Interpretation ID: 30112 30113 - Goodman
Mr. Timothy H. Goodman
Thomas Hine LLP
1919 M Street, N.W. Suite 700
Washington, D.C. 20036 Dear Mr. Goodman:
This responds to your October 8, 2021 letter concerning two provisions of the National Traffic and Motor Vehicle Safety Act (Safety Act) (49 U.S.C.§§ 30101 et seq.) as applied to several automated vehicles your client produces. The vehicles are currently undergoing testing on public roads for testing or evaluation under the non-application provision in 49 U.S.C. 30112(b)(10).1 After the testing, your client plans to seek a general exemption under 49 U.S.C. 30113 (regulations codified at 49 CFR part 555) for the sale or commercial deployment of identical vehicles.2 You ask: if the National Highway Traffic Safety Administration (NHTSA) were to grant the part 555 exemption petition for the identical vehicles, could the grant include the vehicles now undergoing testing on public roads? You believe the answer should be yes.
As explained below, NHTSA agrees with much of your analysis regarding the logic in including the nonconforming FAST Act vehicles3 in the part 555 exemption since the vehicles in the two groups would be identical. However, there is tension between 30112(b)(10) and 30113 that must be reconciled, and a provision in part 555 that is contrary to this outcome.4 The part 555 provision could be changed, but changes to the regulations are best accomplished through notice and comment rulemaking. So, while NHTSA agrees with the logic of your interpretation request, we believe that seeking a change via rulemaking would resolve the ambiguity in the applicable laws more definitively and would provide an opportunity for public comment on the issue.
Background
The Safety Act directs, in general, 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 motor vehicle or motor vehicle equipment manufactured on or after the effective date of an applicable Federal motor vehicle safety standard (FMVSS), unless the vehicle or equipment complies with the standard.5 However, the prohibition is subject to exceptions and exemptions,6 two of which are relevant to your letter.
First, § 30112(b)(10), established in December 2015 as part of the FAST Act, states that the general prohibition in 30112 that a person may not manufacture for sale, sell, offer for sale, introduce or deliver for introduction in interstate commerce, or import, nonconforming vehicles does not apply to the “introduction of a motor vehicle in interstate commerce solely for purposes of testing or evaluation by a [qualifying] manufacturer that agrees not to sell or offer for sale the motor vehicle at the conclusion of the testing or evaluation.”7 This provision allows those qualifying manufacturers to operate, on public roads, nonconforming domestically produced vehicles for testing or evaluation. (The manufacturer you describe in your letter is a qualifying manufacturer under § 30112(b)(10).)
Second, § 30113 authorizes NHTSA to exempt motor vehicles from an FMVSS under defined circumstances, thereby temporarily allowing manufacturers to produce nonconforming vehicles for sale or other commercial deployment. Vehicles may only be exempted under § 30113 under one of four enumerated bases, including a basis that the vehicle for which the exemption is sought offers an overall safety level at least equal to that of a nonexempt vehicle. (49 U.S.C. 30113(b)(3)(B)(iv), 49 CFR 555.6(d).)
Discussion
The tension between 30112(b)(10) and 30113 arises because the former has language limiting the sale of vehicles introduced in interstate commerce for testing or evaluation after completion of such testing or evaluation, while the latter allows manufacturers a means to sell noncomplying vehicles that are at least as safe as non-exempted vehicles. However, we believe the provisions can be reconciled, as Congress enacted the FAST Act non-application clause after the general exemption provision of 30113 and presumably designed the two provisions to work in concert.
We believe Congress did not envision prohibiting manufacturers from selling or deploying vehicles previously tested or evaluated under 30112(b)(10) if those vehicles are identical to vehicles permitted for sale by 30113; if Congress intended such a surprising outcome under 30112(b)(10), it would have made its intentions clear. Accordingly, we interpret the clause “that agrees not to sell or offer for sale the motor vehicle at the conclusion of the testing or evaluation” as emphasizing Congress’s intent not to permit a later sale or offer for sale of the FAST Act vehicle if it is not at least as safe as a compliant vehicle. Thus, if NHTSA determines that vehicles identical to the 30112(b)(10) vehicles are at least as safe as non-exempt vehicles, it is logical that Congress intended that the 30112(b)(10) vehicles be permitted to be sold or deployed under 30113.
There is, however, more to reconciliating the two, as NHTSA’s regulation implementing 30113 bears on the situation at hand. 49 CFR 555.7(f) states: “[u]nless a later effective 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.” NHTSA explained in the preamble to the final rule that established §555.7(f) that the amendment was “intended to clarify the agency’s policy that exemptions should not have retroactive effect which could serve to excuse manufacture of nonconforming vehicles in violation of […] the Safety Act.”8 We generally agree with your argument that your client’s testing and evaluation vehicles were not nonconforming vehicles in violation of the Safety Act because of the exception in 30112(b)(10) and so 555.7(f)’s focus on nonpermitted actions may not be germane. (Indeed, this is the basis for our position that part 555 could be reconciled with the Fast Act exception.) However, the plain language of part 555 is unambiguous as written; thus, our ability to interpret away from that plain meaning is limited. We believe addressing this matter in rulemaking is appropriate and would provide an opportunity to clarify part 555 as the regulation evolves to include vehicles previously manufactured.
To summarize, based on the language of part 555, NHTSA maintains its general position that part 555 is written to provide exemptions for vehicles that have yet to be manufactured. However, in the situation you describe, it would appear logical to allow the former FAST Act vehicles existing at the time NHTSA grants the part 555 petition to be included in the part 555 exemption. In order to remove any ambiguity, we believe that 49 CFR 555.7(f) should be amended, something NHTSA would consider upon receipt of a petition. Persons interested in submitting a petition for rulemaking to amend part 555 should follow the procedures for such submissions in 49 CFR part 552. It is worth stressing, however, that NHTSA’s conclusion in this letter is not a guarantee of a particular response to a petition for rulemaking. Any decision to grant or deny petitions for rulemaking is made in the context of a rulemaking proceeding in accordance with statutory criteria, including opportunity for notice and comment.
If you have any further questions regarding this issue, please feel free to contact Callie Roach of my staff at (202) 366-2992.
Sincerely,
Digitally signed by ANN
ANN ELIZABETH ELIZABETH CARLSON
CARLSON
Date: 2022.05.19 14:59:50
-04'00'
Ann Carlson Chief Counsel
Dated: 5/19/22
Ref: 30112 and 30113
1 The non-application provision at 49 U.S.C. § 30112(b)(10) was added in 2015 to the Safety Act by the Fixing America’s Surface Transportation (FAST) Act.
2 The basis of the part 555 petition is the exempted vehicles would have an equivalent overall level of safety to a non-exempted vehicle. The exempted vehicles would operate as a single captive fleet; they would not be sold to ordinary consumers.
3 “FAST Act vehicles” refers to vehicles that are tested or evaluated subject to the exception in 30112(b)(10).
4 49 CFR §555.7(f).
5 Section 30112(a)(1) of the Safety Act (49 U.S.C. 30101 et seq.).
6 Sections 30112(a) and (b).
7 Paragraph 30112(b)(10) specifies that the non-applicability only extends to a manufacturer that, prior to the enactment of the FAST Act (December 4, 2015), has (a) manufactured and distributed motor vehicles into the U.S. that are certified to comply with all applicable FMVSS; (b) submitted to the Secretary appropriate manufacturer
identification information under 49 CFR part 566, “Manufacturer Identification;” and (c) if applicable, identified an agent for service of process in accordance with 49 CFR part 551, “Procedural Rules.”
8 39 FR 37988, October 25, 1974.