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50974 Federal Register / Vol. 71, No.

166 / Monday, August 28, 2006 / Notices

APL Marine Services, Ltd.; APL statutory provisions of 49 U.S.C. We shall consider all comments
Maritime Ltd; Central Gulf Lines, Inc.; 30113(b)(2). NHTSA has made no received before the close of business on
CP Ships USA, LLC; Farrell Lines judgment on the merits of the the comment closing date indicated
Incorporated; Fidelio Limited application. above. To the extent possible, we shall
Partnership; Liberty Global Logistics, DATES: You should submit your also consider comments filed after the
LLC; Liberty Shipping Group Limited comments not later than September 12, closing date.
Partnership; Maersk Line, Limited; 2006. I. Advanced Air Bag Requirements and
Matson Navigation Company, Inc.; FOR FURTHER INFORMATION CONTACT: Mr. Small Volume Manufacturers
Patriot Shipping, LLC; Patriot Titan, Ed Glancy or Mr. Eric Stas, Office of the
LLC; Sealift Inc.; and Waterman In 2000, NHTSA upgraded the
Chief Counsel, NCC–112, National requirements for air bags in passenger
Steamship Corporation. Highway Traffic Safety Administration, cars and light trucks, requiring what are
(Authority: 49 CFR 1.66) 400 Seventh Street, SW., Room 5219, commonly known as ‘‘advanced air
Washington, DC 20590. Telephone: bags.’’ 2 The upgrade was designed to
By Order of the Maritime Administrator. (202) 366–2992; Fax: (202) 366–3820.
Dated: August 22, 2006.
meet the goals of improving protection
Comments: We invite you to submit for occupants of all sizes, belted and
Joel C. Richard, comments on the application described unbelted, in moderate-to-high-speed
Secretary. above. You may submit comments crashes, and of minimizing the risks
[FR Doc. E6–14260 Filed 8–25–06; 8:45 am] identified by docket number at the posed by air bags to infants, children,
BILLING CODE 4910–81–P heading of this notice by any of the and other occupants, especially in low-
following methods: speed crashes.
• Web Site: http://dms.dot.gov. The advanced air bag requirements
DEPARTMENT OF TRANSPORTATION Follow the instructions for submitting were a culmination of a comprehensive
comments on the DOT electronic docket plan that the agency announced in 1996
National Highway Traffic Safety site by clicking on ‘‘Help and to address the adverse effects of air bags.
Administration Information’’ or ‘‘Help/Info.’’ This plan also included an extensive
• Fax: 1–(202)–493–2251.
[Docket No. NHTSA–2006–25546, Notice 1] • Mail: Docket Management Facility, consumer education program to
U.S. Department of Transportation, 400 encourage the placement of children in
Koenigsegg Automotive AB; Receipt of rear seats. The new requirements were
Seventh Street, SW., Nassif Building,
Application for a Temporary phased in beginning with the 2004
Room PL–401, Washington, DC 20590.
Exemption From Headlamp • Hand Delivery: Room PL–401 on model year.
Requirements of FMVSS No. 108; the plaza level of the Nassif Building, Small volume manufacturers are not
Advanced Air Bag Requirements of 400 Seventh Street, SW., Washington, subject to the advanced air bag
FMVSS No. 208; and Bumper Standard DC, between 9 a.m. and 5 p.m., Monday requirements until September 1, 2006,
of Part 581 through Friday, except Federal but their efforts to bring their respective
Holidays. vehicles into compliance with these
AGENCY: National Highway Traffic
• Federal eRulemaking Portal: Go to requirements began several years ago.
Safety Administration (NHTSA),
http://www.regulations.gov. Follow the However, because the new requirements
Department of Transportation (DOT).
online instructions for submitting were challenging, major air bag
ACTION: Notice of receipt of petition for suppliers concentrated their efforts on
comments.
temporary exemption from provisions of Instructions: All submissions must working with large volume
Federal Motor Vehicle Safety Standard include the agency name and docket manufacturers, and thus, until recently,
(FMVSS) No. 108, Lamps, Reflective number or Regulatory Identification small volume manufacturers had
Devices, and Associated Equipment, Number (RIN) for this rulemaking. Note limited access to advanced air bag
FMVSS No. 208, Occupant Crash that all comments received will be technology. Because of the nature of the
Protection, and 49 CFR part 581, posted without change to http:// requirements for protecting out-of-
Bumper Standard. dms.dot.gov, including any personal position occupants, ‘‘off-the-shelf’’
information provided. systems could not be readily adopted.
