[Federal Register Volume 59, Number 94 (Tuesday, May 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11918]
[[Page Unknown]]
[Federal Register: May 17, 1994]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 526
[Docket No. 93-25; Notice 2]
RIN 2127-AE65
Petitions and Plans for Relief Under the Automobile Fuel
Efficiency Act of 1980
AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).
ACTION: Final rule.
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SUMMARY: This rule addresses the agency regulations setting forth
content requirements for petitions to be submitted by automobile
manufacturers to obtain relief from certain aspects of the Corporate
Average Fuel Economy (CAFE) program. NHTSA is rescinding those portions
of the regulations that are no longer needed, and updating certain
others.
DATES: The amendments made by this rule are effective June 16, 1994.
Petitions for reconsideration should be submitted by June 16, 1994.
addresses: Submit petitions for reconsideration to: Administrator,
National Highway Traffic Safety Administration, 400 Seventh Street SW.,
Washington, DC 20590.
FOR FURTHER INFORMATION CONTACT: Mr. Orron Kee, Office of Market
Incentives, National Highway Traffic Safety Administration, room 5313,
400 Seventh Street SW., Washington, DC 20590, (202) 366-0846.
SUPPLEMENTARY INFORMATION:
I. History
In 1972, Congress enacted the Motor Vehicle Information & Cost
Saving Act (``the Act'') (15 U.S.C. 1901, et seq.). Title V, Improving
Automotive Efficiency (15 U.S.C. 2001-13) was added to the Act in 1975.
Title V established the CAFE program.
The Act specifies that, in general, each manufacturer's
domestically manufactured (i.e., those with at least 75 percent U.S. or
Canadian content) and imported passenger automobiles must comply
separately with CAFE standards. This provision was originally enacted
to discourage domestic auto manufacturers from merely importing
increasing numbers of fuel efficient, foreign produced cars to comply
with standards.
In 1980, Congress determined that the original provision regarding
domestic content could have two undesired effects. First, it could
discourage foreign manufacturers that wished to begin U.S. production.
Second, it could discourage manufacturers that wished to transfer a
non-domestic automobile to their domestic fleets by gradually
increasing the domestic content of the automobile. In response to these
and other concerns, Congress passed the Automobile Fuel Efficiency Act
(AFEA), amending Title V of the Act by adding a number of provisions
intended to facilitate compliance with the CAFE standards.
To address the first situation, Congress adopted a provision, found
in section 503(b)(3) of the Act, applicable to foreign manufacturers
that began U.S. production either (1) after December 22, 1975 and
before May 1, 1980 or (2) on or after May 1, 1980 and for at least one
model year ending on or before December 31, 1985. Such manufacturers
could be exempted from the Act's requirements that their fleets be
separated into domestic and non-domestic subfleets for CAFE compliance
purposes if they submitted, and NHTSA approved, a petition
demonstrating that granting the exemption would not adversely affect
employment in the U.S. automobile industry.
To address the second situation, Congress added section 503(b)(4)
to the Act. It applies to a manufacturer that wishes to convert a
vehicle from non-domestic to domestic status over a period of several
model years, and to begin including the vehicle in its domestic fleet
from the very beginning of the conversion period. There is no model
year limitation on exercising this provision. To obtain exemption from
the domestic content provision under section 503(b)(4), a petitioner
must show that (among other things) it would achieve at least 75
percent domestic content within four model years.
The AFEA also made a number of other amendments to the Act. It
added section 502(k) to the Act to authorize special relief for
manufacturers that were unable to comply with one or more of the 4-
wheel drive (4WD) light truck fuel economy standards in MYs 1982-85.
Finally, the AFEA added section 502(l) to the Act to authorize
special relief for manufacturers that fell short of a fuel economy
standard in one year, but expected to exceed a fuel economy standard in
a future model year. Section 502(l) provides that the credits that a
manufacturer expects to earn for a future model year can be made
available up to three years in advance of that year in order to offset
civil penalties which would otherwise be assessed for a shortfall in
one of those three years, provided that the manufacturer submits (and
the agency approves) a plan for earning the necessary credits in the
future, and that the manufacturer actually earns the credits.
On July 29, 1982, the agency published a final rule establishing
part 526 setting forth requirements for the contents of petitions to
obtain the various types of relief authorized by the AFEA's amendments
to the Act. (47 FR 32721). The principal provisions of part 526 are:
Section 526.2, specifying requirements relating to
section 503(b)(3) (commencement of U.S. production);
Section 526.3, specifying requirements relating to
503(b)(4) (transfer of models from non-domestic to domestic fleet);
Section 526.4, specifying requirements relating to
section 502(k) (adjustment of CAFE standards for 4-wheel drive light
trucks); and
Section 526.5, specifying requirements relating to
section 502(l) (offsetting compliance shortfall with future credits).
