TPMS FMVSS No. 138, COST EFFECTIVENESS AND BENEFIT-COST ANALYSES

This section combines costs and benefits to provide a comparison of the estimated injuries and lives saved per net cost. Vehicle costs occur when the vehicle is purchased, but the maintenance costs, opportunity costs of refilling tires, safety benefits, and property damage benefits and travel delay benefits accrue over the lifetime of the vehicle. Maintenance costs, opportunity costs, and all of the benefits must therefore be discounted to express their present value and put them on a common basis with vehicle costs.

In some instances, costs may exceed economic benefits, and in these cases, it is necessary to derive a net cost per equivalent fatality prevented. An equivalent fatality is defined as the sum of: (1) fatalities and (2) nonfatal injuries prevented converted into fatality equivalents. This conversion is accomplished using the relative values of fatalities and injuries measured using a"willingness to pay"approach. This approach measures individuals’willingness to pay to avoid the risk of death or injury based on societal behavioral measures, such as pay differentials for more risky jobs.

Table VII-1 presents the relative estimated rational investment level to prevent one injury, by maximum injury severity. Thus, one MAIS 1 injury is equivalent to 0.0031 fatalities. The data represent average costs for crash victims of all ages. The Abbreviated Injury Scale (AIS) is an anatomically based system that classifies individual injuries by body region on a six point ordinal scale of risk to life. The AIS does not assess the combined effects of multiple injuries. The maximum AIS (MAIS) is the highest single AIS code for an occupant with multiple injuries.

**Table VII-1**
Comprehensive Fatality and Injury Relative Values
Injury Severity	2000 Relative Value^*per injury
MAIS 1	.0031
MAIS 2	.0458
MAIS 3	.0916
MAIS 4	.2153
MAIS 5	.7124
Fatals	1.000

Table VII-2 shows the estimated equivalent fatalities for the different Compliance Options. The injuries from Chapter V are weighted by the corresponding values in Table VII-1, added to the fatalities, and then summed.

Table VII-2
Equivalent Fatalities (Undiscounted)
	Fatality Benefits	Injury Benefits	Equivalent Fatalities
Compliance Option 1	121	8,568	250
Compliance Option 2	119	8,373	245
Compliance Option 3	119	8,373	245

The average vehicle costs are estimated to be $69.89 per vehicle for Compliance Option 1, $66.08 for Compliance Option 2, and $48.44 for Compliance Option 3. Multiplying these by 17 million vehicles results in $1,188 million for Compliance Option 1, $1,123 for Compliance Option 2, and $823 million for Compliance Option 3. Maintenance costs and opportunity costs for refilling tires are added to these costs and then offset somewhat by a reduction in costs for fuel economy, tread wear, property damage and travel delay (See Table VII-3).

Table VII-3 (a)
Net Costs per Vehicle
At a 3 Percent Discount Rate
(2001 Dollars)
Opt.	Vehicle Costs	Present Value of Maintenance Costs*	Present Value of Opportunity Costs of Refilling Tires	Present Value of Fuel Savings	Present Value of Tread Wear Savings	Present Value of Property Damage and Travel Delay Savings	Net Costs
1	$69.89	$0 to $55.98	$8.38	$23.08	$4.24	$7.79	$43.16 to $99.14
2	$66.08	$0 to $55.98	$8.38	$19.07	$3.42	$7.70	$44.27 to $100.25
3	$48.44	$0 to $37.23	$8.38	$19.07	$3.42	$7.70	$26.63 to $63.86

Table VII-3 (b)
Net Costs per Vehicle
At a 7 Percent Discount Rate
(2001 Dollars)
Opt.	Vehicle Costs	Present Value of Maintenance Costs*	Present Value of Opportunity Costs of Refilling Tires	Present Value of Fuel Savings	Present Value of Tread Wear Savings	Present Value of Property Damage and Travel Delay Savings	Net Costs
1	$69.89	$0 to $40.50	$6.72	$18.34	$6.03	$6.25	$45.99 to $86.49
2	$66.08	$0 to $40.50	$6.72	$15.14	$4.98	$6.16	$46.52 to $87.02
3	$48.44	$0 to $26.93	$6.72	$15.14	$4.98	$6.16	$28.88 to $55.81

Table VII-4 (a)
Total Annual Costs for 17 Million Vehicles
(Millions of 2001 Dollars)
At a 3 Percent Discount Rate
Opt.	Vehicle Costs	Present Value of Maintenance Costs*	Present Value of Opportunity Costs of Refilling Tires	Present Value of Fuel Savings	Present Value of Tread Wear Savings	Present Value of Property Damage and Travel Delay Savings	Net Costs
1	$1,188	$0 to $952	$142	$392	$72	$132	$734 to $1,685
2	$1,123	$0 to $952	$142	$324	$58	$131	$753 to $1,704
3	$823	$0 to $633	$142	$324	$58	$131	$453 to $1,086

