[Federal Register Volume 64, Number 25 (Monday, February 8, 1999)]
[Proposed Rules]
[Pages 6021-6025]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2970]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 583

[Docket No. NHTSA-98-5064]
RIN 2127-AH33


Motor Vehicle Content Labeling

AGENCY: National Highway Traffic Safety Administration (NHTSA), 
Department of Transportation.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: This document proposes to amend the regulation NHTSA issued to 
implement the American Automobile Labeling Act. That Act requires 
passenger motor vehicles to be labeled with information about their 
domestic and foreign parts content. Congress recently amended that Act 
to make a number of changes in the labeling requirement. This proposal 
would make the regulation consistent with those changes.

DATES: Comments must be received by April 9, 1999.

ADDRESSES: Comments should refer to the docket number, and be submitted 
to: Docket Management, Room PL-401, 400 Seventh Street, SW, Washington, 
DC 20590 (Docket hours are from 10 a.m. to 5 p.m.)

FOR FURTHER INFORMATION CONTACT: For nonlegal issues: Henrietta 
Spinner, Office of Planning and Consumer Programs, National Highway 
Traffic Safety Administration, 400 Seventh Street, SW, Washington, DC 
20590 (202-366-4802).
    For legal issues: Edward Glancy, Office of the Chief Counsel, 
National Highway Traffic Safety Administration, 400 Seventh Street, SW, 
Washington, DC 20590 (202-366-2992).

SUPPLEMENTARY INFORMATION:

Background

    On July 21, 1994, NHTSA published in the Federal Register (59 FR 
37294) a new regulation, 49 CFR part 583, Automobile Parts Content 
Labeling, to implement the American Automobile Labeling Act (AALA). 
That Act, which is codified at 49 U.S.C. 32304, requires passenger 
motor vehicles to be labeled with information about their domestic and 
foreign parts content. We encourage interested persons to read the July 
1994 notice, as well as the various subsequent notices published by the 
agency in response to petitions for reconsideration, for a detailed 
explanation of this program.
    As part of the NHTSA Reauthorization Act of 1998,\1\ Congress 
amended the AALA to make a number of changes in the labeling 
requirement. The changes are set forth in section 7106(d) of the NHTSA 
Reauthorization Act.
---------------------------------------------------------------------------

    \1\ This Act was part of the Transportation Equity Act for the 
21st Century (TEA-21). The full text of TEA-21 and the conference 
report is available on the Web at http://www.fhwa.dot.gov/tea21/.
---------------------------------------------------------------------------

    In this notice, the agency is proposing to amend Part 583 to 
conform it to the amended AALA. We will discuss each of the changes 
made by the Congress, and any conforming amendments being proposed for 
part 583, in the order set forth in section 7106(d).

Changes to the AALA; Proposed Conforming Amendments

Determination of Origin of Engine and Transmission (Subparagraph (1)(A) 
of Section 7106(d))

    The original AALA specified, among other things, that vehicles were 
to be

[[Page 6022]]

labeled with the names of the countries of origin of the engine and 
transmission. The Act provided that these origin determinations were to 
be based on the purchase price of materials received at individual 
engine/transmission plants and were not to include engine/transmission 
assembly costs.
    To reflect the fact these origin determinations did not include 
engine/transmission assembly costs and to ensure that accurate 
information was provided to the public, we specified that the label 
refer to ``Engine Parts'' and ``Transmission Parts'' instead of 
``Engines'' and ``Transmissions':
    Country of Origin:
    Engine Parts: (name of country)
    Transmission Parts: (name of country)
    Section 7106(d)(1)(A) amended the AALA to specify that assembly and 
labor costs incurred for the final assembly of engines and 
transmissions are now to be included in making these country of origin 
determinations. This means that the terms ``Engine Parts'' and 
``Transmission Parts'' will no longer be appropriate for the vehicle 
content label.
    In order to conform part 583 to subparagraph (1)(A), we are 
proposing to amend the calculation procedures set forth in Sec. 583.8. 
We are also proposing to amend Sec. 583.5, so that the wording of the 
vehicle content label would no longer use the terms ``Engine Parts'' 
and ``Transmission Parts.'' It would instead use the terms ``Engine'' 
and ``Transmission.''

