[Federal Register: July 23, 2001 (Volume 66, Number 141)]
[Rules and Regulations]
[Page 38159-38162]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23jy01-18]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 573
[Docket No. NHTSA-2001-10145]
RIN 2127-AI23
Motor Vehicle Safety; Reporting the Sale or Lease of Defective or
Non-Compliant Tires
AGENCY: National Highway Traffic Safety Administration (NHTSA), DOT.
ACTION: Final rule.
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[[Page 38160]]
SUMMARY: This final rule implements section 3(c) of the Transportation
Recall Enhancement, Accountability, and Documentation Act (TREAD Act).
Section 3(c) directed us to issue a final rule by January 30, 2001,
implementing that Act's requirement of the submission of reports
concerning sales and leases of defective or noncompliant tires by
certain persons. Accordingly, we published an interim final rule and
request for comments in the Federal Register on December 26, 2000 (65
FR 81409). We are now publishing a final rule requiring any person who
knowingly and willfully sells or leases for use on a motor vehicle a
defective tire or a tire not in compliance with applicable safety
standards and has actual knowledge that the manufacturer of such tire
has notified its dealers of such defect or noncompliance to report that
sale or lease to NHTSA. There have been no significant changes to the
interim final rule.
DATES: Effective date: This rule is effective August 22, 2001.
Petitions for reconsideration: Any petition for reconsideration of
this rule must be received by NHTSA no later than September 6, 2001.
ADDRESSES: Petitions for reconsideration may be submitted in writing
to: Docket Management, Room PL-401, 400 Seventh Street, SW.,
Washington, DC 20590. Petitions for reconsideration may also be
submitted electronically by logging onto the Docket Management System
website at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://dms.dot.gov. Click on ``Help & Information'' or
``Help/Info'' to obtain instructions for filing your petition
electronically.
Regardless of how a petition is submitted, the docket number of
this document should be referenced in that petition.
You may call Docket Management at 202-366-9324. You may visit the
Docket from 9 a.m. to 5 p.m., Monday through Friday.
FOR FURTHER INFORMATION CONTACT: For non-legal issues, contact Jonathan
White, Office of Defects Investigation, NHTSA, telephone (202) 366-
5226; for legal issues, contact Jennifer T. Timian, Office of Chief
Counsel, NHTSA, telephone (202) 366-5263.
SUPPLEMENTARY INFORMATION:
Background
On November 1, 2000, the TREAD Act, Pub. L. 106-414, was enacted.
The statute was, in part, a response to congressional concerns related
to manufacturers' inadequate reporting to NHTSA of information
regarding possible defects in motor vehicles and motor vehicle
equipment, with specific reference to tires. The TREAD Act directed the
Secretary of Transportation (``the Secretary'') to issue various rules
to improve reporting of information that is or could be related to
defects and noncompliances with applicable Federal motor vehicle safety
standards. The authority to carry out Chapter 301 of Title 49 of the
United States Code, under which the rules directed by the TREAD Act are
to be issued, has been delegated to NHTSA's Administrator pursuant to
49 CFR 1.50.
One of these congressionally mandated rules is found in section
3(c) of the TREAD Act, which added a new subsection (n) to 49 U.S.C.
30166. That subsection directs us to issue, within 90 days of
enactment, a final rule requiring any person who knowingly and
willfully sells or leases for use on a motor vehicle a defective tire
or a tire which is not compliant with an applicable tire safety
standard, with actual knowledge that the manufacturer of such tire has
notified its dealers of such defect or noncompliance as required under
49 U.S.C. 30118(c) or as required by an order under 49 U.S.C. 30118(b),
to report that sale or lease to NHTSA. Under 30166(n)(2), reporting of
such sales or leases is not required where: (A) prior to delivery of
any such tire pursuant to a sale or lease, the defect or noncompliance
is remedied as required under 49 U.S.C. 30120; or (B) notification of
the defect or noncompliance is required pursuant to an order issued
under section 30118(b), but enforcement of the order is restrained or
the order is set aside in a civil action to which 49 U.S.C. 30121(d)
applies.