Table VII-4 (b)
Total Annual Costs for 17 Million Vehicles
(Millions of 2001 Dollars)
At a 7 Percent Discount Rate
Opt.	Vehicle Costs	Present Value of Maintenance Costs*	Present Value of Opportunity Costs of Refilling Tires	Present Value of Fuel Savings	Present Value of Tread Wear Savings	Present Value of Property Damage and Travel Delay Savings	Net Costs
1	$1,188	$0 to $689	$114	$312	$103	$106	$782 to $1,470
2	$1,123	$0 to $689	$114	$257	$85	$105	$791 to $1,479
3	$823	$0 to $458	$114	$257	$85	$105	$491 to $949

One of the conclusions from this analysis is that Compliance Option 1 with the continuous display capability has equivalent or lower net costs than Compliance Option 2 (just providing a warning signal). This occurs because the fuel savings and tread wear savings are equivalent to or more than the cost of the continuous display.

Net Cost (at a 3% discount rate)/Equivalent Fatality Before Discounting Safety Benefits

Net Cost (at a 7% discount rate)/Equivalent Fatality Before Discounting Safety Benefits

Appendix V of the"Regulatory Program of the United States Government", April 1, 1990 - March 31, 1991, sets out guidance for regulatory impact analyses. One of the guidelines deals with discounting the monetary values of benefits and costs occurring in different years to their present value so that they are comparable. The agency performed a cost-effectiveness analysis resulting in an estimate of the cost per equivalent life saved, as shown on the previous pages. The guidelines state,"An attempt should be made to quantify all potential real incremental benefits to society in monetary terms of the maximum extent possible". For the purposes of the cost-effectiveness analysis, the Office of Management and Budget (OMB) has requested that the agency compound costs or discount the benefits to account for the different points in time that they occur.

There is general agreement within the economic community that the appropriate basis for determining discount rates is the marginal opportunity costs of lost or displaced funds. When these funds involve capital investment, the marginal, real rate of return on capital must be considered. However, when these funds represent lost consumption, the appropriate measure is the rate at which society is willing to trade-off future for current consumption. This is referred to as the"social rate of time preference,"and it is generally assumed that the consumption rate of interest, i.e., the real, after-tax rate of return on widely available savings instruments or investment opportunities, is the appropriate measure of its value.

Estimates of the social rate of time preference have been made by a number of authors. Robert Lind ^[39] estimated that the social rate of time preference is between zero and 6 percent, reflecting the rates of return on Treasury bills and stock market portfolios. Kolb and Sheraga^[40] put the rate at between one and five percent, based on returns to stocks and three-month Treasury bills. Moore and Viscusi^[41] calculated a two percent real time rate of time preference for health, which they characterize as being consistent with financial market rates for the period covered by their study. Moore and Viscusi's estimate was derived by estimating the implicit discount rate for deferred health benefits exhibited by workers in their choice of job risk.

OMB Circular A-4 recommends agencies use both 3 percent and 7 percent as the"social rate of time preference".

Safety benefits can occur at any time during the vehicle's lifetime. For this analysis, the agency assumes that the distribution of weighted yearly vehicle miles traveled are appropriate proxy measures for the distribution of such crashes over the vehicle's lifetime. Multiplying the percent of a vehicle's total lifetime mileage that occurs in each year by the discount factor and summing these percentages over the 20 or 25 years of the vehicle's operating life, results in the following multipliers for the average passenger car and light truck as shown in Table VII-4. These values are multiplied by the equivalent lives saved to determine their present value (e.g., in Table VII-5 at 3%, 250 x .8233 = 206). The net costs per equivalent life saved for passenger cars and light trucks are then recomputed and shown in Table VII-6 using the annual net cost figures from Table VII-4a for 17 million vehicles and the discounted equivalent lives saved from Table VII-5. (e.g., for the battery-less TPMS estimate, Compliance Option 1 @ 3 percent discount rate; $734 million/206 equivalent lives saved = $3.6 million per life saved).

Table VII-4
Discounting Multipliers
	3 Percent	7 Percent
Passenger Cars	0.8434	0.6921
Light Trucks	0.8054	0.6315
PC/LT Average	0.8233	0.6600

Table VII-5
Discounting of Equivalent Lives Saved
	Base Equivalent	3 Percent	7 Percent
Compliance Option 1	250	206	165
Compliance Option 2	245	201	161
Compliance Option 3	245	201	161

Table VII-6
Net Costs per Discounted Equivalent Life Saved *
($ millions)
	3 Percent	7 Percent
Compliance Option 1	$3.6 to $8.2	$4.8 to $8.9
Compliance Option 2	$3.7 to $8.5	$4.9 to $9.2
Compliance Option 3	$2.3 to $5.4	$3.0 to $5.9

The results in Table VII-6 show that the cost per equivalent life saved for the battery-less TPMS range from $2.3 million to $3.7 million at a 3% discount rate and from $2.9 million to $4.7 million at a 7% discount rate. For a TPMS with batteries, the cost per equivalent life saved range from $5.2 million to $8.1 million at a 3% discount rate and from $5.6 million to $8.7 million at a 7% discount rate. Thus, a battery-less TPMS is more cost effective than a TPMS with a battery.

