[Federal Register Volume 64, Number 96 (Wednesday, May 19, 1999)]
[Rules and Regulations]
[Pages 27201-27203]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-12607]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 531
[Docket No. NHTSA-98-4853]
RIN 2127-AG95
Passenger Automobile Average Fuel Economy Standards
AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).
ACTION: Final rule.
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SUMMARY: This rule amends the passenger automobile fuel economy
regulation by providing a procedure by which a vehicle manufacturer may
notify NHTSA of the model year in which it elects to consider
production of components and automobile assembly in Mexico as domestic
value added. This domestic value added is used to determine if a
passenger automobile should be assigned to the manufacturer's import or
domestic fleet for computation of the fleet average fuel economy. The
amendment implements a provision of the North American Free Trade
Agreement Implementation Act of 1993.
EFFECTIVE DATE: This amendment is effective July 19, 1999.
ADDRESS: Petitions for reconsideration should refer to the docket
number set forth above and be submitted to Docket Management Section,
Pl-403, 400 7th Street, SW, Washington, DC 20590.
FOR FURTHER INFORMATION CONTACT: Ms. Henrietta L. Spinner, Office of
Planning and Consumer Programs, NHTSA, 400 7th Street, SW, Washington,
DC 20590. Telephone: (202) 366-4802.
SUPPLEMENTARY INFORMATION:
Background
The Corporate Average Fuel Economy (CAFE) law, codified as Chapter
329 of title 49, United States Code, provides that the Administrator of
the Environmental Protection Agency (EPA) calculates the CAFE of each
automobile manufacturer (49 U.S.C. 32904(a)). Section 32904(b) provides
that passenger automobiles manufactured by a manufacturer are to be
divided into two fleets, according to whether or not they are
manufactured domestically. Each manufacturer's domestic and non-
domestic fleet is required to comply separately with the passenger
automobile CAFE standard. An automobile is considered to be
manufactured domestically if at least 75 percent of the cost to the
manufacturer is attributable to value added in the United States and
Canada.
The North American Free Trade Agreement Implementation Act of 1993,
Pub. L. 103-182, amended Section 32904(b) to provide that the value
added to a passenger automobile in Mexico is considered to be domestic
value. As amended, paragraph 32904(b)(3)(A) provides that
[A] passenger car is deemed to be manufactured domestically in a
model year, as provided in subparagraph (B) of this paragraph, if at
least 75 percent of the cost to the manufacturer is attributable to
value added in the United States, Canada, or Mexico, unless the
assembly of the vehicle is completed in Canada or Mexico and the
automobile is imported into the United States more than 30 days
after the end of the model year.
The effect of the amendment is that value added in Mexico is
considered on the same terms as value added in Canada or the United
States. However, the transition to treating Mexican value as domestic
value was not to be immediate. Subparagraph (B) of paragraph
32904(b)(3) sets forth specific conditions to govern the transition,
and specifies different dates for manufacturers, according to whether
or when they began to assemble passenger automobiles in Mexico.
Under subparagraph 32904(b)(3)(B)(i), a manufacturer that began to
assemble automobiles in Mexico before model year 1992 can elect to have
its Mexican production considered domestic beginning with a model year
that begins after the date of its election in the period from January
1, 1997, through January 1, 2004.
A manufacturer that began assembling automobiles in Mexico after
model year 1991 is required to count the value added in Mexico as
domestic value beginning with the model year that begins after January
1, 1994, or the model year in which the manufacturer begins to assemble
automobiles in Mexico, whichever is later (subparagraph (B)(ii)).
A manufacturer that does not assemble automobiles in Mexico may
elect under subparagraph (B)(iii) to have the value of Mexican
components treated as domestic value for purposes of automobiles
manufactured in a model year beginning after the date of its election
in the period from January 1, 1997, through January 1, 2004.
A manufacturer that does not assemble automobiles in either the
United States, Canada, or Mexico is required to count the value of any
Mexican components as domestic value, beginning with the model year
that begins after January 1, 1994 (subparagraph (B)(iv)).
