Petition for Approval of Alternate; Odometer Disclosure Requirements, 48101-48116 [2011-19920]

Agencies

• National Highway Traffic Safety Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 76, Number 152 (Monday, August 8, 2011)]
[Proposed Rules]
[Pages 48101-48116]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-19920]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 580

[Docket No. NHTSA-2011-0109; Notice 1]


Petition for Approval of Alternate; Odometer Disclosure 
Requirements

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

ACTION: Notice of initial determination.

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SUMMARY: The State of Florida has petitioned for approval of alternate 
odometer requirements to certain requirements under Federal odometer 
law. NHTSA preliminarily grants Florida's petition regarding proposed 
alternate disclosure requirements for vehicle transfers involving 
casual or private sales. NHTSA preliminarily denies Florida's petition 
regarding proposed alternate disclosure requirements for sales 
involving licensed dealers. NHTSA preliminarily denies Florida's 
petition regarding proposed alternate disclosure requirements for sales 
of leased vehicles.

DATES: Comments are due no later than September 7, 2011.

ADDRESSES: You may submit comments [identified by DOT Docket ID Number 
NHTSA-2010-] by any of the 
following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the online instructions for submitting 
comments.
     Mail: Docket Management Facility: U.S. Department of 
Transportation, 1200 New Jersey Avenue, SE., West Building Ground 
Floor, Room W12-140, Washington, DC 20590-0001.
     Hand Delivery or Courier: West Building Ground Floor, Room 
W12-140, 1200 New Jersey Avenue, SE., between 9 a.m. and 5 p.m. E.T., 
Monday through Friday, except Federal holidays.
     Fax: 202-493-2251.
    Instructions: For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the Public 
Participation heading of the SUPPLEMENTARY INFORMATION section of this 
document. Note that all comments received will be posted

[[Page 48102]]

without change to https://www.regulations.gov, including any personal 
information provided. Please see the Privacy Act heading below.
    Privacy Act: 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 (65 FR 19477-78) or you may visit https://DocketInfo.dot.gov.
    Docket: For access to the docket to read background documents or 
comments received, go to https://www.regulations.gov or the street 
address listed above. Follow the online instructions for accessing the 
dockets.

FOR FURTHER INFORMATION CONTACT: Otto Matheke, Office of the Chief 
Counsel, National Highway Traffic Safety Administration, 1200 New 
Jersey Avenue, SE., West Building W41-227, Washington, DC 20590 
(Telephone: 202-366-5263) (Fax: 202-366-3820).

SUPPLEMENTARY INFORMATION:

I. Introduction

    Federal odometer law, which is largely based on the Motor Vehicle 
Information and Cost Savings Act (Cost Savings Act) \1\ and Truth in 
Mileage Act of 1986, as amended (TIMA),\2\ contains a number of 
provisions to limit odometer fraud and assure that the buyer of a motor 
vehicle knows the true mileage of the vehicle. The Cost Savings Act 
requires the Secretary of Transportation to promulgate regulations 
requiring the transferor (seller) of a motor vehicle to provide a 
written statement of the vehicle's mileage registered on the odometer 
to the transferee (buyer) in connection with the transfer of ownership. 
This written statement is generally referred to as the odometer 
disclosure statement. Further, under TIMA, vehicle titles themselves 
must have a space for the odometer disclosure statement and States are 
prohibited from licensing vehicles unless a valid odometer disclosure 
statement on the title is signed and dated by the transferor. Titles 
must also be printed by a secure process. With respect to leased 
vehicles, TIMA provides that the regulations promulgated by the 
Secretary require written mileage disclosures be made by lessees to 
lessors upon the lessor's transfer of the ownership of the leased 
vehicle. Lessors must also provide written notice to lessees about 
odometer disclosure requirements and the penalties for not complying 
with them. Federal law also contains document retention requirements 
for odometer disclosure statements.
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    \1\ Public Law 92-513, 86 Stat. 947, 961 (1972).
    \2\ Public Law 99-579, 100 Stat. 3309 (1986).
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    TIMA's motor vehicle mileage disclosure requirements apply in a 
State unless the State has alternate requirements approved by the 
Secretary. The Secretary has delegated administration of the odometer 
program to NHTSA. Therefore, a State may petition NHTSA for approval of 
such alternate odometer disclosure requirements.
    Seeking to implement an electronic vehicle title transfer system, 
the State of Florida has petitioned for approval of alternate odometer 
disclosure requirements. In 2009, NHTSA reviewed certain requirements 
for alternative state programs and approved the Commonwealth of 
Virginia's alternate odometer disclosure program. 74 FR 643, 650 
(January 7, 2009). Florida's program is similar to Virginia's program 
in some respects and appears broader in scope than Virginia's in 
others. Like Virginia's program, the scope of Florida's proposed 
program does not include transactions involving an out-of-state party. 
Unlike Virginia's program, Florida's proposed program encompasses 
transactions involving leased vehicles and odometer disclosures by 
power of attorney. In addition, Florida's proposed program would use 
different mechanisms to document mileage than Virginia's.
    As discussed below, NHTSA's initial assessment is that the portions 
of Florida's proposed program involving private sales satisfy the 
requirements for approval under Federal odometer law, while other 
portions involving transfers between individual owners and dealers, 
transfers of leased vehicles and transfers in which a power of attorney 
is used for purposes of mileage disclosure, do not.