Effective January 1, 2004, OMB Circular A-4 requires that analyses performed in support of proposed rules must include both cost effectiveness and benefit-cost analysis. Benefit-cost analysis differs from cost effectiveness analysis in that it requires that benefits be assigned a monetary value, and that this value be compared to the monetary value of costs to derive a net benefit. In valuing reductions in premature fatalities, we used a value of $3.5 million per statistical life. The most recent study relating to the cost of crashes published by NHTSA ^[42], as well as the most current DOT guidance on valuing fatalities ^[43], indicate a value consistent with $3.5 million. This value represents an updated version of a meta-analysis of studies that were conducted prior to 1993. More recent studies indicate that higher values may be justified. ^[44]

When accounting for the benefits of safety measures, cost savings not included in value of life measurements must also be accounted for. Value of life measurements inherently include a value for lost quality of life plus a valuation of lost material consumption that is represented by measuring consumers after-tax lost productivity. In addition to these factors, preventing a motor vehicle fatality will reduce costs for medical care, emergency services, insurance administrative costs, workplace costs, and legal costs. If the countermeasure is one that also prevents a crash from occurring, property damage and travel delay would be prevented as well. The sum of both value of life and economic cost impacts is referred to as the comprehensive cost savings from reducing fatalities.

The countermeasures that result from the TPMS final rule relate to crash-avoidance, and thus involve property damage or travel delay. The 2002 NHTSA report cited above estimates that the comprehensive cost savings from preventing a fatality for crash-avoidance countermeasures was $3,366,388 in 2000 economics. This estimate is adjusted for inflation to the 2001 cost level used in this report. Based on the CPI ALL Items index (177.1/172.2), this would become $3,462,180. The basis for the benefit-cost analyses will thus be $3.5 million.

Total benefits from injuries and fatalities reduced are derived by multiplying the value of life by the equivalent lives saved. The net benefits are derived by subtracting total net costs from the total benefits, as shown in Table VII-7. Positive Net Benefits indicate that Benefits valued at $3.5 million per equivalent life are higher than Net Costs. Negative Net Benefits indicate that Benefits valued at $3.5 million per equivalent life are lower than Net Costs.

Table VII-7
Net Benefits with a Value of $3.5M per Statistical Life*
(Millions of 2001 Dollars)
	3% Discount Rate	7% Discount Rate
Compliance Option 1	-$14 to–$966 Mil.	$-205 to -$894 Mil.
Compliance Option 2	-$48 to -$1000 Mil.	$-226 to -$915 Mil.
Compliance Option 3	$252 to -$381 Mil.	$74 to -$384 Mil.

We examined the malfunction warning lamp from a cost per equivalent life saved basis for Compliance Option 1 at the 3 percent discount rate (the other Compliance Options and the 7% discount rate would have very similar results). We estimated the cost for a separate telltale lamp and the added circuitry for the malfunction capability at $1.83 per vehicle or $31.1 million annually. The estimated cost for a combination telltale lamp and the added circuitry for the malfunction capability is estimated to be $0.25 per vehicle or $4.3 million annually.

On the benefits side, we estimate the same benefits for providing a separate telltale lamp as for providing a combination telltale lamp as the malfunction indication. The impact that a malfunction/warning lamp would have on benefits depends on what consumers do when they see such a lamp. The benefits of this final rule, safety benefits as well as tread life and fuel economy savings, are directly related to mileage. The average tread life was estimated to be 45,000 miles. The average weighted vehicle miles traveled was 126,678 miles for passenger cars and 153,319 miles for light trucks. That means that potentially 64 percent of the passenger car (1–45,000/126,678) and 71 percent of the light truck mileage will be driven on replacement tires. If 1 percent of the replacement tires are not compatible with TPMS designs, then a weighted average of 0.677 percent of the benefits for both passenger cars andlight trucks could potentially not be obtained if consumers were not provided with a malfunction lamp or if they ignored the malfunction lamp. Assuming that a 1 percent malfunction, either because the TPMS won’t work with some replacement tires or because of another malfunction, resulted in a 0.677 percent loss in benefits, the impact on benefits would be 1 fatality (121 lives saved * 0.00677) and 58 injuries reduced, or 1.7 equivalent lives. The 0.677 percent loss in benefits will also affect the fuel savings and tread life savings. Table VII-8 shows the results of the analysis that a combination lamp would be cost effective, while a separate malfunction lamp would not be cost effective in absolute terms (the cost per equivalent life saved is about the $3.5 to $5.5 million range).