Definition of Final Assembly Place (Subparagraph (1)(B) of Section 
7106(d)

    Subparagraph (1)(B) amends the definition of ``final assembly 
place.'' The Conference Report notes that this amendment ``codifies 
certain regulations which permit labor costs of parts manufactured at 
the same location as final vehicle assembly to be included in the 
vehicle's overall content calculation * * *'' Congressional Record 
H3929 (May 22, 1998).
    We note that subparagraph (1)(B) simply codifies an existing 
provision of part 583, i.e., the definition of final assembly set forth 
in Sec. 583.4(b)(4). Therefore, we do not need to make conforming 
amendments.

Determination of U.S./Canadian Percentage of the Value of Items of 
Equipment by Outside Suppliers (Subparagraph (1)(C) of Section 7106(d)

    The AALA specifies, among other things, that the vehicle content 
labels must indicate the percentage U.S./Canadian parts content, 
determined on a carline basis. To enable vehicle manufacturers to 
calculate this information, the statute requires suppliers of equipment 
to provide information about the origin of the equipment they supply.
    The original AALA specified that, for equipment received from 
outside suppliers, the equipment is considered U.S./Canadian if it 
contains at least 70 percent value added in the U.S./Canada. Thus, any 
equipment that was at least 70 percent U.S./Canadian was valued at 100 
percent U.S./Canadian. Any equipment under 70 percent was valued at 
zero percent. This provision was sometimes referred to as the ``roll-
up, roll-down'' provision. It is reflected in Sec. 583.6(c) of the 
current regulation.
    Subparagraph (1)(C) amended the AALA to eliminate the ``roll-down'' 
portion of this provision. While equipment from an outside supplier 
that is at least 70 percent U.S./Canadian is still to be valued at 100 
percent U.S./Canadian, any equipment under 70 percent is now valued, 
and must be reported, to the nearest five percent. As the Conference 
Report stated:

    Under this subparagraph, suppliers would report [U.S./Canadian] 
content to the nearest five percent. For instance, 38 percent would 
be reported to the manufacturer as 40 percent, rather than zero as 
under current law.

Congressional Record H3929 (May 22, 1998).
    In order to conform part 583 to subparagraph (1)(C), we are 
proposing to amend the procedures for calculating U.S./Canadian parts 
content set forth in Sec. 583.6 and the requirements for outside 
suppliers set forth in Sec. 583.10.
    We note that the proposed amendments would increase the costs of 
compliance with part 583 for some outside suppliers. The original AALA 
did not require outside suppliers to provide specific estimates of the 
U.S./Canada value added of their equipment. Instead, it only required 
them to indicate whether the U.S./Canada value added was at least 70 
percent.\2\ Under the amended AALA, however, outside suppliers which 
provide equipment with U.S./Canada value added of less than 70 percent 
are required to provide specific estimates (i.e., to the nearest five 
percent) of the U.S./Canada value added of their equipment.
---------------------------------------------------------------------------

    \2\ NHTSA discussed in some detail the compliance burdens 
associated with the now superseded requirements for outside 
suppliers at 60 FR 47883-87 (September 15, 1995).
---------------------------------------------------------------------------

Identification of Country of Assembly (Paragraph (2) of Section 
7106(d))

    Paragraph (2) amends section 32304(d) of the AALA to provide that a 
manufacturer's vehicle content label may include a line identifying the 
country in which the vehicle assembly was completed. We note, however, 
that section 32304(b)(1)(B) of the AALA already provides that the label 
must identify the final assembly place for the vehicle by city, State 
(where appropriate) and country. This requirement is reflected in 
Sec. 583.5(b) of the current regulation.
    Since, pursuant to another section of the AALA, Part 583 already 
requires the vehicle content label to state the country in which the 
vehicle assembly was completed, we believe that it is unnecessary to 
amend the regulation in light of paragraph (2).

U.S./Canadian Parts Content of a Vehicle Based on the Assembly Plant 
(Paragraph (3) of Section 7106(d))

    Paragraph (3) amended the AALA to provide that a manufacturer's 
vehicle content label may display separately the domestic content of a 
vehicle based on the assembly plant. We note that, in enacting the 
original AALA, Congress decided that U.S./Canadian parts content should 
be calculated for groups of vehicles rather than for each individual 
vehicle. It also decided to adopt the concept of ``carline'' and its 
definition from the Corporate Average Fuel Economy Program, as the 
basis for determining the relevant groups of vehicles.
    We also note that carline determinations are based on degree of 
commonality in construction, instead of commonality of assembly plant. 
Thus, it is possible that some vehicles in a carline may be 
manufactured at one assembly plant, while other vehicles in the same 
carline may be manufactured at another assembly plant, even one in 
another country.
    If a carline is manufactured at more than one assembly plant, the 
U.S./Canadian content for the portion of the carline manufactured at 
one assembly plant may differ substantially from that for the portions 
manufactured at other assembly plants. Paragraph (3) permits a 
manufacturer to voluntarily display separately on the vehicle content 
label the U.S./Canadian parts content for the portion of the carline 
assembled at the plant where the vehicle was assembled. As noted by the 
Conference Report, this information would be reported in addition to 
the carline average percentage. Congressional Record H3929-30 (May 22, 
1998).
    We note that this provision appears to represent a variation of an 
option currently included in part 583 at Sec. 583.5(e). That option 
applies to carlines consisting of vehicles some of which are assembled 
in the U.S./Canada