II. Statutory Background

    NHTSA recently reviewed the statutory background of Federal 
odometer law in its consideration and approval of Virginia's petition 
for alternate odometer disclosure requirements. See 73 FR 35617 (June 
24, 2008) and 74 FR 643 (January 7, 2009). The statutory background of 
the Cost Savings Act and TIMA and the purposes behind TIMA, as they 
relate to odometer disclosure, other than in the transfer of leased 
vehicles and vehicles subject to liens where a power of attorney is 
used in the disclosure, are discussed at length in NHTSA's Final 
Determination granting Virginia's petition. 74 FR 643, 647-48. A brief 
summary of the statutory background of Federal odometer law and the 
purposes of TIMA, including odometer disclosure requirements for leased 
vehicles, follows.
    In 1972, Congress enacted the Cost Savings Act, among other things, 
to prohibit tampering with odometers on motor vehicles and to establish 
certain safeguards for the protection of buyers with respect to the 
sale of motor vehicles having altered or reset odometers. See Public 
Law 92-513, Sec.  401, 86 Stat. 947, 961-63 (1972). The Cost Savings 
Act required that, under regulations to be published by the Secretary, 
the transferor of a motor vehicle provide a written vehicle mileage 
disclosure to the transferee, prohibited odometer tampering and 
provided for enforcement. See id, Sec.  408.\3\ In general, the purpose 
for the disclosure was to assist buyers to know the true mileage of a 
motor vehicle.
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    \3\ Section 408 stated:
    (a) Not later than 90 days after the date of enactment of this 
Act, the Secretary shall prescribe rules requiring any transferor to 
give the following written disclosure to the transferee in 
connection with the transfer of ownership of a motor vehicle:
    (1) Disclosure of the cumulative mileage registered on the 
odometer.
    (2) Disclosure that the actual mileage is unknown, if the 
odometer reading is known to the transferor to be different from the 
number of miles the vehicle has actually traveled.
    Such rules shall prescribe the manner in which information shall 
be disclosed under this section and in which such information shall 
be retained.
    (b) It shall be a violation of this section for any transferor 
to violate any rules under this section or to knowingly give a false 
statement to a transferee in making any disclosure required by such 
rules.
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    A major shortcoming of the odometer provisions of the Cost Savings 
Act was their failure to require that the odometer disclosure statement 
be on the vehicle's title. In a number of States, the disclosures were 
on separate documents that could be easily altered or discarded and did 
not travel with the title. See 74 FR 644. Consequently, the disclosure 
statements did not necessarily deter odometer fraud employing altered 
documents, discarded titles, and title washing. Id.
    Another significant shortcoming involved leased vehicles. The 
lessor is considered the transferor of the vehicle in leased vehicle 
sales. Titles to leased vehicles are often transferred without the 
lessor obtaining possession of the vehicle. Lessors without direct 
access to their vehicles had to rely solely on their lessees to provide 
actual mileage information. However, lessees had no obligation to 
provide actual mileage information to lessors upon vehicle transfer. 
This environment facilitated roll backs of odometers.

[[Page 48103]]

    Congress enacted TIMA in 1986 to address the Cost Savings Act's 
shortcomings. It amended the Cost Savings Act by adding section 408(d) 
to prohibit States from licensing vehicles unless the new owner 
(transferee) submitted a title from the seller (transferor) containing 
the seller's signed and dated vehicle mileage statement. See Public Law 
99-579, 100 Stat. 3309 (1986); 74 FR 644 (Jan. 7, 2009). TIMA also 
prohibits the licensing of vehicles, for use in any State, unless the 
title issued to the transferee is printed using a secure printing 
process or other secure process, indicates the vehicle mileage at the 
time of transfer and contains additional space for a subsequent mileage 
disclosure by the transferee when it is sold again. Id.
    TIMA also added section 408(e) to the Cost Savings Act to require 
the Secretary to issue regulations regarding odometer disclosures for 
leased vehicles.\4\ The regulations promulgated by the Secretary were 
to require written mileage disclosures by lessees to lessors upon the 
lessor's transfer of the ownership of the leased vehicle. Lessors must 
also provide written notice to lessees about the odometer disclosure 
requirements and the penalties for not complying with them. Federal law 
also contains document retention requirements for odometer disclosure 
statements. TIMA required lessors to retain disclosures made by lessees 
for at least four years following the date that the lessor transfers 
that vehicle.\5\ Id.
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    \4\ TIMA amended the Cost Savings Act to add section 408(e):
    (e)(1) In the case of any leased motor vehicle, the rules under 
subsection (a) shall require written disclosure regarding mileage to 
be made by the lessee to the lessor upon the lessor's transfer of 
ownership of the leased motor vehicle.
    (2) Under such rules, the lessor of a leased motor vehicle shall 
provide written notice to the lessee regarding
    (A) Such mileage disclosure requirements, and
    (B) The penalties for failure to comply with them.
    (3) The lessor shall retain the disclosure made by any lessee 
with respect to any motor vehicle under paragraph (1) For a period 
of at least 4 years following the date the lessor transfers that 
vehicle.
    (4) For purposes of this section, if the lessor transfers 
ownership of any leased motor vehicle without obtaining possession 
of such vehicle, the lessor may, in making the disclosure required 
by subsection (a), Indicate on the title the mileage disclosed by 
the lessee under paragraph (1) Unless the lessor has reason to 
believe that such disclosure by the lessee does not reflect the 
actual mileage of the vehicle.
    \5\ Regulations implementing TIMA were published on August 5, 
1988. 53 FR 29864. Federal regulations require lessors to retain 
odometer disclosure statements received from lessees for a period of 
five years. 49 CFR 580.8(b).
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    TIMA added a provision to the Cost Savings Act allowing States to 
have alternate odometer disclosure requirements with the approval of 
the Secretary of Transportation. Section 408(f) of the Cost Savings Act 
states that the odometer disclosure requirements of subsections (d) and 
(e)(1) shall apply in a State unless the State has in effect alternate 
motor vehicle mileage disclosure requirements approved by the 
Secretary. Section 408(f)(2) further states that the Secretary shall 
approve alternate motor vehicle mileage disclosure requirements 
submitted by a State unless the Secretary determines that such 
requirements are not consistent with the purpose of the disclosure 
required by subsection (d) or (e), as the case may be.
    In 1988, Congress amended section 408(d)(1) of the Cost Savings Act 
to permit the use of a secure power of attorney for purposes of 
odometer mileage disclosure in circumstances where the title was held 
by a lienholder, if allowed by state law. Public Law 100-561 Sec.  40, 
102 Stat. 2805, 2817 (1988). Congress required NHTSA to issue a rule 
ensuring that disclosures be made on the power of attorney document of 
the actual mileage at the time of transfer and that the mileage be 
restated exactly by the person exercising power of attorney on the 
title in the space therefor. Id. The rule, consistent with the purposes 
of the Act and the need to facilitate enforcement thereof, was to 
prescribe that the power of attorney form be issued by the State to the 
transferee using a secure process, as provided for titles, and provide 
for retention of a copy with the original submitted back to the State. 
Id. In 1989, NHTSA implemented the 1988 statutory amendments by 
promulgating amendments to the odometer disclosure regulations, 
providing that a transferor may give a secure power of attorney to a 
transferee for the purpose of mileage disclosure in two circumstances--
when the transferor's title is physically held by a lienholder or when 
the title is lost. In either instance, use of a power of attorney 
document for mileage disclosure is permissible only if otherwise 
permitted by State law.\6\
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    \6\ Regulations implementing the amendment were published on 
August 30, 1989. 54 FR 35879. The regulations addressed numerous 
aspects of disclosure by power of attorney, including the form, 
certification by the person exercising the power of attorney, and 
access of the transferee to prior title and power of attorney 
documents.
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    In 1990, Congress again amended section 408(d) of the Cost Savings 
Act.\7\ The amendment provided that the rule adopted under the 1988 
amendment not require that a vehicle be titled in the State in which 
the power of attorney was issued and addressed retention of powers of 
attorneys by States. See Public Law 101-641 Sec.  7(a), 104 Stat. 4654, 
4657 (1990).\8\
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    \7\ Section 7(a) of Public Law 101-641 directed that the third 
sentence of subsection (d)(2)(C) be amended. However, there was no 
subsection (d)(2)(C) in section 408. The amendment was restated as 
amending the third sentence of subsection (d)(1)(C) as the probable 
intent of Congress. This amendment is currently codified at 49 
U.S.C. 32705(b)(2)(A).
    \8\ Regulations implementing this amendment were published on 
September 20, 1991. 56 FR 47681.
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    In 1994, in the course of the recodification of various laws 
pertaining to the Department of Transportation, the Cost Savings Act, 
as amended, was repealed, reenacted and recodified without substantive 
change. See Public Law 103-272, 108 Stat. 745, 1048-1056, 1379, 1387 
(1994). The odometer statute is now codified at 49 U.S.C. 32701 et seq. 
In particular, Section 408(a) of the Cost Savings Act was recodified at 
49 U.S.C. 32705(a). Sections 408(d) and (e), which were added by TIMA 
(and later amended), were recodified at 49 U.S.C. 32705(b) and (c). The 
provisions pertaining to approval of State alternate motor vehicle 
mileage disclosure requirements were recodified at 49 U.S.C. 32705(d).