Table VII-8
Incremental Cost per Equivalent Life Saved Analysis for Malfunction Lamp
Cost in Millions of 2001 Dollars
Opt. 1 (3% discount rate)	Vehicle Costs	Opp. Costs	Fuel Savings	Tread Wear Savings	Prop. Damage and Travel Savings	Net Costs	Equiv. Lives Saved	Cost/Eq. Life Saved
Separate Malfunction Lamp	$31.1	$1.0	$2.7	$0.5	$0.9	$28.0	1.7	$16.5
Combination Lamp	$4.3	$1.0	$2.7	$0.5	$0.9	$1.2	1.7	$0.7

Above, we used a value of $3.5 million in valuing reductions in premature fatalities. In valuing reductions in fatalities, we also examined a value of $5.5 million per statistical life as a sensitivity analysis. This represents a central value consistent with a range of values from $1 to $10 million suggested by recent meta-analyses of the wage-risk value of statistical life (VSL) literature ^[45]. Table VII-9 presents the net benefits using a value of $5.5 million per statistical life saved.

Table VII-9
Net Benefits with a Value of $5.5M per Statistical Life*
(Millions of 2001 Dollars)
	3% Discount Rate	7% Discount Rate
Compliance Option 1	$397 to–$555 Mil.	$124 to -$564 Mil.
Compliance Option 2	$355 to -$597 Mil.	$97 to -$592 Mil.
Compliance Option 3	$655 to $22 Mil.	$397 to -$61 Mil.

The Regulatory Flexibility Act of 1980 (5 U.S.C§601 et seq.) requires agencies to evaluate the potential effects of their proposed and final rules on small business, small organizations and small Government jurisdictions.

5 U.S.C§603 requires agencies to prepare and make available for public comments initial and final regulatory flexibility analysis (RFA) describing the impact of proposed and final rules on small entities. Section 603(b) of the Act specifies the content of a RFA. Each RFA must contain:

As required in the Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act, NHTSA is requiring a tire pressure monitoring system.

NHTSA is requiring these changes under the Authority of 49 U.S.C. 322, 30111, 30115, 30117, and 30666; delegation of Authority at 49 CFR 1.50. The agency is authorized to issue Federal motor vehicle safety standards that meet the need for motor vehicle safety.

3. Description and estimate of the number of small entities to which the final rule will apply

The final rule would affect motor vehicle manufacturers, second-stage or final stage manufacturers, manufacturers of aftermarket wheels and rims, and manufacturers of low tire pressure monitoring systems.

Business entities are defined as small business using the North American Industry Classification System (NAICS) code, for the purpose of receiving Small Business Administration assistance. One of the criteria for determining size, as stated in 13 CFR 121.201, is the number of employees in the firm. For establishments primarily engaged in manufacturing or assembling automobiles (the NAICS code is 336111), light trucks (336112), motor homes (336213), new tires, or motor vehicle body manufacturing (336120), the firm must have less than 1,000 employees to be classified as a small business. The TPMS suppliers would fall under either Subsection 336340, Motor Vehicle Brake System Manufacturers, or Subsection 336322, Other Motor Vehicle Electrical and Electronic Equipment Manufacturers. A company under these subsections must have less than 750 employees to be considered a small business.

Currently, there are about 4 small motor vehicle manufacturers in the United States, Avanti, Panoz, Saleen, and Shelby. All of these manufacturers have much less than 1,000 employees.

There are a significant number (about 750) of final-stage manufacturers or alterers that could be impacted by the final rule. Almost all of these are small businesses with less than 1,000 employees. These manufacturers buy incomplete vehicles and finish them or do van conversions.

There are less than 5 motor home or recreational vehicle small manufacturers, which produce vehicles under 10,000 pounds GVWR, which would have to comply with the standard.

The Specialty Equipment Market Association (Docket No. 19054-65) stated that there are 550 small businesses making aftermarket tires and custom wheels and this is a $3.23 billion industry.

There are at least 15 suppliers of direct measurement system radio frequency transmission technology (Beru, IQ Mobil, Johnson Controls, Schrader-Bridgeport, Pacific Industrial Company, TRW, SmarTire, Rayovac, Emtop, ETV Corporation Pty Limited, MLHO Inc., GE Infrastructure Sensing, ALPS Automotive Inc., EnTire Solutions, LLC, and Fleet Specialties Company). There are at least 7 suppliers of indirect ABS integrated technology include Continental Teves, TRW, Bosch, Eaton, NIRA Dynamics AB, Sumitomo, and Toyota. There is one company that supplies a system that monitors the tires and puts air into the tire, Cycloid Company.

Many of these companies are not domestic companies. Only five of these are domestic companies that may have less than 750 employees (MLHO Inc., ALPS Automotive Inc., EnTire Solutions, LLC, Fleet Specialties Company, and Cycloid Company). The agency does not have employee data on these companies, except that Cycloid Company has less than 10 employees and outsources the manufacturing of their products.

There are a substantial number of small businesses that will be impacted by this final rule.

4. A description of the projected reporting, recording keeping and other compliance requirements of a final rule including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record.

