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TRAFFIC SAFETY ACT OF 1966

CONFERENCE REPORT

Mr. MAGNUSON. Mr. President, I submit a report of the committee of conference on the disagreeing votes of the two Houses on the amendment of the House to the bill (S. 3005) to provide for a coordinated national safety program and establishment of safety standards for motor vehicles in interstate commerce to reduce accidents involving motor vehicles and to reduce deaths and injuries occurring in such accidents. I ask unanimous consent for the present consideration of the report.

The PRESIDING OFFICER. The report will be read for the information of the Senate.

The legislative clerk read the report. (For conference report, see House proceedings of Aug. 31, 1966, CONGRESSIONAL RECORD, pp. 21342-21348.)

The PRESIDING OFFICER. Is there objection to the present consideration of the report?

There being no objection, the Senate proceeded to consider the report.

Mr. MAGNUSON. Mr. President, the work of the conference committee on S. 3005, the National Traffic and Motor Vehicle Safety Act of 1966, has produced a bill which is, in my judgment, substantially greater than the sum of its parts. The sessions of the conference committee were conducted in harmony and with a common determination to construct, from the Senate and House versions, the best possible motor vehicle safety program.

In basic structure and purpose, the Senate and the House bills were identical.

Each provided for the mandatory establishment of initial standards by January 31 of next year, to be placed into effect on the 1968 model year cars. Each provided for the issuance of new and revised standards a year later, with

continuous

upgrading of standards thereafter. To insure the establishment of meaningful safety standards, each bill provided for a broad program of research and testing; and to insure compliance, each bill provided broad powers of testing, inspection, and enforcement.

In addition, each bill had elaborate provisions to insure that both car owners and the Secretary of Commerce are given adequate notice of safety defects discovered after vehicles have left the factory.

This basic structure is, of course, preserved in the conference report. Nevertheless, there remained a number of substantial differences between the Senate and the House versions. The Senate conferees adopted several features of the House bill in the belief that they contributed to the scope and efficacy of the bill.

Thus, the conferees adopted the House treatment of trucks and buses, which clarified the Secretary's authority to set standards for all trucks and buses, but preserved the authority of the ICC to require the addition of nonstructural safety features subsequent to manufacture.

I yield to the Senator from Michigan. The PRESIDING OFFICER. Does the Senator from Maryland yield to the Senator from Michigan?

Mr. TYDINGS. Mr. President, I ask unanimous consent that I may yield to the Senator from Michigan without losing my right to the floor.

The PRESIDING OFFICER. Without objection, it is so ordered. The Senator from Michigan is recognized.

Mr. HART. Mr. President, I have just two points on which I should like to hear the reaction of the able chairman of the committee. The first has to do with the

standards that would be applied in the instances of trucks and buses.

Would not the Secretary, in setting the initial standards for trucks and buses, generally have to follow the existing ICC safety regulations?

Mr. MAGNUSON. Presumably the Secretary would have to rely, at least at the beginning, heavily upon the ICC standards. Of course, he is not limited to them. He may use any existing standards applicable to trucks or buses.

Mr. HART. Does the chairman know of any existing safety standards for trucks and buses except the ICC regulations?

Mr. MAGNUSON. No, I do not; and as the Senator knows, the ICC regulations are quite strict. Offhand I do not know of any. GSA regulations might apply to some light trucks that are used by the Government, but they would apply to only that type of vehicle.

Mr. HART. Realizing the shortness of time between now and the end of January of next year, when the initial standards must be issued, and realizing, as the Senator says, that the ICC regulations appear to be, if not the only ones, certainly the most complete existing standards for trucks and buses

Mr. MAGNUSON. And they are the result of long experience by the ICC in connection with safety regulations.

Mr. HART. Indeed; and, additionally, the fact that manufacturers are now following those regulations in the production of buses and trucks-in view of those facts, is it not to be expected that the Secretary would use the ICC regulations as at least the general basis for his initial set of standards for trucks and buses?

Mr. MAGNUSON. I think that would be a very reasonable expectation. At least to begin with.

Mr. HART. In any event, the Secretary would be under the obligation to insure that they be, as the bill now reads, "reasonable, practicable, and appropriate for the particular vehicle."

