[Federal Register Volume 60, Number 65 (Wednesday, April 5, 1995)]
[Rules and Regulations]
[Pages 17254-17272]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8130]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Parts 552, 554, 573, 576, and 577
[Docket No. 93-68; Notice 2]
RIN 2127-AD83
Petitions for Rulemaking, Defect and Noncompliance Orders;
Standards Enforcement and Defect Investigations; Defect and
Noncompliance Reports; Record Retention; and Defect and Noncompliance
Notification
AGENCY: National Highway Traffic Safety Administration, DOT.
ACTION: Final rule.
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SUMMARY: The National Highway Traffic Safety Administration (NHTSA) is
amending several provisions of its regulations that pertain to its
enforcement of the provisions of Chapter 301 of Title 49 of the United
States Code (49 U.S.C. 30101-169, formerly the National Traffic and
Motor Vehicle Safety Act), with respect to manufacturers' obligations
to provide notification and remedy without charge to owners of motor
vehicles or items of motor vehicle equipment that have been determined
not to comply with a Federal motor vehicle safety standard or to
contain a defect related to motor vehicle safety.
Some of the rules published today implement provisions added by the
Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA),
regarding requirements for notification of certain vehicle lessees and
for a second notification to owners of recalled vehicles and items of
motor vehicle equipment in the event that NHTSA determines that the
original notification has not resulted in an adequate number of
vehicles or items of equipment being returned for remedy.
This rule also amends the regulation governing NHTSA's
consideration of petitions for rulemaking or for an investigation of an
alleged safety-related defect or a noncompliance with a Federal motor
vehicle safety standard (49 CFR part 552) and NHTSA's procedures
following an initial determination that a safety-related defect exists.
49 CFR part 554. The rule also makes several changes in the regulations
governing the form and content of defect and noncompliance reports
submitted to NHTSA by manufacturers (49 CFR part 573); and to the
agency's record retention requirements. 49 CFR part 576. Finally, this
rule amends various sections of 49 CFR part 577 regarding the
requirements for notification to owners, purchasers, dealers and
lessees of safety-related defects and noncompliances.
DATES: Effective date: The amendments made in this rule are effective
May 5, 1995.
Any petitions for reconsideration must be received by NHTSA no
later than May 5, 1995.
ADDRESSES: Any petitions for reconsideration should refer to the docket
and notice number of this notice and be submitted to: Docket Section,
Room 5109, National Highway Traffic Safety Administration, 400 Seventh
Street, SW., Washington, DC 20590. (Docket Room hours are 9:30 a.m.-4
p.m., Monday through Friday.)
FOR FURTHER INFORMATION CONTACT: Jonathan D. White, Office of Defects
Investigation, National Highway Traffic Safety Administration, 400
Seventh Street, SW, room 5319, Washington, DC 20590; (202) 366-5227.
SUPPLEMENTARY INFORMATION: These amendments are being adopted by NHTSA
after considering comments received from numerous sources in response
to a Notice of Proposed Rulemaking (NPRM) published on September 27,
1993. 58 FR 50314. NHTSA received comments on some or all of the
proposed amendments from the following: ABAS Marketing, Inc. (Strait
Stop); American Honda Motor Company (Honda); American Automobile
Manufacturers Association (AAMA); Association of International
Automobile Manufacturers (AIAM); Advocates for Highway and Auto Safety
(Advocates); AM General Corporation (AM General); Blue Bird Body
Company (Blue Bird); CIMS; Center for Auto Safety (CAS); Fleetwood
Enterprises, Inc. (Fleetwood); The Kelly-Springfield Tire Company
(Kelly-Springfield); Motor and Equipment Manufacturers' Association
(MEMA); Mack Trucks, Inc. (Mack); Midland-Grau Heavy Duty Systems, Inc.
(a subsidiary of Echlin, Inc.) (Midland); Navistar International
Transportation Corporation (Navistar); National Automobile Dealers
Association (NADA); R.L. Polk & Company (Polk); Sierra Products, Inc.
(Sierra); Truck Manufacturers; Toyota Motor Corporate Services of North
America (Toyota); and Volkswagen of America, Inc (Volkswagen). The
reasons for the proposals were fully discussed in the NPRM.
Not all of the amendments proposed in the NPRM are being adopted as
final rules today. With respect to the proposed amendment of 49 CFR
part 577 regarding the duty of manufacturers to notify dealers of
defects and noncompliances that are determined to exist, discussed in
the NPRM (see 58 FR at 50320), NHTSA has decided that it needs
additional time to consider the appropriate action to take in light of
the issues raised by some of the commenters. Since these issues do not
affect the remaining proposed amendments, the agency has decided to
issue a final rule with respect to those amendments while it resolves
the issues relating to dealer notification.
The regulatory provisions amended by this final rule implement the
National Traffic and Motor Vehicle Safety Act of 1966, as amended
(``Act''), which was originally set out at 15 U.S.C. 1381 et seq.
Recently, as part of a comprehensive codification of transportation
laws, the Act was reenacted as Chapter 301 of Title 49 of the United
States Code. Pub.L. 103-272 (July 5, 1994). Congress specified in
section 6(a) of the statute that the codification is not to be
construed as making any substantive changes, but changed the wording of
almost every section. Some of these changes affect the wording of
sections of NHTSA's regulations that are being amended in this final
rule. The agency believes it is desirable that the language of its
regulations be consistent with that used in the statute. Therefore,
this rule also makes technical amendments to the regulations covered by
this notice to make their wording conform to the language used in the
recodification. Any such amendments will be noted in the appropriate
section of the preamble. The agency emphasizes that, because
[[Page 17255]] Congress did not intend the changes in terminology to be
substantive, these amendments are technical only and do not alter the
meaning of the regulations.
Amendments to Part 552--Petitions for Rulemaking and for Defect and
Noncompliance Investigations
Part 552 implements the citizen petition provisions of 49 U.S.C.
30162 (formerly section 124 of the Act). This rule adopts the proposed
amendments to 49 CFR 552.6 and 552.8 in order to remove any possible
ambiguity with regard to the factors that NHTSA may consider when
deciding whether to grant or deny a citizen petition. The new language
of Sec. 552.8 makes it clear that the regulation does not limit NHTSA's
discretion to consider factors such as resource allocation, agency
priorities, and likelihood of success in litigation which might arise
from the order, when deciding whether to grant or deny petitions filed
pursuant to the Act. The amendment also deletes the reference in
Sec. 552.6 to a determination by the Associate Administrator that there
is a ``reasonable possibility'' that the requested order will be
issued.
While the amended regulation lists some specific factors that the
agency may consider in deciding whether to grant or deny the petition,
the listing is not intended to be exhaustive. It does not preclude the
agency from considering factors not listed. The rule does not require
the agency to consider all factors listed, nor does it set an order of
priority in which the factors must be considered.
Two commenters, CAS and Advocates, expressed the view that the
proposed amendment is too broad or vague, that it should specify safety
as the first factor that NHTSA should consider, and that it should list
certain other specific factors that the agency must consider. While
safety is certainly one factor that the agency will consider, these
commenters fail to recognize that the regulation is intended to be
consistent with the broad discretion given to NHTSA by the Act to grant
or deny petitions. The United States Court of Appeals for the District
of Columbia Circuit recognized the breadth of the discretion conferred
by the Act in Center for Auto Safety v. Dole, 846 F.2d 1532 (D.C. Cir.
1988), on rehearing, vacating 828 F.2d 799 (1987). In that case, the
court specifically rejected an argument by CAS that NHTSA could not
consider factors other than safety in deciding whether to grant or deny
a petition for a safety-related defect or noncompliance proceeding.
Amendments to Part 554--Safety Defect and Standards Noncompliance
Decisions
NHTSA is also amending 49 CFR 554.10 and 554.11, which implement
the provisions of the Act governing initial and final decisions of
safety-related defect or noncompliance by the Secretary. 49 U.S.C.
30118(a) and (b) (formerly section 152 of the Act). Section 554.10 is
amended by deleting subsection (e) in its entirety; and Sec. 554.11 is
amended by deleting subsection (c), which provides that if the
Administrator decides that a failure to comply or a safety-related
defect ``does not exist,'' he or she will notify the manufacturer and
publish ``this finding'' in the Federal Register.
As stated in the NPRM, the Act does not require a decision by NHTSA
that a failure to comply or a safety-related defect does not exist.
And, as a practical matter, the Administrator rarely if ever makes an
affirmative decision that there is no failure to comply or no safety-
related defect. Rather, if the Administrator believes that the
information at his or her disposal does not warrant a final decision of
defect or noncompliance, the investigation is closed, subject to its
possible reopening if additional evidence is obtained.
To minimize the possibility that the public might be subject to
confusing assertions by manufacturers that there has been a decision
that a safety-related defect or noncompliance does not exist, the
agency has decided to adopt the amendments proposed in the NPRM. The
amended section will provide that if the Administrator elects,
following an initial decision under 49 U.S.C. 30118(a), to close an
investigation without making a final decision that a failure to comply
or a safety-related defect exists, he or she will notify the
manufacturer and will publish a notice of that closing in the Federal
Register.
Honda commented that the regulation should give the agency the
option of finding that a defect or noncompliance does not exist when it
closes an investigation. Its rationale is that in the absence of such a
decision, the public would be left in doubt about whether a vehicle did
or did not have the defect or noncompliance. The agency has no reason
to believe that the absence of such decisions in the past has been a
source of confusion for the public. It sees no significant safety
benefit to be gained from making such decisions; and continuing an
investigation until proof of such a negative could be obtained would
divert scarce resources from other areas.
NHTSA also will delete Sec. 554.10(e), which provides that if the
Administrator determines that a failure to comply or a safety-related
defect ``does not exist,'' he or she may, at his/her discretion, within
60 days invite interested persons to submit views on the investigation
at a public meeting as superfluous. The agency has never held a public
meeting following the closing of an investigation. However, if it
should so choose, it may do so even in the absence of such a
regulation. No commenter objected to this change.
Amendments to Part 573--Defect and Noncompliance Reports
NHTSA is amending several sections of 49 CFR part 573 regarding
leased vehicles; the timing and duration of remedy campaigns;
submission of draft owner notification letters to the agency; advance
submission of schedules for notification and availability of remedy
under certain circumstances; quarterly reports on the progress of
recall campaigns; identification by vehicle manufacturers of suppliers
of defective or noncompliant equipment; identification by equipment
manufacturers of vehicle manufacturers that have been supplied with
defective or noncompliant equipment; and requirements for submission of
information regarding the scope of a recall campaign in certain
instances.
Definitions
NHTSA is amending Sec. 573.4, ``Definitions,'' to include
definitions of the terms ``leased motor vehicle,'' ``lessor,'' and
``lessee,'' because those terms are not currently defined in part 573.
(These definitions will also be added to part 577.) The definition of
``leased motor vehicle'' is identical to that which appears in 49
U.S.C. 30119(f)(1). The definitions of ``lessor'' and ``lessee'' in
this amendment are consistent with the definition of ``leased motor
vehicle.''
Under the definitions proposed in the NPRM, only lessors that
leased five or more vehicles for a term of at least four months in the
year preceding the date of the notification would be covered by these
regulatory provisions. One commenter, NADA, suggested that the
definition of ``lessor'' be changed to make clear that the lessor is
the owner, as reflected on the vehicle's title, of any five or more
leased vehicles, as of the date of notification by the manufacturer of
the recall.
NHTSA believes that NADA's comment provides a useful clarification
of the term ``lessor,'' by adding the lessor is the owner as shown on
the vehicle's title. It is also reasonable to [[Page 17256]] limit the
term ``lessor'' to those who have ownership at the time of the
notification by the manufacturer of the recall, so that the obligations
of lessors would not be imposed on those who no longer owned the
recalled vehicle at that time.
NHTSA is also adopting an amendment to Sec. 573.4 which defines the
term ``readable form,'' to mean a form that is either readable by the
unassisted eye or by machine. As proposed, the definition required
parties submitting information in machine readable form to obtain prior
written approval from NHTSA's Office of Defects Investigation,
confirming that equipment needed to read the information is readily
available to NHTSA. Toyota commented that for all similar information
responses, once a manufacturer has obtained approval for the original
response in that form, it should not have to obtain approval for future
submissions in the same form. NHTSA believes that one-time approval of
a machine-readable format should suffice to ensure that the agency
receives information in a form which makes it accessible to it.
Requiring approval each time information is submitted would be
duplicative and would unnecessarily reduce the efficiency of the recall
notification process. Accordingly, the rule adopted today incorporates
the changes suggested by Toyota.
NHTSA does not believe a system that permitted oral approval, as
suggested by AAMA, would be workable. In the event that a question
arose about the agency's approval of a particular format, it would be
desirable to have a written record showing the scope of the approval.
Scope of Recall
The agency is amending 49 CFR 573.5(c)(2) to require, as part of
the manufacturer's report to NHTSA of its defect or noncompliance
decision, an explicit statement of how the population that will be
covered by the recall was identified and of how the recall population
differs from any similar vehicles or items of equipment that are not
covered by the recall. If the information is not available to the
manufacturer at the time of filing its part 573 report, it must so
state in that report and furnish an estimated date when it expects it
to be available. When there is such a delay, the manufacturer must
furnish the information to NHTSA within five Federal government working
days of when it becomes available.
