Civil Penalties, 30051-30055 [05-10366]

Agencies

• National Highway Traffic Safety Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 70, Number 100 (Wednesday, May 25, 2005)]
[Proposed Rules]
[Pages 30051-30055]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-10366]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 578

[Docket No. NHTSA-05-21161; Notice 1]
RIN 2127-AJ62


Civil Penalties

AGENCY: National Highway Traffic Safety Administration (NHTSA), DOT

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document proposes to increase the maximum aggregate civil 
penalties for violations of statutes and regulations administered by 
NHTSA pertaining to odometer tampering and disclosure requirements and 
for vehicle theft protection violations. This action would be taken 
pursuant to the Federal Civil Monetary Penalty Inflation Adjustment Act 
of 1990, as amended by the Debt Collection Improvement Act of 1996, 
which requires us to review and, as warranted, adjust penalties based 
on inflation at least every four years.

DATES: Comments on the proposal are due July 25, 2005.
    Proposed effective date: 30 days after date of publication of the 
final rule in the Federal Register.

ADDRESSES: You may submit comments by any of the following methods:
     Web site: https://dms.dot.gov. Follow the instructions for 
submitting comments on the DOT electronic docket site.
     Fax: 1-202-493-2251.
     Mail: Docket Management Facility; U.S. Department of 
Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, 
Washington, DC 20590.
     Hand Delivery: Room PL-401 on the plaza level of the 
Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 
a.m. and 5 p.m., Monday through Friday, except Federal Holidays.
     Federal eRulemaking Portal: Go to https://
www.regulations.gov. Follow the online instructions for submitting 
comments.
    Instructions: All submissions must include the agency name and 
docket number or Regulatory Identification Number (RIN) for this 
rulemaking. For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the Request for 
Comments heading of the Supplementary Information section of this 
document. Note that all comments received will be posted without change 
to https://dms.dot.gov, including any personal information provided. 
Please see the Privacy Act heading under Rulemaking Analyses and 
Notices.
    Docket: For access to the docket to read background documents or 
comments received, go to https://dms.dot.gov at any time or to Room PL-
401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., 
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, 
except Federal Holidays.

FOR FURTHER INFORMATION CONTACT: Michael Kido, Office of Chief Counsel, 
NHTSA, telephone (202) 366-5263, facsimile (202) 366-3820, 400 Seventh 
Street, SW., Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

Background

    In order to preserve the remedial impact of civil penalties and to 
foster compliance with the law, the Federal Civil Monetary Penalty 
Inflation Adjustment Act of 1990 (28 U.S.C. 2461 Notes, Pub. L. 101-
410), as amended by the Debt Collection Improvement Act of 1996, Pub. 
L. 104-134) (referred to collectively as the ``Adjustment Act'' or, in 
context, the ``Act''), requires us and other Federal agencies to 
regularly adjust civil penalties for inflation. Under the Adjustment 
Act, following an initial adjustment that was capped by the Act, these 
agencies must make further adjustments, as warranted, to the amounts of 
penalties in statutes they administer at least once every four years.
    NHTSA's initial adjustment of civil penalties under the Adjustment 
Act was published on February 4, 1997. 62 FR 5167. At that time, we 
codified the adjustments in 49 CFR part 578, Civil Penalties. On July 
14, 1999, we further adjusted certain penalties involving odometer 
requirements and disclosure, consumer information, motor vehicle 
safety, and bumper standards. 64 FR 37876.
    On August 7, 2001, we also adjusted certain penalty amounts 
pertaining to odometer requirements and disclosure and vehicle theft 
prevention. 66 FR 41149. In addition to increases in authorized 
penalties under the Adjustment Act, the Transportation Recall 
Enhancement, Accountability, and Documentation (``TREAD'') Act 
increased penalties under the National Traffic and Motor Vehicle Safety 
Act as

[[Page 30052]]

amended (sometimes referred to as the ``Motor Vehicle Safety Act''). We 
codified those amendments on November 14, 2000. 65 FR 68108. Most 
recently, on September 28, 2004, we adjusted the maximum penalty 
amounts for a related series of violations involving the agency's 
vehicle safety, bumper standards, and consumer information provisions. 
69 FR 57864.
    We have reviewed the civil penalty amounts authorized in part 578 
and propose in this notice to adjust those penalties where warranted 
under the Adjustment Act. Those civil penalties that we are proposing 
to adjust address violations pertaining to odometer tampering and 
disclosure requirements and to vehicle theft protection provisions.

