SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background

II. Discussion of the Interim Final Rule

III. Regulatory Analyses and Notices

IV. Public Participation

I. Background

This interim final rule (IFR) amends 49 CFR part 555, “Temporary Exemption from Motor Vehicle Safety and Bumper Standards,” to align the regulation with the Administrator's statutory discretion to determine the vehicle population covered by a temporary exemption, including vehicles manufactured prior to the effective date of a grant of temporary exemption.^[1]

Except as provided in 49 U.S.C. 30112(b), 30113, and 30114, a person may not manufacture for sale, sell, offer for sale, import, or introduce or deliver for introduction into interstate commerce any motor vehicle that does not comply with the applicable FMVSS and is not covered by a certification to that effect issued under Section 30115.^[2] Section 30112(b) lists limited categories of persons or motor vehicles to which the requirements of section 30112(a) do not apply.^[3]

Section 30113 authorizes the Secretary of Transportation to exempt, on a temporary basis, under specified circumstances, and on terms the Secretary deems appropriate, motor vehicles from an FMVSS or bumper standard.^[4] The Secretary has delegated the authority for implementing this section to NHTSA.^[5] The exercise of NHTSA's authority to grant, in whole or in part, a temporary exemption to a vehicle manufacturer is conditioned upon the agency's making specified findings. The agency must comprehensively evaluate the request for exemption and find that the temporary exemption is consistent with the public interest and with the objectives of the National Traffic and Motor Vehicle Safety Act (“Safety Act”), as amended.^[6] In addition, the agency must make at least one of the following four findings:^[7]

• Compliance with the standard would cause substantial economic hardship to a manufacturer that has tried to comply with the standard in good faith.
• The exemption would make easier the development or field evaluation of a new motor vehicle safety feature providing a safety level at least equal to the safety level of the standard.
• The exemption would make the development or field evaluation of a low-emission motor vehicle easier and would not unreasonably lower the safety level of that vehicle.
• Compliance with the standard would prevent the manufacturer from selling a motor vehicle with an overall safety level at least equal to the overall safety level of nonexempt vehicles.

To provide procedures for implementing the provisions in section 30113 concerning temporary exemptions, NHTSA established 49 CFR part 555, “Temporary Exemption from Motor Vehicle Safety and Bumper Standards,” which became effective January 29, 1973 (38 FR 2694). Section 555.7, “Processing of applications,” describes the steps that NHTSA takes after it receives an exemption petition and the effective date of the temporary exemption if the petition is granted. Under section 555.7(f), unless a later date is specified in the notice of the grant, a temporary exemption is effective upon publication of the notice in the Federal Register and exempts vehicles manufactured on and after the effective date.

In 2015, Congress passed the Fixing America's Surface Transportation (“FAST”) Act.^[8] The FAST Act added 49 U.S.C. 30112(b)(10), which provided a new exception to the prohibition in section 30112(a)(1) against manufacturing for sale, selling, offering for sale, introducing or delivering for introduction into interstate commerce, or importation into the United States of a vehicle not certified to comply with the FMVSS. Section 30112(b)(10) states that section 30112(a)(1) does not apply to vehicles introduced into interstate commerce solely for the purpose of testing or evaluation by particular manufacturers (“FAST Act vehicles”), so long as the manufacturer agrees not to sell or offer for sale the motor vehicle at the conclusion of the testing or evaluation.^[9]

In this IFR, NHTSA amends 49 CFR 555.7(f) to remove the statement that a temporary exemption applies only to vehicles manufactured on and after the effective date of a temporary exemption. NHTSA adds a new paragraph (g), stating that a temporary exemption exempts vehicles manufactured on and after the effective date unless otherwise determined by the Administrator. This IFR also removes language in 49 CFR 555.5 requiring that three copies of a request for exemption be provided to the Administrator.

