Measure includes jail time, unlimited civil fines for concealing safety defects
WASHINGTON, DC -- Automotive industry executives who cover up or conceal the death and injury risks of defective vehicles or parts could face up five years in prison, under sweeping auto safety legislation filed in the Senate late today.
The measure, sponsored by three leading Democrats on the Senate Commerce Committee, comes in advance of a mark-up the panel will hold next week on a broader Republican transportation bill that includes highway, rail and port related provisions.
In addition to the prospect of executives facing jail time, the bill also removes a $35 million cap on civil fines federal regulators could impose on automakers for safety violations, including failing to report dangerous defects.
The legislation, sponsored by U.S. Sens. Bill Nelson (D-Fla.), Richard Blumenthal (D-Conn.) and Edward J. Markey (D-Mass.), was in-part prompted by the committee's on-going investigations into faulty General Motors (GM) ignition switches and defective Takata airbags. The bill contains a number of policy recommendations laid out two weeks ago in a minority staff report on Takata safety lapses.
“If the recent rash of recalls tells us anything, it’s that we must do a much better job of protecting the driving public while holding automakers and regulators more accountable,” said Nelson, the panel’s ranking member. "As we try to find a way forward on a comprehensive highway bill, enacting these critical safety reforms should be a top priority."
“This critical and comprehensive measure will end the unacceptable and tragic record of shirking accountability and responsibility at NHTSA and the auto industry,” said Blumenthal. “This legislation will not only hold auto companies accountable for failing to disclose the deadly and dangerous defects of vehicles, but it will require new, life-saving technology to be implemented in our cars to keep drivers, passengers, and pedestrians safe from preventable tragedies. Lessons must be learned from the GM ignition switch cover-up and the catastrophic Takata airbag failures to prevent similar safety lapses from harming and killing Americans in the future.”
"After several years of the largest and deadliest recalls in U.S. automotive history, the American people deserve comprehensive and sweeping auto safety reform legislation” said Markey. “This legislation will require automakers make public more information about accidents that could be caused by safety defects, upgrade public safety databases, and strengthen enforcement with transparency measures to provide early warnings about potentially deadly defects to the public. It also would encourage state motor vehicle agencies to inform drivers when their cars have been recalled for safety defects and ensure that those cars get repaired. I thank Ranking Member Nelson and Senator Blumenthal for their partnership on this important legislation and look forward to working with all of my colleagues to get this bill enacted."
The legislation also includes consumer protection provisions that, among other things, require:
Below is a section-by-section summary of the lawmakers' bill.
Motor Vehicle Safety Act of 2015
TITLE I—TRANSPARENCY AND ACCOUNTABILITY
Sec. 101. Public availability of early warning data.
Section 101 changes the presumption of disclosure under the Transportation Recall Enhancement, Accountability, and Documentation Act (TREAD Act) to require that information submitted by manufacturers to the National Highway Traffic Safety Administration (NHTSA) through the Early Warning Reporting system be disclosed unless it is exempt from disclosure under the Freedom of Information Act (FOIA). This section further requires NHTSA to rewrite the rule on “Confidential Business Information” with a presumption in favor of maximum public availability of Early Warning information.
Sec. 102. Additional early warning reporting requirements.
Section 102 requires motor vehicle and equipment manufacturers to automatically submit the accident report or other document that first alerted them to a fatality involving their vehicle or equipment to NHTSA’s Early Warning Reporting database. NHTSA is then required to automatically make those documents public unless they are exempted from public disclosure under FOIA or are subject to attorney-client privilege. The section also requires NHTSA to consider Early Warning Reporting information when it is investigating potential safety defects and when it is evaluating citizen petitions for motor vehicle safety standards or enforcement actions.
Sec. 103. Improved National Highway Traffic Safety Administration vehicle safety databases.
Section 103 requires NHTSA to upgrade its online databases to improve searchability, integrate its different databases so they can all be searched at once, and ensure that documents obtained or created by NHTSA related to a safety incident are made both publicly available and keyword searchable in its databases. The section also requires NHTSA to provide public, searchable notices of all inspection and investigation activities it undertakes.
Sec. 104. Corporate responsibility for NHTSA reports.
Section 104 requires that a manufacturer designate a senior executive in the United States to certify the accuracy and completeness of all responses to NHTSA’s requests for information relating to safety investigations.
Sec. 105. Reports to Congress.
This section requires the Department of Transportation Office of Inspector General (DOT OIG) to issue follow-up reports to Congress on NHTSA’s implementation of 17 reforms it recommended in its recent report that highlighted severe deficiencies within the Office of Defects Investigation.