Method of Calculation

    Under the Adjustment Act, we determine the inflation adjustment for 
each applicable civil penalty by increasing the maximum civil penalty 
amount per violation by a cost-of-living adjustment, and then applying 
a rounding factor. Section 5(b) of the Adjustment Act defines the 
``cost-of-living'' adjustment as:
    The percentage (if any) for each civil monetary penalty by which--
    (1) The Consumer Price Index for the month of June of the calendar 
year preceding the adjustment exceeds
    (2) the Consumer Price Index for the month of June of the calendar 
year in which the amount of such civil monetary penalty was last set or 
adjusted pursuant to law.
    Since the proposed adjustment is intended to be effective before 
December 31, 2005, the ``Consumer Price Index [CPI] for the month of 
June of the calendar year preceding the adjustment'' would be the CPI 
for June 2004. This figure, based on the Adjustment Act's requirement 
of using the CPI ``for all-urban consumers published by the Department 
of Labor'' is 568.2.\1\ The penalty amounts that NHTSA seeks to adjust 
based on the Act's requirements were last adjusted in 2001 for the 
odometer tampering and disclosure and vehicle theft protection 
provisions. The CPI figure for June 2001 is 533.3. Accordingly, the 
factor that we are using in calculating the proposed increases is 1.07 
(568.2/533.3) for violations involving the odometer tampering and 
disclosure and vehicle theft protection provisions. Using 1.07 as the 
inflation factor, calculated increases under these adjustments are then 
subject to a specific rounding formula set forth in Section 5(a) of the 
Adjustment Act. 28 U.S.C. 2461, Notes. Under that formula:
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    \1\ Individuals interested in deriving the CPI figures used by 
the agency may visit the Department of Labor's Consumer Price Index 
Home Page at https://www.bls.gov/cpi/home.htm. Scroll down to ``Most 
Requested Statistics'' and select the ``All Urban Consumers (Current 
Series)'' option, select the ``U.S. ALL ITEMS 1967=100--
CUUR0000AA0'' box, and click on the ``Retrieve Data'' button.
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    Any increase shall be rounded to the nearest
    (1) multiple of $10 in the case of penalties less than or equal to 
$100;
    (2) multiple of $100 in the case of penalties greater than $100 but 
less than or equal to $1,000;
    (3) multiple of $1,000 in the case of penalties greater than $1,000 
but less than or equal to $10,000;
    (4) multiple of $5,000 in the case of penalties greater than 
$10,000 but less than or equal to $100,000;
    (5) multiple of $10,000 in the case of penalties greater than 
$100,000 but less than or equal to $200,000; and
    (6) multiple of $25,000 in the case of penalties greater than 
$200,000.

Review of Civil Penalties Prescribed by Section 578.6

    Section 578.6 contains the civil penalties authorized for the 
statutes that we enforce. We have reviewed these penalties, applied the 
formula using the appropriate CPI figures, considered the nearest 
higher multiple specified in the rounding provisions, and tentatively 
concluded that only the penalties discussed below may be increased.