SUMMARY: In accordance with the
Docket: For access to the docket in Further complicating matters, because
procedures in 49 CFR part 555,
order to read background documents or small volume manufacturers build so
Koenigsegg Automotive AB
comments received, go to http:// few vehicles, the costs of developing
(‘‘Koenigsegg’’) has petitioned the
dms.dot.gov at any time or to Room PL– custom advanced air bag systems
agency for a temporary exemption from
401 on the plaza level of the Nassif compared to potential profits
certain head lighting requirements of
Building, 400 Seventh Street, SW., discouraged some air bag suppliers from
FMVSS No. 108, advanced air bag
Washington, DC, between 9 a.m. and 5 working with small volume
requirements of FMVSS No. 208, and
p.m., Monday through Friday, except manufacturers.
bumper standard requirements of 49
Federal holidays. The agency has carefully tracked
CFR part 581. The basis for the Privacy Act: Anyone is able to search occupant fatalities resulting from air bag
application is that compliance would the electronic form of all comments deployment. Our data indicate that the
cause substantial economic hardship to received into any of our dockets by the agency’s efforts in the area of consumer
a manufacturer that has tried in good name of the individual submitting the education and manufacturers’ providing
faith to comply with the standard.1 comment (or signing the comment, if depowered air bags were successful in
This notice of receipt of an submitted on behalf of an association, reducing air bag fatalities even before
application for temporary exemption is
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business, labor union, etc.). You may advanced air bag requirements were
published in accordance with the review DOT’s complete Privacy Act implemented.
1 To view the application, go to: http://
Statement in the Federal Register As always, we are concerned about
dms.dot.gov/search/searchFormSimple.cfm and
published on April 11, 2000 (Volume the potential safety implication of any
enter the docket number set forth in the heading of 65, Number 70; Pages 19477–78) or you
this document. may visit http://dms.dot.gov. 2 See 65 FR 30680 (May 12, 2000).

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Federal Register / Vol. 71, No. 166 / Monday, August 28, 2006 / Notices 50975

temporary exemptions granted by this manufacturer had a substantial role in As for the CCX’s compliance with the
agency. In the present case, we are the development and manufacturing other advanced air bag requirements,
seeking comments on a petition for a process of that vehicle. Koenigsegg states that it does not know
temporary exemption from the whether the CCX will be compliant
IV. Petition of Koenigsegg
advanced air bag requirements. As part because to date it has not had the
of the same document, the petitioner Background. Koenigsegg Automotive financial ability to conduct the
also seeks a temporary exemption from is a Swedish corporation formed in 1999 necessary testing.
the agency’s headlamp requirements to produce high-performance sports As such, Koenigsegg is requesting an
and bumper standard. The petitioner is cars. This application concerns the exemption for the CCX from the rigid
a manufacturer of very expensive, low Koenigsegg CCX which was developed barrier unbelted test requirement with
volume, exotic sports cars. as the next generation of Koenigsegg the 50th-percentile adult male test
vehicles, after production of the CCR dummy (S14.5.2), the rigid barrier test
II. Overview of Petition for Economic requirement using the 5th-percentile
model ended on December 30, 2005.
Hardship Exemption adult female test dummy (belted and
The CCX model (the company’s only
In accordance with 49 U.S.C. 30113 model at this point) is scheduled to go unbelted, S15), the offset deformable
and the procedures in 49 CFR part 555, into production in 2006 and to continue barrier test requirement using the 5th-
Koenigsegg has petitioned the agency at least through the end of 2009. percentile adult female test dummy
for a temporary exemption from certain Originally, Koenigsegg planned to sell (S17), the requirements to provide
headlight requirements of FMVSS No. vehicles only in the European, Mid-East, protection for infants and children (S19,
108 (S7), advanced air bag requirements and Far-East markets, but the company S21, and S23) and the requirement
of FMVSS No. 208 (S14), and bumper decided in late 2005 to seek entry to the using an out-of-position 5th-percentile
requirements of 49 CFR part 581. The U.S. market for reasons related to adult female test dummy at the driver
basis for each portion of the application ongoing financial viability. position (S25).