III. Statutory Purposes

    As discussed above, the Cost Savings Act, as amended by TIMA in 
1986, states that NHTSA ``shall approve alternate motor vehicle mileage 
disclosure requirements submitted by a State unless the [NHTSA] 
determines that such requirements are not consistent with the purpose 
of the disclosure required by subsection (d) or (e) as the case may 
be.'' (Subsections 408(d), (e) of the Cost Savings Act were recodified 
to 49 U.S.C. 32705(b) and (c)). In light of this provision, we now turn 
to our interpretation of the purposes of these subsections, as germane 
to Florida's petition.\9\
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    \9\ Florida petitioned NHTSA requesting approval of alternate 
odometer disclosure requirements. Florida's initial petition, dated 
December 21, 2009, set forth Florida's initial request. Florida 
submitted a second, supplemental petition to NHTSA on October 5, 
2010, that restated Florida's request in greater detail and provided 
more specific information on Florida's current e-Title and odometer 
disclosure program and its proposed program. Together, the petitions 
are identified herein as ``petition'' or ``the petition.''
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    Our Final Determination granting Virginia's petition for alternate 
odometer disclosure requirements identified the purposes of TIMA 
germane to petitions for approval of odometer disclosure requirements 
that did not include disclosures involving reassignment documents, 
leased vehicles, or disclosures by power of attorney.\10\ 74 FR 643, 
647-48 (January

[[Page 48104]]

7, 2009). In addition, because the Florida proposal encompasses 
reassignment documents, transfers of leased vehicles, and disclosures 
by power of attorney, we identify the purposes of TIMA relevant to 
odometer disclosures for leased vehicles (see Initial Determination on 
Wisconsin's petition for alternate odometer disclosure requirements, 75 
FR 20965, 20972-73 (Apr. 22, 2010)) and purposes of allowing for 
disclosures by power of attorney in limited circumstances.
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    \10\ Since Virginia's program did not cover disclosures 
involving leased vehicles or disclosures by power of attorney, the 
purposes of Sections 408(d)(2)(C) and 408(e) of the Cost Savings 
Act, as amended, were not germane and were not addressed in the 
notice approving the Virginia program. See 74 FR 647 n. 12.
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A. TIMA's Purposes Relevant to Vehicle Transfers in the Absence of a 
Lease Agreement

    One purpose of TIMA is to assure that the form of the odometer 
disclosure precludes odometer fraud. 74 FR 647. To prevent odometer 
fraud facilitated by disclosure statements that were separate from 
titles, TIMA required mileage disclosures to be on a secure vehicle 
title instead of a separate document. These titles also had to contain 
space for the seller's attested mileage disclosure and a new disclosure 
by the buyer when the vehicle was sold again. This discouraged mileage 
alterations on titles and limited opportunities for obtaining new 
titles with lower mileage than the actual mileage. Id. This concern 
applies to reassignment documents.\11\
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    \11\ NHTSA amended 49 CFR 580.5(c) to preclude use of a separate 
reassignment form at the time of the first transfer, by a titled 
owner. See 56 FR 47684-85 (Sep. 20, 1991).
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    A second purpose of TIMA is to prevent odometer fraud by processes 
and mechanisms making odometer mileage disclosures on the title a 
condition of any application for a title, and a requirement for any 
title issued by a State. 74 FR 647. This provision was intended to 
eliminate or significantly reduce abuses associated with lack of 
control of the titling process. Id.
    Third, TIMA sought to prevent alterations of disclosures on titles 
and to preclude counterfeit titles through secure processes. 74 FR 648. 
In furtherance of these purposes, paper titles (incorporating the 
disclosure statement) must be produced using a secure printing process 
or protected by ``other secure process.'' \12\ Id.
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    \12\ Congress intended to encourage new technologies by 
including the language ``other secure process.'' The House Report 
accompanying TIMA noted that `` `other secure process' is intended 
to describe means other than printing which could securely provide 
for the storage and transmittal of title and mileage information.'' 
H.R. Rep. No. 99-833, at 33 (1986). ``In adopting this language, the 
Committee intends to encourage new technologies which will provide 
increased levels of security for titles.'' Id. See also Cost Savings 
Act, as amended by TIMA, Sec.  408(d), recodified at 49 U.S.C. 
32705(b).
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    A fourth purpose is to create a record of vehicle mileage and a 
paper trail. 74 FR 648. The underlying purposes of this record and 
paper trail were to better inform consumers and provide mechanisms for 
tracing odometer tampering and prosecuting violators. TIMA's 
requirement that new applications for titles include signed mileage 
disclosure statements on the titles from the prior owners creates a 
permanent record that is easily checked by subsequent owners or law 
enforcement officials. This record provides critical snapshots of 
vehicle mileage at every transfer, which are the fundamental links of 
this paper trail.
    Finally, the general purpose of TIMA is to protect consumers by 
assuring that they receive valid representations of the vehicle's 
actual mileage at the time of transfer based on odometer disclosures. 
74 FR 648.

