 523— PRE 5 



Effective: July 28, 1977 



templates 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, uncliallenged regulatory practice which 
covered the vehicles at issue here when drafting 
the language found in Section 501 of Title V. 

There is nothing in the legislative history of 
Title V which indicates that the intent of Con- 
gress was that the Title have a narrower scope 
than that given by the NHTSA's interpretation 
in the NPRM. In its comment to the NPRM. 
Ford quotes the following passage on p. 90 of the 
House report on Title V in support of its claim 
that vphicles with all the features suiting it for 
off-road use which Ford discussed were not manu- 
factured 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 primarily for off-road 
rather than highway use. (Emphasis sup- 
plied by Ford.) 

Although this language gives some examples of 
the kinds of vehicles wliich Congress intended 
not to be subject to fuel economy standards under 
the Title, e.g., agricultural equipment and con- 
struction equipment, those vehicles are not char- 
acterized by the features which are claimed by 
the manufacturers to establish that a vehicle was 
not manufactured primarily for highway use. 
Furthermore, the language which Ford under- 
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 runway fire apparatus, are some 
vehicles which are not manufactured primarily 
for highway use. A fuller discussion of the 
relevant legislative history is set forth below in 
the section on passenger and nonpassenger auto- 
mobiles. 

Finally, the purpose of the Title dictates that 
its provisions, especially regarding the scope of 
its applicability, be given a liberal construction. 
Congress enacted Title V in response to the en- 
ergy shortage. 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 excluding an 
entire class of vehicles from regulation under the 
Title must be firmly based in the language of the 
Title or its legislative history. Neither AMC nor 
Ford has shown a clear expression of Congres- 
sional intent that the vehicles with the character- 
istics they described, making them suitable for 
off-road operation, 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. 

Passenger automobiles and nonpassenger auto- 
mobiles. This rule separates vehicles classed as 
automobiles into two subcategories — "passenger 
automobiles" and "nonpassenger automobiles". 
The definition of "passenger automobile" in this 
rule is taken directly from Section 501(2) of the 
Act. The "nonpassenger automobile" category is 
a residual subcategory, consisting of all automo- 
biles which are not passenger automobiles. 
Chrysler and General Motors commented that 
the separation of automobiles into passenger 
automobiles and nonpassenger automobiles is 
proper under the Act, and that the NPRM placed 
all vehicle types in the proper category. 

The types of automobiles to be included in 
these subcategories depend upon the interpreta- 
tion given to "primarily" in the definition of 
"passenger automobile". An explanation of this 
agency's interpretation should serve to eliminate 
any remnants of the ambiguity which GSA per- 
ceived in the NPRM regarding the automobiles 
capable of off-highway operation. If "primarily" 
were interpreted to mean "substantially'", as it 
is in the definition of "automobile" discussed 
supra, then almost every automobile would be a 
passenger automobile, since a substantial func- 
tion of almost all automobiles is to transport at 
least two persons. The only nonpassenger auto- 
mobiles under this interpretation would be those 
specifically excluded by the definition of passen- 
ger automobile ; i.e., automobiles capable of off- 
highway operation and automobiles manufactured 
primarily for use in the transportation of more 
than 10 individuals. If, on the other hand, 
"primarily" is interpreted to mean "chiefly" or 
"predominantly", then all automobiles not manu- 
factured chiefly for use in the transportation of 



PART 523— PRE 6 



EfFecHve: July 28, 1977 



individuals would be nonpassenger automobiles, 
as well as the two tyi>es of automobiles excluded 
from the passenjrer automobile category by defi- 
nition. 

The NHTSA inter])ipts the word "primarily" 
in the definition of "passenjjer automobile" to 
mean "chiefly". Based on the discussion below 
of that definition and its legislative history. 
Congress clearly intended that "passenger auto- 
mobile" include only those vehicles traditionally 
regarded as passenger cars, i.e., vehicles whose 
major design features, incbiding body style, re- 
flect the purpose of carrying passengers. Ex- 
amples of the design features which singly or in 
combination indicate that an automobile is not a 
passenger automobile are an open bed for carry- 
ing cargo, heavy duty suspension, and greater 
cargo-carrying than passenger-carrying volume. 

As discussed in the above section entitled 
Automohiles, the use of "primarily" in tlie defi- 
nition of "automobile" must he considered against 
a legislative backdrop of other statutes using the 
identical phrase, and the remedial purposes of 
the Act justifying a broad interpretation of those 
definitions which delineate the scope of its ap- 
plicability. However, the use of "i)riniarily" in 
the definition of "passenger automobile" brings 
other considerations into play. First, the reme- 
dial purposes of the Act do not require a broad 
interpretation of the definition "passenger auto- 
mobile". Section .'502 (b) of the Act requires the 
NHTSiV to set average fuel economy standards 
for nonpassenger automobiles at the maximum 
feasible level. Accordingly, the fuel efficiency 
of these vehicles will be improved regardless of 
whether they are cla.ssified as passenger or non- 
pas.senger automobiles. 

Second, intei'iireting "i)assenger automobile" as 
this i-ule does permits the XHTSA to make the 
passenger automol)ile and nonpassenger automo- 
bile cat«g()iies under the Act parallel the vehicle 
classification scheme established under the Na- 
tional Traffic and Motor Vehicle Safety Act of 
1966, 15 U.S.r. 1381 c.f seq. ("pas.senger car", 
"multipurpose pa.ssenger vehicle", an<l "truck"), 
and very similar to the scheme established under 
the Clean Air Act. 4-2 U.S.C. 1857 ct wq. ("light 
duty vehicle" and "Jigiit duty ti-uck"). Similar 



classification of vehicles for all three regulatory 
purposes will serve to minimize the pos.sibility 
of inconsistent regulatory requirements. Addi- 
tionally, the manufacturers can quickly determine 
the class of their automobiles for fuel economy 
purposes by examining the classification of these 
vehicles under existing regulatory .schemes. 

Third, placing pickup trucks and vans in the 
passenger automobile category would be contrary 
to the intent of Congress, as discussed below. 

In the House of Representatives, the automo- 
bile fuel economy provisions of H.R. 7014 were 
derived almost verbatim from the Sharp floor 
amendment to H.R. 6860. That amendment con- 
tained the following sections: 

Section 301(a)(3) The term "passenger 
automobile" means any automobile which 
has as its primary intended function the 
transportation of not more than ten indi- 
viduals. 

Section 301(a)(4) The term "light-duty 
truck and multipurpose passenger vehicle" 
means any automobile which is not a pas- 
senger automobile. 

By calling the category of automobiles other than 
passenger automobiles "light-duty trucks and 
multipurpose passenger vehicles", the bill did not 
draw on new, amorphous concepts, but, instead, 
chose terms with existing definitions under other 
Acts. Under the Clean Air Act, the EPA de- 
fined the term "light duty truck" at that time as 
"any motor vehicle rated at 6,000 pounds GVW 
or less, which is designed primarily for purposes 
of transportation of property or is a derivative 
of such a vehicle, or is available with special 
features enabling off-street or off-highway opera- 
tion and use"; 40 CFR § 85.202(a) (5). Under 
the Vehicle Safety Act, the NHTSA at the time 
of the adoption of the Sharp amendment defined 
a "multipurpose passenger vehicle" as "a motor 
vehicle with motive power, except a trailer, de- 
signed to carry 10 pei'sons or less which is con- 
structed either on a truck chassis or with special 
features for occasional off-road operation"; 49 
CFR g 571.3. In the Cost Savings Act, Congress 
itself defined "midtipurpose passengei- vehicle" 
in the same way as the NHTSA had in the above 
(juoted regulation; 15 U.S.C. 1901(2). 



PART 523— PRE 7 



Effective: July 28, 1977 



Vehicles similar to AMC's Jeeps had been re- 
garded by botli the EPA and the NHTSA as 
automobiles with special features enabling off- 
highway use. The EPA had classified pickup 
trucks and cargo vans as light duty trucks, be- 
cause EPA determined that these types of vehicles 
were designed primarily to transport property. 
Passenger vans and recreational vehicles, such as 
campere, had also been classed with light duty 
trucks, since these types of vehicles were deriva- 
tives of cargo vans and pickup trucks. The 
NHTSA made the .same classification under the 
Vehicle Safety Act ba.sed on the fact that these 
vehicles were constructed on a truck chassis. 
Station wagons, on the other hand, have never 
been classified as light duty trucks by the EPA. 
The EPA determined that station wagons, which 
are built on passenger car chassis with passenger 
car-type springs and suspension systems, are de- 
signed primarily to transport people, with a sub- 
sidiary ability to transport property. The 
NHTSA reached the same result, since station 
wagons are built on a passenger car chassis. By 
using existing terms with existing applications. 
Congress gave a clear indication of the types of 
automobiles that were intended to be treated 
sepai'ately from passenger automobiles. If the 
word "primarily" in the definition of "passenger 
automobile" is interpreted to mean "chiefly", 
those types of automobiles would be treated sepa- 
rately from passenger automobiles. It seems 
clear that the House intended H.R. 6860 to be .so 
interpreted. 

The class "light duty trucks and multipurpose 
passenger vehicles" was deleted from H.R. 7014 
when reported from Committee. However, the 
Committee Report states: 

"Part A to Title V of H.R. 7014 as reported 
is (with one exception) substantively identi- 
cal to Part I of Title III of H.R. 6860 as 
passed by the House." H.R. Rep. 94-340 
at 87. 

The exception noted in the report referred to 
the procedure for modifying the average fuel 
economy standards for passenger automobiles, 
which does not affect this discussion. The above 
statement in the House Report indicates that the 
substitution of an untitled residual category of 
autoinol)ilcs for the "light duty truck and nmlti- 



purpose passenger vehicle" category was not in- 
tended to broaden the scope of the passenger 
automobile so as to include vehicles designed 
principally for use in the transportation of prop- 
erty, or derivatives thereof. Hence, the House 
intended the word "primarily" in the definition 
of "pas.senger automobile" in H.R. 7014 to mean 
"chiefly". 

The bill originally passed by the Senate deal- 
ing with automobile fuel economy standards was 
S. 1883. That bill .set up two categories of ve- 
hicles, automobiles and light duty trucks, to 
which average fuel economy standards were ap- 
plicable. 

The "automobile" category in S. 1883 was iden- 
tical to the "passenger automobile" category in 
the Act. The other category of vehicles, "light 
duty trucks", was defined exactly as the EPA 
defined it. The Senate thus manifested its intent 
to treat vehicles which had been classed as light 
duty trucks by EPA, specifically, vans, pickup 
trucks, general purpose vehicles, campers, and 
other similar vehicles, separately from the ve- 
hicles classified as "automobiles" under this bill, 
such as sedans, coupes, and station wagons. The 
language of S. 1883 was incorporated verbatim 
into the Senate version of S. 622. 

Thus, both houses of Congress had expressed 
an intent that vehicles classed by EPA as light 
duty trucks be subject to average fuel economy 
standards separate from the standards imposed 
on passenger cars. Both houses presumably un- 
derstood which types of vehicles had been classed 
as light duty trucks by EPA. There was, there- 
fore, nothing for the conference to resolve on this 
point, since the House and Senate bills were in 
agreement. The adoption of the House language 
no more suggests a change from the Senate bill 
than the language in the House bill suggested a 
change from the Sharp amendment. 

The conference report accompanying S. 622, 
the bill which became the Act, explains the clas- 
sification of automobiles thusly : 

"Automobiles are divided into two broad 
categoi'ies foi' purposes of prescribing fuel 
economy standards : passenger automobiles, 
and automobiles which are not passenger 
automobiles (e.g., certain light duty trucks, 
recreational vehicles, and other multipurpose 



PART 523— PRE 8 



EffacKve: July 28, 1977 



vehicles). Automobiles capable of ofT-hiph- 
way operation . . . are specifically designated 
for inclusion in the latter cate<rory." S. Rep. 
No. 94-516, H.R. Rep. No. 94-700 (94th 
Cong., 1st Sess.) at 153. 

This discussion gives no indication that the 
types of vehicles intended to be nonpassengei- 
automobiles changed. Indeed, the types of ve- 
hicles intended by both houses of (^ongress to be 
noni)as.senger automobiles are listed as examples 
of the kinds of vehicles which are not passenger 
automobiles under the Act. The XHTSA must 
interpret the word "primarily" in the definition 
of "passenger automobile" in the way that will 
effectuate the legislative intent. In light of the 
clear indications given by Congress about the 
types of vehicles intended to be nonpassenger 
automobiles, "primarily" must be interpreted to 
mean "chiefly". 

Under this interpretation, there are four types 
of nonpassenger automobiles. The first, and most 
obvious, type of nonpassenger automobile is an 
automobile designed primarily to transport more 
than 10 persons. An example is a van with 
more than 10 seating positions. This type of 
automobile is excluded from the passenger auto- 
mobile category by tile Act. 

The secon<l type of automobile classed as a 
iionpassenger automobile by this rule is an auto- 
moi ilb designeij primai'ily, i.e.. chiefly, for pur- 
poses of transportation of property. Section 
5-23.5(a)(3) and (4) of the rule lists two difl'er- 
ent ways of determining when an automobile is 
designed primarily for use in the transportation 
of |)roperty. .Vn automobile which can transport 
property on an open bed is not manufactured 
diiefly to transpoit individuals, since well over 
half of tlie available space on those automobiles 
consists of tile cargo i)ed, which is exclusively 
cargo-carrying area. Further, tliis type of auto- 
uiobile is designed fo carry heavy loads. 

Automobiles classed as nonpassenger automo- 
biles by this feature are pickup trucks and some 
pa-ssenger car derivatives with oi)en cargo beds, 
such as the Chevrolet El Camino and tlie Ford 
Ranciiero. El Caminos and Rancheros have been 
permanently altered so that they have much less 
passenger-carrying capacity and much more 
property-carrying capacity than the passenger 



cars from which they are derived. The similarity 
of these vehicles to pickup trucks built on a 
truck chassis is indicated by their classification 
in the EPA/FEA 1977 Gas Mileage Guide as 
"standard pickup trucks". These considerations 
appear to the XHTSA to indicate that these 
vehicles are manufactured chiefly for use in the 
transportation of property, so the classification 
of these vehicles proposed in the XPRM is 
adopted in this rule. 

Ford commented that it agreed that its Ranch- 
ero should be classified as a nonpassenger auto- 
mobile. However, Ford urged that the Ranchero 
should continue to be tested under the passenger 
automobile test procedures, rather than the non- 
passenger automobile procedures. EPA, in con- 
sultation with the NHTSA, agrees with Ford 
that the additional testing would be unnecessary, 
and so the Ranchero will be tested as a passenger 
automobile. This determination will appear in a 
rule specifying nonpassenger automobile fuel 
economy test procedures to be published by EPA 
in .Vugust. 

An automobile which provides greater cargo- 
carrying than passenger-carrying volume is also 
an automobile designed primarily for purposes 
of transportation of pioperty. Since more of the 
space inside the vehicle has been dedicated to 
transporting cargo, and such vehicles are typic- 
ally designed to carry heavy loads, this agency 
concludes that the chief consideration in design- 
ing the veliicle was the ability to transport prop- 
erty. Automobiles that are classed as nonpas- 
senger automobiles on the basis of this feature 
include cargo vans and multistop vehicles. 

The third type of nonpassenger automobile 
under this rule is a derivative of an automobile 
designed primarily for the transportation of 
property. Section 523.5(a)(2) and (5) addresses 
this type of nonpassenger automobile. An auto- 
mobile in which the cargo-carrying area lias been 
converted to provide temporary living quarters 
is typically a derivative of a cargo van or pickup 
truck. Automobiles that are classified as non- 
passenger automobiles on the basis of this feature 
include campers. 

Tlie other common derivative of an automobile 
<lesigne(l primarily for the transportation of 
pro|)erty is the passenger van. In essence, it is a 



PART 523— PRE 9 



Effective: July 28, 1977 



cargo van in which readily removable seats have 
been installed in the cargo-carrying area. This 
derivative can be easily converted back into an 
automobile with greater cargo-carrying than 
passenger-carrying volume, i.e., a cargo van, by 
removing tliese seats with means installed by the 
manufacturer for that purpose or with simple 
tools, such as a screwdriver or a wrench. 

Although station wagons built on passenger 
car chassis have a convertibility feature, fold- 
down rear seats, this characteristic is not sufficient 
to exclude them from the passenger automobile 
category. Like the passenger van with removable 
seats, the station wagon with its seats folded 
down is easily converted back into the basic in- 
terior arrangement. Indeed, the conversion is 
easier since no tools are required. However, it is 
not the convertibility factor alone which results 
in passenger vans being classified as nonpas.senger 
automobiles. It is that factor together with the 
derivative nature of those vans. Neither passen- 
ger vans nor station wagons have been perma- 
nently altered from the parent vehicles, as the 
El Camino/Ranchero vehicles have. Therefore, 
since a passenger van is designed with the same 
chassis, springs, and suspension system as a cargo 
van, it is treated in the same way as a cargo van. 
A station wagon is designed with the same chassis, 
springs, and suspension system as a sedan, and 
so is placed in the same category as a sedan. 

The fourth and final type of nonpassenger 
automobile under this rule is an automobile 
capable of oif-highway operation. 

Ford and International Harvester commented 
that the 5 ground clearance measurements pro- 
posed in the NPRM would adequately serve to 
distinguish automobiles capable of ofT-highway 
operation from other automobiles. The GSA 
commented that all of these measurements relate 
solely to vertical obstacle negotiation potential, 
and suggested that NHTSA consider other fac- 
tors, .such as slope-climbing potential, vegetation 
override potential, and swimming potential, 
which would also make an automobile capable of 
off-highway operation. Tlie NHTSA considered 
incorporating some of these other factors in the 
NPRM, but discovered that every vehicle with a 



GVWR under 6,000 pounds which had one of 
these other features also liad four of the five 
characteristics listed in the rule. Therefore, in 
the interest of avoiding unnecessary complexity, 
NHTSA has decided to list only the five char- 
acteristics given in the NPRM. If a need arises 
in the future to establish additional criteria, the 
NHTSA will initiate rulemaking. 

Vehicles ivith a GVWR between 6,000 and 
10,000 pounds. The Act classifies as an automo- 
bile any 4-wheeled vehicle propelled by fuel 
which is manufactured primarily for use on pub- 
lic streets, roads, and highways (except any ve- 
hicle operated exclusively on a rail or rails) 
which has a GVWR of not more than 6,000 
pounds. Such a vehicle with a GVWR between 
6,000 and 10,000 pounds may be classified as an 
automobile if the Administrator makes two find- 
ings. First, the Administrator must determine 
that average fuel economy standards are feasible 
for tliat type of vehicle. Second, the Adminis- 
trator must also determine that either average 
fuel economy standards for this type of vehicle 
will result in significant energy conservation or 
that this type of vehicle is used for substantially 
the same purposes as a vehicle type with a 
GVWR of not more than 6,000 pounds. 

The NPRM set forth the Administrator's pro- 
posed determination that average fuel economy 
standards are feasible for passenger cars with a 
GVWR between 6,000 and 10,000 pounds, and 
that these cars are used for substantially the 
same purposes as passenger cars with a GVWR 
of not more than 6,000 pounds. Chrysler, Ford, 
and General Motors commented that this deter- 
mination was appropriate. 

International Hai^vester expressed no view on 
the merits of the determination, but suggested 
that the determination should be made in a sepa- 
rate notice. Since a proposed determination has 
been published and comments received thereon, it 
would be unnecessarily burdensome and .seem- 
ingly purpo.seless to re(iuest commenters to ad- 
dress the .same proposal again. Moreover, 
delaying publication of a determination which 
can be made final now would serve no useful 
purpose. 



PART 523— PRE 10 



Effective: July 28, 1977 



The Automobile Club of Southern California 
urged that station wao^ons with a GVWR of 
greater than 6,000 pounds be classified as non- 
passenger automobiles. The basis for this sug- 
gested disparate treatment is that station wagons 
can carry more passengers or more cargo than 
other passenger cars. It was noted that when 
the large wagon is carrying nine passengers, the 
passenger miles per gallon can be the same as 
that of an automobile with a higher fuel economy 
carrying fewer passengers. When carrying cargo, 
the wagon is, according to the Automobile Club, 
serving the same purposes as other nonpassenger 
automobiles. Notwithstanding these observations, 
they would also be applicable to station wagons 
with a GVWR of not more than 6,000 pounds. 
Therefore, this agency does not perceive sufficient 
basis in the Automobile Club's comments for 



changing its treatment of station wagons with a 
GVWR greater than 6,000 pounds. 

In light of the foregoing. Title 49, Code of 
Federal Regulations, is amended by adding a 
new Part 523, Vehicle Classification, to read as 
set forth below. 

The program official and attorney principally 
responsible for the development of this rule are 
Douglas Pritchard and Stephen Kratzke, re- 
spectively. 

Issued in Washington, D.C., on July 21, 1977. 

Joan Claybrook 

Administrator, National Highway 
Traffic Safety Administration 

42 F.R. 38362 
July 28, 1977 



PART 523— PRE 11-12 



PREAMBLE TO PART 523— VEHICLE CLASSIFICATION 

(Docket No. FE-77-05; Notice 4) 



This notice establishes averafje fuel economy 
st-andards for light trucks (pickup trucks and 
vans, genei-ally) manufactured in model years 
1980 and 1981. This notice also extends the 
applicability of light truck fuel economy stand- 
ards and labeling requirements to vehicles with 
gross vehicle weight ratings (GVWR) from 6,001 
to 8,500 pounds beginning in model year 1980. 
The issuance of tliese standards is required by 
section 002 (b) of the Motor Vehicle Information 
and Cost Savings Act, as amended ("the Act"). 
The standards are intended to result in the sav- 
ings of approximately 8 billion more gallons of 
gasoline over the life of the light tracks manu- 
factured in these 2 years than would be saved if 
the standards were set at the estimated model 
vear 1979 fuel economy levels for these vehicles. 
Date : These standards will apply in model years 
1980 and 1981. 

For further inf&nmitlan contact : 

Mr. George L. Parker, National Highway 
Traffic Safety Administration, 400 Seventh 
Street, S.W., Washington, D.C. 20590 202- 
472-6902. 

Supplementary information. ; 

I. BACKGKOrND IXFORMATIOX 

Title V of the Act provides for the establish- 
ment of average fuel economy .standards for 
various types of automobiles. Under section 
501(1) of the Act, the term "automobile" is de- 
fined to include "any 4-wheel vehicle propelled 
by fuel which is manufactured pi'imarily for use 
on public streets, roads, and highways. . . ." and 
which either has a gross vehicle weight rating 
of 6000 pounds or less or which is rated between 
6000 and 10,000 pounds and meets certain addi- 
tional requirements 1( described below), as deter- 
mined by the Secretary of Transportation. Auto- 



mobiles manufactured primarily for use in the 
transportation of not moi-e than 10 individuals 
are defined as "passenger automobiles" under 
section 501(2). and are subject to fuel economj' 
standards established in or pursuant to section 
502(a). The residual category comprised of all 
automobiles other than passenger automobiles is 
subject to fuel economy standards established 
])ursuant to section 502(b) of the Act. They in- 
clude most pickup trucks, vans, and light utility 
vehicles. Automobiles in this rapidly growing 
I'esidual category were previously called "non- 
passenger automobiles" in rulemaking to estab- 
lish fuel economy standards, but will henceforth 
be called "light trucks," to more closely reflect 
the common terminology used to describe the 
affected vehicles. This change is strictly one of 
name; it has no substantive significance. 

Section 502(b) of the Act provides that fuel 
economy standards for light trucks must be estab- 
lished by the Secretary of Transportation be- 
ginning with the 1979 model year and for each 
model year thereafter. Authority to conduct 
the automotive fuel economy program was dele- 
gated by the Secretary of Transportation to the 
Administrator of the National Highway Traffic 
Safety Administration (NHTSA) in 41 F.R. 
25015, June 22, 1976. The standards are avei^age 
fuel economy standards. As long as the average 
fuel economy of the entire fleet of automobiles 
subject to a standard meet or exceed the standard,; 
the fuel economy of some individual vehicles 
may be below the standard. Standards are re- 
quired to be set at the "maximum feasible average 
fuel economy level" for each year, considering- 
technological feasibility, economic practicability, 
the effect of other Federal motor vehicle stand- 
ards on fuel economy, and the need of the Nation 
to conserve energy. See section 501 (e). On March 
14, 1977, standards for light trucks manufactured 



PART 523— PRE 13 



in model year 1979 were published in 42 F.R. 
13807. This notice establishes standards for lijjht 
trucks manufactui-ed in model years 1980 and 
1981. 

The starting point for this rulemaldng pro- 
ceeding was the information gathered during 
the rulemaking for model year 1979 conducted 
between March 1976 and March 1977. In March 
1977, the agency issued a 29-page questionnaire 
(DX-OOl) to the major light truck manufacturers 
to obtain information relating to the light ti-ucks 
currently produced by those companies and their 
capabilities to improve the average fuel econ- 
omy of their light track fleet for 1980 and 1981. 
During June 1977, the agency met with each 
of the domestic respondents to discuss their re- 
sponses to the questionnaire. Because the re- 
sponses to the questionnaire did not adequately 
discuss all of the manufacturer's capabilities for 
improving fuel economy, the agency sent special 
orders in August 1977 to the light truck manu- 
factures to obtain additional infonnation regard- 
ing those capabilities. These were followed in 
September with special orders to component man- 
ufactures and material suppliers to obtain their 
views and data regarding various technological 
methods for improving fuel economy. 

On December 15, 1977, in 42 F.R. 63184, a 
notice of proposed rulemaking (NPRM) was 
published. It was based on the extensive material 
submitted in response to the information-gather- 
ing initiatives discussed in the preceding para- 
graph and on other infonnation available to the 
agency. In addition to proposing standards for 
the 1980 and 1981 model years, the notice also 
proopsed extending the applicability of the light 
truck fuel economy standards for the first time 
to certain vehicles with G\nVRs between 6,001 
and 8,500 pounds. 

It should be noted that a truck's GTWR is 
the weight of the vehicle when loaded to maxi- 
mum rated capacity. The curb weight of a light 
truck is typically ;nuch less than its GVWR. 
For example, a pickup truck with a GVIVR 
of 5,600 pounds can weigh about 3,600 pounds, 
almost 1,200 pounds less than a full-size sedan. 
DN-067, App. V, Ex. D (Ford). A large van 
with a GVWR of 9,500 pounds (which would 
not be subject to these standards) can weigh 



slightly less than that same 4,800 pound full-size 
sedan. Id. 

In addition, the NPRM generally discussed 
the problems of captive imports, i.e., those pro- 
duced outside the United States and Canada and 
imported by a domestic company for sale here, 
and set forth in detail two out of a wide range 
of possible alternative schedules for imposing a 
requirement that a company's "captive import" 
light trucks not be counted together with that 
company's domestic light trucks in the calcula- 
tion of its average fuel economy for standards 
compliance purposes. The notice also proposed 
requiring fuel economy labeling of light trucks 
with GVWR's between 6,001 and 8,500 pounds 
beginning with the 1979 model year. Currently, 
consumers are not consistently provided with 
any reliable information regarding the fuel econ- 
omy of these vehicles. 

The NPRM also announced a public hearing 
to be held in "Washington, D.C.. on January 16 
and 17, 1978, and invited applications for finan- 
cail assistance from individuals or organizations 
which desired to participate in the rulemaking 
but which were financially unable to do so. Four 
applications by public interest groups for assist- 
ance were granted. 

Concurrent with the issuance of the NPR^SI, 
the agency released three documents which dis- 
cussed the basis for and impacts of the proposed 
standards. The first document, titled ''Rulemak- 
ing Support. Paper for the 1980 and 19S1 ^lodel 
Year Xonpassenger Automobile Fuel Economy 
Standards" (hereafter called the PSP). de- 
scribed the technical and economic basis for the 
proposed standards. The second document, titled 
"Preliminary Impact Assessment of the Xon- 
passenger Automobile Fuel Economy Standards 
for Model Years 1980 and 1981" (hereafter called 
the PIA), further discussed the economic im- 
pacts of the proposed standards on the manu- 
facturers and on customers and certain alterna- 
tives to the proposal. The third document was 
a draft environmental impact statement. 

The January 16-17 public hearing was not 
one required by statute, but was held to provide 
interested parties an additional opportunity to 
present their views on the proposal. The XHTSA 
Administrator and Deputy Administrator pre- 



PART 523--PRE 14 



sided over the hearing. Thirty-one organizations 
or officials, including all the major domestic light 
truck manufacturers, several parts and materials 
suppliers, four Congressmen, labor union repre- 
sentatives, and several community organizations 
and public interest groups testified at the hearing. 
Representatives of the Environmental Protection 
Agency (EPA) and the Department of Energj' 
(DOE) participated on the panel of officials 
which queried the witnesses. 

A similarly wide range of individuals and 
organizations, including most of the hearing par- 
ticipants, provided written comments on the pro- 
posal. The NPRM established a deadline of 
Januarj- 30, 1978, for the submission of written 
comments on the proposal. A limited extension 
of this deadline was granted in 43 F.R. 3600 
(January 26, 1978) for submission of supple- 
mental material. However, in keeping with the 
agency's policy of considering later submissions 
to the extent practicable (DN-38, -41, ^3) addi- 
tional material pro%-ided by participants up to 
the time of final drafting of this notice was also 
considered. 

Material contained in the ESP and the PIA, 
together with written submissions from interested 
persons, hearing statements, special order re- 
sponses, and other relevant material were all con- 
sidered in developing the standards promulgated 
in this notice. More detailed information on the 
teclmical and eeonomic bases for these stand- 
ards are contained in the Supplement to the Rule- 
making Support Paper (hereafter called RSPS) 
and Final Impact Assessment (FIA). Copies 
of these documents will be available soon from 
the Office of Automotive Fuel Economy Stand- 
ards. XHTSA, 400 Seventh Street, S.W., 
"Washington, D.C. 20.590. 

II. Prixcipal Changes Made in the 
Final Rule 

As a result of ne-^ information generated by 
the vehicle manufacturers and others and sub- 
mitted in response to the NPRM, substantial 
changes to the proposed regulations have been 
made. The most common comment was that the 
proposed standards were too stringent and would 
result in reduced production and employment. 



These comments were generally based upon in- 
formation from the light truck manufacturers 
that was not available to the agency until after 
the issuance of its proposal. The standards have 
been established at levels significantly above the 
projected model year 1979 levels, but substantially 
below the proposed levels. Also, the agency 
has established a separate class for "captive im- 
port" light trucks beginning with the 1980 model 
year to prevent the standards from encouraging 
the increased importation of these vehicles and 
exportation of domestic jobs. A separate class 
with a lower fuel economy standard is also estab- 
lished for light trucks manufactured by com- 
panies which do not produce passenger automo- 
biles and thus have limited access to passenger 
automobile engine and emission control tech- 
nology. This latter class was adopted to take 
into account the difficulties of International Har- 
vester Corporation in meeting fuel economy 
standards. Finally, the proposed requirement 
that light trucks with G^^^ls of 6,001-8,500 
pounds have fuel economy labels beginning with 
the 1979 model year was delayed at the request 
of EPA until the 1980 model year. 

III. CoiISrENTS ON THE NPRM AND 

XHTSA's Assessment 

a. INFORMAL RULEMAKING PROCESS 

The response of many commenters to the 
NPRM suggest it would be useful to recite sev- 
eral aspects of the theory of informal rulemaking, 
i.e., the process by which the fuel economy stand- 
ards are developed. Informal rulemaking is 
essentially like the legislative process in which 
there is extensive, continuous gathering of infor- 
mation and adjustment of proposals. Many com- 
menters appeared to regard the NPRM more as 
the culmination of the agency fact gathering 
process than as a further step in that process. 
The agency attempted to make the tentative na- 
ture of the proposal and the need for additional 
information as plain as possible. The agency 
itemized a variety of issues on which further 
comment and data were desired. It was expressly 
noted that such additional information could 
substantially affect the level of the final stand- 
ards. (42 F.R. 63195.) 



PART 523— PRE 15 



b. SCOPE AND APPLICABILITY OF THE STANDARD 

Some commenters suggested that there was no 
forewarning that light trucks above 6000 pounds 
GVIVR might be regulated in model years 1980- 
81. Neither the statute nor events support this 
contention. Given the well-known urgent need 
to conseri'e energy and the equally well-known 
bases for finding under section 501 ( 1 ) of the Act 
that fuel economy standards should be extended 
for these vehicles, such extension should have 
been anticipated since the passage of the Act for 
these reasons alone. There were, moreover, far 
moi'e direct reasons for anticipating the exten- 
sion. The notice of proposed rulemaking (41 
F.R. 52087, at 52088 ; November 26, 1976) for 1979 
light truck fuel economy standards stated that 
the agency was considering regulating these 
higher rated light trucks beginning in model year 
1980. The agency's March 1977 questionnaire 
made this intention clearer still by i-equesting in- 
formation for these vehicles. Any remaining 
doubt was removed by the agency deputy ad- 
ministrator's prepared statement for a July 1977 
Congressional hearing on fuel economy legisla- 
tion. He announced that the agency would issue 
standards covering 1980-81 light trucks with 
GVWRs up to 8.500 pounds. 

International Harvester Corporation (IH) ar- 
gued that NHTSA lacks the authority to estab- 
lish fuel economy standards for light trucks in 
the 6,001-8,500 pound GVWR range. DN-097, p. 
2. This extension of the "automobile" category 
was proposed primarily because of the potential 
energy savings. The G"\^VR ratings of many 
light trucks have been raised over the past six 
years, resulting in the number of light trucks 
in the 6,001-8,500 pound range increasing from 
approximately a one-third share of total 0-8,500 
pound GVAVR sales to approximately a two- 
thirds share in 1977 and continuing into 1978. 
This trend was due in part to the fact that more 
stringent emission standards have been applied 
to vehicles with G^^VRs up to 6.000 poimds, 
with the attendant, need for catalytic converters 
and unleaded gas, DN-055, p. II-ll. Ford Motor 
Company (Ford) endorses the extension of fuel 
economy standards up to the 8,500 pound GVWR 
level (DN-067, p. 15), and General ^Motors Cor- 
poration (GM) found the 8,500 pound GVT^Tl 
level to be an appropriate limit for fuel economy 



standards and "a reasonable cut off between the 
commercial and mixed personal/commercial use 
vehicles." DN-096, p. 7. 

International Harvester disputed NHTSA's 
tentative conclusions that significant energy sav- 
ings are achievement for the 6,001-8,500 pound 
GVWR light trucks, and that those light trucks 
are used substantially for the same purposes as 
the 0-6,000 pound GVWR fleet. Under the stat- 
ute, the extension of the "automobile" category 
could be based on either of these findings. 
NHTSA reaffirms both of those findings. As 
noted in the preceding paragraph, there are cur- 
rently almost twice as many light trucks being 
sold in the 6,001-8,500 pound GVWR range as in 
the 0-6,000 pound GWVR range. The agency's 
technical asses.sment (as set forth in the supple- 
ment to the agency's Rulemaking Support Paper) 
demonstrated that the over-6,000 pound G'V^WR 
trucks had as much fuel economy improvement 
potential as did the 0-6,000 pound GVWR light 
trucks on a per-vehicle basis. Congress found 
the fuel saving potential associated with the 0- 
6,000 pound G\^VR light trucks so significant 
that it required that those vehicles be subject to 
fuel economy standards. Since the fuel saving 
potential of the latter vehicles is "significant," 
then the fuel saving potential for the 6,001-8,500 
pound GVWR vehicles is significant too, a 
fortiori. 

The matter is clearer still when it is considered 
that, as the NPRM noted, a 10 percent improve- 
ment in the fuel economy of the 6,001-8,500 pound 
GVWR light trucks would save about 1.4 billion 
gallons of gasoline per year over the lifetime of 
one model year's production, a savings closely 
approximating that resulting from the 1979 stand- 
ard for 0-6,000 pound G\nVR light trucks. 

With respect to the question of the usage of 
all these light trucks, it is instructive to note the 
personal and recreational uses for which the 
trucks are frequently advertised. The Center for 
Auto Safety reviewed various periodicals going 
back to 1960 and concluded that the emphasis 
in light truck advertising has shifted from com- 
mercial capabilities to the sale of trucks as pas- 
senger car substitutes. DN-095, p. 12. This 
advertising trend is consistent with information 
submitted bv the manufacturers which indicates 



PART 523— PRE 16 



a mixture of commercial and personal usafre for 
light trucks up to 8.500 pounds G^'AVR. DN-096, 
App. A, Fijrure A.l (GM) ; DX-067, App. V. p. 5 
(Ford); DX-120. App. M (Chn-sler). See also 
DX-I06 (Recreation Vehicle Industry Associa- 
tion). 

The Public Interest Campai<m argued that 
limiting the extension of the light truck category 
to 8500 pound G^'A^'R may not end tlie problem 
created when manufacturers increase tlie GVWR 
of their vehicles to avoid the applicability of 
standards. DX-160, p. 22. This problem is in- 
herent whenever a regulatory line is drawn. It 
is likely that some light trucks which currently 
have G^1VR■s just below 8.500 pounds will in the 
future be rated by their manufacturers just above 
that point. However, the agency does not expect 
any circumvention of this type to be as prevalent 
as the shift in G"\'T^"R across tlie previous 6,000 
pound di^-iding line. This expectation is based 
on the fact that relatively few light trucks are 
currently sold in the 8.000-8.500 pound G^'^WR 
range, compared to the number rated just below 
6,000 pounds prior to the imposition of emission 
standards up to that level. Further, vehicles 
rated much above 7.000 pounds are equipped with 
heavy duty suspensions and other components 
which make them unattractive for personal uses 
Thus, greater owner sacrifices would be required 
to shift over the 8.500 pound G^'TVR line than 
was the case for a shift over the 6.000 pound 
G^ W'K line. However, if the agency's projection 
in this regard proves to be incorrect, the light 
truck categors- could be further expanded to 
avoid circumvention of the fuel economy stand- 
ards. 

American Motors Corporation (AM) requested 
that light trucks sold to the Government for 
military use be exempted from the fuel economy 
standard. AM argues that such vehicles are not 
designed for use primarily on roadways, and are 
therefore not "automobiles" as that term is de- 
fined in section 501>(1) of the Act. The Act 
contains no specific pro\-ision for exemption of 
military' vehicles. The vehicles in question, the 
M-151 Jeep, are subject to emission standards 
under the Clean Air Act, despite the existence 
of such an exemption pro^nsion in that statute, 
42 U.S.C. 1857f-2 (b)(1). The existence of this 
emission data provides a potential source of fuel 



economy data to detennine compliance with fuel 
economy standards. The sales of these vehicles 
have historically not constituted a large enough 
portion of AM's light truck sales to substantially 
affect that company's fuel economy average. All 
information currently available to the agency 
indicates that the use of these vehicles differs in 
no significant respect from the use of nonmilitary 
Jeeps, which have previously been determined 
to be subject to fuel economy standards. 42 F.R. 
38364. July 28, 1974. Therefore, based on this 
information, the militaiT Jeeps are subject to 
fuel economy standards. In any event, the 
agency would be very cautious in projecting 
changes to those vehicles which might impair 
their functional attributes. The agency would 
consider any further submissions by AM or any 
other interested party relating to the extent to 
which the uses of these military Jeeps differ from 
the uses for which publicly marketed Jeeps are 
manufactured. 

Two possible changes in the proposed classifica- 
tion scheme for light trucks were suggested in 
the comments. Ford argued that manufacturers 
be given the option of complying with a com- 
bined standard applying to all light trucks or 
with the proposed separate 2-wheel drive and 
4-wheel drive standards. The combined stand- 
ard would be set at a level between the 2-wheel 
drive and 4-wheel drive .standards, with the exact 
level depending on tlie relative sales levels of 
those two classes of light trucks for a particular 
manufacturer. DX-067. p. 13. Chrysler and 
Toyota supported this option. DN-120, p. 7; 
DX-088. p. 7. International Han-ester argued 
for a separate classification and standard for 
4-wheel drive light trucks with G^^T?s between 
6,001 and 8.500 poimd.s. and 2-wheel drive light 
trucks which are derived from those vehicles. 
All of IH's light trucks would fall in that class. 
The Public Interest Economics Foundation made 
a similar proposal. DX-173, p. 5. 

With respect to the Ford proposal, the three 
largest domestic light truck manufacturers and 
Toyota have all argued at some point in this 
proceeding for a single standard applicable to 
all light trucks. DX-001-02. p. 4 (Ford) ; DN- 
001-05, p. 9 (Chrysler) ; DX-096, p. 4 (GM) ; 
DX-088, p. 7 (Toyota). The main advantage 
of a single, all-inclusive standard is that it pro- 



PART 52.3— PRE 17 



vides the greatest flexibility for a manufacturer 
with a broad product line to select among pos- 
sible methods for achieving a given level of fuel 
economy improvement. For example, where 
separate classes exist, a manufacturer is required 
to make certain improvements to vehicles in each 
class in order to comply with the separate stand- 
ards. On the other hand, if a single, all 
inclusive standard were established, a manu- 
facturer would have the option of concentrat- 
ing its available resources on making major 
improvements (such as a total veliicle redesign) 
to certain classes of vehicles. See 42 F.R. 63186. 

However, the smaller manufacturers with more 
limited product lines may be disadvantaged under 
a single-standard approach, since the larger man- 
ufacturers may be able to avoid making changes 
to their vehicles in the same classes as the smaller 
manufacturers' vehicles, through the judicious 
use of the previously described flexibility. The 
smaller manufacturers would have to undertake 
product changes to their vehicles. This would 
increase the price of the small manufacturers' 
vehicles compared to the price of the similar ve- 
hicles of the large manufacturer. DN-098, p. 2 
(AM). For example, AM and IH both manu- 
facture primarily 4-whe«l drive vehicles. Under 
a single-standard approach, the larger manufac- 
turers could focus their fuel economy improve- 
ment efforts on their 2-wheel drive vehicles, an 
option unavailable to AM or IH. AM and IH 
would have to change their 4-wheel drive ve- 
hicles, possibly placing those vehicles at a com- 
petitive disadvantage vis-a-vis the 4-wheel drive 
vehicles of the larger manufacturers. 

Although recognizing that the Ford proposal 
has some merit, the agency is extremely con- 
cerned that the classification of automobiles for 
fuel economy standards purposes not have a 
major anti-competitive effect. AM and IH rely 
extensively on the sale of 4-wheel drive vehicles 
to generate profits, to a much greater extent than 
do the larger companies. The agency observes 
that an optional combined standard could permit 
the companies with full product lines to obtain 
price and possibly performance advantages over 
AM and IH for comparable 4-wheel drive ve- 
hicles, through the mechanism described in the 
preceding paragraph. These competitive factors 
did not present as serious a problem in the 



agency's 1979 light truck rulemaking, where 
standards were set at levels more in line with 
manufacturer's planned fuel economy levels. 
Therefore, in consideration of these advantages 
and the effect of the small manufacturers on level 
of the combined standard, the agency is not 
adopting the Ford proposal. 

Nor can the agency accept IH's proposal, which 
might tend to exacerbate the trend toward higher 
GVWRs that has occurred over the past five 
years and which was due at least in part to 
different Federal standards above and below the 
6,000 pound GVWR dividing line. However, the 
agency recognizes that IH has unique problems 
given 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. Further, IH has not had ex- 
perience with state-of-the-art emission control 
technology, which the other manufacturers have 
obtained in the passenger automobile market. 

Therefore, NHTSA is establishing a separate 
class and fuel economy standard pursuant to 
section 502(b) of the Act for all light trucks 
manufactured by a manufacturer whose light 
truck fleet is powered by basic engines which 
are not used in passenger automobiles. This 
separate class is established for only two model 
years' duration. The agency concludes that IH 
should be able to achieve levels of fuel efficiency 
in line with the other manufacturers by the 1982 
model year either through purcliasing engines 
from outside sources or by making improve- 
ments to curi-ent engines. This resolution of the 
separate classification question satisfies the con- 
cerns expressed by IH in recommending a sep- 
arate standard for 4-wheel drive vehicles with 
GVWRs over 6,000 pounds, without perpetuating 
the incenttive for increasing light truck GVWRs 
above the 6,000 pound level or maintaining 
GVWRs at those levels. 

An issue on which the agency requested com- 
ment in the NPRM (42 F.R. 63187) is whether 
a manufacturer's "captive import" light trucks 
should be permitted to be counted together with 
its domestic light trucks in tlie calculation of 
that manufacturer's fuel economy average for 
compliance purposes, or whether those trucks 
should be treated separately as are captive im- 



PART 523— PRE 18 



port passenger automobiles under passenger auto- 
mobile fuel economy standards. The former 
approach would cncoura<;e importation of foreign 
produced, captive import light trucks and the 
exportation of domestic jobs. The latter ap- 
proach would pre\-ent the standards from en- 
couraging domestic manufacturers from taking 
these steps. The agency discussed in detail two 
of the many possible resolutions of the issue in 
the NPKil. One suggestion was to provide for 
separate treatment of captive imports beginning 
with the 1980 model year. The other suggestion 
permitted manufacturers to include captive im- 
ports for 1980 and 1981 (with separate treatment 
beginning with the 1982 model j'ear) in their 
calculation of domestic fuel economy averages, 
but to limit the number of includable captive 
imports to 6 percent of the total number of light 
trucks manufactured in each class for each model 
year. 

The first suggestion was supported by the 
United Auto Workers (DX-093) ; General Motors 
(DN-096. p. 15. Section III) ; and the Center 
for Auto Safety (DX-056, p. 115). The UAW 
(DN-056, p. 587) and the Center for Auto 
Safety base their suggestions on the belief that 
separate treatment of captive imports would en- 
courage the earliest possible domestic protluction 
of these smaller, more fuel efficient trucks. On 
the other hand, Chrysler, Ford, and Toyo Kogyo 
argue that the Act provides no legal authority 
for requiring separate treatment of captive im- 
ports, and that such a requirement would pro- 
mote neither domestic employment nor maximum 
fuel conservation (DX-120, p. 14 (Chrysler) ; 
DX-149, App. VIII, Tab. B (Ford) ; DX-103. 
p. 2 (Toyo Kogyo).) Alternatively. Chrysler 
argues that a requiren^ent for separate treatment 
of captive imports should be delaj-ed until such 
time as sales levels justify and lead-time permits 
their domestic production. DX-056, p. 373. 

XHTSA believes that a requirement for the 
separate treatment of captive import light trucks 
would produce desirable results from the point 
of view of promoting energy conservation, pre- 
serving competition within the automobile in- 
dustry, and promoting domestic employment. 
The agency also disagrees with the arguments 
that it lacks adequate authority to impose such 
a requirement. After re\newing the comments 



of the various participants in the rulemaking 
proceeding, XHTSA finds no substantial reason 
to delay any longer the effective date for a re- 
quirement of separate compliance of captive im- 
port light trucks. Therefore, the regulations 
promulgated herein establish such a requirement 
beginning with the 1980 model year. 

The importation of captive imfxjrt trucks posed 
a threat to domestic employment similar to that 
posed by the importation of captive import pas- 
senger automobiles. The agency's authority to 
require that captive import light tmcks comply 
separately with fuel economy standards is the au- 
thority to establish "separate standards for dif- 
ferent classes" of light trucks in section 502(b) 
of the Act. Ford and Chrysler argue that this 
classification authority is restricted to classes 
based on attributes of a vehicle, such as size or 
intended use. However, these arguments over- 
look the broad meaning of "class" as defined in 
various dictionaries. Further, nothing in section 
502(b) establishes the sort of limitation argued 
for by Ford and Chrj'sler. In fact, the Act's 
legislative historj- shows that a broad reading 
of the term is intended. The Conference Keport 
(S. Rep. 94-516, 94th Cong., 1st Sess., at p. 155) 
states, in discussing the classification authority, 
that separate classes "could be based on func- 
tional classifications or other factors.'''' (Em- 
phasis added). 

Ford and Chrysler also argued that the defini- 
tions of "manufacture" and "manufacturer" in 
section 501 of the Act include both domestically 
produced and imported automobiles, and there- 
fore conclude that a fuel economy standard must 
apply to both categories or classes of vehicles. 
In fact, these definitions establish only that both 
of these classes of automobiles are to be regu- 
lated. They do not establish how the vehicles 
are to he classified for that purpose. They could 
be placed in the same or separate classes. 

Ford also claimed that language on page 91 
of the House Report, which contemplates the 
establishment of "similar" procedures for treat- 
ing captive import light trucks as those specified 
for captive import passenger automobiles under 
section 503(b) (1) of the Act, requires that some 
transition period be established between model 
years when captive imports are fully includable 



PART 523— PRE 19 



and fully excluded from domestic fuel economy 
average calculations. However, a "similar" re- 
quirement need not be identical in every respect. 
The separate classification was not immediately 
applied, but delayed one year to 1980. The man- 
ufacturers have been on notice for a substantial 
period of time that a requirement of this general 
nature was being seriously considered by the 
agency, permitting them to make their plans ac- 
cordingly. 42 F.R. 13810-11 ; March 14, 1977. 

Ford also pointed out that if a separate class 
were established for captive import light trucks, 
that class would be required to have a standard 
set at the maximum feasible level for that class. 
Ford argued that the agency had failed to set 
the standard for the captive import class at that 
level in the XPRM. However, NHTSA con- 
cludes that the maximum feasible average fuel 
economy level for the captive import class is the 
same as for the residiial class of all other light 
trucks. That reference point is the same one 
suggested in the XPEM for captive import light 
trucks. Captive import light trucks currently 
have higher fuel economy in general than do- 
mestically manufactured light trucks, due to the 
fact that the captive imports are typically more 
compact in size. However, if the captive imports 
were subject to a more stringent fuel economy 
standard than all other light trucks, virtually 
identical vehicles (such as the Ford Courier, a 
captive import, and the Mazda pickup ti-uck, 
which is imported by Toyo Kogyo of Japan) 
would be subject to different fuel economy stand- 
ards. In that case, the captive import vehicle 
might be required to make fuel economy improve- 
ments (at some cost) which a similar vehicle 
imported by a foreign company might not have 
to make. Thus, the captive imports would be 
placed at a competitive disadvantage, due to 
the extra cost resulting from eiloi-ts to comply 
with fuel economy standards. In that case, 
where similar vehicles sell for different prices, 
it would be expected that the sales of the 
captive import vehicles would suffer, resulting 
in less energy consei^-ation than would other- 
wise be the case. Therefore, the agency con- 
clude,? that imposing a more stringent standard 
for captive import, light trucks than is applicable 
to all other light trucks would be inconsistent 



with the "economic practicability" consideration 
in section 502(e) of the Act. 

Finally, Ford argues that a separate standard 
for captive imports does not promote the general 
purposes of the Act. The primary purpose of 
the Act is energy conservation. However, section 
503(b), the "runway plant" provision, unambig- 
uously establishes that Congress regarded do- 
mestic employment as a paramount consideration 
with respect to captive imports. The agency con- 
cludes that the separate standard for captive im- 
ports will promote energy savings since it will 
encourage greater efforts to improve the fuel 
economy of domestically produced light trucks 
and in the longer run will encourage use of an 
additional method (domestic production of small 
light tracks) for complying with fuel economy 
standards at the option of the manufacturer. 
Vigorous efforts to sell these domestic compact 
tracks would produce a market shift and con- 
comitant energy savings. As measured by rela- 
tive degree of marketing effort, the attitude of 
the major domestic producers toward smaller 
trucks has not been markedly positive. It is 
likely that it will take every available method 
or incentive to change this view and thus promote 
both energy savings and domestic employment. 
See DN-056, p. 346 (Chrysler) and p. 355-6 (re- 
marks by NHTSA Administrator Claybrook). 
With a provision for the separate compliance 
of captive import, light tracks, NHTSA will be 
able to base its fuel economy standards in future 
model years on the projected domestic production 
of these smaller trucks, providing a further in- 
centive for switching from foreign to domestic 
production. As noted above, a second purpose 
of the statute is the promotion of domestic em- 
ployment. Congressional Record H 5383, 5386 
(daily ed.. June 12, 1975). To the extent the 
captive import requirement provides an addi- 
tional incentive to shift to domestic production 
of vehicles which are cuiTently produced abroad 
and imported, domestic employment will benefit. 
Therefore, the agency concludes that this require- 
ment promotes the general purposes of the 
statute. 

It is important to note that the separate class 
for captive import light trucks does not prohibit 
the importation of such vehicles. It simply keeps 
the fuel economy program from inducing manu- 



PART 523— PRE 20 



facturers to increase their importation of those 
vehicles instead of producino; tliose small vehicles 
domestically or making improvements to their 
larger domestic veliicles. Assuring tliat those im- 
provements are made was one of the express 
purposes of the sponsor of the "runway plant" 
amendment. Congressional Eecord H 5386 (daily 
ed., June 12, 1975). In view of the domestic man- 
ufacturers* investment in captive import light 
trucks, the profitability of those vehicles and com- 
petition from foreign manufacturers of similar 
vehicles, the agency anticipates that the domestic 
companies will continue to market tlieir captive 
imports. If the foreign manufacturers improve 
the fuel economy of their compact light trucks, 
the domestic manufacturers will presumably 
make similar improvements to remain competi- 
tive. 

b. FUF.L ECOXOMY PROJECTION METHODOLOGY 

One of the problems which confronted the 
agency in developing the proposed standards was 
the absence of fuel economy test data for the 
light trucks in the 6,001-8,500 pound G^^TTTl 
range. These trucks will be tested for emissions 
in a manner which yields fuel economy data for 
the first time beginning with the 1979 model 
year. Initial test data for these vehciles are 
just now becoming available. Therefore, the 
agency utilized a regression equation which re- 
lates vehicle characteristics such as engine dis- 
placement, test weight, and drivetrain ratios to 
measured fuel economy for passenger automobiles 
and light trucks. The regression equation was 
used to extrapolate and interpolate from actual 
test data to develop baseline fuel economy projec- 
tions for vehicles which have not yet been tested, 
adjusting for differences in relevant vehicle char- 
acteristics. DN-055: DX-152. Many of the 
manufacturers objected to the use of this equa- 
tion, but none offered a method before the is- 
suance of the NPRM which the agency could 
demonstrate to be superior to the one it had de- 
veloped. 

Since the issuance of the NPRM, some of the 
manufacturers have begun testing prototype 1979 
model year vehicles in the 6,001-8,500 pound 
G^'WK class and have submitted their test re- 
sults to XHTSA. This data would clearly be, 
the best evidence of the actual fuel economy rat- 



ings these vehicles will achieve in 1979, assuming 
that this early testing of development vehicles 
accurately reflects the fuel economy ratings those 
vehicles will achieve in final testing for that year. 
However, this may well not be the case, given 
that major improvements in fuel economy typ- 
ically occur between early development testing 
and final emission certification and fuel economy 
testing. DN-259 (GM). The use of the regres- 
sion equation would take this phenomenon into 
account, in that extrapolations and interpola- 
tion are made from final test data, not from 
early development vehicles. For this reason, 
GM, which concluded that the agency was 
"not too far off" in its baseline assessment, 
recommended that the agency wait until the 1979 
certification data become available, and then mod- 
ifj' the projected baseline where necessar\'. DN- 
056, p. 77. Ford, on the other hand, claims that 
development data for its 1978 vehicles closely 
approximated final certification values. DN-067, 
.\pp. IV, Ex. A, p. 2. Ford's conclusion, how- 
ever, relates to a model year in which emission 
standards were carried over from several prior 
years, by which time calibrations would be ex- 
pected to more closely approach full optimiz- 
tion. This is not the case for the 1979 model 
year, when new emission standards and several 
test procedure amendments will apply for the 
first time to these light trucks. Therefore, Ford's 
1978 experience is not a valid indicator for 1979. 

Despite Ford's protests that the agency's 
methodology is inaccurate in projecting its fuel 
economy for 1980-81 and that its test data 
should be used instead to develop a baseline, 
XHTSA cannot conclude that Ford's procedure 
is superior. In fact, the agency has taken Ford's 
pre-1979 data and attempted to reconcile it with 
NHTSA's projections for Ford, and has con- 
cluded that the results yielded by the two pro- 
cedures can be fully reconciled (in teniis of 
projecting the same level of average fuel economy 
for the light truck fleet). See RSP-S. 

