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Importation. Section 108(b)(3) prohibits the admission into the United States of any vehicle or equipment offered for importation in violation of paragraph (1) of subsection (a) of this section. This refusal of admission shall be under joint regulations issued by the Secretary of the Treasury and the Secretary of Commerce. However, the Secretary of the Treasury and the Secretary of Commerce may permit the importation of a vehicle or item of equipment which does not conform to the Federal safety standards upon such terms and conditions as they determine appropriate to insure that it will either be brought into conformity, or exported, or abandoned to the United States.

This paragraph provides the necessary administrative flexibility to permit the importation of vehicles where it is demonstrated to the satisfaction of the Secretary of the Treasury and the Secretary of Commerce that such vehicles or equipment will be brought into conformity with applicable Federal safety standards or will be exported, or abandoned to the United States.

Temporary importation. Section 108(b)(4) of the reported bill authorizes the Secretary of the Treasury and the Secretary of Commerce by joint regulation to permit temporary importation of used motor vehicles or items of motor vehicle equipment into the United States.

The provisions of this paragraph are designed to accommodate foreign tourists who may bring their vehicles with them on visits to this country and also to permit importation of certain vehicles for diplomatic use. It is emphasized that the authority granted in this paragraph is to be exercised only for the importation of vehicles and equipment for temporary periods.

Export.-Section 108(b)(5) provides that paragraph (1) of subsection (a) does not apply in the case of a vehicle or item of equipment which is intended solely for export, which is so labeled or tagged, and which is in fact exported.

This legislation does not purport to establish standards for motor vehicles or motor vehicle equipment to be used entirely outside the United States.

Common law liability.-Section 108(c) of the reported bill provides that compliance with any Federal motor vehicle safety standard does not exempt a person from any liability under common law.

It is intended, and this subsection specifically establishes, that compliance with safety standards is not to be a defense or otherwise to affect the rights of parties under common law particularly those relating to warranty, contract, and tort liability. It follows that noncompliance even though exempt under paragraph (2) of subsection (b) of this section will not excuse any person from otherwise applicable legal liability.

CIVIL PENALTIES Section 109 of the reported bill provides that whoever violates any provision of section 108, or regulation issued thereunder, will be subject to a civil penalty of up to $1,000 for each violation. Each violation is a separate one with respect to each vehicle or item of equipment or failure or refusal to allow or perform a required act. However, the maximum civil penalty for any related series of violations shall not exceed $400,000. The Secretary is authorized to

compromise these civil penalties and in the case where the United States may owe moneys to the person charged, the amount of such penalty may be deducted from the sums owed.

After considering other possible amounts, the committee determined that a penalty of not more than $1,000 would be most appropriate for an individual violation of any provision of section 108. As to a series of violations—that is, a violation which is repeated in terms of numbers of units but which is essentially the result of a single deficiency--the committee established a maximum penalty of $400,000. It should be understood that $1,000 and $400,000 are maximums, and within these maximums the Secretary has discretion to compromise.

INJUNCTIONS

Section 110 of the reported bill provides that the U.S. district courts shall have jurisdiction, for cause shown and subject to the applicable Federal Rules of Civil Procedure, to restrain violations of this title upon petition by an appropriate U.S. attorney or the Attorney General of the United States. The Secretary is directed to give notice to any person against whom an action for an injunction is contemplated, whenever practicable, and afford him an opportunity to present his views. Except in the case of a knowing and willful violation, such person shall also be afforded a reasonable opportunity to achieve compliance. Failure on the part of the Secretary to give notice and afford such an opportunity for compliance shall not preclude the granting of appropriate relief. In any proceeding for criminal contempt for violation of an injunction or restraining order, which violation also constitutes a violation of this title, trial shall be by the court or, upon demand of the accused, by jury, and rule 42(b) of the Federal Rules of Criminal Procedure shall be applicable.

In all criminal or injunction proceedings for enforcement or to restrain violations of this title, subpenas for witnesses requiring attendance in a court of the United States in any district may run into any other district.