B. TIMA's Purposes Relevant to Leased Vehicles

    TIMA recognized that additional mechanisms were needed to assure 
accurate odometer disclosures for leased vehicles. In vehicle leases, 
the lessor typically retains ownership of the vehicle, but does not 
possess it. The lessor, as a transferor, must comply with Federal 
odometer disclosure requirements when it subsequently transfers title 
to a leased vehicle. However, prior to TIMA, lessees were not obligated 
by Federal odometer law to provide lessors with accurate odometer 
disclosure statements. TIMA addressed this issue, as discussed above. A 
number of purposes can be derived from TIMA's provisions, discussed 
above, relating to the transfer of ownership of leased vehicles.
    One purpose of TIMA's leased vehicle provisions is to assure that 
lessors have the vehicle's actual odometer mileage at the time of 
transfer.
    A second purpose of TIMA's leased vehicle provisions is to assure 
that lessees provide lessors with an odometer disclosure statement.
    A related purpose is to assure that lessees are formally notified 
of their odometer disclosure obligations and the penalties for failing 
to comply by not providing complete and truthful information.
    A fourth purpose is to set the ground rules for the lessors, 
providing for lessors to indicate the mileage provided by the lessee on 
the title, unless the lessor has reason to believe that the disclosure 
by the lessee does not reflect the actual mileage of the vehicle.
    A fifth purpose of TIMA's leased vehicle provisions is to create 
records and a paper trail. This is an expansion of the fourth general 
purpose of TIMA stated above. The paper trail includes the written, 
dated and signed odometer disclosure statement by the lessee. Unlike 
odometer disclosure statements on vehicle titles that are filed with 
the State, a lessee's odometer disclosure statement is separate from 
the title and not filed with the State. Instead, the disclosure 
statement is sent to the lessor, who must retain a copy for at least 
five years. The retention of lessee odometer disclosure statements by 
lessors permits law enforcement officials to trace fraudulent 
disclosure statements back to lessees, if necessary.
    Last, the overall purpose of TIMA's leased vehicle provisions, 
consistent with the general purposes of TIMA, is to ensure that there 
are valid representations of the vehicle's actual mileage at the time 
of transfer. See H.R. Rep. No. 99-833, at 33 (1986).

C. Mileage Disclosures by Power of Attorney

    NHTSA's rule implementing TIMA provided that ``[n]o person shall 
sign an odometer disclosure statement as both the transferor and the 
transferee in the same transaction.'' \13\ In general, this provision, 
which was intended to limit fraud, was not questioned. However, in 
instances when a lienholder holds title to a vehicle being sold this, 
as a practical matter, presented a considerable regulatory burden, 
because when a dealer bought a used vehicle, it would be required to go 
to the lienholder and obtain the title, and then go back to the seller 
so that the seller could record the mileage on the title. The last step 
often was difficult and could be avoided if the seller executes a power 
of attorney to the buyer authorizing the buyer to record the mileage 
upon receipt of the title.\14\
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    \13\ 49 CFR 580.5(h); 53 FR 29464, 29477 (Aug. 5, 1988).
    \14\ See 134 Cong. Rec. H10079 (daily ed. Oct. 12, 1988).
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    In 1988, Congress amended TIMA to provide for the limited use of 
powers of attorney for recording mileage, when the title is physically 
held by a lienholder at the time of the transfer and is authorized by 
State law. See Pipeline Safety Reauthorization Act of 1988 (PSRA) Sec.  
401, 15 U.S.C. 1988(d)(1) (1988). (Section 401 of the PSRA, as amended 
in 1990 (see below), was recodified at 49 U.S.C. 32705(b)(2)(A).) The 
amendment required NHTSA to issue a rule. The rule, which was to 
address the form and reasonable

[[Page 48105]]