Mr. MAGNUSON. Yes; that is correct.

Mr. HART. I thank the Senator. My second question has to do with a feature of the bill which I shall not say gave the committee trouble, but which involved problems that we spent considerable time identifying and resolving-the section that deals with the applicability of the antitrust laws.

The Senate committee approved the section of the bill that deals with the application of the antitrust laws to cooperative activities in the field of safety, which was passed by the Senate as section 113 and was passed, in identical language, by the House as section 116, and has now been accepted, of course, by the conferees.

I have the clear impression that when this section was approved by our Committee on Commerce-and was approved unanimously-we did it on the basis of the understanding that our committee report would contain an explanatory statement. A statement is made at page 13 of the committee report; but it had been my understanding that that statement would make clear that manufac

turers could rely on the interpretation of the antitrust laws that was given to us, as contained in the Department of Justice letters that are a part of our record. I thought our conclusion was that the report would go on to say that a more detailed amendment incorporating this interpretation was not necessary. The report, however, states only that since the more detailed amendment would be merely declaratory of existing law, the amendment was not necessary.

I assume, and I should like to have the RECORD clearly show-if I am wrong, I can be corrected-there was no intention on the part of the distinguished chairman of the committee to infer that manufacturers could not rely on the interpretations contained in the letters of the Department of Justice.

I noted some time ago that in the discussion in the House the explanation was given that reliance could be had on the interpretation of the Department.

Without further delaying the adoption of the report, I inquire of our able chairman whether this is solely reflective of the purpose and intention.

Mr. MAGNUSON. I think that I can answer that question for the Senator.

It is the clear understanding of the committee that the manufacturers can rely on the interpretation of antitrust laws contained in the letters of the Department of Justice. As the Senator recalls, the committee went over that matter very carefully. That is the reason why we did not add any more specific language embodying these interpretations in the bill itself.

I think I can speak for the conferees that this was the intention of the conferees and the intention of the Members of the House when they adopted similar language.

Mr. HART. I thank the chairman 21487 very much.

I share with the chairman the conviction that this legislation is good. It is a strong bill. It is not an unduly burdensome bill.

I think the public interest is protected. Admittedly, as our experience develops in this area in the years ahead, there may be changes and modifications made in the approach to the problem. However, as of now, our able chairman has brought to the Senate a strong, executive piece of legislation.

Mr. MAGNUSON. The conferees adopted the House provisions relating to the safety, labeling, and grading of tires, which carried out the substance and intention of the tire safety bill. S. 2669, passed by the Senate earlier this year.

The conferees adopted the House provision directing the Secretary to establish standards for used cars, as an aid to State officials in applying meaningful motor vehicle inspection throughout the life of the car on the road.

The Senate conferees accepted, as a most constructive addition, the House provision authorizing the Secretary to require manufacturers to disclose safety performance and technical data on their products to new car purchasers. For that purpose, the Secretary is authorized to require manufacturers to furnish him

with such data so that he can determine what should be disclosed to purchasers. In so doing, the Secretary is not expected to divulge manufacturers' trade secrets, except to the extent that he determines such information should be in the hands of prospective purchasers.

The Senate accepted the House provision, similar to the Senate's, requiring the Secretary to develop and test experimental and demonstration motor vehicles and motor vehicle systems and equipment. This program is designed to advance scientific and engineering applications to commercially manufactured motor vehicles and equipment, and should not be limited to traditional methods of automobile design, styling, testing, or production.

The Senate conferees accepted the House provision that compliance with Federal standards does not exempt any person from common law liability. This provision makes explicit, in the bill, a principle developed in the Senate report. This provision does not prevent any person from introducing in a lawsuit evidence of compliance or noncompliance with Federal standards. No court rules of evidence are intended to be altered by this provision.

The Senate Members accepted the House provisions creating a Presidentially appointed Traffic Safety Administrator, operating through a National Traffic Safety Agency, sharing the belief of the House conferees that responsibility for so significant a program as traffic safety should be focused upon a statutory administrator and a statutory agency.