Odometer Tampering and Disclosure, 49 U.S.C. Chapter 327 (49 CFR 
578.6(f)(1))

    The maximum civil penalty for a related series of violations of 49 
U.S.C. Sec.  32709 is $120,000, as specified in 49 CFR 578.6(f)(1). 
Applying the appropriate inflation factor (1.07) to the calculation 
raises this figure to $128,400, an increase of $8,400. Under the 
rounding formula, any increase in a penalty's amount shall be rounded 
to the nearest multiple of $10,000 in the case of penalties greater 
than $100,000. In this case, the increase would be $10,000. 
Accordingly, we propose that Section 578.6(f)(1) be amended to increase 
the maximum civil penalty to $130,000 for a related series of odometer 
tampering and disclosure violations. However, the maximum civil penalty 
for a single violation remains at $2,200 because the inflation-adjusted 
figure is not yet at a level to be increased. Similarly, the penalty 
amount prescribed in Section 578.6(f)(2) for a violation that involves 
the intent to defraud (the greater of three times actual damages or 
$2,000) remains the same.

Vehicle Theft Protection, 49 U.S.C. Chapter 331 (Section 578.6(g)(1)-
(2))

    Under 49 CFR 578.6(g)(1), the maximum civil penalty for a related 
series of violations of 49 U.S.C. 33114(a)(1)-(4) is $300,000. Applying 
the appropriate inflation factor (1.07) raises this figure to $321,000, 
which is an increase of $21,000. Under the formula, any increase in a 
penalty's amount shall be rounded to the nearest multiple of $25,000 in 
the case of penalties greater than $200,000. In this instance, the 
rounding rules provide for an increase of $25,000. Accordingly, we 
propose that Section 578.6(g)(1) be amended to increase the maximum 
civil penalty to $325,000 for a related series of violations that 
pertain to NHTSA's vehicle theft protection provisions found at 49 
U.S.C. 33114(a)(1)-(4).
    With regard to the maximum penalty for a single violation of 49 
U.S.C. 33114(a)(5), as provided in 49 CFR 578.6(g)(2), applying the 
appropriate inflation factor (1.07) raises this amount to $128,400, an 
increase of $8,400. Using the rounding formula, which dictates rounding 
to the nearest $10,000 for penalty amounts greater than $100,000 but 
less than or equal to $200,000, the new adjusted amount changes to 
$130,000. Accordingly, we propose to amend the maximum civil penalty 
for a single daily violation of Section 578.6(g)(2) to $130,000.
    However, the maximum penalty for a single violation of 49 U.S.C. 
33114(a)(1)-(4) remains at $1,100 because the inflation-adjusted figure 
is not yet at a level to be increased.

Other Issues--Technical Correction

    Finally, the agency is proposing to amend the language in Section 
578.6(g)(2) to achieve consistency within the text of the regulation. 
Specifically, the word ``government'' after ``United States'' will be 
capitalized to reflect that word's usage within other parts of Section 
578.6.

Effective Date

    The amendments would be effective 30 days after publication of the 
final rule in the Federal Register. The adjusted penalties would apply 
to violations occurring on and after the effective date.

Request for Comments

How Do I Prepare and Submit Comments?

    Your comments must be written and in English. To ensure that your 
comments are correctly filed in the Docket, please include the docket

[[Page 30053]]

number of this document in your comments.
    Your comments must not be more than 15 pages long (49 CFR 553.21). 
We established this limit to encourage you to write your primary 
comments in a concise fashion. However, you may attach necessary 
additional documents to your comments. There is no limit on the length 
of the attachments.
    Please submit two copies of your comments, including the 
attachments, to Docket Management at the beginning of this document, 
under ADDRESSES. You may also submit your comments electronically to 
the docket following the steps outlined under ADDRESSES.

How Can I Be Sure That My Comments Were Received?

    If you wish Docket Management to notify you upon its receipt of 
your comments, enclose a self-addressed, stamped postcard in the 
envelope containing your comments. Upon receiving your comments, Docket 
Management will return the postcard by mail.

How Do I Submit Confidential Business Information?

