[Federal Register Volume 74, Number 19 (Friday, January 30, 2009)]
[Rules and Regulations]
[Pages 5740-5779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-1835]



[[Page 5731]]

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Part II





Reader Aids





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Cumulative List of Public Laws



110th Congress, Second Session

[[Page 5732]]

CUMULATIVE LIST OF PUBLIC LAWS

    This is the cumulative list of public laws for the 110th Congress, 
Second Session. Other cumulative lists (1993-2008) are available online 
at http://www.archives.gov/federal-register/laws/past/index.html. 
Comments may be addressed to the Director, Office of the Federal 
Register, Washington, DC 20408 or send e-mail to <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="543d3a323b143a3526357a3231302631337a333b22">[email protected]</a>.
      
    The text of laws may be ordered in individual pamphlet form 
(referred to as ``slip laws'') from the Superintendent of Documents, 
U.S. Government Printing Office, Washington, DC 20402 (phone, 202-512-
2470). The text will also be made available on the Internet from GPO 
Access at http://www.gpoaccess.gov/plaws/index.html. Some laws may not 
yet be available online or for purchase.

 
   Public Law                                Title                                    Approved         122 Stat.
 
110-181.........  National Defense Authorization Act for Fiscal Year 2008....  Jan. 28, 2008........  3
110-182.........  To extend the Protect America Act of 2007 for 15 days......  Jan. 31, 2008........  605
110-183.........  Commission on the Abolition of the Transatlantic Slave       Feb. 5, 2008.........  606
                   Trade Act.
110-184.........  To designate the facility of the United States Postal        Feb. 6, 2008.........  612
                   Service located at 427 North Street in Taft, California,
                   as the ``Larry S. Pierce Post Office''.
110-185.........  Economic Stimulus Act of 2008..............................  Feb. 13, 2008........  613
110-186.........  Military Reservist and Veteran Small Business                Feb. 14, 2008........  623
                   Reauthorization and Opportunity Act of 2008.
110-187.........  Do-Not-Call Improvement Act of 2007........................  Feb. 15, 2008........  633
110-188.........  Do-Not-Call Registry Fee Extension Act of 2007.............  Feb. 15, 2008........  635
110-189.........  Cameron Gulbransen Kids Transportation Safety Act of 2007..  Feb. 28, 2008........  639
110-190.........  Airport and Airway Extension Act of 2008...................  Feb. 28, 2008........  643
110-191.........  Andean Trade Preference Extension Act of 2008..............  Feb. 29, 2008........  646
110-192.........  To provide for the continued minting and issuance of         Feb. 29, 2008........  648
                   certain $1 coins in 2008.
110-193.........  To make technical corrections to the Federal Insecticide,    Mar. 6, 2008.........  649
                   Fungicide, and Rodenticide Act.
110-194.........   To designate the facility of the United States Postal       Mar. 11, 2008........  651
                   Service located at 59 Colby Corner in East Hampstead, New
                   Hampshire, as the ``Captain Jonathan D. Grassbaugh Post
                   Office''.
110-195.........  To designate the facility of the United States Postal        Mar. 12, 2008........  652
                   Service known as the Southpark Station in Alexandria,
                   Louisiana, as the John ``Marty'' Thiels Southpark Station,
                   in honor and memory of Thiels, a Louisiana postal worker
                   who was killed in the line of duty on October 4, 2007.
110-196.........  To extend agricultural programs beyond March 15, 2008, to    Mar. 14, 2008........  653
                   suspend permanent price support authorities beyond that
                   date, and for other purposes.
110-197.........  Providing for the appointment of John W. McCarter as a       Mar. 14, 2008........  655
                   citizen regent of the Board of Regents of the Smithsonian
                   Institution.
110-198.........  Higher Education Extension Act of 2008.....................  Mar. 24, 2008........  656
110-199.........  Second Chance Act of 2007: Community Safety Through          Apr. 9, 2008.........  657
                   Recidivism Prevention.
110-200.........  To amend Public Law 110-196 to provide for a temporary       Apr. 18, 2008........  695
                   extension of programs authorized by the Farm Security and
                   Rural Investment Act of 2002 beyond April 18, 2008.
110-201.........  To preserve existing judgeships on the Superior Court of     Apr. 18, 2008........  696
                   the District of Columbia.
110-202.........  Safety of Seniors Act of 2007..............................  Apr. 23, 2008........  697
110-203.........  Congratulating the Army Reserve on its centennial, which     Apr. 23, 2008........  701
                   will be formally celebrated on April 23, 2008, and
                   commemorating the historic contributions of its veterans
                   and continuing contributions of its soldiers to the vital
                   national security interests and homeland defense missions
                   of the United States.
110-204.........  Newborn Screening Saves Lives Act of 2007..................  Apr. 24, 2008........  705
110-205.........  To amend Public Law 110-196 to provide for a temporary       Apr. 25, 2008........  713
                   extension of programs authorized by the Farm Security and
                   Rural Investment Act of 2002 beyond April 25, 2008.
110-206.........  Traumatic Brain Injury Act of 2008.........................  Apr. 28, 2008........  714
110-207.........  Purple Heart Family Equity Act of 2007.....................  Apr. 30, 2008........  719
110-208.........  To amend Public Law 110-196 to provide for a temporary       May 2, 2008..........  720
                   extension of programs authorized by the Farm Security and
                   Rural Investment Act of 2002 beyond May 2, 2008.
110-209.........  To award a congressional gold medal to Daw Aung San Suu Kyi  May 6, 2008..........  721
                   in recognition of her courageous and unwavering commitment
                   to peace, nonviolence, human rights, and democracy in
                   Burma.
110-210.........  To designate the facility of the United States Postal        May 7, 2008..........  723
                   Service located at 20 Sussex Street in Port Jervis, New
                   York, as the ``E. Arthur Gray Post Office Building''.
110-211.........  To designate the facility of the United States Postal        May 7, 2008..........  724
                   Service located at 1704 Weeksville Road in Elizabeth City,
                   North Carolina, as the ``Dr. Clifford Bell Jones, Sr. Post
                   Office''.
110-212.........  To designate the facility of the United States Postal        May 7, 2008..........  725
                   Service located at 5815 McLeod Street in Lula, Georgia, as
                   the ``Private Johnathon Millican Lula Post Office''.
110-213.........  To designate the facility of the United States Postal        May 7, 2008..........  726
                   Service located at 424 Clay Avenue in Waco, Texas, as the
                   ``Army PFC Juan Alonso Covarrubias Post Office Building''.
110-214.........  To designate the facility of the United States Postal        May 7, 2008..........  727
                   Service located at 3100 Cashwell Drive in Goldsboro, North
                   Carolina, as the ``John Henry Wooten, Sr. Post Office
                   Building''.
110-215.........  To designate the facility of the United States Postal        May 7, 2008..........  728
                   Service located at 116 Helen Highway in Cleveland,
                   Georgia, as the ``Sgt. Jason Harkins Post Office
                   Building''.
110-216.........  To designate the facility of the United States Postal        May 7, 2008..........  729
                   Service located at 3701 Altamesa Boulevard in Fort Worth,
                   Texas, as the ``Master Sergeant Kenneth N. Mack Post
                   Office Building''.
110-217.........  To designate the facility of the United States Postal        May 7, 2008..........  730
                   Service located at 701 East Copeland Drive in Lebanon,
                   Missouri, as the ``Steve W. Allee Carrier Annex''.
110-218.........  To designate the facility of the United States Postal        May 7, 2008..........  731
                   Service located at 3035 Stone Mountain Street in Lithonia,
                   Georgia, as the ``Specialist Jamaal RaShard Addison Post
                   Office Building''.
110-219.........  To designate the facility of the United States Postal        May 7, 2008..........  732
                   Service located at 725 Roanoke Avenue in Roanoke Rapids,
                   North Carolina, as the ``Judge Richard B. Allsbrook Post
                   Office''.
110-220.........  To designate the facility of the United States Postal        May 7, 2008..........  733
                   Service located at 10799 West Alameda Avenue in Lakewood,
                   Colorado, as the ``Felix Sparks Post Office Building''.
110-221.........  To designate the facility of the United States Postal        May 7, 2008..........  734
                   Service located at 3050 Hunsinger Lane in Louisville,
                   Kentucky, as the ``Iraq and Afghanistan Fallen Military
                   Heroes of Louisville Memorial Post Office Building'', in
                   honor of the servicemen and women from Louisville,
                   Kentucky, who died in service during Operation Enduring
                   Freedom and Operation Iraqi Freedom.

[[Page 5733]]

 
110-222.........  To designate the facility of the United States Postal        May 7, 2008..........  735
                   Service located at 201 West Greenway Street in Derby,
                   Kansas, as the ``Sergeant Jamie O. Maugans Post Office
                   Building''.
110-223.........  To designate the facility of the United States Postal        May 7, 2008..........  736
                   Service located at 3800 SW. 185th Avenue in Beaverton,
                   Oregon, as the ``Major Arthur Chin Post Office Building''.
110-224.........  To designate the facility of the United States Postal        May 7, 2008..........  737
                   Service located at 160 East Washington Street in Chagrin
                   Falls, Ohio, as the ``Sgt. Michael M. Kashkoush Post
                   Office Building''.
110-225.........  To designate the facility of the United States Postal        May 7, 2008..........  738
                   Service located at 2650 Dr. Martin Luther King Jr. Street,
                   Indianapolis, Indiana, as the ``Julia M. Carson Post
                   Office Building''.
110-226.........  To designate the facility of the United States Postal        May 7, 2008..........  739
                   Service located at 6892 Main Street in Gloucester,
                   Virginia, as the ``Congresswoman Jo Ann S. Davis Post
                   Office''.
110-227.........  Ensuring Continued Access to Student Loans Act of 2008.....  May 7, 2008..........  740
110-228.........  To provide for extensions of leases of certain land by       May 8, 2008..........  753
                   Mashantucket Pequot (Western) Tribe.
110-229.........  Consolidated Natural Resources Act of 2008.................  May 8, 2008..........  754
110-230.........  To temporarily extend the programs under the Higher          May 13, 2008.........  877
                   Education Act of 1965.
110-231.........  To amend Public Law 110-196 to provide for a temporary       May 18, 2008.........  878
                   extension of programs authorized by the Farm Security and
                   Rural Investment Act of 2002 beyond May 16, 2008.
110-232.........  Strategic Petroleum Reserve Fill Suspension and Consumer     May 19, 2008.........  879
                   Protection Act of 2008.
110-233.........  Genetic Information Nondiscrimination Act of 2008..........  May 21, 2008.........  881
110-234.........  Food, Conservation, and Energy Act of 2008.................  May 22, 2008.........  923
110-235.........  To provide for an additional temporary extension of          May 23, 2008.........  1552
                   programs under the Small Business Act and the Small
                   Business Investment Act of 1958, and for other purposes.
110-236.........  To ratify a conveyance of a portion of the Jicarilla Apache  May 27, 2008.........  1553
                   Reservation to Rio Arriba County, State of New Mexico,
                   pursuant to the settlement of litigation between the
                   Jicarilla Apache Nation and Rio Arriba County, State of
                   New Mexico, to authorize issuance of a patent for said
                   lands, and to change the exterior boundary of the
                   Jicarilla Apache Reservation accordingly, and for other
                   purposes.
110-237.........  To make technical corrections regarding the Newborn          May 27, 2008.........  1556
                   Screening Saves Lives Act of 2007.
110-238.........  To temporarily extend the programs under the Higher          May 30, 2008.........  1558
                   Education Act of 1965.
110-239.........  To amend title 4, United States Code, to encourage the       June 3, 2008.........  1559
                   display of the flag of the United States on Father's Day.
110-240.........  Protecting Our Children Comes First Act of 2007............  June 3, 2008.........  1560
110-241.........  Credit and Debit Card Receipt Clarification Act of 2007....  June 3, 2008.........  1565
110-242.........  To make technical corrections to section 1244 of the         June 3, 2008.........  1567
                   National Defense Authorization Act for Fiscal Year 2008,
                   which provides special immigrant status for certain
                   Iraqis, and for other purposes.
110-243.........  Directing the United States to initiate international        June 3, 2008.........  1569
                   discussions and take necessary steps with other Nations to
                   negotiate an agreement for managing migratory and
                   transboundary fish stocks in the Arctic Ocean.
110-244.........  SAFETEA-LU Technical Corrections Act of 2008...............  June 6, 2008.........  1572
110-245.........  Heroes Earnings Assistance and Relief Tax Act of 2008......  June 17, 2008........  1624
110-246.........  Food, Conservation, and Energy Act of 2008.................  June 18, 2008........  1651
110-247.........  Federal Food Donation Act of 2008..........................  June 20, 2008........  2314
110-248.........  Local Preparedness Acquisition Act.........................  June 26, 2008........  2316
110-249.........  To amend the International Center Act to authorize the       June 26, 2008........  2317
                   lease or sublease of certain property described in such
                   Act to an entity other than a foreign government or
                   international organization if certain conditions are met.
110-250.........  To reform mutual aid agreements for the National Capital     June 26, 2008........  2318
                   Region.
110-251.........  Kendell Frederick Citizenship Assistance Act...............  June 26, 2008........  2319
110-252.........  Supplemental Appropriations Act, 2008......................  June 30, 2008........  2323
110-253.........  Federal Aviation Administration Extension Act of 2008......  June 30, 2008........  2417
110-254.........  To grant a Federal charter to Korean War Veterans            June 30, 2008........  2419
                   Association, Incorporated.
110-255.........  To authorize the Administrator of the Environmental          June 30, 2008........  2423
                   Protection Agency to accept, as part of a settlement,
                   diesel emission reduction Supplemental Environmental
                   Projects, and for other purposes.
110-256.........  To temporarily extend the programs under the Higher          June 30, 2008........  2425
                   Education Act of 1965.
110-257.........  To remove the African National Congress from treatment as a  July 1, 2008.........  2426
                   terrorist organization for certain acts or events, provide
                   relief for certain members of the African National
                   Congress regarding admissibility, and for other purposes.
110-258.........  To revise the short title of the Fannie Lou Hamer, Rosa      July 1, 2008.........  2428
                   Parks, and Coretta Scott King Voting Rights Act
                   Reauthorization and Amendments Act of 2006.
110-259.........  To award posthumously a Congressional gold medal to          July 1, 2008.........  2430
                   Constantino Brumidi.
110-260.........  Edward William Brooke III Congressional Gold Medal Act.....  July 1, 2008.........  2433
110-261.........  Foreign Intelligence Surveillance Act of 1978 Amendments     July 10, 2008........  2436
                   Act of 2008.
110-262.........  To designate the United States bankruptcy courthouse         July 15, 2008........  2479
                   located at 271 Cadman Plaza East in Brooklyn, New York, as
                   the ``Conrad B. Duberstein United States Bankruptcy
                   Courthouse''.
110-263.........  To redesignate Lock and Dam No. 5 of the McClellan-Kerr      July 15, 2008........  2480
                   Arkansas River Navigation System near Redfield, Arkansas,
                   authorized by the Rivers and Harbors Act approved July 24,
                   1946, as the ``Colonel Charles D. Maynard Lock and Dam''.
110-264.........  To designate the station of the United States Border Patrol  July 15, 2008........  2482
                   located at 25762 Madison Avenue in Murrieta, California,
                   as the ``Theodore L. Newton, Jr. and George F. Azrak
                   Border Patrol Station''.
110-265.........  To designate the facility of the United States Postal        July 15, 2008........  2483
                   Service located at 1190 Lorena Road in Lorena, Texas, as
                   the ``Marine Gunnery Sgt. John D. Fry Post Office
                   Building''.
110-266.........  To designate the Port Angeles Federal Building in Port       July 15, 2008........  2484
                   Angeles, Washington, as the ``Richard B. Anderson Federal
                   Building''.
110-267.........  To designate the facility of the United States Postal        July 15, 2008........  2485
                   Service located at 11151 Valley Boulevard in El Monte,
                   California, as the ``Marisol Heredia Post Office
                   Building''.
110-268.........  To designate the facility of the United States Postal        July 15, 2008........  2486
                   Service located at 19101 Cortez Boulevard in Brooksville,
                   Florida, as the ``Cody Grater Post Office Building''.
110-269.........  To designate the facility of the United States Postal        July 15, 2008........  2487
                   Service located at 11001 Dunklin Drive in St. Louis,
                   Missouri, as the ``William `Bill' Clay Post Office
                   Building''.

[[Page 5734]]

 
110-270.........  To designate the facility of the United States Postal        July 15, 2008........  2488
                   Service located at 117 North Kidd Street in Ionia,
                   Michigan, as the ``Alonzo Woodruff Post Office Building ''.
110-271.........  To designate the facility of the United States Postal        July 15, 2008........  2489
                   Service located at 7231 FM 1960 in Humble, Texas, as the
                   ``Texas Military Veterans Post Office''.
110-272.........  To designate the facility of the United States Postal        July 15, 2008........  2490
                   Service located at 120 Commercial Street in Brockton,
                   Massachusetts, as the ``Rocky Marciano Post Office
                   Building''.
110-273.........  District of Columbia Water and Sewer Authority Independence  July 15, 2008........  2491
                   Preservation Act.
110-274.........  To amend the Water Resources Development Act of 2007 to      July 15, 2008........  2493
                   clarify the authority of the Secretary of the Army to
                   provide reimbursement for travel expenses incurred by
                   members of the Committee on Levee Safety.
110-275.........  Medicare Improvements for Patients and Providers Act of      July 15, 2008........  2494
                   2008.
110-276.........  To designate the United States customhouse building located  July 15, 2008........  2598
                   at 31 Gonzalez Clemente Avenue in Mayaguez, Puerto Rico,
                   as the ``Rafael Martinez Nadal United States Customhouse
                   Building''.
110-277.........  American Veterans Disabled for Life Commemorative Coin Act.  July 17, 2008........  2599
110-278.........  Children's Gasoline Burn Prevention Act....................  July 17, 2008........  2602
110-279.........  To provide for certain Federal employee benefits to be       July 17, 2008........  2604
                   continued for certain employees of the Senate Restaurants
                   after operations of the Senate Restaurants are contracted
                   to be performed by a private business concern, and for
                   other purposes.
110-280.........  Maritime Pollution Prevention Act of 2008..................  July 21, 2008........  2611
110-281.........  National Fish and Wildlife Foundation Establishment Act      July 21, 2008........  2617
                   Amendment of 2008.
110-282.........  To designate a portion of United States Route 20A, located   July 23, 2008........  2618
                   in Orchard Park, New York, as the ``Timothy J. Russert
                   Highway''.
110-283.........  New and Emerging Technologies 911 Improvement Act of 2008..  July 23, 2008........  2620
110-284.........  To designate the United States courthouse located at 1716    July 23, 2008........  2627
                   Spielbusch Avenue in Toledo, Ohio, as the ``James M.
                   Ashley and Thomas W.L. Ashley United States Courthouse''.
110-285.........  Caroline Pryce Walker Conquer Childhood Cancer Act of 2008.  July 29, 2008........  2628
110-286.........  Tom Lantos Block Burmese JADE (Junta's Anti-Democratic       July 29, 2008........  2632
                   Efforts) Act of 2008.
110-287.........  Approving the renewal of import restrictions contained in    July 29, 2008........  2649
                   the Burmese Freedom and Democracy Act of 2003.
110-288.........  Clean Boating Act of 2008..................................  July 29, 2008........  2650
110-289.........  Housing and Economic Recovery Act of 2008..................  July 30, 2008........  2654
110-290.........  Regulatory Improvement Act of 2007.........................  July 30, 2008........  2914
110-291.........  Over-the-Road Bus Transportation Accessibility Act of 2007.  July 30, 2008........  2915
110-292.........  To name the Department of Veterans Affairs outpatient        July 30, 2008........  2917
                   clinic in Ponce, Puerto Rico, as the ``Euripides Rubio
                   Department of Veterans Affairs Outpatient Clinic''.
110-293.........  Tom Lantos and Henry J. Hyde United States Global            July 30, 2008........  2918
                   Leadership Against HIV/AIDS, Tuberculosis, and Malaria
                   Reauthorization Act of 2008.
110-294.........  To authorize the Edward Byrne Memorial Justice Assistance    July 30, 2008........  2971
                   Grant Program at fiscal year 2006 levels through 2012.
110-295.........  DTV Transition Assistance Act..............................  July 30, 2008........  2972
110-296.........  Criminal History Background Checks Pilot Extension Act of    July 30, 2008........  2974
                   2008.
110-297.........  Soboba Band of Luiseno Indians Settlement Act..............  July 31, 2008........  2975
110-298.........  Law Enforcement Congressional Badge of Bravery Act of 2008.  July 31, 2008........  2985
110-299.........  To clarify the circumstances during which the Administrator  July 31, 2008........  2995
                   of the Environmental Protection Agency and applicable
                   States may require permits for discharges from certain
                   vessels, and to require the Administrator to conduct a
                   study of discharges incidental to the normal operation of
                   vessels.
110-300.........  To temporarily extend the programs under the Higher          July 31, 2008........  2998
                   Education Act of 1965.
110-301.........  Libyan Claims Resolution Act...............................  Aug. 4, 2008.........  2999
110-302.........  To designate the Department of Veterans Affairs outpatient   Aug. 12, 2008........  3003
                   clinic in Wenatchee, Washington, as the Elwood ``Bud''
                   Link Department of Veterans Affairs Outpatient Clinic.
110-303.........  To designate the facility of the United States Postal        Aug. 12, 2008........  3004
                   Service located at 401 Washington Avenue in Weldon, North
                   Carolina, as the ``Dock M. Brown Post Office Building''.
110-304.........  To name the Department of Veterans Affairs medical center    Aug. 12, 2008........  3005
                   in Miami, Florida, as the ``Bruce W. Carter Department of
                   Veterans Affairs Medical Center''.
110-305.........  To designate the facility of the United States Postal        Aug. 12, 2008........  3006
                   Service located at 120 South Del Mar Avenue in San
                   Gabriel, California, as the ``Chi Mui Post Office
                   Building''.
110-306.........  To designate the facility of the United States Postal        Aug. 12, 2008........  3007
                   Service located at 10449 White Granite Drive in Oakton,
                   Virginia, as the ``Private First Class David H. Sharrett
                   II Post Office Building''.
110-307.........  To designate the facility of the United States Postal        Aug. 12, 2008........  3008
                   Service located at 1155 Seminole Trail in Charlottesville,
                   Virginia, as the ``Corporal Bradley T. Arms Post Office
                   Building''.
110-308.........  To designate the facility of the United States Postal        Aug. 12, 2008........  3009
                   Service located at 219 East Main Street in West Frankfort,
                   Illinois, as the ``Kenneth James Gray Post Office
                   Building''.
110-309.........  To designate the facility of the United States Postal        Aug. 12, 2008........  3010
                   Service located at 42222 Rancho Las Palmas Drive in Rancho
                   Mirage, California, as the ``Gerald R. Ford Post Office
                   Building''.
110-310.........  To designate the facility of the United States Postal        Aug. 12, 2008........  3011
                   Service located at 14500 Lorain Avenue in Cleveland, Ohio,
                   as the ``John P. Gallagher Post Office Building''.
110-311.........  To designate the Federal building and United States          Aug. 12, 2008........  3012
                   courthouse located at 300 Quarropas Street in White
                   Plains, New York, as the ``Charles L. Brieant, Jr.,
                   Federal Building and United States Courthouse''.
110-312.........  United States Parole Commission Extension Act of 2008......  Aug. 12, 2008........  3013
110-313.........  To amend title 35, United States Code, and the Trademark     Aug. 12, 2008........  3014
                   Act of 1946 to provide that the Secretary of Commerce, in
                   consultation with the Director of the United States Patent
                   and Trademark Office, shall appoint administrative patent
                   judges and administrative trademark judges, and for other
                   purposes.
110-314.........  Consumer Product Safety Improvement Act of 2008............  Aug. 14, 2008........  3016
110-315.........  Higher Education Opportunity Act...........................  Aug. 14, 2008........  3078

[[Page 5735]]

 
110-316.........  To amend the Federal Food, Drug, and Cosmetic Act to revise  Aug. 14, 2008........  3509
                   and extend the animal drug user fee program, to establish
                   a program of fees relating to generic new animal drugs, to
                   make certain technical corrections to the Food and Drug
                   Administration Amendments Act of 2007, and for other
                   purposes.
110-317.........  Hubbard Act................................................  Aug. 29, 2008........  3526
110-318.........  To amend the Internal Revenue Code of 1986 to restore the    Sept. 15, 2008.......  3532
                   Highway Trust Fund balance.
110-319.........  To designate the United States courthouse located at 225     Sept. 17, 2008.......  3533
                   Cadman Plaza East, Brooklyn, New York, as the ``Theodore
                   Roosevelt United States Courthouse''.
110-320.........  To designate the United States courthouse located in the     Sept. 18, 2008.......  3534
                   700 block of East Broad Street, Richmond, Virginia, as the
                   ``Spottswood W. Robinson III and Robert R. Merhige, Jr.,
                   United States Courthouse''.
110-321.........  To provide for extensions of certain authorities of the      Sept. 19, 2008.......  3535
                   Department of State, and for other purposes.
110-322.........  To amend the Federal Rules of Evidence to address the        Sept. 19, 2008.......  3537
                   waiver of the attorney-client privilege and the work
                   product doctrine.
110-323.........  Government Accountability Office Act of 2008...............  Sept. 22, 2008.......  3539
110-324.........  Veterans' Compensation Cost-of-Living Adjustment Act of      Sept. 24, 2008.......  3549
                   2008.
110-325.........  ADA Amendments Act of 2008.................................  Sept. 25, 2008.......  3553
110-326.........  To amend title 18, United States Code, to provide secret     Sept. 26, 2008.......  3560
                   service protection to former Vice Presidents, and for
                   other purposes.
110-327.........  Need-Based Educational Aid Act of 2008.....................  Sept. 30, 2008.......  3566
110-328.........  SSI Extension for Elderly and Disabled Refugees Act........  Sept. 30, 2008.......  3567
110-329.........  Consolidated Security, Disaster Assistance, and Continuing   Sept. 30, 2008.......  3574
                   Appropriations Act, 2009.
110-330.........  Federal Aviation Administration Extension Act of 2008, Part  Sept. 30, 2008.......  3717
                   II.
110-331.........  To designate the facility of the United States Postal        Sept. 30, 2008.......  3720
                   Service located at 301 Commerce Street in Commerce,
                   Oklahoma, as the ``Mickey Mantle Post Office Building''.
110-332.........  To designate the Department of Veterans Affairs clinic in    Sept. 30, 2008.......  3721
                   Alpena, Michigan, as the ``Lieutenant Colonel Clement C.
                   Van Wagoner Department of Veterans Affairs Clinic''.
110-333.........  To designate the facility of the United States Postal        Sept. 30, 2008.......  3722
                   Service located at 1717 Orange Avenue in Fort Pierce,
                   Florida, as the ``CeeCee Ross Lyles Post Office Building''.
110-334.........  To designate the Federal Bureau of Investigation building    Oct. 1, 2008.........  3723
                   under construction in Omaha, Nebraska, as the ``J. James
                   Exon Federal Bureau of Investigation Building''.
110-335.........  To amend title 11, District of Columbia Official Code, to    Oct. 2, 2008.........  3724
                   implement the increase provided under the District of
                   Columbia Appropriations Act, 2008, in the amount of funds
                   made available for the compensation of attorneys
                   representing indigent defendants in the District of
                   Columbia courts, and for other purposes.
110-336.........  Library of Congress Sound Recording and Film Preservation    Oct. 2, 2008.........  3726
                   Programs Reauthorization Act of 2008.
110-337.........  To amend title 49, United States Code, to expand passenger   Oct. 2, 2008.........  3729
                   facility fee eligibility for certain noise compatibility
                   projects.
110-338.........  John F. Kennedy Center Reauthorization Act of 2008.........  Oct. 3, 2008.........  3731
110-339.........  Healthy Start Reauthorization Act of 2007..................  Oct. 3, 2008.........  3733
110-340.........  Child Soldiers Accountability Act of 2008..................  Oct. 3, 2008.........  3735
110-341.........  To amend Public Law 108-331 to provide for the construction  Oct. 3, 2008.........  3738
                   and related activities in support of the Very Energetic
                   Radiation Imaging Telescope Array System (VERITAS) project
                   in Arizona.
110-342.........  Expressing the consent and approval of Congress to an        Oct. 3, 2008.........  3739
                   interstate compact regarding water resources in the Great
                   Lakes--St. Lawrence River Basin.
110-343.........  To provide authority for the Federal Government to purchase  Oct. 3, 2008.........  3765
                   and insure certain types of troubled assets for the
                   purposes of providing stability to and preventing
                   disruption in the economy and financial system and
                   protecting taxpayers, to amend the Internal Revenue Code
                   of 1986 to provide incentives for energy production and
                   conservation, to extend certain expiring provisions, to
                   provide individual income tax relief, and for other
                   purposes.
110-344.........  Emmett Till Unsolved Civil Rights Crime Act of 2007........  Oct. 7, 2008.........  3934
110-345.........  Drug Endangered Children Act of 2007.......................  Oct. 7, 2008.........  3938
110-346.........  North Korean Human Rights Reauthorization Act of 2008......  Oct. 7, 2008.........  3939
110-347.........  To designate the facility of the United States Postal        Oct. 7, 2008.........  3944
                   Service located at 101 West Main Street in Waterville, New
                   York, as the ``Cpl. John P. Sigsbee Post Office''.
110-348.........  To designate the facility of the United States Postal        Oct. 7, 2008.........  3945
                   Service located at 101 Tallapoosa Street in Bremen,
                   Georgia, as the ``Sergeant Paul Saylor Post Office
                   Building''.
110-349.........  To designate the facility of the United States Postal        Oct. 7, 2008.........  3946
                   Service located at 200 North Texas Avenue in Odessa,
                   Texas, as the ``Corporal Alfred Mac Wilson Post Office''.
110-350.........  To extend the authority of the Secretary of Education to     Oct. 7, 2008.........  3947
                   purchase guaranteed student loans for an additional year,
                   and for other purposes.
110-351.........  Fostering Connections to Success and Increasing Adoptions    Oct. 7, 2008.........  3949
                   Act of 2008.
110-352.........  To designate the facility of the United States Postal        Oct. 7, 2008.........  3982
                   Service located at 18 S. G Street, Lakeview, Oregon, as
                   the ``Dr. Bernard Daly Post Office Building''.
110-353.........  To designate the facility of the United States Postal        Oct. 7, 2008.........  3983
                   Service located at 1700 Cleveland Avenue in Kansas City,
                   Missouri, as the ``Reverend Earl Abel Post Office
                   Building''.
110-354.........  Breast Cancer and Environmental Research Act of 2008.......  Oct. 8, 2008.........  3984
110-355.........  Health Care Safety Net Act of 2008.........................  Oct. 8, 2008.........  3988
110-356.........  Federal Protective Service Guard Contracting Reform Act of   Oct. 8, 2008.........  3996
                   2008.
110-357.........  National Infantry Museum and Soldier Center Commemorative    Oct. 8, 2008.........  3998
                   Coin Act.
110-358.........  To amend title 18, United States Code, to provide for more   Oct. 8, 2008.........  4001
                   effective prosecution of cases involving child
                   pornography, and for other purposes.
110-359.........  Old Post Office Building Redevelopment Act of 2008.........  Oct. 8, 2008.........  4005
110-360.........  Debbie Smith Reauthorization Act of 2008...................  Oct. 8, 2008.........  4008
110-361.........  Paul D. Wellstone Muscular Dystrophy Community Assistance,   Oct. 8, 2008.........  4010
                   Research, and Education Amendments of 2008.
110-362.........  To extend for 5 years the program relating to waiver of the  Oct. 8, 2008.........  4013
                   foreign country residence requirement with respect to
                   international medical graduates, and for other purposes.
110-363.........  Boy Scouts of America Centennial Commemorative Coin Act....  Oct. 8, 2008.........  4015

[[Page 5736]]

 
110-364.........  Oregon Surplus Federal Land Act of 2008....................  Oct. 8, 2008.........  4018
110-365.........  Great Lakes Legacy Reauthorization Act of 2008.............  Oct. 8, 2008.........  4021
110-366.........  To extend the waiver authority for the Secretary of          Oct. 8, 2008.........  4025
                   Education under section 105 of subtitle A of title IV of
                   division B of Public Law 109-148, relating to elementary
                   and secondary education hurricane recovery relief, and for
                   other purposes.
110-367.........  Defense Production Act Extension and Reauthorization of      Oct. 8, 2008.........  4026
                   2008.
110-368.........  To make a technical correction in the NET 911 Improvement    Oct. 8, 2008.........  4027
                   Act of 2008.
110-369.........  United States-India Nuclear Cooperation Approval and         Oct. 8, 2008.........  4028
                   Nonproliferation Enhancement Act.
110-370.........  Native American Heritage Day Act of 2008...................  Oct. 8, 2008.........  4035
110-371.........  Appalachian Regional Development Act Amendments of 2008....  Oct. 8, 2008.........  4037
110-372.........  Senior Professional Performance Act of 2008................  Oct. 8, 2008.........  4043
110-373.........  ALS Registry Act...........................................  Oct. 8, 2008.........  4047
110-374.........  Prenatally and Postnatally Diagnosed Conditions Awareness    Oct. 8, 2008.........  4051
                   Act.
110-375.........  To repeal the provision of title 46, United States Code,     Oct. 8, 2008.........  4055
                   requiring a license for employment in the business of
                   salvaging on the coast of Florida.
110-376.........  To reauthorize the United States Fire Administration, and    Oct. 8, 2008.........  4056
                   for other purposes.
110-377.........  Poison Center Support, Enhancement, and Awareness Act of     Oct. 8, 2008.........  4063
                   2008.
110-378.........  Reconnecting Homeless Youth Act of 2008....................  Oct. 8, 2008.........  4068
110-379.........  QI Program Supplemental Funding Act of 2008................  Oct. 8, 2008.........  4075
110-380.........  To provide that funds allocated for community food projects  Oct. 8, 2008.........  4080
                   for fiscal year 2008 shall remain available until
                   September 30, 2009.
110-381.........  Michelle's Law.............................................  Oct. 9, 2008.........  4081
110-382.........  Military Personnel Citizenship Processing Act..............  Oct. 9, 2008.........  4087
110-383.........  Pechanga Band of Luiseno Mission Indians Land Transfer Act   Oct. 10, 2008........  4090
                   of 2007.
110-384.........  Let Our Veterans Rest in Peace Act of 2008.................  Oct. 10, 2008........  4094
110-385.........  To improve the quality of Federal and State data regarding   Oct. 10, 2008........  4096
                   the availability and quality of broadband services and to
                   promote the deployment of affordable broadband services to
                   all parts of the Nation.
110-386.........  Hydrographic Services Improvement Act Amendments of 2008...  Oct. 10, 2008........  4106
110-387.........  Veterans' Mental Health and Other Care Improvements Act of   Oct. 10, 2008........  4110
                   2008.
110-388.........  To provide for the appointment of the Chief Human Capital    Oct. 10, 2008........  4144
                   Officer of the Department of Homeland Security by the
                   Secretary of Homeland Security.
110-389.........  Veterans' Benefits Improvement Act of 2008.................  Oct. 10, 2008........  4145
110-390.........  White Mountain Apache Tribe Rural Water System Loan          Oct. 10, 2008........  4191
                   Authorization Act.
110-391.........  Special Immigrant Nonminister Religious Worker Program Act.  Oct. 10, 2008........  4193
110-392.........  Comprehensive Tuberculosis Elimination Act of 2008.........  Oct. 13, 2008........  4195
110-393.........  To authorize the Secretary of Commerce to sell or exchange   Oct. 13, 2008........  4203
                   certain National Oceanic and Atmospheric Administration
                   property located in Norfolk, Virginia, and for other
                   purposes.
110-394.........  National Sea Grant College Program Amendments Act of 2008..  Oct. 13, 2008........  4205
110-395.........  To designate the facility of the United States Postal        Oct. 13, 2008........  4210
                   Service located at 245 North Main Street in New City, New
                   York, as the ``Kenneth Peter Zebrowski Post Office
                   Building''.
110-396.........  To designate the facility of the United States Postal        Oct. 13, 2008........  4211
                   Service located at 2523 7th Avenue East in North Saint
                   Paul, Minnesota, as the ``Mayor William `Bill' Sandberg
                   Post Office Building''.
110-397.........  To designate the facility of the United States Postal        Oct. 13, 2008........  4212
                   Service located at 4233 West Hillsboro Boulevard in
                   Coconut Creek, Florida, as the ``Army SPC Daniel Agami
                   Post Office Building''.
110-398.........  To amend the commodity provisions of the Food,               Oct. 13, 2008........  4213
                   Conservation, and Energy Act of 2008 to permit producers
                   to aggregate base acres and reconstitute farms to avoid
                   the prohibition on receiving direct payments, counter-
                   cyclical payments, or average crop revenue election
                   payments when the sum of the base acres of a farm is 10
                   acres or less, and for other purposes.
110-399.........  To designate the facility of the United States Postal        Oct. 13, 2008........  4223
                   Service located at 156 Taunton Avenue in Seekonk,
                   Massachusetts, as the ``Lance Corporal Eric Paul
                   Valdepenas Post Office Building''.
110-400.........  Keeping the Internet Devoid of Sexual Predators Act of 2008  Oct. 13, 2008........  4224
110-401.........  Providing Resources, Officers, and Technology To Eradicate   Oct. 13, 2008........  4229
                   Cyber Threats to Our Children Act of 2008.
110-402.........  To extend the authority of the United States Supreme Court   Oct. 13, 2008........  4254
                   Police to protect court officials off the Supreme Court
                   Grounds and change the title of the Administrative
                   Assistant to the Chief Justice.
110-403.........  Prioritizing Resources and Organization for Intellectual     Oct. 13, 2008........  4256
                   Property Act of 2008.
110-404.........  Presidential Historical Records Preservation Act of 2008...  Oct. 13, 2008........  4281
110-405.........  Air Carriage of International Mail Act.....................  Oct. 13, 2008........  4287
110-406.........  Judicial Administration and Technical Amendments Act of      Oct. 13, 2008........  4291
                   2008.
110-407.........  Drug Trafficking Vessel Interdiction Act of 2008...........  Oct. 13, 2008........  4296
110-408.........  Criminal History Background Checks Pilot Extension Act of    Oct. 13, 2008........  4301
                   2008.
110-409.........  Inspector General Reform Act of 2008.......................  Oct. 14, 2008........  4302
110-410.........  To designate the Department of Veterans Affairs Outpatient   Oct. 14, 2008........  4318
                   Clinic in Hermitage, Pennsylvania, as the Michael A.
                   Marzano Department of Veterans Affairs Outpatient Clinic.
110-411.........  Native American Housing Assistance and Self-Determination    Oct. 14, 2008........  4319
                   Reauthorization Act of 2008.
110-412.........  Personnel Reimbursement for Intelligence Cooperation and     Oct. 14, 2008........  4336
                   Enhancement of Homeland Security Act of 2008.
110-413.........  Stephanie Tubbs Jones Gift of Life Medal Act of 2008.......  Oct. 14, 2008........  4338
110-414.........  Mercury Export Ban Act of 2008.............................  Oct. 14, 2008........  4341
110-415.........  Methamphetamine Production Prevention Act of 2008..........  Oct. 14, 2008........  4349
110-416.........  Mentally Ill Offender Treatment and Crime Reduction          Oct. 14, 2008........  4352
                   Reauthorization and Improvement Act of 2008.
110-417.........  Duncan Hunter National Defense Authorization Act for Fiscal  Oct. 14, 2008........  4356
                   Year 2009.
110-418.........  To designate a portion of the Rappahannock River in the      Oct. 14, 2008........  4772
                   Commonwealth of Virginia as the ``John W. Warner Rapids''.
110-419.........  To clarify the boundaries of Coastal Barrier Resources       Oct. 15, 2008........  4773
                   System Clam Pass Unit FL-64P.
110-420.........  Code Talkers Recognition Act of 2008.......................  Oct. 15, 2008........  4774
110-421.........  Bulletproof Vest Partnership Grant Act of 2008.............  Oct. 15, 2008........  4778
110-422.........  National Aeronautics and Space Administration Authorization  Oct. 15, 2008........  4779
                   Act of 2008.

