17254 Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations

List of Subjects in 47 CFR Part 73

Radio broadcasting.

Part 73 of Title 47 of the Code of

Federal Regulations is amended as

follows:

PART 73—[AMENDED]

1. The authority citation for Part 73

continues to read as follows:

Authority: Secs. 303, 48 Stat., as amended,

1082; 47 U.S.C. 154, as amended.

§ 73.202 [Amended]

2. Section 73.202(b), the Table of FM

Allotments under Minnesota, is

amended by adding Pequot Lakes,

Channel 261A.

Federal Communications Commission.

John A. Karousos,

Chief, Allocations Branch, Policy and Rules

Division, Mass Media Bureau.

[FR Doc. 95–7945 Filed 4–4–95; 8:45 am]

BILLING CODE 6712–01–F

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety

Administration

49 CFR Parts 552, 554, 573, 576, and

577

[Docket No. 93–68; Notice 2]

RIN 2127–AD83

Petitions for Rulemaking, Defect and

Noncompliance Orders; Standards

Enforcement and Defect

Investigations; Defect and

Noncompliance Reports; Record

Retention; and Defect and

Noncompliance Notification

AGENCY: National Highway Traffic

Safety Administration, DOT.

ACTION: Final rule.

SUMMARY: The National Highway Traffic

Safety Administration (NHTSA) is

amending several provisions of its

regulations that pertain to its

enforcement of the provisions of

Chapter 301 of Title 49 of the United

States Code (49 U.S.C. 30101–169,

formerly the National Traffic and Motor

Vehicle Safety Act), with respect to

manufacturers’ obligations to provide

notification and remedy without charge

to owners of motor vehicles or items of

motor vehicle equipment that have been

determined not to comply with a

Federal motor vehicle safety standard or

to contain a defect related to motor

vehicle safety.

Some of the rules published today

implement provisions added by the

Intermodal Surface Transportation

Efficiency Act of 1991 (ISTEA),

regarding requirements for notification

of certain vehicle lessees and for a

second notification to owners of

recalled vehicles and items of motor

vehicle equipment in the event that

NHTSA determines that the original

notification has not resulted in an

adequate number of vehicles or items of

equipment being returned for remedy.

This rule also amends the regulation

governing NHTSA’s consideration of

petitions for rulemaking or for an

investigation of an alleged safety-related

defect or a noncompliance with a

Federal motor vehicle safety standard

(49 CFR part 552) and NHTSA’s

procedures following an initial

determination that a safety-related

defect exists. 49 CFR part 554. The rule

also makes several changes in the

regulations governing the form and

content of defect and noncompliance

reports submitted to NHTSA by

manufacturers (49 CFR part 573); and to

the agency’s record retention

requirements. 49 CFR part 576. Finally,

this rule amends various sections of 49

CFR part 577 regarding the requirements

for notification to owners, purchasers,

dealers and lessees of safety-related

defects and noncompliances.

DATES: Effective date: The amendments

made in this rule are effective May 5,

1995.

Any petitions for reconsideration

must be received by NHTSA no later

than May 5, 1995.

ADDRESSES: Any petitions for

reconsideration should refer to the

docket and notice number of this notice

and be submitted to: Docket Section,

Room 5109, National Highway Traffic

Safety Administration, 400 Seventh

Street, SW., Washington, DC 20590.

(Docket Room hours are 9:30 a.m.–4

p.m., Monday through Friday.)

FOR FURTHER INFORMATION CONTACT:

Jonathan D. White, Office of Defects

Investigation, National Highway Traffic

Safety Administration, 400 Seventh

Street, SW, room 5319, Washington, DC

20590; (202) 366–5227.

SUPPLEMENTARY INFORMATION: These

amendments are being adopted by

NHTSA after considering comments

received from numerous sources in

response to a Notice of Proposed

Rulemaking (NPRM) published on

September 27, 1993. 58 FR 50314.

NHTSA received comments on some or

all of the proposed amendments from

the following: ABAS Marketing, Inc.

(Strait Stop); American Honda Motor

Company (Honda); American

Automobile Manufacturers Association

(AAMA); Association of International

Automobile Manufacturers (AIAM);

Advocates for Highway and Auto Safety

(Advocates); AM General Corporation

(AM General); Blue Bird Body Company

(Blue Bird); CIMS; Center for Auto

Safety (CAS); Fleetwood Enterprises,

Inc. (Fleetwood); The Kelly-Springfield

Tire Company (Kelly-Springfield);

Motor and Equipment Manufacturers’

Association (MEMA); Mack Trucks, Inc.

(Mack); Midland-Grau Heavy Duty

Systems, Inc. (a subsidiary of Echlin,

Inc.) (Midland); Navistar International

Transportation Corporation (Navistar);

National Automobile Dealers

Association (NADA); R.L. Polk &

Company (Polk); Sierra Products, Inc.

(Sierra); Truck Manufacturers; Toyota

Motor Corporate Services of North

America (Toyota); and Volkswagen of

America, Inc (Volkswagen). The reasons

for the proposals were fully discussed in

the NPRM.

Not all of the amendments proposed

in the NPRM are being adopted as final

rules today. With respect to the

proposed amendment of 49 CFR part

577 regarding the duty of manufacturers

to notify dealers of defects and

noncompliances that are determined to

exist, discussed in the NPRM (see 58 FR

at 50320), NHTSA has decided that it

needs additional time to consider the

appropriate action to take in light of the

issues raised by some of the

commenters. Since these issues do not

affect the remaining proposed

amendments, the agency has decided to

issue a final rule with respect to those

amendments while it resolves the issues

relating to dealer notification.

The regulatory provisions amended

by this final rule implement the

National Traffic and Motor Vehicle

Safety Act of 1966, as amended (‘‘Act’’),

which was originally set out at 15 U.S.C.

1381 et seq. Recently, as part of a

comprehensive codification of

transportation laws, the Act was

reenacted as Chapter 301 of Title 49 of

the United States Code. Pub.L. 103–272

(July 5, 1994). Congress specified in

section 6(a) of the statute that the

codification is not to be construed as

making any substantive changes, but

changed the wording of almost every

section. Some of these changes affect the

wording of sections of NHTSA’s

regulations that are being amended in

this final rule. The agency believes it is

desirable that the language of its

regulations be consistent with that used

in the statute. Therefore, this rule also

makes technical amendments to the

regulations covered by this notice to

make their wording conform to the

language used in the recodification. Any

such amendments will be noted in the

appropriate section of the preamble. The

agency emphasizes that, because
Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations 17255

Congress did not intend the changes in

terminology to be substantive, these

amendments are technical only and do

not alter the meaning of the regulations.

Amendments to Part 552—Petitions for

Rulemaking and for Defect and

Noncompliance Investigations

Part 552 implements the citizen

petition provisions of 49 U.S.C. 30162

(formerly section 124 of the Act). This

rule adopts the proposed amendments

to 49 CFR 552.6 and 552.8 in order to

remove any possible ambiguity with

regard to the factors that NHTSA may

consider when deciding whether to

grant or deny a citizen petition. The

new language of § 552.8 makes it clear

that the regulation does not limit

NHTSA’s discretion to consider factors

such as resource allocation, agency

priorities, and likelihood of success in

litigation which might arise from the

order, when deciding whether to grant

or deny petitions filed pursuant to the

Act. The amendment also deletes the

reference in § 552.6 to a determination

by the Associate Administrator that

there is a ‘‘reasonable possibility’’ that

the requested order will be issued.

While the amended regulation lists

some specific factors that the agency

may consider in deciding whether to

grant or deny the petition, the listing is

not intended to be exhaustive. It does

not preclude the agency from

considering factors not listed. The rule

does not require the agency to consider

all factors listed, nor does it set an order

of priority in which the factors must be

considered.

Two commenters, CAS and

Advocates, expressed the view that the

proposed amendment is too broad or

vague, that it should specify safety as

the first factor that NHTSA should

consider, and that it should list certain

other specific factors that the agency

must consider. While safety is certainly

one factor that the agency will consider,

these commenters fail to recognize that

the regulation is intended to be

consistent with the broad discretion

given to NHTSA by the Act to grant or

deny petitions. The United States Court

of Appeals for the District of Columbia

Circuit recognized the breadth of the

discretion conferred by the Act in

Center for Auto Safety v. Dole, 846 F.2d

1532 (D.C. Cir. 1988), on rehearing,

vacating 828 F.2d 799 (1987). In that

case, the court specifically rejected an

argument by CAS that NHTSA could not

consider factors other than safety in

deciding whether to grant or deny a

petition for a safety-related defect or

noncompliance proceeding.

Amendments to Part 554—Safety Defect

and Standards Noncompliance

Decisions

NHTSA is also amending 49 CFR

554.10 and 554.11, which implement

the provisions of the Act governing

initial and final decisions of safetyrelated defect or noncompliance by the

Secretary. 49 U.S.C. 30118(a) and (b)

(formerly section 152 of the Act).

Section 554.10 is amended by deleting

subsection (e) in its entirety; and

§ 554.11 is amended by deleting

subsection (c), which provides that if

the Administrator decides that a failure

to comply or a safety-related defect

‘‘does not exist,’’ he or she will notify

the manufacturer and publish ‘‘this

finding’’ in the Federal Register.

As stated in the NPRM, the Act does

not require a decision by NHTSA that a

failure to comply or a safety-related

defect does not exist. And, as a practical

matter, the Administrator rarely if ever

makes an affirmative decision that there

is no failure to comply or no safetyrelated defect. Rather, if the

Administrator believes that the

information at his or her disposal does

not warrant a final decision of defect or

noncompliance, the investigation is

closed, subject to its possible reopening

if additional evidence is obtained.

To minimize the possibility that the

public might be subject to confusing

assertions by manufacturers that there

has been a decision that a safety-related

defect or noncompliance does not exist,

the agency has decided to adopt the

amendments proposed in the NPRM.

The amended section will provide that

if the Administrator elects, following an

initial decision under 49 U.S.C.

30118(a), to close an investigation

without making a final decision that a

failure to comply or a safety-related

defect exists, he or she will notify the

manufacturer and will publish a notice

of that closing in the Federal Register.

Honda commented that the regulation

should give the agency the option of

finding that a defect or noncompliance

does not exist when it closes an

investigation. Its rationale is that in the

absence of such a decision, the public

would be left in doubt about whether a

vehicle did or did not have the defect

or noncompliance. The agency has no

reason to believe that the absence of

such decisions in the past has been a

source of confusion for the public. It

sees no significant safety benefit to be

gained from making such decisions; and

continuing an investigation until proof

of such a negative could be obtained

would divert scarce resources from

other areas.

NHTSA also will delete § 554.10(e),

which provides that if the Administrator

determines that a failure to comply or a

safety-related defect ‘‘does not exist,’’ he

or she may, at his/her discretion, within

60 days invite interested persons to

submit views on the investigation at a

public meeting as superfluous. The

agency has never held a public meeting

following the closing of an

investigation. However, if it should so

choose, it may do so even in the absence

of such a regulation. No commenter

objected to this change.

Amendments to Part 573—Defect and

Noncompliance Reports

NHTSA is amending several sections

of 49 CFR part 573 regarding leased

vehicles; the timing and duration of

remedy campaigns; submission of draft

owner notification letters to the agency;

advance submission of schedules for

notification and availability of remedy

under certain circumstances; quarterly

reports on the progress of recall

campaigns; identification by vehicle

manufacturers of suppliers of defective

or noncompliant equipment;

identification by equipment

manufacturers of vehicle manufacturers

that have been supplied with defective

or noncompliant equipment; and

requirements for submission of

information regarding the scope of a

recall campaign in certain instances.

Definitions

NHTSA is amending § 573.4,

‘‘Definitions,’’ to include definitions of

the terms ‘‘leased motor vehicle,’’

‘‘lessor,’’ and ‘‘lessee,’’ because those

terms are not currently defined in part

573. (These definitions will also be

added to part 577.) The definition of

‘‘leased motor vehicle’’ is identical to

that which appears in 49 U.S.C.

30119(f)(1). The definitions of ‘‘lessor’’

and ‘‘lessee’’ in this amendment are

consistent with the definition of ‘‘leased

motor vehicle.’’

Under the definitions proposed in the

NPRM, only lessors that leased five or

more vehicles for a term of at least four

months in the year preceding the date

of the notification would be covered by

these regulatory provisions. One

commenter, NADA, suggested that the

definition of ‘‘lessor’’ be changed to

make clear that the lessor is the owner,

as reflected on the vehicle’s title, of any

five or more leased vehicles, as of the

date of notification by the manufacturer

of the recall.

NHTSA believes that NADA’s

comment provides a useful clarification

of the term ‘‘lessor,’’ by adding the

lessor is the owner as shown on the

vehicle’s title. It is also reasonable to
17256 Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations

limit the term ‘‘lessor’’ to those who

have ownership at the time of the

notification by the manufacturer of the

recall, so that the obligations of lessors

would not be imposed on those who no

longer owned the recalled vehicle at

that time.

NHTSA is also adopting an

amendment to § 573.4 which defines the

term ‘‘readable form,’’ to mean a form

that is either readable by the unassisted

eye or by machine. As proposed, the

definition required parties submitting

information in machine readable form to

obtain prior written approval from

NHTSA’s Office of Defects Investigation,

confirming that equipment needed to

read the information is readily available

to NHTSA. Toyota commented that for

all similar information responses, once

a manufacturer has obtained approval

for the original response in that form, it

should not have to obtain approval for

future submissions in the same form.

NHTSA believes that one-time approval

of a machine-readable format should

suffice to ensure that the agency

receives information in a form which

makes it accessible to it. Requiring

approval each time information is

submitted would be duplicative and

would unnecessarily reduce the

efficiency of the recall notification

process. Accordingly, the rule adopted

today incorporates the changes

suggested by Toyota.

NHTSA does not believe a system that

permitted oral approval, as suggested by

AAMA, would be workable. In the event

that a question arose about the agency’s

approval of a particular format, it would

be desirable to have a written record

showing the scope of the approval.

Scope of Recall

The agency is amending 49 CFR

573.5(c)(2) to require, as part of the

manufacturer’s report to NHTSA of its

defect or noncompliance decision, an

explicit statement of how the

population that will be covered by the

recall was identified and of how the

recall population differs from any

similar vehicles or items of equipment

that are not covered by the recall. If the

information is not available to the

manufacturer at the time of filing its

part 573 report, it must so state in that

report and furnish an estimated date

when it expects it to be available. When

there is such a delay, the manufacturer

must furnish the information to NHTSA

within five Federal government working

days of when it becomes available.

