[Federal Register: December 5, 2002 (Volume 67, Number 234)]
[Rules and Regulations]
[Page 72384-72393]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05de02-13]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Parts 573 and 577
[Docket No. NHTSA-2001-11108, Notice 2]
RIN 2127-AI27
Motor Vehicle Safety; Acceleration of Manufacturer's Remedy
Program
AGENCY: National Highway Traffic Safety Administration (NHTSA), DOT
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This document adopts a regulation implementing Section 6(a) of
the Transportation Recall Enhancement, Accountability, and
Documentation (TREAD) Act. Under this rule, motor vehicle and motor
vehicle equipment manufacturers will be required to accelerate their
programs to remedy a defect related to motor vehicle safety or a
noncompliance with a Federal motor vehicle safety standard if directed
to do so by NHTSA. The agency will impose this requirement if it
determines that the manufacturer's remedy program is not likely to be
capable of completion within a reasonable time and finds: that there is
a risk of serious injury or death if the remedy program is not
accelerated; and that acceleration of the remedy program can be
reasonably achieved by expanding the sources of replacement parts,
expanding the number of authorized repair facilities, or both.
DATES: Effective Date: The effective date of the final rule is January
6, 2003. Petitions for Reconsideration: Petitions for reconsideration
of the final rule must be received not later than January 21, 2003.
ADDRESSES: Petitions for reconsideration of the final rule should refer
to the docket and notice number set forth above and be submitted to
Administrator, National Highway Traffic Safety Administration, 400
Seventh Street, SW., Washington, DC 20590, with a copy to Docket
Management, Room PL-401, 400 Seventh Street, SW., Washington, DC 20590.
FOR FURTHER INFORMATION CONTACT: For non-legal issues, contact George
Person, Office of Defects Investigation, NHTSA, (202) 366-5210. For
legal issues, contact Coleman Sachs, Office of Chief Counsel, NHTSA,
(202) 366-5238.
SUPPLEMENTARY INFORMATION:
I. Background
On November 1, 2000, the TREAD Act, Public Law 106-414, was
enacted. The statute was an outgrowth, in part, of Congressional
concerns over manufacturers' delays in repairing or replacing motor
vehicles or motor vehicle equipment items that contain a safety-related
defect or fail to comply with a Federal motor vehicle safety standard
(FMVSS).
Under 49 U.S.C. 30118(b), the agency may make a final decision that
a motor vehicle or item of replacement motor vehicle equipment contains
a defect related to motor vehicle safety or does not comply with an
applicable FMVSS. In addition, under section 30118(c), a manufacturer
of a motor vehicle or replacement equipment item is required to notify
the agency when it determines, or should determine, that the vehicle or
equipment item contains a defect that is related to motor vehicle
safety or does not comply with an applicable safety standard.
Under both circumstances, the manufacturer is required to provide
notification of the defect or noncompliance to owners, purchasers, and
dealers of the affected vehicle or equipment item, and remedy the
defect or noncompliance without charge. Section 30119 sets forth
statutory requirements for owner notification and requires the
manufacturer to give such notice within a reasonable time. See also 49
CFR Part 577. However, if the agency makes a final decision under
section 30118(b) that a motor vehicle or equipment item contains a
safety-related defect or noncompliance, then it prescribes under
section 30119(c)(1) the date by which the manufacturer must provide
notification to the affected owners, purchasers, and dealers.
49 U.S.C. 30120 further provides that a manufacturer of a defective
or noncompliant motor vehicle or replacement equipment item must repair
it or replace it with an identical or reasonably equivalent vehicle or
equipment item or, in the case of a
[[Page 72385]]
vehicle, refund the purchase price less depreciation. Under section
30120(c), if a manufacturer decides to repair a defective or
noncomplying motor vehicle or replacement equipment item and the repair
is not done adequately within a reasonable time, the manufacturer is
required to replace the vehicle or equipment item without charge or,
for a vehicle, refund the purchase price. Failure to repair within 60
days after the vehicle or equipment item is presented to a dealer in
accordance with the manufacturer's notification is prima facie evidence
of failure to repair within a reasonable time. The agency can extend
the 60-day period if good cause for the extension is shown and the
reason is published in the Federal Register before the period ends.
Section 30120(d) requires the manufacturer to submit its program
for remedying a defect or noncompliance to the agency. Manufacturers
fulfill this requirement by submitting defect and noncompliance
information reports to NHTSA in accordance with procedures set forth in
49 CFR Part 573. Section 573.6(c)(8) of these regulations requires a
manufacturer, as part of its report, to provide a description of the
manufacturer's program for remedying the defect or noncompliance. In
1995, NHTSA amended that section (then 573.5(c)(8)) to require a
manufacturer to advise NHTSA of the estimated date on which it will
begin sending notifications to owners that there is a safety-related
defect or noncompliance and that a remedy without charge will be
available, and the estimated date on which the notification campaign
will be completed. See Section 573.6(c)(8)(ii). In the preamble of the
proposed rule that led to the 1995 amendment, NHTSA explained that
there had been an increase in the number of recalls in which there was
a significant delay in the commencement of the remedy campaign, and, in
some instances, an inordinate extension in the duration of the
campaign. NHTSA further explained that the amendment was necessary for
the agency to assure that the timing and duration of remedy campaigns
were appropriate, and to enable it to respond more completely to public
questions concerning the timing of recall campaigns. 58 FR 30817,
September 27, 1993.
Section 6(a) of the TREAD Act added a new paragraph (3) to 49
U.S.C. 30120(c), which provides that if the Secretary determines that a
manufacturer's remedy program is not likely to be capable of completion
within a reasonable time, the Secretary may require the manufacturer to
accelerate the remedy program if the Secretary finds: (A) There is a
risk of serious injury or death if the remedy program is not
accelerated; and (B) acceleration of the remedy program can be
reasonably achieved by expanding the sources of replacement parts,
expanding the number of authorized repair facilities, or both. Although
section 30120(c)(3) is self-executing in the absence of implementing
regulations, the statute provides that the Secretary may prescribe
regulations to carry out its purposes. This authority has been
delegated to NHTSA's Administrator pursuant to 49 CFR 1.50.
On December 11, 2001, we issued a notice of proposed rulemaking
(NPRM) at 66 FR 64897 that would implement this provision, in which we
solicited comments on how we could best approach this task. We received
11 comments in response to the NRPM. These were submitted by the
Alliance of Automobile Manufacturers (Alliance), Bendix Commercial
Vehicle Systems LLC (Bendix), Delphi Automotive Systems LLC (Delphi),
Ford Motor Company (Ford), the Juvenile Products Manufacturers
Association, Inc. (JPMA), the National Automobile Dealers Association
(NADA), the Rubber Manufacturers Association (RMA), the Truck
Manufacturers Association (TMA), Volkswagen of America, Inc., on its
own behalf, as well as that of Volkswagen AG and Audi AG (Volkswagen),
and Wenda A. Wacker, who commented both as a private citizen and as an
employee of the California Department of Motor Vehicles (DMV). In
addition, a comment was submitted by Attorney Lawrence Henneberger on
behalf of the Motor and Equipment Manufacturers Association (MEMA) and
the Original Equipment Suppliers Association (OESA). These comments
have provided us with a variety of insights in developing this final
rule.