[[Page 5737]]

 
110-423.........  To provide that Federal employees receiving their pay by     Oct. 15, 2008........  4818
                   electronic funds transfer shall be given the option of
                   receiving their pay stubs electronically.
110-424.........  To authorize funding to conduct a national training program  Oct. 15, 2008........  4819
                   for State and local prosecutors.
110-425.........  Ryan Haight Online Pharmacy Consumer Protection Act of 2008  Oct. 15, 2008........  4820
110-426.........  Stephanie Tubbs Jones Organ Transplant Authorization Act of  Oct. 15, 2008........  4835
                   2008.
110-427.........  To authorize the Administrator of General Services to take   Oct. 15, 2008........  4837
                   certain actions with respect to parcels of real property
                   located in Eastlake, Ohio, and Koochiching County,
                   Minnesota, and for other purposes.
110-428.........  Inmate Tax Fraud Prevention Act of 2008....................  Oct. 15, 2008........  4839
110-429.........  To authorize the transfer of naval vessels to certain        Oct. 15, 2008........  4842
                   foreign recipients, and for other purposes.
110-430.........  Appointing the day for the convening of the first session    Oct. 15, 2008........  4846
                   of the One Hundred Eleventh Congress and establishing the
                   date for the counting of the electoral votes for President
                   and Vice President cast by the electors in December 2008.
110-431.........  To authorize funding for the National Crime Victim Law       Oct. 15, 2008........  4847
                   Institute to provide support for victims of crime under
                   Crime Victims Legal Assistance Programs as a part of the
                   Victims of Crime Act of 1984.
110-432.........  To amend title 49, United States Code, to prevent railroad   Oct. 16, 2008........  4848
                   fatalities, injuries, and hazardous materials releases, to
                   authorize the Federal Railroad Safety Administration, and
                   for other purposes.
110-433.........  To extend through 2013 the authority of the Federal          Oct. 16, 2008........  4971
                   Election Commission to impose civil money penalties on the
                   basis of a schedule of penalties established and published
                   by the Commission.
110-434.........  Vessel Hull Design Protection Amendments of 2008...........  Oct. 16, 2008........  4972
110-435.........  Webcaster Settlement Act of 2008...........................  Oct. 16, 2008........  4974
110-436.........  To extend the Andean Trade Preference Act, and for other     Oct. 16, 2008........  4976
                   purposes.
110-437.........  Capitol Visitor Center Act of 2008.........................  Oct. 20, 2008........  4983
110-438.........  National Guard and Reservists Debt Relief Act of 2008......  Oct. 20, 2008........  5000
110-439.........  To designate the facility of the United States Postal        Oct. 21, 2008........  5003
                   Service located at 2150 East Hardtner Drive in Urania,
                   Louisiana, as the ``Murphy A. Tannehill Post Office
                   Building''.
110-440.........  To designate the facility of the United States Postal        Oct. 21, 2008........  5004
                   Service located at 100 West Percy Street in Indianola,
                   Mississippi, as the ``Minnie Cox Post Office Building''.
110-441.........  To designate a portion of California State Route 91 located  Oct. 21, 2008........  5005
                   in Los Angeles County, California, as the ``Juanita
                   Millender-McDonald Highway''.
110-442.........  To designate the facility of the United States Postal        Oct. 21, 2008........  5007
                   Service located at 1750 Lundy Avenue in San Jose,
                   California, as the ``Gordon N. Chan Post Office Building''.
110-443.........  To designate the facility of the United States Postal        Oct. 21, 2008........  5008
                   Service located at 300 Vine Street in New Lenox, Illinois,
                   as the ``Jacob M. Lowell Post Office Building''.
110-444.........  To designate the facility of the United States Postal        Oct. 21, 2008........  5009
                   Service located at 4 South Main Street in Wallingford,
                   Connecticut, as the ``CWO Richard R. Lee Post Office
                   Building''.
110-445.........  To designate the facility of the United States Postal        Oct. 21, 2008........  5010
                   Service located at 801 Industrial Boulevard in Ellijay,
                   Georgia, as the ``First Lieutenant Noah Harris Ellijay
                   Post Office Building''.
110-446.........  To designate the facility of the United States Postal        Oct. 21, 2008........  5011
                   Service located at 513 6th Avenue in Dayton, Kentucky, as
                   the ``Staff Sergeant Nicholas Ray Carnes Post Office''.
110-447.........  To designate the facility of the United States Postal        Oct. 21, 2008........  5012
                   Service located at 210 South Ellsworth Avenue in San
                   Mateo, California, as the ``Leo J. Ryan Post Office
                   Building''.
110-448.........  To designate the facility of the United States Postal        Oct. 22, 2008........  5013
                   Service located at 7095 Highway 57 in Counce, Tennessee,
                   as the ``Pickwick Post Office Building''.
110-449.........  Unemployment Compensation Extension Act of 2008............  Nov. 21, 2008........  5014
110-450.........  United States Army Commemorative Coin Act of 2008..........  Dec. 1, 2008.........  5017
110-451.........  Civil Rights Act of 1964 Commemorative Coin Act............  Dec. 2, 2008.........  5021
110-452.........  Child Safe Viewing Act of 2007.............................  Dec. 2, 2008.........  5025
110-453.........  To direct the Secretary of the Interior to take into trust   Dec. 2, 2008.........  5027
                   2 parcels of Federal land for the benefit of certain
                   Indian Pueblos in the State of New Mexico, and for other
                   purposes.
110-454.........  To designate the facility of the United States Postal        Dec. 19, 2008........  5035
                   Service located at 1501 South Slappey Boulevard in Albany,
                   Georgia, as the ``Dr. Walter Carl Gordon, Jr. Post Office
                   Building''.
110-455.........  Ensuring that the compensation and other emoluments          Dec. 19, 2008........  5036
                   attached to the office of Secretary of State are those
                   which were in effect on January 1, 2007.
110-456.........  America's Beautiful National Parks Quarter Dollar Coin Act   Dec. 23, 2008........  5038
                   of 2008.
110-457.........  William Wilberforce Trafficking Victims Protection           Dec. 23, 2008........  5044
                   Reauthorization Act of 2008.
110-458.........  Worker, Retiree, and Employer Recovery Act of 2008.........  Dec. 23, 2008........  5092
110-459.........  Short-term Analog Flash and Emergency Readiness Act........  Dec. 23, 2008........  5121
110-460.........  To make a technical correction in the Paul Wellstone and     Dec. 23, 2008........  5123
                   Pete Domenici Mental Health Parity and Addiction Equity
                   Act of 2008.
 


[[Page 5739]]

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Part III





Department of Justice





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28 CFR Part 25



 National Motor Vehicle Title Information System (NMVTIS); Final Rule

Federal Register / Vol. 74 , No. 19 / Friday, January 30, 2009 / 
Rules and Regulations

[[Page 5740]]


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DEPARTMENT OF JUSTICE

28 CFR Part 25

[Docket No. FBI 117; AG Order No. 3042-2009]
RIN 1110-AA30


National Motor Vehicle Title Information System (NMVTIS)

AGENCY: Department of Justice.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The National Motor Vehicle Title Information System (NMVTIS) 
has been established pursuant to 49 U.S.C. 30502 and has the 
participation, or partial participation, of at least 36 states. The 
purpose of NMVTIS is to assist in efforts to prevent the introduction 
or reintroduction of stolen motor vehicles into interstate commerce, 
protect states and individual and commercial consumers from fraud, 
reduce the use of stolen vehicles for illicit purposes including 
fundraising for criminal enterprises, and provide consumer protection 
from unsafe vehicles. This rule implements the NMVTIS reporting 
requirements imposed on junk yards, salvage yards, and insurance 
carriers pursuant to 49 U.S.C. 30504(c). This rule also clarifies the 
process by which NMVTIS will be funded and clarifies the various 
responsibilities of the operator of NMVTIS, states, junk yards, salvage 
yards, and insurance carriers regarding NMVTIS.

DATES: Effective Date: This rule is effective March 2, 2009.

FOR FURTHER INFORMATION CONTACT: Alissa Huntoon, 810 7th Street, NW., 
Washington, DC 20531, 202-616-6500, www.NMVTIS.gov.

SUPPLEMENTARY INFORMATION: 

Background

    The Anti-Car Theft Act of 1992, Public Law No. 102-519, 106 Stat. 
3384, required the Department of Transportation (DOT) to establish an 
information system intended to enable states and others to access 
automobile titling information. As part of the Anti-Car Theft Act of 
1992, DOT was authorized to designate a third party to operate the 
system. Since 1992, the American Association of Motor Vehicle 
Administrators (AAMVA) has acted in the capacity of the operator of the 
system. AAMVA is a nonprofit, tax exempt, educational association 
representing U.S. and Canadian officials who are responsible for the 
administration and enforcement of motor vehicle laws. The requirements 
of the Anti-Car Theft Act of 1992 were amended by Public Law 103-272 
and the Anti-Car Theft Improvements Act of 1996, Public Law No. 104-
152, 110 Stat. 1384. The Anti-Car Theft Improvements Act of 1996 
renamed the automobile titling system the ``National Motor Vehicle 
Title Information System'' and transferred responsibility for 
implementing the system from DOT to the Department of Justice (DOJ). 
Hereinafter, the Anti-Car Theft Act of 1992 and the revisions made by 
Public Law 103-272 and the Anti-Car Theft Improvements Act of 1996, 
codified at 49 U.S.C. 30501-30505, are collectively referred to as the 
``Anti-Car Theft Act''or the ``Act.''
    While the overall purpose of the Anti-Car Theft Act is to prevent 
and deter auto theft, title II of the Act, which authorizes NMVTIS, is 
intended to address automobile title fraud. Accordingly, the primary 
purpose of NMVTIS is to prevent various types of theft and fraud by 
providing an electronic means for verifying and exchanging title, 
brand, theft, and other data among motor vehicle administrators, law 
enforcement officials, prospective and current purchasers (individual 
or commercial), and insurance carriers.\1\ Currently, 37 states are 
actively involved with NMVTIS, representing nearly 75% of the U.S. 
motor vehicle population. Specifically, 13 states are participating 
fully in NMVTIS, 14 states are regularly providing data to the system, 
and an additional 10 states are actively taking steps to provide data 
or participate fully.\2\ States that participate fully in the system 
provide data to the system on a daily or real-time basis and make 
NMVTIS inquiries before issuing a new title on a vehicle from out of 
state and preferably before every title verification, regardless of its 
origin or reason. Participating states also pay user fees to support 
the system and the services provided to the state.
---------------------------------------------------------------------------

    \1\ Brands are descriptive labels regarding the status of a 
motor vehicle, such as ``junk,'' ``salvage,'' and ``flood'' 
vehicles.
    \2\ There are currently 13 states participating fully in NMVTIS: 
Arizona, Florida, Indiana, Iowa, Kentucky, Massachusetts, New 
Hampshire, Nevada, Ohio, South Dakota, Virgina, Washington, and 
Wisconsin. Fourteen states are providing regular data updates to 
NMVTIS: Alabama, California, Delaware, Georgia, Idaho, Louisiana, 
Nebraska, New Jersey, New York, North Carolina, Pennsylvnia, 
Tennesses, Texas, and Wyoming. Ten states are actively taking steps 
to provide data or participate fully: Arkansas, Michigan, Minnesota, 
Missouri, Montaina, New Mexico, Oklahoma, South Carolina, Vermont, 
and West Virginia. See www.NMVTIS.gov for a map of current 
participation status.
---------------------------------------------------------------------------

    In 2006, the Integrated Justice Information Systems (IJIS) 
Institute, a nonprofit membership organization made up of technology 
companies, was asked by Department of Justice's Bureau of Justice 
Assistance (BJA) to conduct a full review of the NMVTIS system 
architecture to identify any technological barriers to NMVTIS 
implementation and to determine if any potential cost savings was 
available through emerging technology. The IJIS Institute report found 
that ``the NMVTIS program provides an invaluable benefit to state 
vehicle administrators and the public community as a whole. Advantages 
of the program include improving the state titling process, as well as 
providing key information to consumers and law enforcement agencies.'' 
In addition to this study, the Government Accountability Office (GAO) 
also found NMVTIS to hold benefit potential for states, and a private 
cost-benefit study also determined that NMVTIS could provide benefits 
in the range of $4 to $11 billion dollars annually if fully 
implemented. NMVTIS and its benefits to states, law enforcement, 
consumers, and others have been widely touted by motor vehicle or auto-
industry organizations including AAMVA and the National Automobile 
Dealers Association (NADA), by law enforcement organizations such as 
the International Association of Chiefs of Police and the National 
Sheriffs Association, by the North American Export Committee (NAEC), 
and by the International Association of Auto Theft Investigators. 
NMVTIS's benefits have also been recognized by national consumer 
advocacy organizations, and by industry-affiliated groups including the 
National Salvage Vehicle Reporting Program and many others, as 
identified in the public comments.
    NMVTIS is a powerful tool for state titling agencies. Fully 
participating state titling agencies are able to use NMVTIS to prevent 
fraud by verifying the motor vehicle and title information, information 
on brands applied to a motor vehicle, and information on whether the 
motor vehicle has been reported stolen--all prior to the titling 
jurisdiction issuing a new title. In order to perform this check, these 
states run the vehicle identification number (VIN) against a national 
pointer file, which provides the last jurisdiction that issued a title 
on the motor vehicle and requests details of the motor vehicle from 
that jurisdiction. Using a secure connection, states then receive all 
required information or the complete title of record from the state of 
record. States can then use this information to verify information on 
the paper title being presented.
    Verification of this data allows fully participating states to 
reduce the issuance of fraudulent titles and reduce

[[Page 5741]]

odometer fraud. Once the inquiring jurisdiction receives the 
information, a state is able to decide whether to issue a title. For 
states fully participating through integrated, online access, if a new 
title is issued, NMVTIS notifies the last titling jurisdiction that 
another jurisdiction has issued a title. The old jurisdiction then can 
inactivate its title record. This action allows fully participating 
jurisdictions to identify and purge inactive titles on a regular basis 
and eliminates the need for these agencies to conduct these processes 
manually. This service provides a measurable benefit to states in terms 
of cost savings. In 2007, over 18.4 million title-update transactions 
were initiated and over 45 million messages were generated via NMVTIS, 
which allows states to work and communicate securely and to perform 
electronic title transactions between states.
    NMVTIS also allows fully participating states to ensure that brands 
are not lost when a motor vehicle travels from state to state. As noted 
above, brands are descriptive labels regarding the status of a motor 
vehicle. Many brands, such as a flood vehicle brand, indicate that a 
motor vehicle may not be safe for use. Unfortunately, motor vehicles 
with brands on their titles can have their brands ``washed'' (i.e., 
removed ) from a title if the motor vehicle is retitled in another 
state that does not check with the state that issued the previous title 
and with other states that may have previously issued titles on the 
vehicle to determine if it has any existing brands not shown on the 
paper title. Because NMVTIS keeps a history of brands applied by any 
state to the motor vehicle at any time, it protects individual and 
corporate consumers by helping ensure full disclosure so that 
purchasers are not defrauded or placed at risk by purchasing an unsafe 
motor vehicle. Currently, there are approximately 300,000,000 VINs in 
NMVTIS with over 40,000,000 brands included. NMVTIS also prevents 
``clean title'' vehicles that are actually a total loss or salvage from 
being used to generate a paper title that is later attached to a stolen 
vehicle that is ``cloned'' to the destroyed ``clean title'' vehicle. 
Criminal enterprises seek these ``clean title'' vehicles, which are low 
cost to them (because they are destroyed or salvage), because it 
increases their return when they sell a cloned stolen vehicle. It has 
been noted that criminal profits in such a case can more than quadruple 
if a ``clean title'' vehicle is used for cloning. Even worse, because 
these cloned vehicles are able to get into the titling systems of the 
non-participating states, they often continue to be sold to new and 
unsuspecting owners. There have been cases involving car dealers who 
had purchased stolen cloned vehicles and resold them to individual 
consumers. NMVTIS also provides protections from other types of related 
theft and fraud that ultimately place lives at risk and cost states, 
consumers, and the private sectors billions of dollars each year. The 
proceeds from these illicit activities support additional crime and 
fraud and even serious and violent crime. For more information on the 
benefits of NMVTIS, visit www.NMVTIS.gov.

Discussion of Comments

    On September 22, 2008, the Department of Justice published a 
proposed rule to implement various requirements concerning NMVTIS. See 
National Motor Vehicle Title Information System (NMVTIS), 73 FR 54544 
(Sept. 22, 2008). The rule proposed the imposition of reporting 
requirements on junk yards, salvage yards, and insurance carriers. In 
addition, the rule clarified the funding process for NMVTIS and the 
responsibilities of the operator of NMVTIS, states, junk yards, salvage 
yards, and insurance carriers. The comments and the Department's 
responses are discussed below:

1. General Comments

    Comment: Several commenters suggested that NMVTIS will deter 
various types of crime and fraud and suggested that since the passage 
of the Anti-Car Theft Act, the types of crime and fraud, as well as the 
methods, have evolved. These commenters noted that the purpose of 
NMVTIS remains to address these types of crime and fraud.
    Response: DOJ agrees that since the passage of the Anti-Car Theft 
Act, crimes and crime techniques have evolved. DOJ, therefore, has 
updated the stated purpose of NMVTIS to be more reflective of the crime 
and expansive direct and indirect fraud NMVTIS was intended to address 
and is addressing today.
    Comment: The American Salvage Pool Association (ASPA) commented 
that junk and salvage yards have an exemption for reporting where and 
when a non-stolen verification is obtained under 49 U.S.C. 33110, which 
authorizes a system that has never been implemented. The ASPA commented 
that this exemption ``is telling, however, in linking NMVTIS'[s] 
statutory purpose to theft prevention, as opposed to brand 
information.''
    Response: In addition to the fact that title II of the Anti-Car 
Theft Act addresses fraud, it is clear that brand information can be 
directly linked to vehicle theft in addition to fraud. Law enforcement 
investigations have repeatedly shown that ``clean title'' total loss 
vehicles are a preferred commodity among car cloning and car theft 
rings, as they bring a higher return on investment. The Anti-Car Theft 
Act exemption, which is in 49 U.S.C. 33111, provides that junk and 
salvage yards are not required to report on an automobile if they are 
issued a verification under 49 U.S.C. 33110 stating that the automobile 
or parts from the automobile are not reported as stolen.

2. Effectiveness

    Comment: Several submissions questioned the effectiveness of NMVTIS 
in eliminating or preventing fraud and theft. Several of these 
commenters suggested the need for quantitative proof of the system's 
effectiveness before the law should be followed. At the same time, 
however, several submissions recognized the value of NMVTIS. As one 
commenter noted, ``NMVTIS would undoubtedly cut down on the number of 
rebuilt wreck fraud cases.'' And the State of Texas Department of 
Transportation noted that ``[t]he system provides numerous obvious 
benefits to titling agencies, law enforcement[,] and vehicle sellers, 
as well as consumer protection to the buying public.''
    Response: The Anti-Car Theft Act's participation requirements were 
established based on analyses presented at the time of the bill's 
introduction and passing. Further, an extensive cost-benefit analysis 
and a Government Accountability Office study both have independently 
determined that NMVTIS will produce a significant public benefit that 
greatly exceeds the costs of implementing the program. The cost-benefit 
study found that the system is only as effective as the number of 
vehicles represented in the system. Non-participating states create 
``loopholes'' where brands can be washed, allowing further fraud in any 
state--participating or not. Discussions with private-vehicle-history-
report providers and ongoing law enforcement investigations at the 
state, local, and federal levels have shown that non-participating 
states are targeted for exploitation because their vehicle titling 
information is not immediately shared with other states and because 
they have no efficient ability to inquire with all other states that 
may have previously titled the vehicle.
    Feedback from participating states points to other positive 
outcomes of the program. One state reports a 17%

[[Page 5742]]

decrease in motor vehicle thefts; another reports a 99% recovery rate 
on vehicles identified as stolen; three states have identified cloned 
vehicles by working together, prior to issuing new titles; and another 
state reports cracking a car theft ring responsible for cloning more 
than 250 cars worth $8 million. Aside from these results, it is clear 
that if all states comply with the Anti-Car Theft Act requirements, 
brand washing in the way it is most commonly conducted today will be 
eliminated because there is no other way to title a vehicle other than 
going through a state titling process. The same goes for vehicle 
cloning, which would be virtually eliminated if every state 
participated as required.
    Moreover, Experian Automotive reported that in the first six months 
of 2008 alone, there have already been more than 185,000 titles that 
initially were branded in one state, and were then transferred and re-
titled in a second state in a way that resulted in a purportedly clean 
title. Given all these facts, we can be sure that NMVTIS will be 
effective in eliminating this type of fraud, preventing a significant 
number of crimes, and potentially saving the lives of citizens who 
would otherwise purchase unsafe vehicles.
    In addition to the system's documented value in reducing theft and 
fraud in protecting consumers, the system also has been shown to create 
greater efficiencies within the titling process when the inquiry and 
response are integrated into the states' titling processes.
    Comment: NAEC commented that ``the effectiveness [of NMVTIS] can 
only be truly measured [when] all jurisdictions are participating, 
because of the holes that are currently in the system due to lack of 
full participation.'' The State of California Department of Motor 
Vehicles seemingly agreed with this comment when it noted that ``these 
beneficial outcomes can only be achieved when all 50 states and the 
District of Columbia are participating.'' The Virginia Department of 
Motor Vehicles commented that ``the system provides a great value to 
participating states, and that value will exponentially increase as 
each jurisdiction begins fully participating.''
    Response: DOJ agrees in part with these assessments. As discussed 
above, partial participation creates loopholes that criminal 
organizations exploit, and, therefore, measuring the full benefit of a 
comprehensive NMVTIS is difficult without participation by all states. 
However, NMVTIS provides significant benefits to participating states 
even when state participation is not at 100%.
    Comment: One commenter asked if the information would have much 
``practical utility,'' or whether it would only serve as further 
documentation of a market that is only broadly related to secondary 
criminal enterprises. The commenter further noted that ``the rule will 
only spur increased sophistication of organized crime. This increased 
sophistication must be balanced against the proposed benefits from the 
small contraction in the secondary criminal market that is assumed to 
occur under this rule. One of the benefits of the proposed rule is the 
documentation of salvage pool sales. But this benefit is limited: it 
will only require criminals to go through more steps, steps that 
require increased organizational skills. Hence, although the rule may 
push some criminals out of the market overall (the less sophisticated 
and organized), it will also indirectly spur increased sophistication 
and organization of the surviving criminal organizations. Although one 
of the primary goals of NMVTIS is theft deterrence, there is no data to 
support the conclusion that this portion of the criminal market will be 
affected by the proposed rule.''
    Response: DOJ disagrees with these comments. Substantial evidence, 
statements, and documentation indicate that NMVTIS will impact vehicle 
theft and fraud.
    Comment: Several commenters, including law enforcement, consumer 
advocates, industry associations, and state motor vehicle 
administrators, including California's, noted that NMVTIS is needed and 
will be effective in addressing the threats of auto theft, cloning, and 
fraud, and in providing protection for consumers against fraud.
    Response: DOJ agrees with these comments and notes that the 
expected benefits and positive outcomes of NMVTIS have been confirmed 
not only by government and private research, but also by multiple 
representatives of every stakeholder community affected by the system, 
including state titling agencies, state and local law enforcement, 
consumers, insurance carriers, and junk-or salvage-yard operators.
    Comment: The NAEC commented that law enforcement successes to date 
can validate the benefits and costs associated with NMVTIS and that 
``the NAEC is solid in its belief that NMVTIS is a fundamentally sound 
approach to `title washing,' title fraud, vehicle theft[,] and public 
safety related to the `branding' of un-road worthy vehicles in this 
Country.'' The NAEC provided data from one state that uses NMVTIS and, 
as a result, has identified and recovered hundreds of stolen vehicles. 
The NAEC further commented that to suggest that the system should be 
cancelled ``demonstrates a lack of understanding [of] the magnitude of 
the vehicle theft problem in North America and Public Safety issues 
surrounding `branded' vehicles.''
    Response: DOJ agrees with the NAEC's assessment of NMVTIS.
    Comment: The State of Illinois Motor Vehicle Administration 
commented that other services have become available since the Anti-Car 
Theft Act was passed and that NMVTIS should ``be put on hold'' while an 
analysis on the need for NMVTIS can be conducted. The Maine Bureau of 
Motor Vehicles suggested that NMVTIS was not needed because ``consumers 
have other options for checking vehicle title status prior to 
purchase.''
    Response: While other fee-based options for checking vehicle title 
status are available for consumers, the ability of consumers to check 
NMVTIS for vehicle title status is required by federal law and a 
federal court order. When fully implemented, NMVTIS will provide 
assurances that no other option can provide--complete and timely 
information on all vehicles in the U.S. The Anti-Car Theft Act provided 
no flexibility for states, insurance carriers, or junk or salvage yards 
to filter information shared with NMVTIS; thus NMVTIS will be the most-
reliable source of information once fully implemented. Several 
providers of vehicle history information have agreed to make NMVTIS 
data available as a way of enhancing their products, demonstrating that 
NMVTIS does have unique value. DOJ is not in a position to put NMVTIS 
on hold, as recent litigation was based on the complaint that DOJ had 
waited too long to issue NMVTIS regulations. A court has ordered DOJ to 
publish these regulations by January 30, 2009. See Public Citizen, Inc. 
v. Mukasey, No. 3:08-cv-00833-MHP, 2008 WL 4532540 (N.D. Cal. Oct. 9, 
2008).
    Comment: One commenter noted that ``it is beyond the scope of the 
NMVTIS regulations to reform the process by which insurers assign title 
designations; however having the sales reported in a timely fashion, 
and by including appropriate identification of both international, 
domestic (out of state) and domestic (in state) buyers, it will help 
the Law Enforcement Community in its effort to control crime and 
protect the public.''
    Response: It is beyond the scope of NMVTIS and DOJ's intentions to 
alter insurance carrier policies and procedures in terms of title 
designations. While transfers of vehicles from insurance carriers to 
others would

[[Page 5743]]

likely be captured in the NMVTIS reporting process due to subsequent 
reporting by junk and salvage yards, it is unlikely that the names of 
buyers will be reported or captured in the system because this is not a 
required data field. Requiring the name of such buyers is of 
significant value to law enforcement for preventing and investigating 
automobile theft and fraud. Additionally, as is pointed out elsewhere 
in these comments, establishing a ``chain of possession or custody'' is 
important for effective and efficient law enforcement investigations.
    Comment: One commenter noted that ``[a]ccording to Experian 
Automotive, (PR Newswire August 25, 2008 Experian, Schaumburg, IL), in 
the first 6 months of 2008 alone, there have already been more than 
185,000 titles that initially were branded in the first state, and were 
then transferred and re-titled in a second state in a way that resulted 
in a `clean' title. This situation cannot be addressed without much 
stronger controls and full reporting. There is a great deal of abuse of 
the title system and we regularly observe severely damaged units that 
have been given clean title designations to vehicles that have massive 
damage. As a result, criminals regularly buy these vehicles for the 
paper, and steal a like vehicle and engage in cloning or VIN 
swapping.''
    Response: Once all states comply with the law, NMVTIS will protect 
against these types of abuses by creating a brand history (a record of 
the various brands associated with a particular VIN) for every vehicle, 
which will prevent a future title-issuing agent from being unaware of a 
vehicle's brand history and will eliminate the possibility of a vehicle 
being titled in more than one state (a common occurrence today).
    Comment: Maine Bureau of Motor Vehicles commented that Maine 
``already has procedures in place to check for stolen status prior to 
issuing a title and for carrying forward out-of-state brands.''
    Response: NMVTIS is designed to provide more than a simple stolen-
vehicle check. Further, neither carrying forward out-of-state brands 
based on paper titles presented, nor checking the paper documentation 
against a third-party data provider, eliminates brand washing. Washed 
brands may not appear on paper or in third-party databases. Because 
states are required to report title transactions to NMVTIS and to check 
NMVTIS prior to issuing a new title, NMVTIS is the only system that can 
eliminate such brand washing when fully implemented. No state, except 
those participating in NMVTIS when fully implemented, has any ability 
to fully verify brand histories and carry forward out-of-state brands 
without manually contacting every state and the District of Columbia 
prior to issuing a new title.
    Comment: One commenter noted that ``the benefits of NMVTIS are also 
not illogical simply because concrete figures do not exist concerning 
its limited implementation.'' ``Given NMVTIS'[s] [implementation] 
status, any figures outlining the benefits would prove highly 
conservative even if found. It is not difficult to imagine though that 
illegal reselling of salvaged vehicles takes advantage [of] reporting 
gaps by moving across state lines. Statistics concerning such 
operations are well-documented even if the benefits of NMVTIS are 
not.'' ``Being able to verify the success and results of NMVTIS thus 
depends critically on the provision of information from all states.''
    Response: DOJ agrees with this comment.
    Comment: The Missouri Department of Revenue commented that the 
system is only as good as the number of jurisdictions participating, 
and in light of current participation levels, the state is expending 
resources for data that may not be inclusive or accurate.
    Response: As of December 2008, NMVTIS includes nearly 75% of the 
U.S. vehicle population. At the same time, several states are actively 
working towards participation in NMVTIS, which will take NMVTIS closer 
to 100% participation. With the inclusion of insurance and junk- and 
salvage-yard information, and given that many states report to NMVTIS 
in ``real time,'' NMVTIS is likely to be as inclusive as any vehicle 
title history database available, even before 100% state participation. 
As for accuracy, the system currently includes only data from state 
motor vehicle administrations, and DOJ is aware of no errors in NMVTIS. 
As stated in this rule, procedures and safeguards will be put into 
place to ensure identification and correction of any errors identified. 
Non-participating states, on the other hand, are expending their 
resources based on fraudulent information when they issue titles in 
many situations.