Manufacturers often decide that a

safety-related defect or noncompliance

exists in only some portion of their

production of a given model or item of

equipment; for example, in vehicles or

items of equipment manufactured

between certain dates, or in certain

locations, or with certain engines or

options. On several occasions within the

past few years, manufacturers have had

to revise the scope of their recalls after

they or NHTSA uncovered information

indicating that additional vehicles or

equipment items contained the defect or

noncompliance.

Although some manufacturers have

included information in their part 573

reports that explains the basis on which

they selected the specific vehicles or

equipment items that will be covered by

a recall, NHTSA’s current regulations do

not explicitly require manufacturers to

do so. NHTSA has found that when this

information is not provided, it has been

difficult to ascertain whether the scope

of the recall proposed by the

manufacturer is adequate. The

amendment will ensure that the agency

has the information it needs to ensure

that the recall scope proposed by the

manufacturer is correct.

AAMA and Blue Bird opposed the

amendment on the ground that the

agency already has the authority to

request this information in individual

cases as needed. AAMA also

commented that requiring it in all cases

will be unduly burdensome, and that

NHTSA does not need this information

for every recall. These were the only

comments on this proposal.

The fact that NHTSA has authority to

ask for this information in individual

cases is not a reason for not requiring it

across the board. Requiring it by

regulation will make NHTSA’s oversight

of the recall process more efficient,

because it will eliminate the need for

the agency to decide in each case

whether to ask for the information.

Moreover, it will ensure that the

information is available even in those

instances in which NHTSA might fail to

request the information because the

need for it is not apparent at the time

the manufacturer submits its defect or

noncompliance report.

NHTSA does not believe it is unduly

burdensome to require this information,

which will ordinarily be readily

available to the manufacturer at the time

it files its part 573 report. In making a

defect or noncompliance decision, the

manufacturer is likely to have identified

the particular vehicles or items of

equipment covered by the recall, and it

will, of necessity, have a basis for that

identification. The amendment does

permit later filing when a manufacturer

does not have the information at the

time the report is submitted.

NHTSA also disagrees with AAMA’s

contention that the agency does not

‘‘need’’ the information in every recall.

Whenever the manufacturer is recalling

fewer than all similar vehicles or items

of equipment, the agency needs to know

why the scope of the recall is limited in

order to ensure that the recall campaign

adequately covers the population

affected by the defect or noncompliance.

In the past, there have been instances in

which a manufacturer expanded the

scope of a recall after NHTSA obtained

information showing that other vehicles

or items of equipment had the same

defect or noncompliance. The delay in

the agency’s learning about the

additional defective or noncomplying

vehicles or equipment items exposed

members of the public to a safety risk

that could have been avoided had the

information explaining the scope of the

recall been available to NHTSA when

the manufacturer first notified NHTSA

of its decision to recall.

Identification of Suppliers and

Customers

NHTSA is amending § 573.5(c)(2) to

require the manufacturer of a recalled

vehicle or item of equipment to identify

the supplier (if different from the

vehicle manufacturer) of any component

or assembly that contains the defect or

noncompliance, and to require an

equipment manufacturer that decides

that a defect or non-compliance exists in

its product to identify all manufacturers

that purchased the defective or noncomplying components for use in new

motor vehicles or new items of

equipment.

Both of these requirements will assist

the agency in assuring at an early point

in the recall process that a recall

encompasses all vehicles and items of

equipment that contain defective or

noncomplying components rather than

being inappropriately limited to a single

manufacturer’s production.

Identification of the supplier will, at the

outset of the campaign, permit the

agency to contact the supplier promptly

to ascertain whether the same

component was distributed to other

manufacturers or as replacement

equipment. Likewise, early

identification of the supplier’s other

customers (if any) will permit the

agency to contact the affected

manufacturers sooner to apprise them of

their responsibilities under the Act once

a defect or noncompliance in an item of

equipment has been identified.

AAMA, AM General and Blue Bird

expressed views about this proposal.

AAMA and Blue Bird contended that

such a requirement would be unduly

burdensome for manufacturers. The

agency disagrees. In many instances,

manufacturers already provide this

information to NHTSA when they are
Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations 17257

conducting a recall. Moreover, in most

if not all recalls, the manufacturer will

know the particular component or

components that caused the defect or

noncompliance in the completed

product, and will certainly be aware of

the identity of the entity that supplied

the component. If the manufacturer

believes that the defect or

noncompliance is not caused by a

component or assembly from an outside

supplier, it need not provide any

information in response to this

provision. Moreover, any burden is far

outweighed by the safety benefit of

allowing the agency to identify other

vehicles or items of equipment with the

same defective or noncompliant

component.

Both Blue Bird and AAMA also noted

that the agency already has the authority

to request this information in individual

recalls. While this statement is correct,

it is not a reason for not adopting this

provision. The information required by

the amendment is obviously more

accessible to the manufacturer than to

the agency; the agency may not be able

to identify all cases in which it is

appropriate to request such information.

Moreover, the amendment ensures that

this type of information will be

available to NHTSA at the beginning of

the recall process. This will have the

safety benefit of permitting earlier

identification of other vehicles or items

of equipment with the same defect or

noncompliance, which will minimize

the length of time that the public is

exposed to a safety risk because it

avoids unnecessary delay in making the

remedy available to all affected owners.

Section 30102(b)(1) of Title 49 does

not, as AAMA argues, prohibit the

agency from requiring manufacturers to

provide this information for

components that are not replacement

equipment as defined by that section.

That section merely states that the

vehicle manufacturer, and not the

component manufacturer, is responsible

for remedying a defect or

noncompliance in a component

installed in a vehicle as original

equipment. It does not preclude NHTSA

from obtaining information about the

identity of the manufacturer or supplier

of components used as original

equipment. The agency does not intend

to use the information to hold the

component manufacturer responsible

for remedying the defect or

noncompliance. Its purpose is to learn

from the latter whether any other

vehicle manufacturer used the same

component in its vehicles, so that the

agency can then contact the

manufacturer of those vehicles to

ascertain whether additional recalls

should be conducted.

AM General expressed a concern that

this provision could have an adverse

effect on suppliers whose components

are identified by manufacturers as

defective, in instances where further

examination reveals that they are not in

fact the cause of the defect or

noncompliance. The number of

instances in which such incorrect

identification occurs is likely to be quite

small because, in most instances, the

cause of the problem has already been

identified by the time the manufacturer

makes its decision that there is a safetyrelated defect or noncompliance. If a

manufacturer is still uncertain as to

whether a defect or noncompliance is

attributable to a component or assembly

from an outside supplier when it files

its defect or noncompliance report with

NHTSA, the manufacturer’s report

should make that uncertainty clear. Any

adverse publicity that does erroneously

affect a supplier can be countered by

publicizing the correct information

when it becomes available. Finally, the

safety benefit of having this information

available to NHTSA, as described above,

will far outweigh the risk that, in a few

instances, a supplier might be

incorrectly identified as the origin of a

defective or noncomplying product.

Schedule for Notification Campaigns

Although many recalls are

implemented within a reasonable time

of the decision that a safety-related

defect or noncompliance exists, NHTSA

has noted an increase in the number of

recalls in which there has been a

significant delay between the

manufacturer’s decision that a defect or

noncompliance exists and the

commencement of the manufacturer’s

recall campaign. There have also been a

limited number of instances in which

the duration of the campaign was

inordinately extended. The

manufacturers in question have

generally sought to justify these delays

and extensions on the basis that needed

parts and/or facilities were not available

and it would therefore be pointless to

notify owners of the defect or

noncompliance.

While such unavailability may in

certain cases justify some delay, it is

important that the agency be aware of

the manufacturer’s anticipated schedule

at the earliest possible time in order to

assure that notification campaigns

under the Act are commenced in a

timely fashion and completed within an

appropriate time period. In addition, in

some instances, even if implementation

of the remedy must be deferred (e.g.,

because needed parts are not available),

it is appropriate for the manufacturer to

send an interim notification to advise

consumers of actions they should take

prior to repairs being made. Finally, the

agency needs to be able to respond to

questions about the timing of the recall

from the public and/or the media.

Therefore, NHTSA proposed to

amend 49 CFR 573.5(c)(8) to require

manufacturers to provide information

about their schedule for owner

notification, along with a description of

any factors that they anticipated could

interfere with the schedule. Under the

proposal, schedules would have been

required for all recalls. In addition, the

NPRM proposed that if a manufacturer

planned to begin the campaign more

than 30 days after its defect or

noncompliance decision, or planned to

spread the notification campaign over

more than 45 days, the manufacturer

would have to identify the basis for

such a delay. In addition, the NPRM

proposed that if a manufacturer were

unable to follow the schedule it had

originally submitted, it would have to

inform NHTSA promptly and submit a

revised schedule.

AAMA opposed the proposal on

several grounds: that it would make

NHTSA a participant in, rather than an

observer of, the recall process; that it

would use manufacturer resources that

would otherwise be devoted to

implementing the recall campaign; that

it is unneeded because most recall

campaigns are implemented within a

reasonable time; and that the

requirement for a schedule would not

speed up the remedy of vehicles

because manufacturers would still need

time to design and test parts, design and

test the remedy, and train personnel.

NHTSA, as the agency charged by

Congress with enforcement of the

notification and remedy provisions of

the Act, is of necessity a ‘‘participant’’

in the recall process. An integral part of

this responsibility is to ensure that

manufacturers carry out their recall

obligations in a reasonable manner,

which includes avoiding undue delay in

sending owners notification of the

defect or noncompliance.

The agency does not believe that the

requirement will divert resources that

would otherwise be used in the

campaign; or that it will cause a delay

in the implementation of recall

campaigns, as Blue Bird commented. A

manufacturer that determines that a

recall is necessary will necessarily have

to develop a schedule for implementing

the recall. The proposal and the rule as

adopted simply require that, for those

relatively rare recalls for which a delay

is anticipated, the schedule, along with
17258 Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations

an explanation thereof, be provided to

NHTSA.

AIAM opposed the proposal because

it did not believe that manufacturers

should be required to explain normal

design, production, and distribution

delays. It argued that only unique delays

in a particular recall campaign, or

delays of more than 75 or 90 days in

sending out notification, should have to

be explained. Moreover, it noted that

foreign-based manufacturers need more

than 30 days to initiate notification and

begin the remedy because of the need to

be in contact with their headquarters,

and that it often takes more than 30 days

to get an updated owner list from R. L.

Polk.

The purpose of this provision is to

ensure that the recall campaign is

initiated within a reasonable time after

the defect or noncompliance

determination. NHTSA is not concerned

with whether the delay is due to

ordinary or unique circumstances. Its

interest is in whether it is reasonable.

The information the amendment

requires is intended to enable NHTSA to

evaluate the reasonableness of the delay,

and to provide for interim notification

where appropriate.

NHTSA believes that most

notification campaigns can be

commenced within 30 days of a

manufacturer’s defect or noncompliance

decision and completed within 45 after

they are commenced. However, to

eliminate any ambiguity in calculating

time periods, and to provide

manufacturers with slightly more time,

NHTSA has revised the final rule so that

the periods in question are calculated

from the date of the notice to the agency

of the defect or noncompliance

decision.

Based on past experience, and given

the availability of telefax and other

rapid electronic means of

communication, that time period should

be sufficient to allow manufacturers to

obtain the information they need, either

from Polk or from parent companies or

suppliers located overseas. Moreover, if

more time is required, the manufacturer

need only advise the agency and explain

the basis for the delay. NHTSA will not

disapprove reasonable schedules for

recall campaigns.

Advocates supported the requirement

for a schedule, but also suggested that

manufacturers be required to notify all

owners within 30 days of notifying

NHTSA of the defect or noncompliance.

Advocates explained that any delays in

the availability of the remedy could be

explained to owners in the notification

letter. NHTSA believes that a 30-day

requirement for notification under all

circumstances is unnecessarily rigid. It

prefers to have the flexibility to decide

on a case-by-case basis whether a

proposed schedule is unreasonable.

AM General opposed the proposal

because it believed that the

manufacturer would be bound by the

schedule, which would limit its

flexibility in conducting the recall

campaign. It also expressed concern that

NHTSA needed to define more clearly

the circumstances under which it would

take action against a manufacturer

under this section and what the action

would be. Finally, it commented that

NHTSA normally is able to learn of

problems with recall campaigns through

its regular interaction with

manufacturers, and that the agency

already has sufficient means at its

disposal to compel a manufacturer to act

more quickly.

Contrary to AM General’s contention,

the amendment does not unreasonably

limit manufacturer flexibility. The

amendment clearly states that if

unexpected circumstances arise, that

would result in unanticipated delay, the

manufacturer may submit a revised

schedule. If there are valid reasons for

the delay, there would be no agency

action against the manufacturer.

Honda commented that a definition of

the term ‘‘campaign’’ is needed, to

clarify whether it means notification to

owners or the availability of the remedy.

The agency has revised the regulatory

language to clarify that the time periods

triggering the need to submit a schedule

refer to owner notification. However,

NHTSA has also added language to

clarify that if the remedy will not be

available at the time owners are notified

of the defect or noncompliance, the

manufacturer’s report must state when

the remedy will be provided. This

requirement makes explicit what was

already implicit in existing § 573.5(c)(8)

(redesignated by this amendment as

§ 573.5(c)(8)(i)), which requires each

manufacturer to include in its report ‘‘a

description of its program for remedying

the defect or noncompliance.’’

(Emphasis added.)

Based on its consideration of the

comments received on the NPRM, and

on its experience in monitoring

manufacturer compliance with the

notification and remedy requirements of

the Act, NHTSA now believes that it is

not appropriate to require

manufacturers to submit the detailed

scheduling information such as that

proposed in the NPRM for every recall

campaign. Instead, the agency believes

it is appropriate to focus on recalls in

which the manufacturer intends to

delay commencement or completion of

the notification campaign to assure that

such delays are not unreasonable.

For recalls in which the manufacturer

intends to commence owner notification

within 30 days, and to complete the

notification campaign within 75 days of

notifying NHTSA, it is unlikely that the

agency would find that the schedule

was unreasonable or would create a

significant safety problem. Accordingly,

the detailed scheduling information

proposed in the NPRM will not be

required for those recalls. (Of course,

NHTSA has the authority to require

manufacturers to provide scheduling

and related information on a case-bycase basis, even apart from these general

regulatory requirements.)

