[Federal Register Volume 66, Number 14 (Monday, January 22, 2001)]
[Proposed Rules]
[Pages 6523-6532]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-1524]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 534

[Docket No. NHTSA 2001-8668]
RIN 2127-AG97


Fuel Economy Standards--Rights and Responsibilities of 
Manufacturers in the Context of Changes in Corporate Relationships

AGENCY: National Highway Traffic Safety Administration (NHTSA), 
Department of Transportation.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document proposes a new regulation to define the rights 
and responsibilities of manufacturers under

[[Page 6524]]

the agency's corporate average fuel economy program in the context of 
changes in corporate relationships. The proposed regulation addresses 
the rights and responsibilities of predecessors and successors, as well 
the rights and responsibilities of manufacturers in other situations 
where there have been changes in corporate relationships, e.g., changes 
in control. Among other things, the proposed regulation would address 
how fuel economy credits are allocated in these types of situations.

DATES: Comments must be received by March 23, 2001.

ADDRESSES: You should mention the docket number of this document in 
your comments and submit your comments in writing to: Docket 
Management, Room PL-401, 400 Seventh Street, S.W., Washington, D.C. 
20590. Alternatively, you may submit your comments to the docket 
electronically by logging onto the Dockets Management System website at 
http://dms.dot.gov. Click on ``Help & Information'' or ``Help/Info'' to 
obtain instructions for filing the document electronically. (This 
website also enables you to view the materials in the docket for this 
rulemaking.)
    You may call Docket Management at 202-366-9324. You may visit the 
Docket from 10:00 a.m. to 5:00 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Edward Glancy, Office of the Chief 
Counsel, National Highway Traffic Safety Administration, 400 Seventh 
Street, SW, Washington, DC 20590 (202-366-2992).

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
    A. Statutory Provisions
    B. Past Positions Taken by NHTSA With Respect to Predecessors 
and Successors
II. Proposal
    A. Introduction
    B. The Proposed Regulation
    1. Definitions
    2. Predecessors and Successors
    3. Manufacturers within Control Relationships
    4. Changes in Corporate Relationships Not Directly Addressed by 
the Proposed Regulation
    C. Supplementary Fuel Economy Reports
III. Rulemaking Analyses and Notices
    A. Executive Order 12866 and DOT Regulatory Policies and 
Procedures
    B. Regulatory Flexibility Act
    C. National Environmental Policy Act
    D. Executive Order 13132 (Federalism)
    E. Unfunded Mandates Act
    F. Executive Order 12778 (Civil Justice Reform)
    G. Paperwork Reduction Act
    H. Regulation Identifier Number (RIN)
    I. Plain Language
    J. Executive Order 13045
    K. National Technology Transfer and Advancement Act
IV. Submission of Comments

I. Background

A. Statutory Provisions

    In December 1975, Congress enacted the Energy Policy and 
Conservation Act (EPCA) in response to the energy crisis created by the 
oil embargo of 1973-74 and the level of oil imports, particularly from 
OPEC sources. Congress included a provision establishing an automotive 
fuel economy regulatory program. That provision added a new Title V, 
``Improving Automotive Efficiency,'' to the Motor Vehicle Information 
and Cost Saving Act. Congress has made various amendments to the fuel 
economy provisions since 1975, and the fuel economy provisions are now 
codified in Chapter 329 of Title 49 of the United States Code.
    Under Chapter 329, manufacturers are required to meet average fuel 
economy standards for passenger automobiles and light trucks. While 
separate fuel economy standards apply for each model year, 
manufacturers that fail to achieve the level of a standard within a 
particular model year do not necessarily violate the statute. Instead, 
under certain circumstances, a shortfall in one year (or years) can be 
offset if a manufacturer exceeds the standard in another year (or 
years). Under the Act, manufacturers earn credits for exceeding average 
fuel economy standards which may be carried back for three model years 
or carried forward for three model years.
    Chapter 329 defines the term ``manufacturer'' as ``a person engaged 
in the business of manufacturing automobiles, including a predecessor 
or successor of the person to the extent provided under regulations 
prescribed by the Secretary * * *'' (The Secretary has delegated 
responsibility for the automotive fuel economy program to NHTSA. 49 CFR 
1.50(f).) To date, we have not issued any regulations concerning 
predecessors and successors. We have also not issued any regulations 
concerning the rights and responsibilities of manufacturers in other 
situations where there have been changes in corporate relationships, 
e.g., changes in control.

B. Past Positions Taken by NHTSA With Respect to Predecessors and 
Successors

    Under general principles of corporate law, the term ``successor'' 
ordinarily refers to a corporation which, through amalgamation, 
consolidation, or other legal succession, becomes invested with the 
rights and assumes the burdens of another corporation. See Black's Law 
Dictionary, West Publishing Co.
    The automotive fuel economy program contains provisions which raise 
special issues related to the rights and burdens of predecessors and 
successors. Of particular significance are the provisions related to 
credits.
    Because credits may be carried backward three years and forward 
three years, compliance with a fuel economy standard for a particular 
model year may actually be determined over as much as a seven-year 
period. A variety of changes in corporate relationships may occur 
during such a long period, e.g., mergers, acquisitions, spin-offs, 
etc., and these provisions raise the issue of how credits and 
shortfalls should be allocated when such changes occur.
    In a 1990 letter to Chrysler, we addressed how fuel economy values 
should be calculated for Chrysler and AMC during the model year in 
which Chrysler acquired AMC, model year (MY) 1987. We concluded that 
all of Chrysler's and AMC's vehicles should be treated as manufactured 
by the same manufacturer for that model year. In reaching this 
conclusion we stated the following: \1\
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    \1\ Our 1990 letter referred to the language and section numbers 
of the Motor Vehicle Information and Cost Savings Act. Those 
provisions were codified into 49 U.S.C. Chapter 329 by Pub. L. 103-
272 (July 5, 1994). Section 1(a) of that law stated that the laws 
being codified were being done so ``without substantive change''.
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    Fuel economy standards apply to passenger automobiles 
manufactured by a manufacturer, for a particular model year. See 
section 502(a)(l). Moreover, average fuel economy is calculated 
based on the total number of passenger automobiles manufactured in a 
given model year by a manufacturer. See section 503(a)(l). Under 
section 503(c), the term ``passenger automobiles manufactured by a 
manufacturer'' includes all automobiles manufactured by persons who 
control, are controlled by, or are under common control with, such 
manufacturer.'' Since Chrysler controlled AMC prior to the end of 
the 1987 model year, and since fuel economy standards apply to 
particular model years as a whole and not to separate parts of a 
model year, it is our opinion that all of the vehicles produced by 
both Chrysler and AMC for model year 1987 shall be treated as if 
manufactured by the same manufacturer, i.e., placed into one fleet. 
Otherwise, one or both of the manufacturers would have two separate 
CAFE values, pre-acquisition (or pre-control) and post-acquisition 
(or post-control), for the same model year.

