[Federal Register Volume 87, Number 139 (Thursday, July 21, 2022)]
[Proposed Rules]
[Pages 43688-43729]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-15355]



[[Page 43687]]

Vol. 87

Thursday,

No. 139

July 21, 2022

Part III





 Consumer Product Safety Commission





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16 CFR Part 1421





Safety Standard for Debris Penetration Hazards; Proposed Rule

Federal Register / Vol. 87, No. 139 / Thursday, July 21, 2022 / 
Proposed Rules

[[Page 43688]]


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CONSUMER PRODUCT SAFETY COMMISSION

16 CFR Part 1421

[CPSC Docket No. CPSC-2021-0014]


Safety Standard for Debris Penetration Hazards

AGENCY: Consumer Product Safety Commission

ACTION: Notice of proposed rulemaking; notice of opportunity for oral 
presentation of comments.

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SUMMARY: The U.S. Consumer Product Safety Commission (Commission or 
CPSC) has determined preliminarily that there is an unreasonable risk 
of injury and death associated with debris penetration in off-highway 
vehicles (OHVs), including recreational off-highway vehicles (ROVs) and 
utility task/terrain vehicles (UTVs). To address these risks, the 
Commission proposes a rule to prevent debris penetration into the 
occupant area of an ROV/UTV. The Commission is providing an opportunity 
for interested parties to present written and oral comments on this 
notice of proposed rulemaking (NPR). Like written comments, any oral 
comments will be part of the rulemaking record.

DATES: 
    Deadline for Written Comments: Written comments must be received by 
September 19, 2022.
    Deadline for Request to Present Oral Comments: Any person 
interested in making an oral presentation must send an electronic mail 
(email) indicating this intent to the Division of the Secretariat at 
<a href="/cdn-cgi/l/email-protection#7c1f0c0f1f51130f3c1f0c0f1f521b130a"><span class="__cf_email__" data-cfemail="cba8bbb8a8e6a4b88ba8bbb8a8e5aca4bd">[email protected]</span></a> by August 22, 2022.

ADDRESSES: 
    Written Comments: You may submit written comments in response to 
the proposed rule, identified by Docket No. CPSC-2021-0014, by any of 
the following methods:
    Electronic Submissions: Submit electronic comments to the Federal 
eRulemaking Portal at: https://www.regulations.gov. Follow the 
instructions for submitting comments. CPSC typically does not accept 
comments submitted by email, except as described below. CPSC encourages 
you to submit electronic comments by using the Federal eRulemaking 
Portal, as described above.
    Mail/Hand Delivery/Courier Written Submissions: Submit comments by 
mail/hand delivery/courier to: Division of the Secretariat, Consumer 
Product Safety Commission, 4330 East West Highway, Bethesda, MD 20814; 
telephone: (301) 504-7479. If you wish to submit confidential business 
information, trade secret information, or other sensitive or protected 
information that you do not want to be available to the public, you may 
submit such comments by mail, hand delivery, or courier, or you may 
email them to: <a href="/cdn-cgi/l/email-protection#5a392a29397735291a392a2939743d352c"><span class="__cf_email__" data-cfemail="8ceffcffefa1e3ffcceffcffefa2ebe3fa">[email protected]</span></a>.
    Instructions: All submissions must include the agency name and 
docket number. CPSC may post all comments without change, including any 
personal identifiers, contact information, or other personal 
information provided, to: https://www.regulations.gov. Do not submit 
through this website: confidential business information, trade secret 
information, or other sensitive or protected information that you do 
not want to be available to the public. If you wish to submit such 
information, please submit it according to the instructions for mail/
hand delivery/courier/confidential written submissions.
    Docket for NPR: For access to the docket to read background 
documents or comments received, go to: https://www.regulations.gov, and 
insert the docket number, CPSC-2021-0014, into the ``Search'' box, and 
follow the prompts.

FOR FURTHER INFORMATION CONTACT: Han Lim, Directorate for Engineering 
Sciences, Office of Hazard Identification and Reduction, Consumer 
Product Safety Commission, National Product Testing and Evaluation 
Center, 5 Research Place, Rockville, MD 20850; telephone: 301-987-2327; 
<a href="/cdn-cgi/l/email-protection#4a222623270a293a3929642d253c"><span class="__cf_email__" data-cfemail="fb93979296bb988b8898d59c948d">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

I. Background and Statutory Authority

    On May 11, 2021, the Commission published an advance notice of 
proposed rulemaking (ANPR) to develop a rule to address the risk of 
injury associated with fire and debris penetration hazards in off-
highway vehicles (OHVs) (86 FR 25817).\1\ The vehicles comprising OHVs 
in the ANPR were all-terrain vehicles (ATVs), recreational off-highway 
vehicles (ROVs), and utility terrain or utility task vehicles (UTVs). 
The Commission received 10 comments. The Commission is issuing this 
notice of proposed rulemaking that focuses solely on debris penetration 
hazards, which are specific to ROVs and UTVs.\2\ Debris penetration 
through the floorboard or wheel well of an ROV or UTV can impale the 
occupants of the vehicles, and incidents associated with debris 
penetration have caused severe injuries and deaths. The information 
discussed in this preamble is derived from CPSC staff's briefing 
package for the NPR, which is available on CPSC's website at: https://www.cpsc.gov/s3fs-public/NPR-Safety-Standard-for-Recreational-Off-Highway-Vehicle-and-Utility-Task-Terrain-Vehicle-Debris-Penetration-Hazards-Updated-5-24-22.pdf?VersionId=WsZvCXh1daVDICnjLnOzyalVPE4uTL4t.
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    \1\ At the ANPR stage, the Commission noted that although at 
that time the rulemaking involved three vehicle types and two 
different hazard patterns, it was possible that the Commission would 
divide the proceeding into separate rulemakings at the NPR stage. 
This proposed rule will address the debris penetration hazard 
associated with ROVs and UTVs. The Commission intends to address 
fire hazards associated with ATVs, ROVs, and UTVs in a separate 
rulemaking.
    \2\ The Commission voted 4-0 to approve this notice, as amended: 
https://www.cpsc.gov/s3fs-public/Comm-Mtg-Min-NPR-Safety-Standard-for-Recreational-Off-Highway-Vehicle-and-Utility-Task-Terrain-Vehicle-Debris-Penetration-Hazards.pdf?VersionId=Jrg4w.CQSRMWfpsnNernXSSJcF5vZtFL.
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    This rulemaking addressing the debris penetration hazards 
associated with ROVs and UTVs falls under the authority of the CPSA. 15 
U.S.C. 2051-2084. Section 7(a) of the CPSA authorizes the Commission to 
promulgate a mandatory consumer product safety standard that sets forth 
performance or labeling requirements for a consumer product, if such 
requirements are reasonably necessary to prevent or reduce an 
unreasonable risk of injury. 15 U.S.C. 2056(a). Section 9 of the CPSA 
specifies the procedure that the Commission must follow to issue a 
consumer product safety standard under section 7 of the CPSA. In 
accordance with section 9, the Commission commenced this rulemaking by 
issuing an ANPR.
    According to section 9(f)(1) of the CPSA, before promulgating a 
consumer product safety rule, the Commission must consider, and make 
appropriate findings to be included in the rule, on the following 
issues:
    <bullet> The degree and nature of the risk of injury that the rule 
is designed to eliminate or reduce;
    <bullet> The approximate number of consumer products subject to the 
rule;
    <bullet> The need of the public for the products subject to the 
rule and the probable effect the rule will have on utility, cost, or 
availability of such products; and

[[Page 43689]]

    <bullet> The means to achieve the objective of the rule while 
minimizing adverse effects on competition, manufacturing, and 
commercial practices.

Id. 2058(f)(1).
    Under section 9(f)(3) of the CPSA, to issue a final rule, the 
Commission must find that the rule is ``reasonably necessary to 
eliminate or reduce an unreasonable risk of injury associated with such 
product'' and that issuing the rule is in the public interest. Id. 
2058(f)(3)(A)&(B). Additionally, if a voluntary standard addressing the 
risk of injury has been adopted and implemented, the Commission must 
find that:
    <bullet> The voluntary standard is not likely to eliminate or 
adequately reduce the risk of injury, or
    <bullet> Substantial compliance with the voluntary standard is 
unlikely.
    Id. 2058(f)(3)(D). The Commission also must find that expected 
benefits of the rule bear a reasonable relationship to its costs and 
that the rule imposes the least burdensome requirements that would 
adequately reduce the risk of injury. Id. 2058(f)(3)(E)&(F).

II. The Products

A. ROV

    An ROV is a motorized vehicle designed for off-highway use, with 
these features: four or more wheels with tires designed for off-highway 
use; non-straddle seating for one or more occupants; a steering wheel 
for steering controls; foot controls for throttle and braking; and a 
maximum vehicle speed greater than 30 miles per hour (mph). ROVs are 
typically equipped with Rollover Protective Structures (ROPS), seat 
belts, and other restraints, such as doors, nets, and shoulder bolsters 
for the protection of occupants.
    There are two distinct ROV varieties: utility-type ROVs and 
recreational-type ROVs. Models emphasizing utility have larger cargo 
beds, greater cargo capacities, and lower top speeds. Models 
emphasizing recreation have smaller cargo beds, lower cargo capacities, 
and higher top speeds. Both types of ROVs are included in the scope of 
the proposed rule.

B. UTVs

    UTVs have physical characteristics like ROVs. However, UTVs 
generally have maximum speeds between 25 and 30 mph. UTVs are included 
in the scope of the proposed rule. Figure 1 shows a picture of typical 
Utility-Type ROV, a Recreational-Type ROV, and a UTV.
[GRAPHIC] [TIFF OMITTED] TP21JY22.002

III. Risk of Injury

A. Description of Hazard

    ROVs and UTVs are intended to be driven off-highway and have all-
terrain capabilities; typical uses include farm work, hunting, 
recreation, trail riding, and competitive racing. These vehicles are 
often driven in wooded areas or trails, where the vehicles can be 
expected regularly to be driven over tree branches and sticks.
    Debris penetration involves debris (usually a tree branch or stick) 
cracking or penetrating the occupant area of an ROV or UTV. Debris 
penetration hazards are a comparatively greater concern for ROVs and 
UTVs because the wheel-well areas on these vehicles are generally 
larger and more open, compared to those of ATVs. In incidents, the 
debris usually cracks or penetrates through the floorboard of the 
underside of the ROV or UTV. When such penetration occurs, there is a 
potential for the branch or other debris to penetrate far enough into 
vehicle to harm occupants of the vehicle. As described in Section III.B 
of this preamble, debris penetration can occur even when the vehicle is 
being driven at low speeds.

B. Incident Data

1. Debris Penetration Recalls
    There have been three debris penetration recalls, all associated 
with ROVs. CPSC recall data include the number of affected vehicles, 
number of incidents, and injuries associated with the recalls. ROV 
manufacturers generated the recall data; although there may be some 
overlap in the incidents, the ROV manufacturer data is separate and 
distinct from the data associated with CPSC Epidemiology staff's injury 
and death analyses in Section III.B of this preamble, and the data 
associated with the Engineering Sciences assessment, in Section IV.A of 
this preamble.
    Collectively, over the period from 2014 through 2016, these three 
recalls consisted of approximately 55,000 recalled vehicles, 630 
incidents of debris cracking or breaking through the floorboards, and 
10 injuries. There were no deaths associated with ROV debris 
penetration hazards among these recalls.
2. National Electronic Injury Surveillance System (NEISS) and CPSC's 
Consumer Product Safety Risk Management System (CPSRMS) Data
    CPSC Epidemiology staff reviewed NEISS injury cases and CPSRMS 
injury cases that occurred in the period from 2009 to 2021. Staff 
searched for debris penetration incidents involving ATVs, ROVs, and 
UTVs.
    None of the debris penetration incidents involved an ATV (other 
than an ROV mischaracterized as an ATV). Given that ATVs do not have 
floorboards, the lack of debris penetration incidents involving ATVs 
was not unexpected. Because of this, ATVs are not included within the 
scope of the proposed rule.

[[Page 43690]]

    Between 2009 and 2021, there were a total of 107 incidents found in 
CPSC databases involving debris penetration hazards; 104 of these 
incidents were found in CPSRMS, and 3 injury cases were found in NEISS. 
A previous search conducted for the ANPR, completed in spring 2021, 
returned 105 total incidents involving debris penetration hazards, 
consisting of 103 CPSRMS incidents and 2 NEISS injury cases.
    Due to the small sample size of NEISS injury data, staff cannot 
estimate injuries.\2\ Instead, for the debris penetration hazard 
scenario, staff counted the three injuries from NEISS with the other 
reported injuries from CPSRMS. Table 1 shows the yearly breakout of 
debris penetration hazards by data sources and severity of incidents.

                      Table 1--Reported Incidents of OHV Debris Penetration Hazards by Year
                                      [CPSRMS: 2009-2021, NEISS: 2009-2020]
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                                                       Total                          Injury
                      Year                           incidents    Fatal reported     reported       Non-injury
                                                     reviewed        incidents       incidents       incidents
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Total...........................................             107               6              22              79
2009............................................               1               0               1               0
2010............................................               4               1               1               2
2011............................................               3               0               1               2
2012............................................               7               0               0               7
2013............................................               8               0               2               6
2014............................................              11               1               1               9
2015............................................               8               1               3               4
2016............................................              30               0               5              25
2017............................................              27               2               2              23
2018............................................               5               0               4               1
2019 *..........................................               2               1               1               0
2020 *..........................................               0               0               0               0
2021 *..........................................               1               0               1               0
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Sources: CPSRMS and NEISS.
* Data collection is ongoing.

    Many of the 104 debris penetration incidents found in CPSRMS 
include multiple people riding in the OHV. However, for reports 
involving nonfatal injuries, only the age and/or gender of one or two 
of the victims is recorded. In reports received from manufacturers and 
retailers, which largely consist of non-injury incidents, basic victim 
demographic information is frequently not included at all.
    Table 2 presents a broad overview of the distribution of the 107 
debris penetration incidents by primary victims' age and gender. Forty-
four of the 47 incidents with victim age missing are non-injury 
incidents; all 36 incidents with both victim age and gender missing are 
non-injury incidents as well.

                   Table 2--Reported Incidents of Debris Penetration Hazards by Age and Gender
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                                                                                      Gender
                                                      Female           Male           missing          Total
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0-17 years......................................               2               6               0               8
18-34 years.....................................               4              11               0              15
35-54 years.....................................               9              17               0              26
55+ years.......................................               0              11               0              11
Age Missing.....................................               1              10              36              47
                                                 ---------------------------------------------------------------
    Total.......................................              16              55              36             107
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Sources: CPSRMS and NEISS.

    CPSC field staff conducted in-depth investigations on the six fatal 
incidents. In all six fatal incidents, only one victim per incident 
died, as opposed to multiple fatalities per incident. Two incidents 
involved the death of a passenger, while the other four involved the 
death of the driver. Four involved a tree branch, one a large stick, 
and one a 2- to 3-inch piece of wood. At least three involved 
penetration of an occupant's chest.
    The severity of the 22 nonfatal injury incidents due to debris 
penetration is presented in Table 3. The injuries ranged from mostly 
minor cuts, bruises and/or abrasions, to more severe injuries, like 
broken bones or debris impalement in the body. Most of the nonfatal 
injuries occurred in the lower area of the body (e.g., ankles, legs, 
foot) or abdomen.

   Table 3--Reported Incidents of Debris Penetration Hazards by Injury
                                Severity
                   [2009-2020 NEISS, 2009-2021 CPSRMS]
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                     Injury severity                         Incidents
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Treated and Released, or Released without Treatment.....               2
Hospital Admission......................................               4
Emergency Department Treatment Received.................               3
First Aid Received by Non-Medical Professional..........               1
No First Aid or Medical Attention Received..............               2

[[Page 43691]]

 
Level of care not known.................................              10
                                                         ---------------
    Total Injury Incidents..............................              22
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Source: CPSRMS and NEISS.

IV. Relevant Existing Standards

    There are two voluntary standards associated with ROVs and UTVs: 
ANSI/ROHVA 1, American National Standard for Recreational Off-Highway 
Vehicles, and ANSI/OPEI B71.9, American National Standard for 
Multipurpose Off-Highway Utility Vehicles. A description of each 
standard follows.

A. ANSI/ROHVA 1 American National Standard for Recreational Off-Highway 
Vehicles

    The Recreational Off-Highway Vehicle Association (ROHVA) developed 
ANSI/ROHVA-1 American National Standard for Recreational Off-Highway 
Vehicles, which sets mechanical and performance requirements for ROVs. 
The most recent version of ANSI/ROHVA-1 was published in 2016. The 
ANSI/ROHVA-1-2016 standard defines an ``ROV'' as a motorized off-
highway vehicle designed to travel on four or more tires, intended by 
the manufacturer for recreational use by one or more persons and having 
the following characteristics:
    <bullet> A steering wheel for steering control;
    <bullet> Foot controls for throttle and service brake;
    <bullet> Non-straddle seating;
    <bullet> Maximum speed capability greater than 30 MPH;
    <bullet> Gross Vehicle Weight Rating (GVWR) no greater than 1,700 
kg (3,750 lbs);
    <bullet> Less than 2,030 mm (80 in) in overall width;
    <bullet> Engine displacement equal to or less than 1,000 cc for 
gasoline fueled engines;
    <bullet> Identification by means of a 17-character PIN or VIN.
    The standard addresses design, configuration, and performance 
aspects of ROVs, including requirements for accelerator and brake 
controls; service and parking brake/parking mechanism performance; 
lateral and pitch stability; lighting; tires; handholds; occupant 
protection; labels; and owner's manuals. The latest version of the 
standard adds vehicle handling requirements and enhanced seat belt 
reminder requirements to address rollover and occupant ejection hazards 
associated with ROVs. ANSI/ROHVA 1-2016 does not have requirements to 
address debris penetration into the occupant area of the vehicle.
    ROHVA member companies include Textron (formerly known as Arctic 
Cat), Bombardier Recreational Products (BRP), Honda, John Deere, 
Kawasaki, Polaris, and Yamaha. Work on ANSI/ROHVA-1 started in 2008; 
work was completed with publication of ANSI/ROHVA 1-2010. The standard 
was immediately opened for revision, and a revised standard, ANSI/ROHVA 
1-2011, published in July 2011. The most recent version was published 
in 2016.

B. ANSI/OPEI B71.9 American National Standard for Multipurpose Off-
Highway Utility Vehicles

    Some ROV manufacturers that emphasize the utility applications of 
their vehicles worked with the Outdoor Power Equipment Institute (OPEI) 
to develop ANSI/OPEI B71.9 American National Standard for Multipurpose 
Off-Highway Utility Vehicles. The most recent edition of the OPEI 
standard was published in 2016. ANSI/OPEI B71.9 defines a 
``multipurpose off-highway utility vehicle'' (MOHUV) as a vehicle 
having features specifically intended for utility use and having these 
characteristics:
    <bullet> Intended for transport of one or more persons and/or 
cargo, with a top speed in excess of more than of 25 mph;
    <bullet> Overall width of 2,030 mm (80 in) or less;
    <bullet> Designed to travel on four or more wheels, two or four 
tracks, or combinations of four or more wheels and tracks;
    <bullet> Use of a steering wheel for steering control;
    <bullet> Equipped with a non-straddle seat;
    <bullet> Gross Vehicle Weight Rating of no more than 1,814 kg 
(4,000 lbs.); and
    <bullet> Minimum cargo capacity of 159 kg (350 lbs.).
    The Commission considers MOHUVs with maximum speed capabilities 
between 25 and 30 mph to be ``UTVs.'' The Commission considers MOHUVs 
with maximum speed capabilities greater than 30 mph to be ROVs. The 
OPEI standard includes requirements for accelerator and brake controls; 
service and parking brake/parking mechanism performance; lateral and 
pitch stability; lighting; tires; handholds; occupant protection; 
labels; and owner's manuals. The latest version of the OPEI standard 
added vehicle handling requirements and enhanced seat belt reminder 
requirements (that are identical to the requirements in ANSI/ROHVA 1-
2016) for vehicles with maximum speeds greater than 30 mph to address 
rollover and occupant ejection hazards associated with ROVs. ANSI/OPEI 
B71.9-2016 does not have requirements to address debris penetration 
into the occupant area of the vehicle.
    OPEI member companies include Honda, John Deere, Kawasaki, and 
Yamaha. Work on ANSI/OPEI B71.9 was started in 2008, and it was 
completed with the publication of ANSI/OPEI B71.9-2012 in March 2012. 
The most recent version was published in 2016.

C. CPSC Staff Voluntary Standard Activity

    In a September 2018 meeting with ROHVA and OPEI, CPSC staff 
discussed the largest of the ROV debris penetration recalls involving 
628 manufacturer reports of debris cracking or penetrating through the 
floorboards and 8 injuries. Staff recommended that OPEI and ROVHA form 
task groups to study the ROV debris penetration issue. In subsequent 
meetings, CPSC staff discussed the debris penetration hazard recalls 
and redacted debris penetration in-depth investigation (IDI) reports 
with ROHVA and OPEI. At the most recent meeting on April 1, 2022, OPEI 
and ROHVA members shared exploratory work on test methods to evaluate 
debris penetration hazards and expressed an interest in collaborating 
with CPSC staff on the issue. The voluntary standard activity is 
ongoing; however, there are currently no ballots that address the 
debris penetration hazard or timetable from either organization.