II. Discussion
A. Application
In the NPRM, we proposed that the acceleration of remedy rule apply
to manufacturers of motor vehicles and replacement equipment items
whose products have been determined to contain a safety-related defect
or a noncompliance with a FMVSS. The manufacturing entities that are
subject to these requirements are listed in 49 CFR 573.3(a)-(f). We did
not receive any comments on the proposed application of this rule. We
are adopting this aspect of the rule as proposed.
B. Circumstances Under Which the Administrator May Require a
Manufacturer To Accelerate Its Remedy Program
1. Risk of Serious Injury or Death
In the NPRM, we noted that under 49 U.S.C. 30120(c)(3), the
decision to require a manufacturer to accelerate its remedy program is
to be exercised at the discretion of the Administrator. We proposed
that the Administrator be required to make two findings and one
determination to invoke this provision. One of the proposed findings,
adopted from the statute, was that there is a risk of serious injury or
death if the remedy program is not accelerated. See proposed section
573.14(b)(1). We observed that for the Administrator to make this
finding, there need only be a risk of serious injury or death, and not
necessarily a high probability.
We received several comments with regard to this proposed finding.
The Alliance, Ford, JPMA, Delphi, TMA, and NADA all took exception to
the statements in the preamble that there need only be a risk of
serious injury or death, and not necessarily a high probability, for a
manufacturer to be required to provide an accelerated remedy, and that
most safety recall campaigns address circumstances where a serious risk
of injury or death can be found. The Alliance observed that under such
a premise, the agency could find that virtually every recall meets the
first test for requiring an accelerated remedy. Contending that
Congress believed that an accelerated remedy would only be necessary in
rare instances, the Alliance recommended that the text of proposed
section 573.14(b)(1) be changed to require the Administrator to find,
before requiring an accelerated remedy, ``that there is an imminent
risk of serious injury or death if the remedy program is not
accelerated.'' Ford, an Alliance member, concurred with the Alliance's
comments in this regard. TMA expressed a similar opinion regarding the
authorizing language in the TREAD Act.
JPMA asserted that there must be an existing risk of serious injury
or death, and not a mere possibility, before the agency could require
an accelerated remedy. In its view, this would have the benefit of
filtering out recalls that address only minor injuries and those that
address injury risks that could arise in the future, but are not
present as yet. JPMA asserted that in neither of these circumstances
would an accelerated remedy be warranted under the TREAD Act. Likewise,
NADA proposed that an accelerated remedy be required only in recalls
involving an ``unacceptable'' risk
[[Page 72386]]
of serious injury or death and where acceleration can be reasonably and
safely achieved by expanding the sources of remedy parts, repair
centers, or both.
Delphi contended that because Congress gave NHTSA discretionary
authority to require an accelerated remedy, it could not have intended
for these to be a definitive requirement for exercising that authority.
Despite this observation, Delphi requested clarification on the level
of risk that would be necessary before NHTSA would require an
accelerated remedy.
The agency disagrees with many of these comments. The standard is
stated in the statute and it is appropriate to graft that standard into
these regulations. We reject comments that may be viewed as raising the
bar with regard to when the agency may act. We may consider
probabilities and consequences or, put another way, risk and harm.
While we agree that accelerated remedies would not be required to
address defects that present a risk only of minor injuries, we disagree
with JPMA's observation that an accelerated remedy should not be
required in circumstances where the risk of injury is low. Similarly,
we disagree with the Alliance's proposal that we add the adjective
``imminent'' before ``risk of serious injury.'' The term ``imminent''
is not used in the statute and might be subject to varying
interpretations. See Megrig v. KFC Western, Inc., 516 U.S. 479, 486
(1996). The agency's 35 years of experience in investigating suspected
safety-related defects and noncompliances, and monitoring recall
campaigns, have given it sensitivity to the assessment of circumstances
involving the nature, extent, and timing of risk. We intend to assess
the circumstances before requiring a manufacturer to provide an
accelerated remedy. As noted in the NPRM, we do not foresee a need for
the agency to exercise this authority frequently.
2. Expanding Sources of Replacement Parts or Number of Repair
Facilities
As proposed in the NPRM, the second finding the Administrator would
need to make before requiring a manufacturer to accelerate a remedy
program, also adopted from the statute, was that ``acceleration of the
remedy program can be reasonably achieved by expanding the sources of
replacement parts, expanding the number of authorized repair
facilities, or both.'' See proposed section 574.14 (b)(2). We noted
that if warranted under the circumstances, we could require a
manufacturer to add additional suppliers and/or production lines and/or
production shifts in order to increase the number of available remedy
parts. We further noted that in those cases in which the manufacturer
identified supplemental repair facilities, it would have to assure that
the facility had the parts and expertise needed to adequately perform
the remedy.
a. Sources of Replacement Parts
With regard to expansion of the sources of replacement parts, we
noted that this finding is most likely to be made when there is a
substantial aftermarket supply of the parts necessary to effect the
remedy, such as exists for tires, brake rotors, steering and suspension
components, and ignition components. We observed, on the other hand,
that it is less likely that this finding would be made where there is
little or no aftermarket supply, as might be the case for air bags and
anti-lock brake system (ABS) control units, since the particular
specifications of the remedy part is generally unique to the particular
vehicle or supplier involved. Even in the absence of an aftermarket
supply, we noted that manufacturers might be able to expand the sources
of replacement parts, either by contracting with additional suppliers,
or by adding assembly lines or production shifts within their own
plants.
Several commenters took issue with our observation that
manufacturers could be required to expand the supply of replacement
parts needed for a recall by adding assembly lines or production shifts
within their own plants. The Alliance contended that it is nearly
impossible to add assembly lines or additional work shifts to existing
production at affected plants on short notice. First, the Alliance
believes that such excess capacity, both in terms of machinery and
labor, does not exist. Second, the Alliance observed that diverting a
component production line that is dedicated to normal production
requirements to the production of components needed for a recall remedy
would have a ripple effect that would curtail or stop current
production, perhaps even for other manufacturers if the component
supplier ships to other vehicle manufacturers. Third, the Alliance
stated that existing labor agreements may prohibit the hiring of extra
temporary employees, or the purchasing of parts from outside sources
not under contract, referred to as ``outsourcing,'' or limit the amount
of overtime. Finally, the Alliance contended that there would be
international legal implications to any requirement that could affect a
manufacturer's production in foreign plants.