    We also addressed generally the issue of how credits may be applied 
between predecessors and successors, along with the legal and policy 
issues associated with applying credits between predecessors and 
successors. Among other things, we stated the following:


[[Page 6525]]


    We will now address generally the issue of how credits may be 
used where one manufacturer is the successor of another. In 
discussing the issue, we will refer to the following hypothetical 
example: A and B are both car manufacturers. After consolidation, A 
is the only surviving corporation and is invested with the rights 
and assumes the burdens of B. Thus, A is the ``successor'' of B.
    While this example and subsequent discussion is for passenger 
automobiles, the relevant requirements concerning the earning and 
availability of credits are essentially identical for passenger 
automobile standards and light truck standards. Compare section 
502(l)(1)(B) and 49 CFR Part 535, and see 45 FR 83233-36, December 
18, 1980. Thus, our analysis for passenger automobile standards is 
also relevant to light truck standards.

    Section 502(l)(1)(B) states:

    Whenever the average fuel economy of the passenger automobiles 
manufactured by a manufacturer in a particular model year exceeds an 
applicable average fuel economy standard * * *, such manufacturer 
shall be entitled to a credit calculated under subparagraph (C), 
which--
    (i) shall be available to be taken into account with respect to 
the average fuel economy of that manufacturer for any of the three 
consecutive model years immediately prior to the model year in which 
such manufacturer exceeds such applicable average fuel economy 
standard, and
    (ii) to the extent that such credit is not so taken into account 
pursuant to clause (i), shall be available to be taken into account 
with respect to the average fuel economy of that manufacturer for 
any of the three consecutive model years immediately following the 
model year in which such manufacturer exceeds such applicable 
average fuel economy standard.

    We note first that credits earned by a particular manufacturer are 
only ``available to be taken into account with respect to the average 
fuel economy of that manufacturer,'' for any of the three model years 
before, or after, the model year in which the credits are earned. 
(Emphasis added.) In the example set forth above, B is no longer a 
manufacturer under the Cost Savings Act. (Indeed, it is no longer a 
``person'' under section 501(8).) Thus, in the absence of some 
provision concerning ``successors,'' any unused credits that B had 
earned prior to the consolidation would expire unused, since the only 
manufacturer to which they are available no longer exists. However, for 
some purposes B continues to exist as part of A, its ``successor.''
    Section 501(8)'s definition of ``manufacturer'' does not provide 
that the term ``manufacturer'' necessarily includes any predecessor or 
successor but instead provides that the term does so ``to the extent 
provided under rules which the Secretary shall prescribe.'' This 
provision was added by the Automobile Fuel Efficiency Act of 1980 as a 
conforming amendment to the section concerning modification of local 
content requirements to encourage domestic production of fuel efficient 
automobiles and not to the section concerning credits. The legislative 
history does not provide any indication as to why the provision was 
added, and, to date, NHTSA's administration of the statutory provisions 
concerning modification of the local content requirements has not 
turned up a situation for which such rules would be relevant. Should 
rules be issued under section 501(8), NHTSA would do so by notice-and-
comment rulemaking, taking account of the purposes of that section and 
the statutory scheme as a whole.
    Notwithstanding the absence of rules, we do not believe that 
Congress intended to require the forfeit of a manufacturer's unused 
credits in a situation where that manufacturer's substance continues to 
exist as part of a ``successor.'' Thus, taking account of section 
501(8) and the statutory scheme as a whole, we conclude that, in the 
example set forth above, B can be deemed as continuing to exist as part 
of A, from the time of succession.
    This conclusion does not, however, permit the general integration 
of A's and B's credits and shortfalls. Under section 502(l)(1)(B), 
credits earned by a particular manufacturer are only ``available to be 
taken into account with respect to the average fuel economy of that 
manufacturer.'' Since B's existence as part of A only dates from the 
time of succession, B is not the same manufacturer as A prior to the 
time of succession. Thus, any credits earned by B would only be 
available to offset A's shortfalls for the model years during which B 
exists as part of A, since it is only at that time that the credits 
earned by B and applied to A can be considered to be taken into account 
with respect to the average fuel economy of ``that manufacturer.'' 
Similarly, the only credits earned by A which would be available to B 
would be those credits earned during the time when B exists as part of 
A.
    The general integration of A's and B's credits would be 
inconsistent with the basic structure of section 502(l)(1). Assume, for 
example, that A and B are separate manufacturers for model years 1 
through 6, and A is the successor of B for model year 7. If general 
integration of credits were permitted, credits earned by B in model 
year 4 could be applied to A's CAFE for model years 1-6, as well as 
model year 7. However, the structure of section 502(l)(1) does not 
permit this result. Under paragraph (B)(i), any credits earned by B in 
model year 4 are available to be carried back with respect to B's CAFE 
for any of model years 1, 2 and 3. To the extent that such credits are 
not so used, paragraph (B)(ii) makes those credits available to be 
carried forward with respect to B's CAFE for any of model years 5, 6 
and 7. In order for credits earned by B in model year 4 to be applied 
to A's CAFE for model years 1-6, B's credits would first have to be 
carried forward to model year 7 (the model year where A is B's 
successor) and then be carried back to model years 1-6 (for application 
to A's CAFE), a process which has no statutory basis.
    We will now apply the general analysis discussed above to the 
particular facts cited in Chrysler's letter. Prior to MY 1987, Chrysler 
and AMC were two separate manufacturers. Chrysler acquired AMC during 
MY 1987, and became the ``successor'' to AMC at that time. Under 
section 502(l)(1)(B), credits earned by a particular manufacturer are 
only ``available to be taken into account with respect to the average 
fuel economy of that manufacturer.'' Since AMC's existence as part of 
Chrysler only dates from MY 1987, AMC was not the same manufacturer as 
Chrysler prior to MY 1987. Thus, any credits earned by AMC would only 
be available to Chrysler to offset CAFE shortfalls incurred in the 
model years during which AMC exists as part of Chrysler, i.e., MY 1987 
and thereafter, since it is only at that time that the credits earned 
by AMC and applied to Chrysler can be considered to be taken into 
account with respect to the average fuel economy of ``that 
manufacturer.'' Similarly, the only credits earned by Chrysler which 
would be available to AMC would be those credits earned during the time 
when AMC exists as part of Chrysler, i.e., credits earned in MY 1987 
and thereafter.
    The issue of the extent to which Chrysler could use AMC's credits 
was subsequently raised in the context of an enforcement proceeding 
brought by NHTSA staff concerning Chrysler's apparent violation of the 
light truck CAFE standard for MY 1984. On January 8, 1992, DOT Chief 
Administrative Law Judge John J. Mathias issued an Initial Decision and 
Order (I.D.) in which he stated that he agreed with the substance of 
NHTSA Complaint Counsel's position but concluded that the Complaint 
should be dismissed because NHTSA had not prescribed rules pursuant to 
section 501(8) of the Act (since recodified at 49 U.S.C. 
32901(a)(13)(A)) that define the extent to which the term 
``manufacturer'' includes any predecessor or successor of a

