B-217744.6, SEP 26, 1986

B-217744.6: Sep 26, 1986

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THAT MANUFACTURERS' SALES DATA SHOULD NOT BE USED TO PROVIDE A BASIS FOR LOWERING THE CORPORATE AVERAGE FUEL ECONOMY STANDARDS BY REGULATION IS NOT WELL FOUNDED. BECAUSE CONSUMER REACTION IS AN ELEMENT OF THE PRACTICABILITY REQUIREMENT FOR MOTOR VEHICLE SAFETY STANDARDS. OUR OPINION WAS BASED ON PERSUASIVE LEGISLATIVE HISTORY WHICH NHTSA DID NOT ADDRESS WHEN STATING ITS OBJECTION. THERE IS NO REASON TO MODIFY OUR AUG. 30. MARKET TRENDS ARE NOT AMONG THE FACTORS TO BE CONSIDERED" WHEN THE SECRETARY OF TRANSPORTATION LOWERS THE CORPORATE AVERAGE FUEL ECONOMY (CAFE) STANDARDS BY AMENDMENT. OUR ORIGINAL POSITION WAS BASED ON THE LEGISLATIVE HISTORY OF THE CAFE LAW. WE NOTED THAT THE SENATE VERSION OF THE CAFE BILL HAD BEEN AMENDED BY THE CONFERENCE COMMITTEE TO DELETE A PROVISION WHICH WOULD HAVE ALLOWED RELIEF FROM THE MONETARY PENALTIES FOR MANUFACTURERS THAT EXPERIENCED UNANTICIPATED SALES TRENDS RESULTING IN FAILURE TO MEET THE CAFE AVERAGE.

B-217744.6, SEP 26, 1986

TRANSPORTATION DEPARTMENT - NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION - ADMINISTRATION EFFICIENCY DIGEST: NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION'S (NHTSA) OBJECTION TO STATEMENT IN B-217744.2, AUG. 30, 1985, THAT MANUFACTURERS' SALES DATA SHOULD NOT BE USED TO PROVIDE A BASIS FOR LOWERING THE CORPORATE AVERAGE FUEL ECONOMY STANDARDS BY REGULATION IS NOT WELL FOUNDED. THE STATUTE CREATING THE CAFE PROGRAM ALLOWS THE SECRETARY OF TRANSPORTATION TO SET STANDARDS REFLECTING THE "MAXIMUM FEASIBLE FUEL ECONOMY," DETERMINED BY BALANCING "TECHNOLOGICAL FEASIBILITY; AND ECONOMIC PRACTICABILITY" WITH TWO OTHER FACTORS. NHTSA ARGUES THAT ECONOMIC PRACTICABILITY ENCOMPASSES SALES FIGURES BECAUSE OF THE COMMON MEANING OF THE WORDS, AND BECAUSE CONSUMER REACTION IS AN ELEMENT OF THE PRACTICABILITY REQUIREMENT FOR MOTOR VEHICLE SAFETY STANDARDS. CONTRARY TO NHTSA'S ARGUMENT, THE COMMON MEANING OF THE WORDS "ECONOMIC PRACTICABILITY" REFERS TO THE COST OF FUEL ECONOMY IMPROVEMENTS, NOT HOW MANY FUEL EFFICIENT CARS MANUFACTURERS CAN SELL. MOREOVER, OUR OPINION WAS BASED ON PERSUASIVE LEGISLATIVE HISTORY WHICH NHTSA DID NOT ADDRESS WHEN STATING ITS OBJECTION. ACCORDINGLY, THERE IS NO REASON TO MODIFY OUR AUG. 30, 1985, OPINION.

THE HONORABLE JOHN D. DINGELL:

CHAIRMAN, SUBCOMMITTEE ON OVERSIGHT

AND INVESTIGATIONS

COMMITTEE ON ENERGY AND COMMERCE

HOUSE OF REPRESENTATIVES

YOUR LETTER OF DECEMBER 6, 1985, ASKED FOR OUR RESPONSE TO THE NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION'S (NHTSA) DISAGREEMENT WITH OUR STATEMENT IN B-217744.2, AUG. 30, 1985, THAT "SALES EFFECTIVENESS, CONSUMER PREFERENCE, AND MARKET TRENDS ARE NOT AMONG THE FACTORS TO BE CONSIDERED" WHEN THE SECRETARY OF TRANSPORTATION LOWERS THE CORPORATE AVERAGE FUEL ECONOMY (CAFE) STANDARDS BY AMENDMENT.

OUR ORIGINAL POSITION WAS BASED ON THE LEGISLATIVE HISTORY OF THE CAFE LAW. WE NOTED THAT THE SENATE VERSION OF THE CAFE BILL HAD BEEN AMENDED BY THE CONFERENCE COMMITTEE TO DELETE A PROVISION WHICH WOULD HAVE ALLOWED RELIEF FROM THE MONETARY PENALTIES FOR MANUFACTURERS THAT EXPERIENCED UNANTICIPATED SALES TRENDS RESULTING IN FAILURE TO MEET THE CAFE AVERAGE. S. REP. NO. 516, 94TH CONG., 1ST SESS. 152, AND 121 CONG. REC. 30606 (1975). FROM THIS CHANGE, WE INFERRED THAT SALES DATA WERE NOT TO BE TAKEN INTO ACCOUNT TO EXCUSE CAFE SHORTFALLS. BECAUSE LOWERING THE STANDARDS BASED ON SALES PROJECTIONS AMOUNTS TO ANTICIPATORY RELIEF FROM PENALTIES, WE CONCLUDED THAT SALES DATA SHOULD NOT BE TAKEN INTO ACCOUNT IN THAT DECISION EITHER.

WHILE WE ARE NOT PERSUADED THAT OUR ORIGINAL POSITION WAS INCORRECT, WE RECOGNIZE THAT THERE IS ENOUGH LEEWAY IN THE STATUTORY STANDARD OF "ECONOMIC PRACTICABILITY" ON WHICH OUR POSITION WAS BASED TO SUPPORT NHTSA'S RATIONALE. ALSO, NHTSA'S POSITION IS ENTITLED TO GREAT WEIGHT IN VIEW OF ITS IMPLEMENTATION AUTHORITY UNDER THE STATUTE.