V. CPSC and SEA Technical Analysis

A. CPSC Staff Analysis of IDIs

    Engineering Sciences staff examined 53 IDIs,\3\ which included the 
8 IDIs examined in detail in the ANPR and 45 IDIs examined post ANPR. 
Many IDIs contained information for the estimated vehicle speed at the 
time of the accident and the estimated stick diameter.\4\
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    \3\ Out of the 107 incidents, 53 incidents had corresponding in-
depth-investigations IDIs.
    \4\ ``Table 1--Debris Penetration IDI Summaries,'' in section 
II.B of the memorandum from the Division of Mechanical and 
Combustion Engineering, ``Proposed Requirements for Mitigating the 
Debris Penetration Hazards Associated with Recreational Off-Highway 
Vehicles (ROVs) and Utility Task/Terrain Vehicles (UTVs),'' 
summarizes details from the 53 IDIs.
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    Fifty-one IDIs involved tree branches penetrating the floorboards, 
whereas two of the IDIs involved rocks breaking through the 
floorboards. All the IDIs involved ROVs, except one, which involved a 
UTV. Debris penetrations occurred two or more times for a single

[[Page 43692]]

vehicle for some consumers, as described in seven of the IDIs.
    Thirty-three IDIs had information regarding stick diameter. For 
those IDIs that had information regarding stick diameter, death or 
injury occurred from a stick with a diameter between 1 to 3 inches. 
Forty-one IDIs had information regarding the estimated vehicle speed at 
time of impact. For those incidents involving debris penetration from 
wood, the estimated vehicle speed ranged from 2 mph to 25 mph.
    IDI interviewees in their responses sometimes gave ranges to 
estimate stick diameters and vehicle speeds. For example, an 
interviewee believed a stick that penetrated the floorboard was 
approximately 1 to 1.5 inches. The average stick diameter for the low 
range was 2.1 inches and 2.5 inches for the high range.
    For estimated vehicle speeds, the average speed for the low range 
was 10.2 mph and 12.1 mph for the high range. Most of the interviewees, 
66 percent (27 out of 41 IDIs), reported debris penetrations occurring 
at 10 mph or less.
    In two IDIs where the estimated speed was 5 mph, two consumers 
experienced injury to their shin and foot. Only one incident included 
estimated vehicle speeds greater than 25 mph.
    Given that ROVs/UTVs are used in forested trails, it is reasonable 
to expect that the floorboards should protect consumers when ROVs/UTVs 
are operating at speeds of 10 mph or less in these environments.
    Staff measured the floorboards of several model ROVs and determined 
that the average thickness of the plastic floorboards was between 0.1 
and 0.2 inches. In addition, staff's analysis of incident photos 
indicates brittle failure (i.e., where the material does not stretch) 
of the plastic floorboard when penetration occurred, because the 
floorboard was not able to absorb the high kinetic energy of the 
floorboard-stick collision. Edges of the holes or cracks are usually 
clean (i.e., no material stretch indications).

B. Debris Penetration Testing

    The Commission contracted with SEA Ltd. (SEA), to conduct debris 
penetration testing with a remotely operated robotic ROV and a ROV 
mock-up sled that can move on a linear track. The purpose of SEA's 
testing was to quantify the speed and energy necessary for debris, 
e.g., a stick or a branch, to penetrate a ROV floorboard. SEA conducted 
debris penetration testing with a remotely operated robotic ROV and 
also conducted controlled laboratory tests with mock-up ROVs on SEA's 
sled facility. Although SEA's study was conducted on ROV models, 
because the floorboard and UTV front architectures are similar, and in 
some cases, the same as ROV models, the concepts, observations, and 
discussions related to ROVs are equally applicable to UTV models.
    As part of SEA's analysis, SEA reviewed debris penetration IDIs 
provided by CPSC staff. SEA determined that a common pattern in most of 
the severe injury accidents was that a branch or stick, generally, 1 to 
2 inches in diameter, penetrated through the vehicle floor, 
particularly in the foot rest/wheel well areas. Typically, the stick 
was longitudinal to the vehicle, and positioned at an upward angle. The 
end of the stick closest to the vehicle was high enough to get above or 
between the front suspension components of the vehicle. The end of the 
stick farther from the vehicle was either attached to a larger piece of 
wood or embedded in the ground. SEA observed that sticks penetrating 
the vehicle's occupant space were generally straight, and could have 
diameters as high as 5 inches, or as small as 1\1/4\ inches. Occupants 
experienced chest/abdomen impalements or impalements/lacerations to 
lower extremities.
    SEA's initial testing consisted of a remotely operated robotic ROV 
that was driven into a stationary dowel \5\ at 10 mph, as shown in 
Figure 3. SEA conducted two tests with a remotely operated robotic ROV 
to examine the specifics of a debris penetration event. SEA determined 
that a dowel could contact the metal frame members that can influence 
the trajectory of the dowel and the way the dowel penetrates the 
floorboard. Contact in this manner would allow the dowel to experience 
both compressive and bending forces. The bending forces caused the 
dowel to snap after impact when the robotic ROV was traveling at 10 
mph, as shown in Figure 2.
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    \5\ SEA used a 2-inch diameter oak dowel between 39 inches to 65 
inches long for the sled testing. Oak is a hardwood with a 
relatively high modulus of rupture and modulus of elasticity 
material properties. A 2-inch diameter oak dowel is a mass-produced 
item that is readily available. Use of a consistent test component 
will minimize test-to-test variability.
[GRAPHIC] [TIFF OMITTED] TP21JY22.003


[[Page 43693]]


    The second series of testing consisted of a ROV mock-up sled, 
fitted with OEM floorboards and aftermarket floorboard guards, as shown 
in Figure 3.
BILLING CODE 6355-01-P
[GRAPHIC] [TIFF OMITTED] TP21JY22.004

    Both test methods allowed the robotic ROV or the ROV sled to 
collide with a stationary dowel. The full-scale robotic ROV test showed 
similar penetration location and puncture characteristics for the sled 
test (see Figure 4). Both test methods resulted in a dowel penetration 
through the seam area between the floorboard and firewall \6\ sections. 
By performing these engineering tests, SEA quantified the speeds and 
energies required to puncture the floorboards and floorboard guards.
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    \6\ On many ROVs/UTVs, there are two plastic floor panels. The 
main floorboard panel covers the floor and footwell areas in front 
of the feet. A second, semi-vertical plastic panel that is joined to 
the main floorboard is often known as the firewall, which is located 
higher up, at the knee level and above.
[GRAPHIC] [TIFF OMITTED] TP21JY22.005

    Floorboards and aftermarket floorboard guards from five ROV 
manufacturers were tested using the sled method. SEA conducted a total 
of 21 test trials. SEA used sled speeds of 2.5, 5, and 10 mph.
    The sled tests showed that the stock floorboards for two ROV 
manufacturers experienced debris penetrations at 2.5 mph. The stock 
floorboards for all five ROV brands experienced debris penetration at 5 
mph. Figure 5 illustrates a stock floorboard that experience debris 
penetration at 2.5 mph.

[[Page 43694]]

[GRAPHIC] [TIFF OMITTED] TP21JY22.006

    SEA tested various branded aftermarket metal and plastic floorboard 
guards to gauge their material strength properties to resist debris 
penetration. Among the 21 test trials, a metal guard for one brand of 
ROV did not have debris penetration at 10 mph. Two test trials at 5 mph 
with metal guards and one test trial with a plastic guard at 5 mph did 
not have debris penetration. All other test trials with plastic or 
metal guards failed at 10 or 5 mph.
    For tests that did not experience debris penetration, the test 
dowel was redirected, or the dowel slid off to the side or upwards. In 
such cases, the bending forces caused the dowel to snap off. In some 
instances, the sled yawed and pitched before the sled came to a 
complete stop. These actions accomplished the guards' goal of 
protecting the occupants from the debris penetration hazard. Figure 6 
illustrates an aluminum floorboard guard with a black powder coated 
paint surface that prevented debris penetration at 5 mph. The test sled 
pitched and yawed, while the tip of the dowel slightly dented, then 
scraped the floorboard guard's surface and slid to the right before the 
test sled came to complete stop.
[GRAPHIC] [TIFF OMITTED] TP21JY22.007

    SEA staff procured the aftermarket guards from multiple online 
vendors. The existence of a market for these guard products suggests 
there is a need for enhanced protection against debris penetration. 
CPSC is aware of products in the marketplace that can resist debris 
penetration, and these retrofit products offer additional protection 
when compared to stock floorboards that can experience debris 
penetration at speeds as low as 2.5 mph.
    From its testing, SEA concluded:
    <bullet> If better guards are to be designed, it is likely that 
they will not work by absorbing energy, but rather, by redirecting the 
dowel, or breaking it off.

[[Page 43695]]

    <bullet> Guards that worked well in the sled testing tended to work 
well because they pushed the dowel up and/or to the side. Ideally, the 
guards would push the stick all the way to the side of the vehicle and 
outside the zone of the occupant compartment.
    <bullet> Testing showed that a successful design for an aftermarket 
guard or OEM floorboard could involve deflecting the dowel, rather than 
taking on the force directly. Several of the aftermarket guards were 
successful at doing this at 5 mph, and one of the guards tested was 
successful at 10 mph.
    The test dowel did not break in testing that involved a metal 
floorboard guard that was sturdy enough to prevent debris penetration 
at 5 mph. The test dowel deformed the floorboard guard in a scraping 
manner without puncturing the floorboard guard, and the test sled 
pitched and yawed before coming to a full rest. However, the test dowel 
did break at 10 mph for this same metal floorboard guard, due to the 
bending forces being greater when the test sled speed was doubled. If a 
floorboard or floorboard guard is sturdy enough, there will be a 
greater tendency for the floorboard or floorboard guard to deflect the 
dowel and increase the dowel's bending forces when the test sled speed 
is at 10 mph or higher. Thus, a floorboard or floorboard guard that can 
prevent debris penetration at 10 mph will likely prevent debris 
penetration at speeds above 10 mph.
    The requirements and test procedure of the proposed rule are in 
Section VI of this preamble.

VI. Proposed Requirement, Test Procedure, and Prohibited Stockpiling

A. Proposed Requirement

    ROVs and UTVs equipped with current ROV/UTV floorboards offer 
minimal to no protection to the occupants in debris penetration events. 
Stick/branch penetration of floorboards poses impalement and/or 
laceration hazards and the risk of serious injury or death. SEA's sled 
testing showed that dowel penetration can occur at speeds as low as 2.5 
mph on ROVs equipped with standard OEM floorboards. Multiple full-scale 
tests re-created stick/branch penetration in the occupant area, a 
hazard reported in at least 107 incidents, 6 resulting in fatalities.
    To reduce deaths and injuries associated with the debris 
penetration hazards, the Commission is proposing a performance 
requirement and a test procedure that propels a test vehicle or 
simulated vehicle sled at a minimum speed of 10 mph towards a 
stationary 2-inch diameter oak dowel, positioned at an angle between 
12[deg] and 25[deg], to strike the front wheel suspension area of the 
vehicle. The performance requirement specifies that the dowel cannot 
penetrate the occupant area when tested to the proposed impact test 
procedure.
    For the majority of the IDIs that had vehicle speed information, 66 
percent (27 out of 41 IDIs), of the debris penetration events occurred 
at 10 mph or less. A test vehicle or simulated vehicle sled colliding 
with a stationary 2-inch diameter oak dowel at 10 mph represents a 
realistic debris penetration scenario. The requirement will reduce the 
likelihood of impalement and/or lacerations from debris penetration, by 
preventing penetration into the occupant area of these vehicles. The 
SEA testing showed that an aftermarket floorboard guard can prevent 
debris penetration at 10 mph. Instead of energy absorption, the 
aftermarket guard redirected the dowel, allowing the bending forces to 
snap the dowel. It is likely that floorboards or the wheel-well area of 
ROVs/UTVs can be designed to resist debris penetration by redirecting 
the dowel to the side or upwards to avoid injuring the occupants. This 
type of mitigation design would also be effective at higher vehicle 
speeds.

B. Test Procedure

1. Load Condition
    The test protocol requires a load condition of 430 lbs for a two-
seat ROV or UTV model. The 430 lbs represents a driver and a front seat 
passenger, each equivalent to a 95th percentile male (215 pounds). For 
a four-seat model, the load condition requirement is 860 pounds, 
representing the driver and three passengers. For a six-seat model, the 
load condition is 1290 lbs, representing the driver and five 
passengers. Models containing these minimum load weights are described 
below as ``fully loaded.''
2. Test Vehicle or Simulated Vehicle Sled Conditions
    The fully loaded test vehicle is to be fitted with the test 
floorboard and/or floorboard guard(s), as offered for sale. If a 
simulated vehicle sled is used, such that a ROV/UTV front metal frame 
is fitted with the test floorboard and/or floorboard guard(s), the 
simulated vehicle sled must be able to translate on a linear track that 
can propel the simulated vehicle sled to at least 10 mph.
3. Test Speed
    The test vehicle or simulated vehicle sled speed, in miles per hour 
(mph), must be at least 10 mph at the moment of impact.
4. Test Location
    The test dowel is to be positioned at an angle between 12[deg] and 
25[deg] such that it will strike the upper wheel well area of the 
vehicle. The target of the test dowel must be either the floorboard or 
floorboard guard surface of the vehicle, and it must be the point on 
the floorboard or floorboard guard most likely to produce the most 
adverse results, such as a seam, crease, catch point, or bend.
5. Test Equipment
    The test procedures prescribe the diameter (2-inches) and length of 
the dowel (between 39 to 65 inches) and the angle in which the dowel is 
to be installed in the dowel holder (between 12[deg] to 25[deg]). A 
range of angles and a range of dowel lengths are necessary, due to the 
various shapes, depths, contours, suspension component arrangements, 
and control arm dimensions of all the ROV/UTV wheel-well 
configurations. See Figure 7.

[[Page 43696]]

[GRAPHIC] [TIFF OMITTED] TP21JY22.008

    The test procedure also requires that the tip of the dowel be 
tapered, such that the tip surface diameter is 1 inch, and the tip cone 
length is 1 inch. See Figure 8.
[GRAPHIC] [TIFF OMITTED] TP21JY22.009

BILLING CODE 6355-01-C
    The dowel holder must be constructed of a rigid material, such that 
the dowel holder will not fracture during the course of the impact 
test.
    A vehicle or simulated vehicle sled braking system and/or energy 
absorption foam blocks located two feet past the debris penetration 
dowel holder are recommended to minimize damage to test equipment. If a 
braking system is used, it is only permitted to activate after the 
vehicle or simulated vehicle sled collides completely with the debris 
penetrator dowel.
6. Test Conditions
    If a test vehicle is used, the test surface must be dry asphalt or 
dry concrete that is free of contaminants. There must be sufficient 
track length available to allow the test vehicle or simulated vehicle 
sled to reach 10 mph. The test surface must be flat and have a grade 
slope of 1.7 percent (1[deg]) or less. The ambient temperature shall be 
greater than 0 [deg]C (32 [deg]F).
7. Test Procedure
    In the test procedure, a fully loaded, fully instrumented test 
vehicle or simulated vehicle sled is propelled in a straight-line path 
to collide with the test dowel, where the test vehicle or

[[Page 43697]]

simulated vehicle sled speed is at least 10 mph at the moment of 
impact. A minimum of two test trials of one chosen test method must be 
conducted for each vehicle model.
8. Rationale--Test Conditions
    The required ambient temperature of 0 [deg]C (32 [deg]F) or 
greater, maximum allowable flat course slope grade of 1.7% (1[deg]) or 
less, the maximum allowable wind speed of 11.2 mph (18 km/h), flat dry 
asphalt or dry concrete conditions, and the 95th percentile male weight 
are consistent with the lateral stability requirements of ANSI/OPEI 
B71.9-2016 and ANSI/ROHVA-1-2016, simulate real use, and allow for 
repeatable test results.

C. Prohibited Stockpiling

    The proposed rule includes an anti-stockpiling provision that would 
prohibit manufacturers and importers from stockpiling products that 
will be subject to the mandatory rule. The Commission's authority to 
issue an anti-stockpiling provision is in section 9(g)(2) of the CPSA. 
15 U.S.C. 2058(g)(2). The anti-stockpiling provision would prohibit ROV 
and UTV manufacturers and importers from manufacturing or importing 
ROVs or UTVs that do not comply with the requirements of the proposed 
rule between the date of the final rule publishing in the Federal 
Register and the effective date of the rule, at a rate greater than 105 
percent of the rate at which they manufactured or imported ROVs or UTVs 
during the base period for the manufacturer.
    The base period is described in the proposed rule as the calendar 
month with the median manufacturing or import volume within the last 13 
months immediately preceding the month of promulgation of the final 
rule. ``Promulgation'' means the date the rule is published in the 
Federal Register.

VII. Response to Comments

    The Commission published the Off-Highway Vehicle (OHV) Fire and 
Debris Penetration Hazards Advance Notice of Proposed Rulemaking (ANPR) 
in the Federal Register on May 11, 2021. The public comment period 
ended on July 12, 2021. CPSC received 10 comments from the public, 
which can be found under docket number CPSC-2021-0014, at: 
www.regulations.gov. Four of the comments support the rulemaking; six 
of the comments do not support the rulemaking. We respond to the 
comments pertaining to debris penetration hazards here.
    Comment: Four comments express support for the rulemaking. Three of 
these comments (American Academy of Pediatrics, Kids in Danger, and 
Public Citizen) state that voluntary standards for ROVs and UTVs fail 
to adequately protect consumers, given the injuries, deaths and 
incidents that have occurred related to debris penetration. In 
addition, these three comments note that the voluntary standards do not 
include any requirements to protect against debris penetration. Kids in 
Danger further asserts that research shows a correlation between 
mandatory standards on products and a reduction of regulated product-
specific deaths.
    Response: Staff concurs with these comments, because the current 
voluntary standards, ANSI/ROHVA-1-2016 and ANSI/OPEI B71.9-2016, do not 
have resistance to debris penetration performance requirements that 
adequately protect consumers, given the injuries, deaths, and incidents 
that have occurred related to debris penetration.
    Comment: The American Academy of Pediatrics suggests that the 
rulemaking should account for the unique hazards of OHVs used by 
children, especially for ``youth model'' products marketed toward 
younger drivers.
    Response: At least one ROV manufacturer offers youth-oriented ROVs 
that are smaller versions of the full-size ROVs. These vehicles will be 
treated in the same manner as other OHVs. If they meet the definition 
of ROV or UTV, then they are within the scope of the proposed rule.
    Comment: ROHVA and two individuals, Mark Strauch, and Steve Tavara, 
state that it is not clear whether the debris penetration hazard 
incidents identified in the ANPR were caused by lack of clear sight, 
user error, or whether the driver and/or passenger were impaired in 
some fashion. Mark Strauch also states it is unclear whether ROVs are 
becoming dangerous due to ``improper installation, inspection, 
operation, and/or maintenance.''
    Response: Staff examined incident data that showed that debris 
penetrations occur at speeds as low as 2 mph. For 44 percent of the 
IDIs that had information regarding vehicle speed at the time of debris 
penetration, the vehicle speeds during collisions with tree branches 
were 5 mph or less. These data suggest that consumers were generally 
not reckless, and the ROV/UTV floorboard debris penetrations are 
occurring under non-severe conditions. Consequently, staff concluded 
that there was an issue with the vehicle itself rather than the 
operator's behavior or maintenance of the vehicle. By their nature, 
ROVs and UTVs are intended to be driven on off-highway environments. It 
is foreseeable that in an off-highway environment, a vehicle might 
encounter sticks or branches. Penetration of a stick/branch into the 
vehicle's cabin area, even at such low speeds, is indicative of 
insufficient debris resistance of the vehicle. Staff assesses that a 
vehicle intended to be driven in off-highway environments should not be 
susceptible to debris penetration at such low-speeds, regardless of 
maintenance or inspection of the vehicle.
    Comment: Commenters ROHVA, OPEI, SVIA, and Polaris, Inc. 
(``Polaris''), advocate addressing debris penetration hazards through 
the voluntary standards process instead of through rulemaking.
    Response: Although CPSC staff has engaged with the standards 
development organizations (``SDOs'') on this topic for years, no 
substantial progress has been made regarding debris penetration 
hazards. Since 2018, the three SDOs and CPSC staff met multiple times 
to discuss debris penetration hazards, but no substantial progress has 
been made, and discussions remain in the preliminary idea phase. CPSC 
staff will continue to engage with these SDOs, to review any proposals 
they may present, and consider those proposals as CPSC continues with 
its rulemaking activities.
    Comment: ROHVA, Polaris, and Mark Strauch assert that the 
Commission should withdraw its ANPR because it lacks sufficient 
information to determine that there is an ``unreasonable risk of 
injury'' associated with debris penetration hazards. ROHVA asserts that 
debris penetration incidents are rare and involve ``highly dissimilar 
factors,'' making them unsuitable for consideration for mandatory 
rulemaking.
    Response: Staff disagrees that debris penetration incidents are 
rare. CPSC staff has determined that 6 deaths and 22 injuries resulted 
from ROV debris penetration. There were 107 debris penetration 
incidents involving ROVs or UTVs in CPSC databases. Manufacturers 
reported 632 debris penetration incidents related to three different 
recalls.\7\
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    \7\ The manufacturer-reported data is separate and distinct from 
the data from CPSC databases; there may be some overlap between the 
two.
---------------------------------------------------------------------------

    Staff also disagrees with the notion that debris penetration 
incidents involve ``highly dissimilar factors,'' such that a mandatory 
rule would be ineffective. The incidents show that a consistent factor 
in debris penetration incidents is the penetration of debris into the 
floorboard of the vehicles when they are being driven, as marketed and 
intended, in off-road environments,

[[Page 43698]]

even at low-speeds. The proposed test requirement would address the 
inadequacy of the floorboards to protect occupants in the vehicle. CPSC 
contractor SEA procured aftermarket floorboard guards from seven 
different vendors for their test program. The fact that there is 
already a robust market for aftermarket floorguards suggests that, 
contrary to being rare, debris penetrations are occurring often enough 
that there is substantial consumer interest in products to potentially 
remedy the risk of debris penetrations.
    Comment: ROHVA comments that it is inaccurate to characterize the 
630 manufacturer reports associated with the three debris penetration 
recalls as ``debris penetration incidents,'' because not all of the 
incidents involved debris penetration through the floorboard. ROHVA 
notes that the press release for the largest of the three recalls 
states that there were ``628 incident reports of debris cracking or 
breaking through the floor boards.''
    Response: The manufacturer reports consisted of floorboards either 
cracking or breaking during normal operation due to impact with, or 
penetration by, debris from outside the vehicle. Whether or not the 
debris penetrated through the floorboard, staff considers the cracking 
or breaking of the floorboards by objects during normal operation of 
the vehicle to be indicative of a penetration hazard.