[[Page 6023]]

and others of which are assembled in one or more other countries. It 
permits manufacturers to voluntarily identify U.S./Canadian parts 
content for the portion of the carline assembled in the country in 
which the vehicle is actually assembled. If this information is 
provided, it must be included in an explanatory note at the end of the 
label.
    In order to conform part 583 to paragraph (3), we are proposing to 
add to Sec. 583.5 an additional option permitting manufacturers to 
voluntarily identify U.S./Canadian parts content based on the assembly 
plant in which the vehicle was assembled. The details of the option are 
generally patterned after the option included at Sec. 583.5(e), which 
would be retained. We seek comment on whether Sec. 583.5(e) will still 
be needed with this additional provision.

Outside Suppliers Failing To Report (Paragraph (4) of Section 7106(d)

    For the past several years, we have provided a limited, temporary 
provision in the part 583 content calculation procedures to give a 
vehicle manufacturer added flexibility in making content determinations 
in those instances in which outside suppliers have not responded to the 
manufacturer's requests for content information.3 This 
provision is set forth at Sec. 583.6(c)(6). Paragraph (4) amended the 
AALA to codify this regulatory provision and make it permanent.
---------------------------------------------------------------------------

    \3\ For an explanation of this provision, see 62 FR 33756 (June 
23, 1997).
---------------------------------------------------------------------------

    In order to conform part 583 to paragraph (4), we are proposing to 
remove the time limitation included in Sec. 583.6(c)(6). We are also 
proposing conforming changes to make that section consistent with 
subparagraph (1)(C) of section 7106(d) which, as discussed above, 
changed the procedures for calculating the U.S./Canadian content of 
equipment supplied by outside suppliers.

Accounting for the Value of Small Parts (Paragraph (5) of Section 
7106(d)

    The original AALA excluded small parts such as nuts, bolts, clips, 
screws and pins from the definition of ``passenger motor vehicle 
equipment.'' This reduced the burdens associated with obtaining content 
information about these minor items. However, it also meant that they 
were not considered at all in determining parts content. Paragraph (5) 
amends the AALA to provide that the value of small parts is to be 
defaulted to the country of final assembly. In other words, these small 
parts are now considered to be passenger motor vehicle equipment and to 
represent value added in the country where final assembly takes place, 
regardless of actual country of origin of those small parts.
    In order to conform part 583 to paragraph (5), we are proposing to 
amend the definition of passenger motor vehicle equipment set forth at 
Sec. 583.4(b) and the calculation procedures set forth at Sec. 583.6 
and Sec. 583.7.

Other Changes to the Label

    We are proposing a change in the format of the label to make it 
easier to understand. Part 583 currently requires a brief explanatory 
note concerning parts content to be provided at the end of the label. 
We are proposing to move this note to the middle of the label, directly 
below the items of information for which the note is relevant, i.e., 
below the specified U.S./Canadian Parts Content and Major Sources of 
Foreign Parts Content. We request comments on whether any other changes 
to the label, e.g., wording changes or format changes, are appropriate 
in light of the amendments to the AALA.

Effective Date

    The NHTSA Reauthorization Act was signed by the President on June 
9, 1998. While the provisions amending the AALA changed the existing 
labeling requirement and content calculation procedures, they did not 
specify when those changes are to become effective for vehicle 
manufacturers and suppliers.
    Given the leadtime needed to change labels and make calculations 
based on the new calculation procedures, it would not have been 
possible for the vehicle manufacturers to comply with the new 
requirements for their model year 1999 vehicles. However, we believe 
that manufacturers can comply with the new requirements with respect to 
all model year 2000 vehicles, with the possible exception of those 
introduced during the early part of 1999. Since the changes are 
relatively straightforward and leave us little discretion, the vehicle 
manufacturers can implement the changes needed to comply with the new 
requirements. They need not await the final rule to do so.
    Accordingly, we are proposing to apply the new requirements to all 
model year 2000 carlines that are first offered for sale to ultimate 
purchasers on or after June 1, 1999. This would affect the vast 
majority of model year 2000 carlines, since most will be introduced in 
the fall of 1999. For model year 2000 carlines that are first offered 
for sale before June 1, 1999, manufacturers would have the option of 
following the new requirements or the old ones.

