Interpretation ID: nht93-3.10

DATE: April 21, 1993

FROM: John Womack -- Acting Chief Counsel, U.S. Department of Transportation, NHTSA

TO: Jeffery A. Kester -- Product Development, Green Wheels Electric Car Company

TITLE: None

ATTACHMT: Attached to letter dated 3-18-93 from Jeffery A. Kester to John Womack (OCC 8439)

TEXT: We have received your letter of March 18, 1993, with respect to electric vehicle conversions and the Federal Motor Vehicle Safety Standards (FMVSS).

As we understand it, Green Wheels intends to convert 1975-84 Volkswagen Rabbits to electric power. Because the FMVSS directly apply only to the manufacture of new vehicles you understand that you are "not bound to comply with the FMVSS and have no reason to petition from exemption from any standards in the FMVSS."

You have concluded that section 108(a)(2)(A) of the National Traffic and Motor Vehicle Safety Act (15 U.S.C. 1397(a)(2)(A)) applies in this instance, but are worried by the fact that the conversion operations will render inoperative "'devices or elements of design' on a permanent basis," as "(t)he vehicle will obviously be used during the time such devices or elements of design no longer exist." You believe that any devices or elements of design rendered inoperative by conversion operations should be disregarded if it will not compromise safety when the vehicle is in operation. For example, because a flammable fuel system no longer exists after conversion to electric power, you should not be regarded as having rendered the system inoperable.

On this basis, you have asked for a confirmation of the "viability" of your interpretation, which you may provide to prospective customers. You have also asked for recommendations for any further action with reference to compliance with section 108(a)(2)(A), information on petitioning for exemption under section 108(a)(2)(B), and information concerning the establishment of standards for used motor vehicles under section 108(b)(1).

We are pleased to provide you with our views on this matter. We do not interpret section 108(a)(2)(A) as prohibiting the removal of fuel system components installed in accordance with Standard No. 301 during the conversion to electric propulsion, as long as the converter ensures that its modifications do not "knowingly render inoperative, in whole or in part, any device or element of design" required for compliance with any other Federal motor vehicle safety standard.

By way of background, it is important to understand the scheme established by the Vehicle Safety Act (15 U.S.C. 1381 et seq.) with respect to new and used vehicles. With respect to the issues you have raised, certain statutory provisions are relevant. These are discussed below and quoted in pertinent part:

SECTION 108(a)(1)(A) (15 U.S.C. 1397(a)(1)(A)): "No person shall manufacture for sale, sell, offer for sale, or introduce in interstate commerce, or

import into the United States, any motor vehicle ... on or after the date any applicable Federal motor vehicle safety standard takes effect ... unless it is in conformity with such standard and is covered by a certification ...."

SECTION 108(b)(1): "Paragraph (1) (A) of subsection (a) shall not apply to the sale, offer for sale, or the introduction or delivery for introduction in interstate commerce of any motor vehicle ... after the first purchase of it in good faith for purposes other than resale."

Under section 108(b)(1), a "new" vehicle becomes a "used" one after its first purchase for purposes other than resale, and certain actions may occur without violation of the Vehicle Safety Act. Please compare section 108(b)(1) with section 108(a)(1)(A). When a vehicle is used, Section 108(b)(1) clearly allows, without penalty, its sale, offer for sale, introduction a delivery for introduction into interstate commerce even if it does not conform to the FMVSS. However, section 108(b)(1) does not include "manufacture for sale" and "import" in its used vehicle exclusions. With respect to the latter, the agency does require used imported vehicles to be brought into conformance with the FMVSS.

We assume that Congress deemed it impossible to "manufacture for sale" a vehicle "after its first purchase for purposes other than resale", and that is the reason why "manufacture for sale" is not included in the used vehicle exclusions of section 108(b)(1).

SECTION 108(b)(1) (CON'D): "It is the policy of Congress to encourage and strengthen the enforcement of State inspection of used motor vehicles. Therefore to that end the Secretary shall conduct a thorough study and investigation to determine the adequacy of motor vehicle safety standards and motor vehicle inspection requirements and procedures applicable to used motor vehicles ... the Secretary ... shall establish uniform Federal motor vehicle safety standards applicable to used motor vehicles."

You have asked whether the Secretary has exercised his authority to establish standards for used motor vehicles. The answer is yes, but the standards do not apply to the remanufacture, repair, or conversion of used vehicles; they only establish criteria to be followed by States, in their motor vehicle inspection programs. See 49 CFR Part 570 VEHICLE IN USE INSPECTION STANDARDS. No standards have been established governing repair or conversion of used vehicles, or "vehicles in use", the term the agency prefers.

Although Congress has not granted the agency authority to establish manufacturing standards for a motor vehicle after its first purchase for purposes other than resale, it did take a limited step intended to ensure that a vehicle remained in compliance with its original FMVSS throughout its life. This step is reflected in section 108(a)(2)(A):

SECTION 108(a)(2)(A): "No manufacturer, distributor, dealer or motor vehicle repair business shall knowingly render inoperative, in whole or in part, any device or element of design installed on or in a motor vehicle ... in compliance with an applicable Federal motor vehicle safety standard, unless such manufacturer or motor vehicle repair business reasonably believes that such vehicle ... will not be used (other than for testing or similar purposes in the course of maintenance or repair) during the time such device or element

of design is rendered inoperative."

The principal purpose of this prohibition is to inhibit the removal of safety equipment such as seat belts and head rests that might be initially unpopular with vehicle operators. However, this agency has interpreted the prohibition to apply to any modification of a used motor vehicle that is performed by manufacturers, distributors, dealers, and motor vehicle repair businesses that has the possible effect of creating a noncompliance.

However, we have not interpreted Section 108(a)(2)(A) as forbidding modifications that result in the inapplicability of one or more of the FMVSS with which a vehicle originally complied. For instance, under section 108(a)(2)(A) we have allowed the conversions of closed sedans to convertibles, as long as FMVSS requirements applicable to convertibles are met at the end of the conversion process. Similarly, to use your hypothetical, we would not interpret section 108(a)(2)(A) as prohibiting the removal of fuel system equipment installed in accordance with Standard No. 301 in the process of conversion to electric propulsion because this standard would not apply to the propulsion source of a new electric vehicle. However, the converter does remain under the obligation to ensure that its modifications do not create a noncompliance. For example, the additional weight of batteries could render inoperative the ability of the converted vehicle to meet the standards with crash test demonstration procedures.

SECTION 108(a)(2)(B): "The Secretary may by regulation exempt any person from this paragraph if he determines that such exemption is consistent with motor vehicle safety and the purposes of this Act. The Secretary may prescribe regulations defining the term 'render inoperative.'"

Although under section 108(a)(2)(B) the agency may "by ... regulation" provide exemptions from section 108(a)(2)(A), we have never developed a procedure by which exemptions may be granted, nor have we adopted a regulation defining "render inoperative." No such regulations are under consideration.

I hope that this letter is responsive to your request.