Only in the cases of G^I and IH has the agency 
been unable to reconcile completely the baseline 
information submitted by the manufacturers with 
XHTSA's projex:tion. In these two cases, 
XHTSA has based its fuel economy projections 
on those manufacturers' supplied baselines. In 
the case of IH, the discrepancy is likely due to 



PART 523— PRE 21 



the difference in engine efficiency between that 
company's engines and those of the other manu- 
facturers (see section III.c.3 of this notice). In 
all other cases, the a<rency has used its orijiinallj" 
projected baseline as set forth in the NPRM, 
with minor adjustments discussed in the RSPS-S. 

C. METHODS FOR I5IPR0VING FUEL ECONOMY 

The proposed standards were based on the use 
of technology whicli is either currently being 
used on some vehicles or which is under develop- 
ment with commercial use planned by at least 
some manufacturers in the 1980-81 time frame. 
The technological changes are, in general, minor, 
evolutionary changes which individually pro- 
duce small benefits, but which when taken 
together can add up to a substantial fuel econ- 
omy improvement. Although the manufacturers 
generally agreed with XHTSA as to which 
methods for improving fuel economy are feasible 
for the 1980-81 model years (cf. bX-067, p. 4 
(Ford)), there was not general agreement as to 
the magnitude of the fuel economy benefit achieve- 
able through the use of each item or the extent 
to wliich the items could be used given the 
leadtime remaining until the 1980 and 1981 model 
years. The manufacturers' specific objections and 
NHTSA's response are set forth in the sections 
immediately following. 

1. Weight reduction. The agency projected 
weight reductions ranging from approximately 
69 pounds to over 600 pounds for portions of 
the individual manufacturer's fleets, averaging 
nearly 400 pounds per vehicle by 1981, compared 
to a i977 base. 42 F.R. 63189. Between 200 and 
300 pounds of this weight reduction was due to 
the use of aluminum, plastics, and high strength 
steel in certain specified light trucks, as substi- 
tutes for current materials. The remainder of 
the weight reduction was due to the introduction 
of new, more efficiently designed truck models 
which were either planned or being considered 
by certain manufacturers. Under current fuel 
economy test procedures, the benefit of this weight 
reduction would be realized only to the extent 
the reduction is great enough to place a particular 
vehicle in a lower "inertia weight class." Be- 
ginning with the 1980 model year, the width 
of these inertia weight class bands will generally 
be halved, thereby providing a greater incentive 



for manufacturers to reduce the weight of their 
vehicles. However, tlie new "test weight" class 
clianges may result in some vehicles being tested 
at liigher simulated weights than under the old 
procedure, and other vehicles being tested at 
lower weights. DN-096, p. 11 (GM). It appears 
that the manufacturers have carefully targeted 
the weights of their current vehicles to take 
maximum advantage of the current inertia weight 
classes, so that the test procedure change will re- 
sult in a trend toward lower measured fuel econ- 
omy. This anomaly was taken into account in 
the methodology used to develop the proposed 
standards. 

The agency projected the introduction of new, 
redesigned light trucks only where the manufac- 
turers indicated, in response to a special order 
(DX-OlO) issued under section 505(b)(1) of 
the Act, that a new model was either planned 
by the manufacturer or at a development stage 
where introduction was judged feasible by 
NHTSA in the 1980-81 period. This conserva- 
tive approach to new model introduction was 
taken by the agency despite the fact that addi- 
tional new models would be expected for much 
of the domestic light truck fleet in the 1980-81 
time frame if historical vehicle redesign cycles 
were followed (DX-001-02, Att. 1, p. 1 (Ford)), 
and despite the fact that the manufacturers have 
been on notice since December 1975 that they 
would be required to make maximum feasible 
improvements in their light trucks beginning 
with tlie 1979 model year, at least for their trucks 
in the 0-6,000 pound G\nYR range. See section 
502(b) of the Act. However, none of the manu- 
facturers apparently plan to offer a new truck 
model in the 1980-81 time which is designed to 
acliieve maximum feasible weight reduction. 

Some of the manufacturers have projected 
feasible weight reductions of a magnitude very 
close to those projected by NHTSA. See, e.g., 
DN-097-A, p. 6 (IH): I)-010-02, p. 8 (AM). 
Many of the manufacturers' projections of weight 
reduction potential for 1980 and 1981 have in- 
creased significantly during the course of the 
rulemaking, indicating that leadtime may still not 
limit this potential to currently planned weight 
levels as claimed by the manufacturers. DN-001- 
06, p. 7 (IH) ; DX-120, App. D, p. 2 (Chrysler) ; 
DX-001-01, p. 26 (GM 50 to 100 pounds for 



PART 523— PRE 22 



1980) and DN-096, p. 11 (160 pounds). Ford's 
weight reduction projections have also varied 
considerabl}', and have become increasing:ly pes- 
simistic. For example, Ford's projected average 
inertia weip;ht for 1979 model year 2-wheel drive 
lijllit trucks increased 123 pounds in five months, 
and the similar 1980 figure increased by nearlj' 
300 pounds, between Ford's responses to 
XHTSA's August 10 special order (DN-010-02, 
App. F) and its comments on the NPKM (DN- 
067, App. IV, Ex. J, p. 2). See also DN-149 
Volume II, Addendum II, p. 10, where Ford cites 
the "evolutionary" nature of its product plan- 
ning in explaining how its projected average test 
weight increased as much as 188 pounds over 5 
montlis. Part of these changes is due to changes 
in fuel economy test procedures, according to 
Ford. Ford now claims tliat its new, liglitweight 
pickup truck, which will be introduced in the 
1980 model year and will have a lower test weight 
than the current pickup truck by 263-396 pounds, 
will result in only a 1 percent fleet-wide fuel 
economy benefit. Id. p. 1. 

In order to obtain independent verification of 
the weight reduction achievable through material 
substitution, the agency issued special orders to 
various aluminum, steel, and plastics suppliers. 
DN-018. These companies indicated that weight 
reductions in excess of those projected by 
XHTSA will be technologically feasible in the 
early 1980's, in some cases as much as 900 pounds 
total. See, e.g., DN-018-44 (Kaiser Aluminum 
Co.) and DX-018-60 (ALCOA). 

The agency concluded on the basis of all this 
information that although the ultimate weight 
reduction potential for current light trucks is 
greater than that initially projected by X'^HTSA. 
reductions feasible in the near term (particularly 
the 1980 model year) are more limited. Further, 
it appears that in most cases, the weight reduc- 
tions projected by the manufacturers differed 
from XHTSA"s projections priniarly due to dis- 
crepancies in estimated baseline inertia weights 
and in the effect of the inclusion of optional 
equipment on test vehicles. With respect to the 
latter points, XHTSA has deferred to the man- 
facturers' presumably better knowledge of their 
current light truck fleets. The agency has also 
not projected the redesign of some vehicle com- 
ponents when a complete vehicle redesign is 



planned by the manufacturer in 1982 or 1983. 
Therefore, NHTSA has generally adopted man- 
ufacturer' projected weight reduction plans in 
the standard-setting analysis. However, NHSTA 
has projected, based on statements by GM, that 
GM could offer a redesigned pickup truck for 
the 1981 model year (as a mid-model year entry) 
resulting in an additional fleet average 250 
pounds weight reduction for 2-wheel drive ve- 
hicles in that model year. NHTSA has retained 
its initial weight reduction projection for 
Chrysler, in the absence of any information wliich 
indicates that that projection is not feasible. 
NHTSA has made relatively minor upward ad- 
justments to Ford's 1981 2-wheel drive weight 
reduction projection, and adopted Ford's other 
projections. However, NHTSA has been un- 
able to completely reconcile all of Ford's various 
weight reduction projections, and remains skep- 
tical, in view of the substantial weight reduction 
potential, that Ford's 4-year program will result 
in only the relatively small weight reduction 
benefit it apparently projects for its new pickup 
truck line. 

2. Aerodynamic improvements. The proposed 
fuel economy standards were based on improve- 
ments in vehicle aerodynamic characteristics only 
where a manufacturer planned to introduce a 
new vehicle. In those cases, a 4 percent fuel 
economy improvement was projected. 42 F.R. 
63189. Information submitted by the manufac- 
turers indicates that the agency's projections in 
this area were pessimistic. On the basis of Ford's 
planned redesign of its pickup trucks for 1980, 
it appears that fuel economy can be improved 
up to .5 to 6 percent through reductions in ve- 
hicle frontal area and aerodynamic drag coeffi- 
cient. Some of the manufacturers indicated that 
aerodynamic improvements could be achieved 
without undertaking a complete vehicle redesign, 
through minor body modifications such as the 
addition of air dams and the use of smaller 
mirrors. DX^-001-01, p. 48, DN-096, App. B, p. 
27 (GM); DX-120, App. G (Chrysler). There- 
fore the agency adopted the fuel economy im- 
provement achieved for Ford's new pickup truck, 
and projects a fuel economy improvement of 2.3 
percent for GM and approximately 1 percent for 
Chrysler in the 1980 and 1981 model years for 
minor aerodynamic improvements. (See RSP- 



PART .523— PRE 23 



S.) No improvements are projected for tlie other 
manufactui-ers. 

3. Engine efficiency improvements. In the 
NPRM, the agency projected that engine effi- 
ciency improvements on the order of 8 percent 
were feasible for all manufacturers other than 
AM, with AM capable of an improvement of 
11 percent because of its currently less efficient 
engines. 42 F.R. 63190. Among the methods for 
obtaining this improvement are improved fuel 
metering, redesigned combustion chambers, in- 
creased expansion ratio and compression ratio, 
reduced internal friction, intake system and valve 
timing optimization, electronic spark advance, 
and improved exhaust gas recirculation. The 
percent fuel economy improvements projected 
for each manufacturer were based on responses 
to a detailed technical questionnaire (DN-001) 
sent to each manufacturer, and in particular a 
detailed response by Chrysler Corp. (DN-001- 
05). Subsequent engine mapping studies of typi- 
cal light truck engines support the agency's 
original projections. Chrysler indicated efficiency 
improvements in the areas listed above vcould 
result in improvements at least of the magnitude 
projected in the NPRM. Improvements of this 
magnitude were also projected by IH (DN-001- 
06, p. 24) and were in fact experienced in the 
past when engines were optimized. DN-149, Add. 
2, sect. II. 

However, at the .January 16-17 public hearing, 
Chrysler indicated that it could not support en- 
gine efficiency imjirovements of the magnitude 
which NHTSA concluded Chi-ysler had projected 
as being feasible for 1980 in its questionnaire 
response. Several reasons were given by Chrysler 
at the hearing for this apparent change of posi- 
tion, including that the Chrysler questionnaire 
response information was merely "a gleam in the 
eyes of the engineers" and did not have "the 
highest level of corporate approval." DN-056, 
pp. 370-1. Subsequently, Chrysler advanced 
another theory for the apparent discrepancy be- 
tween their questionnaire response and their 
position at the public hearing, i.e., that it mis- 
interpreted certain language in the questionnaire. 
Chrysler argues that, in their interpretation, 
technology is "applied" not when it is used on 
production vehicles as NHTSA intended that 



term in its questionnaire to be interpreted, but 
when technology advances one stage in the re- 
search and development process. DN-120, App. 
Q, p. 7. In effect, Chrysler now argues that not 
all of the technology in question will be available 
for the 1980 or 1981 model years. Chrysler also 
reduced some of its prior projections of expected 
fuel economy improvements attributable to 
technology. 

Subsequent information submitted by the other 
manufacturers indicated that much of the tech- 
nology projected to be used in the NPRM was 
either not feasible for 1980 or 1981, already be- 
ing used and thus not a means available for 
future improvement, or part of the advanced 
emission control technology which would permit 
the attainment of more stringent 1979 emission 
standards with minimum reduction in fuel 
economy, but would produce no net fuel economy 
benefit." DN-067, App. IV, Ex. A, p. 2 (Ford). 
GM indicated that no improvement in fuel 
economy is expected from the use of electronic 
engine controls, since mechanical systems can be 
(and to some extent already have been) optimized 
to provide similar results. DN-146-A, pp. 47- 
.53. An analysis by the Department's Transpor- 
tation Systems Center refutes this claim. DN- 
283. 

Several items of technology (other than im- 
proved exhaust gas recirculation or optimized 
engine calibrations) will be available for engine 
efficiency improvements. GM indicates that it 
will be making certain minor carburetor improve- 
ments for 1980. DN-096, p. 11. In 1979, Ford 
will be implementing certain engine efficiency 
improvements, such as increased compression 
ratio, for all light trucks with G^IVRs between 
6,001 and 8.500 pounds. DN-G67, App. IV, Ex. 
A, p. 2. This benefit is accounted for by the 
use of the agency's regression equation, since 
trucks in the 0-6,000 pound GVWR category 
already have these improvements and those were 
extrapolated for the 6,001-8,500 pound GVWR 
trucks. However, two Ford engine families have 
not yet been optimized through combustion 
chamber revisions, but could be for 1980. Id. 
at p. 4. Ford also states that it will begin using 
some electronic engine controls beginning with 
the 1978 model year, but has no plan to use these 
controls on trucks until 1981, and then only in 



PART 523— PRE 24 



California. Id. at 13-14. NHTSA sees no reason 
why these electronics could not be more widely 
applied in lifjht trucks by Ford, especially since 
Chrj'sler ma}' begin usin<r some of these electronic 
controls as early as 1980 in trucks. DN-120, 
App. J. Chrysler also plans improved intake 
manifolds for two of its engines for 1980. Id. 
AM indicates that improvements of up to 5.5 
percent are feasible (DN-098, p. 1) and stated 
at the hearing that improvements up to 8 pei'cent 
might be feasible. DN-056. p. 468. IH originally 
projected substantial fuel economy improvements 
for the use of electronics, heat inlet charge, and 
combustion chamber and intake manifold re- 
design (the latter for the 1979 model year). 
DN-001-06, p. 24. IH's later submissions were 
less optimistic on this point. The potential for 
engine efficiency improvements by IH is high- 
lighted by data submitted by that company (Id. 
App. G) which indicate that its four cylinder 
engines obtain the same or even slightly worse 
fuel economy than its V-8, about 13 mpg. The 
agency's analysis indicates that the IH V-8 en- 
gine too could be improved since it obtains about 
1 mpg less than a comparable engine from 
Chrysler, Ford, or GM. 

The agency concludes that fuel economy im- 
provements up to the levels originally proposed 
are technologically feasible, but probably cannot 
be fully implemented in the 1980-81 period, be- 
cause of competing demands (due to stringent 
emission standards) from passenger automobiles. 
Rather, the agency projects that manufacturers 
will be able to optimize emission control systems 
during this period to eliminate any fuel economy 
penalty resulting from changes in emission stand- 
ards. In the case of GM and Chrysler, more 
extensive improvements are already planned, thus 
avoiding the leadtime problem. Therefore, the 
agency has incorporated those companies' projec- 
tions of a net 2.4 percent (1.4 percent for 4- 
wheel drive light trucks) fuel economy improve- 
ment for Chrj'sler in 1981 and 1.2 percent for 
GM in 1980, beyond the optimization of the emis- 
sion system. For the other manufacturers, no 
net improvement is projected (beyond emission 
control system optimization). 

4. Engine accessory efficiency improvements. 
The agency originally projected that accessory 



efficienc}' and accessory drive improvements 
amounting to 2 percent could be achieved. 42 
F.R. 63189. The achievability of a 2-percent fuel 
economy improvement through the use of im- 
proved accessory drives was not generally chal- 
lenged by the manufacturers. See, e.g., DN-001- 
05, Table 4 (Chrysler); DN-067, App. IV, Ex. 
E (Ford). However, questions were raised as 
to whether the leadtime is sufficient to imple- 
ment these improvements by the 1980-81 model 
years. Id., Ford. The agency agrees that lead- 
time may not be adequate to implement new 
accessory drives by 1981, unless already planned. 
A number of accessory efficiency improvements 
appear feasible for the 1980-81 period, however, 
such as improved water pumps and power steer- 
ing pumps, reduced alternator loads, installing 
viscous fan clutches, the use of flex fans, and the 
optimization of accessory drive ratios. See, e.g., 
DN-Oge. App. B, p. 27 (GM). These efficiency 
improvements are projected by NHTSA to obtain 
a fuel economy improvement of approximately 
1 percent by 1981. 

5. Diesel engines. None of the manufacturers 
took major exception to the agency's projections 
with respect to the use of diesel engines. The 
agency's position on this matter was that until 
the unknown potentially adverse health effects 
associated with widespread use of diesel engines 
are better quantified, the maximum feasible use 
of these engines will not be projected. The 
agency took the posture of acknowledging the 
existence of any plans on the part of manufac- 
turers to use diesels but did not base standards 
on further dieselization beyond that currently 
planned. 

Citizens for Clean Air argues that the agency 
should not rely on the projected use of diesel 
engines to any extent until the issue of adverse 
health affects is resolved. DN-056, p. 563. Con- 
versely, the Public Interest Campaign argued 
that the agency lacks authority to base fuel 
economy standards on less than maximum feasible 
use of diesels. DN-160, p. 6. That organization 
argues that it is for EPA, not NHTSA, to deter- 
mine whether any health problems are associated 
with the use of diesel engine-s, and if a problem 
does exist, to set an appropriate emission stand- 
ard. 



PART 523— PRE 25 



The agency recognizes the danger in basing 
administrative standards on extra-statutory con- 
siderations. See, e.g., Union Electric Company v. 
Train, 427 U.S. 246, 257 (1976). However, 
NHTSA feels that there is at least a possibility 
that EPA may determine that certain currently 
unregulated emissions from diesel powered ve- 
hicles must be regulated, and that control of these 
emissions to the required level may either be 
impossible or may be achievable only with a fuel 
economy penalty so substantial that the diesel 
engine offers no net fuel economy benefit. 
NHTSA, EPA, and DOE are jointly studying 
these issues. 

NHTSA deems it inappropriate to encourage 
the manufacturers to make investments in tool- 
ing for diesel engines when the use of those en- 
gines may not be tolerated in the future. There- 
fore, the final fuel economy standards for 1980-81 
will not be based on any projected use of diesel 
engines, even when they are currently offered 
or planned. This will permit reduction of any 
current manufacturer plans to offer diesels if a 
health problem is found. This should not be 
viewed as a determination by the agency that 
unavoidable adverse health effects would result 
from widespread dieselization. 

6. Variable displacement engine technology. 
NHTSA projected limited use of variable or dual 
displacement engine technology (based on the 
Eaton valve selector system) for the 1980 and 
1981 model years. This technology would per- 
mit engines to operate on a portion of their 
cylinders during light load operating modes such 
as idle and cruising at constant speed. 

The agency projected that a 10 percent fuel 
economy benefit would be achievable by vehicles 
using this technology. DN-056, p. 419 (Eaton) ; 
DN-001-05, Table TV (Chrysler); DN-001-06, 
p. 24 (IH). Ford indicated plans to use this 
technology as early as the 1978 model year (DN- 
001-02, Att. 14, p. 2) and IH stated that use was 
expected by the 1981 model year (IH, id). 

Since the issuance of the NPRM, the prospects 
for use of this technology have apparently dete- 
riorated considerably. Ford planned to use this 
system on its 300 CID, six cylinder engine, de- 
spite warnings from the system's developer that 



that particular engine was the worst possible 
candidate for dual displacement. DN-056, p. 406 
(Eaton). As Eaton had warned, rough running 
and lack of reserve power made the system 
unworkable in the six cylinder engine, resulting 
in the termination of that particular program. 
DN-067, Supp. App. IV, Ex. C (Ford). Ford 
now plans to implement the technology first on 
eight cylinder passenger cars, despite the fact that 
any drivability problems associated with the 
technology' would be more likely tolerated by 
truck owners than by passenger car owners. Id. 
GM (DN-096, App. B, p. 30) and Chrysler (DN- 
120, App. F.) have also experienced a variety 
of problems with the technology, although GM 
still targets usage of variable displacement en- 
gines for the 1981 model year (DN-146-A, p. 
143). 

In view of the uncertain future of this par- 
ticular item of technology, NHTSA is not basing 
the 1980-81 fuel economy standards on the pro- 
jected use of variable displacement engine tech- 
nology. Rather, it is recognized that technical 
problems remain to be solved, and if those 
problems can be solved, the use of variable dis- 
placement engines will provide the manufacturers 
with some degree of flexibility in meeting the 
standards. 

7. Turhochargers. The agency did not base its 
proposed standards on the projected use of tur- 
bochargers. Turbochargers, when used with 
spark ignition engines, do not directly improve 
fuel economy, but rather increase engine horse- 
power, thereby permitting the substitution of 
smaller displacement engines in a given appli- 
cation. AVhen used with diesel engines, turbo- 
chargers apparently result in additional benefits, 
including direct improvements in engine fuel 
efficiency and reduced particulate emissions. 
(DN-146-A, p. 143). The reasons for not bas- 
ing the proposed standards on the use of turbo- 
chargers were primarily that in order to take 
optimal advantage of turbocharging, shifts in 
small engine production capacity would lie neces- 
sary, and the smaller engines should be initially 
designed with turbocharging in mind. See 42 
F.R. 63190. Leadtime was judged insufficient to 
accomplish this. 



PART 523— PRE 26 



Altlion<rh the a<rency's projected 10 percent fuel 
economy benefit from turbochartringf was sup- 
ported by participants in the rulemaking pro- 
ceeding:, so were the reasons supporting the need 
for substantial leadtime for any high production 
volume turbocharging program. DX-067, App. 
IV, Ex. D (Ford), D\-056, p. 715 (Schwitzer) ; 
DN-096, p. 32 (G-M— with respect to leadtime 
issue). Therefore, the agency is not basing the 
1980-81 fuel economy standards on the projected 
use of turbochargers. in conjunction with smaller 
displacement engines. However, at least one 
manufacturer apparently plans to use a limited 
number of turbochargers on light trucks in the 
1980-81 time frame, and it is possible that others 
will as well. Therefore. turlx)chargers, along 
with variable displacement and diesel engines, are 
options that may be available to at least some 
of the manufacturers to provide the flexibility 
of additional methods for meeting the fuel 
economy standards. 

8. Automatic transmission improvements. The 
agencj' projected that a 3.5 percent fuel economy 
improvement could be achieved for the portion 
of the fleet which uses automatic transmissions 
through the addition of lockup clutches to those 
transmissions. In addition, based on the indi- 
cated plans of Ford, it was projected that limited 
use of that manufacturers integral overdrive 
automatic transmission could occur as early as 
the 1980 model year, producing a 10 percent bene- 
fit where applied. The 3.5 percent benefit from 
the use of the loclaip clutch was based primarily 
on information from ChrA'sler. DN-001-05. 
Table IV. GM and Ford also supported the 
magnitude of that improvement. DX-096, App. 
B. p. 23 (GM) ; DX-06T. App. IV, Ex. G (Ford). 

An additional area of automatic transmission 
improvement is minor transmission efficiency im- 
provements through the use of larger torque con- 
verters. Ford attributes a 0.5 percent fuel 
economy increase to' these improvements (id.) 
and GM projects 2 percent, although that benefit 
is not fully additive to the 3.5 percent benefit for 
the use of the lockup clutch. 

By the time of the January lfi-17 public hear- 
ing, some of the manufacturers had reduced their 
preproposal projections of planned usage and 



expected fuel economy benefit from the various 
automatic transmission improvements. Ford in- 
dicated that no integral overdrive transmissions 
would be available for 1980 model year light 
trucks, since it claimed that all those transmis- 
sions would be necessary for passenger car appli- 
cation. DN-067, App". IV, Ex. G, p. 2. No 
detailed information to support this claim was 
provided. Chrysler, which had originally 
claimed that the benefit associated with lockup 
clutch is 3.5 percent, and had raised that estimate 
on one occasion, subsequently claimed that the 
benefits were reduced to 3 percent, because of a 
reported need to mitigate drivability problems. 
DX-120. App. B, p. 1. Ford also claimed that 
it is unreasonable to expect it to implement the 
lockup clutch for 1980 and 1981. given that it is 
in the process of implementing the integral over- 
drive transmission, albeit over an extended period 
of years. Id., App. G, p. 2. With regard to 
the latter point, it should be noted that the other 
companies are also developing advanced trans- 
missions similar to the Ford integral overdrive, 
but are planning on implementing the lookup 
clutch as an interim measure. 

The agency concludes that by implementing 
lockup clutches, minor transmission efficiency im- 
provements, and advanced transmissions like the 
integral overdrive to the maximum feasible ex- 
tent, fuel economy improvements of 3.5 percent 
for the automatic transmission portion of the 
fleets of GJH and Chrysler in 1980, and of AM 
and IH in 1981, are feasible. In the case of Ford, 
a transmission efficiency improvement of 0.5 per- 
cent is projected for 1980. For 1981, the agency 
has adopted Ford's projection that its FIOD 
transmission will be available for approximately 
18 percent of its light trucks. However, NHTSA 
finds no basis for concluding that the fuel 
economy benefit of that transmission will be less 
than the originally projected 10 percent, in the 
absence of any tests by Ford. In addition, 
XHTi^A projects that Ford could offer a lockup 
clutch or other equivalent improvement on the 
remainder of its automatic transmission-equipped 
light trucks, in the absence of any any plan by 
Ford to make a complete switch to FIODs in 
the foreseeable future. 



PART 523— PRE 27 



9. Improved manual transmissions. The 
agency projected the substitution of overdrive or 
wide ratio manual transmissions or manual trans- 
missions with additional driven gears for cur- 
rent (primarily 3-speed) manual transmissions 
beginning with the 1980 model year. These trans- 
missions have generally been available as options 
at extra cost on passenger automobiles for several 
years. A 5 percent fuel economy benefit was 
projected for these transmissions. GM supported 
this figure (DN-096, App. B, p. 24). Chrysler 
projected a 4 percent improvement (DN-120, 
App. L, p. 5), and Ford foimd the 5 percent 
figure to be at the upper end of the expected 
range. DN-067, App. IV, Ex. G. However, 
objections were raised as to the extent of the 
projected usage of these transmissions. 

Beginning with the 1981 model year, GM ap- 
parently plans to make these more fuel efficient 
transmissions standard equipment on their light 
trucks. DN-146-A, p. 126. With GM talcing this 
action, the other manufacturers would likely fol- 
low suit for competitive reasons, to the extent 
production capacity permits. Indications are 
that, at least by the 1981 model year, additional 
production capacity for improved manual trans- 
missions will be available for Ford and Chrysler. 
DN-067, App. IV, Ex. G, p. 8 (Ford— additional 
capacity available for 1981) ; DN-056, p. 345 
(Chrysler — current constraint on increased usage 
is marketing, not production capacity, and in- 
creased marketing efforts will be undertaken in 
the future). With respect to AM and HI, trans- 
missions are supplier items, so that marketability 
is likely to be the only possible major constraint 
to the change to improved manual transmissions. 
Therefore, the agency has adopted the manufac- 
turers' projections for the usage levels of these 
improved transmissions in 1980, and has revised 
upward by a moderate amount the projections 
of the companies with respect to the 1981 usage, 
where feasible. See RSP-S. The initially pro- 
jected 5 percent fuel economy benefit per affected 
vehicle was retained from the NPRM. 

10. Improved Ji.-wheel drive transfer cases. 
Another item of technology which was not in- 
cluded in the projections on which the proposed 
standards were based is the use of "part-time" 
4-wheel drive, where "full-time" 4-wheel drive 
transfer cases are currently used. These new 



transfer cases, which permit reduction of fric- 
tional losses by minimizing the number of trans- 
fer case components which are moving in the 
2-wheel drive mode, should result in fuel economy 
improvements of 4 to 8 percent for these 4-wheel 
drive light trucks which currently use full-time 
4-wheel drive. DN-184, Table B-la (GM) ; 
DN-120, Att. B, p. 27 (Chrysler). Part of AM's 
and Ford's 4-wheel drive fleet also uses full-time 
4-wheel drive currently, and NHTSA concludes 
that both could use this new transfer case. There- 
fore, fuel economy improvements projections 
have been included in the analysis for the final 
standards. 

11. Improved crankcase, rear axle, and trans- 
mission lubricants. The agency projected fuel 
economy improvements of 2 percent for 1980 and 
6 percent for 1981 through the use of a variety 
of improved lubricants. The principal lubricants 
expected to be available to achieve these benefits 
are lower viscosity real axle lubricants (1 per- 
cent benefit) and friction modified motor oils 
such as those currently offered by Exxon and 
Arco in the aftermarket (5 percent benefit). 

The vehicle manufacturers raised three major 
objections to the agency's projections in this area. 
First, it was argued that on the basis of the ve- 
hicle manufacturers' tests of these improved lu- 
bricants, the fuel economy benefits attributed to 
the lubricants were overstated. Second, the 
manufacturers noted that EPA approval of some 
of these lubricants (friction modified or synthetic 
base motor oils) would be necassary to use these 
lubricants in fuel economy testing, and that 
approval had previously been withheld. Third, 
it was argued that extensive durability tests of 
these lubricants would be necessary before they 
could be used as factory fill lubricants and recom- 
mended for )ise thereafter. 

AVith respect to the first point, Exxon and Arco 
both supported the agency's ,5 percent projection 
for friction modified motor oils. DN-0.')6, p. 1R7 
(F;xxon — 51/2 percent on the EPA test) ; Id., p. 
516 (Arco — 4.85 percent, based on road tests of 
147 vehicles). Arco indicated that an additional 
2 percent benefit (or a total of 7 percent for 
motor oils alone) was expected in less tlian 2 
years, when that company expects to offer a lower 
viscosity version of its friction modified oil. Id., 
p. 534. Many other oil companies will be offer- 



PART 523— PRE 28 



ing lubricants of this general type in the near 
future. DN-113. GM projected fuel economy 
improvements of 3-6 percent from improved 
crankcase and axle lubricants (up to 4 percent 
with friction modified crankcase oils) but claimed 
that these improvements would not be feasible 
until the 1982 model year or later. DN-096, pp. 
10-11. 

GM, Ford, and Chrysler all submitted data 
showing lesser fuel economy improvements than 
shown by the oil companies. GM submitted data 
on the fuel economy benefit associated with low 
\-iscosity engine lubricants (DN-184. p. 2), which 
showed a lower fuel economy benefit than would 
be expected through the use of friction modified 
oils. DX-056, p. 516 (Arco). GM also sub- 
mitted data on tests (generally 2-3 tests each) 
of various unspecified lubricants compared to an 
unspecified base oil, and found fuel economy 
improvements of up to 3.8 percent. Chrj'sler 
conducted a series of test on both the Arco and 
Exxon lubricants, and found fuel economy im- 
provements of up to approximately 3 percent. 
DX-120, Att. B, p. 21. Most of these tests were 
conducted with reference to a 10W30 base oil 
(the Arco and Exxon lubricants are both 10W40) , 
thereby possibly reducing the benefit which would 
be achieved had viscosity been held constant in 
the testing. Further, there appears to be no rea- 
son why 10W30 versions of these improved lubri- 
cants could not be made available for use by the 
manufacturers by 1980, which should result in 
fuel economy improvements in line with the 
Exxon and Arco data, which compared 10W40 
oils. DN-0.56, p. 536, DN-185 (Arco). In addi- 
tion, Chrysler's tests were conducted at low 
mileage, and showed a trend toward greater fuel 
economy improvement at higher mileage. Exxon 
indicated that the fuel economy benefit achieved 
by their lubricant would appear primarily after 
2,000 miles, beyond the mileage at which 
Chrysler's tests were conducted. DX-056, p. 171. 
Taking these factors into account, Chrysler's 
data are not inconsistent with that of the oil 
companies. 

Ford's test program for friction modified 
lubricants also showed low fuel economy im- 
provements. DN-067. App. IV., Ex. K, p. 9. 
Tests were conducted on the Exxon oil and 
another blend (not Arco), and the base oil for 



comparison purposes was 10W30, creating the 
same problem of comparability as the Chrysler 
tests. The Ford data consisted of tripicate tests 
of four vehicles using each type of lubricant. 

With respect to improved rear axle and trans- 
mission lubricants, tests of Mobil's synthetic axle 
lubricant support, an improvement of 1 percent. 
DN-109, DN-056, p. 695-6. GM projects an 
improvement of 0.7 percent for lower viscosity 
axle lubricants. DX-096, App. B, p. 8. Ford's 
tests of lower viscosity axle lubricants showed 
no fuel economy benefit, and it has not tested 
friction modified axle lubricants yet. DN-149, 
App. IV, Ex. K, p. 13. Ford claims that SAE 
papers on the subject indicate that no fuel 
economy improvement, rather than a 1 percent 
improvement, would show up on the current fuel 
economy test from the use of friction modified 
axle lubricants, but NHTSA finds nothing in 
the cited paper to support Ford's reading. 
Chrysler also found "no significant improvement" 
when switching to lower viscosity axle lubricant. 
DX-120, App. H, p. 3. 

Ford projects that manual transmission ve- 
hicles will begin using lower viscosity automatic 
transmission fluid as a lubricant. DN-149, App. 
IV, Ex. K, p. 17. NHTSA's analysis indicates 
that such a change could, because of the similarity 
to using improved axle lubricants, result in a fuel 
economy improvement of 1 percent by 1981. 

As to the second point, EPA has not previously 
approved the use of the improved crankcase 
lubricants in fuel economy and emission testing 
because of its valid concern that the lubricants 
may not be used in actual service by consumers. 
If the lubricants were used in EPA testing but 
not in actual service, the EPA tests results woidd 
be unrepresentative of actual driving experience, 
overstating actual fuel economy and thereby pos- 
sibly misleading consumers. EPA is also con- 
cerned that some lubricant additives may reduce 
emission control system durability. Therefore, 
EPA has indicated that it would not approve the 
use of friction modified and synthetic engine 
lubricants until it received reasonable assurances 
that the lubricants would likely be used by con- 
sumers. Possible methods for demonstrating this 
likelihood are competitive retail prices, wide- 
spread commercial availability, and the existence 



PART 523— PRE 29 



of a generic definition for these lubricants so that 
the vehicle manufacturers can identify them and 
encourage their use. 0^-120, App. H, Att. B. 

EPA has recently taken the position that fric- 
tion modified and synthetic engine lubricants 
could be used in durability testing for 1980 model 
year emission certification. DN-195. Further, 
it appears very likely that remaining impedi- 
ments to that use of these lubricants in fuel 
economy testing will be removed in time to per- 
mit full use of these lubricants as factory-fill for 
the 1980 model year. One previous impediment, 
the lack of a procedure to define these oils gen- 
erically, is expected to be removed by December 
of this year, when the American Society for Test- 
ing Materials (ASTM) is scheduled to complete 
development of such a procedure. DN-056, p. 
175. 

The general availability of these lubricants in 
time for the 1980 model year, another require- 
ment for their permitted use in fuel economy 
testing, also seems assured, given the expanding 
activity of the oil companies in this field. DN- 
056, p. 523, DN-112, 113. Current selling prices 
of many of these lubricants appear to be ade- 
quate to satisfy EPA's concern that it be likely 
that consumers will in fact use these lubricants. 
These latter two requirements are necessary to 
provide an assurance that the lubricants will be 
used as replacement lubricants, not just for fuel 
economy testing. Therefore, it is quite likely 
that these lubricants can be used by the 1980 
model year in fuel economy testing. See also 
DN-160, p. 7 (Public Interest Campaign). How- 
ever, neither this agency nor EPA can predict 
with complete certainty when approval of those 
lubricants will become possible. 

With respect to the vehicle manufacturers' 
third objection, the agency concludes that the 
manufacturers should be able to complete all 
necessary durability testing of these friction 
modified lubricants by the 1980 model year. DN- 
096, p. 10 (GM).. Judging from the data sub- 
mitted by the manufacturers, the agency believes 
that testing of these lubricants has already 
progressed significantly. The oil companies 
which produce these improved lubricants have 
already conducted substantial testing of the lubri- 
cants before they were first marketed. DN-056, 



p. 175-6 (Exxon). In fact, the oil companies 
argue that one of the major advantages of using 
the friction modified lubricants is that engine 
wear is reduced. Id., p. 535 (Arco). Since these 
oils also meet American Petroleum Institute 
Criteria for SE grade lubricants, engine dur- 
ability should be improved. The oil companies 
found no reason to expect any adverse impacts 
from switching to these oils, which are of the 
same viscosity, come from the same base stock, 
and have most of the same additives as current 
factory fill oils. Id., p. 175 (Exxon). In fact, 
it appeal's that a less extensive durability pro- 
gram would be necessary in switching to friction 
modified oils than in switching to a lower vis- 
cosity oil, which GM indicates could be done by 
1980. See also id., p. 296 (Ford). Ford ap- 
parently was willing to use these lubricants as 
early as the 1978 model year. DX-149, App. 
IV, Ex. K, p. 2. In fact, GM's oil durability test 
requirements which were provided to NHTSA 
recently refer only to tests for lower viscosity 
engine oils, not friction modified oils. DN-184, 
p. 4. 

Therefore, the agency projects that a total fuel 
economy benefit of at least 3 percent is achievable 
through the use of improved lubricants (crank- 
case and axle). To assure ample time for the 
approval of these lubricants for use in vehicle 
fuel economy testing by EPA, NHTSA will not 
project their use prior to the 1981 model year. 
It should be noted that it is possible that, by that 
model year, further improvements in crankcase 
lubricants may result in additional fuel economy 
improvements, considering the agency's conserva- 
tive projection of the currently achievable bene- 
fit. Also, the use of improved manual transmis- 
sion lubricants may expand in 1981. This could 
provide a further safety margin for the manu- 
facturers. However, since the eventual approval 
of these lubricants is beyond the agency's con- 
trol, alternative fuel economy standards for the 
1981 model year will be established. In the un- 
likely event that EPA has not yet approved the 
use of these improved lubricants by January 1, 
1980, a lower fuel economy standard, excluding 
the projected use of the lubricants, will be in 
effect. If, as the agency expects, this approval 
is given by then, a higher (by 0.5 mpg) standard 
will apply. NHTSA expects that the manufac- 



PART 523— PRE 30 



turers will still have a strong incentive to seek 
the expeditious approval of those lubricants, in 
order to use the lubricants in passenger auto- 
mobiles as well as for light trucks. 

12. Reduced rolling resistance. The agency 
projected that a fuel economy improvement of 
4.5 percent would be acliieveable by the 1980 
model year through the use of current or ad- 
vanced radial tires on all light trucks, rather 
than the bias ply and bias belted tires currently 
used. Tliis improvement was based on measured 
differences (using the tire companies' own test 
procedures) in tire rolling resistance between 
radial and bias tires and the known relationship 
between rolling resistance and fuel economy for 
passenger automobiles. See, e.g., DN-018-28, 
Table I (Goodyear): DX-018-49. p. 1 (Fire- 
stone); DN-OlS-ie, p. 2 (Uniroyal). Further 
significant reductions in tire rolling resistance 
through increased tire inflation pressure and 
other means were anticipated for the near future. 
DX-018-28. p. 4 (Goodyear) ; DN-018-46, p. 2 
(Uniroyal) : DX-018-i9. p. 2 (Firestone). Good- 
year indicated that there is a possibility that 
their new elliptic tire, for which they project a 
fuel economy benefit of up to 6 percent compared 
to current radial tires, could be available for 
use on a portion of those light trucks which 
use passenger car type tires (primarily those un- 
der 6.400 pounds (G"\n^Tl) by the 1980 model 
year. D^M4.=): DN-146-A. p". 106-7. GM in- 
dicated that the same benefits achievable with the 
elliptic tire would be achievable with more con- 
ventional tires bv increasing inflation pressure. 
Id. 

After the issuance of the NPRM. it became 
increasingly clear that the fuel economy benefits 
a.ssociated solely with a switch to current radial 
tires would not equal 5 percent. A number of 
participants in the proceeding indicated that 
radial tires were inappropriate for use on off- 
road vehicles, due to the greater vulnerability of 
radial tires to sidewa'll damage. DX-056. p. 190 
(Goodyear) : DX-097, p. .5 (IH) ; DX-098, p. 1 
(AM): DX-096, p. 9 (GM). In addition, prob- 
lems exist in measuring the radial-bias tire fuel 
economy differential on current EPA fuel econ- 
omy test procedures. Current test procedures 
apparently accurately simulate the characteristics 
of radial tires but overestimate the fuel economy 



characteristics of bias tires. DN-067, App. TV, 
Ex. F (Ford) ; DX-018-19 (Firestone) ; DN-145 
(Goodyear). The light tire manufacturers gen- 
erally projected fuel economj^ improvements in 
tlie range of 2 percent for the portion of their 
fleets which use passenger car type tires, assuming 
that the optional "coast-down" test procedure 
could be used to measure the fuel economy benefit 
of switching to radial tires. DX-120, App. C 
(Chrysler— 21/2 percent) : DN-906, p. 9 (GM— 
11/2 percent) ; I)X-067, App. IV, Ex. F (Ford) : 
DX-088, p. 4 (Toyota). 

In view of this new information submitted 
after the issuance of the XPRM, the agency has 
re-analyzed the potential for fuel economy im- 
provements from switching to radial tires. On 
the basis of this detailed analysis of the tires 
currently used by the manufacturers on light 
trucks and current recommended inflation pres- 
sures, the agency now projects that fuel economy 
improvements ranging from 1.6 to 2..5 percent 
can be achieved for approximately 80 percent of 
the light truck fleet (excluding off-road applica- 
tions) by switching to radial tires and by making 
minor inflation pressure increases. See RSP-S. 
It should be noted that to the extent new tire 
concepts such as the elliptic tire become available 
for use in light trucks in the 1980-81 period, 
the manufacturers will have additional flexibility 
in meeting the fuel economy standards. It is 
possible that the agency's originally projected 
fuel economy benefit will be achieved with these 
advanced tire concepts. 

13. Engine displacement or drive ratio reduc- 
tions. The agency projected that reductions in 
average engine displacement or drive ratios (gear 
ratios or axle ratios) or both could be imple- 
mented by the 1980 model year for each manu- 
facturer. Specifically, it was projected that the 
product of engine displacement multiplied by 
total drivetrain ratio (CID x X/V) could be 
reduced 10 percent from 1977 levels for each 
manufacturer, in addition to reductions made in 
conjunction with weight reduction, to maintain 
constant vehicle performance. Drive ratio 
changes can be accomplished with relativelj' 
short lead time. Such reductions were projected 
to result in fuel economy improvements of ap- 
proximately 4 percent. Reductions in engine 
displacement or drive ratio tend to diminish a 



PART 523— PRE 31 



vehicle's acceleration and grade-climbing ability, 
thereby limiting the extent to which tliese re- 
ductions can be implemented without impairing 
the vehicle's functional capabilities. 

It should be noted that these reductions are 
projections of reductions in average engine dis- 
placement or drivetrain ratio, and not every 
vehicle would be expected to achieve such a re- 
duction. For example, vehicles incorporating 
overdrive transmissions would not be expected 
to fully implement such reductions and other 
vehicles would be expected to achieve reductions 
greater than 10 percent. The 10 percent figure 
was based on an analysis by the Department of 
Transportation wliich indicated that much 
larger reductions, i.e., as high as 30 percent, could 
be achieved without violating any of the mini- 
mum perfoiTnance criteria specified by the manu- 
facturers. DN-036, App. B. The agency used a 
10 percent reduction instead of the 30 percent 
reduction projected in the document based on 
the agency's judgment that major reductions in 
acceleration performance occurring over a rela- 
tively short, period of time might result in con- 
sumer dissatisfaction and possibly reduced sales, 
notwithstanding the ability of the vehicles to 
satisfy minimum performance requirements. 

The manufacturers and many other partici- 
pants in the ralemaking expressed concern as to 
whether the proposed standards could be achieved 
while still maintaining acceptable levels of light 
truck performance and utility. However, no 
participant advanced any specific vehicle per- 
fonnance criteria different from those previously 
analyzed by the agency, and no specific informa- 
tion was presented which contradicted the orig- 
inal conclusion as to the feasibility of a 10 
percent reduction in engine displacement or 
drivetrain ratio or both. In fact, it appears that 
all of the manufacturers except Chrysler and IH 
have presented infonnation which indicates that 
the 10 percent reduction is feasible and in some 
cases currently planned. DN-096, App. B, p. 25 
(GM) ; DN-149, App. IV, Ex. I (Ford) ; DN- 
010-02, p. 10 (AM). Chi-y-sler is apparently in- 
vestigating certain specific approaches for reduc- 
ing engine displacement or drive ratio. DN-120, 
Att. B, p. 25. Further, it appears that even with 
a 10 percent reduction in CID x N/V, Chrysler's 
average performance level for a given test weight 



would be higher than those of many of the other 
manufacturers. See RSP-S. 

An example of the difference between the argu- 
ments made at the January 16-17 hearing or in 
written comments and the actual manufacturer 
plans and capabilities relating to this issue is 
the position taken by Ford. At various times in 
the rulemaking. Ford stated on one hand that 
it could not reduce average engine displacement 
because of production capacity constraints (DN- 
149, App. IV, Ex. I, p. 2) and because such re- 
ductions might be fatal to their truck's func- 
tional capacities, but on the other hand that 
reductions in CID alone of more than 10 per- 
cent were planned. DN-010-02, App. F; DN- 
149, App. IV, Ex. I, p. 1. Ford similarly raised 
numerous objections t« NHTSA's projections of 
feasible reductions in N/V ratio (DN-149, App. 
IV, Ex. 1), despite the fact that significant re- 
ductions of that parameter are also planned by 
Ford. DN-149, App. IV, Ex. I, p. 1. Thus, 
Ford objected strenuously to the feasibility of 
NHTSA's projections of CID x N/V reductions, 
despite the fact that it plans to make even 
greater reductions than those projected by the 
agency. With respect to the issue of whether 
these reductions will improve fuel economy by 
the amount projected by NHTSA, Ford's own 
test data for 1979 light trucks supports improve- 
ments of at least the level projected. See RSP-S. 

Therefore, the reductions in engine displace- 
ment or drivetrain ratio projected initially by 
the agency have been retained, except where the 
manufacturers' plans exceed those projections. 
In the latter cases, the final projections were 
based on tlie manufacturers' plans. However, the 
agency projects a more limited 7 percent reduc- 
tion for Chrysler in 1980. The agency projects 
that Chrysler may need an additional year to 
phase-in maximum reductions, given its limited 
current plans to make these changes and its past 
reliance on high performance levels as a market- 
ing teclinique. 

14. Mix shifts. For the 1980-81 model years, 
the agency projected negligible shifts in the 1977 
product mix of the manufacturers beyond those 
projected by the manufacturers, or, looked at 
another way. the agency jtrojected that the man- 
ufacturers would take such actions as necessary 
to assure that product sales would not shift to- 



PART 523— PRE 32 



ward tlie higher test weight classes. The one 
exception to this statement is that the agency 
projected the sale of a limited number of "mini- 
vans" and other new truck concepts by General 
Motors in the 1980-81 model years. GM now 
indicates that sales of the mini-van, at least in 
a light truck configiiration, are not planned. 
DX-O06, p. 51-3. Because of the limited variety 
of market class offerings currently available in 
the light truck market, as compared to passenger 
automobiles, mix .shifts could occur in the future 
primarily through new product offerings. New 
offerings which are not currently planned are not 
feasible in the limited time left before the 1980 
and 1981 model years. 

However, the agency projects that one limited 
type of mix shift is feasible for the 1980 model 
year. Because of recent changes in the fuel 
economy and emissions test procedures by EPA, 
optional equipment must be included on test ve- 
hicles if it is projected to be sold on 33 percent 
of the vehicles in a particular "car line." Under 
the previous test procedures, optional equipment 
was included only if it was projected to be sold 
on 33 percent of the vehicles in a particular 
"engine family." An "engine family" is, gen- 
erally, a combination of basic engine and emis- 
sion control systems, independent of the vehicle 
in which the engine is placed. This test proce- 
dure revision would be expected to have a random 
impact on the manufacturers, with no trend to- 
ward either higher or lower test weights. How- 
ever, it appears that the manufacturei-s have 
carefully targeted the availability of optional 
equipment to take maximum advantage of the 
option rule (e.g., restricting options on some 
engine families to 30 percent usage), so that the 
change to the "car line" test will initially in- 
crease average test weights. However, given time 
between the test procedure change and the 1980 
model year, there is no reason to believe that 
the manufacturers will not be able to reallocate 
their option offerings among engine families 
(e.g., restricted option sales to 30 percent for 
some car lines which currently have option sales 
levels of just 33 percent) to offset the effect of 
the nile change. In fact, it appears that such 
efforts are already planned. DN-146-A, p. 26-8. 
No net reduction in the total number of options 



sold for all light trucks need result from such 
actions. 

d. ECONOMY PRACTICABILITY 

Relatively few objections were raised with 
respect to the costs attributed by the agency to 
various technological improvements. None of 
the comments suggested that the cost of imple- 
menting the technologies upon which the pro- 
posed standards were based would exceed the 
bounds of economic practicability. However, the 
manufacturers and others did argue that com- 
pliance with standards at the levels of the pro- 
posal, with to those commenters implied taking 
steps beyond implementing the projected tech- 
nologies, would be economically impracticable. 
With respect to the latter issue, the difference 
between the agencj''s position and that of the 
manufacturers resulted from differences in the 
projected fuel economy benefit achievable with 
the various technological improvements and the 
extent to which these improvements could be 
implemented by a particular model year, and 
from the consequent assumption by the manu- 
facturers that compliance measures beyond those 
specified in the proposal would be necessary. 
These differences have been discussed in section 
III.c above, and the final standards are estab- 
lished at levels closer to what the manufacturers 
projected than the proposed standards. 

The increase in capital expenditures necessary 
for individual manufacturers to comply with the 
1980 and 1981 standards is not large, either 
absolutely or relatively. Almost no increase in 
capital investment will be neces,sary for the manu- 
facturers to achieve the standards instead of their 
lower recommended levels of average fuel econ- 
omy. Typically, the difference between the 
standards and the recommended levels consisted 
of low capital measures such as performance re- 
ductions and lubricants. The capital investment 
necessary to make up this difference is not the 
full investment attributable to the standard. A 
portion, but not all, of the capital investment 
necessary to achieve the manufacturer's recom- 
mended levels is also attributable to the stand- 
ards. The rea-son for not attributing all of this 
latter investment to the standards is that the 
agency anticipates that the need to remain com- 
petitive with other manufacturers and the mar- 



PART 523— PRE 33 



ketability of increased fuel economy would have 
led the manufacturers to voluntarily make fuel 
economy improvements even if there were no fuel 
economy standards. The leg;islative record for 
the fuel economy provisions of the Act is replete 
with statements supporting the reasonableness of 
anticipating: that result. Even if the entire 
capital investment for raisin<r average fuel econ- 
omy to the level of the standards were attributed 
to the standards, the increase in business-as- 
usual capital expenditures would be negligible, on 
the order of 3 percent. That small figure may 
be an overstatement because it is based on the 
pessimistic assumption that none of the capital 
investments could be offset through normal busi- 
ness expenditures. 

With respect to the issue of the specific types 
of analysis which should be imdertaken in a 
determination of economic practicability, GM 
and Ford argued that NHTSA should consider 
the impact of fuel economy standards on the 
economy as a whole, not just the industry itself. 
DN-067, App. V, p. 1 (Ford) ; DN-096, App. 
D, p. 1, DN-056, p. 93 (GM). NHTSA recog- 
nizes the need to consider such factors as the 
impacts of standards on employment in the auto 
industry and its suppliers, inflation, vehicle sales, 
and the trade balance, and the agency did so in 
its impact assessment. DN-067, App. V, p. 1 
(Ford). These matters are, of course, inter- 
related, in that product changes which are not 
accepted by some consumers will reduce industr\' 
sales, at least in the short term, with resulting 
deceases in employment and industry profitabil- 
ity. However, the agency believes that limited 
visible or otherwise preceptible product changes 
that may be necessai-y to comply with these 
standards will be accepted by consumers. 

Several of the manufacturers urged that the 
economic practicability of the fuel economy 
standards be determined in the context of the 
other Federal vehicle standards which the manu- 
facturers must meet. The assumption of these 
commenters appeared to be that it would be. suf- 
ficient in making such an analysis simply to know 
the expenditures necessitated by the various 
Federal vehicle regulatory programs. The short- 
comings of such an analysis are obvious. A 
definitive analysis of the sort urged by these 
commenters implies the availability of extensive 



information regarding all of the manufacturers' 
resources and demands on those resources. None 
of these commenters provided or offered to pro- 
vide such information. 

Ford argues that greater emphasis should be 
placed on cost-benefit analysis in determining 
economic practicability. Id. Ford states that 
greater reliance should be placed on the language 
of section 325(a) of title III of the Act, relat- 
ing to appliance energy efficiency and not auto- 
motive fuel efficiency. That section clearly en- 
visions substantial reliance on cost-benefit analysis 
in setting standards. However, section 325 also 
goes to great lengths to differentiate between the 
concepts of "feasibility" and whether standards 
are "economically justified," with cost-benefit 
analysis being tied to the latter concept only. 
Since the language in section 502 of the Act is 
expressed in terms of "feasibility" and "practi- 
cability," the agency remains of the view that 
Congress intended that these terms be interpreted 
consistently in different sections of the same 
statute. See 42 F.R. 33537. Nevertheless, the 
agency notes that the benefits of the technology 
projected by NHTSA to be used in meeting the 
1980-81 fuel economy standards would meet a 
cost-benefit test. This result could change de- 
pending on the retail price increases which the 
various manufacturers elect to impose, and de- 
pending on whether the manufacturers elect to 
purchase technology from outside sources or 
produce it themselves. See FIA. 

No slowdown in the growth of the light truck 
market should occur as a result of these stand- 
ards. Of all the projected methods for improv- 
ing fuel economy, only engine displacement or 
drive ratio reductions and the use of diesel en- 
gines have the potential to be viewed by con- 
sumers as having adverse impacts on the utility 
of light trucks despite their contributions to in- 
creased fuel economy. In both cases, NHTSA 
projected changes no more stringent than those 
already contemplated by the manufacturers. The 
unplanned production of new, downsized trucks 
is not projected due to leadtime constraints and 
is not necessary to meet the standards promul- 
gated herein. The other projected changes will 
hardly be preceived by vehicle owners, except 
with respect to slight initial vehicle price changes 
and significant fuel economy improvements. 



PART 523— PRE 34 



The possibility of adverse sales and employ- 
ment impacts resultinp: from retail price increases 
can be roughly projected through the use of 
economic models. Since the retail price increases 
associated with this rule are expected to be small, 
absolutely as well as compared to the fuel sav- 
ings, compliance with these standards should not 
result in any significant sales or employment 
effects. See Final Impact Assessment. Similarly, 
the vehicle and price changes should not lead t« 
retention by owners of older vehicles instead of 
buying the new more efficient ones. 

GM argues that the fuel savings associated 
with the proposed standards are small in com- 
parison to the risks associated with compliance 
with those standards. DN-096, App. D. GM's 
comment about risks clearly applies to standards 
set at the proposed levels. Since the final stand- 
ards have been reduced as a result of new infor- 
mation received since the proposal and are near 
the levels recommended by the manufacturers, 
they presumably do not present the risks men- 
tioned by GM. Because of changes in the base- 
line pursuant to manufacturers' comments, 
however, the savings are similar to those for the 
proposed standards. Those methods of improv- 
ing fuel economy which involve possible market- 
ing risk, such as engine displacement reductions, 
have been established at levels equal to GM's 
own projections. With respect to the magnitude 
of the potential energy savings associated with 
these standards, the light truck fuel economy 
standards should not be considered in a vacuum, 
but rather must be viewed in the context of the 
entire national energy conservation program. If 
each element of that program were to be cut back 
or eliminated on the grounds that the savings 
achievable with that element is small in com- 
parison to the total energA' problem, then the 
overall program could not be successful. 

Ford objected to the exclusion of the cost for 
their new pickup truck line in the agency's 
economic analysis. This cost was not included 
in the agency's Preliminary Economic Impact 
Assessment because the new truck series was not 
an extraordinary- cost associated with these fuel 
economy standards. The introduction of these 
new models is consistent with Ford's historic re- 
design cycle, and would have occurred at approxi- 
mately the planned time regardless of the 



existence, of standards. DN-001-02, Att. 1, p. 1. 
Ford began work on the new truck prior to the 
enactment of the Act, and Ford stated that the 
fuel economy standards were only one factor 
considered in the design. DN-056, p. 225. 
Further, it is apparent from the other factors 
specified by Ford that the standards were not 
the only reason for making fuel economy im- 
provements. The fact that the fuel economy 
standards were one of the concerns in planning 
that truck does not necessarily imply that addi- 
tional costs were as.sociated with that concern. 
Ford submitted no information which would in- 
dicate that the cost of introducing a new light 
tnick for general mai'keting, competitive, and 
compliance purposes is any greater than the cost 
of introducing a new light truck for marketing 
and competitive purposes alone. Therefore, no 
costs associated with this new light truck, other 
than those for the technological improvements 
discussed in this notice (e.g., improved lubricants, 
radial tires, etc.) have been attributed to this 
rulemaking. 

