XI. Rulemaking Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

NHTSA has considered the impact of this rulemaking action under Executive Order 12866 and the Department of Transportation's regulatory policies and procedures. This rulemaking document was reviewed by the Office of Management and Budget (OMB) under E.O. 12866, "Regulatory Planning and Review." This rule is not economically significant under E.O. 12866. However, the action has been determined to be "significant" under the Department of Transportation's regulatory policies and procedures because of the degree of public interest in this subject. This rule is not a major rule under Chapter 8 of Title 5, U.S. Code.

Further, the agency does not believe that the annual net economic impacts of the actions taken under this rule will exceed $100 million per year. This final rule does not require a motor vehicle manufacturer, dealer or repair business to take any action or bear any costs except in instances in which a dealer or repair business agrees to install an on-off switch for an air bag. For consumers, the purchasing and installation of on-off switches is permissive, not prescriptive. Accordingly, universal use of on-off switches by risk group members is unlikely. As noted below, the agency estimates that the percentage of vehicle owners who will ultimately choose to seek and use on-off switches is relatively low. Further, while NHTSA has specified four risk groups and made them eligible for on-off switches, the agency is affirmatively recommending only that two of the four specified risk groups obtain on-off switches. As a result, the agency does not believe this rule will yield benefits whose value exceeds $100 million in any one year.

When an eligible consumer obtains the agency's authorization for the installation of a retrofit on-off switch and a dealer or repair business agrees to install the switch, there will be costs associated with that action. The agency estimates that installation of an on-off switch would typically require less than one hour of shop time, at the average national labor rate of up to $50 per hour. NHTSA estimates the cost of providing an on-off switch for the passenger air bag is $38 to $63 and the cost of providing an on-off switch for both driver and passenger air bag is $51 to $76. Ford estimated the cost of installing an aftermarket on-off switch that controls both the driver and passenger air bag to be $95 to $124.

At this time, any estimate of the number of vehicle owners who will actually fill out request forms, obtain agency authorization and pay for retrofit on-off switches is necessarily subject to substantial uncertainty. The agency's experience with requests for deactivation suggests a figure that is much lower than the estimates offered by some commenters based on public opinion surveys. The agency believes that actual experience provides a sounder basis for making an estimate. Based on the volume of deactivation requests,⁽⁵²⁾ the greater public interest in on-off switches than in deactivation, the burst of publicity likely to surround the issuance of the final rule, and the time needed for the public education campaign to take full effect, NHTSA estimates that at least 100,000 request forms will be submitted to the agency in the first year after the issuance of this final rule, and that the annual average for the three-year period including that year and the next two years will be at least 80,000.

Because of the public interest in air bags, the publicity that will surround the issuance of this final rule, and the continuing public education campaign, NHTSA expects that many more people will read the information brochure than will fill out request forms and seek authorization for on-off switches. The agency has no directly relevant experience upon which to base an estimate. However, NHTSA estimates that the number of persons who read the brochure will be at least 1,000,000 over the three year period following the issuance of this final rule. Thus, the annual average will be at least 330,000 people.

In view of the preceding analysis, there are no mandatory costs associated with this rule. A final regulatory evaluation for this notice has been placed in the docket.

Regulatory Flexibility Act

NHTSA has considered the effects of this rulemaking action under the Regulatory Flexibility Act. Most dealerships and repair businesses are considered small entities, and a substantial number of these businesses may perform on-off switch installations pursuant to this rule, and would presumably profit from these installations. However, the economic impact on any given business will not be significant. For every 100,000 vehicle owners who voluntarily decide to seek authorization to have an on-off switch installed and who obtain that authorization, the average new vehicle dealer will install about 4.4 on-off switches before the introduction of advanced air bags solves the problem. NHTSA estimates the cost of providing a single on-off switch that operates both driver and passenger air bag is $51 to $76. Ford estimated that cost as $95 to $124. Based on a range from $51 to $124, the average dealer will receive, for each 100,000 on-off switches installed nationwide, additional revenues of between $224 and $545, before subtracting the cost of materials, labor, and overhead. This does not represent a significant amount of money for these businesses.

To the extent that consumers take their vehicles to the much larger number of used car dealers and smaller repair businesses for on-off switch installations, the economic impact would be diluted on a per-business basis. A small number of businesses may specialize in on-off installation, and this rule would have a large impact on them. However, NHTSA has noted a reluctance, on the part of the people receiving letters of authorization to deactivate their air bags, to take their vehicles to businesses other than dealerships. Assuming that this lack of "demand" for the independent businesses extends to on-off switch installation, and given the general liability concerns even on the part of the dealerships, the agency does not believe that a substantial number of businesses will specialize in on-off switch installation.

