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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 111 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 111

 To establish domestic content requirements for motor vehicles sold or 
        distributed in interstate commerce in the United States.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            January 5, 1993

Mr. Burton of Indiana introduced the following bill; which was referred 
  jointly to the Committees on Energy and Commerce and Ways and Means

_______________________________________________________________________

                                 A BILL

 
 To establish domestic content requirements for motor vehicles sold or 
        distributed in interstate commerce in the United States.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fair Practices in Automotive 
Products Act''.

SEC. 2. PURPOSE.

    The purpose of this Act is to encourage the production in the 
United States by American workers of automotive products which are sold 
or distributed in interstate commerce.

SEC. 3. DEFINITIONS.

    (a) In General.--As used in this Act:
            (1) The term ``automotive products'' means motor vehicles 
        and parts for use in the production of new motor vehicles.
            (2) The term ``added domestic value'', when used with 
        respect to a vehicle manufacturer for any model year, means the 
        aggregate of--
                    (A) the production costs of all automotive products 
                sold by the vehicle manufacturer in the United States, 
                other than for export, during that model year, and
                    (B) the export value of all automotive products 
                that were either--
                            (i) manufactured by the vehicle 
                        manufacturer in the United States and exported 
                        from the United States by, or on behalf of, 
                        such manufacturer during that model year, or
                            (ii) manufactured in the United States by 
                        any other person and purchased by the vehicle 
                        manufacturer and exported from the United 
                        States by, or on behalf of, such manufacturer 
                        during that model year, but only to the extent 
                        that the export value of such automotive 
                        products is not included in automotive products 
                        to which clause (i) applies;
        reduced by the aggregate appraised value, as determined for 
        purposes of the customs laws, of all automotive products that 
        were entered by, or on behalf of, the vehicle manufacturer 
        during that model year.
            (3) The term ``domestic content ratio'' means, with respect 
        to a vehicle manufacturer for any model year, the percentage 
        determined by multiplying by one hundred the factor obtained by 
        dividing--
                    (A) the added domestic value determined for that 
                manufacturer for that model year under paragraph (2); 
                by
                    (B) the production costs determined, for purposes 
                of paragraph (2)(A), for that manufacturer for that 
                model year.
            (4) The term ``entered'' means entered, or withdrawn from 
        warehouse for consumption, within the customs territory of the 
        United States.
            (5) The term ``export value'' means, with respect to an 
        automotive product--
                    (A) the free-on-board price for which the vehicle 
                manufacturer sells the product for exportation from the 
                United States; or
                    (B) if the vehicle manufacturer sells the product 
                for such exportation to a buyer that controls, is 
                controlled by, or is under common control with, such 
                manufacturer, the price at which such or similar 
                products are freely offered for free-on-board sale to 
                all purchasers in the principal markets of the United 
                States in the usual wholesale quantities and in the 
                ordinary course of trade for such exportation.
            (6) The term ``model year'' means a vehicle manufacturer's 
        annual production period (as determined by the Secretary) which 
        includes January 1 of a calendar year, or if a vehicle 
        manufacturer does not have an annual production period, the 
        calendar year. A model year shall be designated by the year in 
        which January 1 occurs.
            (7) The term ``motor vehicle'' means any three-wheeled or 
        four-wheeled vehicle propelled by fuel which is manufactured 
        primarily for use on the public streets, roads, and highways 
        (except any vehicle operated exclusively on a rail or rails), 
        and which is rated as ten thousand pounds gross vehicle weight 
        or less. Such term does not include (A) any motorcycle, or (B) 
        any vehicle determined by the Secretary to be an automobile 
        capable of off-highway operation within the meaning of section 
        501(3) of the Motor Vehicle Information and Cost Savings Act.
            (8) The term ``production cost'' means, with respect to an 
        automotive product, the wholesale price to dealers in the 
        United States for that product as set forth in the vehicle 
        manufacturer's official dealer price list that is in effect at 
        the time the product is sold at wholesale.
            (9) The term ``Secretary'' means the Secretary of 
        Transportation.
            (10) The term ``vehicle manufacturer'' means any person 
        engaged in the business of producing motor vehicles for 
        ultimate retail sale in the United States and includes as one 
        entity all persons who control, are controlled by, or are in 
        common control with, such person. Such term also includes any 
        predecessor or successor of such a vehicle manufacturer.

SEC. 4. DETERMINATION OF ADDED DOMESTIC VALUE.

    Two or more vehicle manufacturers may not include, for purposes of 
determining their respective added domestic values, the value of the 
same automotive product; but such manufacturers may, under rules 
prescribed under section 5(b), apportion the value of that automotive 
product among them.