3. Need and Purpose

    Comment: One commenter asked ``To what extent is consumer 
protection and the prevention of fraud in the secondary car market 
domestically and internationally a high priority for the agency?''
    Response: The prevention of fraud that affects U.S. citizens, 
whether it be here or abroad, and consumer protection are priorities 
for DOJ and for NMVTIS. DOJ's Strategic Plan includes in its second 
goal ``Strategic Objective 2.5: Combat public and corporate corruption, 
fraud, economic crime, and cybercrime.'' U.S. Department of Justice 
Strategic Plan, Fiscal Years 2007-2012.
    Comment: One commenter noted that states often sell their vehicle 
history records to private, third-party organizations who then resell 
the data. The commenter requested that the final rule spell out that 
the states own the data and that the operator of the system may not 
resell the data to other providers without authorization of the states.
    Response: While NMVTIS may contain a subset of data on vehicles 
titled within the U.S., it does not include all of the information a 
state motor vehicle administration may possess. DOJ agrees that the 
state-maintained vehicle history databases are the province of the 
states, and that the intent of the Anti-Car Theft Act was not to create 
a database of information for bulk resale. The operator of the system, 
therefore, will not resell the NMVTIS database in its entirety to 
anyone. Two key goals of the Anti-Car Theft Act, however, are consumer 
access to the data and a self-funded system. For these reasons, the 
operator will be allowed to charge consumers for use.
    Comment: The State of Illinois motor vehicle administration 
questioned how NMVTIS will interface with law enforcement data systems 
within the state that are used to identify and ``flag'' stolen 
vehicles.
    Response: NMVTIS is not expected to ``interface'' with law 
enforcement systems within the state. Information in NMVTIS related to 
a vehicle's ``theft status'' or history emanates from one of two 
places--state brands and the theft file of the National Insurance Crime 
Bureau (NICB), which is derived from the FBI's National Crime 
Information Center (NCIC). Law enforcement systems will be able to link 
or connect to the NMVTIS law enforcement access site, however, which 
will include all NMVTIS information without restriction. NCIC will 
always be the primary repository of active theft files for law 
enforcement. Stolen vehicle information in NMVTIS is provided only for 
state titling purposes for those states that cannot access NCIC or 
state-based law enforcement systems.

4. Prospective Purchaser Inquiries

    Comment: The Idaho Transportation Department commented that the 
proposed rules included several data elements in the requirement for 
prospective-purchaser inquiry responses

[[Page 5744]]

or consumer access reports that would effectively eliminate the need 
for an actual state record to be requested by a consumer or prospective 
purchaser, thereby reducing state revenues realized from the sale of 
motor vehicle records.
    Response: At a minimum, NMVTIS will provide the following pieces of 
information in response to an inquiry, if that data is present in 
NMVTIS: (a) The current state of title; (b) the brand history of the 
vehicle; (c) the latest reported odometer reading; and (d) information 
about the vehicle's reported appearance in the inventory of a covered 
junk or salvage yard or on any insurance carrier determination of total 
loss related to that vehicle. There are several reasons, however, why 
states are likely to continue to experience demand for their full title 
records. First, states often possess additional information that is not 
anticipated to be within NMVTIS but that is of interest to many 
purchasers. This information may include ownership information, lien-
holder information, registration information, safety-inspection data, 
and other details that the states may have but are not required to 
report to NMVTIS. Second, by providing consumers with the current state 
of title, NMVTIS actually serves as a nationwide pointer that will 
result in an increase in requests for state records. And DOJ will 
direct the operator to ensure that all consumer access portal providers 
provide consumers with a link to the state's site or to the state's 
designated vehicle history report access point, enabling consumers to 
purchase the full state record. Third, states are eligible to become 
portal providers, thereby capturing an opportunity to increase revenues 
by providing access to NMVTIS data and to the states' records for a 
state-determined fee.
    Comment: The State of Nevada Department of Motor Vehicles commented 
that ``Nevada will not allow the unauthorized release of the title data 
we send to NMVTIS. Nevada statutes limit what data can be released and 
to whom. Will AAMVA have the capability and assume the responsibility 
of prescreening those who want to access Nevada title data to ensure 
the disclosure complies with Nevada statutes? Will AAMVA have the 
capability of collecting and forwarding the fees currently charged for 
accessing and receiving Nevada's title records without Nevada becoming 
a third party?''
    Response: Neither NMVTIS nor the operator will be releasing any 
state's vehicle title records. The information that will be shared via 
NMVTIS is not a state's vehicle title record and is generated from the 
index maintained by NMVTIS, with limited information on the identified 
vehicle, as authorized and directed by the Anti-Car Theft Act. This 
federal statute provides the necessary authorization and direction 
concerning what information will be shared, how it will be shared, and 
to whom it can be shared. After providing the NMVTIS information in 
response to a consumer inquiry, NMVTIS, through the third-party portal 
providers, will offer consumers the ability to be directed to the state 
of record's Web site in order to purchase the state's full vehicle 
title record from the current state of record. Once that ``handoff'' 
occurs, any decision by consumers to purchase the state's title record 
will be governed by applicable state statutes, policies, and processes, 
and by the state's vehicle-history-report provider's policies and 
processes. NMVTIS prospective purchaser inquiry was designed in this 
way in an effort to point consumers to state Web sites for state 
vehicle title histories from that state should they be desired and 
available, thus enabling consumers to purchase the full record and 
generating revenues for the states.
    Comment: Several motor vehicle administration agencies and other 
organizations commented that if personal information is released by 
NMVTIS to non-government organizations, it may be in conflict with the 
provisions of the Driver's Privacy Protection Act of 1994 (DPPA). 
Several of these commenters recommended that this information only be 
available to law enforcement or government organizations, while others 
indicated that they would be prohibited from sharing personal 
information with prospective purchasers.
    Response: According to the DPPA, 18 U.S.C. 2721(b)(2), permitted 
uses of information protected by the DPPA include ``[f]or use in 
connection with matters of motor vehicle or driver safety and theft; 
motor vehicle emissions; motor vehicle product alterations, recalls, or 
advisories; performance monitoring of motor vehicles, motor vehicle 
parts and dealers; motor vehicle market research activities, including 
survey research; and removal of non-owner records from the original 
owner records of motor vehicle manufacturers.'' In addition, 18 U.S.C. 
2721(b)(3) provides additional authorizations ``[f]or use in the normal 
course of business by a legitimate business or its agents, employees, 
[or] contractors.'' These exceptions include sufficient authorization 
for states to provide access to personal identifying information, and 
many commenters agreed. Nonetheless, NMVTIS includes personal 
information primarily for the benefit of law enforcement agencies, 
including governmental regulatory and compliance-monitoring agencies 
that may not have immediate access to such data or to state motor 
vehicle-history files. NMVTIS will not provide personal information in 
the NMVTIS central file to individual prospective purchasers and may 
not provide access to any other type of user without securing DOJ 
approval of such access.
    Comment: Several commenters, notably from the consumer-advocacy 
community, encouraged DOJ to ``minimize, to the greatest extent 
possible[,] any cost to consumers for accessing the data base.''
    Response: By statute, the fees NMVTIS charges will not be more than 
the costs of operating the system. Although NMVTIS does not control 
what portal providers will charge for consumer access to the data, by 
making that data available to all potential portal providers at the 
same price, it will be difficult for any provider to charge too high a 
premium for access to that data.
    Comment: One commenter noted that NMVTIS will make it possible for 
users to understand either what a state-issued brand (i.e., statement 
of the condition or prior use of a vehicle) means or to which state 
they need to go to understand the brand's meaning. ``Even if in some 
circumstances NMVTIS can say nothing more than `branded in jurisdiction 
X,' at least the NMVTIS user will know which [state] jurisdiction to 
consult.''
    Response: Because neither the Anti-Car Theft Act nor NMVTIS creates 
universal brands, DOJ will direct the NMVTIS operator to ensure that 
consumer-access portal providers provide a link to brand definitions 
and any available related explanations, so that consumers can be aware 
of how brands may be defined. One of NMVTIS's benefits is that it will 
identify which states have branded a vehicle, informing consumers of 
which jurisdiction to consult for further information.
    Comment: The State of Alaska commented that neither DOJ nor the 
NMVTIS operator should be permitted to discount transaction fees for 
volume purchasers. This commenter stated that not discounting the price 
will maximize revenue collected to offset NMVTIS operational costs, 
resulting in reduced rates charged to the states.
    Response: The volume discounts established by the current operator 
have been more effective in securing consumer-access portal providers 
than the non-discounted rates. DOJ will continue to monitor the fee 
structure to

[[Page 5745]]

ensure that it is effective in securing participating providers without 
increasing reliance on state fees. Fees generated through the portal 
providers will offset the financial impact on states.
    Comment: One commenter noted that the NMVTIS prospective-purchaser 
inquiry is redundant of similar services that already exist.
    Response: A significant number of consumer advocacy, law 
enforcement, and other organizations submitted comments arguing that 
NMVTIS's prospective-purchaser inquiry is not redundant with existing 
services. For example, NMVTIS receives certain state data more 
frequently than some of the third-party databases, and the data NMVTIS 
receives includes information that some of the third-party databases do 
not have.
    Comment: The Institute of Scrap Recycling Industries, Inc. (ISRI) 
argued that the law does not give DOJ the authority to expand NMVTIS 
data collection to further the interests of a particular group of 
stakeholders. The ISRI expressed concern that certain stakeholders 
would promise smooth and easy implementation of the rule if DOJ were to 
demand collection of additional data for NMVTIS.
    Response: No individual or entity has made such claims or promises, 
and DOJ has not expanded the scope of data to be collected beyond that 
which was intended or demonstrated to be necessary to accomplish the 
program's goals as set forth in statute.

5. Privacy

    Comment: One commenter noted that ``[t]here are provisions in law 
in regards to privacy of individual identity that do not appear to be 
satisfactorily addressed in this document.'' Another commenter noted 
that it will not send any names to NMVTIS because names do not validate 
a title and because of concerns over compliance with the DPPA. The 
Virginia Department of Motor Vehicles commented that NMVTIS was 
intended as a pointer system, and it is not necessary for that pointer 
system to include all data fields, particularly private information. 
AAMVA also recommended against requiring owner name in the NMVTIS 
central file for privacy and cost reasons.
    Response: DOJ takes these concerns very seriously and agrees that 
privacy interests must be protected. While names may not be needed to 
validate a title, names are relevant and necessary from a law 
enforcement perspective, and in certain other situations. To ensure the 
protection of privacy, however, DOJ has amended the rule to provide 
that no privacy fields shall be available without DOJ approval to any 
NMVTIS user, other than state-titling, law enforcement, or other 
government agency. Additionally, the operator shall ensure that no 
individual prospective purchaser has access to any personal 
information. DOJ will require that the operator of NMVTIS have an 
approved privacy policy in place that describes how the operator will 
ensure adequate privacy protections, consistent with the DPPA and other 
relevant statutes.
    Comment: NAEC noted that data privacy fields should be available 
for law enforcement purposes.
    Response: DOJ agrees with this comment.
    Comment: The Automotive Recyclers Association (ARA) and ISRI both 
emphasized that confidential business information, such as the number 
and type of automobiles processed by individual junk and salvage yards 
in a given period of time, the sources of those vehicles, and related 
information, should not be released to the public or other data 
providers.
    Response: The operator will not disseminate this type of 
information to any non-governmental entity or individual, and this 
information will not be available to prospective purchasers. DOJ will 
closely monitor this aspect of the system to ensure that access to 
sensitive or personal data only proceeds with DOJ approval.
    Comment: Several commenters requested clarification in the final 
rule on any liability or immunity for providing data to NMVTIS as the 
Anti-Car Theft Act requires.
    Response: The Anti-Car Theft Act grants certain immunity for those 
reporting data to the system. The scope of this immunity is described 
in the Act at 49 U.S.C. 30502(f) and does not require clarification.
    Comment: Several commenters recommended maintaining provisions for 
accessing personal information to qualified DPPA commercial consumers, 
so that entities that currently work with the states to access this 
information could continue to do so, which would benefit the states and 
NMVTIS.
    Response: Providing continued access to these entities may 
facilitate effective and efficient service to the states, but such 
access may only occur with DOJ approval, and may also require 
compliance with state application and certification processes and 
procedures. In most cases, these entities will only use NMVTIS as a 
pointer to connect with and access the state's data, including personal 
information, if the state provides for that access.

6. Timely Reporting

    Comment: Several commenters, including several national consumer-
advocacy organizations, requested that dispositions by insurance, junk, 
or salvage sales to other entities be reported at the time of the sale 
and include the identity of the buyer, which would support law 
enforcement investigations into fraud and theft. The National Salvage 
Vehicle Reporting Program also commented that salvage pools should be 
required to report sales within one business day of the sale in order 
to reduce fraud and theft.
    Response: The reporting of dispositional information is critical 
and needs to be timely, but the DOJ cannot require that the reporting 
be anything other than monthly in accordance with the requirements of 
the Anti-Car Theft Act. DOJ has added a requirement for such entities 
to report the name of the primary buyer of such vehicles.
    Comment: ARA and ISRI commented that junk- and salvage-yard 
operators have an interest in reporting efficiency and recommended that 
such entities be permitted to report the ultimate intended disposition 
of the vehicle at the time of initial reporting. ASPA also reported 
that requiring an entity to continuously report that a vehicle is in 
its inventory is inefficient and pointless.
    Response: In cases where the ultimate disposition is known with 
certainty, junk- and salvage-yard operators now will be permitted to 
report disposition in their initial report. The reporting entity is 
responsible for ensuring that the vehicle is disposed of in the manner 
reported or for filing an updated report to account for a different 
disposition. In response to concerns of reporting inefficiency, DOJ 
notes that entities report once when the vehicle enters the inventory 
and are only required to report again on that vehicle if they need to 
update the record. Should the disposition be known at the time of 
initial reporting (e.g., ``sale''), the entity would only be reporting 
once on each vehicle.
    Comment: One state motor vehicle administration and other 
commenters asked that insurance carriers report more frequently. That 
state motor vehicle administration noted that ``if a vehicle is damaged 
on the 5th day of the month and the insurance carrier has already sent 
[its] file for the month, the state will not know of the damage until 
the following month's update.'' Several commenters representing nearly 
every stakeholder group noted that it was important for the reporting 
into NMVTIS to be timely, ideally in ``real time.'' Experian Automotive 
commented

[[Page 5746]]

that a monthly reporting requirement would be slower than the current 
industry practice for insurers.
    Response: The 16-year-old language of the Anti-Car Theft Act is no 
longer consistent with business practices in an electronic age. 
Nonetheless, the language of the Anti-Car Theft Act provides no 
flexibility with regard to this reporting requirement. DOJ does 
strongly encourage, however, that all reporters provide data to the 
system as quickly as possible, preferably within 24 hours of 
acquisition, determination, or other reporting trigger. DOJ expects to 
highlight such reporting efficiencies and stakeholder participation on 
its official NMVTIS site, www.NMVTIS.gov.

7. Third-Party Reporting and Reporting Exceptions

    Comment: Two commenters argued that an exception allowing junk- and 
salvage-yard reporting to occur through a state titling agency was 
flawed. One of these commenters suggested that all junk and salvage 
yards should be required to report directly into NMVTIS. The NADA also 
commented that allowing this exemption would only serve to create a 
loophole, particularly in cases of conflicting definitions among the 
states and between states and the Anti-Car Theft Act. Instead, NADA 
suggested allowing an exemption in cases where an insurance carrier 
reports to a third party that has no definitional restrictions, such as 
the NICB, that can transmit the information to NMVTIS without concern 
for conflicting definitions.
    Response: While DOJ will take steps to ensure data integrity and 
quality, it would be unreasonable to prevent third-party reporting. 
Ultimately, insurance carriers and junk and salvage yards are 
responsible for their compliance with the Act, including the reporting 
of required information. These reporters must ensure that they are 
compliant with the reporting requirements for every vehicle handled. If 
such reporters cannot be certain of a third party's ability to provide 
the required information into NMVTIS, the reporter must report through 
a different third-party provider. Additionally, certain states require 
this reporting, and therefore, a duplicate reporting structure would 
continue to exist even if DOJ did not allow junk or salvage yards to 
report through states. For purposes of clarification, however, the 
Anti-Car Theft Act does not provide a specific exemption for insurance 
carriers to report through states, as it does for junk- and salvage-
yard operators. Instead, DOJ has provided an exemption for insurance 
carriers to report to NMVTIS through an identified third party that is 
approved by the system operator. DOJ and the operator have attempted to 
identify potential third parties that can report to NMVTIS who already 
receive this type of information from insurance carriers and junk- and 
salvage-yard operators.
    Comment: ARA commented that pursuant to the Act, ``junk and salvage 
yard operators are not required to report on a vehicle when they are 
issued a verification stating that the automobile or parts from the 
automobile are not reported as stolen.'' ARA argued against the 
exemption's implement on the grounds that the exemption is ``completely 
unworkable'' without time limits on the verification and other 
controls, and because the exemption creates a ``significant loophole 
that could foster additional illegal activity.''
    Response: Pursuant to the Anti-Car Theft Act, a junk or salvage 
yard that is issued a verification under 49 U.S.C. 33110 stating that 
an automobile or parts from that automobile are not reported as stolen 
is not required to report to NMVTIS. Therefore, the Department has 
retained this exemption from NMVTIS reporting in these regulations.
    Comment: The ARA commented that it appreciates attempts to exempt 
reporting by junk and salvage yards that already report to a third-
party organization that is sharing its information with NMVTIS. The ARA 
further commented, however, that yards not currently participating with 
a cooperating third party will need a separate reporting mechanism that 
is labor efficient and economical in order to report NMVTIS 
information.
    Response: DOJ agrees. The operator will designate at least three 
third-party organizations that have expressed a willingness to share 
with NMVTIS information that they receive from insurers and junk and 
salvage yards. In addition, DOJ will endeavor to identify a reporting 
mechanism that is ``sector'' and ``stakeholder'' neutral. Third-party 
providers need to be identified who will provide the information to the 
stakeholders or allow such third-party providers to charge a nominal 
fee for collecting and reporting the information on behalf of junk and 
salvage yards. DOJ hopes to identify providers that do not charge fees, 
but this is difficult with sector-or stakeholder-neutral providers.
    Comment: Several state motor vehicle administrations commented on 
the third-party exemptions provided in the proposed rule. One state 
motor vehicle administration commented that it currently has some but 
not all of the information required for junk and salvage reporting. The 
state suggested that it does not have the resources available to accept 
and report all of the information required from junk and salvage yards. 
Another state motor vehicle administration made a similar point and 
stated that the requirements effectively establish an inefficient dual-
reporting requirement. Another suggested that the phrase ``or cause to 
be provided on its behalf'' be clarified so that it is clear that 
states do not have a responsibility to report insurance, junk, or 
salvage information to NMVTIS on behalf of these organizations. The 
State of New York commented that it receives reports from junk and 
salvage yards in paper, that it does not process all of the reports 
received, and that the processing time may be beyond the reporting 
timeframes required of junk and salvage yards. Another asked that 
entities reporting to states as their chosen method of compliance be 
required to certify that they are meeting their reporting requirements 
by reporting to a specific state or states.
    Response: A state's willingness to make such alterations to 
accommodate third-party reporting is strictly voluntary. Junk and 
salvage yards in states that cannot accommodate third-party reporting 
as required by the Anti-Car Theft Act and the rules will have other 
options for compliance reporting. While DOJ is committed to avoiding 
inefficient processes, DOJ is not able to eliminate data fields for the 
sake of efficiency alone and is not willing to impose additional 
requirements on the states to expand data collection and reporting on 
behalf of junk- and salvage-yard operators.
    Comment: ASPA commented that while the proposed rule allows states 
to share junk and salvage information with NMVTIS, the inclusion of 
this data in state title information systems would be based on the 
state's definition of ``salvage'' and ``junk'' vehicles. ASPA 
questioned how the state would report data that it may not have because 
that state does not require submission of that data.
    Response: The rule requires that junk- and salvage-yard reporting 
by or through states must include all of the data that junk- and 
salvage-yard operators are required to report. State definitions of 
``salvage'' or ``junk'' do not alter a junk-or salvage-yard operator's 
responsibility to report vehicles in its inventory. If junk- and 
salvage-yard operators are not reporting all of the required data to 
the state, or the state is not able to report all of the data to NMVTIS 
as required of the yard, the junk or salvage yard must report 
independently of the state.

[[Page 5747]]

    Comment: ASPA contended that the provisions of the proposed rule 
with regard to the direct-reporting exemptions for junk or salvage 
yards that already report inventories to the states appear to conflict 
with the wording of the statute that ASPA described as ``only 
requir[ing] the reporting of acquisition'' of such vehicles.
    Response: The Act specifically spells out what information is to be 
reported by junk and salvage yards and requires junk and salvage yards 
to report more than the mere acquisition of the vehicle.

8. Total Loss Definition/Fair Salvage Value

    Comment: One commenter expressed concern at the reference to ``fair 
salvage value.'' Any vehicle with a high salvage value will be totaled 
with a lower damage appraisal, and any vehicle with a low salvage value 
will be totaled with a high damage appraisal. The commenter noted that 
without uniformity as to the assignment of the salvage declaration, 
consumer protection cannot be guaranteed. The commenter argued for a 
more uniform definition of total loss that is not driven by the salvage 
value, noting that ``[t]his proposed market assessment of the vehicle 
value can either make or break the rule.'' Others commented positively 
on the use of a ``value-based'' definition.
    Response: DOJ used this reference because it was required by the 
Anti-Car Theft Act. DOJ understands that there are different ways or 
bases for determining total loss, and that different stakeholders may 
argue for different standards based on their interests.
    Comment: Nationwide Mutual Insurance Company commented that 
Congress specifically granted the DOJ authority to collect information 
from insurers on vehicles that such insurers have ``obtained possession 
of'' and determined to be ``junk automobiles or salvage automobiles.'' 
Nationwide further commented that ``[i]t is not logical that declaring 
a vehicle a total loss should trigger reporting of the total loss 
automobiles as salvage and/or junk. The determination of [a] vehicle as 
a total loss can be based upon other economic considerations not 
reflective solely on the actual cost of reporting the vehicle. 
Therefore, we assert that the inclusion of total loss information in 
the proposed rule is inconsistent with our understanding of the intent 
of the statute.''
    Response: DOJ disagrees. DOJ is mandated to require reporting of 
``salvage'' vehicles, which DOJ has determined to include those 
vehicles determined to be a ``total loss.'' DOJ recognizes that, in 
certain circumstances, the decision to declare a vehicle a ``total 
loss'' may be based on other determinations, such as the fact that a 
vehicle has been stolen. To address this issue, insurance carriers are 
strongly encouraged to include with ``total loss'' reporting the 
primary reason for the determination. Doing so not only would provide a 
better position for insurance carriers, but it also would allow the 
consumer to be aware of the specific circumstances for the 
determination. DOJ does not agree that ``obtained'' should be defined 
in such a limited way to include only ownership.
    Comment: Nationwide Mutual Insurance Company commented that DOJ 
should clarify the definitions of junk and salvage by requiring 
insurers to report on those automobiles titled as ``junk'' or 
``salvage'' under the laws of the state where the insurer obtains title 
to the motor vehicle.
    Response: DOJ disagrees and notes that not even half of the states 
require such titles or brands (see Texas's comment below). Such a 
definition, therefore, would create a significant loophole that would 
be counter to the consumer-protection intentions of the Anti-Car Theft 
Act.
    Comment: The State of Texas Department of Transportation commented 
that `` `Total loss' is not a term used in Texas salvage motor vehicle 
law and has no bearing on whether a vehicle is determined to be a 
salvage vehicle. A vehicle can be considered a `total loss' by an 
insurance company, but not be branded as salvage because the vehicle 
does not meet the definition of salvage in the title state. * * * Use 
of this term could be problematic if NMVTIS shows a vehicle as a total 
loss and the Texas records indicate nothing.''
    Response: The requirement for insurance carriers to report ``total 
loss'' information is put in place for exactly this reason--vehicles 
that are salvage may not be branded as salvage by many states. To 
resolve this discrepancy, NMVTIS blends reported information from 
multiple sources so that prospective purchasers are aware of the 
vehicle's true history and can avoid being defrauded and placed in an 
unsafe vehicle. The presence of ``total loss'' information in the 
absence of a state salvage brand will need to be explained by portal 
providers, so that prospective purchasers (and others) are aware of 
what the apparent discrepancy means, and how it occurs. DOJ does not 
expect states to take any action based on this information that is not 
authorized in state law and does not believe that it was the intention 
of the Anti-Car Theft Act to require them to do so.
    Comment: Several insurance-related associations commented that 
``[t]he statute requires that insurers report junk and salvage 
automobiles, yet the regulation would require reporting of `total 
losses,' a term that would include some automobiles that are not junk 
or salvage. It is axiomatic that a regulation cannot expand the limits 
of a statute, and especially if in doing so, the regulation imposes 
added burdens and costs. Not only is such expansion inconsistent with 
the underlying statute but there is also nothing in the Court's order 
in Public Citizen et al. v. Michael Mukasey that mandates or authorizes 
any such expansion of the statutory definition of automobiles to be 
reported.''
    These commenters further noted ``that the statutory definitions of 
`junk' and `salvage' in 49 U.S.C. 30501 are not used by most state or 
insurance carriers. To enable consistency with the existing state laws 
and data systems and thereby to expeditiously implement NMVTIS, we 
request that the last sentence of Section 25.55(a) be amended to read 
in the final regulation: `An insurance carrier shall report on any 
automobile that it has determined to be a junk or salvage automobile 
under the law of the applicable jurisdiction.' This approach makes 
sense because since the Congress enacted this statute in 1992, most 
states have defined the meaning of `junk' or `salvage.' These state 
laws represent the best understanding of these terms today. Requiring 
their use by regulation would implement the spirit of the law in a 
practical way. Data reported by insurers in this manner will also be 
consistent with data reported by the states.''
    Opposing this view, consumer-advocate litigators commented that 
``[t]he Insurers comment that `any expansion via regulation of the 
categories of automobiles for which reporting is mandated * * * would 
be unauthorized. * * *' However, they do not suggest that it is outside 
the scope of the Department's authority to provide construction for 
such terms in the statutes. It is obviously the duty and the province 
of the Department to use its broad discretion in construing these 
terms.'' The consumer-advocate litigators further commented that the 
rule's enabling of electronic reporting through third parties that may 
already have access to the data addresses the need for reporting in the 
least-burdensome and least-costly fashion. These commenters further 
argued that ``[t]he Insurers take issue with the Department's proposal 
to provide that a vehicle treated as a total loss is deemed

[[Page 5748]]

a salvage vehicle. However, it is squarely with the Department's 
province to make the determination that the fact that a vehicle has 
been treated as a total loss indeed is evidence that it is a `salvage' 
vehicle, and that both legally and practically the vehicle is a 
`salvage' vehicle. Similarly, it is necessary, in carrying out the 
clear protective purposes of the statutes, that this construction be 
given to these terms. * * * The Insurers next propose amending the last 
line of Sec.  25.55(a) to state `An insurance carrier shall report on 
any automobile that it has determined to be a junk or salvage 
automobile under the law of the applicable jurisdiction.' Such a change 
would incorporate the limitation they seek of disregarding total loss 
vehicles. It also appears to be an attempt to require that state 
definitions of `junk' or `salvage' be substituted for the definitions 
in the statutes, rather than additional to and supplementary of them. 
That would be entirely improper, of course, defeating the central 
purpose of providing a national definition of `salvage' that sets a 
floor for reporting, not a ceiling.'' These commenters further noted 
the ``extraordinary patchwork of state laws regarding title `brands' 
and even the terms used for labeling `salvage' or `total loss' 
vehicles. The uniform minimal reporting standard provided by the NMVTIS 
statutes is of critical importance.''
    Response: DOJ agrees that it possesses authority and responsibility 
to provide the definition of these terms. Additionally, in order to 
meet the requirements of the Act with regard to providing prospective 
purchasers with the information needed to make an informed purchase 
decision, and in order to inform state title administrations and law 
enforcement of that vehicle's history, full disclosure of total-loss 
information is needed regardless of a state's action or inaction on 
that vehicle.
    Comment: Several insurance-related organizations and associations 
commented that ``[s]ection 25.55(a) states that the insurer must report 
automobiles that it has obtained `possession of and has decided are 
junk automobiles or salvage automobiles.' The term possession is not 
clear. To be workable, `possession' should be construed as `the titled 
owner' as represented on the certificate of title, because insurers 
would only be able to report on those automobiles to which they are 
titled owners. Otherwise, they do not record `possession' of 
automobiles and could not report them.''
    The insurance-related organizations further commented that 
``[r]eplacing `possession' in the regulation with `titled owner' would 
also be workable and consistent with the remainder of the sentence 
which requires that insurers must report automobiles which they possess 
and have decided they are junk or salvage automobiles. Both the 
`possession' and `decision' are manifested by re-titling, which is 
reportable by insurers in an efficient manner. Therefore, the language 
would read, `a report that contains an inventory of all automobiles of 
the current model year or any of the four prior model years, that the 
carrier during the past month is the titled owner and has decided are 
junk automobiles or salvage automobiles.' ''
    Opposing this view, several consumer-advocate litigators commented 
that while the term is not clear and needs construction in furtherance 
of the protective purposes of the statute, they disagreed with the 
insurers' proposed substitution of ``is the titled owner of'' for ``has 
obtained possession of'' in section 25.55(a). These commenters further 
noted that the effect of the insurers' comments would be to ``eliminate 
any reporting requirement of salvage vehicles by insurance carriers 
whatsoever for all but those vehicles that they do in fact actually 
title in their name. There are innumerable reasons why, and methods by 
which, they may legally in many instances not obtain titles to salvage 
vehicles in their names under the existing hole-laden patchwork of 
state laws. In addition, if this change were made, and if they 
blatantly violated a state law by failing to get a salvage title issued 
in their names, they would appear not to be in violation of the federal 
law by not reporting to NMVTIS, because they would not have been the 
`titled owner.' The opposite construction of `possession' is crucial. 
In fact, the very example they provide of a salvage vehicle that comes 
into their possession but that they do not title shows how NMVTIS 
should work to be effective: They should report such vehicles. If there 
are multiple reports on the same vehicle, there is no harm done; but if 
such salvage vehicles are not reported, there is every harm done.'' 
Other consumer advocates commented that ``possession'' should be 
defined to include both actual and constructive possession and should 
include exercising control over an automobile directly or indirectly.
    Response: Limiting insurance reporting to those vehicles owned by 
insurance companies would create a large loophole through which total-
loss or salvage vehicles would remain under ``clean title.'' Such a 
loophole was clearly not intended to exist under NMVTIS, and in order 
to provide consumer protection against fraud, insurance carriers must 
be required to report on all vehicles that they determine to be a total 
loss.
    Comment: Several insurance-related organizations and associations 
commented that ``[s]ection 25.55(b) sets forth the mandatory data 
elements. We believe that applying the following interpretations will 
allow a reporting system to be put in place that complies with all 
aspects of the statute, including the `least burdensome and costly' 
directive and that can reasonably meet the Court's deadline in Public 
Citizen et al. v. Mukasey.
    ``a. VIN. This can be reported.
    ``b. The date on which the automobile was obtained or designated as 
a junk or salvage automobile. Again, interpreting this requirement to 
mean the date on which the automobile was re-titled `junk' or `salvage' 
comports with legal and practical considerations and would be most cost 
effective.
    ``c. The name of the individual or entity from whom the automobile 
was obtained or who possessed it when the automobile was designated as 
a junk or salvage automobile. Again, as set forth above, the only cost 
effective way for insurers to meet this obligation is to construe it to 
mean the name of the insurer when the automobile was re-titled. 
Providing the name of the individual or entity from whom the automobile 
was obtained does not provide useful information to law enforcement or 
consumers.
    ``d. The name of the owner of the automobile at the time of the 
filing of the report. In most instances, this will be the buyer of the 
salvage or junk automobile, or the insurance company when the insurance 
company retains ownership, for instance to crush a junk vehicle.''
    Opposing this view, several consumer-advocate litigators commented 
that the insurers suggest `that the regulations should provide that 
they do not have to report the name of the person from whom a salvage 
vehicle was obtained. This is directly contrary to 49 U.S.C. 
30504(b)(3). The ownership trail of all of these vehicles is critical 
for law enforcement and consumer investigative purposes, and Congress 
noted that by writing it into law.'''
    The consumer-advocate litigators further commented that ``[t]he 
Insurers also suggest that the `owner of the automobile at the time of 
the filing of the report' would normally be the buyer of the salvage 
vehicle, and would only be the insurance carrier if it retained

[[Page 5749]]

ownership to crush a vehicle. I submit that it is important that both 
the buyer and the insurance carrier be identified under the 
regulations.''
    Response: DOJ agrees with the comments of the consumer-advocacy 
organizations and has retained the total-loss reporting requirements 
that were included in the proposed rule.
    Comment: Several commenters, including the NADA, ARA, Experian 
Automotive, the National Salvage Vehicle Reporting Program, insurance 
services organizations, consumer advocate attorneys, and others, 
expressed strong support for DOJ's ``modernization and clarification of 
language found in the Anti-Car Theft Act related to salvage and junk 
vehicles, to include within this the requirement to report on all total 
loss vehicles, including those recognized by the state and those not 
recognized by the state but determined a total loss by an insurance 
carrier.'' Several of these commenters also pointed out that many 
total-loss vehicles do not receive salvage brands due to varied and 
unreliable state definitions and criteria. Relying on state definitions 
of ``salvage,'' therefore, would be highly inconsistent, would 
perpetuate fraud and theft, and would fail to accomplish the objective. 
Comments submitted by Amica Mutual Insurance Co. underscore the need to 
collect ``total loss'' data. Such data provides additional consumer 
protection, potentially decreases fraudulent activity, and reduces the 
number of unsafe vehicles in the marketplace.
    Response: DOJ agrees with these comments.
    Comment: The NADA, ARA, National Salvage Vehicle Reporting Program, 
several national consumer-advocacy organizations, and other 
organizations commented that the proposed rules fail to require 
insurance carriers to report all vehicles that they declare a total 
loss, including those retained by insureds. Often, individuals who 
retain possession of their ``total loss'' vehicle can avoid disclosure, 
or they may not apply for salvage titles. The NADA commented that the 
final rule should be revised to eliminate the concept of possession and 
instead focus on those insured motor vehicles that the insurance 
company declares, or the applicable jurisdiction defines, to be a 
``total loss.''
    Response: DOJ disagrees that the proposed rule puts such a 
limitation in place. DOJ requires that insurance carriers who declare a 
vehicle a total loss and allow the insured to retain the vehicle must 
still be required to report such declarations.
    Comment: The NADA commented that ``total loss'' should be defined 
broadly to capture all total-loss vehicles. ``The final rule should not 
define `total loss' in Section 25.52, but rather should define `total 
loss motor vehicle' as `those motor vehicles determined to be a total 
loss under the laws of the applicable jurisdictions and those 
designated as a total loss by each insurance company under the terms of 
its policies.' ''
    Response: DOJ appreciates this clarification and agrees that 
``total loss'' includes all total-loss vehicles.
    Comment: ASPA commented that ``[w]hen an automobile is classified 
as a total loss by an insurance company, it does not necessarily mean 
that the automobile is a `salvage automobile.' On page 54546 of the 
Federal Register, in Section 2 `Insurance Carriers,' the explanation of 
the Proposed Rule expands the definition of `salvage automobiles' when 
it states: `For purposes of clarification, the Department of Justice 
has determined that this definition [salvage automobiles] includes all 
automobiles found to be a total loss under the laws of the applicable 
jurisdiction or designated as a total loss by the insurance carrier 
under the terms of its policies.' ''
    ``In common usage, `salvage' is not synonymous with `total loss.' 
There are many circumstances in which an insurance company may declare 
a vehicle a `total loss,' but the vehicle does not meet the `salvage' 
definition of the relevant state. If a stolen vehicle is not recovered 
quickly, the insured may be paid for the missing vehicle. If the 
vehicle is later recovered in a largely undamaged condition, the 
vehicle, although a `total loss' due to its late recovery, may not meet 
the relevant `salvage' definition and, often, is sold by the insurer 
with a `clear' (i.e., not branded) title. The definition in the 
Proposed Rule lumps this undamaged theft recovery into the `salvage' 
definition, thus devaluing the vehicle and, again, creating confusion 
about the applicability of the laws of the relevant state.''
    ASPA further commented that ``[m]ore generally, pursuant to 49 
U.S.C. 30501(7), `salvage automobile' is clearly defined as `an 
automobile that is damaged by collision, fire, flood, accident, 
trespass, or other event, to the extent that its fair salvage value 
plus the cost of repairing the automobile for legal operation on public 
streets, roads, and highways would be more than the fair market value 
of the automobile immediately before the event that caused the damage.' 
This definition is both clear and unambiguous on its face and, 
therefore, requires no `clarification.' ''
    ``In the Proposed Rule, the DOJ is attempting to expand the 
definition of salvage automobile `[f]or purposes of clarification' to 
include automobiles determined to be a total loss under the law of the 
applicable jurisdiction or designated as a total loss by the insurer 
under the terms of its policies. We contend that this significant 
expansion of the definition is not necessary, and that the proposed 
definition actually contradicts accepted custom and usage within the 
insurance and salvage industries.
    ``The DOJ's proposed amendment to the definition of salvage 
automobile would subject many clear title automobiles to the reporting 
requirements of NMVTIS. This is problematic, and is clearly not what 
Congress envisioned when it created the definition for salvage 
automobile. In Chevron U.S.A., Inc. v. Natural Resources Defense 
Council, Inc., 467 U.S. 837 (1984), the Court implemented a two-part 
analysis to determine the appropriate standard of review towards a 
government agency that attempts to amend statutory language. Here, 
since the current definition of salvage automobile is not ambiguous, 
the proposed `clarification' by the DOJ is not based on a permissible 
construction of the statute and should not be allowed.''
    Response: DOJ disagrees. Total-loss vehicles are just that--a total 
loss--at the time the determination is made. Total-loss vehicles fall 
within the definition of ``salvage'' and must be reported. In response 
to other comments, DOJ notes that insurance carriers are strongly 
encouraged by the final rule to report to NMVTIS the primary reason for 
the determination of total loss, addressing this commenter's concerns 
specifically and providing much-improved disclosure for consumers.
    Comment: One submission argues for ``the necessity of all states to 
adhere to the Uniform Certificate of Title Act.'' ``If the state has a 
different definition of a Salvage vehicle the branding now becomes an 
arbitrary issue.''
    Response: The Uniform Certificate of Title Act and the benefits of 
uniform titling procedures aside, the Anti-Car Theft Act does not 
require States to adopt standard brand labels or definitions. NMVTIS 
has a process in place to record each state's unique brand label and to 
relate it to one of the 78 brand types used in the NMVTIS database. The 
state's brand labels and definitions remain unchanged in NMVTIS.