Rulemaking Analyses and Notices

A. Executive Order 12866 and DOT Regulatory Policies and Procedures

    We have 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 not reviewed by 
the Office of Management and Budget under E.O. 12866, ``Regulatory 
Planning and Review.'' The rulemaking action has been determined not to 
be significant under the Department's regulatory policies and 
procedures.
    This document proposes to amend 49 CFR Part 583 to conform the 
agency's content labeling requirements and calculation procedures to 
recent statutory changes. The changes are so minor that they would not 
have any measurable effect on vehicle prices.
    The change most likely to result in cost impacts is the one 
requiring outside suppliers to make calculations of U.S./Canadian 
content, to the nearest five percent, for equipment with U.S./Canadian 
content below 70 percent. This will increase compliance costs for some 
outside suppliers. The agency notes that there are about 15,000 
suppliers to vehicle manufacturers. However, many small suppliers 
procure all their inputs from the same country, and will experience 
negligible costs. NHTSA believes that cost impacts for other suppliers 
will be small and will diminish over time. Somewhat higher costs are 
likely to be experienced the first year as suppliers become familiar 
with the new calculation procedures and incorporate them into their 
programming or other systems.
    While the agency believes that the cost impacts will be small, it 
does not have sufficient information to quantify such costs. Comments 
are requested concerning this issue. Because the economic impacts of 
this proposal are so minimal, preparation of a full regulatory 
evaluation is not necessary.

B. Regulatory Flexibility Act

    We have considered the effects of this rulemaking action under the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.) I hereby certify that 
the proposed amendment would not have a significant economic impact on 
a substantial number of small entities. Therefore, a regulatory 
flexibility analysis is not required for this action. Although certain 
small businesses, such as parts suppliers and some vehicle 
manufacturers, are affected by the regulation, the effect on them is 
minor. The requirements are strictly

[[Page 6024]]

informational and, as discussed above, cost impacts small.

C. National Environmental Policy Act

    We have analyzed this proposed amendment for the purposes of the 
National Environmental Policy Act and determined that it would not have 
any significant impact on the quality of the human environment.

D. Executive Order 12612 (Federalism)

    We have analyzed this proposed amendment in accordance with the 
principles and criteria set forth in Executive Order 12612. We have 
determined that the proposed amendment does not have sufficient 
federalism implications to warrant the preparation of a Federalism 
Assessment.

E. Paperwork Reduction Act

    Information collection requirements proposed in this notice differ 
from those approved by the Office of Management and Budget under the 
provisions of the Paperwork Reduction Act (Pub. L. 96-511) and assigned 
OMB Control Number 2127-0573. The current approval will expire on June 
30, 2001. Since NHTSA believes that the changes proposed in this notice 
will result in a small increase in the paperwork burden of this 
reporting requirement, if the changes proposed in this NPRM are made 
final, NHTSA will ask OMB for approval to amend OMB Control Number 
2127-0573 to account for any additional information collection burdens 
imposed on the public.

Request for Comments

    We invite interested persons to submit comments on this proposal. 
Two copies should be submitted.
    All comments must not exceed 15 pages in length (49 CFR 553.21). 
Necessary attachments may be appended to these submissions without 
regard to the 15-page limit. This limitation is intended to encourage 
commenters to detail their primary arguments in a concise fashion.
    If a commenter wishes to submit certain information under a claim 
of confidentiality, three copies of the complete submission, including 
purportedly confidential business information, should be submitted to 
the Chief Counsel, NHTSA, at the street address given above, and two 
copies from which the purportedly confidential information has been 
deleted should be submitted to the Docket Section. A request for 
confidentiality should be accompanied by a cover letter setting forth 
the information specified in the agency's confidential business 
information regulation. 49 CFR part 512.
    We will consider all comments received before the close of business 
on the comment closing date indicated above. The comments will be 
available for examination in the docket at the above address both 
before and after that date. To the extent possible, we will consider 
comments filed after the closing date. We will consider comments 
received too late for consideration in regard to this action as 
suggestions for further rulemaking action. Comments will be available 
for inspection in the docket. We will continue to file relevant 
information as it becomes available in the docket after the closing 
date, and recommend that interested persons continue to examine the 
docket for new material.
    Those persons desiring to be notified upon receipt of their 
comments in the rules docket should enclose a self-addressed, stamped 
postcard in the envelope with their comments. Upon receiving the 
comments, the docket supervisor will return the postcard by mail.

