manufacturers website about its use of firewalls would not be actionable if these subjects were covered by the best practices. in sum, the commission understands the desire to provide businesses with certainty and incentives to implement best practices. however, the security provisions of the discussion draft would allow manufacturers to receive substantial liability protections in exchange for weak best practices by a council they control. t thank you for the opportunity to provide the commission's views on the discussion draft. we lo-- >> gentlelady yields back. we will move to the question and answer portion of the hearing. to begin, i'll recognize myself

for five minutes. ms. mithal, let me ask you to clarify. you mentioned there would be one of your start with security business initiatives in austin, texas. is that's correct? >> that's correct. >> what's the date you gave for that? >> november 5th. >> i wanted to repeat that because although my congressional district is a little north of austin it obviously will effect people in my state. dr. rosekind, thank you for being here. thank you for always being very generous with your time and very forthcoming whenever they are questions. thank you for opening up the doors of the national highway traffic safety administration to come and visit with you and see the good work that you and the men and women employed there --

the good work that you're doing. i have a copy of the inspector general's report. this was issued in june of this year. can you take just a moment and go through which recommendations have been implemented? >> certainly. just as context, i'll be clear that one of the things we did was actually commit to fulfilling all 17 recommendations within a year of which the inspector general made sure i understood that's never done, to actually make that kind of commitment, and we actually gave a schedule. i mention that because the first one has been completed two weeks ahead of schedule. >> very well. can you briefly describe the operations for the council of vehicle electronics, vehicle software, and emerging technologies, that council that's being set up at nhtsa?

>> the current -- sorry. just trying to clarify. >> is there a council for vehicle electronics at nhtsa? >> we have an office. >> an office. >> right. >> okay. >> in fact, and i'm just trying to get my bearings there. in 2015, i actually -- and we can send it to you, we published vehicle and cybersecurity. it actually describes how over the last few years starting in 2012 we reorganized our offices to have a specific office that addresses that with people vehicle looking at that. >> is there a separate office for vehicle software? >> that's in that -- and we have seven people in d.c. and three at our ohio vehicle research and testing center that's there. >> and who leads that office of that council? >> well, right now the associate

administrator is the technical lead on that. >> and that also includes the center for emerging technologies at nhtsa? >> correct. >> is there a mission statement that has been published for that office or that council? >> i don't know if there's a specific mission statement for that office, but all of that would be in the 2015 nhtsa and vehicle cybersecurity that we'll send you. >> if you were to give us a thumbnail of what the mission of that office is, could you do that? >> sure. you know, in 2012, i think this was trying to look ahead. what's been interesting for me is everyone saying this is an issue now. this has been on us for at least three years, starting with a structural change to the agency that would have at least focused people looking at this. and they're looking at policy, testing, research, and having

continual interactions in the industry. >> let me just ask you does federal trade commission currently coordinate with the national highway traffic safety administration on data privacy and security? >> we do, yes. for example, we've had several meetings with nhtsa staff. we also commented on their report on vehicle to vehicle communications last year. >> let me just take a minute, dr. rosekind. this may not be entirely within your area, but you're aware another subcommittee held a hearing on the volkswagen emission issue. do you know what are the standard allowable nitrous oxide emissions are? can you give me a figure in grams or liters of what is

allowable under nitrous oxide emission? >> i can make sure we send you a technical report so i can give you a specific number. >> that would be great. and i would like to know what that was in calendar year 2000 as a reference point. would that be possible? >> you bet. >> i will yield back. >> thank you. i'd actually like the victims or their families of the gm switch failure to raise your hands. i want to thank you very much for coming today. i know this is of great interest to you. i have a question for dr. rosekind. so this draft would require nhtsa to coordinate with au auto manufacturers before publishing any notice of vehicle defect or compliance concern.

it seems as though a manufacturer could obstruct the notification process at least temporarily by failing to submit the vehicle identification numbers. how would requiring nhtsa to coordinate with manufacturers before publishing a notice of a defect present a risk to nhtsa's ability to issue recalls when necessary? >> and i'd like to handle this actually from two angles. one is what you're highlighting. this actually addresses nhtsa initiated actions. why that's important. because many of the recalls that occur are initiated by the automakers. they identify something and they move forward. a nhtsa initiated recall is because they have denied the need to do that and we've had to have the action. the concern is the timeline and control of that would be basically under the control of the person who created the

defect. but i think the other part really has to do withholding the safety information. it's really frustrating to put the information out and not have the supply of parts. but i can't imagine any of us si sitting here and nowing that we had vehicle safety information, holding that back, and have someone lose their life. if people have they information, they get to choose what they'd like to do, including park their car or get a rental. one has to do with the control in timeline, that would be the manufacturer. the other is for us to think about the potential delay in providing information, which clearly we'd rather do as soon as we have it. >> thank you. it's clear the ability to move quickly in situations in which a vehicle defect poses a series public safety risk, even the life of someone, is essential, but nhtsa has no authority to

take emergency action. that's why in the legislation mr. pallone and i have introduced the vehicle safety improvement act includes imminent hazard authority, which gives the administration the ability to step in and issue a recall in cases where defects substantially increases the likelihood of serious injury or death. so how would this imminent hazard authority be helpful to nhtsa in carrying out its mission to reduce deaths, injuries, and economic loss resulting from motor vehicle crashes? >> thank you, congressman, for identifying. we don't want to go from withholding information. we think we need to be in the other direction, which is what you have talked about. that authority, which others already have, is not available currently to nhtsa. >> some of my colleagues have

noted today traffic deaths rose by 14% in the first six months of 2015. injuries have risen by 30% since 2013. i'm concerned this draft bill would put more strain on nhtsa without actually improving safety. according to one estimate, the number of vehicles on u.s. roads grew by nearly 4 million vehicles from 2013 to 2014. meanwhile nhtsa's budget has remained relatively flat over the past few years. appropriations for fiscal year 2016 continue that trend. coming in more than $70 million short of nhtsa's request. do you believe that stagnant funding for nhtsa has made it harder for the administration to do its job of keeping unsafe vehicles off the road? >> there's no question. last time i appeared before you i made the comment give us more resources, we'll give you more safety. the equation is very straightforward. if you give us more requirements

at the same resources, you will get less safety. >> this draft calls on nhtsa to conduct at least eight new reports and studies without providing any additional funding. would you expect that additional reports and studies to require a diversion of resources from other nhtsa programs? >> absolutely. we need the technical and other resources to produce these kinds of reports. >> thank you. i yield back. >> chair thanks the gentlelady. chair recognizes the vice chair of the subcommittee, mr. lance, for five minutes for questions, please. >> thank you, mr. chairman. good morning to you both. the state and motor vehicle agency in new jersey has contacted me, and i think this is a concern of various state agencies. there is a section directing motor vehicle agencies to notify drivers of open recalls on their vehicles when they are renewing

registration and in new jersey that's once a year and i presume that's true in other states as well. and there is some concern at the state level that this would put an undue burden on the various states. i understand the benefit of increasing notification and remedy recall rates, but i do share some of the concerns of the agency in new jersey. could you please, dr. rosekind, comment on the feasibility of your agency's coordinating with state agencies to ensure they are able to have the information necessary to inform drivers of recalls? >> congressman you just used the word, which is feasibility. nhtsa held a retooli ining reca event. how do we get remedies? you've hit on the concern.

there's no technology. nobody knows the cost. nobody knows the procedures to use dmvs to get this information out. it's a great concept. they're a super touch point to get to people. the question is how to do it. for grow america, the question was for a pilot study to figure it out. >> i presume the pilot study would be with one or several of the various jurisdictions. >> some of that is outlined in grow america. it involves two states. just the things that i mentioned, which is we need to figure out the technology, what would be the procedures, what would be the cost. you do a pilot in a couple studies. obviously with your view to how you would scale it for the whole country. >> is it typical in the states that vehicle registration is once a year or are there multi-year registrations in some

of the states? >> i believe it's annual. if there's an exception, i can find that out for you. >> thank you very much. under the legislation, automakers would be required to take reasonable steps to ensure that other entities adhere to the automakers privacy policies. and the automakers privacy policies as applied to automakers would not be subject to ftc jurisdiction. what about the privacy policies of other agencies that would have to adhere to the automakers privacy policies? i request any comments you might have on that. >> it appears that the safe harbor action would apply to the manufacturers. >> thank you very much. i yield back the balance of my time, mr. chairman. >> chair recognizes the

gentleman from new jersey, mr. pallone. >> thank you, mr. chairman. high-tech vehicle safety technologies are expected to save thousands of lives per year once they are in broad use. two types of v-to-v technology could prevent more than 3,000 crashes. title 5 of this bill is based on a false trade off, vehicle safety instead of environmental safety. sections 5.02 and 5.03 would exchange credits. particularly in light of the shocking emission fraud scandal surrounding volkswagen, i'm worried that automakers will comply with environmental