Volkswagen, which is a member of the Alliance, added that any
extraterritorial directive by NHTSA might trigger a foreign country to
respond by passing ``claw back'' or ``blocking'' legislation.
Volkswagen described such legislation as mandating that domestic
companies overseas not comply with U.S. law, and cited its view of the
British Protection of Trading Interests Act of 1980. Volkswagen stated
that it is possible that the foreign county could also respond by
passing ``copy-cat'' legislation, which would mimic the applicable
provisions of U.S. law with respect to U.S.-manufactured vehicles sold
in that country. Volkswagen, which does not have production facilities
in the United States, recommended that the rule be redrafted to specify
that it applies only to production line or shifts located in the United
States. Anticipating that NHTSA would not accept this position,
Volkswagen suggested, in the alternative, that if the agency does not
incorporate this limitation into the rule, that it consult with the
U.S. Trade Representative and the State Department before requiring a
foreign manufacturer to accelerate a remedy program so that the
consequential implications and responses from the foreign government
can be explored.
Volkswagen also contended that the need to increase production to
assure a supply of recall remedy components could violate labor
agreements in foreign countries. It stated, for example, that in
Germany, some labor agreements restrict the hiring of temporary
employees, preclude purchasing parts from outside sources, limit the
amount of overtime, and require pre-approval of the union to add shifts
or change a worker's duties. Volkswagen also cited many of the
practical problems associated with adding production lines or shifts
that were raised by the Alliance. Additionally, Volkswagen cited the
economic consequences of shutting down a production line that is used
for normal production.
JPMA expressed concern that child restraint manufacturers do not
have excess tooling or trained labor that could be used to provide
additional production lines or work shifts. The comment urged NHTSA to
take these factors into account in recalls affecting these
manufacturers.
We do not agree with the premises of many these comments. For
example, there is overcapacity in many segments of the global
automotive industry. Moreover, if a vehicle manufacturer has greater
than expected sales and calls
[[Page 72387]]
upon suppliers to provide more parts than originally projected,
suppliers make adjustments and increase the number of parts delivered.
We wish to point out that legitimate production issues will be taken
into consideration by the agency in determining, under section
573.14(b)(2), whether an acceleration of remedy program can be
``reasonably achieved'' by expanding the sources of replacement parts.
If there are legal or practical limitations to a manufacturer's ability
to comply with an acceleration of remedy directive, these can be
identified by the manufacturer in providing the agency with information
under section 573.14(c).
Turning to the international law implications of this rule that
were raised by Volkswagen, NHTSA wishes to observe that if a foreign-
based manufacturer produces vehicles for sale in the United States,
that manufacturer is legally obligated to comply with all laws
administered by NHTSA that apply to the manufacturers of vehicles sold
in this county, including laws governing remedies for safety-related
defects and noncompliances. There is nothing in the TREAD Act, or in
any other statute administered by the agency, that would exempt foreign
manufacturers from meeting these obligations. As discussed previously,
NHTSA anticipates that it will only rarely have the need to require a
manufacturer to accelerate a remedy program. Foreign-based
manufacturers may raise particular issues regarding the expansion of
the sources of replacement parts. They should be aware that our primary
concern will be to have the problem corrected as quickly as possible,
and that we will expect them to surmount difficulties to the fullest
extent possible.
b. Number of Repair Facilities
With regard to the expansion of the number of authorized repair
facilities, we noted in the NPRM that major vehicle manufacturers have
large networks of dealers to perform repairs. As a consequence, we
stated that we would ordinarily not expect to find a need for these
major manufacturers to expand the number of authorized repair
facilities. We observed that other vehicle manufacturers, such as
importers of limited-production vehicles and multistage vehicle
manufacturers, and most manufacturers of equipment items, do not have
established networks of repair facilities. Noting that the need to
travel a long distance may discourage vehicle owners from having remedy
repairs performed, we stated that we could require such manufacturers
to expand the number of repair facilities in order to assure that the
campaign is completed in a reasonable time.
The Alliance commented on this aspect of the proposal. While not
challenging the agency's assumption that its members \1\ should have a
sufficient dealer networks to conduct any recall, the Alliance took
exception to the notion that its members might be required to provide
additional facilities ``if an owner would have to travel a large
distance to obtain the remedy repair directly from the manufacturer or
one of its dealers.'' The Alliance contended that the TREAD Act was not
intended to address the issue of convenience to a vehicle owner and
asserted that owners have already factored inconvenience into their
purchase decision. The Alliance further noted that if recall parts were
to be provided to a repair facility unrelated to the manufacturer that
is subject to the acceleration of remedy directive, no infrastructure
would be in place to provide those parts and problems could occur in
communicating to the unrelated facility the vehicle identification
numbers (VINs) of the vehicles to be remedied, verifying the VINs as a
basis for authorizing the recall repairs, or recording the recall
status of the vehicles involved. The Alliance also noted that its
members would not be able to prevent an unrelated facility from
``overcharging'' for the recall work or charging for additional work on
the basis that it is required to remedy a defect.
---------------------------------------------------------------------------
\1\ BMW, DaimlerChrysler, Fiat, Ford, GM, Isuzu, Mazda,
Mitsubishi, Nissan, Porsche, Toyota, Volkswagen, Volvo.
---------------------------------------------------------------------------
The agency continues to believe that the proximity of authorized
service facilities, or the lack thereof, would be an appropriate
consideration in requiring an expansion in the number of repair
facilities. We expect that the issue would arise less often in the case
of major light vehicle manufacturers than special purpose vehicle
manufacturers such as ambulance or school bus manufacturers. In any
event, the agency does not believe that it is necessary to address
these issues within the text of the final rule. If circumstances should
dictate the use of repair facilities unrelated to the manufacturer
conducting the recall, it will be up to the manufacturer to work out,
by contract or otherwise, the processes necessary to supply required
parts and perform required repairs, and to verify that vehicles covered
by the recall receive the remedy, as well as to arrange appropriate
reimbursement so that owners would not have to pay for the work
performed.
3. Capability of Completion Within Reasonable Time
The NPRM also proposed that before requiring a manufacturer to
accelerate its remedy program, the Administrator must also determine
that the program is not likely to be capable of completion within a
reasonable time. See proposed section 573.14(b)(3). We proposed to
decide the issue of reasonableness in light of all of the
circumstances, including the efforts that the manufacturer has made to
complete the remedy program, as well as the safety risks associated
with the defect or noncompliance.
We noted that the statute is silent with respect to when we can
require a manufacturer to accelerate its program under section 6(a). We
expressed the belief that in the interests of motor vehicle safety, it
would be appropriate for us to impose such a requirement at any time
that the statutory conditions are found to exist.
No comments were submitted regarding this issue. Section
573.14(b)(3) is therefore adopted as proposed.