List of Subjects in 49 CFR Part 583

    Imports, Labeling, Motor vehicles, Reporting and recordkeeping 
requirements.

    In consideration of the foregoing, we propose to amend 49 CFR part 
583 as follows:

PART 583--AUTOMOBILE PARTS CONTENT LABELING

    1. The authority citation for part 583 would continue to read as 
follows:

    Authority: 49 U.S.C. 32304, 40 CFR 1.50, 501.2(f).

    2. Section 583.4 would be amended by revising paragraph (b)(7) to 
read as follows:


Sec. 583.4  Definitions.

* * * * *
    (b) * * *
    (7) Passenger motor vehicle equipment means any system, 
subassembly, or component received at the final assembly point for 
installation on, or attachment to, such vehicle at the time of its 
initial shipment by the manufacturer to a dealer for sale to an 
ultimate purchaser. Passenger motor vehicle equipment also includes any 
system, subassembly, or component received by an allied supplier from 
an outside supplier for incorporation into equipment supplied by the 
allied supplier to the manufacturer with which it is allied.
* * * * *
    3. Section 583.5 would be amended by revising paragraph (a)(4), 
(a)(5), (b), and (i) to read as follows:


Sec. 583.5  Label requirements.

    (a) * * *
    (4) Country of origin for the engine. The country of origin of the 
passenger motor vehicle's engine (the procedure for making this country 
of origin determination is set forth in Sec. 583.8);
    (5) Country of origin for the transmission. The country of origin 
of the passenger motor vehicle's transmission (the procedure for making 
this country of origin determination is set forth in Sec. 583.8);
* * * * *
    (b) Except as provided in paragraphs (e), (f) and (g) of this 
section, the label required under paragraph (a) of this section shall 
read as follows, with the specified information inserted in the places 
indicated (except that if there are no major sources of foreign parts 
content, omit the section ``Major Sources of Foreign Parts Content''):
Parts Content Information
For vehicles in this carline:
    U.S./Canadian Parts Content: (insert number) %
    Major Sources of Foreign Parts Content:
    (name of country with highest percentage): (insert number) %
    (name of country with second highest percentage): (insert number) %

    Note: Parts content does not include final assembly, 
distribution, or other non-parts costs.

For this vehicle:
    Final Assembly Point: (city, state, country)
    Country of Origin:
    Engine: (name of country)
    Transmission: (name of country)
* * * * *
    (i) Carlines assembled in more than one assembly plant. (1) If a 
carline is assembled in more than one assembly plant, the manufacturer 
may, at its option, add the following additional information at the end 
of the explanatory note specified in paragraph (a)(6) of this section, 
with the specified information inserted in the places indicated:

    Two or more assembly plants produce the vehicles in this 
carline. The vehicles assembled at the plant where this vehicle was 
assembled have a U.S./Canadian parts content of [__]%.

    (2) A manufacturer selecting this option shall divide the carline 
for purposes of this additional information into portions representing 
each assembly plant.
    (3) A manufacturer selecting this option for a particular carline 
shall provide the specified additional information on the labels of all 
vehicles within the carline.

[[Page 6025]]

    4. Section 583.6 would be amended by revising paragraphs (a), 
(c)(1)(ii), (c)(3)(ii), and (c)(6) to read as follows:


Sec. 583.6  Procedure for determining U.S./Canadian parts content.