II. Discussion of the Interim Final Rule

A. Purpose of the Interim Final Rule

Section 2 of Executive Order 14219 instructs agencies to identify and rescind or modify, as appropriate, regulations that do not comport with the best reading of the underlying statutory authority. The purpose of this IFR is to align the regulatory text regarding the ( printed page 48309) effective date of exemptions with the Safety Act's provision establishing that authority. Section 30113 does not restrict the granting of an exemption to only motor vehicles that have already been manufactured; nor does the statute state that an exemption only has future effect. In a final rule that was issued on October 25, 1974 without prior notice and comment, paragraph (f) was added to section 555.7 together with certain additional amendments to part 555. The agency found that because the amendments pertained to agency practice and were interpretative in nature, no notice of proposed rulemaking was required under 5 U.S.C. 553(b). In that rulemaking, NHTSA stated that the purpose of paragraph (f) was to clarify NHTSA's policy that temporary exemptions should not “serve to excuse manufacture of nonconforming vehicles” in violation of section 108(a)(1) of the Safety Act (now codified as 49 U.S.C. 30112(a)(1)).^[10] That section provides in relevant part that “a person may not manufacture for sale, sell, offer for sale, introduce or deliver for introduction in interstate commerce, or import into the United States, any [nonconforming] motor vehicle or motor vehicle equipment.”

By limiting the Administrator to granting temporary exemptions only to vehicles manufactured on and after the effective date of a temporary exemption, section 555.7 does not comport with the best reading of section 30113, which does not so limit the Administrator's discretion. It remains NHTSA's general policy that part 555 should not serve to excuse prior violations of section 30112(a), including prior manufacture for sale of nonconforming vehicles. Revising paragraph (f) does not change that policy. Rather, it codifies the Administrator's statutory discretion to exempt previously manufactured vehicles in circumstances that are consistent with the agency's enabling legislation as amended by the FAST Act. For instance, vehicles produced or operating in interstate commerce that are subject to exceptions created under the FAST Act or relevant exemptions may appropriately be eligible for exemptions under part 555—which, of course, requires the appropriate safety determination and a finding that granting an exemption is consistent with the public interest and the Safety Act. This issue is particularly relevant in light of dramatic changes in vehicle technology and in light of passage of the FAST Act—and as reflected in recent changes in the nature of exemption requests received by NHTSA. Going forward, NHTSA intends to review each request for exemption of vehicles already manufactured prior to a grant of exemption on a case-by-case basis.^[11]

B. Considerations Specific to FAST Act Vehicles

Although the amendment in this IFR is not specific to FAST Act vehicles, NHTSA anticipates that manufacturers of vehicles that utilize the exception for testing or evaluation added by the FAST Act may seek exemptions for such vehicles under the amended section 555.7.^[12] This may prevent substantial waste by codifying for these vehicles a pathway to uses other than testing or evaluation. Granting such exemptions would not be contrary to NHTSA's policy that part 555 exemptions generally should not excuse the manufacture of nonconforming vehicles because these vehicles were not required to meet the FMVSS in the first instance. Because both section 30112(b)(10) and section 30113 provide exceptions to the prohibitions of section 30112(a), should such vehicles be granted an exemption under section 30113 to be used for purposes other than “testing or evaluation,” the vehicles would no longer be subject to section 30112(b)(10).

In establishing the non-application provision in section 30112(b)(10), Congress facilitated the expeditious testing of new vehicle technologies on public roads. Unlike the process for obtaining temporary exemptions, no approval from NHTSA is required for qualifying manufacturers (those producing FMVSS-compliant vehicles prior to the enactment of the FAST Act) to operate their test vehicles on public roads. NHTSA believes that Congress's incorporation of the language “agrees not to sell or offer for sale” in section 30112(b)(10) was not meant to bar vehicles operated under 30112(b)(10) from entry into the market entirely or that such a manufacturer is precluded from seeking to avail itself of other available legal pathways. Accordingly, if a manufacturer is granted an exemption under section 30113 that includes a vehicle originally introduced into interstate commerce under 30112(b)(10), the grant of the 30113 exemption for that vehicle would render moot the restrictions of section 30112(b)(10). This would allow the vehicle to be used for purposes other than testing or evaluation, including being offered for sale if the terms of the exemption so permit.^[13]