4. Consultation With Manufacturer
In the NPRM, we stated that we anticipated that there would be
consultation between NHTSA and the manufacturer before a manufacturer
would be formally required to accelerate the remedy program, but noted
that such consultation is not required by the statute. We stated our
expectation that in most cases in which we believed that acceleration
was appropriate, the manufacturer would take action without being
directed to do so by the agency.
There were several comments regarding the issue of agency
consultation with affected manufacturers. The Alliance expressed the
belief that NHTSA is required under the Administrative Procedure Act to
consult with the affected manufacturer before an acceleration of remedy
directive is issued and to give the manufacturer an opportunity to be
heard on the questions of whether there is a risk of serious injury or
death if the remedy program is not accelerated and whether acceleration
of the remedy program can be reasonably achieved. RMA also commented
that the agency should be obliged to consult with any affected
manufacturer before issuing an acceleration of remedy directive. TMA
expressed concern over the adequacy of the consultation provisions in
the proposed rule and the absence of a provision for the appeal of an
[[Page 72388]]
acceleration of remedy directive short of filing a Federal court
action. In their joint comment, MEMA and OESA observed that ``if the
process is to be an informed one for the agency and one of fairness to
affected manufacturers while serving the public interest in avoidance
of safety risk, NHTSA should closely consult with a manufacturer before
proceeding with an accelerated [remedy] program.'' Those commenters
stated that the need for consultation between an affected manufacturer
and NHTSA should be incorporated into the regulatory text and not
merely alluded to in the preamble.
The agency does not agree that a manufacturer has a statutory right
to consultation. Nonetheless, we have added language to the text of
section 573.14(c) to provide for consultation with the affected
manufacturer before the agency requires the acceleration of a remedy
program. This may enhance the agency's understanding of what is
reasonably achievable. Addressing the TMA's comment, we have decided
not to provide an opportunity for an administrative appeal of a
directive for a manufacturer to accelerate a remedy program. On a
practical level, the agency will have consulted with the affected
manufacturer before requiring the manufacturer to accelerate a remedy
program. Hopefully, this consultation will produce consent to implement
an accelerated remedy, and minimize the conflicts that could be the
subject of an administrative appeal. In addition, allowing an
administrative appeal would introduce delay that would undermine the
purpose of the accelerated remedy program.
C. Effect of Acceleration on the Nature and Quality of the Remedy
1. Equivalency of Replacement Parts and Repair Facilities
We stated in the NPRM that we would require manufacturers to assure
that replacement parts from additional suppliers used under accelerated
remedy programs are equivalent to the remedy parts supplied by the
manufacturer, so that there will be no difference in the quality of the
remedy received by owners. We noted, however, that in those instances
where parts are purchased from manufacturers other than those who would
ordinarily supply parts for the vehicle in question, it might be
difficult to determine whether or not the part is equivalent. As a
consequence, we proposed that the agency would, in appropriate cases,
require manufacturers to provide information to owners with respect to
any differences among different brands of replacement parts. We also
stated that the service procedures must be ``reasonably equivalent'' to
those that would have been used if the remedy program were not
accelerated. See proposed Section 573.14(e).
Several comments were received concerning the need for equivalency
of replacement parts and repair procedures. The Alliance complained
that the proposed rule provided no clarification on who would make the
determination of equivalency and the basis on which it would be made.
The Alliance asked, for instance, whether the determination would be
based on the engineering performance of the remedy or whether warranty
and post-recall service availability would also be considered. The
Alliance surmised that while aftermarket parts might be readily
available for use as replacement components in a recall remedy, the
matter of establishing that those parts perform in an equivalent manner
to original equipment might be extremely complex and controversial. The
Alliance further expressed the belief that the untested and unverified
substitution of aftermarket parts may not result in equivalence, and
may cause the manufacturer, dealer, and vehicle owner to bear certain
additional secondary costs. The Alliance contended that this is
particularly true if the aftermarket product is warranted, as these
products typically are, by the product manufacturer and not the vehicle
manufacturer. The Alliance conjectured that if the aftermarket product
should fail, the vehicle owner would be obliged to seek remedy from the
product manufacturer as opposed to the vehicle manufacturer. Because
the performance of the aftermarket part would in this circumstance be
unknown to the vehicle manufacturer, and because equipment
manufacturers are, in most respects, not covered by NHTSA's recently
issued early warning reporting (EWR) rules, the Alliance contended that
any problems in the performance of aftermarket replacement parts might
not be reported to the agency. As a consequence, the Alliance asserted
that NHTSA must make the determination of equivalence when directing a
manufacturer to obtain parts from an alternative source, and must also
take responsibility for that determination and its consequences, in
place of the vehicle manufacturer.
Ford stated that it concurs in the Alliance's position on the issue
of equivalency. In addition, Ford stated that the proposal for the
Administrator to find, before requiring a manufacturer to accelerate a
remedy program, that acceleration of the program can be reasonably
achieved by expanding the sources of replacement parts, expanding the
number of authorized repair facilities, or both, ``imposes on the
agency a responsibility to gather information necessary to decide
whether these extraordinary remedies are appropriate.'' The comment
contended, without support, that the agency is also obligated to ensure
that the remedies ``do not compromise vehicle safety or interfere with
the intellectual property rights of the various parties.''
In their joint comment, MEMA and OESA asked who is to make, and
take responsibility for, a determination that a replacement part or
service facility is ``reasonably equivalent,'' and who is to oversee
the testing of alternative parts or the evaluation of additional
service facilities. The comment contended that if the agency proceeds
with a final rule, it ``must articulate standards or baselines'' for
the term ``reasonably equivalent,'' and ``take responsibility for any
such determinations made with respect both to additional sources of
parts and service facilities.'' The organizations indicated concern
over the involvement of additional suppliers and third party service
outlets for which their members will be held accountable, particularly
in the context of a safety recall campaign. The comment stated that
manufacturers would be reluctant to be part of such a program because
of concern over potential product liability exposure for deficiencies
in the products and services of others, the negative competitive impact
of having to recommend other suppliers' parts and identify them as
equivalent to the manufacturer's own, and future recall responsibility
if a competitor's product or third party service facility is deficient.
In its comment, Bendix contended that the proposed rule places an
undue burden on the affected manufacturer to assure that replacement
parts from other sources are compatible and will perform properly as a
substitute for the manufacturer's own product. Bendix also asserted
that a manufacturer could suffer competitive harm if it were forced to
use a competitor's product to accelerate a recall, especially if it was
obliged to provide consumers with specific product comparisons. Like
MEMA and OESA, Bendix expressed concern over legal issues such as who
would take responsibility for the equivalence of the replacement part,
and who would be responsible for defective substitute components,
particularly if a crash should result or an additional recall should be
necessary.
[[Page 72389]]
Delphi also took issue with the requirement in the proposed rule
for the recalling manufacturer to assure the equivalence of replacement
parts. Noting that many of the parts installed on motor vehicles meet
QS-9000 and/or ISO-9000 certification, the comment asserted that an
alternate supplier must have its parts certified to ensure that this
level of quality is maintained. Delphi expressed concern that the
recalling manufacturer might have to divulge ordinarily protected
intellectual property in assisting an alternate supplier in the
production of remedial parts.