[[Page 6526]]

manufacturer of automobiles. CHRYSLER CORPORATION (NHTSA--Fuel Economy 
Standards Enforcement), U.S. Dep't. of Transportation, Office of 
Hearings, Washington, D.C., Docket 47414 (January 8, 1992). Later, 
NHTSA's Administrator set aside the I.D. and issued an order directing 
that the agency commence a proceeding to prescribe such rules. In re 
CHRYSLER CORPORATION; Corporate Average Fuel Economy Enforcement 
Proceeding, U.S. Dep't. of Transportation, National Highway Traffic 
Safety Administration, Docket No. 47414 (March 31, 1992).

II. Proposal

A. Introduction

    Our initial purpose in developing this proposal was to define the 
extent to which predecessors and successors of manufacturers of 
automobiles should be included within the term ``manufacturer.'' 
However, during the development of the proposal, we decided to expand 
that purpose. We recognized that a number of the issues concerning how 
credits may be used between predecessors and successors also arise in 
the context of other changes in corporate relationships, e.g., changes 
in control. While we could handle issues related to changes in control 
by interpretation of the statute, we believe it would be helpful for 
both the industry and the agency to have a regulation in place which 
provides guidance in this area.
    In developing this proposal, we have attempted to achieve two key 
goals. First, we would like the regulation to be as faithful as 
possible to the purpose of the statute and the overall statutory 
scheme. Second, we would like the regulation to be as simple as 
possible, while still providing the necessary guidance for the agency 
and the industry to use in determining how changes in corporate 
relationships are to be considered in determining compliance with fuel 
economy standards.
    The purpose of Chapter 329 is, of course, energy conservation. As 
to the overall statutory scheme, we believe there are several aspects 
that are relevant to how we should treat changes in corporate 
relationships.
    First, to promote flexibility, Congress decided to allow compliance 
with fuel economy standards to be determined over a multi-year period. 
In particular, a manufacturer may offset a shortfall for any given 
model year by using credits it has earned or will earn in the three 
prior model year or three succeeding model years.
    Second, Congress limited the use of credits to the manufacturer 
which earned them; credits may not be bought or sold.
    Third, average fuel economy is measured, and compliance with fuel 
economy standards determined, for groups of companies within a control 
relationship rather than for individual companies.
    We believe that each of these aspects of the statutory scheme needs 
to be reflected in the regulation concerning the rights and 
responsibilities of manufacturers in the context of changes in 
corporate relationships.
    As to our desire to keep the regulation as simple as possible, we 
are concerned that an effort to comprehensively address all of the 
various ways corporate relationships may change over time could get the 
agency bogged down in defining endless situations that it would 
probably never have to deal with in practice. At the same time, we 
believe there is a need for the regulation to provide the necessary 
guidance for the agency and the industry to use in determining how 
changes in corporate relationships are to be considered in determining 
compliance with fuel economy standards. We are proposing a regulation 
that we believe would accomplish this. A discussion of the proposed 
regulation follows.

B. The Proposed Regulation

    The proposed regulation is relatively short. It begins by setting 
forth definitions of several key terms, including predecessor, 
successor and control relationship. It includes a section which 
specifically addresses several situations concerning predecessors and 
successors which have either already occurred or might reasonably be 
expected to occur. Examples, in the form of specific factual 
situations, are provided for purposes of clarity. It also includes a 
section which specifically addresses several potential situations 
regarding changes in control relationships. The details of the proposed 
regulation are discussed below. We specifically request comments on 
whether the regulation should specifically address any additional types 
of changes in corporate relationships, or provide additional examples 
in the form of factual situations and, if so, how. To the extent that a 
situation arose that was not directly addressed by the regulation, the 
agency would make necessary determinations based on interpretation of 
the statute and the principles reflected in the regulation.
    We note that the proposed regulation would adopt the same positions 
concerning predecessors and successors as we did in our 1990 letter to 
Chrysler.
1. Definitions
    The proposed regulation includes four definitions.
    Control relationship. ``Control relationship'' is defined to mean 
the relationship that exists between manufacturers that control, are 
controlled by, or are under common control with, one or more other 
manufacturers. This definition reflects the provision at 49 U.S.C. 
32901(a)(4) which specifies that the automobiles manufactured by a 
manufacturer include automobiles manufactured by a person that 
controls, is controlled by, or is under common control with the 
manufacturer.
    Successor. ``Successor'' is defined to mean ``a manufacturer which 
has become vested with the rights and assumed the burdens of another 
manufacturer.'' This definition reflects the ordinary corporate law 
meaning of the term ``successor.''
    Predecessor. ``Predecessor'' is defined to mean ``a manufacturer 
whose rights have been vested in and whose burdens have been assumed by 
another manufacturer.'' This definition reflects the ordinary corporate 
law meaning of the term and mirrors the proposed definition for 
``successor.''
    Identity. Under the proposed regulation, ``identity'' is defined to 
mean ``the relationship between a predecessor and a successor during 
the time in which the successor owns 50 percent or more of the assets, 
based on valuation, that had belonged to the predecessor.'' This is the 
time when we believe it is reasonable to view the predecessor 
manufacturer as continuing to exist as part of the successor. The 
proposed limitation with respect to owning 50 percent or more of the 
assets is to address a possible situation where one company might 
purchase another, become the successor, but then quickly sell the 
assets to a third company. As discussed below, we use the concept of 
identity, in the context of predecessors and successors, as part of 
specifications to ensure that credits are only used by a manufacturer 
which can reasonably be considered to have earned them.
2. Predecessors and Successors
    The proposed regulation has four specifications which define the 
extent to which predecessors and successors of manufacturers of 
automobiles are included within the definition of ``manufacturer,'' for 
purposes of the automotive fuel economy program. Examples, in the form 
of specific factual