C. Certification and Production Volume

Under 49 CFR part 555 and part 567, “Certification,” manufacturers must certify vehicles subject to a temporary exemption as conforming to all applicable FMVSS and bumper standards in effect on the date of manufacture of the vehicle, and must affix securely a label containing specified language, including the date of manufacture as well as a list of standards for which they have been exempt.^[14] This IFR does not amend these requirements. Therefore, the same certification and labeling requirements will apply to exempted vehicles manufactured prior to the date of an exemption as those manufactured after, subject to any terms and conditions of an exemption grant. This is true regardless of whether the applicable FMVSSs change during the time between a vehicle being manufactured and when an exemption is granted. However, the Administrator may consider such factors when determining whether a grant is consistent with the public interest and the Safety Act and when determining what grant terms may be appropriate. In addition, consistent with 49 U.S.C. 30113(d), for the purpose of accounting the maximum annual sales volume under a grant, vehicles manufactured prior to the effective date of a grant will be accredited to the 12-month period in which they are sold ( i.e., regardless of the timing of their manufacture).

D. Reduction in Application Paperwork Burden

This IFR also removes the requirement in 49 CFR 555.5(b) requiring that applications be submitted in three copies. In lieu of physical duplicate submissions, applicants are now required to submit electronically via email. This administrative modernization eliminates unnecessary ( printed page 48310) paper burdens and costs for petitioners while enabling faster distribution and concurrent internal review of exemption requests within the agency.

E. Prior Notice and Comment Not Required

The Administrative Procedure Act (APA), codified at 5 U.S.C. 553, provides that notice and public comment procedures are not applicable to “interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice” (5 U.S.C. 553(b)(A)). The APA defines “rule” as “the whole or part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy” (5 U.S.C. 551(4)) (emphasis added). Interpretive rules “advise the public of the agency's construction of the statutes and rules which it administers.” See, e.g., Perez v. Mortgage Bankers Ass'n, 575 U.S. 92, 97 (2015) (citing Shalala v. Guernsey Memorial Hospital, 514 U.S. 87, 99 (1995)).

As explained above, this IFR is a rule of agency organization, procedure, or practice, an interpretative rule, or general statement of policy and therefore notice-and-comment procedures need not be done under 5 U.S.C. 553. This IFR clarifies NHTSA's policy that the determination of whether a particular exemption complies with the requirements of the Safety Act is done on a case-by-case basis within the context of analyzing a specific request for exemption. This IFR interprets the current text of sections 30113 and 30112 to not place a direct restriction on exemptions applicable to vehicles that were previously manufactured and to establish cognizable populations of such vehicles that may be eligible for exemptions. In addition, under the principles stated in Perez v. Mortg. Bankers Ass'n, 575 U.S. 92 (2015), the agency is not required to use notice and comment procedures to issue a new interpretive rule amending an existing interpretive rule. Just as the 1974 rule did not undergo notice and comment procedures, no such procedures are needed for this IFR.

In determining whether a rule is “legislative” (and thus generally subject to the APA's notice and comment requirements) rather than “interpretative,” among the factors courts consider are whether, in the absence of a rule, an agency has an adequate basis for enforcement action or other agency action to confer benefits; whether the rule leaves the agency with any discretion; and whether the rule repudiates or is irreconcilable with a prior legislative rule. Each of these factors is addressed briefly below.

This IFR has no impact on the agency's basis for enforcement actions. It does not confer benefits because NHTSA, in prior instances consistent with statute, has exempted certain vehicles notwithstanding § 555.7(f). It also does not commit the Administrator to any substantive outcome in response to any exemption request. The IFR is not irreconcilable with a prior legislative rule, as the previous rule it amends was itself an interpretive rule or a rule of agency procedure.

This IFR is also a rule of agency organization, procedure, or practice. Part 555 contains procedures governing how NHTSA processes applications for exemption, such as which documents are published in the Federal Register , the timing of effect, and whether a public hearing is needed. The amendments to § 555.5 direct the electronic means by which applications for exemption are to be submitted. The amendments to § 555.7 codify the scope of the Administrator's discretion regarding the determination of an exempted vehicle population. In addition, the changes do not impact substantive rights because NHTSA has exempted relevant vehicles where appropriate under statute notwithstanding the language in § 555.7.