VIII. Preliminary Regulatory Analysis

A. Introduction

    Pursuant to section 9(c) of the Consumer Product Safety Act, 
publication of a proposed rule must include a preliminary regulatory 
analysis containing:
    <bullet> A preliminary description of the potential benefits and 
potential costs of the proposed rule, including any benefits or costs 
that cannot be quantified in monetary terms, and an identification of 
those likely to receive the benefits and bear the costs.
    <bullet> A discussion of the reasons why a standard submitted to 
the Commission in response to the ANPR was not published as the 
proposed rule.
    <bullet> A discussion of why a relevant voluntary safety standard 
would not eliminate or adequately reduce the risk of injury addressed 
by the proposed rule.
    <bullet> A description of any reasonable alternatives to the 
proposed rule, together with a summary description of their potential 
costs and benefits and why such alternatives should not be published as 
a proposed rule.
    The primary focus of this preliminary regulatory analysis is the 
Commission's preliminary assessment of potential benefits and costs 
from the proposed rule. CPSC staff estimates benefits by subtracting 
the expected societal costs (i.e., deaths and injuries from floorboard 
debris penetration), assuming the rule has been implemented, from the 
expected societal costs in the absence of the rule (or baseline 
scenario). Estimated costs include costs to industry from implementing 
a ROV/UTV fix that addresses the debris penetration hazard, the costs 
associated with government oversight and compliance monitoring, and the 
deadweight losses that are the measured impacts to consumers and 
producers displaced from the ROV/UTV market because of a potential 
price increase. CPSC staff estimated benefits and costs over a 30-year 
period starting in 2024, which is the year that the rule would go into 
effect. A 30-year period allows for several cycles of useful life for 
ROVs and UTVs and ensures the assessment accounts for the long-term 
effects of the proposed rule. Staff presents all estimates in 2021 
dollars. To account for the time value of money, staff applied an 
annual 3 percent discount rate to forecasted benefits and costs. The 
preliminary regulatory analysis also explains why voluntary safety 
standards would not eliminate or adequately reduce the risk of injury 
addressed by the proposed rule. It describes alternatives to the 
proposed rule and their potential costs and benefits, and it explains 
why these alternatives should not be published as a proposed rule. In 
addition, although the ANPR invited commenters to submit standards for 
publication as the proposed rule, or part of the proposed rule, no 
standard was submitted during the ANPR comment period, and thus, no 
standard was available for the Commission to consider.

B. Market Information

1. Retail Prices
    In 2019, ROV and UTV manufacturers' suggested retail prices (MSRP) 
ranged from a minimum of $4,599 to a maximum of $53,700. When weighted 
by sales volume, the mean MSRP is $13,182 for ROVs and UTVs,\8\ which, 
in 2021 dollars, equates to $14,302. As shown in Figure 8, before 2013, 
the average ROV and UTV MSRP showed a downward trend. However, 
beginning in 2013, the average ROV and UTV MSRPs have increased 
steadily. This trend appears to be driven by increasing sales of more 
expensive models with higher maximum MSRPs. Figure 9 displays MSRPs for 
ROVs and UTVs from 2004 through 2019, in constant 2021 dollars.
---------------------------------------------------------------------------

    \8\ Unless otherwise noted, the ROV/UTV product and market 
information is based on CPSC staff analysis of 1998-2019 sales data 
provided by Power Products Marketing, Eden Prairie, MN (2020).
---------------------------------------------------------------------------

BILLING CODE 6355-01-P

[[Page 43699]]

[GRAPHIC] [TIFF OMITTED] TP21JY22.010

1. Annual Sales and Shipments
    Except for 2009, annual sales of ROVs and UTVs in the United States 
have increased steadily, from an estimated 35,041 units in 1998, to an 
estimated 429,135 units in 2019. Figure 10 illustrates combined ROV and 
UTV unit sales from 1998 through 2018.
[GRAPHIC] [TIFF OMITTED] TP21JY22.011

    Staff identified 35 manufacturers known to have supplied ROVs and 
UTVs to the U.S. market in 2019: 17 from the United States, 14 from 
China (including Taiwan), and one each from Canada, Mexico, South 
Korea, and Spain. Additionally, there are 48 distributers/brands. Staff 
estimated U.S. manufacturers accounted for approximately 83 percent of 
U.S. ROV and UTV sales in 2019, and that current members of ROHVA and/
or OPEI accounted for approximately 95 percent of U.S. ROV and UTV 
sales in 2019.
    Staff identified 461 different ROV and UTV model variants and 
configurations sold in the United States in 2019. Excluding variants 
and configurations that appear to be based on a common base model, 
staff estimated that there may be as few as 107 unique models 
introduced in 2019, and they estimated a total of 672 models in use by 
consumers.
2. Estimated ROV and UTV Units in Use
    Staff estimates there were 2.34 million ROVs and UTVs in use in the 
United States in 2019. The Commission developed this estimate based on 
the number of sales of ROV and UTV in prior years, and then designated 
a product life (in years) to each unit sold. The distribution of 
product life years for ROVs and UTVs informs the analysis of what 
proportion of units will last above or below its average product life. 
For example, the average product life for an

[[Page 43700]]

ROV/UTV is 6 years. Therefore, a plurality of ROVs/UTVs will be in use 
for 6 years, but some ROVs/UTVs will be in use less than the expected 6 
years, while others will be in use longer than 6 years. The 
distribution of product life informs this analysis of what proportion 
of sold units will fall into each amount (in years) of product life. 
This process helps assess how many ROVs/UTVs are still in use, given 
any number of years after they are sold.

C. Preliminary Regulatory Analysis: Benefits Assessment

    This section presents the potential benefits associated with 
implementing the performance requirement from the proposed rule for 
mitigating debris penetration hazards associated with ROVs and UTVs.
1. Benefits Assessment Methodology
    The Commission conducted the preliminary regulatory analysis from a 
societal perspective that considers significant costs and health 
outcomes. The Commission captured expected reduction in societal costs 
by estimating the number of deaths and injuries from debris penetration 
that would be prevented by the proposed rule. The Directorate for 
Epidemiology (EP) retrieved casualties reported through NEISS, a 
national probability sample of U.S. hospital emergency departments 
(ED), and the CPSRMS database of consumer incident reports. Staff then 
forecasted the number of expected reported deaths and injuries for a 
30-year study period and converted the value of prevented deaths and 
injuries into monetary terms using the Value of Statistical Life (VSL) 
for deaths and CPSC's Injury Cost Model (ICM) for injuries.
    Staff used a 30-year study period to assess the benefits of the 
proposed rule. Staff assumed, for the purpose of this analysis, that 
the rule will go into effect at the beginning of 2024; this results in 
a study period of 2024 through 2053. A 30-year period allows for 
several cycles of useful life for ROVs and UTVs and ensures the 
benefits assessment accounts for all long-term effects from the 
proposed rule. Staff then converted the aggregate benefits over the 30-
year study period into annualized and ``per-product'' outputs. An 
annualized output converts the aggregate benefits over 30 years into a 
consistent annual amount while considering the time value of money. 
This metric is helpful when comparing the benefits among different 
rules or policy alternatives that may have different timelines; or 
those that have similar timelines, but benefits for one are front-
loaded, while the other's benefits have a latent effect. A per-product 
metric expresses the benefits from the rule in one unit of product. 
This metric is helpful when assessing the impact in marginal terms; for 
example, comparing benefits to an increase in retail price or marginal 
increase in cost of production per-unit.
2. Deaths and Injuries Over the 30-Year Study Period
    CPSC staff identified six deaths and 22 nonfatal injuries that 
occurred from 2009 through 2021, related to debris penetration 
incidents involving occupants. Of the 22 nonfatal injuries, four 
required hospital admission, three resulted in ED treatment, two were 
treated and released, or released without treatment, one received first 
aid by a non-medical professional, and two received no treatment. The 
level of care provided for the remaining 10 incidents is not known. 
CPSC staff gathered these casualties from NEISS (three nonfatal 
incidents) and CPSRMS (the remaining incidents) and confirmed there was 
no overlap.
    Next, staff used the incident data on debris penetration from NEISS 
and CPSRMS to forecast the number of injuries from debris penetration 
treated in EDs and other settings throughout the 30-year study period. 
Typically, the Commission would use reported injuries from NEISS, which 
only records injuries from a sample of U.S. hospitals, and then the 
Commission would extrapolate the data into a national estimate. 
However, the number of recorded incidents of debris penetration from 
the sample hospitals was lower than the publication criteria 
established in NEISS. Therefore, staff could not develop a national 
estimate and had to estimate the benefits using a forecast of reported 
injuries from the sample hospitals only. There are likely many more 
unreported incidents outside of the sample hospitals not accounted for 
in this analysis, and thus, staff's estimated benefits are likely an 
underestimate.
    To forecast future deaths and injuries from debris penetration, 
staff used death and injury rates per million ROVs/UTVs with its 
forecast of ``ROVs/UTVs in use'' throughout the 30-year study period. 
Staff assumed deaths and injuries would stay the same as the average 
rates observed between 2010 to 2019 \9\ in the NEISS and CPSRMS 
databases: 0.36 deaths, 0.24 hospital admissions, 0.24 ED admissions, 
and 0.72 doctor/clinic visits per million ROVs/UTVs in use.
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    \9\ The Commission based its estimated injury rates on the 
incident data from the window 2010-2019. This window represents a 
typical 10-year time frame for data analysis, and was the most 
robust, most recent data that was continuous. Because of ongoing 
reporting, data from the latest years, 2020 and 2021, are 
incomplete, and were thus not used in the analysis.
---------------------------------------------------------------------------

    Staff forecasted ROVs/UTVs in use using exponential smoothing. 
Staff then multiplied the number of ROVs/UTVs in use in each year of 
the study period by the rates of deaths and injuries, to estimate the 
total number of deaths and injuries for each year of the 30-year study 
period. Figure 11 displays the estimated number of incidents for each 
death and injury category from 2010 through 2053 in the baseline 
scenario, which assumes the proposed rule does not go into effect.

[[Page 43701]]

[GRAPHIC] [TIFF OMITTED] TP21JY22.012

    Figure 11 illustrates that most injuries are treated in a doctor's 
office/clinic. In the year 2053, estimated injuries treated at a 
doctor's office/clinic reach 5 per year; injuries treated at the ED and 
those admitted to the hospital largely overlap over the analysis period 
and reach 1.7 in both cases in 2053; and the estimated number of deaths 
reaches 2.5 in 2053. In the same year, staff estimated the number of 
ROVs and UTVs in use to reach 6.98 million, or about three times the 
number in use in 2019.
3. Societal Costs of Deaths and Injuries Over the 30-Year Study Period
    This section presents the methodology to monetize the costs from 
deaths and injuries from debris penetration in the absence of the rule 
and determines how much those societal costs would be avoided if CPSC 
promulgated the proposed rule.
(a) Societal Cost From Deaths
    To estimate the societal costs of debris penetration-related 
deaths, staff applied the VSL. VSL is an estimate used in benefit-cost 
analysis to place a value on reductions in the likelihood of premature 
deaths. The VSL does not place a value on individual lives, but rather, 
it represents an extrapolated estimate based on the rate at which 
individuals trade money for small changes in mortality risk. This is a 
``willingness to pay'' methodology that attempts to measure how much 
individuals are willing to pay for a small reduction in their own 
mortality risks, or how much additional compensation they would require 
to accept slightly higher mortality risks. For this analysis, staff 
applied a VSL developed by the U.S. Environmental Protection Agency 
(EPA). The EPA VSL, when adjusted for inflation, is $10.5 million \10\ 
in 2021 dollars. Staff multiplied the VSL by the number of forecasted 
deaths throughout the study period to calculate societal cost of deaths 
from debris penetration in the absence of the proposed rule. Figure 12 
displays these costs throughout the study period.
---------------------------------------------------------------------------

    \10\ In 2008, the EPA estimated the value of a statistical life 
at $7.9 million. CPSC adjusted this estimate for inflation to the 
end of 2021, using the Consumer Price Index for All Urban Consumers 
(CPI-U), estimated the Bureau of Labor Statistics and rounded it to 
the nearest hundred thousand. The adjustment is as follows: $7.9M x 
(278.802/210.228) = $10.477M, which is then rounded to $10.5M.

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[[Page 43702]]

[GRAPHIC] [TIFF OMITTED] TP21JY22.013

    According to Figure 12, in the first year of the study period 
(2024), costs from deaths are $11.47 million and grow to $26.42 million 
in 2053. Over 30 years, estimated societal costs from deaths due to 
debris penetration aggregate to $568.3 million, according to CPSC staff 
estimates.
(b) Societal Cost From Injuries
    CPSC staff estimated the societal costs of nonfatal injuries from 
debris penetration using the ICM. The ICM provides estimates of the 
societal costs of medically treated injuries. The societal cost 
components provided by the ICM include medical costs, work losses, and 
the intangible costs associated with pain and suffering.
    Medical costs include three categories of expenditures: (1) medical 
and hospital costs associated with treating the injured victim during 
the initial recovery period and in the long run, including the costs 
associated with corrective surgery, the treatment of chronic injuries, 
and rehabilitation services; (2) ancillary costs, such as costs for 
prescriptions, medical equipment, and ambulance transport; and (3) 
costs of health insurance claims processing. The ICM derives cost 
estimates for these expenditure categories from several national and 
state databases, including the Medical Expenditure Panel Survey (MEPS), 
the Nationwide Inpatient Sample of the Healthcare Cost and Utilization 
Project (HCUP-NIS), the Nationwide Emergency Department Sample (NEDS), 
the National Nursing Home Survey (NNHS), MarketScan[supreg] claims 
data, and a variety of other federal, state, and private databases.
    Work loss estimates include: (1) the forgone earnings of the 
victim, including lost wage work and household work; (2) the forgone 
earnings of parents and visitors, including lost wage work and 
household work; (3) imputed long-term work losses of the victim that 
would be associated with permanent impairment; and (4) employer 
productivity losses, such as the costs incurred when employers spend 
time rearranging schedules or training replacement workers. The ICM 
bases these estimates on information from the MEPS, the Detailed Claim 
Information (a workers' compensation database) maintained by the 
National Council on Compensation Insurance, the National Health 
Interview Survey, the U.S. Bureau of Labor Statistics, and other 
sources.
    The intangible costs of injury reflect the physical and emotional 
trauma of injury, as well as the mental anguish of victims and 
caregivers. Intangible costs are difficult to quantify because they do 
not represent products or resources traded in the marketplace. 
Nevertheless, they typically represent the largest component of injury 
cost and need to be accounted for in any benefit-cost analysis 
involving health outcomes. The ICM develops monetary estimates of these 
intangible costs from jury awards for pain and suffering. Although 
these awards can vary widely on a case-by-case basis, studies have 
shown that these awards are systematically related to several factors, 
including economic losses, the type and severity of injury, and the age 
of the victim. The ICM derives these estimates from a regression 
analysis of jury awards compiled by Jury Verdicts Research, Inc., in 
nonfatal product liability cases involving consumer products.
    The ICM estimated that the costs (in 2021 dollars) associated with 
nonfatal debris penetration injuries are: $17,013 for injuries treated 
at the doctor's office/clinic, $24,694 for injuries treated at the 
emergency department, and $101,433 for injuries that result in hospital 
admission. The Commission multiplied these estimates by the number of 
forecasted incidents in Figure 11 to estimate societal costs from 
injuries through 2053. Figure 13 shows the forecasted societal costs 
from injuries in the absence of the rule through 2053.

[[Page 43703]]

[GRAPHIC] [TIFF OMITTED] TP21JY22.014

BILLING CODE 6355-01-C
    As reflected in the chart, society would incur a cost in the first 
year of the study period (2024) of $0.04 million for injuries treated 
at a doctor's office/clinics, $0.02 million for those treated at EDs, 
and $0.07 million for injuries resulting in hospital admissions. These 
costs grow to $0.09 million for doctor's office/clinic, $0.04 million 
for ED, and $0.17 million for hospital admissions in 2053. Over 30 
years, staff estimated the societal costs from injuries due to debris 
penetration aggregate to $1.85 million for doctor's office/clinic, 
$0.89 million for ED, and $3.66 million for hospital admissions. The 
total cost for all injuries reaches $6.39 million over the 30-year 
study period.
(c) Benefits From the Proposed Rule
    The total estimated societal cost of deaths and injuries in the 
absence of the proposed rule would be $574.69 million over the study 
period (2024-2053). However, the proposed requirements in the proposed 
rule are not expected to mitigate all the deaths and injuries from 
debris penetration. Based on laboratory tests, CPSC staff estimates 
that approximately 95 percent of all incidents would be avoided because 
of the implementation of the proposed rule.\11\ The Commission assesses 
that implementing the performance requirement would prevent all debris 
penetration incidents that occur when the vehicle is travelling 10 mph 
or below, and most incidents travelling above 10 mph.
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    \11\ Staff supplements its assessment of a 95 percent effective 
efficacy rate with a sensitivity analysis that reduces the effective 
efficacy rate to 60 percent in section VIII.E.1 of this preamble, 
Uncertainty and Sensitivity Analysis. Sixty percent represents an 
approximation of the share of debris penetration incidents that 
occurred when vehicles were traveling 10 mph or below.
---------------------------------------------------------------------------

    Additionally, in the initial years after the implementation of the 
proposed rule, some noncompliant ROVs and UTVs will still be in use. To 
account for this, staff estimated the percentage of noncompliant ROVs/
UTVs in each year during the 30-year study period. For instance, in the 
first year of the study period (2024), staff estimated that only 17.6 
percent of ROVs/UTVs in use would be compliant, and only 16.7 percent 
(17.6 percent product compliant rate x 95 percent rule effective rate) 
of the $11.6 million in societal costs would be avoided because of the 
proposed rule, which equates to $1.94 million ($11.6 million x 16.7 
percent). Staff estimates the compliance rate of ROVs/UTVs in use 
increases to 84.4 percent by 2029 (i.e., 6 years from the 
implementation of the rule), and it approaches 100 percent by 2035. 
After this adjustment, staff estimated that from 2024 through 2053, an 
aggregate $537.29 million in societal costs would be avoided if the 
CPSC promulgated the proposed rule.
4. Annualized and Per-Vehicle, In-Use Benefits of the Proposed Rule
    Staff converted the aggregate benefits over the 30-year period of 
study into annualized and ``per-product'' metrics.
    The undiscounted average annual benefits are $17.02 million. To 
calculate present value, staff discounted the annual benefits in each 
year of the 30-year period using a compounding three 3 percent discount 
rate. The annualized benefits, at a 3 percent discount rate, are $15.47 
million. To estimate the benefit per product, staff divided the 
annualized benefits (undiscounted and discounted) by the average number 
of compliant vehicles. Using this methodology, staff estimated the 
benefits from the proposed rule per ROV or UTV in use to be $20.32 per 
vehicle undiscounted and $12.07 per vehicle discounted at three 3 
percent.
    Table 4 presents the findings from this benefits assessment from 
both the annualized and per-product perspectives.