    If you wish to submit any information under a claim of 
confidentiality, you should submit the following to the Chief Counsel 
(NCC-110) at the address given at the beginning of this document under 
the heading FOR FURTHER INFORMATION CONTACT: (1) A complete copy of the 
submission; (2) a redacted copy of the submission with the confidential 
information removed; and (3) either a second complete copy or those 
portions of the submission containing the material for which 
confidential treatment is claimed and any additional information that 
you deem important to the Chief Counsel's consideration of your 
confidentiality claim. A request for confidential treatment that 
complies with 49 CFR part 512 must accompany the complete submission 
provided to the Chief Counsel. For further information, submitters who 
plan to request confidential treatment for any portion of their 
submissions are advised to review 49 CFR part 512, particularly those 
sections relating to document submission requirements. Failure to 
adhere to the requirements of Part 512 may result in the release of 
confidential information to the public docket. In addition, you should 
submit two copies from which you have deleted the claimed confidential 
business information, to Docket Management at the address given at the 
beginning of this document under ADDRESSES.

Will the Agency Consider Late Comments?

    We will consider all comments that Docket Management receives 
before the close of business on the comment closing date indicated at 
the beginning of this notice under DATES. In accordance with our 
policies, to the extent possible, we will also consider comments that 
Docket Management receives after the specified comment closing date. If 
Docket Management receives a comment too late for us to consider in 
developing the proposed rule, we will consider that comment as an 
informal suggestion for future rulemaking action.

How Can I Read the Comments Submitted by Other People?

    You may read the comments received by Docket Management at the 
address and times given near the beginning of this document under 
ADDRESSES.
    You may also see the comments on the Internet. To read the comments 
on the Internet, take the following steps:
    (1) Go to the Docket Management System (DMS) Web page of the 
Department of Transportation (https://dms.dot.gov/).
    (2) On that page, click on ``search.''
    (3) On the next page (https://dms.dot.gov/search/), type in the 
four-digit docket number shown at the heading of this document. 
Example: if the docket number were ``NHTSA-2001-1234,'' you would type 
``1234.''
    (4) After typing the docket number, click on ``search.''
    (5) The next page contains docket summary information for the 
docket you selected. Click on the comments you wish to see.
    You may download the comments. The comments are imaged documents, 
in either TIFF or PDF format. Please note that even after the comment 
closing date, we will continue to file relevant information in the 
Docket as it becomes available. Further, some people may submit late 
comments. Accordingly, we recommend that you periodically search the 
Docket for new material.

Rulemaking Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

    We have considered the impact of this rulemaking action under 
Executive Order 12866 and the Department of Transportation's regulatory 
policies and procedures. This rulemaking document was not reviewed 
under Executive Order 12866, ``Regulatory Planning and Review.'' This 
action is limited to the proposed adoption of adjustments of civil 
penalties under statutes that the agency enforces, and has been 
determined to be not ``significant'' under the Department of 
Transportation's regulatory policies and procedures.

Regulatory Flexibility Act

    We have also considered the impacts of this notice under the 
Regulatory Flexibility Act. I certify that a final rule based on this 
proposal will not have a significant economic impact on a substantial 
number of small entities. The following provides the factual basis for 
this certification under 5 U.S.C. 605(b). The proposed amendments 
almost entirely potentially affect manufacturers of motor vehicles and 
motor vehicle equipment.
    The Small Business Administration's regulations define a small 
business in part as a business entity ``which operates primarily within 
the United States.'' 13 CFR 121.105(a). SBA's size standards were 
previously organized according to Standard Industrial Classification 
(``SIC'') Codes. SIC Code 336211 ``Motor Vehicle Body Manufacturing'' 
applied a small business size standard of 1,000 employees or fewer. SBA 
now uses size standards based on the North American Industry 
Classification System (``NAICS''), Subsector 336--Transportation 
Equipment Manufacturing, which provides a small business size standard 
of 1,000 employees or fewer for automobile manufacturing businesses. 
Other motor vehicle-related industries have lower size requirements 
that range between 500 and 750 employees.\2\
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    \2\ For example, according to the new SBA coding system, 
businesses that manufacture truck trailers, travel trailers/campers, 
carburetors, pistons, piston rings, valves, vehicular lighting 
equipment, motor vehicle seating/interior trim, and motor vehicle 
stamping qualify as small businesses if they employ 500 or fewer 
employees. Similarly, businesses that manufacture gasoline engines, 
engine parts, electrical and electronic equipment (non-vehicle 
lighting), motor vehicle steering/suspension components (excluding 
springs), motor vehicle brake systems, transmissions/power train 
parts, motor vehicle air-conditioning, and all other motor vehicle 
parts qualify as small businesses if they employ 750 or fewer 
employees. See https://www.sba.gov/size/sizetable.pdf for further 
details.
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    Many small businesses are subject to the penalty provisions of 49 
U.S.C. Chapters 327 (odometer disclosure and tampering) or 331 (vehicle 
theft protection) and therefore may be affected by the adjustments that 
this NPRM proposes to make. For example, based on comprehensive 
reporting pursuant to the early warning reporting (EWR) rule under the 
Motor Vehicle Safety Act, 49 CFR Part 579, of the more than 60 light 
vehicle manufacturers reporting, over half are small