TITLE II—ENHANCED SAFETY AUTHORITY AND CONSUMER PROTECTION
Sec. 201. Civil penalties.
Section 201 removes the cap on NHTSA’s civil penalty authority, which is currently at $35 million.
Sec. 202. Criminal penalties.
Section 202 makes it a crime, punishable by fines and up to five years in prison, for a corporate officer to knowingly conceal the fact that a corporate action or product poses a danger of death or serious physical injury. Federal agencies must be verbally informed within 24 hours of the entity or person acquiring actual knowledge of a serious danger, and they must be further informed by writing within 15 days. Any affected employees of the business entity must be informed in writing as soon as practicable, as well as any other identifiable individual who may be exposed to the serious danger. In addition, the section would create a safe harbor from that criminal liability in cases where that corporate officer notifies a federal regulatory agency and individuals subject to the danger.
This section also clarifies NHTSA’s enforcement authority against persons who use electronic devices to affect the performance of a motor vehicle or motor vehicle equipment of which they are not the individual owner. Section 202 further includes criminal penalties for violations by persons who knowingly use these devices to endanger public safety or with reckless disregard for the safety of human life.
Sec. 203. Cooperation with foreign governments.
Section 203 directs NHTSA to engage in cooperative agreements with its foreign counterparts in order to better monitor and address safety defects in globally manufactured and sold vehicles. The agency currently is limited in its ability to collaborate with its foreign counterparts on transportation matters, and certain research projects would benefit from the ability to also share resources and funding.
Sec. 204. Imminent hazard authority.
Section 204 provides NHTSA with the authority to expedite a recall order in the case of a substantial likelihood of death or serious injury to the public.
Sec. 205. Used passenger motor vehicle consumer protection.
Section 205 prohibits the sale or lease of a used vehicle that has an unrepaired safety defect or does not comply with an applicable motor vehicle safety standard. The prohibition does not apply to circumstances where recall information is not available or accessible at the time the vehicle is sold or leased.
Sec. 206. Unattended children warning system.
Section 206 calls on NHTSA to conduct a safety research initiative into possible technological means for preventing deaths of children who are accidentally left behind in vehicles by caretakers. The section directs NHTSA to either commence a rulemaking within a year of completing the two-year research initiative or to submit a report to Congress on its reasons for not commencing such a rulemaking.
Sec. 207. Collision avoidance technologies.
Section 208 requires the Secretary of Transportation to initiate a rulemaking process within two years to require vehicles with a gross weight greater than 26,000 pounds be equipped with crash mitigation and avoidance technologies. The regulations are to establish standards for equipment that prevents collisions with moving and stationary vehicles, pedestrians, cyclists, and road users.
Sec. 208. Pedestrian safety.
Section 208 requires NHTSA to establish standards for vehicle hoods and bumpers in order to reduce pedestrian fatalities and injuries.
Sec. 301. Authorization of appropriations.
Section 301 authorizes increased resources for NHTSA at the same levels proposed in the Administration’s GROW AMERICA Act.
TITLE IV—RECALL PROCESS IMPROVEMENTS
Sec. 401. Recall obligations under bankruptcy.
Section 401 preserves all recall obligations for manufacturers that are subject to Chapter 11 bankruptcy proceedings.
Sec. 402. Dealer requirement to check for and remedy recall.
Section 402 requires authorized dealers to check for and fix safety defects subject to open recalls when consumers take their cars in for routine maintenance.
Sec. 403. Application of remedies for defects and noncompliance.
Section 403 removes the 10-year limitation on the obligation of auto and parts manufacturers to replace or fix defects at no charge to consumers.
Sec. 404. Direct vehicle notification of recalls.
Section 404 directs NHTSA to promulgate rules that would require new vehicles to feature a warning feature – similar to tire pressure monitor light on the dashboard – that would notify consumers that their cars are subject to a safety recall.
Sec. 405. State notification of open safety recalls.
Section 405 establishes a grant program for State motor vehicle registration agencies to check each registered vehicle for open safety recalls (using the NHTSA recall database) and to notify registered owners and lessees of those recalls when they send out registration reminders and registration documents.
Sec. 406. Recall completion pilot grant program.
Section 406 establishes a pilot grant program for State motor vehicle registration agencies to implement a system that requires each owner or lessee to complete all safety recall remedies prior to registration, when the parts and labor are available and the owner or lessee has had sufficient time to complete the recall remedy.
Sec. 407. Improvements to notification of defect or noncompliance.
Section 407 directs NHTSA to promulgate rules that would require recall notifications be delivered via electronic means (e.g., e-mail) in addition to first-class mail. In addition, the section allows manufacturers to notify NHTSA of defects via electronic mail.