is that compliance would cause The petitioner argues that it tried in Koenigsegg further requests an
substantial economic hardship to a good faith, but could not bring the exemption from the headlamp
manufacturer that has tried in good faith vehicle into compliance with the requirements set forth in S7 of FMVSS
to comply with these standards. A copy headlamp, advanced air bag, and No. 108 and the bumper standard in 49
of the petition 3 is available for review bumper requirements, and would incur CFR part 581.
and has been placed in the docket for Koenigsegg stated its intention to
substantial economic hardship if it
this notice. produce a second generation of the CCX
cannot sell vehicles in the U.S. after
model by late 2009, which would be
III. Statutory Background for Economic January 1, 2007.
certified as complying with all
Hardship Exemptions Eligibility. Koenigsegg is a small, applicable U.S. standards, including
privately-owned company with 30 full- ones for headlamps (FMVSS No. 108
A manufacturer is eligible to apply for
time staff members and several part- S7), advanced air bags (FMVSS No. 208
a hardship exemption if its total motor
time employees. The company is a small S14), and bumpers (49 CFR part 581).
vehicle production in its most recent
volume manufacturer whose total Accordingly, Koenigsegg seeks an
year of production did not exceed
production is less than 50 cars per year, exemption from the enumerated
10,000 vehicles, as determined by the
having produced between four and eight requirements from January 1, 2007
NHTSA Administrator (49 U.S.C.
vehicles per year for the past four years. through December 31, 2009.
30113).
In determining whether a According to the company, its sales Economic hardship. Publicly
manufacturer of a vehicle meets that revenues have averaged approximately available information and also the
criterion, NHTSA considers whether a $3.7 million per year. Koenigsegg is not financial documents submitted to
second vehicle manufacturer also might affiliated with any other automobile NHTSA by the petitioner indicate that
be deemed the manufacturer of that manufacturer. the CCX project will result in financial
vehicle. The statutory provisions According to its current forecasts, losses unless Koenigsegg obtains a
governing motor vehicle safety (49 Koenigsegg anticipates the following temporary exemption.
U.S.C. Chapter 301) do not include any number of CCX vehicles would be In the past three years (2003 to 2005),
provision indicating that a manufacturer imported into the United States, if its the company has had losses totaling
might have substantial responsibility as requested exemptions were to be $1,637,399, and during this time period,
manufacturer of a vehicle simply granted: 25 in calendar year (CY) 2007; the company’s factory burned to the
because it owns or controls a second 30 in CY 2008, and 30 in CY 2009. ground and had to be rebuilt.
manufacturer that assembled that Requested exemptions. Koenigsegg Koenigsegg did make a profit of $58,341
vehicle. However, the agency considers states that it intends to certify the CCX in 2003 and $722,406 in 2004, but it
the statutory definition of as complying with the rigid barrier incurred a substantial loss of $2,418,416
‘‘manufacturer’’ (49 U.S.C. 30102) to be belted test requirement using the 50th- in 2005.
sufficiently broad to include sponsors, percentile adult male test dummy set As of the time of the application,
depending on the circumstances. Thus, forth in S14.5.1 of FMVSS No. 208. The Koenigsegg has invested over $3.2
NHTSA has stated that a manufacturer petitioner states that it previously million on the CCX project in order to
may be deemed to be a sponsor and thus determined the CCX’s compliance with have the vehicle meet U.S. standards—
a manufacturer of a vehicle assembled rigid barrier unbelted test requirements not including the three provisions
by a second manufacturer if the first using the 50th-percentile adult male test which are the subject of the present
dummy through the S13 sled test using petition for temporary exemption. The
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3 The company requested confidential treatment a generic pulse rather than a full vehicle company has stated that it cannot hope
under 49 CFR part 512 for certain business and test. Koenigsegg states that it, therefore, to attain profitability if it incurs
financial information submitted as part of its cannot at present say with certainty that additional research and development
petition for temporary exemption. Accordingly, the
information placed in the docket does not contain
the CCX will comply with the unbelted expenses at this time.