Manufacturers often decide that a safety-related defect or
noncompliance exists in only some portion of their production of a
given model or item of equipment; for example, in vehicles or items of
equipment manufactured between certain dates, or in certain locations,
or with certain engines or options. On several occasions within the
past few years, manufacturers have had to revise the scope of their
recalls after they or NHTSA uncovered information indicating that
additional vehicles or equipment items contained the defect or
noncompliance.
Although some manufacturers have included information in their part
573 reports that explains the basis on which they selected the specific
vehicles or equipment items that will be covered by a recall, NHTSA's
current regulations do not explicitly require manufacturers to do so.
NHTSA has found that when this information is not provided, it has been
difficult to ascertain whether the scope of the recall proposed by the
manufacturer is adequate. The amendment will ensure that the agency has
the information it needs to ensure that the recall scope proposed by
the manufacturer is correct.
AAMA and Blue Bird opposed the amendment on the ground that the
agency already has the authority to request this information in
individual cases as needed. AAMA also commented that requiring it in
all cases will be unduly burdensome, and that NHTSA does not need this
information for every recall. These were the only comments on this
proposal.
The fact that NHTSA has authority to ask for this information in
individual cases is not a reason for not requiring it across the board.
Requiring it by regulation will make NHTSA's oversight of the recall
process more efficient, because it will eliminate the need for the
agency to decide in each case whether to ask for the information.
Moreover, it will ensure that the information is available even in
those instances in which NHTSA might fail to request the information
because the need for it is not apparent at the time the manufacturer
submits its defect or noncompliance report.
NHTSA does not believe it is unduly burdensome to require this
information, which will ordinarily be readily available to the
manufacturer at the time it files its part 573 report. In making a
defect or noncompliance decision, the manufacturer is likely to have
identified the particular vehicles or items of equipment covered by the
recall, and it will, of necessity, have a basis for that
identification. The amendment does permit later filing when a
manufacturer does not have the information at the time the report is
submitted.
NHTSA also disagrees with AAMA's contention that the agency does
not ``need'' the information in every recall. Whenever the manufacturer
is recalling fewer than all similar vehicles or items of equipment, the
agency needs to know why the scope of the recall is limited in order to
ensure that the recall campaign adequately covers the population
affected by the defect or noncompliance. In the past, there have been
instances in which a manufacturer expanded the scope of a recall after
NHTSA obtained information showing that other vehicles or items of
equipment had the same defect or noncompliance. The delay in the
agency's learning about the additional defective or noncomplying
vehicles or equipment items exposed members of the public to a safety
risk that could have been avoided had the information explaining the
scope of the recall been available to NHTSA when the manufacturer first
notified NHTSA of its decision to recall.
Identification of Suppliers and Customers
NHTSA is amending Sec. 573.5(c)(2) to require the manufacturer of a
recalled vehicle or item of equipment to identify the supplier (if
different from the vehicle manufacturer) of any component or assembly
that contains the defect or noncompliance, and to require an equipment
manufacturer that decides that a defect or non-compliance exists in its
product to identify all manufacturers that purchased the defective or
non-complying components for use in new motor vehicles or new items of
equipment.
Both of these requirements will assist the agency in assuring at an
early point in the recall process that a recall encompasses all
vehicles and items of equipment that contain defective or noncomplying
components rather than being inappropriately limited to a single
manufacturer's production. Identification of the supplier will, at the
outset of the campaign, permit the agency to contact the supplier
promptly to ascertain whether the same component was distributed to
other manufacturers or as replacement equipment. Likewise, early
identification of the supplier's other customers (if any) will permit
the agency to contact the affected manufacturers sooner to apprise them
of their responsibilities under the Act once a defect or noncompliance
in an item of equipment has been identified.
AAMA, AM General and Blue Bird expressed views about this proposal.
AAMA and Blue Bird contended that such a requirement would be unduly
burdensome for manufacturers. The agency disagrees. In many instances,
manufacturers already provide this information to NHTSA when they are
[[Page 17257]] conducting a recall. Moreover, in most if not all
recalls, the manufacturer will know the particular component or
components that caused the defect or noncompliance in the completed
product, and will certainly be aware of the identity of the entity that
supplied the component. If the manufacturer believes that the defect or
noncompliance is not caused by a component or assembly from an outside
supplier, it need not provide any information in response to this
provision. Moreover, any burden is far outweighed by the safety benefit
of allowing the agency to identify other vehicles or items of equipment
with the same defective or noncompliant component.
Both Blue Bird and AAMA also noted that the agency already has the
authority to request this information in individual recalls. While this
statement is correct, it is not a reason for not adopting this
provision. The information required by the amendment is obviously more
accessible to the manufacturer than to the agency; the agency may not
be able to identify all cases in which it is appropriate to request
such information. Moreover, the amendment ensures that this type of
information will be available to NHTSA at the beginning of the recall
process. This will have the safety benefit of permitting earlier
identification of other vehicles or items of equipment with the same
defect or noncompliance, which will minimize the length of time that
the public is exposed to a safety risk because it avoids unnecessary
delay in making the remedy available to all affected owners.
Section 30102(b)(1) of Title 49 does not, as AAMA argues, prohibit
the agency from requiring manufacturers to provide this information for
components that are not replacement equipment as defined by that
section. That section merely states that the vehicle manufacturer, and
not the component manufacturer, is responsible for remedying a defect
or noncompliance in a component installed in a vehicle as original
equipment. It does not preclude NHTSA from obtaining information about
the identity of the manufacturer or supplier of components used as
original equipment. The agency does not intend to use the information
to hold the component manufacturer responsible for remedying the defect
or noncompliance. Its purpose is to learn from the latter whether any
other vehicle manufacturer used the same component in its vehicles, so
that the agency can then contact the manufacturer of those vehicles to
ascertain whether additional recalls should be conducted.
AM General expressed a concern that this provision could have an
adverse effect on suppliers whose components are identified by
manufacturers as defective, in instances where further examination
reveals that they are not in fact the cause of the defect or
noncompliance. The number of instances in which such incorrect
identification occurs is likely to be quite small because, in most
instances, the cause of the problem has already been identified by the
time the manufacturer makes its decision that there is a safety-related
defect or noncompliance. If a manufacturer is still uncertain as to
whether a defect or noncompliance is attributable to a component or
assembly from an outside supplier when it files its defect or
noncompliance report with NHTSA, the manufacturer's report should make
that uncertainty clear. Any adverse publicity that does erroneously
affect a supplier can be countered by publicizing the correct
information when it becomes available. Finally, the safety benefit of
having this information available to NHTSA, as described above, will
far outweigh the risk that, in a few instances, a supplier might be
incorrectly identified as the origin of a defective or noncomplying
product.
Schedule for Notification Campaigns
Although many recalls are implemented within a reasonable time of
the decision that a safety-related defect or noncompliance exists,
NHTSA has noted an increase in the number of recalls in which there has
been a significant delay between the manufacturer's decision that a
defect or noncompliance exists and the commencement of the
manufacturer's recall campaign. There have also been a limited number
of instances in which the duration of the campaign was inordinately
extended. The manufacturers in question have generally sought to
justify these delays and extensions on the basis that needed parts and/
or facilities were not available and it would therefore be pointless to
notify owners of the defect or noncompliance.
While such unavailability may in certain cases justify some delay,
it is important that the agency be aware of the manufacturer's
anticipated schedule at the earliest possible time in order to assure
that notification campaigns under the Act are commenced in a timely
fashion and completed within an appropriate time period. In addition,
in some instances, even if implementation of the remedy must be
deferred (e.g., because needed parts are not available), it is
appropriate for the manufacturer to send an interim notification to
advise consumers of actions they should take prior to repairs being
made. Finally, the agency needs to be able to respond to questions
about the timing of the recall from the public and/or the media.
Therefore, NHTSA proposed to amend 49 CFR 573.5(c)(8) to require
manufacturers to provide information about their schedule for owner
notification, along with a description of any factors that they
anticipated could interfere with the schedule. Under the proposal,
schedules would have been required for all recalls. In addition, the
NPRM proposed that if a manufacturer planned to begin the campaign more
than 30 days after its defect or noncompliance decision, or planned to
spread the notification campaign over more than 45 days, the
manufacturer would have to identify the basis for such a delay. In
addition, the NPRM proposed that if a manufacturer were unable to
follow the schedule it had originally submitted, it would have to
inform NHTSA promptly and submit a revised schedule.
AAMA opposed the proposal on several grounds: that it would make
NHTSA a participant in, rather than an observer of, the recall process;
that it would use manufacturer resources that would otherwise be
devoted to implementing the recall campaign; that it is unneeded
because most recall campaigns are implemented within a reasonable time;
and that the requirement for a schedule would not speed up the remedy
of vehicles because manufacturers would still need time to design and
test parts, design and test the remedy, and train personnel.
NHTSA, as the agency charged by Congress with enforcement of the
notification and remedy provisions of the Act, is of necessity a
``participant'' in the recall process. An integral part of this
responsibility is to ensure that manufacturers carry out their recall
obligations in a reasonable manner, which includes avoiding undue delay
in sending owners notification of the defect or noncompliance.
The agency does not believe that the requirement will divert
resources that would otherwise be used in the campaign; or that it will
cause a delay in the implementation of recall campaigns, as Blue Bird
commented. A manufacturer that determines that a recall is necessary
will necessarily have to develop a schedule for implementing the
recall. The proposal and the rule as adopted simply require that, for
those relatively rare recalls for which a delay is anticipated, the
schedule, along with [[Page 17258]] an explanation thereof, be provided
to NHTSA.
AIAM opposed the proposal because it did not believe that
manufacturers should be required to explain normal design, production,
and distribution delays. It argued that only unique delays in a
particular recall campaign, or delays of more than 75 or 90 days in
sending out notification, should have to be explained. Moreover, it
noted that foreign-based manufacturers need more than 30 days to
initiate notification and begin the remedy because of the need to be in
contact with their headquarters, and that it often takes more than 30
days to get an updated owner list from R. L. Polk.
The purpose of this provision is to ensure that the recall campaign
is initiated within a reasonable time after the defect or noncompliance
determination. NHTSA is not concerned with whether the delay is due to
ordinary or unique circumstances. Its interest is in whether it is
reasonable. The information the amendment requires is intended to
enable NHTSA to evaluate the reasonableness of the delay, and to
provide for interim notification where appropriate.
NHTSA believes that most notification campaigns can be commenced
within 30 days of a manufacturer's defect or noncompliance decision and
completed within 45 after they are commenced. However, to eliminate any
ambiguity in calculating time periods, and to provide manufacturers
with slightly more time, NHTSA has revised the final rule so that the
periods in question are calculated from the date of the notice to the
agency of the defect or noncompliance decision.
Based on past experience, and given the availability of telefax and
other rapid electronic means of communication, that time period should
be sufficient to allow manufacturers to obtain the information they
need, either from Polk or from parent companies or suppliers located
overseas. Moreover, if more time is required, the manufacturer need
only advise the agency and explain the basis for the delay. NHTSA will
not disapprove reasonable schedules for recall campaigns.
Advocates supported the requirement for a schedule, but also
suggested that manufacturers be required to notify all owners within 30
days of notifying NHTSA of the defect or noncompliance. Advocates
explained that any delays in the availability of the remedy could be
explained to owners in the notification letter. NHTSA believes that a
30-day requirement for notification under all circumstances is
unnecessarily rigid. It prefers to have the flexibility to decide on a
case-by-case basis whether a proposed schedule is unreasonable.
AM General opposed the proposal because it believed that the
manufacturer would be bound by the schedule, which would limit its
flexibility in conducting the recall campaign. It also expressed
concern that NHTSA needed to define more clearly the circumstances
under which it would take action against a manufacturer under this
section and what the action would be. Finally, it commented that NHTSA
normally is able to learn of problems with recall campaigns through its
regular interaction with manufacturers, and that the agency already has
sufficient means at its disposal to compel a manufacturer to act more
quickly.
Contrary to AM General's contention, the amendment does not
unreasonably limit manufacturer flexibility. The amendment clearly
states that if unexpected circumstances arise, that would result in
unanticipated delay, the manufacturer may submit a revised schedule. If
there are valid reasons for the delay, there would be no agency action
against the manufacturer.
Honda commented that a definition of the term ``campaign'' is
needed, to clarify whether it means notification to owners or the
availability of the remedy. The agency has revised the regulatory
language to clarify that the time periods triggering the need to submit
a schedule refer to owner notification. However, NHTSA has also added
language to clarify that if the remedy will not be available at the
time owners are notified of the defect or noncompliance, the
manufacturer's report must state when the remedy will be provided. This
requirement makes explicit what was already implicit in existing
Sec. 573.5(c)(8) (redesignated by this amendment as
Sec. 573.5(c)(8)(i)), which requires each manufacturer to include in
its report ``a description of its program for remedying the defect or
noncompliance.'' (Emphasis added.)
Based on its consideration of the comments received on the NPRM,
and on its experience in monitoring manufacturer compliance with the
notification and remedy requirements of the Act, NHTSA now believes
that it is not appropriate to require manufacturers to submit the
detailed scheduling information such as that proposed in the NPRM for
every recall campaign. Instead, the agency believes it is appropriate
to focus on recalls in which the manufacturer intends to delay
commencement or completion of the notification campaign to assure that
such delays are not unreasonable.
