EWR threshold raised to 5000 units

THE National Highway Traffic Safety Administration (NHTSA) is providing the work-truck industry with significant relief from the regulatory burdens associated with the Early Warning Reporting (EWR) rule.

NHTSA announced a significant amendment to its EWR regulations to ease the reporting burdens on “small” motor vehicle manufacturers. For trailers, NHTSA amends 49 CFR § 579.24 to increase the threshold for filing quarterly EWR reports with NHTSA from 500 trailers annually to 5000.

The National Association of Trailer Manufacturers (NATM), in its supporting comments, estimated this 10-fold increase would relieve 57% of NATM-member trailer manufacturers currently submitting quarterly EWR reports from future filing obligations. The higher threshold means that only a few truck trailer manufacturers will be required to comply with the more detailed early warning reporting requirements of the Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act.

The rule change was the result of years of work on the part of NATM, the National Truck Equipment Association (NTEA), and the Truck Trailer Manufacturers Association (TTMA).

The new rule change takes effect October 19. This means, based upon advice from NHTSA's Office of Chief Counsel, those manufacturers producing between 500 and 5000 trailers annually will not have to file their third-quarter 2009 EWR reports with NHTSA, due November 30, and will have no filing obligations for the fourth quarter of 2009 or for any period thereafter, unless their annual production levels begin to exceed 5000 units.

In 2000, Congress enacted the TREAD Act. As part of that law, Congress directed NHTSA to begin collecting data from motor vehicle manufacturers that could provide an earlier warning of safety defects. In 2002, NHTSA created the EWR requiring manufacturers to submit significant amounts of data on a quarterly basis. Since Congress had admonished NHTSA to be cautious of the regulatory burden being imposed, NHTSA created a small-volume manufacturer category that required minimal reporting. That category's annual production volume was set at fewer than 500 vehicles per year.

Industry associations argued that the small-volume production level set by NHTSA was too low and would result in a significant burden on small companies without providing NHTSA data of any statistical significance. NHTSA initially rejected those arguments.

The NTEA officially petitioned NHTSA to amend the EWR rule by raising the comprehensive reporting production threshold for manufacturers from 500 to 5000 vehicles annually. In December 2008, NHTSA finally issued a proposed rule to amend the production levels, but the proposal offered only partial relief.

In its original notice to amend the EWR thresholds, NHTSA proposed increasing the production level from 500 to 5000 for manufacturers of light vehicles (cars, vans and pickups) and trailers, eliminating the small-volume reporting category for buses (making every bus manufacturer submit comprehensive reports) and keeping the level at 500 for medium and heavy vehicles. This proposal was not acceptable to the NTEA.

The NTEA argued, supported by the Small Business Administration and multiple congressional offices, that providing regulatory relief to truck manufacturers was both necessary and appropriate.

In the final rule, NHTSA agreed that medium and heavy truck producers should get relief from the comprehensive quarterly reporting burden. The new regulation increases the small-volume manufacturer category from fewer than 500 to fewer than 5000 vehicles per year for light vehicles, trailers and medium/heavy vehicles.

NHTSA has decided not to amend the reporting categories for emergency vehicle manufacturers and has also decided not to eliminate the small-volume category for bus manufacturers but rather to reduce it from fewer than 500 to fewer than 100 vehicles per year. The NTEA argued that completely eliminating the small-volume bus category would require a company that produced even one bus to comprehensively report. Such reporting would be of no value to NHTSA in its efforts to identify defects in a timelier manner. NHTSA agreed with the NTEA.

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