regulations. >> yes. two things. one is secretary fox has asked us to accelerate anything that is a new life-saving technology. the new vehicle proposed rule will get out at the end of the year. yes, i think we need to acknowledge ten manufacturers came forward and made a commitment to make automatic emergency braking standard on all of their vehicles. >> the proposed rule you mentioned would require all manufacturers to make all their vehicles v-to-v enabled? >> correct. >> and that you said by the end of the year? >> the proposal would be out by the end of the year. >> are there other incentives such as revising end cap that you're considering to get these technologies deployed to all cars and not just the luxury cars? >> there are three tools. we like to use all of them. rule making is one. end cap is under review right now. more to talk about that in the

near future, but ali'm also highlighting these ten auto manufacturers to do this on their own. these are three different tools. i really have been pushing collaboration and the opportunity to expedite and expand safety beyond the minimums we get from rule making. >> again, v-to-v be installed on every new vehicle is already in the pipeline. you said the insurance institute for highway safety requires the vehicle to be equipped with certain safety technologies? >> that's correct. >> then you said you worked with iihs to get certain commitments on technologies from manufacturers. >> correct. in january, we announced that automatic emergency braking is being added to end cap and there are further changes that are coming soon. >> okay. i think most consumers would like to have a car that is both

fuel efficient and safe. i mean, that makes sense. do you support giving automakers credits for installing automotive technologies? >> i think the general principles that i stated are pretty important here. the american public expects both safety and public health. and the second part is i really hope that the manufacturers have enough incentive for life-saving technologies. those are going to be the lives say save and injuries they prevent. >> do you want to give me an opinion on whether you like or support this idea of giving the automakers the cafe credits because they install these advanced auto technologies? >> we don't think there should be a compromise. you should be able to get safety and public health and environmental concerns addressed. i think the incentives are already there. >> all right. i appreciate that.

what impact would the corporate average fuel economy or cafe credit provision in this draft have on vehicle fuel economy and how might that affect consumers that buy these new cars? in other words, what impact would the cafe credit provision have on fuel economy? >> the credit? >> yeah. >> i'm not sure it would change the actual -- the levels of what are actually covered under fuel efficiency. it's more of the incentivizing that's part of that proposal. >> so do you want to venture a guess as to how it would affect consumers that buy these new cars? >> these are very good questions, but i'd like to get a

little more detailed before taking a position on it. >> thanks. >> the chair recognizes the gentleman from kentucky, mr. guthrie, five minutes for your questions, please. >> thank you, mr. chairman. did nhtsa or the department of transportation participate in the development of the cybersecurity framework and will it participate in future iterations of that framework? >> we have ongoing interactions with all kinds of government agencies. we are always involved pretty much in participating as well as having them participate in our activities. >> are there ways nhtsa could participate to develop best practices for automotive cybersecurity? >> yes. in fact, if you look at the model of having the ten manufacturers come together to work on aeb as standard, it is a model to be applied across all kinds of issues, including cybe. everybody has already read the

secretary is planning on having a meeting with the ceos about the safety concerns we've been reading about. he has specifically identified safety and cybersecurity to talk to the ceos about it. >> the other question, nhtsa and the auto industry spoke about how to apply the framework to the development of automotive security? >> the discussions have begun. >> ms. mithal, what standard if auto manufacturers tested the security of cars appropriately before putting them on the market? >> sure. our standard is section 5 of the act which prohibited deceptive practices. if a company makes a misrepresentation, we can take action. an unfair practice is one that causes or is likely to cause consumer injury, not outweighed by the benefits to competition and not reasonably avoidable by consumers. it's a cost benefit analysis. there's no such thing as perfect security, but what we require is

reasonable security. >> thank you. in your testimony, you discussed the ftc's start with security. quote, a business initiative. can you discuss how that should be applied to car companies and others involved in the connected car space? >> sure. i can give a couple of examples. one example we give in the security business guidance is companies should test products before they launch them. opposed to launching the products first and seeing about problems later. something we call security by design. another thing we talk about in our start with security guidance is having a vehicle to accept vulnerability reports. companies can know of security research that's out there and evolving threats and emerging issues in their devices. >> thank you. >> including cars. >> appreciate it. that's all i have, mr. chairman. i yield back. >> chair thanks the gentleman. gentleman yields back. the chair recognizes the gentleman from massachusetts. five minutes. >> thank you very much to the

panel and the chairman. i want to thank the chairman for calling the hearing. many of the cars contain navigation and event data recording systems, among others, that all have the ability to record driving history information. auto manufacturers, other third parties l aly ies also have acc wealth of information. it's concerning to me, candidly, and i'm sure it concerns a number of other consumers, as well. people want to know their data is safe and being kept private, at least when it is being used with their consent. dr. rosekind, i was hoping that you might be able to start the discussion. data privacy provision in this discussion draft would require car companies submit privacy policies to nhtsa, but it does not give nhtsa any change for acceptable policies. is that how you read it, as well? >> yes. >> do you think consumers could

be or should be concerned that there's no ability for nhtsa to recommend any changes? >> i think the public expects and wants nhtsa both to regulate and set guidelines for the standards that protect them, the traveling public. >> ms. mithal? >> yes. i think there are concerns that, although the bill prescribes requirements to be placed in privacy policies, it may not require companies to follow them, or may not have enforcement mechanisms. >> it's my understanding under the draft bill, the auto maker will receive protection from civil penalties and enforcements by providing nhtsa with the privacy policy that addresses the items in the draft. such as whether or not the auto maker collects, uses or shares data, and if the consumer has any choice of the use or collection. it will not matter how a given company chooses to address the items though. as i read section 301, a car

maker can hypothetically submit a privacy policy to nhtsa, violate the policy and still be protected from enforcement. a car maker can make promises to consumers about collecting the data and suffer no consequences under the act if they break that. ms. mithal, is that your understanding of how this system is set up under the draft legislation? >> that is our understanding, and it's a concern. >> do you think the bill provides sufficient senses for the auto makers to adhere to the provisions for consumers? >> unfortunately, no. >> if we have a situation where a car company claims to have expansive privacy policies to product consumer data andpolici that a deceptive practice? >> yes. it would strip the authority. >> thank you. i have additional questions about the anti-hacking provision, which would create a civil penalty from gaining authorized access to the data in

the system. we'd like to prevent bad actors from accessing the car systems, some observers expressed conc n concerns about penalizing the white house hackers to draw attention to the hackers. these have been covering volkswagen and controlling a jeep remotely via an internet. we heard from repair shops that they think they could be precluded from accessing important information they needed to repair cars. they suggest non-auto dealers repair up to 80% cars that are still not under warrant. ms. mithal, do you have any thoughts on the provision, from your expertise in reviewing data security cases? could you envision a scenario where information could be siloed so repair shops could get information to repair cars but not fiddle with, say, emergency brakes? >> let me be clear.

we agree that there should be civil penalties for malicious hackers, but we are concerned this bill would disincentivized security researchers who contact companies, suggest they fix the vulnerabilities, and companies fix that to help consumers. we believe the bill would create an impediment to that. on the auto repairs, i have deference on that issue. >> you mention third-degreeed t bit. can you talk about the importance of the researchers to the data security work? >> it's very important. it's the white hat hackers and researchers bringing these problems to the attention of both the car manufacturers and regulators like the ftc. >> do you have any idea how to make that distinction, between white hat and black hat? >> it will require careful drafting and we look forward to working with the subcommittee on that. >> yield back. >> gentleman yields back. the chair recognizes the lady

from tennessee, ms. blackburn. >> thank you, mr. chairman. let's stay with the regulation issue. one of our concerns is dual regulation. as you all may or may not be aware, we have kind of grappled with this. ms. mithal, i know that you are with privacy in the internet space with the fcc, trying to get in on top of the ftc jurisdiction. that has caused a tremendous amount of confusion. let me go where mr. kennedy was, and let's talk about the way you've got a manufacture that can get the safe harbor, and then a void that section 5 enforcement, if the manufacturer is meeting those requirements that are listed. now, nhtsa already handles the issue of privacy and auto motive

space. what we want to do is avoid this confusion and this dual regulation. so is the ftc going to honor the recognition that nhtsa has this lead, and are they going to honor the safe harbor provision and act in good faith when they are reviewing these manufacturer's privacy policies and making certain that they meet those requirements? >> so if i could make two points in response to your question? >> sure. >> first, concern is that the safe harbor is too broad in many respects. one example is the privacy policy requirements only apply to vehicle data collected from owners, renters or lessees. for example, if a manufacturer makes a misrepresentation on a website, that applies to shoppers about how they're collecting shoppers data, that wouldn't be covered by the privacy policy, but the ftc

couldn't bring action. we have concerns about the breadth of the safe harbor. we work very well with nhtsa. we support the goal of avoiding overlapping and duplicative requirements. at the same time, nhtsa and the ftc have different focuses. for example, nhtsa does recalls and is very -- we defer to their expertise in car safety issues. at the same time, we have the ability to get exwquitable reli in the form of, for example, implementing a security program, getting outside audits, in some cases, redress. we think that both agencies bring particular expertise and can bring different remedies to the issues. >> you are committed to making certain that we draw the lines here so we don't end up with a dual regulation or with confusion? >> exactly. >> you all have born the brunt of this, if you will. >> that's exactly right.

