House panel backs bill prompted by Toyota saga

Toyota Motor Corporation President and CEO Akio Toyoda testifies on Toyota's car safety recalls in front of the House Committee on Oversight and Government Reform on Capitol Hill in Washington, February 24, 2010.

WASHINGTON (Reuters) - Legislation enhancing the power of regulators to force auto recalls, create rules to prevent unintended acceleration, and require quiet-running electric cars make some noise to ensure pedestrian safety is headed to the full U.S. House of Representatives.

Prompted by industry and regulatory shortcomings identified in the congressional investigation of recent Toyota Motor Corp recalls, the auto safety legislation -- the most sweeping in nearly a decade -- would increase caps on fines and mandate regulations for vehicle data recorders.

The House Energy and Commerce Committee approved the bill by a 31-21 margin on Wednesday, sending it to the full House for consideration.

A deal between committee Chairman Henry Waxman and Representative John Dingell, an industry ally, eased some portions of the bill and is expected to improve its chances of passage in the Democratic-led House.

Waxman's original bill would have removed the limit on government-imposed fines, now at $16.4 million. But the proposal adopted by the committee would cap civil penalties at $200 million.

Another change would let automakers weigh in on any plan by regulators to force a recall if the government considered a vehicle defect an imminent threat to safety.

The bill would also require automakers to equip quiet-running electric and hybrid cars with "alert sounds" that would alert blind and other pedestrians to their presence.

Motorists, under the proposed law, would be able to launch a court appeal if federal transportation regulators reject their petition for a formal investigation of a safety complaint.

The plan also mandates safety standards for vehicle electronics and unintended acceleration, including systems to ensure that vehicle brakes trump acceleration in all circumstances.

Toyota has recalled more than 8.5 million cars worldwide since last October, mainly for unintended acceleration in popular brands. Most of the recalls were in the United States.

The National Highway Traffic Safety Administration (NHTSA) is investigating reports that as many as 89 crash deaths since 2000 may be related to the acceleration problems.

A trade group representing major auto manufacturers, including General Motors Co, Ford Motor Co and Toyota, said changes to the original proposal have improved the bill but were not wholly satisfactory.

The Alliance of Automobile Manufacturers said the provision allowing judicial review for rejected safety petitions "will create more legal obstacles to road safety."

Republicans are expected to try and amend the legislation on the House floor, with some calling it too tough on an industry trying to regain its footing after a recession-driven downturn.

If it passes the House, the measure would have to be reconciled with similar legislation working its way through the Senate.

(Reporting by John Crawley; Editing by Tim Dobbyn and Steve Orlofsky)