[Federal Register Volume 62, Number 188 (Monday, September 29, 1997)]
[Rules and Regulations]
[Pages 50876-50882]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-25665]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 594

[Docket No. 97-046; Notice 2]
RIN 2127-AG73


Schedule of Fees Authorized by 49 U.S.C. 30141; Fee for Review 
and Processing of Conformity Certificates for Nonconforming Vehicles

AGENCY: National Highway Traffic Safety Administration (NHTSA), 
Department of Transportation.

ACTION: Final rule.

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SUMMARY: This rule amends NHTSA's regulations that prescribe a schedule 
of fees authorized by 49 U.S.C. 30141 for various functions performed 
by the agency with respect to the importation of motor vehicles. The 
amendment establishes a fee for the agency's review and processing of 
statements that registered importers submit to certify that vehicles 
that were not originally manufactured to conform to all applicable 
Federal motor vehicle safety standards have been brought into 
conformity with those standards. The fee, which is set at $14.00 for 
fiscal year 1998, applies to all vehicles for which conformity 
certificates are submitted to NHTSA, including vehicles imported from 
Canada, which currently account for over 98 percent of the 
nonconforming vehicles that are processed by NHTSA.

DATES: The amendment established by this final rule will become 
effective on October 29, 1997.
    Any petitions for reconsideration must be received by NHTSA not 
later than November 13, 1997.

ADDRESSES: Any petitions for reconsideration should refer to the docket 
and notice numbers above and be submitted to: Docket Section, National 
Highway Traffic Safety Administration, 400 Seventh Street, S.W., 
Washington, D.C. 20590. Docket hours are 9:30 a.m. to 4 p.m., Monday 
through Friday.

FOR FURTHER INFORMATION CONTACT: For non-legal issues: Clive Van Orden, 
Office of Vehicle Safety Compliance, National Highway Traffic Safety 
Administration, 400 Seventh Street, S.W., Washington, D.C. 20590 (202-
366-2830). For legal issues: Coleman Sachs, Office of Chief Counsel, 
National Highway Traffic Safety Administration, 400 Seventh Street, 
S.W., Washington, D.C. 20590 (202-366-5238).

SUPPLEMENTARY INFORMATION:

A. Background

    This rule was preceded by a notice of proposed rulemaking (NPRM) 
that NHTSA published on July 15, 1997 (62 FR 37847), proposing to 
establish a fee for the agency's review and processing of conformity 
certificates submitted by registered importers and to set the fee for 
fiscal year (FY) 1998 at $17.00 per vehicle. The NPRM stated that 49 
U.S.C. 30141 permits an importer who is registered with NHTSA (a 
``registered importer'') to import a motor vehicle that was not 
originally manufactured to conform to all applicable Federal motor 
vehicle safety standards (FMVSS), provided that NHTSA has decided that 
the vehicle is eligible for importation. Once a motor vehicle has been 
declared eligible for importation, it is imported under bond by a 
registered importer or by an individual who has executed a contract or 
other agreement with a registered importer to bring the vehicle into 
compliance with applicable FMVSS. When the registered importer 
completes all necessary alterations, it must certify to NHTSA that the 
vehicle meets the FMVSS. See 49 U.S.C. 30146(b) and 49 CFR 592.6(e). 
This is accomplished by submitting, in accordance with regulations and 
guidance issued by NHTSA, a package containing photographic and 
documentary evidence of the vehicle's conformance with each applicable 
FMVSS. Each of these packages is reviewed by NHTSA's Office of Vehicle 
Safety Compliance (OVSC) to verify the accuracy of the information it 
contains. If NHTSA questions the registered importer's certification of 
compliance, the registered importer is notified pursuant to 49 CFR 
592.8(c) to hold the vehicle for inspection. Acceptance of the 
certification ends the agency's involvement with the vehicle.
    The NPRM noted that NHTSA staff expends much time reviewing and 
evaluating routine compliance packages, and even more time if a package 
does not indicate conformance with the FMVSS, necessitating follow-up 
action.

[[Page 50877]]

Based on figures accumulated to date, NHTSA expects to review over 
21,000 compliance packages in FY 1997, which will end on September 30, 
1997.

