2024-20651. Make Inoperative Exemptions; Retrofit Air Bag On-Off Switches and Air Bag Deactivations

Table 1—Estimated Annual Cost Impacts in Cases Where the On-Off Switch Exemption Is Eliminated

[2022 Dollars, Enforcement Discretion Baseline]

Cost item (entity)	Status quo cost	Cost under proposed rule	Net cost impact
Requests (Applicants)	$686.14	$0.00	−$686.14
On-Off Switch Installation (Applicants)	8,186.32	0.00	−8,186.32
Data Processing and Storage (Government)	61.39	0.00	−61.39
Documentation and Reporting (Industry)	87.58	0.00	−87.58
Total	9,021.43	0.00	−9,021.43

The corresponding annual cost impact under the Enforcement Non-Discretion baseline is summarized in Table 2:

Table 2—Estimated Annual Cost Impacts in Cases Where the On-Off Switch Exemption Is Eliminated

[2022 Dollars, Enforcement Non-Discretion Baseline]

Cost item (entity)	Status quo cost	Cost under proposed rule	Net cost impact
Requests (Applicants)	$404.06	$0.00	−$404.06
On-Off Switch Installation (Applicants)	4,820.80	0.00	−4,820.80
Data Processing and Storage (Government)	36.15	0.00	−36.15
Documentation and Reporting (Industry)	51.58	0.00	−51.58
Total	5,312.60	0.00	−5,312.60

The total annual cost impact is estimated to be −$9,021.43 under the Enforcement Discretion baseline and −$5,312.60 under the Enforcement Non-Discretion baseline.

Air Bag On-Off Switch Safety Impacts. Safety effects of the proposed rule in this category are assumed to be limited to the reduction in risk for front-seat passengers 13 years of age or older in vehicles with no on-off switch. NHTSA assumed that advanced air bags are estimated to be equally safe with or without an on-off switch for passengers 12 years of age or younger, because advanced air bags are designed either not to deploy or to deploy in a low-risk manner when small children are present ( i.e., the switch does not offer any benefit or detriment for small children). For passengers 13 years of age or older, reducing on-off switch exemption requests would improve safety by mitigating the risk of traveling while an on-off switch is in the off position, removing the protective effect of the air bag. ( print page 76044)

The safety benefit per vehicle in this category is estimated as the reduction in fatality risk per mile for front-seat passengers 13 years of age or older, multiplied by the vehicle miles traveled (VMT) where such passengers are present and the monetized value of a unit reduction in fatality risk. Analyses of 2017-2021 Crash Reporting Sampling System data and Fatality Analysis Reporting System data indicate that the front seat of light-duty vehicles was occupied by a passenger 13 years of age or older approximately 12 percent of the time in non-fatal crashes and 14 percent of the time in fatal crashes. Studies have estimated an overall light-duty vehicle occupant fatality rate of 0.82 fatality per 100 million VMT,^[19] which represents approximately 73 percent of the average overall fatality rate from 2009 through 2012. The agency applied this ratio to the most recent overall fatality rate of 1.34 fatalities per 100 million VMT to identify an estimated light-duty vehicle fatality rate of 0.98 fatalities per 100 million VMT. Multiplying this fatality rate by 14 percent yields an estimated fatality rate for front-seat occupants 13 years of age or older of 0.14 fatality per 100 million VMT.

Studies indicate the effectiveness of frontal air bags in reducing fatalities for front-seat occupants to be 12 percent for passenger cars and 14 percent for light trucks and vans (LTVs).^[20] Thus, traveling with an inactivated frontal air bag is estimated to be 1/(1-0.12), or 13.6 percent, riskier in passenger cars (1/(1-0.14), or 16.3 percent, riskier in LTVs). Assuming a light-duty vehicle sales split of one-third passenger cars and two-thirds LTVs for the vehicles affected by the proposed rule (which reflects recent vehicle sales splits), the average increase of risk of traveling in the front seat with an improperly deactivated frontal air bag is estimated to be 15.4 percent. NHTSA assumed a 10.3 percent misuse rate for air bag on-off switches when adults travel in the front passenger seat. Multiplying this misuse rate by the estimated 15.4 percent increase in risk when on-off switches are misused yields an estimate of incremental risk of 1.6 percent for front-seat passengers 13 years of age or older in the presence of air bag on-off switches. In turn, multiplying the estimated incremental risk by the fatality rate for front-seat passengers 13 years of age or older (0.14 fatality per 100 million VMT) yields an estimate of incremental fatality risk for these passengers in the presence of an air bag on-off switch equal to 0.0022 fatality per 100 million VMT.

For the Enforcement Discretion baseline, the agency estimated expected per-vehicle annual VMT ( i.e., expected VMT taking scrappage into account) by multiplying the average of the passenger car and LTV VMT schedules used in the analysis supporting the Corporate Average Fuel Economy Rulemaking by their corresponding vehicle survival schedules. Applying three-percent- and seven-percent discount rates yields estimates of discounted lifetime vehicle VMT equal to 13.0 times and 9.7 times the first-year VMT.

