[Code of Federal Regulations]
[Title 40, Volume 27]
[Revised as ofJuly 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 40CFR600.511-80]

[Page 913-915]
 
                   TITLE 40--PROTECTION OF ENVIRONMENT
 
         CHAPTER I--ENVIRONMENTAL PROTECTION AGENCY (CONTINUED)
 
PART 600--FUEL ECONOMY OF MOTOR VEHICLES--Table of Contents
 
   Subpart F--Fuel Economy Regulations for Model Year 1978 Passenger
 
Sec. 600.511-80  Determination of domestic production.

    (a) An automobile shall be considered domestically produced in any 
model year if it is included within a domestically produced car line 
(car line includes station wagons for purposes of this paragraph), 
unless the assembly of

[[Page 914]]

such automobile is completed in Canada or Mexico and such automobile is 
not imported into the United States prior to the expiration of 30 days 
following the end of the model year. For purposes of this paragraph a 
car line will be considered domestically produced if the following ratio 
is less than 0.25:
    (1) The sum of the declared value, as defined in Sec. 600.502, of 
all of the imported components installed or included on automobiles 
produced within such a car line within a given model year plus the cost 
of transportation and insuring such components to the United States port 
of entry, the Mexican port of entry (when paragraph (b)(3) of this 
section applies), or the Canadian port of entry but exclusive of any 
customs duty, divided by
    (2) The cost of production, as defined in Sec. 600.502, of 
automobiles within such car line.
    (b) For the purposes of calculations under this subpart with respect 
to automobiles manufactured during any model year,
    (1) An average exchange rate for the country of origin of each 
imported component shall be used that is calculated by taking the mean 
of the exchange rates in effect at the end of each quarter set by the 
Federal Reserve Bank of New York for twelve calendar quarters prior to 
and including the calendar quarter ending one year prior to the date 
that the manufacturer submits the calculation of the preliminary average 
for such model year. Such rate, once calculated, shall be in effect for 
the duration of the model year. Upon petition of a manufacturer, the 
Administrator may permit the use of a different exchange rate where 
appropriate and necessary.
    (2) For automobiles for which paragraph (b)(3) of this section does 
not apply pursuant to the schedule in paragraph (b)(4), components shall 
be considered imported unless they are either:
    (i) Wholly the growth, product, or manufacture of the United States 
and/or Canada, or
    (ii) Substantially transformed in the United States or Canada into a 
new and different article of commerce.
    (3) For automobiles for which this paragraph applies pursuant to the 
schedule in paragraph (b)(4) of this section, components shall be 
considered imported unless they are either:
    (i) Wholly the growth, product, or manufacture of the United States 
and/or Canada and/or Mexico, or
    (ii) Substantially transformed in the United States and/or Canada 
and/or Mexico into a new and different article of commerce.
    (4) Paragraphs (b)(4) (i) through (v) of this section set forth the 
schedule according to which paragraph (b)(3) of this section applies for 
all automobiles manufactured by a manufacturer and sold in the United 
States, wherever assembled.
    (i) With respect to a manufacturer that initiated the assembly of 
automobiles in Mexico before model year 1992, the manufacturer may 
elect, at any time between January 1, 1997, and January 1, 2004, to have 
paragraph (b)(3) of this section apply to all automobiles it 
manufactures, beginning with the model year commencing after the date of 
such election.
    (ii) With respect to a manufacturer initiating the assembly of 
automobiles in Mexico after model year 1991, paragraph (b)(3) of this 
section shall apply to all automobiles it manufactures, beginning with 
the model year commencing after January 1, 1994, or the model year 
commencing after the date that the manufacturer initiates the assembly 
of automobiles in Mexico, whichever is later.
    (iii) With respect to a manufacturer not described by paragraph 
(b)(4) (i) or (ii) of this section assembling automobiles in the United 
States or Canada but not in Mexico, the manufacturer may elect, at any 
time between January 1, 1997, and January 1, 2004, to have paragraph 
(b)(3) of this section apply to all automobiles it manufactures, 
beginning with the model year commencing after the date of such 
election, except that if such manufacturer initiates the assembly of 
automobiles in Mexico before making such election, this paragraph shall 
not apply, and the manufacturer shall be subject to paragraph (b)(4)(ii) 
of this section.
    (iv) With respect to a manufacturer not assembling automobiles in 
the

[[Page 915]]

United States, Canada, or Mexico, paragraph (b)(3) of this section shall 
apply to all automobiles it manufactures, beginning with the model year 
commencing after January 1, 1994.
    (v) With respect to a manufacturer authorized to make an election 
under paragraph (b)(4) (i) or (iii) of this section which has not made 
that election within the specified period, paragraph (b)(3) of this 
section shall apply to all automobiles it manufactures, beginning with 
the model year commencing after January 1, 2004.
    (5) All elections under paragraph (b)(4) of this section shall be 
made in accordance with the procedures established by the Secretary of 
Transportation pursuant to 15 U.S.C. 2003(b)(2)(G)(iii).
    (c) If it is determined by the Administrator at some date later than 
the date of entry that the declared value of such imported components 
did not represent fair market value at the date of entry, through U.S. 
Bureau of Customs appraisals, the Administrator may review the 
determination made pursuant to paragraph (a) of this section as to 
whether the pertinent car lines which utilize such components were 
correctly included within the manufaturer's domestically-produced or 
foreign-produced fleets. If such a determination was in error due to 
misrepresentation of the valuation of imported components at the date of 
entry, the Administrator may recalculate the manufacturer's average for 
the affected model year, according to Sec. 600.510, to reflect the 
correct valuation of such imported components in each affected car line.
    (d) In calculating average fuel economy under Sec. 600.510(c), the 
Administrator will separate the total number of passenger automobiles 
produced by a manufacturer into the following two categories:
    (1) Passenger automobiles which are domestically produced by the 
manufacturer,
    (2) Passenger automobiles which are not domestically produced and 
which are imported by the manufacturer.
    (e) In calculating average fuel economy under Sec. 600.510(c), the 
Administrator will separate the total number of light trucks produced by 
a manufacturer into the following two categories:
    (1) Light trucks which are domestically produced by the 
manufacturer.
    (2) Light trucks which are not domestically produced and which are 
imported by the manufacturer.

[42 FR 45662, Sept. 12, 1977, as amended at 43 FR 39376, Sept. 5, 1978; 
59 FR 679, Jan. 6, 1994; 59 FR 33914, July 1, 1994]