Mr. Michael J. Wirsch
Manager
Electric Transportation Department
Sacramento Municipal Utility District
P.O. Box 15830
Sacramento, CA 95852-1830

Dear Mr. Wirsch:

This is in reply to your letter of June 16, 1995, relating to the disposition of 16 City-El electric vehicles ("EVs") which were imported into the United States in 1992 for purposes of demonstration and testing. The EVs do not meet the Federal motor vehicle safety standards.

The EVs were imported pursuant to the declaration that, at the end of the test period, they would be exported or brought into compliance with the Federal motor vehicle safety standards not later than November 1995. You suggest that there may be a third alternative, which you would prefer: "transferring ownership" to McClellan Air Force Base for use on base property and not on the public roads. McClellan apparently has been testing another group of 25 EVs.

Although a literal interpretation of our regulations does not permit this transaction without exportation and reimportation of the EVs, we have determined that the transaction you propose is in the public interest, and may be accomplished, subject to the terms of this letter.

In brief, the regulation under which the EVs were imported does not allow transfer of ownership or possession, and provides that such vehicles must be exported or brought into compliance with all applicable Federal motor vehicle safety standards at the end of the period for which admission has been authorized. The regulations would permit the EVs to be exported to Mexico or Canada, transferred to McClellan, and reimported into the United States by McClellan under the same terms and conditions as the original importation (your letter indicates that McClellan may also be engaged in an evaluation of electric vehicles for use on military bases).

We assume that this course of action would be acceptable to you and to McClellan. Under that assumption, we have tentatively concluded that it would be in the public interest to forego the formalities and to allow a direct transfer of the EVs to McClellan without requiring them to be exported. However, in order to allow us to reach a final conclusion, we want you to obtain from McClellan and to provide us with a written statement similar to what McClellan would have provided had it imported the vehicles itself. Understanding from you that the EVs will not be operated on the public roads, McClellan should also provide this assurance. We also need a statement as to McClellan's eventual intended disposition of the EVs, which should include an assurance that none of the EVs will be sold to individuals for on-road use. This is especially important in view of the fact that McClellan appears to be one of the military bases that has been selected for closure.

Our eventual agreement to the transaction you propose will not relieve you of your obligation to fulfill the requirements of the U.S. Customs Service regarding the original importation of the EVs.

If you have any further questions, you may refer them to Taylor Vinson of this Office (202-366-5263).

Sincerely,

John Womack Acting Chief Counsel

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