[[Page 5750]]

9. Chain of Custody/Names of Those Who Provided/Those Who Purchased

    Comment: One commenter noted that ``[t]he reporting requirement of 
the junk and salvage yards may need some change. There are many 
different routes for a vehicle to come into a yard, very often it is 
not by the `owner of record' or the titled owner. A more definitive 
approach to recording the information of the entity placing the vehicle 
into the salvage yard should be taken, more identifying information 
regarding the entity placing the vehicle into the salvage yard should 
be captured. * * * How does the system handle this in a manner that 
will notify the title State of a cancel record and provide a bona-fide 
chain of events leading to the yard?''
    Response: The reporting requirement for junk and salvage yards 
applies to every vehicle regardless of what ``route'' it took into the 
yard or who brought in the vehicle. Further, it is the responsibility 
of the junk or salvage yard to provide, among other data, the name of 
the individual or entity from whom the automobile was obtained. The 
NMVITIS reporting requirements do not affect existing state-level 
requirements for junk- and salvage-yard operators to provide states 
with a notice of title or record cancellation and any data fields 
required in such notifications. NMVTIS will not issue such 
notifications to states, but states will be able to view the reported 
salvage- or junk-yard status of any vehicle at any time. With the 
cumulative vehicle histories constructed in NMVTIS, states and law 
enforcement can identify the ``chain of events'' with reliability once 
there is full system participation.
    Comment: One commenter noted that ``stolen'' designations or 
notifications sometimes are not made when a vehicle is first reported 
stolen. In these instances, the commenter suggested that law 
enforcement may receive a false negative response on a stolen check due 
to this delay. The commenter suggested that the system provide a 
notification to law enforcement officers filing a report on a stolen 
vehicle that a prior stop and ``stolen'' check was made on the vehicle, 
providing notification and an investigative lead to the reporting 
officer of where the vehicle was stopped and who made the stolen 
inquiry. Another commenter noted that stolen-vehicle information is not 
required to be in NMVTIS, and nothing in the regulations requires a 
state to check NCIC before issuing a title.
    Response: NMVTIS is not intended or expected to replace the 
information or services available to law enforcement through NCIC. NCIC 
is and will remain the primary system used and relied upon by local law 
enforcement to check the ``stolen'' status of a vehicle. NMVTIS's 
capturing of ``stolen'' status and history information is to inform 
state titling agencies and others who may not have access to NCIC that 
a vehicle was at one time reported as ``stolen.'' Stolen vehicle 
information is included in NMVTIS via NICB so that states that do not 
have access to NCIC can be apprised of a vehicle's questionable status 
before issuing a new title.
    Comment: The National Auto Auction Association commented that 
``NMVTIS should include lien holder names and license plate numbers'' 
for various reasons.
    Response: While DOJ will authorize the operator to seek additional 
information for NMVTIS as may be necessary to accomplish program goals, 
DOJ will not require these data fields to be included in NMVTIS.
    Comment: The National Auto Auction Association commented that DOJ 
should clarify in the final rule whether data maintained in the NMVTIS 
central file is to be considered the official legal record of a 
jurisdiction's data.
    Response: The official record for any vehicle will be determined by 
the state. However, NMVTIS is expected to be a reliable source of title 
information that users can rely on to make decisions.

10. Brand Definitions

    Comment: One commenter asked, ``[h]ow is the branding procedure 
determined? Is there a preexisting national standard for what brands 
exist and how a vehicle is classified under such brands or is the 
determination made on a state-by-state basis? If the standard is 
national (which would make sense given the national objective), maybe a 
list of definitions of the applicable brands should be placed in the 
rule's definition section.'' Another commenter noted that the 
development of standardized definitions and brands for all states would 
be extremely beneficial in ensuring that the intent of NMVTIS is fully 
recognized. Several state motor vehicle administrations pointed out 
that the definitions of ``salvage'' and ``total loss'' in the proposed 
rule are different from state definitions. Another commenter noted that 
to add information based on the definitions in the proposed rule will 
conflict with State definitions of brands, compromise the integrity of 
the NMVTIS database, and reduce the value of the information in the 
database.
    Response: NMVTIS does not affect state branding procedures, and the 
Anti-Car Theft Act did not require a national standard for branding. 
Although differing definitions may create complexity in deciphering a 
vehicle's brand history, NMVTIS will accept any official state brand 
and will share that brand with other states, thereby relating that 
brand to a brand type or ``NMVTIS Brand.'' Users of NMVTIS will notice 
state brands as well as a separate category for insurance, junk, and 
salvage information, if any is available. The differences in these 
reporting streams also will be defined so that users will know if a 
vehicle has been or is a junk or salvage automobile by virtue of a 
state brand indicating such, or by an insurer's determination that the 
vehicle was a total loss. Consumers and others also will be advised if 
a vehicle has been in the possession of a junk or salvage yard. 
Information is reported by multiple data sources and is reported in a 
segregated fashion with links for explanations.
    Comment: ASPA provided the following example as evidence of the 
problems that would be created by the proposed rule: ``Michigan's 
salvage law covers current model year passenger vehicles and those of 
the preceding five model years. Therefore, a 2002 passenger motor 
vehicle does not become a `salvage vehicle' or a `scrap vehicle' in 
Michigan, regardless of the fact that the vehicle has been damaged and 
`totaled' by an insurance carrier. In this situation, Michigan, when 
reporting to NMVTIS, presumably would not include the car in the 
state's branded title submissions. An insurance carrier reporting to 
NMVTIS presumably would not include the car because it is outside of 
the age limitations applicable to insurance carriers. However, a 
salvage yard or junk yard, using the definitions in the Proposed Rule, 
presumably would report the vehicle as a `salvage automobile' or a 
`junk automobile,' when reporting to NMVTIS. So, for a state or other 
inquirer of NMVTIS, NMVTIS will show that the vehicle has a salvage or 
junk history. This occurs regardless of the fact that the relevant 
state did not deem the vehicle salvage or scrap.''
    Response: This comment offers an excellent example of how NMVTIS 
reporting will fill the holes that currently allow salvage or junk 
vehicles to remain unbranded, creating opportunities for theft and 
consumer fraud.

11. Brand Washing

    Comment: One commenter asked ``if brand information is already 
collected by states, how exactly would brand `washing' occur? If the 
retitling state

[[Page 5751]]

checks the title of the previous state wouldn't that information be 
included with the title?'' Another commenter recommended that NMVTIS 
retain a prior state's brand history even when a state does not accept 
a previous state's brand.
    Response: Brand histories or designations are not always carried 
forward by the states. Retitling states do not necessarily check with 
the previous states before issuing a new title. In some states, the 
paper title from the previous state of record is accepted as the basis 
for the new title to be issued. Because of the reliance in some states 
on paper titles as evidence of prior titling history, and because not 
all states check with the prior states of record, brand washing occurs 
regularly. NMVTIS will create a nationwide brand history for every 
vehicle, requiring that all states check with NMVTIS rather than simply 
relying on paper documentation. Brand washing will be significantly 
reduced, if not eliminated. A state's decision not to acknowledge a 
prior state's branding will not affect the NMVTIS brand history.

12. Self Insurers Included in the Definition

    Comment: Several commenters expressed disappointment that self 
insurers were left out of the rule. One commenter noted that the 
definitions should encompass a ``self insurer,'' be it a municipality, 
lease company, or large corporation, and that this is a current 
``hole'' in the system.
    Response: DOJ agrees that the Anti-Car Theft Act's definition of 
``insurance carrier'' includes entities that underwrite their own 
insurance, such as certain rental car companies. The definition, 
however, excludes any organization that does not underwrite its own 
insurance.

13. Salvage Automobile Defined

    Comment: One commentator noted that the definition of a ``salvage 
automobile'' should also include any automobile that an insurance 
company has taken ownership of in settlement of a claim and any vehicle 
that a state has issued a title to an insurer for. Another commenter 
noted that ``[t]he responsibilities of the insurance carriers should 
include, in the area of the reporting, if the insurance company 
obtained a title from the state in their name, the state in which they 
obtained it and the type of title.'' Several consumer-advocacy 
organizations commented that every automobile obtained by a salvage 
yard or junk yard that the salvage yard or junk yard knows, or has 
reason to know, has come from an insurance carrier, or from any person 
or entity in connection with the resolution of insurance claims, should 
be deemed as a salvage automobile or junk automobile and must be 
reported as such. These commenters suggested that the rules should 
provide for a presumption that any automobile obtained or sold by a 
salvage or junk yard, and that has known unrepaired wreck or flood 
damage, is either a salvage automobile or junk automobile, and that 
such a vehicle must be reported as such. Similarly, the rules should 
include a presumption that any automobile obtained or sold by a salvage 
yard or junk yard, without knowledge as to the automobile's physical 
condition, is either a salvage automobile or junk automobile, and must 
be reported as such. This would prevent salvage yards or junk yards 
from maintaining an ``empty head'' to avoid compliance. The commenters 
suggested that ``these presumptions (as to automobiles not obtained 
from insurers) can be overcome if and only if the salvage or junk yard 
has qualified appraisal personnel employees or others acting solely on 
its behalf, entirely independent of any other persons or entities, 
perform a good-faith physical and value appraisal of the automobile and 
determine that the automobile does not meet the definition of `salvage' 
or `junk.' ''
    Response: Based on the proposed rule, a ``salvage auto'' is defined 
as ''an automobile that is damaged by collision, fire, flood, accident, 
trespass, or other event, to the extent that its fair salvage value 
plus the cost of repairing the automobile for legal operation on public 
streets, roads, and highways would be more than the fair market value 
of the automobile immediately before the event that caused the 
damage.'' 49 U.S.C. 30501(7).
    For purposes of clarification, the Department of Justice has 
determined that this definition includes all automobiles found to be a 
total loss under the laws of the applicable jurisdiction or designated 
as a total loss by the insurance carrier under the terms of its 
policies. By definition, this would mean that every automobile obtained 
by a salvage yard or junk yard that the salvage yard or junk yard 
knows, or has reason to know, has come from an insurance carrier, or 
from any person or entity in connection with the resolution of 
insurance claims, should be deemed as a salvage automobile or junk 
automobile and must be reported as such. DOJ does not agree that any 
automobile with unknown damage or any automobile obtained without 
knowledge of its physical condition should be considered a junk or 
salvage automobile. DOJ agrees that a junk or salvage yard may be 
excepted from reporting any vehicle that a qualified independent 
appraiser determines does not meet the definition of a salvage or junk 
automobile. This determination by the appraiser must be in writing and 
made after performing a good-faith physical and value appraisal. 
Although not required, the Department recommends that junk and salvage 
yards retain the reports and written appraisals for a period of ten 
years from the date of the report. Additionally, a salvage auction or 
salvage pool that does not handle any vehicles from or on behalf of 
insurance carriers is categorically exempted from this rule until such 
time as they may handle a vehicle from an insurance carrier.
    Comment: One commenter noted that the lack of common terms will 
undermine the clarity and usefulness of the information provided: ``How 
will NMVTIS reconcile the differences in law as to what constitutes a 
`total loss?' How will this undermine or effect achievement of 
NMVTIS'[s] goals? How will NMVTIS reconcile the differences amongst 
insurance company policies as to what constitutes a `total loss?' How 
will this undermine or effect achievement of NMVTIS'[s] goals?'' The 
West Virginia Department of Transportation also commented that the rule 
should establish a standard for establishing total loss as opposed to 
relying on the rules of insurance carriers and states.
    Response: NMVTIS will not attempt to ``reconcile'' differences in 
definitions. Rather, NMVTIS recognizes that different definitions and 
criteria are in place within different insurance companies and states. 
NMVTIS accepts these ``native'' determinations and notifies users that 
``X company'' or ``X state'' has made a determination that the vehicle 
is a ``total loss,'' ``salvage vehicle,'' etc. NMVTIS will provide all 
users with full disclosure and explanation on the differences in 
definitions and determinations and how this may or may not affect a 
vehicle. NMVTIS's mandate is to notify users of the determinations made 
in a vehicle's history, not to make such determinations uniform or 
conforming.

14. Junk Yard Definition

    Comment: ISRI commented that it objects to the presumption in the 
rule that vehicle recyclers operate only one of two things, a ``junk 
yard'' or a ``salvage yard,'' and suggests that DOJ clarify the full 
scope of entities to be included under the general heading of ``junk or 
salvage yards.''

[[Page 5752]]

    Response: While DOJ relied upon the language in the Anti-Car Theft 
Act to describe the category of required entities, DOJ acknowledges 
that the terms do not adequately reflect the professional and varied 
nature of the vehicle-recycling industry. In general terms, any entity 
that owns, controls, handles, or acquires salvage vehicles is included 
in the reporting requirements of this rule, which is consistent with 
current business practices. Similarly, scrap-vehicle shredders, scrap-
metal processors, ``pull- or pick-apart yards,'' salvage pools, salvage 
auctions, and other types of auctions handling salvage vehicles 
(including vehicles declared a ``total loss'') are included in the 
definition of ``junk or salvage yards.''
    Comment: ISRI also requested that new definitions of ``scrap 
vehicle,'' ``scrap-vehicle shredder,'' and ``scrap-metal processor'' be 
added to the rule to exclude these entities from the reporting 
requirement.
    Response: DOJ has clarified the rule, but rather than eliminate the 
reporting requirements for these entities, DOJ revised the regulations 
to establish an exemption that would cover prohibitive reporting 
circumstances that these entities face.
    Comment: One commenter argued that the definition of ``junk yard'' 
is too broad and may unnecessarily include used car dealers and others 
who may rebuild vehicles with the intention of reselling them. The 
commenter suggested that having such entities report these vehicles 
into NMVTIS would potentially label these vehicles as ``junk or 
salvage'' and preclude the vehicles from being retitled in some states.
    Response: One of the main purposes of NMVTIS is to provide 
prospective purchasers and others with reliable histories of a 
vehicle's previous and current condition as it relates to salvage and 
loss. Vehicles reported as having been in the possession of a ``junk'' 
or ``salvage yard'' may not be viewed in the same way that vehicles 
with a ``junk'' or ``salvage'' brand may be viewed in state titling 
processes. Each state will continue to make its own determinations 
regarding vehicle titling based on state law. Although any individual 
or business engaged in the business of acquiring ``junk'' or 
``salvage'' automobiles (which includes motor vehicles determined by an 
insurance carrier to be a ``total loss'') generally must by law report 
such vehicles to NMVTIS, there are two exceptions to this requirement. 
First, an automobile that is determined to not meet the definition of 
salvage or junk after a good-faith physical and value appraisal 
conducted by a qualified independent appraiser is not required to be 
reported. Second, DOJ has added a clarification that individuals and 
entities that handle less than five salvage or total-loss vehicles per 
year need not report under the salvage-yard requirements, which is 
consistent with existing standards that used car dealers are familiar 
with.
    Comment: Many commenters, including Iowa Attorney General Thomas J. 
Miller, noted that the inclusion of salvage pools in the reporting 
requirements for junk and salvage yards ``will help close a significant 
loophole'' and will ``further deter fraudulent used car sales, vehicle 
theft,'' and other crimes.
    Response: Requiring salvage pools or auto auctions to report on 
salvage or insurance claim vehicles will increase the effectiveness of 
the program, ensuring that consumers and others are not defrauded by 
sellers who conceal salvage or ``total loss'' histories.
    Comment: Several commenters, including the ISRI, the Virginia 
Department of Motor Vehicle Administrators, and other industry 
associations and representatives, commented that the proposed rules do 
not clearly indicate that scrap-metal processors, shredders, pull-apart 
yards, and others who often receive and demolish many end-of-life 
vehicles are included in the reporting requirements.
    Response: The regulations have been revised to clarify that the 
definition of junk and salvage yards includes not only salvage pools, 
but also scrap-metal processors, shredders, pull-apart yards, and 
others who handle or control total-loss, junk, or salvage automobiles, 
otherwise described as end-of-life vehicles.
    Comment: ASPA commented that DOJ should recognize that VIN 
inspections conducted in most states would make a salvage automobile an 
unattractive choice for criminals, and that cloning a salvage vehicle 
would result in the cloned vehicle having a ``salvage'' branded title.
    Response: DOJ recognizes that some states require vehicle 
inspections upon retitling, and some states place a ``brand'' on 
salvage vehicles. In these states, a salvage vehicle may not make an 
attractive choice for VIN cloning. However, not every state has these 
requirements, and VIN inspections typically do not inspect or verify 
hidden VINs. As a result, cloned vehicles go undetected. Even 
electronic diagnostic modules that would otherwise display the VIN can 
be defeated, allowing the clone to be virtually undetectable. Most 
often, the criminal activity that DOJ referred to in the proposed rule 
is related to total-loss or ``end-of-life'' vehicles that are purchased 
because they have a ``clean title'' that is then fraudulently connected 
with a stolen vehicle, which ``clones'' the stolen vehicle to the non-
stolen, ``clean title'' vehicle. Because the non-stolen vehicle was 
destroyed and sold to an individual, it no longer appears on the road 
and no notification of its destruction may be made to the current state 
of title.
    Comment: Copart, Inc. argued that because salvage pools do not own 
the vehicles sold at salvage pools or auto auctions, and therefore by 
definition do not ``resell'' them, they do not meet the definition of 
salvage yard and are therefore not required to report. Copart further 
contended that salvage pools should be required to report only those 
vehicles that they purchase for resale, and that any other 
interpretation goes beyond the plain language of the statute.
    Response: DOJ disagrees with this interpretation and notes that 
salvage pools do in fact handle and cause to be resold (on behalf of 
their current owner, who ``bought'' the vehicle from another) salvage 
and total-loss vehicles.
    Comment: Copart, Inc. argued that salvage pools do not typically 
have access to the information needed to determine whether a vehicle 
meets the NMVTIS definition of junk vehicle or salvage vehicle. Copart 
further contended that junk and salvage yards should only be required 
to report to NMVTIS those vehicles sold on a salvage or junk 
certificate under applicable state law.
    Response: Allowing junk and salvage yards to report only on 
vehicles with salvage titles would perpetuate the problems described 
elsewhere, including fraud and theft. Nonetheless, DOJ has addressed 
this issue in the definition of a ``salvage auto'' that now includes 
exceptions for vehicles that are not salvage, including total-loss 
vehicles.
    Comment: Copart, Inc. argued that requiring salvage pools to report 
to NMVTIS is wasteful and duplicative because they function as an 
intermediary between other entities that are required to report, such 
as insurance carriers, dismantlers, and scrap-metal processors.
    Response: Criminal organizations exploit salvage-pool services, 
purchasing total-loss vehicles with ``clean titles'' to facilitate the 
cloning and resale of stolen vehicles. To address this issue, law 
enforcement and other organizations require information on the vehicles 
handled by salvage pools. Additionally, many if not most vehicles

[[Page 5753]]

sold by salvage pools do not end up in a junk or salvage yard, and not 
all vehicles sold by salvage pools, including those with significant 
damage, are determined to be a total loss by insurance carriers. For 
these reasons, it is essential that salvage pools report to NMVTIS.
    Comment: Copart, Inc. argued that DOJ should interpret ``junk 
yard'' and ``salvage yard'' to include all vehicle auction companies so 
as not to discriminate against ``salvage pools'' that sell both clean-
titled and salvage vehicles.
    Response: All vehicle auction companies should not be required to 
report on all vehicles handled or in their inventory. Instead, those 
organizations that handle or resell vehicles on behalf of insurance 
carriers after a determination of total loss, regardless of salvage 
title, should be required to report. This should hold true regardless 
of whether the entity operates as a ``salvage pool'' or refers to 
itself as an ``auto auction,'' ``salvage auction,'' ``abandoned-vehicle 
auction,'' ``tow-lot auction,'' ``scratch-and-dent'' sale or auction, 
etc. As the National Salvage Vehicle Reporting Program noted, ``the 
recommended guideline for determining that an entity is required to 
report * * * should be if the entity owns or acquires, [or handles] 
total loss/salvage vehicles in whole or in part.'' Under such 
circumstances, it should be required to report all vehicles to NMVTIS. 
DOJ will clarify this requirement in the final rule.

15. Salvage Brand

    Comment: One commenter noted that ``[i]f the NMVTIS project is to 
succeed it would be a reasonable assumption to require a uniform 
approach to the assignment of the `salvage' brand by any member state. 
The system is only as good as the data in it, if the data is not 
applicable to uniform situations there will always be discrepancies.''
    Response: A uniform approach to branding would be advantageous in 
many respects. The Anti-Car Theft Act, however, does not provide the 
authority for DOJ to develop or mandate uniform branding, which would 
be a significant and potentially costly change for states to implement. 
As each state makes its own determinations, and NMVTIS relates state 
brands to an aggregated brand or brand category within NMVTIS, the non-
uniform approach does not create an insurmountable problem. DOJ will 
ensure that those who access NMVTIS information have the opportunity to 
learn about the different state brands that exist and the impact of 
other reporting on these brands to create greater awareness and 
understanding of their meaning.

16. Definition of Automobile

    Comment: NAEC argued that the rule should require the inclusion of 
``trucks, SUVs and other non-automobiles as prescribed by the Federal 
Anti-Car Theft Act for Parts Marking'' because of their popularity with 
vehicle thieves. Other organizations, including the Idaho 
Transportation Department, contended that ``NMVTIS records should also 
include all vehicles that a state may title, and not be limited to 
standard types of vehicles.'' The Minnesota Department of Public Safety 
stated that if it is required to report on all vehicles in its 
database, ``it might well grind to a halt,'' and costs would increase 
considerably.
    Response: Although DOJ cannot extend the Act's definition to 
include all motor vehicles, it is important to note that many states 
currently include such vehicles in their reporting to NMVTIS. DOJ 
strongly encourages this continued reporting practice in light of 
supporting comments, the value to law enforcement, and the need to 
protect citizens against fraud and theft. Moreover, it may be more 
costly or burdensome for states to filter out those vehicles not 
meeting the statutory requirement than to submit all motor vehicles to 
NMVTIS.
    Comment: One commenter recommended that DOJ clarify when a vehicle 
is no longer a vehicle for purposes of reporting, especially in junk or 
salvage yards that often do not receive a complete vehicle.
    Response: DOJ offers two clarifications in response to this 
comment. First, a vehicle is thought to be present for reporting 
purposes when a vehicle frame is present. Similarly, in cases where 
questions as to the ``true VIN'' of a vehicle arise, DOJ has determined 
that the true VIN for NMVTIS's purposes is the VIN on the frame of the 
vehicle.

State Responsibilities

17. Start Dates

    Comment: In reference to the proposed June 1, 2009, start date for 
state reporting and inquiries into the system, several states and AAMVA 
noted that the states would have difficulty meeting this date. One 
state commented that ``[t]he requirement to budget, upgrade and work to 
complete compliance requirements for NMVTIS cannot be met by this 
timeline--it is simply not doable even with the political will and 
funds available. To arbitrarily select a date that is not workable in 
any manner is unfair and unrealistic.'' Other commenters noted that it 
would take time to accomplish the necessary statutory and regulatory 
changes that may be required, and that their states had not budgeted 
for NMVTIS and could not pay NMVTIS fees in light of current economic 
circumstances. AAMVA further commented that DOJ should establish a 
process for approving ``temporary exemptions from the deadline where a 
reasonable timeline for compliance is presented and approved by the 
Department.'' The State of California proposed a ``phasing in'' of 
participants. The dates proposed by states as alternative start dates 
ranged from 2010 to ``1 year from the date funding is secured'' by the 
state.
    Response: Although DOJ has worked closely with the system operator 
to reduce the need for state system modifications, and although the 
requirements of the Act have been in place since 1992, DOJ understands 
that it will take time for states to implement some provisions of the 
regulation. To provide relief in this regard, DOJ has elected to extend 
the compliance date for states not yet participating to January 1, 
2010. By this date, all states and the District of Columbia will be 
required to provide daily title transaction updates to NMVTIS, make 
inquiries into NMVTIS before issuing a title on a vehicle coming in 
from out-of-state, and paying any user fees that may be billed by the 
operator. The Department believes that the states can comply by that 
date. Similarly, DOJ has decided against a ``phasing in'' approach to 
state participation commencement because there is no equitable way of 
selecting phasing dates and participants in each phase. DOJ points out 
that most of the provisions required to be implemented by January 1, 
2010, are essentially the same requirements that have been a part of 
the Anti-Car Theft Act since either 1992 or 1996, and states, 
therefore, have had at least 12 years to implement the provisions of 
the Act. Thirteen states have already done so without regulations in 
place.
    Comment: One commenter noted that the proposed start date is just 
prior to an AAMVA-announced decision to continue as the operator of the 
system and therefore creates a conflict for states should AAMVA decide 
not to continue as the operator.
    Response: AAMVA has assured DOJ that should a decision be made in 
August of 2009 to discontinue its role as the operator, AAMVA will 
continue to provide transition services and continuity until a new 
operator is identified and is able to assist states that

[[Page 5754]]

rely on NMVTIS in their daily operations.
    Comment: One commenter asked how the proposed start date had been 
determined and has requested justification for the date. The commented 
wrote that in the absence of this justification, the date appears 
arbitrary. The State of Illinois motor vehicle administration 
maintained that ``the proposed timeframe for implementing the NMVTIS 
program under these rules is unrealistic to the point of being 
absurd.'' Although that Illinois agency conceded that the start date 
was likely driven by ongoing litigation and a court order, the 
commenter noted ``that [the] order is either currently under appeal and 
a stay of enforcement should be sought pending appeal, or the 
Department of Justice [may have] chose[n] not to seek an appeal.''
    Response: The proposed start date was chosen after an analysis of 
historical timelines to provide batch data to the system, the number of 
states that currently have implementation funding from DOJ either 
directly or through AAMVA, the number of states that have indicated 
previously that they were working towards implementation already, and 
an expected release of stand-alone access to facilitate title 
verifications. As noted previously, however, the Anti-Car Theft Act has 
been in place for over 16 years, and many states have already 
implemented the provisions beyond the minimum specifications. Finally, 
the court order does not affect the state-implementation date in any 
way, and in fact is not even mentioned in that order.
    Comment: Several state motor vehicle administrations asked what 
penalties are in place for states that do not implement prior to the 
required start date and what provisions will be made for jurisdictions 
that are in process or intend to implement at a later date.
    Response: While DOJ will place its priority on supporting state 
implementation, DOJ would review state refusals to participate to 
determine the proper response. DOJ also will work with state officials 
in support of NMVTIS to encourage state compliance. This outreach could 
include contacts with state legislatures, governors, consumer-action 
networks, and law enforcement associations.
    Comment: One commenter suggested that DOJ publish a map of 
participating and non-participating states, so that citizens can 
observe the participation status of every state.
    Response: DOJ will make this map available on www.NMVTIS.gov and 
also will notify every consumer that accesses the site which states are 
not participating.
    Comment: The State of Alaska commented that ``there should be a 
process in place that allows states to continue to issue titles when 
NMVTIS is not operational during states' normal business days and 
hours.'' Alaska recommended that states be permitted to ``issue titles 
when NMVTIS is not operational, hold the inquiries in a queue and 
submit the queued inquiries when NMVTIS is operational. If a problem is 
detected with a title, it would be revoked.'' The State of Illinois 
commented that standards of performance should be established to 
address these issues.
    Response: While NMVTIS is typically only down for various reasons 
between 1 a.m. and 6 a.m. Eastern Time and one Sunday morning each 
month, there are processes in place for unexpected down time during 
state business hours. While specific processes vary by state according 
to state business processes, there are methods of continuing offline, 
such as mailing the new title at a later time, issuing a temporary 
title, etc. DOJ cannot alter the Anti-Car Theft Act's requirement to 
make a NMVTIS inquiry prior to issuing a new title. Therefore, new 
titles should not issue when NMVTIS is unavailable. Current system 
response time is less than three seconds per inquiry, and the number of 
unexpected system down times has been minimal. DOJ notes that the 
NMVTIS connection has not been ``down'' for 30 minutes or more at any 
time during the last three years, demonstrating that it is a reliable 
connection and service.
    Comment: A state motor vehicle administration agency suggested that 
the requirement for an ``instant title verification check'' is 
problematic for states that do not issue titles over-the-counter. The 
commenter suggested that the word ``instant'' be removed from the final 
rule.
    Response: Some states do not issue titles ``instantly.'' The 
``instant title verification check,'' therefore, may take place after 
the customer has left the title administration agency but before a new 
title is issued. In these cases, states may make the NMVTIS inquiry 
when appropriate in the titling process, so long as the inquiry is made 
and title verified before a new permanent title issues.
    Comment: One commenter asked if a title-verification check would 
need to be performed on a state title that was being reassigned after 
being purchased from an out-of-state dealer.
    Response: It is unclear from the comment if the commenter was 
referring to a title being transferred out-of-state or into the state. 
States are required to check incoming titles related to vehicles from 
out-of-state. States are not required to check titles being transferred 
out of the state. With regard to the need to verify titles during 
dealer reassignment or the transfer of vehicles from one dealer to 
another, the Act requires that states verify the title of any 
automobile coming from another state, which DOJ has determined includes 
dealer reassignments when involving dealers in different states.
    Comment: One commenter argued that the system should provide state 
motor vehicle titling agencies with sufficient information to resolve 
discrepancies during the title-verification process.
    Response: NMVTIS provides state motor vehicle-title administrations 
with all relevant data in the system and a seamless and secure 
electronic connection to other online state title records. NMVTIS will 
make available any additional information within NMVTIS that may be 
needed to resolve such discrepancies. In the last year alone, the 
system generated 45 million secure messages and notifications and made 
18.4 million update transactions.
    Comment: One commenter noted that information gleaned from a 
state's ``instant title verification,'' such as reports of prior 
removal of a vehicle from the vehicle population by export, 
destruction, reported existence in a salvage or junk yard, or other 
indication that the vehicle should not be present, should result in a 
physical inspection of the vehicle to determine the validity of the 
title and the vehicle.
    Response: While DOJ agrees that such reports or results will flag 
for states the title transactions and vehicles that should be further 
reviewed prior to undertaking a new title transaction, DOJ cannot 
require such inspections. It is each state's responsibility to 
institute policies and procedures for resolving such concerns. This 
comment does illustrate how NMVTIS can ``flag'' for states those 
vehicles and transactions that should be carefully reviewed to prevent 
fraud and theft.
    Comment: One state motor vehicle administration asked how NMVTIS 
will obtain data from the insurance companies and junk and salvage 
yards.
    Response: Insurance carriers, junk yards, and salvage yards are 
required to report the data enumerated in the Act and regulations. The 
operator will identify more than one reporting mechanism for electronic 
reporting, in a format prescribed by the operator. AAMVA and DOJ will 
identify the

[[Page 5755]]

official reporting mechanisms and processes via www.NMVTIS.gov.
    Comment: The Nevada Department of Motor Vehicles complained that 
requiring states to provide ``the date the vehicle was obtained is an 
expensive and time consuming process'' and that states should be 
permitted to continue sending the title-issue date instead.
    Response: There is no requirement proposed for states to submit the 
date a vehicle was obtained. This requirement is in relation to 
insurance carrier and junk and salvage reporting.
    Comment: The Oregon Department of Motor Vehicles commented that it 
currently only collects odometer information on those vehicles subject 
to federal odometer requirements and would be burdened to collect such 
information on all vehicles. The National Salvage Vehicle Reporting 
Program argued that states and insurers should be required to include 
mileage reporting in their data provided to NMVTIS.
    Response: States are only required to provide odometer information 
on those vehicles subject to federal odometer requirements, 49 U.S.C. 
32705, and not on all vehicles unless already recorded by the state. 
States are required to provide to NMVTIS the most recent odometer 
reading for such vehicles and any later odometer information contained 
within state title records. DOJ strongly encourages all reporting 
entities to include odometer readings where available.
    Comment: One commenter recommended that the final rules spell out 
what is actually required from the states and how (i.e., in which 
format) this information is to be provided. Another commenter, the 
California State Motor Vehicle Title Administration, recommended that 
the rule be revised to require information that is consistently 
available across all states and that only information held by state 
titling agencies be subject to reporting requirements.
    Response: DOJ will clarify what is required of each state and will 
describe format issues to the extent practical and appropriate. DOJ 
cannot simply choose to use only information that is available in every 
state consistently for purposes of populating the system, as doing so 
would limit the included data and significantly reduce the system's 
value.
    Comment: One commenter recommended that DOJ require that the 
operator be responsible for developing at least two approaches for 
NMVTIS inquiries and that DOJ should prepare a cost study relating to 
the expenses associated with the fully integrated, online approach to 
compliance.
    Response: There are already at least two approaches for state 
compliance with NMVTIS: (1) A fully integrated, online approach, 
whereby a state's title information system automatically queries 
NMVTIS, and NMVTIS provides real-time updates to both states involved 
in the transaction; and (2) a stand-alone approach, whereby title 
clerks send inquiries to NMVTIS via a web access point, and their state 
sends daily updates through a batch upload. A third option, serving 
central site states, entailing a process whereby verifications are 
performed via batch inquiry, will be explored and may be implemented 
soon. However, DOJ disagrees with the need to prepare a cost study 
because an extensive cost-benefit study of this issue already exists, 
and cost data from other state implementations is already available for 
estimation purposes.
    Comment: The NADA and at least one state motor vehicle 
administration commented that DOJ should clarify that states are 
required to submit all brands to NMVTIS for all automobiles titled 
within the state.
    Response: DOJ agrees and has clarified this requirement under 
25.54(a)(2), consistent with statutory requirements.
    Comment: The Minnesota Department of Public Safety argued that 
states should be required to provide title numbers, ``since it would be 
nearly impossible to establish the `validity and status' of purported 
titles without them.''
    Response: Participating states already have access through NMVTIS 
to observe the full title of record, including the title numbers and 
other information needed to establish the validity and status of titles 
presented. However, DOJ encourages the states to voluntarily submit 
that information to NMVTIS with the approval of the operator and the 
Department.
    Comment: The Minnesota Department of Public Safety commented that 
``the proposed rule also would require states to provide [`t]he name of 
the state that issued the most recent certificate of title' and `[t]he 
name of the individual or entity to whom [it] was issued' when making 
an inquiry to NMVTIS. This information is not, and cannot be, recorded 
in MnDVS' current title information system.''
    Response: This language was taken from the Anti-Car Theft Act to 
describe what information would be needed in order for states to make 
an inquiry into NMVTIS. Since the passage of the Anti-Car Theft Act, 
and with the very recent development of a standalone access model that 
only requires a VIN to search, these requirements have changed and this 
information is no longer needed. At the present time, only the VIN is 
needed to make an inquiry. This update will be reflected in the final 
rule.
    Comment: The West Virginia Department of Transportation argued that 
some states exempt vehicles that reach a certain age from the 
requirements of titling, and that these vehicles should be exempt from 
reporting.
    Response: The rule requires states to report on all automobiles 
included in the states' titling systems, regardless of age. However, if 
state law exempts certain vehicles from titling, those vehicles need 
not be reported to NMVTIS. The state should make the operator aware of 
these exceptions, however, so that consumers in the state and in other 
states are advised of this exception, which they may take into account 
when checking the history of vehicles through NMVTIS.