Ford also argued that the cost of electronic 
engine controls and three-way catalysts is so high 
that their use is unjustifiable for light trucks in 
1980-81. DN-067, App. IV, Ex. A, p. 15. The 
agency has never suggested that thre«-way catal- 
ysts be used on all light trucks for 1980-81. With 
respect to the use of electronic engine controls 
for spark advance, air-to-fuel ratio, and exhaust 
gas recirculation rate. Ford submmited only "re- 
tail price equivalents" for the cost of those items, 
which includes an unspecified mark-up. Infor- 
mation currently available to the agency from 
suppliers of electronic components indicates that 
the cost of these items on a high volume, per 
miit basis would not justifv' retail price increases 
to the level specified by" Ford ($128). It is 
impossible for the agency to analyze Ford's ob- 
jection as to the cost for variable displacement 
engine technology, which Ford also provides in 
terms of a retail price equivalent. Id, App. V, 
p. 13. Ford's objection to the agency's projected 
cost for engine displacement and/or drive ratio 
reductions (Id, App. V, p. 12) is based on Ford's 
assumption that it would have to introduce a new 
line of engines beyond its current plans. That 
assumption is unfounded. See section III.c.13 
of this notice. Ford's objection to the cost of 



PAET 523— PEE 35 



weight reduction is also based on its assumption 
that product changes beyond those projected by 
NHTSA would be necessary to achieve the fuel 
economy benefit specified by the agency. As 
discussed in section III.c.l of this notice, the 
agency's revised weight reduction projection for 
Ford is based on the agency's best estimate of 
the benefit achievable from Ford's planned new 
truck line and other actions such as option re- 
strictions which have no associated cost, 

Chrysler (DN-120, App. N) and IH (DN- 
097-A, App. J) objected to the costs used by 
the agency for weight reduction by material 
substitution. Although Chrysler provided no 
basis for its estimate of a 3.5(t per pound cost 
penalty for weight reduction by material sub- 
stitution, and IH failed to provide any detailed 
information (such as breakdowns of material 
and fabrication costs) in support of its claimed 
costs for various component substitutions, from 
other information it appears that the agency's 
cost projections for some components were too 
low. Alcoa (DN-018-60) provided detailed cost 
information for aluminum components, and other 
material suppliers provided similar information 
for various plastic and high strength steel items. 
Therefore, the cost estimate for weight reduc- 
tion by material substitution has been adjusted 
in accordance with this newly supplied informa- 
tion. See Final Impact Assessment. 

Chrysler also objected to the cost associated 
with diesel engines. Since the agency has not 
projected any use of diesel engines, the cost of 
dieselization is not attributable to these fuel 
economy standards, and is therefore not included 
in the agency's analysis. However, Chrv'slcr cor- 
rectly points out that the agency's cost estimate 
for diesel engines was based on the cost resulting 
from conversion of a current engine production 
facility to produce a dieselized version of an 
existing engine, and high volume sales of that 
engine. Docket FE-76-01-GR-003, Document 3, 
App. B. This scenario accurately reflects the 
dieselization program of only GM among the 
domestic manufacturers, at the present time. 
If a manufacturer were to purchase engines from 
an outside source, the cost of dieselization to the 
consumer would be much higher. DN-120, App. 
N. Chrysler and IH both plan to continue pur- 



chasing diesel engines, at least for the near 
future. 

Perhaps the most frequent comment in the 
entire rulemaking involved the concern expressed 
by the light truck industry, Congressmen, com- 
munity groups, and others that the proposed 
standards would result in substantial unemploy- 
ment. Based on the post-proposal statements 
of the manufacturers, many commenters assumed 
that the agency had given insufficient considera- 
tion to the possible employment impacts of its 
proposal. This is manifestly not so. The agency 
sought, based on the information available to it, 
to propose standards that could be met without 
any significant employment impact. The anal- 
ysis of that information indicated that no un- 
planned major design clianges, new engines or 
new models would be necessary to meet the pro- 
posed standards. 

In their post-proposal comments, the light 
truck manufacturers submitted new information 
which contradicted or clarified previous submis- 
sions or which filled previous infoniiation gaps. 
The new infonnation showed that some tech- 
nology would not yield the degree of fuel econ- 
omy improvement indicated by the pre-proposal 
information and that some technology could not 
be used to the extent previously indicated by 
agency analysis. Some manufacturers noted that 
the technological projections underlying the pro- 
posal would not yield the proposed levels of 
average fuel economy and imputed to the agency 
an intent to require the manufacturers to make 
technological changes not feasible within the 
available leadtime or to make drastic reductions 
in product offerings. Neither the proposal nor 
its supporting documents were based on such an 
intent. 

As noted above, the agency sought to propose 
standards that would not adversely affect em- 
ployment. The agency continues to embrace that 
goal. 

With respect to the issue raised by Ford and 
others, NHTSA has made adjustments to the 
proposed fuel economy standards in light of in- 
formation submitted after the issuance of the 
NPRM in December. On the basis of all this 
information, NHTSA concludes that the fuel 
economy standards established herein can be met 



PART 523— PRE 36 



without elimination of any current product offer- 
injrs, and without any necessar\' loss in employ- 
ment. By niakinp; the various relatively minor 
technolofrical improvements discussed in this 
notice, XHTSA projects that each manufacturer 
can achieve the final standards. The impact 
on employment of making these vehicle improve- 
ments may well be positive. DX-160. pp. 16-18 
(Public Interest Campaign), and FIA. The final 
standards are set at levels significantly lower 
than the proposed standards, due to the post- 
proposal submissions, comments, and data from 
a wide range of participants in the proceeding. 
Such re^^sions are entirely consistent with the 
informal rulemaking process, in which an agency 
makes a proposal based on the best information 
it then has available, solicits additional informa- 
tion from all interested individuals and organi- 
zations, and then establishes a final rule based 
on all available information, including changes 
based on comments on the proposal. See 5 U.S.C. 
553, "International Harvester v. Ruckleshaus." 
478 F. 2d 615, 632. 

Chrysler responded to the proposal by announc- 
ing that it was delaying the conversion of its 
Jefferson Avenue assembly plant in Detroit from 
the production of full-size passenger cars to van 
production. DN-120, p. 13. Chrysler stated 
further that issuance of final standards at the 
proposed level would lead to a closing of the 
plant permanently. Subsequently, the company 
indicated that the plant would definitely remain 
open if the standards were established at a much 
lower level specified by Chrysler. However. 
Chrysler declined to state the maximum level of 
standards which could be set without that com- 
pany's deciding to close the plant. Therefore, 
the agency issued a special order under sec- 
tion 505(b) of the Act to Chrysler to obtain 
information related to Chrysler's statements, e.g., 
information about current and future van sales 
and production capacity. DX-191. Chrysler 
did not respond, or provided incomplete answers 
to several crucial questions and requests for docu- 
ments in the special order, particularly those 
items bearing on the relationship of the proposed 
standards and decision to delay the conversion. 
DX-191. 191-A. 

The final standards established by this notice 
should not cause or pose the possibility of plant 



closings. They reflect the agency's consideration 
of all of the post-proposal information submitted 
by the manufacturers regarding the fuel economy 
improvements to be gained from particular tech- 
nologies and the extent to which those technol- 
ogies can be implemented in 1980-81. Significant 
changes have been made to the agency's original 
projections concerning these matters. There is 
ample leadtime for modest departures required 
from the manufacturer's plans for 1980 and the 
only slightly less modest extra effort necessary 
for 1981. 

e. THE EFFECT OF OTHER FEDERAL MOTOR 
XTHICLE STANDARDS 

A number of changes in Federal emission 
standards and associated test procedures will 
occur between 1977 (the base year for our cal- 
culations) and 1980-81. The major change is 
the tightening of the light truck emission stand- 
ards from 2 grams per mile of hydrocarbons 
(HC), 20 grams per mile of carbonmonoxide 
(CO), and 3.1 grams per mile of oxides of ni- 
trogen (\0x) for 0-6,000 pound G\T\"R trucks 
only to levels of 1.7/18/2.3. respectively, for 1979 
model year light trucks with GVWEs up to 
8.500 pounds. The manufacturers claimed fuel 
economy penalties ranging from 3 to 5 percent 
largely associated with the change in the XOx 
standard, with changes in the other two stand- 
ards apparently having much less effect. In the 
1979 fuel economy standard rulemaking, the 
same issue arose, and the agency took the position 
that none of the manufacturers had demonstrated 
the existence of an unavoidable penalty. 42 FR 
13813-4. Only Chrysler and Ford have since 
submitted additional data or arguments to sup- 
port their claims of penalties. 

Chrysler's argument for a 3 percent penalty is 
based upon a comparison of 1978 data from the 
CalifoiTiia light tnick fleet subject to standards 
of 0.9/17/2.0 and the "49-state" fleet subject to 
Federal standards. XHTSA finds a number of 
serious eiTors in this comparison. First, the 
California 1978 standards are more stringent than 
the 1979 Federal standards. Chrysler assumes 
that the differences between these two sets of 
standards can be accounted for by making the 
assumption that the fuel economy penalty re- 
sulting from more stringent emission standards 



PART 523— PRE 37 



is linearly related to the change in the NOx 
standard. Clii-ysler offers no basis for this as- 
sumed relationship, and NHTSA knows of no 
reason why such a relationship should exist, par- 
ticularly when more advanced control technology 
may be available for compliance with the more 
stringent standard. Second, Chrysler compared 
these standards based on 1978 technology, while 
NHTSA methodology requires a comparison 
based on 1977 versus 1980-81 emission control 
technology. Therefore, under Chrysler's pro- 
cedure, tlie fuel economy of vehicles subject to 
Federal emission standards has the advantage 
of one additional year of technology develop- 
ment, while the fuel economy of California ve- 
hicles is understated because it does not reflect, 
as it should, the technological development that 
will occur between 1977 and 1980-81. Thus, 
the measured penalty was inappropriately in- 
creased. In this rulemaking. NHTSA must de- 
termine the fuel economy achievable in 1980-81 
based on the technology available and the emis- 
sion standards applicable in those years, com- 
pared to the fuel economy that was achievable 
in model year 1977 with 1977 emission standards 
and control technology. Thus, Chrysler's anal- 
ysis failed to account for advances in technology 
between 1977 and 1980-81. Third, and perhaps 
most significant. California experience has in 
general not been a valid indicator of 49-state 
experience with respect to emission standards 
effects. The reason for the past unrepresenta- 
tiveness of California experience is that manu- 
facturere cannot devote the same level of effort 
toward optimizing emission control systems and 
engine calibrations to minimize the effect of more 
stringent emission standards when those stand- 
ards are applicable only to a small minority 
(perhaps 10 percent) of their fleet as it does 
when they are applicable to 90 percent of their 
fleet. Therefore, lower fuel economy would be 
expected if a particular set of (California) emis- 
sions standards applied to a minority of the fleet, 
and compliance was achieved by modifying a 
portion of the fleet which was originally designed 
to meet less stringent (Federal) standards. 
Therefore, the agency is unpersuaded by 
Chrysler's argument. 

Ford attempted to demonstrate the existence 
of an emission standard-related fuel economy 



penalty by two methods. First, it used an ana- 
lytical method, called "engine mapping", which 
is designed to .show the theoretical relationship 
between fuel economy and NOx emissions at 
various emission standard levels. This approach 
showed that a penalty of approximately 1 per- 
cent is theoretically achievable through optimal 
use of proposed technology. DN-067, App. VI, 
p. 2. Second, Ford submitted test data from 16 
development vehicles which were calibrated to 
meet 1979 standards, and compared those results 
to 1978 emission certification data for identical 
vehicles (in terms of engine, transmission, inertia 
weight, and axle ratio). Under that procedure, 
a fuel economy penalty of 4 percent was meas- 
ured. Id., p. 5. NHTSA has a number of diffi- 
culties in accepting the results of either of these 
procedures and applying them to this rulemaking. 

First, Ford's tests were conducted on develop- 
ment vehicles at initial calibration settings. Sub- 
stantial improvements are feasible after the first 
testing of development vehicles, on a continuing 
basis through 1980 and 1981. Ford's analysis 
ignores this effect by comparing 1979 develop- 
ment data against data for 1978 vehicles, which 
have been subject to the same emission standards 
for several years, with ample opportunity to 
more closely approach full optimization. Ford 
denies the existence of .such an improvement 
effect between initial development testing and 
final emission certification, but bases its argu- 
ment on its experience in the 1978 model year, 
a year in which the emission standards did not 
change, and for wjiich calibrations would be ex- 
pected to more closely approach full optimiza- 
tion. 

Second, Ford's engine mapping procedure 
does not measure the relevant fuel economy dif- 
ferential for the purposes of NHTSA projec- 
tions. Ford's procedure attempts to measure 
fuel economy when meeting 1979 emission stand- 
ards using 1979 emission control technology, and 
compares tliat value to fuel economy achievable 
using 1979 technology to meet 1977 model year 
standards. DN-149, App. VI. This procedure 
is patterned after that specified in section 502(d) 
of the Act. NHTSA, on the other hand, under 
section 502(e)(3) of the Act, must not only 
assess tlie effect of the change in emission stand- 
ards between 1977 and 1979 (and on to 1980 



PART 523— PRE 38 



and 1981, where standards will remain the same) 
luit also consider the ofTsettinsi efi'eet of differ- 
ences between the technolojjA' and calibrations 
actually used in 1977 and the technology and 
calibrations which will be available for use in 
1980-81. Thus, Ford's engine mapping analysis 
failed to consider advances in emission control 
technolofTA' between 1977 and 1979, and further 
advances achievable throufjh 1980 and 1981. In- 
stead, technoloofy and calibration optimization 
were assumed by Ford to be fixed at a particular 
level. However, improvements in emission con- 
trol technolop}- have in fact occurred in this 
1977-79 period. DX-067, App. IV, Ex. A, Att. 
1. The small magnitude of the theoretical pen- 
alty claimed by Ford (1 percent) and the fact 
that advances in technology were not considered 
in developing that penalty indicates that the ac- 
tual 1977-79 combined effect of emission stand- 
ards changes and technology advances may well 
be an improvement in fuel economy, not a loss. 

Third, it has been demonstrated that when 
passenger automobile NOx emission standards 
were made more stringent in 1977 (from 3.1 to 
2.0 gram per mile), engine efficiency improve- 
ment more than offset any adverse impacts of 
the new emission standard, when various ex- 
traneous factors affecting fuel economy were 
disaggregated. SAE paper 76079.5. EPA ex- 
pects that this historical effect should also be 
applicable in the case of comparable reductions 
in the light truck NOx emission standard. DN- 
255, pp. 1-2. 

Therefore, XHTSA reaffirms its position that 
the 1979 change in Federal emi.ssion standards 
has not been demonstrated to cause an adverse 
impact on average fuel economy for light trucks. 

Ford also argued that the agency has not ade- 
quately accounted for the effect of California 
emission standards, which are more stringent 
than Federal standards. DX-067, App. VI, p. 
9. Ford claims that the effect of these standards 
is 0.1 mpg, or less than 1 percent. As EPA 
points out. Ford's analysis is based upon a com- 
parison of 1978 California and 49-State vehicles, 
and does not accurately reflect the types of tech- 
nology which will be used in 1980-81 to comply 
with California standards. Ford indicates that 
it will be using electronic engine controls in con- 
junction with three-way catalysts to meet these 



more stringent California standards in 1981. 
I)X-149, App. IV Supp., Ex. A, p. 5. (Ford). 
In fact, Ford has already begim using this type 
of technology on its 1978 California passenger 
cars. Vehicles using this technology are pro- 
jected by Ford to achieve the same fuel economy 
as a 49-State vehicle in the same model year. 
NHTSA projects that, given current efforts to 
develop these advanced emission control systems 
for passenger car use, a sufficient number of 
tliese systems could be applied to 1980-81 model 
year California light trucks to eliminate the al- 
most negligibly small effect of the California 
standards. 

Several manufacturers have also claimed that 
EPA's recently issued advisory circular on 
changes to the transmission shift schedule for 
fuel economy and emission testing of manual 
transmission vehicles will result in a fuel econ- 
omy penalty. DX-097, p. 4 (IH) ; DN-096, 
App. B, p. "25 (GM) ; DN-067, App. VI, p. 15 
(Ford). Previously, the manufacturers have 
been permitted to shift manual transmission ve- 
hicles in fuel economy and emission testing ac- 
cording to the shift schedule specified in the 
owner's manual. According to EPA, some man- 
ufacturers have taken advantage of this provision 
by specifying shift schedules in the owner's 
manuals for certain vehicles which are not repre- 
sentative of typical driving. These new shift 
schedules have recommended shifting at ex- 
tremely low engine speeds, or in some cases skip- 
ping gears in the shift pattern, resulting in 
artificially high fuel economy and low emissions. 
DX-255, Advisory Circular Number 72, January 
19, 1978. Under the new requirements, three 
alternative shift patterns are permitted, either 
shifting at 66, 65, and 57 percent of rated engine 
speed into second, third, and fourth gears, re- 
spectively, or shifting at 15, 25, and 40 miles per 
hour into second, third, and fourth gears, respec- 
tively, or some other shift pattern which the 
manufacturer demonstrates to be representative 
of actual driving experience. Id. In the first 
two alternatives, skipping gears while shifting up 
(e.g., first directly to third or fourth) is not 
permitted. 

The manufacturers have not yet had the oppor- 
tunity to fully evaluate the effect of the change 
in the EPA test procedure on fuel economy. 



PART 523— PRE 39 



DX-149, App. YI. p. Ifi (Ford) ; DN-146-A, pp. 
127-8 (GM). Early submissions by the manu- 
facturers evaluated the impact of a requirement 
of shiftinfr at 66 percent of rated engine speed 
for all pears, not the final EPA requirement. 
DN-096, App. B. Table B-7 (GM) ; DN-067. 
App. YI, p. 16 (Ford). Therefore, there is in- 
sufficient data to justify NHTSA's making an 
adjustment to the standards now. Althoufjh the 
test procedure change was intended to have the 
effect of reducing the measured fuel economy of 
some vehicles, and make the measured fuel econ- 
omy more representative of on-the-road fuel 
economy, the manufacturers have as yet not 
quantified the magnitude of this effect. To jus- 
tify any reduction, the agency would be required 
to determine the number of test vehicles which 
were shifted in an unrepresentative manner in 
1977, the specific shift schedule permitted under 
the new requirements which would provide the 
most favorable results for individual manufac- 
turers, and the fuel economy impact for indi- 
vidual vehicles of the change from 1977 shift 
patterns to this most favorable new pattern. 
This adjustment factor would be expected to vary 
from manufacturer to manufacturer, depending 
on the extent to which unrepresentative shift 
schedules wei-e specified in 1977. Therefore, the 
agency will make no adjustment to the standards 
to account for this effect in the current rule- 
making, but will accept petitions from individual 
manufacturers which attempt to justify a reduc- 
tion in the standards because of the test proce- 
dure change. 

Ford also argued that changes in test proce- 
dures for measuring evaporative emissions from 
vehicle fuel tanks would cause a fuel economy 
penalty. This new procedure, called the SHED 
test, attempts to more accurately quantify the 
total amount of hydrocarbons which escape from 
the vehicle, other than as exhaust emissions. 
Ford's argument for a penalty of 0.08 mile per 
gallon is that the new test procedui-e will measure 
more escaped vap9rs than the old one, thus re- 
quiring the manufacturers to use more efficient 
evaporative emission control systems. These 
more efficient systems would, according to Ford, 
result in more hydrocarbon vapors being retained 
in the evaporative cannister and fed through the 



carburetor. However, Ford assumes that none of 
these vapors would be combusted and do work, 
but instead would be sent straight out the exhaust 
system. This additional hydrocarbon exhaust 
would be measured on the fviel economy test as 
fuel consumed, however, according to Ford. 
D\-149, App. VI, Ex. B. NHTSA cannot accept 
tliis analysis for two reasons. First, there is no 
reason to believe that all the extra gasoline vapors 
retained in the gas tank and sent through the 
carburetor would escape combustion. If some 
portion of this extra gasoline vapor is combusted 
and does work in moving the vehicle, then a 
benefit in measured fuel economy should result. 
Second, EPA indicates that improved evapora- 
tive emission control systems are available which 
make efficient use of the extra fuel which is re- 
tained in the cannister rather than vented to the 
atmosphere. Id. Therefore, NHTSA concludes 
that Ford has not demonstrated that a fuel econ- 
omy penalty exists due to its current evaporative 
emission control system, and that no penalty need 
exist if a more efficient design were adopted. 

f. THE NEED OF THE N.\TI0N TO CONSERVE ENERGY 

No detailed comments were received on this 
consideration in establishing the "maximum 
feasible average fuel economy level," other than 
that made by GM- and addressed in section Ill.d 
of this notice. The agency believes that the need 
of the nation to conserve energy continues to be 
very substantial. See also DX-160, p. 20 (Public 
Interest Campaign). 

g. BASIS FOK DETERMINING THE "MAXIMUM 
FEASIBLE AVERAGE FUEL ECONOMY'' LEVEL 

Many participants in the proceeding argued 
that the agency had established fuel economy 
standards at levels above those achievable by one 
or more of the manufacturers, and that such a 
procedure exceeds the agency's statutory author- 
ity. DN-097, p. 8 (IH) ; DN-096, p. 12 (GM) ; 
DN-149, App. YIII, Att. A (Ford) ; DN-120, 
p. 9 (Chrysler) ; DN-056-05 (Congressman John 
Dingell). On the other hand, the Center for 
Auto Safety argued that standards cannot be 
based on the "least capable manufacturer," citing 
supportive language in the Conference Report 
on the Act and the various provisions in the Act 
for compromise or elimination of civil penalties 



PART 523— PRE 40 



in case of a failure to meet fuel economy stand- 
ards. DX-l;i5. See also DN-160, p. 8 (Public 
Interest Campaion). 

It should be noted at the outset that the ao:ency 
did not propose standards at levels which it con- 
cluded could not be met by one or more of the 
manufacturers. Rather, the agency postulated 
certain technoloo;ical improvements, calculated 
the resultintr fuel economy for the various manu- 
facturers, and then discussed certain additional 
measures which could be undertaken by certain 
manufacturei-s to achieve the hicrher level of fuel 
economy at which the standards were set. 42 F.R. 
63103. While it is true that the a<rency discussed 
the ability of some of the manufacturers to jiay 
civil penalties in case of noncompliance, the pay- 
ment of such penalties was viewed as an alterna- 
tive (albeit an undesirable one) which some 
manufacturers nii<rht adopt rather than making 
all feasible fuel economy improvements. The 
manufacturers uniformly stated at the January 
16-17 public hearinir and in their written sub- 
missions that they would not opt for payment of 
civil penalties rather than making feasible fuel 
economy improvements, and the agency applauds 
this policy. 

As will be discussed in section V of this notice, 
the final 1980-81 fuel economy standards are es- 
tablished at levels which NHTSA projects to be 
technologically feasible and economically prac- 
ticable for all the manufacturers. Therefore, 
XHTSA need not address the comments relating 
to this issue. 

IV. Other Miscellaneous Comments 
ON THE NPRM 

AMC and Chrysler argued that fuel economy 
labeling of light tnicks in the 6001-8.500 pound 
GVWR range should not be required in the 1979 
model year, as was proposed in the NPRM. AM 
argues first that requiring the fuel economy test- 
ing necessary to develop data for labeling would 
impose an unacceptable burden on them and on 
EPA. DN-098, p. ~7. Both AM (id.) and 
Chrysler (DX-120. Att. B. p. 31) argue further 
that requiring labeling in 1979 will further im- 
pair the credibility of the fuel economy data as a 
valid representation of on-the-road driving ex- 
perience. Chrysler bases its argument on the 
fact that EPA's current labeling procedures for 



light tnicks do not distinguish between vehicles 
which might be expected to fall into different 
"car lines" (e.g., Ford F-lOO and F-200 series 
pickup trucks) since they are marketed as differ- 
ent models. Instead, EPA has in the past in- 
cluded all of a manufacturer's pickup trucks in a 
single car line, potentially creating a situation 
where a wide variety of vehicles with greatly 
different fuel economy ratings would have the 
same fuel economy rating on the labels. 

XHTSA is of the view that defining ''car line" 
in a manner more consistent with the way that 
term is used for passenger automobiles (i.e., de- 
fining vehicles marketed as different models to 
be different car lines, such as the F-lOO and 
F-200) would solve much of this difficulty. How- 
ever, to require fuel economy labeling for the 
1979 model year, this problem would have to be 
resolved almost immediately. EPA has informed 
this agency earlier this month that it may not be 
able to resolve this problem in time to make the 
amendments effective for the 1979 model year. 
Therefore, the fuel economy labeling requirement 
will not be made applicable until the 1980 model 
year. 

NHTSA concluded that the fuel economy 
labeling provision for 1979 was especially im- 
portant in part because such a requirement 
would result in the generation of fuel economy 
data for vehicles with GV~\VRs between 6,001 and 
8,500 pounds, in addition to the benefit to con- 
sumers of having this information. The Agency's 
effort to compensate for the current absence of 
that data was one of the manufacturers' primary 
objections to NHTSA's standard-setting meth- 
odology in this rulemaking. NHTSA deems it 
important to have this information as soon as 
possible to develop a fuel economy baseline based 
on test data for the light truck standards for 
model years after 1981. Therefore, NHTSA is 
requesting by this notice that each of the manu- 
facturers provide by April 15 information on the 
extent to which they will provide NHTSA with 
fuel economy data (city and highway driving 
cycle) for their 1979 6,001-8,500 pound GVWR 
light trucks, and the time by which this testing 
could be accomplished. In view of the impor- 
tance which the manufacturers understandably 
attach to baselines based on test data, the agency 
assumes that such data will be readily forthcom- 



PART 523— PRE 41 



ing from the manufacturers. To facilitate issu- 
ance of the notice of proposed rulemaking for 
1982 and thereafter, these tests should be avail- 
able by sometime this fall. Voluntary provision 
of this data by the manufacturers would obviate 
the need for NHTSA to exercise its authority 
under section 505(c) (1) of the Act to establish a 
rule which requires this testing on an expedited 
basis. Such a rule, if necessary, would likely 
require the testing by the end of this fall of the 
light truck configurations identified in 40 CFR 
600.506(c). 

NHTSA invited comment on tlie extent to and 
manner in which monetary credits could be trans- 
ferred between the 1979 and 1980 model years, 
given the change in NHTSA's light truck classi- 
fication scheme between 1979 and 1980. For 1979, 
light trucks are classified as either a single group 
or two groups, one consisting of "4-wheel drive 
general utility vehicles," and the other of "all 
other light trucks.'" For 1980, this classification 
will be changed, with 2-wheel drive and 4-wheel 
drive classes being established. However, section 
508(a)(3)(B) of the Act prohibits applying 
credits generated by light trucks in one class to 
civil penalties incurred by light trucks in a dif- 
ferent class. The Center for Auto Safety con- 
cludes that this requirement means that when the 
classification system is changed between model 
years, no carryover monetary credits can be ap- 
plied unless the revised classes included identical 
vehicles for a particular manufacturer. DX-155. 
Ford, on the other hand, argues that manufac- 
turers should not be penalized by the change in 
the classification scheme, so that credits earned 
by one class could be applied to penalties incurred 
by any other class which overlaps the first, at the 
manufacturer's option, between the 1979 and 1980 
model years. DN-149, App. VIII, Att. C. No 
other participant in the proceeding addressed the 
issue in detail. Although NHTSA believes that 
all manufacturers can meet the 1980 standards, 
this issue may be of importance to some manu- 
facturers in the 1980 model year. NHTSA 
wishes to give this issue further consideration 
and invites interested individuals and organiza- 
tions to submit further comments on the question 
to NHTSA. 

IH objected to the limited time available for 
connnent on the proposed standards. DN-097, 



p. 2. The originally specified comment period of 
45 days (42 FR 63184) was extended on a limited 
basis "for 10 days (DN-38-A, 43 FR 3600, Jan- 
uary 26, 1978), at the request of IH among others 
(DN-038), and IH took advantage of that exten- 
sion. DN-97-A. Further, the agency let it be 
known that it would consider late submissions to 
the extent practicable, given the need to issue the 
final standards as soon as possible. All comments 
received before issuance of the final rule were 
considered. DN-038-A. In fact, the agency has 
affirmatively sought out additional information 
relating to IH's capabilities to make fuel econ- 
omy improvements to its light trucks after the 
close of the extended comment period. In addi- 
tion, it appears that the comment period for the 
light truck manufacturers effectively began some 
five weeks prior to the publication of the NPRM, 
when the Department of Commerce (without 
authorization by this agency) provided copies of 
a draft NPRM to the manufacturers, which pro- 
vided the substance of the agency's proposal. 
DN-191, question 10. Therefore, IH effectively 
had much more than the 90-day comment period 
it requested. 

AM claimed that the agency violated section 
502(b) of the Act by failing to promulgate the 
1980 model year standard at least 18 months 
prior to the start of that model year. Section 
501(12) defines "model year" to be "a manufac- 
turer's annual production period (as defined by 
the EPA Administrator) which includes January 
1" of the specified calendar year. If no annual 
production period exists, then the model year 
coincides with the calendar year. Id. AM states 
that its 1980 annual production period begins in 
July, 1979, and that the "18-month rule" there- 
fore requires the issuance of the 1980 standard in 
January, 1978. 

EPA has yet to deteiinine a single model year 
for purposes of section 502(b) of the Act. In- 
deed, annual production periods appear to run 
from as early as that specified by AM to the 
beginning of a calendar year for many of the 
foreign companies. NHTSA has endeavored to 
pi-ovide approximately 18 months notice to the 
domestic manufacturers by the expeditious com- 
pletion of this rulemaking. It is the agency's 
view that issuance of these by mid-March satisfies 
all statutory requirements. 



PART 523— PRE 42 



Several of the manufacturers and other par- 
ticipants in the ruleniakinof proceedincr arjjued 
tliat tlie percentajre increase for tlie proposed 
standards over l!)7f> levels was not consistent with 
the one mile per irallon increments Conjiress es- 
tablished for passeiifrer automobile standards in 
1978-80. It should first he noted that the final 
standards have been set at levels which require 
a lesser relative improvement over 1970 levels 
than did the proposal. However, the fact that 
Con<rress in 1975. with less and much older infor- 
mation than XHTSA currently has available, set 
standards for a different type of vehicle at par- 
ticular levels has little bearing on the question of 
what is the maximum feasible averajre fuel econ- 
omy level for ligrht trucks. If major improve- 
ments in fuel economy are economically and 
technolo<rically feasible in a short time, then 
XHT.'^A is statutorily required to set standards 
at levels commensurate with those capabilities. 

Several of the commenters made the related 
sunrpestion that to require a large percentafre 
improvement in averasre fuel economy was pre- 
sumptively inappropriate. The percentage 
chanpfe in fuel economy standards is. by itself, 
an unreliable indicator of the time and effort 
necessary to meet the standards. This should be 
obvious from the fact that some substantial fuel 
economy improvements can be made quickly with 
little or no additional capital investment while 
some fairly minor improvements may take much 
longer and require significant additional invest- 
ment. Only by examining the technological 
changes underlying the differences in fuel econ- 
omy standards for different model years can any 
meaningful judgment be made about the I'eason- 
ableness and stringency of the standards. 

V. Calcflatiox of the 1980 axd 1981 
Standards 

As discussed in section Ill.b of this notice, the 
basic methodology on which the final standards 
are based is unchanged from the proposal. Re- 
visions have been made as noted above to the 
projected benefit achievable with the various 
items of technology-. '\Mien these revisions are 
jected to be capable of achieving the following 
taken into account, the manufacturers are pro- 
levels of average fuel economy for their light 
trucks: 



1980 1981 

2-WD 4-WD 2-WD 4-WD 

AM 23.6 15.1 24.1 16.2 

Chrysler 16.4 14.4 18.0 15.8 

Ford 16.6 14.6 18.7 16.3 

GM 16.8 14.1 18.7 15.7 

IH 14.1 14.0 15.2 15.3 

Nissan 24.4 25.2 

Toyo Kogj'o 32.0 33.0 

Toyota 25.8 17.5 26.6 18.4 

Volkswagen 18.0 19.5 

( 1981 projections would be reduced by 0.5 mpg if 
improved lubricants cannot be used in fuel econom.v 
testing. ) 

As can be seen from the above information, 
Chrysler has the lowest projected fuel economy 
for 2-wheel-drive light trucks, and Gil the lowest 
for 4-wheel drive. IH would be subject to a sepa- 
rate standard, as previously discussed. 

Because the agency's fuel economy projections 
for the major manufacturers fall within a rela- 
tively narrow range, and because insufficient lead- 
time exists for the manufacturers to make major 
improvements beyond those described in this no- 
tice, the agency finds it appropriate to establish 
the 1980 and 1981 standards at levels no higher 
than those projected for the manufacturer with 
the lowest fuel economy level. In view of this 
limited leadtime, the agency is making a slight 
downward adjustment to some of the levels 
projected for the "least capable" manufacturers 
to provide a safety margin for compliance and to 
create some additional flexibility for the manu- 
facturers in meeting the standards. The maxi- 
mum feasible average fuel economy levels, and 
therefore the fuel economy standards, are estab- 
lished as follows: 





2-wheel- 
driTe 


4-wheel- 
drlve 


Limited 
product line 
light truck 


1980 

1981 


16.0 

* 16.0 


14.0 
*15.5 


14.0 
*15.0 



* The 1981 model year standards are 0.5 mpg lower 
than the values .specified above if approval of improved 
lubricants for fuel economy testing is not granted by the 
EPA by January 1, 1980. 



PART 523— PRE 43 



VI. Standards for 1982 and Later 
Model Years 

As discussed in section III of this notice, the 
limited leadtime available before the 1980 model 
year and slijjhtly limited leadtime before 1981 
model year have sifrnificantly restricted the ex- 
tent to which the ajjency can project fuel econ- 
omy improvements for the manufacturers. For 
example, no completely new vehicles or enjiines 
were projected by NHTSA unless those items 
were already planned by manufacturers. There- 
fore, the ag:ency will issue in early 1979 a notice 
of proposed rulemaking to establish fuel economy 
standards for the 1982-1984 and possible 1985 
model years. The much "reater leadtime for 
these model years will, in turn, enable the ajjency 
to project major improvements in fuel economy 
beyond those set forth in this notice. 

In virtually every technology category dis- 
cussed in section III of this notice, significant 
potential exists for additional fuel economy im- 
provements. For example, the agency projected 
weight reductions of approximately 200 pounds 
for the 1980-81 model years. Information avail- 
able from material suppliers indicates that weight 
reductions of up to 900 pounds are currently 
feasible through substitution of ligliter weight 
materials. If such material substitutions were 
undertaken in conjunction with a complete vehicle 
redesign (including some downsizing), it is pos- 
sible that the average weight of light trucks 
could be reduced by a further 1,000 pounds, com- 
pared to current levels. Weight reduction of this 
magnitude could improve fuel economy by ap- 
proximately 20 percent. Domestic production of 
small pickup trucks could be begun. 

Additional lubricant improvements of as high 
as 5 percent were described above. Advanced 
tires could provide an additional 3 percent fuel 
economy improvement beyond 1981 levels. Turbo- 
charged versions of smaller displacement engines 
could maintain vehicle performance while im- 
proving fuel economy by 10 percent. It is pos- 
sible that further development work on variable 
displacement engine technology will solve current 
problems experienced by the truck manufactur- 
ers, resulting in a fuel economy improvement of 
10 percent. Widespread use of advanced auto- 
matic transmissions similar to the FIOD should 



result in a fuel economy improvement of 6.5 
percent, beyond 1981 levels. Aerodynamic im- 
j)rovements should result in fuel economy im- 
provements of at least 4 percent when current 
light trucks are redesigned in the 1982-5 period. 
A major area for potential fuel economy im- 
provement is the use of diesel engines. Diesel 
engines have traditionally been used in medium 
and heavy duty trucks, and it is reasonable to 
expect that light truck purchasers would accept 
diesels in view of the fuel economy improvement 
of at least 25 percent associated with their use. 
Turbocharged diesel engines, which have ap- 
peared on larger trucks in the past, offer even 
greater improvements, wliile reducing particulate 
emissions and improving acceleration capabilities. 
However, questions relating to the effects on 
health and potential for control of diesel emis- 
sions must be resolved before NHTSA will base 
fuel economy standards on the use of diesel en- 
gines. Use of other engine types, such as the 
Ford PROCO (programmed combustion) engine, 
may also be feasible in the 1982-85 time frame. 

VII. Impact of Standards on 
Petroleum Consumption 

The standards presented in section V of this 
notice are projected to result in the savings of 
about 8 billion gallons of gasoline over the life 
of the light trucks produced in the 1980 and 1981 
model years. Even gasoline savings of this mag- 
nitude will not eliminat* the nation's dependence 
on foreign petroleum and the associated trade 
deficit. However, these standards constitute a 
significant part of the overall energy conservation 
program whicli can gradually reduce this de- 
pendence. See Final Impact Assessment. 

The impact of our national dependence on im- 
ported petroleum has become a matter of increas- 
ing concern over the past several months. The 
national trade deficit was over $26 billion for 
1977, while the cost of imported petroleum was 
almost $45 billion in that same year. The na- 
tional cost of oil imports has been increasing at a 
rate of over 30 percent per year since 1975. Pe- 
troleum now constitutes about one-tliird of all 
imports. The impact of this large trade deficit 
on domestic inflation is substantial. Although 
the light truck standards will not solve this prob- 



PART 523— PRE 44 



km by themselves, they could reduce total pe- 
troleum imports by SI billion in 1985 and $2 
billion in 1090. XHTSA deems this a significant 
benefit for the nation, and an important step in 
attempting to reduce the overall import problem. 

VIII. Economic Impact of Standards 

The economic impact of these standards was 
evaluated. This evaluation concludes that retail 
price increases in the range of sixty dollars total 
are expected from the actions necessary to achieve 
compliance with fuel economy standards for 1980 
and 1981. This relatively small increase com- 
pares to a lifetime operating cost reduction of 
about 600 dollars per vehicle, due to the reduction 
in gasoline consimiption for these light trucks. 
It is projected by XHTSA that light truck sales 
and related employment in the light truck in- 
dustrj- will be at higher levels in 1980-Sl than 
currently exist in the absence of some unrelated 
and curren tlyunforeseen downard turn in the 
national economy. The largest factor in this 
trend toward higher sales and employment is the 
underlying increasing consumer demand for these 
vehicles. It is projected that improving the fuel 
economy of light trucks will have a small effect 
in improving sales levels, since good fuel economy 
is a desirable vehicle attribute. Slightly higher 
retail prices resulting from the fuel economy 
standards might tend to slightly offset this trend 
toward higher sales. However, the effects of 
improved fuel economy and slightly higher retail 
prices are small in comparison to the underlying 
sales trend. Therefore. XHTSA concludes that 
the manufacturers' efforts to comply with fuel 
economy standards will at worst cause no loss in 
sales or emploj'ment, and may result in slight 
gains. 



IX. E^-^^RO^•MEVTAL larPACT of the 

Standards 

The environmental impact of the standards 
was also evaluated, in accordance with section 
102 of the Xational Environmental Policy Act, 
42 U.S.C. 4332. Copies of the agency's final 
environmental impact statement are available 
from the Office of Automotive Fuel Economy, at 
the address set forth at the beginning of this 
notice. That document sets forth the basis for 
the agency's conclusion that the standards will 
result in no significant adverse impacts on the 
environment. In fact, the major environmental 
impact of the standards, reduction in petroleum 
consumption, should reduce current adverse im- 
pacts resulting from high levels of petroleum 
exploration, drilling, transportation and refining. 
One type of technology- which improves fuel 
economy but which may have adverse environ- 
mental effects is the use of diesel engines. Be- 
cause of possible adverse environmental effects 
associated with the use of diesel engines, the 
agency set standards at levels which could be 
met without the use of those engines. 

Authority : Sec. 9, Pub. L. 89-670, 80 Stat. 981 
(49 U.S.c' 1657) ; sec. 301, Pub. L. 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 lawyer principalh' 
responsible for the development of this proposed 
regulation are George L. Parker and Roger C. 
Fairchild, respectively. 

Issued on March 15, 1978. 

Joan Claybrook 
Administrator 

43 F.R. 11995-12013 
AAareh 23, 1978 



PAET 523— PRE 45-46 



PREAMBLE TO AMENDMENT TO PART 523— VEHICLE CLASSIFICATION 

(Docket No. FE 77-05; Notice 7) 



Action; Technical amendment. 

Summary: This notice amends the definition of 
the term "automobile" as it appears in the 
agency's fuel economy vehicle cla.ssification refju- 
lations. The amendment is intended to clarify 
the applicability of the light truck fuel economy 
standards for model year 1980 and tliereafter. 

Effective date: This amendment is effective 
Januan- 15, 1979. 

For further information contact: 

Francis J. Turpin, Office of Automotive Fuel 
Economy Standards, National Highway 
Traffic Safety Administration, 400 Seventh 
Street, S.W.," Washington, D.C. 20590 (202) 
472-6902). 

Supplementary information : Section 501 ( 1 ) of 
the Motor Vehicle Information and Cost Savings 
Act ("the Act"), 15 U.S.C. 2001(1), defines the 
term "automobile" for purposes of establishing 
the applicability of automotive fuel economy 
standards and other fuel economy-related require- 
ments. That definition includes vrithin the scope 
of that term any "4-wheeled vehicle propelled by 
fuel which is manufactured primarily for use on 
public streets, roads, and highways (except for 
any vehicle operated exclusively on a rail or 
rails), and which is rated at 6000 pounds gross 
vehicle weight or less." That section also au- 
thorizes the Secretary of Transportation to ex- 
pand the "automobile" categon' and thereby 
regulate additional vehicles if certain findings are 
made. These findings relate to the feasibility of 
standards for such vehicles, the energy savings 
potential associated with regulating the vehicles, 
and the usage of the vehicles. 

On March 23, 1978, in 43 FR 11995, the Na- 
tional Highway TraJSc Safety Administration 
(XHTSA) published the required findings with 



respect to certain vehicles (called "light trucks") 
with gross vehicle weight ratings between 6001 
and 8500 pounds. The vehicles in the 6001 to 
8500 pound GVWR range which were excluded 
from the expanded automobile category were a 
relatively small number of vehicles with either 
curb weights in excess of 6000 pounds or with 
frontal areas of more than 46 square feet (prin- 
cipally step-vans), or both. These vehicles were 
excluded because of design features which would 
largely preclude personal use thus making regu- 
lation as heavy duty vehicles proper (41 FR 
56316). 

The Environmental Protection Agency (EPA), 
which conducts fuel economy testing under the 
Act, has recently informed NHTSA of an error 
encountered in measuring the frontal area of 
some of the step-vans. It appears that in order 
to exclude the intended largei'-frontal area ve- 
hicles, the regulatory dividing line must be re- 
duced from 46 to 45 square feet. The number of 
vehicles affected by this change is extremely 
small in relation to the number of light trucks 
in the 6001 to 8500 pound GVWR range. There- 
fore, NHTSA is amending the appropriate regu- 
latory language to correct this error. 

Since this amendment is in the nature of a 
technical correction and affects such a small num- 
ber of vehicles, it is determined that a notice of 
proposed rulemaking is unnecessary and contrarj' 
to the public interest, within the meaning of 5 
U.S.C. 553(b). Therefore, this notice will be 
issued as a final rule. 

NHTSA has also determined that this docu- 
ment does not contain a significant regulation 
requiring a regulatory analysis under Executive 
Order 12044. Further, this action does not re- 
quire an environmental impact statement under 
the National Environmental Policy Act (49 
U.S.C. 4321 etseq.). 



PART 523— PRE 47 



This amendment is eflfective immediately, since authority at 41 FR 25015, June 22, 1976, and 43 

its effect is to relieve a restriction. See 5 U.S.C. FR 8525, March 2, 1978. 

553(d) (1). Issued on January 15, 1979. 

In consideration of the foregoing, 49 CFR, .,. , i Af t?- i i f • 

(_ napter V, is amended .... » • . i • ■ , ^ 

Associate Administrator 

AUTHORITY : Sec. 9, Pub. L. 89-670, 80 Stat. for Rulemaking 

931 (49 U.S.C. 1657) ; sec. 301, Pub. L. 94-163, 44 F.R. 4492-4493 

89 Stat. 901 (15 U.S.C. 2002); delegation of January 15, 1979 



PART 523— PRE 48 



PART 523— VEHICLE CLASSIFICATION 



Sec. 

523.1 Scope. 

523.2 Definitions. 

523.3 Automobiles. 

523.4 Passenger automobiles. 

523.5 Nonpassenger automobiles. 

AUTHORITY: Sec. 301, Pub. L. 94-163. 80 
Stat. 901 (15U.S.C. 2001). 

§ 523.1 Scope. 

This part establishes categories of vehicles that 
are subject to Title V of the Motor Vehicle In- 
formation and Cost Savings Act, 15 U.S.C. 2001 
et. seq. 

§ 523.2 Definitions. 

"Approach angle" means the smallest angle, in 
a plan side view of an automobile, formed by the 
level surface on which the automobile is standing 
and a line tangent to the front tire static loaded 
radius arc and touching the underside of the 
automobile forward of the front tire. 

"Axle clearance" means the vertical distance 
from the level surface on which an automobile is 
standing to the lowest point on the axle differ- 
entia] of the automobile. 

"Basic vehicle frontal area" is used as defined 
in 40 CFR § 86.079-2. 

"Breakover angle" means the supplement of 
the largest angle, in the plan side view of an 
automobile, that can be formed by two lines 
tangent to the front and rear static loaded radii 
arcs and intersecting at a point on the tmderside 
of the automobile. 



"Cargo-carrying volume" means the luggage 
capacity or cargo volume index, as appropriate, 
and as those terms are defined in 40 CFR 600.315. 
in the case of automobiles to which either of 
those terms apply. With respect to automobiles 
to which neither of those terms apply, "cargo- 
carrying volume" means the total volume in cubic 
feet rounded to the nearest 0.1 cubic feet of either 
an automobile's enclosed nonseating space that is 
intended primarily for carrying cargo and is not 
accessible from the passenger compartment, or 
the space intended primarily for carrying cargo 
bounded in the front by a vertical plane that is 
perpendicular to the longitudinal centerline of 
the automobile and passes through the reannost 
point on the rearmost seat and elsewhere by the 
automobile's interior surfaces. 

"Curb weight" is defined the same as "vehicle 
curb weight" in 40 CFR Part 86. 

"Departure angle" means the smallest angle, 
in a plan side view of an automobile, formed by 
the level surface on which the automobile is 
standing and a line tangent to the rear tire static 
loaded radius arc and touching the underside of 
the automobile rearward of the rear tire. 

"Gross vehicle weight rating" means the value 
specified by the manufacturer as the loaded 
weight of a single vehicle. 

"Passenser-carrying volume" means the sum of 
the front seat volume and, if any, rear seat 
volume, as defined in 40 CFR 600.315, in the case 
of automobiles to which that term applies. With 
respect to automobiles to which that term does 
not apply, "passenger-carrying vobime" means 
the sum in cubic feet, loimded to the nearest 0.1 
cubic feet, of the volume of a vehicle's front seat 
and seats to the rear of the front seat, as ap- 
plicable, calculated as follows with the head 
room, shoulder room, and leg room dimensions 
determined in accordance with the procedures 



PART 523-1 



outlined in Society of Automotive Engineers 
Recommended Practice J 1100a, Motor Vehicle 
Dimensions (Report of Human Factors Engi- 
neering Committee, Society of Automotive Engi- 
neers, approved September 1973 and last revised 
September 1975.) 

(a) For front seat volume, divide 1,728 into 
the product of the following SAE dimensions, 
measured in inches to the nearest 0.1 inches, and 
round the quotient to the nearest 0.001 cubic feet. 

(1) H61 — Effective head room — front. 

(2) W3 — Shoulder room — front. 

(3) L34 — Maximum effective leg room — accel- 
erator. 

(b) For the volume of seats to the rear of the 
front seat, divide 1,728 into the product of the 
following SAE dimensions, measured in inches 
to the nearest 0.1 inches, and round the quotient 
to the nearest 0.001 cubic feet. 

(1) H63 — Effective head room — second. 

(2) W4 — Shoidder room — second. 

(3) L51 — Minimum effective leg room — second. 

"Running clearance" means the distance from 
the surface on which an automobile is standing 
to the lowest point on the automobile, excluding 
unsprung weight. 

"Static loaded radius arc'" means a portion of 
a circle whose center is the center of a standard 
tire-rim combination of an automobile and whose 
radius is the distance from that center to the 
level surface on which the automobile is standing, 
measured with the automobile at curb weight, the 
wheel parallel to the vehicle's longitudinal cen- 
terline, and the tire inflated to the manufactur- 
er's recommended pressure. 

"Temporary living quarters" means a space in 
the interior of an automobile in which people 
may temporarily live and which includes sleep- 
ing surfaces, such as beds, and household con- 
veniences, such as a sink, stove, refrigerator, or 
toilet. 

§ 523.3 Automobile. 

(a) An automobile is any 4-wheeled vehicle 
propelled by fuel which is manufactured primar- 



ily for use on public streets, roads, and highways 
(except any vehicle operated exclusively on a rail 
or rails), and that either — 

(1) Is rated at 6,000 pounds gross vehicle 
weight or less ; or 

(2) Which— 

(i) Is rated more than 6,000 pounds gross ve- 
hicle weight, but less than 10,000 pounds gross 
vehicle weight, 

(ii) Is a type of vehicle for which the Admin- 
istrator determines, under paragraph (b) of this 
section, average fuel economy standards are 
feasible, and 

(iii) (A) Is a type of vehicle for which the 
Administrator determines, under paragraph (b) 
of this section, average fuel economy standards 
will result in significant energy conservation, or 

(B) Is a type of vehicle which the Adminis- 
trator determines, under paragraph (b) of this 
section, is substantially used for the same pur- 
poses as vehicles described in paragraph (a) (1) 
of this section. 

(b) The following vehicles rated at more than 
6,000 pounds and less than 10,000 pounds gross 
vehicle weight are determined to be automobiles : 

(1) Vehicles which would satisfy the criteria 
in §523.4 (relating to passenger automobiles) 
but for their gross vehicle weight rating. 

(2) Vehicles which would satisfy the criteria 
in § 523.5 (relating to light trucks) but for their 
gross vehicle weight rating, and which 

(i) Have a basic vehicle frontal area of 45 
square feet or less. 

(ii) Have a curb weight of 6,000 pounds or 
less. 

(iii) Have a gross vehicle weight rating of 
8,500 pounds or less, and 

(iv) Are manufactured during the 1980 model 
year or thereafter. 

§ 523.4 Passenger automobile. 

A passenger automobile is any automobile 
(other than an automobile capable of off-highway 
operation) manufactured primarily for use in the 
transportation of not more than 10 individuals. 



PART 523-2 



9 523.5 Light truck. 

(a) A lifrht truck is an automobile other than 
a passenjrcr automobile which is either desipnerl 
for off-hig;h\vay operation, a,s described in para- 
g:raph (b) of this section, or desijrned to perform 
at least one of the following functions: 

(1) Transport more than 10 persons; 

(2) Provide temporary living quarters; 

(3) Transport property on an open bed; 

(4) Provide greater cargo-carrying than pas- 
senger-carrying volume ; or 

(5) Permit expanded use of the automobile for 
cargo-carrying purposes or other nonpassenger- 
carrying purposes through removal of seats by 
means installed for that purpose by the automo- 
bile's manufacturer or with simple tools, such as 
screwdrivers and wrenches, so as to create a flat. 
floor level surface extending from the forward- 
most point of installation of those seats to the 
rear of the automobile's interior. 

(b) An automol)ile capable of otF-highway op- 
eration is an automobile — 



(1) (i) That has 4-wheel drive; or 

(ii) Is rated at more than 6.000 pounds gross 
vehicle weight ; and 

(2) That has at lea.st four of the following 
characteristics (see Figure 1) calculated when 
the automobile is at curb weight, on a level sur- 
face, with the front wheels parallel to the auto- 
mobile's longitudinal centerline, and the tires 
inflated to the manufacturer's recommended 
pressure — 

(i) Approach angle of not less than 28 degrees. 

(ii) Breakover angle of not less than 14 de- 
grees. 

(iii) Departure angle of not less than 20 de- 
grees. 

(iv) Running clearance of not less than 8 
inches. 

(v) Front and rear axle clearances of not less 
than 7 inches each. 

42 F.R. 38362 
July 28, 1977 



A - - APPROACH ANGLE 
e -- BREAKOVER ANGLE 
C -- DEPARTURE ANGLE 




PART 523-3-4 



Effective: July 2S, 1977 



PREAMBLE TO PART 525— EXEMPTIONS FROM AVERAGE FUEL ECONOMY STANDARDS 
(Docket No. FE 76-04; Notice 2) 



This notice establislies the format and content 
requirements for petitions whicli may be filed by 
low volume manufacturers of passenjrer automo- 
biles requestinjr exemption from average fuel 
economy standards pursuant to section 502(c) 
of the Motor Vehicle Information and Cost Sav- 
ings Act, as amended. The notice also establishes 
the timing requirements for the filing of such 
petitions, and describes the procedures that the 
agency will follow in acting on petitions. 

Effective Date: July 28, 1977. 

For Further Information, Contact : 

Douglas F. Pritchard 

OflBce of Automotive Fuel Economy 

National Highway Traffic Safety 

Administration 
Department of Transportation 
Washington, D.C. 20590 
(202) 755-9384 

Supplemental^ Information : 

Section 502(c) of the Motor Vehicle Informa- 
tion and Cost Savings Act, as amended (the 
Act), provides that a low volume manufacturer 
of passenger automobiles may be exempted from 
the average fuel economy standards for passen- 
ger automobiles established by or under Section 
502(a) if those standards are more stringent than 
the maximum feasible average fuel economy for 
the low volume manufacturer, and if the Admin- 
istrator of the Xation>al Highway Traffic Safety 
Administration (NHTSA) establishes an alter- 
native standard for the low volume manufac- 
turer. A low volume manufacturer under the 
Act is one who manufactures leas than 10,000 
passenger automobiles in the model year for 
which the exemption is sought (the affected 
model year), and who produced less than 10,000 
passenger automobiles in the second model year 



preceding the affected model year. This final 
rule adds a new Part 525 to NHTSA regulations, 
and establishes the timing, content, and format 
requirements of petitions for exemption, and sets 
forth the procedure that the agency will follow 
in acting on petitions. 

This final rule was preceded by a notice of 
proposed rulemaking (NPRM), 41 FR 53827, 
December 9, 1976. The proposed rule provided 
that petitions for exemptions for model year 
1980 and subsequent model years must be sub- 
mitted to the agency not later than 24 months 
before the beginning of the affected model year. 
Petitions for exemption for model year 1978 must 
be submitted not less than three months before 
the beginning of that model year, and petitions 
for model year 1979 must be submitted not later 
than 12 months before the beginning of that 
model year. The petition would have to include 
information showing that the petitioner was a 
low volume manufacturer, and data, views, and 
arguments that show that the petitioner's maxi- 
mum feasible average fuel economy for the af- 
fected model year is less than the level of the 
otherwise applicable fuel economy standard. The 
proposed rule sets out specific items of infonna- 
tion relating to the petitioner's claimed maximum 
feasible average fuel economy which all petitions 
must include. 

The NPRM further proposed that the NHTSA 
would publish in the Federal Register notice of 
receipt of a petition for an exemption, and would 
place the nonconfidential portions of the petitions 
in the public docket. After considering the pe- 
tition and other information available to it, the 
NHTSA would publish a notice of proposed 
rulemaking announcing its proposed decision on 
the petition, and soliciting comments on the pro- 
posed decision. After opportunity for comment, 
and a consideration of any comments that might 



PART 525— PRE 1 



Effective; July 28, 1977 



he received, the XHTSA would publish its final 
decision on the petition. The decision would 
either grant the exemption and establish an alter- 
native average fuel economy standard that the 
petitioner would have to meet, or would deny the 
petition. The reasons for the decision would also 
be set forth. 