[[Page 6527]]

situations, are provided for purposes of clarity.
    Specification (a). The first proposed specification provides that 
``(s)uccessors are responsible for any civil penalties that arise out 
of fuel economy shortfalls incurred by predecessors.'' We recognize 
that this specification could be considered unnecessary in the sense 
that it simply states what follows directly from corporate law: the 
assumption of the burdens of a predecessor corporation, as well as the 
vesting of the rights of that corporation, is an inherent part of being 
a successor under corporate law. However, we believe that any 
regulation which specifies the extent to which predecessors and 
successors of manufacturers of automobiles are included within the 
definition of ``manufacturer,'' for purposes of the automotive fuel 
economy program, should make this clear at the outset.
    Specification (b). The second specification provides that ``(i)f 
one manufacturer becomes the successor of another manufacturer during a 
model year, all of the vehicles produced by those manufacturers during 
the model year are treated as though they were manufactured by the same 
manufacturer.'' It also provides that ``(a) manufacturer is considered 
to have become the successor of another manufacturer during a model 
year if it is the successor on September 30 of the corresponding 
calendar year and was not the successor for the preceding model year.''
    As we discussed in our 1990 letter to Chrysler, fuel economy 
standards apply to passenger automobiles manufactured by a 
manufacturer, for a particular model year, and average fuel economy is 
calculated based on the total number of passenger automobiles 
manufactured in a given model year by a manufacturer. We recently 
reiterated that view in a January 13, 2000 letter to Volvo Cars of 
North America. Since fuel economy standards apply to particular model 
years as a whole and not to separate parts of a model year, we believe 
that if one manufacturer acquires another during a model year, they 
should be deemed the same manufacturer, with a single CAFE value, for 
that model year.
    In a 1990 letter to Ford, we concluded that, for purposes of 
deciding the model year in which one manufacturer acquires another, the 
``traditional model year,'' starting approximately October 1, is the 
appropriate frame of reference. The second sentence in specification 
(b) reflects this interpretation.
    Specification (c). The third proposed specification provides that 
``(c)redits earned by a predecessor may be used by a successor for 
those model years in which there is an identity between the predecessor 
and successor, subject to availability of the credits and the general 
three-year restriction on carrying credits forward.''
    As we discussed in our letter to Chrysler, the statute provides 
that credits are available only to the manufacturer which earned them. 
Therefore, in the absence of some regulatory provision concerning 
successors, any unused credits of a predecessor would simply expire 
unused.
    However, we continue to believe that Congress did not intend to 
require the forfeit of a manufacturer's unused credits in a situation 
where that manufacturer's substance continues to exist as part of a 
``successor.'' We are therefore proposing that credits earned by a 
predecessor may be used by a successor for those model years in which 
there is identity between the predecessor and successor.
    Credits earned by a predecessor could not, however, be used by a 
successor for model years in which there was no identity between the 
predecessor and successor. We believe that, in such a situation, the 
credits could not reasonably be considered to be used by the 
manufacturer which had earned them.
    The following example helps illustrate how this provision would 
work in practice:
    A purchases B in model year x and becomes the successor of B. A's 
CAFE in model year x (which includes the combined production of what 
had been A and B) is less than the applicable CAFE standard for that 
model year. B had credits at the time of the acquisition because it 
exceeded the applicable fuel economy standard in the previous model 
year. The credits of B (the predecessor) could be used by A in model 
year x, model year x+1 and model year x+2, because there would be an 
identity between B and A in those model years. However, the credits of 
B could not be used to offset any shortfall incurred by A in model year 
x-1 or before, since there was no identity between B and A during those 
model years.
    As indicated above, we believe that the use of B's credits (the 
predecessor's credits) by A (the successor) for model years x-1 or 
before (model years before the acquisition) could not reasonably be 
considered to be use by the manufacturer which had earned them. There 
was no relationship between A and B model year x-1 and before; they 
were two completely different manufacturers.
    Moreover, as we discussed in our 1990 letter to Chrysler, the 
statute does not provide for the same credits being carried both 
forward and backward; e.g., forward to A from before the time it 
acquired B and then backward to A for the model years prior to the 
acquisition when A had shortfalls.
    Finally, it would be inappropriate to allow A (the successor) to 
succeed to rights with respect to B's credits that are greater than B 
had at the time of the acquisition. As of the time of the acquisition, 
the only right B had with respect to carrying its existing credits 
backward was the right to apply them to its own fleet; it did not have 
the right to apply them to the fleets of other manufacturers or to sell 
them to be applied to such fleets.
    Specification (d). The fourth proposed specification provides that 
``(c)redits earned by a successor during model years in which there is 
an identity between the successor and predecessor may be used to offset 
a predecessor's shortfall, subject to availability of the credits and 
the general three-year restriction on carrying credits backward.''
    Under the statute, a manufacturer that experiences a shortfall 
which it cannot offset by using credits it has earned during the past 
three model years has three additional model years to earn offsetting 
credits. However, given that the statute provides that credits may only 
be used by the manufacturer that earned them, there would be no way of 
offsetting a predecessor's remaining shortfalls in the absence of a 
regulatory provision.
    We do not believe that Congress intended to require the forfeiture 
of a manufacturer's ability to offset CAFE shortfalls by earning future 
credits simply because it was acquired by another manufacturer; i.e., 
in a situation where that manufacturer's substance continues to exist 
as part of a ``successor.'' We are therefore proposing that credits 
earned by a successor during model years in which there is an identity 
between the successor and predecessor may be applied to a predecessor's 
shortfall.
    Specifications (c) and (d), taken together, give the successor all 
the rights the predecessor had with respect to credits, both as to the 
use of existing credits and the ability to earn future credits to 
offset existing shortfalls. We are aware that some manufacturers would 
like the successor to somehow have greater rights than those enjoyed by 
the predecessor. For example, while AMC's rights to its MY 1984 
credits, as