For recalls in which the manufacturer intends to commence owner
notification within 30 days, and to complete the notification campaign
within 75 days of notifying NHTSA, it is unlikely that the agency would
find that the schedule was unreasonable or would create a significant
safety problem. Accordingly, the detailed scheduling information
proposed in the NPRM will not be required for those recalls. (Of
course, NHTSA has the authority to require manufacturers to provide
scheduling and related information on a case-by-case basis, even apart
from these general regulatory requirements.)
In those cases where the manufacturer intends to exceed the time
periods set out in the amended final rule, there is a greater
likelihood that the remedy will not be available within a reasonable
time, as required by 49 U.S.C. 30120(c). Therefore, the amendment
adopted today retains the requirement proposed in the NPRM for filing a
schedule for the campaign and a detailed description of the factors on
which the proposed schedule is based in such instances. Such factors
will often include the time frame for development and testing of the
specific remedy for the defect or noncompliance, the time frame for
production of any necessary parts, and the anticipated date(s) for
distribution of those parts to dealers and/or owners.
The final rule also retains the requirement that if a manufacturer
becomes aware that circumstances will delay implementation of the
recall, it must promptly inform NHTSA of the reasons for the delay and
submit a new schedule. Such submission must also contain the basis for
the new schedule, which shall also be subject to disapproval by the
Administrator.
The preamble to the NPRM noted that a manufacturer that intended to
seek an exemption from the recall requirements of the Act pursuant to
49 U.S.C. 30118(d) and 30120(h) and 49 CFR part 556 on the basis that
the defect or noncompliance was ``inconsequential as it relates to
motor vehicle safety'' would have to advise the agency of its intention
to do so in its initial report under part 573. In its comments, AIAM
suggested that the schedule requirement be waived when a manufacturer
intends to file an inconsequentiality petition.
The agency agrees that it would not be appropriate to require a
manufacturer that intends to petition for inconsequentiality to file a
schedule at the time it notifies the agency of a defect or
noncompliance, since no recall will take place if the petition is
granted. However, this does not mean that the schedule requirement
should be completely waived in such [[Page 17259]] circumstances, since
if the petition is denied, the manufacturer will have to conduct a
recall within a reasonable time thereafter. Therefore, NHTSA has added
a new Sec. 573.5(c)(8)(v) to clarify that the time periods for filing a
schedule for owner notification shall run from the date of the agency's
denial of the petition, whether or not the manufacturer appeals that
denial pursuant to 49 CFR 556.7.
The final rule also adds a new Sec. 573.5(c)(8)(vi) to require that
in the event a manufacturer that had informed NHTSA in its part 573
report that it intended to file a petition for an inconsequentiality
exemption does not do so within the 30-day period established by 49 CFR
556.4(c), the time frame for filing a schedule specified in
Sec. 573.5(c)(8)(ii) would begin to run from the end of that 30-day
period. If NHTSA finds that manufacturers are abusing this provision in
order to avoid filing the required schedules, it will take appropriate
action.
Submission of Proposed Owner Letters to the Agency
NHTSA is also amending 49 CFR 573.5(c) to add a requirement that
manufacturers submit to the agency for review, copies of their proposed
owner notification letters before, rather than after, the letter is
sent to owners. (In the NPRM, this proposed amendment was added to
paragraph (9) of Sec. 573.5(c). However, for the sake of clarity the
agency has decided that this requirement should be in a separate
paragraph. Accordingly, in the final rule, the requirement for
submission of proposed owner letters will be paragraph (10) of
Sec. 573.5(c). The paragraph on recall campaign numbers, designated as
(10) in the NPRM will now be paragraph (11).) The final rule provides
that the manufacturer must submit a proposed owner notification letter
to the Office of Defects Investigation (ODI) at least five Federal
government business days prior to the date it intends to begin mailing.
As noted in the NPRM, the purpose of this requirement is to allow NHTSA
to review a manufacturer's draft to ascertain whether it complies with
all statutory and regulatory requirements before mailing, since sending
a corrected letter after the first mailing causes unnecessary expense
and could confuse owners.
AAMA asserted that NHTSA lacks the statutory authority to
``dictate, edit or approve in advance'' a manufacturer's notification
to owners. The amendment does not purport to grant to the agency any
authority to ``dictate'' the precise wording of owner notification
letters. While NHTSA has the authority pursuant to 49 U.S.C. 30118(e)
(formerly section 156 of the Act) to order manufacturers to take
specified steps if it decides that they have not adequately carried out
their notification responsibilities, this amendment is part of a more
informal process. NHTSA's experience has been that when it identifies
deficiencies in a proposed owner notification letter, most
manufacturers are willing to make appropriate changes. In any event,
the fact that the agency may not be able to compel a manufacturer
legally to modify an owner notification letter at that stage does not
mean that the agency cannot or should not take steps to try to convince
manufacturers to make appropriate changes in an effort to maximize the
response to recall campaigns.
AAMA's fear that the regulation will lead to NHTSA's
``micromanaging'' the form and content of letters simply is not
warranted. The agency has neither the time nor the interest to get
involved in the minute details of rewriting owner notification letters
that meet statutory and regulatory requirements. The extent of its
involvement will be to ensure to the maximum possible extent that those
letters meet all such requirements.
Several commenters expressed concern that requiring such advance
review could unduly delay the recall notification process. Some also
suggested that the agency add a provision permitting a manufacturer to
send the letter if it has not heard from NHTSA within a specified time.
As noted above, this amendment does not provide NHTSA with the
authority to force a manufacturer to delay its owner notification
campaign until the agency approves the wording of the manufacturer's
proposed owner letter. Thus, the amendment is unlikely to add any delay
at all, since manufacturers almost always prepare drafts of owner
notification letters well before the actual mailing begins. In any
event, the amendment specifically authorizes the agency to waive this
requirement where warranted by safety considerations or other
appropriate factors.
Nevertheless, in order to ensure that the agency has adequate time
to review the draft letter and contact the manufacturer to resolve any
problems, the amendment requires the manufacturer to submit the
proposed letter by a means which allows verification that the letter
was received by ODI and indicates the date of receipt. The agency
encourages manufacturers to send their draft notification letters to
ODI by fax, at 202-366-7882 (primary) or 202-366-1767 (alternate).
Other means that provide verification of receipt are overnight delivery
(either by Express Mail or private delivery service) addressed to:
Office of Defects Investigation, National Highway Traffic Safety
Administration, 400 Seventh Street, SW., Room 5319, Washington, DC
20590; and hand delivery to ODI at that address. Neither first-class
mail nor certified mail would be acceptable because of lengthier
delivery times and/or the absence of proof of receipt.
Two commenters, AAMA and Truck Manufacturers, support the present
system, which requires manufacturers to submit copies of owner
notification letters to NHTSA only after mailing to owners. AM General
suggested amending the proposal to require sending copies of owner
notification letters to NHTSA on the same day they are mailed to
owners. AAMA states that there is no need for the amendment because
most letters already meet the requirements of part 577 and because many
manufacturers currently send draft copies of owner notification letters
to NHTSA in advance of mailing.
The fact that many manufacturers already seek out NHTSA's advance
approval is not an argument against the amendment. To the contrary, it
shows that it is practicable and desirable. Similarly, the fact that
most owner letters comply with regulatory requirements does not provide
a basis for not trying to assure that even more letters fully comply.
As pointed out in the NPRM, NHTSA has had several experiences in
which an owner notification letter has failed to comply with all of the
requirements of part 577. In such instances, it would rarely be
productive (and might be confusing and counterproductive) to require
the manufacturer to send a second, corrected letter. The amendment will
also increase the agency's ability to respond to questions about the
recall from the public and/or the media by ensuring that the agency is
informed about the specifics of the notification letter before the
manufacturer actually initiates the recall.
Finally, the agency views as neither necessary nor desirable
Toyota's suggestion that NHTSA incorporate in its regulations a
provision allowing it to waive requirements for owner notification
letters in certain instances, such as negotiated settlements. NHTSA's
broad discretion to enter into negotiated settlements of enforcement
matters has already been recognized by the courts. See Center for Auto
Safety v. Lewis, 685 F.2d 1381 (D.C. Cir. 1982). In any event, the
amendment as proposed and adopted specifically allows the agency to
waive this requirement. [[Page 17260]]
Quarterly Reports
NHTSA is amending 49 CFR 573.6(a) to establish specific due dates
for quarterly reports on the progress of ongoing recall campaigns. The
NPRM proposed to amend this section by establishing due dates for
quarterly reports on the twentieth calendar day after the close of each
calendar quarter.
Most commenters favored the idea of amending this provision. The
two that did not--Midland and Truck Manufacturers--favored maintaining
the present system largely because the proposed schedule would not give
enough time for some manufacturers (especially small companies that are
not computerized) to submit their reports. AAMA favored amending the
due dates, but also expressed the view that the dates in the proposal
would not allow some companies enough time. Kelly-Springfield expressed
the same view. The agency has decided to adopt the schedule suggested
by AAMA, which sets definite calendar dates on which the reports would
be due, but allows more time than the language proposed in the NPRM.
Under the final rule, manufacturers must file their quarterly reports
of recall campaign status no later than April 30 for the quarter ending
March 31, July 30 for the quarter ending June 30, October 30 for the
quarter ending September 30; and January 30 for the quarter ending
December 31, unless the specified filing date falls on a weekend or
Federal holiday. In such cases, the quarterly report would be due on
the next day on which the Federal government is open for business.
NHTSA believes that this schedule allows a reasonable amount of
time for all manufacturers, even those that are small and lack computer
facilities. Since the date is always the same, i.e., the 30th of the
given month, the agency believes it will be easier to keep track of
than Kelly-Springfield's suggestion, which was the last business day of
the month.
The NPRM also proposed to amend Sec. 573.6(b) by adding a new
paragraph (6) that would require both vehicle and equipment
manufacturers to indicate separately in their quarterly reports the
number of vehicles and items of equipment that are repaired and/or
returned by dealers prior to their first sale to the public. AAMA, AM
General, Blue Bird, and Truck Manufacturers opposed the proposal
because of the added cost and time that would be needed to prepare the
quarterly report. AAMA added that it saw no justification for such a
requirement. No other commenter opposed the proposal, with Midland
favoring it and Volkswagen taking a neutral position but giving
information on the time and cost entailed in making the changes that
would be needed to its computer system to track inventory return
information separately.
After reviewing these comments, the agency has decided to make the
requirement applicable only to equipment manufacturers, rather than to
both vehicle and equipment manufacturers as proposed in the NPRM. Under
49 U.S.C. 30116, defective and noncompliant motor vehicles in dealer
inventory must be, and usually are, repaired by the dealer prior to
sale to the public; whereas that section requires the manufacturer of
equipment to repurchase the defective or noncomplying items that are in
inventory at the time of the defect or noncompliance decision. In
addition, the agency believes that there is a greater need for the
agency to keep track of whether defective or noncomplying equipment is
being returned by dealers and retailers to manufacturers because of the
greater number of items that are involved in equipment recalls, the
higher percentage of items that are kept in the inventories of dealers
and retailers at any given time, and the greater likelihood that
dealer/retailer inventory will contain items subject to recall. In
addition, the agency is clarifying that manufacturers should include in
this category items returned prior to first sale to the public from all
retailers, not just ``dealers,'' as well as from distributors of the
items in question.
Recordkeeping for Leased Vehicles
NHTSA is amending 49 CFR 573.7 to require manufacturers to maintain
information concerning notification of owners of leased vehicles if the
manufacturer knows that a vehicle is leased, and to require lessors of
leased vehicles to maintain certain information concerning
notifications they send to the lessees of those vehicles. The final
rule adds a provision that was not in the NPRM: that the records with
respect to notification of lessees must be maintained for one calendar
year following the expiration of the lease. The agency added this
provision because it was necessary to make clear to lessors and
manufacturers how long these records must be maintained. The other
record retention requirements in part 573 specify a length of time for
which the records must be kept.
In the NPRM, NHTSA proposed to amend Sec. 573.7(a) to require the
manufacturer to identify those vehicles on its list of owners/
purchasers receiving notification which it knows to be leased. The
proposal would not have required a separate list of those vehicles that
were leased, but would have required that leased vehicles be clearly
identified as such. The agency also proposed to add a new
Sec. 573.7(d), which would have required each lessor notifying its
lessees of a defect or noncompliance to maintain a list of the names
and address of the lessees, to include the name and address of the
lessee, the VIN, and the date the lessor sent the notification to the
lessee. Based on the comments received on that proposal, which are
summarized below, the agency has decided to adopt a final rule which
differs in some respects from the original proposal.
AAMA, NADA, Polk, Truck Manufacturers and Toyota opposed the
proposal in the NPRM. AIAM supported the proposal with modifications.
AAMA, Truck Manufacturers and Toyota based their opposition on the
difficulty that manufacturers would have identifying which vehicles in
a recall are leased, and the cost and burden of developing a system
that would enable a manufacturer to keep track of this information.
Polk's opposition was based on the difficulty of ascertaining from
state vehicle registration records whether or not a vehicle is leased.
The agency notes that the proposal in the NPRM would have required
manufacturers to maintain records of notifications sent to ``known
lessors.'' This would not have required manufacturers to identify in
its records leased vehicles other than those it already knew to be
leased. However, because of the apparent misunderstanding of the extent
of the manufacturer's obligation under the first proposal, NHTSA is
implementing a revised and simplified version of this requirement,
which is intended to make clear that the lists maintained by
manufacturers under this section do not need to identify those vehicles
that are leased except to the extent that the manufacturer already has
that information at the time it sends the notification letter.