Three comments to the NPRM were received 
by the agency. Two of the conimenters were low 
volume manufacturei-s of passenger automobiles. 
Checker Motors Corporation and Avanti Motor 
Corporation. The third commenter was Miss 
Suzanna Goodyear-, who did not indicate an af- 
filiation with any particular interest, and who 
presumably commented as an interested member 
of the public. In addition, the agency obtained 
information from Checker and Avanti in a series 
of telephone conversations supplementing their 
written conunents. All written comments, and 
written memoranda of all telephone conversations, 
were placed in the public docket. These com- 
ments and memoranda were carefully considered 
by the agency in the development of the final rule. 

A number of issues were raised by the com- 
ments. These issues, and their resolution, along 
with specific changes to the proposed rule, are 
described in the following discussion. 

Issues raised by the comwnents and changes to 
the proposed rule. 

Exemptions for nonessential automobiles. 

Miss Suzanna Goodyear commented that ex- 
emptions fronr fuel economy standards should be 
given only to vehicles that are ''vital to our so- 
ciety, like fire engines." Miss Goodyear stated 
that she did not agree with exempting what she 
termed "specialty cars" and that she could see no 
reason to encourage motorized recreation. Strictly 
speaking. Miss Goodyear's comment relates to the 
decision on a petition for an exemption, rather 
than the procedural and format requirements 
governing such petitions. At this time, the 
agency does not 'believe that any manufacturer 
of passenger automobiles who qualifies as a low 
volume manufacturer under section 502(c) should 
be prohibited from petitioning for an exemption 
from an otherwise applicable fuel econonry 
standard because of the intended use of the ve- 
hicles, or for any other reason. However, al- 
though any low volinne manufacturer of 



passenger automobiles may petition for an ex- 
emption regardless of the intended use of the 
vehicles manufactured, the nature of the vehicle 
may be relevant to the determination of the 
maximum feasible average fuel economy which 
the petitioner can achieve. Some aspects of ve- 
hicle design and performance may be deemed 
less critical than others compared to the need to 
conserve energy. Thus, in the process of estab- 
lishing alternative standards for exempted manu- 
facturers, the agency may determine that greater 
trade-offs can be made between those less critical 
aspects and improved fuel economy than can be 
made regarding the other aspects of design and 
performance. 

Need for alternative standards. Both Checker 
and Avanti questioned whether an alternative 
average fuel economy standard should be estab- 
lished for a low volume manufacturer who has 
received an exemption. Avanti suggested that 
manufacturers of less than 500 passenger auto- 
mobiles per model year be completely exempted 
from compliance with fuel economy standards, 
while alternative standards be set for manufac- 
turers producing between 500 and 10,000 passen- 
ger automobiles per model year. Section 502(c) 
clearly provides that exemptions can be granted 
only when alternative standards are established : 

The Secretary [or his delegate, the Admin- 
istrator of NHTSA] rruiy not issue exemp- 
tions with respect to a model year unless he 
establishes, by rule, alternative average fuel 
economy standards for passenger automobiles 
manufactured by manufacturers which re- 
ceive exemptions under this subsection. . . . 
Each such standard shall be set at a level 
which the [Administrator] determines is the 
maxinmm feasible average fuel economy 
level for the manufacturers to which the 
standard applies. 
It is difficult to imagine statutory language 
that more clearly and completely prohibits the 
Administrator from granting exemptions from 
fuel economy standards when no alternative 
standard is set. Congress, by including section 
502(c) in the Act, recognized that low volume 
manufacturers may have special problems in im- 
proving fuel economy that are not shared by the 
major industry manufacturers, and that these 



PART 525— PRE 2 



EffecHve: July 28, 1977 



sppcial problems could justify special treatment 
for the low volume manufacturers. Xevertheless, 
the laiifniajre of section r)0'2(c) clearly shows that 
Conjrress expected low volume manufacturers to 
attain the maximum level of average fuel econ- 
omy consistent with their capabilities. Because 
of this clear expression of Confrressional intent 
on the issue of altei'native standards, the com- 
ments of Checker and Avanti in this regard must 
be rejected. As a final word on this point, Avanti 
asserted as part of its claim for total exemption, 
that it was disadvantaged in its effort to meet an 
average fuel economy standard because it pro- 
duces only one type of vehicle and is therefore 
imable to do any fuel economy averaging. The 
fact that Avanti cannot average a variety of 
pa.«senger automobiles will be considered by the 
agency in determining Avanti's maximum feas- 
ible average fuel economy, should it petition for 
an exemption. Therefore. Avanti's narrow 
product line should not disadvantage it in 
any way. 

Need for product and marketing information. 
Avanti suggested in its comment that any low 
volume manufacturer which uses an engine that 
has been tested by the manufacturer of the en- 
gine should be exempt from any fuel economy 
test requirements and should not be required to 
file a petition containing justification for an 
exemption from a fuel economy standard. Avanti 
suggested that a statement indicating the type of 
engine used in the vehicle and a reference to the 
testing of the engine by the engine manufacturer 
should be sufficient. 

The automotive fuel economy program is con- 
cerned with the fuel economy of automobiles, not 
the fuel economy of engines alone. Although 
the engine of a passenger automobile has a sub- 
stantial effect on its fuel economy, the engine is 
only one of many aspects of a passenger automo- 
bile that determine the fuel economy of that 
vehicle. Other aspects, such as transmissions, 
axle ratios, and vehicle weight, also have a sub- 
stantial effect on the fuel economy of a passenger 
automobile. To consider only the engine, as 
-Vvanti .suggests, would be to ignore many im- 
portant passenger automobile attributes which 
relate to fuel economy, and would give an ex- 
tremely inaccurate picture of the fuel economy 
of a particular passenger automobile. The agency 



must have information about a variety of passen- 
ger automobile characteristics if it is to carry out 
its statutory task of determining maximum 
feasible average fuel economy. Moreover, the 
Environmental Protection Agency (EPA), which 
has issued regulations for the fuel economy test- 
ing of passenger automobiles, does not require 
the testing of engines, but vehicle configurations, 
which are a unique combination of basic engine, 
engine code, inertia weight, transmission con- 
figuration, and axle ratio. Thus, engine test re- 
sults would not be sufficient for the agency to 
rely upon. Further, as a representative of Avanti 
stated in a telephone conversation with an em- 
ployee of the agency, the suggestion relating to 
engine testing would have been more appropri- 
ately directed to the EPA. 

Although Avanti's suggestion that referencing 
engine test results is a sufficient showing to sup- 
port a petition for an exemption cannot be 
adopted, the agency notes that the regulation is 
not intended to require any low volume manu- 
facturer to conduct fuel economy testing in sup- 
port of a petition. It is permissible under section 
52.5.7(e) of the proposed and final regulation for 
a low volume manufacturer to submit test results 
of passenger automobiles with similar configura- 
tions to the passenger automobiles for which an 
exemption is being sought, and to extrapolate 
projected fuel economy values from those results. 
Thus, although more than engine tests will be 
required, the agency has endeavored to minimize 
the testing burden for the low volume manu- 
facturer. 

Schedide for the suhrni-ssimi of petitions. Both 
Checker and Avanti objected to the proposed re- 
quirement that petitions for exemption for model 
years beyond 1980 be submitted not later than 24 
months in advance of the affected model year. 
The objections of Checker and Avanti had the 
same basis. Both manufacturers purchase en- 
gines from General Motoi-s instead of building 
the engines themselves. General ^Motors does not 
supply Checker or Avanti with engine data re- 
lating to fuel economy performance until shortly 
before the time those manufacturers begin pro- 
duction for a model year. Therefore, both 
Avanti and Checker claim that they would be 
unable to petition for an exemption two years in 
advance of the affected model vear because thev 



PART 525— PRE 3 



Effective: July 28, 1977 



would ha\e insufficieiU data upon which to base 
a projection of avera<re fuel economy. 

The objection of Checker and Avanti to tlie 
two year requiienient raises a difficult problem 
for the agency. The ajiency realizes that the low 
Aolume manufacturers which purchase engines 
for use in their vehicles must depend on tlieir 
engine suppliers for much information relating 
to the engine, especially the etfects of the engine 
on fuel economy. Moreover, since General 
Motors, the engine supplier for both Checker and 
Avanti, has been continually developing engines 
with improved fuel economy, it is likely that the 
fuel economy effects of any particular size engine 
will change o\er time. Therefore, even a low 
volume manufacturer that traditionally buys 
the same size engine and plans to continue 
doing so will not necessarily know what effect a 
future engine of that size will have on fuel econ- 
omy. Also, the manufacturer of the engine may- 
be reluctant to tell the low volume manufacturer 
what the likely fuel economy effects of a par- 
ticular engine will be on the grounds that the 
infoi'mation is unknown, or is a ti'ade secret. 
Without data relating to the fuel economy of the 
engine, the low volume manufacturer will have 
difficulty projecting the future fuel economy of 
its automobiles. 

Nevertheless, the agency wishes to avoid the 
situation in which it must accept the low volume 
manufacturers' planned fuel economy as the 
maximum feasible level of average fuel economy 
because there is insufficient leadtime to make fuel 
economy improvements that the petitioner could 
have made with more leadtime. Such situations 
are likely to arise if the agency waits until just 
before the beginning of the affected model year 
to reach a decision on a petition for exemption, 
as it must do if petitions are accepted up until 
shortly before the affected model year. Further, 
the agency wants to make its decision on a peti- 
tion for exemption and alternative standard as 
early as possible so that the low volume manu- 
facturer will have a firm fuel economy target, 
and enough leadtime to make whatever product 
or marketing changes which may be necessary to 
meet the alternative standard, if the exemption 
is granted, or the general standard if the exemp- 
tion is not granted. 



The agency has decided to retain the two year 
requirement. Ketention of this requirement is 
more consistent with the basic energy conserva- 
tion purposes of the Act since it permits the 
setting of standards that will require greater fuel 
economy improvements by the exempted manu- 
facturers. The agency believes also that it is 
essential that the low volume manufacturers 
know the fuel economy standard which they will 
have to meet well in advance of the beginning of 
the affected model year so that they ma,v make any 
necessary changes in their product plans with a 
maximum of efficiency and a minimum of expense 
and disruption. Allowing petitions for exemp- 
tion to be filed six or seven months before the 
beginning of the affected model year would barely 
leave the agency time to reach a decision before 
the manufacturer must begin production, and 
would leave the manufacturer little time to make 
any changes that may be necessary in light of the 
decision on the petition. 

Moreover, the agency believes that the lack of 
engine data problem raised by Checker and 
Avanti is not insurmountable. Although Checker 
and Avanti have been unable to get the most 
current engine performance data, neither com- 
pany has experienced significant difficulty in ob- 
taining an engine which they desired. Thus, the 
low volume manufacturers know to a high degree 
of certainty what engines will be available for 
their use. With this knowledge, the low volume 
manufacturers should be able to make reasonable 
projections of the range of fuel economy which 
they can expect to achieve. For example, if a 
low volume manufacturer uses a 350 cubic inch 
displacement engine in the year of application 
(two years before the beginning of the affected 
model year) and knows that it will be able to use 
a 350 cubic inch engine in the affected model 
year, the low volume manufacturer can assume 
no improvement in fuel economy from the engine, 
and can project fuel econonn' for the affected 
model year from other aspects of the vehicle, 
such as weight reduction or lowering the axle 
ratio. The low volume manufacturer can also 
project fuel economy improvement from using a 
smaller engine in the affected model year, such 
as a 305 cubic inch engine. 



PART 525— PRE 4 



Effective: July 28, 1977 



In addition, the afrencv believes that the low 
vohime manufacturer nuiy he able to project in- 
creases in fuel economy associated with particular 
improvements in an enfrine. Both Avanti and 
Checker indicated to the agency that General 
Motors has always been extremely helpful to 
them in their product planninp; to allow them to 
accommodate the (Jeneral Motors enfrines. As 
the fuel economy i)erformance of the engines be- 
comes a more significant aspect of the product 
plannin<r of the low volume manufacturers, they 
may find that General Motors will be willinsr to 
assist them by supplyiu"; advance engine infor- 
mation relating to fuel economy. In addition, 
the agency, through reporting requirements ap- 
plicable to General Motors, or other engine sup- 
plier, or through subpoena, could obtain 
information about the fuel economy effects of a 
particular engine. The agency would use this 
information to evaluate the maximum feasilile 
average fuel economy of the low volume manu- 
facturer. In light of these considerations, the 
agency has determined that the public interest in 
energy- conservation, as well as the interest of the 
low volume manufacturers, will be best served by 
requiring petitions for exemption for model 
years lieyond 1080 to be filed not later than two 
years before the beginning of the affected model 
year. 

Notwithstanding the foregoing, the agency has 
determined to provide for situations where new 
information obtained within two years of the 
beginning of the affected model year can be 
brought to the agency's attention, and possibly 
modify the decision on a petition for an exemp- 
tion. Therefore, section 52.5.11 of the final rule 
allows a low volume manufacturer which has had 
a petition denied to reapply, anj-time before the 
beginning of the atl'ected model year, on the 
basis of information that was unavailable despite 
due diligence, at the timt of the original applica- 
tion. Tliis change is intended to ensure that no 
low volume manufacturer is deprived of an op- 
jwrtunity to make a complete showing of his 
inaxinunn feasible average fuel economy by the 
requirement tliat petitions for exemptions for 
model year beyond 1970 be filed not later than 
two years before the beginning of the affected 
nifMlel vear. 



AVith respect to petitions for exemption for 
model year 1078. the agency has decided to delete 
the requirement that petitions be submitted not 
later than three months before the beginning of 
tliat model year. Under the final rule, petitions 
may be submitted at any time before the begin- 
ning of the model year. This change was made 
since less than three months remain before model 
year 1978. The two low vohime manufacturers 
that have thus far indicated an interest in peti- 
tioning for an exemption have previously been 
advised that if they wish to submit petitions, 
they could do so by following the format and 
content requirements of the proposed rule. 

The agency has made the following technical 
and clarifying changes to the rule. 

The phrase "content and format requirements 
for petitions for exemptions" is substituted for 
the term "guidelines'' in section .525.2. to make 
clear that the requirements of Part 525 are man- 
datory and not merely advisory. 

A new paragraph (b) is added to section 
525.7. requiring petitioners to state whether the 
petitioner controls, is controlled by, or is under 
connnon control with another manufacturer of 
pas.senger automobiles, and if so, to indicate the 
number of passenger automobiles manufactured 
by such other manufacturer in the second model 
year immediately preceding the affected model 
year. The agency interprets the term "control" 
to include any stock ownership, credit relation- 
ship or contractual arrangement which enables 
one person, as a practical matter, to influence the 
decisions of another person. Paragraphs (b) 
through (g) are redesignated (c) thi'ough (h). 

In addition, the paragraph that was 525.7(e) 
in the XPRM is amended by substituting "40 
CFR 600.506(a) (2)" for "40 CFR (a) (2)". This 
amendment corrects a typographical error which 
appeared in the XPRM and is not a substantive 
change. 

The subparagraph that appeared as 525.7(d) 
(5) in the XPRM is amended to read "fuel 
metering system, including the number of carbu- 
retor barrels, if applicable'". This change is not 
substantive, but is made to make the subpara- 
graph consistent with terminology in EPA regu- 
lations in 40 CFR Part 600. 



PART 525— PRE 5 



Effecfive: July 28, 1977 



The subparagraph that appeared in the NPKM 
as 525.7(g)(5) would have required petitioners 
which are not considering means or strategies to 
comply with applicable average fuel economy 
standards for the ailected model year to explain 
their reasons for not doing so. This subparagraph 
is amended to make it clear that the explanations 
are to be comprehensive. As amended, the sub- 
paragraph requires that the explanation include 
discussion of weight reduction, straight-line ac- 
celeration reduction, other technological changes 
or improvements, and shifts in production mix. 
This amendment will ensure that the agency re- 
ceives economic and technological justification for 
all major aspects of potential fuel economy im- 
provement. 

All references to "Part 522" are deleted. At 
the time of the NPRM, the agency intended to 
issue a procedural regulation. Part 522, that 
would specify the informal rulemaking proce- 
dures used by the agency in the fuel economy 
area. The agency has since decided to continue 
to use the procedures in 47 CFR 551-553. 



In light of the foregoing. Title 49, Code of 
Federal Regulations, is amended by adding a 
new Part 525, Exemptions From Average Fuel 
Ecmioviy Stan/lards. Because these rules are 
procedural in nature, the agency has determined 
that they shall become etl'ective on the date of 
publication in the Federal Register. 

The program official and lawyer principally 
responsible for the development of this regulation 
are Douglas Pritchard and David Zisser, respeo- 
tively. 

Issued on July 21, 1977. 



Joan Claybrook 

National Highway Traffic Safety 
Administrator 

42 F.R. 38374 
July 28, 1977 



PART 525— PRE 6 



PREAMBLE TO AMENDMENTS TO PART 525— EXEMPTIONS FROM AVERAGE 
FUEL ECONOMY STANDARDS 

(Docket No. FE 76-04; Notice 4) 



Action: Final rule. 

Summary: This rule makes several amendments to 
the requirements governing the contents of peti- 
tions by manufacturers of fewer than 10,000 
passenger automobiles annually for exemptions 
from the generally applicable fuel economy 
standards and in the procedures followed by the 
National Highway Traffic Safety Administration 
(NHTSA) in processing those petitions. These 
amendments will require that petitions for exemp- 
tion contain more information concerning the fuel 
economy testing of the vehicles, but otherwise 
simplify the general content requirements for 
these petitions. In addition, the notice of receipt of 
the petitions and the proposed decision on the peti- 
tions wOl now be combined into one notice. These 
changes will simplify and expedite the preparation 
and processing of these petitions. 

Effective date: This rule is effective with respect to 
petitions for exemption for 1980 and subsequent 
model years. 

For further information contact: 

William Devereaux, Office of Automotive Fuel 
Economy Standards, National Highway 
Traffic Safety Administration, Washington, 
D.C. 20590 (202-755-9384). 

Supplementary information: 

Section 502(c) of the Motor Vehicle Information 
and Cost Savings Act, as amended (the Act), pro- 
vides that a low volume manufacturer of passenger 
automobiles may be exempted from the generally 
applicable average fuel economy standards for 
passenger automobiles if those standards are more 
stringent than the maximum feasible average fuel 
economy for that manufacturer and if the NHTSA 
establishes an alternative standard for the 
manufacturer at its maximum feasible level. Under 
the Act, a low volume manufacturer is one who 



manufactures fewer than 10,000 passenger 
automobiles in the model year for which the ex- 
emption is sought (the affected model year) and 
who manufactures fewer than 10,000 passenger 
automobiles in the second model year preceding 
the affected model year. 

To implement section 502(c), NHTSA issued 
Part 525, Exemptions From Average Fuel 
Economy Standards. Part 525 prescribes the con- 
tent of exemption petitions and sets forth the 
agency procedures for processing those petitions. 
In connection with the processing of petitions sub- 
mitted by low manufacturers, several problems 
with the process for handling exemption petitions 
became apparent. The most obvious problems were 
the amount of time needed to obtain a complete 
petition from the petitioners and the amount of 
time needed to publish a final decision on the peti- 
tions. To reduce these problems, NHTSA pub- 
lished a notice of proposed rulemaking to amend 
Part 525 at 44 FR 21051; April 9, 1979. 

Two comments were submitted in response to 
this proposal. One comment addressed the issue of 
the fuel economy improvements to be expected 
from improved lubricants, but did not address any 
of the issues raised in the notice. Accordingly, that 
comment will not be discussed further in this 
notice. 

The other comment was submitted by Aston 
Martin Lagonda, a low volume manufacturer. 
Aston Martin suggested that the rule be amended 
so that low volume manufacturers not be required 
to submit petitions two years before the affected 
model year. This suggestion has not been adopted. 
For the same reasons set forth in the final rule 
originally establishing Part 525 (42 FR 38374; July 
28, 1977), NHTSA believes that retention of the 
two year requirement is more consistent with the 
energy conservation purposes of the Act. Early 



PART 525-PRE 7 



submission allows NHTSA to set standards at 
levels that require maximum fuel economy 
improvements by the exempted manufacturers. 
The agency also believes that it is essential that 
low volume manufacturers know the fuel economy 
which they will have to meet as far in advance of 
the affected model year as possible, so that the 
manufacturers can make any necessary changes in 
their product plans with a maximum of efficiency 
and a minimum of expense and disruption. 

Aston Martin went on to argue that it should not 
be expected to make any significant alterations to 
its vehicles. This does not relate to the issues 
raised in the proposal, but on how NHTSA should 
determine a manufacturer's maximum feasible 
average fuel economy. As such, the comment is not 
relevant to the issues raised in the notice. 

Neither of these commenters responded to 
NHTSA's request for comments as to means of 
avoiding an annual submission and processing of 
petitions for exemption, and the request for com- 



ments on extending the duration of the exemption 
from the current three year maximum to a longer 
period. Since no commenter has raised any objec- 
tion to the proposed amendments, they are being 
adopted without change. 

The agency has reviewed the impacts of this rule 
and determined that they are minimal, and that the 
rule is not a significant regulation with the mean- 
ing of Executive Order 12044. 

The program official and attorney principally 
responsible for the development of this proposed 
regulation are WUliam Devereaux and Stephen 
Kratzke, respectively. 

In consideration of the foregoing, 49 CFR Part 
525 is amended. . . . 

Issued on September 19, 1979. 

Joan Claybrook 
Administrator 

44 F.R. 55578 
September 27, 1979 



PART 525-PRE 8 



PREAMBLE TO AN AMENDMENT TO PART 525-EXEMPTIONS FROM 
AVERAGE FUEL ECONOMY 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 avaOable 
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 Repc/rts, is 
revised as follows: 

(1) Section 537.5(c) (7) (i) and (ii) are deleted 
and replaced wdth 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: 

§ 537.1 1 Public Inspection of information. 

(a) Except as provided in paragraph (b), any per- 
son may inspect the information and data submit- 



PART 525; PRE 9 



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 
Januarys, 1981 



PART 525; PRE 10 



PART 525— EXEMPTIONS FROM AVERAGE FUEL ECONOMY STANDARDS 



Sec. 




525.1 


Scope. 


525.2 


Purpose. 


525.3 


Applicability. 


525.4 


Definitions. 


525.6 


Requirements for petition. 


525.7 


Basis for petition. 


525.8 


Processing of petitions. 


525.9 


Duration of exemption. 


525.10 


Renewal of exemption. 


525.11 


Termination of exemption; amendment 




of alternative average fuel economy 




standard. 


525.12 


Public inspection of information. 


525.13 


Confidential information. 



§ 525.1 Scope. 

This part establishes procedures under section 
502(c) of the Motor Vehicle Information and Cost 
Savings Act, as amended (15 U.S.C. 2002), for the 
submission and disposition of petitions filed by low 
volume manufacturers of passenger automobiles to 
exempt them from the average fuel economy 
standards for passenger automobiles and to 
establish alternative average fuel economy 
standards for those manufacturers. 

§ 525.2 Purpose. 

The purpose of this Part is to provide content 
and format requirements for low volume manufac- 
turers of passenger automobiles which desire to 
petition the Administrator for exemption from ap- 
plicable average fuel economy standards and for 
establishment of appropriate alternative average 
fuel economy standards and to give interested per- 
sons an opportunity to present data, views and 
arguments on those petitions. 

§ 525.3 Applicability. 

This part applies >to passenger automobile 
manufacturers. 



§ 525.4 Definitions. 

(a) Statutory terms. 

(1) The terms "fuel," "manufacture," 
"manufacturer," and "model year" are used as 
defined in section 501 of the Act. 

(2) The terms "average fuel economy," "fuel 
economy," and "model type" are used as defined 
in 40 CFR 600.002-77. 

(3) The term "automobile" means a vehicle 
determined by the Administrator under 49 CFR 
523 to be an automobile. 

(4) The term "passenger automobile" means 
an automobile determined by the Administrator 
under 49 CFR 523 to be a passenger automobile. 

(5) The term "customs territory of the United 
States" is used as defined in 19 U.S.C. 1202. 

(b) Other terms. 

(1) The terms "base level" and "vehicle con- 
figuration" are used as defined in 40 CFR 
600.002-77. 

(2) The term "vehicle curb weight" is used as 
defined in 40 CFR 85.002. 

(3) The term "interior volume index" is used 
as defined in 40 CFR 600.315-77. 

(4) The term "frontal area" is used as defined 
in 40 CFR §86.129-79. 

(5) The term "basic engine" is used as defined 
in 40 CFR § 600.002-77(a)(21). 

(6) The term "designated seating position" is 
defined in 49 CFR § 571.3. 

(7) As used in this Part, unless otherwise 
required by the context— 

"Act" means the Motor Vehicle Information and 
Cost Savings Act (Pub. L. 92-513), as amended by 
the Energy Policy and Conservation Act (Pub. L. 
94-163); 

"Administrator" means the Administrator of the 
National Highway Traffic Safety Administration; 



PART 525-1 



"Affected model year" means a model year for 
which an exemption and alternative average fuel 
economy standard are requested under this Part; 

"Production mix" means the number of 
passenger automobiles, and their percentage of the 
petitioner's annual total production of passenger 
automobiles, in each vehicle configuration which a 
petitioner plans to manufacture in a model year; 
and 

"Total drive ratio" means the ratio of an 
automobile's engine rotational speed (in revolu- 
tions per minute) to the automobile's forward 
speed (in miles per hour). 

§ 525.5 Limitation on eligibility. 

Any manufacturer that manufactures (whether 
or not in the customs territory of the United 
States) 10,000 or more passenger automobiles in 
the second model year preceding an affected model 
year or in the affected model year, is ineligible for 
an exemption for that affected model year. 

§ 525.6 Requirements for petition. 

Each petition filed under this part must— 

(a) Identify the model year or years for which 
exemption is requested; 

(b) Be submitted not later than 24 months before 
the beginning of the affected model year, unless 
good cause for later submission is shown; 

(c) Be submitted in three copies to: Administrator, 
National Highway Traffic Safety Administration, 
Washington, D.C. 20590; 

(d) Be written in the English language; 

(e) State the full name, address, and title of the 
official responsible for preparing the petition, and 
the name and address of the manufacturer; 

(f) Set forth in full data, views and arguments of 
the petitioner supporting the exemption and alter- 
native average fuel economy standard requested 
by the petitioner, including the information and 
data specified by § 525.7 and the calculations and 
analyses used to develop that information and 
data. No docunjents may be incorporated by 
reference in a petition unless the documents are 
submitted with the petition; 

(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. (46 FR 2063-January 8, 1981. Effective: 
April 9, 1981)1 



§ 525.7 Basis for petition. 

(a) The petitioner shall include the information 
specified in paragraphs (b) through (h) in its petition. 

(b) Whether the petitioner controls, is controlled 
by, or is under common control with another 
manufacturer of passenger automobiles, and, if so, 
the nature of that control relationship, and the total 
number of passenger automobiles manufactured by 
such other manufacturer or manufacturers. 

(c) The total number of passenger automobiles 
manufacutured or likely to be manufactured 
(whether or not in the customs territory of the 
United States) by the petitioner in the second model 
year immediately preceding each affected model 
year. 

(d) For each affected model year, the petitioner's 
projections of the most fuel efficient production mix 
of vehicle configurations and base levels of its 
passenger automobiles which the petitioner could 
sell in that model year, and a discussion demon- 
strating that these projections are reasonable. The 
discussion shall include information showing that 
the projections are consistent with— 

(1) The petitioner's annual total production and 
production mix of passenger automobiles manufac- 
tured or likely to be manufactured in each of the 
four model years immediately preceding that 
affected model year; 

(2) Its passenger automobile production 
capacity for that affected model year; 

(3) Its efforts to comply wit that average fuel 
economy standard; and 

(4) Anticipated consumer demand in the 
United States for passenger automobiles during 
that affected model year. 

(e) For each affected model year, a description 
of the following features of each vehicle configura- 
tion of the petitioner's passenger automobiles to be 
manufactured in that affected model year: 

(1) Frontal area; 

(2) Vehicle curb weight; 

(3) Number of designated seating positions 
and interior volume index; 

(4) Basic engine, displacement, and SAE net 
horsepower; 

(5) Fuel metering system, including the 
number of carburetor barrels, if applicable; 

(6) Drive train configuration and total drive 
ratio; and 

(7) Emission control system; 



PART 525-2 



(8) Dynamometer road load setting, deter- 
mined in accordance with 40 CFR Part 86, and the 
method used to determine that setting, including 
information indicating whether the road load 
setting was adjusted to account for the presence of 
air conditioning and whether the setting was based 
on the use of radial ply tires; and 

(9) Use of synthetic lubricants, low viscosity 
lubricants, or lubricants with additives that affect 
friction characteristics in the crankcase, differen- 
tial, and transmission of the vehicles tested under 
the requirements of 40 CFR Parts 86 and 600. 
With respect to automobiles which will use these 
lubricants, indicate which one will be used and 
explain why that type was chosen. With respect to 
automobiles which will not use these lubricants, 
explain the reasons for not so doing. 

(f) For each affected model year, a fuel economy 
value for each vehicle configuration specified in 40 
CFR 600.506 (aX2), base level, and model type of 
the petitioner's passenger automobiles to be 
manufactured in that affected model year 
calculated in accordance with Subpart C of 40 CFR 
Part 600 and based on tests or analyses com- 
parable to those prescribed or permitted under 40 
CFR Part 600 and a description of the test 
procedures or analytical methods. 

(g) For each affected model year, an average 
fuel economy figure for the petitioner's passenger 
automobiles to be manufactured in that affected 
model year calculated in accordance with 40 CFR 
600.510(e) and based upon the fuel economy values 
provided under paragraph (f) of this section and 
upon the petitioner's production mix projected 
under paragraph (d) of this section for the affected 
model year. 

(h) Information demonstrating that the average 
fuel economy figure provided for each affected 
model year under paragraph (g) of this section is 
the maximum feasible average fuel economy 
achievable by the petitioner for that model year, 
including— 

(1) For each affected model year and each of 
the two model years immediately following the 
first affected model year, a description of the 
technological means selected by the petitioner for 
improving the average fuel economy of its 
automobiles to be manufactured in that model 
year. 

(2) A chronological description of the peti- 
tioner's past and planned efforts to implement the 



means described under paragraph (hXl) of this 
section. 

(3) A description of the effect of other Federal 
motor vehicle standards on the fuel economy of the 
petitioner's automobiles. 

(4) For each affected model year, a discussion 
of the alternative and additional means considered 
but not selected by the petitioner that would have 
enabled its passenger automobiles to achieve a 
higher average fuel economy than is achievable 
with the means described under paragraph (h)(1) of 
this section. This discussion must include an 
explanation of the reasons the petitioner had for 
rejecting these additional and alternative means. 

(5) In the case of a petitioner which plans to 
increase the average fuel economy of its passenger 
automobiles to be manufactured in either of the 
two model years immediately following the first 
affected model year, an explanation of the peti- 
tioner's reasons for not making those increases in 
that affected model year. 

§ 525.8 Processing of petitions. 

(a) If a petition is found not to contain the infor- 
mation required by this Part, the petitioner is 
informed about the areas of insufficiency and 
advised that the petition will not receive further 
consideration until the required information is sub- 
mitted. 

(b) The Administrator may request the peti- 
tioner to provide information in addition to that re- 
quired by this Part. 

(c) The Administrator publishes a proposed deci- 
sion in the Federal Register. The proposed decision 
indicates the proposed grant of the petition and 
establishment of an alternative average fuel 
economy standard, or the proposed denial of the 
petition, specifies the reasons for the proposal and 
invites written public comment on the proposal. 

(d) Any interested person may, upon written re- 
quest to the Administrator not later than 15 days 
after the publication of a notice under paragraph 
(c) of this section, meet informally with an ap- 
propriate official of the National Highway Traffic 
Safety Administration to discuss the petition or 
notice. 

(e) After the conclusion of the period for public 
comment on the proposal, the Administrator 
publishes a final decision in the Federal Register. 
The final decision is based on the petition, written 
public comments, and other available information. 



PART 525-3 



The final decision sets forth the grant of the ex- 
emption and estabHshes an alternative average 
fuel economy standard or the denial of the petition, 
and the reasons for the decision. 

§ 525.9 Duration of exemption. 

An exemption may be granted under this Part 
for not more than three model years. 

§525.10 Renewal of exemption. 

A manufacturer exempted under this Part may 
request renewal of its exemption by submitting a 
petition meeting the requirements of §§ 525.6 and 
525.7. 

§ 525.11 Termination of exemption; amendment of 
alternative average fuel economy standard. 

(a) Any exemption granted under this Part for 
an affected model year does not apply to a 
manufacturer that is ineligible under § 525.5 for an 
exemption in that model year. 

(b) The Administrator may initiate rulemaking 
either on his own motion or on petition by an 
interested person to terminate an exemption 
granted under this Part or to amend an alternative 
average fuel economy standard established under 
this Part. 

(c) Any interested persons may petition the 
Administration to terminate an exemption granted 
under this Part or to amend an alternative average 
fuel economy standard established under this Part. 



§ 525.12 Public inspection of information. 

[(a) Except as provided in paragraph (b), any 
person 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 information 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. 
(46 FR 2063- January 9, 1981. Effective: April 9, 
1981)1 



§525.13 [Deleted] 



42 F.R. 38374 
July 28, 1977 



PART 525-4 



PREAMBLE TO PART 527— REDUCTION OF PASSENGER AUTOMOBILE 
AVERAGE FUEL ECONOMY STANDARDS 

(Docket No. FE 76-2; Notice 2) 



ACTION: Final rule. 

SUMMARY: This regulation prescribes require- 
ments for the contents and processing of petitions 
by passenger automobile manufacturers to reduce 
the average fuel economy standards applicable to 
passenger automobiles produced in model years 
1978, 1979, and 1980 to compensate for any adverse 
fuel economy impact of more stringent Federal 
motor vehicle emission, safety, noise, or 
damageability standards in those years. Such 
requirements and reductions are authorized by the 
Motor Vehicle Information and Cost Savings Act. 
This regulation is intended to provide notice to 
passenger automobile manufacturers of the pro- 
cedures to be followed in processing those petitions. 

EFFECTIVE DATE: November 14, 1977. 

FOR FURTHER INFORMATION CONTACT: 

Mr. Theodore Bayler, 

Office of Automotive Fuel Economy, (NFE-01), 
National Highway Traffic Safety 
Administration, 400 Seventh Street, S.W., 
Washington, D.C. 20590, 202-755-9384. 

SUPPLEMENTARY INFORMATION: 

I. Background Information 

Title V of the Motor Vehicle Information and Cost 
Savings Act, as amended (hereafter, "the Act"), 
establishes average fuel economy standards ap- 
plicable to manufacturers of passenger automobiles. 
The term "passenger automobiles" generally in- 
cludes four-wheeled vehicles manufactured primar- 
ily for on-road use and for the transportation of ten 
or fewer passengers, e.g., sedans and station 
wagons. See 15 U.S.C. 2001(1) and (2) and 41 F.R. 
55368. Compliance of a manufacturer with these 
standards is to be determined by averaging the fuel 
economy ratings of the various types of passenger 
automobiles manufactured by the manufacturer in a 
model year and comparing that number to the fuel 
economy standard. The Act specifies fuel economy 



standards of 18, 19, 20, and 27.5 miles per gallon for 
model years 1978, 1979, 1980, and 1985, respec- 
tively. Fuel economy standards for model years 
1981-84 have been established administratively at 
22 mpg for 1981, 24 mpg for 1982, 26 mpg for 1983, 
and 27 mpg for 1984. Fuel economy values for the 
various types of passenger automobiles are deter- 
mined in accordance with procedures established by 
the Environmental Protection Agency. See 40 CFR 
Part 600. 

The fuel economy achievable by a particular 
passenger automobOe may be adversely affected by 
the technology adopted by the manufacturer in 
order to comply with Federal motor vehicle emis- 
sion, safety, noise, and damageability standards 
(hereafter called "nonfuel economy standards") re- 
quirements. The fuel economy standards for model 
years 1978-80 were established at levels which took 
into account the effects of the nonfuel economy 
standards in effect in 1975. However, in order to 
compensate for possible increases in the stringency 
of the nonfuel economy standards and for any cor- 
responding fuel economy impacts, an additional pro- 
vision was included in the Act. Under Section 502(d) 
of the Act, a manufacturer can petition for an ad- 
justment of a fuel economy standard (called a 
"Federal standards fuel economy reduction") due to 
the impacts of these more stringent nonfuel 
economy standards. The Act gives the Department 
authority to publish regulations specifying the re- 
quired content of these petitions; the regulations 
published herein are based upon this authority. 

These regulations were published in proposed 
form on October 26, 1976. See 41 F.R. 46878. A 
comment period of 60 days was established. A 
docket was established for this rulemaking pro- 
ceeding in the Department's headquarters offices in 
Washington, D.C. Four domestic automobile com- 
panies, two federal agencies, one manufacturer of 
gasoline additives, one newspaper publishing 
association, one "public interest" group, and three 



PART 527-PRE-l 



private individuals submitted written comments on 
the proposal. All written comments, together with 
certain other related material such as an economic 
impact assessment were placed in the docket and 
made available for public inspection. Finally, 
copies of this notice were circulated to various 
Federal agencies for their comment and review. 
All of the various submissions, discussions referred 
to above, and other available information were 
considered in developing the final regulations pro- 
mulgated herein. 

Section 502(g) of the Act requires that petitions 
for reduction be processed according to standard 
informal rulemaking procedures, except for the 
mandatory additional opportunity for oral presen- 
tations. The Act also authorizes the consolidation 
of petitions by more than one automobile manufac- 
turer, to permit the conduct of a single proceeding 
for all. See section 502(d) (4). As noted in the 
preamble to the October 26 notice, NHTSA intends 
to exercise this consolidation authority to the max- 
imum extent possible, consistent with the other re- 
quirements of the Act and the commonality of 
issues raised by various petitioners. See 41 F.R. 
46884. This will reduce the administrative burden 
of processing petitions and will facOitate participa- 
tion in the proceeding by less affluent individuals 
and organizations, who might be unable to par- 
ticipate in a series of completely separate pro- 
ceedings. 

These regulations require a manufacturer apply- 
ing for a reduction to submit information on two 
sets of passenger automobiles for the purpose of 
calculating a reduction. The first set is the actual 
set of passenger automobiles which the manufac- 
turer plans to produce in the model year for which 
the reduction is requested (hereafter called the "af- 
fected model year"). The second set is the 
hypothetical set of passenger automobiles which 
the manufacturer would have produced had 
1975-level standards in those nonfuel economy 
categories for which a reduction is sought (e.g., 
emissions and damageability) still been in effect. 
For each of these sets, information is requested on, 
among other things, the distribution of vehicles 
among the various vehicle categories expected to 
be produced (called the "production mix"), the fuel 
economy-related technology used in the vehicles, 
and any available technology not used but which 
would have reduced any loss of fuel economy and 
improved the resulting vehicle fuel economy. From 



all this information, the average fuel economy of 
the two sets of vehicles can be calculated, and the 
difference between the two averages gives an in- 
dication of the fuel economy penalty associated 
with the nonfuel economy standards. The required 
information would also enable NHTSA to assure 
that the manufacturer has used all available means 
for complying with the nonfuel economy standards 
so as to minimize or avoid entirely any reduction of 
the fuel economy of its passenger automobiles. If a 
manufacturer sustains its burden of demonstrating 
that a reduction is warranted under the statute 
and the regulations, the fuel economy standard ap- 
plicable to that manufacturer for the affected 
model year is reduced in accordance with Section 
502(d) of the Act. 

A more detailed description of this rule and 
related statutory requirements can be found in the 
Notice of Proposed Rulemaking published in 41 
F.R. 46878 on October 26, 1976. 

II. Principal Changes In the Rule 

As a result of the public comments and NHTSA's 
further analysis, several changes were made to the 
rule as proposed. Under the final rule, NHTSA will 
grant confidential treatment to any portion of a 
reduction petition only in the most exceptional cir- 
cumstances. Based on comments expressly solic- 
ited in the NPRM, the procedure for calculating a 
reduction was revised to take into account the 
possible interaction of efforts to comply with more 
than one category of Federal standards. In addi- 
tion, the format for submitting information on 
each of a petitioner's vehicle configurations was 
revised to make data submission less burdensome. 
The final rule revises the methodology for ad- 
justing a petitioner's production mix when none of 
the petitioner's passenger automobiles has a fuel 
economy rating that equals or exceeds the fuel 
economy standard. Also, several revisions to the 
proposed procedures for holding hearings on peti- 
tions were adopted. Each of these changes, as well 
as requested changes that were not adopted, are 
discussed in greater detail below. 

III. Comments Received and the Final 
Version of the Regulation 

A. Required Contents of Petitions 

Several commenters raised questions with 

respect to the quantity of data and level of detail 

required in petitions. The NPRM suggested that 

the submission of particular items of data and in- 



PART 527-PRE-2 



formation would not be required, but that the peti- 
tioner would be required to make various specified 
showings by whatever means it deemed best. If the 
means chosen by a manufacturer were inadequate, 
its petition would be denied. The Administrator 
retained the authority to require additional 
supporting information at any time prior to a final 
decision, however, and to suspend processing of 
the petition untO such information was submitted. 

Ford Motor Co., in its comment on the NPRM, 
argues that NHTSA should not refuse to consider a 
petition on the basis of inadequacy "unless the 
petition on its face fails to present any information 
with respect to each of the items required under 
the applicable regulations." This argument rests 
on Ford's reading of "International Harvester v. 
Ruckelshaus," 478 F.2d 615 (D.C. Cir. 1973). 
However, the portion of that opinion which Ford 
cites actually states that denial of a petition on the 
grounds of incompleteness is improper where the 
petitioner came forward "with all the data there 
was to be had, and the Administrator did not ask 
for more." 478 F.2d at 642. Therefore, NHTSA 
reasserts its right to request additional relevant in- 
formation where such information either presently 
exists or can be generated and made available, and 
to refuse to further consider petitions which a peti- 
tioner fails to supplement as required. Failure to 
provide such information constitutes a failure to 
satisfy the burden of persuasion in the proceeding. 

Most of the automobile manufacturers which 
responded to the NPRM cautioned NHTSA on the 
potentially burdensome impact of the data submis- 
sion requirements, particularly with respect to the 
requirement for the submission of detailed infor- 
mation on the technology used in each vehicle con- 
figuration (as defined by EPA in 40 CFR 600.002- 
77) of the petitioner's passenger automobiles. It is 
NHTSA's intent to minimize the data submission 
burden on petitioners, consistent with our need for 
detailed information in order to calculate reduc- 
tions. However, the EPA average fuel economy 
calculation procedure, which is also applicable to 
our reduction calculations, requires fuel economy 
values for most large-selling vehicle configura- 
tions. Each data point in the average fuel economy 
calculation may affect the reduction calculation 
and must therefore be reviewed by NHTSA in our 
analysis of petitions for reduction. To reduce this 
burden, the regulations permit the incorporation 
by reference of material contained elsewhere in the 



petition. For example, a petitioner could first list 
all technology which is used throughout its entire 
product line, then list additional technology which 
is common to an individual car line but which dif- 
fers from other car lines, and so on wath similar 
listings for each model type within that car line, 
each base level, and finally each configuration. 
This approach should reduce the amount of 
duplication involved in presenting the required in- 
formation. 

Chrysler Corporation suggested two additional 
methods for reducing this burden. First, it sug- 
gests that petitioners should be permitted to sub- 
mit copies of reports containing quarterly vehicle 
production data which are submitted to EPA pur- 
suant to 40 CFR 86.077-36 and 86.078-37 in order 
to satisfy the need for information on its past pro- 
duction mix and totals. Second, it suggests that the 
requirement that petitions continually be updated 
as new information becomes available should be 
revised to permit periodic updates. Both sugges- 
tions have merit. To the extent that reports re- 
quired to be submitted to EPA or to any other 
agency present the information required under 
this regulation in a straightforward manner, not 
requiring extensive culling of useful information 
from surrounding material irrelevant to a section 
502(d) proceeding, copies of those reports may be 
submitted. The EPA reports cited by Chrysler may 
satisfy the product mix submission requirements. 
With respect to the question of updating petitions, 
Chrysler correctly points out that much of the re- 
quired data, such as projected production mix and 
total, will be in a state of flux at the time the 
manufacturer submits its petition. The regulation 
has, therefore, been changed to require the submis- 
sion of revised information within 30 days after the 
revision. This permits petitioners to submit new in- 
formation either as it becomes available or to sub- 
mit monthly updates including more than one 
change. Allowing more than 30 days for submis- 
sion of updated information (Chrysler suggested 
90 days) would prejudice NHTSA's ability to 
evaluate petitions quickly and accurately. 

In contrast to the above comments, the Center 
for Auto Safety argues that the data required to be 
submitted under the proposed regulations is inade- 
quate to evaluate petitions. That organization sug- 
gests requiring the submission of additional infor- 
mation similar to that required in EPA emission 
standard suspension proceedings, principally in- 



PART 527-PRE-3 



volving the manufacturer's research and develop- 
ment program resources and its efforts to develop 
alternative technology. NHTSA has concluded 
that it would be inappropriate to routinely require 
the submission of all of this information as part of 
every petition for a reduction. However, to the ex- 
tent that this type of information is relevant to a 
particular reduction proceeding, it is expected that 
it would normally be submitted to NHTSA as part 
of the manufacturer's petition for a reduction. 
Much of the suggested information seems more 
relevant to an evaluation of a manufacturer's max- 
imum feasible fuel economy improvements in a 
standard-setting proceeding than to a reduction 
proceeding. Compliance vnth applicable fuel 
economy standards is not a prerequisite to qualify- 
ing for a reduction. Both manufacturers which 
greatly exceed and manufacturers which fail to 
meet the fuel economy standards may still qualify 
for a reduction if they can demonstrate that their 
fuel economy suffered as a result of their efforts to 
comply with nonfuel economy standards, not- 
withstanding the use of a "reasonably selected 
technology." For the purpose of submitting a peti- 
tion, it is not even necessary for a manufacturer to 
actually have used reasonably selected technology 
in its vehicles, since a petition must be granted if a 
fuel economy penalty would have resulted had the 
petitioner used such a technology. See section 
502(d) (2) (B) (ii) of the Act. 

B. Reasonably Selected Technology 
A difference of opinion in the comments arose 
with respect to the determination of whether a par- 
ticular technology is "reasonably selected." Ford 
argues that this should be an individualized deter- 
mination, with the reasonableness of a given 
technology depending on the particular manufac- 
turer's circumstances. On the other hand, the 
Council on Wage and Price Stability contends that 
the regulations would have an anticompetitive ef- 
fect unless the same criteria were applied to all 
technological assessments for all manufacturers. 
In the Council's view, the regulation should not 
tolerate the use of less energy efficient technology 
by financially weaker manufacturers, since to do so 
would reward inefficiencies in management, pro- 
duction, or marketing which a competitive market 
would penalize. Although recognizing merit in the 
Council's argument, NHTSA cannot contravene 
the clear Congressional intent that an individual- 



ized evaluation be performed. Section 502(d) of 
House bOl H.R. 7014, the direct precursor to the 
reduction provisions in section 502(d) of the Act, 
required that "emission standards penalties" be 
calculated on the basis of "all passenger automo- 
biles to be manufactured in a model year," not 
limiting consideration to a particular manufac- 
turer's fleet. The House Report on H.R. 7014 (H. 
Rep. No. 94-340, 94th Cong., 1st Sess. 90 (1975)) 
states that the determination of an emission stand- 
ards penalty should be on "an industry-wide basis, 
rather than a manufacturer-by-manufacturer 
basis." However, the version of that provision 
which came out of the Conference Committee con- 
tained significantly different language. Under the 
conference substitute, reductions are to be based 
on "the reduction in a manufacturer's average fuel 
economy in a model year." (Emphasis added.) Sec- 
tion 502(d) of the Act is replete with references to 
the petitioning manufacturer's unique cir- 
cumstances. For example, in evaluating various 
technological options to determine whether the 
petitioner applied a reasonably selected 
technology, the Administration must, under the 
Act, consider the manufacturer's cost and lead- 
time requirements. Also, only fuel economy values 
for the petitioning manufacturer are to be con- 
sidered in calculating a reduction. Therefore, the 
Council's position cannot be accepted. It should be 
noted, however, that beyond 1980, fuel economy 
standards will be the same for all manufacturers, 
and any anticompetitive pressures generated by 
these procedures will no longer exist. 

The Council also suggests that a "cost- 
effectiveness" analysis be performed when 
evaluating various technological options. The Act 
requires that NHTSA evaluate the additional costs 
and fuel savings associated with these options. It is 
NHTSA's intent to compare the costs of techno- 
logical improvements with the value of their 
associated fuel economy benefits. This would be ac- 
complished by placing a dollar value on the 
gasoline saved. As noted by the Council, it may be 
appropriate to assume a number of different 
gasoline prices in conducting this analysis, since 
the present pump price cannot be expected to 
reflect the average pump price prevailing over the 
lifetime of the vehicles produced in the affected 
model years, nor does it reflect the "social cost" of 
gasoline. The results of these analyses would be 
factors considered by the Administration in deter- 



PART 527-PRE-4 



mining whether a particular technology is 
"reasonably selected." 

C. Adjustment and Selection of 
Production Mix 

In certain instances, a petitioner's projected pro- 
duction mix for the affected model year would not 
be used in calculating reductions. This would occur 
whenever the petitioner's average fuel economy at 
the projected mix failed to meet the standard for 
that model year, even if its vehicles were modified 
to meet 1975-level nonfuel economy standards. In 
such cases, the petitioner's projected production 
mix would be adjusted according to the procedure 
set forth in section 527.11 of the regulations. 

Ford notes that the use of this slightly arbitrary 
adjustment procedure may result in the use, for 
calculation purposes, of a production mix which 
would have been infeasible for the manufacturer to 
implement. However, NHTSA remains convinced 
that the proposed adjustment procedure is gener- 
ally appropriate. Section 502(d) (3) (E) of the Act 
requires the use in reduction calculation of a pro- 
duction mix which would have resulted in com- 
pliance with fuel economy standards. An adjusted 
mix is used only if the manufacturer would fail to 
meet the fuel economy standards with its planned 
production mix, even if the manufacturer's 
vehicles were designed to meet 1975 nonfuel 
economy standards in all four categories. If a mix 
existed which was feasible for the manufacturer 
and which would have resulted in meeting the fuel 
economy standard, the manufacturer presumably 
would have used it rather than risk the substantial 
civil penalties associated with noncompliance. Fur- 
thermore, if no adjustment methodology were 
specified in advance, petitioners would have an in- 
centive to postulate increased production of those 
vehicle configurations with a large nonfuel 
economy standard-related gas mileage penalty. It 
was deemed necessary, therefore, to use a uniform 
adjustment methodology. In most instances, the 
methodology adopted results in reasonable types 
of adjustments which a manufacturer might well 
decide to employ in order to comply with the fuel 
economy standards. 

The Center for Auto Safety objected to the ad- 
justment procedure used when no mix of a peti- 
tioner's automobiles would meet the applicable fuel 
economy standard. This situation would arise if the 
petitioner did not manufacture even a single vehi- 



cle configuration whose fuel economy met or ex- 
ceeded the standard. Under the proposal, such a 
petitioner would use its projected mix in 
calculating the reduction, even though that mix 
failed to satisfy the requirements of section 
502(d) (3) (E). The Center recommends using that 
mix which would come closest to meeting the 
standard, to wit, all vehicles produced being of that 
configuration with the highest fuel economy. This 
suggested revision has been incorporated in the 
final rule. Since in this situation the section 
502(d) (3) (E) requirement cannot be met by any 
mbc vehicles, it is reasonable to come as close as 
possible to complying with that requirement, 
which the Center's approach does. As a practical 
matter, however, it should be noted that it is ex- 
tremely unlikely that this provision wall ever apply 
to a petitioner. NHTSA is aware of no vehicle 
manufacturer subject to fuel economy standards 
which would not qualify for a low-volume exemp- 
tion under section 502(c) of the Act and which fails 
to manufacture at least one vehicle configuration 
whose fuel economy equals or exceeds even the 
most stringent standard applicable in the 1978-80 
period, the 1980 standard of 20 mpg. 

Ford also argues that in those instances where a 
petitioner can demonstrate that its production mix 
would differ from that projected if 1975-level non- 
fuel economy standards remained in effect, it 
should use that revised mix in its set 2 calculation. 
However, as discussed in the preamble to the 
NPRM at 41 F.R. 46882, section 502(d) (3) (E) of 
the Act requires the use of the same production 
mix for set 1 and set 2 passenger automobiles. 
Ford did not specifically dispute this statutory con- 
struction in its comment. Therefore, the regula- 
tions continue to require the use of a single produc- 
tion mix. 

D. Fuel Economy Reduction 
Calculation Procedures 
The most fundamental issue raised with respect 
to calculation procedures involves the use of 
analytical methods as an alternative to fuel 
economy tests in petitions. The notice of proposed 
rulemaking permitted the use of such methods. 
General Motors Corp. and Ford argued that such 
analyses are appropriate and should be permitted. 
Chrysler, on the other hand, argued that such 
analyses are inappropriate, at least for deriving 
the majority of the required fuel economy values. 
The need to use alternatives to actual fuel economy 



PART 527-PRE-5 



testing arises because of three incompatibilities 
between EPA's fuel economy testing requirements 
and the procedures for processing reduction peti- 
tions. First, EPA test results may not be available 
for all specified vehicle configurations in time for 
inclusion in a manufacturer's petition. Section 
502(d) (1) of the Act permits manufacturers to sub- 
mit reduction petitions at any time within the 
twenty-four months before the beginning of the af- 
fected model year. Petitioners would, as a practical 
matter, hope to file petitions and obtain a final 
decision as early as possible, in order to obtain 
maximum leadtime in planning production ad- 
justments which may be necessary depending on 
the level of the applicable average fuel economy 
standard. However, required EPA testing may not 
be completed until just prior to the required date 
for the manufacturer's preliminary determination 
of its fuel economy average, 10 days prior to its 
public introduction date. See 40 CFR 600.506-78 
(a). Second, the EPA tests can only provide data 
with respect to set 1 vehicles, and then only to the 
extent that the planned production vehicles employ 
a reasonably selected technology. Third, an incom- 
patibility arises where the projected production 
mix must be adjusted for purposes of calculating a 
reduction, and different configurations are re- 
quired to be tested under the EPA regulations at 
the adjusted mix than would be required under the 
projected mix. In each of these cases, EPA test 
data may not be available for inclusion in the peti- 
tion for reduction. 

The maximum use of actual test data is clearly 
desirable from the point of view of acciu-acy in 
calculating reductions, and is indeed mandated by 
section 502(d) (2) (A). However, it must be 
recognized that imposing substantial additional 
test requirements upon the manufacturers would 
be extremely burdensome, given the cost of con- 
ducting those tests (estimated by Ford at a 
minimum of $3,000 per test). Therefore, NHTSA 
wrill continue to permit the use of appropriate 
analytical methods in limited situations. Whether a 
given method is appropriate will be determined in 
the context of individual reduction proceedings. 

The regulations promulgated herein permit the 
submission of petitions based on analytical 
methods, subject to certain conditions. First, the 
petition must contain all available data from EPA 
fuel economy testing and the petitioner's own in- 
house testing program which has been completed 



by the time the petition is submitted. Second, the 
petitioner must schedule its fuel economy testing 
so that as much testing is completed by the time of 
submission as is reasonably practicable. Third, to 
the extent practicable, testing should be scheduled 
so that those vehicle configurations with the 
largest projected sales are tested first, so that this 
important data may be included in the petition. 
Fourth, the previously discussed monthly updates 
of petitions must include all additional test data 
which becomes avaOable. Finally, if set 1 data is 
based in whole or significant part upon analytical 
methods, the decision made by NHTSA on the peti- 
tion will be an "interim decision," subject to revi- 
sion Lf there are significant disparities between 
subsequently obtained EPA test data and the 
analyses submitted in the petition. See pp. 156-7 of 
the Conference Report (S. Rep. No. 94-516, 94th 
Cong., 1st Sess. (1975)). To avoid situations in 
which the submitted non-test data consistently 
overstates the reduction shown through actual test 
results, and to take into account variability in test 
procedures, the "significance" of disparities be- 
tween EPA and analytically generated data will be 
determined with reference to the aggregate im- 
pact of all disparities. In other words, large dif- 
ferences between interim and final fuel economy 
values for individual configurations would not re- 
quire revision of the interim decision if the dif- 
ferences did not reflect systematic bias in the 
analytical procedure used by the petitioner. 
"Significant disparities" will be defined as those 
which, when taken together, would result in a dif- 
ference of 0.1 mpg or more in the calculated 
average, the level of precision specified in section 
503(e) of the Act for fuel economy calculations. 
Relatively large but nonsystematic errors would 
tend to cancel each other out in the overall calcula- 
tion. The approach adopted in this regulation will 
permit early processing of petitions and will give 
the petitioner the advantage of greater leadtime, 
but will place the risk of using inaccurate analytical 
methods on the advocate of those methods. 