>> consumers have been confused about the reach of the fcc and the ftc and is it diminishing your jurisdiction. as we look at this issue, and knowing cars are going to be more inter connected, not less, more computerized, not less, you're going to have more data and people will say, what are you doing with the data? how do you turn that into usable information? this is something that should be cleaned up and handled appropriately on the front end. administrator rosekind, i want to go to you. how is nhtsa addressing the data collection practices of auto makers and others in the automotive space? what form of guidance are you currently giving? have you laid that out, and what do you intend to do? because we all know you can't be technology specific, if you will. you're going to have to umbrella

this. speak for just a moment before we run out of time. speak to that. >> i can just very quickly tell you, some of those are already clearly outlined. things like the electronic data recorders that exist. there are privacy concerns there. they, for example, don't collect anything about the drivers. those already have fairly clear -- it's more communications issue. i think what we're now talking about is a lot of new areas that we are just understanding. because our cars are computers. you've highlighted something important. it's going to require increased collaboration between our agenesis for us to be able to apply our expertise, so we make sure we protect people. when there are malicious attempts to go after the data, we have ways to keep people protected. >> i appreciate that. we know that the data collection practices from the auto makers and others in the industry can be used to provide some increased safety protocols. i think consumers are interested in that, but they want to guard

their privacy, and they want to make certain that the data that is there is useful information. it is utilized in an appropriate way. yield back. >> the lady yields mback. chair recognizes the gentleman from north carolina, for five minutes. >> i've been watching you intermittently on television, both of you look good on television. thank you very much. mr. chairman, i'd like to focus my questions on the safety bill i introduced with the ranking member and congresswoman capps. the companion legislation pass td senate with bipartisan support as part of the senate's highway bill, and is supported by the rental car industry. many of them are here today. consumer organizations and general motors and honda and others. it would ensure that rental car companies fix recalled vehicles in their fleets before renting

or selling them. so let me ask you, mr. administrator, thank you for coming today, come to opponents of the legislation said rental car companies should be allowed to rent or sell unrepaired, defective, recalled cars, unless the manufacturer has specifically issued a, do not drive warning. is there any federal standard for when a do not drive warning must be issued? >> thank you for pointing that out because that do not drive issiis issued by the manufacturer, not nhtsa. they're determining whether or not the criteria would be to allow that to occur on a rental or used car. that happens extremely rarely. >> so state again for the record, who decides when such a warning is issued? >> the manufacturer who has the defect, create td vehicle, determines the do not drive. >> can you give us some examples of defects where do not drive

warning was not issued by the manufacturer? for example, has any manufacturer issued a do not drive warning for takata air bags? >> that would be the example i would give. given that's the largest recall in auto mihistory for sure, may the united states. there is no do not drive out on any takata air bag. >> thank you. that's what i needed to get into the record, mr. chairman. i yield back. >> gentleman yields back. chair recognizes the gentleman from houston, texas, mr. olson. f five minutes for questions, please. >> i thank the chair. welcome, dr. rosekind, and mrs. mithal. i started driving in 1978, vehicle safety depended on turning wrenches in socket, and now it's about key boards and

electronics. my first question is for you, dr. rosekind. in nhtsa's view, should cybersecurity weaknesses be treated the same way as traditional vehicle safety defects? if so, what federal motor safety standards is nhtsa using to make that determination? if not, how is nhtsa addressing cybersecurity weaknesses in vehicles? >> there are a few questions in there, and i'll try to go to the core. you're right, things have changed dramatically. the secretary and nhtsa are really excited about seeing technology innovations accelerate our work and safety. but cybersecurity is one of the areas that's going to take a collaboration across government, manufacturers and roothers to figure out what needs to be done. we have tools from rule making to all kinds of voluntary efforts that the manufacturers

want to do. so we have to absolutely acknowledge that information sharing and analysis center was created by the auto makers, to make sure they could get together and identify and share information, a critical element. i point out that you can ask for all the regulation you want, but in cybersecurity, nimble and flexible is necessary. we have to identify current and new tools to deal with this issue going into the future. >> is this using the cybersecurity framework to guide its work in keeping vehicles safe? >> one source. we have been in contact with a full change, dod, homeland security, anybody that has expertise, including private technology companies, of course, that have done protection for our mobile phones and other elements. we're in contact with a full range of trying to learn from them and how we can apply it to cybersecurity and the auto industry. >> data collection, dr.

rosekind, section 4109 a would prohibit the rental of a vehicle by a rental company if there is an open recall. i have a few questions regarding data collection attributed to this change in the highway bill. how many lives can nhtsa estimate would be saved if every rental vehicle under open recall is grounded by rental companies as required by section 4109 a of the grow america act? >> i will get you that analysis as part of our technical assistance. we will get you that. for used as well as rental cars. >> how many injuries did nhtsa estimate will be prevented if rental car groundedenacted? >> we will include injuries and fatalities and crashes for you. >> thank you. ms. mithal, how many data

security cases has the ftc brought against car companies in the last five years? any idea? >> we've not brought any car cases. we've brought 55 general security, from care to cameras and phones. all the principles apply equally to connected cars. >> so zero for cars so far? >> correct. >> okay. what is the commission's expertise with respect to the security of critical safety systems and vehicles? are there differences in how criminal safety system vehicles should be treated compared to other infrastructures? >> our focus has been on process. so all of our 55 cases stand for the lesson that companies need to implement processes up front to make sure to protect against security violations. for example, companies including car companies, need to hire people responsible for security. they need to conduct risk assessments, oversee their

service providers, keep abreast of technologies surrounding them and emerging technologies that affect their areas. that's consistent with the cybersecurity framework approach. >> as dr. rosekind mentioned, be nimble because this changes like that. we have to keep up with the changes. i yield back. thank you. >> the chair recognizes the gentle lady from california. five minutes for questions, please. >> thank you plrks chairman, , holding this hearing and accepting my willingness to participate. this touches on many issue, and i want to explore a topic brought up by the two last questi questioners. the critical issue that has been omitted from the draft, rental car safety. in 2004, two young sisters, rachel and jacqueline, were killed when their rented pt cruiser caught fire and crashed.

the sisters were returning home after visiting their parents just outside my district in california and had no idea that the car they were driving was subject to a safety recall that had not been fixed, nor acknowledged, before the rental company gave them this car. despite receiving the safety recall notice a month before renting them the car, the rental company failed to get the free safety repairs done. while federal law prohibits car dealers from selling new cars subject to recall, there is no similar law to prevent rental companies from renting out dangerous recalled cars. there is a safety oversight and one that can and must be fixed. that's why, as has been acknowledged, i introduced bipartisan legislation with my colleges, walter jones and others, to close this loophole. it would fix federal law to prohibit rental car companies from renting or selling recalled

cars. it's supported by many, and the bill passed the senate as part of the drive act and change td petition to pass the bill recently started by rachel and jackie's mother, has been signed by 150,000 consumers across the country. yet, i'm disappointed this issue is not mentioned in the draft we're considering today. administrator rosekind, i know nhtsa and the administration have been working to address this important issue. does nhtsa support legislation to prohibit the rental of recalled vehicles? >> yes. >> opponents of the bill erroneously claim that the bill would not improve consumer safety. given nhtsa's support for banning the rental of recalled vehicles, i think it's clear that you, perhaps, disagree with this assessment. would you briefly elaborate? thank you. >> new, used or rental vehicles that have a known defect should be remedied before they're on the road.

>> thank you. despite the broad support behind hr 2198, the groups are fighting against this common sense effort. under pressure, the alliance of auto manufacturers is, instead, proposing potentially harmful alternative, that only requires rental companies to disclose that the vehicle is under recall before renting it out. their proposal only prohibits the rental of recalled cars with do not drive notices, as was referenced, despite the fact that notices represent only a tiny fraction of safety recalls. administrator rosekind, last year, nhtsa provided a letter to senator s boxer expressing its position on the proposal. >> i will repeat to be clear. new, used rental, if it has a defect, it should be off the road. as we were discussing, the do

not drive is determined by the manufacturer of the defect, not nhtsa. it's very rare. >> thank you for clarifying that and making it -- underscoring it. some opponents have argued that nhtsa recall -- because so few come with do not drive requirements. does nhtsa issue frivolous recalls? by definition, aren't all safety recalls due to serious safety risk? >> yes. we have a specific investigation process to determine those defects. >> thank you. and i will yield back my time, but before doing so, i ask consent to enter into the record november 2007 letter from nhtsa to the senator, outlining the agency's response to the auto alliance proposal. and i yield back the balance of my time. >> gentle lady yields back. seeing no other members present to ask questions, let me ask the

ranking member if she'd like new redirect? >> no. thank you. >> let me, dr. rosekind, i wanted to make sure that we offer, once again, the concept of people checking their vehicle identification numbers against the database you provide. perhaps you could just detail how someone would do that if they wanted to check. >> chairman burgess, every time i appear before you, you graciously make sure that we provide information for consumers to do something about recalls. i can't thank you enough for that because i don't think we are ever done getting the information out. people can go to safer car.gov. safer car.gov. look up their vehicle information number and see if there are any open recalls. what's most important is that they find something, they have to act on it. call their dealer, get it fixed. >> what if, like, they don't