A manufacturer covered by either subparagraph (B)(i) or (B)(iii)
that does not make an election within the specified period must
consider any value added in Mexico as domestic value beginning with the
model year that begins after January 1, 2004 (subparagraph (B)(v)).
Subparagraph 32904(b)(3)(C) provides that the Secretary of
Transportation ``shall prescribe reasonable procedures'' for those
manufacturers that can elect the model year for which the value added
in Mexico is to be treated as domestic value. Insofar as the
calculation of CAFE levels is the
[[Page 27202]]
responsibility of the EPA Administrator, the procedures issued by the
Secretary must be in the form of directions to the EPA Administrator.
EPA has amended its regulations at 40 CFR 600.511-80 to incorporate the
provisions of the NAFTA Implementation Act (59 FR 33914; July 1, 1994).
In anticipation of implementing regulations being issued by the
Secretary of Transportation, subsection (b)(5) of 40 CFR 600.511-80
provides that any model year elections by a manufacturer are to be made
in accordance with the regulations issued by the Secretary.
Insofar as 49 U.S.C. 32904(b)(3) does not limit a manufacturer's
discretion to elect any model year in the period from January 1, 1997,
through January 1, 2004, NHTSA concludes that the implementing
procedures need only specify the method in which a manufacturer gives
notice of its election and provide a minimum notice period before the
beginning of the model year elected. Accordingly, this rule amends
section 531.6 of title 49 CFR to provide that any manufacturer making a
model-year election under subparagraphs (B)(i) and (B)(iii) of 49
U.S.C. 32904(b)(3) shall notify the EPA and NHTSA Administrators of its
election not later than 60 days before the beginning of the model year
to which the election applies.
Final Rule
This amendment is published as a final rule, without prior notice
and opportunity to comment. The NAFTA Implementation Act required that
the agency issue procedures to allow manufacturers to elect certain
options by January 1, 1997. The regulations contained in this final
rule are ministerial in nature and simply implement the express
provisions of the NAFTA Implementation Act. Accordingly, the agency
finds, for good cause, that notice and comment are unnecessary and
issues the amendment as a final rule. 5 U.S.C. 53(b)(3)(B).
Impact Analyses
A. Executive Order 12866 and DOT Regulatory Policies and Procedures
This rule was not reviewed under Executive Order 12866 (Regulatory
Planning and Review). NHTSA has considered the economic implications of
the rule and determined that it is not significant within the meaning
of the DOT Regulatory Policies and Procedures. Today's amendment will
not affect manufacturer or supplier costs.
B. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility Act, the agency has
considered the impact this rule would 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. Although certain
small businesses, such as parts suppliers, and some vehicle
manufacturers are affected by the regulation, the effect on them is
negligible.
C. National Environmental Policy Act
The agency has analyzed the environmental impacts of the rule in
accordance with the National Environmental Policy Act, 42 U.S.C. 4321
et seq., and has concluded that it will not have a significant effect
on the quality of the human environment.
D. Executive Order 12612 (Federalism)
This action has been analyzed in accordance with the principles and
criteria contained in Executive Order 12612, and it has been determined
that the rule does not have sufficient Federalism implications to
warrant the preparation of a Federalism Assessment.
E. Paperwork Reduction Act
This final rule includes new ``collections of information,'' as
that term is defined by the Office of Management and Budget (OMB). The
rule contains information collections that are subject to review by OMB
under the Paperwork Reduction Act of 1995 (Pub. L. 104-13). The title,
description, and respondent description of the information collections
are shown below with an estimate of the annual burden. Included in the
estimate is the time for reviewing regulations, searching existing data
sources, gathering and maintaining the data, and completing and
reviewing the collection of information.
Title: 49 CFR part 531--Passenger Automobile Average Fuel Economy
Standards.
Need for Information: This information is needed to determine the
domestic and non-domestic automobile fleets for CAFE computation
purposes. The NAFTA Implementation Act's provision for the treatment of
Mexican content permits certain manufacturers to elect the model year
for which Mexican content in their automobiles will be treated as
domestic content.