18. Unfunded Mandate

    Comment: Commenters argued that the mandate for NMVTIS has not been 
funded, and that the requirement for compliance has not been applied or 
enforced for the 15 years of this process. On the other hand, one 
commenter noted that NMVTIS is not an unfunded mandate in view of DOJ's 
investment of over $15 million in the system since its inception and in 
view of DOJ grants to states to support system participation.
    Response: The Anti-Car Theft Act explicitly requires that user 
fees, rather than federal funding, sustain NMVTIS. Although no funds 
have been appropriated to DOJ for NMVTIS, DOJ has invested over $15 
million in NMVTIS, with a substantial portion going to states to assist 
them with compliance. The U.S. Department of Transportation previously 
provided funding during the period it was responsible for the system, 
which ended in 1996.
    Comment: One commenter noted that DOJ's determination that the rule 
does not meet the threshold cost or burden requirements of the Unfunded 
Mandate Reform Act of 1995 is not sufficient in and of itself to 
satisfy the legal responsibilities. Specifically, the commenter noted 
that ``[t]he fact that the Department of Justice (DOJ) has decided that 
it is a small enough amount of money that the Unfunded Mandate Reform 
Act of 1995 does not apply, or that the DOJ has determined that per 
Executive Order 13132, the cost imposed does not provide sufficient 
cause for a Federalism issue, is not sufficient.''

[[Page 5756]]

    Response: The Department of Justice, based on its own analysis, 
made appropriate determinations based on law and regulation. The White 
House Office of Management and Budget reviewed and approved this 
analysis.
    Comment: The City and County of Honolulu Division of Motor Vehicle, 
Licensing and Permits disagreed with the aggregate amount estimated by 
DOJ in the ``Unfunded Mandates Reform Act of 1995'' section of the 
proposed rule ``because their estimate is based on the less expensive 
standalone web solution which operationally degrades customer service 
and increases the work of our over-the-counter staff.'' The commenter 
further noted that the aggregate amount should ``factor in the 
development and deployment of the much more costly integrated on-line 
solution option that will ultimately be the final solution that states 
will move towards'' and should include the additional costs that will 
result ``from the increased load on the system to each jurisdiction 
when all jurisdictions, insurance companies, salvage yards, consumers, 
law enforcement, etc. are given access to the system.'' The commenter 
concluded by stating that using this methodology, the aggregate costs 
will ``easily exceed the $100 million resulting in the applicability of 
the Unfunded Mandates Reform Act.''
    Response: The methodology employed to calculate the aggregate costs 
of the program uses the minimum requirements for system participation. 
DOJ sees no purpose in using a level of participation not required by 
DOJ as the basis for the cost calculations. While states ultimately may 
move towards an integrated, online solution for efficiency, and 
although this method of participation does benefit NMVTIS, DOJ does not 
require it for compliance. It is DOJ's responsibility to determine the 
least-costly, most-effective way for implementing the solution, and 
that is the methodology used in the proposed rule. Further, a fully 
implemented system, with all jurisdictions, insurance carriers, junk 
and salvage yards, consumers, and law enforcement personnel accessing 
and reporting, does not translate directly into an increase in costs 
for states. In fact, it could very well decrease state costs through 
offset fees.
    Comment: The City and County of Honolulu Division of Motor Vehicle, 
Licensing and Permits further maintained that because the combined 
city/county government is a ``small'' government, it is uniquely 
impacted by the regulations and is entitled to relief. Additionally, 
this commenter contended that the operator's requirements for 
extracting and mapping the required data are burdensome, and that 
should the operator undertake these responsibilities, batch data 
submission would be much easier to achieve.
    Response: The Unfunded Mandates Reform Act and 5 U.S.C. 601(5) 
define ``small governmental jurisdiction'' generally as rural 
jurisdictions, those with populations under 50,000, and areas of 
limited revenues. Based on this definition, the city/county identified 
by the commenter would not appear to qualify as a ``small governmental 
jurisdiction.'' In terms of the operator's requirements and the burden 
associated with such requirements, DOJ will continue to direct the 
operator to provide as much flexibility in requirements as is feasible, 
and DOJ will continue to provide technical assistance upon request to 
identify alternative solutions where necessary.

19. Inquiring Into NMVTIS Versus Other Systems

    Comment: More than one state motor vehicle administration commented 
that NMVTIS will not provide a more substantial benefit than checking 
third-party vehicle history databases which some states already check. 
One state motor vehicle administration suggested that the law was 
unclear as to whether the Anti-Car Theft Act required states to check 
NMVTIS or another third-party database, stating that ``[t]he previous 
intent was to provide a system that a state may utilize to verify title 
before titling a vehicle. This left open the use of other systems, such 
as Carfax, to research titles. The requirement to mandate use of NMVTIS 
to verify titles is unrealistic, unworkable and unfair. The intent of 
the process is to protect citizens against fraud. NMVTIS is not the 
only system that supports this intent. Limiting research to this system 
could also lead to misinformation and misapplication of process.''
    Response: The Anti-Car Theft Act requires states to verify titles 
through NMVTIS. No other system, public or private, can provide the 
same level of assurance as NMVTIS once full compliance is reached. DOJ 
also points to comments submitted by several organizations that 
highlighted concerns with the reliability of third-party databases. 
States wishing to provide increased protections for consumers are 
encouraged to continue to check such private databases in addition to 
making the NMVTIS inquiry as required by federal law.
    Comment: One commenter noted that ``the fully implemented system * 
* * will also provide consumers with a source of comprehensive 
information. Current services such as Carfax have partially filled the 
need for information, but these providers do not offer as current and 
complete titling information as the proposed NMVTIS system.''
    Response: NMVTIS provides a unique service in terms of the source 
of its data, its comprehensiveness, and its timeliness. Services such 
as CARFAX will continue to provide information to the public that is 
not intended to be included in NMVTIS, such as vehicle repair 
histories, etc. For this reason, these private services will continue 
to offer unique and beneficial services.

20. Time Lags

    Comment: Several commenters noted that allowing states to upload 
data (e.g., batch uploading) may create a ``time lag'' that could 
impact law enforcement investigations and impede the ability of the 
system to accomplish its goals. One commenter suggested that it would 
be better to wait until states secure the necessary funding before 
proceeding with implementation.
    Response: DOJ has examined this issue closely with the system 
operator and with third-party vehicle-history providers. While many 
third-party databases experience lag time of several weeks or months in 
getting state updated data, NMVTIS is designed to significantly reduce 
or eliminate the lag time entirely to provide reliable information to 
users. For this reason, states choosing the stand-alone method of 
participation and batch uploads will be required after initial set-up 
to establish batch updates at least every 24 hours. This requirement 
will greatly diminish the possibility of exploitation of lag time and 
provide a more up-to-date vehicle history check than is currently 
available. States do have the option of implementing in fully online 
mode where data transmission is in real time. DOJ does not have the 
flexibility to delay implementation until states have funding to 
implement the fully online mode. Pursuant to a federal district court 
order, DOJ is required to have the rules published and system available 
by January 30, 2009.
    Comment: One state motor vehicle administration noted that when 
using the stand-alone method of making inquiries before issuing a new 
title on out-of-state vehicles, an impact on customer service is 
expected. Specifically, the commenter stated that an additional ``three 
to five minutes of processing time'' is expected due to the fact that 
title clerks in this administration are using a mainframe that does not 
allow simultaneous internet access, and that to make such

[[Page 5757]]

a check, the clerk would have to log out, make the NMVTIS inquiry, and 
log back in to the mainframe for each out-of-state title transfer.
    Response: The lower cost stand-alone method of participation is not 
as timely as the fully integrated online method. DOJ is committed to 
working with states and the operator to identify new alternative 
methods to reduce or eliminate such inefficiencies, such as dedicating 
one internet-capable PC that could be available to all clerks with the 
NMVTIS page continuously running. With system response time currently 
at three seconds or less, this alternative may impact customer service 
less. Ultimately, however, although the stand-alone method of making 
inquiries is far less costly for states to implement, it may be less 
efficient than the fully integrated, online method.
    Comment: One state motor vehicle administration recommended that 
``all surrendered titles should be verified when being transferred[,] 
and the rule should not limit this requirement only to `purchased' 
vehicles. Without verifying all surrendered titles it is not known 
whether the title surrendered is the latest title issued[,] and there 
are many reasons titles are transferred other than through a sale.''
    Response: DOJ agrees with this recommendation and notes that the 
final rule clarifies that the requirement to make verifications 
pertains to any title or vehicle coming in from another state, 
including transfers. States are also strongly encouraged to perform 
such verifications on every title transaction, which is most effective 
when implementing via the online, integrated approach.
    Comment: One state motor vehicle administrator asked if 
manufacturers' certificates of origin (MCOs) must be verified as well.
    Response: Because MCOs are not vehicle titles per se, states are 
not required to verify MCOs in NMVTIS. However, DOJ strongly recommends 
that state motor vehicle administrators make inquiries on all title 
transactions, including initial registration of an MCO, to identify and 
eliminate fraud and to protect consumers.

Insurance Carriers

21. Reporting on Recent-Year Vehicles

    Comment: One commenter asked ``[w]hat is the reason to require 
insurance carriers to report only vehicles manufactured within the past 
five model years that they consider junk or salvage? If these vehicles 
will always go directly to junk or salvage yards, won't the vehicle be 
reported there anyway? Conversely if there is an opportunity for other 
disposal of the vehicles, shouldn't the insurance carriers be required 
to report all vehicles since the VINs could still be stolen for 
swapping?'' Other commenters noted that vehicles older than five years 
are often involved in consumer fraud and encouraged provisions for the 
database to cover the same ten-year age range as is used for odometer 
reporting.
    Response: The Anti-Car Theft Act only required insurance carriers 
to report vehicles in the current and four prior model years. DOJ is 
not able to reverse or alter this limitation by increasing the 
reporting parameters. Junk and salvage yards later may report some 
vehicles that insurance carriers are not required to report. The 
Department, however, encourages insurance carriers to report older 
vehicles.
    Comment: ASPA commented that section 25.55(b)(3) of the proposed 
rule requires insurance carriers to report ``the name of the individual 
or entity from whom the automobile was obtained or who possessed it 
when the automobile was designated as a junk or salvage automobile,'' 
which would seem to be two different individuals or entities in most 
cases. Further, ASPA notes that it is unclear if the insurance carrier 
would know the name of the owner when it files the report.
    Response: Although the proposed rule required reporting of the name 
of the individual or entity either from whom the automobile was 
obtained or who possessed it when the automobile was designated as a 
junk, salvage, or total-loss automobile, the Anti-Car Theft Act 
specifically states that both names are required. Reporting both names 
is necessary to establish a ``chain of custody'' and for other law 
enforcement and consumer-protection purposes. DOJ changed this language 
in the final rule to require both names pursuant to the Anti-Car Theft 
Act. In reference to the concern that insurers may not know the name of 
the owner, most carriers do possess this information, as this would be 
the owner of the automobile at the time the vehicle was determined a 
total loss, salvage, or junk.
    Comment: Farmers Insurance commented that the ``trigger'' for 
insurance-carrier reporting should be when the insurance carrier sells 
the vehicle or when the customer determines it will retain ownership of 
the vehicle, because such dispositions may not be known for as much as 
90 days after the loss occurs.
    Response: Because disposition may not be known at the time of 
initial reporting, this rule allows the insurance carrier to file a 
supplemental disposition or update. Many comments emphasized the 
importance of timely reporting, even when the named owner in the 
initial report is the insurance company.
    Comment: Farmers Insurance suggested that a 12-month grace period 
should be granted for insurance reporting to begin in light of ``proper 
system upgrades'' that may be required.
    Response: DOJ is not able to provide a grace period, as the court 
has ordered the reporting to begin by March 31, 2009. Additionally, 
because DOJ aims to enable third-party reporting through organizations 
that may already receive such data from insurance carriers, the burden 
of any system changes should be minimal.

22. Non-Required Data

    Comment: One commenter argued that ``[t]he proposed rule overstates 
the benefits provided to consumers. Particularly, the fact that 
insurance carriers are only `strongly encouraged to provide * * * other 
information relevant to a motor vehicle's title' undermines the broad 
benefits implied by the rule.'' ``The type of information not reported 
includes the reason why the insurance carrier may have obtained 
possession of the motor vehicle--flood, water, collision, fire damage, 
or theft.'' The NADA further recommended that the rule should require 
insurers to report the reasons they obtained possession of the vehicle 
to prevent brand washing and fraud. Additionally, this information 
would assist in cases where a vehicle is considered a total loss for 
purely economic reasons (e.g., theft). Several insurance-related 
organizations contended that for any voluntary reporting that may be 
contemplated, immunity provisions must apply to this voluntary 
reporting as well.
    Response: DOJ disagrees that the rule overstates the benefits of 
NMVTIS. DOJ does agree, however, that the reason for the total-loss or 
salvage designation by insurance carriers may be of importance to a 
prospective purchaser and to others. Not only does this protect the 
consumer's interest, but the additional reporting criteria also benefit 
insurance carriers. Therefore, the Department strongly encourages 
insurance carriers to report this data element.
    Comment: AAMVA commented that unless the rule requires ``junk and 
salvage dealers'' to report the percentage of damage sustained by each 
vehicle in their inventories to the states, the states would not be 
able to consider applying a state junk or salvage brand on these 
vehicles.

[[Page 5758]]

    Response: States will not be in a position to make such judgments 
based on junk- and salvage-yard operator reporting. Insurance carriers 
have ready access to this information, which is the typical basis for a 
state's designation. Although the reporting of junk- and salvage-yard 
inventories was likely not intended to support state-branding 
decisions, reporting of junk- and salvage-yard inventories may be 
helpful to states in making brand decisions, but likely not conclusive. 
Although such vehicles may not end up branded by the states, consumers 
and other states have the benefit of knowing that the vehicle was in 
the possession of a junk or salvage yard and therefore may wish to 
inspect the vehicle or to require an inspection before making purchase 
or titling decisions. DOJ is not in a position to require reporting of 
the percentage of damage. However, insurance carriers and others are 
encouraged to report this information.
    Comment: One commenter asked ``[h]ow will DOJ know which states, 
junk, salvage, and insurance companies are reporting information and 
reporting all the information that is required? Will someone audit 
their reports? I recommend that the system operator and the DOJ both 
make a list of who is reporting and publish that list * * * and audit 
reporting compliance.'' The commenter also suggested that DOJ require 
entities to report the company name, address, and phone number for any 
reports submitted. Another commenter asked who would inform insurance 
carriers and junk and salvage yards of the requirement to report 
information to NMVTIS, and who would identify those organizations 
required to report.
    Response: DOJ will instruct the operator to publish and maintain a 
list of the entities reporting information to NMVTIS. The list will 
include the name of the reporting entity, city and state of the 
reporting entity, the date that data was last submitted by the entity, 
and any contact information for the reporting entity. With regard to 
who would inform reporting entities of the requirements, DOJ will work 
with the operator, state-licensing authorities, and affected 
associations and advocacy organizations to ensure proper outreach and 
education.
    Comment: Several state motor vehicle administrations argued that 
DOJ should limit what non-required data the operator could ask for and 
receive (e.g., address of the vehicle owner). Another believed that the 
value of encouraging non-required data is unknown, and that reporting 
may only increase the number of discrepancies or errors. ISRI contended 
that DOJ should limit the ability of the operator to request 
additional, non-required data, because the current operator would be 
encouraged to request additional information that would generate 
revenues to the benefit of the association and its members, creating a 
conflict of interest. The Minnesota Department of Vehicle Services 
(MnDVS) argued that the provisions of section 25.53(c), which allow the 
providers of non-required data to query the system if beneficial in 
addressing motor vehicle theft, ``exceeds the authority conferred by 
Congress, is overly broad, and as such represents an arbitrary and 
capricious exercise of rulemaking power.'' Other commenters, however, 
reported that other data may be needed for specific purposes and argued 
in support of this flexibility.
    Response: It would be difficult to describe what data the operator 
is restricted from asking for or accepting, other than social security 
number, dates of birth, and addresses. DOJ points out that states need 
not provide data that is not specifically required in these regulations 
or the Act, and DOJ will need to approve the acceptance of non-required 
data. Moreover, the non-required data that is readily available would 
add great value to some consumers, to law enforcement, and to others 
(e.g., NICB flood vehicle database, vehicle export data, other North 
American vehicle history records, NICB theft file, etc.). While more 
data always increases the chances of discrepancies, DOJ does not want 
to discourage this voluntary reporting. While the current operator does 
have the best interests of its membership in mind, however, it also has 
expressed concern for others affected by the rule and will represent 
the concerns of all stakeholders, not as a trade association, but as 
the operator of a DOJ system. In response to MnDVS's comment, DOJ is of 
the opinion that if not in violation of the Anti-Car Theft Act or other 
federal privacy statutes, such cooperation is necessary and not 
arbitrary or capricious.
    Comment: Several commenters, including at least one from the state 
motor vehicle administration community, encouraged the inclusion of 
lien-holder information in the data provided to NMVTIS in light of the 
difficulty of obtaining this information on out-of-state titles and the 
associated budget impact on states. Other commenters, including 
insurance-related organizations, Assurant Solutions, and the NADA, 
suggested that additional data (including lien-holder information) will 
provide a crosscheck of information, close up loopholes, and improve 
NMVTIS.
    Response: This comment demonstrates the importance of allowing the 
operator of the system to request and accept additional information 
beyond the NMVTIS requirements. While states and others are not 
required to comply, there may be good reason to do so that would result 
in cost savings among the stakeholders. In terms of lien-holder 
information, while DOJ is not in a position to require that lien-holder 
information be included in the central file, DOJ notes that the 
existing secure network could be used in conjunction with the NMVTIS 
central-file information to query the current state of record and to 
access lien-holder information in that state's title record through the 
secure network provided by the current operator. Queries of and access 
to the actual state records should only be permitted when a state has 
agreed to provide such access, when any state application or 
certification procedures are completed, and when such access is in 
conformance with the Anti-Car Theft Act, the DPPA, etc.
    Comment: One commenter suggested that DOJ include registration 
information in the list of required data as a means to ensure accurate 
tracking of vehicle ownership.
    Response: Including registration information is beyond the scope of 
NMVTIS. Although it may be useful, DOJ cannot require such information.
    Comment: The National Salvage Vehicle Reporting Program commented 
that insurance-carrier reporting should commence on or before March 31, 
2009, as required by the federal district court, and that initial 
reporting by all covered entities should include historical data to the 
extent available, so that NMVTIS is complete beginning on March 31. 
Several insurance-related organizations or associations reported that 
``[t]he start date for insurers should be clarified. We believe the 
best approach is to provide that the system applies to automobiles 
declared junk or salvage on or after April 1, 2009, [and that] the 
system must be established by March 31, 2009. However, we prefer that 
more time is provided for insurers to comply.''
    Response: DOJ will require that all vehicles declared junk or 
salvage (including ``total loss'') on or after April 1, 2009, be 
reported to NMVTIS. However, DOJ strongly encourages insurance carriers 
and junk- and salvage-yard operators to provide data on vehicles that 
were declared junk, salvage, or total loss before that date and as far 
back as 1992, if such data is available.

[[Page 5759]]

    Comment: The National Salvage Vehicle Reporting Program commented 
that ``NSVRP strongly endorses the inclusion in the rules of 3rd party 
enhanced standards that allow for data generators to report to NMVTIS 
more completely and more frequently than minimally specified in the 
rules.''
    Response: While DOJ is not in a position to articulate data-
reporting requirements or standards regarding data that is not 
statutorily or otherwise required, DOJ notes that the National Salvage 
Vehicle Reporting Program has worked with nearly every stakeholder 
group affected by NMVTIS to develop standards for voluntary reporting 
to NMVTIS that would benefit states, law enforcement, consumers, and 
others. DOJ applauds the National Salvage Vehicle Reporting Program and 
strongly encourages the operator to adopt these standards as suggested 
voluntary compliance standards. While the standards cannot be mandated 
on any reporting entity, those entities that adopt the standards and 
report voluntarily in a manner that is consistent with the standards 
will be providing a significant public benefit.
    Comment: The National Salvage Vehicle Reporting Program commented 
that NMVTIS must support the electronic MCO process and should serve as 
a catalyst for implementation of the electronic MCO system nationwide.
    Response: DOJ is in favor of supporting an electronic MCO process 
as a way of eliminating and preventing fraud and reducing theft. In 
addition to NMVTIS, the use of the secure AAMVAnet communications 
network for states would likely be necessary, and it would be AAMVA's 
responsibility to authorize its use for this purpose.

Junk Yards and Salvage Yards

23. Salvage Pools

    Comment: Several law enforcement and related commenters strongly 
agreed with the assessment that Salvage Pools are one of the most 
significant sources used by criminal groups as a source of paperwork 
and as a way to fund their operations. These commenters agree that 
Salvage Pools must report vehicles to NMVTIS both when they receive 
vehicles for sale, and when they sell those vehicles. These commenters 
further noted that such salvage pools have sophisticated technological 
capabilities and should not have any problem meeting the reporting 
requirements. Several of these commenters noted that in some cases, 
individuals purchase severely damaged units at or via these pools and 
then steal a similar make and model for cloning purposes. For this 
reason, these commenters also recommended reporting the buyer's name 
for these vehicles. Several national consumer-advocacy organizations 
also supported the constructive definition including salvage pools and 
the requirement to add buyer name in the reporting requirements.
    Response: DOJ reaffirms its determination to include ``salvage 
pools'' and ``salvage auctions'' in the definition of junk or salvage 
yards, thereby requiring them to comply with the corresponding 
reporting requirements. The name of the buyer is not reported elsewhere 
despite being very valuable for law enforcement and other purposes. 
DOJ, therefore, added the name of the buyer as required data to report. 
Because many of the purchasers are reportedly international buyers, 
some of whom have been linked to fraud and theft rings that purchase 
such vehicles for clean paper to use on stolen vehicles in the U.S., 
DOJ also will add to the requirements an indication whether the vehicle 
is intended for export.
    Comment: The Nevada Department of Motor Vehicles commented that by 
statute, Nevada requires wreckers and salvage pools to apply and 
transfer their salvage titles, junk certificates, and non-repairable 
certificates within 10 to 30 days. Nevada suggested that these 
organizations should be exempt from reporting because the DMV already 
sends this data to NMVTIS.
    Response: Junk and salvage yards, including salvage pools, are not 
required to report data to NMVTIS if the state already reports the 
required junk- and salvage-yard information to NMVTIS pursuant to this 
regulation.
    Comment: One commenter asked whether ``the definitions of junk yard 
and salvage yard, which include even a single individual, [are] a 
substantial overstep?'' Several consumer-protection organizations also 
suggested that, with respect to the definition of ``in the business 
of,'' junk and salvage yards should be defined as any entity or 
individual meeting the description in the definition that acquires or 
owns five or more salvage or junk automobiles within the preceding 12 
months, which is analogous to other similar reporting standards.
    Response: DOJ modified the final rule consistent with the comment 
from the consumer-protection organizations. The qualifier of five or 
more vehicles is taken from federal odometer law, and its definition of 
``car dealers'' from 49 U.S.C. 32702(2).
    Comment: One commenter (CARS of Wisconsin) argued that 
``information about who owned the vehicle prior to it being junked is 
unnecessary.'' The Wisconsin Department of Transportation contended 
that requiring junk and salvage yards to report the name of the vehicle 
supplier is unnecessary, as is the disposition of such vehicles. 
Wisconsin DOT commented that because these vehicles are scrapped or 
destroyed by these entities and cannot be returned to road use, it is 
unnecessary to report this information.
    Response: Comments from law enforcement entities on the proposed 
rule demonstrates that this information is of significant value. 
Additionally, even when a vehicle cannot return to the road, the VIN 
can be used to clone a stolen vehicle. In states that do not have the 
same junk-branding requirements as Wisconsin, a junked vehicle can 
``live on'' through a cloned stolen vehicle, which will only cease once 
NMVTIS is fully implemented.
    Comment: The Virginia Department of Motor Vehicles expressed 
concern that the proposed rule seemed to encourage junk- and salvage-
yard operators to submit data via FTP or facsimile that potentially 
would include personal identifying information.
    Response: DOJ encourages all reporters to report electronically 
whenever possible. In cases where electronic reporting is not an 
option, DOJ will direct the operator to identify a reporting procedure 
to accommodate the situation. Regardless of the reporting method, DOJ 
and the operator will ensure that all possible safeguard measures are 
taken, including secure FTP wherever possible.
    Comment: One commenter requested that DOJ require the operator to 
accept junk- and salvage-yard data from any junk or salvage yard 
directly or through a third party on their behalf to minimize 
administrative burden.
    Response: DOJ has provided the operator with flexibility in 
identifying the specific methods of reporting to NMVTIS. It is not in 
the system's best interest for all required reporters to report 
directly into the system, due to technical and business reasons. The 
operator is expected to identify three or more different methods of 
transmitting information to NMVTIS and will make this information 
available via its Web site, as will DOJ via www.NMVTIS.gov.
    Comment: Several commenters have noted that, similar to insurance-
carrier reporting, junk and salvage reporting of vehicle presence in 
inventory on a 30-day basis leaves a significant amount of time for 
fraud and theft to occur. These commenters recommended that DOJ require 
reporting of not only presence in

[[Page 5760]]

inventory, but also disposition of the vehicle. The recommendations for 
the revised reporting timeline varied in the recommendations from 
immediately to several business days.
    Response: The Anti-Car Theft Act defines the reporting timeline, 
and, therefore, DOJ can only require reporting on a monthly basis. DOJ 
does strongly encourage all reporters to report data as soon as 
possible or on a daily basis.
    Comment: ASPA commented that ``while `salvage pools' were not 
included by Congress in the `Anti-Car Theft Act of 1992' as an entity 
with reporting requirements, the DOJ sweeps our industry into the group 
which has these reporting requirements. * * * The salvage pool industry 
wants to be helpful in combating vehicle theft, but we want to insure 
that any reporting requirements imposed on our industry are reasonable, 
in light of the fact that Congress did not specifically place reporting 
requirements on salvage pools.''
    Response: DOJ appreciates ASPA's declaration and will work to 
ensure that reporting requirements on every industry are reasonable. 
The reporting requirements proposed for salvage pools are the same 
requirements placed on salvage yards, which also handle salvage 
vehicles. Because a salvage pool is in the business of acquiring 
(constructively defined to include handling or controlling on behalf 
of) salvage automobiles for resale, it fits well within the statutory 
definition of salvage yards.
    Comment: ASPA commented that because salvage pools generally serve 
as ``agents'' for insurance carriers, salvage pools should only be 
subject to the reporting requirements of insurance carriers as they 
relate to the age of automobile to be reported.
    Response: DOJ disagrees with this recommendation because salvage 
pools are included in the definition of salvage yards, as opposed to 
insurance carriers.
    Comment: ISRI and the National Salvage Vehicle Reporting Program 
both suggested an exemption from reporting for vehicles acquired from 
an entity that is obligated to meet the reporting requirements of the 
Act and rule. They argued that this exemption is necessary, not because 
of the burden of double reporting, but because, in the case of the 
scrap-metal-recycling industry, many vehicles are acquired after being 
flattened or crushed to an extent that a VIN cannot be reasonably 
obtained.
    Response: Many scrap-metal processors and shredders do receive 
flattened and bundled vehicles and vehicle parts. In those cases, 
recording a VIN for every vehicle is nearly impossible. Both ISRI and 
the National Salvage Vehicle Reporting Program assert that such 
entities are at the ``end of the line'' in handling end-of-life 
vehicles, and almost always receive vehicles from those who are 
required to report on the vehicle before it is crushed or bundled. 
Additionally, with scrap-metal processors and shredders, there is no 
possibility that the vehicle will be subsequently purchased for 
operation on public roads by an unsuspecting consumer. However, cloning 
and destruction of stolen vehicles remain a threat. For these reasons, 
DOJ created an exception for reporting to NMVTIS in cases where a 
scrap-metal processor or shredder confirms that the vehicle supplier 
reported the required data to NMVTIS. Scrap-metal processors and 
shredders that receive automobiles for recycling in a condition that 
prevents identification of the VINs need not report the vehicles to the 
operator if the source of each vehicle has already reported the vehicle 
to NMVTIS. In cases where a supplier's compliance with NMVTIS cannot be 
ascertained, however, scrap-metal processors and shredders must report 
these vehicles to the operator based on a visual inspection, if 
possible. If the VIN cannot be determined based on this inspection, 
scrap-metal processors and shredders may rely on primary documentation 
(i.e., title documents) provided by the vehicle supplier.

Lenders and Automobile Dealers

    Comment: Iowa Attorney General Thomas J. Miller supported the DOJ 
proposal that lenders and auto dealers have access to NMVTIS in order 
to further NMVTIS's goals of reducing crime, especially fraud.
    Response: Commercial consumers will have access to NMVTIS.
    Comment: Assurant Solutions argued that lenders and dealers need 
not only the ability to query NMVTIS for information, but also need the 
ability to communicate and electronically exchange motor vehicle 
information to achieve greater efficiencies in title processing, and to 
limit the number and type of paper-based transactions as a strategy to 
significantly decrease fraud. Specifically, the commenter suggested 
that lenders and dealers communicate errors or changes to NMVTIS.
    Response: Communication to and from NMVTIS is currently facilitated 
through the use of the current operator's secure and proprietary 
network, AAMVANet. This network is not a component of NMVTIS per se, 
and therefore the operator governs use of this network for 
communication between NMVTIS and its users. In terms of providing 
lenders and dealers with the ability to make corrections and changes, 
DOJ notes that it has concerns with authorizing any user other than a 
state motor vehicle administration or its agents (where applicable) to 
make corrections directly or changes to NMVTIS data. However, DOJ 
directed the operator to develop a process for reporting possible 
errors and requesting changes that may also be used by lenders and 
dealers.