 Table 4--Total and Per-Product Benefits, Undiscounted and Discounted at
                                   3%
------------------------------------------------------------------------
                                                         Present value
            Benefits                 Undiscounted     (discounted at 3%)
------------------------------------------------------------------------
Annualized ($M).................              $17.02              $15.47
Per Vehicle ($).................               20.32               12.07
------------------------------------------------------------------------


[[Page 43704]]

D. Preliminary Regulatory Analysis: Cost Analysis

    This section discusses the costs this proposed rule would impose on 
society. There are three sets of societal costs discussed under this 
cost section: the cost of implementing an ROV/UTV fix that addresses 
the debris penetration hazard; the costs associated with government 
oversight and compliance monitoring (considered negligible); and the 
deadweight losses or market impacts derived from the implementation of 
an ROV/UTV fix.
    Like the benefits estimation, the time span of the cost analysis 
covers a 30-year period that starts in 2024, which is the expected year 
of implementation of the rule. This cost analysis presents all cost 
estimates in 2021 dollars, including cost estimates before 2021, using 
price index adjustments. This cost analysis also discounts costs in the 
future, using a 3 percent discount rate to estimate their present 
value.\12\
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    \12\ Discounting future estimates to the present allows staff 
not only to consider the time value of money, but also the 
opportunity cost of the investment, that is, the value of the best 
alternative use of funds.
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    In this regulatory assessment, staff considers two solutions to the 
debris penetration hazards under the proposed rule, each with a 
separate set of costs. Both scenarios are effective in preventing 
debris penetration at 10 mph and below, and mitigating debris 
penetration above 10 mph. Both scenarios require manufacturers to 
redesign existing models to allow proper installation of the floorboard 
solution of choice.
    1. Redesigned Floorboards: Manufacturers fully redesign floorboards 
where most of the material in the original floorboard is redistributed 
into a new shape and thickness that is required to address the debris 
penetration hazard. Manufacturers then redesign ROV/UTV models to 
enable the installation of the redesigned floorboards and meet the 
requirements of the new ROV/UTV proposed mandatory standards.
    2. Floorboard Guards: Manufacturers redesign existing floorboards 
to add a 2' x 2' x 0.19'' aluminum piece that acts as a floorboard 
guard and prevents debris penetration. This new aluminum piece's design 
blocks debris from hitting hazardous sections of the floorboard. 
Manufacturers then redesign ROV/UTV models to enable the installation 
of floorboards with floorboard guards that meet the requirements of the 
new ROV/UTV proposed mandatory standards.
    This analysis assessed these two solutions as separate scenarios to 
produce a range of potential costs of compliance with the proposed 
rule. Some of the unit cost estimates in this analysis are based on SEA 
Ltd.'s testing and analysis. Under each scenario, staff assumed that 
100 percent of manufacturers decide to adopt the solution being 
assessed. Therefore, staff estimated in each scenario the full cost of 
deploying that solution for all firms. In practice, however, 
manufacturers may choose a combination of the two solutions, or a 
different solution that proves more cost effective. Staff welcomes 
public comments on the likelihood of manufacturers adopting either 
solution or a solution not considered in this analysis.
<bullet> Cost of Implementing an ROV/UTV Fix to Debris Penetration
    Manufacturers directly incur costs to redesign existing models and 
produce new designs that solve the debris penetration hazard, as well 
as the cost of producing and installing either a redesigned floorboard 
or floorboard guard on each new ROV/UTV manufactured after the 
implementation of this proposed rule is implemented. The increased cost 
is then passed indirectly on to wholesalers.
    The subcategories of costs for implementing an ROV/UTV fix to 
debris penetration are:
[ssquf] Cost of Redesigning Existing ROV/UTV Models and of New Designs
    Manufacturers incur design costs that include redesigning existing 
ROV/UTV models, as well as designing future ROV/UTV models, which 
enable the installation of a floorboard solution to the debris 
penetration hazard.
    Manufacturers would have to redesign existing ROV/UTV models with a 
floorboard solution if they wish to continue selling these models to 
consumers. Manufacturers, therefore, would have to allocate funds to 
produce a floorboard solution design and adapt existing ROV/UTV models 
to enable the installation of a floorboard solution. Manufacturers 
would likely incur expenditures in design labor, design production, 
design validation, and compliance testing. Each of these subcategories 
of costs are discussed below.
[cir] Cost of Design Labor
    The cost to compensate model designers employed by the manufacturer 
(or a third-party design shop) for the time it takes to produce a 
blueprint of the redesigned ROV/UTV model.
[cir] Cost of Design Production
    The cost of materials and labor required to fabricate prototypes of 
the ROV/UTV model.
[cir] Cost of Design Validation
    The cost of conducting validation testing of prototypes to ensure 
proper functioning of the redesigned ROV/UTV model and conformance with 
preset requirements established by the manufacturer. This is 
customarily conducted through in-house, indoor sled testing.
[cir] Cost of Compliance Testing
    The cost of conducting formal third party compliance testing to 
verify compliance with the requirements of the new ROV/UTV mandatory 
standards. Compliance testing is customarily conducted through third 
party testing.
    Manufacturers would also be required to upgrade all new designs 
with the floorboard solution. A large-scale ROV/UTV manufacturer \13\ 
conveyed to staff that once existing models have been redesigned with a 
working floorboard solution, new models can adapt such a solution at a 
minimal cost. Therefore, the additional cost of implementing a debris 
penetration solution onto future designs is considered negligible, and 
it is not addressed further in this analysis.
---------------------------------------------------------------------------

    \13\ CPSC staff conducted a virtual meeting on February 7, 2022, 
with a large manufacturer's representative to discuss the cost of 
implementing an ROV/UTV fix to the debris penetration hazard.
---------------------------------------------------------------------------

[ssquf] Cost of Manufacturing and Installing a Floorboard Solution
    Manufacturers directly incur costs to produce the floorboard 
solution of their choice \14\ and install it in every new vehicle 
manufactured after the implementation of the proposed rule. 
Manufacturers would likely incur expenditures to purchase the required 
materials to fabricate the floorboard and produce and install the 
selected floorboard solution. These subcategories of costs are 
discussed below.
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    \14\ The floorboard solution can be fabricated in-house by the 
manufacturer or by a third party contractor hired by the 
manufacturer.
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[cir] Cost of Materials and Production of the Floorboard Solution
    Staff assumed that the production cost of the floorboard solution 
closely matches the production cost of the original floorboard. 
Therefore, the incremental production cost is negligible, and the 
estimates in this subcategory focus exclusively on the incremental cost 
of the materials required to produce the floorboard solution.

[[Page 43705]]

[cir] Cost of Installation of the Floorboard Solution
    Staff assumed that the installation cost of the floorboard solution 
closely matches the installation cost of the original floorboard. 
Therefore, the incremental installation cost is negligible.
<bullet> Cost of Government Oversight and Compliance Monitoring
    Staff does not expect the implementation of the proposed rule to 
require significant resources or additional oversight and compliance 
monitoring by CPSC. CPSC can reasonably provide oversight and 
monitoring of the new ROV/UTV floorboard requirements with existing 
resources. Therefore, staff assumed the additional cost incurred by the 
government to provide additional oversight and compliance monitoring to 
be of an insignificant magnitude, and thus, it is not addressed further 
in this analysis.
<bullet> Deadweight Loss
    The requirements for ROVs/UTVs in the proposed rule increase the 
marginal cost of production for manufacturers. Manufacturers can 
transfer some, or all, of the increased production cost to consumers 
through price increases.<SUP>15 16</SUP>
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    \15\ An increase in the marginal cost of production in a 
competitive market normally is followed by an increase in the prices 
at which products are traded. The portion of the increased 
production costs that are paid for by consumers through higher 
market prices depends on the price responsiveness of demand and 
supply of the product. The price responsiveness of demand and supply 
are measured by the price elasticity of demand and supply, 
respectively. Price elasticity is a measure of how responsive the 
volume of product demanded or supplied in the market is to a change 
in the price of such product. See footnote 15 in the staff briefing 
package for formula to estimate price elasticity. For most products, 
the elasticity of demand is a negative number that indicates price 
increases lead consumers to demand less of the product; while the 
elasticity of supply is a positive number that indicates an 
increased willingness to offer products in the market as the price 
of the product increases.
    \16\ See footnote 16 in the staff briefing package for the 
formula to estimate the change in the market price of equilibrium 
that follows an increase in production costs in a competitive 
market. In a market with a completely inelastic demand, producers 
can transfer the entire change in the cost of production to 
consumers through price increases. The highest the elasticity of 
demand, the lowest the portion of the increased production costs 
that can be transferred to consumers through price increases.
---------------------------------------------------------------------------

    At the margins, some producers of a product may exit the market as 
a result of production cost increases where their increased marginal 
costs come to exceed the market price. At the same time, a fraction of 
consumers of that product are excluded from the market because the 
increased market price now exceeds their personal price threshold for 
purchasing. Deadweight loss \17\ is the measure of the losses faced by 
these marginal producers and consumers, who are forced out of the 
market due to the new requirements of the proposed rule. For this 
analysis, staff estimated deadweight loss for each year the proposed 
rule is expected to have an impact on marginal cost and market price. 
The estimate assumes that producers based their production decisions on 
the long-term impacts of the rule on their cost of production.
---------------------------------------------------------------------------

    \17\ See footnote 17 in Tab B of the staff briefing package for 
the calculation used to estimate deadweight loss.
---------------------------------------------------------------------------

    The following two subsections present the cost estimates for each 
of the two scenarios for compliance with the proposed rule.
1. First Compliance Scenario: The Cost of Redesigned Floorboards
    This subsection presents cost estimates for the scenario that 
assumes all manufacturers install a fully redesigned floorboard on each 
new ROV/UTV to comply with the proposed rule. Manufacturers would also 
redesign all existing and future ROV/UTV models to allow proper 
installation of the redesigned floorboards.
(a) Cost of Redesigning ROV/UTV Models
    Staff estimated the cost of redesigning all existing ROV/UTV models 
by multiplying the unit cost of redesigning each existing model by the 
number of ROV/UTV models to be redesigned. These factors are discussed 
in more detail below. As discussed earlier, the additional design cost 
to enable the installation of the redesigned floorboards on new ROV/UTV 
model designs is considered negligible; therefore, this section only 
presents cost estimates for the redesign of existing ROV/UTV models.
i. Unit Cost of Redesigning ROV/UTV Models
    Staff estimated the unit cost of redesigning existing ROV/UTV 
models in two steps. First, staff estimated the unit cost of 
redesigning a single or ``first'' model, before achieving any cost 
improvements.\18\ Second, staff developed a cost improvement curve to 
account for economies of scale in the redesign of a large number of 
models, and the efficiency gains from specialization and learning.
---------------------------------------------------------------------------

    \18\ The design costs per ROV/UTV model are expected to decrease 
as the number of redesigned ROV/UTV models increases (i.e., fixed 
costs spread over additional models, increased level of experience 
redesigning ROV/UTV models).
---------------------------------------------------------------------------

    Staff estimated the unit cost of the ``first'' model using 
information from multiple sources, including laboratory tests performed 
to measure speeds and energy levels at which debris penetrate ROV/UTV 
floorboards.\19\ CPSC staff produced estimates of the cost of 
redesigning a ROV/UTV at each stage of the design process:
---------------------------------------------------------------------------

    \19\ CPSC Study of Debris Penetration of Recreational Off-
Highway Vehicle Floorboards conducted under contract by SEA Ltd., in 
2020/2021.
---------------------------------------------------------------------------

[cir] Cost of Design Labor
    Staff estimated it would require a team of two designers 1 month to 
produce a final blueprint of an ROV/UTV model design that complies with 
the requirements of the proposed rule, or approximately a total of 347 
hours.\20\ The average compensation rate of a designer is $63.96 per 
hour \21\ for a total cost of $22,536 per redesigned model in 2021 
dollars.
---------------------------------------------------------------------------

    \20\ CPSC staff estimated it would take up to two-person months 
to modify an existing ROV/UTV model that does not comply with the 
requirements of the proposed rule, with a maximum of 4 months and a 
minimum of 1 month. Source: Notice of Proposed Rulemaking to 
Establish a Safety Standard for Recreational Off-Highway Vehicles. 
September 2014. This is 346.67 hours, the average number of hours 
per month of 173.33 (40 hours a week x 52 weeks a year/12 months) 
times 2 (two-person months).
    \21\ As of September 2021, the average total hourly compensation 
for management, professional, and related workers was estimated at 
$63.96 (Bureau of Labor Statistics, Table 2--Employer Costs for 
Employee Compensation for Civilian Workers by Occupational and 
Industry Group, https://www.bls.gov/news.release/ecec.t02.htm). The 
total cost for two-person months as of September 2021 is $22,172.8 
(346.67 hours times $63.96). Adjusted by the CPI price index, this 
estimate increases to $22,535.89 ($22,172.8 x 278.802/274.31) as of 
December 2021 (Bureau of Labor Statistics--Consumer Price Index for 
All Urban Consumers, Series ID CUUR0000SA0, 1982-84 base period, 
https://data.bls.gov/cgi-bin/surveymost?cu).
---------------------------------------------------------------------------

[cir] Cost of Design Production
    Staff estimated the cost of fabrication of each floorboard at 
$2,000 per floorboard prototype. Staff estimated an average of three 
floorboard prototypes would be required per model redesign for a total 
production cost of $6,000 per model.
[cir] Cost of Design Validation
    Staff estimated 2 days of validation testing would be required per 
each redesigned ROV/UTV model for a total of $59,372 per model.\22\
---------------------------------------------------------------------------

    \22\ As part of the CPSC study on debris penetration, SEA Ltd., 
conducted a total of 5 days of validation testing for a total cost 
of $138,570, or $27,714 per day as of September 2020. The cost of 2 
days of testing brought forward to the end of 2021, using the CPI 
price index for all urban consumers, is $59,732.36 ($27,714 per day 
x 2 days x 278.802/260.28).
---------------------------------------------------------------------------

[cir] Cost of Compliance Testing
    Staff estimated that, on average, two ROV/UTV models would be 
tested per

[[Page 43706]]

day of sled testing or $14,843 per redesigned model.\23\
---------------------------------------------------------------------------

    \23\ The cost of validation testing from the CPSC contract with 
SEA Ltd., is $27,714 per day as of September 2020. CPSC staff 
estimates a total of three validation tests can be performed per day 
of third-party validation testing; however, the logistics involved 
in validation testing may reduce it to an average of two tests per 
day. The cost per model in dollars as of the end of 2021 is then 
$14,843 ($27,714 per day/2 models per day x 278.802/260.28).
---------------------------------------------------------------------------

    Based on the unit costs, the total ``first'' model cost per 
redesigned ROV/UTV model is $102,751.\24\ This estimate is before the 
consideration of cost improvements from economies of scale and learning 
in model design.\25\ To account for cost improvements, as the number of 
ROV/UTV models that are redesigned increases, staff used a cost 
improvement curve. The improvement curve assumes that every time the 
number of units produced doubles, there is a 5.4 percent reduction in 
the average redesign cost per ROV/UTV model.\26\
---------------------------------------------------------------------------

    \24\ $102,751.34 = $22,535.89 (labor cost) + $6,000 (floorboard 
fabrication) + $59,372.36 (validation testing) + $14,843.09 
(compliance testing).
    \25\ The traditional definition of ``learning curves'' --or more 
properly in this case, ``cost improvement curves''--is centered on 
the observation that the cost per unit is reduced by a certain 
percentage every time the number of units produced doubles. The most 
cited models are derived from T.P. Wright (1936--cumulative average 
unit cost) and J.R. Crawford (1944--specific unit cost). See 
footnote 26 in Tab B of the staff briefing package for the 
functional form in both of these models.
    \26\ For simplicity, staff assumed each of the redesign cost 
categories discussed here follows the same cost improvement trend. 
See footnote 27 in Tab B of the staff briefing package for the 
functional form of the cost improvement curve--or learning curve--
used by staff.
    Cost improvement curves are usually estimated econometrically 
using available cost/manufacturing data; however, in the absence of 
such information, CPSC selected the cost improvement percentage 
based on cost improvement curves from similar activities and derived 
the parameters.
---------------------------------------------------------------------------

    Figure 14 shows the cost improvement trends for each of the design 
cost components discussed earlier:
BILLING CODE 6355-01-P
[GRAPHIC] [TIFF OMITTED] TP21JY22.015

    The trends in the chart show that when manufacturers redesign 3,000 
ROV/UTV models in a particular year, the average redesign cost per 
model in that year would reach almost half the redesign cost of the 
``first'' model (overall a cost of around $52,000 per model).
    Since the redesign cost of models varies with the number of models 
redesigned each year, it is pertinent to discuss--before the discussion 
of unit cost per model--the forecasted the number of models.
ii. Number of Redesigned ROV/UTV Models
    Figure 15 shows the number of new models sold during the period 
1991 through 2019, as well as an estimate of the total number of ROV/
UTV models in use by consumers during the same period.\27\ For 
instance, in 2019, a total of 107 new models were introduced; the same 
year, an estimated 672 models were in use by ROV/UTV owners/users.
---------------------------------------------------------------------------

    \27\ The number of models sold in each year of this period was 
estimated using the North American Utility Vehicle Sales from 1991 
to 2019. It excludes ROV/UTV models designed for the use of children 
(i.e., ``Minis'').

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[[Page 43707]]

[GRAPHIC] [TIFF OMITTED] TP21JY22.016

    Staff forecasted the number of new models every year in the 30-year 
study period by applying exponential smoothing forecasting techniques 
\28\ to the number of new models produced.\29\ Then, staff used the 
forecast of the number of models to estimate how many models would be 
in use in every year in the 30-year study period by applying a 
statistical distribution of model life rates \30\ based on the average 
number of years a model is offered for sale in the market for new ROVs/
UTVs.
---------------------------------------------------------------------------

    \28\ Exponential smoothing is a time series forecasting 
technique that produces projections that are weighted averages of 
past observations, with weights that decay exponentially as the 
observations get older. More recent observations are, therefore, 
assigned heavier weights and carry more importance in the forecast.
    \29\ CPSC staff developed two sets of forecasts, the first set 
(or baseline forecast) assumes no impacts from the proposed rule, 
while the second set considers a small reduction in the number of 
models as a result of the market impacts of introducing the proposed 
rule. Because the cost impacts of the proposed rule are relatively 
small, the difference between the two sets of forecasts are small 
and not noticeable in the chart below.
    \30\ A two-parameter gamma distribution was used to forecast 
model survival rates with a shape parameter of 5 and scale parameter 
of 1. These distribution parameters are consistent with a mean model 
duration of 5 years, which was estimated subtracting the year of 
model introduction from the year the model was discontinued from the 
North American Utility Vehicle Sales database. The distribution of 
model life rates mentioned above is the converse of the distribution 
of model survival rates.
[GRAPHIC] [TIFF OMITTED] TP21JY22.017

    Figure 16 shows the number of new models sold and the number of 
models in use during each year within the 30-year study period. In 
2023, a year before the assumed implementation of the proposed rule, 
the number of ROV/UTV models in use is 762. This is the number of 
existing models that manufacturers would be required to redesign.\31\ 
Staff assumed for purposes of this analysis that redesign of all 
existing models would occur over 2 years, from 2024 to

[[Page 43708]]

2025, at 381 models per year. Although the proposed effective date for 
the draft rule is 180 days after promulgation, staff assumed 
manufacturers would prioritize redesigning the most popular models 
before the effective date. Staff welcomes public comment on the 
redesign process of ROV and UTV models and the rapidity with which this 
is able to occur.
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    \31\ Starting on the year of implementation of the rule 
(expected in 2024), all existing and new models will have to include 
a floorboard solution that complies with the requirements of the new 
standard to be sold to new/prospective ROV/UTV customers. Given the 
incremental cost of designing new models is negligible, the redesign 
cost is only estimated for existing models requiring new blueprints 
that enable the installation of the redesigned floorboards.
---------------------------------------------------------------------------

    Due to cost improvements associated with redesigning a relatively 
large number of ROV/UTV models, (381) in each of the first 2 years, 
staff estimated the initial cost per model redesign to drop from 
$102,751 to an average of $53,877 each year. Therefore, the industry 
incurs a redesign cost of $20.51 million in 2024 and 2025, 
respectively. The total redesign costs over the 30-year study period 
are $41.02 million. The total redesign costs are equivalent to a 
present value of $39.24 million at a 3 percent discount rate. Table 5 
summarizes the ROV/UTV redesign cost under the redesigned floorboard 
scenario:

                                      Table 5--Redesign Costs in Scenario I
                                             [Redesign floorboards]
----------------------------------------------------------------------------------------------------------------
                                                                     Cost per                         ROV/UTV
                 Redesigned floorboard scenario                   redesign model  Number of ROV/   redesign cost
                                                                       ($M)         UTV models         ($M)
----------------------------------------------------------------------------------------------------------------
2024............................................................          $0.054             381          $20.51
2025............................................................           0.054             381           20.51
Overall.........................................................           0.054             762           41.02
Present Value...................................................  ..............  ..............           39.24
----------------------------------------------------------------------------------------------------------------

(b) Cost of Manufacturing a ROV/UTV Floorboard Solution
    Staff estimated the cost of producing and installing \32\ 
redesigned ROV/UTV floorboards on all new ROVs/UTVs manufactured after 
the implementation of the proposed rule, by multiplying the unit cost 
of each floorboard by the number of floorboards to be installed. These 
components are discussed in more detail below.
---------------------------------------------------------------------------

    \32\ As discussed, the additional cost of installing redesigned 
floorboards on new ROVs/UTVs is considered negligible; therefore, 
this section only presents cost estimates for the additional 
production costs (more specifically the additional materials) of the 
redesigned floorboards.
---------------------------------------------------------------------------

i. Unit Cost of Redesigning Floorboards
    Staff estimated the unit cost of the redesigned ROV/UTV floorboard 
in two steps. First, staff used unit costs informed by laboratory tests 
performed to measure floorboard resistance at different speeds, for the 
additional cost of production and materials as the cost of the 
``first'' redesigned floorboard in the cost improvement curve.\33\ 
Second, staff produced an estimate of the average additional cost per 
floorboard once manufacturers started producing compliant floorboards 
in large quantities; the cost-improvement curve to render estimates in 
line with the subject matter experts in CPSC's Directorate for 
Engineering assessed would be the cost after economies of scale take 
effect.
---------------------------------------------------------------------------

    \33\ The traditional definition of ``learning curves''--or more 
properly in this case ``cost improvement curves''--is centered on 
the observation that the cost per unit is reduced by a certain 
percentage every time the number of units produced doubles. The most 
cited models are derived from T.P. Wright (1936--cumulative average 
unit cost) and J.R. Crawford (1944--specific unit cost). See 
footnote 34 in Tab B of the staff briefing package for the 
functional form in both of these models.
---------------------------------------------------------------------------

    Staff estimated the incremental cost of the ``first'' ROV/UTV 
floorboard using information from laboratory tests performed to measure 
debris penetration resistance of ROV/UTV floorboards. Staff estimated 
the cost of a floorboard resistant to debris penetration at 10 mph to 
be $264.\34\ Staff then produced an estimate of the cost of the 
redesigned floorboard considering cost improvements from economies of 
scale, as well as other considerations, like the reuse of most of the 
material contained in existing floorboards. The average incremental 
cost per floorboard under these conditions is not expected to exceed 
$10 per floorboard.
---------------------------------------------------------------------------

    \34\ CPSC Study of Debris Penetration of Recreational Off-
Highway Vehicle Floorboards conducted under contract by SEA Ltd., in 
2020/2021. SEA tested multiple floorboards, a floorboard that 
successfully resisted debris penetration at 10 mph was purchased for 
$259 in August 2021. This estimate was brought forward to the end of 
2021, using the Consumer Price Index for all Urban Consumers 
($263.96 = $259 x 278.802/273.567).
---------------------------------------------------------------------------

    Staff calibrated a cost improvement curve that assumes each time 
the number of floorboards produced doubles, there is a 15.9 percent 
reduction in the average floorboard cost.\35\ Figure 17 shows the cost 
improvement curve at different scales of floorboard production:
---------------------------------------------------------------------------

    \35\ See footnote 36 in Tab B of the staff briefing package for 
an explanation of the calculation.