Finally, although such a determination is not necessary due to this IFR being an interpretative rule, general statement of policy, or rule of agency organization, procedure, or practice, there is good cause to issue this IFR without prior notice and comment under 5 U.S.C. 553 (b)(B) because notice and public comment are unnecessary. This is an action that only states agency interpretation and general policy and aligns the regulatory text with that interpretation. Nonetheless, the agency is seeking comment as detailed below.

F. Request for Comment

As explained above, the APA authorizes NHTSA to issue this IFR without prior notice or opportunity for public comment. As an IFR, this regulation is in effect and binding upon its effective date. No further regulatory action by NHTSA is necessary to make this rule effective. However, to benefit from comments that interested parties and the public may have, NHTSA is requesting that any comments be submitted to the docket for this notice. NHTSA is providing an opportunity for comment on this IFR for 30 days after this action's publication date. Comments received in response to this notice will be considered by the agency. Following the close of the comment period, the agency will publish a final rule responding to the comments and making any necessary changes to the provisions of this IFR.

III. Regulatory Analyses and Notices

Executive Order (E.O.) 12866, E.O. 14192, and E.O. 14219

NHTSA has considered the impact of this rulemaking action under Executive Order (E.O.) 12866, E.O. 14192, and E.O. 14219. This rule is nonsignificant under E.O. 12866 and was not reviewed by the Office of Management and Budget. NHTSA has not quantified any potential benefits or costs. NHTSA does not anticipate any new regulatory costs, as the rule does not amend any of the substantive requirements for petitions submitted under part 555. Removal of the three-copy requirement will provide a minor reduction in paperwork burden. E.O. 14219 is discussed above.

Executive Order 13132 (Federalism)

NHTSA has examined today's rule pursuant to E.O. 13132 (64 FR 43255, August 10, 1999) and concludes that no additional consultation with States, local governments, or their representatives is mandated beyond the rulemaking process. The agency has concluded that this rule does not have federalism implications because the rule does not 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 IFR makes minor amendments to an existing procedural regulation in 49 CFR part 555 and is not a safety standard and imposes no new requirements or responsibilities.

Executive Order 12988 (Civil Justice Reform)

When promulgating a regulation, E.O. 12988 specifically requires that the agency must make every reasonable effort to ensure that the regulation, as appropriate: (1) specifies in clear language the preemptive effect; (2) specifies in clear language the effect on existing Federal law or regulation, including all provisions repealed, circumscribed, displaced, impaired, or modified; (3) provides a clear legal standard for affected conduct rather than a general standard, while promoting simplification and burden reduction; (4) specifies in clear language the retroactive effect; (5) specifies whether administrative proceedings are to be required before parties may file suit in court; (6) explicitly or implicitly ( printed page 48311) defines key terms; and (7) addresses other important issues affecting clarity and general draftsmanship of regulations.

Pursuant to this E.O., NHTSA notes that, as discussed above with regard to E.O. 13132, there is no preemptive effect associated with this IFR. NHTSA notes further that there is no requirement that individuals submit a petition for reconsideration or pursue other administrative proceeding before they may file suit in court.

Executive Order 13609 (Promoting International Regulatory Cooperation)

E.O. 13609 promotes international regulatory cooperation to meet shared challenges involving health, safety, labor, security, environmental, and other issues and to reduce, eliminate, or prevent unnecessary differences in regulatory requirements. NHTSA has analyzed this IFR under the policies and agency responsibilities of E.O. 13609 and has determined that it has no effect on international regulatory cooperation.

Regulatory Flexibility Act

Under the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) (as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996; 5 U.S.C. 601, et seq.), where a proposed rule must be published for comment by 5 U.S.C. 553 or any other law, agencies must prepare and make available for public comment a regulatory flexibility analysis that describes the effect of the rule on small entities ( i.e., small businesses, small organizations, and small government jurisdictions). No regulatory flexibility analysis is required, however, if the head of an agency or an appropriate designee certifies that the rule will not have a significant economic impact on a substantial number of small entities. Because NHTSA was not required by law to publish a proposed rule, the analytical requirements of the RFA do not apply.