such information that the agency has determined to test requirement under S14.5.2, which is Koenigsegg stated that costs for
be confidential. a 25 mph rigid barrier test. external assistance with developing an

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50976 Federal Register / Vol. 71, No. 166 / Monday, August 28, 2006 / Notices

advanced air bag system would cost $641,000 project which is nearing system available, and efforts to find a
over $3 million (over $9 million if completion. supplier willing to undertake the project
internal costs are included for interior According to its petition, Koenigsegg to produce a FMVSS No. 108-compliant
redesign, testing, and tooling), and anticipates that 2 years will be needed headlamp for the CCX have been
meeting the headlamp and bumper to install an advanced air bag system on unavailing, presumably due to the ultra-
requirements would entail an additional the CCX. Modifications would involve low quantity of vehicles involved.4
$1 million in expenditures. development of new components, such Instead, Koenigsegg decided to produce
In its petition, Koenigsegg reasoned as changes to the instrument panel a headlamp for the CCX in-house
that worldwide sales (including the U.S. design and advanced air bag installation (homologated to European Union
market) of the current CCX in higher components such as mountings and requirements), utilizing a lighting
volumes over the next 3 years is brackets. Vehicle testing would also be source from a major lighting
necessary to reduce production costs conducted during that time. manufacturer (Hella). The petitioner
and to make available funding for Furthermore, because the vehicle was stated that the plexiglass lens of the
development of the next generation of not originally designed for the U.S. headlamp box is an integral part of the
the CCX, which would be compliant market, it likewise did not have vehicle body and design. The company
with all U.S. air bag, headlamp, and headlamps or a bumper system or an explained that despite its good faith
bumper requirements. In essence, underlying bumper structure that efforts, the headlamps for the CCX as yet
Koenigsegg argued that the exemption is complies with U.S. requirements. do not fully comply with the headlamp
necessary to allow the company to According to Koenigsegg, achieving requirements of FMVSS No. 108.
‘‘bridge the gap’’ until fully compliant compliance with those requirements Specifically, while the CCX headlamps
vehicles can be funded, developed, will necessitate a redesign of the vehicle have been designed to pass the geometry
tooled, and introduced. body and headlamps at the same time, requirements of FMVSS No. 108, the
so to that extent, the petitioner argued required aerodynamic lens will not pass
If the exemption is denied,
that these two modifications should be environmental testing and must be re-
Koenigsegg projects a net loss of $82.4
considered together. engineered.
million over the period from 2006–2009. To provide a part 581-compliant
However, if the petition is granted, the According to Koenigsegg, the
bumper would require re-engineering
company anticipates a profit of over $27 company did explore the possibility of
and retooling the current CCX bumper
million during that same period. The developing an ‘‘interim U.S. headlamp’’
system. The company explained that it
petitioner argued that a denial of this without a polycarbonate cover.
has undertaken redesign of its front and
petition could preclude entry into the However, that alternative was
rear bumper systems in an effort to
U.S. market until 2010 or later, a determined to be unworkable for the
achieve compliance with U.S. bumper
development which would have a following reasons. First, there were
standard requirements, including
highly adverse impact on the company. concerns that the absence of the
inserting foam and reinforcements,
According to the petitioner, if the increasing rear deck offset, and moving polycarbonate lens ‘‘ruins the design of
exemption request is not granted, the the front bumper cut line as high and the body,’’ a result which customers
company would face a ‘‘virtually inboard as possible. However, were deemed unlikely to accept and
insurmountable problem’’ in terms of Koenigsegg stated that it has been which was expected to result in
funding and introducing a vehicle that unable to fully meet the requirements of decreased sales.5 Second, it was
meets all applicable U.S. requirements, part 581, for the following reasons. determined that an interim headlamp
and it might ultimately drive the First, the petitioner stated that without a polycarbonate lens would
company out of business because the extremely low vehicle height and have unacceptable aerodynamic effects
rest of the world export market would aerodynamic requirements for the which would negatively impact vehicle
be inadequate to ensure profitability. vehicle dictate that the standard 20-inch performance. Third, there were
Good faith efforts to comply. As stated pendulum height falls above the current concerns that by engineering an interim
above, Koenigsegg initially planned to bumper cut lines. In addition, the headlamp exclusively for the U.S.