In those cases where the manufacturer

intends to exceed the time periods set

out in the amended final rule, there is

a greater likelihood that the remedy will

not be available within a reasonable

time, as required by 49 U.S.C. 30120(c).

Therefore, the amendment adopted

today retains the requirement proposed

in the NPRM for filing a schedule for the

campaign and a detailed description of

the factors on which the proposed

schedule is based in such instances.

Such factors will often include the time

frame for development and testing of the

specific remedy for the defect or

noncompliance, the time frame for

production of any necessary parts, and

the anticipated date(s) for distribution of

those parts to dealers and/or owners.

The final rule also retains the

requirement that if a manufacturer

becomes aware that circumstances will

delay implementation of the recall, it

must promptly inform NHTSA of the

reasons for the delay and submit a new

schedule. Such submission must also

contain the basis for the new schedule,

which shall also be subject to

disapproval by the Administrator.

The preamble to the NPRM noted that

a manufacturer that intended to seek an

exemption from the recall requirements

of the Act pursuant to 49 U.S.C.

30118(d) and 30120(h) and 49 CFR part

556 on the basis that the defect or

noncompliance was ‘‘inconsequential as

it relates to motor vehicle safety’’ would

have to advise the agency of its

intention to do so in its initial report

under part 573. In its comments, AIAM

suggested that the schedule requirement

be waived when a manufacturer intends

to file an inconsequentiality petition.

The agency agrees that it would not be

appropriate to require a manufacturer

that intends to petition for

inconsequentiality to file a schedule at

the time it notifies the agency of a defect

or noncompliance, since no recall will

take place if the petition is granted.

However, this does not mean that the

schedule requirement should be

completely waived in such
Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations 17259

circumstances, since if the petition is

denied, the manufacturer will have to

conduct a recall within a reasonable

time thereafter. Therefore, NHTSA has

added a new § 573.5(c)(8)(v) to clarify

that the time periods for filing a

schedule for owner notification shall

run from the date of the agency’s denial

of the petition, whether or not the

manufacturer appeals that denial

pursuant to 49 CFR 556.7.

The final rule also adds a new

§ 573.5(c)(8)(vi) to require that in the

event a manufacturer that had informed

NHTSA in its part 573 report that it

intended to file a petition for an

inconsequentiality exemption does not

do so within the 30-day period

established by 49 CFR 556.4(c), the time

frame for filing a schedule specified in

§ 573.5(c)(8)(ii) would begin to run from

the end of that 30-day period. If NHTSA

finds that manufacturers are abusing

this provision in order to avoid filing

the required schedules, it will take

appropriate action.

Submission of Proposed Owner Letters

to the Agency

NHTSA is also amending 49 CFR

573.5(c) to add a requirement that

manufacturers submit to the agency for

review, copies of their proposed owner

notification letters before, rather than

after, the letter is sent to owners. (In the

NPRM, this proposed amendment was

added to paragraph (9) of § 573.5(c).

However, for the sake of clarity the

agency has decided that this

requirement should be in a separate

paragraph. Accordingly, in the final

rule, the requirement for submission of

proposed owner letters will be

paragraph (10) of § 573.5(c). The

paragraph on recall campaign numbers,

designated as (10) in the NPRM will

now be paragraph (11).) The final rule

provides that the manufacturer must

submit a proposed owner notification

letter to the Office of Defects

Investigation (ODI) at least five Federal

government business days prior to the

date it intends to begin mailing. As

noted in the NPRM, the purpose of this

requirement is to allow NHTSA to

review a manufacturer’s draft to

ascertain whether it complies with all

statutory and regulatory requirements

before mailing, since sending a

corrected letter after the first mailing

causes unnecessary expense and could

confuse owners.

AAMA asserted that NHTSA lacks the

statutory authority to ‘‘dictate, edit or

approve in advance’’ a manufacturer’s

notification to owners. The amendment

does not purport to grant to the agency

any authority to ‘‘dictate’’ the precise

wording of owner notification letters.

While NHTSA has the authority

pursuant to 49 U.S.C. 30118(e) (formerly

section 156 of the Act) to order

manufacturers to take specified steps if

it decides that they have not adequately

carried out their notification

responsibilities, this amendment is part

of a more informal process. NHTSA’s

experience has been that when it

identifies deficiencies in a proposed

owner notification letter, most

manufacturers are willing to make

appropriate changes. In any event, the

fact that the agency may not be able to

compel a manufacturer legally to modify

an owner notification letter at that stage

does not mean that the agency cannot or

should not take steps to try to convince

manufacturers to make appropriate

changes in an effort to maximize the

response to recall campaigns.

AAMA’s fear that the regulation will

lead to NHTSA’s ‘‘micromanaging’’ the

form and content of letters simply is not

warranted. The agency has neither the

time nor the interest to get involved in

the minute details of rewriting owner

notification letters that meet statutory

and regulatory requirements. The extent

of its involvement will be to ensure to

the maximum possible extent that those

letters meet all such requirements.

Several commenters expressed

concern that requiring such advance

review could unduly delay the recall

notification process. Some also

suggested that the agency add a

provision permitting a manufacturer to

send the letter if it has not heard from

NHTSA within a specified time. As

noted above, this amendment does not

provide NHTSA with the authority to

force a manufacturer to delay its owner

notification campaign until the agency

approves the wording of the

manufacturer’s proposed owner letter.

Thus, the amendment is unlikely to add

any delay at all, since manufacturers

almost always prepare drafts of owner

notification letters well before the actual

mailing begins. In any event, the

amendment specifically authorizes the

agency to waive this requirement where

warranted by safety considerations or

other appropriate factors.

Nevertheless, in order to ensure that

the agency has adequate time to review

the draft letter and contact the

manufacturer to resolve any problems,

the amendment requires the

manufacturer to submit the proposed

letter by a means which allows

verification that the letter was received

by ODI and indicates the date of receipt.

The agency encourages manufacturers to

send their draft notification letters to

ODI by fax, at 202–366–7882 (primary)

or 202–366–1767 (alternate). Other

means that provide verification of

receipt are overnight delivery (either by

Express Mail or private delivery service)

addressed to: Office of Defects

Investigation, National Highway Traffic

Safety Administration, 400 Seventh

Street, SW., Room 5319, Washington,

DC 20590; and hand delivery to ODI at

that address. Neither first-class mail nor

certified mail would be acceptable

because of lengthier delivery times and/

or the absence of proof of receipt.

Two commenters, AAMA and Truck

Manufacturers, support the present

system, which requires manufacturers to

submit copies of owner notification

letters to NHTSA only after mailing to

owners. AM General suggested

amending the proposal to require

sending copies of owner notification

letters to NHTSA on the same day they

are mailed to owners. AAMA states that

there is no need for the amendment

because most letters already meet the

requirements of part 577 and because

many manufacturers currently send

draft copies of owner notification letters

to NHTSA in advance of mailing.

The fact that many manufacturers

already seek out NHTSA’s advance

approval is not an argument against the

amendment. To the contrary, it shows

that it is practicable and desirable.

Similarly, the fact that most owner

letters comply with regulatory

requirements does not provide a basis

for not trying to assure that even more

letters fully comply.

As pointed out in the NPRM, NHTSA

has had several experiences in which an

owner notification letter has failed to

comply with all of the requirements of

part 577. In such instances, it would

rarely be productive (and might be

confusing and counterproductive) to

require the manufacturer to send a

second, corrected letter. The

amendment will also increase the

agency’s ability to respond to questions

about the recall from the public and/or

the media by ensuring that the agency

is informed about the specifics of the

notification letter before the

manufacturer actually initiates the

recall.

Finally, the agency views as neither

necessary nor desirable Toyota’s

suggestion that NHTSA incorporate in

its regulations a provision allowing it to

waive requirements for owner

notification letters in certain instances,

such as negotiated settlements.

NHTSA’s broad discretion to enter into

negotiated settlements of enforcement

matters has already been recognized by

the courts. See Center for Auto Safety v.

Lewis, 685 F.2d 1381 (D.C. Cir. 1982). In

any event, the amendment as proposed

and adopted specifically allows the

agency to waive this requirement.
17260 Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations

Quarterly Reports

NHTSA is amending 49 CFR 573.6(a)

to establish specific due dates for

quarterly reports on the progress of

ongoing recall campaigns. The NPRM

proposed to amend this section by

establishing due dates for quarterly

reports on the twentieth calendar day

after the close of each calendar quarter.

Most commenters favored the idea of

amending this provision. The two that

did not—Midland and Truck

Manufacturers—favored maintaining the

present system largely because the

proposed schedule would not give

enough time for some manufacturers

(especially small companies that are not

computerized) to submit their reports.

AAMA favored amending the due dates,

but also expressed the view that the

dates in the proposal would not allow

some companies enough time. KellySpringfield expressed the same view.

The agency has decided to adopt the

schedule suggested by AAMA, which

sets definite calendar dates on which

the reports would be due, but allows

more time than the language proposed

in the NPRM. Under the final rule,

manufacturers must file their quarterly

reports of recall campaign status no later

than April 30 for the quarter ending

March 31, July 30 for the quarter ending

June 30, October 30 for the quarter

ending September 30; and January 30

for the quarter ending December 31,

unless the specified filing date falls on

a weekend or Federal holiday. In such

cases, the quarterly report would be due

on the next day on which the Federal

government is open for business.

NHTSA believes that this schedule

allows a reasonable amount of time for

all manufacturers, even those that are

small and lack computer facilities. Since

the date is always the same, i.e., the

30th of the given month, the agency

believes it will be easier to keep track

of than Kelly-Springfield’s suggestion,

which was the last business day of the

month.

The NPRM also proposed to amend

§ 573.6(b) by adding a new paragraph (6)

that would require both vehicle and

equipment manufacturers to indicate

separately in their quarterly reports the

number of vehicles and items of

equipment that are repaired and/or

returned by dealers prior to their first

sale to the public. AAMA, AM General,

Blue Bird, and Truck Manufacturers

opposed the proposal because of the

added cost and time that would be

needed to prepare the quarterly report.

AAMA added that it saw no justification

for such a requirement. No other

commenter opposed the proposal, with

Midland favoring it and Volkswagen

taking a neutral position but giving

information on the time and cost

entailed in making the changes that

would be needed to its computer system

to track inventory return information

separately.

After reviewing these comments, the

agency has decided to make the

requirement applicable only to

equipment manufacturers, rather than to

both vehicle and equipment

manufacturers as proposed in the

NPRM. Under 49 U.S.C. 30116,

defective and noncompliant motor

vehicles in dealer inventory must be,

and usually are, repaired by the dealer

prior to sale to the public; whereas that

section requires the manufacturer of

equipment to repurchase the defective

or noncomplying items that are in

inventory at the time of the defect or

noncompliance decision. In addition,

the agency believes that there is a

greater need for the agency to keep track

of whether defective or noncomplying

equipment is being returned by dealers

and retailers to manufacturers because

of the greater number of items that are

involved in equipment recalls, the

higher percentage of items that are kept

in the inventories of dealers and

retailers at any given time, and the

greater likelihood that dealer/retailer

inventory will contain items subject to

recall. In addition, the agency is

clarifying that manufacturers should

include in this category items returned

prior to first sale to the public from all

retailers, not just ‘‘dealers,’’ as well as

from distributors of the items in

question.

Recordkeeping for Leased Vehicles

NHTSA is amending 49 CFR 573.7 to

require manufacturers to maintain

information concerning notification of

owners of leased vehicles if the

manufacturer knows that a vehicle is

leased, and to require lessors of leased

vehicles to maintain certain information

concerning notifications they send to

the lessees of those vehicles. The final

rule adds a provision that was not in the

NPRM: that the records with respect to

notification of lessees must be

maintained for one calendar year

following the expiration of the lease.

The agency added this provision

because it was necessary to make clear

to lessors and manufacturers how long

these records must be maintained. The

other record retention requirements in

part 573 specify a length of time for

which the records must be kept.

In the NPRM, NHTSA proposed to

amend § 573.7(a) to require the

manufacturer to identify those vehicles

on its list of owners/purchasers

receiving notification which it knows to

be leased. The proposal would not have

required a separate list of those vehicles

that were leased, but would have

required that leased vehicles be clearly

identified as such. The agency also

proposed to add a new § 573.7(d), which

would have required each lessor

notifying its lessees of a defect or

noncompliance to maintain a list of the

names and address of the lessees, to

include the name and address of the

lessee, the VIN, and the date the lessor

sent the notification to the lessee. Based

on the comments received on that

proposal, which are summarized below,

the agency has decided to adopt a final

rule which differs in some respects from

the original proposal.

AAMA, NADA, Polk, Truck

Manufacturers and Toyota opposed the

proposal in the NPRM. AIAM supported

the proposal with modifications.

AAMA, Truck Manufacturers and

Toyota based their opposition on the

difficulty that manufacturers would

have identifying which vehicles in a

recall are leased, and the cost and

burden of developing a system that

would enable a manufacturer to keep

track of this information. Polk’s

opposition was based on the difficulty

of ascertaining from state vehicle

registration records whether or not a

vehicle is leased.

The agency notes that the proposal in

the NPRM would have required

manufacturers to maintain records of

notifications sent to ‘‘known lessors.’’

This would not have required

manufacturers to identify in its records

leased vehicles other than those it

already knew to be leased. However,

because of the apparent

misunderstanding of the extent of the

manufacturer’s obligation under the first

proposal, NHTSA is implementing a

revised and simplified version of this

requirement, which is intended to make

clear that the lists maintained by

manufacturers under this section do not

need to identify those vehicles that are

leased except to the extent that the

manufacturer already has that

information at the time it sends the

notification letter.

AAMA also noted that to assure that

lessees receive notification of a recall, it

would be necessary to include language

in the notification letter directing

lessors to notify lessees in all

notification letters. Although the first

NPRM did not propose such a

requirement, the agency has decided,

after considering comments on the

proposed amendments to part 577

regarding notification of lessees, that the

simplest and most effective way to

ensure that lessees will be notified is to

require manufacturers to include in all
Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations 17261

notification letters sent to vehicle

owners a statement that if the vehicle is

leased, the lessor must send the

notification letter (or a copy thereof) to

the lessee. That amendment is discussed

more fully elsewhere in this notice.