Vehicle manufacturers that phase-in production must report to the agency how they have met the phase-in schedule and keep records of this. However, all of the small final-stage manufacturers and small volume vehicle manufacturers can meet the standard starting September 1, 2007 and have no phase-in. Thus, none of the small businesses discussed above that may be impacted by this final rule have reporting or record keeping requirements.

Table VIII-1 provides information about the 4 small domestic manufacturers in MY 2004.

Table VIII-1
Small Vehicle Manufacturers
Manufacturer	Employees	Estimated Sales	Sale Price Range	Est. Revenues*
Avanti	22	13	$25,000 to $63,000	$572,000
Panoz	50	150	$90,000 to $125,000	$16,125,000
Saleen	150	1,000	$39,000 to $59,000	$49,000,000
Shelby	44	60	$42,000 to $135,000	$5,310,000

As with other systems in the vehicle, these manufacturers will have to rely on suppliers to provide the hardware, and then they would have to integrate the system into their vehicles. The average price increase per vehicle is estimated to range from $48 to $70. Compared to the least expensive vehicle in Table VIII-1, the upper end of the cost range ($70) is less than three-tenths of one percent ($70/$25,000 = .0028). Compared to a weighted average sales price ($58,000), the cost is about 1 tenth of one percent ($70/$58,000 = .0012).

We believe that the market for the products of these small manufacturers is highly inelastic. Purchasers of these products are enticed by the desire to have an unusual vehicle. Thus, we do not believe that raising the price to include the value of a TPMS will have much, if any, effect on vehicle sales. We suspect these price increases will be passed on to the final costumer. Based on this analysis, the agency believes that the final rule will not have a significant economic impact on these four small domestic manufacturers.

In almost every case, the first stage manufacturer would include a TPMS system with the frame of the vehicle, which would include the tires and dashboard. Thus, a pass-through certification process will apply to these manufacturers. The average price of a light truck made by a final stage manufacturer and alterer will be more than the average price of a light truck (roughly $27,000). Thus, the high end of the cost range of $70 is about a quarter of one percent ($70/$27,000 = .0026). Since all light trucks would have a similar price increase, we believe that this additional cost can be passed through to consumers without affecting competition. Thus, while there are a significant number of second-stage and final stage manufacturers impacted by the final rule, we do not believe the impact will be economically significant.

Most motor homes manufactured in the weight class up to 10,000 pounds GVWR use a van chassis supplied by the larger manufacturers (GM or Ford) and could use the TPMS systems supplied with the chassis. To demonstrate compliance with FMVSS 138, a motor home manufacturer would primarily rely upon the chassis manufacturer’s incomplete vehicle document. These smaller motor homes are a very small percent of the motor home market. The economic impact on motor home manufacturers would even be less than 2 tenths of one percent, since their cost is higher than the average light truck. Again, we believe the price increase can be passed through to consumers. The agency does not expect there to be an economically significant impact on motor home manufacturers.

In the NPRM, the agency proposed to exempt temporary spare tires and aftermarket rims, that don’t match the original equipment rims, from the requirements on a practicability basis. The agency thought that this should eliminate the concerns of small businesses that make and sell custom wheels and aftermarket rims.

SEMA (Docket No. 19054-65) stated that there would be a significant economic impact on a large number of wheel and rim manufacturers and the aftermarket wheel service industry. SEMA stated that a large number of the wheel and rim manufacturer’s sales are through dealerships and are installed prior to the vehicle’s first sale. Thus, these replacement or alternate custom wheels must meet the standard. SEMA is concerned that the final rule could have the effect of restricting the ability of aftermarket suppliers to provide a full range of wheel and tire combinations to consumers. They were concerned that the language requiring aftermarket wheels to be compatible with only those combinations recommended by a vehicle manufacturer could disallow aftermarket equipment that does not match manufacturer’s recommendations.

SEMA recommended that vehicle manufacturers should be required to comply with applicable Society of Automotive Engineers (SAE) and European Union (EU) standards governing the design of the wheel mounting pockets in order to facilitate transferal of sensors from the OE tires/wheel to replacement tires/wheels. The agency is not making such a requirement.

There are two methods of mounting a direct TPMS sensor on a rim. A small cutout area on the rim can be made in the mold for a sensor, or a strap can hold the sensor on the rim. If the replacement tire manufacturers don’t get specific information on the cutout area or want to produce a more generic mold that could be used on any vehicle with the same size tires, they could use a strap to secure the sensor. Four straps are not very expensive compared to perhaps $800 for replacement rims ($4/$800 = .0025). We believe the strap method could be applied and not have a significant economic impact on these aftermarket rim suppliers.