produce vehicles for the European, Mid- company stated that packaging market, the company would lose the
East, and Far-East markets, but once it constraints for the structure required to advantages associated with producing a
was determined in 2005 that entry into fulfill the high-speed crash ‘‘world car’’ which can be introduced
the U.S. market was a necessary part of requirements of FMVSS No. 208 and the into any market, something of great
its business plan, the company invested requirements of the roof stowage under importance for an ultra-low-volume
over $3.2 million on research and the front hood dictate the maximum size manufacturer. In addition, Koenigsegg
development and tooling for its U.S. of the front bumpers. Koenigsegg argued determined that the cost of developing
CCX program. In 18 months, the that despite its good faith efforts, the interim headlamp could not be
company was able to bring the vehicle additional time will be required to justified when amortized over the small
into compliance with all applicable achieve full compliance with part 581, number of units involved.
NHTSA regulations (other than those and the company does not currently In light of the above, the company
which are the subject of the present have the resources to fund the requisite again stated that because of the cost and
exemption petition), as well as the development efforts. length of this project, such headlighting
emissions regulations administered by As to headlamps, Koenigsegg
the Environmental Protection Agency explained that it has undertaken 4 In an August 10, 2006 supplement to its

(EPA). significant efforts in pursuit of CCX application (included in this docket, following the
Koenigsegg petition), Koenigsegg stated that it may
In light of limited resources, the compliance with the headlamp have now identified a large lighting manufacturer
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petitioner stated that it was necessary to requirements of FMVSS No. 108, but interested in developing a FMVSS No. 108-
first develop the vehicle with a standard problems have stemmed from the compliant headlighting system for the CCX, but it
U.S. air bag system. The company company’s inability to find a supplier. would be ‘‘at a price higher than the $500,000 thus
far estimated.’’
reengineered the CCX with an Audi TT The petitioner stated that given the 5 The petitioner asserted that such considerations
driver air bag system and developed a unique shape of the CCX, there is no were a factor in the agency’s earlier decision to grnt
new passenger air bag system, a available ‘‘off-the-shelf’’ headlamp a ‘‘waiver’’ for the headlamp of the Lotus Elise.

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Federal Register / Vol. 71, No. 166 / Monday, August 28, 2006 / Notices 50977

efforts must await the second generation engineering and certain advanced safety DATES: You should submit your
of the U.S. CCX. features that are not required by the comments not later than September 12,
In short, Koenigsegg argued that, FMVSSs, including racing brakes with 2006.
despite good faith efforts, limited anti-lock capability and traction control. FOR FURTHER INFORMATION CONTACT: Mr.
resources prevent it from bringing the In addition, the company argued that Ed Glancy or Mr. Eric Stas, Office of the
vehicle into compliance with all the CCX has enhanced fuel efficiency Chief Counsel, NCC–112, National
applicable requirements, and it is due to its highly aerodynamic design. Highway Traffic Safety Administration,
beyond the company’s current 400 Seventh Street, SW., Room 5219,
capabilities to bring the vehicle into full V. Issuance of Notice of Final Action
Washington, DC 20590. Telephone:
compliance until such time as We are providing a 15-day comment (202) 366–2992; Fax: (202) 366–3820.
additional resources become available period, in light of the short period of Comments: We invite you to submit
as a result of U.S. sales. With funding time between now and the time the comments on the application described
from sale of the current generation of advanced air bag requirements become above. You may submit comments
U.S. CCX, the company expects that effective for small volume identified by docket number at the
additional development efforts could manufacturers (i.e., September 1, 2006). heading of this notice by any of the
start in 2007, thereby allowing After considering public comments and following methods:
production of a fully compliant vehicle other available information, we will • Web site: http://dms.dot.gov.
in late 2009. publish a notice of final action on the Follow the instructions for submitting
Koenigsegg argues that an exemption application in the Federal Register. comments on the DOT electronic docket
would be in the public interest. The
Issued on: August 18, 2006. site by clicking on ‘‘Help and
petitioner put forth several arguments in
Ronald L. Medford, Information’’ or ‘‘Help/Info.’’
favor of a finding that the requested
exemption is consistent with the public Senior Associate Administrator for Vehicle • Fax: 1–(202)–493–2251.