The agency has carefully considered each of these comments. We
start from the premise that in an accelerated remedy context, a
manufacturer will generally need to engage in the procurement of parts
in a manner and on a schedule different from its ordinary practices.
While exceptional efforts may be required, there are limits. Because
the statute authorizes us to require a manufacturer to accelerate its
remedy program only if such acceleration ``can reasonably be
achieved,'' by definition the burden on the manufacturer will not be
insurmountable. We expect to consider the types of issues raised in
these comments as part of the consultative process under section
573.14(c).
Finally, the agency will not assume any legal responsibility for
determining the equivalency of replacement parts or repair facilities,
or for any consequences that result from the use of replacement parts
or the service actions under an accelerated remedy. Nothing in the
TREAD Act acceleration of remedy provision places liability on the
Federal government for its actions or authorizes us to adopt any form
of indemnity program.
2. Equivalency of Tires
With regard to passenger car tires, we noted that guidelines are
available to assure that tires from alternative sources are at least
equivalent to those being replaced. These guidelines, found in the
Uniform Tire Quality Grading System (UTQGS), set forth three criteria
that buyers can use to make relative comparisons among passenger car
tires. See 49 CFR 575.104. We proposed that the manufacturer be
required to provide tires of a size and type that are suitable for the
owner's vehicle and of the same or better UTQGS rating in each
category. Alternatively, we observed that a manufacturer could do what
Bridgestone/Firestone, Inc. (Firestone) did in connection with its
recall of Firestone Radial ATX and Wilderness AT tires. There,
Firestone authorized owners to obtain replacement tires of their choice
from any tire manufacturer, and agreed to reimburse the owner up to a
specified amount per tire. We noted that for the purpose of the
acceleration of remedy program, the reimbursement amount would have to
be sufficient to allow for the purchase of a tire that is reasonably
equivalent to the defective or noncompliant tire.
Two comments were received concerning the equivalency of remedy
issue as it pertains to tires. One of these comments, from RMA,
recommended that the text of proposed section 573.14(e) be changed to
specify that the replacement tire have the same or higher load index
and speed rating as the defective or noncompliant tire it is to
replace. The second comment, from the Alliance, cited circumstances in
which an alternative tire identical in size, type, and Uniform Tire
Quality Grading to a tire furnished as original equipment on a vehicle
may not in fact be equivalent in terms of ``tire ply, steer, noise,
rolling resistance, and tire uniformity.''
We agree with the RMA suggestion and are including appropriate
language in the final rule. Although we recognize the validity of the
Alliance's comment, we believe that it would not be practical to
specify in the rule that all replacement tires must be equivalent to
the recalled tires in every possible respect. Therefore, we will not
add the parameters identified by the Alliance to the text of section
573.14(e). However, an agency decision requiring acceleration may
specify particular features that must be present to ensure equivalency
under the circumstances of a given recall.
3. Equivalency of Child Restraint Systems
We proposed to require that all replacement child restraint systems
provided under an accelerated remedy program be of the same type and
the same overall quality as the recalled restraints. Examples of the
``types'' of child restraint systems for purposes of this rule are
rear-facing infant seats with a base, rear-facing infant seats without
a base, convertible seats (designed for use in both rear- and forward-
facing modes), forward-facing only seats, high back booster seats with
a five-point harness and belt positioning booster seats. These examples
are described in a NHTSA brochure, DOT HS 809 230 (May 2002). These
types are listed as examples; if in the future another type of seat is
marketed, it can be referenced in any agency decision under this rule.
D. Obligations of a Manufacturer That Is Required To Accelerate Its
Remedy Program
Under the proposal in the NPRM, a manufacturer who is required to
accelerate its remedy campaign would be required to implement the
accelerated remedy program as directed by the agency. We noted that the
level of detail and direction provided by the agency might vary, and
that it could include expanding the sources of replacement parts
provided to the manufacturer's franchised dealers, expanding the number
of authorized repair facilities to include facilities not owned or
franchised by the manufacturer that have repair or replacement
capabilities, or other provisions. We further noted that the agency
might require the submission of implementation plans and schedules, and
might also require the reimbursement of consumers, particularly where
facilities that are not owned or franchised by the manufacturer are
involved.
One comment was received regarding these implementation issues.
That comment, from TMA, observed that there was nothing in the proposed
rule that identified how much lead time the agency would allow a
manufacturer to implement an accelerated remedy program. Rather than
specifying, within the text of the rule, the amount of lead-time that a
manufacturer will be allowed, the agency believes that this matter can
be best addressed on a case-by-case basis, after consultation with the
manufacturer. This will permit the agency to take a reasoned approach
to the implementation of the accelerated remedy program, taking account
of the unique circumstances that can exist within any given recall.
E. Manufacturer's Notice to Vehicle or Equipment Owners
In the NPRM, we observed that the notice that a manufacturer who is
required to accelerate a remedy campaign would be required to send to
owners of the vehicles or equipment items involved would vary,
depending on the circumstances. We stated that if the manufacturer has
not sent an initial notification to owners under 49 CFR Part 577,
relevant information about alternative parts or authorized repair
facilities could be included in the initial notification letter. If the
manufacturer has already sent an initial notification to owners under
49 CFR Part 577, the manufacturer would in most circumstances be
required to send a supplemental letter to all owners except those who
have had the remedy
[[Page 72390]]
performed. Proposed section 577.12 included provisions regarding the
scope, timing, form, and content of the notice to be sent by the
manufacturer.
The Alliance submitted the only comment on the owner notification
aspects of the proposed rule. The Alliance recommended that a
manufacturer affected by an acceleration of remedy directive be allowed
to place within the owner notification letter a statement that parts or
services are being provided by suppliers or facilities other than its
own, that those parts or services would not be guaranteed by the
manufacturer conducting the recall, and that the owner should inquire
with the part or service provider to learn whether any warranties are
being provided. The agency disagrees with this suggestion, because we
are concerned that this sort of language could discourage owners from
having defects or noncompliances remedied with the alternate parts or
at the alternate facilities, and thus would undermine the purpose of
requiring acceleration. However, if a manufacturer believes that the
circumstances of a particular recall warrant the inclusion of caveats
in the owner notification letter, it may bring those circumstances to
our attention during the consultation process.