There are a number of issues to be considered related to aftermarket sales and the service industry. One of SEMA’s main concerns is in possible impacts to their service industry related to aftermarket sales. SEMA believes that the service industry must be provided service information from the original vehicle manufacturers and that the service industry should be able to reprogram a TPMS so that if a wheel upgrade that operates at a higher-pressure threshold is used, the TPMS can give an appropriate warning. SEMA believe its customers would expect this level of service. This may require the service industry to invest in computer diagnostic equipment, and employee training in order to access, service, repair, install and calibrate all of the different types of TPMS. Failure to take these steps could result in the business violating the relevant statutory provisions against making a safety device inoperative ^[46]. NHTSA has decided that failure to reprogram the TPMS will not make it inoperative. The TPMS will still work, even though it may not work at the most efficient level.

SEMA recommended that vehicle manufacturers be required to share, in a timely and affordable manner, all service information needed to operate a compliant TPMS. SEMA suggest that NHTSA consult with the Environmental Protection Agency (EPA) for guidance, because EPA has required vehicle manufacturers to share on-board diagnostic system information with the service and repair industry.

The agency is allowing, but not requiring TPMS systems to be reprogrammable. At this point in time, the agency does not know how easy it will be to reprogram a TPMS system. If it is easy to do, then there will be no substantial economic impact on the service industry. If none of them are reprogrammable, then the service industry will not have the ability to change the system. If it takes some knowledge on the part of the service dealer, then that knowledge will have to be shared with the service industry. SEMA wants NHTSA to require that this knowledge be shared.

At this point of time and knowledge, the agency cannot claim that this rule will have a significant economic impact on a substantial number of small businesses. Only if reprogrammable TPMS systems become a large part of the TPMS designs, and only if knowledge of how to redesign them is not shared with the service industry could it have a significant economic impact.

5. An identification, to the extent practicable, of all relevant Federal rules which may duplicate, overlap, or conflict with the final rule

We know of no Federal rules which duplicate, overlap, or conflict with the final rule.

6. A description of any significant alternatives to the final rule which accomplish the stated objectives of applicable statutes and which minimize any significant economic impact of the final rule on small entities.

The only alternatives available for small entities relate to the leadtime phase-in discussed above.

There are no other alternatives that can achieve the stated objectives without installing countermeasures into the vehicle.

The Unfunded Mandates Reform Act of 1995 (Public Law 104-4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditures by State, local or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually (adjusted annually for inflation with base year of 1995). Adjusting this amount by the implicit gross domestic product price deflator for the year 2001 results in $112 million (109.42/98.11 = 1.12). The assessment may be included in conjunction with other assessments, as it is here.

This final rule is not likely to result in expenditures by State, local or tribal governments of more than $112 million annually. However, it is estimated to result in the expenditure by automobile manufacturers and/or their suppliers of more than $112 million annually. The agency has estimated that compliance with this final rule would cost from $775 million to over $1.1 billion. The final cost will depend on choices made by the automobile manufacturers.

These effects have been discussed in the Final Regulatory Impact Analysis; see for example the chapters on Cost, Benefits and the previous discussion in this chapter on the Regulatory Flexibility Act.

Section 1(b) II of Executive Order 12866 Regulatory Planning and Review requires the agencies to take into account to the extent practicable"the costs of cumulative regulations". To adhere to this requirement, the agency has decided to examine both the costs and benefits by vehicle type of all substantial final rules with a cost or benefit impact effective from MY 1990 or later. In addition, proposed rules are also identified and preliminary cost and benefit estimates provided.

Costs include primary cost, secondary weight costs and the lifetime discounted fuel costs for both primary and secondary weight. Costs will be presented in two ways, the cost per affected vehicle and the average cost over all vehicles. The cost per affected vehicle includes the range of costs that any vehicle might incur. For example, if two different vehicles need different countermeasures to meet the standard, a range will show the cost for both vehicles. The average cost over all vehicles takes into account voluntary compliance before the rule was promulgated or planned voluntary compliance before the rule was effective and the percent of the fleet for which the rule is applicable. Costs are provided in 2000 dollars, using the implicit GNP deflator to inflate previous estimates to 2000 dollars.

Benefits are provided on an annual basis for the fleet once all vehicles in the fleet meet the rule. Benefit and cost per average vehicle estimates take into account voluntary compliance.

Table IX-1
COSTS OF RECENT PASSENGER CAR RULEMAKINGS
(Includes Secondary Weight and Fuel Impacts)
(2000 Dollars)
Description	Effective Model Year	Cost Per Affected Vehicle $	Cost Per Average Vehicle $
FMVSS 114, Key Locking System to Prevent Child - Caused Rollaway	1993	$9.44–19.58	$0.53 - 1.08
FMVSS 214, Dynamic Side Impact Test	1994 - 10% phase-in 1995 - 25% 1996 - 40% 1997–100%	$69.06–672.59	$62.52
FMVSS 208, Locking Latch Plate for Child Restraints	1996	$0.89–17.93	$2.40
FMVSS 208, Belt Fit	1998	$3.41–17.09	$1.26 - 1.82
FMVSS 208, Air Bags Required	1997 - 95% 1998–100	$503.50–608.39	$503.50–608.39
FMVSS 201, Upper Interior Head Protection	1999 - 10% 2000 - 25% 2001 - 40% 2002 - 70% 2003–100%	$37.76	$37.76
FMVSS 225, Child Restraint Anchorage Systems	2001 - 20% 2002 - 50% 2003 - 100%	$3.01 - $7.08	$6.07
FMVSS 208, Advanced Air Bags	Two phases 2003 to 2010	$24.15 to 134.40	Depends on method chosen to comply
FMVSS 301, Fuel Tank Integrity Upgrade	2007 - 40% 2008 - 70% 2009 - 100%	$5.08	$2.35

