Interpretation ID: nht71-4.15

DATE: 09/20/71

FROM: AUTHOR UNAVAILABLE; L. R. Schneider; NHTSA

TO: Phillips Petroleum Company

TITLE: FMVSS INTERPRETATION

TEXT: This is in reply to your letter of June 29, 1971, requesting that we reconsider certain opinions provided to you in a letter dated June 4, 1971, which was in response to your letter of May 11, 1971. The opinions you wish us to reconsider concern whether certain tires used by Phillips for experimental purposes must comply with Motor Vehicle Safety Standard No. 109. The facts as you state them are that Phillips purchases new passenger car tires that have been certified as conforming to Standard No. 109, buffs them down, and then applies new tread, consisting of experimental rubber compounds, to them. You state that these experimental tires are tested by using them on the public roads, as well as by other methods.

In our letter to you of June 4 we stated that we consider these tires to be new pneumatic tires, and subject to Motor Vehicle Safety Standard No. 109. He further stated that we considered the testing of them on public highways to be an introduction of these tires in interstate commerce, and that if the tires failed to conform to the standard, then such testing would be in violation of @ 109(a)(1) of the National Traffic and Motor Vehicle Safety Act, (11 U.S.C. @ 1397(a)(1)). For the reasons given below, we affirm our earlier opinion. In addition, while not stated in our earlier letter, the failure by Phillips to certify these tires as conforming to Standard No. 109, pursuant to section 114 of the Act (13 U.S.C. @ 1403), Standard No. 109, and the Tire Identification and Recordkeeping regulations (49 CFR Part 574) constitutes a violation of section 108(a)(3) of the Act (15 U.S.C. @ 1397(a)(3)). Each violation of section 108(a)(1) and 108(a)(3) is subject to a civil penalty, as provided in section 109 of the Act, and to other sections as provided in section 110 (15 U.S.C. @@ 1373, 1399).

Your position appears to be that the tires in question are not covered by either Standard No. 109 or Standard No. 117 (Retreaded Pneumatic Tires) as the National Traffic and Motor Vehicle Safety Act does not apply to the use of motor vehicles or motor vehicle equipment after the first purchase for a purpose other than resale. You claim that Phillips' activity with respect to these tires is merely to use them and, citing section 108(b)(1) of the Act (15 U.S.C. @ 1397(b)(1)), takes place after the first purchase for a purpose other than resale and is consequently not within the scope of section 108(a)(1). The tires, therefore, need not comply with the standards.

You make a concurrent argument as well, in which you state that the prohibitions in section 108(a)(1) are "restricted to controlling the sale or resale of tires in commercial channels." You go on to state that if this were not true, the government would be forced to control the use and resale of the tires by the consumer. You feel that this argument is substantiated by the exemption in Standard No. 109 concerning the sale (your emphasis) of "reclassified tires."

Phillips' activity under the Act with respect to the tires in question is not that of a user or consumer, but that of a manufacturer. According to your letter Phillips purchases new passenger tires for the purpose of transforming them into experimental tires. In this regard Phillips is manufacturing a new and different tire, and the original tires are no more than raw materials which become part of the final product manufactured by Phillips. Whether or not Phillips ultimately sells or intends to sell the tires is unimportant in determining whether Phillips is a statutory manufacturer, as the definition of "manufacturer" under the Act (@ 102(3), 15 U.S.C. @ 1391(3)) does not require that the product be manufactured or assembled for sale.

Moreover, you are incorrect in your analysis of the provisions of the National Traffic and Motor Vehicle Safety Act. Section 108(a)(1) prescribes more than the manufacturing for sale, or the sale of motor vehicle and motor vehicle equipment. In clear language it also prescribes the introduction of such components in interstate commerce, and prohibits the latter as well as the former activities after the effective date of a motor vehicle safety standard, unless the vehicle or item of equipment conforms to the standard. Contrary to the arguments in your letter, the use of such components on the public highways is an introduction of them in interstate commerce and subject to the prohibitions of section 108(c)(1). The exception to this, "after the first purchase . . . in good faith for purposes other than resale" (@ 108(b)(2)), is intended to exempt used

vehicles (and equipment) manufactured after a standard's effective date, as a continued reading of the section, which authorizes the establishment of used vehicle standards, indicates. It allows, for example, a vehicle or item of equipment that was manufactured after the effective date of applicable standards to be resold without requiring the seller to ensure that the vehicle or equipment is in the same condition with regard to the standards as when it was new. This section is not intended to allow individuals to manufacture vehicles or equipment for their own use on public highways without complying with applicable standards.

Your reference to the treatment of reclassified tires is not in point. The decision in that rulemaking action was to prohibit either the manufacture or the sale of these tires, and the latter course was chosen so that manufacturers would not be required to destroy noncertified tires that would be inexpensive and not unsafe for a narrowly prescribed use. In no way does this exemption reflect the limitation that you suggest on the authority of the NHTSA.

As we stated to you in our letter of June 4, 1971, the tires that you manufacture are not retreaded tires as the casings used in their manufacturer do not come from used tires. However, these tires are new pneumatic tires, and as such are subject to Motor Vehicle Safety Standard No. 109.