National Environmental Policy Act

The Department has analyzed the environmental impacts of this IFR pursuant to the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321, et seq.). NHTSA has determined that this rule is categorically excluded pursuant to 23 CFR 771.118(c)(4). Categorical exclusions are categories of actions that the agency has determined normally do not significantly affect the quality of the human environment and therefore do not require either an environmental assessment (EA) or environmental impact statement (EIS). See DOT Order 5610.1D § 9. In analyzing the applicability of a categorical exclusion (CE), the agency must also consider whether extraordinary circumstances are present that would warrant the preparation of an EA or EIS. Id. § 9(b).Each DOT Operating Administration (OA) may apply CEs established in another OA's procedures. Id. § 9(f). To do so, the OA “must evaluate the action for extraordinary circumstances identified in the OA procedures in which the CE is established to determine if a normally excluded action may have a significant impact and coordinate with the originating OA to ensure that the CE is being applied correctly.” Id. This rulemaking, which removes the statement that a temporary exemption applies only to vehicles manufactured on and after the effective date of a temporary exemption, codifies the Administrator's discretion to determine the vehicle population covered by a temporary exemption, and removes the requirement that an application be submitted in three copies, is categorically excluded pursuant to 23 CFR 771.118(c)(4), “Planning and administrative activities not involving or leading directly to construction, such as: Training, technical assistance and research; promulgation of rules, regulations, directives, or program guidance; approval of project concepts; engineering; and operating assistance to transit authorities to continue existing service or increase service to meet routine demand.” NHTSA has coordinated with the Federal Transit Administration to ensure that this CE is being applied correctly. NHTSA does not anticipate any environmental impacts, and there are no extraordinary circumstances present in connection with this rulemaking.

Paperwork Reduction Act

Under the Paperwork Reduction Act of 1995 (PRA), a person is not required to respond to a collection of information by a Federal agency unless the collection displays a valid Office of Management and Budget (OMB) control number. There are no changes to information collections associated with this IFR.

National Technology Transfer and Advancement Act

Under the National Technology Transfer and Advancement Act of 1995 (NTTAA) (Pub. L. 104-113), “all Federal agencies and departments shall use technical standards that are developed or adopted by voluntary consensus standards bodies, using such technical standards as a means to carry out policy objectives or activities determined by the agencies and departments.” There are no voluntary consensus standards relevant to this IFR.

Unfunded Mandates Reform Act

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires Federal agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually ($206 million adjusted for inflation with base year of 1995). This IFR would not result in expenditures by State, local, or tribal governments, in the aggregate, or by the private sector in excess of $206 million annually. As a result, the requirements of Section 202 of the Act do not apply.

Regulation Identifier Number (RIN)

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

Privacy Act

In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its rulemaking process. DOT posts these comments, without edit, to www.regulations.gov, as described in the system of records notice, DOT/ALL-14 FDMS, accessible through www.dot.gov/​privacy. To facilitate comment tracking and response, we encourage commenters to provide their name, or the name of their organization; however, submission of names is completely optional. Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). For information on DOT's compliance with the Privacy Act, please visit https://www.transportation.gov/​privacy.

Congressional Review Act

Pursuant to the Congressional Review Act (CRA) (5 U.S.C. 801, et seq.), the Office of Information and Regulatory Affairs designated this IFR as not a “major rule,” as defined by 5 U.S.C. 804(2). NHTSA will submit this IFR to Congress and the Government Accountability Office as required by the CRA. ( printed page 48312)

IV. Public Participation

How do I prepare and submit comments?

Your comments must be written and in English. To ensure that your comments are filed correctly in the Docket, please include the docket number indicated in this document in your comments.

Pursuant to 49 CFR 553.21, your comments must not be more than 15 pages long. NHTSA established this limit to encourage you to write your primary comments in a concise fashion. However, you may attach necessary additional documents to your comments. There is no limit on the length of the attachments.

