Document ID: NHTSA-2015-0048-0001
Agency: nhtsa
Document Type: Rule
Title: Defect and Noncompliance Notification
Posted Date: 2015-09-14T04:00Z

[Federal Register Volume 80, Number 177 (Monday, September 14, 2015)]
[Rules and Regulations]
[Pages 55035-55037]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-22922]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 577

[Docket No. NHTSA-2015-0048]
RIN 2127-AL60

Defect and Noncompliance Notification

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

ACTION: Final rule.

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SUMMARY: This final rule amends NHTSA's regulation requiring motor 
vehicle manufacturers and replacement equipment manufacturers to notify 
owners and purchasers of a defect or noncompliance in vehicles or 
equipment that they produced. The amendments in this final rule will 
clarify that a manufacturer of replacement equipment providing a defect 
or noncompliance notification pursuant to this regulation can inform 
the purchaser of the replacement equipment of the manufacturer's intent 
to remedy the defect or noncompliance by refunding the purchase price 
of the replacement equipment. NHTSA is amending this regulation so that 
the regulation conforms to changes in the defect and noncompliance 
remedy provisions in the National Traffic and Motor Vehicle Safety Act 
(Safety Act) contained in the Moving Ahead for Progress in the 21st 
Century Act (MAP-21).

DATES: Effective date: This final rule is effective November 13, 2015.
    Petitions for reconsideration: Petitions for reconsideration of 
this final rule must be received not later than October 29, 2015.

ADDRESSES: Any petitions for reconsideration should refer to the docket 
number of this document and be submitted to: Administrator, National 
Highway Traffic Safety Administration, 1200 New Jersey Avenue SE., West 
Building, Ground Floor, Docket Room W12-140, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Thomas Healy, Office of Chief Counsel, 
NHTSA, 1200 New Jersey Avenue SE., Washington, DC 20590. Mr. Healy's 
telephone number is (202) 366-2992. His fax number is (202) 493-3820.

[[Page 55036]]

SUPPLEMENTARY INFORMATION:

I. Background

    The Safety Act requires manufacturers of motor vehicles or items of 
replacement equipment to notify NHTSA and owners and purchasers of the 
vehicles or equipment if the manufacturer determines that a motor 
vehicle or item of motor vehicle equipment contains a defect related to 
motor vehicle safety or does not comply with an applicable motor 
vehicle safety standard and to remedy the defect or noncompliance 
without charge. 49 U.S.C. 30118(c), 30120. Manufacturers must provide 
notification pursuant to the procedures set forth in section 30119 of 
the Safety Act. Section 30119 sets forth the contents of the 
notification, which includes a clear description of the defect or 
noncompliance, the timing of the notification, means of providing 
notification and when a second notification is required. 49 U.S.C. 
30119.
    Section 30120 of the Safety Act provides a list of permissible 
remedies from which manufacturers must choose when determining how to 
remedy at defect. Section 30120 contains different remedy provisions 
for manufacturers of motor vehicles and manufacturers of replacement 
equipment. Section 30120 allows manufacturers of motor vehicles to 
remedy a defect or noncompliance ``by repairing the vehicle; . . . by 
replacing the vehicle with an identical or reasonably equivalent 
vehicle; or . . . by refunding the purchase price, less a reasonable 
allowance for depreciation.'' 49 U.S.C. 30120(a)(1)(A). Prior to MAP-
21, Section 30120 allowed manufacturers of replacement equipment to 
remedy a defect or noncompliance by ``repairing the equipment or 
replacing the equipment with identical or reasonable equivalent 
equipment.'' 49 U.S.C. 30120(a)(1)(B) (2011). MAP-21 amended section 
30120 by expanding the list of permissible remedies available to 
replacement equipment manufacturers to include refunding the purchase 
price of the equipment.\1\
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    \1\ Public Law 112-141, 126 Stat. 771 (2012), Section 31311.
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    The conduct of a recall notification campaign, including how and 
when owners, dealers, and distributors are notified, is addressed by 
regulation in 49 CFR part 577, Defect and Noncompliance Notification. 
Section 577.5 specifies the required content and structure of the owner 
notifications. Section 577.6 specifies the required content and 
structure of the notification if the owner notification is sent 
pursuant to an order by the NHTSA Administrator. Section 577.5 and 
577.6 both specify that that the owner notification must include a 
statement notifying the owner of the vehicle or replacement equipment 
how the manufacturer intends to remedy the defect or noncompliance.
    This final rule amends Sec. Sec.  577.5 and 577.6 of 49 CFR part 
577 so that the requirements for the statement notifying owners or 
purchasers of replacement equipment how the manufacturer intends to 
remedy a defect or noncompliance reflect the MAP-21 amendment allowing 
manufacturers of replacement equipment to remedy a defect or 
noncompliance by refunding the purchase price.