B. Authority for Fee

    NHTSA is authorized under 49 U.S.C. 30141(a)(3) to establish an 
annual fee requiring registered importers to pay for the costs of 
carrying out the registered importer program. The agency is also 
authorized under this section to establish fees to pay for the costs of 
processing the conformance bonds that registered importers provide, and 
fees to pay for the costs of making agency decisions relating to the 
importation of noncomplying motor vehicles and equipment. As stated in 
the NPRM, NHTSA believes it is entitled to reimbursement under 49 
U.S.C. 30141 for the costs of reviewing conformity packages submitted 
by registered importers to secure the release of the conformance bonds 
that cover noncomplying vehicles.
    Because NHTSA's approval of the conformity package is a necessary 
predicate to the release of these bonds, NHTSA has concluded that the 
expense incurred by the agency in reviewing and processing each package 
may be treated as part of the bond processing cost, for which NHTSA is 
authorized to set a fee under 49 U.S.C. 30141(a)(3)(A).
    Additionally, NHTSA's decision to approve the release of a bond 
based on its review of a conformity package qualifies as a ``decision'' 
under Subchapter III of Title 49, U.S. Code, for which the agency is 
authorized to set a fee under 49 U.S.C. 30141(a)(3)(B). Section 
30141(e) provides that the amounts collected as fees from registered 
importers under section 30141(a)(3) ``are only for use by the Secretary 
of Transportation--(1) in carrying out this section and sections 30146 
(a)-(c)(1), (d), and (e) and 30147(b) of this title * * *.'' NHTSA's 
authority to review conformity packages is principally derived from 
section 30146(c). That provision authorizes the Secretary of 
Transportation to require the compliance certification submitted by a 
registered importer to ``be accompanied by evidence of compliance the 
Secretary considers appropriate * * *.'' In light of the fact that 
section 30141(e) clearly authorizes the use of fees collected from 
registered importers under section 30141(a)(3) to support NHTSA's 
actions in reviewing conformity packages, NHTSA has concluded that it 
is authorized under 49 U.S.C. 30141(a)(3)(B) to charge fees for that 
purpose.
    Even if such authority did not exist in Chapter 301 of Title 49, 
U.S. Code, the Independent Offices Appropriation Act of 1952, 31 U.S.C. 
9701, provides ample authority for NHTSA to impose fees that are 
sufficient to recover the agency's full costs for the review and 
processing of conformity packages. By reviewing the conformity package 
and authorizing the release of the conformance bond that is posted upon 
entry of a nonconforming vehicle, NHTSA is performing a specific 
service for an identifiable beneficiary that can form the basis for the 
imposition of a fee under 31 U.S.C. 9701.
    Courts have long recognized that federal agencies may impose fees 
under section 9701 for providing comparable services to regulated 
entities. See, e.g., Seafarers International Union of North America v. 
U.S. Coast Guard, 81 F.3d 179, 183 (D.C. Cir. 1996)(finding the Coast 
Guard authorized to charge reasonable fees for processing applications 
for merchant mariner licenses, certificates, and work documents); 
Engine Manufacturers Association v. E.P.A., 20 F.3d 1177, 1180 (D.C. 
Cir. 1994)(finding the E.P.A. authorized to impose a fee to recover its 
costs for testing vehicles and engines for compliance with the emission 
standards of the Clean Air Act); and National Cable Television 
Association, Inc. v. F.C.C., 554 F.2d 1094, 1101 (D.C. Cir. 1976) 
(finding the F.C.C. authorized to impose fees for issuing certificates 
of compliance to cable television operators).
    In view of the language and judicial construction of 31 U.S.C. 
9701, NHTSA is relying on this provision as an independent source of 
authority for the conformity package review fee. The agency believes 
that this provision and 49 U.S.C. 30141 each provide sufficient 
separate authority for this fee and the other fees that the agency has 
established under 49 CFR Part 594. Section 9701 was not cited as 
authority for the Part 594 fees previously established by the agency 
because each of those fees was expressly authorized under the language 
of 49 U.S.C. 30141 or its predecessor provision. When the prior fees 
were established, NHTSA did not recognize a need to impose a fee for 
the review and processing of conformity certificates because those 
actions accounted for a relatively small share of the work performed by 
OVSC. In the ensuing years, OVSC has devoted a substantially greater 
share of its work to those efforts, so that a fee is now necessary to 
offset the agency's costs for performing this work.