conditions of the limited power of attorney, was to ensure disclosure 
on the power of attorney document of the actual mileage at the time of 
transfer and ensure that such mileage will be restated exactly by the 
person exercising the power of attorney in the space referred to in 
TIMA. Further, consistent with the purposes of the Cost Savings Act as 
amended and the need to facilitate enforcement thereof, the rule was to 
prescribe the form of the power of attorney to be issued by the State 
to the transferee and for retention of a copy of such power of 
attorney. As amended in 1990, this statutory provision provided that 
the rule promulgated by NHTSA must require the person granted the power 
of attorney to retain a copy of the power of attorney form and submit 
the original form to the State along with a copy of the title showing 
the restatement of the mileage. The statute also permitted the agency 
to prescribe that the State retain the power of attorney and copy of 
the title for an appropriate period or that the State adopt alternative 
measures consistent with the purposes of the statute. The statute 
mandated that the rule not require that a vehicle be titled in the 
State in which the power of attorney was issued. Public Law 101-641, 
104 Stat. 4654, 57 (Nov. 28, 1990).
    In 1989, NHTSA implemented the PSRA by promulgating amendments to 
the odometer disclosure regulations.\15\ The rule provides that a 
transferor may give a secure power of attorney to a transferee for the 
purpose of mileage disclosure in two circumstances--when the 
transferor's title is physically held by a lienholder or when the title 
is lost.\16\ In either instance, use of a power of attorney document 
for mileage disclosure is permissible only if otherwise permitted by 
State law. In this rule, NHTSA narrowly amended its earlier rule 
prohibiting any party from signing an odometer disclosure statement as 
both the transferor and transferee in the same transaction to add an 
exception. The amendment allowed the same person to so sign the 
odometer disclosure statement if he or she satisfied the detailed, 
specific provisions on powers of attorney added to the regulations in 
49 CFR 580.13 or 14. These provisions state the form and conditions of 
the power of attorney. Also, the power of attorney document must be 
issued by the State and be set forth by a secure process.\17\ While 
providing for powers of attorney, NHTSA expressed concern that powers 
of attorney that allow a person to sign a disclosure as both the 
transferor and transferee result in only one party to the transaction 
being aware of the previous mileage disclosures, which could jeopardize 
the integrity of the paper trail--the evidence of rollbacks that 
Congress intended to enhance by enacting TIMA.\18\
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    \15\ NHTSA issued an interim final rule on March 8, 1989 (54 FR 
9809) and a final rule on August 30, 1989 (54 FR 35879).
    \16\ 54 FR 35879 (Aug. 30, 1989).
    \17\ See 49 CFR 580.4.
    \18\ 54 FR 9809, 9810 (March 8, 1989). As is self evident, 
ordinarily such a practice provides opportunities for fraud. See 54 
FR 9812; 54 FR 35882.
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    A number of purposes can be derived from the statute directing 
NHTSA to issue a rule and the implementing rule.
    One purpose was to provide limited exception(s) to a rule 
prohibiting a person from signing an odometer disclosure statement as 
both the transferor and transferee in the same transaction, which had 
the effect of prohibiting the use of powers of attorney for purposes of 
recording mileage on titles of motor vehicles.\19\ More particularly, a 
purpose was to permit a power of attorney for disclosure of the 
odometer reading at the time of sale of a vehicle to be given by the 
seller to the buyer, in the limited situation when the owner's title is 
physically held by a lienholder at the time of the transaction and the 
power of attorney is allowed by State law.\20\ Another limited 
situation in which a power of attorney may be used, as recognized in 
the implementing regulation, is where the title is not present because 
it has been lost by the person to whom it was issued by the State, if 
permitted by State law.\21\ In order for a power of attorney to be used 
in the lost title situation, the transferee (e.g., the dealer) must 
apply for the duplicate title on behalf of the transferor. Under these 
circumstances, a power of attorney is available to facilitate consumer 
vehicle sales transactions, but is not available in other than consumer 
sales transactions, where the risk of fraud is considerably 
greater.\22\
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    \19\ As Congressman Whittaker noted, ``we have drafted the 
amendment in a very narrow fashion.'' 134 Cong. Rec. H10079 (daily 
ed. Oct. 12, 1988).
    \20\ This does not include the practice of floor planning. Floor 
planning is a practice by which a financial institution will 
physically hold a title as security for financing, without formally 
filing or recording a security interest, on a vehicle offered for 
sale by a dealer. 54 FR 35885-35886. This also does not include a 
situation in which the lending institution that financed the 
vehicle's purchase is located in a state that requires the 
lienholder to hold the title as security, but the vehicle is 
registered in a different state, which allows the owner, rather than 
the lienholder to hold the title. Under the 1991 amendment to the 
Cost Savings Act, NHTSA considers the creation of another category 
of exempted transferors inappropriate.
    \21\ 49 CFR 580.13, 54 FR 35883.
    \22\ The 1988 amendments did not modify the TIMA provisions 
relating to leased vehicles.
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    A second purpose was to assure that the form of the power of 
attorney document issued by a State precluded odometer fraud. While 
under the limited circumstances discussed above and if allowed under 
State law, with use of a power of attorney one person may sign the 
odometer disclosure on the title as both the transferor and transferee, 
to limit fraud, the power of attorney form must meet certain minimum 
requirements.\23\ Congress specified that NHTSA would prescribe a form 
by rule. Under the rule, the form must be separated into part A, and if 
permitted by State law, B and C.\24\
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    \23\ Among these are the requirements of NHTSA's rule, 49 CFR 
580.13 and 580.14.
    \24\ 49 CFR 580.13; see 54 FR 9812.
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    The transferor's power of attorney to the transferee for mileage 
disclosure must be on part A of a secure form issued by the State to 
the transferee.\25\ Using this form, the transferor appoints the 
transferee his/her attorney-in-fact for the purpose of mileage 
disclosure. The form provides for written disclosure by the transferor 
to the transferee of the information that is stated on a vehicle title 
under 49 CFR 580.5 when ownership of the vehicle is transferred.\26\ 
Among other things, there must be a space in part A for the transferor 
and transferee to sign the power of attorney form and print their names 
and a space for the transferor to disclose the mileage. Part A must 
also contain a reference to the Federal odometer law and state that 
providing false information or the failure of the person granted the 
power of attorney to submit the form to the State may result in fines 
and/or imprisonment. The disclosure on part A of the power of attorney 
form is commonly made by the

[[Page 48106]]

seller when he or she trades-in a vehicle at a dealer.
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    \25\ 49 CFR 580.13; see 54 FR 9812.
    \26\ 49 CFR 580.13 requires the form to contain, in part A, a 
space for: (1) The odometer reading at the time of transfer; (2) the 
date of transfer; (3) the transferor's name and current address; (4) 
the transferee's name and current address; and (5) the vehicle make, 
model, year, body type, and vehicle identification number (VIN). 
Part A shall also contain a space for the transferor to certify that 
to the best of his knowledge either: (1) The odometer reading 
reflects the actual mileage; or (2) if the transferor knows that the 
odometer reading reflects mileage in excess of the designed 
mechanical odometer limit, he shall include a statement to that 
effect; or (3) if the transferor knows that the odometer reading 
differs from the mileage and the difference is greater than that 
caused by a calibration error, he shall include a statement that the 
odometer reading does not reflect the actual mileage and should not 
be relied upon with a warning notice to alert the transferee that a 
discrepancy exists between the odometer reading and the actual 
mileage.
---------------------------------------------------------------------------

    After part A of the power of attorney form has been used, part B 
may be executed when a vehicle addressed on part A is resold.\27\ Part 
B of the secure power of attorney form, if permitted by State law, 
allows a subsequent transferee to give a power of attorney to his 
transferor to review the title and any reassignment documents for 
mileage discrepancies, and if no discrepancies are found, to 
acknowledge disclosure on the title, while maintaining the integrity of 
the first seller's disclosure. The disclosure required to be made by 
the transferor to the transferee for this transaction on part B of the 
power of attorney form tracks information required to be made by the 
transferor to the transferee on the title when ownership of a vehicle 
is transferred on a title under 49 CFR 580.5.\28\ Among other things, 
the power of attorney must contain a space for the transferor to 
disclose the mileage to the transferee and sign and date the form, and 
a space for the transferee to sign and date the form.
---------------------------------------------------------------------------

    \27\ 49 CFR 580.14.
    \28\ 49 CFR 580.14 requires part B of the form to contain a 
space for the mileage disclosure from the transferor to the 
transferee, and contain space for the following information: (1) The 
odometer reading at the time of the transfer; (2) the date of the 
transfer; (3) the transferor's name and current address; (4) the 
transferee's name and current address; and (5) the vehicle make, 
model year, body type, and VIN. Part B shall also contain a 
reference to the Federal odometer law and state that providing false 
information or the failure of the person granted the power of 
attorney to submit the form to the State may result in fines and/or 
imprisonment. Part B shall also contain a space for the transferor 
to certify that to the best of his knowledge either: (1) The 
odometer reading reflects the actual mileage; or (2) if the 
transferor knows that the odometer reading reflects mileage in 
excess of the designed mechanical odometer limit, he shall include a 
statement to that effect; or (3) if the transferor knows that the 
odometer reading differs from the mileage and the difference is 
greater than that caused by a calibration error, he shall include a 
statement that the odometer reading does not reflect the actual 
mileage and should not be relied upon, with a warning notice to 
alert the transferee that a discrepancy exists between the odometer 
reading and the actual mileage.
---------------------------------------------------------------------------