Proposed Use of Information: The information would advise the EPA
Administrator that a manufacturer has made an election as to the model
year in which it will consider Mexican content to be domestic content,
thereby enabling the EPA Administrator to identify the manufacturer's
domestic and non-domestic automobile fleets.
Frequency: The agency estimates that manufacturers will report this
information once as they prepare to consider Mexican content as
domestic content.
Burden Estimate: The agency estimates that a manufacturer may
encounter a total burden of five to seven hours to prepare a letter
stating that it is electing to count the Mexican content in its
passenger automobile fleet as domestic content. Seventeen manufacturers
are eligible to make this election. Accordingly, the agency estimates
the total burden hours to be 85 to 119.
Respondents: There are 20 manufacturers, but only 17 are eligible
to make an election. The other three manufacturers produce only light
trucks, and light truck fleets are not divided into domestic and non-
domestic fleets for CAFE purposes.
Form(s): Not applicable.
Average burden hours per respondent: The agency estimates that a
manufacturer may experience a total burden of five to seven hours to
prepare a letter stating its intent to include Mexican content as
domestic content in its passenger automobile fleet.
Average burden cost per respondent: The agency estimates that a
manufacturer may incur a cost of $200 to $300 to comply with this
requirement. This cost includes the salary of its personnel to review
this requirement, to examine its passenger automobile fleet content
data, and to prepare and send the letter advising EPA and NHTSA
Administrators of the manufacturer's election.
Individuals and organizations may submit comments on the
information collection requirements by June 18, 1999. The reporting and
recordkeeping requirements associated with this final rule will be
submitted to OMB for approval in accordance with the Paperwork
Reduction Act (Pub. L. 104-13). The agency believes that the amendment
made by this rule will result in a minimal increase in the paperwork
burden for vehicle manufacturers and suppliers.
F. Civil Justice Reform
This rule will not have any retroactive effect and does not preempt
any State law. The rule does not require submission of a petition for
reconsideration or other administrative proceedings before parties may
file suit in court.
[[Page 27203]]
G. Notice and Comment
NHTSA finds that prior notice and opportunity for comment are
unnecessary under 5 U.S.C. 553(b)(3)(B) because this action requires
only that manufacturers provide notice of elections they are making
with regard to the inclusion of value added in Mexico. It does not
affect a manufacturer's ability to make an election or the timing its
election. In view of the negligible impacts of the rule, the agency
finds there is good cause to issue the rule without prior notice and
opportunity for comment.
List of Subjects in 49 CFR Part 531
Energy conservation, Fuel economy, Gasoline, Imports, Labeling,
Motor vehicles, Reporting and recordkeeping requirements.
In consideration of the foregoing, 49 CFR part 531 is amended as
follows:
PART 531--PASSENGER AUTOMOBILE AVERAGE FUEL ECONOMY STANDARDS
1. The authority citation for Part 531 is revised to read as
follows:
Authority: 49 U.S.C. 32902, 49 U.S.C. 32904; Delegation of
authority at 49 CFR 1.50.
2. Section 531.6(b) is added to read as follows:
Sec. 531.6 Measurement and calculation procedures.
* * * * *
(b) A manufacturer that is eligible to elect a model year in which
to include value added in Mexico as domestic value, under subparagraphs
(B)(i) and (B)(iii) of 49 U.S.C. 32904(b)(3), shall notify the
Administrators of the Environmental Protection Agency and the National
Highway Traffic Safety Administration of its election not later than 60
days before it begins production of automobiles for the model year. If
an eligible manufacturer does not elect a model year before January 1,
2004, any value added in Mexico will be considered domestic value for
automobiles manufactured in the next model year beginning after January
1, 2004, and in subsequent model years.
Issued on: May 10, 1999.
L. Robert Shelton,
Associate Administrator for Safety Performance Standards.
[FR Doc. 99-12607 Filed 5-18-99; 8:45 am]
BILLING CODE 4910-59-P