Because the economic impact, per average business, is so small, I hereby certify that it will not have a significant economic impact on a substantial number of small entities. NHTSA notes again that the requirements will not impose any mandatory economic impact on any entities, small or otherwise.

The Unfunded Mandates Reform Act

The Unfunded Mandates Reform Act of 1995 (Public Law 104-4) requires 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. This rule does not meet the definition of a Federal mandate, because it is completely permissive. In addition, annual expenditures will not exceed the $100 million threshold.

Executive Order 12612 (Federalism)

The agency has analyzed this rulemaking in accordance with the principles and criteria set forth in Executive Order 12612. NHTSA has determined that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.

Civil Justice Reform

This final rule has no retroactive effect. NHTSA is not aware of any State law that would be preempted by this final rule. This final rule does not repeal any existing Federal law or regulation. It modifies existing law only to the extent that it replaces an agency procedure under which vehicle owners had to obtain authorization to have their air bags deactivated with a new procedure under which owners may seek authorization to have on-off switches installed. This new procedure involves reading an information brochure about air bag safety and submitting to NHTSA a signed and dated request form on which the owner certifies that he or she has read the brochure and that he or she, or a user of his or her vehicle, is a member of a risk group defined by the agency. If the agency approves the request, it sends an authorization letter to the vehicle owner. This final rule does not require submission of a petition for reconsideration or the initiation of other administrative proceedings before a party may file suit in court.

Paperwork Reduction Act

Several of the conditions placed by this final rule on the exemption from the make inoperative prohibition are considered to be information collection requirements as that term is defined by the Office of Management and Budget (OMB) in 5 CFR part 1320. Specifically, this rule conditions the exemption for motor vehicle dealers and repair businesses upon vehicle owners filling out and submitting a request form to the agency, obtaining an authorization letter from the agency and then presenting the letter to a dealer or repair business. The exemption is also conditioned upon the dealer or repair business filling in information about itself and the installation in the form provided for that purpose in the authorization letter and then returning the form to NHTSA. The information collection requirements for part 593 have been approved by OMB, pursuant to the requirements of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).

List of Subjects in 49 CFR Part 571

Imports, Motor vehicle safety, Motor vehicles, Rubber and rubber products, Tires.

List of Subjects in 49 CFR Part 595

Imports, Motor vehicle safety, Motor vehicles.

In consideration of the foregoing, NHTSA amends chapter V of title 49 of the Code of Federal Regulations as follows:

PART 571-FEDERAL MOTOR VEHICLE SAFETY STANDARDS

1. The authority citation for Part 571 of Title 49 continues to read as follows:

Authority: 49 U.S.C. 322, 30111, 30115, 30117, and 30166; delegation of authority at 49 CFR 1.50.

2. Section 571.208 is amended by revising S4.5.2, 4.5.4 and 4.5.4.4 to read as follows:

§ 571.208 Standard No. 208, Occupant crash protection.

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S4.5.2 Readiness indicator. An occupant protection system that deploys in the event of a crash shall have a monitoring system with a readiness indicator. The indicator shall monitor its own readiness and shall be clearly visible from the driver's designated seating position. If the vehicle is equipped with a single readiness indicator for both a driver and passenger air bag, and if the vehicle is equipped with an on-off switch permitted by S4.5.4 of this standard, the readiness indicator shall monitor the readiness of the driver air bag when the passenger air bag has been deactivated by means of the on-off switch, and shall not illuminate solely because the passenger air bag has been deactivated by the manual on-off switch. A list of the elements of the system being monitored by the indicator shall be included with the information furnished in accordance with S4.5.1 but need not be included on the label.

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S4.5.4 Passenger Air Bag Manual On-Off Switch. Passenger cars, trucks, buses, and multipurpose passenger vehicles manufactured before September 1, 2000 may be equipped with a device that deactivates the air bag installed at the right front passenger position in the vehicle, if all the conditions in S4.5.4.1 through 4.5.4.4 are satisfied.

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S4.5.4.4 The vehicle owner's manual shall provide, in a readily understandable format:

(a) Complete instructions on the operation of the on-off switch;

(b) A statement that the on-off switch should only be used when a member of a passenger risk group identified in the request form in Appendix B to part 595 of this chapter is occupying the right front passenger seating position; and,

(c) A warning about the safety consequences of using the on-off switch at other times.

3. Part 595 is added to read as follows:

PART 595 -- RETROFIT ON-OFF SWITCHES FOR AIR BAGS

Sec.

595.1 Scope.

595.2 Purpose.

595.3 Applicability.

595.4 Definitions.

595.5 Requirements.

Appendix A to Part 595 --Information Brochure.

Appendix B to Part 595--Request Form.

Appendix C to Part 595--Installation Of Air Bag On-off Switches.