AAMA also noted that to assure that lessees receive notification of
a recall, it would be necessary to include language in the notification
letter directing lessors to notify lessees in all notification letters.
Although the first NPRM did not propose such a requirement, the agency
has decided, after considering comments on the proposed amendments to
part 577 regarding notification of lessees, that the simplest and most
effective way to ensure that lessees will be notified is to require
manufacturers to include in all [[Page 17261]] notification letters
sent to vehicle owners a statement that if the vehicle is leased, the
lessor must send the notification letter (or a copy thereof) to the
lessee. That amendment is discussed more fully elsewhere in this
notice.
NADA opposed the proposal to require each lessor to maintain a list
of the names and addresses of the lessees it has notified. NADA stated
that if lessors are required to forward all recall notification letters
to lessees, there is no need to require lessors to keep records of
those lessees to which it sent the letters. It also commented that it
would be unduly burdensome for small leasing companies to keep the
``detailed'' records that would be required by the proposal.
NHTSA notes that the obligation of lessors to keep records of all
lessees who have been notified of a recall is analogous to the
obligation of a manufacturer to keep records of those whom it has
notified. It is, however, less complex because, unlike the manufacturer
list, it does not need to be updated each quarter for status of the
remedy, and requires only a one-time entry for the date on which the
notification was sent to the lessee.
As stated in the NPRM, NHTSA has found the information maintained
by manufacturers pursuant to Sec. 573.7 to be useful in the agency's
efforts to evaluate whether manufacturers' notification and remedy
campaigns are adequate. Because Congress amended the Safety Act to
require lessors to send recall notifications to lessees (see 49 U.S.C.
30119(f)), NHTSA needs the same type of information from lessors in
order to evaluate whether lessors are adequately carrying out their
obligations. While the agency recognizes that this recordkeeping may
impose a burden on some lessors, that burden is outweighed by the
safety benefit of having such information available.
Copies of Manufacturer Communications
NHTSA is also amending Sec. 573.8 to clarify that the requirement
that manufacturers furnish NHTSA with copies of ``all notices,
bulletins and other communications * * * sent to more than one
manufacturer, distributor, dealer, or purchaser, regarding any defect
in his vehicles or items of equipment * * * whether or not such defect
is safety-related,'' applies to communications made by electronic
means. It is making the same amendment to Sec. 573.5(c)(9), which
requires manufacturers to send to NHTSA ``a representative copy of all
notices, bulletins, and other communications that relate directly to
the defect or noncompliance and are sent to more than one manufacturer,
distributor, dealer or purchaser,'' within five days of sending them to
the manufacturers, distributors, dealers or purchasers.
Only one commenter, AIAM, opposed this proposal. It stated that
NHTSA lacks the authority under the Act to require this ``additional''
information from manufacturers. AIAM's objection is misplaced. The
amendment does not increase the scope of the agency's existing
authority to require manufacturers to submit certain types of
information. It merely makes explicit a requirement that was already
inherent in the regulations as previously written.
Recall Identification Numbers
In order to minimize confusion during NHTSA's monitoring of recall
campaigns and to improve the agency's response to owners and
prospective purchasers, NHTSA is adding a new provision to part 573
(Sec. 573.5(c)(11)), which requires manufacturers to provide the
manufacturer's identification number for each recall if it is not
identical to the campaign number assigned by the agency. In the NPRM,
this amendment was designated Sec. 573.5(c)(10). However, the agency
has decided to redesignate it as Sec. 573.5(c)(11) in the final rule
because it has revised the numbering of the preceding paragraph. The
amendment is otherwise identical to that proposed in the NPRM. No
commenter raised any issues relating to this amendment.
Amendments to Part 576--Record Retention
NHTSA is amending 49 CFR 576.5 to provide that records concerning
malfunctions that may be related to motor vehicle safety and that refer
to a specific vehicle must be retained for eight years from the close
of the model year during which the vehicle was manufactured (i.e., the
date on which the last vehicle was produced for the model year). This
amendment differs from that proposed in the NPRM. In the amendment as
proposed, the eight-year time period began to run with the date the
vehicle was sold, and retention would also have been required for
records for five years after they were acquired or generated, if that
was later than eight years after the date of sale.
NHTSA decided to change the language from that proposed in the NPRM
after considering the comments of several manufacturers, whose
objections to the proposal focused principally on the requirement that
the eight years be counted from the date of sale. These manufacturers
asserted that a requirement that records be kept according to sale date
would be unworkable and unreasonably costly and burdensome. See
comments of AAMA, AIAM, Chrysler, Navistar and Toyota. These
commenters, as well as Blue Bird and Fleetwood, suggested that basing
the record retention requirement on the model year of production would
be more workable.
After careful consideration, NHTSA believes that the commenters
have raised legitimate concerns. The suggested alternative would be
more workable and less costly, and would not reduce the availability of
relevant records.
The agency has also decided to eliminate the language in the NPRM
that would have required manufacturers to maintain records for five
years from the date they were acquired or generated, if that would be
later than eight years from the date of sale. The number of records
that would be retained beyond those that are generated within the first
eight years after the model year of production is likely to be small.
Moreover, the potential benefits would be slight, since most
investigations of defects and noncompliances begin far earlier than
eight years after production. However, notwithstanding this amendment,
the agency retains the authority to require a manufacturer to retain
records for vehicles more than eight years old if it has an open
investigation of an alleged noncompliance or safety-related defect that
includes such vehicles.
Amendments to Part 577--Defect and Noncompliance Notification
The agency is amending several sections of 49 CFR part 577 to
revise the provisions regarding notification of safety-related defects
and noncompliances with Federal motor vehicle safety standards.
Definitions
NHTSA is amending Sec. 577.4, ``Definitions,'' to add definitions
of the terms ``lessor,'' ``lessee'' and ``leased motor vehicle.'' As
was the case with the amendment of the definition section of part 573
to incorporate these terms, the amendment to this section is being made
to implement 49 U.S.C. 30119(f), the statutory section that requires
that lessees of motor vehicles receive notification of safety-related
defects and noncompliances.
The definition of ``lessor'' adopted today is slightly different
from that in the NPRM. This is necessary to make it consistent with the
definition of the same term in part 573 as amended today. The agency
decided to adopt a suggestion of a commenter, NADA, that
[[Page 17262]] defines the lessor as the owner, as reflected on the
vehicle's title, of any five or more leased vehicles, as of the date of
notification by the manufacturer of the recall. The definitions adopted
today for the terms ``lessee'' and ``leased motor vehicle'' are the
same as those in the NPRM. No commenter objected to the proposed
changes in Sec. 577.4.
Marking of Recall Notification Envelopes
The agency is amending Sec. 577.5(a) to add a requirement for
marking the envelope in which recall notification letters are sent by
requiring that the envelope containing the notification bear, in all
capital letters, the words ``SAFETY,'' ``RECALL'' and ``NOTICE,'' in
any order. Other words may be included, and the type may be any size as
long as it is larger than that used for the address. The language must
be also be distinguishable from other wording on the front of the
envelope in some manner other than size, such as by typeface (e.g.,
bold, italic), color, and/or underlining.
This amendment differs slightly from the proposal in the NPRM. The
proposal would have required use of the phrase, ``SAFETY RECALL
NOTICE'' in boldface capital letters. In response, several commenters
suggested alternative wording. Others expressed the view that the
current system works well enough, that the proposal did not give
manufacturers enough flexibility, or that it would be too costly and/or
burdensome to change the envelopes now in use.
NHTSA believes that the cost of adding new wording to recall
notification envelopes will be relatively low, and will be outweighed
by the safety benefit of making it more likely that the recipient will
read the letter. Moreover, while the present system works well, in many
cases there is need for improvement in the rate of owner response to
recalls. Accordingly, the agency believes that it is appropriate to
require manufacturers to mark the outside of recall notification
envelopes to alert recipients to the importance of their contents.
However, there is merit to the view expressed in some comments that
more flexibility should be allowed than would have been permitted under
the proposal in the NPRM. The agency believes that the amendment
adopted today should satisfy concerns about flexibility in envelope
format while calling recipients' attention to the contents of the
envelope. However, to ensure that envelopes comply with regulatory
requirements, the amendment includes a requirement for one-time
submission of envelope format to the agency. Once a given format is
approved, the manufacturer need not submit its envelope format again
before using it for other recalls, unless there are changes.
This review will, like the agency review of draft notification
letters discussed earlier in this preamble, be limited to ensuring that
the envelope markings comply with the minimum requirements of the
regulations. The agency's experience with advance review of
notification letters has been that it makes the notification process
more efficient because it allows the manufacturer to correct any
aspects of the material that do not comply with the regulations before
undertaking the entire mailing. Advance review of envelope format would
doubtless have the same effect.
Notification for Leased Vehicles
NHTSA is amending Sec. 577.5 to add new subsections (h) and (i),
which establish requirements for notification of lessees of leased
vehicles concerning the existence of safety-related defects or
noncompliances in their vehicles.
As proposed in the NPRM, subsection (h) would have required a
manufacturer to send different notification letters, depending on
whether or not the vehicle was leased. The proposal would have required
the manufacturer to include language describing the lessor's duty to
provide notification to the lessee only in letters sent by the
manufacturer to a known lessor of a leased motor vehicle, and to
provide the lessor with a copy of the notification to be sent to
lessees.
A number of commenters noted that to the extent that the proposed
amendment would require manufacturers to identify the vehicles in the
recall population that are leased, it would present a problem because
manufacturers often do not know which vehicles are leased and which are
not. For example, Polk opposed the proposal on the grounds that state
vehicle registration records do not identify lessors/lessees, so that
obtaining this information for notification purposes would be extremely
difficult. AIAM and Honda made similar comments.
Other commenters objected to notifying lessors or lessees
separately from other vehicle owners, or to the requirement that
manufacturers include a separate copy of the notification letter for
the lessee in the mailing to the lessor. See comments of NADA, Toyota
and Truck Manufacturers. These commenters suggested including in all
owner notification letters a statement of a lessor's obligation to
notify a lessee of the recall campaign.
NHTSA believes that there is merit to the concerns these commenters
have raised about this aspect of the proposal. In addition, to the
extent that the language of the proposal would have meant that only
owners of vehicles known by the manufacturer to be leased vehicles
would have received a notification that informed them of their
obligation to provide notification to lessees, it would have meant that
lessees of vehicles not known by the manufacturer to be leased--a
potentially large number--would not receive any notification of safety-
related defects or noncompliances and the availability of a remedy
without charge.
Accordingly, NHTSA has decided to modify subsection (h) to require
manufacturers to include in all notification letters a statement of
lessors' obligations regarding recall notification letters. If the
manufacturer is sending the letter to a recipient that it knows to be a
lessor of lessee of a leased vehicle it may use language that is not
identical to that in letters sent to recipients whose vehicles are not
known to be leased. However, in all cases, the letter must clearly
state the lessor's obligation under Federal law to provide notification
to lessees of its vehicles and to comply with regulations regarding
retaining records of notifications sent to lessees. The amendment does
not require the manufacturer to furnish the lessor with a separate copy
of the notification letter to be sent to lessees.
The final rule adopts Sec. 577.5(i) as proposed in the NPRM. That
subsection restates the requirement of 49 U.S.C. 30119(f), which
requires a lessor who receives notification of a safety-related defect
or noncompliance in a leased motor vehicle to send a copy of the
notification to the lessee of the vehicle. It adds to the statutory
language requirements that the lessor send the notification to the
lessee as prescribed by new Sec. 577.7(a)(2)(iv), which requires that
the notice be sent by first-class mail, and that it be sent to the
lessee no more than 10 calendar days from the date the lessor received
the notification from the manufacturer. Finally, it clarifies that the
requirement applies to all notifications, both initial and follow-up,
except where the manufacturer has notified all of a lessor's lessees
directly.
Timing of Owner Notification Letters
The agency is amending Sec. 577.7, ``Time and Manner of
Notification,'' with modifications from the language proposed in the
NPRM. Those changes [[Page 17263]] are based on its consideration of
the comments on the NPRM.
The NPRM proposed to amend Sec. 577.7(a)(1) to give the agency
authority to order a manufacturer to notify owners of a safety-related
defect or noncompliance on a specific date, when it finds that such a
letter would be in the public interest. A number of manufacturers
objected to the original proposal because it did not contain any
criteria upon which the decision would be based, and failed to require
NHTSA to consult with the manufacturer before deciding to order
notification on a specific date. The agency believes that it is
desirable to provide a list of criteria to assure both manufacturers
and the public that the decision is based on consideration of all
appropriate and relevant factors. It is also desirable to allow the
manufacturer to make its views known to the agency before the decision
is made.
Accordingly, the agency has modified the proposed regulatory
language by adding a list of factors that may be considered by the
agency, and a requirement that the agency consult with the manufacturer
before making the decision. The factors that may be considered include
the severity of the risk to safety; the likelihood of occurrence of the
defect or noncompliance; whether there is something that an owner can
do to reduce either the likelihood of occurrence of the defect or
noncompliance or the severity of the consequences; whether there will
be a delay in the availability of the remedy from the manufacturer; and
the anticipated length of any such delay. The agency may also consider
other factors relevant to whether early notification would be in the
interest of safety.