know their vehicle identification number off the top of their head? is there a place to find that information? >> good point because i'm not sure any of us would know that off the top of our head. you can find that at the bottom left of your windshield. it's usually on the insurance card. there are multiple places you can go. we have a mobile app you can look it up now. >> very good advice. our trip out to your location, you're fine people and informed me i had a problem with a vehicle. not the one i was expecting but, nevertheless, it was important information to have. lest people think we come here with assigned talking points and never listen to each other, i wanted to point out your testimony earlier in the year, and we were doing the appropriations bill for the department of transportation, and i did offer an amendment that night because of your testimony during the day, that took $4 million from the

secretary's general and accounting line item on the budget and moved it to your line item on the budget for additional safety work. i think afterwards, when i discussed with you, the offer still stands. i'll be happy to discuss with you or even go with you to the appropriate appropriations subcommittee when the budget request is made to the appropriations committee next year. because this is important. just one -- one final observation, and then i'll go on. the inspector general's audit report, your response, the appendix to the audit report, your response to the things that were brought up, i wanted to highlight one of the bullet points. use of safety systems approach to look for possible relationships between a symptom in one vehicle system and a possible critical failure in

other system. as we were going through, and this was prior to your tenure, but last year, we were going through on another subcommittee, the ignition problems on the cobalt vehicles, and the non-deployment of air bags, that being such a critical finding. it was of concern to me that this would appear in accident reports. albeit, over a ten-year time span. there weren't a large number, but nevertheless, any time a vehicle air bag nondeployment occurred, it seemed like that should be something which must be unveinvestigated. you outline here that, consider, if possible, to defect theories that don't fit with previously held assumptions. in other words, look for another reason, other than something you normally would. i'll never forget the accident report where one vehicle, there were two vehicles involved in a head on collision. unfortunately, it was not

survival in either vehicle. in one car, you have the air bag, the other was not. there wasn't a tree hit, wasn't a curb or anything that would jar the ignition switch. one air bag works and one doesn't. why did the one not work? i'm grateful to see that line item in your discussion of the points that were brought up by the ig's report. i think that's of critical importance. i'll yield. five minutes for questions. >> thank you very much, chairman. appreciate this opportunity. want to thank the witnesses for being here to answer our questions. keeping in mind the millions of cars on our roads, keeping them safe is complicated and expensi expensive. the draft we're looking at today does not address increased funding, though the provisions would show responsibilities to the agency. dr. rosekind, in your testimony

today, you said the failure to address gaps in nhtsa's available personnel and resource rs a known risk to safety. can you explain how civil penalties for violations of motor vehicles safety standards and other violations affect those gaps? >> all of the penalties that are collected go right to the u.s. treasury, so we don't get any of those for our work. >> okay. so no matter how effective you are or even industry admits and/or forwards the penalties, there's no direct correlation between the amount of work that comes to your agency versus the amount of effective -- or what you're rendering. >> that's correct. the last time i appeared here, i said, if you gave us more resources, we can deliver more safety. if you give more demands without more resources, you get less safety. >> okay. thank you.

this draft does not address raising the cap on civil penalties that nhtsa can seek from manufacturers for violation. the vehicle safety improvement act would eliminate the cap. in the past few years, there have been several widely publicized scandals surrounding the auto industry. in 2014 alone, nhtsa issued more than 127 million civil penalties. dr. rosekind, 35 million sounds like a large amount of money, but we continue to hear about the egregious safety violations in the industry. nhtsa has had to be creative in finding ways to make penalties appropriate for the violations. the current maximum penalty, is that enough to be an effective deterrent? >> no. that's why in grow america, we suggested a $300 million cap. no cap is good with us, too, but at least $300 million is what's proposed to have a meaningful deterrent.

>> now, if the $35 million cap were significantly raised, what, in your opinion, would effect or the expectation of how the behavior of auto makers may or may not change? >> i think our expectation would be, with appropriate deterrents, like civil penalties, we'd want to see a proactive safety culture. defects, conduct recalls earlier and faster. >> would raising the per violation fine and eliminating the cap on civil penalties improve safety, in your opinion? >> that's the intent. the current level is not the deterrent it should be. >> when was the last time that level was raised? >> good question. i'll make sure that's in our technical assistance when we provide that to you. it's been a while. the $35 million is basically been on the books for a long time. >> for years now? >> yeah. >> and the curve on activity or the volume of vehicles and the

industry dollar amount value, year to year, has that been going up? >> absolutely. if you're trying to make that distinction, yes, our authorities stated a certain level while the number of vehicles were at 265 million on the roadways now. the number of recalls is going this way, while we've been staying this way. if you look at the budget, which we talked about last time i was here, really in sort of real dollars, we're down from where we were ten years ago. >> i constantly hear elected officials across the country talking about how we should run government more like a business. does it seem like we're running your department like a business when you just describe the amount of activity going up, the amount of dollar amount in the industry going up, et cetera, yet, your budget and your ability to create more safe activity is flat?

>> no. i'll make a personal comment, which is, i have a different, unique background, having been in academics and as a scientist, had my own business with consulted with top 100 companies all over the world. i bring that perspective for efficiency, eh secretaryiffecti. it's one of the frustrations of wanting to do more with not enough resources. people, money. >> well, i'm of the opinion in this country that we're fortunate to take public safety for granted in so many ways. it's unfortunate that we're not fortifying you with the resources necessary to keep us as safe as you can. thank you so much. yield back. >> chair thanks the gentleman. seeing as there are no further members wishing to ask questions for the first panel, i want to thank both witnesses for being here today, for their time. this will conclude our first panel. we will take a two-minute recess to set up for the second panel.

welcome back. thank you all for your patience and taking time to be with us here today. we'll move to our second panel for today's hearing. we will follow the same format as during the first panel. each witness will be given five minutes for an opening statement followed by a round of questions from members. for the second panel, we have the following witnesses. mr. bainwol, the president and ceo of the alliance of automobile manufacturers. mr. john bozzella. mrs. will sswilson. mr. greg dotson. former administrator of the traffic safety administration. mr. peter welch, president of the national automobile dealers association. and mr. michael wilson, the ceo of the automotive recyclers

association. we do appreciate all of you being with us this morning. we're grateful for your forbearings during the first panel. mr. bainwol, you're recognized for your opening statement, please. >> thank you, chairman. given the size of this panel, i'm reminded of what former senator john warner said we he became elizabeth taylor's sixth husband. he said, i know what to do, i'm just not sure how to make it interesting. here i go. thank you for the opportunity to testify today on behalf of 12 global oems based in the u.s., europe and asia, our companies are 75% of the marketplace. our industry put about a billion new cars on the road in the next decade. that's a lot of steel and a lot of aluminum. astounding level of production with massive job and economic implications. more striking is a game-changing

innovation that will bring social benefits. our companies are investing $100 billion a year in research, including the development of the next generation of connected vehicle technologies. these technologies will save lives, save fuel and enhance mobility. over the last decade, your house colleagues invested highway dollars to make smart vehicles and infrastructure a reality. to build a mark of tomorrow includes $175 million over the next six years. they're making this investment for an important reason. that's because congestion wastes $3 billion -- i'm sorry -- 3 billion gallons of fuel every year. the federal highway administration estimates 12.5% of congestion, 3 million metric tons, is directly attributable to crashes. thus, there is a direct link between reducing crashes and reducing co2 emissions. for this subcommittee, the focus

is the potential of this technology to save lives. the technologies offer us an opportunity to address the 94%, if not more, of all accidents that nhtsa attributes to driver error. it's crucial to address this. more than 32,000 people died in car crashes last year. far too many. 25% below what it was a decade ago. but it's still too many. nhtsa said connected vehicles had the potential to mitigate 80% of crashes. last week, a group released a study, showing that advanced driving assist systems could prevent 10,000 fatalities and 30% of all crashes occurring in the u.s. we should all share the goal of deploying these technologies as soon as possible. how can we not? it's why the modest incentives, and they are modest, included for the technologies does make sense. a connected car with crash

awareness technologies is safer and cleaner. it's not a tradeoff, it's a convergence of interests. the harmonization of the gains that these technologies offer changes the policy paradigm. it causes us to think how we accelerate this into the fleet. we applaud the committee to save lives. if passed, it can prevent tragedies and the impact on greenhouse gas emissions is equally real. while the benefits of the technologies are profound, connectivity and data introduce challenges, including privacy and cybersecurity. we commend the committee for generating new proposals. last year, the industry was the first non-internet sector to issue consumer privacy protection principles. they built off the well-established in where and how you drive.