[[Page 6528]]

of the time of its acquisition in MY 1987, were to apply them to its 
own fleet in MY 1981-1983 and 1985-1986 (since it had no successor in 
that time period) and to apply them to itself (as part of Chrysler) in 
MY 1987, Chrysler, as successor to AMC, wanted to be able to apply 
AMC's 1984 credits to offset shortfalls incurred by its own 
(Chrysler's) pre-MY 1987 fleet. However, such use of AMC's credits 
could not reasonably be considered a use by the manufacturer which had 
earned them and therefore would be inconsistent with the statute.
    We also note that permitting such use of credits would discourage 
energy conservation. For example, to the extent that a successor had 
been planning to exceed standards in the future to earn credits that 
could be carried back to cover pre-acquisition shortfalls, permitting 
the successor to use the predecessor's previously earned credits to 
cover those shortfalls would remove the incentive to exceed those 
standards.
3. Manufacturers within Control Relationships
    The proposed regulation has eight specifications concerning the 
rights and responsibilities of manufacturers within control 
relationships. These specifications are generally based on the same 
principles we considered in developing the proposed specifications 
concerning predecessors and successors. A discussion of the eight 
specifications follows.
    Specification (a). The first proposed specification provides that 
``(i)f a civil penalty arises out of a fuel economy shortfall incurred 
by a group of manufacturers within a control relationship, each 
manufacturer within that group is jointly and severally liable for the 
civil penalty.'' This specification follows directly from the statutory 
provisions which provide that average fuel economy is measured, and 
compliance with fuel economy standards determined, for groups of 
companies within a control relationship rather than for individual 
companies. However, we believe that any regulation which specifies the 
rights and responsibilities of manufacturers within control 
relationships should make this clear at the outset. As a practical 
matter, we would initially seek payment of any civil penalties arising 
from the fuel economy performance of a group of manufacturers within a 
control relationship from whoever that group designated as being 
responsible.
    Specification (b). The second proposed specification provides that 
``(a) manufacturer is considered to be within a control relationship 
for an entire model year if and only if it is within that relationship 
on September 30 of the calendar year in which the model year ends.'' 
This specification corresponds directly to the proposed specification 
(b) for predecessors and successors, and reflects the same rationale.
    Specification (c). The third proposed specification provides that 
``(t)o the extent that a manufacturer within a control relationship was 
outside that relationship for a previous model year and not within any 
other control relationship, credits earned by the manufacturer during 
such model year may be used by the group of manufacturers within the 
control relationship for those model years in which the manufacturer is 
within that relationship, subject to the agreement of the manufacturer, 
the availability of the credits, and the general three-year restriction 
on carrying credits forward.''
    This specification is very similar to the proposed specification 
(c) for predecessors and successors. If a previously independent 
manufacturer has been purchased or otherwise brought within a control 
relationship, its credits do not expire but can continue to be used by 
it under the same conditions as before. For model years in which it is 
now part of a group of manufacturers, application of its credits to 
itself would mean application to the entire group of manufacturers 
since average fuel economy is measured, and compliance with fuel 
economy standards determined, for groups of companies within a control 
relationship rather than for individual companies.
    We note that one difference between this proposed specification and 
the corresponding one we are proposing for predecessors and successors 
is the statement that use of the credits is subject to the agreement of 
the manufacturer which earned them. In the case of a predecessor/
successor situation, the predecessor no longer exists and the successor 
has assumed all of its rights and duties. In this situation, however, 
the previously independent company continues to exist and could have 
different interests than the group of manufacturers. We therefore 
believe it is appropriate to make use of the credits subject to the 
agreement of that company. Similar provisions are included in several 
of the other proposed specifications for manufacturers within control 
relationships.
    Specification (d). The fourth proposed specification provides that 
``(t)o the extent that a manufacturer within a control relationship was 
outside that relationship for a previous model year and not within any 
other control relationship, shortfalls incurred by the manufacturer for 
such model year may be offset by credits earned by the group of 
manufacturers within the control relationship for subsequent model 
years in which the manufacturer is within the relationship, subject to 
the agreement of the other manufacturers, the availability of the 
credits, and the general three-year restriction on carrying credits 
backward.''
    This specification is very similar to the proposed specification 
(d) for predecessors and successors.
    Specifications (e) through (h). The final four proposed 
specifications for manufacturers within control relationships address 
situations in which a manufacturer which is controlled by another 
manufacturer is sold or otherwise spun off. We note that, given the 
general trend toward consolidation in the auto industry, this situation 
appears less likely to arise than the ones discussed earlier. 
Nonetheless, we believe that there is sufficient possibility that spin-
offs may occur that it is reasonable to address spin-offs in the 
proposed regulation.
    The proposed specifications generally provide that a company which 
has been spun off may use credits that were earned while it was part of 
a group of manufacturers, subject to the agreement of the other 
manufacturer or manufacturers in the group. They also generally provide 
that credits which the spun-off company earns may be carried back to 
the group of manufacturers for model years in which it was part of the 
group, subject to the spun-off company's approval.
    We recognize that in situations where a manufacturer which is 
controlled by another manufacturer is sold to a third manufacturer, 
there is a possibility that the manufacturers might wish to transfer a 
greater number of credits than can reasonably be considered to be 
related to the transaction at issue. The following example illustrates 
such a possibility:

    A, a very large manufacturer with a large credit balance, 
controls B, a very small manufacturer which only produces vehicles 
with low fuel economy, by virtue of owning B's stock. A sells B to 
C, a very large manufacturer with a large credit deficit. C would 
like to get as many credits as possible in this transaction.

    In this situation, we believe it would be reasonable to permit B to 
take some credits with it. It was part of the group of manufacturers 
which earned the credits. Moreover, B might be able to argue that it 
did not improve its fuel economy in the past because it was part

[[Page 6529]]

of a group of manufacturers that together exceeded the CAFE standard.
    However, given that the statute does not permit the selling of 
credits, we do not believe it would be reasonable to permit B to take 
with it a greater number of credits than it could use if it had become 
independent. B has not produced any vehicles which exceed the fuel 
economy standard, and, if we permitted a large-scale transfer of 
credits, the sale of B might be nothing more than a disguised 
transaction to transfer credits. We have therefore included provisions 
in the proposed specifications to limit the transfer of credits in this 
and similar types of situations to numbers that can reasonably be 
considered to be directly related to the sale of the company at issue.
4. Changes in Corporate Relationships Not Directly Addressed by the 
Proposed Regulation
    We believe the proposed regulation addresses the types of changes 
in corporate relationships that are most likely to occur. Moreover, we 
are requesting comments on whether the regulation should specifically 
address any additional types of changes in corporate relationships, or 
provide additional examples in the form of factual situations and, if 
so, how. Depending on the comments, we may include provisions in the 
final rule addressing additional types of changes in corporate 
relationships and/or additional examples in the form of factual 
situations. Since we do not believe it would be possible to 
comprehensively address every conceivable situation that could arise, 
the proposed regulation includes a provision stating that to the extent 
that the regulation does not directly address an issue concerning the 
rights and responsibilities of manufacturers in the context of a change 
in corporate relationships, the agency will make determinations based 
on interpretation of the statute and the principles reflected in the 
regulation.