Several commenters objected to the proposed change on the grounds
that the agency already has the authority to require owner notification
on a specific date. NHTSA agrees with this statement, but does not
agree that it is a reason for not adopting this provision. The agency
believes that it is desirable to make this authority explicit because
there have been instances when manufacturers have refused to notify
owners of a safety-related defect or noncompliance in conformity with a
NHTSA request. Having a regulation authorizing the agency to require
notification on a date certain will make manufacturer compliance more
certain.
AAMA and Chrysler commented that the change is unnecessary because
the manufacturer, and not the agency, is in the best position to know
when early notification (i.e., notification prior to the time a remedy
is available) is warranted. NHTSA disagrees. As the agency charged by
statute with enforcing the notification and remedy requirements of the
Act, it is in the best position to consider objectively all of the
factors, including the safety of the public, that need to be
considered, and to give them appropriate weight. Based on some
manufacturers' past history of undue reluctance to comply with NHTSA
requests to notify owners of a defect or noncompliance prior to the
availability of a remedy, the agency believes that it is unwise to
entrust responsibility for making this judgment solely to the
manufacturer. Moreover, the changes made in the NPRM language to give
manufacturers the opportunity to submit their views should be adequate
to address concerns expressed by some manufacturers that their concerns
would not be considered.
The agency notes that it does not intend to exercise the authority
to designate a date for owner notification letters except in cases
where the commencement of the remedial campaign will be delayed
substantially and there appear to be safety benefits associated with a
prompt owner notification.
Advocates commented that all owners should be notified immediately
after the agency is informed of the existence of the defect or
noncompliance, so that they would be able to take measures to minimize
the effect of the defect or noncompliance until the remedy is
available. It proposes a two-step notification process for all recalls,
with the first owner notification to be sent within 30 days of agency
notification, and a second notice to be sent later regarding the
remedy. CAS also supported a 30-day deadline for notification in all
recalls.
As stated above in connection with the amendment to
Sec. 573.5(c)(8), the agency does not believe it would be productive to
establish a 30-day deadline for all recalls, or to institute a
mandatory two-step notification process for all recalls. Given that
recalls can vary widely in such matters as the number of items, the
severity of the hazard, the complexity of the remedy and the size and
resources of the manufacturer, the agency believes that an approach
that allows for flexibility in handling each recall individually is
preferable. Further, the two-step notification process introduces the
possibility of owner confusion. The agency believes that these factors,
along with the increased cost of sending a second owner letter, will
outweigh the safety benefit of such a process in most circumstances.
Timing of Notification to Lessees
The agency is also adding a new paragraph (iv) to subsection (a)(2)
of Sec. 577.7. The new paragraph requires that a lessor must send its
lessees a copy of the manufacturer's notification letter by first-class
mail within 10 days of receiving it. No commenter opposed this
proposal.
Disclaimers
NHTSA is amending Sec. 577.8, ``Disclaimers,'' to make clear that
that section's prohibition of disclaimers of the existence of a safety-
related defect or noncompliance applies equally to follow-up
notifications. The agency received no comments on this proposal.
Follow-up Notification
The final rule also adds a new Sec. 577.10, which sets forth the
criteria under which the agency will determine whether a manufacturer
must conduct a follow-up notification campaign and the requirements
applicable to such campaigns. This new section implements 49 U.S.C.
30119(e) (formerly section 153(d) of the Act), which authorizes NHTSA
to require manufacturers to send a second notification of a defect or
noncompliance, ``in such manner as (NHTSA) may by regulation
prescribe,'' where the agency determines that the initial notification
campaign has not resulted in an adequate number of vehicles or items of
equipment being returned for remedy. With minor changes, the final rule
adopts the proposals in the NPRM.
New Sec. 577.10(b) sets forth criteria that NHTSA may consider in
making a determination under this provision. The criteria include, but
are not limited to, the percentage of covered vehicles or items of
equipment that have already been returned for remedy; the amount of
time that has elapsed since the prior notification was sent; the
likelihood that a follow-up notification will increase the number of
vehicles or items of equipment receiving the remedy; the seriousness of
the safety risk from the defect or noncompliance; and whether the prior
notification(s) undertaken by the manufacturer complied with the
requirements of the statute and regulations.
The agency does not intend that this list of factors be exhaustive.
Accordingly, paragraph (b)(6) makes it clear that NHTSA may consider
additional factors as it deems appropriate.
Section 577.10(c) provides that a manufacturer is required to
provide follow-up notification only with respect [[Page 17264]] to
vehicles or items of equipment that have not been returned for remedy
pursuant to the prior notification(s). Pursuant to paragraph (d), the
manufacturer is required to send the follow-up notification to all
categories of recipients (i.e., owners, first purchasers, lessors,
lessees, manufacturers, distributors, dealers, and retailers) that
received the prior notification(s), except where the agency determines
that a lesser scope is appropriate.
Paragraph (e) describes the required contents of the follow-up
notification. The notice will have to include a statement that
identifies it as a follow-up to an earlier notification, and must urge
the recipient to present the vehicle or item of equipment for remedy.
In addition, except where the agency determines otherwise, the notice
must include the other information required to be included in an
initial notification letter.
Paragraph (f) requires that the outside of the envelope or other
communication containing the follow-up notification meet the same
requirements as an envelope containing an initial notification, as set
forth in 49 CFR 577.5(a). Unlike the NPRM, the final rule does not
recite those requirements verbatim, but rather incorporates them by
reference to the appropriate section of these regulations.
Paragraph (g) allows the agency to authorize use of postcards or
other media rather than letters for follow-up notification where
appropriate.
AAMA and Blue Bird commented that the regulation is not needed
because manufacturers already send out follow-up notification, and that
follow-up notifications are likely to cause owner confusion. These
comments challenge the wisdom of the decision by Congress to authorize
NHTSA to require follow-up notification, rather than the substantive
merit of NHTSA's proposed regulation. Since Congress has decided that
it is appropriate to give NHTSA this authority, and has authorized
NHTSA to promulgate implementing regulations, these comments are not
persuasive.
AIAM and Toyota commented that the regulation should mandate,
rather than permit, NHTSA to consider the factors listed. The agency
believes that mandatory language would be unwise because it would
unduly restrict its discretion. Flexibility is essential to
administration of the agency's recall program, given the highly varied
nature of safety recalls. However, the agency will generally consider
the enumerated factors, since they are relevant to the need for a
follow-up notification.
The NPRM proposed that the scope, timing, form and content of the
follow-up notification would be ``designed by the Administrator, in
consultation with the manufacturer.'' AIAM commented that the
regulation should state that the follow-up notification letter will be
``developed,'' rather than ``designed'' by the agency, and that the
content of the letter should be a cooperative effort between NHTSA and
the manufacturer. Toyota also commented that the agency should only be
involved in ``approving'' the follow-up notification, not in
``designing'' it; and that if NHTSA has problems with a manufacturer's
follow-up notification, it should consult with the manufacturer to work
out the problem.
The agency interprets these comments to express reservations about
the extent of NHTSA's control over follow-up notification letters. The
agency believes that it must have such control, in order to carry out
its statutory responsibility to maximize the effectiveness of recall
campaigns. However, the agency has decided to change the word
``designed'' in Sec. 577.10(a) to ``established,'' to reflect the fact
that the scope, timing, form, and content of the follow-up notification
will result from consultation between NHTSA and the manufacturer,
rather than from independent NHTSA action.
Advocates and CAS commented that evaluation of safety risk should
not be a criterion equal to the others, since the existence of a recall
indicates that there is a safety risk. While recalls under the Act are
by their nature safety-related, some defects and noncompliances pose a
much greater risk to safety than others, by virtue of such factors as
the severity of the consequences and the likelihood that the problem
will occur. NHTSA believes that it is entirely appropriate for it to
consider the degree of the risk to safety as a factor in deciding
whether to require a manufacturer to undertake a follow-up
notification. However, the agency notes that it is not required to give
equal weight to all of the listed criteria.
Advocates and CAS also favored setting a minimum permissible
completion rate for all recalls, with follow-up notification for all
recalls falling below that percentage. Midland commented that NHTSA
should define what is considered to be an inadequate completion rate;
and Navistar said NHTSA should set ``guidelines'' for when a follow-up
notification would be required.
As previously stated, NHTSA believes that it is important for it to
retain substantial discretion and flexibility in order to carry out the
responsibility to maximize the effectiveness of recalls. Setting a
minimum completion requirement for all recalls would seriously restrict
this flexibility. Moreover, such a system would be neither fair nor
workable, given the number of factors that affect the completion rate,
such as the nature of the item (whether vehicle, tire or equipment),
its age, the seriousness of the defect, and the means used to notify
owners (e.g., individual notification letter or public notice).
CAS suggested that follow-up notification should be required for
all recalls involving a defect or noncompliance that poses a
significant safety risk. In addition to the difficulty of defining when
a defect or noncompliance presents a ``significant safety risk,'' the
agency does not believe it would be reasonable to impose a requirement
such as this, which fails to take into account whether a recall has
achieved a high completion rate.
CAS also commented that the follow-up notification should be sent
by certified mail, not post card. NHTSA continues to believe that it
should retain discretion to decide what medium or media would be the
most effective for follow-up notification in each individual case.
Mack Truck supported the follow-up notification regulation, noting
that it has a practice of automatically sending a second notice if
recall work has not been done on a vehicle by the end of the second
calendar quarter of a recall campaign.
Navistar commented that the recall completion rate should be based
on the number of vehicles in service, not the number produced. The
agency assumes that this comment refers to one of the factors the NPRM
listed for consideration by NHTSA in deciding whether to require
follow-up notification: the percentage of vehicles or items of
equipment that have been presented for remedy (proposed
Sec. 577.10(b)(1)). The agency believes it is reasonable to continue
its practice of computing recall completion rates based on the number
of recalled units produced, rather than the number in service as
suggested by Navistar. The number of items produced is a definite
number that is provided to NHTSA by the manufacturer when it reports
its decision that there is a safety-related defect or noncompliance,
whereas the number of items in service can never be more than a rough
estimate. Having such a definite number makes it possible for NHTSA to
compute recall completion rates with greater accuracy than would be
possible using an estimate of how many items are in service.
[[Page 17265]]
Moreover, the number of items in service will change during the
course of any recall, which would greatly complicate the task of
arriving at precise completion rates. Moreover, the final rule
specifically provides that recall completion rate is only one of
several criteria upon which the agency will base a decision to require
a follow-up notification. In deciding whether a recall completion rate
is inadequate, the agency will consider the age of the recalled items
and other factors which might significantly reduce the number of items
in service at the time of the recall. It recognizes that a lower
completion rate is to be expected where there has been significant
attrition in the population of items in use by the time of the recall,
or where the nature of the recalled item (e.g., something that is
disposable or very inexpensive) makes it less likely that owners will
respond to a recall.
Navistar also commented that NHTSA should only require a follow-up
notification where it can be shown that it will significantly improve
the completion rate. Such a standard is unworkable and is also
inconsistent with the language Congress used in authorizing NHTSA to
require follow-up notification. It would be difficult, if not
impossible, to demonstrate in advance that a follow-up notification
would result in a significant improvement of the recall completion
rate. Moreover, the Navistar standard is inconsistent with 49 U.S.C.
30119(e), which authorizes the agency to order a second notification
when ``notification * * * has not resulted in an adequate number of
vehicles or items of motor vehicle equipment being returned for
remedy.''
Navistar also expressed concern that unnecessary follow-up notices
could result in customer confusion and wasted effort, especially when
recalled vehicles are old and a significant number have been scrapped.
The agency believes that the criteria to be considered by the agency
will provide adequate protection against the ``wasted effort'' that
Navistar fears.
Polk commented that state vehicle registration records do not
identify lessors/lessees, so that obtaining this information for
renotification purpose would be extremely difficult. The agency has
addressed these concerns in the sections of the final rule concerned
with leased vehicle notification by requiring all notification letters
to include a statement directing lessors to notify their lessees. See
49 CFR 577.5(i).
Toyota suggested adding another factor to be considered: the
likelihood that the owner will experience the safety-related defect or
noncompliance. NHTSA does not believe that this is an appropriate
criterion. In the large majority of recalls, there is no way of
predicting the likelihood that an owner will experience the defect or
noncompliance. It would be inconsistent with the purpose of the Act,
which is to prevent accidents, injuries and fatalities before they
happen, to fail to notify an owner based on a prediction that the
problem is not likely to occur in a particular vehicle. The final rule
does take account of the fact that there may be instances in which the
population that is appropriate for follow-up notification will be
smaller than that covered by the original recall campaign. Section
577.10(d) allows NHTSA to narrow the scope of the population that will
receive follow-up notification in appropriate instances.
Toyota also commented that a low completion rate should not be the
only reason the agency uses to justify requiring renotification. In
Sec. 577.10(b), the final rule lists five specific factors, including
but not limited to the completion rate, that the agency may consider.
It also authorizes NHTSA to consider other factors that are consistent
with the purpose of the Act.
NHTSA's Toll-Free Hotline
The agency is adopting a final rule amending Sec. 577.5(g)(1)(vii)
to state that the telephone number for its toll-free Auto Safety
Hotline for calls originating in the Washington, D.C. area is (202)
366-0123. The agency received no comments on this proposed change.
Technical Amendments
NHTSA is adopting several technical amendments to 49 CFR Parts 552,
554, 573 and 577 that are needed to make these parts consistent with
the new codification of the enabling statute as Chapter 301 of Title 49
of the United States Code (Pub. L. 103-272 (July 5, 1994)) and with the
language of the amendments adopted today. These amendments did not
appear in the NPRM, but do not require notice and comment because they
are technical amendments only. They do not change the meaning of these
regulations.