As previously noted, it is unlikely that any test 
data for set 2 vehicles would be generated unless 
additional tests were run specifically for the pur- 
poses of providing data for a reduction petition. In 
this regard, Chrysler has suggested conducting 
tests on prototype vehicles in each of the peti- 
tioner's largest-selling vehicle configurations 
which comprise a total of seventy percent of the 



PART 527-PRE-6 



petitioner's sales, then modifying each vehicle 
tested to comply with 1975-level nonfuel economy 
standards and retesting the same vehicle. 
Presumably, analytical methods could be used to 
provide set 2 data for the other configurations 
which were not tested, and EPA-approved data 
would satisfy other set 1 requirements, although 
Chrysler does not specifically suggest this. This ap- 
proach would appear to be an entirely appropriate 
method for generating data for a petition. 
However, NHTSA will not attempt to establish 
generally applicable minimum testing re- 
quirements for all manufacturers. Manufacturers 
may submit petitions in which set 2 data is based 
entirely upon analytical methods. However, such 
manufacturers should recognize that data based 
upon analytical methods will not be given the same 
probative weight as actual test data in NHTSA's 
review of petitions. As previously noted, particular 
types of analytical methods may be found to be 
completely inadequate for predicting fuel economy 
values, and a petition based on such analyses could 
not be granted. 

Where it becomes necessary to obtain fuel 
economy data for particular vehicle configurations 
solely because of required adjustments to the pro- 
duction mix, NHTSA would accept appropriate 
non-test data for both set 1 and set 2. These con- 
figurations would generally not have large sales 
fractions, even under the adjusted production mix, 
and would not be tested otherwise. 

Ford has suggested that, in calculating a reduc- 
tion due to emission standards, vehicles subject to 
the more stringent California emission standards 
should be included in set 1 but excluded from set 2. 
This approach would have the effect of lowering 
set 1 average fuel economy wath respect to that of 
set 2, and thereby increasing the reduction 
granted, because of the generally lower fuel 
economy of vehicles subject to California emission 
standards. 

Ford bases its argument on its reading of H.R. 
7014, which contained the House version of Title 
V, and its view of the assumptions on which Con- 
gress based the reduction provisions. First, Ford 
points out that section 502(d) (3) (C) (i) of the Act 
specifies the first step in calculating a Federal 
standards fuel economy reduction is determining 
"the reduction in a manufacturer's average fuel 
economy in a model year which results from the ap- 



plication of a category of Federal standards ap- 
plicable to such model year, and which would not 
have occurred had Federal standards of such 
category applicable to model year 1975 remained 
the only standards of such category in effect." Sec- 
tion 502(d)(3)(D) lists several "categories of 
Federal standards," the first of which, emission 
standards, specifically includes the more stringent 
California standards. Ford concludes from this 
that the reference in section 502(d) (3) (C) (i) to the 
average fuel economy resulting from the applica- 
tion of a "category of Federal standards" for the 
affected model year, which corresponds to set 1 
fuel economy under the regulations, must include 
California vehicles because of the definition of 
"category of Federal standards" in section 502(d) 
(3) (D). 

However, in Ford's view, the reference to 
"Federal standards of such category applicable to 
model year 1975" in section 502(d) (3) (C) (i), which 
corresponds to set 2 fuel economy under the 
regulations, is not subject to the same definition, 
despite the use of the words "such category" and 
"Federal standards." Rather, in Ford's view, the 
standards on which set 2 fuel economy is to be 
based are to be determined by referring to section 
502(d) of H.R. 7014, which bases the calculation of 
an emission standards fuel economy penalty on the 
1975-level 49-state emission standards. Ford's sec- 
ond argument is that reductions must be calculated 
in a manner consistent with the procedure Con- 
gress used to project the 1980 fuel economy stand- 
ard, which was based on the level of fuel economy 
achieved at 1975-level 49-state emission standards, 
again referring to H.R. 7014 and its legislative 
history. 

NHTSA is unable to accept this argument. The 
language of section 502(d) of the Act is unam- 
biguous on its face in this respect. Reductions are 
to be calculated on the basis of changes in strin- 
gency in a "category of Federal standards," and, 
in the case of emission standards, the category was 
defined to include the more stringent California 
standards. The differences in the language of the 
phrases "category of Federal standards" and 
"Federal standards of such category" are too 
minor to justify giving them completely different 
meanings, especially when the latter phrase clearly 
refers to the former. If the meaning of a statute is 
unambiguous on its face, the generally accepted 
rules of statutory construction prohibit reference 
to the legislative history to seek a different 
meaning. 



PART 527-PRE-7 



Even assuming arguendo that Ford's reading of 
H.R. 7014 is correct, it does not follow that the 
Conference Committee necessarily adopted the 
House provision in total. Ford argues that the Con- 
ference Committee lacked authority to amend the 
House version since, under 2 U.S.C. 190c(a), a Con- 
ference Committee can amend a provision only 
where the House and Senate versions disagree. If 
Ford's reading of the House bill is correct, the two 
bills must be viewed as being inconsistent. Under 
section 504 of S. 1883, baseline fuel economy was 
established at the "industrywide average fuel 
economy level for model year 1974," which must 
be read to include California vehicles. Fuel 
economy standards were to be established taking 
into account "the impact of other Federal stand- 
ards." See § 504(a) (3) of S. 1883. The product of 
the Conference Committee would necessarily, 
therefore, be viewed as a "germane modification 
of subjects in disagreement" between the two bills. 
2 U.S.C. 190c(a). 

Furthermore, to the extent that the reduction 
procedure and the 1978 fuel economy standards set 
forth in H.R. 7014 were drafted with an assumed 
baseline of 1975 49-state emission standards in 
mind, the manufacturers will not suffer under the 
Conference substitute from any increased strin- 
gency due to the inclusion of California vehicles. 
The Conference substitute decreased each of the 
fuel economy standards applicable in model years 
1978 to 1980 by 0.5 mile per gallon and reduced the 
amount by which the calculated average fuel 
economy penalty must be diminished when 
calculating the allowable reduction from 1.0 to 0.5 
mile per gallon per category of standards. 

Ford's approach is also inconsistent with the pur- 
pose of section 502(d). If the intent of that provi- 
sion is to first measure the impact on fuel economy 
of affected model year nonfuel economy standards 
with respect to 1975-level standards and to give 
the manufacturers partial credit for that impact, 
the Ford approach would overstate the actual fuel 
economy penalty experienced. In fact, it is theoret- 
ically possible under Ford's approach for a 
manufacturer to obtain an emission standards 
reduction where effected model year and 1975 
emission standards are identical in stringency. The 
more stringent California emission standards had 
a measurable impact upon average 50-state vehicle 
fuel economy in 1975. Congress recognized that 
fact in adopting section 502(d), and the final 
regulations must also take that fact into account. 



Chrysler Corporation stated that the NPRM was 
unclear regarding the methodology to be used for 
revising the 1978 or 1979 standard for domestic 
passenger automobiles with includable captive im- 
ports when a manufacturer requests the reduction 
of the standard as it applies to those vehicles, but 
not as it applies to the residual, nonincludable 
group of captive imports. Under the reduction 
regulations, the manufacturer is to provide for its 
captive imports the same type of technological in- 
formation that it is required to provide for its 
domestically manufactured vehicles. The fuel 
economy calculations are to be performed in ac- 
cordance with EPA procedures in 40 CFR Part 
600. With respect to the treatment of captive im- 
ports in model years 1978 and 1979, 40 CFR 
600.511-78 restates the requirements of section 
503(b) of the Act. Under § 600.511-78, the peti- 
tioner separately calculates, using the projected 
production mix, the average fuel economy of its 
planned imports for the affected model year. Next, 
the petitioner divides its planned imports into its 
"includable base import volume" and into a 
residual group of planned imports. Both groups are 
deemed to have the same average fuel economy as 
the manufacturer's overall volume of planned im- 
ports. In calculating a reduction, as in calculating 
an overall fuel economy average for standards 
compliance purposes, the "includable" imports are 
treated as a single model type with a sales volume 
equal to the includable base import volume. That 
model type is added to the model types of 
domestically manufactured passenger automo- 
biles. The residual group is not included in the 
calculation. Corresponding technological informa- 
tion and fuel economy calculations are required to 
be provided for the set 2 vehicles with the technol- 
ogy modified to reflect the assumption of 
1975-level nonfuel economy standards in those 
categories for which a reduction is sought. 

The NPRM raised the issue of how to take into 
account possible interactions between technology 
used by a manufacturer to comply with different 
categories of nonfuel economy standards. Such in- 
teractive effects might appear if, for example, 
compliance with a vehicle damageability standard 
required the addition of relatively heavy bumpers 
to a vehicle and the additional weight made com- 



PART 527-PRE-8 



pliance with emission standards more difficult.* 
The procedure set forth in the NPRM would have 
calculated a reduction by separately assessing the 
impacts of the two standards, if reductions for both 
damageability and emission standards were re- 
quested. The damageability standards reduction 
would have been calculated by subtracting the 
average fuel economy of the vehicles designed to 
comply with all categories of affected model year 
standards (set 1) from the average fuel economy of 
those vehicles at 1975-level damageability stand- 
ards and affected model year standards in all other 
categories (set 2), less 0.5 mile per gallon. The 0.5 
mile per gallon per category of standards is sub- 
tracted as required by section 502(d) (3) (C) of the 
Act. See Table 1. 

Table 1 





Emission 
standards 


Safety 
standards 


Noise 
standards 


DamageabOity 
standards 


Setl 


AMY' 


AMY 
AMY 


AMY 
AMY 


AMY 


Set 2 


AMY 


75 MY 









' AMY = affected model year 
Similarly, under the procedure in the NPRM, the 
reduction attributable to more stringent emission 
standards would be calculated by subtracting the 
same set 1 fuel economy as in Table 1 from the 
average fuel economy of those vehicles designed to 
meet 1975-level emissions standards and affected 
model year standards in all other categories of 
standards, less 0.5 mile per gallon. See Table 2. 

Table 2 





Emission 
standards 


Safety 
standards 


Noise 
standards 


Damageability 
standards 


Setl 

Set 2 


.... AMY- 
. . . . 75 MY 


AMY 
AMY 


AMY 
AMY 


AMY 
AMY 









' AMY = affected model year 
The total reduction would have been calculated by 
summing the two numbers calculated above. This 
sum may not reflect the actual fuel economy pen- 
alty suffered by the petitioner due to the interac- 



' It is also possible that compliance with more stringent stand- 
ards in one category may facilitate compliance with more strin- 
gent standards in another category. For example, a safety 
requirement relating to high-speed crash survivability might re- 
quire the use of "soft" vehicle front ends, which reduce vehicle 
weight and might, therefore, make compliance with emission 
standards easier. 



tion problem. This becomes apparent when one 
considers that the comparison in Table 1 would 
measure not just the damageability standards 
penalty, but also an emission standards impact 
resulting from the ability of set 2 vehicles to use 
less extensive emission controls, due to their 
lighter weight. The impact of emission standards 
could be partially "double counted" in the above 
example. 

Ford has suggested an alternative method for 
calculating reductions which avoids the interaction 
problem by not attempting to apportion the total 
fuel economy penalty incurred among the various 
categories of standards for which a reduction is 
sought. Under Ford's approach, the same set 1 
vehicles would be used as above. However, set 2 
would include vehicles designed to meet 1975-level 
standards in all categories for which a reduction is 
sought. In the example above, where reductions 
for both emission and damageabUity standards 
were sought, the two sets would be defined as set 
forth in Table 3. 

Table 3 





Emission 
standards 


Safety 
standards 


Noise 
standards 


Damageability 
standards 


Set 1 


. . AMY' 


AMY 
AMY 


AMY 
AMY 


AMY 


Set 2 


75 MY 


75 MY 









' AMY = affected model year 
In calculating a reduction, the difference in fuel 
economy of the two sets would be calculated, and 
0.5 mile per gallon would be subtracted for each 
category of standards for which a reduction is 
sought. Thus, in the example above, 1.0 mile per 
gallon would be subtracted from the fuel economy 
difference between the two sets. 

The Ford approach greatly reduces the data re- 
quirements and simplifies calculations where 
reductions for more than one category of stand- 
ards are sought. In addition, the Ford procedure is 
mathematically equivalent to that specified in the 
Act, merely rearranging and reassociating the 
terms in the overall summation. Where interac- 
tions are present, the Ford procedure measures 
the true total impact on fuel economy, while the 
procedure specified in the NPRM, as the NPRM 
preamble noted, could either overstate or 
understate that effect. The fact that the Ford pro- 
cedure does not assign a fuel economy penalty to 
each of the separate categories of standards is un- 



PART 527-PRE-9 



important, since the total penalty is the critical 
number in adjusting the fuel economy standard. 
The only possible inaccuracy in the Ford procedure 
would occur if, for example, one of the categories 
of standards had an associated fuel economy dif- 
ference between the two vehicle sets of less than 
0.5 mile per gallon. Under the NPRM approach, 
the fact that the difference for category A was less 
than 0.5 mile per gallon would have no effect on 
the calculation of the applicable fuel economy 
reduction for category B. The only significance of 
the fact would be that no applicable fuel economy 
reduction would be allowed for category A. Under 
the Ford approach, there would be such an effect 
since the differences for the two categories are 
added together and then 1.0 mile per gallon (0.5 
mile per gallon for each category) is subtracted 
from the total difference. To the extent that 0.5 
mile per gallon was greater than the difference for 
category A, it would be subtracted from the poten- 
tial reduction obtainable under category B. A peti- 
tioner could avoid this penalty, however, by simply 
not applying for a reduction in that category. 
Although the statute defines separate reductions 
for each category of standards, nothing in the 
statute requires that these numbers be separately 
calculated. 

Therefore, the NHTSA has revised the final 
regulations to incorporate the Ford proposal. The 
regulations no longer provide for the separate 
calculation of "applicable fuel economy reduc- 
tions" as in § 527.10 of the proposed rule, and cor- 
responding revisions have been made in other 
sections. 

American Motors Corporation raised two issues 
relevant to the manner in which reductions are 
calculated. First, it suggested that uniform reduc- 
tions be promulgated for all manufacturers where 
changes in stringency of nonfuel economy stand- 
ards occur and where the impact of those changes 
is similar for all manufacturers. Although it is not 
inconceivable that such a situation could arise, 
NHTSA is unaware of any cases of this type, and 
does not anticipate promulgating uniform reduc- 
tions at this time. In order to grant a reduction 
NHTSA must evaluate the technology actually 
used by a manufacturer and other technology 
which might have been reasonably selected. Both 
of these determinations are necessarily individual- 
ized, necessarily made in the context of an in- 
dividual manufacturer's situation, and the overall 



determination would not, therefore, lend itself to 
uniform treatment. See discussion of reasonably 
selected technology in section HIb. AMC's second 
point was that changes in nonfuel economy test 
procedures which affect the stringency of those 
standards should be treated the same as changes in 
the numerical level of the standards. NHTSA 
agrees that where a test procedure change has this 
effect, the change should be treated the same as a 
revision to the standard for purposes of calculating 
a reduction. However, whether particular test pro- 
cedure changes will be deemed to have such an ef- 
fect must be determined in individual reduction 
proceedings, since the precise effect of such 
changes may differ for the various automobile 
manufacturers. Changes in the emission test pro- 
cedures which impact measured fuel economy 
values (the emission and city fuel economy test pro- 
cedures are the same) for 1978, 1979, or 1980 
would be evaluated for comparability under section 
503(d) (1) of the Act. Changes in nonfuel economy 
test procedures or standards which occur after 
1980 would be reflected in possible amendments to 
the fuel economy standards, under section 502(f). 

Ford raised the issue of whether petitioners 
would be permitted to base their analyses on their 
need to build vehicles in such a way that the 
vehicles will have a high probability of meeting ap- 
plicable nonfuel economy standards. Ford main- 
tains it must "target" its production process to the 
achievement of an effectively more stringent 
standard, in order to take into account product 
variability and, in the case of emissions, perform- 
ance deterioration of control technology. To the 
extent that a petitioner can demonstrate that its 
projected design targeting is reasonable and con- 
sistent with past practice, such level may be taken 
into account in petitions. However, NHTSA will 
carefully scrutinize any purported lower design 
targets to assure that assumed safety margins are 
reasonable in light of methods available to 
manufacturers to reduce these margins without 
undue risk and its own past practices. Among 
these methods might be retesting failed vehicles, 
certifying several versions of individual models in- 
tended for sale, and avoiding recertification of a 
previous year's vehicles which met a subsequent 
year's more stringent nonfuel economy standards. 

The Ethyl Corporation argued that all fuel 
economy calculations must take into account the 
different amounts of energy needed to produce a 



PART 527-PRE-lO 



gallon of leaded or unleaded gasoline. The need for 
unleaded gasoline was generated in part by the 
adverse impact of lead additives on some emission 
control devices. However, the determination of the 
equivalence of various types of automobile fuels is 
the responsibility of EPA under section 503(d) (2) 
of the Act and it would be improper for NHTS A to 
attempt to decide the matter in this proceeding. 

E. Hearing Procedures and Processing of 
Petitions 
Several comments were received with respect to 
the question of the proper format for reduction 
proceedings. Since some of those comments 
resulted from misunderstandings of or ambiguities 
in the NPRM, it is worthwhile to restate and 
clarify the intended procedures. The proceeding 
would commence with the submission of a petition 
by a manufacturer. The Administrator would then 
evaluate the petition to assure that it meets each of 
the requirements of §§ 527.5 through 527.12 of the 
regulations. If the petition is deemed to be in- 
complete, the Administrator would so notify the 
petitioner, specifying the additional material needed. 
Once a complete petition is received, it is placed in 
a public docket, and a copy of the petition is 
transmitted to the Federal agency responsible for 
the administration of the category of standards for 
which a reduction is sought for that Agency's 
evaluation. For example, in the case of a petition 
for an emission standards reduction, a copy of the 
petition would be sent to the Environmental Pro- 
tection Agency. Simultaneously, the Administra- 
tor would publish a notice of receipt in the 
Federal Register. The notice would state that a 
petition had been received, identify the petitioner, 
cite the reduction requested and summarize the 
petitioner's rationale therefor, state the Adminis- 
trator's options for disposition of the petition and 
list the criteria to be applied in evaluating the peti- 
tion. The notice would also identify the location of 
copies of the petition available for public inspection 
and solicit comment on the petition. Once com- 
ments are received from interested parties and 
Federal agencies and evaluated, a proposed deci- 
sion or, as appropriate, set of alternative decisions 
would be published. In the latter case, the proposal 
would set forth reasonable alternative dispositions 
of the issues, granting, denying, or denying in part 
the reduction. The alternatives could range from 
complete denial to complete granting of petitions. 



but neither of these extreme positions would be 
proposed unless NHTSA concluded that those 
levels could be supported by available data and in- 
formation and were based on reasonable assump- 
tions and judgments. This will permit advocates of 
either granting or denying the petition to focus 
their comments on attacking the undesirable alter- 
native or alternatives and supplementing the data 
base for the desired one. The proposal would set 
forth the data, analyses, and methodology on 
which each alternative disposition is based, and 
would request comments from the public. The 
notice also establishes a time and place for a public 
hearing. Following the hearing, and subsequent 
comment period, the entire record for the pro- 
ceeding is reviewed and an interim or final decision 
is published. An interim decision is subject to read- 
justment when EPA test data becomes available, 
after an opportunity for public comment on the 
readjustment. 

EPA's Office of Mobile Source Air Pollution 
Control (OMSAPC) and the Center for Auto Safety 
have suggested that proceedings held pursuant to 
this regulation be patterned after those held in the 
past by EPA on the suspension of automotive emis- 
sion standards. Under the suggested EPA pro- 
cedure, a notice of receipt would be published con- 
taining the same information as the notice of 
receipt in the NHTSA procedure, plus information 
about the required hearing. OMSAPC and the 
Center for Auto Safety suggest eliminating the 
proposed decision from the NHTSA procedure. 
They propose holding the public hearing after the 
issuance of the notice of receipt and then pro- 
ceeding to a final notice. OMSAPC argues that this 
procedure is legally sufficient and superior from a 
policy standpoint to the NHTSA procedure. 

With respect to the first point, it is true that in- 
itial notices which do not provide detailed informa- 
tion on every aspect of the final rule adopted are 
appropriate in some cases. See, e.g., "Ethyl Corp. 
V. EPA, " 541 F.2d 1, at 48. However, courts may 
be less tolerant of such "general" notices in 
rulemaking proceedings which have significant ad- 
judicatory aspects. In such cases, the inclusion of a 
requirement for opportunity for oral comment in 
addition to the usual opportunity for submission of 
written comments may evince a Congressional 
policy of encouraging greater "give-and-take" in 
the rulemaking proceeding, which may in turn re- 
quire a more detaOed description of the "subjects 



PART 527-PRE-ll 



and issues involved." See, e.g., "International 
Harvester," supra at 632, where the court ex- 
presses diffidence with respect to the opportunity 
for full public comment provided in the EPA pro- 
cedure. Also, the statutory requirements under 
which NHTSA proceedings will be held differ in 
two respects from those under which EPA oper- 
ated. First, no statutory time constraint is 
specified for the completion of a reduction pro- 
ceeding, as was the case under the Clean Air Act. 
The court in "International Harvester" frequently 
cited the Clean Air Act "60 day requirement" as a 
basis for tolerating certain procedural "short- 
cuts." 478 F.2d at 629, 631, 632. Second, unlike 
EPA, NHTSA rulemaking, under section 502(d) is 
subject to the "substantial evidence test" in any 
subsequent judicial review. 15 U.S.C. 2004(a). 
Although the courts are still grappling with the 
question of the effect of combining informal 
rulemaking under 5 U.S.C. 553, normally subject 
to the less stringent "arbitrary and capricious" 
test of 5 U.S.C. 706(2) (A), with the substantial 
evidence test, at least one court has concluded that 
such a combination necessitates additional pro- 
cedural safeguards to assure the opportunity for a 
full dialogue between the agency and interested 
parties. "Mobil Oil Corp. v. FPC, " 483 F.2d 1238, 
1257-1263 (D.C. Cir. 1973). This may also necessi- 
tate the presentation of a more precise statement 
of the agency's views at a time prior to the for- 
mulation of a final nile. NHTSA does not conclude 
from this discussion that a procedure such as 
EPA's is necessarily inadequate in the context of 
section 502(d), but rather that substantial legal 
questions may exist with respect to the appro- 
priateness of that procedure. 

OMSAPC also argues that its procedures would 
avoid shifting the burden of proof in a proceeding 
away from the petitioner. However, under the 
EPA procedure, once the petitioner makes its 
prima facie case, the burden is shifted to anyone, 
including the agency, which seeks to apply a dif- 
ferent methodology to reach a different result. See 
"International Harvester," supra at 643. The only 
effect of the proposed decision in the NHTSA pro- 
cedure is to clarify where the burden of proof lies 
at that time, by either advancing one or more alter- 
native methodologies or concurring in the peti- 
tioner's. 

In addition, NHTSA disagrees with the policy 
arguments made by OMSAPC. The original intent 
of the regulations has been clarified to require that 
the notice of receipt will solicit comments from the 



general public. (See letter from Stephen Wood, 
Assistant Chief Counsel, NHTSA, to Eric Stork, 
Deputy Assistant Administrator for Mobile Source 
Air Pollution Control, EPA, dated November 17, 
1976, Docket FE 76-2, No. lA.) Taken together 
with our prior statement that the views of other af- 
fected Federal agencies would be sohcited (41 F.R. 
46884) and formal interagency review require- 
ments for rulemaking, it appears that OMSAPC's 
objections regarding NHTSA taking a position on 
a petition prior to receiving any outside input have 
been met. Furthermore, it is NHTSA's view that 
the use of a proposed decision will achieve a signifi- 
cant improvement over the EPA procedure, by 
soliciting public comment on not only Agency 
methodology (it is not clear from the OMSAPC 
comment that they even recommended this, the 
"International Harvester" requirement for such 
comment notwithstanding), but also on the applica- 
tion of that methodology. While the law may not 
require such a full opportunity for comment, 
NHTSA deems it appropriate to provide more than 
the bare minimum which the Administrative Pro- 
cedure Act requires. In light of this, NHTSA can- 
not conclude that the EPA procedure is clearly 
superior to that set forth in this regulation from a 
policy standpoint. 

With respect to the issues of the desirability of 
permitting "two cycles of notice and comment" on 
complex matters and making public the agency's 
views on matters important to the final rulemaking 
at a time prior to the final decision, "in order to 
enhance the usefulness of further comments," the 
positions adopted in this regulation appear to be 
supported by a recent recommendation of the Ad- 
ministrative Conference of the United States. See 
Recommendation No. 76-3, 1 CFR 305.76-3, also 
published in 41 F.R. 29654, July 19, 1976. 

There is some merit in the points raised by 
OMSAPC and the Center for Auto Safety, in 
regard to the likelihood that an agency which pro- 
poses a specific rule has a natural tendency to 
resist changes to the rule. Efforts to minimize this 
acknowledged phenomenon conflict with NHTSA's 
need to provide a full opportunity for public com- 
ment by clearly detailing the relevant considera- 
tions in the proceeding. NHTSA has attempted to 
balance these conflicting considerations by pro- 
viding in the regulation that the proposed decision 
will, when appropriate, contain alternatives which 
establish a reasonable range of justifiable reduc- 



PART 527-PRE-12 



tions, or denial of the petition. Therefore, the pro- 
posed procedure, as clarified, has been retained. 

Several commenters raised the issue of the need 
for NHTSA to act on petitions as expeditiously as 
possible. Recognizing the importance of an early 
decision to the petitioning manufacturer, NHTSA 
will endeavor to complete the entire decision pro- 
cess within 180 days from the time a complete peti- 
tion is received. If complying with that goal proves 
impossible, NHTSA will still make every effort to 
expedite the decision, albeit by a later date. 

Several changes to the procedures for the public 
hearing on petitions were adopted. As suggested 
by EPA, individuals other than NHTSA officials 
may serve on the hearing panel. In order to em- 
phasize the need for complete and accurate presen- 
tations at the hearing, all testimony will be made 
under oath. In addition, any participant in the pro- 
ceeding may petition NHTSA to use its authority 
under section 505(b) of the Act to compel the ap- 
pearance and testimony at the hearing of any in- 
dividual shown to have relevant information 
necessary to an informed decision in the pro- 
ceeding. The agency may well use that authority 
on its own initiative to secure the testimony of 
automobile manufacturers and suppliers of 
automobile components. Notice of the public hear- 
ing will be given through the issuance of a press 
release by NHTSA, in addition to a Federal 
Register notice, in order to inform the public at 
large. 

F. Treatment of Confidential 
Information 

Several commenters discussed the question of 
how NHTSA should handle petitioners' requests 
for confidential treatment of information included 
in petitions for reduction. In such cases, the 
public's need to obtain access to the information in 
order to make informed comments on the petition 
runs counter to the manufacturer's desire to pre- 
vent disclosure of infomiation which may be of 
some benefit to its competitors. This same conflict 
appears in most of NHTSA's rulemaking activities 
under Title V of the Act. In recognition of the im- 
portance of these issues, NHTSA published a 
notice requesting comment on how these requests 
for confidential treatment should be handled. 42 
F.R. 3240 (January 17, 1977). 



After evaluating comments submitted on this 
issue in the context of this proceeding and the 
January 17 notice, NHTSA deems it appropriate to 
alert potential petitioners to the agency's intention 
to grant confidential treatment to information sub- 
mitted as part of reduction petitions only in excep- 
tional circumstances. This approach is taken under 
the authority of section 505(d) (1) of the Act which 
permits the release of trade secret information 
where relevant to any administrative or judicial 
proceedings. NHTSA does this for several reasons. 
First, Congress has expressed its intent that the 
1976-80 fuel economy standards established in sec- 
tion 502(a) (1) of the Act should be entitled to a 
strong presumption of validity and should be 
modified only on a clear showing by a petitioner 
and after a broad opportunity for public participa- 
tion in the reduction proceeding. Unlike most other 
rulemaking under the Motor Vehicle Information 
and Cost Savings Act, Congress specified that sec- 
tion 502(d) rulemaking would be subject to the 
more stringent "substantial evidence" test in any 
subsequent judicial review, and that participants in 
the rulemaking proceeding would be entitled to 
make oral presentations, in addition to the usual 
opportunity for written comment. See 15 U.S.C. 
2002(g) and 2004(a). In view of the manufacturer- 
specific nature of reduction proceedings (see sec- 
tion Illb above), the ability of participants in the 
proceeding to effectively comment on all relevant 
issues would be limited unless they have access to 
the entire petition. This is a greater problem in the 
context of reduction proceedings than in most 
nilemaking proceedings, where industry-wide con- 
siderations and long-term capabilities are of 
greater relevance. The portions of a petition for 
which a petitioner is most likely to request con- 
fidential treatment, projected production mix and 
technology to be employed or capable of being 
employed in the affected model year, will be 
critical to an informed analysis of the petition and 
are likely to be central issues in NHTSA's final 
decision. Second, no manufacturer is required to 
submit a reduction petition, so that the potential 
release of any confidential information is, in a 
sense, voluntary on the part of the manufacturer. 
Although manufacturers possess a statutory right 
to petition for a reduction, it is not unreasonable 
for NHTSA, in exercising its discretionary author- 
ity under section 505(d) (1) to promote the goals of 
Title V, to require manufacturers to balance their 



PART 527-PRE-13 



need for a reduction against the potential danger 
from release of the contents of their petition. 
Failure to obtain a reduction is unlikely to have 
devastating consequences for a manufacturer. All 
manufacturers other than those qualifying for 
"low-volume" exemptions under section 502(c) of 
the Act are expected to have average fuel 
economies either closely approaching or exceeding 
the applicable fuel economy standards for model 
years 1978-80. Thus, even in the worst case, a 
manufacturer which, without a reduction, would 
fail by a small margin to meet the standard, could 
elect to pay the civil penalty specified in section 
508, which, because of the manufacturer's nearly 
meeting the standard, would be relatively small on 
a per-vehicle basis, compared to the price of the 
automobile. On the other hand, such a manufac- 
turer could elect to implement some of the tech- 
nological improvements which would be necessary 
to meet the next year's fuel economy standard in 
any case, one year early in order to avoid paying 
the penalties. Finally, the information submitted in 
a petition would become public in a relatively short 
time regardless. Petitions must be submitted 
within two years of the start of the affected model 
year under section 502(d) (1). In most cases, a com- 
petitor would not have adequate leadtime to take 
advantage of the information contained in the peti- 
tion between the time of submission and the start 
of the affected model year, when the information 
necessarily becomes public through the sale of the 
affected model year vehicles. For these reasons. 



NHTSA will grant confidential treatment to infor- 
mation contained in reduction petitions only in 
exceptional, and presently unforeseen, cir- 
cumstances. 

IV. Economic and Environmental Impacts 

The economic and environmental impacts of 
these regulations were evaluated and found to be 
minimal. The granting of denial of reductions 
based on these regulations may have significant 
impacts but those impacts will be individually 
evaluated in the context of individual reduction 
proceedings. No adverse environmental impacts 
were found to be associated with this essentially 
procedural regulation itself. The only economic im- 
pacts would involve staff time spent in preparing 
and evaluating petitions and perhaps a small 
number of additional fuel economy tests. The addi- 
tional costs attributable to the rule are expected to 
be under three million dollars total for both the in- 
dustry and the government, based on the submis- 
sion of four petitions. 

The program official and lawyer principally 
responsible for the development of this regulation 
are Ralph J. Hitchcock and Roger C. Fairchild, 
respectively. 

Issued on November 4, 1977. 

Joan Claybrook 
Administrator 
42 F.R. 58938 
November 14, 1977 



PART 527-PRE-14 



PART 527-REDUCTION OF PASSENGER AUTOMOBILE AVERAGE 
FUEL ECONOMY STANDARDS 

(Docket No. FE 76-2; Notice 2) 



Sec. 

527.1 Scope and purpose. 

527.2 Applicability. 

527.3 Definitions. 

527.4 Eligibility. 

527.5 Requirements for petition. 

527.6 Technology. 

527.7 Fuel economy. 

527.6 Average fuel economy. 

527.9 Federal standards fuel economy reduction. 

527.10 Projected production total and mix. 

527.11 Production mix for determining Federal 
standards fuel economy reductions. 

527.12 Calculation of fuel economy values and 
average fuel economy. 

527.13 Supplementary Information requirements. 

527.14 Processing of petitions. 

527.15 Public hearing. 

527.16 Public Inspection of Information. 

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 authority 
at 41 FR 25015, June 22, 1976. 

§ 527.1 Scope and purpose. 

This part estabhshes procedures for the sub- 
mission and disposition of petitions filed by 
manufacturers of passenger automobiles to obtain 
reduction of the applicable average fuel economy 
standard for model year 1978, 1979, or 1980. These 
reductions are intended to offset any loss of fuel 
economy due to the application in that year to 
passenger automobiles of Federal emission, safety, 
noise, or damageability standards more stringent 
than those applicable in model year 1975. This part 
also estabhshes procedures for holding pubUc hear- 
ings on those petitions. 



§ 527.2 Applicability. 

This part applies to manufacturers of passenger 
automobiles. 
§ 527.3 Definitions. 

(a) Statutory terms. (1) The terms "Federal 
standards fuel economy reduction," "fuel," 
"manufacturer," "model year," and "reasonably 
selected technology" are used as defined in section 
501 or 502 of the Act. 

(2) The terms "average fuel economy," "fuel 
economy," and "model type" are used in 40 CFR 
600.002-77. 

(3) The terms "automobile" and "passenger 
automobile" are used as defined in section 501 of 
the Act and in accordance with the determina- 
tions in 49 CFR Part 523. 

(b) Other terms. (1) The terms "base level" and 
"vehicle configuration" are used as defined in 40 
CFR 600.002-77. 

(2) As used in this part, unless otherwise re- 
quired by the context— 

"Act" means the Motor Vehicle Information 
and Cost Savings Act (Pub. L. 92-513), as 
amended by the Energy Policy and Conservation 
Act (Pub. L. 94-163). 

"Administration" means the National 
Highway Traffic Safety Administration. 

"Affected model year" means the model year 
for which a reduction of an average fuel economy 
standard is requested under this part. 

"Category of Federal standards" means any of 
the following categories of motor vehicle stand- 
ards and associated measurement procedures— 

(1) Emissions standards issued under section 
202 of the Clean Air Act (42 U.S.C. 1857f-l), and 
emissions standards applicable by reasons of sec- 
tion 209(b) of that Act (42 U.S.C. 1857f-6a(b)); 



PART 527-1 



Traffic and Motor Vehicle Safety Act of 1966 (15 
U.S.C. 1381 et seq.); 

(3) Noise emission standards issued under sec- 
tion 6 of the Noise Control Act of 1972 (42 U.S.C. 
4905); or 

(4) Property loss reduction standards issued 
under title I of the Act (15 U.S.C. 1911 et seq.). 

"EPA Administrator" means the Administrator 
of the Environmental Protection Agency. 

"Modifications" means changes by a petitioner 
in the technology of a passenger automobile con- 
sistent with the need of the Nation to improve 
automobile fuel economy and with the energy sav- 
ings, economic costs, and leadtime requirements 
associated with the technologies that would have 
been practicably available to the petitioner given 
the applicability of the model year 1975 standards 
in the category or categories of Federal standard 
for which a reduction is sought. 

"NHTSA Administrator" means the Adminis- 
trator of the National Highway Traffic Safety 
Administration. 

"Production mix" means the number of 
passenger automobiles, and the percentage of the 
petitioner's annual total production of passenger 
automobiles, in each vehicle configuration which a 
petitioner plans to produce in a specified model 
year. 

"Set 1" means the set of passenger automobiles 
which a petitioner will produce in the affected 
model year. 

"Set 2" means the set of passenger automobiles 
which a petitioner would have produced in the af- 
fected model year had the model year 1975 stand- 
ards in all categories of Federal standards for 
which a Federal standards fuel economy reduction 
is sought been the only standards in those 
categories. 

§ 527.4 Eligibility. 

Any manufacturer of passenger automobiles 
may petition the NHTSA Administrator under this 
part for a reduction of the average fuel economy 
standard applicable to passenger automobiles for 
model year 1978, 1979, or 1980. 



Each petition filed under this part must: 

(a) Request the reduction of an average fuel 
economy standard for not more than one model 
year; 

(b) Identify the affected model year; 

(c) Be submitted within the 24-month period im- 
mediately preceding the beginning of the affected 
model year; 

(d) Be submitted in twenty copies to: Adminis- 
trator, National Highway Traffic Safety Adminis- 
tration, Washington, D.C. 20590; 

(e) Be written in the English language; 

(f) State the full name, address, and title of the 
official responsible for the preparation of the peti- 
tion; and 

(g) Set forth in full the data, views, and 
arguments of the petitioner supporting the 
Federal standards fuel economy reduction re- 
quested in its petition, including the information 
and data specified in §§ 527.6 through 527.12 and 
the calculations and analyses used to develop the 
information and data. No documents may be incor- 
porated by reference in a petition unless the 
documents are submitted with the petition. 

§ 527.6 Technology. 

(a) The petitioner shall submit the following in- 
formation as part of its petition— 

(1) Set 1 technology. For each vehicle con- 
figuration specified in 40 CFR 600.506(a) (2) (iii) 
of the petitioner's passenger automobiles to be 
produced in the affected model year, the infor- 
mation specified in paragraph (a) (1) (i) and (ii) of 
this section: 

(i) A description of the technology that is in- 
corporated in the vehicle configuration and 
that either relates to the petitioner's efforts to 
comply with any category of Federal stand- 
ards or affects the fuel economy of the vehicle 
configuration; 

(ii) A description of any alternative or addi- 
tional technology that was practicably avail- 
able to the petitioner for incorporation in the 
vehicle configuration and the use of which 
would have enabled that vehicle configuration 
to achieve higher fuel economy and would have 
resulted in a smaller Federal standard fuel 
economy reduction than the technology 
described under paragraph (a) (1) (i) of this 
region; and 



PART 527-2 



(iii) For each item of alternative technology 
described under paragraph (a) (1) (ii) of this 
section, a statement of the reasons for not in- 
corporating the item, including a comparison 
of the fuel savings, economic costs and lead- 
time requirements of that item and of the 
technology that was incorporated in the vehi- 
cle configuration. 

(2) Set 2 technology. A description of the 
modifications that the petitioner would have 
made to each vehicle configuration specified in 
40 CFR 600.500<a) (2) (iii) had the model year 
1975 standards in all categories of Federal stand- 
ards for which a Federal standards fuel economy 
reduction is sought been the only standards in 
those categories for the affected model year. 
S S27.7 Fuel economy of vehicle configurations and 
model types. 
The petitioner shall submit a fuel economy value 
for each vehicle configuration specified in 40 CFR 
600.506(a) (2) (iii) and for each model type of the 
petitioner's set 1 and set 2 passenger automobiles. 

§ 527.8 Average fuel economy. 

The petitioner shall submit the average fuel 
economy determined in accordance with 
$ 527.12(c) of the petitioner's set 1 and set 2 
passenger automobiles. 

§ S27.9 Federal standards fuel economy reduction. 

Federal standards fuel economy reductions shall 
be calculated as follows: 

(a) Subtract— 

(1) Set 1 fuel economy determined under 
S 527.8 from 

(2) Set 2 fuel economy determined under 
S 527.8; and 

(b) Subtract 0.5 mOes per gallon from the result 
obtained under paragraph (a) of this section for 
each category of Federal standards for which a 
Federal standards fuel economy reduction is 
sought. 

§ 527.10 Projected production total and mix. 

(a) The petitioner shall submit its projections, 
based on the average fuel economy standard for 
passenger automobiles as specified in the Act for 
the affected model year, of its total production and 
production mix of all model types of its passenger 
automobiles for the affected model year, and all 



vehicle configurations within each of those model 
types, and information demonstrating that those 
projections are reasonable. The information shall 
include information showing that those projections 
are consistent with the petitioner's mixes of 
passenger automobiles produced or expected to be 
produced in each model year from model year 1975 
through the model year immediately preceding the 
affected model year, its passenger automobile pro- 
duction capacity for the affected model year, its ef- 
forts to comply with that average fuel economy 
standard, and the anticipated consumer demand 
for passenger automobiles during that model year. 

§527.11 Production mix for determining Federal 
standards fuel economy reductions. 

The production mix to be used for calculating 
Federal standards fuel economy reductions shall 
be the mix or mixes specified in paragraph (a), (b), 
or (c) of this section, as appropriate. 

(a) (1) The production mix to be used shall be the 
mix projected under § 527.10 if either of the follow- 
ing conditions are met: 

(i) The average fuel economy determined in 
accordance with § 527.12(c) of the petitioner's 
passenger automobiles for the affected model 
year, based upon the production mix projected 
under § 527.10, equals or exceeds this ap- 
plicable average fuel economy standard; or 

(ii) The average fuel economy based on the 
mix projected under § 527.10 of the 
petitioner's passenger automobiles to be pro- 
duced in the affected model year with the 
modifications that the petitioner would have 
made to them had the standards in one or 
more categories of Federal standards for 
model year 1975 been the only standards in 
that category or categories in effect during the 
affected model year equals or exceeds the ap- 
plicable average fuel economy standard. 
(2) If the condition in paragraph (a) (1) (i) of 
this section is not met but the condition in 
paragraph (a) (1) (ii) of this section is met, the 
petitioner shall provide the information specified 
in SS 527.6, 527.7, and 527.8 for the passenger 
automobiles described in paragraph (a) (1) (ii). 

(b) If the average fuel economy of no mix of 
passenger automobiles for the affected model year 
as modified under § 527.11(a) (1) (ii) equals or ex- 
ceeds the applicable average fuel economy stand- 
ard, the production mix to be used shall be that 



PART 527-3 



mix with production total equal to that total pro- 
jected under S 527.10 and with all vehicles being of 
the vehicle configuration with the highest fuel 
economy. 

(c) The production mix to be used shall be that 
mix calculated under this paragraph if none of the 
criteria in paragraphs (a) or (b) of this section are 
met. For the purposes of adjusting the production 
mix pursuant to this paragraph, the following pro- 
cedures shall be followed: ' 

(1) Assume initially that the modified 
passenger automobiles specified in paragraph 
(a) (1) (ii) of this section are to be produced in the 
production total and mix projected under 
$ 527.10. 

(2) Keeping that total production constant, ad- 
just that production mix as follows: 

(i) For each model type of those modified 
passenger automobiles whose fuel economy is 
less than the average fuel economy standard 
for passenger automobiles for the affected 
model year, decrease the numbers of those 
modified passenger automobiles in that model 
type and in each vehicle configuration within 
that model type by 0.1 percent. 

(ii) For each model type of those modified 
passenger automobiles whose fuel economy is 
equal to or greater than that standard, in- 
crease the numbers of those modified 
passenger automobiles in that model type and 
in each vehicle configuration within that model 
type by that percentage which, in conjunction 
with the decrease specified in paragraph 
(c) (2) (i) of this section, will keep the total pro- 
duction constant. 

(3) Calculate the average fuel economy of the 
production mix as adjusted under paragraph 
(c) (2) of this section. 

(4Xi) If the average fuel economy calculated 
under paragraph (c) (3) of this section equals or 
exceeds the applicable fuel economy standard, 
the mix as adjusted under paragraph (c) (2) of 
this section shall be used for calculating Federal 
standards fuel economy reductions. 

(ii) If the average fuel economy calculated 
under paragraph (c) (3) of this section is less 
than the standard, adjust the projected pro- 
duction mix further by repeating the pro- 
cedure in paragraphs (c) (2) and (3) of this sec- 
tion until the first production mix is reached 



whose average fuel economy equals or exceeds 

that standard. 

§ 527.1 1 Calculation of fuel economy values and 
average fuel economy. 

For the purposes of this part, fuel economy 
values shall be determined as follows: 

(a) Determination of vehicle configuration fiiel 
economy values. (1) For each vehicle configuration 
for which a fuel economy value is required under 40 
CFR 600.506(a) (2) (i) through (a) (2) (iii) and for 
which a fuel economy value has been determined 
and approved imder 40 CFR Part 600, the peti- 
tioner shall submit that fuel economy value. 

(2) For each vehicle configuration for which a 
fuel economy value is required under 40 CFR 
600.506(a) (2) (iii) and for which an approved 
value does not exist, the petitioner 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 procedures or analytical methods. Values 
based on actual tests conducted in accordance 
with procedures specified in Subpart B of 40 
CFR Part 600, shall be entitled to greater pro- 
bative weight in NHTSA's evaluation of peti- 
tions than values based on analytical methods. 
Values to be used in the average fuel economy 
calculation in $ 527.8 and based on methods 
other than such actual tests will be acceptable to 
NHTSA only if the petitioner demonstrates in its 
petition that— 

(i) The petition contains all data previously 
approved by EPA and all relevant fuel 
economy test data from the petitioner's in- 
house testing program; 

(ii) To the maximum extent practicable, all 
fuel economy testing required to be conducted 
under 40 CFR Part 600, has been scheduled so 
that as much testing as possible is completed 
prior to the submission of the petition; and 

(iii) To the maximum extent practicable, 
testing required to be conducted under 40 CFR 
Part 600, has been scheduled so that those 
vehicle configurations with the largest pro- 
jected sales are tested first, 
(b) Determination of model type fuel economy 
values. For each model type, the petitioner shall 
submit a fuel economy value based on the values 
determined in accordance with paragraph (a) of 



PART 527-4 



this section and calculated in the same manner as 
model type fuel economy values are calculated for 
use under Subpart F of 40 CFR Part 600. 

(c) Determination of average fuel economy. 
Average fuel economy shall be based upon fuel 
economy values calculated under paragraph (b) of 
this section for each model type and shall be 
calculated in accordance with 40 CFR 600.506, ex- 
cept that— 

(1) The production mix determined under 
$ 527.11 shall be used in place of projected sales; 
and 

(2) Fuel economy values for running changes 
implemented and for vehicle configurations 
added are required only for those changes or ad- 
ditions made before the submission of the peti- 
tioner's petition. Data for subsequent running 
changes and added vehicle configurations must 
be included in reports submitted under 
$ 527.13(c). 

§527.13 Supplementary Information requirements. 

(a) The petitioner shall provide the NHTSA Ad- 
ministrator with any revisions that it makes, after 
submitting its petition and before a final decision is 
rendered under $ 527.14, to the production mix 
and total provided under $ 527.10. The petitioner 
shall submit information demonstrating that the 
revisions are reasonable, including the information 
described in S 527.10. 

(b) For each vehicle configuration of the peti- 
tioner's passenger automobiles to be produced in 
the affected model year for which a fuel economy 
value is generated by the petitioner's in-house 
testing program or approved by the EPA Ad- 
ministrator under 40 CFR 600.506-78 after the 
submission of the petition and before a final deci- 
sion is rendered under S 527.14, the petitioner 
shall provide the NHTSA Administrator with that 
value and a revised fuel economy value for that 
vehicle configuration as modified under 
$ 527.6(a) (2). 

(c) All revisions required to be submitted under 
$ 527.13(a) or (b) shall be submitted within thirty 
days of their availability to the petitioner. The peti- 
tioner shall show the effect on the petition of all 
revisions submitted. 

f 527.14 Processing of petitions. 

(a) On receipt of a petition, the petition is 
evaluated for completeness. If a petition is found 



not to contain the information required by this 
part, the petitioner is informed about the areas of 
insufficiency and advised that the petition will not 
receive further consideration until the necessary 
information is submitted. 

(b) The NHTSA Administrator may request the 
petitioner to provide relevant information in addi- 
tion to that required by this part: Provided, That 
such informaton either presently exists or can be 
obtained by the petitioner without undue hardship. 
(c)(1) After the NHTSA Administrator con- 
cludes that a petition contains all the information 
required under this part, a notice of receipt of the 
petition is published in the Federal Register. The 
notice of receipt provides the following informa- 
tion: 

(i) That a petition has been received; 
(ii) The petitioner's identity; 
(iii) The reduction requested and a brief 
summary of the petitioner's rationale therefor; 
(iv) NHTSA's options for disposition of the 
petition; 

(v) The criteria to be applied in evaluating 
the petition; 

(vi) The location of copies of the petition 
available for public inspection; and 

(vii) An invitation of comments from the 
public and a deadline for submission of those 
comments. 

(2) At the same time the notice of receipt is 
published, a copy of the petition is sent to the 
Federal agency responsible for administering 
the category of standards for which the Federal 
standards fuel economy reduction is sought and 
the comments of that agency are invited. 

(d) The NHTSA Administrator requests the 
EPA Administrator to provide him with fuel 
economy values as they are approved by the EPA 
for the petitioner's passenger automobiles to be 
produced in the affected model year. These values 
replace the corresponding unapproved values in all 
calculations of average fuel economies. 

(e) After all comments are received and 
evaluated, the NHTSA Administrator publishes a 
proposed decision or set of reasonable alternative 
decisions in the Federal Register. The notice 
specifies the reasons for each alternative, solicits 
written comment on the proposal, and establishes 
a date and place for a public hearing. 



PART 527-5 



(f) After the conclusion of the public comment 
period and hearing specified in paragraph (e) of 
this section, the NHTSA Administrator publishes a 
final decision in the Federal Register. The final 
decision is based upon the petition, written and 
oral comments, and other available information. 
The final decision sets forth the grant or denial of 
the petition in accordance with section 502(d) (2) of 
the Act and the reasons for the decision. To the ex- 
tent practicable, a final decision will be rendered 
within 180 days of receipt of a complete petition. 

(g) If fuel economy values approved by the EPA 
Administrator cannot be obtained by the NHTSA 
Administrator for most model types of the peti- 
tioner's passenger automobiles to be produced in 
the affected model year, the NHTSA Administra- 
tor may rely on fuel economy values submitted pur- 
suant to S 527.12(a) (2) and issue the notice 
described in paragraph (f) of this section as an 
interim determination. The notice, which is 
published in the Federal Register, contains the in- 
terim determination and the findings and analysis 
upon which such determination is based. The in- 
terim determination becomes final unless the 
NHTSA Administrator determines, after notice 
and opportunity for written and oral comment in 
accordance with this section, that significant 
disparities exist between the fuel economy values 
upon which the interim determination was based 
and fuel economy values subsequently approved by 
the EPA Administrator or submitted by the peti- 
tioner under § 527.13(b). Notice of the final deter- 
mination with the adjusted reduction and of the 
reasons therefor is published in the Federal 
Register. For the purposes of this section, 
disparities between approved and unapproved data 
are deemed significant if, when all such disparities 
are taken together, the total average fuel economy 
calculate pursuant to § 527.8 would differ by 0.1 
mOe per gallon or more. 

§527.15 Public hearing. 

(a) Each hearing under $ 527.14(e) is a 
legislative type hearing intended to provide in- 
terested persons with an opportunity to state their 
views or arguments, or to provide pertinent infor- 
mation concerning the proposed reduction. 

(b) (1) The NHTSA Administrator appoints one 
or more employees of the Administration to serve 



on the hearing panel and designates one of those 
employees to be the presiding official. Other 
Federal employees may be invited to serve on the 
panel as well. 

(2) The presiding official may: 
(i) Limit the length of oral presentations; 
(ii) Exclude irrelevant or redundant 
material; and 

(iii) Direct that corroborative material be 
submitted in writing rather than presented 
orally, 
(c) Any person desiring to make an oral state- 
ment at the hearing should file a notice of such in- 
tention and, if practicable, five copies of his pro- 
posed statement with the NHTSA Administrator 
at least ten days prior to the hearing. 

(d)(1) The NHTSA Administrator requires 
representatives of the petitioner able to address all 
matters raised in the petition to attend the hear- 
ing. 

(2) The NHTSA Administrator may, on his 
own motion or at the request of a hearing partici- 
pant, require any person who submits written 
comments to the NHTSA Administrator on the 
proposed reduction before the hearing or who 
has relevant information necessary to an in- 
formed decision in the proceeding to attend the 
hearing at any time before its conclusion. 

(3) The Administrator requires any person 
who, under paragraph (d) (1) or (2) of this section 
attends the hearing, to respond to questions 
posed to him under paragraph (e) of this section. 

(4) All testimony at the hearing is made under 
oath. 

(e) Any individual appointed under paragraph 
(b) of this section may, on his own initiative or at 
the request of any interested person attending the 
hearing, propound questions to— 

(1) Any person subject to paragraph (d) of this 
section. 

(2) Any person who makes an oral presenta- 
tion at the hearing. 

(f) Interested persons attending the hearing 
may submit to the panel written questions to be 
propounded to persons identified in paragraph (e) 
of this section. Questions for a witness other than 
those identified in paragraph (d) (1) of this section 
may not be submitted to the panel after the com- 
pletion of testimony by that witness. 



PART 527-6 



(g) A verbatim transcript of the proceeding is as provided in § 527.15(g) regarding transcripts of 

made and copies are available from the reporter at the public hearings, any person may obtain copies 

the expense of any person requesting them. of the information avaOable for inspection under 

this paragraph in accordance with the regulations 

§ 527.1 6 Public Inspection of Information. of the Office of the Secretary of Transportation (49 

Any person may inspect available information CFR Part 7). 

relevant to a petition under this part, including the [FR Doc. 77-32887 Filed 11-11-77; 8:45 am] 
petition and any supporting data, memoranda of 

informal meetings with the petitioner or any other Joan Claybrook 

interested persons, the transcript of the public Administrator 

hearing, and the notices regarding the petition, in 42 F.R. 58938 

the Docket Section of the Administration. Except November 14, 1977 



PART 527-7 



EfFecKve; July 28, 1977 



PREAMBLE TO PART 529— MANUFACTURERS OF MULTISTAGE AUTOMOBILES 

(Docket No. FE 77-02; Notice 2) 



The purpose of this notice is to establish a rule 
for determining, in cases where more than one 
person is the manufacturer of an automobile, 
which person is to be treated as the manufacturer 
for purposes of Title V of the Motor Vehicle 
Infonnation and Cost Savings Act, as amended 
(15 U.S.C. 2001 et seq.), and its implementing 
regulations. Section 501(8) of the Act requires 
such rule to be issued. In most instances, the 
rule makes the incomplete automobile manufac- 
turer responsible for meeting the Title V require- 
ments, including those relating to automobile 
fuel economy standards, fuel economy labeling, 
and reporting. 

Effective Date : July 28. 1977. 

For further information, contact : 

Roy Dennison 

National Highway Traffic Safety 

Administration 
Department of Transportation 
400 Seventh Street, S.W., 
Washington. D.C. 20590 
(202) 755-9384 

Supplementary Information : 

Section 501(8) of Title V requires the Admin- 
istrator of the National Highway Traffic Safety 
Administration (NHTSA) to prescribe rules for 
determining, in cases where more than one person 
is the manufacturer of an automobile, which per- 
son is to be treated as the manufacturer of that 
automobile and thus responsible for compliance 
with the requirements of Title V. The principal 
requirements are those for complying with aver- 
age fuel economy standards, submitting reports, 
and placing fuel economy labels on new auto- 
mobiles. 

The general outlines of a rule to implement 
section 501(8) were first discussed in the notice 
of proposed rulemaking (November 26, 1976, 41 



FR 52087) on average fuel economy standards 
for model year 1979 nonpassenger automobiles. 
That notice stated that the agency contemplated 
issuing a proposal that would place compliance 
responsibilities on incomplete automobile manu- 
facturers in most instances. A notice of proposed 
rulemaking (NPRM) dealing directly with multi- 
stage automobiles was published on February 14. 
1977 (42 FR 9040). Consistent with the" No- 
vember 26 notice, the NPRM proposed that in- 
complete automobile manufacturers be made 
responsible in most instances for complying with 
the Title V requirements. The major exception 
to this assignment of responsibility was when a 
subsequent manufacturer, i.e., an intermediate or 
final-stage manufacturer, altered an automobile 
sufficiently to void the results of the fuel economy 
testing of the automobile by the incomplete auto- 
mobile manufacturer. In such an instance, the 
subsequent manufacturer would become partially 
or totally i-esponsible for complying with Title V. 