On May 20, 1993, the agency published a NPRM (58 FR 29378)
proposing to rescind those sections of the implementing regulation that
were no longer required because the passage of time rendered them
obsolete, and to amend certain language in the regulation that was
inconsistent (e.g., different ways of referring to the same statutory
text).
Since NHTSA did not receive any comments in response to the NPRM,
it is adopting the amendments as proposed. This final rule rescinds
certain parts of the implementing regulation, and makes the other minor
changes that are fully described below.
II. Changes to Part 526
A. Rescission of Sec. 526.4, Relating to the Adjustment of Fuel Economy
Standards for 4-Wheel Drive Light Trucks
Section 526.4 describes the procedures for manufacturers to
petition for relief from light truck CAFE standards applicable to 4WD
light trucks for MYs 1982-85. This procedure implements section 502(k)
of the Act.
To be granted the relief provided by section 502(k) with respect to
one or more of those model years, a manufacturer must demonstrate that
it cannot meet the fuel economy standard for that year without
suffering a severe economic impact, such as plant closures or layoffs.
Although the timing of the petition is not expressly specified, the use
of the subjunctive mood regarding the finding to be made by the agency
indicates that the petition had to be filed before the start of the
model year for which the relief was requested. No petitions were filed
under this section for these long past model years.
Accordingly, NHTSA believes that section 502(k) and its
implementing regulatory provision in Sec. 526.4 are moot. The agency is
therefore rescinding this provision.
B. Deletion of Final Sentence of Sec. 526.5(a) Relating to Separation
of Light Truck Fleets Into 2-Wheel and 4-Wheel Drive Fleets
Section 526.5 specifies the content of manufacturers' plans for
earning CAFE credits in future years to offset current year penalties.
The provision implements section 502(l) of the Act. As noted above,
under section 502(l), a manufacturer may avoid violating the Act and
paying a civil penalty for falling short of a standard in one model
year if the manufacturer submits to the agency a plan showing that it
reasonably anticipates earning enough credits during the next three
model years to offset the shortfall.
A portion of Sec. 526.5 has become moot. The last sentence in
Sec. 526.5(a) provides that the information specified in Sec. 526.4(e)
is to be submitted in connection with any contemplated transfer of CAFE
credit between classes of light trucks. As noted above, all of
Sec. 526.4 is being rescinded by this notice. Accordingly, the agency
is also deleting the last sentence of Sec. 526.5(a). The meaning of
Sec. 526.5(a) will remain unchanged.
C. Redesignation of Citations to AFEA
Although the regulatory relief provisions of the AFEA were added by
the AFEA to the Act, part 526 does not uniformly cite the Act. For
example, the part references the relevant sections of the AFEA whenever
it discusses petitions and plans specified by the AFEA, but references
the Act in other places. The lack of consistency in the citations is a
potential source of confusion and inconvenience to the public.
Therefore, the agency is converting all references in part 526 to the
AFEA into references to the corresponding sections of the Act.
D. Change to Title of 49 CFR 526.3
The title of Sec. 526.3 is being changed from ``Transfer of vehicle
from foreign to U.S. production'' to ``Transfer of vehicle from non-
domestic to domestic fleet.'' Section 526.3 implements section
503(b)(4) of the Act, which allows manufacturers to average certain
non-domestic models with their domestic fleets if (1) these models have
not been previously domestically manufactured, (2) these models have at
least 50 percent domestic content, and (3) the manufacturer will raise
the domestic content of these models to a minimum of 75 percent within
four model years. Section 503(b)(4) of the Act says nothing about
actually ``transferring'' a vehicle from foreign to domestic
``production''. A vehicle assembled in the U.S. or Canada, but
containing less than 75 percent domestic content, could be eligible
under this provision. Additionally, there is no reference to any
specific country as a production site. The change in the title of
Sec. 526.3 will therefore reflect more accurately the language of the
Act.
E. Change in Text of 49 CFR 526.3(a)
Section 503(b)(4)(A)(ii) of the Act states that at least 50 percent
of the cost to the manufacturer of each automobile covered by the
manufacturer's petition regarding transfer from non-domestic fleet to
domestic fleet should be attributable to ``value added in the United
States or Canada.'' By adding the words ``or Canadian'' to the phrase
``those with 50 to 75 percent U.S. value added,'' the text of
Sec. 526.3(a) will accurately reflect the meaning of the Act.
Additionally, for the sake of clarification, the wording of
Sec. 526.3(a) will read ``those with at least 50 percent, but less than
75 percent.''