NADA opposed the proposal to

require each lessor to maintain a list of

the names and addresses of the lessees

it has notified. NADA stated that if

lessors are required to forward all recall

notification letters to lessees, there is no

need to require lessors to keep records

of those lessees to which it sent the

letters. It also commented that it would

be unduly burdensome for small leasing

companies to keep the ‘‘detailed’’

records that would be required by the

proposal.

NHTSA notes that the obligation of

lessors to keep records of all lessees

who have been notified of a recall is

analogous to the obligation of a

manufacturer to keep records of those

whom it has notified. It is, however, less

complex because, unlike the

manufacturer list, it does not need to be

updated each quarter for status of the

remedy, and requires only a one-time

entry for the date on which the

notification was sent to the lessee.

As stated in the NPRM, NHTSA has

found the information maintained by

manufacturers pursuant to § 573.7 to be

useful in the agency’s efforts to evaluate

whether manufacturers’ notification and

remedy campaigns are adequate.

Because Congress amended the Safety

Act to require lessors to send recall

notifications to lessees (see 49 U.S.C.

30119(f)), NHTSA needs the same type

of information from lessors in order to

evaluate whether lessors are adequately

carrying out their obligations. While the

agency recognizes that this

recordkeeping may impose a burden on

some lessors, that burden is outweighed

by the safety benefit of having such

information available.

Copies of Manufacturer

Communications

NHTSA is also amending § 573.8 to

clarify that the requirement that

manufacturers furnish NHTSA with

copies of ‘‘all notices, bulletins and

other communications * * * sent to

more than one manufacturer,

distributor, dealer, or purchaser,

regarding any defect in his vehicles or

items of equipment * * * whether or

not such defect is safety-related,’’

applies to communications made by

electronic means. It is making the same

amendment to § 573.5(c)(9), which

requires manufacturers to send to

NHTSA ‘‘a representative copy of all

notices, bulletins, and other

communications that relate directly to

the defect or noncompliance and are

sent to more than one manufacturer,

distributor, dealer or purchaser,’’ within

five days of sending them to the

manufacturers, distributors, dealers or

purchasers.

Only one commenter, AIAM, opposed

this proposal. It stated that NHTSA

lacks the authority under the Act to

require this ‘‘additional’’ information

from manufacturers. AIAM’s objection

is misplaced. The amendment does not

increase the scope of the agency’s

existing authority to require

manufacturers to submit certain types of

information. It merely makes explicit a

requirement that was already inherent

in the regulations as previously written.

Recall Identification Numbers

In order to minimize confusion during

NHTSA’s monitoring of recall

campaigns and to improve the agency’s

response to owners and prospective

purchasers, NHTSA is adding a new

provision to part 573 (§ 573.5(c)(11)),

which requires manufacturers to

provide the manufacturer’s

identification number for each recall if

it is not identical to the campaign

number assigned by the agency. In the

NPRM, this amendment was designated

§ 573.5(c)(10). However, the agency has

decided to redesignate it as

§ 573.5(c)(11) in the final rule because it

has revised the numbering of the

preceding paragraph. The amendment is

otherwise identical to that proposed in

the NPRM. No commenter raised any

issues relating to this amendment.

Amendments to Part 576—Record

Retention

NHTSA is amending 49 CFR 576.5 to

provide that records concerning

malfunctions that may be related to

motor vehicle safety and that refer to a

specific vehicle must be retained for

eight years from the close of the model

year during which the vehicle was

manufactured (i.e., the date on which

the last vehicle was produced for the

model year). This amendment differs

from that proposed in the NPRM. In the

amendment as proposed, the eight-year

time period began to run with the date

the vehicle was sold, and retention

would also have been required for

records for five years after they were

acquired or generated, if that was later

than eight years after the date of sale.

NHTSA decided to change the

language from that proposed in the

NPRM after considering the comments

of several manufacturers, whose

objections to the proposal focused

principally on the requirement that the

eight years be counted from the date of

sale. These manufacturers asserted that

a requirement that records be kept

according to sale date would be

unworkable and unreasonably costly

and burdensome. See comments of

AAMA, AIAM, Chrysler, Navistar and

Toyota. These commenters, as well as

Blue Bird and Fleetwood, suggested that

basing the record retention requirement

on the model year of production would

be more workable.

After careful consideration, NHTSA

believes that the commenters have

raised legitimate concerns. The

suggested alternative would be more

workable and less costly, and would not

reduce the availability of relevant

records.

The agency has also decided to

eliminate the language in the NPRM that

would have required manufacturers to

maintain records for five years from the

date they were acquired or generated, if

that would be later than eight years from

the date of sale. The number of records

that would be retained beyond those

that are generated within the first eight

years after the model year of production

is likely to be small. Moreover, the

potential benefits would be slight, since

most investigations of defects and

noncompliances begin far earlier than

eight years after production. However,

notwithstanding this amendment, the

agency retains the authority to require a

manufacturer to retain records for

vehicles more than eight years old if it

has an open investigation of an alleged

noncompliance or safety-related defect

that includes such vehicles.

Amendments to Part 577—Defect and

Noncompliance Notification

The agency is amending several

sections of 49 CFR part 577 to revise the

provisions regarding notification of

safety-related defects and

noncompliances with Federal motor

vehicle safety standards.

Definitions

NHTSA is amending § 577.4,

‘‘Definitions,’’ to add definitions of the

terms ‘‘lessor,’’ ‘‘lessee’’ and ‘‘leased

motor vehicle.’’ As was the case with

the amendment of the definition section

of part 573 to incorporate these terms,

the amendment to this section is being

made to implement 49 U.S.C. 30119(f),

the statutory section that requires that

lessees of motor vehicles receive

notification of safety-related defects and

noncompliances.

The definition of ‘‘lessor’’ adopted

today is slightly different from that in

the NPRM. This is necessary to make it

consistent with the definition of the

same term in part 573 as amended

today. The agency decided to adopt a

suggestion of a commenter, NADA, that
17262 Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations

defines the lessor as the owner, as

reflected on the vehicle’s title, of any

five or more leased vehicles, as of the

date of notification by the manufacturer

of the recall. The definitions adopted

today for the terms ‘‘lessee’’ and ‘‘leased

motor vehicle’’ are the same as those in

the NPRM. No commenter objected to

the proposed changes in § 577.4.

Marking of Recall Notification

Envelopes

The agency is amending § 577.5(a) to

add a requirement for marking the

envelope in which recall notification

letters are sent by requiring that the

envelope containing the notification

bear, in all capital letters, the words

‘‘SAFETY,’’ ‘‘RECALL’’ and ‘‘NOTICE,’’

in any order. Other words may be

included, and the type may be any size

as long as it is larger than that used for

the address. The language must be also

be distinguishable from other wording

on the front of the envelope in some

manner other than size, such as by

typeface (e.g., bold, italic), color, and/or

underlining.

This amendment differs slightly from

the proposal in the NPRM. The proposal

would have required use of the phrase,

‘‘SAFETY RECALL NOTICE’’ in

boldface capital letters. In response,

several commenters suggested

alternative wording. Others expressed

the view that the current system works

well enough, that the proposal did not

give manufacturers enough flexibility,

or that it would be too costly and/or

burdensome to change the envelopes

now in use.

NHTSA believes that the cost of

adding new wording to recall

notification envelopes will be relatively

low, and will be outweighed by the

safety benefit of making it more likely

that the recipient will read the letter.

Moreover, while the present system

works well, in many cases there is need

for improvement in the rate of owner

response to recalls. Accordingly, the

agency believes that it is appropriate to

require manufacturers to mark the

outside of recall notification envelopes

to alert recipients to the importance of

their contents.

However, there is merit to the view

expressed in some comments that more

flexibility should be allowed than

would have been permitted under the

proposal in the NPRM. The agency

believes that the amendment adopted

today should satisfy concerns about

flexibility in envelope format while

calling recipients’ attention to the

contents of the envelope. However, to

ensure that envelopes comply with

regulatory requirements, the

amendment includes a requirement for

one-time submission of envelope format

to the agency. Once a given format is

approved, the manufacturer need not

submit its envelope format again before

using it for other recalls, unless there

are changes.

This review will, like the agency

review of draft notification letters

discussed earlier in this preamble, be

limited to ensuring that the envelope

markings comply with the minimum

requirements of the regulations. The

agency’s experience with advance

review of notification letters has been

that it makes the notification process

more efficient because it allows the

manufacturer to correct any aspects of

the material that do not comply with the

regulations before undertaking the

entire mailing. Advance review of

envelope format would doubtless have

the same effect.

Notification for Leased Vehicles

NHTSA is amending § 577.5 to add

new subsections (h) and (i), which

establish requirements for notification

of lessees of leased vehicles concerning

the existence of safety-related defects or

noncompliances in their vehicles.

As proposed in the NPRM, subsection

(h) would have required a manufacturer

to send different notification letters,

depending on whether or not the

vehicle was leased. The proposal would

have required the manufacturer to

include language describing the lessor’s

duty to provide notification to the lessee

only in letters sent by the manufacturer

to a known lessor of a leased motor

vehicle, and to provide the lessor with

a copy of the notification to be sent to

lessees.

A number of commenters noted that

to the extent that the proposed

amendment would require

manufacturers to identify the vehicles in

the recall population that are leased, it

would present a problem because

manufacturers often do not know which

vehicles are leased and which are not.

For example, Polk opposed the proposal

on the grounds that state vehicle

registration records do not identify

lessors/lessees, so that obtaining this

information for notification purposes

would be extremely difficult. AIAM and

Honda made similar comments.

Other commenters objected to

notifying lessors or lessees separately

from other vehicle owners, or to the

requirement that manufacturers include

a separate copy of the notification letter

for the lessee in the mailing to the

lessor. See comments of NADA, Toyota

and Truck Manufacturers. These

commenters suggested including in all

owner notification letters a statement of

a lessor’s obligation to notify a lessee of

the recall campaign.

NHTSA believes that there is merit to

the concerns these commenters have

raised about this aspect of the proposal.

In addition, to the extent that the

language of the proposal would have

meant that only owners of vehicles

known by the manufacturer to be leased

vehicles would have received a

notification that informed them of their

obligation to provide notification to

lessees, it would have meant that lessees

of vehicles not known by the

manufacturer to be leased—a potentially

large number—would not receive any

notification of safety-related defects or

noncompliances and the availability of

a remedy without charge.

Accordingly, NHTSA has decided to

modify subsection (h) to require

manufacturers to include in all

notification letters a statement of

lessors’ obligations regarding recall

notification letters. If the manufacturer

is sending the letter to a recipient that

it knows to be a lessor of lessee of a

leased vehicle it may use language that

is not identical to that in letters sent to

recipients whose vehicles are not

known to be leased. However, in all

cases, the letter must clearly state the

lessor’s obligation under Federal law to

provide notification to lessees of its

vehicles and to comply with regulations

regarding retaining records of

notifications sent to lessees. The

amendment does not require the

manufacturer to furnish the lessor with

a separate copy of the notification letter

to be sent to lessees.

The final rule adopts § 577.5(i) as

proposed in the NPRM. That subsection

restates the requirement of 49 U.S.C.

30119(f), which requires a lessor who

receives notification of a safety-related

defect or noncompliance in a leased

motor vehicle to send a copy of the

notification to the lessee of the vehicle.

It adds to the statutory language

requirements that the lessor send the

notification to the lessee as prescribed

by new § 577.7(a)(2)(iv), which requires

that the notice be sent by first-class

mail, and that it be sent to the lessee no

more than 10 calendar days from the

date the lessor received the notification

from the manufacturer. Finally, it

clarifies that the requirement applies to

all notifications, both initial and followup, except where the manufacturer has

notified all of a lessor’s lessees directly.

Timing of Owner Notification Letters

The agency is amending § 577.7,

‘‘Time and Manner of Notification,’’

with modifications from the language

proposed in the NPRM. Those changes
Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations 17263

are based on its consideration of the

comments on the NPRM.

The NPRM proposed to amend

§ 577.7(a)(1) to give the agency authority

to order a manufacturer to notify owners

of a safety-related defect or

noncompliance on a specific date, when

it finds that such a letter would be in

the public interest. A number of

manufacturers objected to the original

proposal because it did not contain any

criteria upon which the decision would

be based, and failed to require NHTSA

to consult with the manufacturer before

deciding to order notification on a

specific date. The agency believes that

it is desirable to provide a list of criteria

to assure both manufacturers and the

public that the decision is based on

consideration of all appropriate and

relevant factors. It is also desirable to

allow the manufacturer to make its

views known to the agency before the

decision is made.

Accordingly, the agency has modified

the proposed regulatory language by

adding a list of factors that may be

considered by the agency, and a

requirement that the agency consult

with the manufacturer before making

the decision. The factors that may be

considered include the severity of the

risk to safety; the likelihood of

occurrence of the defect or

noncompliance; whether there is

something that an owner can do to

reduce either the likelihood of

occurrence of the defect or

noncompliance or the severity of the

consequences; whether there will be a

delay in the availability of the remedy

from the manufacturer; and the

anticipated length of any such delay.

The agency may also consider other

factors relevant to whether early

notification would be in the interest of

safety.

Several commenters objected to the

proposed change on the grounds that

the agency already has the authority to

require owner notification on a specific

date. NHTSA agrees with this statement,

but does not agree that it is a reason for

not adopting this provision. The agency

believes that it is desirable to make this

authority explicit because there have

been instances when manufacturers

have refused to notify owners of a

safety-related defect or noncompliance

in conformity with a NHTSA request.

Having a regulation authorizing the

agency to require notification on a date

certain will make manufacturer

compliance more certain.

AAMA and Chrysler commented that

the change is unnecessary because the

manufacturer, and not the agency, is in

the best position to know when early

notification (i.e., notification prior to the

time a remedy is available) is warranted.

NHTSA disagrees. As the agency

charged by statute with enforcing the

notification and remedy requirements of

the Act, it is in the best position to

consider objectively all of the factors,

including the safety of the public, that

need to be considered, and to give them

appropriate weight. Based on some

manufacturers’ past history of undue

reluctance to comply with NHTSA

requests to notify owners of a defect or

noncompliance prior to the availability

of a remedy, the agency believes that it

is unwise to entrust responsibility for

making this judgment solely to the

manufacturer. Moreover, the changes

made in the NPRM language to give

manufacturers the opportunity to

submit their views should be adequate

to address concerns expressed by some

manufacturers that their concerns

would not be considered.