---------------------------------------------------------------------------

[[Page 43709]]

[GRAPHIC] [TIFF OMITTED] TP21JY22.018

    Figure 17 shows that with 100,000 floorboards produced, the average 
cost drops to less than $15 per redesigned floorboard. In most years, 
sales of new ROV/UTVs are above 500,000 units, which the cost 
improvement curve correlates to an average additional cost of less than 
$10 per redesigned floorboard. The average floorboard cost is, as shown 
in the chart, dependent on the number of sales per year, which is 
discussed below.
ii. Number of ROVs/UTVs Sold
    Figure 18 shows the number of new ROVs/UTVs sold during the period 
1998 through 2019, as well as an estimate of the total number of ROVs/
UTVs in use during the same period.\36\ During 2019, firms sold 429,135 
new ROVs/UTVs to consumers, and the number of ROVs/UTVs in use during 
the same year averaged 2.34 million.
---------------------------------------------------------------------------

    \36\ Staff estimated the number of ROVs/UTVs sold each year 
during the period 1998 to 2019, using the North American Utility 
Vehicle Sales database. For the purpose of the analysis, the number 
of vehicles excludes ROVs/UTVs sold for the use of children (e.g., 
ROV/UTV ``Minis'').

---------------------------------------------------------------------------

[[Page 43710]]

[GRAPHIC] [TIFF OMITTED] TP21JY22.019

    Staff used exponential smoothing techniques to forecast the number 
of new ROV/UTV sales within the 30-year study period.\37\ Staff also 
forecasted the number of ROVs/UTVs in use by applying a statistical 
distribution of product life rates \38\ to the fleet.
---------------------------------------------------------------------------

    \37\ CPSC staff developed two sets of ROV/UTV forecasts, the 
first set (or baseline forecast) assumes no impacts from the 
proposed rule, while the second set considers a small reduction in 
the number of ROVs/UTVs from the market impacts of the proposed 
rule. Because the cost impacts of the proposed rule are relatively 
small, the difference between the two sets of forecasts is small and 
not noticeable.
    \38\ A two-parameter gamma distribution was used to forecast 
ROV/UTV survival rates with shape parameter of 6 and scale parameter 
of 1 corresponding to a mean ROV/UTV duration of 6 years. The 
distribution of product life rates mentioned in the paragraph above 
is the reciprocal of the distribution of survival rates.
[GRAPHIC] [TIFF OMITTED] TP21JY22.020

    Figure 19 shows ROVs/UTVs sales and the number of ROVs/UTVs in use 
during the 30-year study period. Since each new ROV/UTV sold requires a 
redesigned floorboard, the number of floorboards to be fabricated is 
equivalent to the number of units sold during the period 2024 to 2053. 
Figure 20 shows the number of floorboards produced over time and the 
corresponding (undiscounted) cost per unit.

[[Page 43711]]

[GRAPHIC] [TIFF OMITTED] TP21JY22.021

    The total cost of producing and installing redesigned floorboards 
in every new ROV/UTV is $227.09 million over the 30-year study period. 
The equivalent present value at a 3 percent discount rate is $142.15 
million. Table 6 summarizes these costs:

                         Table 6--Additional Cost of Floorboards on ROV/UTVs--Scenario I
                                            [Redesigned floorboards]
----------------------------------------------------------------------------------------------------------------
                                                                                    Millions of      Cost  of
                                                                   Average cost    new ROVs/UTVs    redesigned
                 Redesigned floorboard scenario                   per redesigned       with       floorboards on
                                                                    floorboard      redesigned       ROVs/UTVs
                                                                        ($)         floorboards        ($M)
----------------------------------------------------------------------------------------------------------------
2024-2053.......................................................           $9.04           25.12         $227.09
Present Value...................................................  ..............  ..............          142.15
----------------------------------------------------------------------------------------------------------------

    The total cost of implementing the redesigned floorboard fix for 
debris penetration is summarized in Table 7:

                                Table 7--Redesign and Production Cost--Scenario I
                                            [Redesigned floorboards]
----------------------------------------------------------------------------------------------------------------
                                                                                      Cost of
                                                   Average cost     Millions of     redesigned     Present value
        Cost of redesigned floorboard fix           per ROV/UTV    new ROVs/UTVs    floorboards        ($M)
                                                        ($)                            ($M)
----------------------------------------------------------------------------------------------------------------
Cost of Redesigning Existing Models.............           $1.63           25.12          $41.02          $39.24
Cost of Producing Redesigned Floorboards........            9.04           25.12          227.09          142.15
Cost of Redesigning Floorboard Fix..............           10.67           25.12          268.11          181.39
----------------------------------------------------------------------------------------------------------------

(c) Deadweight Loss
    To produce an estimate of the market-related losses to producers 
and consumers, staff estimated the annual average increased cost of 
production, the resulting increase in average prices, and reduction in 
volumes traded in the ROV/UTV market. Staff then used those estimates 
to calculate the deadweight loss for each year in the 30-year study 
period.
    Staff assumed that manufacturers would increase prices in response 
to changes in the average long-term variable costs of producing ROVs/
UTVs. Staff calculated the expected changes in long-term variable costs 
by spreading the spikes in short-term costs from complying with the 
proposed rule, as shown in Figure 21:

[[Page 43712]]

[GRAPHIC] [TIFF OMITTED] TP21JY22.022

    Staff augmented the average long-term cost per ROV/UTV redesigned 
floorboard shown in Figure 19 by a 38 percent \39\ wholesaler 
distribution markup. This simulates the market impact that the proposed 
rule has on the ROV/UTV supply curve.
---------------------------------------------------------------------------

    \39\ The effective market impact is likely to include a markup 
to cover the wholesalers' distribution costs. The 38 percent markup 
comes from Goldberg 1995.
---------------------------------------------------------------------------

    Staff adjusted the average annual prices from the period 2004 to 
2019,\40\ to constant 2021 dollars,\41\ and then forecasted prices for 
the 30-year study period using exponential smoothing. The charts in 
Figure 22 show the prices in baseline conditions (assuming no proposed 
rule in effect) forecasted through 2053, as well as the price impacts 
of the proposed implementation of the rule.
---------------------------------------------------------------------------

    \40\ Average annual prices were estimated using the North 
American Utility Vehicle Sales database. Prices of ROV/UTV designed 
for the use of children were excluded from the weighted price 
average.
    \41\ Prices were brought forward using the Consumer Price Index 
for All Urban Consumers from the Bureau of Labor Statistics.
[GRAPHIC] [TIFF OMITTED] TP21JY22.023

    The impact of the rule on the ROV/UTV price is very small, 
accounting for less than 0.03 percent of the average market price.\42\ 
Consequently, the change in market volume is also very small. The small 
price and quantity

[[Page 43713]]

impacts result in deadweight losses under $6,000 per year, and 
aggregate to approximately $160,000 over the 30-year study period. In 
the context of this proposed rule, deadweight loss is not a significant 
cost and is likely to be masked by other economic factors.
---------------------------------------------------------------------------

    \42\ See footnote 43 in Tab B of the staff briefing package for 
formula used to estimate the price impact.
---------------------------------------------------------------------------

(d) Total Cost Under First Compliance Scenario: Redesigned Floorboard
    Table 8 summarizes the cost of the first compliance scenario: the 
design and production of redesigned floorboards.

             Table 8--Total Cost of ROV/UTV Fix--Scenario I
                        [Redesigned floorboards]
------------------------------------------------------------------------
 Cost of redesigned floorboard fix ($M)     Total cost     Present value
------------------------------------------------------------------------
Cost of Redesigning Existing Models.....          $41.02          $39.24
Cost of Production of Redesigned                  227.09          142.15
 Floorboards............................
Deadweight Loss.........................            0.16            0.10
Cost of First Compliance Scenario.......          268.26          181.49
------------------------------------------------------------------------

2. Second Compliance Scenario: The Cost of a Floorboard Guard
    This subsection presents cost estimates for the scenario that all 
manufacturers produce and install a floorboard guard under the 
floorboard to comply with the proposed rule. Manufacturers would 
redesign floorboards to add a 2' x 2' x 0.19'' aluminum piece that can 
prevent debris penetration. Manufacturers would also have to redesign 
all existing and future ROV/UTV models to allow proper installation of 
the floorboard guard.
(a) Cost of Redesigning ROV/UTV Models
    Staff estimated the cost of redesigning all existing ROV/UTV models 
to allow for the installation of floorboard guards by multiplying the 
unit cost of redesigning each existing model \43\ by the number of ROV/
UTV models to be redesigned. These two cost elements are discussed in 
more detail below.
---------------------------------------------------------------------------

    \43\ The additional design cost to enable the installation of 
the floorboard guards on new ROV/UTV model designs is considered 
negligible. This section focuses only in the costs of redesigning 
existing ROV/UTV models.
---------------------------------------------------------------------------

i. Unit Cost of Redesigning ROV/UTV Models
    Like the estimation method used with the first compliance scenario, 
staff estimated the unit cost of redesigning existing ROV/UTV models in 
two steps. First, staff estimated the unit cost of redesigning a single 
or ``first'' model before cost improvements. Second, staff developed a 
cost improvement curve to account for the diminishing cost of 
redesigning through economies of scale.\44\
---------------------------------------------------------------------------

    \44\ Costs improvements are expected as fixed costs spread over 
additional model redesigns, and the level of experience and 
specialization redesigning ROV/UTV models for floorboard debris 
penetration increases.
---------------------------------------------------------------------------

    Staff developed the unit cost of the ``first'' ROV/UTV model 
redesign from related studies and reports, including a set of 
laboratory tests performed to measure floorboard resistance at 
different speeds.\45\ Staff produced unit cost estimates for four 
stages in the design process:
---------------------------------------------------------------------------

    \45\ CPSC Study of Debris Penetration of Recreational Off-
Highway Vehicle Floorboards conducted under contract by SEA Limited 
in 2020/2021.
---------------------------------------------------------------------------

[cir] Cost of Design Labor
    Staff estimated it would take two designers 1 month to produce 
final blueprints, or approximately 347 hours.\46\ The average 
compensation rate for a designer is $63.96 per hour for a total cost of 
$22,536 per redesigned ROV/UTV model in 2021 dollars.\47\
---------------------------------------------------------------------------

    \46\ CPSC staff estimated each redesign would take up to two-
person months, with a maximum of four months and a minimum of one 
month (Notice of Proposed Rulemaking to Establish a Safety Standard 
for Recreational Off-Highway Vehicles. September 2014). Two-person 
months are equivalent to 346.67 hours: the average number of hours 
per month of 173.33 (40 hours a week x 52 weeks a year/12 months) 
times 2.
    \47\ The average total hourly compensation for management, 
professional, and related workers was estimated as of September 2021 
at $63.96 (BLS, https://www.bls.gov/news.release/ecec.t02.htm). The 
total cost for two-person months as of September 2021 is then 
$22,172.8 (346.67 hours times $63.96). Adjusted by the CPI price 
index, this estimate increases to $22,535.89 ($22,172.8 x 278.802/
274.31) as of December 2021 (CPI-U, ID: CUUR0000SA0, https://data.bls.gov/cgi-bin/surveymost?cu).
---------------------------------------------------------------------------

[cir] Cost of Design Production
    Staff used information from its study on debris penetration \48\ to 
produce an estimate of the cost per floorboard prototype at $500. 
Assuming an average of three floorboard prototypes per ROV/UTV model 
redesign, staff estimated a total production cost of $1,500 per 
redesigned model.
---------------------------------------------------------------------------

    \48\ Conducted by SEA Limited under contract with CPSC (Debris 
Penetration of ROVs Floorboards).
---------------------------------------------------------------------------

[cir] Cost of Design Validation
    Staff estimated 2 days of validation testing per each redesigned 
ROV/UTV model for a total of $59,372.\49\
---------------------------------------------------------------------------

    \49\ Ibid. SEA Ltd., conducted 5 days of validation testing for 
a total cost of $138,570, or $27,714 per day as of September 2020. 
The cost of 2 days of testing brought forward to the end of 2021, 
using the CPI price index for all urban consumers, is $59,732.36 
($27,714 per day x 2 days x 278.802/260.28).
---------------------------------------------------------------------------

[cir] Cost of Compliance Testing
    Staff estimated that, on average, two ROV/UTV models would be 
tested using the test sled method at $14,843 per model.\50\
---------------------------------------------------------------------------

    \50\ The cost per day of sled testing, as provided by SEA Ltd., 
was $27,714 as of September 2020. CPSC staff estimates that, on 
average, two models would be tested per day. The cost per model as 
of the end of 2021 is then $14,843 ($27,714 per day/2 models per day 
x 278.802/260.28).
---------------------------------------------------------------------------

    Based on these inputs, staff estimated the total cost per ``first'' 
redesigned model is $98,251.\51\ This is before considering the cost 
improvement from scale, specialization, and learning. Staff then used a 
cost improvement curve that calculates a 5.4 percent reduction in per-
unit cost every time the number of units redesigned doubles.\52\
---------------------------------------------------------------------------

    \51\ $98,251.34 = $22,535.89 (labor cost) + $1,500 (floorboard 
fabrication) + $59,372.36 (validation testing) + $14,843.09 
(compliance testing).
    \52\ CPSC staff assume the same cost trends for each design cost 
category. See footnote 53 in Tab B of the staff briefing package for 
the formula used to estimate the slope of the cost improvement 
curve.
---------------------------------------------------------------------------

    Figure 23 shows the cost improvement trends for each of the design 
cost components discussed earlier:

[[Page 43714]]

[GRAPHIC] [TIFF OMITTED] TP21JY22.024

    The average redesign cost per model is dependent on the number of 
models redesigned each year, which is discussed in the following 
section.
ii. Number of Redesigned ROV/UTV Models
    Staff used the same forecast of the number of new models introduced 
each year and number of models in use by consumers for this compliance 
scenario as in the redesigned floorboard scenario.\53\ The baseline 
data in 2019 reveals 107 new ROV/UTV models introduced and 672 existing 
ROV/UTV models used by consumers.
---------------------------------------------------------------------------

    \53\ The same baseline number of models is used for both 
compliance scenarios (see baseline data and forecast in the 
corresponding section of the first compliance scenario -``redesign 
floorboards''- for additional context). The number of models sold in 
each year of this period was estimated using the North American 
Utility Vehicle Sales from 1991 to 2019, excluding models design for 
children.
---------------------------------------------------------------------------

    Staff used the baseline forecast of the number of new models to 
produce an estimate of new models that would need to be redesigned 
under the proposed rule.\54\ Then, staff used the forecasted number of 
new models to estimate the number of redesigned models in use every 
year throughout the 30-year study period by applying a statistical 
distribution of model life rates.\55\
---------------------------------------------------------------------------

    \54\ CPSC staff developed a second set of forecasts from the 
baseline forecast by considering the market impacts of the proposed 
rule. Due to the relatively small cost impacts of the proposed rule, 
the difference between the two sets of forecasts is not noticeable 
in the chart.
    \55\ As discussed, a two-parameter gamma distribution was used 
to forecast model survival rates with shape parameter of 5 and scale 
parameter of 1, consistent with an estimated mean model duration of 
5 years. The model life rates distribution is the converse of the 
model survival rates distribution.
---------------------------------------------------------------------------

    The forecast matches almost exactly the chart shown in Figure 16 
with 762 ROV/UTV models in use in 2023. This value is the number of 
existing models that manufacturers would be required to redesign.\56\ 
Staff assumed that manufacturers would spread the redesign activities 
over a period of 2 years, at 381 ROV/UTV models per year. The 
improvement over the cost of the ``first'' redesigned model would bring 
down the average cost per model from $98,251 to an average of $51,042 
each year. Consequently, the ROV/UTV industry would incur redesign 
costs of $19.43 million in 2024 and 2025, respectively, as shown in 
Table 9:
---------------------------------------------------------------------------

    \56\ All existing and new models will have to include a 
floorboard solution--a floorboard guard in this case that complies 
with the requirements of the new standard--in order to be sold to 
new/prospective ROV/UTV customers. However, the additional cost of 
redesigning new models is considered negligible based on discussions 
with manufacturers, so the focus of the estimate is on redesigned 
existing models only.

                                     Table 9--Redesign Costs in Scenario II
                                               [Floorboard guards]
----------------------------------------------------------------------------------------------------------------
                                                                     Cost per                         ROV/UTV
                    Floorboard guard scenario                       redesigned    Number of  ROV/  industry cost
                                                                    model ($M)      UTV models         ($M)
----------------------------------------------------------------------------------------------------------------
2024............................................................          $0.051             381          $19.43
2025............................................................           0.051             381           19.43
Overall.........................................................           0.051             762           38.87
Present Value...................................................  ..............  ..............           37.19
----------------------------------------------------------------------------------------------------------------

(b) Cost of Manufacturing ROV/UTV Floorboard Guards
    Staff estimated the cost of producing and installing \57\ 
floorboards with floorboard guards on all new ROVs/UTVs by multiplying 
the additional cost per floorboard guards by the number of new ROVs/
UTVs that would have a floorboard guard installed.
---------------------------------------------------------------------------

    \57\ Like the first compliance scenario, the additional cost of 
installing floorboard guards in new ROVs/UTVs is considered 
negligible. The focus of the section is on the additional production 
costs of floorboard guards (more specifically the additional 
materials).

---------------------------------------------------------------------------

[[Page 43715]]

i. Unit Cost of Adding a Floorboard Guard
    Staff estimated the unit cost of adding floorboard guards to 
floorboards in two steps. First, staff estimated the additional cost of 
the ``first'' floorboard with a floorboard guard in it, before any cost 
improvements.\58\ Second, staff developed an estimate of the average 
cost of a floorboard using a floorboard guard considering the 
efficiencies from economies of scale, by calibrating and applying a 
cost improvement curve.
---------------------------------------------------------------------------

    \58\ Cost improvements are expected due to process improvements 
and reuse of designs, additional learning and experience in the 
production process, and economies of scale in the acquisition of 
materials.
---------------------------------------------------------------------------

    Staff estimated the incremental cost of the ``first'' floorboard 
with a floorboard guard to be $51.09, based on the cost of the 
materials considering a 2' x 2' x 0.19' aluminum sheet.\59\ Staff then 
applied the cost curve, which calculates a 5.5 percent reduction in 
average cost every time the number of ROVs/UTVs with a floorboard guard 
doubles.\60\
---------------------------------------------------------------------------

    \59\ CPSC staff estimate this cost applying a 50% manufacturer 
discount to the Grainger retail price for an aluminum sheet of these 
characteristics, price at $102.17 as of the end of 2021.
    \60\ See footnote 61 in Tab B of the staff briefing package for 
the formula used to estimate the cost improvement curve.
---------------------------------------------------------------------------

    Figure 24 shows the cost improvement curve at different scales of 
production:
[GRAPHIC] [TIFF OMITTED] TP21JY22.025

    This chart shows that with 100,000 floorboards produced, the cost 
drops to an average of about $20. In most years, the sales of new ROV/
UTVs are greater than 500,000 units, which reduces the average cost to 
slightly above $17 per new ROV/UTV.
ii. Number of ROVs/UTVs Sold
    The baseline forecasts of sale volumes of new ROVs/UTVs and the 
number of ROVs/UTVs in use by consumers in section VIII.D.1.(a)(ii), 
Number of Redesigned ROV/UTV Models, are also applicable to this 
compliance scenario.\61\ The baseline data in 2019 show 429,135 new 
ROVs/UTVs sold and 2.3 million ROVs/UTVs in use by consumers.
---------------------------------------------------------------------------

    \61\ The number of ROVs/UTVs sold each year from 1998 to 2019, 
was estimated using the North American Utility Vehicle Sales 
database; it excludes ROVs/UTVs sold for the use of children (e.g., 
the ``Mini''). The baseline data and forecasts applied to both 
compliance scenarios.
---------------------------------------------------------------------------

    Staff used the baseline forecast of the number of new ROVs/UTVs to 
produce an estimate of new ROVs/UTVs under the proposed rule.\62\ Staff 
also forecasted the number of ROVs/UTVs in use by applying a 
statistical distribution of product life rates \63\ to the total fleet. 
The forecasted volumes match, almost exactly, the volumes shown in 
Figure 16. Additionally, Figure 25 shows the number of floorboards 
produced over time and the corresponding cost per unit.
---------------------------------------------------------------------------

    \62\ CPSC staff developed a second set of forecasts subtracting 
from the baseline forecast of sales the volume impacts of the 
proposed rule. Due to the relatively small price, and hence, volume 
impacts of the proposed rule, the difference between the two sets of 
forecasts is barely noticeable.
    \63\ A two-parameter gamma distribution was used to forecast 
ROV/UTV survival rates with a shape parameter of 6 and a scale 
parameter of 1, corresponding to a mean ROV/UTV duration of 6 years. 
The distribution of product life rates is the converse of the 
distribution of survival rates.

---------------------------------------------------------------------------

[[Page 43716]]

[GRAPHIC] [TIFF OMITTED] TP21JY22.026

    To calculate the total incremental cost of producing and installing 
floorboard guards in every new ROV/UTV over the 30-year study period, 
staff multiplied the average cost of a floorboard guard by the number 
of ROVs/UTVs produced. Staff calculated this cost to be $430.33 
million. The equivalent present value at a 3 percent discount rate is 
$266.94 million. Table 10 summarizes the cost of producing ROV/UTV 
floorboards with floorboard guards: \64\
---------------------------------------------------------------------------

    \64\ Note that the number of ROVs/UTVs equipped with floorboards 
containing deflectors shields is slightly below the number of ROVs/
UTVs under the first alternative with ``redesigned floorboards.'' 
The reason for this slight difference is that the implementation of 
the floorboard guard solution is slightly more expensive, causing a 
slimly steeper increase in prices, and hence, a slightly reduced 
sales volume.