Responsibilities of the Operator of NMVTIS

24. Consumer Access Methods

    Comment: One commenter argued that ``[t]he Web-based access should 
be open to private individuals who wish to check the status of a 
prospective purchase.'' And the NADA supported the provisions in the 
proposed rule allowing dealers to access NMVTIS as prospective 
purchasers, which is likely to help thwart motor vehicle-title fraud. A 
consumer-advocate attorney commented that if this information becomes 
widely and readily available, the vehicle-fraud industry will be 
significantly reduced.
    Response: Prospective purchasers (including dealers who purchase 
vehicles for resale) are required to have access to information 
necessary to make an informed purchase decision, and DOJ will require 
that consumer access be available by January 30, 2009.
    Comment: Experian Automotive argued that DOJ should not overlook 
the significant costs involved in marketing and distributing vehicle-
history information, and suggested that these costs are beyond what the 
operator can provide.
    Response: These costs are significant. Under the model of third-
party portal providers (as opposed to a single, operator-provided 
consumer access model), the third parties, not the operator or DOJ, 
will bear the most significant marketing and distribution costs. It is 
partly because of these costs that the third-party model was selected.
    Comment: Experian Automotive argued that NMVTIS is not chartered to 
provide the level of information and support that Experian or other 
private vehicle-history report companies provide.
    Response: DOJ has no intention of competing with private vehicle-
history-report companies. Those private services possess data that 
NMVTIS does not intend to provide (e.g., vehicle repair and service 
histories). NMVTIS is simply intended as a government-sponsored service 
to verify the title and

[[Page 5761]]

brand history of a vehicle reliably, thereby preventing fraud and 
theft.
    Comment: Several motor vehicle administrations and one services 
organization argued that the operator should not be permitted to sell 
bulk vehicle data from any state, which would effectively allow private 
information resellers to bypass contractual agreements and seek the 
state's database from the NMVTIS operator. Additionally, at least one 
state motor vehicle administration suggested that the operator should 
conduct regular program and security audits and should screen potential 
access providers.
    Response: The operator will not sell the NMVTIS central file or any 
particular state's dataset (i.e., all VINs from a particular state). 
All information provided will be in response to VIN queries, except in 
cases of law enforcement queries, which could include searches of 
NMVTIS by reporting entity name, names associated with reports, 
location, etc. Data provided to NMVTIS will remain in the possession of 
the operator and any contractors supporting the operator (i.e., data 
center hosting or backup). Consumer-access providers are restricted 
from downloading and storing bulk NMVTIS data for resale or reuse and 
must use data in accordance with the Anti-Car Theft Act. Any entity 
using NMVTIS data in a manner inconsistent with these regulations may 
not be covered under the Act's immunity provisions. The operator shall 
conduct regular reviews and audits of security arrangements and program 
compliance and shall work with DOJ to establish access-provider 
standards to ensure that the access providers are professional and 
reputable, and that information and access are provided according to 
the Act.
    Comment: One commenter argued that ``[t]he responsibilities of the 
operator of the NMVTIS system are confusing in subsection (b)(3) and 
(b)(5), [as] they appear to have the same meaning and impact.''
    Response: These subsections describe what the operator of NMVTIS is 
statutorily required to provide to users of the system, including 
information regarding a vehicle's current or past status as a junk or 
salvage vehicle. In other words, NMVTIS will make information about 
vehicle history available to consumers, state titling agencies, law 
enforcement, and others through an electronic (e.g., Web-based) 
inquiry. Although subsections (b)(3) and (b)(5) overlap somewhat, it is 
possible that the operator may have information indicating that a 
vehicle has been branded a junk or salvage that did not arise from a 
report submitted by a junk or salvage yard or insurance carrier.
    Comment: One commenter noted that ``[w]ith the expected low 
implementation costs for this consumer system, there are major benefits 
to centralizing the system within a government Web site in order to 
reduce further consumer misinformation. In the alternative, a detailed 
scheme prohibiting third-parties from charging certain fees for 
accessing the system'' would be desirable. The commenter further 
emphasized the importance of regulating third-party involvement.
    Response: Third-party involvement will be regulated and monitored 
by the operator and DOJ. DOJ believes that this is the most sensible 
manner of implementing consumer access. DOJ has established 
www.NMVTIS.gov as a central source of reliable information concerning 
NMVTIS, providers, requirements, etc.
    Comment: One commenter suggested that the operator be required to 
establish a data-quality plan that may rely on technological tools to 
scan for and flag errors in VINs that may be reported to the system.
    Response: DOJ agrees with this comment and will direct the operator 
to adopt all reasonable strategies and techniques for ensuring data 
quality.
    Comment: In response to DOJ's request for comments on methods of 
NMVTIS access, several commenters agreed that third-party providers may 
be better suited for handling information access than a single 
provider. The Minnesota Department of Public Safety argued, however, 
that private third parties should not be permitted to have access to 
NMVTIS data in the manner proposed, with little oversight, or to 
generate profit from the data contributed by the states. Additionally, 
the commenter stated that this would violate the provisions of the 
Anti-Car Theft Act that restrict the operator from taking a profit from 
its role as the NMVTIS operator.
    Response: The third-party providers are not given open access to 
NMVTIS data. Rather, they are only provided access to that data that 
the Anti-Car Theft Act requires to be available to prospective 
purchasers. Additionally, the operator will maintain much more than 
``little'' oversight over these contractors. Last, while the Anti-Car 
Theft Act restricts the operator from making a profit, the Anti-Car 
Theft Act provides no restrictions on third-party contractors, 
including states that wish to be a portal provider. DOJ will move 
forward with a third-party provider approach to consumer access.
    Comment: The NADA commented on the importance of providing access 
to NMVTIS information for the wholesale vehicle market: ``If wholesale 
auctions have access to NMVTIS data, fraudulently titled vehicles could 
be easily flagged and reported to law enforcement officials 
expeditiously and efficiently. * * * Transparency at the wholesale 
level will only help to deter motor vehicle title fraud and enhance the 
NMVTIS system.''
    Response: DOJ agrees and notes that enabling this type of access 
also will assist in generating revenues to sustain the system and 
possibly offset or eliminate state fees. So long as this access is on 
an inquiry basis, and NMVTIS data is not sold in bulk as previously 
described, DOJ will authorize and direct the operator to provide such 
access to dealers and other commercial consumers, consistent with the 
Anti-Car Theft Act.
    Comment: Several commenters expressed concern that the operator 
must provide robust security protections for the information to be 
included in NMVTIS.
    Response: DOJ will ensure that the operator relies on industry-
standard security and related protections, including any relevant 
policy recommendations of the Global Justice Information Sharing 
Initiative that relate to security and privacy protections of 
information systems used in the criminal-justice environment.
    Comment: ISRI argued that DOJ's authorization for the operator to 
identify third-party organizations to receive and provide data to 
NMVTIS in lieu of allowing all required entities to report directly to 
NMVTIS is problematic. ISRI believes that allowing third-party 
organizations to handle the information creates a security risk, 
provides an opportunity for market participants to access confidential 
business information, and could create a cost burden for reporting 
entities. ISRI recommended additional security protections and 
restrictions that would prevent these potential problems.
    Response: The current operator's information architecture is not 
designed to allow hundreds, and possibly thousands, of reporting 
entities to report directly to NMVTIS. In light of this, and because 
many of the covered reporting entities are already reporting to third-
party entities, such as the Insurance Services Office (ISO), allowing a 
third party to receive and provide the required information is 
effective and reduces burden on reporting entities by allowing their 
current reporting to be used in NMVTIS compliance. DOJ will require the 
operator to designate at least

[[Page 5762]]

three third-party organizations for reporting purposes, so that covered 
entities can choose which third party they are most comfortable with. 
Additionally, any third-party organization that develops a reporting 
application at the operator's request will agree to terms and 
conditions restricting the sale or use of the data, consistent with the 
Anti-Car Theft Act.
    Comment: Auto Data Direct, Inc. suggested creating a policy to 
prevent free dissemination of prospective-purchaser-inquiry data by any 
entity and suggested charging all consumer-access providers the same 
fees in order to maintain a level playing field.
    Response: DOJ agrees and will direct the operator to ensure that 
all consumer-access portal providers are charged the same fees for 
NMVTIS information, notwithstanding volume discounts. Consumer-access 
providers, however, are currently not restricted in what they can 
charge the end user (prospective purchaser) for an inquiry, as DOJ has 
determined that the ``market'' can determine this better than any 
artificial caps or minimums.
    Comment: The Minnesota Department of Public Safety commented that 
section 30504 of the Act requires DOJ to prescribe by regulation the 
procedures and practices to facilitate reporting to NMVTIS. The 
commenter suggests that DOJ is merely placing this burden on the 
operator to circumvent the DOJ's own responsibilities.
    Response: DOJ strongly disagrees with this assessment. Requiring 
that these procedures, which are subject to change and modification as 
technology advances, be published in federal regulations is unwise and 
inefficient and would only serve to restrict the states and other 
covered participants from working with the operator to improve 
reporting practices. It is in everyone's best interest that such 
detailed procedures are not codified in regulation beyond the 
procedures and practices that are described herein (i.e., third-party 
reporting, reporting via batch upload or realtime, etc.).
    Comment: AAMVA asserted that it cannot support the development and 
implementation of a third-party reporting mechanism to support 
insurance, junk, and salvage reporting. AAMVA reports that to establish 
this connection with the required two or three third-party 
organizations would require $1 million to $1.5 million in development 
costs and up to $400,000 in annual operating costs from federal funds 
to implement this provision.
    Response: DOJ is under court order to establish this mechanism by 
March 31, 2009. DOJ has recently provided AAMVA with federal funds of 
nearly $300,000, and AAMVA expects to receive approximately $1,500,000 
in user fees by end of year 2008. Much of these funds are spent on 
other activities, including and especially support for currently 
participating states. DOJ expects to work with AAMVA on cost controls 
and to intervene to ensure that the basic connection is established as 
required by the court. The Anti-Car Theft Act specifies that NMVTIS 
will not depend on federal funds and is to be supported by user fees.
    Comment: The National Salvage Vehicle Reporting Program commented 
that commercial consumers such as auto dealers would desire the ability 
to inquire on multiple VINs at the same time in a ``batch'' format at 
an appropriate cost. Consumer-advocate attorney Bernard Brown commented 
that ``such broad access to NMVTIS data should be provided for all of 
these businesses and entities to level the playing field'' in the 
competitive market place. Other consumer-advocacy organizations 
commented that such commercial consumers should not be permitted to 
provide the NMVTIS vehicle history to other consumers without also 
notifying such consumers of the NMVTIS disclaimers and warnings.
    Response: Similar to the need for central-issue states to inquire 
against multiple VINs at the same time, commercial consumers should 
have the same service available at a cost commensurate with the 
service. Because DOJ is directing the operator to make such a batch-
inquiry process available for central-issue states, this same service 
should be available to dealers and other commercial consumers. DOJ 
points out, however, that these searches will require a VIN for each 
vehicle to be searched. That is, no bulk data will be made available to 
any consumers. DOJ will require the operator to require all third-party 
portal providers to make a NMVTIS Notice and Disclaimer available to 
all consumers accessing the system. Additionally, DOJ has collaborated 
with the Federal Trade Commission on its Used Car Buyers Guide 
regulations to ensure that the FTC is aware of NMVTIS and the 
accompanying notice and disclaimer.
    Comment: Several commenters, including the National Salvage Vehicle 
Reporting Program, stated that the inclusion of specific disclaimers 
for limitations to the data reported by the system is essential for 
consumer protection purposes.
    Response: DOJ agrees and will work collaboratively with the 
operator and others to ensure that appropriate notices and disclaimers 
are in place.
    Comment: One commenter noted the need for proactive efforts by DOJ 
and the operator in the areas of public awareness and education on 
NMVTIS and the issues it addresses.
    Response: DOJ will work with the operator and the various 
stakeholder communities to develop and distribute information through 
www.NMVTIS.gov and other means.
    Comment: Several consumer-advocacy organizations argued that 
consumers should be provided access either at no cost or nominal cost 
without onerous access requirements and allowed to make multiple 
inquiries for a fixed price. Similarly, these organizations contended 
that consumers who have completed vehicle purchases should be able to 
verify their vehicles' history, and that the Department should take 
into account consumers' lack of access to credit and the ``digital 
divide.''
    Response: DOJ agrees that consumers should be able to access NMVTIS 
at nominal cost, that there should be no onerous access requirements, 
and that any consumer--including those who recently purchased a vehicle 
and those who may be considering purchasing a vehicle in the future--
should be permitted access. DOJ will take into account the comments on 
pricing structures and the issues of credit access and ``digital 
divide'' while working with the operator to establish the consumer-
access provisions.

25. Operator Accountability

    Comment: Several state departments of Motor Vehicle Administration 
argued that the operator must provide a reasonable and timely process 
for correction and amendment of records that contain errors, and that 
the operator must take responsibility for notifying users of the 
erroneous information. Another asked who would be responsible for 
working with insurance carriers and junk and salvage yards when their 
data is questionable or incorrect. The commenter also asked how the 
data would be corrected.
    Response: DOJ agrees that an error-verification and correction 
process is vital to the success of the program. However, in some 
circumstances, it may be impossible to fully verify the facts of some 
situations (e.g., vehicles disposed of). The operator will be required 
to work with data reporters to identify and resolve potential data 
errors, to note within the central file any discrepancies reported or 
the findings of any investigations of errors, and to notify those who 
accessed the information of any confirmed erroneous information.

[[Page 5763]]

No entity, including the operator, may remove any data reported by 
another organization, and only state motor vehicle-title 
administrations can unilaterally change their data, which will update 
in NMVTIS. Insurance carriers and junk- and salvage-yard operators do 
not have access to modify data in the system, but are required to 
notify the operator immediately of erroneous information that they 
previously reported and to immediately report corrected information, 
which will be flagged or noted in the system as an update. Although the 
erroneous information may be retained in the file, it will be noted as 
corrected via update, and the updated, correct information will be 
available. In releasing insurance, junk, or salvage information, the 
operator may include the name of the reporting organization and its 
contact information, so that anyone questioning the validity of the 
report can go directly to the source of the information. It is 
important to point out that while NMVTIS is authorized to serve as a 
data repository and data provider, NMVTIS was not expected to serve as 
an arbitrator of questionable or even conflicting information. It is 
the responsibility of the data reporters (including states and 
insurance, junk, and salvage organizations) to provide correct 
information, and to provide updates and corrections as soon as they are 
identified. Although the operator should not remove previously reported 
information, the operator can add a ``note'' to the record regarding 
the corrected information, along with the corrected information. 
Additionally, DOJ added a section to the regulation (section 25.57) 
that provides for error correction in exceptional circumstances.
    Comment: One commenter stated that ``[t]he GAO report stated that 
there have been problems with funding NMVTIS through AAMVA, including: 
excessive consultant fees; lack of documentation for payments; failing 
to maintain records supporting financial reports; and failing to 
adequately administer contractual arrangements with the states. GAO 
report at 10. How has the track record for management of NMVTIS 
improved since then? What type of financial oversight is expected for 
the system? And what type of compensation structure does NMVTIS propose 
for its labor costs?''
    Response: Because the current operator (AAMVA) has received grant 
funding from DOJ, the operator is responsible for complying with all 
grant requirements, including financial and programmatic requirements 
relating to contracting, documentation, and performance. Also, DOJ will 
play an active role in overseeing the administration of the system. DOJ 
also has added requirements for the operator to publish an annual 
report to include revenues and expenses by category. DOJ leaves 
operator labor cost structures up to the operator to determine what is 
most advantageous and cost-effective while complying with DOJ financial 
requirements. DOJ also has added a requirement (should DOJ not be the 
operator) for an annual independent audit of NMVTIS revenues and 
expenses, the results of which will be publicly available. DOJ also may 
terminate the operator status of any organization (if not the 
Department of Justice) for cause, should that be necessary. DOJ also 
has coordinated with another federal agency, the Office of the 
Inspector General (OIG), which recently completed audits of the 
operator's financial recordkeeping and practices and will continue to 
monitor these issues. DOJ also notes that the GAO study was completed 
many years ago, and that AAMVA has undergone many changes since that 
time.
    Comment: One commenter asked ``to what extent is the potential for 
corruption of those who manage the system a concern? What internal 
controls will be implemented? Is this why access provided by the 
operator to users of NMVTIS must be approved by the Department of 
Justice? Sec.  25.53(d).''
    Response: DOJ has no basis for any concerns of corruption. The 
internal controls in place to protect the integrity of the system are 
many and varied, including technological controls, transparency, and 
oversight from a variety of stakeholders.
    Comment: One commenter noted that ``[t]he estimates in the 
regulations give the impression that the operator doesn't know exactly 
how much the system costs to operate[.] The estimates provided all seem 
pretty high. Why does it cost so much to operate the system? Is DOJ 
sure that the operator has the experience and ability to run the system 
well?''
    Response: DOJ is very concerned about current system costs. DOJ 
will continue to monitor and encourage cost-saving options and will 
look to the annual independent audits to inform the operator and DOJ of 
additional cost-saving strategies. DOJ notes that the current operator, 
AAMVA, already administers other federal-state systems successfully. 
DOJ will continue to encourage AAMVA to seek cost savings by 
outsourcing technological solutions as appropriate and by adopting 
current and less-costly technological solutions.
    Comment: One commenter asked ``[h]ow will DOJ oversee the program 
and the operator? Because these questions are obvious and because 
others have already asked questions about the same issues, I recommend 
that DOJ create some kind of governance model to oversee the project. 
The current operator has close ties to the states, but other groups 
required to participate don't have a seat at the table. A board of 
governors that has people from the groups that use the system or need 
the system is definitely needed.'' Similarly, one state motor vehicle 
administration noted that ``the proposed rules and the options AAMVA is 
willing to provide do not match. The lack of flexibility on the part of 
AAMVA results in many options set forth in the proposed rule not 
actually being available to the states.'' The California motor vehicle 
administration commented that a board or commission made up of state 
representatives, DOJ, and the operator should be engaged to discuss and 
agree upon the requirements relating to consumer access. Other 
commenters also recommended the establishment of a steering committee 
to govern operation of NMVTIS outside of the rules.
    Response: It is DOJ's responsibility to oversee the program and 
make or approve all policy decisions regarding the implementation of 
NMVTIS. To ensure input from all stakeholders, the Department may 
establish a NMVTIS Advisory Board to make recommendations to DOJ 
regarding the system and its operation.
    Comment: Several commenters recommended that DOJ publish the NMVTIS 
system budget on an annual basis for review as a part of an annual 
report, and another commented that the operator should be required to 
provide quarterly reports on the number of vehicles reported on during 
each quarter, along with dispositional information, in order to give 
better insight into the effectiveness and compliance rates within the 
system. Another state motor vehicle-title administration recommended 
that the operator be required to have procured an independent audit of 
the fees generated and expenses incurred on an annual basis.
    Response: DOJ will require the operator (if not the Department of 
Justice) to prepare and publish electronically a detailed annual report 
that includes many of these items, and DOJ also will require an annual 
independent audit of NMVTIS revenues, costs, expenditures, and 
financial controls and practices, which shall also be available.
    Comment: The California motor vehicle administration suggested that

[[Page 5764]]

DOJ should identify its responsibility for oversight of the system and 
operator performance, and that specific performance measures should be 
established along with a minimum-performance period such as a year. The 
commenter further suggested that the review of operator performance 
should include solicited comments from the various system stakeholders.
    Response: As previously stated in these comments, the Anti-Car 
Theft Act provides that NMVTIS is a DOJ system over which DOJ has sole 
responsibility and control. As necessary, DOJ will enter into an 
Memorandum of Understanding (MOU) with the operator that addresses 
these issues in greater detail.
    Comment: Several commenters noted the need to require the operator 
to provide information to reporters and others on its compliance and 
the compliance of others in the program.
    Response: DOJ will work with the operator to establish the specific 
compliance monitoring, management-control functions, and 
administrative-dashboard features that will be required. In its annual 
report, the operator will provide compliance data and information on 
which states, insurance carriers, and junk- and salvage-yard entities 
are reporting to the system and participating, if available.

User Fees

26. Per Transaction

    Comment: Several commenters noted that the user fees should be 
based on a ``per transaction'' basis: ``The fee structure based on a 
pro-rata share to states based on the number of registered vehicles is 
not an equitable structure. States put information into the system and 
all the states involved in the system benefit from this. Under a pro-
rata system, states that have a low number of title transfers but a 
high number of vehicles ha[ve] to pay in more for the system for 
marginal benefit. Other states, for example states that act as dealer 
hubs and have a large number of title transfers but a small number of 
registered vehicles[,] would be benefitting disproportionately. For 
those reasons, the fees should be applied on a per transaction basis.''
    Response: Several commenters, including state motor vehicle-title 
administrations, noted that fees based on a ``transaction'' basis could 
serve as a disincentive for states to participate and to make NMVTIS 
inquiries, which would leave consumers and others vulnerable. 
Additionally, several commenters noted that fees based on a pro rata 
basis provided the ability to know fees in advance, which would assist 
in budget planning and requests. Finally, a transaction-based fee 
structure would require the operator of NMVTIS to revise its billing 
process and would likely be more costly to implement. For these reasons 
primarily, DOJ has determined that state user fees will be based on the 
number of motor vehicles titled or registered as reported by the U.S. 
Department of Transportation's Federal Highway Administration through 
its Highway Statistics Program and reports. With full state 
participation mandated beginning January 1, 2010, the operator will 
invoice all states regardless of their level of participation. State 
fees shall be reviewed biennially and announced to the states as soon 
as possible, preferably more than one year in advance of becoming 
effective.
    Comment: Experian Automotive commented that some aspects of the 
proposed rule could be read to allow the establishment of a fee beyond 
what would be reasonable for the records, which would be essentially 
the same as prohibiting the disclosure of information outright.
    Response: The current inquiry fee used in consumer-access pricing 
is based on market assessments, and with volume discounts included, has 
been effective in securing consumer-access provider-organization 
agreements. However, DOJ will carefully monitor consumer access pricing 
to ensure that the average consumer is not ``priced out.''
    Comment: AAMVA and the States of California, New York, and Alaska 
commented that user fees based on the number of vehicles registered in 
the state are the preferred basis, as this will enable states to 
determine the fees in advance, which will support budget planning. At 
the same time, states such as Texas, Oregon, South Carolina, and Hawaii 
have recommended a fee structure other than the number of registered 
vehicles because of the high number of registered vehicles in some 
states. The State of California recommended that the fees be the 
subject of a separate, future rulemaking, that the operator be required 
to make its expenses publicly available, and that a stakeholder group 
comprising the operator, DOJ, and states provide input into the fees.
    Response: DOJ agrees with AAMVA and several states in making the 
basis for state fees the number of vehicles registered or titled. DOJ 
cannot defer rulemaking on fees because the operator has indicated 
extensively that funding for NMVTIS is critical. In fact, in the 
operator's public comments on this rule, it acknowledges that it cannot 
implement key aspects of NMVTIS in accordance with a federal court's 
order without critical funding. For these reasons, DOJ must resolve 
this issue now. DOJ agrees that all expenses and revenues for NMVTIS be 
made publicly available annually.
    Comment: More than one commenter argued that ``[c]harging a `user 
fee' to a state for the information they are required to upload to the 
system is simply unfair. If anything, the states are providing this 
information as a courtesy to enable the NMVTIS process to function. As 
such, a state should not be charged a fee for providing data. Rather, 
anyone, including a state, which uses the system to process requests, 
should pay fees for system use.''
    Response: The user fee is not charged to a state solely for sharing 
its data with the system and other states. The user fees are assessed 
in light of the states' use of the system overall as is required by 
law, including making inquiries into the system, relying on the system 
to maintain a national brand history, and facilitating the secure 
exchange of title information and updates between states to protect the 
states' consumers. Additionally, all states receive a level of added 
protection from fraud via participation by other states.
    Comment: The State of South Carolina Department of Motor Vehicles 
suggested that ``states could be charged for inquiries prior to the 
issuance of a new jurisdictional title based on an out-of-state title; 
however, states should be reimbursed for these charges based on the 
number of third-party inquiries that the system receives. If such a 
model is not developed, then states will take a double hit: the cost of 
full participation in the program, as well as the loss of revenue 
resulting from third parties being able to obtain current 
jurisdictional data through alternative means.''
    Response: Regardless of the fee model, DOJ has taken steps with the 
operator of the system to ensure that impact on states is minimized. In 
fact, the model that South Carolina proposes is very similar to the 
model being considered by DOJ and the operator. The model DOJ is 
proposing for generating revenue includes a component designed to 
``point'' consumers to the full title history in the state of record, 
thereby potentially generating additional revenues for the state, and 
the model includes a strategy of using revenue to cover system 
operational costs as well as offsetting state user fees. Once system 
operational costs are covered, DOJ anticipates offsetting or 
eliminating state fees entirely with revenues generated by the

[[Page 5765]]

system. Should NMVTIS ever reach the point where an unexpected surplus 
of user fee revenue exists, DOJ could direct the operator to reduce 
user fees the following year or could use the funds to support state 
upgrades to motor vehicle title information systems. This latter use of 
funds would be directed by DOJ exclusively.
    Comment: The State of Illinois motor vehicle administration 
commented that in order for NMVTIS to be effective, NMVTIS should 
purchase vehicle-history data from the state, ``mark up'' the price of 
the data, and sell the data to third parties. Illinois suggested that 
``with this model, everyone wins,'' and that ``consumers win because 
they can rely on the complete, consistent, and efficient flow of 
information about motor vehicles.''
    Response: While this concept may be appealing to some, the concept 
has several major flaws. First, the Anti-Car Theft Act does not 
authorize or even suggest that DOJ should purchase state data. Had this 
been contemplated by Congress, funds would have to have been 
appropriated or at least authorized to make the purchases. 
Additionally, government agencies are not in a position to engage in 
speculative purchases. Consumers would not win under this scenario 
because they would be left to pay high prices for vehicle-history 
information, which many cannot afford and should not have to do to be 
protected. Last, this is not what is required under the Anti-Car Theft 
Act.
    Comment: The State of California recommended that the states be 
charged a flat fee for participation that would cover NMVTIS operating 
expenses, and that all revenues generated from consumer access be 
returned to the states.
    Response: DOJ believes that, based on the arguments presented by 
the states in response to the proposed rule, there is no equitable way 
to charge a flat fee due to variances in the number of vehicles in the 
states, number of title transactions, number of out-of-state transfers 
into the states, etc. DOJ believes that the fees must be based on a 
factor that is correlated to a state's required use of the system. In 
terms of returning revenues generated from consumer access to the 
states, this is not too dissimilar to what DOJ has proposed--offsetting 
state fees (potentially entirely) with revenues from consumer access 
once system operating costs are covered.
    Comment: One commenter stated that ``states should not be charged 
simply for submitting their title data to NMVTIS. States that choose to 
use NMVTIS should not be charged for assisting the DOJ.''
    Response: States are not charged for simply submitting data to 
NMVTIS. States are required to use NMVTIS for inquiries prior to 
issuing new titles for out-of-state vehicles, and NMVTIS can provide 
real-time updates and corrections as well as a secure method of sharing 
title information between states. In fact, for the 13 states currently 
online, 45 million messages or exchanges have been processed by NMVTIS, 
and the State of California has commented that NMVTIS is an ``integral 
part of state operational activities,'' demonstrating that NMVTIS does 
provide services to the states. The purpose of NMVTIS is not to assist 
DOJ, and DOJ has limited use for the data in NMVTIS. NMVTIS is a 
service to states that provides greater consumer protection, reduces 
crime, and can improve titling process efficiencies, all three of which 
ultimately reduce costs to the states overall as well as to consumers.
    Comment: One commenter noted that ``the Department of Justice does 
possess a legitimate interest in incentivizing full state participation 
in NMVTIS.'' All states receive a benefit from NMVTIS. ``Title washing 
and rebranding of vehicles remain a national problem, not somehow 
confined merely within state borders. Providing information to NMVTIS 
allows law enforcement agencies to confront crimes that may have 
originated or affected states outside of their jurisdiction.''
    Response: DOJ agrees with this comment.
    Commenter: One commenter expressed disappointment regarding state 
concerns over user fees and system costs and recommended that DOJ 
pursue enforcement against non-participating states.
    Response: DOJ appreciates the concern and will monitor state 
compliance with the Anti-Car Theft Act and the NMVTIS rules.
    Comment: One commenter noted that the fee structure should be based 
on the activities generating the most costs, such as storing vehicle 
data, performing verifications, etc.
    Response: DOJ agrees that the fees should match the costs of the 
system. In asking for comments on the fee structure, however, DOJ was 
attempting to solicit input from the field regarding the most equitable 
manner of developing the fees and applying them to all states. As for 
costs, the majority of current expenses are for supporting online 
states and states in the process of implementation and data storage.
    Comment: The State of New York Department of Motor Vehicles 
commented that a transaction-based fee could serve as a disincentive to 
states to query the system often. The state further commented that a 
flat fee may be more effective.
    Response: DOJ appreciates this input and assumes that the 
commenters' reference to a ``flat fee'' could include a tiered fee 
structure, such as what is in place today, as this results in a flat 
fee for the states in each tier.
    Comment: One commenter noted that ``[w]e remain convinced that if 
this is a program that is as effective as it is pronounced to be, if it 
will truly accomplish all of the goals it is said to have, then it 
should be fully funded and supported by the Department of Justice. 
Otherwise, it should be funded by fees charged for those states, 
individuals and organizations who request data from the system, based 
on a transaction fee as determined by AAMVA to sustain the system. If 
that is not possible and the DOJ will not fund it, it should be 
cancelled.''
    Response: The Anti-Car Theft Act explicitly states that NMVTIS 
should not be dependent on federal funds for operation. DOJ has awarded 
over $15 million to NMVTIS and participating states, in addition to the 
funds awarded by the Department of Transportation prior to 1996. Since 
1992, no more than $2 million has been collected in user fees by the 
operator. DOJ will comply with the Anti-Car Theft Act in requiring a 
system of user fees to support system development, operation, and 
maintenance. Because the Anti-Car Theft Act requires that DOJ implement 
the system so that it is sustained by user fees, DOJ has no ability to 
``cancel'' the program.

27. Tier Structure

    Comment: Several commenters, including AAMVA, noted that a tiered 
structure is the most workable structure from a budgeting perspective, 
given that this type of basis or structure will lessen the need for 
annual changes to fees, which are unworkable for states with biennial 
budgets. However, some states, such as Oregon, Virginia, Alaska, 
Minnesota, and others, noted that a non-tiered structure is preferred.
    Response: DOJ appreciates this input and has elected to keep the 
tier structure in place. While there is still disparity between small 
and large states, and between those states that have significant 
differences in the number of titled vehicles, the tiered structure does 
help in reducing disparities between states of similar size. 
Additionally, the tier structure allows the per-vehicle

[[Page 5766]]

basis fee structure to remain relatively stable, rather than 
fluctuating constantly, and because it acts as a stabilizer, it results 
in a stable fee that states can budget for appropriately. Last, the 
tier structure is the structure that the AAMVA Board has adopted as a 
workable method for establishing fees.
    Comment: AAMVA commented that in addition to retaining the tiered 
fee structure, DOJ should modify the final rule to allow changes to the 
fee structure to be determined through a mutual agreement between DOJ 
and the operator.
    Response: DOJ firmly believes that issues such as the structure of 
mandatory fee systems should be addressed in a public manner, as 
opposed to handled informally and without input from stakeholders.

28. Per Vehicle

    Comment: More than one commenter noted that user fees should be 
based on the number of ``automobiles'' titled versus the number of 
``motor vehicles'' titled in a particular state.
    Response: While DOJ understands the comment and agrees in 
principle, the ``basis'' for calculating such fees has no impact when 
fees are adjusted to cover system costs. In other words, charging a 
user fee of $0.02 based on the number of ``motor vehicles,'' versus 
$0.04 based on number of ``automobiles,'' is academic. Because NMVTIS 
already includes and services titles on all motor vehicles that a state 
may provide data on, many stakeholders and DOJ encourage states to make 
verifications on all motor vehicle transactions. States have been 
paying fees based on number of motor vehicles, and because the number 
of motor vehicles (a more comprehensive figure) is easier to calculate 
for states and the operator, DOJ authorizes the operator to continue 
the practice of charging user fees based on the number of motor 
vehicles titled in the states.

29. Charging Non-Participants

    Comment: Several commenters, including the current operator, 
expressed concern with charging fees to all states regardless of 
participation. The North Dakota Department of Transportation noted that 
the proposal to allow the operator to charge the user fee to all 
states, even if a state is not a current participant in NMVTIS, is 
``unfair'' and that there has been no evidence provided that 
demonstrates the enhanced effectiveness of NMVTIS when all states 
participate. That commenter also argued that there is no evidence that 
criminals have targeted non-participating states. The commenter noted 
that ``paying for the privilege of participating * * * is patently 
unfair and simply ludicrous.'' Another commenter stating the same 
conclusion described the system as ``an unfunded mandate where the 
particular costs to states are vague, and the total costs ill-
defined.'' The State of Texas commented that this would not represent a 
true ``user fee,'' and the State raised the possibility of 
``constitutional problems'' in paying such a fee.
    Response: DOJ disagrees with each of these comments. Because all 
states are required to participate fully in NMVTIS and all states 
receive benefits from the system, all states must pay the user fees. 
There is no option for states to not participate in NMVTIS, which 
includes paying user fees to support the system as required by the 
Anti-Car Theft Act. Existing research demonstrates NMVTIS's 
effectiveness. Moreover, state and local law enforcement organizations, 
as well as automotive insurance experts, agree that non-participating 
states are being targeted for exploitation. It is important to note 
that the operator of the system has no discretion with regard to 
charging user fees, as this is the economic model established by the 
Anti-Car Theft Act. The operator has been steadfast in ensuring that 
DOJ understands and appreciates the perspective of its members and has 
worked closely with DOJ to identify ways of lessening the burden of 
implementation on state agencies. Additionally, states have multiple 
options for implementation in order to best manage the costs of 
participation, and certain cost-saving and potential state-revenue-
enhancing features have been established or planned.
    Comment: The State of California commented that ``we agree with the 
recommendation to charge all states. If the fee is charged to all 
states regardless of participation, there will likely be greater 
participation by all states. This could increase the value of the 
database, generating additional consumer transactions, which can then 
be used to offset the user fees charged to states.''
    Response: DOJ agrees that by charging all states a user fee in 
light of the requirement for all states to participate and the benefits 
all receive, any disincentive to make title verifications or use the 
system in the manner required is eliminated.
    Comment: One commenter noted that his or her state ``will not 
voluntarily pay user fees.''
    Response: User fees will not be voluntary. Because the Anti-Car 
Theft Act requires that NMVTIS be self-sustaining through user fees, 
the final rule requires the operator to issue invoices and charge users 
of the system a user fee based on system operating costs and other 
factors that affect the costs, such as necessary upgrades or 
enhancements. Payment of the user fee is required for compliance with 
Federal law.
    Comment: One commenter noted that all users of the system should be 
charged user fees, including entities reporting data.
    Response: At this time, DOJ is not in favor of this recommendation 
because of the increased financial burden it would place on junk and 
salvage yards and insurance carriers, and the disincentive it would 
impose on their reporting of data.

30. Enforcement

    Comment: Several commenters from various stakeholder groups asked 
who would be responsible for enforcement of the provisions of the rule 
and how enforcement responsibilities will be conducted.
    Response: Responsibility for enforcement of this rule resides with 
the Department of Justice overall. Within DOJ, several component 
organizations (including the Bureau of Justice Assistance, the Federal 
Bureau of Investigation, and the Civil Division's Federal Programs 
Branch) will collaborate with each other, with the operator, and with 
state and local law enforcement to ensure compliance and to respond to 
allegations of non-compliance.
    Comment: ARA commented that an ``amnesty period'' should be 
provided because most automotive recyclers will depend on inventory-
management vendors to provide a reporting mechanism.
    Response: While an ``amnesty period'' per se is not established, 
DOJ will work closely with the ARA and other organizations including 
the operator (if not the Department of Justice) to ensure that the 
commencement of reporting is not impeded. During the initial period of 
reporting, DOJ will be focused on implementation as opposed to purely 
enforcement.
    Comment: Several insurance carriers suggested language for 
clarifying the enforcement aspects of the rule, recommending that a 
``violation'' be defined as ``an act in flagrantly and in conscious 
disregard of this chapter'' and that the rule include a statement 
limiting liability of insurance carriers for what is reported and not 
reported.
    Response: DOJ will not define ``violation'' in this regulation 
because such a definition is unnecessary. The Anti-Car Theft Act 
provides DOJ with

[[Page 5767]]

sufficient discretion to seek and assess penalties, including a 
requirement that DOJ consider the size of the business of the person 
charged and the gravity of the violation.
    Comment: The National Salvage Vehicle Reporting Program commented 
that any penalties levied against a required reporter should be 
determined in a way that will result in a material fine that could 
force a modification in behavior. This comment was supported by 
comments from consumer-advocate attorneys who noted that ``[t]he 
Department should construe the enforcement provisions of the statutes 
to make them as strong as possible with respect to any potential 
deliberate violations by insurance carriers or salvage yards.''
    Response: DOJ will carefully consider any penalties applied as 
required by the Anti-Car Theft Act.
    Comment: The National Salvage Vehicle Reporting Program commented 
that ``the establishment of regular document procedures by an entity to 
provide compliance should be considered a mitigating factor to 
demonstrate good intent.''
    Response: The Department did not propose any regulations governing 
its enforcement efforts in the proposed rule. At this time, the 
Department believes that enforcement concerns are adequately addressed 
by the Anti-Car Theft Act and other applicable statutes and 
regulations.
    Comment: Several insurance-related organizations or associations 
commented that ``49 U.S.C. 40505 sets forth a $1000 civil penalty for 
`each violation of the chapter.' With millions of data points reported 
from and to many sources, there needs to be an interpretation of this 
provision that makes clear that good faith efforts to comply would be 
enough to avoid the penalty. For example, we request that the 
Department include language along these lines in the final regulation: 
`A violation for purposes of 49 U.S.C. 30505 means an act that is 
committed flagrantly and in conscious disregard of this chapter.' ''
    Opposing this view, several national consumer organizations 
commented that ``the Department should flatly reject the American 
Insurance Association's proposal that its enforcement authority be 
limited by a `flagrant disregard' standard. Nothing in the Anti-Car 
Theft Act authorizes or contemplates such a standard, and the AIA does 
not adequately explain why such a standard is necessary, or how it 
would be satisfied. Consistent with congressional intent, the 
Department should preserve its full enforcement authority with respect 
to the reporting requirements of the Anti-Car Theft Act and its 
implementing regulations.''
    Response: As a matter of policy, DOJ will preserve its full 
enforcement authority and discretion, including the ability to 
determine what constitutes a violation of the Act. As noted above, the 
Department believes that enforcement concerns are adequately addressed 
by the Anti-Car Theft Act and other applicable statutes and 
regulations.