C. Comments

    Three comments were submitted in response to the notice of proposed 
rulemaking. The first of these was from Philip Trupiano of Auto 
Enterprises, Inc. of Clawson, Michigan, a registered importer. In his 
comment, Mr. Trupiano contends that NHTSA lacks statutory authority to 
establish the proposed fee for the review and processing of conformity 
packages. Specifically, Mr. Trupiano states that the action taken by 
the agency on these packages cannot be characterized as a ``decision'' 
under Subchapter III of Title 49, U.S. Code, for which the agency is 
authorized to set a fee under 49 U.S.C. 30141(a)(3)(B). Mr. Trupiano 
asserts that NHTSA's claim to that effect is refuted by the letters 
that the agency issues to registered importers following its review of 
conformity packages, which Mr. Trupiano describes as merely 
acknowledging receipt of the importer's certification and stating that 
a determination of a vehicle's compliance with the FMVSS may only be 
made upon actual compliance testing by NHTSA.
    Mr. Trupiano appears to have misconstrued the nature of the 
decision the agency makes upon its review of a conformity package. That 
decision is not whether the vehicle in fact conforms to all applicable 
FMVSS, but instead whether the bond that is issued to ensure such 
conformity may be released. The agency reaches its decision on whether 
the bond may be released based on its review of the conformity package 
submitted by the importer. If the conformity package provides 
sufficient evidence that the vehicle complies with all applicable 
FMVSS, NHTSA issues the release letter. As Mr. Trupiano has noted, the 
letter contains the caveat that it does not constitute an agreement on 
NHTSA's part that the vehicle in fact complies with all applicable 
FMVSS since testing must be performed to determine compliance with many 
of the standards. NHTSA's decision to release the conformance bond 
based on its review of the conformity package is nonetheless a decision 
under Subchapter III of Title 49, U.S. Code, for which the agency is 
authorized to set a fee under 49 U.S.C. 30141(a)(3)(B).
    Mr. Trupiano also asserts that 31 U.S.C. 9701 does not provide 
alternate authority for establishment of the proposed fee because 
paragraph (c)(2) of section 9701 states that ``[t]his section does not 
affect a law of the United States--* * * prescribing bases for 
determining charges * * *.'' Applying this language, Mr. Trupiano 
contends that section 9701 provides no authority for the proposed fee 
because Congress has elsewhere ``prescribed the bases for which fees 
would be assessed for the registered importer program * * *.''

[[Page 50878]]