we're moving aggressively in cyber security. as this committee knows, auto makers will stand up the information sharing and analysis center to the sharing of potential cyber threats and countermeasures in real time. yel yet, we hear you loucloud and clear. you wanted us to move further. we're moving forward with the best practices initiative, as well, so we have a fully integrated approach to addressing risks. the future of mobility is extremely bright. we're on the precipice. technology will make this happen. it will enable safety outcomes in an economy that's more productive because people and goods will be able to move much more efficiently around the country. this committee has started this conversation by the future mobility in ernest. we look forward to working with you to build this new reality. >> the chair thanks the gentleman. mr. bozzella, you're recognized

for five minutes. >> mr. chairman, ranking member, members of the subcommittee, thank you for allowing me to testify today. mr. chairman, thank you for your thoughtful work on motor vehicle safety and holding this hearing today. our industry has been in the news a great deal lately, and not always for the best of reasons. this hearing gives us a chance to discuss onion going efforts to improve motor vehicle safety and enhance public trust through the research and development of new technologies. the draft bill released last week contains a number of ideas designed to advance our goal of improved motor vehicle safety. we appreciate the sub committees commitment to address new and emerging challenges associated with the development of vehicles that not only ak ctively avoid collisions but talk to each other and the surrounding

infrastructure. one, recall notification during vehicle registration. two, adoption of connected car technology. three, industry efforts to stay ahead of privacy and cybersecurity challenges. consumers should be informed of the recall status of their vehicles. auto makers believe the effective way to achieve this end is to use state dmv offices to notify owners of open recalls at the time they register or renew their registration. we have initial data that suggests there is public support for this approach. in a survey commissioned by global auto makers and the alliance of automobile manufacturers, we looked how consumers respond to and think about recall notices and found overwhelming support for the idea of receiving recall information from the dmv. over 70% of those asked about this issue supported not only notification at registration, but a requirement that recalls be remedied prior to

registration. more research needs to be done, but these initial results indicate the subcommittee is moving in the right direction, as it explores ways to increase recall completion rates. we are also please thad the draft bill recognizes the substantial benefits associated with the installation of dedicated short-range communications that allow cars to communicate with each other and the surrounding infrastructure. leading to fewer crashes, less congestion and other potential benefits. nhtsa agrees this technology could be, quote, a game changer, unquote, potentially addressing 80% of vehicle crashes involving non-impaired drivers. encouraging the fastest deployment possible of dsrc will spread the benefits of this life saving technology more quickly and more widely. the enormous benefits of connected car technologies outweigh the challenges that come with living in a connected world. as auto makers bpursue these

innovations, we recognize cybersecurity and privacy protections are essential to building consumer confidence. to ensure the security of safety critical driving systems and to protect the privacy of consumer data, we have begun establishing best practices. these best practices will allow auto makers the flexibility to quickly and effectively respond to the dynamic nature of cyber challenges. this builds on steps we have already taken, such as the creation of industry privacy principles to protect consumer information and the launch of the automotive information sharing and analysis center, to share intelligence on immediate threats and vulnerabilities. last year, u.s. auto makers took steps to protect the privacy of consumers through the responsible stewardship of information collected from in-vehicle technologies and services and the meaningful

disclosure of privacy principles and practices. we engage with privacy advocates and the trade commission during the development of these principles. as early as january of 2016, all major auto manufacturers will be accountable to the ftc for these privacy commitments. we have questions about how the privacy provision outlined in the bill would interact with the commitments that have already been made by auto makers. in august, u.s. auto makers incorporated the auto isac. by the end of the year, we expect the isac infrastructure to be operational. this is not unique to auto makers. any approach to address cyber threats should be consistent with approaches used in other industries. thank you, again, for the opportunity to appear before you today. happy to answer any questions you may have. >> chair thanks the gentleman.

you're recognized for an opening statement. >> thank you. chairman, ranking member and members of the subcommittee, i'm ann wilson, the senior vice president for the association. thank you for allowing me the opportunity to testify today. more than 1,000 companies manufacture components and systems for use in light and heavy duty vehicle, original equipment and after market industries. our members provide more than 734,000 direct jobs nationwide, making the motor vehicle parts industry the largest supplier of manufacturing jobs nationwide. suppliers work closely with vehicle manufacturers to provide cutting edge and innovativepone vehicles. 2/3 of the value of today's vehicles. today, i'll focus on the safety benefits of address driver assistance systems.

these are included in the draft in the term, advanced automatic technology. as is widely recognized and previously discussed, motor vehicle safety continues to improve. the safety factors are improvement to the structure design and technologies. we recently published a study on the benefits of the technologies. a complete copy has been circulated to all the committee members. the mema study focused on current technologies that can pr live safety benefits and form the pathway to a partially or fully autonomous vehicle plate that can eliminate traffic fatalities. however, this study did find that technologies that are currently available have a potential to prevent 30% of all crashes nationwide, a total of 10,000 lives saved every year.

today, however, relatively few vehicles on the road have these technologies, and their penetration in the market is only growing at 2% to 5% annually. since the vast majority of accidents in the u.s. are caused by driver error, the adoption of this technology in the u.s. fleet is a missed opportunity. i'd like to take a minute and discuss exactly what the eknology e technology is. it can be grouped into three. that he has that can aid the driver, assist the driver in performing the systems. it includes night vision, rear mounted mirrors that enhance the rear vision, adaptive lighting and surround systems. features alert the driver of potential dangers. park assist, collision warning, lane departure warning, which activates a beeper or causes the driver's seat to vibrate when

the vehicle drifts out of its lane. other warning systems include blind spot and rear cross detectors and monitoring systems. they actively engage steering, accelerate and/or braking systems, as is needed to ensure the vehicle's safe operations. such features include collision assist, adaptive cruise control, self-parking and lane keeping assist, which actively returns the vehicle to its original lane when it's in danger of drifting from it. there's also pedestrian avoidance, which warns the driver of an impending collision with a pedestrian and in some situations will assist the driver in steering and braking to avoid the situation. marketing incentives will increase the adoption and lower the costs of these tech meteorologies. mema supports the efforts of the committee to promote the technologies through the new car assessment program and advance

credits for fuel economy and greenhouse gas emissions. we do have the following comments on the committee draft. in title 5, section 501, buyers must be included in the automotive technology adviser committee. we believe 35% threshold specify for inclusion of the technology on the label is too high. collision avoidance systems are currently available and if they are in new vehicles, they must be lifted in the rating as part of all new vehicle labels. section 502, mema supports avoiding credits for advance in t for the green house emissions. however, there should not be a difference in the credits for vehicles with at least three advanced safety technologies and vehicles with one connected vehicle technology. mema thanks the committee to provide greater consumer

acceptance and technologies. the industry is committed to working with you to establish new and innovative ways to increase the adoption of these life-saving technologies and to address other critical issues. thank you. >> the chair nothanks the winnt. you're recognized for five minutes. >> thank you for the opportunity to testify today. i'm vice president for energy policy, center for american progress. we're dedicated to improving the lives of american. many americans rely on their cars and trucks to get to work, do their jobs, transport their family safely. for these reasons, the industry has regulated in different ways to minimize accidents, our dependence on oil and prevent pollution from choking our economies. the result is that today's vehicles have attributes once believed to be incompatible.

today, i'll focus my testimony on sections 502 and 503, the discussion draft. i have provided a lengthier statement for the record. i'd like to highlight the five important reasons that the sections are flawed. first, the discussion draft presents a false choice by asking members of congress to choose vehicle safety over pollution reduction. that's an unnecessary tradeoff. the fact is we need both safer motor vehicles and cleaner cars and trucks and there's no reason the american people can't have both. second, there is not a sound analytic basis for the proposal. the bill would encourage auto makers to use this technology by giving them pollution credits for every car they manufacture with crash avoidance technology, like automatic emergency braking, or technology that helps with congestion mitigation, like an in-dash gps. unfortunately, there isn't sufficient data to support the credits. in 2012, the environmental protection agency and department of transportation examined this issue.

auto maker dimeler argued it should provide the credits for the crash avoidance technology. the agency said the credits should be awarded where there were real-world improvements to fuel economy. they must be verifiable and transparent. the agencys -- technologies for satisfied. it's best left to nhtsa's exercise of vehicle safety authority. the discussion draft would reverse this conclusion. section 502 a provides a credit of three or more grams of carbon dioxide per mile to any vehicle equipped with advanced vehicle technology. the bill offers a credit of six or more grams of carbon dioxide for any vehicle equipped with connected vehicle technology. it's more than dimeler argued

epa was warranted for this technology in 2012. though epa is determining the extent of volkswagen's violation, in the estimates, the excess pollution from the non-complying vw vehicles is less than three grams per mile. the fact is, three grams per mile, every day, every year, for every car, adds up to substantial pollution. third, the discussion draft would allow more solution for using technologies that are going to be used even without this incentive. for instance, last month, ten major vehicle manufacturers publicly committed to making automatic emergency braking a standard feature in all new vehicles. it makes no sense to give these companies incentive for something they intend to do anyway. fourth, the loopholes created by the bill could only grow bigger over time. section 503 a would authorize the secretary of transportation to select any technology and award that as many credits to

incentivize, unquote, the adoption. there's no upper bound limit on how many credits might be awarded under this language. finally, the bill as currently drafted would curb the role of states in innovating carbon pollution reductions at the state level. as we have seen time and again, the states are the laboratories of innovation. they have demonstrated countless successes, and there's no basis for stripping them of their important role. it was the state of california that led the way in detecting the vw emissions scandal. mr. chairman, ranking member and members of the subcommittee, it has not been easy for the united states to establish a regulatory structure that's transparent, data driven, technology based and effective. i urge you to reject for new special interest loopholes and maintain the current system. the american people expect a system that cuts pollution and increases safety. let's not sacrifice one for the other. i'd be happy to take any questions you have. >> chair thanks the gentleman.