A relatively minor exception was provided in 
the instance of a final-stage manufacturer that 
completed manufacture of a multistage automo- 
bile in a model year after the model year in 
which the incomplete automobile manufacturer 
finished its manufacturing operations on the 
automobile and that marketed the automobile as 
one manufactured in the latter model year. The 
NPRM provided that the final-stage manufac- 
turer would assume responsibility for compliance 
in this circumstance also. Under either excep- 
tion, the assumption of responsibility by the 
subsequent manufacturer would permit the in- 
complete automobile manufacturer to remove the 
automobile from its fleet of automobiles subject 
to the fuel economy standards. 

Comments on the February 14, 1977 notice 
were received from American Motors Corporation 
(AMC), Chrysler, Ford, General Motors (GM) 



PART 529— PRE 1 



EWeclivc: July 28, 1977 

and the Automobile Club of Southern California 
(Auto Club). All comments have been consid- 
ered and the most significant ones are discussed 
below. 

Major differences hehoeen the frroposed and 
final rules. The most significant differences be- 
tween the proposed rule and the final rule estab- 
lished by this notice are set forth below: 

(1) The manufacturer which attaches the por- 
tion of the automobile body containing the wind- 
shield and front seat side windows t« an 
incomplete automobile is made responsible for 
affixing the fuel economy label to that automobile. 

(2) An incomplete automobile manufacturer 
is responsible for submitting a partial semi- 
annual report regarding its incomplete automo- 
biles even if it ceases to be treated as their 
manufacturer for purposes of standards and 
labeling compliance. No report is required from 
intermediate or final-stage manufacturers under 
any circumstance. 

(3) The final rule does not adopt the proposed 
requirement that a final-stage manufacturer 
which sells a multistage automobile as one manu- 
factured in the model year in which it completed 
its manufacturing operations must assume respon- 
sibility for complying with Title V with respect 
to that automobile if that model year is subse- 
quent to the model year in which the incomplete 
automobile manufacturer completed its manufac- 
turing operations. 

Assignment of responsibility. The NPKM as- 
signed to incomplete automobile manufacturers 
the responsibility for complying with the require- 
ments of Title V and its implementing regida- 
tions that affect multistage automobiles. Ford 
and Chrysler agreed with this assignment, noting 
that the incomplete automobile manufacturer is 
the manufacturer of a multistage automobile 
if it designs and builds the chassis and power 
train components that primarily determine the 
fuel economy of the completed automobile. Ford 
observed that incomplete automobile manufac- 
turers generally have the engineering manpower 
and test facilities necessary to perform fuel econ- 
omy development and testing, while intermediate 
and final-stage manufacturers seldom have these 
resources. Neither AMC nor GM objected to this 
assignment. 



Ford and GM also stated that they did not 
object to the proposed assignment of responsi- 
bility because including their incomplete automo- 
biles in their fleets for standards compliance 
purposes would have a negligible effect on their 
average fuel economy. This was said to be true 
even if the fuel economy of their incomplete 
automobiles were based upon "worst case" testing. 

Ford and Chrysler did, however, limit their 
agreement with the proposed assignment of re- 
sponsibility to those automobiles which had been 
completed by the subsequent manufacturers 
within the specifications of the incomplete auto- 
mobile manufacturer. Ford and Chrysler urged, 
as the agency had proposed, that if an interme- 
diate or final-stage manufacturer exceeds the 
maximum curb weight or maximum frontal area 
specified by the incomplete automobile manufac- 
turer, thus invalidating the fuel economy values 
determined by the incomplete automobile manu- 
facturer, that subsequent manufacturer should 
become responsible for that automobile under 
Title V. 

Compliance loith average fuel eco^nmny stand- 
ards. The NPRM suggested alternative methods 
of testing to determine the fuel economy of multi- 
stage automobiles. It was noted that the practice 
of "worst case" testing, while appropriate for 
emissions certification, might not be suited for 
use under Title V. For emissions standard en- 
forcement purposes, the actual emissions levels 
are not too important. WHiat is important is 
whether they exceed the maximum specified in 
the emissions standards. However, the actual 
tested level of performance is important under 
the fuel economy program. The fuel economy 
of each model type produced by a manufacturer 
is used to calculate whether and to what extent 
the average fuel economy of the manufacturer 
has fallen below or exceeded the prescribed mini- 
mum level of average fuel economy. The amount 
of civil penalties and credits against civil penal- 
ties are determined by the level of shortfall or 
excess, respectively. The NPRM noted that if 
an incomplete automobile manufacturer were re- 
quired to determine the fuel economy of its fleet 
based partially on " worst case"' tested incomplete 
automobiles, a manufacturer of a substantial 
number of those automobiles could be at a dis- 
advantage relative to a manufacturer of only 



PART 529— PRE 2 



Effective: July 28, 1977 



single-stage automobiles in tryinjr to comply with 
the average fuel economy standards. 

The comments suggest that there would be no 
such disadvantage. GM said that it preferred 
"worst case" testing because that approach mini- 
mized GM's testing burden. Ford expressed no 
preference, pointing out that the use of "best 
case" testing instead of "worst case" testing or 
vice versa would make no practical difference in 
the resulting average fuel economy. Ford, GM, 
and Chrysler all noted that the sale of incomplete 
automobiles was such a small proportion of 
their total sales that the effect of the incomplete 
automobiles on their average fuel economy was 
negligible. Ford stated that determining more 
representative fuel economies would require ad- 
ditional testing. In that company's view, that 
additional testing was not justified because of 
the insufficient effect on average fuel economy. 

The XPKM also noted that "worst case" test- 
ing might be inappropriate for determining fuel 
economy because the fuel economy' value appear- 
ing on the label would then be the lowest possible 
value for that automobile. That is, the value 
would be tliat for an automolnle completed to the 
maximum permissible curb weight and frontal 
area specified by the incomplete automobile 
manufacturer. Thus, a final-stage manufacturer 
that completes an automobile with a curb weight 
and frontal area significantly less than the max- 
ima would not be rewarded by a commensurately 
higher fuel economy value. Thus, there would 
be reduced incentive for a final-stage manufac- 
turer to attempt to minimize curb weight and 
frontal area. Further, in competing with manu- 
facturers of single-stage vehicles having a com- 
parable size and function, the final-stage 
manufacturer might be at a disadvantage due to 
the comparatively low fuel economy that its 
automobiles appear to be capable of achieving. 
No final-stage manufacturer commented on this 
or any other portion of the proposed rule. 

Ford, GM, and Chrysler opposed additional 
testing to determine the fuel economy of multi- 
stage automobiles more accurately. They stated 
that the cost and burden of additional testing 
could cause an incomplete automobile manufac- 
turer to eliminate or sharply curtail production 
of those automobiles. In response to a question 
posed in the XPKM, the costs stated by the 



manufacturers for retesting an automobile after 
having tested it and then reset the road load 
would range from $200 to $400. 

Chi-ysler stated that it believed that the fuel 
economy values for multistage automobiles should 
represent as accurately as possible the fuel econ- 
omy that would result from testing the completed 
automobile. For the reasons stated in the im- 
mediately preceding paragraph, that company 
said that there is no cost-effective way of ac- 
curately establishing the fuel economy of com- 
pleted multistage automobiles through testing. 
However, Chrysler indicated that the cost of con- 
ducting additional fuel economy tests should not 
prevent developing a best estimate of the fuel 
economy that could be achieved by the completed 
multistage automobiles. Chrysler suggested a 
method that might be used for determining a 
best estimate of the fuel economy for those auto- 
mobiles. 

Under Chrysler's suggested method, the incom- 
plete automobile would be tested in its "worst 
case" condition. If the curb weight and frontal 
area of the completed automobile incorporating 
the incomplete automobile are less than the max- 
ima specified for the incomplete automobile, then, 
according to Chrysler, it should be possible to 
estimate mathematically the fuel economy of the 
incomplete automobile using the fuel economy 
values for the completed automobile and incom- 
plete automobile. 

Ford and GM responded negatively to the sug- 
gestion in the XPRM that a more accurate de- 
termination of the fuel economy of multistage 
automobiles might be possible through improved 
communication between the incomplete and final- 
stage manufacturers. These commenters stated 
that there was no practicable means by which 
they could learn about the final specifications of 
the incomplete automobiles that they manufac- 
ture. According to these commenters. incomplete 
automobiles are sold to more than 1.000 different 
intermediate and final-stage manufacturers and 
converted into as many as 25 different types of 
automobiles, with the final-stage manufacturer 
having substantial latitude regarding body style 
and shape and options. 

All of the above comments regarding methods 
foi' developing fuel economy values have been 
referred to the Environmental Protection Agency 



PART 529— PRE 3 



EReclive: July 28, 1977 

(EPA). The EPA has the authority under sec- 
tion 503 of Title V for specif yinji the procedures 
for determining fuel economy. 

CmnpUmice with labeling requirements. Chrys- 
ler, Ford, and GM recommended that the fuel 
economy lahel values for multistage automobiles 
be derived from the corresponding completed, 
single-stage automobiles manufactured by the in- 
complete automobile manufacturer. This com- 
ment, like the other comments on methods for 
developing fuel economy values, has been referred 
to EPA for consideration. 

Chrysler. Ford, and GM also commented that 
they were presently complying with the labeling 
requirements in the same manner as for single- 
stage automobiles. Ford noted that most fuel 
economy labels for incomplete automobiles were 
attached to the windshields or side windows. For 
incomplete automobiles sold with no body, that 
company reconnnended that the labels be enclosed 
with the emissions certification and safety com- 
pliance information furnished by the incomplete 
automobile manufacturer to subsequent manufac- 
turers. The NHTSA agrees with this recom- 
mendation. The rule has been revised to provide 
that while the incomplete automobile manufac- 
turer would be responsible for preparing the fuel 
economy label for those incomplete automobiles, 
the responsibility for affixing the label would be 
placed on the manufacturer that adds the body 
to the automobile. 

Ford conunented that the NPRM did not com- 
pletely and appropriately assign responsibility 
for the fuel economy labels remaining affixed to 
the multi-stage automobiles. That company 
stated tliat when the incomplete automobile 
manufacturer affixes the label to an incomplete 
automobile, all subsequent manufacturers of the 
automobile must assume responsibility and be 
held accountable for maintaining the label. The 
NHTSA agrees that there was incomplete as- 
signment of this responsibility. The rule has 
been revised to ensure an unbroken chain of 
accountability for the fuel economy labels' re- 
maining attached. If a manufacturer receives 
an incomplete automobile that has the portion of 
the body including the windshield and front seat 
side windows and therefore should be labeled, 
but does not have a fuel economy label, the 
manufacturer is recjuired to attach a label identi- 



cal to the one that should be on the automobile. 
The document containing the curb weight and 
frontal area maxima and the addenda, if any, 
to that document will identify the previous man- 
ufacturer of that automobile which should have 
prepared the missing label. Similarly, if a fuel 
economy label is removed from an incomplete 
automobile while it is in the possession of one of 
its manufacturers, that manufacturer must re- 
attach that label or obtain an identical one from 
the manufacturer which prepared the removed 
label. A manufacturer is not required to replace 
a label that is removed in the circumstances of 
the immediately preceding sentence if the manu- 
facturer has exceeded one of the maxima and 
must prepare a new label with new fuel economy 
values. 

Compliarwe with reporting requirements. The 
NPRM assigned reporting responsibilities in the 
same general manner as standards compliance 
and labeling responsibilities, but stated that the 
manner of assigning reporting responsibilities 
would be addressed in greater detail in a subse- 
quent notice of proposed ralemaking dealing 
solely with reporting requirements. That subse- 
quent notice was published April 11, 1977, 42 FR 
18867. The question of multistage manufacturers 
was addressed at 42 FR 18869. The reporting 
NPRM provided that even when an intermediate 
or final-stage manufacturer assumed full respon- 
sibility for the compliance of an automobile with 
the fuel economy standards, it would assume only 
partial responsibility for compliance with the re- 
porting requirements. In commenting on the 
multistage NPRM, Chrysler, Ford, and GM 
stated that an intermediate or final-stage manu- 
facturer which exceeds the curb weight and 
frontal area maxima should assume the reporting 
responsibilities. However, in conunenting on the 
subsequent reporting NPRISI, none of these man- 
ufacturers objected to a proposal that the report- 
ing responsibilities be divided between the 
incomplete automobile manufacturer and one of 
the subsequent manufacturers when the latter 
manufacturer exceeds one of the maxima. 

After considering these comments and the com- 
ments discussed above about the degree of com- 
munication between the incomplete automobile 
manufacturers and subsequent manufacturers, the 
NHTSA has decided to make several relatively 



PART 529— PRE 4 



Effecfive: July 28, 1977 



minor changes in the reporting responsibilities 
described in the reporting NPRM. First, the in- 
complete automobile manufacturer would not be 
required to provide information relating to cer- 
tain aspects of completed multistage automobiles 
manufactured from its incomplete automobiles. 
These aspects would include items such as num- 
ber of designated seating positions, body style, 
and passenger and cargo can-ying volumes. Based 
on the comments regarding the lack of communi- 
cations between the incomplete automobile man- 
ufacturers and the subsequent manufacturers, 
information of this type would apparently not 
be available to the incomplete automobile manu- 
facturers. Second, intermediate and final-stage 
manufacturers are not required to do any report- 
ing under any circumstances, including any cir- 
cumstance in which an intermediate or final-stage 
manufacturer exceeds the maximum frontal area 
or curb weight. Given the agency's expectation 
that intermediate and final-stage manufacturers 
will rarely exceed either of the maxima, these 
manufacturers were unlikely to have been re- 
quired to submit reports in any event. For the 
same reason, incomplete automobile manufactur- 
ers are imlikely to be required to submit more 
information about their incomplete automobiles 
than they would have been required to do under 
the reporting NPRM. Further, exceeding the 
maxima would not affect most of the information 
that the incomplete automobile manufacturer is 
required to submit. 

Model year determination. The NPRM pro- 
vided that the final-stage manufacturer would 
have two options regarding the designation of 
model year of a multistage automobile. The 
manufacturer could choose to offer for sale or 
sell the automobile as one manufactured in either 
the model year in which the incomplete automo- 
bile manufacturer completed its manufacturing 
operations or the model year in wliich that final- 
stage manufacturer completed its manufacturing 
operations. It was proposed that if the final- 
stage manufacturer chose to offer the automobile 
for sale as one manufactured in the model year 
in which the incomplete automobile manufacturer 
completed its manufacturing operations, and if 
no subsequent manufacturer had exceeded the 
curb weight and frontal area maxima, the final- 
stage manufacturer could rely on the fuel econ- 



omy testing and label of the incomplete 
automobile manufacturer. If, however, the final- 
stage manufacturer completed the automobile in 
a model year after the incomplete automobile 
manufacturer completed its manufacturing op- 
erations and if the final-stage manufacturer 
elected to offer the automobile for sale as one 
manufactured in the latter model year, the final- 
stage mantifacturer would become the manufac- 
turer of the automobile for the purposes of Title 
V and would be required to conduct fuel economy 
testing and to comply with the fuel economy 
standard and labeling requirements for that later 
model year. 

Chrysler initially commented that the model 
year of a multistage automobile should be the 
model year in which the incomplete automobile 
manufacturer completed its manufacturing op- 
erations. This comment was qualified in a sub- 
sequent meeting and telephone conversation with 
the NHTSA which were summarized in mem- 
oranda placed in the docket. In that meeting 
and conversation, Chrysler stated that its sugges- 
tion regarding model year was merely meant to 
indicate that a multistage automobile should be 
subject to the average fuel economy standard for 
the model year in which the incomplete automo- 
bile manufacturer completes its manufacturing 
operations on the automobile unless a subsequent 
manufacturer exceeded either the maximum 
frontal area or maximum curb weight in a sub- 
sequent model year. With respect to the market- 
ing of completed automobiles, Chrysler intended 
to suggest that the final -stage manufacturer have 
the option of marketing the completed multistage 
automobile either as one manufactui'ed in the 
model year in which the manufacturer for stand- 
ards compliance purposes completed its manu- 
facturing operations or as one manufactured in 
the model year in which the final-stage manufac- 
turer completed its manufacturing operations. 
Chrysler went further to urge that the final-stage 
manufacturer's election of the latter model year 
not cause that manufacturer to become the manu- 
facturer of that automobile for the purposes of 
Title V and to be compelled to comply with the 
applicable fuel economy standard for that model 
year. Chrysler's connnents stemmed from a con- 
cern that the NPRM would have motivated final- 
stage manufacturers to oixler all of their 



PART 529— PRE 



incomplete automobiles for delivery early in each 
model year to avoid having to market out-of-date 
automobiles. That company stated that it had 
discourafred such one-time ordering because large 
block ordering was disruptive of its efforts to 
spread orders evenly over each model year. 

The XHTSA believes that the Chrysler com- 
tnents have merit. To avoid unnecessarily burden- 
ing both the incomplete automobile manufacturers 
and final-stage manufacturers, the rule has been 
revised to eliminate the model-year-determination 
provision. The elimination of that provision 
leaves the manufacturer free under Part 529 to 
designate the model year of its automobiles as it 
desires. However, the fuel economy label will 
bear the model year in which the manufacturer 
for purposes of standard and labeling compliance 
completed its manufacturing operations. Fur- 
ther, other law may limit the discretion of the 
manufacturer in designating a model year. See 
the discussion below of the Auto Club comment. 

The elimination of the provision on model year 
determination makes it unnecessary to respond in 
detail to an objection by GM t« that provision. 
That company interpreted that provision as 
meaning that any multistage automobile that a 
final-stage manufacturer completes after the 
model year in which the incomplete automobile 
manufacturer completes its manufacturing op- 
erations would be subtracted from the incomplete 
automobile manufacturer's fleet for that earlier 
model year. That interpretation was wrong in 
several respects. However, the essential point is 
that the model year in which a multistage auto- 
mobile is completed has no effect on the deter- 
mination of which automobiles are to be counted 
as being in the incomplete automobile manufac- 
turer's fleet. 

The Auto Club objected to the model-year- 
det«rmination proposal on the basis that it con- 
flicted with California law. Section 11713..5 of 
the California Vehicle Code prohibits a dealer or 
manufacturer from offering for sale a motor ve- 
hicle if the vehicle is represented to be of a model 
year different from the model year designated at 
the time of manufacture oi- assembly. The Auto 
Club stated that "if the incomplete automobile 
manufacturer, who is the manufacturer for pur- 
poses of Federal law, designates a model year for 
the incomplete automobile, then any final-stage 



manufacturer licensed to do business in California 
who attempts to sell that automobile under sub- 
division (a) of Section 529.7 would be in viola- 
tion of (the California Vehicle Code)." 

The deletion of the model-year-determination 
provision eliminates the problem perceived by 
the Auto Club. The provision was eliminated in 
response to the Chrysler comment discussed 
above and to avoid the possibility of unnecessar- 
ily interfering with California law. The agency 
notes that the provision might not have caused 
any interference. The determination under Part 
529 of which manufacturer is to be treated as the 
manufacturer of a multistage automobile is con- 
trolling for the limited purposes of Title V only. 
Under the National Traffic and Motor Vehicle 
Safety Act (15 U.S.C. 1391 et seq.) and imple- 
menting regulation in 49 CFR Part 568, the 
final-stage manufacturer is treated as the manu- 
facturer. These differing determinations of who 
is to be treated as a manufacturer to serve dif- 
ferent statutory purposes do not control the de- 
termination of who is a manufacturer under 
California law. California, not Federal, law 
must be interpreted to determine which of the 
manufacturers of a multistage automobile is the 
manufacturer of the automobile for the purposes 
of section 11713.5 of the California Vehicle Code. 

Additional coTiinients. Ford suggested that the 
proposal be modified to include express reference 
to importers of incomplete automobiles in the 
definition of "incomplete automobile manufac- 
turer". This agency does not believe that this 
additional language is necessary. The term 
"manufacture" is defined in section 501 to include 
the importation of automobiles into the customs 
territory of the United States. 

Chrysler recommended that the NHTSA con- 
sider exempting an incomplete automobile manu- 
facturer from any responsibility under Title V 
with respect to its complete automobiles if those 
automobiles constitute less than 2 percent of the 
total number of automobiles that the manufac- 
turer produces in that class. This recommenda- 
tion was based upon Chrysler's arguments about 
the negligible effects of those incomplete automo- 
biles on the average fuel economy of the manu- 
facturer. There is no authority under Title V 
for adopting Chrysler's suggestion. Exemption 
from standard compliance responsibilities are 



PART 529— PRE 6 



Effective: July 28, 1977 



available only to low volume manufacturers of 
passenorer automobiles. Most multistajre automo- 
biles are nonpassenger automobiles. Further, the 
exemptions are not complete. Alternative stand- 
ards must be established for exempted manufac- 
turers. 

GM recommended that the multistag^e automo- 
bile rule be drafted to permit a final-stage manu- 
facturer which manufactures less than 10,000 
automobiles per year to petition for an exemption 
under section 502(c) of Title V. That company 
stated that when an exemption is crianted for 
multistage automobiles, their incomplete automo- 
bile manufacturer should not have to include any 
of them in its fleet. Section 502(c) provides for 
the exemption of manufacturers which manufac- 
ture less than 10.000 passenger automobiles per 
year. As noted above, the exemptions can apply 
to passenger automobiles only and can be granted 
only if an alternative standard is established for 
the exempted passenger automobiles. The eligi- 
bility of a final-stage manufacturer to apply for 
an exemption depends upon the number of pas- 
senger automobiles it produces, assembles, or im- 
ports and upon whether it is treated under this 
rule as the manufacturer of those automobiles. 
If the final-stage manufacturer produces a multi- 
stage automobile but is not treated as its manu- 
facturer, that final-stage manufacturer may not 
obtain its exemption under section 502(c). An 
exemption may be granted to a manufacturer for 
automobiles under Title V only if the manufac- 



turer can demonstrate that its maximum feasible 
average fuel economy is less than the level of 
average fuel economy specified in the standard 
generally applicable to all manufacturers. An 
automobile for whose fuel economy the final-stage 
manufacturer has no responsibility has no bear- 
ing upon its maximum feasible average. If the 
final-stage manufacturer produces a multistage 
automobile and is treated as its manufacturer, 
that automobile is excluded by this rule from the 
incomplete automobile manufacturer's fleet irre- 
spective of any exemption. Thus, GM's comment 
states no basis for changing the rule. 

In light of the foregoing, Title 49, Code of 
Federal Regulations, is amended by adding a new 
Part 529, Manufacturers of Multistage Automo- 
biles. . . . 

The program official and lawyer principally 
responsible for the development of this rule are 
Roy Dennison and Kathy DeMeter, respectively. 

Issued in AVashington, D.C. on July 21, 1977. 



Joan Claybrook 

National Highway Traffic Safety 
Administrator 



42 F.R. 38369 
July 28, 1977 



PART 529— PRE 7-8 



PART 529-MANUFACTURERS OF MULTISTAGE AUTOMOBILES 



Sec. 

529.1 Scope and purpose. 

529.2 Applicability. 

529.3 Definitions. 

529.4 Requirements for incomplete automobile 
manufacturers. 

529.5 Requirements for intermediate manufac- 
turers. 

529.6 Requirements for final-stage manufac- 
turers. 

529.7 Determination of model year. 
AUTHORITY: Sec. 301, Pub. L. 94-163, 80 

Stat. 901 (15 U.S.C. 2001), delegation of author- 
ity at 41 FR 25015, June 22, 1976. 

§ 529.1 Scope and purpose. 

This part determines, in cases where more than 
one person is the manufacturer of an automobile, 
which person is to be treated as the manufacturer 
for purposes for compliance with Title V of the 
Motor Vehicle Information and Cost Savings Act, 
as amended (15 U.S.C. 2001 et seq.), and rules 
issued thereunder. 

§ 529.2 Applicability. 

This part applies to incomplete automobile 
manufacturers, intermediate manufacturers, and 
final-stage manufacturers of automobiles that are 
manufactured in two or more stages. 

§ 529.3 Definitions. 

(a) Statutory terms. (1) The term "automo- 
bile" is used as defined in section 501 of the Act 
and in accordance with the determinations in 49 
CFR Part 523. 

(2) The terms "manufacture," "manufac- 
turer," and "fuel economy" are used as defined in 
section 501 of the Act. 

(b) Other terms. (1) "Act" means the Motor 
Vehicle Information and Cost Savings Act (Pub. 
L. 92-513), as amended by the Energy Policy 
and Conservation Act (Pub. L. 94-163). 



(2) "Completed automobile" means an auto- 
mobile that requires no further manufacturing 
operations to perform its intended function, other 
than the addition of readily attachable compo- 
nents, such as mirrors or tire and rim assemblies, 
or minor finishing operations such as painting. 

(3) "Curb weight" is defined the same as 
"vehicle curb weight" in 40 CFR Part 86. 

(4) "Final-stage manufacturer" means a 
person who performs such manufacturing opera- 
tions on an incomplete automobile that it becomes 
a completed automobile. 

(5) "Frontal area" is used as defined in 40 
CFR § 86.079-2. 

(6) "Incomplete automobile" means an as- 
semblage consisting, as a minimum, of frame and 
chassis structure, power train, steering system, 
suspension system, and braking system to the ex- 
tent that those systems are to be part of the 
completed automobile, that requires further man- 
ufacturing operations, other than the addition of 
readily attachable components, such as mirrors 
or tire and rim assemblies, or minor finishing 
operations such as painting, to become a com- 
pleted automobile. 

(7) "Incomplete automobile manufacturer" 
means a person who manufactures an incomplete 
automobile by assembling components none of 
which, taken separately, constitute a complete 
automobile. 

(8) "Intermediate manufacturer" means a 
person, other than the incomplete automobile 
manufacturer or the final-stage manufacturer, 
who performs manufacturing operations on an 
incomplete automobile. 

§ 529.4 Requirements for incomplete automobile 
manufacturers. 

(a) Except as provided in paragraph (c) of 
this section § 529.5 and § 529.6, each incomplete 
automobile manufacturer is considered, with re- 
spect to multistage automobiles incorporating its 



PART 529-1 



incomplete automobiles, the manufacturer of the 
multistage automobiles for purposes of the re- 
quirements of Title V and rules issued there- 
under. 

(b) Each incomplete automobile manufacturer 
shall furnish with each of its incomplete automo- 
biles, when it is delivered to the subsequent man- 
ufacturer, (1) a document that contains the 
following information— 

(i) Name and mailing address of the in- 
complete automobile manufacturer. 

(ii) Month and year during which the in- 
complete automobile manufacturer performed its 
last manufacturing operation on the incomplete 
automobile. 

(iii) Identification of the incomplete auto- 
mobile or group of incomplete automobiles to 
which the document applies. The identification 
may be by serial number or otherwise, but it 
must be sufficient to enable a subsequent manu- 
facturer to ascertain positively that the docuemnt 
applies to a particular incomplete automobile even 
if the document is not attached to that automo- 
bile. 

(iv) Fuel economy values determined by 
the incomplete automobile manufacturer for the 
automobile in accordance with 40 CFR Part 600 
and a statement that a fuel economy label con- 
taining those values has been prepared in accord- 
ance with Environmental Protection Agency 
regulation by the manufacturer identified in the 
document. 

(v) Maximum curb weight that may not 
be exceeded by a subsequent manufacturer with- 
out invalidating the fuel economy values deter- 
mined by the incomplete automobile manufac- 
turer. 

(vi) Maximum frontal area that may not 
be exceeded by a subsequent manufacturer with- 
out invalidating the fuel economy values 
determined by the incomplete automobile manu- 
facturer. 

(vii) Whether the fuel economy values 
have been computed with the road load horse- 
power set to take into account the presence of air 
conditioning. 

(2) A fuel economy label conforming with 
40 CFR Part 600. 



(c) (1) The incomplete automobile manufac- 
turer shall either attach the document specified 
in paragraph (b) (1) of this section to the in- 
complete automobile in such a manner that it 
will not be inadvertently detached or send that 
document directly to the subsequent manufacturer 
to which that automobile is delivered. 

(2) (i) If the incomplete automobile manu- 
facturer places the portion of the body including 
the windshield and front seat side windows on 
the incomplete automobile, the manufacturer 
shall attach the fuel economy label specified in 
paragraph (b) (2) of this section to that automo- 
bile in accordance with 40 CFR Part 600. If the 
incomplete automobile manufacturer does not 
place that portion of the body on the incomplete 
automobile, that manufacturer shall send that 
label directly to the subsequent manufacturer to 
which that automobile is delivered. 

(ii) Upon request by an intermediate or 
final-stage manufacturer for a copy of a fuel 
economy label that is required by paragraph 
(b) (2) to have been prepared by the incomplete 
automobile manufacturer for one of its incom- 
plete automobiles, identified by the requesting 
manufacturer in the same fashion as in the docu- 
ment specified in paragraph (b) (1) of this sec- 
tion, the incomplete automobile manufacturer 
shall send that manufacturer a copy of the label. 

§ 529.5 Requirements for intermediate manufac- 
turers. 

(a) Except as provided in paragraph (d) of 
this section and in § 529.6, each intermediate 
manufacturer whose manufacturing operations 
on an incomplete automobile cause it to exceed 
the maximum curb weight or maximum frontal 
area set forth in the document furnished it by 
the incomplete automobile manufacturer under 
§ 529.4(c) (1) or by a previous intermediate 
manfacturer under paragraph (b) of this sec- 
tion, as appropriate, is considered the manufac- 
turer of the multistage automobile manufactured 
from that automobile for the purpose of the re- 
quirements of Title V and rules issued there- 
under, other than that in Part 537, Fuel Economy 
Reports. 

(b) Each intermediate manufacturer of an in- 
complete automobile shall furnish, in the manner 
specified in § 529.4(c), to the subsequent manu- 



PART 529-2 



facturer of that automobile the document required 
by § 529.4(b) regarding that automobile. If any 
of the changes in the automobile made by the 
intermediate manufacturer affect the validity of 
the fuel economy values or other statements in 
the document or any addendum attached to the 
document by a previous manufacturer shall 
furnish an addendum to the document that con- 
tains its name and mailing address and an indi- 
cation of all changes that should be made in the 
document to reflect changes that it made in the 
automobile. 

(c) Each intermediate manufacturer that is 
required by paragraph (b) of this section to 
furnish an addendum to a document required by 
§ 529.4(b) shall, within 10 days after completing 
its manufacturing operations, send a copy of the 
document and addendum to the Administrator 
of the Environmental Protection Agency and to 
the manufacturer previously considered under 
this part to be the manufacturer of the automo- 
bile. 

(d) (1) If the intermediate manufacturer's 
manufacturing operations on an incomplete auto- 
mobile cause it to exceed the maximum curb 
weight or maximum frontal area set forth in the 
document furnished it by the incomplete automo- 
bile manufacturer under § 529.4(c) (1) or a pre- 
vious intermediate manufacturer under paragraph 
(b) of this section, as appropriate, that manu- 
facturer shall prepare a new fuel economy label 
for that automobile in accordance with 40 CFR 
Part 600. 

(2) If neither the intermediate manufac- 
turer of an incomplete automobile nor any pre- 
vious manufacturer of that automobile has placed 
the portion of the body including the windshield 
and front seat side windows on that automobile, 
the intermediate manufacturer shall send the fuel 
economy label furnished it by the incomplete 
automobile manufacturer under § 529.4(c) (2) (i) 
or a previous intermediate manufacturer under 
paragraph (d) (2) of this section or prepared by 
it under paragraph (d) (1) of this section, as 
appropriate, directly to the subsequent manufac- 
turer to which that automobile is delivered. 

(3) If the intermediate manufacturer places 
the portion of the body including the windshield 
and front seat side windows on the incomplete 



automobile, that manufacturer shall attach the 
fuel economy label furnished it under § 529.4(c) 
(i) or paragraph (d) (2) of this section or the 
fuel economy label prepared by it under para- 
graph (d) (1) of this section, as appropriate, to 
that automobile in accordance with 40 CFR Part 
600. 

(4) The intermediate manufacturer shall at- 
tach to the incomplete automobile in accordance 
with 40 CFR Part 600 a fuel economy label 
identical to the label that is required under this 
part to have been prepared by the manufacturer 
considered under this part to be the manufac- 
turer of that automobile if: 

(i) The portion of the body including the 
windshield and front seat side windows was 
added to the incomplete automobile by a previous 
manufacturer; 

(ii) The intermediate manufacturer's man- 
ufacturing operations do not cause that automo- 
bile to exceed either of the maxima specified in 
paragraph (d) (1) of this section; and 

(iii) That label is not on that automobOe 
when received by the intermediate manufacturer 
or is removed from that automobile while it is in 
the possession of that manufacturer. 

(5) Upon request by a subsequent interme- 
diate manufacturer or by a final-stage manufac- 
turer for a copy of a fuel economy label prepared 
by the intermediate manufacturer under para- 
graph (d) (1) of this section for one of its incom- 
plete automobiles, identified by the requesting 
manufacturer in the same fashion as in the docu- 
ment specified in § 529.4(b) (1), the intermediate 
manufacturer shall send that manufacturer a 
copy of that label. 

§ 529.6 Requirements for final-stage manufac- 
turers. 

(a) Except as provided in paragraph (c) of 
thij section, each final-stage manufacturer whose 
manufacturing operations on an incomplete auto- 
mobile cause the completed automobile to exceed 
the maximum curb weight or maximum frontal 
area set forth in the document specified in § 529.4 
(b) and furnished it by the incomplete automo- 
bile manufacturer under § 529.4(c) (1) or by the 
last intermediate manufacturer under § 529.5(b), 
as appropriate, is considered the manufacturer 
of the completed automobile for the purpose of 



PART 529-3 



the requirements of Title V and rules issued 
thereunder, other than those in Part 537, Fuel 
Economy Reports. 

(b) Each final-stage manufacturer that be- 
comes the manufacturer of a multistage automo- 
bile under paragraph (a) of this section shall, 
within 10 days after completing its manufactur- 
ing operations on that automobile, send written 
notification of its exceeding the curb weight or 
frontal area maximum to the Administrator of 
the Environmental Protection Agency and to the 
manufacturer previously considered under this 
part to be the manufacturer of the automobile. 

(c) (1) If the final-stage manufacturer be- 
comes the manufacturer of a multistage automo- 
bile under paragraph (a) (1) of this section, that 
manufacturer shall prepare a new fuel economy 
label for that automobile in accordance with 40 
CFR part 600. 

(2) If the final-stage manufacturer places 
the portion of the body including the windshield 
and front seat side windows on the incomplete 
automobile, that manufacturer shall attach the 
fuel economy label furnished by the incomplete 
automobile manufacturer under § 529.4(c) (2) or 
by the last intermediate manufacturer under 



§ 529.5(d) (2) or the fuel economy label prepared 
by the final-stage manufacturer under paragraph 
(c) (1) of this section, as appropriate, to that 
automobile in accordance with 40 CFR Part 600. 
(3) The final-stage manufacturer shall at- 
tach to the completed automobile in accordance 
with 40 CFR Part 600 a fuel economy label 
identical to the label that is required under this 
part to have been prepared by the manufacturer 
considered under this part to be the manufacturer 
of that automobile if: 

(i) The portion of the body including the 
windshield and front seat side windows was 
added to the completed automobile by a previous 
manufacturer; 

(ii) The final-stage manufacturer's manu- 
facturing operations do not cause that automobile 
to exceed either of the maxima specified in para- 
graph (c) (1) of this section; and 

(iii) That fuel economy label is not on 
that automobile when received by that manufac- 
turer or is removed from that automobile while 
it is in the possession of that manufacturer. 

42 F.R. 38369 
July 28, 1977 



PART 529-4 



Model Years 1981-)984 



PREAMBLE TO PART 531— PASSENGER AVERAGE FUEL ECONOMY STANDARDS 

(Docket No. FE 76-1; Notice 5) 



This notice establishes average fuel economy 
standards for passenger automobiles manufac- 
tured in model years 1981-84. These standards 
are 22 miles per gallon (mpg) for passenger 
automobiles produced in model year 1981, 24 mpg 
for 1982, 26 mpg for 1983, and 27 mpg for 1984. 
These standards are promulgated to satisfy the 
requirements of section 502(a)(3) of the Motor 
Vehicle Information and Cost Savings Act, as 
amended. The establishment of these standards 
is intended to result in the consumption of ap- 
proximately 41 billion fewer gallons of gasoline 
(worth $19 billion, with gasoline valued at 65(f 
per gallon) over the life of the vehicles manu- 
factured in 1981-84 than would be the case if the 
average fuel economy of new passenger automo- 
biles remained at the level of the 1980 fuel econ- 
omy standard, 20.0 mpg. 

Dates : These standards will apply to the model 
years 1981 through 1984. 

For further information contact: 

Mr. Stanley R. Scheiner 

National Highway Traffic Safety 
Administration 

Department of Transportation 

400 7th Street, S.W. 

Washington, D.C. 20590 

(202-472-5906) 

Supplementary Information : 
I. Background information. 

Title V of the Motor Vehicle Information and 
Cost Savings Act, as amended (hereafter, "the 
Act"), establishes average fuel economy standards 
applicable to manufacturers of passenger auto- 
mobiles. Title V was added to the Act by Part 
A of Title III of the Energy Policy and Con- 
servation Act (hereafter, "the Energy Act'"). 
The term "passenger automobiles" generally in- 
cludes four-wheeled vehicles manufactured pri- 
marily for on-road use and for the transportation 



of ten or fewer passengers, e.g., sedans, coupes, 
and station wagons. See 15 U.S.C. 2001(1) and 
(2), and 41 FR 55368, December 20, 1976. Com- 
pliance of a manufacturer with these standards 
is to be determined by computing the production- 
weighted fuel economy average of the various 
model types of passenger automobiles manufac- 
tured by the manufacturer in a model year and 
comparing that number to the fuel economy 
standard. Fuel economy values for the various 
model types of passenger automobiles are deter- 
mined in accordance with procedures established 
by the Environmental Protection Agency. See 
41 FR 38675, September 10, 1976. The Act speci- 
fies fuel economy standards of 18, 19, and 20 mpg 
for model years 1978, 1979, and 1980, respectively, 
and 27.5 mpg for 1985 and thereafter. Fuel 
economy standards for model years 1981-84 are 
to be establislied administratively by the Secre- 
tary of Transportation not later than July 1, 
1977. See section 502(a)(3) of the Act. This 
notice establishes the latter standards. 

Section 502(a) (3) imposes two substantive re- 
quirements for the 1981-84 standards. That sec- 
tion requires that the standards for each of those 
model years be set at a level which (1) is the 
maximum feasible average fuel economy level 
and (2) will result in steady progress toward 
meeting the 1985 standard. The statutorily- 
established standard for 1985 and thereafter of 
27.5 mpg may be adjusted either upward or 
downward by the Secretary of Transportation if 
lie determines that the present standard does not 
reflect the maximum feasible average fuel econ- 
omy level for those years. If the Secretary 
amends the standard for any model year to a 
level above 27.5 mpg or below 26.0 mpg, that 
amendment is subject to a veto by either House 
of the Congress. See section 502(a)(4). In 
determining maximum feasible average fuel 
economy, the Secretary must, under section 



PART 531— PRE 1 



Effective: Model Years 1981-1984 



502(e) of the Act, consider four factors: tech- 
nological feasibility, economic practicability ; the 
effect of other Federal motor vehicle standards 
on fuel economy ; and the need of the nation to 
conserve energy. 

Responsibility for the automotive fuel economy 
program was delegated by the Secretary of 
Transportation to the Administrator of the 
National Highway Traffic Safety Administration 
(NHTSA) in 41 FR 25015, June 22, 1976. Rule- 
making under section 502(a)(3) was initiated 
on September 23, 1976, when the NHTSA pub- 
lished an advance notice of proposed rulemaking 
(ANPRM). See 41 FR 41713. The ANPRM 
solicited specific information on all subjects rele- 
vant to the establishment of 1981-84 standards, 
with particular emphasis on the four considera- 
tions relating to the determination of maximum 
feasible average fuel economy levels set forth 
above. Six automobile manufacturers, two in- 
dustry trade associations, one state and one fed- 
eral energy agency, and one private individual 
provided responses to the ANPRM. These re- 
sponses were considered in developing the notice 
of proposed rulemaking and suppoi-ting materials 
discussed below. To encourage the lepresentation 
in the proceeding of interests and points of view 
which have traditionally been underrepresented 
due to the high costs of participation, NHTSA 
invited applications for financial assistance from 
individuals and groups which were financially 
unable to participate. See 42 FR 5178, January 
27, 1977. Five public interest organizations re- 
ceived funding in this first action under the 
Department's demonstration program for finan- 
cial assistance, which was announced in 42 FR 
2864, January 13, 1977. 

On February 22, 1977, a notice of proposed 
rulemaking and public hearing (NPRM) was 
published in 42 FR 10321. This notice discussed 
in additional detail the issues which were deemed 
relevant to the establishment of 1981-84 stand- 
ards. The notice also announced the availability 
of a document titled "Data and Analysis for 
1981-84 Passenger Automobile Fuel Economy 
Standards" (hereafter, the "Support Docu- 
ment"), which set forth the methodology and 
data on which fuel economy improvement projec- 
tions would be based. This document was re- 
leased on March 1, 1977. As noted in the NPRM, 



the Support Document projected potentially 
achievable fuel economy levels which would re- 
sult in steady progress toward meeting 27.5 mpg 
by 1985. These projections were based on the 
use of a limited class of technological improve- 
ments, and were therefore not projections of 
"maximum feasible average fuel economy levels.'' 
See 42 FR 10322, and Tr-I, p. 87 (remarks of 
Dr. Robert Sawyer).' However, such projections 
were useful for demonstrating that average fuel 
economy levels in the range to be considered in 
this proceeding were achievable. 

The NPRM also announced a public hearing 
to commence on March 22, 1977, to permit inter- 
ested parties to make oral presentations in addi- 
tion to their opportunity to make written 
submissions. The hearing was not required by 
the Act, but was held at the discretion of the 
Secretary to augnxent the opportunity for public 
participation in this important informal rule- 
making action. The Secretary of Transportation 
presided over the first day of the hearing, to- 
gether with the Administrator of the Federal 
Energy Administration and the Deputy Admin- 
istrator of the Environmental Protection Agency. 
Representatives of the latter agencies also par- 
ticipated throughout the remainder of the hear- 
ing. Eleven companies, groups and individuals 
made presentations at the hearing, including five 
passenger automobile companies and four funded 
public interest groups. The NPRM established 
a deadline of April 7, 1977, for the submission of 
written comments on the NPRM and the Support 
Document and on issues raised at the hearing. 
This deadline was extended on April 1, 1977, to 
April 12, 1977, at the request of Chrysler Cor- 
poration,= to allow additional time for the pre- 



' The abbreviation "Tr" refers to the transcript of the 
fuel economy public hearing, copies of which are in the 
fuel economy docket. The roman numeral following the 
abbreviation refers to the transcript volume, "I" being 
the Tuesday, March 22 volume, "II" being the March 23 
volume, and "III" being the March 24 volume. Refer- 
ences to the transcript and other materials are intended 
as an aid to persons dealing with the voluminous ma- 
terials in this rulemaking, and may not lie exhaustive. 

' DN-2.'5. The abbreviation "DN" followed by a num- 
ber refers to the docket number of material in NHTSA 
docket FE 76-01-XO3. This docket is located in Room 
5108 of the Nassif Building, 400 Seventh Street, S.W., 
Washington, D.C., and is open to the public during 
normal business hours. 



PART 531— PRE 2 



Effective: Model Years 1981-1984 



paration of responses to questions for which the 
hearing: panel received no answer at the hearing. 
See 42 FR 18413. April 7, 1977. To assure fully 
responsive answers to certain important questions 
asked at the public hearing-, "special orders" were 
issued on April 1. 1977. under section .50o(b)(l) 
of the Act to the five automobile companies which 
participated in the hearing. DN-7. In addition, 
on April 21. similar special orders were issued to 
certain foreign passenger automobile manufac- 
turers to obtain information on their capabilities 
to achieve higli levels of average fuel economy. 
DN-28. On April 20, special orders were sent to 
five automobile equipment and material suppliers 
to obtain information on the fuel economy im- 
provement potential and cost associated with the 
equipment and material they could supply to 
passenger automobile manufacturers in the 1981- 
84 period. DX-27. An additional special order 
was issued on May 19 to the recipients of the 
April 1 order to obtain further information on 
the impact of the Administration's proposed 
emission standards and energj' plan on fuel 
economy. DN-35. All comments and responses 
have been considered and the most significant are 
discussed below. 

Material contained in the Support Document, 
as supplemented or revised in light of material 
submitted in response to the XPRM and special 
orders, together with other relevant material, 
were used in the development of the standards 
promulgated herein. More detailed infonnation 
including more extensive data and analyses used 
in the development of these standards is con- 
tained in a Rulemaking Support Paper (here- 
after, the "RSP"). copies of which will soon be 
available from the Office of Automotive Fuel 
Economy (NFE-^01), National Highway Traffic 
Safety Administration, 400 Seventh Street, S.W., 
Washington, B.C. 20590 or by calling 202-472- 
."i906. The data and analyses in that paper ap- 
pear to justify average fuel economy standards 
more stringent than 27.5 mpg by 1985. However, 
the scope of notice limits this final rule to stand- 
ards for 1981-84. Thus, the statutory standard 
of 27.5 mpg for 1985 and thereafter cannot be 
changed by this rulemaking. Further, standards 
of 27.5 mpg or higher cannot be set for any year 
before 1985 so long as the 1985 standard remains 
at 27.5 mpg. This second limitation results from 



the statutory requirement that the 1981-84 stand- 
ards lead to steady progress toward the 1985 
standard. 

It should be noted that these limitations on the 
1981-85 standards are only temporary. Shortly, 
the Department intends to exercise its authority 
under section 502(a) (,4) of the Act to initiate 
rulemaking to increase the average fuel economy 
standards for 1985 and thereafter. At that time, 
tlie relation between the new standard for 1985 
and the standards for 1981-84 established herein 
will be considered. A further discussion of this 
topic is contained in section XII below. 

II. Methodology on which standards are based. 

A. The methodological approach. 

In view of the statutory requirement for maxi- 
mum feasible standards and of the nation's need 
to conserve energy, the Department has attempted 
to set fuel economy standards at the most strin- 
gent possible level, consistent with other statutoi-y 
requirements. At least two approaches exist for 
determining such maximum levels. One ap- 
proach is to evaluate the most fuel efficient pas- 
senger automobiles produced today in each of the 
various market classes of automobiles, and to use 
that evaluation to set improvement targets for 
all other automobiles in the same class. This 
approach has the advantage of providing a clear 
basis for evaluating current technological capa- 
bilities. However, to the extent that the best of 
the present vehicles, or even existing prototype 
vehicles, do not employ all available fuel econ- 
omy-improving technology, this approach does 
not truly measure even current maximum capa- 
bilities. Further, it does not consider technologi- 
cal improvements that will occur in time to be 
incorporated in the 1981-84 passenger automo- 
biles. Therefore, in developing 1981-84 fuel 
economy standards, the Department has employed 
a diifei-ent approach. The adopted methodology 
looks at pre.sent passenger automobiles and 
projects the impact of applying current and ex- 
pected future technology to those vehicles. This 
approach has the disadvantage that no one has 
actually built or tested a vehicle that combines 
the technological attributes of the vehicles pos- 
tulated in the anah'sis. However, the Depart- 
ment is convinced that the individual technologi- 



PART 531— PRE 3 



Effective: Model Years 1981-1984 



cal improvements considered in this analysis have 
been sufficiently well demonstrated through engi- 
neering analysis and other means that the com- 
bined fuel economy projections provide a reliable 
estimate of the achievable fuel economy of future 
passenger automobiles. 

The Department's analysis started with the 
detailed schedules for downsizing, weight reduc- 
tion through materials substitution and matching 
of engines with vehicles by the four major do- 
mestic manufacturers, as contained in the Sup- 
port Document. Then the schedules for inertia 
weight reduction over the period 1981-85 were 
revised to reflect further information. The 
projected fuel economy results for each manu- 
facturer for each year were then revised to reflect 
the new weight estimates as well as the Depart- 
ment's assessment that an average 10 percent 
reduction in acceleration performance could be 
achieved by the 1981 model year to increase fuel 
economy by an additional -1 percent. 

Next, the percentage increases in fuel economy 
due to technological improvements in transmis- 
sions, aerodynamic drag, rolling resistance, engine 
and vehicle accessories, and lubricants were eval- 
uated and these technological improvements were 
projected to be phased-in to the 1981-85 vehicles 
at various rates for each manufacturer. The 
phase-in schedules took into account differences 
in capability for implementation among the 
manufacturers. 

The technologies and the associated increases 
in fuel economy are : 

Improved automatic transmission 10% 

Improved manual transmission 5% 

Improved lubricants 2% 

Reduced accessory loads 2% 

Reduced aerodynamic drag 4% 

Reduced rolling resistance 3% 

In addition, the assessment included a 1 percent 
fuel economy penalty due to safety standards 
necessary to assure adequate levels of crash sur- 
vivability in the automobile fleet of the 1980's. 
See RSP. 

Finally, the distribution of car sizes for each 
manufacturer was assumed to be approximately 
the same as in 1976. 



The diesel engine was also considered in the 
assessment. It is available to manufacturers as an 
alternative way to obtain increased fuel economy 
and the Depai'tment concludes that manufactur- 
ers potentially could achieve a 25 percent pene- 
tration of diesel engine powered passenger 
automobiles by 1985. Similarly, the Department 
considered a shift in size distribution to 10 per- 
cent large cars, 25 percent midsize, 25 percent 
compact, and 40 percent subcompact by 1985 as a 
way to obtain a further increase in fuel economy. 
Diesel engines and mix shifts were placed in a 
"safety margin" category of technologically 
feasible means for the purposes of this rule- 
making. 

The economic practicability of the specific 
technical approach to improving fuel economy 
was examined in depth. The assessment consid- 
ered the cost to the manufacturer of the needed 
capital facilities and the variable costs associated 
with the various technological improvements in 
fuel economy. It projected price increases based 
on those cost estimates. It examined the overall 
costs to the consumer due to changes in new car 
prices, improvements in fuel economy, and 
changes in maintenance costs over the life of the 
car. It considered the impacts of price and fuel 
economy changes upon new car sales. It exam- 
ined in some depth the capability of the four 
domestic manufacturers to finance the capital 
facilities and equipment out of revenue. 

This approach results in a demonstration of 
one feasible path for attainment of the fuel econ- 
omy standards, which, however, is not necessarily 
the least cost or lowest risk path for each auto- 
mobile manufacturer to adopt to achieve com- 
pliance. Since the fuel economy standards are 
"performance standards," manufactui-ers are free 
to select any alternative path for achieving com- 
pliance. Even if the Department had based its 
fuel economy projections on the use of all loiown 
technology, manufacturers would .still have flex- 
ibility in achieving compliance. In some cases, 
the Department's analysis makes an allowance 
for alternative technologies (e.g., downsizing or 
material substitution to achieve weight reduction) 
from which manufacturers may select. In addi- 
tion, manufacturers may increase the percent of 
their pi'oduction for which some methods are 
used and thereby generate flexibility to decrease 



PART 531— PRE 4 



Effective: Model Years 1981-1984 



the usage of some other method. The manufac- 
turers may vary the intensity with which they 
apply a particular method, for example, achiev- 
ing a greater or lesser reduction in weight or 
acceleration capability. Many of the achievable 
improvements assumed in the analysis are based 
on projections of fuel economy improvement 
potential which the Department considers con- 
servative. If improvements in fuel economy 
greater than those projected are in fact realized, 
more flexibility is obtained. Finally, any new 
technological developments over the intervening 
years would generate additional flexibility. For 
these reasons, it is clear that, even excluding the 
measures comprising the compliance safety mar- 
gin provided in this analysis, alternate ap- 
proaches to complying with fuel economy 
standards will be open to the automobile manu- 
facturers. 

B. Statutory reqw'renifnts. 

Section 502 of the Act provides guidance re- 
garding the analysis to be used in setting the 
1981-84 fuel economy standards. The first re- 
quired step is to determine the "maximum fea- 
sible average fuel economy level." The first 
consideration required under section 502(e) in 
determining that level is "technological feasibil- 
ity." The Department interprets the latter 
phrase, in the context of the "maximum feasible" 
requirement and the methodological approach 
discussed above, as presenting the question of 
whether the various technological options for 
improving fuel economy are, individually and 
when used with other options, capable of com- 
mercial application in 1981-84. Therefore, the 
technology' considered in the Department's assess- 
ment is not liii\ited to that presently in produc- 
tion. If it can be reasonably projected that the 
technologA' will become available in time to be 
applied in a specified model year, its use is tech- 
nologically feasible in that year. See generally 
"Chrysler Corp. v. Department of Transporta- 
tion," 472 F.2d 659 (6th Cir. 1972, at 671-3: 
"International Harvester v. Ruckelshaus," 478 
F.2d 615 (D.C. Cir. 1973), at 628-9. Although 
marketing strategies for encouraging the pur- 
chase of fuel efficient passenger automobiles are 
not items of technology, those strategies have 
been included in the "mix shift" portion of the 



discussion of the technology -based average fuel 
economy projections. Given the use of "maxi- 
mum," the Act must be construed to require the 
Department to base its analysis on the use of all 
feasible methods for improving average fuel 
economy. 

The NPRM. at 42 FR 10322, solicited comment 
on the second statutory consideration, "economic 
practicability." Ford Motor Company argued 
that this consideration, along with the techno- 
logical feasibility consideration, requires the De- 
partment to reject any level of standards which 
would create even a risk of reductions in industry 
sales, employment or profits or of restrictions in 
the mix of automobiles offered for sale. DN-15, 
Document II, p. 2. Ford suggests basing the 
standards on a "risk-benefit" analysis. Chrysler 
Corporation argued that the term means as a 
minimum that "the various manufacturers are 
financially capable of taking the necessary steps 
to insure compliance." DN-30, p. 20. Chrysler 
goes on to state that the analysis should require 
a consideration of the impacts of the proposed 
standards on employment, inflation, and consum- 
ers. The Department's view on this issue is more 
consistent with that of Chrysler than with Ford's. 
The dictionary meaning of the word "prac- 
ticable'' is that something is "capable of being 
put into practice, done or accomplished." Web- 
ster's Third New International Dictionai-y, p. 
1780 (1961) 8 Oxford English Dictionary, p. 1218 
(1970). "Economic practicability"' is nowhere 
defined in the Act. However, similar terms, 
"economically justified" and "economically fea- 
sible," are used in Part B of Title III of the 
Energy Act, and it is possible to infer the mean- 
ing of "economic practicability'' from the use of 
those terms. The word "practicable" is synony- 
mous with "feasible,'' according to the Oxford 
definition. This appeal's to be consistent with the 
way the term is used in the Act. 

Section 325(a)(4)(D) defines "economically 
justified": 

. . . improvement of enei-gy efficiency is eco- 
nomically justified if it is economically feasible 
the benefits of reduced energy consumption, 
and the savings in operating costs throughout 



PART 531— PRE 5 



EfFective: Model Years 1981-1984 



the estimated average life of the covered 
product, outweigh — 

(i) any increase to purchasers in initial 
charges for, or maintenance expenses of, the 
covered product which is likely to result from 
the imposition of the standard, 
(ii) any lessening of the utility or the per- 
formance of the covered product, and 
(iii) any negative effects on competition. 

It should be noted that "economically feasible 
the benefits of" is a granmiatical error which 
appears in the P]nergy Act itself as well as the 
Conference Report. The legislative history in- 
dicates that it should probably be read "eco- 
nomically feasible and if the benefits of." 