The Alliance also commented on the specific language to be included
in the owner notification letter that was set out in proposed section
577.12(c)(6). That language was intended to alert owners that if they
paid for a remedy from a service facility not affiliated with the
manufacturer, or for replacement parts from sources other than the
manufacturer, those expenses would be eligible for reimbursement. The
proposed language would further direct the owner to a website, toll-
free telephone number, or mailing address where the owner could obtain
information on the costs that are eligible for reimbursement and on the
procedures for obtaining reimbursement. The Alliance stated that this
language had the potential to confuse consumers. While acknowledging
that a manufacturer should be obligated to explain the costs that will
be covered, how to obtain reimbursement, and how to obtain additional
information from the manufacturer, the Alliance asserted that ``NHTSA
should not attempt to prescribe the exact wording of the notification,
in order to permit manufacturers to conform the style and readability
of the language to the rest of the notification letter.''
We recently addressed a variety of issues related to reimbursement
of costs associated with remedying defects and noncompliances in a
separate regulation implementing Section 6(b) of the TREAD Act,
``Reimbursement Prior to Recall.'' See 67 FR 64049 (October 17, 2002).
In that rule, we decided not to specify exact wording for manufacturer
notifications about the possible availability of reimbursement. Rather,
we described what needed to be in the owner notification and stated
that we would review the manufacturer's proposed language regarding
reimbursement as part of our general review of owner notifications
under 49 CFR 573.6(c)(10). See 67 FR at 64061. We will take the same
approach here. To permit manufacturers reasonable flexibility in the
wording of the owner notification letter, we have eliminated proposed
section 577.12(c)(6).
The Alliance also recommended that proposed section 577.12(c)(2) be
changed to reflect that its requirements will not apply if the
manufacturer, after consultation with the agency, agrees to take steps
voluntarily to accelerate the remedy, rather than pursuant to a
directive. The Alliance pointed out that in this circumstance the
specific requirements of section 577.12 would not be triggered, because
paragraph (a) of that section explains that the notification
requirements only apply when the Administrator requires acceleration.
The agency believes that the owner notification requirements in
proposed section 577.12 should apply whenever a remedy program is
accelerated at the suggestion of the agency, regardless of whether the
affected manufacturer agrees ``voluntarily'' to take steps to
accelerate the program following consultation with the agency or is
directed to do so. Accordingly, it would not be appropriate to waive
the notification requirements altogether for manufacturers who agree to
accelerate their remedy program in advance of receiving a formal
directive to do so from the agency. To reflect this, we have changed
the text of section 577.12(a) to require notification, in accordance
section 577.12, ``[w]hen the Administrator requires a manufacturer to
accelerate its remedy program under section 573.14 of this chapter, or
when a manufacturer agrees with a request from the Administrator that
it accelerate its remedy program in advance of being required to do
so.'' We have made a corresponding change to proposed section
577.12(c)(2) to emphasize that the statement ``that the National
Highway Traffic Safety Administration has required the manufacturer to
accelerate its remedy program'' need only be included in the owner
notification letter when the Administrator has directed that the remedy
program be accelerated.
F. Accelerated Remedy Programs Involving Reimbursement
We noted in the NPRM that in some circumstances, a remedy campaign
could be accelerated without any out-of-pocket expense to the owners of
the vehicles or equipment items involved, precluding the need for those
owners to be reimbursed by the manufacturer. We observed that in these
instances, appropriate financial arrangements could be made between the
manufacturer and the dealer or repair facility. For example, when a
vehicle is repaired at a dealer who is franchised or authorized by the
vehicle manufacturer or when the parts in question (such as a tire) are
provided by a facility owned or franchised by the manufacturer, the
manufacturer would reimburse the dealer for the cost of the parts as
well as the labor, and the owner would not have any out-of-pocket
expense. We noted, however, that in other circumstances, the
accelerated remedy program might be structured to allow an owner to
obtain the remedy from independent third-party parts suppliers and/or
repair facilities, pay that independent entity, and then be reimbursed
by the manufacturer.
We stated that reimbursement under an accelerated remedy program
would be similar in most respects to the applicable provisions of our
regulation implementing section 6(b) of the TREAD Act, codified as the
third and fourth sentences of 49 U.S.C. 30120(d) (``pre-notification
remedy''), with two obvious differences. For one, the periods covered
by the respective programs would be different. Under the pre-
notification remedy program, reimbursement would be available for
expenditures made by vehicle or equipment owners before they receive
notification of a defect or noncompliance from the manufacturer. Under
an acceleration of remedy program, reimbursement would be available for
owner expenditures made after notification from the manufacturer, as
provided in the program. Second, under the pre-notification remedy
program, reimbursement would be available for a range of remedies
addressing the underlying problem. In contrast, under an acceleration
of remedy program, reimbursement may not be available at all, or when
it is, may be conditioned on the use of a specific remedy. In addition,
owners could be limited to obtaining the remedy at specific service
facilities under an acceleration of remedy program.
[[Page 72391]]
We noted in the NPRM that despite these substantive differences,
the general procedures for obtaining reimbursement in the two programs
would be very similar. The provisions specifying the documentation a
manufacturer may require a claimant to submit to obtain reimbursement
would be identical in the two programs, as would the provisions
relating to the amount of reimbursement and the time frame for seeking
reimbursement, and the method for owners to obtain information about
reimbursement availability.
Since the process governing reimbursement under the two programs
would virtually be the same, we stated in the NPRM that there was no
need for us to repeat those provisions or discuss them in the context
of this rulemaking. Instead, we referred interested persons to our
discussion of the reimbursement provisions in the preamble to the pre-
notification remedy NPRM, and stated that to the extent that we modify
the proposal in that NPRM following public comment, we would make
corresponding changes to the applicable provisions of the accelerated
remedy rule. We published a final rule on pre-notification remedies on
October 17, 2002 at 67 FR 64049. In that final rule we made a number of
relatively minor substantive changes to the provisions proposed in the
NPRM, but these changes would not have a significant effect upon
acceleration of remedy programs. As a consequence, there is no need to
make corresponding revisions to section 573.14. In the preceding
section of this document, we discussed changes that we have made in the
text of proposed section 577.12 concerning notification to owners when
reimbursement is to be provided as part of an accelerated remedy
program.
G. Termination of an Accelerated Remedy Program
In the NPRM, we expressed the belief that a manufacturer should be
able to terminate an accelerated remedy program when the conditions
that gave rise to the need for an accelerated program no longer exist.
We noted that we should not require a manufacturer to authorize the use
of alternative replacement parts or to reimburse an owner who purchased
such parts if the manufacturer is able to provide the recall remedy
promptly. Thus, we proposed to allow a manufacturer that believes that
it can meet all future demand for the remedy in a prompt manner through
its own normal mechanisms (e.g., its dealers) to request authorization
to terminate an accelerated remedy program.
Under section 573.14(g) of the proposed rule, if NHTSA agreed with
the manufacturer's request, the manufacturer could terminate the
program, provided that notice is given to all owners of unremedied
vehicles or equipment items at least 30 days in advance of the
termination date of the accelerated remedy program. We invited comment
with regard to how such notice should be given. No comments regarding
this issue were submitted, and we are not addressing it within the text
of this final rule.