The agency notes that it does not

intend to exercise the authority to

designate a date for owner notification

letters except in cases where the

commencement of the remedial

campaign will be delayed substantially

and there appear to be safety benefits

associated with a prompt owner

notification.

Advocates commented that all owners

should be notified immediately after the

agency is informed of the existence of

the defect or noncompliance, so that

they would be able to take measures to

minimize the effect of the defect or

noncompliance until the remedy is

available. It proposes a two-step

notification process for all recalls, with

the first owner notification to be sent

within 30 days of agency notification,

and a second notice to be sent later

regarding the remedy. CAS also

supported a 30-day deadline for

notification in all recalls.

As stated above in connection with

the amendment to § 573.5(c)(8), the

agency does not believe it would be

productive to establish a 30-day

deadline for all recalls, or to institute a

mandatory two-step notification process

for all recalls. Given that recalls can

vary widely in such matters as the

number of items, the severity of the

hazard, the complexity of the remedy

and the size and resources of the

manufacturer, the agency believes that

an approach that allows for flexibility in

handling each recall individually is

preferable. Further, the two-step

notification process introduces the

possibility of owner confusion. The

agency believes that these factors, along

with the increased cost of sending a

second owner letter, will outweigh the

safety benefit of such a process in most

circumstances.

Timing of Notification to Lessees

The agency is also adding a new

paragraph (iv) to subsection (a)(2) of

§ 577.7. The new paragraph requires

that a lessor must send its lessees a copy

of the manufacturer’s notification letter

by first-class mail within 10 days of

receiving it. No commenter opposed this

proposal.

Disclaimers

NHTSA is amending § 577.8,

‘‘Disclaimers,’’ to make clear that that

section’s prohibition of disclaimers of

the existence of a safety-related defect or

noncompliance applies equally to

follow-up notifications. The agency

received no comments on this proposal.

Follow-up Notification

The final rule also adds a new

§ 577.10, which sets forth the criteria

under which the agency will determine

whether a manufacturer must conduct a

follow-up notification campaign and the

requirements applicable to such

campaigns. This new section

implements 49 U.S.C. 30119(e)

(formerly section 153(d) of the Act),

which authorizes NHTSA to require

manufacturers to send a second

notification of a defect or

noncompliance, ‘‘in such manner as

(NHTSA) may by regulation prescribe,’’

where the agency determines that the

initial notification campaign has not

resulted in an adequate number of

vehicles or items of equipment being

returned for remedy. With minor

changes, the final rule adopts the

proposals in the NPRM.

New § 577.10(b) sets forth criteria that

NHTSA may consider in making a

determination under this provision. The

criteria include, but are not limited to,

the percentage of covered vehicles or

items of equipment that have already

been returned for remedy; the amount of

time that has elapsed since the prior

notification was sent; the likelihood that

a follow-up notification will increase

the number of vehicles or items of

equipment receiving the remedy; the

seriousness of the safety risk from the

defect or noncompliance; and whether

the prior notification(s) undertaken by

the manufacturer complied with the

requirements of the statute and

regulations.

The agency does not intend that this

list of factors be exhaustive.

Accordingly, paragraph (b)(6) makes it

clear that NHTSA may consider

additional factors as it deems

appropriate.

Section 577.10(c) provides that a

manufacturer is required to provide

follow-up notification only with respect
17264 Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations

to vehicles or items of equipment that

have not been returned for remedy

pursuant to the prior notification(s).

Pursuant to paragraph (d), the

manufacturer is required to send the

follow-up notification to all categories

of recipients (i.e., owners, first

purchasers, lessors, lessees,

manufacturers, distributors, dealers, and

retailers) that received the prior

notification(s), except where the agency

determines that a lesser scope is

appropriate.

Paragraph (e) describes the required

contents of the follow-up notification.

The notice will have to include a

statement that identifies it as a followup to an earlier notification, and must

urge the recipient to present the vehicle

or item of equipment for remedy. In

addition, except where the agency

determines otherwise, the notice must

include the other information required

to be included in an initial notification

letter.

Paragraph (f) requires that the outside

of the envelope or other communication

containing the follow-up notification

meet the same requirements as an

envelope containing an initial

notification, as set forth in 49 CFR

577.5(a). Unlike the NPRM, the final

rule does not recite those requirements

verbatim, but rather incorporates them

by reference to the appropriate section

of these regulations.

Paragraph (g) allows the agency to

authorize use of postcards or other

media rather than letters for follow-up

notification where appropriate.

AAMA and Blue Bird commented that

the regulation is not needed because

manufacturers already send out followup notification, and that follow-up

notifications are likely to cause owner

confusion. These comments challenge

the wisdom of the decision by Congress

to authorize NHTSA to require followup notification, rather than the

substantive merit of NHTSA’s proposed

regulation. Since Congress has decided

that it is appropriate to give NHTSA this

authority, and has authorized NHTSA to

promulgate implementing regulations,

these comments are not persuasive.

AIAM and Toyota commented that

the regulation should mandate, rather

than permit, NHTSA to consider the

factors listed. The agency believes that

mandatory language would be unwise

because it would unduly restrict its

discretion. Flexibility is essential to

administration of the agency’s recall

program, given the highly varied nature

of safety recalls. However, the agency

will generally consider the enumerated

factors, since they are relevant to the

need for a follow-up notification.

The NPRM proposed that the scope,

timing, form and content of the followup notification would be ‘‘designed by

the Administrator, in consultation with

the manufacturer.’’ AIAM commented

that the regulation should state that the

follow-up notification letter will be

‘‘developed,’’ rather than ‘‘designed’’ by

the agency, and that the content of the

letter should be a cooperative effort

between NHTSA and the manufacturer.

Toyota also commented that the agency

should only be involved in ‘‘approving’’

the follow-up notification, not in

‘‘designing’’ it; and that if NHTSA has

problems with a manufacturer’s followup notification, it should consult with

the manufacturer to work out the

problem.

The agency interprets these comments

to express reservations about the extent

of NHTSA’s control over follow-up

notification letters. The agency believes

that it must have such control, in order

to carry out its statutory responsibility

to maximize the effectiveness of recall

campaigns. However, the agency has

decided to change the word ‘‘designed’’

in § 577.10(a) to ‘‘established,’’ to reflect

the fact that the scope, timing, form, and

content of the follow-up notification

will result from consultation between

NHTSA and the manufacturer, rather

than from independent NHTSA action.

Advocates and CAS commented that

evaluation of safety risk should not be

a criterion equal to the others, since the

existence of a recall indicates that there

is a safety risk. While recalls under the

Act are by their nature safety-related,

some defects and noncompliances pose

a much greater risk to safety than others,

by virtue of such factors as the severity

of the consequences and the likelihood

that the problem will occur. NHTSA

believes that it is entirely appropriate

for it to consider the degree of the risk

to safety as a factor in deciding whether

to require a manufacturer to undertake

a follow-up notification. However, the

agency notes that it is not required to

give equal weight to all of the listed

criteria.

Advocates and CAS also favored

setting a minimum permissible

completion rate for all recalls, with

follow-up notification for all recalls

falling below that percentage. Midland

commented that NHTSA should define

what is considered to be an inadequate

completion rate; and Navistar said

NHTSA should set ‘‘guidelines’’ for

when a follow-up notification would be

required.

As previously stated, NHTSA believes

that it is important for it to retain

substantial discretion and flexibility in

order to carry out the responsibility to

maximize the effectiveness of recalls.

Setting a minimum completion

requirement for all recalls would

seriously restrict this flexibility.

Moreover, such a system would be

neither fair nor workable, given the

number of factors that affect the

completion rate, such as the nature of

the item (whether vehicle, tire or

equipment), its age, the seriousness of

the defect, and the means used to notify

owners (e.g., individual notification

letter or public notice).

CAS suggested that follow-up

notification should be required for all

recalls involving a defect or

noncompliance that poses a significant

safety risk. In addition to the difficulty

of defining when a defect or

noncompliance presents a ‘‘significant

safety risk,’’ the agency does not believe

it would be reasonable to impose a

requirement such as this, which fails to

take into account whether a recall has

achieved a high completion rate.

CAS also commented that the followup notification should be sent by

certified mail, not post card. NHTSA

continues to believe that it should retain

discretion to decide what medium or

media would be the most effective for

follow-up notification in each

individual case.

Mack Truck supported the follow-up

notification regulation, noting that it has

a practice of automatically sending a

second notice if recall work has not

been done on a vehicle by the end of the

second calendar quarter of a recall

campaign.

Navistar commented that the recall

completion rate should be based on the

number of vehicles in service, not the

number produced. The agency assumes

that this comment refers to one of the

factors the NPRM listed for

consideration by NHTSA in deciding

whether to require follow-up

notification: the percentage of vehicles

or items of equipment that have been

presented for remedy (proposed

§ 577.10(b)(1)). The agency believes it is

reasonable to continue its practice of

computing recall completion rates based

on the number of recalled units

produced, rather than the number in

service as suggested by Navistar. The

number of items produced is a definite

number that is provided to NHTSA by

the manufacturer when it reports its

decision that there is a safety-related

defect or noncompliance, whereas the

number of items in service can never be

more than a rough estimate. Having

such a definite number makes it

possible for NHTSA to compute recall

completion rates with greater accuracy

than would be possible using an

estimate of how many items are in

service.
Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations 17265

Moreover, the number of items in

service will change during the course of

any recall, which would greatly

complicate the task of arriving at precise

completion rates. Moreover, the final

rule specifically provides that recall

completion rate is only one of several

criteria upon which the agency will base

a decision to require a follow-up

notification. In deciding whether a

recall completion rate is inadequate, the

agency will consider the age of the

recalled items and other factors which

might significantly reduce the number

of items in service at the time of the

recall. It recognizes that a lower

completion rate is to be expected where

there has been significant attrition in the

population of items in use by the time

of the recall, or where the nature of the

recalled item (e.g., something that is

disposable or very inexpensive) makes it

less likely that owners will respond to

a recall.

Navistar also commented that NHTSA

should only require a follow-up

notification where it can be shown that

it will significantly improve the

completion rate. Such a standard is

unworkable and is also inconsistent

with the language Congress used in

authorizing NHTSA to require follow-up

notification. It would be difficult, if not

impossible, to demonstrate in advance

that a follow-up notification would

result in a significant improvement of

the recall completion rate. Moreover,

the Navistar standard is inconsistent

with 49 U.S.C. 30119(e), which

authorizes the agency to order a second

notification when ‘‘notification * * *

has not resulted in an adequate number

of vehicles or items of motor vehicle

equipment being returned for remedy.’’

Navistar also expressed concern that

unnecessary follow-up notices could

result in customer confusion and wasted

effort, especially when recalled vehicles

are old and a significant number have

been scrapped. The agency believes that

the criteria to be considered by the

agency will provide adequate protection

against the ‘‘wasted effort’’ that Navistar

fears.

Polk commented that state vehicle

registration records do not identify

lessors/lessees, so that obtaining this

information for renotification purpose

would be extremely difficult. The

agency has addressed these concerns in

the sections of the final rule concerned

with leased vehicle notification by

requiring all notification letters to

include a statement directing lessors to

notify their lessees. See 49 CFR 577.5(i).

Toyota suggested adding another

factor to be considered: the likelihood

that the owner will experience the

safety-related defect or noncompliance.

NHTSA does not believe that this is an

appropriate criterion. In the large

majority of recalls, there is no way of

predicting the likelihood that an owner

will experience the defect or

noncompliance. It would be

inconsistent with the purpose of the

Act, which is to prevent accidents,

injuries and fatalities before they

happen, to fail to notify an owner based

on a prediction that the problem is not

likely to occur in a particular vehicle.

The final rule does take account of the

fact that there may be instances in

which the population that is appropriate

for follow-up notification will be

smaller than that covered by the original

recall campaign. Section 577.10(d)

allows NHTSA to narrow the scope of

the population that will receive followup notification in appropriate instances.

Toyota also commented that a low

completion rate should not be the only

reason the agency uses to justify

requiring renotification. In § 577.10(b),

the final rule lists five specific factors,

including but not limited to the

completion rate, that the agency may

consider. It also authorizes NHTSA to

consider other factors that are consistent

with the purpose of the Act.

NHTSA’s Toll-Free Hotline

The agency is adopting a final rule

amending § 577.5(g)(1)(vii) to state that

the telephone number for its toll-free

Auto Safety Hotline for calls originating

in the Washington, D.C. area is (202)

366–0123. The agency received no

comments on this proposed change.

Technical Amendments

NHTSA is adopting several technical

amendments to 49 CFR Parts 552, 554,

573 and 577 that are needed to make

these parts consistent with the new

codification of the enabling statute as

Chapter 301 of Title 49 of the United

States Code (Pub. L. 103–272 (July 5,

1994)) and with the language of the

amendments adopted today. These

amendments did not appear in the

NPRM, but do not require notice and

comment because they are technical

amendments only. They do not change

the meaning of these regulations.

With respect to part 552, the technical

amendments are as follows. Because the

final rule amends the title of § 552.8 to

replace ‘‘Determination whether to

commence a proceeding’’ with

‘‘Notification of agency action on the

petition,’’ the contents to part 552 is

amended to reflect this change. In

addition, § 30162(a) of Title 49 of the

United States Code now refers to a

petition for a proceeding to decide,

rather than to determine, whether to

issue an order requiring a manufacturer

to provide notification and remedy for

a safety-related defect or

noncompliance. Accordingly, § 552.1,

Scope, is amended to change the word

‘‘determination’’ to ‘‘decision.’’ Section

552.2, Purpose, is amended to change

‘‘determinations’’ to ‘‘decisions.’’

Section 552.3, General, is amended to

change ‘‘determine’’ to ‘‘decide.’’ The

first sentence of § 552.7, Public Meeting,

is amended to change ‘‘determination’’

to ‘‘decision.’’ Finally, § 552.9(b), Grant

of Petition, is amended to change

‘‘determine’’ to ‘‘decide.’’

The agency is also adopting the

following technical amendments to part

554. The contents section is amended to

change the word ‘‘determinations’’ to

‘‘decisions’’ for the headings of

§§ 554.10 and 554.11. Section 554.2,

Purpose, is amended to change

‘‘National Traffic and Motor Vehicle

Safety Act (the Act)’’ to ‘‘49 U.S.C.