With respect to part 552, the technical amendments are as follows.
Because the final rule amends the title of Sec. 552.8 to replace
``Determination whether to commence a proceeding'' with ``Notification
of agency action on the petition,'' the contents to part 552 is amended
to reflect this change. In addition, Sec. 30162(a) of Title 49 of the
United States Code now refers to a petition for a proceeding to decide,
rather than to determine, whether to issue an order requiring a
manufacturer to provide notification and remedy for a safety-related
defect or noncompliance. Accordingly, Sec. 552.1, Scope, is amended to
change the word ``determination'' to ``decision.'' Section 552.2,
Purpose, is amended to change ``determinations'' to ``decisions.''
Section 552.3, General, is amended to change ``determine'' to
``decide.'' The first sentence of Sec. 552.7, Public Meeting, is
amended to change ``determination'' to ``decision.'' Finally,
Sec. 552.9(b), Grant of Petition, is amended to change ``determine'' to
``decide.''
The agency is also adopting the following technical amendments to
part 554. The contents section is amended to change the word
``determinations'' to ``decisions'' for the headings of Secs. 554.10
and 554.11. Section 554.2, Purpose, is amended to change ``National
Traffic and Motor Vehicle Safety Act (the Act)'' to ``49 U.S.C. Chapter
301.'' Section 554.3, Application, is amended to change the statutory
citations to reflect the new codification in Title 49. The headings of
Secs. 554.10 and 554.11 are amended to change the word
``determinations'' to ``decisions,'' in order to be consistent with the
new statutory language at 49 U.S.C. 30118. The text of these
subsections is also amended to replace the words ``determine[s]'' or
``determination'' with ``decide[s]'' or ``decision'', respectively,
wherever they appear.
The technical amendments to part 573 are as follows. Paragraphs
(b)-(f) of Sec. 573.3 are amended to change the words ``determined to
exist'' to ``decided to exist.'' The definition of ``Act'' in the first
paragraph of Sec. 573.4, Definitions, is amended to replace ``the
National Traffic and Motor Vehicle Safety Act of 1966, as amended (15
U.S.C. 1381, et seq.)'' with ``49 U.S.C. Chapter 301.'' The agency is
also amending the second sentence of Sec. 573.5(c)(1) to replace
``Sec. 110(e) of the National Traffic and Motor Vehicle Safety Act (15
U.S.C. 1399(e)'' with ``49 U.S.C. Sec. 30164(a).'' The latter two
amendments are necessary because the July 1994 codification repealed
the National Traffic and Motor Vehicle Safety Act of 1966, as amended,
and replaced it with a codification in Title 49 of the United States
Code.
The agency is adopting the following technical amendments to part
577. The Contents to part 577 is amended by changing ``Sec. 577.5
Notification pursuant to a manufacturer's determination'' to ``Sec.
577.5 Notification pursuant to a manufacturer's decision''; and by
changing ``Sec. 577.6 Notification pursuant to Administrator's
[[Page 17266]] determination'' to ``Sec. 577.6 Notification pursuant to
Administrator's decision.'' Section 577.4, Definitions, is amended by
changing the definition of the term ``Act'' from ``the National Traffic
and Motor Vehicle Safety Act of 1966, as amended, 15 U.S.C. 1391 et
seq.'' to ``49 U.S.C. Chapter 301.''
The title of section 577.5 is changed from ``Notification pursuant
to a manufacturer's determination'' to ``Notification pursuant to a
manufacturer's decision.'' The first sentence of Sec. 577.5(a) is
amended by changing ``section 157 of the Act'' to ``49 U.S.C.
30118(e).'' Paragraphs (1) and (2) of Sec. 577.5(c) are amended to
replace the word ``determined'' with ``decided'' in the text to be used
by manufacturers in recall notification letters. Section 577.5(d) is
amended by changing ``determines'' to ``decides.''
The title of Sec. 577.6 is changed from ``Notification pursuant to
Administrator's determination'' to ``Notification pursuant to
Administrator's decision.'' Section 577.6(a) is amended by changing
``section 152 of the Act'' to ``49 U.S.C. section 30118(b).'' Section
577.6(b) is amended by changing ``determines'' to ``decides'' in
subsection (3); by changing ``determination'' to ``decision'' in
subsection (5); by changing ``determination'' to ``decision'' in
subsections (9)(i) (A) and (C); and by changing ``determination'' to
``decision'' in subsections (10)(iv) and (11). Section 577.6(c)(1) is
amended by changing ``determination'' to ``decision.'' Section 577.7,
Time and manner of notification, is amended by revising subsection
(a)(2)(ii)(B) by replacing ``determined'' by ``decided,'' by replacing
``necessary'' with ``required'' and by replacing ``determine'' with
``require.''
Rulemaking Analyses and Notices
1. Executive Order 12291 (Federal Regulation) and DOT Regulatory
Policies and Procedures
NHTSA has analyzed this final rule and determined that it is
neither ``major'' within the meaning of Executive Order 12291 nor
``significant'' within the meaning of the Department of Transportation
regulatory policies and procedures.
The provisions of this final rule that would result in additional
costs would be the one that extends from five to a maximum of eight
years the period for which motor vehicle manufacturers must retain
records concerning malfunctions that may be related to motor vehicle
safety; and the one that authorizes NHTSA to require manufacturers of
motor vehicles and motor vehicle equipment to mail a follow-up
notification of a safety-related defect or noncompliance if it
determines that the number of vehicles or items of equipment that have
received the remedy is inadequate.
Other provisions that will result in additional costs are the one
that would require vehicle lessors to mail notification of safety-
related defects or noncompliances with Federal motor vehicle safety
standards to each lessee of a vehicle covered by the notification and
remedy campaign and the requirement that lessors maintain lists of
lessees to whom they send such notification.
The costs associated with requiring manufacturers to retain records
for a longer period should be minimal if not negligible, and would be
offset by the benefit that would result from the manufacturers' ability
to determine the existence of safety-related defects and noncompliances
with safety standards in a wider range of vehicles, as well as the
enhancement of NHTSA's enforcement efforts, particularly with respect
to latent defects and noncompliances. The cost of sending out a follow-
up notification will be less than that incurred for an initial
notification, as it will be required only in those cases in which the
agency makes a determination that the response to the first
notification is inadequate; and will only involve a fraction of the
vehicles or items of equipment subject to the initial recall, i.e.,
those that have not yet been remedied. The cost of the follow-up
notification will be outweighed by the benefit of increasing the number
of noncompliant and defective vehicles and items of motor vehicle
equipment that are remedied. In addition, the provisions relating to
follow-up notification are required by the amendments added by ISTEA.
The cost of vehicle lessor notification of lessees is offset by the
safety benefit that would result from the increased number of
individuals who would return for remedy a vehicle or item of equipment
that has a safety-related defect or does not comply with a Federal
motor vehicle safety standard. In addition, this provision is required
by the amendments added by ISTEA.
The cost of the requirement that vehicle lessors maintain lists of
lessees of leased vehicles involved in notification and remedy
campaigns is outweighed by the fact that these records will enable
NHTSA to enforce the statutory requirement that lessees be notified of
the existence of safety-related defects or standards noncompliances in
their vehicles and of the availability of a remedy without charge for
the defect or noncompliance. In addition, the information to be
retained is minimal, consisting only of the identities of the vehicle,
the lessee and the recall, and the date the lessor sent the
notification to the lessee.
2. Regulatory Flexibility Act
The agency has also considered the effects of this rulemaking
action under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). I
certify that this proposed rule will not, if promulgated, have a
significant economic impact on a substantial number of small entities.
The regulations implementing the statutory amendment authorizing
NHTSA to require a follow-up notification in instances where it
determines that an initial notification has not resulted in the remedy
of an adequate number of defective or non-complying vehicles or items
of motor vehicle equipment will affect motor vehicle equipment
manufacturers who are small businesses. However, the agency anticipates
that the effect on those entities will not be significant because the
proposed regulations implementing this provision allow flexibility in
the amount of information that would be required for the second
notification, and also permit reducing postage costs through the use of
post-cards instead of first-class letters in appropriate circumstances.
The new provisions requiring lessors to notify lessees of safety-
related defects or noncompliances in leased motor vehicles, which are
being adopted pursuant to a statutory amendment requiring such
notification, will also affect vehicle lessors who are small
businesses. However, NHTSA anticipates that the effect of these
amendments on these entities will be minimized by the exception to the
requirement for notification by the lessor in cases where a lessor and
a manufacturer have agreed that the manufacturer will notify lessees
directly. In addition, the amendments provisions should result in a
safety benefit as more leased vehicles will be returned for remedy of
safety-related defects and noncompliances with Federal motor vehicle
safety standards.
With respect to the additional recordkeeping requirements adopted
for vehicle lessors, the amount of information required is small and
should not place any significant cost burdens on the lessors. The
information is essential to the agency's ability to enforce the new
provisions requiring lessors to notify lessees of safety-related
defects and noncompliances with Federal motor vehicle safety standards
in their vehicles, and the economic [[Page 17267]] impact will be
outweighed by the benefit to safety from NHTSA's ability to enforce
this provision effectively.
To the extent the above amendments do have an impact on small
businesses, those impacts are minimal and would be offset by the safety
benefits that they would provide.
3. National Environmental Policy Act
In accordance with the National Environmental Policy Act of 1969,
the agency has analyzed the environmental impacts of this rulemaking
action and determined that implementation of this action will not have
a significant impact on the quality of the human environment. The new
record-keeping requirements will not introduce any new or harmful
matter into the environment.
4. Paperwork Reduction Act
Certain provisions in the final rule that would require
manufacturers to submit information to NHTSA, and to retain other
information, are considered to be information collection requirements,
as that term is defined by the Office of Management and Budget (OMB) in
5 CFR part 1320. The provision in the rule that would require vehicle
lessors to retain information is considered to be an information
collection requirement, as that term is defined by the Office of
Management and Budget (OMB) in 5 CFR part 1320. Accordingly, this
requirement has been submitted to OMB for its approval, pursuant to the
requirements of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).
Comments on the proposed information collection requirements were
solicited in the NPRM. No comments on these requirements were received
by NHTSA.
5. 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 rulemaking does not have sufficient federalism implications to
warrant the preparation of a Federalism Assessment.
List of Subjects
49 CFR Part 552
Administrative practice and procedure; Motor vehicle safety;
Reporting and recordkeeping requirements.
49 CFR Part 554
Administrative practice and procedure; Motor vehicle safety.
49 CFR Part 573
Imports; Motor vehicle safety; Motor vehicles; Reporting and
recordkeeping requirements; tires.
49 CFR Part 576
Motor vehicle safety; Reporting and recordkeeping requirements.
49 CFR Part 577
Motor vehicle safety.
In consideration of the foregoing, parts 552, 554, 573, 576, and
577 of title 49 of the Code of Federal Regulations are amended as
follows:
PART 552--PETITIONS FOR RULEMAKING, DEFECT, AND NONCOMPLIANCE
ORDERS
1. The authority citation for Part 552 is revised to read as
follows:
Authority: 49 U.S.C. 30111, 30118, 30162; delegation of
authority at 49 CFR 1.50.
2.-3. Section 552.1 is revised to read as follows:
Sec. 552.1 Scope.
This part establishes procedures for the submission and disposition
of petitions filed by interested persons pursuant to 49 U.S.C. Chapters
301, 305, 321, 323, 325, 327, 329 and 331 to initiate rulemaking or to
make a decision that a motor vehicle or item of replacement equipment
does not comply with an applicable Federal motor vehicle safety
standard or contains a defect which relates to motor vehicle safety.
4. Section 552.2 is revised to read as follows:
Sec. 552.2 Purpose.
The purpose of this part is to enable the National Highway Traffic
Safety Administration to identify and respond on a timely basis to
petitions for rulemaking or defect or noncompliance decisions, and to
inform the public of the procedures following in response to such
petitions.
5. Section 552.3 is revised to read as follows:
Sec. 552.3 General.
Any interested person may file with the Administrator a petition
requesting him:
(a) to commence a proceeding respecting the issuance, amendment or
revocation of a motor vehicle safety standard, or
(b) to commence a proceeding to decide whether to issue an order
concerning the notification and remedy of a failure of a motor vehicle
or item of replacement equipment to comply with an applicable motor
vehicle safety standard or a defect in such vehicle or equipment that
relates to motor vehicle safety.
6. Section 552.6 is revised to read as follows:
Sec. 552.6 Technical review.
The appropriate Associate Administrator conducts a technical review
of the petition. The technical review may consist of an analysis of the
material submitted, together with information already in the possession
of the agency. It may also include the collection of additional
information, or a public meeting in accordance with Sec. 552.7.
7. Section 552.8 is revised to read as follows:
Sec. 552.8 Notification of agency action on the petition.
After considering the technical review conducted under Sec. 552.6,
and taking into account appropriate factors, which may include, among
others, allocation of agency resources, agency priorities and the
likelihood of success in litigation which might arise from the order,
the Administrator will grant or deny the petition. NHTSA will notify
the petitioner of the decision to grant or deny the petition within 120
days after its receipt of the petition.
PART 554--STANDARDS ENFORCEMENT AND DEFECT INVESTIGATIONS
8. The authority citation for part 554 is revised to read as
follows:
Authority: 49 U.S.C. 30102-103, 30111-112, 30117-121, 30162,
30165-67; delegation of authority at 49 CFR 1.50.