III. Regulatory Analyses and Notices
A. Regulatory Policies and Procedures
Executive Order 12866, ``Regulatory Planning and Review'' (58 FR
51735, October 4, 1993) provides for making determination whether a
regulatory action is ``significant'' and therefore subject to Office of
Management and Budget (OMB) review and to the requirements of the
Executive Order. The Order defies as ``significant action'' as one that
is likely to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or Tribal government or communities;
(2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
We have considered the impact of this final rulemaking action under
E.O. 12866 and the Department of Transportation's Regulatory Policies
and Procedures. This rulemaking was not reviewed under the executive
order and is not considered ``significant'' under the Department of
Transportation's regulatory policies and procedures. The impacts of
this rule are expected to be so minimal as not to warrant preparation
of a full regulatory evaluation. We do not foresee substantially
increased costs to a manufacturer because of an accelerated remedy
program. First, a remedy program will already be in place at the time
that a manufacturer is required by the agency to accelerate that
program. The scope of the remedy program is not being expanded under
this final rule. The only aspects that will be affected are the time
for completion of the remedy and alternative sources of replacement
parts or repair facilities needed to perform the remedy. Second, we
expect this provision to be invoked infrequently, since in the large
majority of cases, the manufacturer's original remedy program will
fully address the defect or noncompliance in a timely fashion, or no
accelerated remedy will be reasonably available.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.)
requires agencies to evaluate the potential effects of their proposed
and final rules on small businesses, small organizations, and small
governmental jurisdictions. Business entities are defined as small by
standard industry classification for the purposes of receiving Small
Business Administration (SBA) assistance.
We have also considered the impacts of this final rule under the
Regulatory Flexibility Act. For the reasons discussed above with regard
to E.O. 12866 and the DOT Policies and Procedures, I certify that this
final rule will not have significant economic impact on a substantial
number of small entities. The impacts of this rule are expected to be
so minimal as not to warrant preparation of a full regulatory
evaluation because this provision only involves motor vehicle and
equipment manufacturers that have submitted defect or noncompliance
reports. The majority of recalls are not initiated by small entities.
The primary impact of this rule will be on major motor vehicle
manufacturers. Even this impact will be small because we anticipate
that we will only rarely need to require a manufacturer to accelerate
its remedy program.
C. National Environmental Policy Act
We have analyzed this rule under the National Environmental Policy
Act and determined that it will not have any significant impact on the
quality of the human environment.
D. Paperwork Reduction Act
In the NPRM, we stated that the proposed rule would impose new
collection of information burdens within the meaning of the Paperwork
Reduction Act of 1995 (PRA). See NPRM at 66 FR 64090. At that time, we
had no experience under the TREAD Act acceleration provision, did not
engage in an analysis, and simply assumed that the PRA would be
applicable. We have since evaluated this issue, and concluded, for a
number of reasons, that the final rule will not
[[Page 72392]]
impose a collection of information burden that would trigger the
requirements of the PRA.
First, in a recall, NHTSA may accelerate a remedy based on the
statute alone, and the final rule itself provides no independent
authority for the agency to require a manufacturer to undertake a
collection of information. In any event, 49 CFR Part 573 already
contains information collection requirements. To the extent needed, if
at all, PRA authorization would be subsumed in periodic renewals of
information collection authorizations with regard to Part 573.
Second, even if the final rule could be construed as imposing a
collection of information requirement, that requirement would be highly
discrete in the context of an individual recall action, of limited
extent, and would arise so infrequently as to call the need for PRA
approval into question. As indicated in the preceding discussion, the
agency does not foresee the need to require manufacturers to provide
accelerated remedies with any significant frequency. In fact, the
acceleration provision (which, as previously indicated, is self-
executing) has not been invoked in the two years since the TREAD Act
was enacted.
Third, there are substantial questions as to how many manufacturers
would be subject to the final rule or when they would be so subject. As
such, additional information collection requirements stemming from the
rule, if any, will not affect a sufficient number of manufacturers, or
a sufficient share of the manufacturers within each of the industries
regulated by the agency, to require the agency to obtain authorization
under the PRA. See 5 CFR 1320.7(c) and (s).
Lastly, if there were any information collection requirements that
result from the final rule, those requirements would arise in the
context of agency actions to monitor manufacturers' recalls that either
are influenced by agency investigations or are undertaken by a
manufacturer exclusively on its own initiative. As such, these
information collections appear to be exempt from the coverage of the
PRA under OMB regulations at 5 CFR 1320.4(a)(2), which exempt
collections of information ``during the conduct of an administrative
action, investigation, or audit involving an agency against specific
individuals or entities.''
In any event, we are providing an opportunity for comment on the
above by February 3, 2003. If a commenter suggests that there are PRA
information collection burdens, the commenter should provide a detailed
explanation of the basis for that suggestion in the context of this
rule and estimates of the burden, with adequate support.
E. Executive Order 13132 (Federalism)
Executive Order 13132 on ``Federalism'' requires us to develop an
accountable process to ensure ``meaningful and timely input'' by State
and local officials in the development of ``regulatory policies that
have federalism implications.'' The E.O. defines this phrase to include
regulations ``that have substantial direct effects on the States, on
the relationship between the national government and the States, or on
the distribution of power and responsibilities among the various levels
of government.'' This rule, which is limited in its application to
motor vehicle and motor vehicle equipment manufacturers, will not have
substantial direct effect on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government, as
specified in E.O. 13132.
F. Civil Justice Reform
This rule will not have a retroactive or preemptive effect.
Judicial review of the rule may be obtained pursuant to 5 U.S.C. 702.
That section does not require that a petition for reconsideration be
filed prior to seeking judicial review.
G. Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 (Pub.L. 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 expenditure by State, local or tribunal
governments, in the aggregate, or by the private sector, of more than
$100 million annually. Because this rule will not have a $100 million
annual effect, no Unfunded Mandates assessment is necessary and one
will not be prepared.
H. Plain Language
Executive Order 12866 and the President's memorandum of June 1,
1998, require each agency to write all rules in plain language.
Application of the principles of plain language includes consideration
of whether the material is organized to suit the public's needs,
whether the requirements in the rule are clearly stated, whether the
rule contains technical language or jargon that is not clear, and
whether a different format would make the rule easier to understand. We
have endeavored to meet these objectives in preparing this final rule.
List of Subjects
49 CFR Part 573
Motor vehicle safety, Reporting and recordkeeping requirements,
Tires.
49 CFR Part 577
Motor vehicle safety.
In consideration of the foregoing, NHTSA is amending 49 CFR Parts
573 and 577 as set forth below.
1. The authority citation for Part 573 continues to read as
follows:
Authority: 49 U.S.C. 30102-103, 30112, 30117-121, 30166-167;
delegations of authority at 49 CFR 1.50; 501.2.
2. Part 573 is amended by adding Sec. 573.14 to read as follows:
Sec. 573.14 Accelerated remedy program.