Chapter 301.’’ Section 554.3,

Application, is amended to change the

statutory citations to reflect the new

codification in Title 49. The headings of

§§ 554.10 and 554.11 are amended to

change the word ‘‘determinations’’ to

‘‘decisions,’’ in order to be consistent

with the new statutory language at 49

U.S.C. 30118. The text of these

subsections is also amended to replace

the words ‘‘determine[s]’’ or

‘‘determination’’ with ‘‘decide[s]’’ or

‘‘decision’’, respectively, wherever they

appear.

The technical amendments to part 573

are as follows. Paragraphs (b)–(f) of

§ 573.3 are amended to change the

words ‘‘determined to exist’’ to

‘‘decided to exist.’’ The definition of

‘‘Act’’ in the first paragraph of § 573.4,

Definitions, is amended to replace ‘‘the

National Traffic and Motor Vehicle

Safety Act of 1966, as amended (15

U.S.C. 1381, et seq.)’’ with ‘‘49 U.S.C.

Chapter 301.’’ The agency is also

amending the second sentence of

§ 573.5(c)(1) to replace ‘‘§ 110(e) of the

National Traffic and Motor Vehicle

Safety Act (15 U.S.C. 1399(e)’’ with ‘‘49

U.S.C. § 30164(a).’’ The latter two

amendments are necessary because the

July 1994 codification repealed the

National Traffic and Motor Vehicle

Safety Act of 1966, as amended, and

replaced it with a codification in Title

49 of the United States Code.

The agency is adopting the following

technical amendments to part 577. The

Contents to part 577 is amended by

changing ‘‘Sec. 577.5 Notification

pursuant to a manufacturer’s

determination’’ to ‘‘Sec. 577.5

Notification pursuant to a

manufacturer’s decision’’; and by

changing ‘‘Sec. 577.6 Notification

pursuant to Administrator’s
17266 Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations

determination’’ to ‘‘Sec. 577.6

Notification pursuant to Administrator’s

decision.’’ Section 577.4, Definitions, is

amended by changing the definition of

the term ‘‘Act’’ from ‘‘the National

Traffic and Motor Vehicle Safety Act of

1966, as amended, 15 U.S.C. 1391 et

seq.’’ to ‘‘49 U.S.C. Chapter 301.’’

The title of section 577.5 is changed

from ‘‘Notification pursuant to a

manufacturer’s determination’’ to

‘‘Notification pursuant to a

manufacturer’s decision.’’ The first

sentence of § 577.5(a) is amended by

changing ‘‘section 157 of the Act’’ to ‘‘49

U.S.C. 30118(e).’’ Paragraphs (1) and (2)

of § 577.5(c) are amended to replace the

word ‘‘determined’’ with ‘‘decided’’ in

the text to be used by manufacturers in

recall notification letters. Section

577.5(d) is amended by changing

‘‘determines’’ to ‘‘decides.’’

The title of § 577.6 is changed from

‘‘Notification pursuant to

Administrator’s determination’’ to

‘‘Notification pursuant to

Administrator’s decision.’’ Section

577.6(a) is amended by changing

‘‘section 152 of the Act’’ to ‘‘49 U.S.C.

section 30118(b).’’ Section 577.6(b) is

amended by changing ‘‘determines’’ to

‘‘decides’’ in subsection (3); by changing

‘‘determination’’ to ‘‘decision’’ in

subsection (5); by changing

‘‘determination’’ to ‘‘decision’’ in

subsections (9)(i) (A) and (C); and by

changing ‘‘determination’’ to ‘‘decision’’

in subsections (10)(iv) and (11). Section

577.6(c)(1) is amended by changing

‘‘determination’’ to ‘‘decision.’’ Section

577.7, Time and manner of notification,

is amended by revising subsection

(a)(2)(ii)(B) by replacing ‘‘determined’’

by ‘‘decided,’’ by replacing ‘‘necessary’’

with ‘‘required’’ and by replacing

‘‘determine’’ with ‘‘require.’’

Rulemaking Analyses and Notices

1. Executive Order 12291 (Federal

Regulation) and DOT Regulatory

Policies and Procedures

NHTSA has analyzed this final rule

and determined that it is neither

‘‘major’’ within the meaning of

Executive Order 12291 nor ‘‘significant’’

within the meaning of the Department

of Transportation regulatory policies

and procedures.

The provisions of this final rule that

would result in additional costs would

be the one that extends from five to a

maximum of eight years the period for

which motor vehicle manufacturers

must retain records concerning

malfunctions that may be related to

motor vehicle safety; and the one that

authorizes NHTSA to require

manufacturers of motor vehicles and

motor vehicle equipment to mail a

follow-up notification of a safety-related

defect or noncompliance if it determines

that the number of vehicles or items of

equipment that have received the

remedy is inadequate.

Other provisions that will result in

additional costs are the one that would

require vehicle lessors to mail

notification of safety-related defects or

noncompliances with Federal motor

vehicle safety standards to each lessee

of a vehicle covered by the notification

and remedy campaign and the

requirement that lessors maintain lists

of lessees to whom they send such

notification.

The costs associated with requiring

manufacturers to retain records for a

longer period should be minimal if not

negligible, and would be offset by the

benefit that would result from the

manufacturers’ ability to determine the

existence of safety-related defects and

noncompliances with safety standards

in a wider range of vehicles, as well as

the enhancement of NHTSA’s

enforcement efforts, particularly with

respect to latent defects and

noncompliances. The cost of sending

out a follow-up notification will be less

than that incurred for an initial

notification, as it will be required only

in those cases in which the agency

makes a determination that the response

to the first notification is inadequate;

and will only involve a fraction of the

vehicles or items of equipment subject

to the initial recall, i.e., those that have

not yet been remedied. The cost of the

follow-up notification will be

outweighed by the benefit of increasing

the number of noncompliant and

defective vehicles and items of motor

vehicle equipment that are remedied. In

addition, the provisions relating to

follow-up notification are required by

the amendments added by ISTEA.

The cost of vehicle lessor notification

of lessees is offset by the safety benefit

that would result from the increased

number of individuals who would

return for remedy a vehicle or item of

equipment that has a safety-related

defect or does not comply with a

Federal motor vehicle safety standard.

In addition, this provision is required by

the amendments added by ISTEA.

The cost of the requirement that

vehicle lessors maintain lists of lessees

of leased vehicles involved in

notification and remedy campaigns is

outweighed by the fact that these

records will enable NHTSA to enforce

the statutory requirement that lessees be

notified of the existence of safety-related

defects or standards noncompliances in

their vehicles and of the availability of

a remedy without charge for the defect

or noncompliance. In addition, the

information to be retained is minimal,

consisting only of the identities of the

vehicle, the lessee and the recall, and

the date the lessor sent the notification

to the lessee.

2. Regulatory Flexibility Act

The agency has also considered the

effects of this rulemaking action under

the Regulatory Flexibility Act (5 U.S.C.

601 et seq.). I certify that this proposed

rule will not, if promulgated, have a

significant economic impact on a

substantial number of small entities.

The regulations implementing the

statutory amendment authorizing

NHTSA to require a follow-up

notification in instances where it

determines that an initial notification

has not resulted in the remedy of an

adequate number of defective or noncomplying vehicles or items of motor

vehicle equipment will affect motor

vehicle equipment manufacturers who

are small businesses. However, the

agency anticipates that the effect on

those entities will not be significant

because the proposed regulations

implementing this provision allow

flexibility in the amount of information

that would be required for the second

notification, and also permit reducing

postage costs through the use of postcards instead of first-class letters in

appropriate circumstances.

The new provisions requiring lessors

to notify lessees of safety-related defects

or noncompliances in leased motor

vehicles, which are being adopted

pursuant to a statutory amendment

requiring such notification, will also

affect vehicle lessors who are small

businesses. However, NHTSA

anticipates that the effect of these

amendments on these entities will be

minimized by the exception to the

requirement for notification by the

lessor in cases where a lessor and a

manufacturer have agreed that the

manufacturer will notify lessees

directly. In addition, the amendments

provisions should result in a safety

benefit as more leased vehicles will be

returned for remedy of safety-related

defects and noncompliances with

Federal motor vehicle safety standards.

With respect to the additional

recordkeeping requirements adopted for

vehicle lessors, the amount of

information required is small and

should not place any significant cost

burdens on the lessors. The information

is essential to the agency’s ability to

enforce the new provisions requiring

lessors to notify lessees of safety-related

defects and noncompliances with

Federal motor vehicle safety standards

in their vehicles, and the economic
Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations 17267

impact will be outweighed by the

benefit to safety from NHTSA’s ability

to enforce this provision effectively.

To the extent the above amendments

do have an impact on small businesses,

those impacts are minimal and would

be offset by the safety benefits that they

would provide.

3. National Environmental Policy Act

In accordance with the National

Environmental Policy Act of 1969, the

agency has analyzed the environmental

impacts of this rulemaking action and

determined that implementation of this

action will not have a significant impact

on the quality of the human

environment. The new record-keeping

requirements will not introduce any

new or harmful matter into the

environment.

4. Paperwork Reduction Act

Certain provisions in the final rule

that would require manufacturers to

submit information to NHTSA, and to

retain other information, are considered

to be information collection

requirements, as that term is defined by

the Office of Management and Budget

(OMB) in 5 CFR part 1320. The

provision in the rule that would require

vehicle lessors to retain information is

considered to be an information

collection requirement, as that term is

defined by the Office of Management

and Budget (OMB) in 5 CFR part 1320.

Accordingly, this requirement has been

submitted to OMB for its approval,

pursuant to the requirements of the

Paperwork Reduction Act (44 U.S.C.

3501 et seq.). Comments on the

proposed information collection

requirements were solicited in the

NPRM. No comments on these

requirements were received by NHTSA.

5. Executive Order 12612 (Federalism)

This action has been analyzed in

accordance with the principles and

criteria contained in Executive Order

12612, and it has been determined that

the rulemaking does not have sufficient

federalism implications to warrant the

preparation of a Federalism Assessment.

List of Subjects

49 CFR Part 552

Administrative practice and

procedure; Motor vehicle safety;

Reporting and recordkeeping

requirements.

49 CFR Part 554

Administrative practice and

procedure; Motor vehicle safety.

49 CFR Part 573

Imports; Motor vehicle safety; Motor

vehicles; Reporting and recordkeeping

requirements; tires.

49 CFR Part 576

Motor vehicle safety; Reporting and

recordkeeping requirements.

49 CFR Part 577

Motor vehicle safety.

In consideration of the foregoing,

parts 552, 554, 573, 576, and 577 of title

49 of the Code of Federal Regulations

are amended as follows:

PART 552—PETITIONS FOR

RULEMAKING, DEFECT, AND

NONCOMPLIANCE ORDERS

1. The authority citation for Part 552

is revised to read as follows:

Authority: 49 U.S.C. 30111, 30118, 30162;

delegation of authority at 49 CFR 1.50.

2.–3. Section 552.1 is revised to read

as follows:

§ 552.1 Scope.

This part establishes procedures for

the submission and disposition of

petitions filed by interested persons

pursuant to 49 U.S.C. Chapters 301, 305,

321, 323, 325, 327, 329 and 331 to

initiate rulemaking or to make a

decision that a motor vehicle or item of

replacement equipment does not

comply with an applicable Federal

motor vehicle safety standard or

contains a defect which relates to motor

vehicle safety.

4. Section 552.2 is revised to read as

follows:

§ 552.2 Purpose.

The purpose of this part is to enable

the National Highway Traffic Safety

Administration to identify and respond

on a timely basis to petitions for

rulemaking or defect or noncompliance

decisions, and to inform the public of

the procedures following in response to

such petitions.

5. Section 552.3 is revised to read as

follows:

§ 552.3 General.

Any interested person may file with

the Administrator a petition requesting

him:

(a) to commence a proceeding

respecting the issuance, amendment or

revocation of a motor vehicle safety

standard, or

(b) to commence a proceeding to

decide whether to issue an order

concerning the notification and remedy

of a failure of a motor vehicle or item

of replacement equipment to comply

with an applicable motor vehicle safety

standard or a defect in such vehicle or

equipment that relates to motor vehicle

safety.

6. Section 552.6 is revised to read as

follows:

§ 552.6 Technical review.

The appropriate Associate

Administrator conducts a technical

review of the petition. The technical

review may consist of an analysis of the

material submitted, together with

information already in the possession of

the agency. It may also include the

collection of additional information, or

a public meeting in accordance with

§ 552.7.

7. Section 552.8 is revised to read as

follows:

§ 552.8 Notification of agency action on

the petition.

After considering the technical review

conducted under § 552.6, and taking

into account appropriate factors, which

may include, among others, allocation

of agency resources, agency priorities

and the likelihood of success in

litigation which might arise from the

order, the Administrator will grant or

deny the petition. NHTSA will notify

the petitioner of the decision to grant or

deny the petition within 120 days after

its receipt of the petition.

PART 554—STANDARDS

ENFORCEMENT AND DEFECT

INVESTIGATIONS

8. The authority citation for part 554

is revised to read as follows:

Authority: 49 U.S.C. 30102–103, 30111–

112, 30117–121, 30162, 30165–67; delegation

of authority at 49 CFR 1.50.

9.–10. Section 554.2 is revised to read

as follows:

§ 554.2 Purpose.

The purpose of this part is to inform

interested persons of the procedures

followed by the National Highway

Traffic Safety Administration in order

more fairly and effectively to implement

49 U.S.C. Chapter 301.

11. Section 554.3 is revised to read as

follows:

§ 554.3 Application.

This part applies to actions,

investigations, and defect and

noncompliance decisions of the

National Highway traffic Safety

Administration under 49 U.S.C. 30116,

30117, 30118, 30120 and 30165.

12. Section 554.10 is amended by

revising paragraphs (a), (b), (c),

introductory test, (c)(2) and (c)(4), and

by removing paragraph (e), to read as

follows:
17268 Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations

§ 554.10 Initial decisions and public

meetings.

(a) An initial decision of failure to

comply with safety standards or of a

safety-related defect is made by the

Administrator or his delegate based on

the completed investigative file

compiled by the appropriate office.

(b) The decision is communicated to

the manufacturer in a letter which

makes available all information on

which the decision is based. The letter

advises the manufacturer of his right to

present information, views, and

arguments to establish that there is no

defect or failure to comply or that the

alleged defect does not affect motor

vehicle safety. The letter also specifies

the time and place of a public meeting

for the presentation of arguments or sets

a date by which written comments must

be submitted. Submission of all

information, whether at a public

meeting or in written form, is normally

scheduled about 30 days after the initial

decision. The deadline for submission

of information can be extended for good

cause shown.