    Mr. Trupiano's contention that 31 U.S.C. 9701 does not provide 
alternate authority for the proposed fee also appears to be based on a 
misreading of that statute. The only provision that Mr. Trupiano cites 
in support of this contention is 49 U.S.C. 9701(c)(2), which states: 
``(c) this section does not affect a law of the United States--* * * 
(2) prescribing bases for determining charges, but a charge may be 
redetermined under this section consistent with the prescribed bases.'' 
The legislative history of section 9701 reveals that it was derived 
from a provision previously codified at 31 U.S.C. 483a (1976), which 
stated, as one of its provisos, ``[t]hat nothing contained in this 
section shall repeal or modify existing statutes prescribing bases for 
calculation of any fee, charge or price * * *.'' This provision has no 
bearing on 49 U.S.C. 30141(a)(3)(B), because that section merely 
authorizes the establishment of fees to pay for the costs of making 
decisions under Chapter 301, without prescribing any bases for the 
calculation of such fees. Contrary to Mr. Trupiano's apparent 
interpretation of subsection (b)(2) of 31 U.S.C. 9701, that subsection 
does not preclude an agency from establishing a fee under section 9701 
where other statutory authority for the establishment of the fee may 
exist. The subsection instead merely states that if the other statute 
prescribes a basis for determining the amount of the fee, that basis 
shall be given effect.
    Mr. Trupiano next challenges the finding by NHTSA in the regulatory 
analysis portion of the NPRM that the proposed fee would not have a 
significant economic impact on a substantial number of small 
businesses, precluding the need for the agency to prepare a regulatory 
flexibility analysis under the Regulatory Flexibility Act. As Mr. 
Trupiano notes, this finding was predicated on the agency's belief that 
importers could pass along the proposed fee, which is quite small in 
comparison to the value of the vehicles to which it would apply, to the 
ultimate purchasers of those vehicles. Mr. Trupiano instead contends 
that vehicles imported from Canada must compete with domestically 
produced versions of those vehicles and that the value of Canadian 
imports, which is set by the value of their domestic counterparts, 
would not be enhanced in any manner by payment of the proposed fee. As 
such, Mr. Trupiano asserts that the fee would have to be absorbed by 
the importer and that it could have significant cost consequences if 
the volume of imports by any one importer is sufficiently high. 
Additionally, Mr. Trupiano asserts that NHTSA did not provide advance 
notice to registered importers or their trade association prior to 
issuance of the NPRM, or seek alternatives that would reduce the cost 
of processing compliance packages. The alternatives that Mr. Trupiano 
identifies are: ``(1) Electronic data transfer of the conformance 
package and bond release; (2) elimination of unnecessary film 
photographs of the vehicles; (3) reduction in the amount of the 
conformity bond required; and (4) shorter turnaround time in reviewing 
the conformity packages.''
    With regard to the cost impact of the proposed fee on registered 
importers, NHTSA notes that Mr. Trupiano did not identify the profit 
margin on which these businesses typically operate. From NHTSA's 
understanding of this industry, the agency believes that the fee, which 
was proposed at $17.00 but is being established in this final rule at 
$14.00 on the basis of more current data, is quite low in relation to 
the profit earned by the typical registered importer on each 
noncomplying vehicle that it imports. Even if this fee amount could not 
be passed on to the vehicle's ultimate purchaser, as Mr. Trupiano 
contends, the agency believes that the registered importer could absorb 
it without suffering undue financial strain. Based on informal contacts 
with registered importers prior to the issuance of the NPRM, NHTSA 
understood that they could reasonably accommodate a fee in the 
neighborhood of twenty to twenty-five dollars. The $14.00 fee that 
NHTSA is establishing in this final rule, which is based on the 
agency's analysis of the costs it actually incurs in the review and 
processing of conformity packages, is considerably short of this range.
    With respect to the alternatives to the imposition of the proposed 
fee that were identified by Mr. Trupiano, NHTSA notes that the only one 
that would actually reduce the costs that NHTSA incurs in the review 
and processing of conformity packages is the electronic transfer of the 
bond release letter. The agency is currently studying the feasibility 
of implementing such a change. The agency is also examining the issue 
of allowing registered importers to transmit the contents of the 
conformity package electronically. It is the agency's understanding 
that any requirement for the electronic transfer of this data would 
actually increase costs to many registered importers since they lack 
the specialized equipment and expertise necessary to make such 
transmissions. Agency costs are also likely to increase with the 
electronic transfer of conformity data, as it would take longer for a 
reviewer to call up photographs on a computer than to examine hard copy 
photographs in a conformity package.
    The principal impediment to the agency's approval of electronic 
transmissions is the existing requirement for actual photographs to be 
used to verify the certifications in the conformity package that the 
vehicle complies with all applicable standards. NHTSA requires actual 
photographs because they are less subject to manipulation than 
electronically transmitted images and therefore provide a more reliable 
means for identifying the vehicle that is the subject of the conformity 
package and ascertaining its conformity status. Nevertheless, NHTSA is 
still exploring ways to accommodate the interest in electronic 
transmission that has been expressed by some registered importers.
    NHTSA requires the conformance bond that accompanies the entry of a 
noncomplying vehicle to be in an amount equal to 150% of the dutiable 
value of the vehicle. See 49 CFR 591.8. The agency is authorized under 
49 U.S.C. 30141(d)(2) to require importers to provide bonds up to that 
amount. Since the full amount of the bond is released upon NHTSA's 
approval of a conformity package, any reduction in the amount of the 
bond should have negligible cost consequences for registered importers. 
The agency believes that it is necessary for the bond to be in the full 
amount authorized under section 30141(d)(2) to provide maximum 
assurance that nonconforming vehicles imported under bond are brought 
into compliance with all applicable standards.
    Under 49 U.S.C. 30146(a), a registered importer may release custody 
of a vehicle that did not conform to all applicable FMVSS at the time 
of importation 30 days after it submits to NHTSA a conformity package 
covering the vehicle, unless the agency notifies the importer to hold 
the vehicle for inspection or notifies the importer that it has reason 
to question the validity of the certification. Currently, NHTSA is 
processing these packages well within the 30-day limit. Processing time 
is now averaging approximately one and one-half weeks, with an 
additional week taken, on average, if there is a need to communicate 
with the registered importer to address any problem that the agency may 
have with the package. Although the agency continually strives to 
streamline its administrative processes, given current staff and 
budgetary constraints, it would be difficult to achieve any significant 
reduction in the present turnaround