Table IX-2
BENEFITS OF RECENT PASSENGER CAR RULEMAKINGS
(Annual benefits when all vehicles meet the standard)
Description	Fatalities Prevented	Injuries Reduced	Property Damage Savings $
FMVSS 114, Key Locking System to Prevent Child Caused Rollaway	None	50-99 Injuries	Not Estimated
FMVSS 214, Dynamic Side Impact Test	512	2,626 AIS 2-5	None
FMVSS 208, Locking Latch Plate for Child Restraints	Not estimated	Not estimated	None
FMVSS 208, Air Bags Required Compared to 12.5% Usage in 1983 Compared to 46.1% Usage in 1991	4,570 - 9,110 2,842 - 4,505	AIS 2-5 85,930 - 155,090 63,000 - 105,000	None
FMVSS 201, Upper Interior Head Protection	575 - 711	251 - 465 AIS 2-5	None
FMVSS 225, Child Restraint Anchorage Systems –Benefits include changes to Child Restraints in FMVSS 213	36 to 50*	1,231 to 2,929*	None
FMVSS 208, Advanced Air Bags	117 to 215**	584 to 1,043 AIS 2-5**	Up to $85 per vehicle*
FMVSS 301, Fuel Tank Integrity Upgrade	4 to 11	none	none

Table IX-3
COSTS OF PROPOSED PASSENGER CAR RULES
(Includes Secondary Weight and Fuel Impacts)
(2000 Dollars)
Description	Effective Model Year	Cost Per Affected Vehicle $	Cost Per Average Vehicle $
FMVSS 202, Head Restraint Upgrade	TBD–first model year starting 3 years after final rule	$8.10 to $17.15	$10.70
FMVSS 208, Rear Center Seat Lap/Shoulder Belts	2006 - 50% 2007 - 80% 2008 - 100%	$15.41	$3.91
FMVSS 214, Side Impact Oblique Pole Test	TBD–first model year starting 4 years after final rule, then a 3 year phase in of 20%, 50%, all vehicles	$116 to $253	$87 to $199

Table IX-4
BENEFITS OF PROPOSED PASSENGER CAR RULES
(Annual benefits when all vehicles meet the standard)
Description	Fatalities Prevented	Injuries Reduced	Property Damage Savings $
FMVSS 202, Head Restraint Upgrade	None	12,395	None
FMVSS 208, Rear Center Seat Lap/Shoulder Belts	16	279	None
FMVSS 214, Side Impact Oblique Pole Test	343 to 516	440 to 519 AIS 3-5	None

Table IX-5
COSTS OF RECENT LIGHT TRUCK RULEMAKINGS
(Includes Secondary Weight and Fuel Impacts)
(2000 Dollars)
Description	Effective Model Year	Cost Per Affected Vehicle $	Cost Per Average Vehicle $
FMVSS 202, Head Restraints	1992	$46.87–113.70	$5.54
FMVSS 204, Steering Wheel Rearward Displacement for 4,000 to 5,500 lbs. unloaded	1992	$6.05–29.95	$1.07–2.03
FMVSS 208, Rear Seat Lap/Shoulder Belts	1992	$69.25	$0.41
FMVSS 114, Key Locking System to Prevent Child- Caused Rollaway	1993	$9.44–19.58	$0.01 - 0.03
FMVSS 208, Locking Latch Plate for Child Restraints	1996	$0.89 - 17.92	$2.40
FMVSS 108, Center High-Mounted Stop Lamp	1994	$15.06–22.76	$15.53
FMVSS 214, Quasi-Static Test (side door beams)	1994 - 90% 1995–100	$67.38–84.50	$62.45–78.45
FMVSS 216, Roof Crush for 6,000 lbs. GVWR or less	1995	$24.81–222.65	$0.89–8.82
FMVSS 208, Belt Fit	1998	$3.77–17.83	$6.44 - 8.68
FMVSS 208, Air Bags Required	1998 - 90% 1999–100	$503.50–608.39 dual air bags	$503.50–608.39 dual air bags
FMVSS 201, Uppe Interior Head Protection	1999 - 10% 2000 - 25% 2002 - 70% 2003 - 100%	$37.40–81.90	$57.72
FMVSS 225, Child Restraint Anchorage Systems	2001 - 20% 2002 - 50% 2003 - 100%	$3.01 - $7.08	$6.07
FMVSS 208, Advanced Air Bags	two phases 2003 to 2010	$24.15 to 134.40	Depends on method chosen to comply
FMVSS 301, Fuel Tank Integrity Upgrade	2007 - 40% 2008 - 70% 2009 - 100%	$5.08	$2.35

