A. Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (5 U.S.C. §601 et seg.) requires agencies to evaluate the potential effects of their proposal and final rules on small businesses, small organizations, and small governmental jurisdictions.

    5 U.S.C. §Section 603 requires agencies to prepare and make available for public comment an initial and final regulatory flexibility analysis (RFA) describing the impact of proposed and final rules on small entities. Each RFA must contain:

    1. Description of the reasons why action by the agency is being considered

    NHTSA is considering this action to improve the safety of child restraint systems in frontal impact.

    The more biofidelic 12-month-old and Hybrid III family dummies equipped with greater instrumentation are available for crash tests. A more stringent and dummy size specific injury criteria have been developed. The agency believes that child safety would be improved with these new dummies and the more stringent injury criteria.

    2. Objectives of, and legal basis for, the final rule

    NHTSA is proposing this NPRM under the Authority of 49 U.S.C. 322, 30111, 30115, 30117, and 30666; delegation of Authority at 49 CFR 1.50.

    3. Description and estimate of the number of small entities to which the final rule will apply

    The proposed rule would affect portable child restraint manufacturers and dummy manufacturers.

    Suppliers of Child Restraint Systems

    NHTSA estimates there are about 10 manufacturers of portable child restraints, four of which could be small businesses. Table VII-1 shows these 10 portable child restraint manufacturers.

    Business entities were generally defined as small businesses by Standard Industrial Classification (SIC) code, for the purposes of receiving Small Business Administration assistance. The SIC codes have changed. In the small business section of our analyses we have used 500 employees as the cut-off for small businesses for many years. Business entities are now defined as small businesses using the North American Industry Classification System (NAICS) code, for the purposes of receiving Small Business Administration assistance. One of the criteria for determining size, as stated in 13 CRF 121.201, is the number of employees in the firm. There is no separate NAICS code for child restraints. Possible categories include: a) To qualify as a small business in the Motor Vehicle Seating and Interior Trim Category (NAICS 336360), the firm must have fewer than 500 employees, b) In the "All Other Motor Vehicle Parts Manufacturing" category (NAICS 336399), the firm must have 750 employees, c) In the "All Other Transportation Equipment Manufacturing" category (NAICS 336999), the firm must have 500 employees. We believe child restraints fit better into category a) or c). Thus, we will continue to use 500 employees as the limit

    The agency does not believe that the rule will have any significant impact on these businesses.

Table VII-1
Employment of Child Restraint Manufacturers*
(Less than 500 employees qualifies as a small business)

Manufacturer Number of Employees
Babyhood Manufacturing Co. 10
Century 1,000
COSCO (Dorel Company) 1,000
Early Development Co. has less than 10 employees, However, it is partly owned and a joint venture with Takata of Japan Large company
Evenflo itself has 250 employees, but Evenflo is a division of Spalding & Evenflo Co. Inc. 2,600
Ferno-Washington, Inc. 515
Gerry is a product of GERICO, which has 900 employees, But GERICO is a subdivision of Huffy 11,000
Kolcraft 500
Safeline Children's Products Co. < 10
Little Cargo, Inc. < 10

    Test Dummy Manufacturers

    The proposed rule should have a positive effect in the manufacturers of test dummies and the manufacturers of instrumentation for test dummies. In order to do the required tests, an increased number of dummies would be needed. Currently, there are four manufacturers of dummies or parts of dummies: First Technology safety Systems, Advanced Safety Technology Corp., UTAMA, and GESAC. They are all qualified as small business with less than 500 employees. There are six manufacturers of instrumentation of test dummies. Four are manufactures of load cells (P.A. Denton, First Technology Safety Systems, Sensor Developments, Inc., and Sensotec) and two are manufacturers of accelerometers (Endevco and Entran). All of these, except Endevco, are small businesses.

    4. Description of the projected reporting, record keeping and other compliance requirements for small entities

    The proposed rule requires new injury performance requirements and test dummies that would improve child safety restraint systems, and thus protect more children. Manufacturers would have to certify their products comply with the proposed rule.

    5. Duplication with other Federal rules

    There are no relevant Federal rules that may duplicate, overlap or conflict with the final rule.

    6. Description of any significant alternatives to the final rule

    NHTSA proposes two years of leadtime. A longer leadtime might be needed to attain neck measurement values to pass the proposed criteria, especially, when a redesign of the child safety restraint systems is required. The longer leadtime would reduce the impact on small businesses.

    B. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (Public Law 104-4) 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 expenditures by State, local or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually (adjusted annually for inflation with base year of 1995). Adjusting this amount by the implicit gross domestic product price deflator for the year 2000 results in $109 million (106.99/98.1 = 1.09). The assessment may be included in conjunction with other assessments, as it is here.

    This proposal is not estimated to result in expenditures by State, local or tribal governments of more than $109 million annually. It is not going to result in the expenditure by child restraint system manufacturers of more than $109 million annually. The estimated annual cost is $2.72 million. The cost does not include the costs of redesign.

    These effects have been discussed in this Preliminary Regulatory Evaluation. Please see the chapter on Costs.