SEC. 5. DOMESTIC CONTENT RATIOS FOR MODEL YEAR 1994 AND THEREAFTER.

    (a) Ratios.--In order to carry out the purpose of this Act, for 
each model year beginning after January 1, 1993, the minimum domestic 
content ratio for a vehicle manufacturer shall not be less than the 
higher of--
            (1) the domestic content ratio achieved by the vehicle 
        manufacturer in model year 1994 reduced by 10 per centum; or
            (2) the applicable minimum content ratio specified in the 
        following table:

      

----------------------------------------------------------------------------------------------------------------
        Number of motor vehicles produced by the manufacturer                                                   
           and sold in the United States during each year:               Minimum domestic content ratio:        
----------------------------------------------------------------------------------------------------------------
                                                 Model Year 1994                                                
      Not over 100,000........................................  0 percent.                                      
      Over 100,000 but not over 900,000.......................  The number, expressed as a percentage,          
                                                                 determined by dividing the number of vehicles  
                                                                 sold by 30,000.                                
      Over 900,000............................................  30 percent.                                     
                                                 Model Year 1995                                                
      Not over 100,000........................................  0 percent.                                      
      Over 100,000 but not over 900,000.......................  The number, expressed as a percentage,          
                                                                 determined by dividing the number of vehicles  
                                                                 sold by 15,000.                                
      Over 900,000............................................  60 percent.                                     
                                      Each Model Year After Model Year 1995                                     
      Not over 100,000........................................  0 percent.                                      
      Over 100,000 but not over 900,000.......................  The number, expressed as a percentage,          
                                                                 determined by dividing the number of vehicles  
                                                                 sold by 10,000.                                
      Over 900,000............................................  90 percent.                                     
----------------------------------------------------------------------------------------------------------------

    (b) Allocation of Automotive Products Among Manufacturers.--In 
order to carry out the purpose of this Act, the Secretary shall 
prescribe rules or allocating automotive products among vehicle 
manufacturers in appropriate cases such as where--
            (1) a vehicle manufacturer sells automotive products 
        manufactured by it in the United States to another vehicle 
        manufacturer;
            (2) two or more vehicle manufacturers in joint venture 
        produce automotive products in the United States; and
            (3) a vehicle manufacturer produces motor vehicles for 
        ultimate retail sale in the United States, some of which will 
        be sold by that manufacturer and some by another vehicle 
        manufacturer.

SEC. 6. INFORMATION AND REPORTS.

    (a) Vehicle Manufacturers Records and Information.--Each vehicle 
manufacturer that produces more than 100,000 motor vehicles for sale in 
the United States during any model year after model year 1993 must 
establish and maintain such records, and provide such information, 
regarding the production and sale of automotive products by it as the 
Secretary by rule shall require for purposes of carrying out sections 
5(a) and 7.
    (b) Authority To Obtain Information.--
            (1) Secretarial authority.--The authority granted to the 
        Secretary under subsection (b)(1) of section 505 of the Motor 
        Vehicle Information and Cost Saving Act (as in effect on the 
        date of the enactment of this Act) to obtain information and 
        data, and access thereto, that is deemed advisable by the 
        Secretary for purposes of carrying out part V of that Act may 
        be used by the Secretary for purposes of obtaining the 
        information and data, and access thereto, that is necessary or 
        appropriate to carry out sections 5(a) and 7.
            (2) Court authority.--The authority granted to the district 
        courts of the United States under subsection (b)(2) of such 
        section 505 to enforce compliance with action taken by the 
        Secretary under subsection (b)(1) of such section may be used 
        by such courts to enforce actions taken by the Secretary 
        pursuant to paragraph (1) for purposes of carrying out this 
        Act.
            (3) Disclosure of information and data.--The Secretary 
        shall disclose any information and data obtained under this 
        subsection and subsection (a) to the public only in accordance 
        with section 552 of title 5, United States Code and any matter 
        described in subsection (b)(4) of such section shall not be 
        disclosed to the public, except that where such matter may be 
        relevant to any administrative or judicial proceeding to 
        enforce this Act. Such matter may be disclosed in such 
        proceeding only in a manner which would not result in 
        competitive damage or disadvantage, as determined by the 
        Secretary or a court, because of such disclosure.
    (c) Annual Reports.--As soon as practicable after the close of each 
model year after January 1, 1993, the Secretary shall prepare and make 
available to the public a report setting forth the domestic content 
ratio achieved by each vehicle manufacturer during such model year.

SEC. 7. ENFORCEMENT.