This section sets the guidelines for injunctive relief to restrain any violations of this title. This relief may be initiated by a U.S. attorney or the Attorney General of the United States. The Secretary is directed to give notice to any person against whom injunctive relief is contemplated and to receive his views, and except in the case of a knowing and willful violation, the Secretary is required to afford an opportunity for compliance. However, these requirements obtain only when practicable and failure to give notice and afford an opportunity for compliance does not preclude the granting of appropriate relief. In any proceeding for criminal contempt for violation of an injunction under this section, a defendant may elect trial by the court or trial by a jury. A subpena issued in one district court may be transferrable to any other district court in the same proceeding. This section, together with the civil penalties provided in section 109, should constitute sufficient enforcement authority to assure full adherence to Federal safety standards. The committee did not feel it necessary to provide authority to seize vehicles and equipment, and therefore deleted this provision which was contained in the introduced bill.

REIMBURSEMENT TO DISTRIBUTORS OR DEALERS

Section 111(a) requires that if any motor vehicle or item of equipment is determined not to conform to Federal safety standards, or contains a defect which relates to vehicle safety, after the sale of such vehicle or item of equipment by a manufacturer to a distributor or dealer and prior to resale, the manufacturer or distributor shall repurchase such vehicle or item of equipment at the price paid by the affected distributor or dealer plus transportation charges and a reasonable reimbursement of not less than 1 percent per month of the price paid, prorated from the date of notice of nonconformance to the date of repurchase by the manufacturer or distributor, or in the case of motor vehicles, the manufacturer or distributor at his expense shall furnish the purchasing distributor or dealer the required conforming part or parts of equipment for installation and the manufacturer shall reimburse the distributor or dealer for the reasonable value of the installation plus reimbursement of not less than 1 percent per month of the manufacturer's or distributor's selling price prorated from the date of notice of nonconformance to the date such vehicle is brought into conformance with applicable safety standards. However, the distributor or dealer affected is required to proceed with reasonable diligence with the installation of the required part, parts, or equipment.

Section 111(b) provides that in the event the manufacturer or distributor refuses to comply with the requirements of subsection (a) of this section, then the distributor or dealer to whom such nonconforming vehicle or equipment has been sold may sue the manufacturer or distributor in any district court of the United States in which said manufacturer or distributor resides, is found, or has an agent, without regard to the amount in controversy and he shall recover the damage sustained as well as court costs and reasonable attorneys' fees. Any action brought pursuant to this section shall be barred unless commenced within 3 years after the cause of action accrues.

Subsection 111(c) provides that the value of installations and such reasonable reimbursements as specified in subsection (a) of this section shall be fixed by agreement of the parties or, failing such agreement, by the court pursuant to subsection (b) of this section.

Section 111 of the reported bill was included by the committee to place the financial responsibility for noncompliance upon the person or persons who failed to achieve conformance with Federal safety standards rather than upon a distributor or dealer who purchases a vehicle or item of equipment under a presumption and certification that conformance had been achieved.

INSPECTION AND RECORDKEEPING REQUIREMENTS

Section 112(a) of the reported bill authorizes the Secretary to conduct any inspections which are necessary to enforce safety standards. Further, he is authorized to furnish the Attorney General and, when appropriate, the Secretary of the Treasury, with any information indicating noncompliance with such standards, for appropriate action.

Section 112(b) of the reported bill requires every manufacturer of vehicles and every manufacturer of equipment to establish and maintain for a reasonable period of time such records as may reasonably be necessary to enable the Secretary to determine whether such manufacturer has complied or is complying with this title and the safety standards prescribed thereunder. Such manufacturer is required, upon the request of an officer or employee designated by the Secretary, to make appropriate reports and permit inspection of appropriate books, papers, records, and documents, but only to the extent that such reports, books, papers, records, and documents relate to design, engineering, quality control, and shipping and receiving data relevant to determining whether the standards are complied with in the production of vehicles or equipment which have been or are being produced for sale.

Section 112(c) of the reported bill requires every manufacturer of vehicles and every manufacturer of equipment to provide the Secretary with such performance data and other technical data related to performance and safety as may be required to carry out the purposes of this act. The Secretary is authorized to require the manufacturer to give such performance data and technical data to the first person who purchases such vehicle or equipment for purposes other than for resale, as the Secretary determines necessary to carry out this act.