The House bill established a National Motor Vehicle Safety Advisory Council. After considerable discussion, a revised Council provision was adopted by the conferees. The specific representation of motor vehicle manufacturers, motor vehicle equipment manufacturers, and motor vehicle dealers was left to the determination of the Secretary of Commerce, who will appoint the Council, except that the bill expressly requires that a majority of the Council represent the general public. In addition, the requirement in the House bill that the Secretary must seek the advice and recommendations of the Advisory Council before establishing, amending, or revoking any standard was modified to require that the Secretary generally consult with the Advisory Council on motor vehicle safety standards.

The Senate accepted the House's deletion of the Senate language defining the nature of the Secretary's required consultation with the Vehicle Equipment Safety Commission as unnecessary. the statement of the House managers states:

As

In the administration of this provision it is expected that the Secretary will, to the extent consistent with the purposes of this Act, inform the VESC and other agencies of proposed standards and amendments thereto and afford them a reasonable opportunity to study and comment thereon.

The Senate conferees accepted the House version of the cooperation provision-authorizing the Secretary to cooperate with interested public and private

agencies in the planning and development of standards-because there was no substantive difference between it and the more detailed Senate provision. The term "private agencies" as used in the House language covers, of course, the universities, institutions, and interested businesses such as manufacturers, distributors, and dealers of motor vehicles and motor vehicle equipment which were specifically mentioned in the Senate provision.

The Senate bill spelled out in some detail certain of the administrative procedures to be followed in the promulgation of standards; while the House bill made the provisions of the Administrative Procedure Act generally applicable. It was the judgment of the conferees that there were no substantial differences between the procedures in the bills with respect to such matters as the requirements for participation of interested persons in the rulemaking process.

The Senate had specified that issued standards be supported by a technical statement and an explanation of its principal purpose that is capable of being understood by the general public. These specific conditions were deleted by the conferees for simplicity, but it was agreed that they were consistent with the general meaning of section 4(b) of the Administrative Procedure Act.

With respect to sections 7 and 8 of the Administrative Procedure Act. which apply to formal hearings, the Senate bill had expressly provided that these sections would not apply to standardsetting procedures under the act. It was the clear understanding of the conferees. however, that under the language of the House bill, the Secretary will utilize the informal rulemaking procedures of section 4 of the Administrative Procedure Act; and that he need hold a formal hearing under sections 7 and 8 only if he determines that such hearing is desirable.

There were several features of the Senate bill which the Senate conferees beHeved should be retained in the final bill. The House Members were uniformly accommodating in accepting these features.

Thus, the House accepted the Senate language modifying the Secretary's authority to extend the effective date for the implementation of any standard by adding the Senate-imposed requirement that such extensions can only be issued for "good cause shown," thus making it clear that industry must sustain the burden of proof before the Secretary, in order to justify an extension of the normal effective date.

The House Members accepted the Senate provision giving the Secretary general investigatory authority in aid of enforcement of standards, the Senate patent provisions, securing the fruits of federally financed research to the general public, the Senate-specified authority to the Secretary to enjoin nonnegligent as well as negligent violations of standards, and the prohibition-taken from the Senate tire bill-against the regrooving of tires.

The House managers also accepted the Senate defect notification procedures to

require that the manufacturer furnish the Secretary with the substances of oral as well as written defect communications to their dealers. While the manufacturer will not be required to advise the Secretary of every isolated telephone communication with a dealer concerning a possible defect in a car, the Secretary will be expected to adopt regulations to insure that he is informed of the substance of all communications relating to significant defects.

In addition, the Senate notification procedure makes it clear that the Secretary can make public information concerning safety-related defects or noncompliance with standards where necessary for the public safety. As was stated in the Senate report explaining this procedure, the Secretary will be expected to avoid premature publicity, to check with the manufacturer, and to afford him an opportunity, wherever practicable, to accomplish the required notification and correction through the manufacturers' own procedures.

We were also pleased that the House agreed to the restoration of Senate language for the definition of "motor vehicle safety." recognizing that safety is related to design. Performance standards issued under the act are expected to affect the design of such features, for example, as steering assemblies, instrument panels, seat structures. windshields, seat belts. brakes, and door latch and frame components-all of which will particularly affect the design of these components.