interest. Specifically, Koenigsegg argued Safety. • Mail: Docket Management Facility,
that the vehicle would be equipped with [FR Doc. E6–14247 Filed 8–25–06; 8:45 am] U.S. Department of Transportation, 400
a fully-compliant standard U.S. air bag BILLING CODE 4910–59–P Seventh Street, SW., Nassif Building,
system (i.e., one meeting the Room PL–401, Washington, DC 20590.
requirements of FMVSS No. 208 except • Hand Delivery: Room PL–401 on
for the advanced air bag requirements). DEPARTMENT OF TRANSPORTATION the plaza level of the Nassif Building,
As to headlamps, Koenigsegg stated that 400 Seventh Street, SW., Washington,
the CCX’s current headlamps (designed National Highway Traffic Safety DC, between 9 a.m. and 5 p.m., Monday
to European specifications) are very Administration through Friday, except Federal
close to meeting the photometric [Docket No. NHTSA–2006–25544, Notice 1] Holidays.
requirements of FMVSS No. 108, and • Federal eRulemaking Portal: Go to
consequently, they do not pose a safety SS II of America, Inc.; Receipt of http://www.regulations.gov. Follow the
risk. The petitioner stated that the CCX’s Application for a Temporary online instructions for submitting
carbonfibre body system should reduce Exemption From the Air Bag comments.
low-speed damage repair costs even in Requirements of FMVSS No. 208 Instructions: All submissions must
the absence of a conventional bumper include the agency name and docket
AGENCY: National Highway Traffic number or Regulatory Identification
that meets the requirements of part 581.
Safety Administration (NHTSA), Number (RIN) for this rulemaking. Note
However, the company stated that it
Department of Transportation (DOT). that all comments received will be
would also place information in the
vehicle owner’s manual regarding the ACTION: Notice of receipt of petition for posted without change to http://
need for greater care due to the absence temporary exemption from provisions of dms.dot.gov, including any personal
of a conventional bumper system. In all Federal Motor Vehicle Safety Standard information provided.
other areas, Koenigsegg emphasized that (FMVSS) No. 208, Occupant Crash Docket: For access to the docket in
the CCX will comply with applicable Protection. order to read background documents or
FMVSSs. comments received, go to http://
SUMMARY: In accordance with the dms.dot.gov at any time or to Room PL–
As additional bases for showing that
its requested exemption would be in the procedures in 49 CFR part 555, SS II of 401 on the plaza level of the Nassif
public interest, Koenigsegg offered the America, Inc. (SS II) has petitioned the Building, 400 Seventh Street, SW.,
following. The company asserted that agency for a temporary exemption from Washington, DC, between 9 a.m. and 5
there is consumer demand in the U.S. the air bag requirements of FMVSS No. p.m., Monday through Friday, except
for the CCX, and granting this 208. The basis for the application is that Federal Holidays.
application will allow the demand to be compliance would cause substantial Privacy Act: Anyone is able to search
met, thereby expanding consumer economic hardship to a manufacturer the electronic form of all comments
choice. The company also suggested that has tried in good faith to comply received into any of our dockets by the
another reason why granting the with the standard.1 name of the individual submitting the
exemption would not be expected to This notice of receipt of an comment (or signing the comment, if
have a significant impact on safety, application for temporary exemption is submitted on behalf of an association,
specifically because the vehicle is published in accordance with the business, labor union, etc.). You may
unlikely to be used extensively by statutory provisions of 49 U.S.C. review DOT’s complete Privacy Act
owners, due to its ‘‘sporty (second car) 30113(b)(2). NHTSA has made no Statement in the Federal Register
judgment on the merits of the
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nature.’’ Koenigsegg reasoned that given published on April 11, 2000 (Volume
its very low production volume and application. 65, Number 70; Pages 19477–78) or you
customer base, the possibility of any 1 To view the application, go to: http://
may visit http://dms.dot.gov.
child being in the vehicle is extremely dms.dot.gov/search/searchFormSimple.cfm and
We shall consider all comments
small. Finally, Koenigsegg indicated enter the docket number set fourth in the heading received before the close of business on
that the CCX incorporates advanced of this document. the comment closing date indicated

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