Section 325 clearly contemplates that a stand- 
ard must be both economically feasible and justi- 
fied on a cost-benefit basis. Since Congress used 
the two concepts separate!}', it obviously did not 
intend them to be synonymous, i.e., economically 
feasible is not the same as cost-beneficial. This 
is further made clear by the definition of feasi- 
bility in the Conference Report : 
The term feasibility is used in section 325 in 
the strict sense, namely "capable of being car- 
ried out." Economic feasibility refei-s to 
whether or not a manufacturer has the eco- 
nomic capability to carry out the requirements 
of an energy efficiency standard. S. Rep. >fo. 
94-516, H. R. Rep. No. 94-700 (94th Cong., 
1st Sess.) at 172. 

In the dictionary definitions listed above, 
"feasible" was listed as a synonym for "prac- 
ticable," and interchanging them would lead to 
the conclusion that economic practicability is a 
separate concept from cost-beneficial (the second 
element of economically justifiable). 

In addition, not equating cost-benefit consid- 
erations with economic practicability is consistent 
with the goal of achieving maxinuim feasible fuel 
economy by allowing economically and tech- 
nologically possible standards which will improve 
fuel economy but which an analysis, subject to 
many practical limitations, might indicate are 
not cost-beneficial. 



The word "practicable" appears in the other 
major vehicle regulatory statute that NHTSA 
administers, the National Traffic and Motor Ve- 
hicle Safety Act. Section 103(a) of the Vehicle 
Safety Act (15 U.S.C. § 1392(a)) states, in part: 
. . . The Secretary shall establish by order 
appropriate Federal motor vehicle safety 
standards. Each such Federal motor vehicle 
safety standard shall be practicable . . . 
Unfortunately, the term is defined neither in the 
Vehicle Safety Act nor its legislative history. 
However, the legislative historj' of the Vehicle 
Safety Act states that the determination of prac- 
ticability must include consideration of tech- 
nological and economic factors. Further, there 
is a small body of judicial interpretations of the 
term which outlines its contours. 

First, it is clear that the term does not mean 
cost-beneficial. In "Chrysler Corp. v. Depart- 
ment of Transportation," 472 F. 2d 659 (6th Cir. 
1972), the court noted that the Automobile 
Manufacturers Association had suggested a num- 
ber of amendments to the bill from which the 
Vehicle Safety Act arose, including limiting 
standards to those at costs commensurate with 
the benefit to be achieved. Id. at 672, fn. 16. 
and stated: 

None of these specific restraints sought by the 
Automobile Manufacturers Association was 
adopted, and we must decline to write into the 
Act the very same suggestions which Congress 
declined to write into the Act. Id. at 672, 
fn. 16. 

Considering the definition of "economically 
justifiable" that Congress placed in Part B but 
not Part A of Title III of the Energy Act, the 
Department must likewise decline any invitation 
to write such limitation into Part A. 

Wiat "practicability" does mean is suggested 
in the following cases. In "Chrysler Corp. v. 
Department of Transportation," 515 F. 2d 1053 
(6th Cir. 1975), relating to rectangular head- 
lamps, the court stated : 
A review of the cases in this area suggests the 
practicability requirement was designed pri- 
marily to prevent the NHTSA from establish- 
ing mandatory safety standards that are 
economically or technologically infeasible. (ci- 
tations omitted). Id. at 1060. 



PART 531— PRE 6 



EfFective: Model Ye 



In "Chrysler Corporation v. Department of 
Transportation," 472 F. 2d 659 (6th Cir. 1972), 
relatintr to passive restraints the court stated : 
"We do not intend to suggest that the Agencj- 
might impose standards so demanding as to 
require a manufacturer to perform the im- 
possible, or impose standards so imperative 
as to put a manufacturer out of business. 
But it is clear from the Act and its legislative 
history that the Agency may issue standards 
requiring future levels of motor vehicle per- 
formances which the manufacturers could not 
meet unless they devoted more of their re- 
sources to producing additional safety tech- 
nology than they might otherwise do. 

Id. at 672. It should be noted that this ex- 
plicitly recognizes the Department's authority to 
set standards at non-free market dictated levels, 
i.e., at levels not fully cost justified under tradi- 
tional free market economic theory. 

Finally, in "H & H Tire Co. v. U.S. Depart- 
ment of Transportation." 471 F. 2d 350 (7th 
Cir. 1972) the Court said: 
We agree with tlie Government that "the fact 
that a government regulation may cause eco- 
nomic hardship to a party does not make such 
regulation imreasonable." Id. at 354. 

Congress was presumably aware of the judicial 
interpretation of this term. It can be inferred 
from Congress' use of the same term in the Cost 
Savings Act as in the Vehicle Safety Act, both 
of which are overseen by the Commerce Com- 
mittee and administered by the XHTSA, that 
Congress intended the same interpretation in botli 
cases. 

Considering all these factors, the Department 
concludes that "'economic practicability" should 
be interpreted as requiring the standards to be 
within the financial capability of the industry, 
but not so stringent as to threaten substantial 
economic hardship for the industry. A cost- 
benefit analysis would be useful in considering 
these factors, but sole reliance on such an anal- 
ysis would be contrary to the mandate of the Act. 

The third consideration in determining "maxi- 
numi feasible average fuel economy" levels is 
"the effect of other Federal motor vehicle stand- 
ards on fuel economy." This term is interpreted 
to call for making a straight-forward adjustment 



to the fuel economy improvement projections to 
account for the impacts of other Federal stand- 
ards, principally those in the areas of emission 
control, occupant safety, vehicle damageability, 
and vehicle noise. However, only the unavoid- 
able consequences of . compliance with these 
standards should be accounted for. The automo- 
bile manufacturers must be expected to adopt 
those feasible methods of achieving compliance 
with other Federal standards which minimize 
any adverse fuel economy effects of those stand- 
ards. 

The final statutory consideration is the "need 
of the Nation to conserve energy." The Support 
Document contains information on this topic, 
including a discussion of the impact of our na- 
tional need to import large quantities of pe- 
troleum, and the impact of various automotive 
fuel economy standards schedules on such im- 
portation. No participant in the rulemaking 
proceeding disputed the importance of the need 
to conserve energy. The magnitude and promi- 
nence of this need have increased in the years 
since Congress' amendment of the Act. It must 
be recognized that achieving improvements in 
automobile fuel economy, no matter how great, 
will not Viy itself solve the national energy prob- 
lem. Maximum conservation efforts must be 
made in all areas of energy consumption if the 
nation is to begin to solve its overall energy 
problem. It would jeopardize the overall na- 
tional conservation effort if individual elements 
of that effort, such as the automobile fuel econ- 
omy program, were to fail to require the last 
increments of feasible fuel savings on the sole 
ground that such increments are small in com- 
parison to the overall need. Therefore, in con- 
sidering various fuel economy schedules for 
1981-84 passenger automobiles, the Department 
must select the highest schedule consistent with 
the other statutory requirements, due to the 
serious national need to conserve energy. See 
Federal Energy Administration submission. DN- 
37, pp. 1-2. 

The second substantive statutory requirement 
for the 1981-84 standards is that they nuist result 
in "steady pi'ogress" toward meeting the 1985 
standard. Although the Act does not define the 
term "steady progress," some guidance as to the 
term's meaning can be obtained by reference to 



PAET 531— PRE 7 



Effective: Model Years 1981-1984 



the "plain meaning" of the two words, cases 
construing the two words, and the Act's legisla- 
tive history. From a review of these materials, 
it appears that the term requires annual increases 
in average fuel economy, but with none of the 
annual increments varying dramatically from the 
other annual increases. Schedules like those 
suggested by American Motors Corporation 
(Tr-I, p. 74) and by Damiler-Benz AG (DN-10, 
p. 11), which require increases in average fuel 
economy in only one year during the 1981-84 
period, would be inconsistent with the "steady 
progress" requirement, even if they met the 
"maximum feasible" requirement, since they do 
not require annual progress. On the other hand, 
a projected maximum feasible average fuel econ- 
omy level of 26 mpg for 1981, for example, would 
have to be adjusted downward because of the 
disproportionately large increment resulting for 
that year. 

III. Defermlnation of maximum feasible average 
fuel economy levels. 

A. Technology-based fuel economy projecfion.s. 

Participants in the rulemaking proceeding did 
not seriously challenge the appropriateness of the 
basic methodological approach used in the Sup- 
port Document (Docket Number FE 76-01 
GR-3) to project fuel economy improvement 
potential. That methodologj- assigns an analyt- 
ically-dei-ived percent average fuel economy 
improvement to certain options which are tech- 
nologically feasible and applies that percentage 
to each of the various manufacturers' present 
passenger automobile fleets. The same imple- 
mentation schedule is not used for all manufac- 
turers nor for all automobiles in a given 
manufacturer's fleet due to the significant differ- 
ences whicli exist in the financial capability and 
in the efficiency of the current automobiles of the 
various manufacturers. Rather, a maxinunu 
appropriate improvement schedule taking those 
factors into consideration is assigned. The tech- 
nology considered in the development of the 
standards established in this notice are discussed 
in detail below. Because of the qualitative dif- 
ference in the domestic automobiles and the im- 
ports, tlie fuel economy improvement potential 
of the imports will be discussed separately. 



1. Weight reduction. 

The most obvious method for improving fuel 
economy is to make the passenger automobile 
lighter. For analytical purposes, the Support 
Document divided this option into three sub- 
options: downsizing; material substitution; and 
mix shifts. "Downsizing" referred to the reduc- 
tion of vehicle weight and exterior dimensions 
by optimizing the vehicle design. The goal of 
downsizing is to reduce the exterior dimensions 
of the automobile without reducing significantly 
the interior passenger and luggage volume of the 
automobile. According to General Motors, this 
option "retains the essential characteristic of cars 
tliat meet a variety of consumer needs and de- 
sires." DN-18, Attachment VIII, p. 3. The 
Department notes that there is significant varia- 
tion in the interior space of different passenger 
automobiles with the same number of seating 
positions and that tradeoffs between interior 
space and improved fuel economy are possible. 
"Material substitution" refers to the substitution 
of materials with lighter weight for a given 
strength, such as aluminum, plastics, and high- 
strength steel, for currently used materials. "Mix 
shifts" refers to shifting the percentages of the 
vehicles sold in different market classes (e.g., 
selling more compacts and fewer midsize auto- 
mobiles). For explanation of these market 
classes, see the fuel economy labeling regulations 
established by E.P.A. in 41 FR 497.53 (November 
10, 1976). The automobile manufacturers gen- 
erally argued that they were unable to differen- 
tiate between weight savings attributable to 
downsizing and material substitution, since they 
are both inseparable parts of the vehicle redesign 
process. See GM comment, DN-18, p. 11; 
Chrysler conunent, DN-3'2, pg. 11. Therefore, 
the Rulemaking Support Paper has combined 
the weight reduction potentials for those two 
methods. Mix shifts will be dealt with separately 
in section III. A. 10. 

The Support Document based its projections 
of feasible weight reduction through downsizing 
primarily on the reiluctions already achieved by 
General Motors with its large-sized vehicles and 
on press I'eports of planned downsizing of the 
other market classes. See Support Document 2, 
Volume I, page 2-7. Since these projections 
were based on current downsizing efforts, they 



PART 531— PRE 8 



EfFective: Model Years 1981-1984 



may well understate the maximum potential for 
downsizing in 1981-84. See DN-11, p. 4. com- 
ments of Mr. Thomas Austin. In fact. Ford, in 
response to the April 1 special order (DN-7) 
projected greater total weight reduction for its 
fleet than NHTSA had originally assumed. 
DN-15, Doc. Ill, p. 30. GM strongly implied 
that a second round of downsizing, in addition 
to the one now underway, was both feasible and 
planned. DX-18, Att. VIII, p. 3. In addition. 
GM submitted a ''hypothetical scenario" of ac- 
tions it could take to meet a standard of 27.5 
mpg in 1985. DN-18, p. 12. Although GM 
characterizes this scenario as "drastic," the com- 
pany's main concern appears to be that the 
scenario assumes the use of diesel engines in 25% 
of its automobiles and a reduction in average 
acceleration capability. The projected weight 
reductions, which are significantly greater than 
those initially projected by XHTSA. do not ap- 
pear "drastic," and are generally consistent ■\\-ith 
Ford's projections. The reasonableness of GM's 
projections can also be inferred from GM's state- 
ment that the reduction assumed no mix shift 
toward smaller market classes (p. 12) and the 
fact that its projected average inertia weight for 
1984 subcompacts (p. 13) is substantially higher 
(2690 poimds) than that of many subcompacts 
built today. 

Additional evidence that the Support Docu- 
ment's projections of achievable weight reductions 
were unduly pessimistic was provided by Alcoa 
and U.S. Steel Corporation in response to the 
April 20 special order. See DX-27. Alcoa 
projected that the use of aluminum in certain 
vehicle components where that use is expected to 
be feasible by 1982 could reduce the weight of a 
present compact car by 415 pounds. Alcoa em- 
phasized that that total was n-ot based on a com- 
plete list of all feasible aluminum substitutions 
and that no allowance was made for propagation 
effects, i.e., the ability to reduce the weight of 
certain additional components because of weight 
reductions achieved in other components. DN- 
27-D. 

Alcoa projected a material cost increase of only 
$33 for its proposed aluminum substitution. 
U.S. Steel projected a slightly greater weight 
reduction, at a iiigher cost, through the substitu- 
tion of certain steel products for those presently 



used. DN-27-A. These projected weight reduc- 
tions, which do not refer to identical lists of 
vehicle components, are approximately twice as 
great as those projected in the Support Docu- 
ment, Doc. 2, Vol. I, page 2-7, of 150-250 pounds. 
Since the Alcoa and U.S. Steel projections were 
not available at the time of the XPRM, the 
Department is reluctant at this time to revise 
upward its projections in this rulemaking of 
weight-saving potential on the basis of those sub- 
missions. However, these submissions do support 
the feasibility of the original weight reduction 
projections. 

Front engine, front wheel drive power trains 
offer another technological option for further 
downsizing of passenger automobiles. GM 
(DX-18, p. 10) and Chrysler (DX-19, p. 7) each 
projected use of such power trains in their fleets 
in 1981-84. Their use allows additional vehicle 
downsizing through maximizing passenger com- 
partment volume by elimination of the driveline 
tunnel and rear axle kick-up area. It may also 
be possible to reduce the length of the engine 
compartment by transverse mounting of the en- 
gine and transmission. The only projection given 
for fuel economy improvements associated with 
front wheel drive was the 5 percent figure of- 
fered by Dr. Sawyer at the hearing. Tr-III. 
p. 93. Although no percent improvement is as- 
signed to front-wheel drive for the purposes of 
this analysis, the use of such power trains is 
recognized as a feasible method for optimizing 
vehicle design. The availability of this option, 
which was not part of the original DOT anal- 
ysis, tends to confirm the Department's conclusion 
that the weight reductions projected in the Sup- 
port Document are conservative estimates of the 
maximum feasible reductions. There appears to 
be no technological reason which would prohibit 
the use of such power trains in all vehicles, par- 
ticularly if the implementation of this option 
were phased in concurrently with transmission 
changes. (See sections 3 and 4.) 

Therefore, the weight reductions assumed for 
Ford and GM have been revised to take into 
account the higher projections made by those 
companies, but not the submissions by Alcoa and 
U.S. Steel. In the case of AMC and Chrysler, 
the original projections in the Support Document 
have been retained, despite the claims of those 



PAET 531— PEE 9 



Model Years 1981-1984 



two manufacturers that the Department's projec- 
tions exceed their plans. =' AMC argues that its 
vehicles are presently optimally designed, and 
that the other manufacturers' downsizing plans 
will merely bring the latter automobiles up to 
AMC's level of efficiency. DN-14, p. 1. Chiysler 
argues that DOT projections are 100-200 pounds 
too optimistic per vehicle. DN-30, p. 9. With 
respect to both AMC and Chrysler, there is no 
reason to believe that the improvements asso- 
ciated with material substitution are not as fully 
applicable to them as to Ford and GM, which 
did not dispute the projected improvements. 
Neither AMC nor Chrysler gave any indication 
that they presently use light-weight materials to 
a greater extent than their domestic competitors, 
and a comparison of the weights of their present 
vehicles confirms that there is no such difference. 
AMC's claim that absolutely no downsizing of 
its vehicles is possible must also be rejected. For 
example, the AMC Gremlin has less interior 
room than a Honda Accord, but weighs nearly 
800 pounds more. See 1977 EPA/FEA Gas 
Mileage Guide, Second Edition, and Automotive 
News, 1977 Market Data Book Issue, April 27, 
1977, p. 76, 109. The AMC Hornet weighs 
nearly 500 pounds more than an Audi lOOLS, 
but has less interior room. The AMC Pacer 
weighs nearly 600 pounds more than that same 
Audi model, with equivalent interior roominess. 
The AMC Matador weighs 168 pounds more than 
a large .size Pontiac, based on a comparison of 
six-cylinder versions of both cars, but has eight 
less cubic feet of total interior volume. A similar 
comparison between present Chrysler and Ford 
automobiles reveals no significant differences in 
weight or roominess, yet Ford projects that it 
will achieve a significantly lower fleet average 
weight than Chrysler.. It is significant that 
Chrysler engineers have projected that weight 
reductions of 630 pounds could be achieved 
through light-weight material substitution alone 
in a mid-size car, with "moderate changes in 



' Many of tlie automoliile nianufacturer.s' .spt-ciflc ob- 
jections to the percent improvements projected by the 
Department for various technological options are phrased 
in terms of differences between DOT projections and 
ttie manufacturer's present "plan." It is clear, however, 
that under the statute DOT'S projections must be based 
on maximum achievable improvements, notwithstanding 
any contrary "plans" by the manufacturer. 



design and manufacturing techniques." SAE 
Paper #760203, Docket FE-76-01-GR-21.^ Those 
engineers project that such weight reduction 
techniques could be implemented in "two or three 
years," with a resulting fuel economy improve- 
ment of 26 percent. Therefore, the original 
assessments of weight reduction potential for 
AMC and Chrysler have been retained. The 
originally adopted schedule for attaining those 
reductions allows more time for those two com- 
panies to complete the process than in the cases 
of Ford and GM, in order to take into account 
differences in economic and product development 
capabilities (see Support Document, Doc. 4). 
These delays provide needed flexibility for the 
smaller domestic manufacturers without signifi- 
cantly reducing total fuel savings. Table 5.1 of 
the RSP provides the projected fleet average 
inertia weights for each manufacturer and the 
resulting fuel economy values appear in Table 
5.9. 

2. Reduction in straight-line acceleration capa- 
bility. 

Over a limited range of engine parameters, it 
is possible to achieve fuel economy improvements 
through reducing engine displacement or the 
ratio of engine speed to vehicle speed (N/V), or 
some combination of those two items. These re- 
ductions, while improving fuel economy, also 
adversely affect vehicle acceleration capability. 
Where it is possible to merely substitute one set 
of gears for another to change the axle ratio or 
e-xpand the ratio of transmission gearing or 
where sufficient plant flexibility exists for a 
manufacturer to increase the production of lower 
displacement engines, this method of improving 
fuel economy can be implemented in a highly 
economical manner. The primary constraint 
which restricts the use of this method is consumer 
resistance, at least initially, to significantly re- 
duced levels of vehicle acceleration. A secondary 
constraint is the increased difficulty of controlling 
NOx emissions as engine loading increases. 



' "SAE Papers" are technical research papers presented 
before the Society of Automotive Engineers. The papers 
cited in this notice were prepared by engineers and 
scientists expert in particular areas of automotive 
technology. 



PART 531— PRE 10 



EfFective: Model Years 1981-19S4 



Therefore, in the April 1 special orders, the 
automobile manufacturers were required to sub- 
mit estimates of the minimum level of accelera- 
tion i^erformance which consumers currently find 
acceptable. DX-7, Question I.B.2. The responses 
to this question were relatively consistent. In 
terms of the time required for vehicles to ac- 
celerate from rest to a speed of 60 miles per 
hour, GM indicated that vehicles which require 
more than 15 seconds are "currently meeting 
with unfavorable consumer acceptance" (DX-18, 
p. 5) ; Ford judged the same time to be the 
''minimum performance acceptable without en- 
countering consumer resistance" (DX-15, p. 
11) ; Chrysler estimated a ''threshold level" at 
about 17 seconds (DN-32, p. 8) ; and AMC 
states that times in excess of 20 seconds are 
"clearly unacceptable" (DN-14, p. 4). However, 
the specified "thresholds" do not appear to be 
absolute minima, even at present, which all pas- 
senger automobiles must exceed. GM states that 
16 percent of its present fleet of passenger auto- 
mobiles presently have acceleration times poorer 
than its specified minimum (id., p. 5), Ford 
states tliat nearly 26 percent of its fleet is in that 
class (DN^3, Att. I), and AMC states that 26 
percent of its sales are presently near the 20 
second threshold (id., p. 4). Eight percent of 
Chrysler's domestic fleet has acceleration times 
poorer than 17 seconds. DX-32-A. Large por- 
tions of all manufacturers' current import fleets 
have acceleration performance levels poorer than 
these "thresholds." 

In view of these statements, it is concluded 
that a reduction in average passenger automobile 
acceleration of approximately 10 percent from 
the present average baseline acceleration times of 
approximately 14' seconds can be achieved with- 
out incurring substantial consumer resistance. 
This I'eduction roughly corresponds to a fleet 
average ''zero-to-sixty" time of 15.4 seconds, and 
would be phased-in by the 1981 model year. A 
fuel economy benefit of four percent would result 
from this change. 

It should be noted that several factors combine 
to mitigate the impact of even this relatively 
modest reduction. First, it is possible for the 
manufacturers to achieve this reduction by nar- 
rowing the range of offered acceleration char- 
acteristics, e.g., by decreasing the acceleration 



time for its faster automobiles. Even under the 
GM "Hypothetical Scenario," which assumed a 
greater performance reduction than the one 
projected here, the reduction in average accelera- 
tion performance is achieved while concurrently 
improving the performance of the slowest of 
Gil's present passenger automobiles. DX-18, p. 
17. In addition, it may be possible for the manu- 
facturers to offset this performance reduction in 
their passenger automobiles. At the same time 
that a manufacturer switches from an 8-cylinder 
engine to a 6-cylinder engine or lowers the X/V 
ratio, it could increase the acceleration perform- 
ance of whatever engine is used by using a turbo- 
charger or fuel injection system. The use of this 
alternate technology may even result in a net fuel 
economy benefit, in some cases. DX-16, p. 1 
(Volkswagen) and DX-27B, p. 2 and Attachment 
(Bendix). Fuel injection is presently used on a 
number of passenger automobiles, and at least 
one manufacturer plans to use turbochargers in 
the near future. DX-18, p. 9 (GM). Volks- 
wagen, under DOT contract, tested a turbo- 
charged version of the Diesel Rabbit and achieved 
a fuel economy improvement of up to 18 percent 
with a concurrent improvement in acceleration 
performance. The acceleration level of this ve- 
hicle is superior to that of approximately 24 
percent of General Motors' present passenger 
automobiles. DX-16, p. 2 (\^V) and DX-18, 
p. 6 (GM). The fuel economy benefit from 
turbocharging is an indirect one which would 
typically result from the ability to substitute a 
smaller displacement engine for the larger one 
currently used and increasing the smaller en- 
gine's horsepower while maintaining its better 
fuel economy by turbocharging. Therefore, the 
performance reduction discussed above is adopted 
in the analysis on which the 1981-84 standards is 
based. See Rulemaking Support Paper, Section 
5.3, for a further discussion of this topic. 

3. Impraved automatic transmissions. 

The Support Document projected that im- 
provements in automatic transmissions could re- 
sult in a 10 percent fuel economy improvement 
in vehicles which use automatic transmissions, or 
about 85 percent of the domestic fleet. This 
improvement was based on tests of prototype 
transmissions under contract for DOT, and sev- 
eral studies presented in papers submitted to the 



PART 531— PRE 11 



EfFective: Model Yea 



Society of Automotive Engineers. Id. Document 
2, Vol. 1. These data indicate that improvements 
up to nearly 20 percent are achievable with cer- 
tain types of improved automatic transmissions. 
Present automatic transmissions are g;enerally 
three-speed units with a conventional torque 
converter. Some data generated by the domestic 
manufacturers indicate that certain modified ver- 
sions of the present three-speed transmissions, 
principally those employing a lock-up clutch on 
the torque converter in conjunction with a wide 
gear ratio range, have the potential to achieve 
the assumed 10 percent improvement. In addi- 
tion, a four-speed, wide ratio range automatic 
transmission has the potential to achieve even 
greater fuel economy improvements, but at sig- 
nificantly higher costs. Ford, GM, and Chrysler 
each projected fuel economy improvements 
achievable through the use of one or more of the 
above types of automatic transmission of a mag- 
nitude either consistent with or very close to the 
assumed 10 percent figure projected in the Sup- 
port Document. DN-15, Doc. I, p. 3; DN-18, 
p. 3; DX-30, p. 11. Volvo also supported the 
10 percent improvement projection. DX-28-02, 
p. 5. Even if the higher cost four-speed unit is 
necessary to achieve this improvement, none of 
the four domestic manufacturers claimed that the 
use of such units is economically impracticable, 
in response to a specific question in the April 1 
special order. DX-7, Questions IIA and B. 
Indeed, Ford has begun plant modifications to 
permit the production of a four-speed automatic 
transmission with lock-up torque converter in 
time for installation in some 1980 model year 
automobiles. Docket FE-76-01-GR-23. There- 
fore, the original 10 percent improvement is re- 
tained in the final analysis. 

GM argued that the 10 percent improvement 
in automatic transmissions is not applicable to 
all automobiles which use automatic transmis- 
sions. DN-19, p. 3. Lightweight vehicles "with 
small displacement engines, small automatic 
transmissions and higli axle ratios" are projected 
to attain a significant share of the market and, 
according to GM, the fuel economy of such ve- 
hicles is not significantly improved by the addi- 
tion of a lock-up clutch. Id., p. 4. NHTSA 
cannot accept this argument for several reasons. 
First, G^l addressed itself primarily to the im- 



pact of the lock-up clutch, without addressing 
the impact of increasing the number of geared 
speeds, which, as was previously noted, is consid- 
ered both technologically feasible and economi- 
cally practicable, or of other transmission 
improvement techniques. Second, none of the 
other manufacturers raised a similar objection to 
the assumed across-the-board application, despite 
their even greater orientation toward smaller 
market class automobiles. Third, it should be 
noted that General Motors' engineers have pro- 
jected fuel economy improvements up to nearly 
20 percent, over a wide range of engine sizes and 
axle ratios. See SAE Paper #770418, Docket 
FE-76-01-GR-2i. It may be that GM is im- 
plying that its future use of a (presumably new) 
small automatic transmission with high axle 
ratio would obviate the need to use a lock-up 
torque converter on its small cars. If this is 
true, then the projected 10 percent improvement 
figure for all automobiles which employ auto- 
matic transmissions is still correct, since the new 
drive train would achieve that improvement. 
GM is in no way constrained to achieve that 
improvement in precisely the same manner in 
which it is postulated in this analysis. 

AMC stated that it could only achieve a 2 
percent improvement in its automatic transmis- 
sions. DN-14, p. 1. However, AMC presently 
purchases its transmissions from Chrysler and is 
likely to continue to purchase such technology 
from outside sources in the future. Therefore, 
any transmission improvements achieved by the 
"Big Three" would become available to AMC, 
albeit on a delayed basis. Implementation delays 
similar to those assumed for Chrysler and AMC 
for weight reduction were also assumed for trans- 
mission improvements in this analysis. See RSP 
Tables 5.5-5.8. 

4. Improved maiiual transmissions. 

Another possible area of fuel economy im- 
provement is the use of additional drive gears in 
manual transmissions. Many domestic manual 
transniissions have only 3 speeds. Information 
received on this subject in response to the April 1 
(DN-7) and April 21 (DN-28) special orders 
supports a projected fuel economy improvement 
of 5 percent for the manual transmission portion 
of the fleet. DN-18, p. 8 (GM) ; DN-28-02, p. 6 



PART 531— PRE 12 



(Volvo) : DX-28-03, p. 5 (Honda). Ford's sub- 
mission supports the feasibility of this substitu- 
tion for all present manual transmissions. 
DN-15, Doc. I, p. 11. Xo information was sub- 
mitted which raised any doubts about the tech- 
nologrical feasibility or economic practicability of 
this option. In fact, five-speed manual trans- 
missions have currently achieved substantial 
market penetrations in the import fleet. Honda 
projects that tlie use of five-speed manual trans- 
missions would result in a $50 per vehicle price 
increase (for those vehicles with manual trans- 
missions). DN-28-03, p. 5. Therefore, a 5 per- 
cent improvement for all manual transmission 
vehicles was adopted in the analysis. The per- 
centage of vehicles which use manual transmis- 
sions was not projected to increase between the 
present and 198.5, due to the difficulty encountered 
by certain manual transmission vehicles in at- 
tempting to meet more stringent emission stand- 
ards. The use of manual transmissions with 
additional drive gears results in a small, but 
nevertheless significant, increase in average fuel 
economy. 

5. Improved Juhricanfs and accessories. 
Improvements in average fuel economy can 

also be obtained through the use of synthetic, 
lower viscosity, or extended viscosity range lubri- 
cants and through improvements in the efficiency 
of vehicle and engine accessories such as pumps, 
fans, and accessory drives. A total improvement 
of 4 percent was assigned to these options in the 
Support Document, 2 percent for each category. 
See Doc. 2, Vol. I, p. 2-19. Three domestic 
manufacturers which addressed this issue did not 
object to the 4 percent improvement projection. 
DX-18, p. 1 (GM) ; DX-15. Doc. I, p. 3 (Ford) ; 
DX-14, p. 1 (AMC). Improvements up to the 
assumed 4 percent for lubricant improvements 
alone have been documented. See SAE Papers 
750376 (Docket FE-76-01-GR-21) and 750675 
(Docket FE-76-01-GR-21). Therefore, the as- 
sumed 4 percent improvement is retained in this 
analysis. 

6. Reduction of aerodynamic drag aiul rolling 
resistance. 

Further fuel economy improvements are 
achievable through reducing the automobile's 
aerodynamic drag and rolling resistance. The 



latter term refers to the use of improved radial 
and other advanced tires and reductions in the 
frictional losses of bearings and other similar 
drive line and chassis components. Aerodynamic 
drag and rolling resistance improvements should 
be achieved in two ways. The first way is to 
obtain credit for aerodynamic drag reductions 
already achieved, through the use of the optional 
EPA "coast-down" procedure for determining 
road load dynamometer settings in fuel economy 
tests. See 40 CFE 86.177-11 (e)(2). If the op- 
tional procedure is not used, fuel economy test 
results will be based on current tabulated values 
of road load power which in certain cases may 
result in deleterious fuel economy effects. The 
second way results from future improvement in 
these two areas. Credit for future aerodynamic 
drag reductions must also be obtained through 
the use of the optional EPA procedure. Data 
indicates that improvements in the first category 
alone can be of substantial magnitude. See RSP, 
App. D, Ref. 18. 

The automobile manufacturers expressed a 
major difference of opinion on the magnitude of 
achievable improvements in this area. GM indi- 
cated that improvements up to 4 percent for 
aerodynamic drag and 4 percent for rolling re- 
sistance were achievable. DX-18, p. 5, 10, and 
AXPRM submission. Docket Xumber FE 76-01- 
XOl, #10, pp. 16a, 21-24. The other manufac- 
turers indicated much lower improvement poten- 
tial, although apparently not assigning a high 
research and development priority to these items. 
DX-14, pp. 4, 5 (AMC); DX-19, p. 3, DX-32, 
Att. II (Chrysler) ; DX-15, Doc. I, p. 11 (Ford). 
As was frequently the case with the manufac- 
turers' statements, the percent improvements 
given reflect present plans as opposed to maxi- 
mum capabilities. Therefore, the Department 
conducted an investigation to determine which of 
the disparate projections most closely corre- 
sponded to the actual maximum feasible improve- 
ment. Available data indicates that improvements 
in the upper range of GM's projections are in 
fact feasible for the 1981-84 time period. Volks- 
wagen, for example, has demonstrated how rela- 
tively minor changes to automobile exterior 
design can result in significant reductions in 
aerodynamic drag, e^•en bej'ond the GM projec- 
tions. SAE Paper #760185, Docket FE-76-01- 



PART 531— PRE 13 



Effective: Model Years 1981-1984 



GEr-21. Methods for reducing aerodynamic drag 
are discussed further in Appendix D of the 
Rulemaking Support Paper. 

In the case of rolling resistance, it appears 
that a 5 percent fuel economy improvement can 
be obtained by switching from bias tires to "first 
generation" radials, although much of the switch- 
ing has already occurred. "Second generation"" 
radials which will offer further improvements of 
2 to 4 percent are now under development, with 
GM apparently being the leader in this area 
among the auto companies. Docket FE76-01- 
GR-19, 20, 22. It should be noted that develop- 
ments in this area will result from the automobile 
companies working together with the tire manu- 
facturers, since the automobile companies gen- 
erally do not manufacture their own tires. It is 
likely that majoi' bieakthioughs by one automo- 
bile manufacturer would soon become available 
to all manufacturers, since the tire company 
which produces the improved tire could market 
tliat tire freely. Additional rolling resistance 
reduction can be obtained through increasing tire 
inflation pressures while making appropriate 
changes in the vehicle suspension system. See 
Appendix D of the Rulemaking Support Paper 
for further information on reducing rolling re- 
sistance. It is concluded that the previously 
discussed improvements in each of these two 
areas are feasible in the 1981-84 time frame, on 
a gradual phase-in basis. See RSP, Tables 
5.5-5.8. 

7. Use of alternative erigines. 

The present fleet of domestically manufactured 
passenger automobiles is powered exclusively by 
conventional, homogeneous charge spark ignition 
gasoline engines. However, certain alternative 
engine types such as the'diesel and such stratified 
charge concepts as the Honda CVCC and the 
Ford PROCO (programmed combustion) ofl'er 
the potential for significantly better fuel ef- 
ficiency than present engines. Many manufac- 
turers plan to use some form of alternative 
engine in their domestic fleets in the near future, 
including General Motors with the diesel (DX- 
18, p. 32), Ford with the PROCO (DX-15, Doc. 
I, p. 2), and Chrysler with a form of pre-chamber 
engine (DN-35-01, Attachment B, p. 6), in addi- 
tion to the Honda CVCC and Mercedes, "^W, and 



Peugeot diesels already on the market. In the 
case of the diesel, the Support Document pro- 
jected (Summaiy Report, p. A39), and the do- 
mestic manufacturer most actively pursuing the 
development of diesel engines confirmed in its 
response to the April 1 special order, that the 
diesel offers 25 percent better fuel economy than 
a comparably performing conventional spark 
ignition engine. DX-18, p. 2 and Attachment V 
(GM) ; DX-7, Question I.A. In addition, Volvo 
indicates that the PROCO engine can be ex- 
pected to provide an improvement in fuel econ- 
omy of approximately 20 percent. DX-15, Doc. 
I, p. 3 and Tr-II, p. 38. Honda projects a fuel 
economy improvement differential of roughly 10 
percent for its CVCC engine. DX-28-03, p. 11. 
This projection may be low. The fuel economy 
difference between its CVCC and non-CVCC 
versions of the Ciyic, as determined in EPA fuel 
economy tests, is approximately 30 percent. The 
Support Document's projection Of a 25 percent 
improvement in fuel economy for the diesel was 
based on a comparison of fuel economy differ- 
entials actually experienced by GM and VW with 
their recently certified diesel passenger automo- 
biles. 

A nimiber of objections were raised by a va- 
riety of participants in the proceeding with re- 
spect to the Department's original projections of 
a market penetration for diesels in the passenger 
automobile fleet growing linearly from 5 percent 
in 1981 to 25 percent in 1985. The passenger 
automobile industry argued that the primary 
difficulties in achieving those substantial market 
penetrations involve questions about the market- 
ability of diesels and the ability of diesel engines 
to meet stringent nitrogen oxides emission stand- 
ards. Tr-II,' p. 105, 126, (GM) ; DX-19, p. 1 
(Chrysler). The marketability problem for 
diesels is attributed to their higher initial cost 
and current problems with esiiaust smoke, engine 
noise, cold-starting, fuel availability, and odors. 
The nitrogen oxide problem results from the 
diesel's alleged inability to achieve nitrogen 
oxide standards as low as 1.0 gram-per-mile, the 
level specified in the Senate and House versions 
of the Clean Air Act amendments. On the other 
hand, representatives of some public interest 
groups argued that the most serious problem 
with the diesel engine is that it emits certain 



PART 531— PRE 14 



presently unregulated, but nevertheless danger- 
ous, pollutants such as particulates and poly- 
nuclear aromatics (PXA) and that increased use 
of diesel engines should therefore be pursued 
with caution. DX-12. pp. 19-28 (Citizen's for 
Clean Aij) : Tr-I. p. 93 (Dr. Sawyer, for En- 
vironmental Defense Fund). 

In order to obtain more information on the 
marketability of diesel engines, the Department, 
in the April 1 special order, required those pas- 
senger automobile manufacturers most actively 
pursuing the diesel option to submit copies of 
any surveys in their possession relating to the 
marketability of diesels in the United States. 
DX-7, Question IV. A (GM) and Question B 
(\^V). These surveys tended to support the 
conclusion that a 20 to 25 percent market pene- 
tration is potentially achievable. DX-18. Att. 
IT. It appears that the initial orientation of 
present passenger automobile buyers toward 
diesels is improved significantly when potential 
buyers obtain more information about the diesel's 
characteristics. In addition, present consumer 
resistance to diesels is based on perceptions of 
those diesel vehicles presently on the road. GM 
reports that "(r)ecent developments have sig- 
nificantly improved some of the factors that have 
historically detracted from the market acceptance 
of diesel engines such as noise, odor, cold start 
time and reduced acceleration." DN-18, p. 2. 
See also DX-16, p. 1 ("S'^W). with respect to the 
turbocharged diesel Kabbit. Further improve- 
ments in diesel performance can be anticipated 
as the use of diesels is expanded. Therefore, 
marketability of diesel engines does not at this 
time appear to be as serious a problem as the 
manufacturers have indicated, although questions 
of the precise extent of future market penetra- 
tion remain. 

Similarly, the nitrogen oxides emission prob- 
lem does not appear to be beyond solution. 
Relatively little has been done in the area of 
research on control of diesel emissions because of 
their present low market penetration and their 
ability to meet present emis.sion .standards essen- 
tially without emis.sion controls external to the 
combustion chamber. In small diesel passenger 
automobiles, such as the VW Kabbit, XOx levels 
either meeting or closely approaching a 1.0 gram- 



per-mile standard liave been achieved without the 
use of such XOx control techniques as exhaust 
gas recirculation. Tr-III, p. 11. In larger auto- 
mobiles, GM states that a level of 1..5 grams-per- 
mile of XOx is achievable with its 350 V-8 
diesel. Tr-II, p. 127. Further, both the recently 
passed House and Senate amendments to the 
Clear Air Act provide for some type of XOx 
waiver for diesel engines. Ford states that its 
PROCO alternative has the capability to achieve 
the 1.0 XOx standard without encountering the 
unregulated pollutant problems to the same ex- 
tent as diesels. Tr-II, pp. 36, 42. The Honda 
CVCC approach appears to offer significantly 
better emission control potential than the homog- 
eneous charge engine, without associated unregu- 
lated pollutant problems. DX-28-03, Attach- 
ment, p. 100. Therefore, the Department has 
concluded that control of XOx emissions down to 
approximately 1.0 gram-per-mile will not present 
an insurmountable barrier to the increased use of 
alternative engines, although further develop- 
ment work may be required. See Tr-I, p. 93 
(Dr. Sawyer). 

The magnitudes of the prolileni presented by 
the unregulated pollutants emitted from the 
diesel and the PROCO and of the potential for 
reducing those emissions are presently unclear. 
The particulate emissions from diesels are of 
concern to EPA because of the potential signifi- 
cant contribution to air quality control regions' 
particulate problems. EPA is studying the total 
mass and other aspects of diesel particulates, but 
as yet no firm guidelines on allowable diesel 
particulate emissions have been set. Control of 
diesel particulates, if needed, is expected to be 
a formidable technical task. See Docket Xumber 
FE-76-01-GR-17. 

For the reasons specified above, and partic- 
ularly because the Department desires further 
information on health effects the Department has 
not included alternative engines in the analysis 
forming the basis for maximum feasible average 
fuel economy projections. The foregoing dispo- 
sition of the "alternative engine" issue does not 
preclude the Department from including the use 
of such engines in projections of maximum 
feasible average fuel economy in a subsequent 
proceeding to amend the 1985 standard. 



PART 531— PRE 15 



Effective: Model Years 1981-1984 



One final point with respect to future use of 
the diesel engine deserves further discussion. Up 
to the present, the use of diesel engines has gen- 
erally been confined to luxury automobiles such 
as the Mercedes and Peugeot. Recently, Volks- 
wagen and General Motors have begun imple- 
mentation of that engine by dieselizing an 
existing engine, rather than designing a com- 
pletely new engine. In view of past applications 
of the diesel engine, it would not be surprising 
if the new dieselized versions of the VW and 
GM engines were marketed as luxury items at a 
high price mark-up, higher than that justified by 
the additional cost alone. If this were done, this 
fuel efficient technology might not get the fair 
market test which it deserves, because of the 
high price differential. 

Volkswagen has not adopted this approach. 
Rather, it has offered its diesel engine as a $170 
option in the Rabbit (Tr-III, p. 18), and all 
indications are that the diesel version is selling 
extremely well, both in the United ytates and in 
Europe. Persistent rumors have circulated that 
the General Motors diesel would be offered at an 
extremely high mark-up, of up to $1,000. Tr-II, 
p. 110. This would raise serious questions as to 
the adequacy of the market test which the GM 
diesel would receive, if those rumors are in fact 
true. See Tr-II, p. Ill (GM). Despite the 
differences in size between the VW and GM 
engines, the Department would be hard pressed 
to understand such a large price difference be- 
tween the two engines. See Support Document, 
Doc. 3, App. B. 

8. Improved spark ignition engines. 

The Support Document projected that a fuel 
economy improvement on the order of 10 percent 
is achievable through ■improvements to the con- 
ventional spark ignition engine. The use of an 
integrated electronic control unit for spark ad- 
vance, fuel metering, and exhaust gas recircula- 
tion, optimization of combustion chamber, intake 
system, and valve timing, and the use of knock 
sensing and fuel injections were identified as 
methods for achieving the improvement. See 
Support Document, Doc. 2, Vol. I, pp. 2-16, 3-7. 
The percent improvement attributable to each of 
those options was not specified, although it was 
stated that 2 percent of the total was assigned to 



fuel injection, with the remaining 8 percent di- 
vided among the others. Id., 3-7. 

The Support Document also identifies other 
spark ignition engine improvements that could 
occur as a result of that Document's downsizing 
methodology. As vehicles were downsized, 
smaller engines were projected to be used in 
those vehicles, in order to maintain horsepower- 
to-weight ratios. However, in selecting among a 
manufacturer's existing engine line, it was antici- 
pated that in those cases where a choice among 
existing engines was possible, the manufacturer 
would select the more efficient one and phase out 
the least efficient. This procedure would result 
in an improvement in average engine efficiency 
of 8 to 13 percent. See Support Document, Doc. 
2, Vol. 1, p. 3-8. 

The Support Document noted further that 
several of the technological changes to engines 
for fuel economy improvement might also be 
used to control engine exhaust emissions. The 
dual benefits of such engine and emission control 
technologies is explicitly recognized. It is neces- 
sary to avoid double counting of benefits, how- 
ever, and since the automobile companies and the 
Environmental Protection Agency (EPA) have 
generally treated the electronic control unit as 
part of the emission control system, this analysis 
is revised accordingly to make it consistent. 
DN-18, p. 20 (GM); DN-15, Doc. I, p. 17 
(Ford) ; "Analysis of Alternative Motor Vehicle 
Emission Standards," Docket FE 76-01-GR-17, 
App. A. Therefore, no separate fuel economy 
benefit was attributed to the use of electronic 
control units. 

The 2 percent fuel economy improvement as- 
signed to fuel injection was confirmed by Ford, 
and no participant in the proceeding suggested 
a lower number. Id., Doc. I, p. 17. Bendix, the 
major domestic manufacturer of these units, 
claimed a 15 percent fuel economy benefit, ad- 
justing for comparable emission and horsepower 
levels. DX-27B, p. 2. Bendix projects the costs 
of the unit, including the previously discussed 
electronic control unit and sensors, to be less than 
$100, about $15 more than the advanced carbu- 
retor it would be likely to replace. Several 
model types now in production employ fuel in- 
jection. See 1977 EPA/FEA Gas Mileage 
Guide. 



PART 531— PRE 16 



EfFeclive: Model Years 1981-1984 



It appears likely that the precise improvement 
achievable throuirh the use of the reinainin<r en- 
gine improvement techniques will vary from 
manufacturer to manufacturer, depending on the 
efficiency of engines presently in use. AMC ex- 
pressed "no disagreement" with the originally 
assigned improvement, which was 10 percent. 
DX-14. p. 1. Chrysler projected up to a 3 per- 
cent fuel economy improvement for redesigned 
cylinder heads, and .a total of 7i/^ percent for 
engine control optimization. DX-30, 10, 44. 
Ford did not address the issue except for the 
impact of electronic control unit. 

Therefore, it appears that a fuel economy im- 
provement rising from 2 to 10 percent, depending 
on the manufacturer, is achievable by improve- 
ments to spark ignition engine efficiency, even 
beyond that associated with the use of the best 
of present engines. In the case of the manufac- 
turers with the most efficient engine lines, the 2 
percent fuel injection benefit would be available, 
as a minimum, since present domestic automo- 
biles use that technology- only to a negligibly 
small extent. In the case of the manufacturers 
with the least efficient engines, even selecting the 
most efficient engines in their lines would not 
result in the application of optimally efficient 
engines. Further techniques would be available 
to those manufacturers to achieve up to the 10 
percent improvement in fuel economy projected 
in the Support Document. 

The Department's assessment of the fuel econ- 
omy improvements due to improved engines in 
1981-1984 is that the detailed matching of specific 
engines with vehicles in specific inertia weight 
classes as identified in the Support Document is 
valid, and that the various engine and emission 
control technologies discussed above can be used 
to maintain the fuel economy resulting from that 
matching process while emission standards are 
tightened. See Section III. C, however, for fur- 
ther discussion of the relation between fuel econ- 
omy and emission standards. 

A specific engine efficiency improvement device 
not included in the previous discussion is the 
variable displacement engine. This concept in- 
volves the use of an electromechanical system 
which deactivates some of the engine's cylinders 
during those operating modes which require less 



power, such as idle, light acceleration, cruising 
and deceleration. Eaton Corporation, the de- 
veloper of this technology, projects fuel economy 
improvements of 10 to 40 percent with its units, 
depending on the engine operating mode. Some 
fuel economy benefit would accrue during all 
operating modes except moderate to heavy ac- 
celeration. Ford, which is the automobile com- 
pany most actively pursuing the implementation 
of this technology, cites fuel economy benefits to 
date of 3 to 7 percent on the EPA composite 
driving cycle. D\-15, Doc. 1, p. 17. It should 
be noted that this technology has been applied 
to certain prototype alternative engines, in addi- 
tion to conventional engines. Tr-II, p. 39. 

9. Build ing '^captive imports" domestically. 

Section .503 of the Act provides that for pur- 
poses of determining compliance with fuel econ- 
omy standards, the fuel economy ratings of 
domestically manufactured automobiles may not 
be averaged after model year 1979 together with 
automobiles more than 25 percent of whose cost 
is attributable to value added outside the United 
States and Canada. Ford, GM, and Chrysler 
each have subcompact passenger automobiles 
which fall in the latter category. Thus, if those 
"captive import" passenger automobiles were 
manufactured in the United States in the future, 
they could be included in those manufacturers' 
av'erages. resulting in some increase in that aver- 
age. All three manufacturers disclaimed having 
present plans to do this, but none claimed this to 
be infeasible. Therefore, this also presents a 
possible method for complying with the fuel 
economy standards, while concurrently increasing 
domestic employment. 

Volkswagen has noted that this provision has 
the anomalous effect of discouraging a foreign 
manufacturer from building production facilities 
in the United States. While it was adopted to 
prevent an exportation of jobs, the provision, as 
applied to a foreign manufacturer, discourages 
the importation of jobs. Although this impact 
may well not have been intended by Congress, it 
follows directly from the statutory language and 
the Department is powerless to change the result 
administratively. However, Volkswagen, or any 
other foreign manufacturer, may manufacture 
automobiles in the United States as long as more 



PAET .531— PRE 17 



Effective: Model Years 1981-1984 



than 'i-") percent of the value added content is 
foreign, and still average those vehicles together 
with their imported fleet. 

10. Miw shifts. 

A significant fuel economy benefit can ho 
achieved through the use of marketing strategies 
to increase the sales of smaller automobiles. In 
addition, some improvement can result from mix 
shifts even in the absence of any initiatives by 
the manufacturers, if increases in demand for 
the smaller market class automobiles can be 
projected. Such a trend is projected by Ford 
and Chrysler, relying in part on long-term trends 
toward the smaller market classes. Tr-II, p. 270 
(Chrysler) and DN-15, Doc. I, p. 11 (Ford). 
See also Tr-I, p. 89 (Dr. Sawyer), DN-13, p. 4 
(Environmental Defense Fund), and DN-21, 
Attachment (Public Intere.st Economics Foun- 
dation), the latter with respect to the issue of the 
feasibility of "forcing" mix shifts. 

Ford argued that requiring the manufacturers 
to take actions to shift the mix of passenger 
automobiles away from that mix which would 
result from "free market" forces is beyond the 
Department's statutory authority. DX-15, Doc. 
IV, p. 3-8. The Department rejects this position 
as inconsistent with the "maximum feasible" re- 
quirement and the legislative history of the Act. 

The legislative history of S. 1883, the Senate 
vei-sion of the fuel economy provisions, contains 
a clear indication of the Congressional intent 
with regard to the role of market forces and mix 
shifts in establishing the standards. In explain- 
ing the standards set in the bill, the Senate 
Commerce Committee stated : 

a DOT/EPA report estimated that up to a 
63-percent improvement in new car fuel econ- 
omy could be achieved by 1980. This 63-percent 
gain was based upon maxinunn technological 
improvement through 1980 (weight reduction, 
aerodynamic drag reduction, transmission im- 
provement, engine resizing and optimization) 
and a moderate shift in sales mix to 35 percent 
large and intermediate cars, and 65 percent 
compact and subcompact cars. Such a shift is 
within the current capability of the auto in- 
dustry. By calling for a 50-percent improve- 
ment, this legislation provides ample cushion 
for unforeseen contingencies. 



S. Rep. No. 94-179 (94th Cong., 1st Sess.) at 10. 
The Committee thus seems to have implicitly 
accepted the necessary or propriety of requiring 
such a mix shift to achieve the standards it set. 
In selecting a 50 percent instead of 63 percent 
improvement, the Committee did not reject any 
particular identified means of improving fuel 
economy. It simply provided a cushion against 
all types of contingencies. One contingency 
would be the failure of the assumed mix to sell. 
Another would be the failure of technology to 
develop at the assumed i)ace or to yield the 
anticipated improvement. The Committee's ac- 
ceptance of the shift is made even clearer a few 
pages later in the Report : 

Figures obtained from the Recreational Ve- 
hicle Industry Association indicate that there 
will be approximately 2 million travel trailers 
(homes-on- wheels) and 1.2 million camping 
trailers (fold-down types) in the hands of the 
American public in 1976. There are also 3.2 
million families in the United States of 7 or 
more persons. If reasonable assumptions are 
made about yearly growth in the number of 
trailers, auto fleet turnover rates, etc., a con- 
servative estimate of the towing and large 
family demand for big cars is something under 
1 million per year over the next few years. 
Even if the most drastic sales mix shifts neces- 
sary to meet the 1980 goal occur, there will 
still be at least 1 million full size and luxury 
cars produced, clearly a sufficient number to 
meet the demand. Special problems could 
arise in the 1980"s if the automakers insist on 
sticking solely to the internal combustion en- 
gine to meet the 1985 goal. However, diesel 
towing packages could be an answer to this 
problem, with no sacrifice in fuel economy. 
Also, light duty trucks, which are not subject 
to the 1980 or 1985 goals, could meet a signifi- 
cant portion of towing demand. 
Id. at 14. The Committee clearly anticipated 
shifts in both sales mix and the type of vehicles 
ofl'ered for given uses. The 1 million figure was 
apparently obtained by nuiltiplying the 10 per- 
cent large car figure used in the mix shift as- 
sumed in the DOT/EPA report and 10 million, 
the total number of passenger automobiles sold 
annuallv in the mid-1970's. 



PART 531— PRE 18 



EfFective: Model Years 1981-1984 



The extent of the sales mix shift the Commit- 
tee contemplated as being possibly required to 
meet the 27.5 inptr standard, and the means that 
would be necessary to achieve it, are apparent 
from the DOT/EPA report cited by the Com- 
mittee. The potential 63 percent improvement 
was under "Scenario D,'" which required : 

Steady technological improvement through the 
1980's . . . 

. . . with 1980 sales mix assumed at 10 percent 
large cars, 25 percent intermediates, 25 percent 
compact, and 40 percent subcompact. 

Potential for Motor Vehicle Fuel Economy Im- 
pi'ovetnents: Report to the Congress, U.S. De- 
partment of Transportation and the U.S. En- 
vironmental Protection Agency, October 24, 1974, 
at 66. The DOT/EPA report also states that : 
. . . sales shift in Scenario D would probably 
not occur "voluntarily" because of market de- 
mands for larger cars, i.e.. Scenario D would 
probably require more substantial government 
pressure on manufacturers and/or consumers 
than would be the case under Scenarios B 
and C. 

Id. at 64, and that ; 

Shift in mix was limited to that possible 
given the availability of production facilities, 
but no limitations due to consumer demand 
were assumed. Some of the technological op- 
tions considered require further development ; 
however, their implementation is deemed 
feasible by 1980. Technological options were 
screened for consumer acceptability prior to 
their inclusion, but once selected, eventual 100 
percent application to the new car fleet was 
assumed. 

/'/. at 4. The Committee thus explicitly recog- 
nized that major shifts in sales mix could be 
required to meet the standards and implicitly 
recognized that these shifts might not result vol- 
untarily but could require gov^ernment pressure 
on the manufacturers and/or consumers. The 
only limit on the mix shift that was contemplated 
was that which was imposed by the availability 
of production facilities; consumer acceptance was 
considered only with respect to technological 
improvements. 



The Senate Committee apparently i-ealized 
that this process would not be without some 
risks. First, as stated above, it reduced its stand- 
ard to require only a 50 percent increase, rather 
than a 63 percent increase, to provide "ample 
cushion for unforeseen contingencies" (emphasis 
added). Second, the bill itself contained provi- 
sions to protect the manufacturers from an 
"unanticipated retail sales mix" beyond the con- 
trol of the manufacturer in section 508(b) (3) : 
(3) The Secretary may waive or modify a 
civil penalty determined under subsection 
(a) (1) of this section if. and to the extent that 
the manufacturer involved demonstrates to the 
Secretary that its failure to comply with an 
applicable average fuel economy performance 
standard resulted from an unanticipated retail 
sales mix among different classes of automo- 
biles or light duty trucks, as appropriate, 
manufactured by it and that such mix was 
beyond the control of the manufacturer: Pro- 
vided, That the Secretary may not waive or 
modify any such penalty unless the manufac- 
turer involved demonstrates to the Secretary 
that it included in its automobiles or light duty 
trucks, as appropriate, all of the improvements 
to increase fuel economy that were technolog- 
ically feasible, and that it made a good faith 
effort to produce or stimulate a retail sales mix 
that would have resulted in compliance with 
the applicable standards, through advertising, 
pricing practices, availability of models, and 
any other means. 

In other words, a manufacturer could be let off, 
but only if it had done everything it could to 
achieve the required product sales mix. 

Finally, the bill provided some additional pro- 
tection for the manufacturers by allowing for 
recoupment of penalties in the event of subse- 
quent overachievement (section 508(c)) and for 
modification of the .standards by the Secretary if 
new information indicated the standards could 
not be achieved (section 504(b)). It should be 
noted, however, that downward revision of the 
1980 and 1985 standards would be subject to 
Congressional approval (section 504(b)(2)). 