In order to timely implement this statutorily-mandated final rule,
we published in the Federal Register on December 26, 2000, an interim
final rule implementing section 3(c) (65 FR 81409). That interim final
rule amended 49 CFR Part 573 to add a new section 573.10, which
specified who would be required to comply with this new reporting
requirement, when such a report would be due to the Agency, and what
information would be required within such a report.
With respect to who would be required to comply with this rule, we
explained that because Congress chose to use the general terms ``any
person'' to describe who would be expected to report sales or leases of
defective or noncompliant tires, the rule would not be limited to
particular classes or categories of persons such as manufacturers or
dealers.\1\ Rather, the rule would apply to the actions of all persons,
to include individuals and corporate entities alike. We were careful to
explain, however, that only those persons who sell or lease a defective
or noncompliant tire for use on a motor vehicle, as opposed to persons
who sell or lease a new or used vehicle equipped with a defective or
noncompliant tire, are covered by the rule. Thus, we explained, motor
vehicle dealers, lessors and rental companies would not be subject to
the rule unless, of course, those persons were to sell or lease a
defective or noncompliant tire separate from a motor vehicle.
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\1\ We also explained that the interim final rule would be
applicable to both new and used tires.
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Additionally, we explained that to be covered under section 573.10,
the person must have actual knowledge that the manufacturer of the tire
at issue had notified its dealers of the defect or noncompliance. We
added, however, that a person need not have received notification
directly from the manufacturer, but that a person's actual knowledge
that the notification was made to dealers would be sufficient to invoke
the reporting requirement under this section.
Lastly, we explained that the principle of respondent superior
applied to this rule, such that employers, principals and other persons
who are legally accountable for the actions of their employees or
agents are required to report any covered sales or leases that their
employees or agents cause while acting within the scope of their
employment. We noted, however, that only one report per covered sale or
lease is required, such that either an employee or his/her employer
could file a report pursuant to section 573.10.
With regard to the timing of reports required under section 573.10,
we provided that such reports would be due to NHTSA no more than five
working days after the person to whom the tire was sold or leased took
possession of the tire. We explained that a five-day rule was chosen
because it would be consistent with 49 CFR 573.5, which requires defect
and noncompliance information reports to be submitted within a five-day
time frame.
In terms of what information will be required in a report submitted
pursuant to section 573.10, we set forth seven categories of
information: (1) A statement that the report was being provided
pursuant to section 573.10 regarding the sale or lease of a defective
or noncompliant tire; (2) the name, address and telephone number of the
person who purchased or leased the tire; (3) the name of the
manufacturer of the tire; (4) the tire's brand name, model name, and
size; (5) the tire's DOT
[[Page 38161]]
identification number; (6) the date of sale or lease; and (7) the name,
address and telephone number of the seller or lessor. We additionally
noted that each report must be dated and signed with the name of the
person printed or typed below the signature, together with the official
position of the individual signing the report where such a report is
filed on behalf of a corporation.
In our publication of the interim final rule we solicited the
public's comments concerning this rule. We received three comments to
our interim final rule. Those comments and our responses, organized by
subject matter, follow.
Comments
Comments Relating to the Scope of Section 573.10
The National Automobile Dealers Association (NADA) commented that
our rule should be amended to contain language specifying that it does
not apply to the sale or lease of a new or used motor vehicle which is
equipped with a tire that is defective or noncompliant. NADA suggested
that such an amendment would clarify the rule's application to only
those persons who sell or lease a defective or noncompliant tire ``for
use on a motor vehicle,'' as specified in section 3(c) of the TREAD
Act, and implemented in our interim final rule.
We believe the phrase ``for use on a motor vehicle'' in the statute
is sufficient to explain that section 573.10 does not apply to sales or
leases of motor vehicles that are equipped with one or more defective
or noncompliant tires. Thus, we do not believe that a specific
provision within section 573.10 to further clarify the rule's
application is necessary. The rule will remain unchanged in this
regard. However, in this context, we note that the sale of a new
vehicle equipped with a defective or noncompliant tire new tire is
prohibited by 49 U.S.C. 30120(i).