C. Supplementary Fuel Economy Reports

    One of our regulations, 49 CFR Part 537, Automotive Fuel Economy 
Reports, requires automobile manufacturers to submit to the agency 
reports concerning their plans to comply with fuel economy standards. 
While we are not proposing any changes to Part 537, we would note that 
successors must submit supplementary reports if required by section 
537.8 of that regulation.

III. Rulemaking Analyses and Notices

A. Executive Order 12866 and DOT Regulatory Policies and Procedures

    NHTSA has considered the impact of this rulemaking action under 
Executive Order 12866 and the Department of Transportation's regulatory 
policies and procedures. This rulemaking document is not economically 
significant. It was reviewed by the Office of Management and Budget 
under E.O. 12866, ``Regulatory Planning and Review.'' The rulemaking 
action has been determined to be significant under the Department's 
regulatory policies and procedures, given the public interest in the 
automotive fuel economy program.
    The proposed regulation would not create any new obligations. It 
would adopt the same positions concerning predecessors and successors 
as we have previously taken in interpretation letters.
    As discussed earlier in this notice, if we did not adopt 
regulations governing the use of CAFE credits by predecessors and 
successors, a predecessor's unused credits would simply expire, since 
the only manufacturer which could use them would no longer exist. 
Similarly, there would be no way of offsetting a predecessor's 
remaining CAFE shortfalls in the absence of some provision concerning 
successors. The successor would thus be required to pay the 
predecessor's penalties, a responsibility which it assumed with the 
rest of the predecessor's obligations, but would have no ability to 
earn future credits to offset the predecessor's shortfalls.
    To address this inequity, the proposed rule, like our prior 
interpretation, would give the successor all the rights the predecessor 
had with respect to the use of preexisting credits and the ability to 
earn future credits.
    The proposed provisions concerning the rights and responsibilities 
of manufacturers in other situations where there have been changes in 
corporate relationships, e.g., changes in control, are essentially a 
statement of our interpretation of the statute and reflect the same 
principles as the provisions relating to predecessors and successors.

B. Regulatory Flexibility Act

    We have considered the effects of this rulemaking action under the 
Regulatory Flexibility Act (5 U.S.C. Sec. 601 et seq.) I hereby certify 
that the proposed rule would not have a significant economic impact on 
a substantial number of small entities. Therefore, a regulatory 
flexibility analysis is not required for this action. As discussed 
above, the proposed regulation would not create any new obligations but 
would simply adopt the same positions concerning predecessors and 
successors as we have previously taken in interpretation letters. 
Similarly, the proposed provisions concerning the rights and 
responsibilities of manufacturers in other situations where there have 
been changes in corporate relationships, e.g., changes in control, are 
essentially a statement of our interpretation of the statute and 
reflect the same principles as the provisions relating to predecessors 
and successors. Moreover, as a practical matter, the acquiring 
corporations most likely to be affected by this regulation are not 
small businesses.

C. National Environmental Policy Act

    NHTSA has analyzed this proposed amendment for the purposes of the 
National Environmental Policy Act and determined that it would not have 
any significant impact on the quality of the human environment.

D. Executive Order 13132 (Federalism)

    The agency has analyzed this proposal in accordance with the 
principles and criteria set forth in Executive Order 13132 and has 
determined that it does not have sufficient federalism implications to 
warrant consultation with State and local officials or the preparation 
of a federalism summary impact statement. The proposed rule would have 
no substantial effects on the States, or on the current Federalism-
State relationship, or on the current distribution of power and 
responsibilities among the various local officials.

E. Unfunded Mandates Act

    The Unfunded Mandates Reform Act of 1995 requires agencies to 
prepare a written assessment of the costs, benefits and other effects 
of proposed or final rules that include a Federal mandate likely to 
result in the expenditure by State, local or tribal governments, in the 
aggregate, or by the private sector, of more than $100 million annually 
(adjusted for inflation with base year of 1995). The proposed rule 
would not result in the expenditure by State, local or tribal 
governments, in the aggregate, or by the private sector, of more than 
$100 million annually.

F. Executive Order 12778 (Civil Justice Reform)

    This proposed rule does not have any retroactive effect. However, 
we would, as a practical matter, consider the regulation in any 
enforcement action regarding predecessors and successors

[[Page 6530]]

that involved conduct that occurred before the regulation became 
effective.
    As discussed earlier, the proposed regulation would not create any 
new obligations but would adopt the same positions concerning 
predecessors and successors as we have previously taken in 
interpretation letters. If we did not adopt special provisions 
governing the use of CAFE credits by predecessors and successors, a 
predecessor's unused credits would simply expire, since the only 
manufacturer which could use them would no longer exist. Similarly, 
there would be no way of offsetting a predecessor's remaining CAFE 
shortfalls in the absence of some provision concerning successors.
    The proposed rule, like our prior interpretation, would address 
this inequity and give the successor all the rights the predecessor had 
with respect to credits. Thus, to the extent we considered and followed 
the approach of the proposed rule in any enforcement action regarding 
predecessors and successors that involved conduct that occurred before 
the regulation became effective, any effect on the amount of penalties 
would be beneficial for the manufacturers.
    We would similarly consider the regulation in any enforcement 
action regarding other situations where there have been changes in 
corporate relationships, e.g., changes in control, that involved 
conduct that occurred before the regulation became effective. However, 
the proposed provisions are essentially a statement of our 
interpretation of the statute.
    States are preempted from promulgating laws and regulations 
contrary to the provisions of this rule. The rule does not require 
submission of a petition for reconsideration or other administrative 
proceedings before parties may file suit in court.

G. Paperwork Reduction Act

    This rulemaking action does not include any collections of 
information.