you're recognized for five minutes for your opening statement, please. >> i thank you very much, mr. chairman and ranking member and members of the subcommittee. i'm the consumer chair add advocates for highway safety and former administrator of nhtsa. i appreciate the opportunity to testify before you today on an important issue, the safety of our family and friends on our nation's roads and highways. let me share important statistics as you begin considering this bill. 33,000 deaths and over 200 million injuries annual ly. 613 recalls already in 2015 involving 40 million vehicles. for these recalls, at least 200 people innocently killed and hundreds injured because auto makers sold cars they knew had safety defects.

house and senate hearings, ten of them over the last two years on gm ignition switches and exploding takata air bags, where heard countless tours of testimony and indignation expressed by members. criminal justice, department of justice and civil fines against recalls since 2010 because of the nhtsa enforcement and justice enforcement. nhtsa safety budget, a measly $130 million a year. measly $130 million. 11 family members behind me today, millions of americans expect their legislators to enact sensible solutions for serious safety problems. one opportunity to get it right. congressional hearings, media reports that dot inspector general reports incovered industry misconduct and nhtsa missteps that put millions at danger on the highway.

we need legislation that addressing the underfunded and understood staff understaffed agency. a lack of civil, adequate civil and criminal penalties to deter auto makers from putting profits before public safety. a predisposition by nhtsa to needlessly withhold information from consumers about safety problems that thwarts their ability to challenge the agency actions. that is now changing under mr. rosekind. thank you. a loophole that allows consumers to drive off the lot of a rental car company or used car dealer with a vehicle under recall but not repaired. agency powerlessness to take swift action. the draft bill will set a safety agenda for the agency for the next six years. at a time where motor vehicle death and injuries are climbing, safety standards are needed. serious problems have been exposed and new challenges face the agency. what does this bill do to

enhance safety with the legal and financial tools to fulfill its mission? very little. instead, it seriously dilutes critical vehicle controls and wastes taxpayer dollars by turning nhtsa into the national highway traffic study administration. it conducts 16 studti ties and reports and puts one safety for the emissions. we know the technology exists to build safe, fuel efficient and safe cars. other provisions delay public notification of recalls until nhtsa is in receipt of all the vehicle information numbers subject to the recall, and nhtsa is required to draft the non-compliance in coordination with the manufacturer. something that alimited to. the bill provides an exemption for vehicles intended for

testing and evaluation. these give aways are unnecessary because this already has a regulatory process to do this in the law. furthermore, the draft bill provides a breathtaking double standard for manufacturers at the expense of consumers. in second 406, mandates that industry failure to follow dot voluntary guidelines cannot be used as evidence in a civil action. industry may be compliance with the guidelines to show compliance with pujt regulbudge regulations in the same civil action. the real intention of these and other provisions and advisory committees and councils are not to prevent safety but thwart the regulating industry and keep the public out. problem solving proposals to the problems identified by the hearings. you've heard again and again, and found in hr 1181. it has been introduced by pallod subcommittee ranking member

january schakowsky. it's a comprehensive approach that includes tougher penalties, hazard authority, improved transparency, pedestrian safety measures, prohibitions on renting vehicles or selling used cars under review and actions on recalls and revolving door selections. to the agency to draft -- address the tragedies of unattended children left behind in a vehicle and 200 some of them die a year. unless this committee acts to pass meaningful legislation, the string of scandals will fire. tires, sudden acceleration, faulty switches, exploding airbags and now cheating diesels. there are no credible excuses for delaying, increased penalties, strengthening nhtsa's authority and resources and

proved standards. that can really save lives and prevent industry fraud. thank you so much for the opportunity. >> mr. welch, you're recognized for five minutes please for an opening statement. >> mr. chairman, ranking member schakowsky, i'm peter kawelch. i'm president of the national automobile dealers agency. a nationwide trade association that represents the new car and truck deal earls throughout the country. the draft bill before you today contains a number of provisions nada supports. dealers support 100% recall completion rate and, again, we commend the subcommittee for its efforts to help us achieve that goal. the recall system congress enacted depends on new car dealers to fix the millions of vehicles now under recall. last year alone, our members

performed 59 million warranty and recall repairs and unfortunately set to break this record again today with the burgeoning number of recalls that are being issued. for the owners of recalled vehicles, it is the local dealer that remedies the defect or noncome form answer. with a notice and fail to act, many dealers contact their customers to schedule a service appointment. one of our texas dealer members found that sending bright pink postcards reminding the owners that the vehicles are under recall get them fixed. currently, the completion rate around 75% which means there's lots of room for improvement. back ordered repair parts and notices are two main reasons that the completion rates lag. it is not unusual for a dealer to wait 60 days or more for a back ordered repair part. some instances, unavailable for over a year.

i don't know of any dealer not eager but they need repair parts to do that. inaction by consumers after receiving a notice also hinders completion rates. one idea nada suggested to nhtsa at the workshop for nhtsa for a campaign to target those groups that are les likely to respond to recall notices. improving nhtsa's recall database and look-up tool is another way to boost the completion rate. the current system was designed for single vehicle look-ups by consumers. it was not designed for commercial use. the dealer can have dozens to thousands of used vehicles in its inventory. this bill should include a provision directing nhtsa to update the databait to allow dealers to check on a daily basis which used vehicles are

under open recall. a tool that's batched multiple requests is critical to n a deal earl's inventory and getting them fixed. we also support sox 203 which would provide notification by state dmv. it's all about notification an awareness and a good idea to help increase the remedy rate. section 205 would extend the period for which cars are recalled from ten to 15 years with the average vehicle on the road at 11.5 years, this makes sense. in conclusion, congress must ensure that any new recall policy it enacts is data driven. the most vefl highway safety policies such as enactment of safety belt laws and anti-drunk driving measures were all based on hard data and now are proven countermeasures. we xhepd the subcommittee for the hard work and stand ready to

work with you to protect america's driving pub. thank you an i look forward to answering any questions. >> chair thanks the gentleman. mr. wilson you are recognized for five minutes. >> chairman burgess, ranking member schakowsky, thank you for the opportunity to steph. i'm michael wilson, ceo of the automaker's recyclers association. we represent the interests of over 4,000 facilities in the united states who each day sell over 500,000 recycled parts to consumers, mechanical shops, collision repair shops and automobile dealers. these quality recycled original equipment parts are built to make the requirements for fit, finish, durability, reliability and safety. these parts are often reutilized in repair and service of vehicles and they continue to

operate as they were originally intended in terms of form, function, performance and safety. i urge congress to add language to provide the industry access to critical original parts data on all motor vehicles. the critical data includes part numbers, names and descriptions tied to each vehicle, vehicle identification number. the straightforward reason for this information is necessary because manufacturers and dealers in the industry speak a totally different parts language than those in the auto recycling community. automakers and dealers utilize original part numbers while there's part numbers. the interchange enables those enthusiasts to find parts they need to keep the vehicling running and in original condition. the interchange indexes millions of parts and equivalents of

other vehicles. for example, a specific part that is in a ford f-150 is also interchangeable with the same part of a ford expedition, a mercury mount near or a lincoln navigatorment it's only through the utilization of the interchange part numbers that automotive manufacturers and recyclers can come together to enhance overall motor vehicle safety, improve recall remedy rates and comply with the statute for used equipment in the tread act. first i would like to address the challenge recyclers face in defective parts in current inventory. regrettably, the tread act and rule makings did not compel essential parts data making it impossible for stakeholders to comply with the federal statute. au automakers are fully aware of the life cycle.

this recognition was underscored in august 2014 when general motors contracted with the third party supplier to coordinate the purchase and return of certain parts subject to a product safety ignition switch recall from facilities. in a third party notice to recycling facilities through the correspo correspondence, also detailed the specific gm part and the ac delco numbers so the manager identifies the parts being recalled. the notice includes the interchange number for ignition switchers. gm understands that a specific part number are vital to locate the effective parts. in nhtsa's current site individuals or companies who sell a significant number of vehicles or parts do not have the vin look-up capability to

necessary information and are severely limited to objections to allowing interinauguration of important data to enhance safety. just as problematic is the data of the automakers of safer car.gov is a recall narrative than part numbers, names or descriptions making it all but impossible to identify specific recall carts electronically. it is essential that recyclers identify those parts associated with vines which have been recalled and not remedied before cars are potentially purchased at auction or acquired from the general public. with access to parts data it will allow the community to comply with the obligations and can help protect the nation drivers from the detective parts. while some concede to the need of the original equipment data for the defective parts, it is important to understand this is not enough. the number of parts in the marketplace is increasing at alarming rates.