    (a) Penalty for Failure To Meet Domestic Content Ratios.--
            (1) In general.--In furtherance of the purpose of this Act, 
        it is unlawful for a vehicle manufacturer to fail to meet for 
        any model year the applicable minimum domestic content ratio 
        required under section 5(a).
            (2) Order of secretary.--If the Secretary finds, after 
        notice and an opportunity for a hearing in accordance with 
        section 554 of title 5, United States Code, that a vehicle 
        manufacturer has violated paragraph (1), the Secretary shall 
        issue an order prohibiting the vehicle manufacturer from 
        entering, or having entered on its behalf, during the 12-month 
        period beginning on the date on which the finding becomes 
        final--
                    (A) a quantity of motor vehicles that exceeds the 
                total quantity of motor vehicles that was entered by, 
                or on behalf of, that manufacturer during the model 
                year in which such violation occurred reduced by the 
                number of motor vehicles that bears to such total 
                quantity the same percentage by which the vehicle 
                manufacturer failed to meet the domestic content ratio 
                for that model year; and
                    (B) parts for motor vehicles in an aggregate value 
                (as appraised for purposes of the customs laws) that 
                exceed the total aggregate appraised value of parts for 
                motor vehicles that were entered by, or on behalf of, 
                that manufacturer during the model year in which such 
                violation occurred reduced by parts of an aggregate 
                value that bear to such total aggregate value the same 
                percentage by which the vehicle manufacturer failed to 
                meet the domestic content ratio for that model year.
            (3) Order content.--An order issued pursuant to paragraph 
        (2) shall specify the total number of motor vehicles and the 
        aggregate appraised value of parts for motor vehicles that may 
        be entered during the applicable 12-month period by, or on 
        behalf of, the vehicle manufacturer.
            (4) Judicial review.--Any person against whom an order is 
        issued under paragraph (2) may, within 60 calendar days after 
        the date of the order, institute an action in the United States 
        court of appeals for the appropriate judicial circuit for 
        judicial review of such order in accordance with chapter 7 of 
        title 5, United States Code. The court shall have jurisdiction 
        to enter a judgment affirming, modifying, or setting aside in 
        whole or in part, the order of the Secretary or the court may 
        remand the proceeding to the Secretary for such further action 
        as the court may direct.
    (b) Other Violations.--
            (1) In general.--Any person who knowingly violates any 
        provision of this Act (other than failure to meet the 
        applicable domestic content ratio for any model year) or any 
        rule or regulation issued under this Act shall be liable, after 
        notice and opportunity for a hearing, to the United States for 
        a civil penalty of not more than $10,000. Each day of a 
        continuing violation under this subsection shall constitute a 
        separate offense.
            (2) Procedures.--
                    (A) Notice.--Before issuing an order assessing a 
                civil penalty against any person for violation of 
                paragraph (1), the Secretary shall provide to such 
                person written notice of the proposed penalty.
                    (B) Assessment.--The Secretary shall promptly 
                assess such penalty, by order, after the date of the 
                receipt of the notice under subparagraph (A) of the 
                proposed penalty.
                    (C) Action for nonpayment.--If the penalty has not 
                been paid within 60 calendar days after the assessment 
                order has been made under subparagraph (B), the 
                Secretary shall institute an action in the appropriate 
                district court of the United States for an order 
                affirming the assessment of the civil penalty. The 
                court shall have authority to review de novo the law 
                and the facts involved, and shall have jurisdiction to 
                enter a judgment enforcing, modifying, and enforcing as 
                so modified, or setting aside in whole or in part, such 
                assessment.
                    (D) Recovery action.--If any person fails to pay an 
                assessment of a civil penalty after the appropriate 
                district court has entered final judgment in favor of 
                the Secretary under subparagraph (C), the Secretary 
                shall institute an action to recover the amount of such 
                penalty in any appropriate district court of the United 
                States. In such action, the validity and 
                appropriateness of such final assessment order or 
                judgment shall not be subject to review.
            (3) Compromise, etc.--The Secretary may compromise, modify, 
        or remit, with or without conditions, any penalty that is 
        subject to imposition or that has been imposed under this 
        subsection.

SEC. 8. STUDY OF DISCRIMINATORY PRACTICES AFFECTING DOMESTIC PRODUCTION 
              OF MOTOR VEHICLE PARTS.

    Within one year after the date of the enactment of this Act, the 
Secretary and the Federal Trade Commission shall jointly undertake an 
investigation, and submit to Congress a written report, regarding those 
policies and practices of vehicle manufacturers that are used to 
persuade United States motor vehicle dealers, in choosing replacement 
parts for motor vehicles, to favor foreign-made parts rather than 
domestically produced parts. Such report shall include recommended 
administrative or legislative action that the Secretary and the Federal 
Trade Commission consider appropriate to assure that domestic producers 
of replacement parts are accorded fair access to the United States 
market for such parts.

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