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businesses. Additionally, many of the roughly 80 manufacturers of 
medium-heavy medium heavy vehicles and buses, the more than 200 trailer 
manufacturers, and the approximately 12 motorcycle manufacturers 
providing comprehensive EWR reports are small businesses. Also, there 
are other, relatively low production light vehicle manufacturers that 
are not subject to comprehensive EWR reporting. There are approximately 
15 manufacturers of child restraints and over 20 tire manufacturers 
that are reporting pursuant to the EWR rule. Also, there are numerous 
other low-volume specialty tire manufacturers that do not provide 
comprehensive EWR reports. Furthermore, there are about 130 registered 
importers. Equipment manufacturers are also subject to penalties under 
49 U.S.C. 30165.
    The odometer tampering and disclosure and vehicle theft protection 
statutes addressed by this proposal cover passenger motor vehicles, 
which are within the compass of the Motor Vehicle Safety Act. As a 
result, the discussion of the numbers and sizes of light vehicle 
manufacturers above also covers those statutes.
    As noted throughout this preamble, this proposed rule would only 
increase the maximum penalty amounts that the agency could obtain for 
violations of provisions related to the odometer and theft protection 
provisions enforced by NHTSA. The proposed rule does not set the amount 
of penalties for any particular violation or series of violations. 
Under the vehicle theft protection statute, the penalty provision 
requires the agency to take into account the size of a business when 
determining the appropriate penalty in an individual case. See 49 
U.S.C. 33115(a)(3) (vehicle theft protection--entity's size shall be 
considered). While the odometer disclosure and tampering statutory 
penalty provision does not specifically require the agency to consider 
the size of the business, the statute requires the agency to consider 
the impact of the penalty on an entity's ability to continue doing 
business. 49 U.S.C. 32709(a)(3)(B). The agency would also consider 
business size under its civil penalty policy when determining the 
appropriate civil penalty amount. See 62 FR 37115 (July 10, 1997) 
(NHTSA's civil penalty policy under the Small Business Regulatory 
Enforcement Fairness Act (``SBREFA'')). The penalty adjustments that 
are being proposed would not affect our civil penalty policy under 
SBREFA. As a matter of policy, we intend to continue to consider the 
appropriateness of the penalty amount to the size of the business 
charged.
    Since this regulation would not establish penalty amounts, this 
proposal will not have a significant economic impact on small 
businesses.
    Further, small organizations and governmental jurisdictions would 
not be significantly affected as the price of motor vehicles and 
equipment ought not to change as the result of this proposed rule. As 
explained above, this action is limited to the proposed adoption of a 
statutory directive, and has been determined to be not ``significant'' 
under the Department of Transportation's regulatory policies and 
procedures.