[[Page 50879]]

time for the review and processing of conformity packages.
    Mr. Trupiano next observes that NHTSA permits individuals to import 
vehicles from Canada that are not certified as complying with all 
applicable FMVSS provided that they furnish a letter from the vehicle's 
manufacturer stating that the vehicle meets those requirements. Mr. 
Trupiano contends that the agency expends many of the same resources in 
processing these imports as it does for vehicles imported by registered 
importers, leading him to question why it is not proposing a fee to 
cover those processing costs. Through an agreement that it entered with 
the U.S. Customs Service in April of this year, NHTSA's approval is no 
longer necessary for the importation of Canadian vehicles for personal 
use. The importer now furnishes the manufacturer's letter directly to 
the Customs Service. As a consequence, there is no longer a basis for 
the agency to impose a fee for processing these imports.
    Mr. Trupiano's final contention is that the proposed fee ``would 
serve to place an additional financial restriction on the entry of 
motor vehicles from Canada, where no such equivalent fee is paid to the 
Canadian government for importing a vehicle from the United States.'' 
As such, he asserts that the fee would constitute a non-tariff barrier 
to trade prohibited under Article 309 of the North American Free Trade 
Agreement (NAFTA).
    Article 309 of NAFTA provides, with certain exceptions that are 
beyond the scope of this discussion, that ``no Party may adopt or 
maintain any prohibition or restriction on the importation of any good 
of another Party * * *.'' NHTSA initially notes that the proposed fee 
would be assessed for the sole purpose of allowing the agency to 
recover its actual costs for the review and processing of conformity 
packages. Assessment of the proposed fee would not prohibit or restrict 
the entry of Canadian-certified vehicles into the United States, and, 
as such, it would not violate any provision of Article 309.
    NHTSA further notes that Article 904 of NAFTA preserves the right 
of each Party to the agreement to ``adopt, maintain or apply any 
standards-related measure, including any such measure relating to 
safety, the protection of human * * * life or health * * * and any 
measure to ensure its enforcement or implementation.'' Article 904 
further provides that ``[s]uch measures include those to prohibit the 
importation of a good of another Party * * * that fails to comply with 
the applicable requirements of those measures or to complete the 
Party's approval procedures.'' The term ``standard-related measure'' is 
defined in Article 915 of NAFTA as including a ``conformity assessment 
procedure.'' NHTSA's review of conformity packages is therefore 
governmental action that is specifically sanctioned by NAFTA and there 
is nothing in that agreement that restricts the right of any Party to 
impose a fee for taking such action.
    The second comment was submitted by Lawrence A. Beyer, an attorney 
who has represented registered importers in matters before the agency. 
Mr. Beyer initially contends that the agency based its calculation of 
the proposed fee on a low estimate of nonconforming vehicle imports. 
Mr. Beyer characterizes the proposed fee as being based on projected 
imports of 16,000 in fiscal year 1998. In contrast to this figure, Mr. 
Beyer states that noncomplying imports thus far in fiscal year 1997 
have averaged 1,727 per month, which translates to a total of 20,729 
vehicles for the entire fiscal year, and that the existing trend is for 
the volume of noncomplying vehicle imports to increase each year. Based 
on these larger projected import figures, Mr. Beyer contends that NHTSA 
should reduce the amount of the proposed fee.
    The agency has decided to accept this recommendation. As noted in 
the NPRM, the proposed fee was calculated on the basis of resources 
expended by NHTSA in processing the 16,000 noncomplying vehicles for 
which conformity packages were submitted in calendar year 1996. Since 
issuing the NPRM, NHTSA has received more complete data on the volume 
of noncomplying vehicles imported during the current fiscal year for 
which conformity packages must be processed by the agency. This 
indicates that 20,786 such vehicle were imported from October 1, 1996, 
the first day of fiscal year 1997, through September 16, 1997. Based on 
this volume, NHTSA anticipates that over 21,000 noncomplying vehicles 
will be imported by the end of this fiscal year on September 30, 1997. 
NHTSA has decided to use this figure in calculating the conformity 
package review fee for fiscal year 1998, as opposed to the 16,000 
vehicle figure identified in the NPRM. Although NHTSA has also 
identified the need to increase one cost element used in calculating 
the fee in light of more accurate information received since issuing 
the NPRM, an overall reduction in the fee from the $17.00 originally 
proposed will be realized by allocating the agency's costs over a 
larger vehicle base. As noted in the NPRM, NHTSA will review the fee at 
least every two years to see if further adjustments are needed. The 
agency is bound to provide this review in order to insure that it 
recovers no more than its actual costs for the review and processing of 
conformity packages.
    Mr. Beyer further contends that NHTSA failed to properly assess the 
impact of the proposed fee on small entities under the Regulatory 
Flexibility Act, and did not solicit the input of affected small 
entities before issuing the NPRM. He additionally contends that the 
proposed fee would constitute a non-tariff barrier to trade under 
NAFTA. Mr. Beyer also observes that the bond release letter issued by 
NHTSA states that it does not constitute agreement by the agency that 
the vehicle in question in fact conforms to all applicable standards. 
The agency has addressed each of these issues in its response to the 
previous comment. Mr. Beyer finally contends that ``NHTSA has attempted 
to bypass its decision regarding VSA-1 eligible imports'' by assigning 
new eligibility numbers. Mr. Beyer asserts that ``[t]here is no 
substantive difference between the compliance issues for the VSA-1 
determination which was paid for in 1989, and the new codes.'' What Mr. 
Beyer overlooks is that the payment that was made in 1989 covered the 
import eligibility decision that NHTSA had made regarding Canadian-
certified vehicles. As noted in the NPRM, that fee is entirely distinct 
from the fee the agency has proposed to recover its costs for the 
review and processing of conformity packages. Given the high volume of 
conformity packages that NHTSA has had to process in recent years, and 
the fact that this responsibility now accounts for a large share of the 
work performed by the Equipment and Imports Division of the agency's 
Office of Vehicle Safety Compliance, there is clearly a need for NHTSA 
to now proceed with the implementation of a fee to recover its costs 
for performing this function.
    The third comment was submitted by Brian Osler, Executive Director 
and Counsel for the North American Automobile Trade Association. Mr. 
Osler states that his association is in favor of NHTSA recovering 
reasonable costs for ensuring compliance with FMVSS. However, he asks 
the agency to consider waiving the requirement for the submission of 
photographs to substantiate compliance certifications. The agency has 
addressed this issue in its response to Mr. Trupiano's comment.