                        Table 10--Additional Cost of Floorboards on ROV/UTVs--Scenario II
                                               [Floorboard guards]
----------------------------------------------------------------------------------------------------------------
                                                                                    Millions of
                                                                   Average cost   new  ROVs/UTVs      Cost of
                    Floorboard guard scenario                           per            with         floorboard
                                                                    floorboard      floorboard      guard ($M)
                                                                       guard           guard
----------------------------------------------------------------------------------------------------------------
2024-2053.......................................................          $17.14           25.10         $430.33
Present Value...................................................  ..............  ..............          266.94
----------------------------------------------------------------------------------------------------------------

    Table 11 summarizes the total cost of implementing the floorboard 
guards fix to debris penetration over the 30-year study period:

                               Table 11--Redesign and Production Cost--Scenario II
                                               [Floorboard guards]
----------------------------------------------------------------------------------------------------------------
                                                                                      Cost of
        Cost of floorboard guard scenario          Average cost     Millions of     floorboard     Present value
                                                    per ROV/UTV    new ROVs/UTVs    guard  ($M)        ($M)
----------------------------------------------------------------------------------------------------------------
Cost of Redesigning Existing Models.............           $1.55           25.10          $38.87          $37.19
Cost of Producing Redesigned Floorboards........           17.14           25.10          430.33          266.94
Cost of Redesigning Floorboard Fix..............           18.69           25.10          469.20          304.13
----------------------------------------------------------------------------------------------------------------

(c) Deadweight Loss
    Like the first compliance scenario, staff estimated the annual 
average increased cost of production associated with the new standard, 
the resulting increase in average prices, and reduction in volumes 
traded in the ROV/UTV market. Then, staff used those estimates to 
calculate the deadweight loss for each year of the analysis.
    Staff calculated the expected changes in long-term variable costs 
by spreading out the spikes in short-term costs, as shown in Figure 26:

[[Page 43717]]

[GRAPHIC] [TIFF OMITTED] TP21JY22.027

    Then, staff augmented the estimated long-term cost presented in 
Figure 22 by a 38 percent \65\ wholesaler distribution markup to 
simulate the market impact of the proposed rule on the ROV/UTV supply 
curve.
---------------------------------------------------------------------------

    \65\ Goldberg 1995.
---------------------------------------------------------------------------

    Staff used the same forecasted baseline prices used in the first 
scenario-along with price sensitivities of demand and supply-to 
estimate price impacts of the proposed rule in this scenario.
[GRAPHIC] [TIFF OMITTED] TP21JY22.028

BILLING CODE 6355-01-C
    As Figure 27 shows, the impact of the proposed rule on the ROV/UTV 
price is slightly higher than in the first compliance scenario, but it 
is still very small, accounting for less than 0.045 percent of the 
average market price.\66\ Consequently, the change in market volume 
would also be very small. The small price and quantity impacts result 
in deadweight losses per year under $20,000, and aggregates to 
approximately $470,000 over the 30-year study period. In the context of 
this proposed rule, the impact of deadweight loss is not significant.
---------------------------------------------------------------------------

    \66\ See footnote 67 in Tab B of the staff briefing package for 
the formula used to estimate the price impact.
---------------------------------------------------------------------------

(d) Total Cost Under Second Compliance Scenario: Floorboard Guards
    Table 12 summarizes the total cost of the second compliance 
scenario over the 30-year study period.

[[Page 43718]]



            Table 12--Total Cost of ROV/UTV Fix--Scenario II
                           [Floorboard Guards]
------------------------------------------------------------------------
                                                           Present value
    Cost of floorboard guard fix ($M)       Total cost         at 3%
------------------------------------------------------------------------
Cost of Redesigning Existing Models.....          $38.87          $37.19
Cost of Production of Floorboard Guards.          430.33          266.94
Deadweight Loss.........................            0.47            0.30
Cost of Second Compliance Scenario......          469.67          304.43
------------------------------------------------------------------------

3. Annualized and Per Vehicle, in Use Cost of the Proposed Rule
    In this regulatory assessment, staff considered two types of 
solutions to the debris penetration hazard under the proposed rule: (i) 
fully redesigned floorboards that utilize most of the material in 
original floorboards, and (ii) floorboards with floorboard guards. Both 
scenarios require manufacturers to redesign existing models to allow 
for proper installation of the floorboard solution of choice. Staff 
estimated in each scenario the cost of all firms fully deploying that 
solution solely. Table 13 below summarizes the aggregate costs of each 
scenario over the 30-year study period, and their respective present 
value using a 3 percent discount rate.

                      Table 13--Total 30-Year Cost of Implementing the Draft Proposed Rule
----------------------------------------------------------------------------------------------------------------
                                                      Cost of      Present value      Cost of      Present value
                                                    redesigned     of redesigned    floorboard     of floorboard
       Cost of debris penetration fix ($M)          floorboard      floorboards       guards          guards
                                                     scenario        scenario        scenario        scenario
----------------------------------------------------------------------------------------------------------------
Cost of Redesigning Existing Models.............          $41.02          $39.24          $38.87          $37.19
Cost of Production of Redesigned Floorboards....          227.09          142.15          430.33          266.94
Deadweight Loss.................................            0.16            0.10            0.47            0.30
Cost of Compliance..............................          268.26          181.49          469.67          304.43
----------------------------------------------------------------------------------------------------------------

    The total 30-year cost estimates of the ROV/UTV debris penetration 
compliance are $268.3 million and $469.7 million, for redesigned 
floorboards or the floorboard guards, respectively. In practice, 
manufacturers may choose to implement either solution, or a different 
solution that proves more cost-effective. The corresponding present 
values for the 30-year cost range is between $181.5 to $304.4 million.
    Using the cost estimates from each scenario, staff calculated the 
annualized cost \67\ and the cost per-product. The average annual cost 
\68\ is $8.94 million for the redesigned floorboards scenario and 
$15.66 million for the floorboard guard scenario. The annualized costs 
(annual costs using a discount rate for the time value of money) is 
$9.26 million at a 3 percent discount rate for the redesigned 
floorboards scenario and $15.53 million for the floorboard guard 
scenario.
---------------------------------------------------------------------------

    \67\ CPSC staff converted the aggregate 30-year costs into 
present values--an amount in today's dollars that is equivalent to 
the 30-year stream of costs-by discounting all future amounts at a 3 
percent discount rate (a rate that accounts for the time value of 
money and the opportunity costs). Then, CPSC staff converted these 
present values into constant annual equivalents, or fixed amounts of 
cost per year over the 30-year period that represent the constant 
cost in today's dollars of implementing of the proposed rule.
    \68\ This is the undiscounted total costs of each compliance 
alternative divided by 30, the number of years in the period of 
analysis.
---------------------------------------------------------------------------

    Staff estimated per-unit cost by dividing the total cost of the 
scenario (undiscounted and discounted) by the number of ROVs and UTVs 
in each compliance scenario over the 30-year period. The total number 
of ROVs & UTVs with the debris penetration fix is 25.12 million in the 
redesigned floorboard scenario and 25.10 in the floorboard guard \69\ 
scenario. In the redesigned floorboard scenario, the cost per unit is 
$10.68 undiscounted and $7.23 discounted at 3 percent. In the 
floorboard guard scenario, the cost per unit is $18.71 undiscounted and 
$12.13 discounted at 3 percent.
---------------------------------------------------------------------------

    \69\ The total number of ROVs & UTVs is slightly different due 
to a small difference in the market price impacts of each scenario.
---------------------------------------------------------------------------

    Table 14 presents the findings from the cost assessment of this 
proposed rule for both the annualized and per-product perspectives.

                    Table 14--Average Annual Cost of Draft Proposed Rule Under Each Scenario
----------------------------------------------------------------------------------------------------------------
                                            Average annual                    Cost per ROV/UTV--  Cost per ROV/
  Cost of compliance with proposed rule   cost--undiscounted    Annualized     undiscounted ($)  UTV--discounted
                                                 ($M)         cost at 3%($M)                        at 3% ($)
----------------------------------------------------------------------------------------------------------------
Scenario 1: Redesigning Floorboards.....             $8.94             $9.26            $10.68             $7.23
Scenario 2: Floorboard Guard............             15.66             15.53             18.71             12.13
----------------------------------------------------------------------------------------------------------------

E. Benefits and Costs Analysis

    Staff compared estimated benefits and costs to assess the relation 
between benefits and costs of the proposed rule. Table 15 below 
displays metrics for both the benefits and costs of the proposed rule. 
It takes the difference and ratio of benefits and costs to assess the 
cost-benefit relationship.

[[Page 43719]]



                        Table 15--Net Benefits of Draft Proposed Rule Under Each Scenario
----------------------------------------------------------------------------------------------------------------
                                                    Annualized    Present value--   Annualized    Present value--
                                                      cost--         redesigned       cost--         floorboard
       Net benefits of proposed rule--($M)          redesigned      floorboards     floorboard        guards
                                                    floorboards                       guards
----------------------------------------------------------------------------------------------------------------
Benefits........................................          $15.47         $303.13          $15.47         $303.15
Costs...........................................            9.26          181.49           15.53          304.43
Net Benefits (Benefits-Cost)....................            6.21          121.64           -0.06           -1.28
B/C Ratio (Benefits / Cost).....................            1.67            1.67            1.00            1.00
----------------------------------------------------------------------------------------------------------------

    Finally, Table 16 compares the benefits and costs of each 
compliance scenario on a per-vehicle basis to add a marginal value 
perspective.

                  Table 16--Per-Vehicle Net Benefits of Draft Proposed Rule Under Each Scenario
----------------------------------------------------------------------------------------------------------------
                                                          Annualized                                Annualized
  Net benefits of proposed     Average undiscounted--    costs at 3%--   Average undiscounted--    costs at 3%--
     rule--$ per vehicle       redesigned floorboards     redesigned        floorboard guards       floorboard
                                                          floorboards                                 guards
----------------------------------------------------------------------------------------------------------------
Benefits....................               $20.32               $12.07               $20.34               $12.08
Costs.......................                10.68                 7.23                18.71                12.13
Net Benefits (Benefits-Cost)                 9.64                 4.84                 1.63                -0.05
B/C Ratio (Benefits / Cost).                 1.90                 1.67                 1.09                  1.0
----------------------------------------------------------------------------------------------------------------

1. Uncertainty and Sensitivity Analysis
    Uncertainty is inherent in any estimate or forecast of future 
events. This preliminary regulatory analysis estimated future benefits 
and costs associated with promulgating the proposed rule using the best 
readily available information and data. However, multiple sources of 
uncertainty may have an impact on the accuracy of the estimates 
developed for this regulatory assessment:
    <bullet> A first source of uncertainty is the use of historical 
data to extrapolate future trends, since it is clearly not certain that 
the future will follow historical patterns; the farther into the 
future, the more uncertain is the estimate. Staff applied statistical 
methods to mitigate this uncertainty to the extent possible.
    <bullet> A second source of uncertainty is the use of assumptions 
to overcome the issue of data availability. Staff carefully developed 
these assumptions based on subject matter expert inputs and literature 
review; however, they may not perfectly reflect the central trends, nor 
the full spectrum of possible occurrences in the real world. Staff 
developed a sensitivity analysis on a few key inputs to mitigate this 
uncertainty.
    <bullet> A third source of estimate uncertainty is the omission of 
certain benefits and costs. For instance, CPSC did not extrapolate the 
number of incidents to the national level due to the number of recorded 
incidents of debris penetration being lower than the publication 
criteria established in NEISS. This may result in a significant 
underestimation of the benefits of the rule. Likewise, CPSC may have 
overlooked certain costs of implementing the proposed rule. The 
Commission requests comment regarding benefits and costs not addressed 
in this analysis.
    The rest of this section describes the results of a sensitivity 
analysis on two assumptions used in this preliminary regulatory 
analysis: (1) the efficacy of the proposed rule as a percent of 
reduction in the number of debris penetration incidents, and (2) the 
time horizon of the study period. In the preliminary regulatory 
analysis, staff assumed the proposed rule assumed 100 percent efficacy 
in preventing debris penetration from compliant vehicles and used a 30-
year time horizon for its study period.
    Table 17 presents estimates of benefits and costs at two different 
levels of efficacy of the proposed rule in reducing the number of 
incidents. Table 17 shows that for the redesign floorboard scenario, 
the benefits exceed the costs, even at a 60 percent efficacy. In the 
case of the floorboard guard scenario, the benefits essentially match 
the cost at a 95 percent efficacy but are lower than the costs when the 
efficacy of the proposed rule is at 60 percent.
---------------------------------------------------------------------------

    \70\ The small difference in benefits between the redesigned-
floorboards and floorboard-guards scenarios is the result of a small 
but different market price impact in each case. The floorboard-guard 
scenario is costlier and, therefore, produces a larger price 
increase that leads to a smaller number of vehicles under the 
proposed rule, and larger benefits with respect to the baseline 
situation without the rule.

         Table 17--Net Benefit Sensitivity to the Efficacy of the Proposed Rule Under Each Scenario \70\
----------------------------------------------------------------------------------------------------------------
                                                      Redesigned floorboards             Floorboard guards
                Net benefits ($M)                ---------------------------------------------------------------
                                                        95%             60%             95%             60%
----------------------------------------------------------------------------------------------------------------
Benefits........................................         $303.13         $191.64         $303.15         $191.64
Costs...........................................       ($181.49)       ($181.49)       ($304.43)       ($304.43)
Net Benefits....................................         $121.64          $10.14         ($1.28)       ($112.79)
B/C Ratio.......................................            1.67            1.06            1.00            0.63
----------------------------------------------------------------------------------------------------------------


[[Page 43720]]

    Table 18 presents estimates of benefits and costs, and sensitivity 
of the net benefits to the length of the study period. It compares the 
30-year study period used in this regulatory assessment with a 20-year 
sensitivity test (2024-2043). Table 18 shows that under the redesigned 
floorboard scenario, the benefits exceed the cost at both lengths of 
time. In the case of the floorboard guard scenario, the costs exceed 
the benefits if the period of analysis is reduced to 20 years.

    Table 18--Net Benefit Sensitivity to the Period of Analysis of the Proposed Rule Under Each Scenario \71\
----------------------------------------------------------------------------------------------------------------
                                          Redesigned floorboards                     Floorboard guards
        Net benefits ($M)        -------------------------------------------------------------------------------
                                    30-Year period      20-Year period      30-Year period      20-Year period
----------------------------------------------------------------------------------------------------------------
Benefits........................  $303.13...........  $194.37...........  $303.15...........  $194.37
Costs...........................  ($181.49).........  ($139.49).........  ($304.43).........  ($221.58)
Net Benefits....................  $121.64...........  $54.88............  ($1.28)...........  ($27.21)
B/C Ratio.......................  1.67..............  1.39..............  1.00..............  0.88
----------------------------------------------------------------------------------------------------------------

F. Staff Evaluation of the Voluntary Standards
---------------------------------------------------------------------------

    \71\ The small difference in benefits between the redesigned-
floorboards and floorboard-guards scenarios is the result of a small 
but different market price impact in each case. The floorboard-guard 
scenario is costlier, and therefore, produces a larger price 
increase that leads to a smaller number of vehicles under the 
proposed rule, and larger benefits regarding the baseline situation 
without the rule.
---------------------------------------------------------------------------

    In developing the proposed rule, staff considered whether the 
Commission could rely on the current voluntary standards. The current 
voluntary standards for ROVs/UTVs are:
    <bullet> ANSI/ROHVA 1-2016 Recreational Off-Highway Vehicles; and
    <bullet> ANSI/OPEI B71.9-2016--American National Standard for 
Multipurpose Off-Highway Utility Vehicles.
1. ANSI/ROHVA-1
    In 2016, ROHVA published the latest version of the standard--ANSI/
ROHVA-1--2016, American National Standard for Recreational Off-Highway 
Vehicles. The first version of the standard was published in 2010. 
ROHVA member companies include Can-AM/BRP, Honda, Deere and Co., 
Kawasaki, Mahindra, Polaris, Textron Specialized Vehicles (formerly 
Artic Cat) and Yamaha. Work on ANSI/ROHVA 1 started in 2008, and work 
completed with publication of ANSI/ROHVA 1-2010. The standard was 
immediately opened for revision, and a revised standard, ANSI/ROHVA 1-
2011, was published in July 2011.
    The ANSI/ROHVA-1-2016 standard defines an ``ROV'' as an off-highway 
vehicle with a minimum top speed of 30 mph, no limit on maximum speed, 
a maximum engine displacement of 1000 cc, and a maximum Gross Vehicle 
Weight Rating (GVWR) of 3,750 lbs. The standard specifies requirements 
for service brakes, parking brakes, and controls specifications for 
engine, drive train, and steering. Lighting equipment, spark arresters, 
and warning labels are also covered by the standard.
    The ANSI/ROHVA-1-2016 standard has requirements for rollover 
protective structures (ROPS), lateral stability, vehicle handling, and 
occupant retention systems that include seat belts and passive 
restraints.
    The ANSI/ROHVA-1-2016 standard does not have requirements for 
resistance to debris penetration. The vehicles defined by the ANSI/
ROHVA 1-2016 standard are included in the definition of ``ROVs'' in the 
proposed rule and subject to the requirements of the proposed rule.
2. ANSI/OPEI B71.9
    In March 2012, OPEI published the ANSI/OPEI B71.9-2012, American 
National Standard for Multipurpose Off-Highway Utility Vehicles, which 
is a voluntary standard applicable to ROVs and UTVs. OPEI member 
companies include Club Car, Deere and Co., Excel Industries, Honda, 
Intimidator, Jacobsen, Kawasaki, Kioti, Kubota, Mahindra, MTD, Polaris, 
Toro, Yanmar, and Yamaha. Work on ANSI/OPEI B71.9 was started in 2008 
and completed with the publication of ANSI/OPEI B71.9-2012 in March 
2012.
    The most recent edition of the OPEI standard was published in 2016; 
it provides a definition of ``multipurpose off-highway utility vehicles 
(MOHUVs),'' which is very similar to the ROHVA definition of ``ROVs.'' 
The OPEI definition of ``MOHUV'' requires a minimum top speed in excess 
of 25 mph. The OPEI definition of ``MOHUV'' requires a minimum cargo 
load of 350 lbs. and limits GVWR to 4,000 lbs. The standard specifies 
requirements for service brakes, parking brakes or mechanisms, and 
vehicle controls. Lighting equipment, spark arresters, and warning 
labels are also covered by the standard. MOHUVs can be ROVs (those 
vehicles with top speeds greater than 30 mph) or UTVs (those vehicles 
with top speeds of less than 30 mph).
    The ANSI/OPEI B71.9-2016 standard does not have requirements to 
guard against the debris penetration risks. The vehicles defined by the 
ANSI/OPEI B71.9-2016 standard are included in the definition of 
``ROVs'' and ``UTVs'' in the proposed rule and subject to the 
requirements of the proposed rule.

G. Alternatives to the Proposed Rule

    The Commission considered four alternatives to the proposed rule: 
(1) conduct marketing campaigns and recalls instead of promulgating a 
final rule; (2) rely on voluntary standards development; (3) limit ROV 
and UTV speed to a maximum of 10 miles per hour, and (4) implement a 
small batch exemption. The Commission is not adopting these 
alternatives, for the following reasons:
1. Conduct Marketing Campaigns and Recalls Instead of Promulgating a 
Final Rule
    The Commission could issue news releases or utilize other 
information and marketing techniques to warn consumers about debris 
penetration hazards associated with ROVs and UTVs instead of issuing a 
mandatory rule. With this alternative, most vehicles would comply with 
one of the two voluntary ROV standards, and ROV and UTV manufacturers 
would incur no costs to modify or test their vehicles to comply with 
the proposed rule. However, neither voluntary standard includes a 
performance standard requirement to prevent debris penetration into the 
occupant area.
    Information and marketing campaigns are unlikely to reduce the 
number of injuries and societal costs associated with ROV/UTV debris 
penetration hazard. ROV/UTV users, aware of the debris penetration 
hazard, may modify their behavior, drive more alertly, reduce driving 
speed, and avoid debris, when possible. However, given that 
encountering debris in an off-highway environment is largely 
unavoidable, and

[[Page 43721]]

that debris penetration is possible at speeds as low as 2 mph, 
information and marketing campaigns are unlikely to substantially 
reduce risk of injury.
    Recalls only apply to an individual manufacturer and product, do 
not extend to similar products, and occur only after consumers have 
purchased and used such products and have been exposed to and 
potentially injured or killed by the hazard. Additionally, recalls can 
only address products that are already on the market and cannot prevent 
unsafe products from entering the market.
    Therefore, much of the estimated $18.02 million annualized societal 
costs would continue to be incurred by consumers in the form of deaths 
and injuries. In addition, this alternative would require either 
additional funding from Congress out of the Federal Treasury, or 
reallocation of CPSC's appropriations, such that other safety-related 
activities that benefit the public are not undertaken. Both options 
entail additional costs to society. For this reason, the Commission is 
not adopting this alternative.
2. Rely on Voluntary Standards Development
    The Commission could direct staff to work with voluntary standards 
development organizations to address the hazard. This alternative would 
allow ROHVA and OPEI member firms to determine collectively the degree, 
manner, and timing of debris penetration hazard mitigation, which could 
delay or reduce costs incurred by these firms to address the hazard. 
ROHVA and OPEI member firms supplied approximately 95 percent of the 
ROVs and UTVs sold in the United States in 2019. Non-member firms may 
choose not to comply with ROHVA and OPEI voluntary standards, and 
therefore, incur no associated costs. However, staff has been 
discussing debris penetration hazards with ROHVA and OPEI since 2018, 
without them making progress on standard development to adequately 
address this hazard pattern. Staff will continue to work with ROHVA and 
OPEI on voluntary standards, but do not know if, or when, a standard 
will be developed to adequately address this hazard. Until such 
voluntary standards are developed, staff expects the number and 
societal costs of injuries and fatalities associated with debris 
penetration hazards to remain at or near current levels on a per-
vehicle basis. Therefore, the Commission is not adopting this 
alternative.
3. Limiting ROV and UTV Speed to a Maximum of 10 Miles per Hour
    In making their recommendation regarding this alternative, CPSC 
staff weighed both quantifiable factors and unquantifiable factors. If 
the Commission promulgated a rule limiting ROV and UTV speed to a 
maximum of 10 miles per hour, staff expects benefits, in the form of 
reduced societal costs, to be substantially less than that of the 
proposed rule, as testing conducted by SEA, Ltd., indicated many ROVs 
and UTVs are subject to debris penetration into the occupant area at 
speeds less than 10 mile per hour. Therefore, although staff would 
expect costs to manufacturers to be less, quantifiable net benefits 
would be less, as well. In addition, setting the maximum speed at 10 
mph could have a negative impact on consumer acceptance of the 
requirement and result in costs, including time, inconvenience, and 
reduced consumer satisfaction, leading to substantial lost consumer 
surplus and utility of the product. Considering both the quantifiable 
and unquantifiable costs and benefits, staff determined that the net 
benefit of this alternative is less than that of the proposed rule. 
Therefore, the Commission is not adopting this alternative.
4. Small Batch Exemption
    The Commission could exclude firms that produce or import small 
numbers of ROVs and/or UTVs from the proposed rule's performance 
requirements. In this case, most small businesses would not suffer 
adverse economic impacts. Small manufacturers supplied approximately 
1.3 percent of ROVs and UTVs sold in the United States in 2019. Small 
distributers of foreign-manufactured ROVs and UTVs accounted for 2.4 
percent of U.S. sales in 2019. Combined, small businesses comprised 
approximately 3.7 percent of the 2019 U.S. ROV and UTV market. The 
Commission is not aware of any fatal or nonfatal debris penetration-
related injuries associated with ROVs and UTVs manufactured or imported 
by small firms. At the same time, however, the Commission is unaware of 
any engineering differences between vehicles manufactured by small 
manufacturers versus large ones, and there are no data to suggest that 
the risk of injury posed by vehicles manufactured or supplied by small 
businesses is any different than the risk posed by vehicles 
manufactured or supplied by large firms. Based on this, the Commission 
is not adopting a small batch exemption.