Table 3—VMT Schedule and Estimated Discounted Vehicle VMT (for Selected Vehicle Ages)

Vehicle age	Annual VMT for surviving vehicles	Survival rate × 3% discount factor	Survival rate × 7% discount factor	Annual exposure (3% discount rate)	Annual exposure (7% discount rate)
1	17,040	1.000	1.000	17,040	17,040
5	14,641	0.853	0.732	14,535	12,480
10	12,310	0.636	0.452	10,843	7,696
15	10,546	0.377	0.221	6,421	3,766
20	9,165	0.178	0.086	3,036	1,472
25	7,981	0.087	0.035	1,477	592
30	6,805	0.049	0.016	831	275
35	5,454	0.017	0.005	294	81
Total/Year 1				13.0	9.7

The monetized (undiscounted) value of the per-vehicle safety benefit in the first year of vehicle use in this category is estimated to be $13.12 (0.0022 mitigated fatality per 100 million VMT × 17,040/100 million VMT × $35.4 million per mitigated fatality ^[21] ). Thus, at a three-percent discount rate, the estimated lifetime per-vehicle safety benefit is estimated to be approximately $171 ($13.12 × 13.0 = $170.58) under the Enforcement Discretion baseline. At a seven-percent discount rate, the estimated lifetime per-vehicle safety benefit is estimated to be approximately $127 ($13.12 × 9.7 = $127.28) under the Enforcement Discretion baseline.

For the Enforcement Non-Discretion baseline, the above approach is used, with one key change: per-vehicle safety benefits are estimated as the above per-vehicle safety benefits multiplied by the share of total lifetime discounted VMT comprised of pre-MY 2016 vehicles. In turn, the share of total lifetime discounted VMT comprised of pre-MY 2016 vehicles is estimated as the sum of estimated discounted lifetime VMT for MY 2004 through 2015 vehicles, divided by the sum of estimated discounted lifetime VMT for MY 2004 through MY 2021 vehicles. Using this approach, the estimated per-vehicle safety benefits are 67 percent lower than in the other baseline at a three-percent discount rate (0.33 × $170.58, or $56.29). The corresponding estimate at a seven-percent rate is 72 percent lower than in the other baseline (0.28 × $170.58, or $34.37).

The total annual safety benefit in this category under the proposed rule is equal to the per-vehicle safety benefit multiplied by the number of affected vehicles. Thus, at a three-percent discount rate, the total annual safety benefit is estimated to be $9,893.80 ( print page 76045) under the Enforcement Discretion baseline ($170.58 per request × 58 requests per year). At a seven-percent discount rate, the total annual safety benefit is estimated to be $7,382.30 under the Enforcement Discretion baseline ($127.58 per request × 58 requests per year). The total annual safety benefit under the Enforcement Non-Discretion baseline is $1,925.20 at a three-percent discount rate ($56.29 × 34.2 = $1,925.20) and $1,175.31 at a seven-percent discount rate ($34.37 × 34.2 = $1,175.31).

Air Bag Deactivation. The proposed rule will formalize and modify the process by which vehicle owners or users can obtain an exemption from the “make inoperative” provision for an air bag deactivation. The proposed rule will have a cost impact for requestors of air bag deactivation exemptions and business entities that deactivate air bags. For this analysis, the agency assumed that annual deactivation requests will be equal to the 2015-2017 annual average of deactivation requests under the proposed rule (seven per year). The agency felt there was no need to run a two-pronged analysis like it did for the on-off switch analysis because there was no change in the way the agency processed air bag deactivation requests; there has never been a formal process for requesting deactivation, and NHTSA has used its enforcement discretion to grant deactivations since the agency started doing so in the mid-1990s. Furthermore, because the agency is simply formalizing a process that is unlikely to result in a noticeable impact on the number of deactivation requests received, granted, or denied, NHTSA does not believe there will be a safety impact for this part of the proposed rule.

Individuals requesting air bag deactivation exemptions under the status quo incur costs associated with preparing the request letter, acquiring supporting documentation, and having the deactivation performed. Under the status quo, a deactivation requestor must write a letter to NHTSA that includes information about the requestor's vehicle and the requestor's reason for requesting an air bag deactivation.

The cost of deactivating an air bag system is unaffected by the proposed rule, meaning the proposed rule would have no impact on the costs associated with deactivation. Furthermore, the proposed rule does not include any additional requirements for businesses performing air bag deactivations, meaning the proposed rule would also have no impact on the costs businesses incur by performing deactivations.

Table 4 below estimates the costs associated with the proposed amendments to the air bag deactivation process (see the docketed economic analysis for this proposed rule for details).

Table 4—Estimated Annual Cost Impacts for Air Bag Deactivation Requests

[2022 Dollars]

Cost item (entity)	Status quo cost	Cost under proposed rule	Net cost impact
Requests (Applicants)	$160.72	$186.69	$25.97
Deactivation (Applicants)	542.50	542.50	0.00
Distributing Forms and Labels, and Data Processing (Government)	61.81	61.81	0.00
Return Form and Labels (Industry)	18.90	18.90	0.00
Safety (Occupants)	N/A	N/A	0.00
Total	722.12	748.09	25.97