II. Public Comment

    NHTSA did not issue an NPRM prior to this final rule. While the 
Administrative Procedure Act (APA) requires that agencies publish a 
general NPRM in the Federal Register prior to issuing a final rule, an 
agency is not required to publish an NPRM if the agency is able to make 
and makes a good cause finding that notice and public comment is 
``impracticable, unnecessary, or contrary to the public interest.'' \2\
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    \2\ 5 U.S.C. 553.
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    NHTSA finds that notice and public comment prior to issuing this 
final rule is unnecessary. The DC Circuit has held that the notice and 
public comment requirements of APA are unnecessary when the ``rule is a 
routine determination, insignificant in nature and impact, and 
inconsequential to the industry and to the public.'' \3\ The amendments 
in this final rule do not create any new rights or obligations not 
already present in 49 U.S.C. 30120. The amendments in this final rule 
update the notification requirements in 49 CFR 577.5 and 577.6 to 
reflect that the option to refund the purchase price of the replacement 
equipment is available to manufacturers as a remedy for a defect or 
noncompliance. Furthermore, these changes were made by statutory 
amendment. Therefore, the amendments contained in this final rule do 
not involve the exercise of discretion on the part of the agency. 
Because this final rule does not create any rights or obligations not 
already present in 49 U.S.C. 30120 or involve the exercise of 
discretion by the agency, the impacts of this rule are insignificant 
and inconsequential to industry and the public making notice and public 
comment unnecessary.
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    \3\ Mack Trucks, Inc. v. E.P.A. 682 F.3d 87, 92 (D.C. Cir. 2012) 
(quoting Util. Solid Waste Activities Grp. v. E.P.A., 236 F.3d 749, 
754 (D.C. Cir. 2001).
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III. Regulatory Notices and Analyses

A. Executive Order 12866, Executive Order 13563, and DOT Regulatory 
Policies and Procedures

    NHTSA has considered the impact of this rulemaking action under 
Executive Order 12866, Executive Order 13563, and the DOT's regulatory 
policies and procedures. This final rule was not reviewed by the Office 
of Management and Budget (OMB) under E.O. 12866, ``Regulatory Planning 
and Review.'' It is not considered to be significant under E.O. 12866 
or the Department's regulatory policies and procedures.
    This regulation amends 49 CFR part 577 to include refund of the 
purchase price of replacement equipment as a remedy available to 
replacement equipment manufacturers remedying a defect or 
noncompliance. This final rule does not require replacement equipment 
manufacturers to take any actions that they are not otherwise already 
required to take. Because there are not any costs or savings associated 
with this rulemaking, we have not prepared a separate economic analysis 
for this rulemaking.

B. Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act, 5 U.S.C. 601 et 
seq., NHTSA has evaluated the effects of this action on small entities. 
I hereby certify that this rule would not have a significant impact on 
a substantial number of small entities. The final rule affects 
manufacturers of motor vehicle replacement equipment some of which 
qualify as small businesses. However, this final rule does not 
significantly affect these entities because it does not require any 
additional actions on the part of equipment manufacturers not already 
required by 49 CFR part 577.

C. Executive Order 13132

    NHTSA has examined this rule pursuant to Executive Order 13132 (64 
FR 43255, August 10, 1999) and concluded that no additional 
consultation with States, local governments or their representatives is 
mandated beyond the rulemaking process. The agency has concluded that 
the rulemaking would not have sufficient federalism implications to 
warrant consultation with State and local officials or the preparation 
of a federalism summary impact statement. The final rule would not have 
``substantial direct effects on the States, on the relationship between 
the national government and the States, or on the

[[Page 55037]]

distribution of power and responsibilities among the various levels of 
government.'' This final rule also will not preempt any state law.

D. National Environmental Policy Act

    NHTSA has analyzed this final rule for the purposes of the National 
Environmental Policy Act. The agency has determined that implementation 
of this action will not have any significant impact on the quality of 
the human environment.