    Commonly, part B is used in the sale of a trade-in vehicle by a 
dealer. If for example, a dealer does not have possession of the title, 
because the vehicle was a trade-in and the lienholder has not yet 
released the title, or because the title was lost and the dealer has 
not yet obtained a duplicate title on behalf of the transferor who sold 
the vehicle to the dealer, the subsequent buyer of the used vehicle 
(the transferee) is permitted to give a power of attorney to the 
transferor/selling dealer to acknowledge the mileage disclosure on 
their behalf. This power of attorney from the transferee to the 
transferor allows the transferor (who is the original seller's attorney 
in fact under Part A) to sign the title as both the transferor and 
transferee in the same transaction.\29\ In addition, because the same 
person signs the title as the transferor and transferee, the 
appointment of the transferor as the transferee's attorney-in-fact must 
be made on part B of the same secure power of attorney form, issued by 
a State, upon which the transferor was appointed the attorney-in-fact 
by the original transferor on part A.\30\ This form enables purchasers 
to examine the previously issued power of attorney for alterations, 
erasures, and other marks, and to learn the name of the prior owner 
without the additional cost of a title search. This is the same 
information that purchasers would receive if the title was not held by 
a lienholder since, under TIMA, the transferor is required to disclose 
mileage on the vehicle's title.
---------------------------------------------------------------------------

    \29\ 49 CFR 580.14.
    \30\ This is done pursuant to 49 CFR 580.13.
---------------------------------------------------------------------------

    The secure power of attorney form with a part B must contain a 
certification in part C.\31\ To ensure that a person exercising a power 
of attorney under both sections 580.13 and 580.14 (parts A and B) is 
fully aware of his/her obligation and their liability for any action 
that is inconsistent with the power of attorney, the rule (Sec.  
580.15) requires the completion, on part C, of a certification 
attesting that the signer has disclosed the mileage on the title 
document consistent with the mileage disclosed on the power of attorney 
form. The signer of part C also attests that he or she has examined the 
title, and that the mileage disclosure made on the title executed under 
the power of attorney is greater than the mileage previously stated on 
the title and any reassignment form.\32\
---------------------------------------------------------------------------

    \31\ The part C certification shall include space for: (1) The 
signature and printed name of the person exercising the power of 
attorney; (2) the address of the person exercising the power of 
attorney; and (3) the date of the certification.
    \32\ As a practical matter, the mileage entered by the dealer 
could never be lower than the mileage already on the title, since if 
the power of attorney set forth a lower mileage, it would void the 
power of attorney as discussed above, and the dealer would not be 
authorized to sign the disclosure on behalf of the transferor.
---------------------------------------------------------------------------

    The part C certification requirement need only apply to the 
subsequent sale situation (typically a trade-in) where the second 
purchaser's only link to the title will be the transferor (dealer). 
Thus, section 580.15 provides that the certification requirement 
applies only when the transferor is exercising a power of attorney for 
both the first sale and second sale customers, as provided for in 
sections 580.13 and 580.14. If the title is present at the time of the 
second sale, the purchaser will be able to review the title himself/
herself to assure that the mileage is entered in accordance with the 
initial transferor's power of attorney and is higher than the mileage 
appearing on the title and reassignment documents.
    Finally, the State itself must issue the power of attorney 
form.\33\
---------------------------------------------------------------------------

    \33\ 54 FR 9812.
---------------------------------------------------------------------------

    A third purpose was to set ground rules for transferors and 
transferees, providing that both parties provide all of the information 
and signatures required in parts A, and as applicable B, and C of the 
secure power of attorney form. This ensures that upon receipt of the 
first transferor's title, the transferee (typically a dealer) must 
complete the space for mileage disclosure on the title exactly as the 
mileage was disclosed by the first transferor on the power of attorney 
form.
    A fourth purpose was to prevent odometer fraud by establishing 
processes, mechanisms and conditions calculated to result in the 
disclosure of the actual mileage on the title.\34\ As provided in the 
PSRA of 1988, NHTSA's rule is to ensure that transferors disclose the 
actual mileage at the time of the transfer on the power of attorney 
document and that persons exercising the power of attorney restate that 
mileage exactly on the title in the space provided. Toward these ends, 
one condition, required by the implementing rule, is inclusion of the 
printed names and signatures of the first transferor and the first 
transferee (typically a dealer) accompanying the mileage disclosure, as 
well as a statement of liability for fines for false statements. The 
transferor shall also certify on the power of attorney form that to the 
best of the transferor's knowledge, either: (1) The odometer reading 
reflects the actual mileage; or (2) if the transferor knows that the 
odometer reading reflects mileage in excess of the designed odometer 
limit, he shall include a statement to that effect; or (3) if the 
transferor knows that the odometer reading differs from the mileage and 
the difference is greater than that caused by a calibration error, he 
shall include a statement that the odometer reading does not reflect 
the actual mileage and should not be relied upon, and a warning notice 
to alert the transferee that a discrepancy exists

[[Page 48107]]

between the odometer reading and the actual mileage.
---------------------------------------------------------------------------

    \34\ Of course, other purposes of TIMA apply, including 
processes and mechanisms making the disclosure of an odometer's 
mileage on the title a condition of the application for a title and 
a requirement for the title issued by the state.
---------------------------------------------------------------------------

    There are additional mechanisms employed in the power of attorney 
regulations to ensure accurate disclosures of the odometer reading and 
to limit fraud. As provided in the rule, upon receipt of the first 
transferor's title, the transferee has a duty to complete the space for 
mileage disclosure on the title exactly as the mileage was disclosed by 
the first transferor on the power of attorney form.\35\ Further, the 
certification provision discussed above provides a mechanism applicable 
to the second sale. As provided by section 580.15, the person 
completing part C of the secure power of attorney form issued by the 
State certifies that he or she has disclosed the mileage on the title 
document consistent with the mileage disclosed to him or her on the 
power of attorney form, that he or she examined the title and the 
mileage disclosure on that title and the mileage disclosure he or she 
is making on the power of attorney is greater than the mileage 
previously stated on the title.
---------------------------------------------------------------------------

    \35\ 49 CFR 580.13(f).
---------------------------------------------------------------------------