The responsibility for the success of the ambitious program embodied in this legislation shifts to the Traffic Safety Administrator. It will be his task to recruit sufficient competent, trained, and experienced technical personnel and administrators to enable this act to be vigorously and imaginatively implemented. I would hope that the full resources and commitment of civil service procedures, including provision for an adequate number of supergrade positions, will be applied to the staffing of the National Traffic Safety Agency.

When we began our deliberations on motor vehicle safety, the annual death toll from motor vehicle accidents had reached 49,000. Today, a little over a year later, projected traffic fatalities for 1966 are 53,000; the projection for 1968 is 60.000; and for every fatality there will be 100 injuries. Only with competent and dedicated administration can we expect to mount a meaningful national counterattack to this massive bloodshed.

Mr. President, one final word, abon1+ cost.

Press reports and industry sources indicate that the 1967 models will include as standard equipment all but 1 of the 17 minimum safety requirements called for under the GSA specifications on federally purchased vehicles which the Committee on Commerce inaugurated with the General Services Administration 2 or 3 years ago. I believe that we should take public notice of the initiative taken by the industry to hasten the availability of a safer car for the American driver.

However, we are disturbed by other reports of a probable price increase for

1967 models which is being blamed in part on the so-called 1967 safety package.

During the hearings on this bill, there was considerable discussion on the point of what mandatory minimum safety standards might cost the car manufacturer and, more importantly, the individual car buyer. Concern was expressed that the manufacturers would be able to attribute price increases largely to implementation of the safety standards. Some even suggested that the legislation might include a requirement of public disclosure of the actual cost of required safety changes so the buyer would know what part, if any, of a price increase he was paying to protect himself and his family and what part might be due to other factors.

It would be tragic indeed to permit this significant legislation-which is designed solely to protect the lives and safety of each of the millions of Americans who drive a car-to serve as a license for the automobile makers to increase prices. I want to make it clear that I am not saying that this will happen. It may be said, in fact, that the manufacturers have demonstrated a measure of restraint in their pricing in the past few years.

Nevertheless, I think that this is the appropriate time to give as much information as we can to the American people so they can judge for themselves when the prices for the 1967 models are announced in the next few weeks.

Actual cost data are a carefully guarded secret of the automobile manufacturer. However, a wealth of significant information relative to these costs is available. And from this information some very interesting observations can be made.

First. The 1966 models sold by the Big Four included as standard equipment all but 2-dual brakes and anti-air-pollution control of the 17 items required by GSA specifications on 1967 models purchased by the Government. This is supported by the testimony of Mr. John Bugas, a Ford Motor Co. vice president, who testified on behalf of the automobile manufacturers in the hearings before the Senate Commerce Committee this April.

Second. Assuming that the substance of the industry's 1967 "safety package." which will be standard on all cars, will include all of the 17 GSA specifications except the air-pollution-control system, the only addition to items already standard on 1966 models will be dual brakes. Our calculations reveal that the manufacturer's cost for dual brakes should not exceed something between $8 and $10. And it should be mentioned that dual brakes were standard equipment on all 1966 American Motors cars and on 1966 Cadillacs.

Third. There is some confusion as to whether 1 of the 17 GSA specifications, the four-way flasher system, was standard on all 1966 models. Even if we add this item, the manufacturer's cost should be less than $2. And this system was definitely standard equipment on Ford's 1966 models.

The four-way flasher has a button on the dashboard which one presses when in trouble at the side of the road, so that the headlights and taillights will go on and off intermittently, such as common

carrier trucks do, to warn oncoming cars of the presence of the vehicle.

Fourth. Where items such as the four-way flasher, which may have been optional previously, are made standard on a new model, it is the practice of the industry to explain a price increase in the new model by pointing to the latest retail list price of the previously optional item. This may well have little relevance to the actual cost increase to the car manufacturer. The unit cost is found to be much less if an item is included on 9 million mass-produced cars than if it is an optional feature which is put on only a percentage of the cars produced. It also disregards the markup between manufacturer and retail on "optionals"—which may run as much as 100 percent or even several times that.