some 100 million vehicles recalled since the beginning of 2014. these campaigns create multiple challenges for my members who provide safe and quality parts to the marketplace. consider the original parts that automotive recyclers sell today and subject of recall at a future date. there is no specific part number to track it going forward if there's a subsequent recall on that part. most agree that the private sector developed or can develop solutions to the vehicle and the part identification along with the remedy tracking problem. however, these systems would only be as good as the data the companies have access to and provide to the effective parties. unfortunately, ihs and other data providers do not have access to important data needed to track recalled parts and significantly increase recall remedy rates.

automakers are accountable for the safety of all original equipment parts in the life cycle and should be reared to share whatever information is needed. the practice of sharing original equipment part numbers should not be an anomaly. especially in light of the new safety norm. consumer demand for a safe replacement market makes it imperative that congress include language to remove the barriers so all parts data is available to all those in the industry. thank you. >> the chair thanks the gentleman and thank all of you for your testimony. we'll move into the question and answering portion of the hearing and i'll begin that -- >> mr. chairman, i have a unanimous -- >> you may present. >> i'm beginning with 45 minutes. may i submit my questions for

the record and ask the witnesses to respond later in writing? >> the gentleman certainly understands there's a lot of members wanting to ask questions and i would be prepared to yield to the gentleman to go first. >> you're very kind and i can talk fast. >> proceed. the gentleman is recognized. >> miss claybrook -- >> i'll hold all the other members. >> you very kind. thank you for coming. as you know, i have worked with lewis capps and miss schakowsky and others and in mai we introduced 2189 the rachel and jacklyn houch safe rental bill. i'm disappointed it was not included but it was included in the bill that the senate is working on. do you share in my disappointment in any way that the text of 2189 was not included as a part of the title? >> i certainly do.

as you heard add min stray rosekind, he does, too. we believe that all cars that have been subject to recall whether they're new cars or used cars or rental cars should all be fixed immediately. >> thank you. why is enacting a national standard so important? >> well, it's important because it causes death and injury on the highway. unsuspecting owners or renters. and that's the bottom line. safety on the highway. >> and to the best of your knowledge, do the vast majority of rental car companies support a federal rental car safety standard? >> that is my understanding. to the vast majority do. and the public does overwhelmingly. >> okay. does anyone on the panel that would dispute that? consumers for autoreliability and safety and the consumers union and the consumer federation of america, aaa and the rental car association all support 2189 and they have called on this committee to move the bill.

either on its own or part of a larger package. do you agree or disagree? >> oh, i completely agree and warning is not enough, by the way. the car has to be fixed. the vehicle has to be fixed. >> finally, for mr. welch, thank you for coming and you know we have a member named peter welch from vermont. your association, mr. welch, believes we should focus more on fixing rental cars instead of grounding them. it seems to me the rental companies have an incentive to repair a grounded vehicle and get it back on the road as soon as possible. so i would think that a rirlt to ground an unrepaired vehicle would actually speed up the repair rate as you know federal law already requires new recalled cars to be grounded until they are fixed. do your members prefer to fix these new recalled cars quickly or simply have them to sit on the lot?

>> of course, our members are the ones that perform the vast majority of recall fixes and remedies across the country. with respect to the rental car bill, we're supportive of the premise behind the bill that vehicles that are unsafe to drive should not be put in the hands of the public. our issue is with that bill is the definition of when is it unsafe to drive a vehicle and differentiating between recalls that would not render a vehicle unsafe to drive as determined by either nhtsa or the original equipment mafr manufacturer of the vehicle. i hope we have a discussion drawing a bright line on when a vehicle is unsafe to drive to distinguish it between the types of recalls that would not affect the safety of driving the vehicle. we have a number of other

issues. i can get into it if you want but in the interest of time, specific provisions on that bill, for instance, it is overly broad because it paints all of the vehicles with the same brush. it's -- we think it's unfair to small businesses. 80% of our members are small businesses. if i have five vehicles in a loaner fleet, i'm subject to the same penalties and fines that avis and hertz is. >> do you think they'd have the same incentive to repair? >> of course, that rafzs another issue and that is the fight for parts. as i mentioned before, the only thing that's holding us back from fixing any vehicle that comes on to our lot is the availability of parts and we have a commissioned a number of research on that. and the average delay part on trade-in vehicles, for instance,

is 60 days and we had some concern that the rental car companies might get in a tug-of-war with the manufacturer for availability of the parts and affect our customers coming in to get their vehicles repaired. >> thank you. thank you. >> one thing? >> yes. >> it seems to me in terms of whether the car is safe to drive, that the manufacturer's made that decision. when they do a recall, they're saying this is a safety issue and the car needs to be fixed and there are very few cars unsafe when they're not driven and seems the manufacturer has made that decision and not up to anybody else to decide nhtsa or anybody else to decide. >> if i could respond to that. >> all right. >> they have stop drive notices and about 6% of the recalls and i understand that there's a dispute between whether it whether it should be 8% or 10%

or 40%. we're the monkey in the middle. we are looking for parts to fix the cars but there's a big difference between for instance, you know, a mislabel and i don't want to be -- try to in any way, shape or form characterize any recall, any violation of a statute subject to vehicle recall but there -- >> when would you fix it? you don't want to fix it today? it's okay to drive it today without a bad label? >> maybe some of the other me believes -- >> as soon as there's the part. >> the chairman was so kind to yield to me. >> the panel -- the dias will ask the questions. >> thank you so much. >> thank you, mr. butterfield. and good luck with your meeting. i'll now recognize myself for five minutes for questions although that was an interesting exchange. let me just ask mr. bainwol

about this isac, the gathering of data. what is the mechanism for disseminating information back then to your members or anyone else involved? >> so the isac, again, which will be stood up in a matter of weeks. i think today an announcement with the board of directors and very much in process. the board is comprised of auto companies. this is form for members. oems to share information about risk and counter measures and so the mechanism is the isac itself and why it's been established. we are augmenting the isac which by definition deals with problems after they have been manifest with the best practices to preempt the possibility of problems so this is a comprehensive approach. we're going to be working

obviously with nhtsa, operating, using guide posts as we develop the best practices including nist but the isac itself is comprised of the oems and including suppliers down the road. >> how do you then get the word out? is it certified mail? carrier pigeon? >> the process is established. they're talking to each other. the oem community -- >> you don't see that as a -- >> when that happens, it will be very quick, accelerated and not a problem. >> very well. mr. welch, if i can ask you a question because, of course, this committee and another subcommittee is very involved on the airbag recall and, of course, in the dallas/ft. worth -- i'm sorry, i meant to

say the ft. worth/dallas area i represent, the back order issue you brought up of the recalled repair parts and what has been the experience with your member dealers as far as being able to get the parts, specifically the airbags for replacement when someone brings their vehicle in to have it fixed? >> well, that's been a particularly troublesome recall as you know. there's some 24 million vehicles are involved that. and in order to produce sophisticated airbags, in sufficient numbers to replace 24 million of them, are going to take time. in fact, the back orders on those depending on the make, the model, what factory they're coming from, availability, could be well over a year and the dilemma that we face day in and day out because of the publicity of the recall received, you know, we have to deal with our consumers, your constituents

that come in and we don't have the replacement part. and the dilemma is they don't affect all of the vehicles the same depending on the cry mat, there's a humidity issue with them. and whatnot. and i think our partners, the manufacturers, are doing as good a job as they can trying to triage the availability of the parts and get them to the regions of the country where they have largest impact with respect to it. we have to wait through that. and do the best that we can with the availability. we have got databases with people waiting, priority issues. and, you know, some of them want us to just, you know, disengage the airbag and there's another dilemma and we don't think that's a good idea. and then there's the debate, you know, between the risk of the occupant having an airbag since not all of them have the defect in them. it's a very complex issue, mr. chair.