IX. Initial Regulatory Flexibility Analysis

    Whenever an agency publishes an NPR, Section 603 of the Regulatory 
Flexibility Act (RFA), 5 U.S.C. 601-612, requires agencies to prepare 
an initial regulatory flexibility analysis (IRFA), unless the head of 
the agency certifies that the rule will not have a significant economic 
impact on a substantial number of small entities. The IRFA, or a 
summary of it, must be published in the Federal Register with the 
proposed rule. Under Section 603(b) of the RFA, each IRFA must address:
    (1) a description of why action by the agency is being considered;
    (2) a succinct statement of the objectives of, and legal basis for, 
the proposed rule;
    (3) a description of and, where feasible, an estimate of the number 
of small entities to which the proposed rule will apply;
    (4) a description of the projected reporting, recordkeeping, and 
other compliance requirements of the proposed rule, including an 
estimate of the classes of small entities which will be subject to the 
requirement and the type of professional skills necessary for 
preparation of the report or record; and
    (5) an identification to the extent practicable, of all relevant 
Federal rules which may duplicate, overlap, or conflict with the 
proposed rule.
    The IRFA must also describe any significant alternatives to the 
proposed rule that would accomplish the stated objectives and that 
minimize any significant economic impact on small entities.

A. Reason for Agency Action

    As described above, the intent of this rulemaking is to reduce 
deaths and injuries resulting from the debris penetration into the 
occupant area of ROVs and UTVs.

B. Objectives of and Legal Basis for the Rule

    The Commission proposes this rule to reduce the risk of death and 
injury associated with debris penetration into the occupant area of 
ROVs and UTVs. The rule is promulgated under the authority of the 
Consumer Product Safety Act (CPSA).

C. Small Entities to Which the Rule Will Apply

    The proposed rule would apply to all manufacturers and importers of 
ROVs and UTVs. ROV and UTV manufacturers may be classified in the North 
American Industrial Classification (NAICS) category 336999 (All Other 
Transportation Equipment

[[Page 43722]]

Manufacturing), or possibly, 336112 (Light Truck and Utility Vehicle 
Manufacturing). The Small Business Administration (SBA) size standard 
for these NAICS classifications are 1,000 employees and 1,500 
employees, respectively. Of the 35 identified ROV and UTV 
manufacturers, the Commission identified seven U.S. ROV and UTV 
manufacturers (20 percent of manufacturers) with fewer than 1,500 
employees, which, therefore, meet the SBA threshold for small business.
    Importers of ROVs and UTVs could be wholesale or retail 
distributers. ROV and UTV wholesalers may be classified in NAICS 
categories 423110 (Automobile and Other Motor Vehicle Merchant 
Wholesalers) or 441228 (Motorcycle, ATV, and All Other Motor Vehicle 
Dealers). The SBA size standard for NAICS classification 423110 is 250 
employees. The SBA size standard for NAICS classification 441228 is $35 
million. Of the 48 identified distributers/brands, of which 26 might be 
foreign importers, the Commission identified 19 firms (39.6 percent of 
distributer/brands) distributing foreign-manufactured (primarily 
Chinese) ROVs and UTVs in 2019, that could be considered small 
businesses.\72\
---------------------------------------------------------------------------

    \72\ Staff made these determinations using information from Dun 
& Bradstreet and ReferenceUSAGov.
---------------------------------------------------------------------------

D. Compliance, Reporting, and Record-Keeping Requirements of Proposed 
Rule

    The proposed rule would establish a performance requirement for 
ROVs and UTVs and a test procedure that suppliers would have to meet to 
sell in the United States.
    In 2021, the Commission contracted SEA to conduct testing related 
to the ROV and UTV debris penetration hazard. SEA tested a small, non-
representative sample of ROV and UTV models with, and without, after-
market guards. None of the models met the performance requirements of 
the proposed rule when operating without aftermarket guards. Therefore, 
the Commission expects most small (and large) ROV and UTV manufacturers 
would incur costs associated with bringing their vehicles into 
compliance with the proposed rule, as well as costs related to testing 
and issuing a general certificate of conformity (GCC).
    In accordance with Section 14 of the CPSA, manufacturers would have 
to issue a GCC for each ROV and UTV model, certifying that the model 
complies with the proposed rule. According to Section 14 of CPSA, GCCs 
must be based on a test of each product or a reasonable testing 
program; and GCCs must be provided to all distributors or retailers of 
the product. The manufacturer would have to comply with 16 CFR part 
1110 concerning the content of the GCC, retention of the associated 
records, and any other applicable requirement.

E. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rule

    At the time of this document's publication, no other federal rules 
duplicate, overlap, or conflict with the proposed rule.

F. Potential Impact on Small Entities

    One purpose of the IRFA is to evaluate the impact of a regulatory 
action on small entities and to determine whether that impact is 
economically significant. Although the SBA allows considerable 
flexibility in determining ``economically significant,'' CPSC typically 
uses 1 percent of gross revenue as the threshold for determining 
``economically significant.'' When CPSC staff cannot demonstrate that 
the impact is lower than 1 percent of gross revenue, staff prepares an 
initial regulatory flexibility analysis.\73\
---------------------------------------------------------------------------

    \73\ The 1 percent of gross revenue threshold is cited as 
example criteria by the SBA and is commonly used by agencies in 
determining economic significance (see U.S. Small Business 
Administration, Office of Advocacy. A Guide for Government Agencies: 
How to Comply with the Regulatory Flexibility Act and Implementing 
the President's Small Business Agenda and Executive Order 13272. May 
2012, pp 18-20. http://www.sba.gov/sites/default/files/rfaguide_0512_0.pdf).
---------------------------------------------------------------------------

1. Impact on Small Manufacturers
    The preliminary regulatory analysis in Section VIII of this 
preamble discusses costs more fully. Based on that analysis, to achieve 
compliance with the proposed rule's performance requirements, ROV and 
UTV suppliers would incur costs from redesigning, retooling, and 
testing. Staff estimated this cost to be $51,050 per model in the first 
year.\74\ This figure includes $9,361 in testing costs per model. Staff 
estimated the additional production cost for labor and material to be 
$29.23 per vehicle produced in the first year. Staff does not 
anticipate new reporting or recordkeeping requirements from this rule.
---------------------------------------------------------------------------

    \74\ Testing may be performed by the manufacturer by third party 
engineering consulting or testing firms.
---------------------------------------------------------------------------

    Staff identified seven ROV and UTV manufacturers that meet SBA size 
standards for small businesses. Staff applied both the per-model and 
per-vehicle costs to each manufacturer's number of models and unit 
sales in 2019. Staff found the initial cost to comply with the proposed 
rule exceeds 1 percent of reported annual revenue for five of the seven 
manufacturers identified as small businesses. For these five ROV and 
UTV manufacturers, the economic impact of the proposed rule is expected 
to be significant.
2. Impact on Small Importers
    Staff identified 14 possible importers of ROVs and UTVs from 
foreign suppliers that would be considered small businesses based on 
SBA size standards. Staff identified an additional five importers for 
which a size determination could not be made, but that are likely small 
based on the number of models and units sold. A small importer would be 
impacted adversely by the proposed rule if its foreign supplier 
withdrew from the U.S. market, rather than incur the cost of 
compliance. Importers would also be impacted adversely if a foreign 
manufacturer failed to provide a GCC and had to perform its own testing 
for compliance. If sales of ROVs and UTVs are a substantial source of 
the importer's business, and the importer cannot find an alternative 
supplier of ROVs and UTVs, the economic impact on these firms might be 
significant. However, the U.S. ROV and UTV market has grown at an 
annual rate of 13.5 percent since 1998; accordingly, it is unlikely 
that foreign manufacturers would exit such a fast-growing market. ROV 
and UTV importers also import other products, such as scooters, 
motorcycles, and other powersport equipment. For these firms, any 
decline in ROV and UTV sales and revenue may be partially or fully 
offset by increasing sales and revenues derived from these other 
products.
    Small importers would be responsible for issuing a GCC certifying 
that their ROVs and UTVs comply with the rule's requirements. However, 
importers may issue GCCs based upon certifications provided by or 
testing performed by their suppliers. The impact on small importers 
whose suppliers provide GCCs should not be significant. If a small 
importer's supplier does not provide the GCC or testing reports, then 
the importer would have to certify each model for conformity based on a 
reasonable testing program. Importers would likely contract with an 
engineering consulting or testing firm to conduct the certification 
tests. As discussed in the regulatory analysis, staff estimated 
certification testing to be $9,361 per model. This would exceed 1 
percent of the revenue for 13 of the estimated 19 identified small 
importers, assuming these firms continue to import the same mix of 
products as in the pre-regulatory environment.

[[Page 43723]]

G. Alternatives for Reducing the Adverse Impact on Small Businesses

    The Commission considered several alternatives to the proposed 
rule. These include: (1) conducting marketing campaigns and recalls 
instead of promulgating a final rule; (2) relying on voluntary 
standards development; (3) limiting ROV and UTV speed to a maximum of 
10 miles per hour, and (4) implementing a small batch exemption. The 
Commission is not adopting these alternatives for the reasons stated 
above.

H. Conclusion

    The Commission identified seven manufacturers that meet the SBA 
criteria to be considered small firms. For five of these firms, the 
estimated cost from the proposed rule exceeds 1 per percent of annual 
revenue. The Commission assesses that the proposed rule could have a 
significant economic impact on these five firms.
    The Commission estimated that there are 19 importers of foreign 
manufactured ROVs and UTVs that meet the SBA criteria to be considered 
small. A small importer whose supplier exits the market, or does not 
provide the importer a GCC, could experience a significant adverse 
economic impact. However, given the fast-growing market, the Commission 
does not anticipate foreign manufacturers will exit the U.S. market, 
and further, the Commission assumes that foreign manufacturers would 
provide certifications that small importers could rely on, so that 
these foreign manufacturers could preserve their sales. Given that 
assumption, the Commission assesses no significant economic impact on 
the importers of ROVs and UTVs.
    In summary, the proposed rule could have a significant adverse 
economic impact on five of the seven identified small manufacturers, 
but it is unlikely to have a significant direct impact on the 19 small 
importers of ROVs and UTVs.
    The Commission welcomes public comments on this IRFA. Small 
businesses that believe they would be affected by the proposed rule are 
encouraged to submit comments. The comments should be specific and 
describe the potential impact, magnitude, and alternatives that could 
reduce the impact of the proposed rule on small businesses.

X. Environmental Considerations

    Generally, the Commission's regulations are considered to have 
little or no potential for affecting the human environment, and 
environmental assessments and impact statements are not usually 
required. See 16 CFR 1021.5(a). The proposed rule is not expected to 
have an adverse impact on the environment and is considered to fall 
within the ``categorical exclusion'' for the purposes of the National 
Environmental Policy Act. 16 CFR 1021.5(c).

XI. Preemption

    Executive Order (E.O.) 12988, Civil Justice Reform (Feb. 5, 1996), 
directs agencies to specify the preemptive effect of a rule in the 
regulation. 61 FR 4729 (Feb. 7, 1996). The proposed regulation for ROVs 
and UTVs is issued under authority of the CPSA. 15 U.S.C. 2051-2089. 
Section 26 of the CPSA provides that ``whenever a consumer product 
safety standard under this Act is in effect and applies to a risk of 
injury associated with a consumer product, no State or political 
subdivision of a State shall have any authority either to establish or 
to continue in effect any provision of a safety standard or regulation 
which prescribes any requirements as to the performance, composition, 
contents, design, finish, construction, packaging or labeling of such 
product which are designed to deal with the same risk of injury 
associated with such consumer product, unless such requirements are 
identical to the requirements of the Federal Standard.'' 15 U.S.C. 
2075(a).
    States or political subdivisions of a state may apply for an 
exemption from preemption regarding a consumer product safety standard, 
and the Commission may issue a rule granting the exemption if it finds 
that the state or local standard: (1) provides a significantly higher 
degree of protection from the risk of injury or illness than the CPSA 
standard, and (2) does not unduly burden interstate commerce. Id. 
2075(c).
    Thus, the proposed rule for ROVs and UTVs, if finalized, would 
preempt non-identical state or local requirements for ROVs and UTVs 
designed to protect against the same risk of injury, i.e., debris 
penetration, from ROVs and UTVs.

XII. Certification

    Section 14(a) of the CPSA requires that products subject to a 
consumer product safety rule under the CPSA, or to a similar rule, ban, 
standard or regulation under any other act enforced by the Commission, 
must be certified as complying with all applicable CPSC-enforced 
requirements. 15 U.S.C. 2063(a). A final rule on ROV and UTV debris 
penetration would subject ROVs and UTVs to this requirement.

XIII. Effective Date

    The Administrative Procedure Act (APA) generally requires that the 
effective date of a rule be at least 30 days after publication of a 
final rule. 5 U.S.C. 553(d). Section 9(g)(1) of the CPSA states that a 
consumer product safety rule shall specify the date such rule is to 
take effect, and that the effective date must be at least 30 days after 
promulgation but cannot exceed 180 days from the date a rule is 
promulgated, unless the Commission finds, for good cause shown, that a 
later effective date is in the public interest and publishes its 
reasons for such finding.
    If finalized, the Commission proposes an effective date of 120 days 
after publication of the final rule. The Commission concludes that ROV/
UTV models that do not comply with the resistance to debris penetration 
requirements can be modified, with design changes to the floorboards 
and/or augmentation of floorboard guards, in less than 4 person-months 
(at the most) and concludes that these ROV/UTV models can be tested for 
compliance in 1 day. Therefore, the Commission concludes that 120 days 
is a reasonable period for manufacturers to modify vehicles, if 
necessary; conduct required tests; and analyze test results to ensure 
compliance with the recommended resistance to debris penetration 
requirements.

XIV. Proposed Findings

    The CPSA requires the Commission to make certain findings when 
issuing a consumer product safety standard. 15 U.S.C. 2058(f). This 
section discusses preliminary support for those findings.

A. Degree and Nature of the Risk of Injury

    The risk of injury involves debris penetration through the 
floorboards of ROVs and UTVs. Debris, usually a tree branch, can 
puncture through the floorboard and enter the occupant area of the 
vehicle, posing a risk of laceration or impalement to the driver and/or 
passengers, which can cause severe injury or death.
    Between 2009 and 2021, there were a total of 107 incidents found in 
CPSC databases involving debris penetration associated with ROVs and 
UTVs. There were 6 reported fatalities and 22 reported injuries related 
to the known debris penetration incidents. Additionally, there were 
approximately 630 reports of debris cracking and/or breaking through 
floorboards and 10 injuries associated with 3 ROV debris penetration 
recalls.

[[Page 43724]]

B. Number of Consumer Products Subject to the Rule

    Except for the year 2009, the annual sales of ROVs and UTVs to the 
United States have increased steadily from an estimated 35,041 units in 
1998 to 429,135 units in 2019. In 2019, there were an estimated 2.34 
million ROVs and UTVs in use in the United States.

C. Need of the Public for the Products and Probable Effect of Utility, 
Cost, and Availability of the Product

    The effect of the rule will be limited to redesigning the 
floorboards of the vehicles; thus, the rule is unlikely to have an 
effect on the utility of ROVs and UTVs.
    The effect of the rule on cost and availability of ROVs and UTVs is 
expected to be minimal. In 2019, the average manufacturer's suggested 
retail prices (MSRP) of ROVs and UTVs ranged from about $4,599 to 
$53,700. When weighted by sales volume, the mean MSRP is $13,182 for 
ROVs and UTVs, which equates to $14,302 in 2021 dollars. The 
preliminary regulatory analysis estimates a per-unit cost to ROVs and 
UTVs of the rule to be $10.68 (undiscounted per unit costs of 
redesigning floorboard for ROVs and UTVs) to $18.71 (undiscounted per 
unit cost of floorboard guard fix for ROVs and UTVs.) Because this per-
unit cost resulting from the rule is a very small percentage of the 
overall retail price of a ROV or UTV, the rule would have only a 
minimal effect on the cost or availability of ROVs or UTVs.

D. Other Means To Achieve the Objective of the Proposed Rule, While 
Minimizing Adverse Effects on Competition and Manufacturing

    The proposed requirement of the rule achieves the objective of 
reducing debris penetration hazards associated with ROVs and UTVs while 
minimizing the effect on competition and manufacturing. Because the 
proposed rule implements a performance requirement, manufacturers may 
choose how best to comply with it. This facilitates, through innovation 
and competition, the rollout of consumer-driven, cost-effective 
designs, and helps minimize potential adverse effects on consumer 
choice, and on manufacturing and commercial practices. Manufacturers 
may develop ways to comply with the performance requirement that are 
either less costly than what the preliminary regulatory analysis 
estimated, or bring more value to the consumer, or both.
    In addition, as described in Section XIV.C of this preamble, the 
per-unit cost resulting from the rule is a very small percentage of the 
overall retail price of an ROV or UTV. With such a relatively low 
impact, it is unlikely that ROV or UTV companies would withdraw from 
the market or that the number of ROV or UTV models will be affected. 
The Commission preliminarily finds that the proposed rule minimizes 
impact on competition, marketing, and commercial practices.

E. Unreasonable Risk

    The Commission is aware of 107 debris penetration incidents from 
its NEISS and CPSRMS databases. There were 6 fatalities, 3 of which 
involved debris penetration into the chest. There were 22 injuries 
caused by floorboard debris penetration, some of the injuries sustained 
were severe.
    There were 3 Commission recalls of ROVs due to debris penetration 
hazards, which collectively involved approximately 55,000 vehicles. 
There were approximately 630 manufacturer-reported incidents of debris 
cracking or breaking through floorboards and 10 injuries associated 
with these recalls.
    ROVs have maximum speed capabilities greater than 30 mph, and UTVs 
have maximum speed capabilities between 25 and 30 mph. These vehicles 
are intended to be driven off-road, including wooded areas or trails, 
where tree branches and sticks are commonplace. CPSC incident data 
shows that debris penetration is occurring at speeds less than 10 mph. 
CPSC testing shows that debris penetration can occur at speeds as low 
as 2.5 mph on standard OEM ROV and UTV floorboards. In addition, these 
incidents often occur rapidly and without notice, so that there is 
little time for the user to react.
    Given the potentially severe and unexpected nature of this hazard 
when using the vehicle as intended, the Commission preliminarily finds 
that this rule is necessary to prevent an unreasonable risk of injury.

F. Public Interest

    The proposed rule is intended to address an unreasonable risk of 
injury from debris penetration into ROVs and UTVs. As explained in this 
preamble, adherence to the requirements of the proposed rule would 
reduce deaths and injuries from ROV and UTV debris penetration 
incidents in the future; thus, the rule is in the public interest.

G. Voluntary Standards

    There are two voluntary standards for ROVs and UTVs:
    <bullet> ANSI/ROHVA 1-2016 Recreational Off-Highway Vehicles;
    <bullet> ANSI/OPEI B71.9-2016--American National Standard for 
Multipurpose Off-Highway Utility Vehicles.
    Neither standard has requirements to address debris penetration. 
For this reason, the Commission preliminarily concludes that the 
voluntary standards will not adequately address the unreasonable risk 
of injury associated with debris penetration in ROVs and UTVs.