9.-10. Section 554.2 is revised to read as follows:
Sec. 554.2 Purpose.
The purpose of this part is to inform interested persons of the
procedures followed by the National Highway Traffic Safety
Administration in order more fairly and effectively to implement 49
U.S.C. Chapter 301.
11. Section 554.3 is revised to read as follows:
Sec. 554.3 Application.
This part applies to actions, investigations, and defect and
noncompliance decisions of the National Highway traffic Safety
Administration under 49 U.S.C. 30116, 30117, 30118, 30120 and 30165.
12. Section 554.10 is amended by revising paragraphs (a), (b), (c),
introductory test, (c)(2) and (c)(4), and by removing paragraph (e), to
read as follows: [[Page 17268]]
Sec. 554.10 Initial decisions and public meetings.
(a) An initial decision of failure to comply with safety standards
or of a safety-related defect is made by the Administrator or his
delegate based on the completed investigative file compiled by the
appropriate office.
(b) The decision is communicated to the manufacturer in a letter
which makes available all information on which the decision is based.
The letter advises the manufacturer of his right to present
information, views, and arguments to establish that there is no defect
or failure to comply or that the alleged defect does not affect motor
vehicle safety. The letter also specifies the time and place of a
public meeting for the presentation of arguments or sets a date by
which written comments must be submitted. Submission of all
information, whether at a public meeting or in written form, is
normally scheduled about 30 days after the initial decision. The
deadline for submission of information can be extended for good cause
shown.
(c) Public notice of an initial decision is made in a Federal
Register notice that--
* * * * *
(2) Summarizes the information on which the decision is based.
* * * * *
(4) States the time and place of a public meeting or the deadline
for written submission in which the manufacturer and interested persons
may present information, views, and arguments respecting the decision.
* * * * *
13. Section 554.11 is revised to read as follows:
Sec. 554.11 Final decisions.
(a) The Administrator bases his final decision on the completed
investigative file and on information, views, and arguments submitted
at the public meeting.
(b) If the Administrator decides that a failure to comply or a
safety-related defect exists, he orders the manufacturer to furnish the
notification specified in 49 U.S.C. 30118 and 30119 and to remedy the
defect or failure to comply.
(c) If the Administrator closes an investigation following an
initial determination, without making a final determination that a
failure to comply or a safety-related defect exists, he or she will so
notify the manufacturer and publish a notice of that closing in the
Federal Register.
(d) A statement of the Administrator's final decision and the
reasons for it appears in each completed public file.
PART 573--DEFECT AND NONCOMPLIANCE REPORTS
14. The authority citation for part 573 is revised to read as
follows:
Authority: 49 U.S.C. 30102-103, 30112, 30117-121, 30166-167;
delegation of authority at 49 CFR 1.50.
Sec. 573.3 [Amended]
15. Section 573.3 is amending by revising paragraphs (b) through
(f) to read as follows:
* * * * *
(b) In the case of a defect or noncompliance decided to exist in a
motor vehicle or equipment item imported into the United States,
compliance with Secs. 573.5 and 573.6 by either the fabricating
manufacturer or the importer of the vehicle or equipment item shall be
considered compliance by both.
(c) In the case of a defect or noncompliance decided to exist in a
vehicle manufactured in two or more stages, compliance with Secs. 573.5
and 573.6 by either the manufacturer of the incomplete vehicle or any
subsequent manufacturer of the vehicle shall be considered compliance
by all manufacturers.
(d) In the case of a defect or noncompliance decided to exist in an
item of replacement equipment (except tires) compliance with
Secs. 573.5 and 573.6 by the brand name or trademark owner shall be
considered compliance by the manufacturer. Tire brand name owners are
considered manufacturers (49 U.S.C. 10102(b)(1)(E)) and have the same
reporting requirements as manufacturers.
(e) In the case of a defect or noncompliance decided to exist in an
item of original equipment used in the vehicles of only one vehicle
manufacturer, compliance with Secs. 573.5 and 573.6 by either the
vehicle or equipment manufacturer shall be considered compliance by
both.
(f) In the case of a defect or noncompliance decided to exist in
original equipment installed in the vehicles of more than one
manufacturer, compliance with Sec. 573.5 is required of the equipment
manufacturer as to the equipment item, and of each vehicle manufacturer
as to the vehicles in which the equipment has been installed.
Compliance with Sec. 573.6 is required of the manufacturer who is
conducting the recall campaign.
16. Section 573.4 is amended by revising the definition of ``Act''
and by adding the following definitions, in alphabetical order, to read
as follows:
Sec. 573.4 Definitions.
* * * * *
Act means 49 U.S.C. Chapter 301.
* * * * *
Leased motor vehicle means any motor vehicle that is leased to a
person for a term of at least four months by a lessor who has leased
five or more vehicles in the twelve months preceding the date of
notification by the vehicle manufacturer of the existence of a safety-
related defect or noncompliance with a Federal motor vehicle safety
standard in the motor vehicle.
Lessee means a person who is the lessee of a leased motor vehicle
as defined in this section.
Lessor means a person or entity that is the owner, as reflected on
the vehicle's title, of any five or more leased vehicles (as defined in
this section), as of the date of notification by the manufacturer of
the existence of a safety-related defect or noncompliance with a
Federal motor vehicle safety standard in one or more of the leased
motor vehicles.
Readable form means a form readable by the unassisted eye or
readable by machine. If readable by machine, the submitting party must
obtain written confirmation from the Office of Defects Investigation
immediately prior to submission that the machine is readily available
to NHTSA. For all similar information responses, once a manufacturer
has obtained approval for the original response in that form, it will
not have to obtain approval for future submissions in the same form. In
addition, all coded information must be accompanied by an explanation
of the codes used.
17. Section 573.5 is amended by revising the second sentence of
paragraph (c)(1) and the introductory text of paragraph (c)(2), by
adding paragraphs (c)(2)(iv) and (v), by redesignating paragraph (c)(8)
as paragraph (c)(8)(i), by adding new paragraphs (c)(8)(ii)--(vi), and
by adding new paragraphs (c)(10) and (c)(11), to read as follows:
Sec. 573.5 Defect and noncompliance information report.
* * * * *
(c) * * * In the case of a defect or noncompliance decided to exist
in an imported vehicle or item of equipment, the agency designated by
the fabricating manufacturer pursuant to 49 U.S.C. section 30164(a)
shall be also stated. * * *
(2) Identification of the vehicles or items of motor vehicle
equipment potentially containing the defect or noncompliance, including
a description of the manufacturer's basis for its
[[Page 17269]] determination of the recall population and a description
of how the vehicles or items of equipment to be recalled differ from
similar vehicles or items of equipment that the manufacturer has not
included in the recall.
* * * * *
(iv) In the case of motor vehicles or items of motor vehicle
equipment in which the component that contains the defect or
noncompliance was manufactured by a different manufacturer from the
reporting manufacturer, the reporting manufacturer shall identify the
component and the manufacturer of the component by name, business
address, and business telephone number. If the reporting manufacturer
does not know the identity of the manufacturer of the component, it
shall identify the entity from which it was obtained.
(v) In the case of items of motor vehicle equipment, the
manufacturer of the equipment shall identify by name, business address,
and business telephone number every manufacturer that purchases the
defective or noncomplying component for use or installation in new
motor vehicles or new items of motor vehicle equipment.
* * * * *
(8)(i) A description of the manufacturer's program for remedying
the defect or noncompliance. The manufacturer's program will be
available for inspection in the public docket, Room 5109, Nassif
Building, 400 Seventh Street, SW, Washington DC 20590.
(ii) If a manufacturer anticipates that its notification campaign
will commence more than 30 days after it has notified NHTSA that a
safety-related defect or noncompliance exists, or anticipates that the
notification campaign will not be completed within 75 days after it has
notified NHTSA of that decision, the manufacturer shall include with
its report to NHTSA a proposed schedule for the notification campaign,
from commencement through completion. If the remedy for the defect or
noncompliance is not available at the time of the owner notification,
the report shall state when the remedy will be provided to owners. The
manufacturer shall also identify and describe in detail the factors on
which the proposed schedule is based. The manufacturer's proposed
schedule shall be subject to disapproval by the Administrator, if the
Administrator determines that it will lead to unreasonable delays in
the notification of and remedy for the defect or noncompliance.
(iii) The manufacturer shall describe any factors that it
anticipates could interfere with its ability to adhere to the proposed
schedule and state with specificity the likely effect of each such
factor.
(iv) A manufacturer that is unable to conduct its notification
campaign in accordance with the schedule submitted pursuant to
paragraph (c)(8)(ii) of this section, or that is otherwise unable to
complete owner notification within 75 days after notifying NHTSA of its
defect or noncompliance decision, shall promptly advise NHTSA of its
inability to do so and provide an explanation for such inability, along
with a revised schedule, or a new schedule in those instances in which
the manufacturer had not previously submitted a schedule. Such
submission shall contain the basis for the new or revised schedule,
which shall also be subject to disapproval by the Administrator.
(v) If a manufacturer intends to file a petition for an exemption
from the recall requirements of the Act on the basis that a defect or
noncompliance is inconsequential as it relates to motor vehicle safety,
it shall notify NHTSA of that intention in its original report to NHTSA
of the defect or noncompliance. If such a petition is filed and
subsequently denied, the time period under which an owner notification
schedule must be filed under paragraph (c)(8) of this section shall run
from the date of the denial of the petition.
(vi) If a manufacturer advises NHTSA that it intends to file such a
petition, and does not do so within the 30-day period established by 49
CFR 556.4(c), the time periods for ascertaining whether an owner
notification schedule must be filed under this section shall run from
the end of that 30-day period. Any such schedule must be filed no later
than the fifth business day after that date.
* * * * *
(10) Except as authorized by the Administrator, the manufacturer
shall submit a copy of its proposed owner notification letter to the
Office of Defects Investigation (``ODI'') no fewer than five Federal
government business days before it intends to begin mailing it to
owners. Submission shall be made by any means which permits the
manufacturer to verify promptly that the copy of the proposed letter
was in fact received by ODI and the date it was received by ODI.
(11) The manufacturer's campaign number, if it is not identical to
the identification number assigned by NHTSA.
18. Section 573.6 is amended by revising the first sentence of
paragraph (a), adding a new paragraph (b)(6) and adding a new paragraph
(d) to read as follows:
Sec. 573.6 Quarterly reports.
(a) Each manufacturer who is conducting a defect or noncompliance
notification campaign to manufacturers, distributors, dealers, or
owners shall submit to NHTSA a report in accordance with paragraphs
(b), (c), and (d) of this section. * * *
(b) * * *
(6) In reports by equipment manufacturers, the number of items of
equipment repaired and/or returned by dealers, other retailers, and
distributors to the manufacturer prior to their first sale to the
public.
* * * * *
(d) The reports required by this section shall be submitted in
accordance with the following schedule, except that if the due date
specified below falls on a Saturday, Sunday or Federal holiday, the
report shall be submitted on the next day that is a business day for
the Federal government:
(1) For the first calendar quarter (January 1 through March 31), on
or before April 30;
(2) For the second calendar quarter (April 1 through June 30), on
or before July 30;
(3) For the third calendar quarter (July 1 through September 30),
on or before October 30; and
(4) For the fourth calendar quarter (October 1 through December
31), on or before January 30.
19. Section 573.7 is amended by revising the heading of the section
and by adding new paragraphs (d) and (e) to read as follows:
Sec. 573.7 Lists of purchasers, owners, lessors and lessees.
* * * * *
(d) If a manufacturer has in its possession at the time it sends
notification of a safety-related defect or noncompliance information
that a vehicle concerning which notification has been sent is a leased
motor vehicle, the list(s) maintained by a manufacturer pursuant to
paragraph (a) of this section shall identify the vehicle as a leased
motor vehicle, and shall identify the person or entity to whom
notification was sent as the lessor or lessee of the vehicle (as
appropriate), if that information is known to the manufacturer. The
manufacturer may also maintain a separate list which includes only
leased vehicles, provided that it is clearly identified as such, and
that it meets the other requirements for a list prepared pursuant to
paragraph (a) of this section. [[Page 17270]]
(e) Each lessor of leased motor vehicles shall maintain, in a form
suitable for inspection, such as computer information storage devices
or card files, a list of the names and addresses of all lessees to
which the lessor has provided notification of a defect or noncompliance
pursuant to 49 CFR 577.5(i). The list shall also include the make,
model, and vehicle identification number of each such leased vehicle,
and either the date on which the lessor mailed notification of the
defect or noncompliance to the lessee, or a statement that the
manufacturer agreed on a specified date to mail the notification
directly to the lessee. A manufacturer that provides notification
directly to lessees shall maintain a list containing the same
information as that required by this paragraph to be maintained by
lessors sending notifications to lessees. The information required by
this paragraph must be retained by the manufacturer or lessor
(whichever sent the notification to the lessee) for one calendar year
from the date the vehicle lease expires.
20. Section 573.8 is revised to read as follows:
Sec. 573.8 Notices, bulletins, and other communications.
Each manufacturer shall furnish to the NHTSA a copy of all notices,
bulletins, and other communications (including those transmitted by
computer, telefax or other electronic means, and including warranty and
policy extension communiques and product improvement bulletins), other
than those required to be submitted pursuant to Sec. 573.5(c)(9), sent
to more than one manufacturer, distributor, dealer, lessor, lessee, or
purchaser, regarding any defect in its vehicles or items of equipment
(including any failure or malfunction beyond normal deterioration in
use, or any failure of performance, or any flaw or unintended deviation
from design specifications), whether or not such defect is safety-
related. Copies shall be in readable form and shall be submitted
monthly, not more than five (5) working days after the end of each
month.