Authority: 49 U.S.C. 322, 30111, 30115, 30117, 30122 and 30166; delegation of authority at 49 CFR 1.50.

§ 595.1 Scope.

This part establishes conditions under which retrofit on-off switches may be installed.

§ 595.2 Purpose.

The purpose of this part is to provide an exemption from the "make inoperative" provision of 49 U.S.C. 30122 and authorize motor vehicle dealers and motor vehicle repair businesses to install retrofit on-off switches for air bags.

§ 595.3 Applicability.

This part applies to dealers and motor vehicle repair businesses.

§ 595.4 Definitions.

The term dealer, defined in 49 U.S.C. 30102(a), is used in accordance with its statutory meaning.

The term motor vehicle repair business is defined in 49 U.S.C. 30122(a) as "a person holding itself out to the public to repair for compensation a motor vehicle or motor vehicle equipment." This term includes businesses that receive compensation for servicing vehicles without malfunctioning or broken parts or systems by adding or removing features or components to or from those vehicles or otherwise customizing those vehicles.

§ 595.5 Requirements.

(a) Beginning January 19, 1998, a dealer or motor vehicle repair business may modify a motor vehicle by installing an on-off switch that allows an occupant of the vehicle to turn off an air bag in that vehicle, subject to the conditions in paragraphs (b)(1) through (5) of this section:

(b)(1) The dealer or motor vehicle repair business receives from the owner or lessee of the motor vehicle a letter from the National Highway Traffic Safety Administration that authorizes the installation of an on-off switch in that vehicle for that air bag and includes a form to be filled in by the dealer or motor vehicle repair business with information identifying itself and describing the installation it makes.

(2) The dealer or motor vehicle repair business installs the on-off switch in accordance with the instructions of the manufacturer of the switch.

(3) The on-off switch meets all of the conditions specified in paragraph (a)(4)(i) and (ii) of this section.

(i) The on-off switch is operable solely by a key. The on-off switch shall be separate from the ignition switch for the vehicle, so that the driver must take some action other than inserting the ignition key or turning the ignition key in the ignition switch to turn off the air bag. Once turned off, the air bag shall remain off until it is turned back on by means of the device. If a single on-off switch is installed for both air bags, the on-off switch shall allow each air bag to be turned off without turning off the other air bag. The readiness indicator required by S4.5.2 of §571.208 of this chapter shall continue to monitor the readiness of the air bags even when one or both air bags has been turned off.

(ii) A telltale light in the interior of the vehicle shall be illuminated whenever the driver or passenger air bag is turned off by means of the on-off switch. The telltale for a driver air bag shall be clearly visible to an occupant of the driver's seating position. The telltale for a passenger air bag shall be clearly visible to occupants of all front seating positions. The telltale for an air bag:

(A) Shall be yellow;

(B) Shall have the identifying words "DRIVER AIR BAG OFF" or "PASSENGER AIR BAG OFF," as appropriate, on the telltale or within 25 millimeters of the telltale;

(C) Shall remain illuminated for the entire time that the air bag is "off;"

(D) Shall not be illuminated at any time when the air bag is "on;" and,

(E) Shall not be combined with the readiness indicator required by S4.5.2 of §571.208 of this chapter.

(4) The dealer or motor vehicle repair business provides the owner or lessee with an insert for the vehicle owner's manual that--

(i) Describes the operation of the on-off switch,

(ii) Lists the risk groups on the request form set forth in Appendix B of this Part,

(iii) States that an on-off switch should only be used to turn off an air bag for a member of one of those risk groups, and

(iv) States the safety consequences for using the on-off switch to turn off an air bag for persons who are not members of any of those risk groups. The description of those consequences includes information, specific to the make, model and model year of the owner's or lessee's vehicle, about any seat belt energy managing features, e.g., load limiters, that will affect seat belt performance when the air bag is turned off.

(5) In the form included in the agency authorization letter specified in paragraph (b)(1) of this section, the dealer or motor vehicle repair business fills in information describing itself and the on-off switch installation(s) it makes in the motor vehicle. The dealer or motor vehicle repair business then sends the form to the address below within 7 working days after the completion of the described installations:

APPENDIX A TO PART 595--INFORMATION BROCHURE

APPENDIX B TO PART 595--REQUEST FORM

APPENDIX C TO PART 595--INSTALLATION OF AIR BAG ON-OFF SWITCHES

[Signature page for Docket No. NHTSA-97-3111 (final rule)]

[RIN 2127-AG61]

Issued on:

Billing Code: 4910-59-P

^52. The agency is using the volume of requests from the peak period during 1997, i.e., April and May. The volume averaged about 400 letters per week during that period. By contrast, the volume in late August-early September was slightly less than 300 per week. In mid-September, the average was even lower, just over 100. However, in October, the weekly average increased to nearly 200.

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