(c) Public notice of an initial decision

is made in a Federal Register notice

that—

* * * * *

(2) Summarizes the information on

which the decision is based.

* * * * *

(4) States the time and place of a

public meeting or the deadline for

written submission in which the

manufacturer and interested persons

may present information, views, and

arguments respecting the decision.

* * * * *

13. Section 554.11 is revised to read

as follows:

§ 554.11 Final decisions.

(a) The Administrator bases his final

decision on the completed investigative

file and on information, views, and

arguments submitted at the public

meeting.

(b) If the Administrator decides that a

failure to comply or a safety-related

defect exists, he orders the manufacturer

to furnish the notification specified in

49 U.S.C. 30118 and 30119 and to

remedy the defect or failure to comply.

(c) If the Administrator closes an

investigation following an initial

determination, without making a final

determination that a failure to comply

or a safety-related defect exists, he or

she will so notify the manufacturer and

publish a notice of that closing in the

Federal Register.

(d) A statement of the Administrator’s

final decision and the reasons for it

appears in each completed public file.

PART 573—DEFECT AND

NONCOMPLIANCE REPORTS

14. The authority citation for part 573

is revised to read as follows:

Authority: 49 U.S.C. 30102–103, 30112,

30117–121, 30166–167; delegation of

authority at 49 CFR 1.50.

§ 573.3 [Amended]

15. Section 573.3 is amending by

revising paragraphs (b) through (f) to

read as follows:

* * * * *

(b) In the case of a defect or

noncompliance decided to exist in a

motor vehicle or equipment item

imported into the United States,

compliance with §§ 573.5 and 573.6 by

either the fabricating manufacturer or

the importer of the vehicle or equipment

item shall be considered compliance by

both.

(c) In the case of a defect or

noncompliance decided to exist in a

vehicle manufactured in two or more

stages, compliance with §§ 573.5 and

573.6 by either the manufacturer of the

incomplete vehicle or any subsequent

manufacturer of the vehicle shall be

considered compliance by all

manufacturers.

(d) In the case of a defect or

noncompliance decided to exist in an

item of replacement equipment (except

tires) compliance with §§ 573.5 and

573.6 by the brand name or trademark

owner shall be considered compliance

by the manufacturer. Tire brand name

owners are considered manufacturers

(49 U.S.C. 10102(b)(1)(E)) and have the

same reporting requirements as

manufacturers.

(e) In the case of a defect or

noncompliance decided to exist in an

item of original equipment used in the

vehicles of only one vehicle

manufacturer, compliance with §§ 573.5

and 573.6 by either the vehicle or

equipment manufacturer shall be

considered compliance by both.

(f) In the case of a defect or

noncompliance decided to exist in

original equipment installed in the

vehicles of more than one manufacturer,

compliance with § 573.5 is required of

the equipment manufacturer as to the

equipment item, and of each vehicle

manufacturer as to the vehicles in

which the equipment has been installed.

Compliance with § 573.6 is required of

the manufacturer who is conducting the

recall campaign.

16. Section 573.4 is amended by

revising the definition of ‘‘Act’’ and by

adding the following definitions, in

alphabetical order, to read as follows:

§ 573.4 Definitions.

* * * * *

Act means 49 U.S.C. Chapter 301.

* * * * *

Leased motor vehicle means any

motor vehicle that is leased to a person

for a term of at least four months by a

lessor who has leased five or more

vehicles in the twelve months preceding

the date of notification by the vehicle

manufacturer of the existence of a

safety-related defect or noncompliance

with a Federal motor vehicle safety

standard in the motor vehicle.

Lessee means a person who is the

lessee of a leased motor vehicle as

defined in this section.

Lessor means a person or entity that

is the owner, as reflected on the

vehicle’s title, of any five or more leased

vehicles (as defined in this section), as

of the date of notification by the

manufacturer of the existence of a

safety-related defect or noncompliance

with a Federal motor vehicle safety

standard in one or more of the leased

motor vehicles.

Readable form means a form readable

by the unassisted eye or readable by

machine. If readable by machine, the

submitting party must obtain written

confirmation from the Office of Defects

Investigation immediately prior to

submission that the machine is readily

available to NHTSA. For all similar

information responses, once a

manufacturer has obtained approval for

the original response in that form, it will

not have to obtain approval for future

submissions in the same form. In

addition, all coded information must be

accompanied by an explanation of the

codes used.

17. Section 573.5 is amended by

revising the second sentence of

paragraph (c)(1) and the introductory

text of paragraph (c)(2), by adding

paragraphs (c)(2)(iv) and (v), by

redesignating paragraph (c)(8) as

paragraph (c)(8)(i), by adding new

paragraphs (c)(8)(ii)—(vi), and by

adding new paragraphs (c)(10) and

(c)(11), to read as follows:

§ 573.5 Defect and noncompliance

information report.

* * * * *

(c) * * * In the case of a defect or

noncompliance decided to exist in an

imported vehicle or item of equipment,

the agency designated by the fabricating

manufacturer pursuant to 49 U.S.C.

section 30164(a) shall be also stated.

* * *

(2) Identification of the vehicles or

items of motor vehicle equipment

potentially containing the defect or

noncompliance, including a description

of the manufacturer’s basis for its
Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations 17269

determination of the recall population

and a description of how the vehicles or

items of equipment to be recalled differ

from similar vehicles or items of

equipment that the manufacturer has

not included in the recall.

* * * * *

(iv) In the case of motor vehicles or

items of motor vehicle equipment in

which the component that contains the

defect or noncompliance was

manufactured by a different

manufacturer from the reporting

manufacturer, the reporting

manufacturer shall identify the

component and the manufacturer of the

component by name, business address,

and business telephone number. If the

reporting manufacturer does not know

the identity of the manufacturer of the

component, it shall identify the entity

from which it was obtained.

(v) In the case of items of motor

vehicle equipment, the manufacturer of

the equipment shall identify by name,

business address, and business

telephone number every manufacturer

that purchases the defective or

noncomplying component for use or

installation in new motor vehicles or

new items of motor vehicle equipment.

* * * * *

(8)(i) A description of the

manufacturer’s program for remedying

the defect or noncompliance. The

manufacturer’s program will be

available for inspection in the public

docket, Room 5109, Nassif Building, 400

Seventh Street, SW, Washington DC

20590.

(ii) If a manufacturer anticipates that

its notification campaign will

commence more than 30 days after it

has notified NHTSA that a safety-related

defect or noncompliance exists, or

anticipates that the notification

campaign will not be completed within

75 days after it has notified NHTSA of

that decision, the manufacturer shall

include with its report to NHTSA a

proposed schedule for the notification

campaign, from commencement through

completion. If the remedy for the defect

or noncompliance is not available at the

time of the owner notification, the

report shall state when the remedy will

be provided to owners. The

manufacturer shall also identify and

describe in detail the factors on which

the proposed schedule is based. The

manufacturer’s proposed schedule shall

be subject to disapproval by the

Administrator, if the Administrator

determines that it will lead to

unreasonable delays in the notification

of and remedy for the defect or

noncompliance.

(iii) The manufacturer shall describe

any factors that it anticipates could

interfere with its ability to adhere to the

proposed schedule and state with

specificity the likely effect of each such

factor.

(iv) A manufacturer that is unable to

conduct its notification campaign in

accordance with the schedule submitted

pursuant to paragraph (c)(8)(ii) of this

section, or that is otherwise unable to

complete owner notification within 75

days after notifying NHTSA of its defect

or noncompliance decision, shall

promptly advise NHTSA of its inability

to do so and provide an explanation for

such inability, along with a revised

schedule, or a new schedule in those

instances in which the manufacturer

had not previously submitted a

schedule. Such submission shall

contain the basis for the new or revised

schedule, which shall also be subject to

disapproval by the Administrator.

(v) If a manufacturer intends to file a

petition for an exemption from the

recall requirements of the Act on the

basis that a defect or noncompliance is

inconsequential as it relates to motor

vehicle safety, it shall notify NHTSA of

that intention in its original report to

NHTSA of the defect or noncompliance.

If such a petition is filed and

subsequently denied, the time period

under which an owner notification

schedule must be filed under paragraph

(c)(8) of this section shall run from the

date of the denial of the petition.

(vi) If a manufacturer advises NHTSA

that it intends to file such a petition,

and does not do so within the 30-day

period established by 49 CFR 556.4(c),

the time periods for ascertaining

whether an owner notification schedule

must be filed under this section shall

run from the end of that 30-day period.

Any such schedule must be filed no

later than the fifth business day after

that date.

* * * * *

(10) Except as authorized by the

Administrator, the manufacturer shall

submit a copy of its proposed owner

notification letter to the Office of

Defects Investigation (‘‘ODI’’) no fewer

than five Federal government business

days before it intends to begin mailing

it to owners. Submission shall be made

by any means which permits the

manufacturer to verify promptly that the

copy of the proposed letter was in fact

received by ODI and the date it was

received by ODI.

(11) The manufacturer’s campaign

number, if it is not identical to the

identification number assigned by

NHTSA.

18. Section 573.6 is amended by

revising the first sentence of paragraph

(a), adding a new paragraph (b)(6) and

adding a new paragraph (d) to read as

follows:

§ 573.6 Quarterly reports.

(a) Each manufacturer who is

conducting a defect or noncompliance

notification campaign to manufacturers,

distributors, dealers, or owners shall

submit to NHTSA a report in

accordance with paragraphs (b), (c), and

(d) of this section. * * *

(b) * * *

(6) In reports by equipment

manufacturers, the number of items of

equipment repaired and/or returned by

dealers, other retailers, and distributors

to the manufacturer prior to their first

sale to the public.

* * * * *

(d) The reports required by this

section shall be submitted in accordance

with the following schedule, except that

if the due date specified below falls on

a Saturday, Sunday or Federal holiday,

the report shall be submitted on the next

day that is a business day for the

Federal government:

(1) For the first calendar quarter

(January 1 through March 31), on or

before April 30;

(2) For the second calendar quarter

(April 1 through June 30), on or before

July 30;

(3) For the third calendar quarter (July

1 through September 30), on or before

October 30; and

(4) For the fourth calendar quarter

(October 1 through December 31), on or

before January 30.

19. Section 573.7 is amended by

revising the heading of the section and

by adding new paragraphs (d) and (e) to

read as follows:

§ 573.7 Lists of purchasers, owners,

lessors and lessees.

* * * * *

(d) If a manufacturer has in its

possession at the time it sends

notification of a safety-related defect or

noncompliance information that a

vehicle concerning which notification

has been sent is a leased motor vehicle,

the list(s) maintained by a manufacturer

pursuant to paragraph (a) of this section

shall identify the vehicle as a leased

motor vehicle, and shall identify the

person or entity to whom notification

was sent as the lessor or lessee of the

vehicle (as appropriate), if that

information is known to the

manufacturer. The manufacturer may

also maintain a separate list which

includes only leased vehicles, provided

that it is clearly identified as such, and

that it meets the other requirements for

a list prepared pursuant to paragraph (a)

of this section.
17270 Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations

(e) Each lessor of leased motor

vehicles shall maintain, in a form

suitable for inspection, such as

computer information storage devices or

card files, a list of the names and

addresses of all lessees to which the

lessor has provided notification of a

defect or noncompliance pursuant to 49

CFR 577.5(i). The list shall also include

the make, model, and vehicle

identification number of each such

leased vehicle, and either the date on

which the lessor mailed notification of

the defect or noncompliance to the

lessee, or a statement that the

manufacturer agreed on a specified date

to mail the notification directly to the

lessee. A manufacturer that provides

notification directly to lessees shall

maintain a list containing the same

information as that required by this

paragraph to be maintained by lessors

sending notifications to lessees. The

information required by this paragraph

must be retained by the manufacturer or

lessor (whichever sent the notification

to the lessee) for one calendar year from

the date the vehicle lease expires.

20. Section 573.8 is revised to read as

follows:

§ 573.8 Notices, bulletins, and other

communications.

Each manufacturer shall furnish to the

NHTSA a copy of all notices, bulletins,

and other communications (including

those transmitted by computer, telefax

or other electronic means, and including

warranty and policy extension

communique ́s and product

improvement bulletins), other than

those required to be submitted pursuant

to § 573.5(c)(9), sent to more than one

manufacturer, distributor, dealer, lessor,

lessee, or purchaser, regarding any

defect in its vehicles or items of

equipment (including any failure or

malfunction beyond normal

deterioration in use, or any failure of

performance, or any flaw or unintended

deviation from design specifications),

whether or not such defect is safetyrelated. Copies shall be in readable form

and shall be submitted monthly, not

more than five (5) working days after the

end of each month.

PART 576—RECORD RETENTION

21. The authority citation for part 576

is revised to read as follows:

Authority: 49 U.S.C. 30112, 30115, 30117–

121, 30166–167; delegation of authority at 49

CFR 1.50.

22. Section 576.5 is revised to read as

follows:

§ 576.5 Basic requirements.

Each manufacturer of motor vehicles

shall retain as specified in § 576.7 every

record described in § 576.6 for eight

years from the last date of the model

year in which the vehicle to which it

relates was produced.

23. Section 576.6 is revised to read as

follows:

§ 576.6 Records.

Records to be retained by

manufacturers under this part include

all documentary materials, films, tapes,

and other information-storing media

that contain information concerning

malfunctions that may be related to

motor vehicle safety. Such records

include, but are not limited to,

communications from vehicle users and

memoranda of user complaints; reports

and other documents, including

material generated or communicated by

computer, telefax or other electronic

means, that are related to work

performed under, or claims made under,

warranties; service reports or similar

documents, including electronic

transmissions, from dealers or

manufacturer’s field personnel; and any

lists, compilations, analyses, or

discussions of malfunctions that may be

related to motor vehicle safety

contained in internal or external

correspondence of the manufacturer,

including communications transmitted

electronically.

PART 577—DEFECT AND

NONCOMPLIANCE NOTIFICATION

24. The authority citation for part 577

is revised to read as follows:

Authority: 49 U.S.C. 30102–103, 30112,

30115, 30117–121, 30166–167; delegations of

authority at 49 CFR 1.50 and 49 CFR 501.8.