The Rubber Manufacturers Associations (RMA) asked that we consider
requiring commercial entities to report sales or leases of used motor
vehicles equipped with defective or noncompliant tires. We do not agree
that such a requirement should be added to 49 CFR 573.10 for several
reasons.
Section 3(c) does not apply to persons who sell or lease new or
used motor vehicles that come equipped with defective or noncompliant
tires. Rather, Congress specified in section 3(c) that it covers sales
and leases of defective or noncompliant tires ``for use on a motor
vehicle.'' An extension of our rule to sales and leases of vehicles by
commercial entities would, therefore, be contrary to the terminology
used within section 3(c).
Furthermore, extending the rule's application in this manner to
only commercial entities would also be contradictory to the language
and intent of section 3(c). As discussed in the preamble to the interim
final rule, Congress chose to use the general terms ``any person,'' as
opposed to the more restricted categories of ``manufacturer'' and
``dealer'' used elsewhere within 49 U.S.C. Chapter 301, in describing
who was to be subject to the reporting requirement. Our application of
this final rule to sales and leases by commercial entities alone and
not to other groups, therefore, would be inconsistent with the
statutory language.
We are, however, amending the applicability section of Part 573
(e.g., section 573.3(a)) to assure that there is no misunderstanding
that section 573.10 applies to all persons and not simply to
manufacturers. As published today, sections 573.3(a) and (g) make clear
(although we do not believe that there was any doubt otherwise) that
section 573.10 applies to all persons.
Comment Concerning Section 573.10's Relationship to Petitions for
Inconsequentiality
The RMA asked that we clarify our rule with respect to tires for
which a manufacturer has filed a petition for exemption from the recall
requirements of 49 U.S.C. Chapter 301 on the basis that a defect or
noncompliance is inconsequential to motor vehicle safety pursuant to 49
U.S.C. 30118(d) and 30120(h). In particular, RMA requested we consider
tolling section 573.10's reporting requirement until such a petition is
ruled upon, and consider an exemption of that reporting requirement
where the agency makes a determination of inconsequentiality.
A reading of section 573.10 together with another of its
counterpart regulations, section 573.5(c)(8)(iii), demonstrates that a
distinct tolling provision or exemption to take into consideration
petitions for determinations of inconsequentiality is not necessary.
Accordingly, we have decided not to add the suggested provisions to
section 573.10. Our explanation follows.
As set forth in section 573.10, one prerequisite to the application
of this reporting requirement is that the person have actual knowledge
that the manufacturer of the tire sold or leased has notified its
dealers of the defect or noncompliance. Such a notification would not
be issued during the pendency of the agency's consideration of a timely
inconsequentiality petition. Under 49 CFR 573.5(c)(8)(iii), where a
manufacturer has filed a timely\2\ petition for a determination of
inconsequential defect or noncompliance, that manufacturer's
notification concerning the defect or noncompliance at issue is not
required unless and until the agency denies that petition. Thus, where
a manufacturer has not issued a notification to its dealers concerning
a defect or noncompliance--such as in the circumstance where a tire
manufacturer has petitioned for a finding of inconsequentiality and is
awaiting a final determination from the agency--section 573.10's
reporting requirement is not applicable.\3\
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\2\ The deadlines for filing such petitions are discussed in 49
CFR 573.5(c)(8)(iv).
\3\ The same would hold true if a petition were granted. This
final rule's reporting requirements would be inapplicable in that
situation because the tire manufacturer would not notify its dealers
of an inconsequential defect or noncompliance.
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Comment Suggesting Educational Outreach to Small Businesses and
Individual Retailers
The Specialty Equipment Market Association (SEMA) commented that
because our rule extends to all persons, including individuals and
small businesses, there may be hardships in informing the individual
salesperson or small business as to our rule and its application to
their conduct. SEMA suggested that comprehensive and ongoing efforts be
made to notify and educate companies and individuals involved in the
sale or lease of tires as to the rule's purpose, requirements,
application and penalties for non-compliance. SEMA did not offer
suggestions or descriptions as to what kinds of efforts it felt we
should undertake that would be helpful in providing effective and
comprehensive information to the individual salesperson or small
retailer. SEMA stated it was taking steps to educate its members of
their obligations under the TREAD Act, which would include 49 CFR
573.10.