    In addition, the PSRA, as amended in 1990, provided another process 
to ensure accurate disclosure of the odometer reading. It required that 
the rule ensure that the person granted a power of attorney must submit 
the completed original power of attorney to the state along with a copy 
of the title (showing the restatement of mileage) and must also retain 
a copy. As directed, NHTSA issued implementing regulations providing 
that the transferee must submit the completed original power of 
attorney form to the State that issued it along with either a copy or 
the actual transferor's title when submitting a new title application. 
This allowed for review of the mileage on the power of attorney form 
and corresponding title.
    NHTSA's regulations provide an additional mechanism facilitating 
verification of previous mileage statements by affording subsequent 
purchasers access to previous title and power of attorney documents. 
Under section 580.16(a), if the second-sale transferee applies for 
title in his own name (in other words, if the second-sale transferee 
does not give power of attorney to his transferor to review the title 
and reassignment documents), then that transferor must show him, upon 
his request, a copy of the power of attorney form completed by the 
previous owner. In any event, under section 580.16(b) of the rule, a 
transferor who was given power of attorney by his transferor and who 
holds title to the vehicle in his name, must, upon request of the 
purchaser (second-sale transferee), show his/her purchaser a copy of 
the previous owner's title and a copy of the power of attorney form 
completed by the previous owner.
    A further mechanism in the rule was its voiding mechanism. As 
provided by the rule, 49 CFR 580.15(b), any mileage discrepancies void 
the power of attorney. NHTSA has characterized this provision as vital; 
\36\ if the mileage reflected by the transferor on the power of 
attorney is less than that previously stated on the title and any 
reassignment documents, the power of attorney shall be void. The power 
of attorney is voided by the existence of a discrepancy, not by an 
action causing a discrepancy.
---------------------------------------------------------------------------

    \36\ 54 FR 35885 (Aug. 30, 1989).
---------------------------------------------------------------------------

    A fifth purpose is to prevent alterations on odometer disclosures 
by powers of attorney and to preclude counterfeit powers of attorney 
through secure processes. In furtherance of these purposes, the power 
of attorney (incorporating the disclosure statement) must be on a form 
issued by the State that is set forth by means of a secure printing 
process or other secure process. It has to be no less secure than the 
title document itself.
    A sixth purpose is to create a record of the mileage on vehicles 
and a paper trail. The PSRA referred to the need to facilitate 
enforcement. In addition, and more specifically, the amended statute 
provided ``the person granted such power of attorney * * * shall submit 
the original back to the State with a copy of the title showing a 
restatement of the mileage.'' \37\ This paper trail includes the 
written, signed (by both the transferor and transferee), and dated 
odometer disclosure statement on the secure power of attorney form, and 
the corresponding entry on the vehicle title, which, as discussed 
above, must read exactly as it was disclosed by the transferor on the 
power of attorney document. The transferee is required to file the 
original power of attorney form with the State that issued it, with a 
copy of the transferor's title or with the actual title when the 
transferee submits a new title application at the same time. The 
transferee is required to return a copy of the power of attorney form 
to the transferor. The State shall retain the original power of 
attorney form for the shorter of (a) Three years or (b) a period equal 
to the State titling record retention period. As stated in the 
rulemaking, the State may retain the copy in any medium by which such 
information may be stored, provided there is no loss of information. 
States are not limited to retaining the records in paper form.
---------------------------------------------------------------------------

    \37\ The definition of ``original power of attorney'' permits a 
secure copy of the power of attorney to be considered an 
``original.'' This is implemented in part in 40 CFR 580.13(f).
---------------------------------------------------------------------------

    The retention of the power of attorney form by the State permits 
law enforcement officials to trace fraudulent disclosure statements 
back to transferors, if necessary.
    Moreover, Section 401 of the PSRA, as amended in 1991, requires 
NHTSA's rules to provide for the retention of the power of attorney 
form. The rule added section 580.8(c), which concerns odometer 
disclosure statement retention. Under this paragraph, motor vehicle 
dealers and distributors who are assigned a power of attorney by their 
transferors are required to retain, for five years, a copy of each 
power of attorney they receive. These documents must be retained at the 
primary place of business of the dealer or distributor in an order that 
is appropriate with business requirements and that permits systematic 
retrieval.
    Seventh, the overall purpose is to protect consumers by assuring 
that they receive valid representations of a vehicle's actual mileage 
at a time of transfer. This includes the ground rules for transferors 
and transferees, providing that both parties provide all of the 
information and signatures required in parts A, B, and C of the secure 
power of attorney form. This ensures that upon receipt of the 
transferor's title, the transferee shall complete the space for mileage 
disclosure on the title exactly as the mileage was disclosed by the 
transferor on the power of attorney form.

IV. The Florida Petition

    Florida, which is in the process of implementing an electronic 
title transfer system (e-title), petitions for approval of alternate 
odometer disclosure requirements.\38\ Florida requests alternate 
disclosure requirements for transfers of motor vehicles in transactions 
between private parties (casual sales) and transfers of motor vehicles, 
whether subject to a lien \39\ or

[[Page 48108]]

not subject to a lien, between private parties and motor vehicle 
dealers. Florida also requests alternate disclosure requirements for 
transactions involving leased vehicles.
---------------------------------------------------------------------------

    \38\ We note that Florida's petition differs markedly from other 
petitions for alternate odometer disclosure requirements NHTSA has 
received from other states. Florida's proposal relies on tag agents, 
rather than an online system, to verify the identity of the 
transferor and transferee in casual sales. These tag agents also 
verify chain of ownership and odometer disclosure in all transfers 
before title can be issued. Identity verification in transactions 
other than casual sales (for which identity of the parties is 
verified by a tag agent) is left to the parties to the 
transaction(s). Florida's proposal encompasses a wide variety of 
transactions and relies on paper forms for a number of these 
transactions.
    \39\ Under Florida law, a lienholder physically possesses the 
title to the vehicle. Thus, Florida permits odometer disclosure by 
power of attorney when title is held by a lienholder and now 
petitions for alternate requirements regarding odometer disclosure 
by power of attorney.
---------------------------------------------------------------------------

    Florida law authorizes the Florida Department of Highway Safety and 
Motor Vehicles (the Department) to accept any application for vehicle 
title by electronic means. See Fla. Stat. Ann. Sec.  319.40 (1997). The 
Department is proposing amendments to the Florida statutes to allow the 
continuation of an electronic certificate of title in lieu of a paper 
certificate of title for transfers of motor vehicles. With electronic 
titling there would not be a paper certificate of title on which to 
disclose the vehicle's mileage at the time of transfer of ownership.

