Interpretation ID: aiam4320
Director
Automotive Safety Engineering
General Motors Corporation
General Motors Technical Center
30400 Mound Road
Warren
MI 48090-9015;
Dear Mr. Rogers: This responds to your letter to Mr. Barry Felrice, our Associat Administrator for Rulemaking, in which you explained why General Motors (GM) believes that it is not subject to the reporting requirements set forth in 49 CFR Part 544, *Insurer Reporting Requirements*. We conclude that GM is an 'insurer' as that term is defined in section 612(a)(3) of the Motor Vehicle Information and Cost Savings Act 15 U.S.C. 2032(a)(3) , that GM is therefore subject to the requirements of Part 544, and that GM is overdue in filing its report for the 1985 calendar year.; 49 CFR S544.3 specifies that, 'This part applies to the issuers o motor vehicle insurance policies listed in Appendices A or B, and *to any person which has a fleet of 20 or more motor vehicles (other than a governmental entity) which are used primarily for rental or lease and are not covered by theft insurance policies issued by insurers of motor vehicles,*' (Emphasis added). The emphasized language in the regulation is simply a quotation of the language used in section 612(a)(3) of the Cost Savings Act. Because the regulation uses the same language as the statute to describe this type of insurer, Part 544 applies only to those insurers that are statutorily-required to file these reports.; You noted in your letter that, 'GM has an employee lease fleet of 400 cars on which it does not have theft insurance.' As such, GM is an insurer within the meaning of section 612(a)(3), because it:; >>>1. Has a fleet of 20 or more vehicles, 2. Uses the vehicles primarily for rental or lease, and 3. Does not have theft insurance policies for this fleet.<<< GM appeared to agree that it was an insurer within the meaning of th statute when it filed its July 29, 1986 comments to the proposed Part 544. On page 2 of its comments, GM stated that the proposed criterion of exempting only those fleets with fewer than 20 vehicles would result in voluminous additional individual reports which would account for a relatively small percentage of the total vehicle population. GM stated that its lease fleet represents less than 5000 of one percent of all U.S. passenger cars. On page 3 of those comments, GM stated: ' The proposal requests additional information to aid in the agency's efforts to establish an appropriate exemption for small rental and leasing companies. As stated above, GM's lease program is expected to have no more than 5000 participants in 1987.' GM then stated that no data on costs or thefts were available for its leased fleet. This comment certainly implies that GM believed it would be required to report if the proposed requirements were adopted. Since the proposed requirements were adopted in this area, NHTSA thought that the vehicle manufacturers clearly understood that they were subject to these requirements, if they had a fleet of vehicles that were rented or leased to employees.; However, in your recent letter, you stated that you now believe tha you were not required to report theft data for this fleet for three reasons. First you stated that the GM 'evaluation fleet', which consists of 41,000 vehicles is *not* used primarily for rental or lease. According to your letter, slightly more than 4,000 vehicles are leased to employees. Since only 4,000 out of 41,000 vehicles in this fleet are leased to employees, you concluded that the 41,000 vehicle fleet is not used primarily for rental or lease. Hence, you believe that the statute does not require GM to report theft data for the 41,000 vehicle fleet. NHTSA agrees that GM is not required to file a report for the 41,000 vehicle fleet. The law requires GM to report *only* for the 4,000 vehicle fleet that is leased to employees.; Second, you argued that GM's 'evaluation lease' establishes conditional contract that limits the rights of the employee lessees. You sated that, 'Conventionally, the term 'lease' is applied to hiring on a lease with full rights of use for the lessee.' Since GM's evaluation lease limits the rights of the lessee, you stated that it is not a 'lease' within the conventional meaning of that word, so GM is not required to report by the statute. NHTSA agrees that the term 'lease' was used in its conventional sense in section 612. However, neither standard dictionaries of the English language nor Black's Law Dictionary define a lease as a transaction that gives *unconditional* rights of use to the lessee. Instead, a lease is generally defined as a transaction whereby an owner gives another the use of his property for a period of time in return for some compensation. GM's employee lease program satisfies this test, so GM is required to report theft data on the vehicles in its employee lease fleet.; Third, GM noted that the preamble to the final rule establishing Par 544 referred to this type of insurer as 'rental and leasing companies.' Since GM is not a rental *and* leasing company, it concludes that Part 544 was not intended to apply to it. NHTSA agrees that GM is not a rental and leasing company. That term was used as a shorthand notation for the following language in the application section of Part 544 and in the statute: 'any person which has a fleet of 20 or more motor vehicles (other than a governmental entity) which are used primarily for rental or lease and are not covered by theft insurance policies ...' This shorthand notation was not intended in any way to limit the requirement in Part 544 and the statute for such persons to file reports. Moreover, the language of Part 544 and the statute prevail over the language in a preamble in any event. Accordingly, GM is required to comply with its statutory duty to file reports.; GM has not yet filed its report for the 1985 calendar year, which wa due by January 31, 1987. Since the report was not filed because of a misunderstanding as to whether GM was subject to the requirements of Part 544, NHTSA will not take any enforcement action against GM for this failure to file a timely report if we receive your report under Part 544 for the 1985 calendar year within 45 days of the date of this letter.; Sincerely, Erika Z. Jones, Chief Counsel