III. Regulatory Analysis
A. Executive Order 12866, Regulatory Planning and Review, and DOT
Regulatory Policies and Procedures
This notice was not reviewed under Executive Order 12866. The
agency has considered the economic implications of these amendments and
determined that these amendments are not significant within the meaning
of the DOT Regulatory Policies and Procedure. No regulatory evaluation
was prepared by the agency because the amendments to the regulation
will not have any economic effects. The primary effect of the
amendments will be to remove from the Code of Federal Regulations
content requirements for a type of petition that can no longer by
submitted to the agency.
B. Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act, the agency has
considered the impact that this rulemaking will have on small entities.
I certify that this action will not have a significant economic impact
on a substantial number of small entities. Therefore, a regulatory
flexibility analysis is not required for this action. As noted above,
these amendments will not have any economic effects. In the case of
small businesses, small organizations, and small governmental units
which purchase automobiles and light trucks, these amendments will not
affect the availability of fuel efficient automobiles or light trucks
or have any significant effect on the overall cost of purchasing and
operating an automobile or light truck.
C. Impact of Federalism
This action has been analyzed in accordance with the principles and
criteria contained in Executive Order 12612, and it has been determined
that the action does not have sufficient Federalism implications to
warrant the preparation of a Federalism Assessment.
D. Executive Order 12778 (Civil Justice Reform)
This rule does not have any retroactive effect. Under section
509(a) of the Act (15 U.S.C. 2009(a)), whenever a Federal motor vehicle
fuel economy standard is in effect, a state may not adopt or maintain
separate fuel economy standards applicable to vehicles covered by the
Federal standard. Section 504 of the Act (15 U.S.C. 2004) sets forth a
procedure for judicial review of final rules establishing, amending or
revoking Federal average fuel economy standards. That section does not
require submission of a petition for reconsideration or other
administrative proceedings before parties may file suit in court.
E. Environmental Impacts
The agency has analyzed the environmental impacts of the amendments
to part 526 in accordance with the National Environmental Policy Act,
42 U.S.C. 4321 et seq. The agency has concluded that they will not have
a significant effect on the quality of the human environment.
List of Subjects in 49 CFR Part 526
Energy conservation, Motor vehicles.
PART 526--[AMENDED]
In consideration of the foregoing, 49 CFR part 526 is amended to
read as follows:
1. The authority citation for part 526 is revised to read as
follows:
Authority: 15 U.S.C. 2002 and 2003; delegation of authority at
49 CFR 1.50.
2. Section 526.1(b) and (c) are revised to read as follows:
Sec. 526.1 General provisions.
* * * * *
(b) Address. Each petition and plan submitted under the applicable
provisions of sections 502 and 503 of the Motor Vehicle Information and
Cost Savings Act must be addressed to the Administrator, National
Highway Traffic Safety Administration, 400 Seventh Street, SW.,
Washington DC 20590.
(c) Authority and scope of relief. Each petition or plan must
specify the specific provision of the Motor Vehicle Information and
Cost Savings Act under which relief is being sought. The petition or
plan must also specify the model years for which relief is being
sought.
3. The introductory text of Sec. 526.2 is revised to read as
follows:
Sec. 526.2 U.S. production by foreign manufacturer.
Each petition filed under section 503(b)(3) of the Motor Vehicle
Information and Cost Savings Act must contain the following
information:
* * * * *
4. The heading, introductory text and introductory text of
paragraph (a) of Sec. 526.3 are revised to read as follows:
Sec. 526.3 Transfer of vehicle from non-domestic to domestic fleet.
Each plan submitted under section 503(b)(4) of the Motor Vehicle
Information and Cost Savings Act must contain the following
information:
(a) For each model year for which relief is sought in the plan and
for each model type of automobile sought to be included by the
submitter in its domestic fleet under the plan (i.e., those with at
least 50 percent but less than 75 percent U.S. or Canadian value
added), provide the following information:
* * * * *
Sec. 526.4 [Removed and Reserved]
5. Section 526.4 is removed and reserved.
6. The introductory text and paragraph (a) of Sec. 526.5 is revised
to read as follows:
Sec. 526.5 Earning offsetting monetary credits in future years.
Each plan submitted under section 502(l) of the Motor Vehicle
Information and Cost Savings Act must contain the following
information:
(a) Projected average fuel economy and production levels for the
class of automobiles which may fail to comply with a fuel economy
standard and for any other classes of automobiles from which credits
may be transferred, for the current model year and for each model year
thereafter ending with the last year covered by the plan.
* * * * *
Issued: May 11, 1994.
Christopher A. Hart,
Deputy Administrator.
[FR Doc. 94-11918 Filed 5-16-94; 8:45 am]
BILLING CODE 4910-59-P