Table IX-6
BENEFITS OF RECENT LIGHT TRUCK RULEMAKINGS
(Annual benefits when all vehicles meet the standard)
Description	Fatalities Prevented	Injuries Reduced	Property Damage Savings $
FMVSS 202, Head Restraints	None	470 - 835 AIS 1 20 - 35 AIS 2	None
FMVSS 204, Steering Wheel Rearward Displacement for 4,000 to 5,500 lbs. Unloaded	12–23	146 - 275 AIS 2-5	None
FMVSS 208, Rear Seat Lap/Shoulder Belts	None	2 AIS 2-5	None
FMVSS 114, Key Locking System to Prevent Child Caused Rollaway	None	1 Injury	Not Estimated
FMVSS 208, Locking Latch Plate for Child Restraint	Not estimated	Not estimated	None
FMVSS 108, Center High Mounted Stop Lamp	None	19,200 to 27,400 Any AIS Level	$119 to 164 Million
FMVSS 214, Quasi-Static Test (side door beams)	58–82	1,569 to 1,889 hospitalizations	None
FMVSS 216, Roof Crush for 6,000 lbs. GVWR or less	2–5	25-54 AIS 2-5	None
FMVSS 208, Belt Fit	9	102 AIS 2-5	None
FMVSS 208, Air Bags Required Compared to 27.3% Usage in 1991	1,082–2,000	21,000 - 29,000 AIS 2-5	None
FMVSS 201, Upper Interior Head Protection	298–334	303 - 424	None
FMVSS 225, Child Restraint Anchorage Systems –Benefits include changes to Child Restraints in FMVSS 213	36 to 50*	1,231 to 2,929*	None
FMVSS 208, Advanced Air Bags	117 to 215**	584 to 1,043 AIS 2-5**	Up to $85 per vehicle*
FMVSS 301, Fuel Tank Integrity Upgrade	4 to 11	none	None

Table IX-7
COSTS OF PROPOSED LIGHT TRUCK RULES
(Includes Secondary Weight and Fuel Impacts)
(2000 Dollars)
Description	Effective Model Year	Cost Per Affected Vehicle $	Cost Per Average Vehicle $
FMVSS 202, Head Restraint Upgrade	TBD -	$8.10 to $17.15	$10.70
FMVSS 208, Rear Center Seat Lap/Shoulder Belts	2006 - 50% 2007 - 80% 2008 - 100%	$15.41 to $201.40	$23.33
FMVSS 214, Side Impact Oblique Pole Test	TBD–first model year starting 4 years after final rule, then a 3 year phase in of 20%, 50%, all vehicles	$116 to $253	$87 to $199

Table IX-8
BENEFITS OF PROPOSED LIGHT TRUCK RULES
(Annual benefits when all vehicles meet the standard)
Description	Fatalities Prevented	Injuries Reduced	Property Damage Savings $
FMVSS 202, Head Restraint Upgrade	None	1,852	None
FMVSS 208, Rear Center Seat Lap/Shoulder Belts	17	253	None
FMVSS 214, Side Impact Oblique Pole Test	343 to 516	440 to 519 AIS 3-5	None

^[39] Lind, R.C., "A Primer on the Major Issues Relating to the Discount Rate for Evaluating National Energy Options," in Discounting for Time and Risks in Energy Policy, 1982, (Washington, D.C., Resources for the Future, Inc.).

^[40] J. Kolb and J.D. Sheraga, "A Suggested Approach for Discounting the Benefits and Costs of Environmental Regulations,: unpublished working papers.

^[41] Moore, M.J. and Viscusi, W.K., "Discounting Environmental Health Risks: New Evidence and Policy Implications," Journal of Environmental Economics and Management, V. 18, No. 2, March 1990, part 2 of 2.

^[42] L. Blincoe, A. Seay, E. Zaloshnja, T. Miller, E. Romano, S. Luchter, R. Spicer, (May 2002) "The Economic Impact of Motor Vehicle Crashes, 2000". Washington D.C.: National Highway Traffic Safety Administration, DOT HS 809 446.

^[43] "Revised Departmental Guidance, Treatment of Value of Life and Injuries in Preparing Regulatory Evaluations", Memorandum from Kirk K. Van Tine, General Counsel and Linda Lawson, Acting Deputy Assistant Secretary for Transportation Policy to Assistant Secretaries and Modal Administrators, January 29, 2002.

^[44] For example, Miller, T.R. (2000): "Variations Between Countries in Values of Statistical Life", Journal of Transport Economics and Policy, 34, 169-188.

^[45] Mrozek, J.R. and L.O. Taylor, What determines the value of a life? A Meta Analysis, Journal of Policy Analysis and Management 21 (2), pp. 253-270.

^[46] See 49 U.S.C. 30112(a) and 30122(b).