H. Regulation Identifier Number (RIN)

    The Department of Transportation assigns a regulation identifier 
number (RIN) to each regulatory action listed in the Unified Agenda of 
Federal Regulations. The Regulatory Information Service Center 
publishes the Unified Agenda in April and October of each year. You may 
use the RIN contained in the heading at the beginning of this document 
to find this action in the Unified Agenda.

I. Plain Language

    Executive Order 12866 and the President's memorandum of June 1, 
1998, require each agency to write all rules in plain language. 
Application of the principles of plain language includes consideration 
of the following questions:

--Have we organized the material to suit the public's needs?
--Are the requirements in the rule clearly stated?
--Does the rule contain technical language or jargon that is not clear?
--Would a different format (grouping and order of sections, use of 
headings, paragraphing) make the rule easier to understand?
--Would more (but shorter) sections be better?
--Could we improve clarity by adding tables, lists, or diagrams?
--What else could we do to make the rule easier to understand?

    If you have any responses to these questions, please include them 
in your comments on this NPRM.

J. Executive Order 13045

    Executive Order 13045 (62 FR 19885, April 23, 1997) applies to any 
rule that: (1) is determined to be ``economically significant'' as 
defined under E.O. 12866, and (2) concerns an environmental, health or 
safety risk that NHTSA has reason to believe may have a 
disproportionate effect on children. This regulatory action does not 
meet either of those criteria.

K. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act (NTTAA) requires NHTSA to evaluate and use existing voluntary 
consensus standards \2\ in its regulatory activities unless doing so 
would be inconsistent with applicable law (e.g., the statutory 
provisions regarding NHTSA's vehicle safety authority) or otherwise 
impractical. This requirement is not relevant to this rulemaking 
action.
---------------------------------------------------------------------------

    \2\ Voluntary consensus standards are technical standards 
developed or adopted by voluntary consensus standards bodies. 
Technical standards are defined by the NTTAA as ``performance-based 
or design-specific technical specifications and related management 
systems practices.'' They pertain to ``products and processes, such 
as size, strength, or technical performance of a product, process or 
material.''
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IV. Submission of Comments

How do I prepare and submit comments?
    Your comments must be written and in English. To ensure that your 
comments are correctly filed in the Docket, please include the docket 
number of this document in your comments.
    Your comments must not be more than 15 pages long. (49 CFR 553.21). 
We established this limit to encourage you to write your primary 
comments in a concise fashion. However, you may attach necessary 
additional documents to your comments. There is no limit on the length 
of the attachments.
    Please submit two copies of your comments, including the 
attachments, to Docket Management at the address given above under 
ADDRESSES.
    Comments may also be submitted to the docket electronically by 
logging onto the Dockets Management System website at http://dms.dot.gov. Click on ``Help & Information'' or ``Help/Info'' to obtain 
instructions for filing the document electronically.
How can I be sure that my comments were received?
    If you wish Docket Management to notify you upon its receipt of 
your comments, enclose a self-addressed, stamped postcard in the 
envelope containing your comments. Upon receiving your comments, Docket 
Management will return the postcard by mail.
How do I submit confidential business information?
    If you wish to submit any information under a claim of 
confidentiality, you should submit three copies of your complete 
submission, including the information you claim to be confidential 
business information, to the Chief Counsel, NHTSA, at the address given 
above under FOR FURTHER INFORMATION CONTACT. In addition, you should 
submit two copies, from which you have deleted the claimed confidential 
business information, to Docket Management at the address given above 
under ADDRESSES. When you send a comment containing information claimed 
to be confidential business information, you should include a cover 
letter setting forth the information specified in our confidential 
business information regulation. (49 CFR Part 512.)
Will the agency consider late comments?
    We will consider all comments that Docket Management receives 
before the close of business on the comment closing date indicated 
above under DATES. To the extent possible, we will also consider 
comments that Docket Management receives after that date. If Docket 
Management receives a comment too late for us to consider it in 
developing a final rule (assuming that one is issued), we will consider 
that

[[Page 6531]]

comment as an informal suggestion for future rulemaking action.
How can I read the comments submitted by other people?
    You may read the comments received by Docket Management at the 
address given above under ADDRESSES. The hours of the Docket are 
indicated above in the same location.
    You may also see the comments on the Internet. To read the comments 
on the Internet, take the following steps:
    (1) Go to the Docket Management System (DMS) Web page of the 
Department of Transportation (http://dms.dot.gov/).
    (2) On that page, click on ``search.''
    (3) On the next page (http://dms.dot.gov/search/), type in the 
four-digit docket number shown at the beginning of this document. 
Example: If the docket number were ``NHTSA-1998-1234,'' you would type 
``1234.'' After typing the docket number, click on ``search.''
    (4) On the next page, which contains docket summary information for 
the docket you selected, click on the desired comments. You may 
download the comments.
    Please note that even after the comment closing date, we will 
continue to file relevant information in the Docket as it becomes 
available. Further, some people may submit late comments. Accordingly, 
we recommend that you periodically check the Docket for new material.

List of Subjects in 49 CFR Part 534

    Fuel economy, Motor vehicles.

    In consideration of the foregoing, we propose to amend chapter V of 
title 49 of the Code of Federal Regulations by adding a new part 534 to 
read as follows:

PART 534--RIGHTS AND RESPONSIBILITIES OF MANUFACTURERS IN THE 
CONTEXT OF CHANGES IN CORPORATE RELATIONSHIPS

Sec.
534.1  Scope.
534.2   Applicability.
534.3   Definitions.
534.4   Predecessors and successors.
534.5   Manufacturers within control relationships.
534.6   Situations not directly addressed by this regulation.

    Authority: 49 U.S.C. 32901; delegation of authority at 49 CFR 
1.50.


Sec. 534.1  Scope.

    This part defines the rights and responsibilities of manufacturers 
in the context of changes in corporate relationships for purposes of 
the automotive fuel economy program established by 49 U.S.C. chapter 
329.


Sec. 534.2  Applicability.

    This part applies to manufacturers of passenger automobiles and 
light trucks.


Sec. 534.3  Definitions.