PART 531— PRE 19 



Effective: Model Years 1981-1984 



To summai-ize briefly, the Committee appar- 
ently recognized that a major sales mix shift 
away from current levels would be necessary to 
meet the standards, and that achieving this shift 
would require pressure from the government on 
the manufacturers and by the manufacturers on 
the consumers. It realized there were risks in- 
volved in this, and tried to reduce them first by 
setting the standards below the maximum achiev- 
able level, and then by allowing an escape clause 
for the manufacturers if the consumers did not 
accept the sales mix necessary to meet that re- 
duced level after every good faith effort to change 
their preferences. Finally, it provided a mech- 
anism for recoupment of penalties, and for re- 
vision of the standards downward, subject to 
Congressional approval, if the standards could 
not be met. 

There is only one statement in the report which 
could be claimed to limit this virtual requirement 
of significant sales mix shifts : 

The fuel economy standards approach 
adopted in this legislation leaves maximum 
flexibility to tlie manufacturer to meet the 
standards. This should result in a more di- 
verse product mix and wide consumer choice. 
In meeting the fuel economy standard ap- 
plicable to any given model year one manufac- 
turer could choose new technology, another 
could choose to shift more rapidly to ligliter 
weight vehicles, and still another could clioose 
some combination of the two. 

S. Rep. No. 94-179, supra, at 6. Arguably, the 
"more diverse product mix" language limits the 
extent to which any mix shift could be pushed. 
However, this argument must be rejected because 
tlie language already states that the standards 
adopted in the bill, which include the significant 
mix shifts, will satisfy this concern. Rather than 
limiting the magnitude of the mix shifts neces- 
sary, this language seems to indicate that the 
approach of letting each manufacturer choose 
its own approach to meeting the standards will 
result in a more diverse product mix than the 
alternative legislative solutions that were consid- 
ered, such as mandating the procedures to be used 
for forbidding the sales of vehicles getting below 
a specified fuel efficiency rating. 



The legislative history of H.R. 7014, the bill 
containing tlie House version of the fuel economy 
provisions, is less specific in its treatment of 
product mix and market demand. The first ref- 
erences were in regard to the process of setting 
the 1980 standards : 

The DOT-EPA study of the potential for 
motor vehicle fuel economy improvement indi- 
cates that witli technological improvements 
and use of smaller engines but without any 
shift to smaller cars, sales-weighted fuel econ- 
omy of automobiles sold in 1980 could reach 
20.3 MPG in 1980 (a 45 percent increase above 
1974). If the maximum feasible shift to small 
cars occurred, sales-weighted fuel economy 
could reach 22.2 mpg in 1980 (a 59 percent 
increase over 1974). The study assumed, for 
purposes of these projections, that these levels 
of fuel economy could be achieved without any 
reduction in the stringency of the statutory 
liydrocarbon (HC) and carbon monoxide (CO) 
emission standards which are scheduled to be 
effective in 1978. 

H.R. Rep. No. 94340 (94th Cong., 1st Sess.) at 

86, and 

The Connnittee, in setting the statutory av- 
erage fuel economy standards for passenger 
automobiles, gave careful consideration to the 
EPA-DOT study's conclusion that a 63 percent 
impro\ement in average fuel economy levels 
between 1974 and 1980 (22.2 MPG) was the 
maxinuun potential improvement in average 
fuel economy. This projection was on an in- 
dustry-wide basis and was not a level which 
each manufacturer necessarily could be ex- 
pected to reach ; it assumed the maximum shift 
to smaller cars which was technologically 
feasible, and it appeared to assume that there 
would be no reduction in fuel economy asso- 
ciated with more stringent emissions standards. 
The Committee, in translating this industry- 
wide potential average fuel economy projection 
into an average fuel economy standard which 
each manufacturer must attain, was of the view 
that any emission standards likely to be in 
effect in 1980 would involve at least a 5 percent 
reduction (1 ilPG) in average fuel economy 
in 1980. In addition, because of the likelihood 
that in that year a number of smaller manu- 



PART 531— PRE 20 



facturers are likely to "overachieve" (have an 
average fuel economy in excess of the industry- 
wide target), tlie Committee felt it could set a 
standard for each manufacturer which was 
somewhat lower than the industry-wide target. 
In light of these considerations, the Committee 
set the average fuel economy standard for each 
manufacturer at 20.5 MPG for model year 
1980. The model year 1978 and 1979 standards 
were set at 2 MPG and 1 MPG. respectively, 
below tlie 1980 standard. 

Id. at 88. 

Taken together, these two passages leave no 
doubt that the Committee based its standards on 
the improvement projection that included the 
significant product mix shift, as discussed above, 
and thus also implicitly accepted the possibility 
that mix shifts would be required to meet the 
standards. Id. at 87. This seems particularly 
clear from the second statement. The Committee 
started with one figure and made two adjustments 
in it to obtain the standard specified in the House 
bill. Since the starting figure was based on the 
mix shift assumed in the DOT-EPA report and 
since neither of the adjustments involved elimi- 
nation of the mix shifts, the final figure must be 
based upon those shifts too. 

The only other mention of product mix or 
consumer demand is the following: 

. . . Committee recognizes that the automobile 
industry has a central role in our national 
economj' and that any regulatory program 
must be carefully drafted so as to require of 
the industry what is attainable without either 
imposing impossible burdens on it or unduly 
limiting consmner choice as to capacity and 
performance of motor vehicles. The Commit- 
tee has devised the regulatory program, which 
appears in Part A of the bill. . . . 

Id. at 87. Again, it is arguable that the "with- 
out . . . unduly limiting consumer choice" lan- 
guage could limit the extent of any market shift. 
However, it is again clear that the Committee 
believed that the program it had proposed would 
satisfy this constraint, i.e., that the mix shifts 
contemplated by the standards would not unduly 
limit consumer choice. Further, this passage 
proscribes only '■^unduly limiting consumer 
choice". (Emphasis added.) That is. consumer 



choice may not be limited unless it can be justi- 
fied by resulting improvements in fuel economy. 

Finally, the House bill did not contain any 
provisions allowing modification of any penalties 
incurred because of unanticipated sales mix. 
However, the bill contained provisions allowing 
both the carry-back and carry-forward of penalty 
credits for overachieving in any model year (sec- 
tion 508(a)(3)) and modification of the stand- 
ards, subject to Congressional disapproval for 
decreases below 26.0 mpg or increases above 27.5 
mpg. 

The legislative history indicates that both 
houses of Congress expected that significant shifts 
in product mix might be required to meet the 
standards they were setting, and that there would 
have to be some efforts to induce the market to 
achieve these shifts. The manufacturers have a 
panoply of marketing measures, including pric- 
ing, advertising, and dealer incentives, to aid 
them in such efforts. Both houses of Congress 
provided some mechanism for reducing penalties 
if the standards could not be achieved, with the 
Senate specifically providing for the effects of a 
failure of a manufacturer to succeed in inducing 
the market to accept the required mix. 

The Act as finally adopted does not contain 
the Senate unanticipated mix provision, but is 
basically identical to the House bill in its penalty 
recoupment provisions. The fact that the Senate 
provision was eliminated may indicate either that 
a tougher standard was finally agreed to by the 
Senate, or that the recoupment and standard 
modification procedures were believed adequate 
to handle failures to achieve required product 
mixes. What is clear is that free market demand 
and product mix in no way determinative of the 
standards finally adopted. If consideration of 
non-free market mix shifts is appropriate in es- 
tablishing the 1980 standard, it must also be 
appropriate for the 1981-84 standards, which are 
required to result in "steady progress" over the 
1980 base toward the 1985 target. 

11. C oinhining the Improvement projecticms. 

To determine the technologically feasible level 
of average fuel economy for each of the domestic 
manufacturers, it is necessary to combine the per- 
cent improvements assigned to each of the tech- 
nological options discussed in section III. A, 



PART 531— PRE 21 



Effective: Model Yea 



according; to the phase-in schcihile set foitli in 
Tables 5.5-5.8 of the RSP. The methodology in 
the Suppoi't Doeunient assumed (Doc. 2. Vol. I, 
p. 2-23), and the manufacturers did not seriously 
dispute, that the improvement options, includinji 
weight reduction, transmissions, engine improve- 
ments, and alternative engines could he combined 
in a straight forward arithmetically additive 
manner. Question I.D of the April 1 special 
order directed the automobile manufacturers to 
specify which, if any, of the options for improv- 
ing fuel economy are not additive, to quantify 
any negative synergistic effect, and to submit any 
data relevant to this issue. GM responded that 
the options it had evaluated are additive. DN-18, 
p. 11. Ford presented a table showing areas of 
judged incompatiliility between various options 
but presented no supporting data or rationale. 
DN-15, Doe. I, p. 14. Most of the areas of ques- 
tionable additivity involved alternative engines, 
(^hrysler expressed tlie opinion that the various 
options are either "additive or very nearly addi- 
tive" and stated that it relied on the assumption 
of additivity for its own internal projections. 
DN-32, p. 12. Chrysler expressed uncertainty 
about the options related to engine speed, such as 
some accessory improvements and over-drive 
transmissions, but was unable to (juantify this 
effect. Therefore, the assumption of additivity 
has been retained. Options which are mutually 
exclusive, such as improved automatic and man; 
ual transmissions, are of course not additive. 



Based upon the technologically feasible weight 
reduction only, the Department projects that 
General Motors, Ford, Chrysler, and American 
Motors will be able to achieve 21.6 mpg, 21.6 
mpg, 22.7 mpg, and 21.2 mpg, respectively, by 
1981, and 22.2 mpg, 23.0 mpg, 23.6 mpg, and 24.7 
mpg. respectively, by 1985. Table 1 lists addi- 
tional average fuel economy gains that can be 
achieved through the use of the other techno- 
logical options. 

B. Economic practicability. 

In considering the economic practicability of 
implementing the technologically feasible options 
in 1981-84, the Department examined several 
different schedules of standards based upon dif- 
ferent sets of options. The sets ranged from one 
that was almost fully comprehensive to one that 
included only sj select number of the options. 
Excluded from all sets were some spark ignition 
engine improvements, variable displacement en- 
gines, further weight reduction beyond that 
initially projected in the Support Document or 
submitted by the manufacturers, and domestic 
protluction of captive import passenger automo- 
biles. Due to the lack of complete data for these 
options and their omission from the XPRM and 
Support Document, they have been excluded from 
further consideration in thi^ rulemaking. Efforts 
will be made to supplement the Department's 
data base in these areas in future rulemaking 
proceedings. 



TABLE 1 

Acceleration reduction 10 percent 

Automatic transmission with lockup torque converter 10 percent 

Five-speed manual transmission 5 percent 

Improved lubricants _' 2 percent 

Reduced accessory loads 2 percent 

Reduced aerodynamic drag 4 percent 

Reduced rolling resistance ;} percent 

Diesels (or equivalent alternative engine) 20-25 percent 

Further weight reduction (additional material substitution and further down- 
sizing, including front wheel drive) 5 percent 

Impi'oved spark ignition engines I'-IO percent 

Variable displacement engines 3-7 percent 

Turbochargers 0-15 percent 

Domestic production of captive imports 0-4 percent 

Mix shift to 10 percent large, 25 percent intermediate, 25 percent compact, 

and 40 percent subcompact 5 percent 



PART 531— PRE 22 



EffecHve: Model Years 1981-1984 



The least comprehensive set was that under- 
lying: the schedule of standards su<rfrested by 
Ford : 21 mpg in 1981 : 22 mp<r in 1982 ; 23 mp<r 
in 1983: 24 mpo: in 1984; and 25 mpo; in 1985. 
Even though that was the hijrhest schedule sujr- 
gested by any manufacturer, the Department 
regards it as a low range schedule. It was re- 
jected for several reasons. First, it would not 
satisfy the maximum feasible requirement. The 
manufacturers have available to them options 
that involve little or no engineering or marketing 
risk that in combination would be economically 
practicable and would enable them to exceed 
substantially Ford's suggested schedule. Second, 
the schedule would violate the requirements that 
the 1981-84 standards result in steady progress 
toward the 1985 standard which, unless changed 
by future rulemaking, is 27.5 mpg, not 25 mpg. 

The Department also considered a high range 
schedule based on all of the options not excluded 
in the first paragraph of this section. 

The Department believes that there are risks 
associated with substantial mix shifts notwith- 
standing the historical trend toward smaller pas- 
senger automobiles. While that trend may 
continue, there is no assurance that it will. For 
reasons including prestige, comfort, and sheer 
size, there continues to be a strong demand for 
midsize and large size passenger automobiles. 
This is true even though most of these automo- 
biles offer no more seating capacity in terms of 
number of jjositions than some compacts. Fur- 
ther, as discussed below, the downsizing of pas- 
senger automobiles may at least temporarily slow 
the trend to small cars. Further, the Department 
lacked sufficient marketing data to justify a 
lesser shift toward small cars. 

Given the overriding purpose of the fuel econ- 
omy provisions in the Act to conserve fuel, the 
Department was concerned that the standards be 
set as high as possible, but not so higli as to 
necessitate the manufacturers' using compliance 
methods that would result in a substantial sales 
drop. To the extent that the total passenger 
automobile population fails to turn over and re- 
new itself at the usual pace because some owners 
retain their existing vehicles for an extra year or 
two, the projected fuel savings from a given fuel 
economy standard would not be fully realized. 
In addition, a substantial sales drop would have 



a significant effect on em[)loyment in the auto- 
mobile and related industries and would ad- 
versely affect the manufacturers' efforts to raise 
capital for further fuel economy improvements. 
See RSP, Chap. 13, Reference 27. Section E. 

The Department concluded that the implemen- 
tation of the schedule of standards resulting 
from this set was not economically practicable 
due to the risk posed by substantial mix shifts 
that a significant number of consumers might 
defer purchasing new passenger automobiles in 
1981-84. Further, implementing all of the op- 
tions in this set would result in levels of average 
fuel economy above those permitted under the 
steady progress requirement, since the 27.5 mpg 
level would be exceeded prior to 1985. 

The Department is also concerned about the 
possible adverse environmental impacts associated 
with some alternative engines, notably the diesel. 
As discussed above, several commenters pointed 
out that particulate and PNA emissions of these 
engines may pose a health hazard. If the exist- 
ence of a health hazard is confirmed by the En- 
vironmental Protection Agency, then regulation 
of those emissions will presumably follow. The 
stringency of those regulations and their effect 
on the fuel economy of the alternative engines is 
indeterminant at this time. As information from 
that agency and other sources clarifies this ques- 
tion, the Department will begin to consider 
whether to base fuel economy standards on the 
use of those engines. 

For all of the foregoing reasons, the Depart- 
ment decided not to set the average fuel economy 
standards so high as to necessitate the use of all 
options within the limited period of 1981-84. 

The Department also considered a medium 
range schedule of standards based on a less com- 
prehensive set of technological options from 
which alternative engines and mix shifts had 
been excluded. In excluding these options as 
bases for determining the fuel economy standards 
under this set of options, the Department was 
particularly mindful that there will be substan- 
tial changes in passenger automobiles in the early 
1980's due to changes in fuel economy and emis- 
sion standards. In a later period of less pi-oduct 
design and technological flux, the risk associated 
with mix shifts and alternative engines would be 
lessened. 



PART 531— PRE 23 



Effective: Model Years 1981-1984 



The Department regai-ds mix shifts and alter- 
native entjines, as well as the options excluded 
from the hijih range set of options, as constitut- 
ing a safety margin for the manufacturers that 
choose to implement the medium range options 
to the extent set forth below. If the latter op- 
tions do not yield the anticipated gains, despite 
the conservative assessments of those gains, the 
manufacturers may avail themselves of options 
in the safety margin. For manufacturers which 
do not wish to implement the medium range 
collection of options in the amount described be- 
low, these additional options represent alternative 
options which they can utilize. The Department 
notes that virtually every option excluded from 
the high or medium range sets of options will be 
used by at least one manufacturer and some by 
several. To the extent that these options are 
used, the manufacturers will not have to rely so 
much on the collection of medium range options. 
Further, all manufacturers can use marketing 
measures to encourage the purchase of the most 
fuel efficient vehicles within each carline. 

The schedule for implementation of the various 
middle range technological options or improve- 
ments, which are set forth in Tables 5.5-5.8 of 
the RSP, reflect the differences in economic 
capability of the various domestic manufacturers. 
That implementation schedule is in, no case more 
stringent than that in the NPRM iSupport Docu- 
ment. See Document 2, Volume 1. Xone of the 
manufacturers claimed that the proposed imple- 
mentation schedule is impracticable. However, 
objections to specific cost assumptions in the 
Support Document were submitted by some 
manufacturers. Since these cost numbers affect 
the projected sales, employment and inflationary 
impacts of the standards, and thereby economic 
practicability, these objections have been care- 
fully reviewed. However, the vagueness and un- 
substantiated character of the assertions in the 
manufacturers' comments have impaired the use- 
fulness of the submitted information, here as in 
the case of tlie technological issues discussed in 
section III. A. 

General Motors, Ford, and Chrysler all ob- 
jected to the projected capital investment re- 
quirement for downsizing of $150-250 million for 
an annual production capacity of 400,000 auto- 
mobiles. All stated that this figure was about 



half the correct amount. DN-18, p. 18 (GM), 
DN^3, Att. II, p. 2 (Ford), and DN-30, p. 53 
(Chrysler). Therefore, and in view of the fact 
that GM and Ford already have had substantial 
experience with implementing this technological 
option, the capital requirement for downsizing 
was revised to the $400 million figure. GM and 
Chrysler both objected to the variable cost sav- 
ings of $200 assigned to downsizing, but neither 
submitted a different figiire or a detailed critique 
of the Department's analysis. Ford's discussion 
of the savings resulted from the inti'oduction of 
a new, small, future car line is consistent with 
the Department's assumption, when weight re- 
duction and concurrent product improvements 
are separated. DN-43, Att. II, p. 3. Therefore, 
the originally projected savings in variable cost 
was retained. Chrysler's unquantified objection 
to the maintenance cost figure is also rejected. 
The Department's further evaluation of data 
supporting the original projection of a 35(f/pound 
maintenance cost saving reaffirms the original 
conclusion. See Support Document, Summary 
Report, p. R-2, #3. 

GM, Ford, and Chrysler raised similarly vague 
objections to the projected capital and variable 
costs attributable to material substitution. DN- 
18, p. 19; DN-43, Att. II, p. 4; DN-30, p. 54. 
Nevertheless, Chrysler conceded that the use of 
high strength steel would have no appreciable 
effect on variable costs. Detailed cost informa- 
tion on the use of aluminum and high strength 
steel was submitted by Alcoa and U.S. Steel 
Corporation, respectively. DN-27-D, DN-27-A. 
Both submissions supported the Department's 
original conclusion about the cost of light-weight 
material substitution. If components are selected 
from the lists of feasible material substitutions 
provided by these two companies, it is possible 
to achieve the weight reductions projected in the 
Support Document witliout increasing variable 
costs. Further weight reductions could be 
achieved at slightly higher cost. Similar objec- 
tions were raised to cost savings attributable to 
reduced maintenance. However, as noted above, 
the Department's further study in this area fully 
.supports the Support Document's projected rela- 
tionship between weight reduction and reduced 
maintenance expense. This savings results from, 
as one example, the ability to use smaller tires 



PART 531— PRE 24 



EfFecHve: Model Years 1981-1984 



on lighter automobiles, thereby reducing replace- 
ment costs. GM failed to quantify or substan- 
tiate its claim that the lighter weight substitute 
materials would be more damage prone than 
present materials. DX-18, p. -22. The Depart- 
ment's analysis, together with the Alcoa and U.S. 
Steel submissions, supports the achievability of 
the assumed weight reduction by careful match- 
ing of a particular substitute material to the 
particular application desired. Furthei'more. Gil 
failed to address the savings associated with the 
improved corrosion resistance of aluminum or 
plastic substitutes. DX-27D. p. 2 (Alcoa). 
Therefore, the original maintenance costs savings 
estimate has been retained. 

The costs associated with improvements in 
such areas as lubricants, accessories, aerodynamic 
drag reduction, and rolling resistance reduction 
are as set forth in Table 7.1 of the Rulemaking 
Support Paper. No contradictory information 
was submitted on these co.sts, in response to a 
specific question in the April 1 and April 21 
special orders. DX-7, DX-28, Question II. A. 

Xo manufacturer challenged the costs attrib- 
uted to automatic transmission improvements. 
Chrysler, the only manufacturer to address the 
issue specifically, found the costs to be within 
"an acceptable planning range." DX-30, p. .55. 
For the purposes of the total cost calculation, the 
upper bound of the cost range for the four speed 
automatic transmission was used as a "safe" esti- 
mate. This probably overstates the total cost 
impact, since, as previously noted, it is likely 
that a variant of the three-speed transmission 
would in fact be used. Capital requirements as- 
sociated with the four-speed unit are up to twenty 
times greater than those for the three-speed (less 
than $10 million vs. $200 million per standard 
production facility with a capacity of ,500,000 
units per year), since relatively inexpensive 
changes can be made to existing transmission 
production facilities to accommodate improve- 
ments to three speed units, while complete new 
plants are necessary to produce four speed units. 

Reductions in acceleration performance were 
assumed to be achieved through the substitution 
of existing smaller displacement engines, up to 
the maximum level consistent with production 
flexibility at existing engine plants, at no in- 



creased cost. These reductions could also be 
achieved through axle ratio changes, at negligible 
cost. 

Total required capital expenditure to achieve 
the postulated fuel economy was generally within 
the range of planned expenditures for fuel econ- 
omy improvement over the 1976-8.5 time period. 
DX-30. p. 52 (Chrysler) ; DX-15, Doc. I. p. 20 
(Ford) ; p. 1-18, Economic Impact Statement 
(see sec. VIII, infra). However, it is not cor- 
rect to treat this as a totally "extraordinary" 
investment required of the automotive industry 
in order to comply with fuel economy standards. 
Much of this expense is "integral to the normal 
cycle of product improvements" which the com- 
panies would engage in regardless of the stand- 
ards. DX-30, p. 55 (Chrysler). The fact that 
improved fuel economy is itself a highly market- 
able attribute for passenger automobiles might 
force the companies to make many of the product 
improvements discussed in this notice, as a result 
of competitive market pressures legardless of the 
fuel economy standards. DX-15, Doc. I, p. 20 
(Ford). Conceptually, this means that the auto- 
mobile companies must, as part of each decision 
to change a significant component in a passenger 
automobile, take into account, and possiblj- re- 
orient their product line in view of, the fuel 
economy requirements. Therefore, the capital 
expenditures discussed above have been adjusted 
to take into account "business-as-usual" reinvest- 
ment, which would occur even in the absence of 
any standards. A further discussion of this topic 
is contained in the RSP, Reference 27, Chap. 13. 

The total cost increases are assumed to be re- 
flected in increased new passenger automobile 
prices according to the formulas set forth in the 
Support Document. See Summary Report, p. 
A-27. Generally, the manufacturers did not ob- 
ject to the total or "bottom line" price changes 
generated by this methodologj-. although they 
did not necessarily agree with all of the details. 
See. e.g.. DX-15,' Doc. I. p. 21 (Ford). GM 
merely noted that price increases are determined 
by market forces, rather than some arbitrary cost 
pass through formula. DX-18, p. 24. The De- 
partment does not take issue with that statement, 
*liut some method must be used to assess price 
impacts, and no participant in the proceeding 
suggested a better alternative. Chrysler argued 



PART 531— PRE 25 



Effective: Model Years 1981-1984 



that the methodology did not provide for recov- 
ery of the value of the investment itself. DN-32, 
p. 19. However, it appears that Chrysler has 
misunderstood the application of the methodol- 
ogy, since capital costs are assumed to be recov- 
ered by price increases tied to the rate of return 
on investment. The projected impact on new car 
prices, as shown in Table 8.1 of the Rulemaking 
Support Paper, is an increase of $54 by 1985, as 
an industry average, relative to 1977 model year 
automobiles. "When gasoline and maintenance 
savings are considered, net savings to the con- 
sumer of approximately $1000 over the life of the 
automobile are projected. See Table 8.4, ESP. 

The final impacts to be considered in the eval- 
uation of economic practicability are the pro- 
jected impacts on industry sales and employment. 
These impacts were projected by using the 
Wharton Automobile Demand Model. See Sup- 
port Document, Summary Report, p. A-91. This 
model is one of the latest and most complex for 
projecting automobile industry sales and employ- 
ment. See DX-15, Doc. I, Att. A, p. 176 (Ford) ; 
DN-30, p. .38 (Chrysler). 

On the basis of this projection, domestic in- 
dustry sales and employment would attain levels 
higher than present levels during the 1981-84 
period, and would be approximately the same as 
would be the case if there were no additional 
costs attributable to fuel economy standards. A 
sensitivity analysis that assumes a 2 percent per 
year increase in automobile prices for the 1981-84 
model years shows a small decrease in projected 
sales during those years and a small increase in 
subsequent years. Since the average change in 
car prices due to these fuel economy standards 
for those same modeL years is only 1 percent, the 
effect on sales is similarly small. 

The Department has been unable to quantify 
the impact of such non-price changes as accelera- 
tion capability reductions and exterior downsiz- 
ing. However, as discussed in section III.A of 
tliis section, these impacts are not expected to be 
severe. The Department has taken into account 
any possible adverse impacts in those areas by 
the provision of a "safety margin" of fuel econ- 
omy improvement potential and in the discussion 
of uncertainties in section IV. 



The industry generally argued that the uncer- 
tainty of consumer acceptance of more fuel ef- 
ficient vehicles was a major concern in this 
rulemaking. Tr-I, pp. 19 (Ford), 50 (GM), 78 
(AMC), and 104 (Chrysler). However, these 
statements appear to be more in the nature of 
fear of the unknown than the result of detailed 
study and analyses. See Ti--II, pp. 10, 23, 58, 
62-64, 121, 146, 161. The Federal Energy Ad- 
ministration's own analyses show that it is the 
"manufacturer's response to the standards, rather 
than the consumer demand, that most influences 
new car fleet average fuel economy under a sce- 
nario of little or no market shift." DN-37, p. 2. 
The provision of a safety margin of technology 
permits a variety of manufacturer responses. 

Improvements in automotive fuel economy, if 
unaccompanied by adverse impacts on other auto- 
niobile attributes, are undeniably an aid to 
marketability. The technological options relied 
upon are not expected to have such accompanying 
detriments. Among these options, material sub- 
stitution, and improvements in accessories, lubri- 
cants, aerodynamic characteristics, and rolling 
resistance are virtually undetectable by consum- 
ers, except with respect to price changes, whose 
impact has been accounted for above. Downsiz- 
ing, while maintaining or even increasing vehicle 
interior roominess, has been accomplished with- 
out consumer rejection to date, in the case of 
General Motors' full-size automobiles. Although 
downsizing of all market classes has yet to be 
completed, it appears likely that purchasers of 
the largest size automobiles are the group most 
concerned about size attributes, and if they are 
willing to accept downsized vehicles, the pur- 
chasers of other market class automobiles would 
also accept them. With respect to automatic 
transmission improvements, it appears that past 
driveability problems with lock-up torque con- 
verters are near resolution, in view of some manu- 
facturers near-term implementation plans. Ac- 
celeration performance reductions have been 
limited to those within the manufacturers' stated 
range of consumer acceptability. Turbochargers 
could be used to offset even those very modest 
acceleration reductions. Safety margin technol- 
ogy would permit flexibility in selecting compli- 
ance approaches which individual manufacturers 
find more salable than the ones projected in this 



PART 531— PRE 26 



Effective; Model Years 1981-1984 



analysis. Further, it is likely that consumer 
acceptance of fuel eiRcient automobiles will in- 
crease as gasoline prices increase in the future. 
Therefore, the Department concludes that mar- 
ketability constraints would not prevent the at- 
tainment, in an economically practicable manner, 
of the standards promulgated herein. 

Thus, it appears that the total impact of the 
fuel economy standards established in this notice 
is relatively modest, certainly within the "eco- 
nomic capability of the industry.'" The Depart- 
ment concludes that compliance with these 
standards is economically practicable. 

C. The effect of other Federal standards. 

The next step in calculating the manufacturers' 
maximum achievable fuel economy is an assess- 
ment of the impact of other motor vehicle stand- 
ards on fuel economy. It is impossible at this 
time to predict with perfect accuracy even the 
level of these standards which will be in effect 
in the 1981-84 period, since all categories of 
tliese standards are either subject to future ad- 
ministrative action or are being reviewed by 
Congress. Xevertheless, for the purposes of this 
analysis, it is assumed that the applicable auto- 
motive emission standards will be those contained 
in the Administration proposal, i.e., 0.41 gram 
per mile hydrocarbons, 3.4 grams per mile carbon 
monoxide, and 1.0 gram per mile of nitrogen 
oxides, with waivers for nitrogen oxides up to 
1.5 gram per mile for heavier diesel automobiles, 
if necessary. The same result would apply under 
either the Hou.se or Senate passed emission 
standard schedules. 

The issue of the impact on fuel economy of 
various proposed emission .standards was one of 
the more controversial ones in this proceeding. 
Much development work remains to be done in 
the emission control area between now and 1981. 
so projections in this rapidly progressing area 
necessarily involve some degree of uncertainty. 
However, the Environmental Protection Agency 
(EPA) has done extensive evaluation of the 
emission control systems now under development. 
The Department of Transportation has worked 
with tlie EPA in many of these studies. 

Among the more recent of these studies are the 
February, 1977, report titled "Analysis of Effects 
of Several Specified Alternative Automobile 



Emission Control Schedules Upon Fuel Economy 
and Costs," prepared jointly by the Departments 
of Commerce and Transportation, the P^nergy 
Research and Development Administration. EPA, 
and FEA; an EPA report dated April, 1977. 
titled "Automotive Emission Control — The De- 
velopment Status, Trends, and Outlook as of 
December 1976;" and the May 19, 1977. "Analysis 
of Alternative Motor Vehicle Emission Stand- 
ards.'" (All of these reports are in the General 
Reference section of the FE 76-01 Docket.) All 
three reports evaluate the optimal emission con- 
trol systems for meeting emission standards at 
minimum fuel economy penalty, and all three 
conclude that little or no penalty need result 
from the u.se of optimal systems at the level of 
the proposed emission standards, as compared to 
1977 levels. This conclusion was supported by 
those public interest representatives which par- 
ticipated in this proceeding and addressed the 
issue. DX-11, p. 8 (Mr. Thomas Austin); 
DN-12, p. 33 (Citizens for Clean Air) ; DN-13. 
p. 16 (Environmental Defense Fund). 

As identified in Appendix A of the Maj- 19, 
1977 DOT-EPA-FEA report, fuel optimal' sys- 
tems to meet standards of 0.41 HC/3.4 CO/1.0 
NOx may be expected to include a three-way 
catalyst, start catalyst, electronic spark advance, 
electronic control of exhaust gas recirculation, 
electronic air-fuel ratio control, oxygen sensor, 
high energy ignition, improved fuel metering, 
and a complex electronic control unit. In addi- 
tion, the heavier cars, those weighing more than 
3000 lbs., would have an air injection unit. 

The passenger automobile manufacturers" views 
on the issue of emission standard penalties varied 
rather widelj'. Ford stated that the proposed 
emission standards could be achieved without 
fuel economy penalty through the use of three- 
way catalyst and full electronic control technol- 
ogy. DN-15, Doc. I, p. 24, Doc. Ill, p. 4, Tr-II, 
pp. 93—4. Volkswagen stated that compliance 
with the emission standards without a fuel econ- 
omy penalty was possible. DX-28-01, p. 2. 
Daimler-Benz projected that compliance with the 
more stringent emission standards would pro- 
duce a 3 to 5 percent benefit in fuel economy for 
the portion of its fleet which presently employs 
fuel injection. DN-28-05, p. 34. 



PART 531— PRE 27 



Effective: Model Years 1981-1984 



On the other hand, the remaining domestic 
manufacturers all project substantial emission 
standards fuel economy penalties. GM claimed 
to have experienced fuel economy penalties as 
high as 20 percent on some prototype vehicles 
(DN-18, p. 27), although it admits that much 
development work remains to be done. Tr-II, 
p. 124. Chrysler projected a penalty of 12 per- 
cent (DN-36, p. 62, DN-35-01, Att. B, p. 27), 
but projects the use of a control system which is 
apparently less efficient than that assumed by 
EPA, DN-30, p. 61, in such areas as the use of 
electronic spark advance, port liners, and start 
catalysts. Further, Chrysler's projections were 
apparently based on actual test data from their 
1977 California vehicles, adjusted by some arbi- 
trary amount for future system optimization. 
These vehicles do not employ thi'ee-way catalysts 
and full electronic controls on which EPA's 
projections ai-e based. Tr-II, p. 258. Likewise, 
AMC's projected fuel economy penalties were 
based on their pre.sent California technology, not 
the advanced system assumed by EPA. DN-14, 
p. 3. GM also assumes a control system less 
complex than EPA's by not including the use of 
such technology as electronic exhaust gas recir- 
culation, electronic air-to-fuel ratio control, port 
liners, and start catalysts. DN-18, p. 27. GM 
remains hopeful that, given enough development 
time, the penalty could be eliminated. Tr-II, 
p. 124. 

Ford notes that, even with the three-way 
catalyst, a clean up catalyst, and a full electronic 
system to meet the 0.41 HC, 3,4 CO, 1.0 NOx 
standard, it would expect a 2 percent diti'erence 
in average fuel economy between the first and 
third year of the standards. DX-15, Doc. I, p. 
15. The May 19, 1977.DOT-EPA-FEA report 
oljserves that : 
The development of technology to control 
emissions and permit good fuel economy cali- 
brations to be maintained is expected to take 
longer than just the development of technology 
solely for the purpose of controlling emissions. 
For example, the use of electronic controls 
which have the potential to be an important 
part of future low emission, fuel efficient sys- 
tems will require the generation and analysis 
of significant quantities of new engine data in 
order to determine more optimum calibrations. 



Thus, it appears that none of the manufactur- 
ers presented any evidence which would directly 
contradict EPA's findings in this area, and in 
fact some manufacturers supported the "no pen- 
alty" assumption. Therefore, it is concluded that 
compliance with the specified emission standards 
in the 1981-84 time period can be achieved with 
little or no fuel economy penalty, through the 
use of the advanced control technology postulated 
by EPA. In the technical analysis contained in 
the RSP, a fuel economy penalty of zero percent 
is used for all the 1981-84 models. 

One other issue with respect to the emission 
standards was raised .by AMC and Chrysler. 
Those two companies claim that an emission test 
procedure change recently proposed by EPA 
(41 FR 38674, Sept. 10, 1976) would, if adopted, 
adversely affect the derivative fuel economy data. 
DN-23, p. 2 and DN-30, p. 30. Chrysler projects 
a very small impact for this revision on fuel 
economy, to the order of 0.28 mpg. The change 
in question involves decreasing the magnitude of 
inertia weight class increments and modification 
of the road load horsepower requirements. The 
proposed changes are intended to permit dyna- 
mometer testing of vehicles at inertia weight and 
road loatl settings that are more representative 
of actual vehicle weight and road load, so that 
the resulting fuel economy value would be a 
more realistic estimate of on-the-road fuel econ- 
omy. Since this test procedure change is merely 
a proposal, it is unnecessary to attempt now to 
quantify the precise impact of any test procedure 
revisions which EPA may ultimately adopt. It 
should be noted further that EPA presently be- 
lieves that the revisions in que.stion should not 
result in a systenuitic change in fuel economy 
data either upward or downward, but rather that 
the revisions tend to improve the overall ac- 
curacy of the data. DN-20, p, 2. 

An adjustment is made to each manufacturer's 
projected fuel economy capability to allow for 
the added weight associated with Federal Motor 
Vehicle Safety Standaids. To assure adequate 
crash survivability in the passenger automobiles 
of the 1980's, additional safety requirements will 
be necessary. Those requirements are anticipated 
to cause an estimated 1 percent fuel economy 
penalty. See RSP. 



PART 531— PRE 28 



Effective: Model Years 1981-1984 



Tlie Department lias no basis at this time to 
project the existence of any other motor vehicle 
standards at a specific level. If tliese projections 
are proven erroneous bv future events, and if the 
impact of those future standards would substan- 
tially reduce the safety margin provided in this 
notice, it may be necessary to reconsider the 
standards promuljrated herein. 

D. The need of the Nation to conserve energy. 

As discussed in section II.B of this notice, this 
final consideration in establishinfr maximum 
feasible avera^re fuel economy levels requires the 
establishment of fuel economy standards at the 
hiofhest level consistent with 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 above 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- 
infr consideration of the emissions standards, an 
adjustment is made in tliat section to Table 2. 





TABLE 


2 






Manufaeturer' 


1981 


1982 


1983 


1981, 


American Motors 


22.2 


22.6 


23.1 


24.7 


Chrj^sler 


23.8 


2.5.1 


26.3 


28.1 


Ford 


23.4 


24.. 5 


26.1 


27.0 


General Motors 


23.3 


24.2 


26.5 


28.8 



E. Establishing the maximum feasible average 

fuel economy level. 
In determiniijo- maximum feasible average fuel 
economy, the Department cannot simply select 
the level achievable by the least capable manu- 
facturer in each model year. Instead, an analysis 
along the lines of that set forth in pages 1.54-5 of 
the Conference Report must be carried out. 
That Report states: 

Such determination should therefore take 
industry-wide 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 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 currently exist, 
and the possible implications for the national 
economy and for reduced competition asso- 
ciated with a severe strain on any manufac- 
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 suifer 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. "WHiether 
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. DX-14, p. 6 
and Attachments, and whose projected maximum 
achievable fuel economy is substantially less than 
its domestic competitors. See Table 2. 

AMien 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 ranfjes from approximately 
one to three miles per orallon less than that of the 
least capable of the "Big 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 lialf 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 must 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 which 
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 1980^s. "Ward's Auto 
World," Julie 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. 
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 maxinmm 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- 
quent years. The only 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 



Effective: Model Years 1981-1984 



compliance would be outweighed by the benefits 
of establishing "niaxinniin feasible average fuel 
economy"' at levels where these manufacturers 
would pay no net civil penalty, taking into ac- 
count their ability to carry credits forward or 
back. 

The Department has concluded that the emis- 
sions standards expected to be effective in the 
early 1980's can be achieved with little or no fuel 
economy penalty. The analysis of average fuel 
economy potential discussed above was predicated 
upon a zero penalty. It appears clear, however, 
that the engineering and manufacturing prob- 
lems associated with the introduction of compli- 
cated emission control technology may well be 
substantial, particularly since these advancements 
will have to be implemented simultaneously with 
other new technology required to meet fuel econ- 
omy and safety standards. Although the De- 
partment has already tried to ensure the sound- 
ness of its average fuel economy standards by 
making generally conservative conclusions at 
each step in its analysis, no allowance has yet 
been made for unforeseen contingencies that may 
arise due to the need for manufacturers to deal 
simultaneously with the diverse set of manufac- 
turing requirements imposed by the various fuel 
economy, emissions, and safety .standards that 
will become effective in the early 1980's, par- 
ticularly in 1981. Allowing for such contingen- 
cies is consistent with the approach taken by the 
Senate Commerce Committee in establishing the 
1980 average fuel economy standard in S. 1883. 
See S. Eep. No. 179, 94th Cong., 1st Sess. 10 
(1975). More important, allowance of these con- 
tingencies will ensure that the manufacturers can 
produce and sell -cars that meet energy, environ- 
mental, and safety needs of the Nation. It is 
important to recognize that one limitation on the 
rate of product innovation is the rate of con- 
sumer acceptance of that innovation. Finally, 
there are some uncertainties, particularly in the 
later years of the 1981-84 period, associated with 
the accuracy of the estimates of the average fuel 
economy to be gained from the combination of 
the various technological options. 

In view of the factors enumerated in the im- 
mediately preceding paragraph, the Department 
has determined it to be prudent to adjust the no 
net penalty average fuel economy levels to 22 



mpg for 1981, 24 mpg for 1982. 26 mpg for 1983. 
and 27 mpg for 1984. Based upon consideration 
of the domestic manufacturers, the Department 
has determined that these are the maximum 
feasible levels of average fuel economy for those 
model years. 

IV. The Imports. 

With the possible exceptions of downsizing, 
mix shifts, straight-line acceleration reductions, 
and domestic production of captive imports, the 
same technological improvement options apply 
to the imported passenger automobiles as to their 
domestic counterparts. Since the passenger auto- 
mobiles produced in foreign countries generalh" 
start at a much higher fuel economy base, those 
passenger automobiles can generally meet any 
level of average fuel economy which the domes- 
tics can attain. However, the possible unavail- 
ability of the options listed above and the fact 
that the U.S. market may account for only a 
small portion of such manufacturers' total sales 
necessitate an analysis of the impact of fuel 
economy standards on the foreign manufacturers. 

Total sales of imported automobiles has varied 
between approximately 1.5 and 20 percent of total 
U.S. sales for the past four years. The four 
largest importers in 1976, Toyota, Nissan 
(Datsun). Volkswagen, and Honda, accounted 
for approximately two-thirds of the import total. 
"Automotive News 1977 Market Data Book 
Issue," p. 70. Each of these four manufacturers 
either presently has or will have in the near 
future an average fuel economy exceeding the 
1985 standard of 27.5 mpg. DN-9, p. 1 
(Toyota) ; DN-28-03. p. 1 (Honda) ; DN-28-04. 
p. 5 (Nissan) ; DN-16, p. 2 (V~\V — projections ex- 
clude Rabbit). Therefore, the majority of the 
import market must only maintain or marginally 
improve their present average fuel economy 
levels to comply with these fuel economy stand- 
ards. Another group of importers, accounting 
for nine percent of import sales, are presently 
either meeting the 1985 standard or are in close 
proximity of that goal. This group includes 
Subaru, and the captive import fleets of Chrysler 
and GM. See 1977 EPA/FEA Gas Mileage 
Guide, Second Edition. Of the remaining manu- 
facturers, which account for a total of slightlv 



PART 531— PRE 31 



EfFective: Model Years 1981-1984 



more than 20 percent of all imports, Volvo, 
Daimler Benz, and British Leyland are the larjj- 
est importers which may face difficulties in meet- 
ing a fuel economy standard of 27.5 mpof. Volvo 
and Daimler-Benz each account for approxi- 
mately 3 percent of the import total, v?ith 
British-Leyland accountin<j for nearly 5 percent. 

Volvo projects that it could achieve an average 
fuel economy level not higher than 24.5 mpg by 
1985. 0^-28-02, p. 9. This level of fuel econ- 
omy vpould result in the imposition of a civil 
penalty of $150 per passenger automobile sold in 
the U.S. Since Volvo presently sells its pas- 
senger automobiles in the $7,000 to $10,000 range 
and since demand in that price range is relatively 
inelastic, the added cost would not be likely to 
reduce sales substantially. Furthermore, NHTSA 
believes that it may be possible for Volvo to 
achieve better fuel economy than it has projected. 
For example, the Volvo projection is apparently 
based on the assumption that no weiglit reduction 
is achieved, although its 244 model weighs nearly 
400 pounds more than a comparable Audi lOOLS. 
See DX-28-02, p. 9 and "Automotive News," 
supra, at 76-7. 

Daimler-Benz projects being able to attain 
levels of fuel economy close to those projected 
for the domestic manufacturers (DN-28-05, p. 
32), primarily by achieving a diesel market 
penetration of over 60 percent by 1980. DN-10, 
p. 8. This projection is also based on relatively 
little weight reduction. For example, Daimler- 
Benz projects that by 1985 its two-seater sports 
model will be in the same or a higher inertia 
weight class as the GM "hypothetical scenario" 
projects for large-size six-seater passenger auto- 
mobiles. DX-2'8-05, p. 31 and DN-18, p. 13. 
Even if Daimler-Benz'' projections reflected the 
maximum fuel economy impi-ovement achievable 
by that company, the civil penalties resulting 
from noncompliance with the fuel economy 
standards would likely be less than those men- 
tioned above with respect to Volvo and would 
have a negligible impact on sales of passenger 
automobiles whose prices are in the $10,000- 
$20,000 range. 

British Leyland's present product mix is split 
between relatively inexpensive two-seater sports 
cars and luxury cars in the jNIercedes price range. 



The small sports cars are highly inefficient even 
by present standards. For example, the MG 
Midget and Triumph Spitfire weigh about the 
same as a Volkswagen Rabbit, yet the Rabbit 
has roughly 50 percent more horsepower and 25 
percent better fuel economy. The Toyota Celica 
weighs 200 pounds more and has 50 percent more 
horsepower than the MG-B, yet the Toyota has 
about 18 percent better fuel economy. See 
"Automotive News," p. 76, and 1977 EPA/FEA 
(las Mileage Guide. Therefore, it seems likely 
that substantial improvements must be made to 
the smaller British Leyland products just to be 
competitive in the U.S. market. If such im- 
provements are made, the British Leyland aver- 
age promulgated level would be close enough to 
the standards promulgated herein to allow any 
required civil penalties to be passed on to con- 
sumers of the luxury passenger automobiles 
which are responsible for bi'inging down their 
average. 

In summary, it appears that the manufacturers 
of the less expensive import passenger automo- 
biles are already in compliance with the ap- 
plicable fuel economy standards through 1985, 
or are close to that level now and can readily 
achieve compliance. The manufacturers of the 
more expensive imports may face some difficulties 
in meeting the standards. However, if those 
difficulties prove to be insurmoimtable, the manu- 
facturers will incur civil penalties that will be 
small in comparison to the price of their pas- 
senger automobiles. Therefore, and in view of 
the Congressional admonition against basing 
these standards on the least fuel efficient manu- 
facturer (see pages 154-5 of the conference re- 
port on the Act, S. Rep. No. 94-516, 94th Cong., 
1st Sess. (1975), and section III.E of this no- 
tice), it is concluded that the establishment of 
these standards is not constrained by the capabil- 
ities of these import manufacturers. A more 
detailed discussion of the capabilities for improv- 
ing fuel economy of these manufacturers is 
contained in Appendix E of the Rulemaking 
Support Paper. Accordingly, the Department 
has determined that the maximum feasible aver- 
age fuel economy levels based upon consideration 
of domestic and foreign manufacturers are the 
same as the levels set forth at the end of section 
III.E. 



PART 531— PRE 32 



Model Years 1981-1984 



V. The "steady progress" criterion and setting 
the standards. 

The final step in tlie stanclaid-.settin<r process 
is the application of the "steady progress" cri- 
terion. As discussed in section II, this provision 
requires that the standards increase each year, 
that all standards fall between 20 and '27.5 nipg;. 
and tliat none of the resultin<r annual increases 
be disproportionate to the other increments. The 
Department has determitied that the maximum 
feasible levels of average fuel economy specified 
at the end of Section V meet each of these tests 
and therefore will result in steady progress 
toward the 1985 standard of 27.5 mpg. There- 
fore, average fuel economy standards are : 22 
mpg for 1981; 24 mpg for 1982: 26 mpg for 
198.3; and 27 mpg for 1984. 

VI. Additional comments on the NPRM. 

Most substantive conunents received relating to 
the establishment of 1981-84 fuel economy stand- 
ards have been discussed above, primarily in sec- 
tion III. as they relate to the development of the 
standards. However, certain additional com- 
ments on the XPRM deserve further discussion. 

The single point raised most frecjuently in the 
rulemaking proceeding by the automobile in- 
dustry did not relate to the teclinological feasi- 
bility or economic practicability of any particular 
level of average fuel economy, but rather involved 
the uncertainties inherent in the establishment of 
tliese standards. Among the uncertainties raised 
by industry were the precise fuel economy ini: 
provements achievable with the various items of 
technolog}-, consumer acceptance of the more fuel 
efficient automobiles to be produced in the future, 
the impact of'future motor vehicle standards in 
areas other than fuel economy, and the state of 
the national economy over the next eight years. 
Tr-I, p. 106 (Chrysler) ; Tr-I, pp. 53-58 (GM) ; 
Doc. IV, pp. 17-35 (Ford). The manufacturers 
who were unable to relate the alleged areas of 
uncertainty to any particular quantified impacts 
on sales or to any particular levels of average 
fuel economy standards. The Department recog- 
nizes that areas of uncertainty exist in this pro- 
ceeding, although not fully agreeing with the 
manufacturers' assessments of the magnitude of 
the resulting risks, particularly in the technology' 
area. But cf. Tr-I, p. 53, where GM characterizes 



the latter uncertainty as ''relatively small." The 
Department also recognizes that in making pro- 
jections as to future events and capabilities it is 
not appropriate to engage in a "crystal ball in- 
quiry." "Natural Resources Defense Council v. 
Morton," 458 F. 2d 827, 837 (D.C. Dir., 1972). 
Nevertheless, the Act. in requiring that 1981-84 
model year fuel economy standards be established 
by July 1, 1977, necessarily contemplates that 
standards will be established on the basis of less 
than perfectly certain information. Nor does the 
law require such certainty, so long as projections 
rest on a rational basis. See generally "Ethyl 
Corp. V. EPA," 511 F. 2d 1, 28 (D.C. cir. 1976) ; 
"National Asphalt Pavement Association v. 
Train," 539 F. •2d 775, 7834 (D.C. Cir. 1976); 
"Reserve Mining Co. v. EPA," 514 F. 2d 492, 
507 n. 20 (8th Cir. 1975) ; "Society of the Plastics 
Industry v. OSHA," 509 F. 2d 1301, 1308 (2d 
Cir. 1975) ; "Amoco Oil Co. v. EPA," 501 F. 2d 
722, 741 (D.C. Cir. 1974) ; "Industrial Union 
Department v. Hodgson," 400 F. 2d 457, 474 
(D.C. Cir. 1974). This is especially true in a 
regulatory program relating to a crucial national 
need such as energy conservation. ''Mobil Oil 
Co. V. FPC," 417 U.S. 283, 318 (1974). 

Substantial efforts have been made to account 
for the uncertainties involved in establishing 
these fuel economy standards. For example, as 
noted in section III, many of the projections of 
achievable fuel economy improvements are based 
on conservative estimates of achievable potential. 
Further, a safety margin of improvement poten- 
tial is provided to compensate for any unforeseen 
contingencies. In addition, it is highly likely 
that some of the uncertainties inherent in this 
proceeding will operate to the manufacturers' 
advantage. For example, future technological 
developments may lead to greater fuel economy 
improvements than even the most optimistic of 
the projections made by the Department. 

Given that the Department is required to set 
standards in an area of some uncertainty, it is 
appropriate to compare the consequences of err- 
ing on either the low or the high side in our 
judgments. This balancing of risks is quite simi- 
lar to that conducted by the court in "Interna- 
tional Harvester Company v. Ruckelshaus," 478 
F. 2d 615 (D.C. Cir. 197.3), involving the EPA 
Administrator's 1975 automobile emission stand- 



PART 531— PRE 33 



Effective: Model Years 1981-1984 



ards suspension decision. If the Department's 
projections err on the low side, one obvious con- 
sequence is the lost opportunity to conserve 
energy, the significance of which needs no further 
discussion. A less obvious consequence is the 
removal of the "technology forcing" effect of a 
strict standard. "Union Electric Co. v. EPA,'' 
427 U.S. 246 (1976). Stringent fuel economy 
standards are likely to encourage the automobile 
industry to pursue the development and refine- 
ment of technology which can reduce fuel con- 
sumption. Standards set at easily achievable 
levels provide no incentive to pursue the develop- 
ment technologies, such as alternative engines, 
which have substantial fuel economy improve- 
ment potential but which may never reach the 
market in large numbers iniless additional tech- 
nological refinement is accomplished. DN-37, p. 
2 (Federal Energy Administration). On the 
other hand, the danger involved in setting the 
standards too high is much less than in the "In- 
ternational Harv'ester"' situation. For example, 
under the Act, the penalty for noncompliance 
with fuel economy standards is a monetary civil 
penalty, the magnitude of which is tied to the 
extent of the violation. On the other hand, 
violation of Clean Air Act emission standards 
might result in enjoining the sale of the non- 
complying vehicles, conceivably resulting in an 
industry shutdown. 42 U.S.C. 1857f-5. Fuel 
economy civil penalties are assessed at a level of 
five dollars per vehicle per 0.1 mpg of violation, 
generally within the capability of the automobile 
companies to either absorb or to pass on to con- 
sumers without substantial sales reduction. l;i 
U.S.C. 2008. In addition, civil penalties incurred 
in one year can be offset by credits earned in the 
previous and subsequent years, as previously 
noted. Penalties large enough to jeopardize a 
company's continued viability or generated by 
forces beyond the company's control can be re- 
<luced or eliminated. 15 U.S.C. 2008(b)(3). 
Finally, the Act provides for amending these 
standards at any time, where the amendment 
makes the standards less stringent. See section 
r)02(f) of the Act. If some unforeseen contin- 
gency arises which makes the attainability of the 
standards appear dubious, adjustments can be 
made. The time frame for making these adjust- 
ments is much greater than was the case in 



"International Harvester." All of the technologi- 
cal improvements assumed in this notice are per- 
mitted and expected to be phased-in over several 
years. If problems arise with respect to the 
marketability or feasibility of the technology, 
the problem will appear at the start of the 
phase-in period for the technology, prior to the 
time when the industry has made irreversible 
commitments in that area regarding their entire 
fleets. This contrasts with the "International 
Harvester" situation where all automobiles would 
have been required to make major technological 
steps in a single year. Thus, a balancing of the 
risks involved in setting the standards indicates 
that less demage is incurred by erring on the 
high side. In that case, corrections can be made 
with limited adverse impacts. If the error is on 
the low side, that error may never become ap- 
parent, since additional research efforts would 
not be full}' pursued, and the damage could be 
irreparable. This counsels against any major 
reduction in the standards to account for "un- 
certainties," especially given the safety margin. 

VII. Impact on petroleum consumption. 

Section 6 of the Rulemaking Support Paper 
and section III of the Economic Impact State- 
ment contain discussions of the impacts on pe- 
troleum consumption of various fuel economy 
standards schedules. The ESP concludes that 
.gasoline savings ranging from approximately 9.6 
billion gallons per year in 1985 to about twice 
that amount in the year 1995 are achievable. See 
Table 6.6, ESP. Over the lives of the passenger 
automobiles produced in model years 1981-84, 
gasoline savings of approximately 41 billion 
gallons would result. These gasoline savings are 
calculated in relation to a baseline of the gasoline 
consumption which would have resulted had the 
new passenger automobile average fuel economy 
remained at a level of 20 mpg for the year 1980 
and thereafter. This baseline was selected be- 
cause it coincides with the level of the statutory 
1980 fuel economy standard, it is consistent with 
the level of average fuel economy likely to have 
been voluntarily achieved by the manufacturers, 
and its use was supported by at least one partici- 
pant in the proceeding. Tr-II, p. 96; DN-15. 
Document III, p. 2 (Ford). To put this fuel 
savings in perspective, the resulting reduction in 



PART 531— PEE 34 



petroleum consumption could result in a cumula- 
tive national savinojs of approximately 2n billion 
dollars by tlie year 1995. 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 Resrulatory Procedures by the NHTSA 
Office of Planning and Evaluation. This assess- 
ment utilizes the assumptions set forth in the 
RSP and expands 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 
reflects chanires from MY 1980 vehicles due solely 
to improvements necessary to meet the rule. 

To summarize the Economic Impact Assess- 
ment, the total change for the Domestic Auto 
Industry for model years 1981-84 (from a base 
of MY 1980 and 20 mpjr) due to the rule are 
estimated as follows : 

Gasoline consumption for the average vehicle 
manufactured in MY's 1981-84 will be reduced 
by approximateh' 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 extraordinarj' 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 rise 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 the 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 Ye 



A major reason for suggestino; 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. 
DX-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 
lange 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 tlieir possible dis- 
advantages. One such advantage is related to the 
"target-projectile" effect. See Docket No. FE- 
76-01 -GR-7, pp. 40-2 (Mr. Stanley Hart). This 
effect lesults from the fact tliat 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 ah). Furthermore, although the shielding 
effect of veliicular 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 veliicles 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 statutoi-y responsi- 
bility imder 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 energy-absorbing 
structural designs. DN-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 sucli 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 fi'om 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 



Effective: Model Years 1981-1984 



The President has recently stated that the na- 
tion's ener<rA' situation will reqniie actions and 
possible sacrifices on the part of all citizens. In 
that context, any sacrifices required of the driv- 
inpr public as a result of these fuel economy 
standards appear insubstantial, mainly requiring; 
the curtailment of wasteful automotive designs 
and technolo<ry. Such measures reduce the need 
for additional and possibly severe methods of 
conservinjr gasoline, such as reducing vehicle 
usao'e, and thus preserve the most im