Fifth. A safety consideration which may result in cost reduction is the removal of certain nonessential items which have been recognized as hazards. An example is the chrome strip found on the top rear edge of the front seat.

Sixth. The industry will no doubt tell us that higher labor and material costs require a price increase. If we examine this, we find that there will be increases in wage rates-probably around 3.7 percent including fringe benefits and estimated cost-of-living increases and materials cost-probably around 2 percent. But we will not hear much about increased productivity of the workers-estimated at about 5 percent-which will keep unit labor costs from rising in spite of wage rate increases, or about the reductions in materials cost which come from improved technology in production and material usage. The net effect of these offsets should cause very little or no overall cost increase to the car manufacturers.

Seventh. It is possible, of course, that significant safety items, in addition to the GSA specifications, will be made standard on all 1967 models. I want to make clear that we strongly encourage this and that we do not believe it should entail any additional cost to the manufacturer requiring an increase in price. I want to make it absolutely clear that if the industry's 1967 safety package ends up in substance as a rehash of the present GSA safety specifications, we are talking about virtually no increase in actual cost to the manufacturer.

(At this point, Mr. MCCARTHY took the chair as Presiding Officer.)

Mr. MAGNUSON. Mr. President, Mr. Bugas testified at the hearings that, and I quote:

There are no costs that affect the entire industry that don't get back to the people.

Of course, that is true. But in closing. the following facts should be known about the economic condition of the automobile industry:

First. The 1965 sales of the Big Four were $38.6 billion and profits $3.1 billion. First 6 months sales in 1966 are ahead of last year and 1966 profits are expected to be about $3 billion.

Second. In 1965 the Big Four's return on equity was 21 percent compared to 12.6 percent for all manufacturing. The first 6 months of 1966 indicate a 21.8 percent rate of return for the car companies.

Mr. President, no one is suggesting that car manufacturers do not want to sell a car as reasonably and as cheaply as possible. We hope they will do that. As I say, we have no facts right now that they will not, but I do hope that because of this bill, there will not be a great deal said about the fact that a safer car necessarily must cost more money. In some cases, it might be even cheaper. Restyling and retooling, I understand, cost more; but, in any event, we are hopeful that the 1967 models-I must compliment the manufacturers-will embody many of these factors voluntarily and will have a price range which will reflect the quality of the cars, their performance, and style. If there is an increase in the cost, it should be attributed to that. It might be a better car all around. But the fact that there are safety devices like the GSA's 17 standards, or the 26 which they have suggested for later on, should not, in my opinion, appreciably add to the cost of the car, or dictate any price increase.

The President of the United States, of course, has asked for self-restraint on the part of business and labor in their price and wage policies. I cannot imagine a more critical time than now for the automobile manufacturers to follow along, which I am sure they will do in this particular case.

This matter has been the subject of long hearings. There was some controversy in the conference. We did not change the Senate and House versions considerably. The Senator from New Hampshire [Mr. COTTON), was one of the most active members of the conference. We took the best parts of both bills. We took part of the House bill, and we think the final bill is better because of the Senate bill.

I personally would like to have gone further in the field of car safety, but it is a giant step forward and a monumental piece of legislation.

Mr. HARTKE Mr. President, will the Senator yield?

Mr. MAGNUSON. Iyield.

Mr. HARTKE. Mr. President, I wish to commend the chairman of the Commerce Committee for his diligence and his good work in this field. He has demonstrated his capacity as chairman for bringing out the type of legislation which is not alone informative but good for the Nation. I want to also compliment the industry. It seems that some of the benefits as a result of this bill are now being shown, especially when Chrysler introduced its new line yesterday.

Mr. MAGNUSON. I read that in the papers. It seems to me that Chrysler took a great step forward.

Mr. HARTKE. Chrysler put heavy emphasis on safety. I think the rest of the industry will do likewise. This legislation is something that will not be harmful to industry, and will be very helpful to the public. I hope it will contribute to reducing the death toll on the highways. With respect to the matter of an advisory council, I think we ought to consolidate the matter as provided in this bill and in the Public Works bill. I do not think we need two advisory councils.