Section 112(d) of the reported bill provides that any information obtained by the Secretary or his representative pursuant to subsection (b) of this section which contains or relates to a trade secret or other matter referred to in 18 U.S.C. 1905 shall be considered as confidential for the purposes of that section, except that such information may be disclosed to other officers and employees concerned with carrying out this title or when relevant to any proceeding under this title. Nothing in this section authorizes the Secretary or any such officer or employee to withhold information from committees of Congress.

The committee's intention, in this section, is to afford to the Secretary the necessary authority to inspect records and to require the furnishing of information from manufacturers to assist him in achieving the purposes of the bill. At the same time the bill would afford protection to the manufacturers against unnecessarily onerous "bookkeeping," and further afford protection to those trade secrets of a manufacturer which may become known to the Secretary and others in carrying out this title. Subsection (c) of this section was added by the committee for the purpose of authorizing the Secretary to obtain all necessary performance and related technical data and to require that purchasers of new vehicles be furnished more information on performance and safety than may heretofore have been true.

NOTIFICATION OF DEFECTS Section 113(a) requires every vehicle manufacturer to give notice of any defect in any vehicle or equipment produced by him which he determines relates to safety to the purchaser (where known to him) within a reasonable time after the manufacturer discovers such defect.

Section 113(b) provides that the notification will be accomplished by certified mail to the first purchaser (other than a dealer) and to any subsequent purchaser to whom has been transferred any warranty upon such vehicle or equipment and by certified mail or other expeditious means to the dealer to whom such vehicle or equipment was delivered.

Section 113(c) requires the notification to contain a clear description of the defect and the evaluation of the risk to traffic safety reasonably related to the defect and a statement of the measures to be taken to repair the defect.

Section 113(d) requires each manufacturer of motor vehicles to furnish the Secretary promptly a copy of any notice, bulletin, or other written notification to his dealers, to purchasers, and to users of his products regarding the existence or correction of any defect. If the Secretary determines the defect is a safety defect, he reviews with the manufacturer the action taken or proposed to be taken with the accompanying notification to purchasers and dealers. If the action taken or proposed to be taken is inadequate to accomplish effective notification, the Secretary is required to order the manufacturer to take such further measures as are reasonable and necessary to give notice and if he fails to promptly comply, an injunction to compel compliance may be sought in accordance with section 109(a). If the Secretary determines after a review by him that publication by him of the information contained in the notice, bulletin, and communication issued by the manufacturer under this section will result in effecting a substantial additional number of corrections, he is required to disclose to the public so much of the information contained in the notice or other information obtained under section 112(a) as he considers necessary to effect a substantial additional number of corrections. The Secretary shall not disclose any information which contains or relates to a trade secret or other matter referred to in 18 U.S.C. 1905 unless such disclosure is necessary to effect a substantial number of corrections.

This section was included to afford a means for uniform and prompt notification to vehicle owners of the discovery of any defects related to safety. “Defect” is a defined term which includes any defect in performance, construction, components, or materials in motor vehicles or motor vehicle equipment. The provisions of this section do not alter other courses available to the Secretary, with respect to the deficiencies which necessitate notification, such as the imposition of a civil penalty or the seeking of injunctive relief. It is the committee's intention that the Secretary will exercise his authority under this section to publish notices and information concerning defects in those situations where so doing will bring about a higher level of safety. In this connection, the committee is confident that the manufacturers will be active in notifying purchasers and users so that defects will be corrected as quickly as possible.

CERTIFICATION

Section 114 of the reported bill requires a manufacturer or distributor of a vehicle or vehicle equipment to furnish to the distributor or dealer at the time of delivery a certification that such vehicle or item of equipment conforms to all applicable Federal safety standards. In the case of an item of equipment the certification may be a label or tag either on the item or on the outside of the container in which it was delivered. In the case of a vehicle this certification must be in the form of a label or tag permanently affixed to the vehicle.

The committee believes that the manufacturer or distributor responsible for conforming to the Federal safety standards should have an affirmative duty to certify that such conformity has been achieved.

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