H. Relationship of Benefits to Costs

    The benefits expected from the proposed rule bear a reasonable 
relationship to its cost. The proposed rule is intended to reduce the 
impalement and laceration risks of a tree branch penetrating the ROV/
UTV floor, and thereby, reduce the societal costs of the resulting 
injuries and deaths. This reduction in societal costs amounts to $15.47 
million per year in projected benefits. The quantifiable benefits of 
the proposed rule are estimated at $12.08 per ROV/UTV. The costs 
associated with the proposed requirements to prevent debris penetration 
are expected to be between $9.26 and $15.53 million per year. On a per-
unit basis, the Commission estimates the total costs of the proposed 
rule to be between $7.23 to $12.13 per ROV/UTV in current dollars.

I. Least-Burdensome Requirement That Would Adequately Reduce the Risk 
of Injury

    As described in Section IX.G of this preamble, the Commission 
considered less burdensome alternatives to the proposed rule addressing 
debris penetration in ROVs and UTVs and concluded preliminarily that 
none of these alternatives would adequately reduce the risk of injury.

XV. Promulgation of a Final Rule

    Section 9(d)(1) of the CPSA requires the Commission to promulgate a 
final consumer product safety rule within 60 days of publishing a 
proposed rule. 15 U.S.C. 2058(d)(1). Otherwise, the Commission must 
withdraw the proposed rule if it determines that the rule is not 
reasonably necessary to eliminate or reduce an unreasonable risk of 
injury associated with the product or is not in the public interest. 
Id. However, the Commission can extend the 60-day period, for good 
cause shown, if it publishes the reasons for doing so in the Federal 
Register. Id.
    The Commission finds that there is good cause to extend the 60-day 
period for this rulemaking. Under both the Administrative Procedure Act 
and the CPSA, the Commission must provide an opportunity for interested 
parties to

[[Page 43725]]

submit written comments on a proposed rule. 5 U.S.C. 553; 15 U.S.C. 
2058(d)(2). The Commission is providing 60 days for interested parties 
to submit written comments. A shorter comment period may limit the 
quality and utility of information CPSC receives in comments, 
particularly for areas where it seeks data and other detailed 
information that may take time for commenters to compile. Additionally, 
the CPSA requires the Commission to provide interested parties with an 
opportunity to make oral presentations of data, views, or arguments. 15 
U.S.C. 2058. This requires time for the Commission to arrange a public 
meeting for this purpose, and provide notice to interested parties in 
advance of that meeting. After receiving written and oral comments, 
CPSC staff must have time to review and evaluate those comments.
    These factors make it impractical for the Commission to issue a 
final rule within 60 days of this proposed rule. Moreover, issuing a 
final rule within 60 days of the NPR may limit commenters' ability to 
provide useful input on the rule, and CPSC's ability to evaluate and 
take that information into consideration in developing a final rule. 
Accordingly, the Commission finds that there is good cause to extend 
the 60-day period for promulgating the final rule after publication of 
the proposed rule.

XVI. Request for Comments

    We invite all interested persons to submit comments on any aspect 
of the proposed rule. Specifically, the Commission seeks comments on 
the following:
    <bullet> Information regarding any analysis and/or tests done on 
penetration of the occupant area of ROVs/UTVs;
    <bullet> Information regarding any analysis on the shape, 
composition, material properties, etc., of objects that have penetrated 
occupant area of ROVs/UTVs;
    <bullet> Information on the speed of the vehicle and the energy 
associated with penetration of the occupant area of ROVs/UTVs;
    <bullet> The preliminary regulatory analysis assumes manufacturers 
would choose between two compliance options ``redesigned floorboards'' 
or ``floorboard guards;'' but in practice, manufacturers may choose 
either of these two solutions or may choose a different solution that 
proves more cost-effective. We request information on the plausibility 
and likelihood of the options considered, and other solutions not 
included in the preliminary regulatory analysis.
    <bullet> Information regarding any potential costs or benefits that 
were not included the preliminary regulatory analysis;
    <bullet> Detailed information regarding cost estimates for either 
of the compliance options in the proposed rule.
    <bullet> Information regarding the number of small businesses 
impacted by the proposed rule and the magnitude of the impacts of the 
proposed rule.
    <bullet> Comments on the definitions in Sec.  1421.2 of the 
proposed rule.
    <bullet> Comments on the testing procedures and protocol of the 
proposed rule, and potential alternatives.
    <bullet> Comments regarding the appropriateness of the 120-day 
effective date, and a quantification of how a 120-day effective date 
would affect the benefits and costs of the proposed rule.
    <bullet> Comments regarding the appropriateness of a 30-day 
effective date, and a quantification of how a 30-day effective date 
would affect the benefits and costs of the proposed rule.
    <bullet> Comments regarding the appropriateness of any other period 
commenters may alternatively recommend, and a quantification of how 
such effective date(s) would affect the benefits and costs of the 
proposed rule.
    <bullet> In estimating the number of debris penetration incidents, 
injuries, and deaths, how should CPSC incorporate the number of known 
debris penetration incidents from OHV recall data that differ from the 
debris penetration incidents available in NEISS and CPSRMS data?
    <bullet> Are there other sources of data that could allow CPSC to 
generate a more robust national estimate of incidents, injuries, or 
deaths associated with OHV debris penetration?
    <bullet> Given the data cited in the analysis above and any other 
relevant sources, is it possible to make reliable estimates of the 
number of incidents, injuries, and deaths associated with OHV debris 
penetration on a national scale? If not, what are plausible assumptions 
concerning these figures? What is a reasonable quantification of the 
benefits tied to avoiding those incidents?
    <bullet> Are there benefits to the proposed rule arising from the 
avoidance of damage to OHVs, and elimination of associated repair 
costs? If so, what is a reasonable quantification of those benefits?

XVII. Notice of Opportunity for Oral Presentation

    Section 9 of the CPSA requires the Commission to provide interested 
parties ``an opportunity for oral presentation of data, views, or 
arguments.'' 15 U.S.C. 2058(d)(2). The Commission must keep a 
transcript of such oral presentations. Id. Any person interested in 
making an oral presentation must contact the Commission, as described 
under the DATES and ADDRESSES section of this notice.

List of Subjects in 16 CFR Part 1421

    Consumer protection, Imports, Administrative practice and 
procedure, Recreation and recreation areas, Safety.

    For the reasons discussed in the preamble, the Commission proposes 
to amend Title 16 of the Code of Federal Regulations as follows:

0
1. Add part 1421 to read as follows:

PART 1421--SAFETY STANDARD FOR ROV AND UTV DEBRIS PENETRATION 
HAZARDS

Sec.
1421.1 Scope, purpose and effective date.
1421.2 Definitions.
1421.3 Requirement.
1421.4 Test procedures.
1421.5 Prohibited stockpiling.
1421.6 Findings.

    Authority: 15 U.S.C. 2056, 15 U.S.C. 2058, and 5 U.S.C. 553.


Sec.  1421.1  Scope, purpose and effective date.

    (a) This part 1421, a consumer product safety standard, establishes 
requirements for recreational off-highway vehicles (ROVs) and utility 
terrain or utility task vehicles (UTVs), as defined in Sec.  1421.2, to 
address debris penetration hazards.
    (b) Any ROV or UTV manufactured or imported after [date that is 120 
days after publication of a final rule] shall comply with the 
requirements stated in Sec.  1421.3.


Sec.  1421.2  Definitions.

    In addition to the definitions in section 3 of the Consumer Product 
Safety Act (15 U.S.C. 2051), the following definitions apply for 
purposes of this part 1421.
    (a) Recreational off-highway vehicle (ROV) means a motorized 
vehicle designed or intended for off-highway use with the following 
features: four or more wheels with tires designed for off-highway use, 
non-straddle-seating for one or more occupants, a steering wheel for 
steering controls, foot controls for throttle and braking, and a 
maximum vehicle speed greater than 30 miles per hour (mph).
    (b) Utility terrain or utility task vehicle (UTV) means a motorized 
vehicle designed or intended for off-highway use with the following 
features: four or more wheels with tires designed for off-highway use, 
non-straddle seating for one or more

[[Page 43726]]

occupants, a steering wheel for steering controls, foot controls for 
throttle and braking, and a maximum vehicle speed typically between 25 
and 30 mph.


Sec.  1421.3  Requirements.

    Upon testing to the test procedure described in Sec.  1421.4, the 
test ROV/UTV floorboard and/or floorboard guard shall not allow any 
breach of the test dowel into the occupant area, although deformations 
and/or deflections of the floorboard and/or floorboard guard are 
allowable. Examples of breach include cracks, holes, tears, seam gaps, 
or any other openings that allow any part of the test dowel to enter 
the occupant area.


Sec.  1421.4  Test procedures.

    (a) Load Condition.
    (1) Weight. The required load condition for a two-seat model is 430 
lbs, representing a driver and a front seat passenger, each equivalent 
to a 95th percentile male (215 lbs). For four-seat models, the load 
condition shall be 860 lbs, representing the driver and three 
passengers. For six-seat models, the load condition shall be 1290 lbs, 
representing the driver and five passengers.

    Note 1 to paragraph (a)(1). Typical gross vehicle weights of 
fully loaded test vehicles or simulated vehicle sleds exceed 2000 
lbs.

    (2) [Reserved].
    (b) Test Vehicle or Simulated Vehicle Sled Conditions.
    (1) The fully loaded test vehicle shall be fitted with the test 
floorboard and/or floorboard guard(s), as offered for sale.
    (2) If a simulated vehicle sled will be used, where a ROV/UTV front 
metal frame is fitted with the test floorboard and/or floorboard 
guard(s), the simulated vehicle sled must be able to translate on a 
linear track that can propel the simulated vehicle sled to at least 10 
mph.
    (c) Test Speed.
    (1) Test Vehicle or simulated vehicle sled speed, in miles per hour 
(mph) shall be measured at the moment of impact.
    (2) The vehicle speed or simulated vehicle sled speed at the moment 
of impact shall be at least 10 mph.
    (d) Test Location. The test dowel shall be positioned in such a way 
that the test dowel will strike the wheel-well area. The target of the 
test dowel cannot be any component other than the floorboard or 
floorboard guard surface. The target shall be at the point on the 
floorboard or floorboard guard most likely to produce the most adverse 
results, such as a seam, crease, catch point, or bend.
    (e) Test Equipment. (1) A 2-inch diameter oak dowel positioned at 
angle between 12[deg] to 25[deg] from horizontal (indicated as X[deg] 
in Figure 1) shall be installed on a dowel holder that can pivot about 
its transverse axis. The length of the dowel shall be between 39 inches 
to 65 inches.
[GRAPHIC] [TIFF OMITTED] TP21JY22.029

    (2) The tip of dowel shall be tapered, such that the tip surface 
diameter is 1 inch, and the tip cone length is 1 inch. See Figure 2.

[[Page 43727]]

[GRAPHIC] [TIFF OMITTED] TP21JY22.030

    (3) The dowel holder shall be constructed of a rigid material, such 
that the dowel holder does not fracture during the impact test.

    Note to section (e)(3). To minimize damage to test equipment, a 
vehicle or simulated vehicle sled braking system and/or energy 
absorption foam blocks located 2 feet past the debris penetrator 
dowel holder is recommended.

    (4) The braking system shall only activate after the vehicle or 
simulated vehicle sled collides completely with the debris penetrator 
dowel.
    (f) Test Conditions. If a test vehicle is used, the test surface 
must be dry asphalt or dry concrete that is free of contaminants. 
Sufficient track length shall be available to allow the test vehicle or 
simulated vehicle sled to reach 10 mph. The test surface must be flat 
and have a grade slope of 1.7% (1[deg]) or less. Ambient temperature 
shall be greater than 0[deg]C (32 [deg]F).
    (g) Test Procedure. The debris penetrator test dowel shall be 
aligned with the target site of the floorboard or floorboard guard. A 
fully loaded, fully instrumented test vehicle or simulated vehicle sled 
shall be propelled in a straight-line path to collide with the debris 
penetrator test dowel, where the test vehicle or simulated vehicle sled 
speed shall be at least 10 mph at the moment of impact. For each 
vehicle model, a minimum of two test trials of one chosen test method 
shall be conducted.

    Note 2 to paragraph (g): Rationale for Test Conditions. The 
required ambient temperature of 0[deg]C (32 [deg]F) or greater, 
maximum allowable flat course slope grade of 1.7% (1[deg]) or less, 
flat dry asphalt or dry concrete conditions, and the 95th percentile 
male weight are consistent with the lateral stability requirements 
of ANSI/OPEI B71.9-2016 and ANSI/ROHVA-1-2016. They simulate real 
use and allow for repeatable test results.

Sec.  1421.5  Prohibited stockpiling.

    (a) Base period. The base period for ROVs and UTVs is the calendar 
month with the median manufacturing or import volume within the last 13 
months immediately preceding the month of promulgation of the final 
rule.
    (b) Prohibited acts. Manufacturers and importers of ROVs and UTVs 
shall not manufacture or import ROVs or UTVs that do not comply with 
the requirements of this part between [date of promulgation of the 
rule] and [effective date of the rule] at a monthly rate that is 
greater than 105 percent of the monthly rate at which they manufactured 
or imported ROVs and UTVs during the base period.


Sec.  1421.6  Findings.

    (a) General. To issue a consumer product safety standard under the 
Consumer Product Safety Act, the Commission must make certain findings 
and include them in the rule. 15 U.S.C. 2058(f)(3). These findings are 
presented in this section.
    (b) Degree and nature of the risk of injury. (1) The risk of injury 
involves debris penetration through the floorboards of ROVs and UTVs. 
Debris, usually a fallen tree branch, can puncture through the 
floorboard and enter the occupant area of the vehicle, posing a risk of 
laceration or impalement to the driver and/or passengers, creating a 
risk of severe injury or death.
    (2) Between 2009 and 2021, there were a total of 107 incidents 
found in CPSC databases involving debris penetration associated with 
ROVs and UTVs. There were six reported fatalities and 22 reported 
injuries related to the known debris penetration incidents. 
Additionally, there were approximately 630 manufacturer reports of 
debris cracking or breaking through floorboards and 10 injuries 
associated with three ROV debris penetration recalls.
    (c) Number of consumer products subject to the rule. Except for the 
year 2009, the annual sales of ROVs and UTVs to the United States have 
increased steadily from an estimated 35,041 units in 1998 to 429,135 
units in 2019. In 2019, there were an estimated 2.34 million ROVs and 
UTVs in use in the United States.
    (d) The need of the public for the product and the effects of the 
rule on the utility, cost and availability. The effect of the rule will 
be limited to redesigning the floorboards of the vehicles, so it is 
unlikely to have an effect on the utility of ROVs and UTVs. The effect 
of the rule on cost and availability of ROVs and UTVs is expected to be 
minimal. In 2019, the average manufacturer's suggested retail prices 
(MSRP) of ROVs and UTVs ranged from about $4,599 to $53,700. When 
weighted by sales volume, the mean MSRP is $13,182 for ROVs and UTVs, 
which equates to $14,302 in 2021 dollars. The preliminary regulatory 
analysis estimates a per-unit cost to ROVs and UTVs of the rule to be 
$10.68

[[Page 43728]]

(undiscounted per unit costs of redesigning floorboard for ROVs and 
UTVs) to $18.71 (undiscounted per unit cost of floorboard guard fix for 
ROVs and UTVs.) Because this per-unit cost resulting from the rule is a 
very small percentage of the overall retail price of a ROV or UTV, the 
rule would have only a minimal effect on the cost or availability of 
ROVs or UTVs.
    (e) Other means to achieve the objective of the rule, while 
minimizing the impact on competition and manufacturing. The rule 
achieves the objective of reducing debris penetration hazards 
associated with ROVs and UTVs while minimizing the effect on 
competition and manufacturing. Because the proposed rule implements a 
performance requirement, manufacturers may choose how best to comply 
with it. This facilitates innovation, competition, consumer choice, and 
the possibility of cost-effective options, and helps minimize adverse 
effects on competition, manufacturing, and commercial practices. In 
addition, as described in paragraph (d) of this section, the per-unit 
cost resulting from the rule is a very small percentage of the overall 
retail price of an ROV or UTV. With such a relatively low impact, it is 
unlikely that ROV or UTV companies would withdraw from the market or 
that the number of ROV or UTV models will be affected. The Commission 
preliminarily finds that the proposed rule minimizes impact on 
competition, marketing, and commercial practices.
    (f) Unreasonable risk. (1) Debris penetration involves debris 
(usually a tree branch or stick) penetrating an ROV or UTV, usually the 
floorboard of the underside of an ROV or UTV. When such penetration 
occurs, the branch or debris can penetrate far enough into the vehicle 
to strike the occupant or passengers. The Commission is aware of 107 
debris penetration incidents from its NEISS and CPSRMS databases. There 
were six fatalities, three of which involved debris penetration into 
the chest. There were 22 injuries caused by floorboard debris 
penetration, some of them severe.
    (2) There were three Commission recalls of ROVs due to debris 
penetration hazards, which collectively involved approximately 55,000 
vehicles. There were approximately 630 manufacturer-reported incidents 
involving debris cracking or breaking through the floorboards and 10 
injuries associated with these recalls.
    (3) ROVs have maximum speed capabilities greater than 30 mph, and 
UTVs typically have maximum speed capabilities between 25 and 30 mph. 
These vehicles are intended to be driven off-road, including wooded 
areas or trails, where tree branches and sticks are commonplace. CPSC 
incident data shows that debris penetration is occurring at speeds less 
than 10 mph. CPSC testing shows that debris penetration can occur at 
speeds as low as 2.5 mph on standard OEM ROV and UTV floorboards. In 
addition, these incidents often occur rapidly and without notice, so 
that there is little time for the user to react.
    Voluntary standards for ROVs and UTVs do not contain requirements 
intended to address floorboard debris penetration in the vehicles.
    (4) Given the potentially severe and unexpected nature of this 
hazard when using the vehicle as intended, the Commission finds that 
this rule is reasonably necessary to eliminate or reduce an 
unreasonable risk of injury.
    (g) Public interest. The proposed rule is intended to address an 
unreasonable risk of injury from debris penetration into ROVs and UTVs. 
Adherence to the requirements of the proposed rule would reduce deaths 
and injuries from ROV and UTV debris penetration incidents in the 
future; thus, the rule is in the public interest.
    (h) Voluntary standards. There are two voluntary standards for ROVs 
and UTVs: ANSI/ROHVA 1-2016, American National Standard for 
Recreational Off-Highway Vehicles, and ANSI/OPEI B71.9-2016, American 
National Standard for Multipurpose Off-Highway Utility Vehicles. 
Neither standard has requirements to address debris penetration. For 
this reason, the Commission concludes that the voluntary standards will 
not adequately address the unreasonable risk of injury associated with 
debris penetration in ROVs and UTVs.
    (i) Relationship of benefits to costs. This rule is intended to 
reduce the impalement and laceration risks of a tree branch penetrating 
the ROV/UTV floor, and therefore, provide projected benefits of $15.47 
million per year by reducing the societal costs of debris penetration 
injuries and deaths. The costs associated with the proposed 
requirements to prevent debris penetration are expected to be between 
$9.26 and $15.53 million per year. The Commission finds that the 
benefits expected from the rule bear a reasonable relationship to its 
costs.
    (j) Least burdensome requirement that would adequately reduce the 
risk of injury. The Commission considered several alternatives to the 
proposed rule. However, the Commission finds that these alternatives 
would not adequately address the unreasonable risk of injury associated 
with debris penetration in ROVs and UTVs.
    (1) Conduct Marketing Campaigns Instead of Promulgating a Final 
Rule. The Commission considered conducting marketing campaigns and 
recalls instead of promulgating a rule to address the debris 
penetration hazard associated with ROVs and UTVs. However, even though 
an information and marketing campaign may make ROV and UTV users more 
aware of the debris penetration hazard, a simple modification of 
consumer behavior would be unlikely to address the risk of injury. 
Encountering debris in an off-highway environment, where these vehicles 
are intended to be driven, is largely unavoidable, and debris 
penetration is possible at speeds as low as 2 mph.
    (2) Recalls. The Commission considered recalls to address the risk 
of debris penetration associated with ROVs and UTVs. Recalls, however, 
only apply to an individual manufacturer and product, do not extend to 
similar products, and occur only after consumers have purchased and 
used such products and have been exposed to and potentially injured or 
killed by the hazard. Additionally, recalls can only address products 
that are already on the market and cannot prevent unsafe products from 
entering the market. With either a marketing campaign or use of 
recalls, much of the estimated $18.02 million annualized societal costs 
would continue to be incurred by consumers in the form of deaths and 
injuries. Therefore, the Commission concludes that marketing campaigns 
and recalls, without a mandatory rule, are unlikely to reduce the risk 
of injury associated with debris penetration.
    (3) Rely on Voluntary Standards Development. The Commission 
considered directing staff to work with voluntary standards development 
organizations to address the hazard. However, staff has been discussing 
debris penetration hazards with ROHVA and OPEI since 2018, and there 
has been inadequate progress on standard development to address the 
risk. Although staff will continue to work with ROHVA and OPEI on the 
voluntary standards, it is not clear if or when a standard will be 
developed to adequately address the risk of injury. Until a voluntary 
standard is developed, the number and societal costs of injuries and 
fatalities associated with debris penetration are likely to remain at 
or near current levels. Therefore, the Commission concludes that 
rulemaking is necessary.
    (4) Limit ROV and UTV Speeds to Maximum of 10 Miles per Hour. The

[[Page 43729]]

Commission considered limiting the maximum speed of ROVs and UTVs to 10 
miles per hour. Although costs to manufacturers would be expected to be 
less under this approach, the quantifiable net benefits would be less 
as well. In addition, setting the maximum speed at 10 mph could have an 
adverse impact on the utility of the vehicles and on consumer 
acceptance of the requirement. Therefore, the Commission is not 
adopting this approach.

Alberta E. Mills,
Secretary, Consumer Product Safety Commission.
[FR Doc. 2022-15355 Filed 7-20-22; 8:45 am]
BILLING CODE 6355-01-P


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