(a) An accelerated remedy program is one in which the manufacturer
expands the sources of replacement parts needed to remedy the defect or
noncompliance, or expands the number of authorized repair facilities
beyond those facilities that usually and customarily provide remedy
work for the manufacturer, or both.
(b) The Administrator may require a manufacturer to accelerate its
remedy program if:
(1) The Administrator finds that there is a risk of serious injury
or death if the remedy program is not accelerated;
(2) The Administrator finds that acceleration of the remedy program
can be reasonably achieved by expanding the sources of replacement
parts, expanding the number of authorized repair facilities, or both;
and
(3) The Administrator determines that the manufacturer's remedy
program is not likely to be capable of completion within a reasonable
time.
(c) The Administrator, in deciding whether to require the
manufacturer to accelerate a remedy program and what to require the
manufacturer to do, will consult with the manufacturer and may consider
a wide range of information, including, but not limited to, the
following: the manufacturer's initial or revised report submitted under
Sec. 573.6(c), information from the manufacturer, information from
other manufacturers and suppliers, information from any source related
to the availability and implementation of the remedy, and the
seriousness of the risk of injury or death associated with the defect
or noncompliance.
(d) As required by the Administrator, an accelerated remedy program
shall include the manner of acceleration (expansion of the sources of
[[Page 72393]]
replacement parts, expansion of the number of authorized repair
facilities, or both), may require submission of a plan, may identify
the parts to be provided and/or the sources of those parts, may require
the manufacturer to notify the agency and owners about any differences
among different sources or brands of parts, may require the
manufacturer to identify additional authorized repair facilities, and
may specify additional owner notifications related to the program. The
Administrator may also require the manufacturer to include a program to
provide reimbursement to owners who incur costs to obtain the
accelerated remedy.
(e) Under an accelerated remedy program, the remedy that is
provided shall be equivalent to the remedy that would have been
provided if the manufacturer's remedy program had not been accelerated.
The replacement parts used to remedy the defect or noncompliance shall
be reasonably equivalent to those that would have been used if the
remedy program were not accelerated. The service procedures shall be
reasonably equivalent. In the case of tires, all replacement tires
shall be the same size and type as the defective or noncompliant tire,
shall be suitable for use on the owner's vehicle, shall have the same
or higher load index and speed rating, and, for passenger car tires,
shall have the same or better rating in each of the three categories
enumerated in the Uniform Tire Quality Grading System. See 49 CFR
575.104. In the case of child restraints systems, all replacements
shall be of the same type (e.g., rear-facing infant seats with a base,
rear-facing infant seats without a base, convertible seats (designed
for use in both rear- and forward-facing modes), forward-facing only
seats, high back booster seats with a five-point harness, and belt
positioning booster seats) and the same overall quality.
(f) In those instances where the accelerated remedy program
provides that an owner may obtain the remedy from a source other than
the manufacturer or its dealers or authorized facilities by paying for
the remedy and/or its installation, the manufacturer shall reimburse
the owner for the cost of obtaining the remedy as specified on
paragraphs (f)(1) through (f)(3) of this section. Under these
circumstances, the accelerated remedy program shall include, to the
extent required by the Administrator:
(1) A description of the remedy and costs that are eligible for
reimbursement, including identification of the equipment and/or parts
and labor for which reimbursement is available;
(2) Identification, with specificity or as a class, of the
alternative repair facilities at which reimbursable repairs may be
performed, including an explanation of how to arrange for service at
those facilities; and
(3) Other provisions assuring appropriate reimbursement that are
consistent with those set forth in Sec. 573.13, including, but not
limited to, provisions regarding the procedures and needed
documentation for making a claim for reimbursement, the amount of costs
to be reimbursed, the office to which claims for reimbursement shall be
submitted, the requirements on manufacturers for acting on claims for
reimbursement, and the methods by which owners can obtain information
about the program.
(g) In response to a manufacturer's request, the Administrator may
authorize a manufacturer to terminate its accelerated remedy program if
the Administrator concludes that the manufacturer can meet all future
demands for the remedy through its own sources in a prompt manner. If
required by the Administrator, the manufacturer shall provide notice of
the termination of the program to all owners of unremedied vehicles and
equipment at least 30 days in advance of the termination date, in a
form approved by the Administrator.
(h) Each manufacturer shall implement any accelerated remedy
program required by the Administrator according to the terms of that
program.
3. The authority citation for 49 CFR Part 577 continues to read as
follows:
Authority: 49 U.S.C. 30102-103, 30112, 30117-121, 30166-167;
delegation of authority at 49 CFR 1.50.
4. Part 577 is amended by adding Sec. 577.12 to read as follows:
Sec. 577.12 Notification pursuant to an accelerated remedy program.
(a) When the Administrator requires a manufacturer to accelerate
its remedy program under Sec. 573.14 of this chapter, or when a
manufacturer agrees with a request from the Administrator that it
accelerate its remedy program in advance of being required to do so, in
addition to complying with other sections of this part, the
manufacturer shall provide notification in accordance with this
section.
(b) Except as provided elsewhere in this section or when the
Administrator determines otherwise, the notification under this section
shall be sent to the same recipients as provided by Sec. 577.7. If no
notification has been provided to owners pursuant to this part, the
provisions required by this section may be combined with the
notification under Sec. Sec. 577.5 or 577.6. A manufacturer need only
provide a notification under this section to owners of vehicles or
items of equipment for which the defect or noncompliance has not been
remedied.
(c) The manufacturer's notification shall include the following:
(1) If there was a prior notification, a statement that identifies
that notification and states that this notification supplements it;
(2) When the accelerated remedy program has been required by the
Administrator, a statement that the National Highway Traffic Safety
Administration has required the manufacturer to accelerate its remedy
program;
(3) A statement of how the program has been accelerated (e.g., by
expanding the sources of replacement parts and/or expanding the number
of authorized repair facilities);
(4) Where applicable, a statement that the owner may elect to
obtain the recall remedy using designated service facilities other than
those that are owned or franchised by the manufacturer or are the
manufacturer's authorized dealers, and an explanation of how the owner
may arrange for service at those other facilities;
(5) Where applicable, a statement that the owner may elect to
obtain the recall remedy using specified replacement parts or equipment
from sources other than the manufacturer;
(6) Where applicable, a statement indicating whether the owner will
be required to pay an alternative facility and/or parts supplier,
subject to reimbursement by the manufacturer; and
(7) If an owner will be required to pay an alternative facility
and/or parts supplier, a statement that the owner will be eligible to
have those expenditures reimbursed by the manufacturer, and a
description of how a consumer may obtain information about
reimbursement from the manufacturer consistent with Sec. 577.11(b)(2),
(c) and (d).
Issued on: November 26, 2002.
Jeffrey W. Runge,
Administrator.
[FR Doc. 02-30523 Filed 12-4-02; 8:45 am]
BILLING CODE 4910-59-P