    (a) Statutory definitions and terms. All terms used in 49 U.S.C. 
chapter 329 are used according to their statutory meaning.
    (b) As used in this part--
    Control relationship means the relationship that exists between 
manufacturers that control, are controlled by, or are under common 
control with, one or more other manufacturers.
    Identity means the relationship between a predecessor and a 
successor during the time in which the successor owns 50 percent or 
more of the assets, based on valuation, that had belonged to the 
predecessor.
    Predecessor means a manufacturer whose rights have been vested in 
and whose burdens have been assumed by another manufacturer.
    Successor means a manufacturer which has become vested with the 
rights and assumed the burdens of another manufacturer.


Sec. 534.4  Predecessors and successors.

    For purposes of the automotive fuel economy program, 
``manufacturer'' includes ``predecessors'' and ``successors'' to the 
extent specified in paragraphs (a) through (d) of this section.
    (a) Successors are responsible for any civil penalties that arise 
out of fuel economy shortfalls incurred by predecessors.

    Example: A purchases B in model year x and is generally invested 
with the rights and duties of B. B had a fuel economy shortfall two 
model years before (model year x-2) for which credits are not 
available and is subject to civil penalties which have not yet been 
paid. A is responsible for those civil penalties.

    (b) If one manufacturer has become the successor of another 
manufacturer during a model year, all of the vehicles produced by those 
manufacturers during the model year are treated as though they were 
manufactured by the same manufacturer. A manufacturer is considered to 
have become the successor of another manufacturer during a model year 
if it is the successor on September 30 of the corresponding calendar 
year and was not the successor for the preceding model year.
    (c) Credits earned by a predecessor may be used by a successor for 
those model years in which there is an identity between the predecessor 
and successor, subject to availability of the credits and the general 
three-year restriction on carrying credits forward.

    Example: A purchases B in model year x and becomes the successor 
of B. A's CAFE in model year x (which includes the combined 
production of what had been A and B) is less than the applicable 
CAFE standard for that model year. B had credits at the time of the 
acquisition because it exceeded the applicable fuel economy standard 
in the previous model year. The credits of B (the predecessor) could 
be used by A in model year x, model year x+1 and model year x+2, 
because there would be an identity between B and A in those model 
years. However, the credits of B could not be used to offset any 
shortfall incurred by A in model year x-1 or before, since there was 
no identity between B and A during those model years.

    (d) Credits earned by a successor during model years in which there 
is an identity between the successor and predecessor may be used to 
offset a predecessor's shortfall, subject to availability of the 
credits and the general three-year restriction on carrying credits 
backward.

    Example: A purchases B in model year x and becomes the successor 
of B. B had a fuel economy shortfall two model years before (model 
year x-2). Any credits earned by A in model year x and model year 
x+1 could be applied to B's shortfall, since there is an identity 
between A and B in model year x and model year x+1. However, credits 
earned by A in any model year before model year x could not be 
applied to B's shortfall, since there was no identity between A and 
B in model year x-1.


Sec. 534.5  Manufacturers within control relationships.

    (a) If a civil penalty arises out of a fuel economy shortfall 
incurred by a group of manufacturers within a control relationship, 
each manufacturer within that group is jointly and severally liable for 
the civil penalty.
    (b) A manufacturer is considered to be within a control 
relationship for an entire model year if and only if it is within that 
relationship on September 30 of the calendar year in which the model 
year ends.
    (c) To the extent that a manufacturer within a control relationship 
was outside that relationship for a previous model year and not within 
any other control relationship, credits earned by the manufacturer 
during such model year may be used by the group of manufacturers within 
the control relationship for those model years in which the 
manufacturer is within that relationship, subject to the agreement of 
the manufacturer, the availability of the credits, and the general 
three-year restriction on carrying credits forward.

[[Page 6532]]

    (d) To the extent that a manufacturer within a control relationship 
was outside that relationship for a previous model year and not within 
any other control relationship, shortfalls incurred by the manufacturer 
for such model year may be offset by credits earned by the group of 
manufacturers within the control relationship for subsequent model 
years in which the manufacturer is within the relationship, subject to 
the agreement of the other manufacturers, the availability of the 
credits, and the general three-year restriction on carrying credits 
backward.
    (e) If a manufacturer which is controlled by another manufacturer 
is sold or otherwise spun off so that it is no longer within that 
control relationship and is not within any other control relationship, 
it may use credits that were earned by the group of manufacturers 
within the control relationship while the manufacturer was within that 
relationship, subject to the agreement of the other manufacturers, the 
availability of the credits and the general restriction on carrying 
credits forward.
    (f) If a manufacturer which is controlled by another manufacturer 
is sold or otherwise spun off so that it is no longer within that 
control relationship but is within another control relationship, it may 
use credits that were earned by the group of manufacturers within the 
former control relationship while the manufacturer was within that 
relationship, subject to the agreement of the other manufacturers, the 
availability of the credits, and the general restriction on carrying 
credits forward, and subject to a demonstration by the manufacturer, 
and approved by the Administrator, that the credits to be used are no 
more than the manufacturer could use if it were not within another 
control relationship.
    (g) If a manufacturer which is controlled by another manufacturer 
is sold or otherwise spun off so that it is no longer within that 
control relationship and is not within any other control relationship, 
credits earned by that manufacturer may be used by the manufacturer or 
group of manufacturers previously within the control relationship for 
model years in which the manufacturer was within that relationship, 
subject to the agreement of the previously controlled manufacturer, the 
availability of the credits and the general restriction on carrying 
credits backward.
    (h) If a manufacturer which is controlled by another manufacturer 
is sold or otherwise spun off so that it is no longer within that 
control relationship but is within another control relationship, 
credits earned by manufacturers within the latter control relationship 
for model years in which the manufacturer is within that relationship 
may be used by the manufacturer or group of manufacturers within the 
former control relationship for model years in which the manufacturer 
was within that relationship, subject to the agreement of the group of 
manufacturers within the latter control relationship, the availability 
of the credits, and the general restriction on carrying credits 
backward, and subject to a demonstration by the manufacturer, and 
approved by the Administrator, that the credits to be used are no more 
than the manufacturer would have earned if it were not within another 
control relationship.


Sec. 534.6  Situations not directly addressed by this regulation.

    To the extent that this regulation does not directly address an 
issue concerning the rights and responsibilities of manufacturers in 
the context of a changes in corporate relationships, the agency will 
make determinations based on interpretation of the statute and the 
principles reflected in the regulation.

    Issued on: January 10, 2001.
Stephen R. Kratzke,
Associate Administrator for Safety Performance Standards.
[FR Doc. 01-1524 Filed 1-19-01; 8:45 am]
BILLING CODE 4910-59-P