Executive Order 13132 (Federalism)

    Executive Order 13132 requires NHTSA to develop an accountable 
process to ensure ``meaningful and timely input by State and local 
officials in the development of regulatory policies that have 
federalism implications.'' ``Policies that have federalism 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.'' Under Executive Order 13132, the agency may not issue a 
regulation with Federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute, unless 
the Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments, the agency 
consults with State and local governments, or the agency consults with 
State and local officials early in the process of developing the 
proposed regulation. NHTSA also may not issue a regulation with 
Federalism implications and that preempts State law unless the agency 
consults with State and local officials early in the process of 
developing the proposed regulation.
    We have analyzed this proposed rule in accordance with the 
principles and criteria set forth in Executive Order 13132 and have 
determined that this proposal does not have sufficient Federal 
implications to warrant consultation with State and local officials or 
the preparation of a Federalism summary impact statement. The proposal 
would not have any substantial impact on the States, or on the current 
Federal-State relationship, or on the current distribution of power and 
responsibilities among the various local officials.

Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995, Pub. L. 104-4, requires 
agencies to prepare a written assessment of the cost, benefits and 
other effects of proposed or final rules that include a Federal mandate 
likely to result in the expenditure by State, local, or tribal 
governments, in the aggregate, or by the private sector, of more than 
$100 million annually. Because this rule will not have a $100 million 
effect, no Unfunded Mandates assessment will be prepared.

National Environmental Policy Act

    We have also analyzed this rulemaking action under the National 
Environmental Policy Act and determined that it has no significant 
impact on the human environment.

Executive Order 12778 (Civil Justice Reform)

    This proposed rule does not have a retroactive or preemptive 
effect. Judicial review of a rule based on this proposal may be 
obtained pursuant to 5 U.S.C. 702. That section does not require that a 
petition for reconsideration be filed prior to seeking judicial review.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1980, we state 
that there are no requirements for information collection associated 
with this rulemaking action.

Privacy Act

    Please note that anyone is able to search the electronic form of 
all comments received into any of our dockets by the name of the 
individual submitting the comment (or signing the comment, if submitted 
on behalf of an association, business, labor union, etc.). You may 
review DOT's complete Privacy Act Statement in the Federal Register 
published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78), or 
you may visit https://dms.dot.gov.

List of Subjects in 49 CFR Part 578

    Imports, Motor vehicle safety, Motor vehicles, Penalties, Rubber 
and rubber products, Tires.

    1. The authority citation for 49 CFR Part 578 would continue to 
read as follows:

    Authority: Pub. L. 101-410, Pub. L. 104-134, 49 U.S.C. 30165, 
30170, 30505, 32308, 32309, 32507, 32709, 32710, 32912, and 33115; 
delegation of authority at 49 CFR 1.50.

    2. Section 578.6 would be amended by revising paragraphs (f)(1), 
(g)(1), and (g)(2) to read as follows:

[[Page 30055]]

PART 578--CIVIL AND CRIMINAL PENALTIES


Sec.  578.6  Civil penalties for violations of specified provisions of 
Title 49 of the United States Code.

* * * * *
    (f) Odometer tampering and disclosure. (1) A person that violates 
49 U.S.C. Chapter 327 or a regulation prescribed or order issued 
thereunder is liable to the United States Government for a civil 
penalty of not more than $2,200 for each violation. A separate 
violation occurs for each motor vehicle or device involved in the 
violation. The maximum civil penalty under this paragraph for a related 
series of violations is $130,000.
* * * * *
    (g) Vehicle theft protection. (1) A person that violates 49 U.S.C. 
33114(a)(1)-(4) is liable to the United States Government for a civil 
penalty of not more than $1,100 for each violation. The failure of more 
than one part of a single motor vehicle to conform to an applicable 
standard under 49 U.S.C. 33102 or 33103 is only a single violation. The 
maximum penalty under this paragraph for a related series of violations 
is $325,000.
    (2) A person that violates 49 U.S.C. 33114(a)(5) is liable to the 
United States Government for a civil penalty of not more than $130,000 
a day for each violation.
* * * * *

    Issued on: May 19, 2005.
Jacqueline Glassman,
Chief Counsel.
[FR Doc. 05-10366 Filed 5-24-05; 8:45 am]
BILLING CODE 4910-59-P