A. Overview of Florida's Electronic Titling System

    Currently Florida stores its titling and registration information 
(including images of all supporting title documentation) in a secure 
database referred to as the Florida Real-time Vehicle Information 
System, or FRVIS. According to Florida's petition, either a Department 
employee or an authorized tag agent at a state-authorized tag office 
enters information into this database. Only a Department employee or 
tag agent can change FRVIS title information, including owner 
information and the odometer disclosure. For title images (scanned, 
electronic copies of vehicle title documents), FRVIS stores all 
applicable data and stores images of documents that remain in the title 
history for the vehicle. Florida law also requires that the Department 
retain all documents regarding applications for, and issuance of, 
certificates of title--including titles, manufacturers' statements of 
origin, applications, and supporting documents submitted with the 
application such as odometer statements, VIN verifications, bills of 
sale, indicia of ownership, dealer reassignments, photographs, and any 
personal identification, affidavits, or documents required by or 
submitted to the Department--for a period of at least 10 years. Fla. 
Stat. Ann. Sec.  319.23(11). The title resides as an electronic record 
in FRVIS; however, secure paper copies of the title can be generated 
from FRVIS if needed.
    Florida intends to use a secure reassignment form in lieu of a 
paper title to capture odometer disclosure and transfer of e-titles. 
Florida law currently allows licensed dealers to use a secure 
reassignment form when making dealer reassignments and odometer 
disclosures after all reassignment and odometer disclosure spaces on 
the reverse side of the Certificate of Title have been used. The form 
links the vehicle to the title record by the VIN and includes the 
required odometer disclosure statements. The Department scans the form 
and stores it in the title history for the vehicle. Florida proposes to 
use a similar form for odometer disclosure in its e-title program.
    In Florida, lienholders hold the title to the vehicles securing the 
loan. Florida began its electronic title and lien (ELT) program in 
2001. Under the current process, the Department contracts with vendors 
who provide secure electronic interface with Florida's titling system 
to participating lienholders. The vendors then contract with financial 
institutions who wish to participate in Florida's electronic title and 
lien program. The participating lienholders allow their titles to 
remain electronic. Electronic liens are satisfied through the secure 
electronic interface and the title is retained electronically until a 
paper copy is requested.\40\
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    \40\ Approximately 24 percent of the more than ten million 
vehicle lien records Florida has are electronic. Additionally, 
almost 50 percent of all new transactions with liens are maintained 
electronically under ELT.
---------------------------------------------------------------------------

B. Florida's Proposed e-Odometer Program

    Florida's proposed e-Odometer program can be divided into three 
transaction types: (1) Casual or private sales; (2) sales involving 
licensed motor vehicle dealers (including sales from private owners to 
licensed dealers, sales between licensed dealers, and sales from 
licensed dealers to private buyers); and (3) sales involving leased 
vehicles. The Agency understands that the program, as proposed, applies 
only when the transferred vehicle is electronically titled at the time 
of transfer of the vehicle.
1. Casual or Private Sales
    Currently, a Florida resident wishing to sell his/her vehicle in a 
casual or private sale needs to have a paper title. The seller signs 
the paper title and discloses the odometer reading to the buyer on the 
title. The buyer then signs the paper title verifying the odometer 
reading. (The odometer disclosure is made on the title and signed by 
the buyer and seller at the time of transfer, in accordance with 49 
U.S.C. 32705 and 49 CFR 580.5.) The buyer takes the paper title to a 
tag office, which processes the transfer of ownership and prints a new 
paper title in the buyer's name, or, if the buyer so elects, creates an 
e-title to be held by the Department.\41\ Whether the buyer elects to 
maintain the title electronically or in paper form, the tag office 
sends the old paper title and any other supporting documentation to the 
Department for scanning into FRVIS.
---------------------------------------------------------------------------

    \41\ The buyer can request a paper title from the tag agent and 
pay a $10 fee, or request a paper title online and pay a $2.50 fee. 
The fee is intended to encourage buyers to maintain vehicle title 
electronically. This fee applies to any paper title request under 
Florida's current system and under the State's proposed program.
---------------------------------------------------------------------------

    Under Florida's proposed e-title program,\42\ if a seller of a 
vehicle has an electronic title and wants to transfer that title, the 
seller and buyer would visit an authorized tag office together. After 
providing adequate identification to the tag agent, the buyer and 
seller would sign, in the presence of the tag agent, a secure 
reassignment form transferring ownership and disclosing the odometer 
reading. A title is then issued in the buyer's name and is stored 
electronically, or the buyer may choose to have a paper title issued. 
The secure reassignment form and copies of the identification are 
scanned into the title record in FRVIS.\43\ Florida maintains that 
these would travel with the title.
---------------------------------------------------------------------------

    \42\ Florida's proposed program does not apply in a casual 
vehicle sale by a seller holding a paper title, only those with e-
title. A seller holding a paper title must follow the current 
procedures to transfer the vehicle--the buyer and seller sign and 
make the required odometer disclosure on the back of the paper 
title. The buyer then can bring the signed title containing the 
required odometer disclosure statement to an authorized tag agent 
and elect at that time to have the title maintained by the State 
electronically. If the buyer elects e-Title and later sells the 
vehicle in a casual sale, he can do so by following the procedures 
for transferring e-title.
    \43\ The Agency understands that the electronic documents are 
linked to the vehicle title history by title number and VIN.
---------------------------------------------------------------------------

2. Sales Involving Licensed Motor Vehicle Dealers
a. Retail Sales of Vehicles With an e-Title But Not Subject to a Lien
    Currently, when a licensed motor vehicle dealer is involved, the 
process for transferring a title to a vehicle with an e-title and not 
subject to a lien is as follows. The seller with e-title brings the 
vehicle to a dealership. The seller and dealer complete a secure power 
of attorney with odometer disclosure. The dealer obtains the paper 
title from a tag agency or online from the Department. The dealer 
transfers the odometer disclosure information from the secure power of 
attorney to the title and signs the title as buyer and seller. When the 
dealer sells the vehicle to another buyer, the dealer and buyer 
complete the reassignment on the paper title with an

[[Page 48109]]

odometer disclosure. The dealer takes both the secure power of attorney 
and the paper title to a tag agency. The title is then transferred to 
the buyer and a receipt is provided. The buyer has the option to obtain 
a new paper title or have the Department hold the title electronically. 
The secure power of attorney and old paper title are scanned and stored 
with title history in FRVIS.
    Under Florida's proposed program, a seller with e-title would bring 
the vehicle to a dealership. The seller and dealer complete a secure 
reassignment form with odometer disclosure. When the dealer sells the 
vehicle to another buyer, the dealer and buyer complete another secure 
reassignment form with odometer disclosure. The dealer takes both of 
the secure reassignment forms to a tag agency. The vehicle title is 
then transferred to the buyer and a receipt is provided. The buyer has 
the option to obtain a paper title or have the Department hold the 
title electronically. The secure reassignment forms are scanned and 
stored with the vehicle title history in FRVIS.
b. Sales of Vehicles With e-Title Subject to a Lien (e-lien in Florida)
    Currently, when a licensed motor vehicle dealer is involved, the 
process for transferring a vehicle subject to an e-lien with e-title is 
as follows. A seller with e-title/e-lien brings the vehicle to a 
dealership. The seller and dealer