    (a) Each manufacturer, except as specified in Sec. 583.5(f) and 
(g), shall determine the percentage U.S./Canadian Parts Content for 
each carline on a model year basis. This determination shall be made 
before the beginning of each model year. Items of equipment produced at 
the final assembly point (but not as part of final assembly) are 
treated in the same manner as if they were supplied by an allied 
supplier. All value otherwise added at the final assembly point and 
beyond, including all final assembly costs, is excluded from the 
calculation of U.S./Canadian parts content. The country of origin of 
nuts, bolts, clips, screws, pins, braces, gasoline, oil, blackout, 
phosphate rinse, windshield washer fluid, fasteners, tire assembly 
fluid, rivets, adhesives, grommets, and wheel weights, used in final 
assembly of the vehicle, is considered to be the country where final 
assembly of the vehicle takes place.
* * * * *
    (c) * * *
    (1) * * *
    (ii) To otherwise have the actual percent of its value added in the 
United States and/or Canada, rounded to the nearest five percent.
* * * * *
    (3) * * *
    (ii) To otherwise have the actual percent of its value added in the 
United States and/or Canada, rounded to the nearest five percent.
* * * * *
    (6) If a manufacturer or allied supplier requests information in a 
timely manner from one or more of its outside suppliers concerning the 
U.S./Canadian content of particular equipment, but does not receive 
that information despite a good faith effort to obtain it, the 
manufacturer or allied supplier may make its own good faith value added 
determinations, subject to the following provisions:
    (i) The manufacturer or allied supplier shall make the same value 
added determinations as would be made by the outside supplier;
    (ii) The manufacturer or allied supplier shall consider the amount 
of value added and the location in which the value was added for all of 
the stages that the outside supplier would be required to consider;
    (iii) The manufacturer or allied supplier may determine that 
particular value is added in the United States and/or Canada only if it 
has a good faith basis to make that determination;
    (iv) A manufacturer and its allied suppliers may, on a combined 
basis, make value added determinations for no more than 10 percent, by 
value, of a carline's total parts content from outside suppliers;
    (v) Value added determinations made by a manufacturer or allied 
supplier under this paragraph shall have the same effect as if they 
were made by the outside supplier;
    (vi) This provision does not affect the obligation of outside 
suppliers to provide the requested information.
* * * * *
    5. Section 583.7 would be amended by revising paragraph (a) to read 
as follows:


Sec. 583.7  Procedure for determining major foreign sources of 
passenger motor vehicle equipment.

    (a) Each manufacturer, except as specified in Sec. 583.5(f) and 
(g), shall determine the countries, if any, which are major foreign 
sources of passenger motor vehicle equipment and the percentages 
attributable to each such country for each carline on a model year 
basis, before the beginning of each model year. The manufacturer need 
only determine this information for the two such countries with the 
highest percentages. Items of equipment produced at the final assembly 
point (but not as part of final assembly) are treated in the same 
manner as if they were supplied by an allied supplier. In making 
determinations under this section, the U.S. and Canada are treated 
together as if they were one (non-foreign) country. The country of 
origin of nuts, bolts, clips, screws, pins, braces, gasoline, oil, 
blackout, phosphate rinse, windshield washer fluid, fasteners, tire 
assembly fluid, rivets, adhesives, grommets, and wheel weights, used in 
final assembly of the vehicle, is considered to be the country where 
final assembly of the vehicle takes place.
* * * * *
    6. Section 583.8 would be amended by revising paragraphs (b) and 
(d) to read as follows:


Sec. 583.8  Procedure for determining country of origin for engines and 
transmissions (for purposes of determining the information specified by 
Secs. 583.5(a)(4) and 583.5(a)(5) only).

* * * * *
    (b) The value of an engine or transmission is determined by first 
adding the prices paid by the manufacturer of the engine/transmission 
for each component comprising the engine/transmission, as delivered to 
the assembly plant of the engine/transmission, and the fair market 
value of each individual part produced at the plant. The assembly and 
labor costs incurred for the final assembly of the engine/transmission 
are then added to determine the value of the engine or transmission.
* * * * *
    (d) Determination of the total value of an engine/transmission 
which is attributable to individual countries. The value of an engine/
transmission that is attributable to each country is determined by 
adding the total value of all of the components installed in that 
engine/transmission which originated in that country. For the country 
where final assembly of the engine/transmission takes place, the 
assembly and labor costs incurred for such final assembly are also 
added.
* * * * *
    7. Section 583.10 would be amended by revising paragraph (a)(5) to 
read as follows:


Sec. 583.10  Outside suppliers of passenger motor vehicle equipment.

    (a) * * *
    (5) For equipment which has less than 70 percent of its value added 
in the United States and Canada,
    (i) The country of origin of the equipment, determined under 
Sec. 583.7(c); and
    (ii) The percent of its value added in the United States and 
Canada, to the nearest 5 percent, determined under Sec. 583.6(c).
* * * * *
    Issued on: January 29, 1999.
L. Robert Shelton,
Associate Administrator for Safety Performance Standards.
[FR Doc. 99-2970 Filed 2-5-99; 8:45 am]
BILLING CODE 4910-59-P