E. Paperwork Reduction Act

    Under the procedures established by the Paperwork Reduction Act of 
1995, a person is not required to respond to a collection of 
information by a Federal agency unless the collection displays a valid 
OMB control number. The information collection requirements for 49 CFR 
part 577, Defect and Noncompliance Notification, are covered by OMB 
control number 2127-0004. The amendments in this final rule have no 
impact on the burden associated with this information collection.

F. National Technology Transfer and Advancement Act

    Under the National Technology Transfer and Advancement Act of 1995 
(NTTAA) (Pub. L. 104-113), ``all Federal agencies and departments shall 
use technical standards that are developed or adopted by voluntary 
consensus standards bodies, using such technical standards as a means 
to carry out policy objectives or activities determined by the agencies 
and departments.'' The amendments in this final rule consist of minor 
revisions to the required content of letters that manufacturers of 
replacement equipment for motor vehicles must sent to purchasers and 
owners to notify them of a defect or noncompliance and do not involve 
any voluntary consensus standards.

G. Civil Justice Reform

    With respect to the review of the promulgation of a new regulation, 
section 3(b) of Executive Order 12988, ``Civil Justice Reform'' (61 FR 
4729, February 7, 1996) requires that Executive agencies make every 
reasonable effort to ensure that the regulation: (1) Clearly specifies 
the preemptive effect; (2) clearly specifies the effect on existing 
Federal law or regulation; (3) provides a clear legal standard for 
affected conduct, while promoting simplification and burden reduction; 
(4) clearly specifies the retroactive effect, if any; (5) adequately 
defines key terms; and (6) addresses other important issues affecting 
clarity and general draftsmanship under any guidelines issued by the 
Attorney General. This document is consistent with that requirement.
    Pursuant to this Order, NHTSA notes as follows. The preemptive 
effect of this final rule is discussed above. NHTSA notes further that 
there is no requirement that individuals submit a petition for 
reconsideration or pursue other administrative proceeding before they 
may file suit in court.

H. Unfunded Mandates Reform Act

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

I. Executive Order 13211

    Executive Order 13211 (66 FR 28355, May 18, 2001) applies to any 
rulemaking that: (1) Is determined to be economically significant as 
defined under E.O. 12866, and is likely to have a significantly adverse 
effect on the supply of, distribution of, or use of energy; or (2) that 
is designated by the Administrator of the Office of Information and 
Regulatory Affairs as a significant energy action. This rulemaking is 
not subject to E.O. 13211.

J. Regulation Identifier Number (RIN)

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

List of Subjects in 49 CFR Part 577

    Imports, Motor vehicle safety, Motor vehicles, Tires, Reporting and 
recordkeeping requirements.

    In consideration of the foregoing, NHTSA amends 49 CFR part 577 as 
follows:

PART 577--DEFECT AND NONCOMPLIANCE NOTIFICATION

0
1. The authority citation for part 577 continues to read as follows:

    Authority:  49 U.S.C. 30102, 30103, 30116-30121, 30166; 
delegation of authority at 49 CFR 1.95 and 49 CFR 501.8.

0
2. Section 577.5 is amended by revising paragraphs (g)(1)(i) and (vi) 
to read as follows:

Sec.  577.5  Notification pursuant to a manufacturer's decision.

* * * * *
    (g) * * *
    (1) * * *
    (i) A statement that he will cause such defect to be remedied 
without charge, and whether such remedy will be by repair, replacement, 
or refund of the purchase price (in the case of remedy of a vehicle, 
less depreciation).
* * * * *
    (vi) In the case of a remedy of a vehicle by refund of purchase 
price, the method or basis for the manufacturer's assessment of 
depreciation.
* * * * *

0
3. Section 577.6 is amended by revising paragraph (b)(9)(i)(B) to read 
as follows:

Sec.  577.6  Notification pursuant to Administrator's decision.

* * * * *
    (b) * * *
    (9) * * *
    (i) * * *
    (B) A statement of the method of remedy. If the manufacturer has 
not yet determined the method of remedy, he will select either repair, 
replacement with an equivalent vehicle or item of replacement 
equipment, or refund of the purchase price (in the case of remedy of a 
vehicle, less depreciation); and
* * * * *

    Issued in Washington, DC, on September 2, 2015 under authority 
delegated in 49 CFR part 1.95.
Mark R. Rosekind,
Administrator.
[FR Doc. 2015-22922 Filed 9-11-15; 8:45 am]
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