>> of course, in the hearings we have held on this, this is all made more difficult because no one knows what the central defect is and the replacement parts that you're putting in the cars that do come in subject to the recall and require replacement part, no complete assurance that the replacement part is compliant with -- since we don't know what the defect was in the first place. you brought up getting the information out to targeted demographics. and that's something that's been the subject of a lot of discussion in this subcommittee, as well. because typically this is the third or fourth owner 0 of a vehicle. in the market in the dallas paper one of the automotive manufacturers took out full-page ads in the newspaper to, you know, if you have like one of our cars, of this vintage, call the number or bring it in or

whatever their requirement was. but it's very, very difficult to get the information out to, again, that third or fourth owner who may not be someone that reads the newspaper regularly and difficult to reach that individual so is that one of the things your association is working on, as well? how do we get people in? >> any way to contact the customer base. unfortunately, as the vehicles get older in age, they don't continue to bring into the franchise dealer for ordinary maintenance. the completion rate, the remedy rate for vehicles five years old or newer is 85% and one of the primary reasons for that is those vehicles are still coming in for warranty work and any time a vehicle comes into a service department, we're scanning the vin, running it. if we have access to the database and snagging them there. >> my time is expired. yield to the gentle lady from

illinois. five minutes for questions please. >> thank you. i wanted to ask a yes or no question of a couple of them, for mr. bainwol. did the alliance of automobile manufacturers ask the committee for the provision in the bill that would give automakers a break from emissions requirements in exchange for adding safety features? >> we did not request it per se. we had a conversation with the value -- >> yes or no? do you support that provision? >> we certainly do. >> you do? >> sure. >> mr. bozzella, i'm asking the same question of the association of global automakers. did you ask the committee for that provision? >> we did not. >> do you support it? >> the provision to incentivize life-saving technologies we think is very important conversation to have. >> i want all consumers to understand that, that

manufacturers of automobiles support a provision that would actually increase pollution in exchange for provide -- i'm not asking now. i'm talking. that wou -- to improve safety of the automobiles. i think it is outrageous. consumers like myself who now have a hybrid are seeking that. i would imagine that auto dolors would find the consumers are coming in and wanting more fuel efficient cars. and to add this as an incentive to get safety often for safety features that are readily available is completely outrageous. i want to thank you, mr. dotson, for your testimony on this matter and i want to move on to something else. >> may we -- >> briefly. >> i'll try to be brief. >> no. you will be brief. it's my time. go ahead. >> it is your time. so the challenge here is i think to some extent is we're talking

past each other. you define it as a matter of defect policy. so when you look at the issue, this chart i think makes it pretty clear. 94% of the challenge coming to death if not more, if not close to 99% is a function of driver error. the magic of this technology is that it will address the totality of the problem. >> what are you talking about? we are talking about incentives that increase auto pollution -- >> we are -- we are talking about maximizing and accelerating the deployment of life saving technology. >> exactly n. a way that increases auto emissions. i'm sorry. i want to move on. it is my time. this is for miss claybrook. over the last several years we have seen multiple scandals of auto manufacturers and major safety defects internally reported and allowed to endanger

people for years before the company did anything about them. nhtsa's ability to collect safety-related information from carmakers is critical to catching and ficking those problems, the draft we are looking at today asked nhtsa to conduct eight new studies and reports without providing any additional funding. meanwhile, almost nothing to improve the communication of agencies. my legislation, the vehicle safety improvement act, would facilitate communications. as former nhtsa administratoadm do you believe that more information would allow the agency to be more effective in the safety mission? use your microphone. would you push the button? and start over. >> absolutely i believe more information is necessary. the early warning system that was created by the 2000 law for the tread act did not give a lot

of specificity about what the manufacturers had to report. they often report inconsistent information. it is very difficult to understand. and they don't -- they fail to report information, many have been fined for that recently. so that law needs to be upgraded an your bill does a good job of helping to do that. i also there needs to be criminal penalties when manufacturers fail to give that information willfully and knowingly. >> do you think the penalties currently are adequate? >> no. first of all, if you look at what the u.s. attorney fined toyota, $1.2 billion and general motors $900 billion and nhtsa's max penalty is $50 million. and also criminal penalties. when a manufacturer knows they might go to jail, they behave differently and pay attention to what's going on. when the general counsel of general motors said he didn't

know about settlements of lawsuits involving the ignition switch and that they were covering up information from the lawsuits, that was just incomprehensible and i think there needs to be stronger penalty provisions. >> i appreciate that. i yield back. >> the chair recognizes the gentleman from kentucky five minutes for your questions, please. >> thank you. thank you for having this hearing. i apologize. there's another subcommittee of this committee going on. i was in the other one during your opening remarks and some of my questions repeat those then i apologize. we'll give you a chance to elabora elaborate. this is for mr. bainwol and then mr. bozzella. have nhtsa and the auto industry had discussions on how to apply the risk management frame work to security? >> not directly nist but discussions with the administrator of best practices. we met with him in september and

his view that the pace of innovation is so rapid that it would be wise for us to move forward with best practices and would be in his words more nimble and as a result of that conversation, as a result of discussions with members of this committee we made the decision and this will be part of the frame work evaluate as we move forward. >> mr. bozzella? >> yes. i will just simply build on mr. bainwol's comment by says the nist frame work is part of our discussion as an industry and i think it is important to recognize that though we have had ongoing conversations with nhtsa, that we can't afford to wait. it's really important that we make sure that our customers have the confidence and the trust in the products so that they can take advantage of the benefits, the life-saving benefits of the technologies and moved forward and continue to consult not only within the

industry and with a broad number of stakeholders and certainly the nist framework is part of those discussions. >> how are car companies dealing with the security of aftermarket or third-party devices being plugged into the vehicle through the obd-2 port? >> this is a very really important question. the -- as you know, congressman, the industry has voluntarily adopted a set of privacy principles that treat sensitive permly identifiable information really as sack ro sant. we care deeply about the customers know we treat where the vehicle has been or other personal data maybe bio metric data if the car is able to collect that type of data or driver behavior data differently

than other kinds of data and we think it is very important that we continue to work with the broad set of stakeholders to understand the implications of what might happen if an aftermarket device is plugged into the obd port and we think consumer education is important in this area. it's a very important question to understand, is the manufacturer of that device -- do they have the same types of privacy policies? have they adopted the same practices? so that actual entrance into the vehicle is -- sort of represents a very important question of how we think about cyber security. >> okay. >> i would simply add that by way of example i have a progressive device, it's allstate device i plug in for insurance purposes. that doesn't run through in terms of privacy question through the manufacturer. that's a relationship with the

insurance company and i derive a value from that because i derive cheaper insurance and an ability to understand better the driving behavior of my children and something we all i think aspire to. so this does get complicated and the point of the example is whether it's insurance for whether it's google or apple or carriers, the relationships here that now really impel us -- compel us to work with suppliers and other folks we have not traditionally worked with so on privacy and on cyber, we're going to have to reach out and we started that process. >> okay. do you have a comment, plisz wilson? >> i represent also aftermarket manufacturers and we have been working with manufacturers to create an iso standard to make sure when they're plugged into the obd port they meet some kind of standards known throughout

the industry. >> all right. thank you. and i'll just -- we have talked on fuel efficient standards and safety and i want a fuel efficient car that's safe. but they're not unrelated because if you're going to go for fuel efficiency, i know this area pretty well. companies try to take weight out of a car and keep it safe. that's how you get fuel efficient. they're interrelated and if you incentivize and automotive companies trying to get to the new cafe standards. which does add to the expense of the car. so if you can -- and the security issues and safety issues are expensive. so if you can give some relief in one area for safety and security first, i think that's important. and then you move to fuel efficient cars, this's a number one priority and they're interdependent. >> and my testimony, congressman, i used the phrase safety equals green. this is a changed paradigm when

these technologies, accident avoid answer technologies, yield better safety outcomes and better emissions records and certainly more productive economy. >> gentleman's time has expired. the chair recognizes the gentleman from massachusetts, five minutes for your questions, please. >> thank you, mr. chairman. thank you to the panelists and witnesses here for their testimony. wanted to touch on section 202 of the draft bill requiring nhtsa for notices with auto manufacturers before going public and would not be published any all vehicle identification numbers are made available to nhtsa. i believe the first panel touched on this a little bit, as well. miss claybrook, if you can, in some of the recent major recalls we have heard concerns that the recalls made public before any information about whether specific vehicle was included in the recall and led to some

customer confusion. at the same time you noted that the delayed notice could have deadly consequences so i wanted you to kind of get you to expand on that. how would you navigate through the tensions? >> first of all, i think at the bottom line, the public, the consumers, the people driving the kars, they're entitled to know there's a problem with the vehicle and maybe do something on their own to avoid the problem while they're waiting for the recall to occur. any delay in announcing that recall i think is disadvantageous and i urge the administrator of nhtsa as i did as director put out a public alert. this provision in this bill suggests they could not do that, that they would be limited the administrator limited in the way that they could communicate to the public and wait for the manufacturer to say okay.

i think that's completely back assward. woir. and so -- >> i got what you meant. >> backwards. and so, the administrator's hands should not be tied that way. >> i believe -- his words and note mind but i believe dr. rosekind spoke those words that if the government is sitting on the fact of a problem and notdy v vulging that information i don't think there's a position any administrator would want to be in. the act gives nhtsa an authority of a recall when an agency determines a recall or noncompliance increases the serious injury or death. so, miss claybrook, how do you think this authority is add van

they you to nhtsa? >> oh, absolutely. because there are occasions where the car is so hazardous that recall ought to be handled immediately. and i would say, also, that this provision that's in the bill was in an earl ler bill about 15 years ago and consumers were extremely upset about it and it was taken out of the bill because the committee came to realize that it was really totally unfair, that the administrator would not be able to inform the public. >> also eliminate azumi understanding original recalls and americans are much more mobile than they have ever been in the past and just because a vehicle is registered in a particular region does not meenl that the vehicle is only driven in that region. all recalls would be carried out on a national basis and pr