31. Liability

    Comment: Several commenters requested that DOJ clarify liability 
and immunity protections for all users of the system--those using the 
data to make decisions and those providing the data to the NMVTIS. At 
least one of these commenters indicated that without such 
clarification, some data reporters may be hesitant to comply. Some 
commenters requested that DOJ clarify protections from both criminal 
and civil liability.
    Response: DOJ does not believe that the applicable immunity 
provisions require clarification. Pursuant to 49 U.S.C. 30502(f): ``Any 
person performing any activity under this section or sections 30503 or 
30504 in good faith and with the reasonable belief that such activity 
was in accordance with this section or section 30503 or 30504, as the 
case may be, shall be immune from any civil action respecting such 
activity which is seeking money damages or equitable relief in any 
court of the United States or a State.''

32. System Operating Costs

    Comment: One commenter noted that the operator should examine its 
financial records and projections more closely in order to narrow the 
estimated system operating cost projections of $3,000,000 to $5,000,000 
annually. Such examination would create greater reliability and equity 
in determining user fees. The commenter further suggested that ``an 
outside bidding process should be enacted to shift the entire program 
onto a contractor.''
    Response: Because the system has not yet been fully implemented, 
and because costs are driven in part by system usage, the annual 
operating costs vary annually and therefore are estimates at this time. 
DOJ agrees, however, that it is imperative that more robust and tighter 
financial procedures and controls be put in place, and that 
transparency be encouraged through an annual publication of an operator 
report of progress and costs, as well as budget projections for the 
coming years. DOJ will ensure that these goals are reflected in the 
requirements of the system operator. While the operator is free to 
consider outsourcing opportunities for operational components (e.g., 
technology, financial oversight, etc.), the Anti-Car Theft Act requires 
that the operator of the system, if it is not the DOJ, be an 
organization that represents the interests of the states. The Act also 
restricts the ability of the operator to make any profit from the 
operation of the system. Based on the current operator's statements 
regarding continued participation as the operator, DOJ is currently 
exploring outside bidding processes that could result in moving the 
program to another operator or to DOJ.

33. Concerns With Cost-Benefit Study

    Comment: Several commenters noted concerns with the cost-benefit 
study cited in the proposed rule and completed by Logistics Management 
Institute (LMI). Concerns include overstatement of the benefits of 
NMVTIS, lack of details regarding the study's methodology, vague 
presentation of findings and issues, and a noted possibility that 
underreported costs were not well addressed. One commenter argued that 
``the LMI study is thoroughly unconvincing, and its methodology is not 
sufficiently revealed as to permit rebuttal.''
    Response: The LMI study was commissioned in 1999 by the National 
Institute of Justice (NIJ). The reports cited are the only reports 
available to DOJ at this time. Although more details may be desirable, 
the LMI study's findings clearly indicate that NMVTIS's benefits 
outweigh the costs. Comparing an individual state's cost estimates for 
implementation with the financial benefits of eliminating even a modest 
number of thefts and brand washings demonstrates the same thing. 
Moreover, the LMI study likely overestimated the costs of participation 
because the only method of participation known at the time of the study 
was the fully integrated method, which required a state to reconfigure 
title information systems to integrate NMVTIS inquiries and updates 
into their automated title processes. With a new ``stand alone'' method 
of participation available, the most costly aspect of known 
participation at that time (i.e., major modifications to title 
information systems) has been eliminated as a requirement.
    Comment: One commenter noted that ``many improvements will remain 
theoretical without full participation. The expected benefits however 
are not illogical; states will only fully gain from NMVTIS once most 
states are full participants.'' ``The best interests of

[[Page 5768]]

states, through their consumers, lies with full participation in 
NMVTIS.'' In agreement with this, the Virginia Department of Motor 
Vehicles commented that ``the system provides a great value to 
participating states and that value will exponentially increase as each 
jurisdiction begins fully participating.''
    Response: NMVTIS will not achieve its full value until there is 
100% state participation. However, some states, such as California, 
have commented very favorably on the benefits of the system, even 
though all states do not yet participate.

34. Cost Calculations

    Comment: One commenter noted that ``[t]here are specific examples 
of laxity in the cost-accounting figures for this rule. For instance, 
although the proposed rule states that average fees charged to states 
by the operator should be less than 3 cents per vehicle, it goes on to 
say that `states that choose to integrate the NMVTIS processes of data 
provision and inquiry into their titling process generally incur one-
time upgrade costs to establish these connections.' It would seem that 
* * * a ballpark figure for this `onetime upgrade' is needed. Further, 
the cost of this `one-time upgrade' may not be insignificant, as 
suggested by the fact that `states can lower their upgrade costs by 
choosing to integrate the NMVTIS reporting and inquiry requirements 
into their business rules but not into their electronic titling 
processes.' This would bring with it, however, a definite loss in 
efficiency.''
    Response: It is important to note that there is no requirement in 
this rule or otherwise that states integrate NMVTIS processes into 
their title-information systems. Because doing so would be strictly and 
totally voluntary on the part of the states, DOJ does not see the need 
to attempt to estimate the costs for this type of implementation. 
Requests from states for DOJ grant funds have ranged from $17,000 to 
nearly $500,000 to implement various aspects of NMVTIS, e.g., data 
provision only, full implementation, etc. While implementing NMVTIS 
through the stand-alone method eliminates the need for nearly all 
system modifications, DOJ agrees that this approach may still affect 
business processes and could therefore impact overall operating costs. 
However, given that NMVTIS inquiries are only required on out-of-state 
vehicles coming into the state, and given that system response time is 
less than three seconds on average, we can reasonably estimate that the 
cost is minimal for a title clerk to enter the VIN, wait approximately 
3 seconds for the response, and review the response (a process 
estimated to take as little as 60 seconds or as much as 3 minutes). DOJ 
has included this estimation in the costs described in the proposed 
rule. Clearly, if discrepancies are found, the time required to process 
the transaction could increase substantially. However, DOJ notes that 
this is not a new cost, but a cost that states already have today.
    Comment: One commenter asked ``has the agency considered the day-
to-day cost of requiring a title clerk to `switch to an internet 
enabled PC to perform a Web search of NMVTIS via a secure virtual 
private network' for every single title check of every single day? 
(Section 25.54(c) requires that each state shall perform an instant 
title verification check through NMVTIS before issuing a certificate of 
title.) Is this additional cost something an underfunded state is 
supposed to bear simply because it is underfunded? What is the actual 
cost of having a clerk provide such a search based on the total number 
of title checks that a state will do in a year?'' A state motor vehicle 
administration commented on the need to provide a ``batch'' 
verification method via stand-alone access, so that many title 
verifications can be conducted as part of a ``back room'' operation.
    Response: The estimated costs for this function have been included 
in the overall cost calculations for the system as described in the 
response above. It is important to point out, however, that a state is 
only required to check NMVTIS when an out-of-state title is presented. 
Although states are encouraged to make NMVTIS inquiries before all 
transactions, it is only required in these limited instances. 
Additionally, states that determine that this process is unworkable may 
make a one-time system modification to automate the NMVTIS inquiry 
function. While most states may opt to use the individual title-
verification method for over-the-counter operations, DOJ will encourage 
the operator to make available a ``batch'' verification method as 
quickly as possible to make compliance more flexible for central-issue 
states.
    Comment: One commenter asked ``what are the anticipated costs of 
causing an insurance carrier to provide the requested information `in a 
format acceptable to the operator?' Sec.  25.55(a). Where is the study 
indicating this cost? How was this cost determined? And was this cost 
balanced against the benefit of consumer protection? This rule will 
increase insurance costs.'' The commenter also asked why insurance 
carriers should have to provide the information at its own cost. If the 
information was being collected under the ``guise'' of consumer 
protection, when it will provide ``any real benefit?''
    Response: DOJ estimated the costs to insurance companies and 
presented these costs and a description of how they were determined in 
the proposed rule. These costs were not balanced against the benefit of 
consumer protection. For insurance carriers already reporting to a 
third party that provides the required information to NMVTIS, no 
additional costs will be incurred. Amica Mutual Insurance and other 
insurance organizations that have begun reporting this information on 
their own have publicly stated the benefits of such reporting. The 
benefits of NMVTIS in terms of consumer protection are well founded and 
common sense.
    Comment: The State of Illinois motor vehicle administration 
commented that compliance in the first year of the program would cost 
the state an estimate $3,700,000, including start-up costs, user fees, 
and the loss of approximately $2,600,000 in annual sales of vehicle 
information. Illinois commented that these costs and the model being 
implemented by the operator is ``nonsensical.'' Other states estimated 
their costs at approximately $200,000. The NADA added that ``[a]ny 
state claims of excessive reporting costs should be weighed against the 
huge costs associated with vehicles with hidden histories entering the 
stream of used vehicle commerce.''
    Response: DOJ disagrees with Illinois's assessment of start-up 
costs. Because the proposed rule did not prescribe a specific user-fee 
model, Illinois's estimate of $700,000 in user fees is not reliable. 
Additionally, organizations that typically purchase state motor vehicle 
records have signaled that they will continue to purchase state data, 
as they are unable to purchase the bulk state data from or through 
NMVTIS. For this reason, Illinois's assertion that it will loose 
$2,600,000 in revenues likely is unfounded. The only place these 
organizations can purchase bulk vehicle data from Illinois is from 
Illinois--NMVTIS will not sell data in this manner. While DOJ is not in 
a position to address Illinois's estimate of start-up costs, DOJ issued 
a solicitation in fiscal years 2007 and 2008 to provide funds to states 
to support NMVTIS start-up costs and encouraged states to apply under 
other unrestricted, eligible funding programs as well. For many years 
between FY 1997 and FY 2004, AAMVA also offered funding support to 
states based on DOJ grant awards to the operator.

[[Page 5769]]

    Comment: AAMVA contended that although the Anti-Car Theft Act 
states that NMVTIS should be self sustaining, NMVTIS represents an 
unfunded mandate that has serious impact on states. AAMVA went on to 
assert that to achieve full implementation and long-term success, 
federal funding of the remaining development work and support for 
system operation is needed.
    Response: The Anti-Car Theft Act requires NMVTIS to be self-
sustaining and ``not dependent on federal funds'' for its operation. To 
date, DOJ has invested more than $15 million in NMVTIS development, 
combined with investments from the U.S. Department of Transportation, 
as well as a reported $30 million investment from AAMVA. Since 1992, 
less than $2 million has been collected from user fees. DOJ is 
concerned that additional investments of federal funds will be used to 
support the required ``services to states'' and will not lead to 
additional development of the system. Additionally, DOJ notes that much 
of the federal funds provided to states through AAMVA remains 
unexpended even years after being provided to facilitate participation. 
From 2003 to date, AAMVA and the states have strongly encouraged DOJ to 
implement the rules for NMVTIS as a necessary step to system 
implementation. With rules now published, system operation and user 
fees established, and third-party providers generating additional user 
fees, it is DOJ's hope that additional federal funding may not be 
needed, and that the system can begin to be self sustaining as 
originally envisioned.
    Comment: AAMVA commented that its Board of Directors recently 
concluded that AAMVA will not be able to continue as the system 
operator if it must subsidize the ongoing development and operation 
costs of NMVTIS. As a result, AAMVA expects a decision by August 2009 
from its Board of Directors as to its continued participation as the 
operator of the system.
    Response: DOJ acknowledges AAMVA's position and, in response, 
developed a Request for Information (RFI) that was published to 
identify prospective new operators and organizations that could support 
DOJ should DOJ become the operator. DOJ expects that any new operator, 
if not DOJ, will comply with the same provisions of this rule and will 
work with DOJ, AAMVA, and the NMVTIS stakeholders to perform a seamless 
transition. The results from the RFI are being used to identify new 
ideas and capabilities to accomplish the program objectives while 
minimizing the burden on states.

Provisions of This Rule

    The continued implementation of NMVTIS and its effectiveness depend 
on the participation and cooperation of a number of parties. According 
to the cost-benefit study conducted by the Logistics Management 
Institute: ``The way NMVTIS is implemented--piecemeal, regionally, or 
nationally--will affect how criminals respond. Criminals are highly 
mobile and may avoid NMVTIS states until most of the country is covered 
by the system. Criminals use technology to their advantage, both to 
identify potential theft targets and to camouflage stolen vehicles.'' 
As a result, any states not fully participating in NMVTIS and their 
citizens may be disproportionately targeted by criminals committing 
vehicle crimes. This finding has been repeatedly confirmed by law 
enforcement at the local, state, and federal levels, and by national 
anti-theft organizations based on experience and active investigations. 
Even private vehicle-history providers have agreed that criminals 
exploit these and similar weaknesses in the vehicle-titling system in 
the U.S., particularly the lack of communication between state motor 
vehicle title and registration agencies. The Anti-Car Theft Act also 
referred to the ``weakest link'' in referring to this problem as it 
relates to brand washing. See Public Law No. 102-519, section 
140(a)(1).
    Participation in NMVTIS must be expanded to all states. In 
addition, insurance carriers, junk yards, and salvage yards also need 
to provide certain information relevant to the life-cycle of an 
automobile in order for NMVTIS to function properly and achieve the 
intended benefits. The Anti-Car Theft Act requires junk yards, salvage 
yards, and insurance carriers to report at least monthly to NMVTIS on 
all junk and salvage automobiles they obtain. Pursuant to 49 U.S.C. 
30504(c), the Attorney General is authorized to issue regulations 
establishing procedures and practices to facilitate reporting the 
required information in the least-burdensome and costly fashion.
    Accordingly, this rule implements the reporting requirements 
imposed on junk yards, salvage yards, and insurance carriers pursuant 
to 49 U.S.C. 30504(c). In addition, this rule clarifies, consistent 
with section 202(a)(1) of the Act, the title and related information to 
be included in the system to determine its adequacy, timeliness, 
reliability, and capability of aiding in efforts to prevent theft and 
fraud. The rule also clarifies the various responsibilities of the 
operator of NMVTIS, states, junk yards, salvage yards, and insurance 
carriers under the Anti-Car Theft Act to help ensure its effectiveness. 
Finally, this rule provides a means by which user fees will be imposed 
to fund NMVTIS, consistent with the requirements of the Anti-Car Theft 
Act and its requirement that NMVTIS be self sustaining and ``not 
dependent on Federal funds.''

1. State Responsibilities

    The effectiveness of NMVTIS increases as more states fully 
participate. NMVTIS will only be as good as the quality and quantity of 
information it contains. Consequently, all non-participating states are 
strongly urged to comply with their obligations under the Anti-Car 
Theft Act and to begin title verifications and reporting title 
information to NMVTIS as soon as possible. While the immediate 
requirement of this rule is to, at a minimum, have all states make 
verifications on incoming, out-of-state titles and provide regular (at 
least daily) data updates to NMVTIS, the ultimate goal is for all 
states to participate in the system via an integrated, online method 
that provides real-time data updates, making inquiries into NMVTIS 
prior to issuing new titles on vehicles coming from out-of-state, and 
sharing other information and data electronically, via NMVTIS. All 
states must be fully participating as required by the Act and this rule 
by January 1, 2010. However, for purposes of continuity and to ensure 
that there is no degradation of services currently provided by NMVTIS, 
the final rule requires all states to maintain at least the level of 
participation (data provision, title verifications, remitting fees) 
that they had established as of January 1, 2009 for the remainder of 
that year and until the full compliance date for all states arrives on 
January 1, 2010.
    In accordance with 49 U.S.C. 30502, NMVTIS must provide a means of 
determining whether a title is valid, where the automobile previously 
was titled, the automobile's reported mileage, if the automobile is 
titled as a junk or salvage automobile in another state, and whether 
the automobile has been reported as a junk or salvage automobile under 
49 U.S.C. 30504. Each state is required to make its titling information 
available to NMVTIS. 49 U.S.C. 30503(a). Each state also is required 
``to establish a practice of performing an `instant' title verification 
check before issuing a certificate of title.'' 49 U.S.C. 30503(b). This 
rule clarifies the procedures for verifying title information and the 
information

[[Page 5770]]

states must report to NMVTIS pursuant to the Anti-Car Theft Act, and 
the procedures and practices that states must follow to provide this 
needed information. Pursuant to 49 U.S.C. 30503(a), states are required 
to perform an ``instant'' title verification check before issuing a 
certificate of title to an individual or entity bringing a vehicle into 
the state. Because several states are ``central issue'' states where 
titles are produced at a central location after an application for 
title has been made, ``instant'' is considered to mean at any point 
before a permanent title is issued. The primary purpose of the 
verification is to determine the validity and status of a document 
purporting to be a certification of title, to determine whether the 
automobile has been a junk or salvage vehicle or has been reported as 
such, to compare and verify the odometer information presented with 
that reported in the system, and to determine the validity of other 
information presented (e.g., lien-holder status, etc.). While the laws 
and regulations of the receiving state will prevail in determining the 
status of the vehicle (e.g., branding, title type, or status), the 
information in NMVTIS should be used by the state to identify 
inconsistencies, errors, or other issues, and to follow state 
procedures and policies for their resolution. Because NMVTIS can 
prevent many types of fraud in addition to simple brand washing, states 
are encouraged to use NMVTIS for verifications on all transactions 
whenever possible. This verification includes in-state title 
transactions, dealer reassignments, lender and dealer verifications, 
updates, corrections, and other types of title transactions. This 
business process is made possible through the integrated, online method 
of state participation and is strongly encouraged by law enforcement, 
consumer protection groups, and private sector entities.
    States are also required under 49 U.S.C. 30503(a) to make selected 
titling information they maintain available for use in NMVTIS. 
Specifically, states are required to report: (1) An automobile's VIN; 
(2) any description of the automobile included on the certificate of 
title, including all brand information; (3) the name of the individual 
or entity to whom the title certificate was issued; and (4) information 
from junk or salvage yard operators or insurance carriers regarding 
their acquisition of junk automobiles or salvage automobiles, if this 
information is being collected by the state. The Anti-Car Theft Act 
also requires that the operator of NMVTIS make available the odometer 
mileage that is disclosed pursuant to 49 U.S.C. 32705 on the date the 
certificate of title was issued and any later mileage information, if 
in the state's title record for that vehicle. Accordingly, the rule 
requires states to provide such mileage information to NMVTIS. States 
shall provide new title information and any updated title information 
to NMVTIS at least once every 24 hours.
    In addition, with the approval of DOJ, the operator, and the state, 
the rule will allow the state to provide any other information that is 
included on a certificate of title or that is maintained by the state 
in relation to the certificate of title.
    The Anti-Car Theft Act specifically covers ``automobiles'' as 
defined in 49 U.S.C. 32901(a). That definition, which is part of the 
fuel economy laws, was most recently amended by the Energy Independence 
and Security Act of 2007, Public Law No. 110-140, and generally covers 
four-wheel vehicles that are rated at less than 10,000 pounds gross 
vehicle weight, but excludes vehicles that operate on rails, certain 
vehicles manufactured in different stages by two or more manufacturers, 
and certain work trucks. Participating states, however, have been 
providing information to NMVTIS on other types of motor vehicles \3\ 
possessing VINs, such as motorcycles and various work trucks. 
Information on these other types of motor vehicles is very useful to 
the users of NMVTIS, and law enforcement organizations including DOJ 
have strongly encouraged states to continue to provide information on 
such vehicles in order to reduce the theft of such vehicles. Therefore, 
while states only are required to report on automobiles, they are 
strongly encouraged to continue reporting to NMVTIS information on all 
motor vehicles possessing VINs in their state titling systems.
---------------------------------------------------------------------------

    \3\ Pursuant to 49 U.S.C. 30102(a)(6), a ``motor vehicle'' means 
a vehicle driven or drawn by mechanical power and manufactured 
primarily for use on public streets, roads, and highways, but does 
not include a vehicle operated only on a rail line.
---------------------------------------------------------------------------

2. Insurance Carriers

    The Anti-Car Theft Act authorized the Attorney General to issue 
regulations establishing procedures by which insurance companies must 
report monthly to NMVTIS on the junk and salvage automobiles they 
obtain. 49 U.S.C. 30504(c). Accordingly, this rule clarifies the 
reporting requirements imposed on insurance carriers regarding junk and 
salvage automobiles. The Anti-Car Theft Act defines a salvage 
automobile to mean ``an automobile that is damaged by collision, fire, 
flood, accident, trespass, or other event, to the extent that its fair 
salvage value plus the cost of repairing the automobile for legal 
operation on public streets, roads, and highways would be more than the 
fair market value of the automobile immediately before the event that 
caused the damage.'' 49 U.S.C. 30501(7). For purposes of clarification, 
the Department of Justice has determined that this definition includes 
all automobiles found to be a total loss under the laws of the 
applicable state, or designated as a total loss by the insurance 
carrier under the terms of its policies, regardless of whether an 
insurance carrier retitles the vehicle into its name or allows the 
owner to retain the vehicle.
    As a practical matter, the determination that an automobile is a 
total loss (i.e., that the automobile has been ``totaled'') is the 
logical event that shall trigger reporting to NMVTIS by an insurance 
carrier. Insurance carriers are required under this rule to provide 
NMVTIS with: (1) The VIN of such automobiles; (2) the date on which the 
automobile was obtained or designated as a junk or salvage automobile; 
(3) the name of the individual or entity from whom the automobile was 
obtained (owner name or lien-holder name) and who possessed the 
automobile when it was designated a junk or salvage automobile; and (4) 
the name of the owner of the automobile at the time of the filing of 
the report with NMVTIS (either the insurance company or the owner, if 
owner-retained). DOJ strongly encourages insurers to include the 
primary reason for the insurance carrier's designation of salvage or 
total loss in this reporting as well. In accordance with 49 U.S.C. 
30504(b), the report must provide such information on ``all automobiles 
of the current model year or any of the 4 prior model years that the 
carrier, during the prior month, has obtained possession of and has 
decided are junk automobiles or salvage automobiles.''
    In addition, although not specifically required by the Anti-Car 
Theft Act or this rule, this rule will permit insurance carriers to 
provide the NMVTIS operator with information on other motor vehicles, 
including older model automobiles, and other information relevant to a 
motor vehicle's title, including the disposition of such automobiles, 
and the name of the individual or entity that takes possession of the 
vehicle. The reporting of this information by insurance carriers will 
help reduce instances in which thieves use the VINs of junk or salvage 
motor vehicles on stolen motor vehicles and will assist in preventing 
and

[[Page 5771]]

eliminating fraud. Accordingly, the Department of Justice strongly 
encourages insurance carriers to report such additional information to 
the operator.

3. Junk and Salvage Yards and Auto Recyclers

    Under this rule, junk yards and salvage yards are required to 
provide NMVTIS with the VIN, the date the automobile was obtained, the 
name of the individual or entity from whom the automobile was obtained, 
and a statement of whether the automobile was crushed or disposed of, 
for sale or other purposes. Such entities must also report whether the 
vehicle is intended for export out of the United States, which will 
assist law enforcement in investigations related to the export and 
cloning of exported vehicles. The reporting of this information will be 
limited to junk yards and salvage yards located within the United 
States. Pursuant to the Anti-Car Theft Act, junk and salvage yards are 
defined as individuals or entities engaged in the business of acquiring 
or owning junk or salvage automobiles for resale in their entirety or 
as spare parts or for rebuilding, restoration, or crushing. See 49 
U.S.C. 30501(5), (8). ``Rebuilding, restoration, and crushing'' is 
reflective of the varied nature of entities that meet this definition. 
Included in this definition are scrap-vehicle shredders and scrap-metal 
processors, as well as ``pull- or pick-apart yards,'' salvage pools, 
salvage auctions, and other types of auctions, businesses, and 
individuals that handle salvage vehicles (including vehicles declared a 
``total loss''). A salvage pool is an entity that acquires junk and 
salvage automobiles from a variety of parties and consolidates them for 
resale at a common point of sale. The pooling of junk and salvage 
automobiles attracts a large number of buyers. It is the belief of the 
Department of Justice and the state and local law enforcement community 
that a significant number of these buyers purchase junk and salvage 
automobiles at salvage pools in order to acquire VINs or titles that 
can be used on stolen motor vehicles or to create cloned motor vehicles 
for other illicit purposes.
    Such entities must report all salvage or junk vehicles they obtain, 
including vehicles from or on behalf of insurance carriers, that can 
reasonably be assumed to be total-loss vehicles. Such entities are not 
required to report any vehicle that is determined not to meet the 
definition of salvage or junk after a good-faith physical and value 
appraisal conducted by qualified appraisal personnel entirely 
independent of any other persons or entities. Second, DOJ has added a 
clarification that individuals and entities of this type that handle 
fewer than five vehicles per year that are determined to be salvage or 
total loss are not required to report under the salvage yard 
requirements, consistent with requirements for automobile dealers, see 
49 U.S.C. 32702(2).
    Pursuant to 49 U.S.C. 30504(a)(2), junk yards and salvage yards 
will not be required to submit reports to NMVTIS if they already report 
the required information to the state in which they are located and 
that state makes available to the operator the information required by 
this rule of junk and salvage entities. Because some junk or salvage 
yards may hold vehicles for several months or years before a final 
disposition (e.g., crushed, sold, rebuilt, etc.) is known, some junk 
and salvage yards may need to provide a supplemental or additional 
report at the time of disposition or within 30 days of the date of 
disposition. Nothing in this rule shall preclude a junk or salvage yard 
from reporting the disposition of a vehicle at the time of first 
reporting, if such a disposition is known with certainty. Junk and 
salvage yards are responsible for ensuring the accuracy and 
completeness of their reporting and for providing corrected information 
to the system should the disposition be changed from what was initially 
reported.

4. Lenders and Automobile Dealers

    The Anti-Car Theft Act requires that the operator make NMVTIS 
information available to prospective purchasers, including auction 
companies and entities engaged in the business of purchasing new or 
used automobiles. The Department believes that the scope of prospective 
purchasers also includes lenders who are financing the purchase of 
automobiles and automobile dealers. Lenders and dealers are integral 
components of the automobile purchasing and titling process who also 
can be the victims of fraud. This rule allows the operator to permit 
public and private entities involved in the purchasing and titling of 
automobiles to access NMVTIS if such access will assist in efforts to 
prevent the introduction or reintroduction of stolen motor vehicles and 
parts into interstate commerce and to prevent fraud. For purposes of 
clarification, this rule permits commercial consumers to access and 
verify NMVTIS information at the time of purchases, as well as at any 
time during the ownership of or involvement with such vehicles (i.e., 
lender verifications). States are strongly encouraged to work with 
lenders and others in using NMVTIS as an electronic means of performing 
title transactions and verifications. Conducting such efforts in an 
electronic fashion will eliminate a major source of fraud--paper-based 
title exchanges, updates, lien releases, etc.

5. Responsibilities of the Operator of NMVTIS

    In accordance with 49 U.S.C. 30502, NMVTIS must provide a means of 
determining whether a title is valid, where the automobile is currently 
titled, the automobile's reported mileage, if the automobile is titled 
as a junk or salvage automobile in another state, and whether the 
automobile has been reported as a junk or salvage automobile under 49 
U.S.C. 30504. Further, the operator of NMVTIS must make relevant 
information available to states, law enforcement officials, prospective 
and current purchasers (individual and commercial), and prospective and 
current insurers. This rule clarifies that the operator of NMVTIS will 
be responsible for collecting the required information and providing 
the necessary access to all permitted users.
    The Department will instruct the operator that if it is not 
receiving reporting entity data directly, then it must identify at 
least three third-party organizations willing to receive reports from 
reporting entities (junk, salvage, insurance) and to share such data 
with NMVTIS. The operator also will take steps to ensure data quality 
to the extent possible and take steps as described in this rule to 
correct reported data, if not reported by a state, which has the 
authority to make changes via updates.
    The operator will be using the National Information Exchange Model 
or any successor information-sharing model for all new information 
exchanges established, and DOJ may require the operator to use Web 
services for all new connections to NMVTIS.

Services to State Motor Vehicle Title Administrations

    The operator will:
    <bullet> Make available to state motor vehicle title 
administrations at least two methods of interacting with NMVTIS. States 
will have the option of participating via ``stand alone'' access, which 
is a basic Internet site that allows a state to enter a VIN and receive 
the results of the search. States currently have the option of fully 
integrating the NMVTIS search function into their title-information 
systems. This method of access allows state systems to perform the 
search seamlessly and without specific effort of the titling staff. 
This method allows updates made after the

[[Page 5772]]

title transaction to be shared with the prior state of title and allows 
real-time updates to NMVTIS as well. The operator also will make 
available a modified stand-alone access process (that allows for batch 
inquiries) to central-issue states to support their efficient title 
administration needs.
    <bullet> Share with states any and all information in NMVTIS, 
including any intended export criteria, junk and salvage history, and 
any other information obtained by the operator (e.g., title history 
information from other North American title administrations, etc.).
    <bullet> Provide the states with the greatest amount of flexibility 
in such things as data standards, mapping, and connection methodology.

Services to Law Enforcement

    In particular, the operator of NMVTIS will be responsible for 
ensuring that state and local law enforcement agencies have access to 
all title information in or available through NMVTIS, including 
personal information collected by NMVTIS for law enforcement purposes. 
A thief can take a stolen, cloned vehicle to a non-participating state 
and get a valid title by presenting the clone and matching fraudulent 
ownership documentation to the new state. Thieves often switch the VIN 
plate (and sometime other VIN stickers) of a stolen motor vehicle with 
one from a junked car in order to get a valid title for the stolen car. 
These activities were possible because the states had no instantly 
updated, reliable way of validating the information on the ownership 
documentation prior to issuing the new title. Investigations have shown 
that sophisticated criminal organizations typically employ fraud 
schemes involving multiple state-title processes and either target non-
participating states as the new title-issuing agent or use fraudulent 
or counterfeit title documents from a non-participating state in order 
to effect brand washing or cloning. Exported vehicles also have become 
a key source for cloning activities. NMVTIS will provide law 
enforcement agencies with access to make inquiries to further their 
investigations of motor vehicle theft and fraud--including fraud 
committed against consumers, businesses, and states. This access will 
allow law enforcement agencies to better identify stolen motor 
vehicles, enhance their ability to identify vehicle theft rings, 
identify cases of public corruption, and identify other criminal 
enterprises involving vehicles. NMVTIS will reduce the ability of 
organized criminal organizations to obtain fraudulent vehicle 
registrations by linking state and local authorities with real-time 
verification of information. This system also will provide an 
additional tool to identify and investigate international organized 
criminal and terrorist activity. NMVTIS will assist investigations of 
vehicles involved in violent crimes, smuggling (narcotics, weapons, 
undocumented aliens, and currency), and fraud. In addition to providing 
access to NMVTIS based on a VIN inquiry, the operator also will allow 
law enforcement agencies to make inquiries based on other search 
criteria in the system, including the organizations reporting data to 
the system, individuals owning, supplying, purchasing, or receiving 
such vehicles (if available), and export criteria.

Services in Support of Consumer Access

    The operator of NMVTIS is responsible for ensuring that a means 
exists for allowing insurers and purchasers to access information, 
including information regarding brands, junk and salvage history, and 
odometer readings. Such access shall be provided to individual 
consumers in a single-VIN search arrangement and to commercial 
consumers in a single-, multiple-, or batch-VIN search arrangement. As 
noted above, motor vehicles that incur significant damage are 
considered ``junk'' or ``salvage.'' Fraud occurs when junk or salvage 
motor vehicles are presented for sale to purchasers without disclosure 
of their real condition or history. Not only are unsuspecting 
purchasers paying more than the motor vehicle is worth, but they do not 
know if the damaged vehicles have been adequately repaired and are safe 
to drive. For example, during Hurricane Katrina, thousands of motor 
vehicles were completely flooded, and many remained under water for 
weeks before flood waters subsided. Many of these flooded motor 
vehicles were taken to other states where they were cleaned and sold as 
purportedly undamaged used cars, despite the damage caused by the 
flood, which jeopardizes the motor vehicles' electrical and safety 
systems. In several reported cases, consumers purchased vehicles that 
had previously been involved in a collision, and airbags were not 
reinstalled. These consumers were later killed in a collision where the 
airbags could not deploy because they were no longer present. This 
fraud has serious consequences, not only for commerce and law 
enforcement, but also for highway and citizen safety.
    The cost for Web-based prospective-purchaser inquiries for 
individuals shall be nominal and take into consideration the potential 
that consumers may lack credit cards or Internet access. Consumer-
access fees charged by the operator may be in addition to fees that may 
be charged by other public or private entities participating in 
providing the service. While this rule does not establish minimum or 
maximum fees for such consumer access in order to allow it to remain 
``market-driven'' and flexible, the Department requires that all 
consumer-access fees and methods be approved by the Department prior to 
enactment.
    The Department anticipates that the operator will implement a Web-
based method of permitting prospective purchasers to access NMVTIS 
information as required by the Act. Consumer access shall be available 
to individual and commercial consumers who are considering purchasing a 
vehicle or who have recently purchased a vehicle. Consumers accessing 
NMVTIS shall receive an indication of and link to the current state of 
title, the brand history (name of brand/brand category), the most 
recent odometer information in the system, and any reports on the 
subject vehicle from junk or salvage yards.

Privacy and Security Protections for NMVTIS

    The operator may not release any personal information to individual 
prospective purchasers. The operator also will develop a privacy policy 
that will address the release of this information as well. The operator 
also will ensure that NMVTIS and associated access services (i.e., 
secure networks used to facilitate access to personal information 
included in NMVTIS) meet or exceed technology industry security 
standards, most notably any relevant Global Justice Information Sharing 
Initiative standards and recommendations.

Accountability and Transparency

    The operator shall publish an annual report describing the 
performance of the system during the preceding year and shall include a 
detailed report of NMVTIS expenses and all revenues received as a 
result of NMVTIS operation. Additionally, the operator (if not the 
Department of Justice) shall be required to procure an independent 
financial audit of NMVTIS expenses and revenues during the preceding 
year. Both the annual performance and budget report and the independent 
audit report shall be publicly available via www.NMVTIS.gov.
    Although DOJ has primary enforcement responsibility for the 
provisions of this rule, the operator

[[Page 5773]]

shall conduct regular reviews of reporting compliance by all reporters 
to assess the extent to which reporting entities are reporting 
appropriately, documentation is in place, and other requirements of 
reporting are being met. The operator shall provide the results of such 
information to DOJ. The operator shall also maintain a publicly 
available, regularly updated listing of all entities reporting to 
NMVTIS. Such listing shall include the name of the reporting entity, 
city/state, contact information, and last-data-reported date.