25.–26. Section 577.4 is amended by

revising the definition of ‘‘Act’’, and by

adding the following definitions, in

alphabetical order, to read as follows:

§ 577.4 Definitions.

* * * * *

Act means 49 U.S.C. Chapter 30101–

30169.

* * * * *

Leased motor vehicle means any

motor vehicle that is leased to a person

for a term of at least four months by a

lessor who has leased five or more

vehicles in the twelve months preceding

the date of notification by the vehicle

manufacturer of the existence of a

safety-related defect or noncompliance

with a Federal motor vehicle safety

standard in the motor vehicle.

Lessee means a person who is the

lessee of a leased motor vehicle as

defined in this section.

Lessor means a person or entity that

is the owner, as reflected on the

vehicle’s title, of any five or more leased

vehicles (as defined in this section), as

of the date of notification by the

manufacturer of the existence of a

safety-related defect or noncompliance

with a Federal motor vehicle safety

standard in one or more of the leased

motor vehicles.

* * * * *

27. Section 577.5 is amended by

revising the heading of the section and

the fourth sentence of paragraph (a), by

adding a new fifth, sixth and seventh

sentence to paragraph (a), by revising

paragraphs (c)(1) and (2) and the

parenthetical in paragraph (g)(1)(vii),

and by adding new paragraphs (h) and

(i), to read as follows:

§ 577.5 Notification pursuant to a

manufacturer’s decision.

(a) * * * The information required

by paragraphs (d) through (h) of this

section may be presented in any order.

The manufacturer shall mark the

outside of each envelope in which it

sends an owner notification letter with

a notation that includes the words

‘‘SAFETY,’’ RECALL,’’ and ‘‘NOTICE,’’

all in capital letters and in type that is

larger than that used in the address

section, and is also distinguishable from

the other type in a manner other than

size. Except where the format of the

envelope has been previously approved

by NHTSA, each manufacturer must

submit the envelope format it intends to

use to NHTSA at least 5 Federal

government business days before

mailing to owners, in the same manner

as is required by § 573.5(c)(9) for owner

notification letters.

* * * * *

(c) * * *

(1) ‘‘(Manufacturer’s name or

division) has decided that a defect

which relates to motor vehicle safety

exists in (identified motor vehicles, in

the case of notification sent by a motor

vehicle manufacturer; identified

replacement equipment, in the case of

notification sent by a replacement

equipment manufacturer);’’ or

(2) ‘‘(Manufacturer’s name or

division) has decided that (identified

motor vehicles, in the case of

notification sent by a motor vehicle

manufacturer; identified replacement

equipment, in the case of notification

sent by a replacement equipment

manufacturer) fail to conform to Federal

Motor Vehicle Safety Standard No.

(number and title of standard).’’

(g) * * *

(1) * * *
Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations 17271

(vii) * * * (Washington, DC area

residents may call 202–366–

0123) * * *

* * * * *

(h) A statement that describes a

lessor’s obligation under Federal law to

provide a lessee of the vehicle to which

the notification letter refers with a copy

of the letter; and to maintain a record

which identifies the lessee(s) to whom

it sent a copy of the letter, the date it

sent the letter, and the Vehicle

Identification Number(s) of the

vehicle(s) that it has leased to that lessee

and to which the notification applies.

The statement must also include the

definition of ‘‘lessor’’ set forth in § 577.4

of this part. If the notification is being

sent directly from a manufacturer to an

individual or entity that the

manufacturer knows to be a lessee, the

manufacturer need not include a

definition of lessor, but must state the

requirement of Federal law regarding

notification of lessees and that it is

providing notification in place of the

lessor.

(i) Any lessor who receives a

notification of a determination of a

safety-related defect or noncompliance

pertaining to any leased motor vehicle

shall send a copy of such notice to the

lessee as prescribed by § 577.7(a)(2)(iv).

This requirement applies to both initial

and follow-up notifications, but does

not apply where the manufacturer has

notified a lessor’s lessees directly.

28. Section 577.6 is amended by

revising the heading of the section and

paragraph (a), paragraphs (b)(2)(i) and

(ii), (b)(3), and (b)(5), paragraphs

(b)(9)(i)(A) and (C), and paragraphs

(b)(10)(iv), (b)(11), and (c)(1), to read as

follows:

§ 577.6 Notification pursuant to

Administrator’s decision.

(a) Agency-ordered notification. When

a manufacturer is ordered pursuant to

49 U.S.C. 30118(b) to provide

notification of a defect or

noncompliance, he shall provide such

notification in accordance with §§ 577.5

and 577.7, except that the statement

required by paragraph (c) of § 577.5

shall indicate that the decision has been

made by the Administrator of the

National Highway Traffic Safety

Administration.

(b) * * *

(2) * * *

(i) ‘‘The Administrator of the National

Highway Traffic Safety Administration

has decided that a defect which relates

to motor vehicle safety exists in

(identified motor vehicles, in the case of

notification sent by a manufacturer of

motor vehicles; identified replacement

equipment, in the case of notification

sent by a manufacturer of replacement

equipment);’’ or

(ii) ‘‘The Administrator of the

National Highway Traffic Safety

Administration has decided that

(identified motor vehicles in the case of

notification sent by a motor vehicle

manufacturer; identified replacement

equipment, in the case of notification

sent by a manufacturer of replacement

equipment) fail to conform to federal

Motor Vehicle Safety Standard No.

(number and title of standard).’’

(3) When the Administrator decides

that the defect or noncompliance may

not exist in each such vehicle or item of

replacement equipment, the

manufacturer may include an additional

statement to that effect.

* * * * *

(5) A clear description of the

Administrator’s stated basis for his

decision, as provided in his order,

including a brief summary of the

evidence and reasoning that the

Administrator relied upon in making his

decision.

* * * * *

(9) * * *

(i) * * *

(A) A statement that the remedy will

be provided without charge to the

owner if the Court upholds the

Administrator’s decision;

* * * * *

(C) A statement that, if the Court

upholds the Administrator’s decision,

he will reimburse the owner for any

reasonable and necessary expenses that

the owner incurs (not in excess of any

amount specified by the Administrator)

in repairing the defect or

noncompliance following a date,

specified by the manufacturer, which

shall not be later than the date of the

Administrator’s order to issue this

notification.

* * * * *

(10) * * *

* * * * *

(iv) The manufacturer’s

recommendations of service facilities

where the owner could have the repairs

performed, including (in the case of a

manufacturer required to reimburse if

the Administrator’s decision is upheld

in the court proceeding) at least one

service facility for whose charges the

owner will be fully reimbursed if the

Administrator’s decision is upheld.

(11) A statement that further notice

will be mailed by the manufacturer to

the owner if the Administrator’s

decision is upheld in the court

proceeding.

* * * * *

(c) * * *

(1) The statement required by

paragraph (c) of § 577.5 shall indicate

that the decision has been made by the

Administrator and that his decision has

been upheld in a proceeding in the

Federal courts; and

* * * * *

29. Section 577.7 is amended by

adding a new sentence at the end of

paragraph (a)(1), by adding a new last

sentence to paragraph (a)(2)(i), and by

adding new paragraph (a)(2)(iv), and

revising paragraph (a)(2)(ii)(B), to read

as follows:

§ 577.7 Time and manner of notification.

(a) * * *

(1) Be furnished within a reasonable

time after the manufacturer first decides

that either a defect that relates to motor

vehicle safety or a noncompliance

exists. The Administrator may order a

manufacturer to send the notification to

owners on a specific date where the

Administrator finds, after consideration

of available information and the views

of the manufacturer, that such

notification is in the public interest. The

factors that the Administrator may

consider include, but are not limited to,

the severity of the safety risk; the

likelihood of occurrence of the defect or

noncompliance; whether there is

something that an owner can do to

reduce either the likelihood of

occurrence of the defect or

noncompliance or the severity of the

consequences; whether there will be a

delay in the availability of the remedy

from the manufacturer; and the

anticipated length of any such delay.

(2) * * *

(i) * * * The manufacturer shall also

provide notification to each lessee of a

leased motor vehicle that is covered by

an agreement between the manufacturer

and a lessor under which the

manufacturer is to notify lessees directly

of safety-related defects and

noncompliances.

(ii) * * *

* * * * *

(B) (Except in the case of a tire) if

decided by the Administrator to be

required for motor vehicle safety, by

public notice in such manner as the

Administrator may require after

consultation with the manufacturer.

* * * * *

(iv) In the case of a notification to be

sent by a lessor to a lessee of a leased

motor vehicle, by first-class mail to the

most recent lessee known to the lessor.

Such notification shall be mailed within

ten days of the lessor’s receipt of the

notification from the vehicle

manufacturer.

* * * * *
17272 Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations

30. Section 577.8 is revised to read as

follows:

§ 577.8 Disclaimers.

(a) A notification sent pursuant to

§§ 577.5, 577.6, 577.9 or 577.10

regarding a defect which relates to

motor vehicle safety shall not, except as

specifically provided in this part,

contain any statement or implication

that there is no defect, that the defect

does not relate to motor vehicle safety,

or that the defect is not present in the

owner’s or lessee’s vehicle or item of

replacement equipment. This section

also applies to any notification sent to

a lessor or directly to a lessee by a

manufacturer.

(b) A notification sent pursuant to

§§ 577.5, 577.6, 577.9 or 577.10

regarding a noncompliance with an

applicable motor vehicle safety standard

shall not, except as specifically

provided in this part, contain any

statement or implication that there is

not a noncompliance, or that the

noncompliance is not present in the

owner’s or lessee’s vehicle or item of

replacement equipment. This section

also applies to any notification sent to

a lessor or directly to a lessee by a

manufacturer.

31. A new § 577.10 is added to read

as follows:

§ 577.10 Follow-up notification.

(a) If, based on quarterly reports

submitted pursuant to § 573.6 of this

part or other available information, the

Administrator decides that a

notification of a safety-related defect of

a noncompliance with a Federal motor

vehicle safety standard sent by a

manufacturer has not resulted in an

adequate number of vehicles or items of

equipment being returned for remedy,

the Administrator may direct the

manufacturer to send a follow-up

notification in accordance with this

section. The scope, timing, form, and

content of such follow-up notification

will be established by the

Administrator, in consultation with the

manufacturer, to maximize the number

of owners, purchasers, and lessees who

will present their vehicles or items of

equipment for remedy.

(b) The Administrator may consider

the following factors in deciding

whether or not to require a

manufacturer to undertake a follow-up

notification campaign:

(1) The percentage of covered vehicles

or items of equipment that have been

presented for the remedy;

(2) The amount of time that has

elapsed since the prior notification(s);

(3) The likelihood that a follow-up

notification will increase the number of

vehicles or items of equipment receiving

the remedy;

(4) The seriousness of the safety risk

from the defect or noncompliance;

(5) Whether the prior notification(s)

undertaken by the manufacturer

complied with the requirements of the

statute and regulations; and

(6) Such other factors as are consistent

with the purpose of the statute.

(c) A manufacturer shall be required

to provide a follow-up notification

under this section only with respect to

vehicles or items of equipment that have

not been returned for remedy pursuant

to the prior notification(s).

(d) Except where the Administrator

determines otherwise, the follow-up

notification shall be sent to the same

categories of recipients that received the

prior notification(s).

(e) A follow-up notification must

include:

(1) A statement that identifies it as a

follow-up to an earlier communication;

(2) A statement urging the recipient to

present the vehicle or item of equipment

for remedy; and

(3) Except as determined by the

Administrator, the information required

to be included in the initial notification.

(f) The manufacturer shall mark the

outside of each envelope in which it

sends a follow-up notification in a

manner which meets the requirements

of § 577.5(a) of this part.

(g) Notwithstanding any other

provision of this Part, the Administrator

may authorize the use of other media

besides first-class mail for a follow-up

notification.

Issued on: March 24, 1995.

Ricardo Martinez,

Administrator.

[FR Doc. 95–8130 Filed 4–4–95; 8:45 am]

BILLING CODE 4910–59–P

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

50 CFR Part 650

[Docket No. 950118017–5081–02; I.D.

122994A]

RIN 0648–AH82

Atlantic Sea Scallop Fishery;

Framework Adjustment 4; Temporary

Reduction in Crew Size Limit

AGENCY: National Marine Fisheries

Service (NMFS), National Oceanic and

Atmospheric Administration (NOAA),

Commerce.

ACTION: Final rule.

SUMMARY: NMFS issues this final rule to

implement Framework Adjustment 4 to

the Atlantic Sea Scallop Fishery

Management Plan (FMP). This

framework adjustment temporarily

adjusts the maximum crew limit on

certain vessels participating in the

scallop fishery from nine to seven

through February 29, 1996.

EFFECTIVE DATE: May 1, 1995.

ADDRESSES: Copies of Amendment 4, its

regulatory impact review, the initial

regulatory flexibility analysis, the final

supplemental environmental impact

statement, and the supporting

documents for Framework Adjustment 4

are available from Douglas Marshall,

Executive Director, New England

Fishery Management Council, Suntaug

Office Park, 5 Broadway, Saugus, MA

01906–1097.

FOR FURTHER INFORMATION CONTACT: Paul

H. Jones, NMFS, Fishery Policy Analyst,

508–281–9273.

SUPPLEMENTARY INFORMATION:

Background

The final rule implementing

Amendment 4 to the FMP was

published on January 19, 1994 (59 FR

2757), with an effective date for most

measures of March 1, 1994. The

amendment retained the FMP’s

objectives to: (1) Restore adult stock

abundance and age distribution; (2)

increase yield per recruit for each stock;

(3) evaluate plan research, development

and enforcement costs; and (4)

minimize adverse environmental

impacts on sea scallops.

Amendment 4 changed the primary

management strategy from a meat count

(size) control to effort control. The

amendment controls total fishing effort

through limited access permits and a

schedule of reductions in allowable

days-at-sea. Supplemental measures

include limits on increases in vessel

fishing power to control the amount of

fishing pressure and to help control the

size of scallops landed, gear restrictions,

and limits on the number of crew

members. The amendment also includes

a framework procedure for adjusting the

management measures in the FMP.

Initially, the maximum crew size was

set at nine.

In response to very high levels of

recruitment documented in the MidAtlantic resource area (Regional

Director’s Status Report, January 1994),

the New England Fishery Management

Council (Council) recommended

lowering the maximum crew size limit

from nine to seven until December 31,

1994. NMFS concurred and through

Framework Adjustment 1, which was

published on July 19, 1994 (59 FR