We do not agree that a comprehensive and ongoing educational
campaign directed at small businesses and individual tire retailers is
necessary with respect to today's final rule. To begin, this is not a
matter to be addressed in a rule. Even if it were, this rule is not
complex and is consistent with ordinary judgment relating to the
intentional sale of defective or noncompliant tires--conduct which is
prohibited pursuant to 49 U.S.C. 30120(i) and (j). In addition, while
this rule applies to all persons, its
[[Page 38162]]
application is limited to persons who both knowingly and willfully sell
or lease a defective or noncompliant tire, and have actual knowledge
that the manufacturer of that tire notified its dealers of the defect
or noncompliance. Under this rule, a very limited number of individuals
would be obligated to file reports. In the interim final rule we stated
that we expect to receive fewer than ten reports of such incidents a
year, and no one suggested that this estimate was erroneous. Under
these limited circumstances, we do not believe a government-directed
educational campaign directed at small businesses and individual tire
retailers is appropriate.
Regulatory Analyses and Notices
1. Executive Order 12866 and DOT Regulatory Policies and Procedures
We have considered the impact of this rulemaking action under E.O.
12866 and the Department of Transportation's regulatory policies and
procedures. This rulemaking was not reviewed under E.O. 12866,
``Regulatory Planning and Review.'' This rulemaking 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
because this provision only involves reporting and the incidence of
covered sales and leases of defective or noncompliant tires is expected
to be small.
2. Regulatory Flexibility Act
We have also considered the impacts of this notice under the
Regulatory Flexibility Act. I certify that this rule will have no
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 reporting and the incidence of covered sales
and leases of defective or noncompliant tires is expected to be small.
3. National Environmental Policy Act
We have analyzed this proposal under the National Environmental
Policy Act and determined that it will not have any significant impact
on the quality of the human environment.
4. Paperwork Reduction Act
NHTSA has determined that this final rule will impose new
collection of information burdens within meaning of the Paperwork
Reduction Act of 1995 (PRA). Pursuant to 5 CFR 1320.13 Emergency
processing, NHTSA asked for, and received, approval from OMB for a
temporary emergency clearance for this collection. In the interim final
rule, NHTSA began the process of requesting a 3-year clearance for this
collection. In that interim final rule we also requested comments from
the public on this new collection of information burden. No comments
were received. NHTSA has submitted its request for a 3-year clearance
for this collection to OMB.
5. 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 Executive Order 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 requires the reporting
of knowing and willful sales or leases of defective or noncompliant
tires where the person selling or leasing the tire has actual knowledge
that the manufacturer of such a tire has notified its dealers of that
defect or noncompliance pursuant to either section 30118(c) or 30118(b)
of the Safety Act, 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 Executive Order 13132.
This rule making does not have those implications because it applies to
those persons who sell or lease defective or noncompliant tires, and
not to the States or local governments.
6. Civil Justice Reform
This rule does 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.
7. Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 (P.L. 104-4) requires
agencies to prepare a written assessment of the cost, 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.
Final Rule
Accordingly, the interim final rule amending 49 CFR part 573 which
was published at 65 FR 81409 on December 26, 2000, is adopted as final
with the following changes:
1. The authority citation for part 573 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.
2. Section 573.3 is amended by revising paragraph (a) and adding
paragraph (g) to read as follows:
Sec. 573.3 Application.
(a) Except as provided in paragraph (g) of this section, this part
applies to manufacturers of complete motor vehicles, incomplete motor
vehicles, and motor vehicle original and replacement equipment, with
respect to all vehicles and equipment that have been transported beyond
the direct control of the manufacturer.
* * * * *
(g) The provisions of Sec. 573.10 apply to all persons.
* * * * *
Issued on: July 18, 2001.
L. Robert Shelton,
Executive Director.
[FR Doc. 01-18309 Filed 7-20-01; 8:45 am]
BILLING CODE 4910-59-U