If you are submitting comments electronically as a PDF (Adobe) file, NHTSA asks that the documents be submitted using the Optical Character Recognition (OCR) process, thus allowing NHTSA to search and copy certain portions of your submissions.

Please note that pursuant to the Data Quality Act, for substantive data to be relied upon and used by the agency, it must meet the information quality standards set forth in the OMB and DOT Data Quality Act guidelines. Accordingly, we encourage you to consult the guidelines in preparing your comments. OMB's guidelines may be accessed at https://www.transportation.gov/​regulations/​dot-information-dissemination-quality-guidelines.

How can I be sure that my comments were received?

If you wish the Docket to notify you upon its receipt of your comments, enclose a self-addressed, stamped postcard in the envelope containing your comments. Upon receiving your comments, the Docket will return the postcard by mail.

How do I submit confidential business information?

You should submit a redacted “public version” of your comment (including redacted versions of any additional documents or attachments) to the docket using any of the methods identified under ADDRESSES . This “public version” of your comment should contain only the portions for which no claim of confidential treatment is made and from which those portions for which confidential treatment is claimed has been redacted. See below for further instructions on how to do this.

You also need to submit a request for confidential treatment directly to the Office of Chief Counsel. Requests for confidential treatment are governed by 49 CFR part 512. Your request must set forth the information specified in part 512. This includes the materials for which confidentiality is being requested (as explained in more detail below); supporting information, pursuant to § 512.8; and a certificate, pursuant to § 512.4(b) and part 512, appendix A.

You are required to submit to the Office of Chief Counsel one unredacted “confidential version” of the information for which you are seeking confidential treatment. Pursuant to § 512.6, the words “ENTIRE PAGE CONFIDENTIAL BUSINESS INFORMATION” or “CONFIDENTIAL BUSINESS INFORMATION CONTAINED WITHIN BRACKETS” (as applicable) must appear at the top of each page containing information claimed to be confidential. In the latter situation, where not all information on the page is claimed to be confidential, identify each item of information for which confidentiality is requested within brackets: “[ ].”

You are also required to submit to the Office of Chief Counsel one redacted “public version” of the information for which you are seeking confidential treatment. Pursuant to § 512.5(a)(2), the redacted “public version” should include redactions of any information for which you are seeking confidential treatment ( i.e., the only information that should be unredacted is information for which you are not seeking confidential treatment).

NHTSA is currently treating electronic submission as an acceptable method for submitting confidential business information to the agency under part 512. Please do not send a hardcopy of a request for confidential treatment to NHTSA's headquarters. The request should be sent to Dan Rabinovitz in the Office of the Chief Counsel at Daniel.Rabinovitz@dot.gov. You may either submit your request via email or request a secure file transfer link. Manufacturers or any companies that already have a Confidential Business Information (CBI) Portal account or an Enterprise Account with NHTSA should use the CBI Portal for their submission. If you submit a CBI request, please also email a courtesy copy of the request to Eli Wachtel at eli.wachtel@dot.gov.

Will the agency consider late comments?

We will consider all comments received before the close of business on the comment closing date indicated above under DATES . To the extent possible, we will also consider comments that the docket receives after that date. If the docket receives a comment too late for us to consider in developing a final rule (assuming that one is issued), we will consider that comment as an informal suggestion for future rulemaking action.

How can I read the comments submitted by other people?

You may read the comments received by the docket at the address given above under ADDRESSES . The hours of the docket are indicated above in the same location. You may also see the comments on the internet. To read the comments on the internet, go to https://www.regulations.gov. Follow the online instructions for accessing the dockets.

Please note that even after the comment closing date, we will continue to file relevant information in the docket as it becomes available. Further, some people may submit late comments. Accordingly, we recommend that you periodically check the Docket for new material. You can arrange with the docket to be notified when others file comments in the docket. See www.regulations.gov for more information.

In consideration of the foregoing, NHTSA amends 49 CFR part 555 as set forth below.

91 FR 48307