PART 576--RECORD RETENTION
21. The authority citation for part 576 is revised to read as
follows:
Authority: 49 U.S.C. 30112, 30115, 30117-121, 30166-167;
delegation of authority at 49 CFR 1.50.
22. Section 576.5 is revised to read as follows:
Sec. 576.5 Basic requirements.
Each manufacturer of motor vehicles shall retain as specified in
Sec. 576.7 every record described in Sec. 576.6 for eight years from
the last date of the model year in which the vehicle to which it
relates was produced.
23. Section 576.6 is revised to read as follows:
Sec. 576.6 Records.
Records to be retained by manufacturers under this part include all
documentary materials, films, tapes, and other information-storing
media that contain information concerning malfunctions that may be
related to motor vehicle safety. Such records include, but are not
limited to, communications from vehicle users and memoranda of user
complaints; reports and other documents, including material generated
or communicated by computer, telefax or other electronic means, that
are related to work performed under, or claims made under, warranties;
service reports or similar documents, including electronic
transmissions, from dealers or manufacturer's field personnel; and any
lists, compilations, analyses, or discussions of malfunctions that may
be related to motor vehicle safety contained in internal or external
correspondence of the manufacturer, including communications
transmitted electronically.
PART 577--DEFECT AND NONCOMPLIANCE NOTIFICATION
24. The authority citation for part 577 is revised to read as
follows:
Authority: 49 U.S.C. 30102-103, 30112, 30115, 30117-121, 30166-
167; delegations of authority at 49 CFR 1.50 and 49 CFR 501.8.
25.-26. Section 577.4 is amended by revising the definition of
``Act'', and by adding the following definitions, in alphabetical
order, to read as follows:
Sec. 577.4 Definitions.
* * * * *
Act means 49 U.S.C. Chapter 30101-30169.
* * * * *
Leased motor vehicle means any motor vehicle that is leased to a
person for a term of at least four months by a lessor who has leased
five or more vehicles in the twelve months preceding the date of
notification by the vehicle manufacturer of the existence of a safety-
related defect or noncompliance with a Federal motor vehicle safety
standard in the motor vehicle.
Lessee means a person who is the lessee of a leased motor vehicle
as defined in this section.
Lessor means a person or entity that is the owner, as reflected on
the vehicle's title, of any five or more leased vehicles (as defined in
this section), as of the date of notification by the manufacturer of
the existence of a safety-related defect or noncompliance with a
Federal motor vehicle safety standard in one or more of the leased
motor vehicles.
* * * * *
27. Section 577.5 is amended by revising the heading of the section
and the fourth sentence of paragraph (a), by adding a new fifth, sixth
and seventh sentence to paragraph (a), by revising paragraphs (c)(1)
and (2) and the parenthetical in paragraph (g)(1)(vii), and by adding
new paragraphs (h) and (i), to read as follows:
Sec. 577.5 Notification pursuant to a manufacturer's decision.
(a) * * * The information required by paragraphs (d) through (h) of
this section may be presented in any order. The manufacturer shall mark
the outside of each envelope in which it sends an owner notification
letter with a notation that includes the words ``SAFETY,'' RECALL,''
and ``NOTICE,'' all in capital letters and in type that is larger than
that used in the address section, and is also distinguishable from the
other type in a manner other than size. Except where the format of the
envelope has been previously approved by NHTSA, each manufacturer must
submit the envelope format it intends to use to NHTSA at least 5
Federal government business days before mailing to owners, in the same
manner as is required by Sec. 573.5(c)(9) for owner notification
letters.
* * * * *
(c) * * *
(1) ``(Manufacturer's name or division) has decided that a defect
which relates to motor vehicle safety exists in (identified motor
vehicles, in the case of notification sent by a motor vehicle
manufacturer; identified replacement equipment, in the case of
notification sent by a replacement equipment manufacturer);'' or
(2) ``(Manufacturer's name or division) has decided that
(identified motor vehicles, in the case of notification sent by a motor
vehicle manufacturer; identified replacement equipment, in the case of
notification sent by a replacement equipment manufacturer) fail to
conform to Federal Motor Vehicle Safety Standard No. (number and title
of standard).''
(g) * * *
(1) * * * [[Page 17271]]
(vii) * * * (Washington, DC area residents may call 202-366-0123) *
* *
* * * * *
(h) A statement that describes a lessor's obligation under Federal
law to provide a lessee of the vehicle to which the notification letter
refers with a copy of the letter; and to maintain a record which
identifies the lessee(s) to whom it sent a copy of the letter, the date
it sent the letter, and the Vehicle Identification Number(s) of the
vehicle(s) that it has leased to that lessee and to which the
notification applies. The statement must also include the definition of
``lessor'' set forth in Sec. 577.4 of this part. If the notification is
being sent directly from a manufacturer to an individual or entity that
the manufacturer knows to be a lessee, the manufacturer need not
include a definition of lessor, but must state the requirement of
Federal law regarding notification of lessees and that it is providing
notification in place of the lessor.
(i) Any lessor who receives a notification of a determination of a
safety-related defect or noncompliance pertaining to any leased motor
vehicle shall send a copy of such notice to the lessee as prescribed by
Sec. 577.7(a)(2)(iv). This requirement applies to both initial and
follow-up notifications, but does not apply where the manufacturer has
notified a lessor's lessees directly.
28. Section 577.6 is amended by revising the heading of the section
and paragraph (a), paragraphs (b)(2)(i) and (ii), (b)(3), and (b)(5),
paragraphs (b)(9)(i)(A) and (C), and paragraphs (b)(10)(iv), (b)(11),
and (c)(1), to read as follows:
Sec. 577.6 Notification pursuant to Administrator's decision.
(a) Agency-ordered notification. When a manufacturer is ordered
pursuant to 49 U.S.C. 30118(b) to provide notification of a defect or
noncompliance, he shall provide such notification in accordance with
Secs. 577.5 and 577.7, except that the statement required by paragraph
(c) of Sec. 577.5 shall indicate that the decision has been made by the
Administrator of the National Highway Traffic Safety Administration.
(b) * * *
(2) * * *
(i) ``The Administrator of the National Highway Traffic Safety
Administration has decided that a defect which relates to motor vehicle
safety exists in (identified motor vehicles, in the case of
notification sent by a manufacturer of motor vehicles; identified
replacement equipment, in the case of notification sent by a
manufacturer of replacement equipment);'' or
(ii) ``The Administrator of the National Highway Traffic Safety
Administration has decided that (identified motor vehicles in the case
of notification sent by a motor vehicle manufacturer; identified
replacement equipment, in the case of notification sent by a
manufacturer of replacement equipment) fail to conform to federal Motor
Vehicle Safety Standard No. (number and title of standard).''
(3) When the Administrator decides that the defect or noncompliance
may not exist in each such vehicle or item of replacement equipment,
the manufacturer may include an additional statement to that effect.
* * * * *
(5) A clear description of the Administrator's stated basis for his
decision, as provided in his order, including a brief summary of the
evidence and reasoning that the Administrator relied upon in making his
decision.
* * * * *
(9) * * *
(i) * * *
(A) A statement that the remedy will be provided without charge to
the owner if the Court upholds the Administrator's decision;
* * * * *
(C) A statement that, if the Court upholds the Administrator's
decision, he will reimburse the owner for any reasonable and necessary
expenses that the owner incurs (not in excess of any amount specified
by the Administrator) in repairing the defect or noncompliance
following a date, specified by the manufacturer, which shall not be
later than the date of the Administrator's order to issue this
notification.
* * * * *
(10) * * *
* * * * *
(iv) The manufacturer's recommendations of service facilities where
the owner could have the repairs performed, including (in the case of a
manufacturer required to reimburse if the Administrator's decision is
upheld in the court proceeding) at least one service facility for whose
charges the owner will be fully reimbursed if the Administrator's
decision is upheld.
(11) A statement that further notice will be mailed by the
manufacturer to the owner if the Administrator's decision is upheld in
the court proceeding.
* * * * *
(c) * * *
(1) The statement required by paragraph (c) of Sec. 577.5 shall
indicate that the decision has been made by the Administrator and that
his decision has been upheld in a proceeding in the Federal courts; and
* * * * *
29. Section 577.7 is amended by adding a new sentence at the end of
paragraph (a)(1), by adding a new last sentence to paragraph (a)(2)(i),
and by adding new paragraph (a)(2)(iv), and revising paragraph
(a)(2)(ii)(B), to read as follows:
Sec. 577.7 Time and manner of notification.
(a) * * *
(1) Be furnished within a reasonable time after the manufacturer
first decides that either a defect that relates to motor vehicle safety
or a noncompliance exists. The Administrator may order a manufacturer
to send the notification to owners on a specific date where the
Administrator finds, after consideration of available information and
the views of the manufacturer, that such notification is in the public
interest. The factors that the Administrator may consider include, but
are not limited to, the severity of the safety risk; the likelihood of
occurrence of the defect or noncompliance; whether there is something
that an owner can do to reduce either the likelihood of occurrence of
the defect or noncompliance or the severity of the consequences;
whether there will be a delay in the availability of the remedy from
the manufacturer; and the anticipated length of any such delay.
(2) * * *
(i) * * * The manufacturer shall also provide notification to each
lessee of a leased motor vehicle that is covered by an agreement
between the manufacturer and a lessor under which the manufacturer is
to notify lessees directly of safety-related defects and
noncompliances.
(ii) * * *
* * * * *
(B) (Except in the case of a tire) if decided by the Administrator
to be required for motor vehicle safety, by public notice in such
manner as the Administrator may require after consultation with the
manufacturer.
* * * * *
(iv) In the case of a notification to be sent by a lessor to a
lessee of a leased motor vehicle, by first-class mail to the most
recent lessee known to the lessor. Such notification shall be mailed
within ten days of the lessor's receipt of the notification from the
vehicle manufacturer.
* * * * * [[Page 17272]]
30. Section 577.8 is revised to read as follows:
Sec. 577.8 Disclaimers.
(a) A notification sent pursuant to Secs. 577.5, 577.6, 577.9 or
577.10 regarding a defect which relates to motor vehicle safety shall
not, except as specifically provided in this part, contain any
statement or implication that there is no defect, that the defect does
not relate to motor vehicle safety, or that the defect is not present
in the owner's or lessee's vehicle or item of replacement equipment.
This section also applies to any notification sent to a lessor or
directly to a lessee by a manufacturer.
(b) A notification sent pursuant to Secs. 577.5, 577.6, 577.9 or
577.10 regarding a noncompliance with an applicable motor vehicle
safety standard shall not, except as specifically provided in this
part, contain any statement or implication that there is not a
noncompliance, or that the noncompliance is not present in the owner's
or lessee's vehicle or item of replacement equipment. This section also
applies to any notification sent to a lessor or directly to a lessee by
a manufacturer.
31. A new Sec. 577.10 is added to read as follows:
Sec. 577.10 Follow-up notification.
(a) If, based on quarterly reports submitted pursuant to Sec. 573.6
of this part or other available information, the Administrator decides
that a notification of a safety-related defect of a noncompliance with
a Federal motor vehicle safety standard sent by a manufacturer has not
resulted in an adequate number of vehicles or items of equipment being
returned for remedy, the Administrator may direct the manufacturer to
send a follow-up notification in accordance with this section. The
scope, timing, form, and content of such follow-up notification will be
established by the Administrator, in consultation with the
manufacturer, to maximize the number of owners, purchasers, and lessees
who will present their vehicles or items of equipment for remedy.
(b) The Administrator may consider the following factors in
deciding whether or not to require a manufacturer to undertake a
follow-up notification campaign:
(1) The percentage of covered vehicles or items of equipment that
have been presented for the remedy;
(2) The amount of time that has elapsed since the prior
notification(s);
(3) The likelihood that a follow-up notification will increase the
number of vehicles or items of equipment receiving the remedy;
(4) The seriousness of the safety risk from the defect or
noncompliance;
(5) Whether the prior notification(s) undertaken by the
manufacturer complied with the requirements of the statute and
regulations; and
(6) Such other factors as are consistent with the purpose of the
statute.
(c) A manufacturer shall be required to provide a follow-up
notification under this section only with respect to vehicles or items
of equipment that have not been returned for remedy pursuant to the
prior notification(s).
(d) Except where the Administrator determines otherwise, the
follow-up notification shall be sent to the same categories of
recipients that received the prior notification(s).
(e) A follow-up notification must include:
(1) A statement that identifies it as a follow-up to an earlier
communication;
(2) A statement urging the recipient to present the vehicle or item
of equipment for remedy; and
(3) Except as determined by the Administrator, the information
required to be included in the initial notification.
(f) The manufacturer shall mark the outside of each envelope in
which it sends a follow-up notification in a manner which meets the
requirements of Sec. 577.5(a) of this part.
(g) Notwithstanding any other provision of this Part, the
Administrator may authorize the use of other media besides first-class
mail for a follow-up notification.
Issued on: March 24, 1995.
Ricardo Martinez,
Administrator.
[FR Doc. 95-8130 Filed 4-4-95; 8:45 am]
BILLING CODE 4910-59-P