6. User Fees

    Pursuant to 49 U.S.C. 30502(c), NMVTIS is to be ``paid for by user 
fees and should be self-sufficient and not be dependent on amounts from 
the United States Government. The amount of fees the operator collects 
and keeps * * * subject to annual appropriations laws, excluding fees 
the operator collects and pays to an entity providing information to 
the operator, may be not more than the costs of operating the System.'' 
Rather than charge states user fees based on the number of transactions 
they place with NMVTIS, AAMVA (the operator of NMVTIS) currently 
employs a ten-tiered fee structure. The fee a particular state is 
charged depends on the tier in which that state is placed based on the 
number of currently titled motor vehicles in that state. As a result of 
the great disparity between the states in their total number of titled 
motor vehicles, the per-vehicle fee currently charged by the operator 
of NMVTIS ranges from less than 1 cent per vehicle in the states with 
the most titled motor vehicles to nearly 7 cents per vehicle in the 
state with the lowest number of titled motor vehicles. This fee 
structure was developed by AAMVA and approved by its Board of 
Directors, comprising state motor vehicle administrators. As noted 
above, AAMVA is a nonprofit, tax-exempt, educational association 
representing U.S. and Canadian officials who are responsible for the 
administration and enforcement of motor vehicle laws.
    This rule requires the operator (if not the Department of Justice) 
to continue to charge user fees to all states based on the total number 
of motor vehicles titled in the state and to continue the tiered 
structure. Such a pro rata fee structure simplifies billing for both 
the states and the operator of NMVTIS. In addition, a state would not 
be subject to a significant change in user fees if it moves from one 
tier to another. Last, a pro rata fee structure eliminates any 
disincentive for states to make title verifications and encourages all 
states to participate in order to receive the benefits of the system 
they are funding.
    In addition, the Department of Justice requires that the operator 
charge user fees to all states, even if a state is not a current 
participant in NMVTIS. In accordance with 49 U.S.C. 30503(a) and (b), 
each state is required to participate in the system, which includes 
making titling information available to NMVTIS, conducting title-
verification checks before issuing a title, and paying any user fees. 
Because all states are required to participate in NMVTIS, this rule 
requires that the operator charge user fees to all states, regardless 
of their current level of participation. Further, this rule requires 
that the operator notify states at least one year in advance of user 
fees and invoice every state at least once per year. This schedule 
shall remain in place until modified by agreement with DOJ.
    Under this rule, and consistent with the Anti-Car Theft Act, users, 
such as purchasers, insurers, consumers, and other non-governmental 
entities, may be charged a fee for inquiries they make to NMVTIS. 
Because of the varying levels of participation by the states, the 
Department has decided to eliminate the proposed provision prohibiting 
the operator from charging transaction fees for consumer transactions 
performed by fully participating states. However, the Department 
retains the authority to allow the operator to discount such fees for 
fully participating states. The operator shall not charge any user fees 
or transaction fees for inquiries made by law enforcement agencies. The 
operator shall ensure that all third-party providers of NMVTIS 
information are eligible for the same prices and discounts, based on 
the product implemented or provided (e.g., single VIN lookup, batch 
lookup, etc.). The operator shall require that all providers and 
methods of consumer access include a visible notice and disclaimer, or 
a link to such a notice or disclaimer, that provides consumers with 
accurate information on what NMVTIS includes and any limitations in the 
database. The names of all noncompliant states shall be disclosed to 
each consumer for purposes of awareness. Providers and methods of 
consumer access also will include a link to operator-provided 
information that explains to consumers how NMVTIS works, such as how 
different reporting streams may explain variances or seemingly 
conflicting information. Those providers and methods of consumer access 
also will provide a link to a state's brand definitions if those brands 
are displayed and the information is available.
    The expenses to be recouped by the operator of NMVTIS through its 
fees will consist of labor costs, data center operations costs, the 
cost of providing access to authorized users, annual functional-
enhancement costs (including labor and hardware), the cost of technical 
upgrades, costs to comply with the provisions of this rule, and other 
costs as approved by the Department of Justice in advance of the 
expense. The operator is authorized to develop a system-enhancement 
reserve that does not exceed 50% of the annual cost of operating the 
system for use in ensuring that critical upgrades can be implemented on 
an emergency basis as necessary. AAMVA currently estimates that the 
annual cost of operating NMVTIS is approximately $5,650,000. According 
to DOT's 2005 Highway Statistics, 241,193,974 vehicles were titled in 
the United States in 2005. Therefore, the cost to fund NMVTIS will 
average less than 3 cents per motor vehicle title, although states in 
different tiers may pay slightly different rates. The operator of 
NMVTIS will inform the states of the applicable fees either through 
publication in the Federal Register or by direct notice or invoicing to 
the states.
    The operator will be required to recalculate its fees on at least a 
biennial (every two years) basis at least one year in advance of their 
effective date. Any fees charged to the states would be offset by 
transaction fees received by the operator. In addition, the total fees 
charged to the states would be reduced by future funds awarded by the 
U.S. Government to the operator to assist in implementing the system. 
Any fees imposed by the operator in connection to NMVTIS must be 
approved by the Department of Justice.
    Notwithstanding individual and batch lookups or inquiries, the 
operator shall not, under any circumstances, sell a state's entire data 
set in bulk or sell the entire NMVTIS data set in bulk.
    Since Fiscal Year 1997, the Department of Justice, through BJA, has 
provided over $15 million to AAMVA for NMVTIS implementation. In Fiscal 
Years 2007-2009, BJA invited states to apply for direct funding from 
DOJ to support initial NMVTIS implementation. In fiscal years 2007 and 
2008, less than six states applied for funds each year. BJA awarded 
funds to five states in fiscal year 2007 and one state in 2008 to 
support system implementation. BJA also invited AAMVA, the system 
operator, to apply for direct funding from BJA in fiscal years 2007 and 
2008, to supplement state participation fees received by AAMVA, as 
authorized under the Anti-

[[Page 5774]]

Car Theft Act, and encouraged states to apply through its other funding 
programs to enhance NMVTIS participation. As a result of these 
solicitations, funding was awarded to AAMVA to assist with NMVTIS 
implementation in fiscal years 2007 and 2008. As noted above, funds 
awarded to the operator of NMVTIS will reduce the amount of user fees 
that must be imposed to implement NMVTIS once all states are 
participating.

7. Governance

    The Department of Justice may establish a NMVTIS Advisory Board to 
provide input and recommendations from stakeholders on NMVTIS 
operations and administration. If created, the Advisory Board's costs 
would be supported by the operator after approval of the Department of 
Justice.

Regulatory Flexibility Act

    The Attorney General, in accordance with the Regulatory Flexibility 
Act, 5 U.S.C. 605(b), has reviewed this regulation and by approving it 
certifies that this regulation will not have a significant economic 
impact on a substantial number of small entities.
    Although the reporting requirements imposed by the Anti-Car Theft 
Act will apply to all small insurance companies and small junk and 
salvage yard operators that handle junk or salvage automobiles, the 
Department believes that the incremental cost for these entities to 
collect VINs and the other required information will be minimal and 
that the rule will not have a significant economic impact on them. Many 
insurance companies and junk and salvage yards already capture VINs as 
a means of positively identifying automobiles and tracking inventory. 
The additional cost to insurance companies, junk yard operators, and 
salvage yard operators to report the collected information 
electronically to NMVTIS is not expected to exceed 1 cent per motor 
vehicle for most entities after the first year. In the first year only, 
start-up investments increase this per-vehicle cost to approximately 4 
cents per vehicle. For the estimated small number of non-automated 
reporting entities, a manual reporting process may be required, in 
which case the additional cost is estimated at 96 cents per vehicle 
annually. In the first year only, the cost for these entities is 
estimated at $1.86 per vehicle due to initial investment or start-up 
needs. Indeed, these costs may be significantly lower or possibly even 
eliminated altogether if insurance, salvage, and junk data is provided 
through a third party that may already have access to the data and may 
be in a position to establish a data-sharing arrangement with NMVTIS in 
order to reduce the reporting burden on these entities.
    Moreover, insurance companies will not be required to provide data 
on automobiles older than the four previous model years. In addition, 
junk and salvage yards will not be required to report if they already 
report the required information to the state and the state makes that 
information available to the operator. The Department has attempted to 
minimize the impact of the rule on small businesses by allowing them to 
use third parties to report the statutorily required information to 
NMVTIS. In addition, the monthly reporting requirements of this rule 
only apply to automobiles obtained by the business within the prior 
month or in cases where an update or correction to previously reported 
data is needed.

Paperwork Reduction Act

    This information collection has been submitted to the Office of 
Management and Budget (OMB) for review in accordance with the 
procedures of the Paperwork Reduction Act of 1995, Public Law No. 104-
13, 109 Stat. 163. If additional information is required contact: Lynn 
Bryant, Department Clearance Officer, United States Department of 
Justice, Justice Management Division, Policy and Planning Staff, 
Patrick Henry Building, Suite 1600, 601 D Street, NW., Washington, DC 
20530.

Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by state, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This rule is not a major rule as defined by section 251 of the 
Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 
804. This rule will not result in a major increase in costs or prices 
or have significant adverse effects on competition, employment, 
investment, productivity, innovation, or on the ability of United 
States-based companies to compete with foreign-based companies in 
domestic and export markets.

Executive Order 12866

    This regulation has been drafted and reviewed in accordance with 
Executive Order 12866, ``Regulatory Planning and Review,'' section 
1(b), Principles of Regulation. The Department of Justice has 
determined that this rule is a ``significant regulatory action'' under 
Executive Order 12866, section 3(f). Accordingly, this rule has been 
reviewed by the Office of Management and Budget.

Regulatory Impact Assessment

    In 1999, the GAO conducted a review of NMVTIS. The GAO report found 
that a life-cycle cost and benefits analysis should be performed to 
determine if further federal funding of NMVTIS was warranted. 
Accordingly, at the request of the Department of Justice, the Logistics 
Management Institute conducted such an analysis. The 2001 LMI report 
found that NMVTIS would achieve significant net benefits if it is fully 
implemented in all 50 states and the District of Columbia. In addition, 
the 2006 IJIS Institute report found that: ``the NMVTIS program 
provides an invaluable benefit to state vehicle administrators and the 
public community as a whole. Advantages of the program include 
improving the state titling process, as well as providing key 
information to consumers and law enforcement agencies.'' Based on these 
reviews of NMVTIS and the Department's experience with automobile theft 
and fraud, the Department believes that the full implementation of 
NMVTIS should reduce the market for stolen motor vehicles, enhance 
public safety, and reduce fraud. This rule will serve to enhance the 
efficacy of NMVTIS by implementing the statutory reporting requirements 
imposed on junk and salvage yards and insurance carriers and clarifying 
the obligations of the states and the operator of NMVTIS.
    The operator of the NMVTIS is entitled to receive revenues from 
user fees to support the system. Currently, these fees generate 
approximately $1.5 million annually. AAMVA, however, estimates the 
annual operating cost of the system to be approximately $5,650,000--
depending on necessary system upgrades that may be required and user 
volume. Therefore, the current AAMVA fee structure under-funds NMVTIS 
by $4,150,000 according to its estimates. According to the Department 
of Transportation's 2005 Highway Statistics, 241,193,974 vehicles were 
titled in the United States in 2005. Therefore, the total cost to the 
operator to fund NMVTIS ranges from 1 cent to

[[Page 5775]]

2.3 cents per motor vehicle title titled in the U.S.
    Consequently, the average fees charged to the states by the 
operator under this proposed rule should be less than 3 cents per 
vehicle. In most cases, states that choose to integrate the NMVTIS 
processes of data provision and inquiry into their titling process 
generally incur one-time upgrade costs to establish these connections. 
In nearly every case, once a connection to the system is established, 
data transmission for uploads and inquiries is automated and occurs 
without recurring costs. With these one-time costs and state fees 
considered, the costs to states are estimated at 6 cents per vehicle. 
This scenario includes making the data available to NMVTIS via real-
time updates and making inquiries into the system prior to issuing new 
titles. While the frequency of reporting does not impact costs under 
this scenario, states can lower their upgrade costs by choosing to 
integrate the NMVTIS reporting and inquiry requirements into their 
business rules but not into their electronic titling processes. In 
these cases, states would see lower costs by establishing a regular 
reporting/data upload process but not re-engineering their own title-
information systems for real-time updates. Under this scenario, instead 
of a state's title-information system automatically making the NMVTIS 
inquiry, the title clerk would switch to an internet-enabled PC to 
perform a web search of NMVTIS via a secure virtual private network 
(VPN). In addition, the cost is minimized because a state is only 
required to check out-of-state titles. Moreover, because this type of 
search is internet-based versus state-title-information system-based, 
no changes to the state's title-information system is required and 
therefore there is no cost for this aspect of compliance. For the 
reporting aspect however (i.e., programming an automated batch upload 
process via file transfer protocol (FTP)), it is anticipated that 
states would incur reporting costs of less than 1 cent per vehicle. 
Assuming the reporting costs for states are 0.005 cents per vehicle and 
that 241,193,974 vehicles are titled in the United States, the 
Department estimates that the reporting costs for states is 
approximately $1,205,970.
    The incremental cost to insurance companies and junk- and salvage-
yard operators that handle junk or salvage automobiles also is expected 
to be low. Many insurance companies and junk and salvage yards already 
capture VINs as a means of positively identifying automobiles and 
tracking inventory. Additionally, for both the insurance sector and the 
junk/salvage industry, many companies are already reporting much of the 
required data to independent third parties who have indicated a 
willingness to pass this data on to DOJ for NMVTIS use.
    According to the NICB, it is estimated that there are approximately 
321 insurance groups representing approximately 3,000 insurers that 
report an estimated 2.4 million salvage and total-loss records annually 
(based on the most recent three-year average). Furthermore, based on 
2007 insurance data, over 60% of these motor vehicles will originate 
from the ten largest insurance groups. These 3,000 insurers would then 
be responsible for reporting this total-loss information to NMVTIS if 
not already reported to a third party that agrees to provide the data 
to NMVTIS. In those cases where the data is already reported to a state 
or to a cooperating third party, there is no additional cost to 
insurance carriers. In cases where this data is not currently reported 
to a cooperating third party, the carrier would be required to report 
the data to NMVTIS. With the assumption that the data is already 
collected in an exportable format, and assuming that NMVTIS would 
establish a reporting mechanism involving a simple FTP-based solution, 
the cost to insurance carriers is similar to the state reporting costs 
of less than 1 cent per vehicle. The FBI previously has estimated that 
approximately 10.5 million junk and salvage vehicles are handled each 
year. Assuming that it costs insurance carriers approximately 0.005 
cents per vehicle to report and that the insurance carriers are 
required to report on all 10.5 million junk and salvage vehicles, then 
the reporting costs to insurance carriers will be approximately $52,500 
annually.
    Similarly, junk and salvage yard operators that already are 
reporting to cooperating third parties would not be required to report 
separately. Thus, NMVTIS would impose no additional burden. For those 
entities not voluntarily reporting to a cooperating third party, a 
separate reporting mechanism would be established. Depending on the 
type of mechanism established (e.g., FTP-based solution, form-fax 
solution, etc.), the costs will vary. It is assumed that all junk and 
salvage yard operators already collect much of the information required 
under the rule, and therefore, it is only the transmission of this data 
to NMVTIS that will result in costs. The table below summarizes these 
cost estimates.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  Total annual
                                                               Initial                                            average labor   Total first year costs
             Yard size                 Reporting method      investment    Annual ongoing labor  Annual vehicle     costs per       (includes initial
                                                                costs              costs            volume *         vehicle       investment costs and
                                                                                                                     (cents)       annual labor costs)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small (non-automated).............  Fax..................             $90  12 hours per year/             1-200              96  $1.86.
                                                                            $96.00.
Small (automated).................  FTP..................               0  24 minutes per year/           1-200               3  3 cents.
                                                                            $3.12.
Medium............................  FTP..................               0  24 minutes per year/         201-500              <1  <1 cent.
                                                                            $3.12.
Large.............................  FTP..................             250  24 minutes per year/       501-7,800              <1  6 cents.
                                                                            $3.12.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(* Note: Per-vehicle costs based on an average annual vehicle volumes.)

    While it is difficult to estimate how many junk and salvage yards 
are not automated, the National Salvage Vehicle Reporting Program and 
other industry representatives estimate that nearly all have some form 
of data collection even if they do not have automation in place. The 
National Salvage Vehicle Reporting Program has discussed with many of 
the inventory-management vendors the assistance that can be made 
available to establish reliable reporting protocols through its 
voluntary and independent efforts within the industry. If such 
assistance is available from these vendors, nearly all junk and salvage 
yards will have some form of automation and be capable of exporting

[[Page 5776]]

and sending monthly reports electronically.
    In cases in which small junk and salvage yards have no form of 
automation or computerized files, the Department assumes that a fax or 
other data-transmittal process would be needed. This paper-based 
process would likely incur additional labor costs that would bring the 
estimated per-vehicle costs for this small number of businesses to 
approximately 0.96 cents per vehicle (annual labor costs). However, 
according to industry representatives, the number of junk and salvage 
yards of this size is relatively small (estimated at 20% of licensed 
junk and salvage yards) and the number of businesses without any 
automation is even lower (expected to be less than 1,700 licensed 
businesses in the U.S.). These businesses would not incur these costs 
if already reporting this data to a state or another cooperating third 
party.
    Assuming that small junk and salvage yards handle approximately 
170,000 vehicles annually (at $0.96 per vehicle annual labor costs) and 
that the remaining junk and salvage yards handle 10,330,000 vehicles 
annually (at an average labor cost of 1 cent per vehicle), then the 
Department estimates that their annual reporting costs will be 
approximately $266,500.
    The Department anticipates that the cost for web-based prospective-
purchaser inquiries will be nominal. Similarly, the cost to law 
enforcement to access NMVTIS also is expected to be minimal because law 
enforcement will not be charged any direct transaction costs. Law 
enforcement will access NMVTIS through their existing infrastructure. 
The only cost will be to the operator of the system based on the number 
of inquiries received from law enforcement. The expected cost to the 
operator is less than 12 cents per inquiry.
    The Department of Justice also considered possible alternatives to 
those proposed in the rule. Indeed, pursuant to 49 U.S.C. 30504(c), the 
Attorney General was required to establish ``procedures and practices 
to facilitate reporting in the least burdensome and costly fashion'' on 
insurance carriers and junk and salvage yards. Because of the statutory 
requirements imposed by the Anti-Car Theft Act, however, the Department 
of Justice did not have many options regarding the information that 
must be provided and the scope of the entities that must report the 
required information. In particular, the information required to be 
reported by the proposed rule is mandated by the Anti-Car Theft Act. 
The Department also considered various alternatives for funding NMVTIS, 
such as a tiered-based fee structure and a transaction-based fee 
structure. Based on the comments to the proposed rule, the Department 
believes that a tiered fee structure based on the total number of motor 
vehicles titled in a state is preferable to these alternatives because 
it complies with the Anti-Car Theft Act and minimizes any burden 
imposed on reporting entities.
    With regard to all sector reporting requirements, in most cases 
reducing the reporting timelines from monthly to semi-annually or less 
will not significantly reduce costs due to the benefits of automated 
processes. Additionally, the costs that this reduced reporting would 
incur by enabling theft and fraud to continue far outweighs the 
benefits. Consumers, states, law enforcement, and others need to know 
as soon as possible when a vehicle is reported as totaled or salvage to 
prevent the vehicle from being turned over to another state or consumer 
with a clean title. Moreover, a monthly reporting cycle is expressly 
required by statute.

Executive Order 13132

    In accordance with section 6 of Executive Order 13132, the 
Department of Justice has determined that this rule does not have 
sufficient federalism implications to warrant a federalism summary 
impact statement. The rule does not impose substantial direct 
compliance costs on state and local governments and does not preempt 
state law. In formulating this rule, the Department has worked closely 
with AAMVA regarding the implementation of NMVTIS.

Executive Order 12988

    This rule meets the applicable standards set forth in sections 3(a) 
and 3(b)(2) of Executive Order 12988, Civil Justice Reform.

List of Subjects

28 CFR Part 25

    Crime, Law enforcement, Motor vehicles safety, Motor vehicles, 
Reporting and recordkeeping requirements, Transportation.

0
Accordingly, by virtue of the authority vested in me as Attorney 
General, including 5 U.S.C. 301 and 28 U.S.C. 509 and 510 and, for the 
reasons set forth in the preamble, part 25 of chapter I of title 28 of 
the Code of Regulations is amended as follows:

PART 25--DEPARTMENT OF JUSTICE INFORMATION SYSTEMS

0
1. The Authority citation for part 25 is revised to read as follows:

    Authority: Public Law 103-159, 107 Stat. 1536, 49 U.S.C. 30501-
30505; Public Law 101-410, 104 Stat. 890, as amended by Public Law 
104-134, 110 Stat. 1321.


0
2. Add a new subpart B to read as follows:
Subpart B--National Motor Vehicle Title Information System (NMVTIS)
Sec.
25.51 Purpose and authority.
25.52 Definitions.
25.53 Responsibilities of the operator of NMVTIS.
25.54 Responsibilities of the States.
25.55 Responsibilities of insurance carriers.
25.56 Responsibilities of junk yards and salvage yards and auto 
recyclers.
25.57 Erroneous junk or salvage reporting.

Subpart B--National Motor Vehicle Title Information System (NMVTIS)


Sec.  25.51  Purpose and authority.

    The purpose of this subpart is to establish policies and procedures 
implementing the National Motor Vehicle Title Information System 
(NMVTIS) in accordance with title 49 U.S.C. 30502. The purpose of 
NMVTIS is to assist in efforts to prevent the introduction or 
reintroduction of stolen motor vehicles into interstate commerce, 
protect states and individual and commercial consumers from fraud, 
reduce the use of stolen vehicles for illicit purposes including 
fundraising for criminal enterprises, and provide consumer protection 
from unsafe vehicles.


Sec.  25.52  Definitions.

    For purposes of this subpart B:
    Acquiring means owning, possessing, handling, directing, or 
controlling.
    Automobile has the same meaning given that term in 49 U.S.C. 
32901(a).
    Certificate of title means a document issued by a state showing 
ownership of an automobile.
    Insurance carrier means an individual or entity engaged in the 
business of underwriting automobile insurance.
    Junk automobile means an automobile that--
    (1) Is incapable of operating on public streets, roads, and 
highways; and
    (2) Has no value except as a source of parts or scrap.
    Junk yard means an individual or entity engaged in the business of 
acquiring or owning junk automobiles for--
    (1) Resale in their entirety or as spare parts; or
    (2) Rebuilding, restoration, or crushing.
    Motor vehicle has the same meaning given that term in 49 U.S.C. 
3102(6).
    NMVTIS means the National Motor Vehicle Title Information System.

[[Page 5777]]

    Operator means the individual or entity authorized or designated as 
the operator of NMVTIS under 49 U.S.C. 30502(b), or the office 
designated by the Attorney General, if there is no authorized or 
designated individual or entity.
    Purchaser means the individual or entity buying an automobile or 
financing the purchase of an automobile. For purposes of this subpart, 
purchasers include dealers, auction companies or entities engaged in 
the business of purchasing used automobiles, lenders financing the 
purchase of new or used automobiles, and automobile dealers.
    Salvage automobile means an automobile that is damaged by 
collision, fire, flood, accident, trespass, or other event, to the 
extent that its fair salvage value plus the cost of repairing the 
automobile for legal operation on public streets, roads, and highways 
would be more than the fair market value of the automobile immediately 
before the event that caused the damage. Salvage automobiles include 
automobiles determined to be a total loss under the law of the 
applicable jurisdiction or designated as a total loss by an insurer 
under the terms of its policies, regardless of whether or not the 
ownership of the vehicle is transferred to the insurance carrier.
    Salvage yard means an individual or entity engaged in the business 
of acquiring or owning salvage automobiles for--
    (1) Resale in their entirety or as spare parts; or
    (2) Rebuilding, restoration, or crushing.
    Note to definition of ``Salvage yard'': For purposes of this 
subpart, vehicle remarketers and vehicle recyclers, including scrap 
vehicle shredders and scrap metal processors as well as ``pull- or 
pick-apart yards,'' salvage pools, salvage auctions, and other types of 
auctions handling salvage or junk vehicles (including vehicles declared 
a ``total loss''), are included in the definition of ``junk or salvage 
yards.''
    State means a state of the United States or the District of 
Columbia.
    Total loss means that the cost of repairing such vehicles plus 
projected supplements plus projected diminished resale value plus 
rental reimbursement expense exceeds the cost of buying the damaged 
motor vehicle at its pre-accident value, minus the proceeds of selling 
the damaged motor vehicle for salvage.
    VIN means the vehicle identification number;


Sec.  25.53  Responsibilities of the operator of NMVTIS.

    (a) By no later than March 31, 2009, the operator shall make 
available:
    (1) To a participating state on request of that state, information 
in NMVTIS about any automobile;
    (2) To a Government, state, or local law enforcement official on 
request of that official, information in NMVTIS about a particular 
automobile, junk yard, or salvage yard;
    (3) To a prospective purchaser of an automobile on request of that 
purchaser, information in NMVTIS about that automobile; and
    (4) To a prospective or current insurer of an automobile on request 
of that insurer, information in NMVTIS about the automobile.
    (b) NMVTIS shall permit a user of the system to establish instantly 
and reliably:
    (1) The validity and status of a document purporting to be a 
certificate of title;
    (2) Whether an automobile bearing a known VIN is titled in a 
particular state;
    (3) Whether an automobile known to be titled in a particular state 
is or has been a junk automobile or a salvage automobile;
    (4) For an automobile known to be titled in a particular state, the 
odometer mileage disclosure required under 49 U.S.C. 32705 for that 
automobile on the date the certificate of title for that automobile was 
issued and any later mileage information, if noted by the state; and
    (5) Whether an automobile bearing a known VIN has been reported as 
a junk automobile or a salvage automobile under 49 U.S.C. 30504.
    (c) The operator is authorized to seek and accept, with the 
concurrence of the Department of Justice, additional information from 
states and public and private entities that is relevant to the titling 
of automobiles and to assist in efforts to prevent the introduction or 
reintroduction of stolen motor vehicles and parts into interstate 
commerce. The operator, however, may not collect any social security 
account numbers as part of any of the information provided by any state 
or public or private entity. The operator may not make personally 
identifying information contained within NMVTIS, such as the name or 
address of the owner of an automobile, available to an individual 
prospective purchaser. With the approval of the Department of Justice, 
the operator may allow public and private entities that provide 
information to NMVTIS to query the system if such access will assist in 
efforts to prevent the introduction or reintroduction of stolen motor 
vehicles and parts into interstate commerce.
    (d) The operator shall develop and maintain a privacy policy that 
addresses the information in the system and how personal information 
shall be protected. DOJ shall review and approve this privacy policy.
    (e) The means by which access is provided by the operator to users 
of NMVTIS must be approved by the Department of Justice.
    (f) The operator shall biennially establish and at least annually 
collect user fees from the states and users of NMVTIS to pay for its 
operation, but the operator may not collect fees in excess of the costs 
of operating the system. The operator is required to recalculate the 
user fees on a biennial basis. After the operator establishes its 
initial user fees for the states under this section, subsequent state 
user fees must be established at least one year in advance of their 
effective date. Any user fees established by the operator must be 
established with the approval of the Department of Justice. The 
operator of NMVTIS will inform the states of the applicable user fees 
either through publication in the Federal Register or by direct notice 
or invoice to the states.
    (1) The expenses to be recouped by the operator of NMVTIS will 
consist of labor costs, data center operations costs, the cost of 
providing access to authorized users, annual functional enhancement 
costs (including labor and hardware), costs necessary for implementing 
the provisions of this rule, the cost of technical upgrades, and other 
costs approved in advance by the Department of Justice.
    (2) User fees collected from states should be based on the states' 
pro rata share of the total number of titled motor vehicles based on 
the Highway Statistics Program of the Federal Highway Administration, 
U.S. Department of Transportation, except in cases where states did not 
report to that program, in which case the states shall make available 
the most recent statistics for motor vehicle title registrations.
    (3) All states, regardless of their level of participation, shall 
be charged user fees by the operator.
    (4) No fees shall be charged for inquiries from law enforcement 
agencies.
    (g) The operator will establish procedures and practices to 
facilitate reporting to NMVTIS in the least burdensome and costly 
fashion. If the operator is not the Department of Justice, the operator 
must provide an annual report to the Department of Justice detailing 
the fees it collected and how it expended such fees and other

[[Page 5778]]

funds to operate NMVTIS. This report must also include a status report 
on the implementation of the system, compliance with reporting and 
other requirements, and sufficient detail and scope regarding financial 
information so that reasonable determinations can be made regarding 
budgeting and performance. The operator shall procure an independent 
financial audit of NMVTIS revenues and expenses on an annual basis. The 
Department of Justice will make these reports available for public 
inspection.


Sec.  25.54  Responsibilities of the States.

    (a) Each state must maintain at least the level of participation in 
NMVTIS that it had achieved as of January 1, 2009. By no later than 
January 1, 2010, each state must have completed implementation of all 
requirements of participation and provide, or cause to be provided by 
an agent or third party, to the designated operator and in an 
electronic format acceptable to the operator, at a frequency of once 
every 24 hours, titling information for all automobiles maintained by 
the state. The titling information provided to NMVTIS must include the 
following:
    (1) VIN;
    (2) Any description of the automobile included on the certificate 
of title (including any and all brands associated with such vehicle);
    (3) The name of the individual or entity to whom the certificate 
was issued;
    (4) Information from junk or salvage yard operators or insurance 
carriers regarding the acquisition of junk automobiles or salvage 
automobiles, if this information is being collected by the state; and
    (5) For an automobile known to be titled in a particular state, the 
odometer mileage disclosure required under 49 U.S.C. 32705 for that 
automobile on the date the certificate of title for that automobile was 
issued and any later mileage information, if noted by the state.
    (b) With the approval of the operator and the state, the titling 
information provided to NMVTIS may include any other information 
included on the certificates of title and any other information the 
state maintains in relation to these titles.
    (c) By no later than January 1, 2010, each state shall establish a 
practice of performing a title verification check through NMVTIS before 
issuing a certificate of title to an individual or entity claiming to 
have purchased an automobile from an individual or entity in another 
state or in cases of title transfers. The check will consist of--
    (1) Communicating to the operator the VIN of the automobile for 
which the certificate of title is sought;
    (2) Giving the operator an opportunity to communicate to the 
participating state the results of a search of the information and 
using the results to determine the validity and status of a document 
purporting to be a certification of title, to determine whether the 
automobile has been a junk or salvage vehicle or has been reported as 
such, to compare and verify the odometer information presented with 
that reported in the system, and to determine the validity of other 
information presented (e.g., lien-holder status, etc.).
    (d) By January 1, 2010, those states not currently paying user fees 
will be responsible for paying user fees as established by the operator 
to support NMVTIS.


Sec.  25.55  Responsibilities of insurance carriers.

    (a) By no later than March 31, 2009, and on a monthly basis as 
designated by the operator, any individual or entity acting as an 
insurance carrier conducting business within the United States shall 
provide, or cause to be provided on its behalf, to the operator and in 
a format acceptable to the operator, a report that contains an 
inventory of all automobiles of the current model year or any of the 
four prior model years that the carrier, during the past month, has 
obtained possession of and has decided are junk automobiles or salvage 
automobiles. An insurance carrier shall report on any automobiles that 
it has determined to be a total loss under the law of the applicable 
jurisdiction (i.e. , state) or designated as a total loss by the 
insurance company under the terms of its policies.
    (b) The inventory must contain the following information:
    (1) The name, address, and contact information for the reporting 
entity (insurance carrier);
    (2) VIN;
    (3) The date on which the automobile was obtained or designated as 
a junk or salvage automobile;
    (4) The name of the individual or entity from whom the automobile 
was obtained and who possessed it when the automobile was designated as 
a junk or salvage automobile; and
    (5) The name of the owner of the automobile at the time of the 
filing of the report.
    (c) Insurance carriers are strongly encouraged to provide the 
operator with information on other motor vehicles or other information 
relevant to a motor vehicle's title, including the reason why the 
insurance carrier obtained possession of the motor vehicle. For 
example, the insurance carrier may have obtained possession of a motor 
vehicle because it had been subject to flood, water, collision, or fire 
damage, or as a result of theft and recovery. The provision of 
information provided by an insurance carrier under this paragraph must 
be pursuant to a means approved by the operator.
    (d) Insurance carriers whose required data is provided to the 
operator through an operator-authorized third party in a manner 
acceptable to the operator are not required to duplicate such 
reporting. For example, if the operator and a private third-party 
organization reach agreement on the provision of insurance data already 
reported by insurance to the third party, insurance companies are not 
required to subsequently report the information directly into NMVTIS.


Sec.  25.56  Responsibilities of junk yards and salvage yards and auto 
recyclers.

    (a) By no later than March 31, 2009, and continuing on a monthly 
basis as designated by the operator, any individual or entity engaged 
in the business of operating a junk yard or salvage yard within the 
United States shall provide, or cause to be provided on its behalf, to 
the operator and in a format acceptable to the operator, an inventory 
of all junk automobiles or salvage automobiles obtained in whole or in 
part by that entity in the prior month.
    (b) The inventory shall include the following information:
    (1) The name, address, and contact information for the reporting 
entity (junk, salvage yard, recycler);
    (2) VIN;
    (3) The date the automobile was obtained;
    (4) The name of the individual or entity from whom the automobile 
was obtained;
    (5) A statement of whether the automobile was crushed or disposed 
of, for sale or other purposes, to whom it was provided or transferred, 
and if the vehicle is intended for export out of the United States.
    (c) Junk and salvage yards, however, are not required to report 
this information if they already report the information to the state 
and the state makes the information required in this rule available to 
the operator.
    (d) Junk and salvage yards may be required to file an update or 
supplemental report of final disposition of any automobile where final 
disposition information was not available at the time of the initial 
report

[[Page 5779]]

filing, or if their actual disposition of the automobile differs from 
what was initially reported.
    (e) Junk and salvage yards are encouraged to provide the operator 
with similar information on motor vehicles other than automobiles that 
they obtain that possess VINs.
    (f) Junk- and salvage-yard operators whose required data is 
provided to the operator through an operator-authorized third party 
(e.g., state or other public or private organization) in a manner 
acceptable to the operator are not required to duplicate such 
reporting. In addition, junk and salvage yards are not required to 
report on an automobile if they are issued a verification under 49 
U.S.C. 33110 stating that the automobile or parts from the automobile 
are not reported as stolen.
    (g) Such entities must report all salvage or junk vehicles they 
obtain, including vehicles from or on behalf of insurance carriers, 
which can be reasonably assumed are total loss vehicles. Such entities, 
however, are not required to report any vehicle that is determined not 
to meet the definition of salvage or junk after a good-faith physical 
and value appraisal conducted by qualified appraisal personnel, so long 
as such appraisals are conducted entirely independent of any other 
interests, persons or entities. Individuals and entities that handle 
less than five vehicles per year that are determined to be salvage, 
junk, or total loss are not required to report under the salvage-yard 
requirements.
    (h) Scrap metal processors and shredders that receive automobiles 
for recycling where the condition of such vehicles generally prevent 
VINs from being identified are not required to report to the operator 
if the source of each vehicle has already reported the vehicle to 
NMVTIS. In cases where a supplier's compliance with NMVTIS cannot be 
ascertained, however, scrap metal processors and shredders must report 
these vehicles to the operator based on a visual inspection if 
possible. If the VIN cannot be determined based on this inspection, 
scrap metal processors and shredders may rely on primary documentation 
(i.e., title documents) provided by the vehicle supplier.


Sec.  25.57  Erroneous junk or salvage reporting.

    (a) In cases where a vehicle is erroneously reported to have been 
salvage or junk and subsequently destroyed (i.e., crushed), owners of 
the legitimate vehicles are encouraged to seek a vehicle inspection in 
the current state of title whereby inspection officials can verify via 
hidden VINs the vehicle's true identity. Owners are encouraged to file 
such inspection reports with the current state of title and to retain 
such reports so that the vehicle's true history can be documented.
    (b) To avoid the possibility of fraud, the operator may not allow 
any entity to delete a prior report of junk or salvage status.

    Dated: January 23, 2009.
Mark Filip,
Acting Attorney General.
[FR Doc. E9-1835 Filed 1-26-09; 11:15 am]
BILLING CODE 4410-02-P


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