D. Fee Computation

    NHTSA has computed all other fees that it collects under the 
authority of 49 U.S.C. 30141 on the basis of all direct

[[Page 50880]]

and indirect costs incurred by the agency in performing the function 
for which the fee is charged. See 54 FR 17792, 17793 (April 25, 1989). 
The Office of Management and Budget (OMB), in Circular A-25 
establishing Federal policy for the assessment of user fees under 31 
U.S.C. 9701, stated that such fees must be ``sufficient to recover the 
full cost to the Federal Government * * * of providing the service, 
resource, or good when the Government is acting in its capacity as a 
sovereign.'' See 58 FR 38142, 38144 (July 15, 1993).
    Applying an approach consistent with its past practices and the OMB 
Circular, the agency has calculated its direct and indirect costs in 
setting the fee for the review and processing of conformity 
certificates as follows:
    The direct costs used to calculate the fee include the estimated 
cost of contract and professional staff time, computer costs, and costs 
for record assembly, marking, shipment and storage.
    The estimated cost of contract and professional staff time is 
calculated on the basis of the full cost for time spent at the 
following currently prevailing rates: Data entry--$44,410 per year; 
computer programmer--$86,650 per year; compliance analyst--$60,092 per 
year. Three quarters of the total hours worked by a single data entry 
specialist on contract to OVSC are devoted to the processing of 
compliance packages. A second data entry specialist on contract to OVSC 
is engaged full time in the processing of compliance packages. 
Multiplying the annual contract cost for the hours worked by these 
contract support staff members ($44,410 each) by 1.75 (representing the 
one data entry position devoted fully to compliance package processing 
and the other in which three quarters of the total hours worked are 
devoted to that function) yields $77,715.50 in data entry labor costs 
that are incurred by NHTSA on an annual basis in the processing of 
compliance packages. Thirty-seven percent of the total hours worked by 
a single computer programmer on contract to OVSC is devoted to the 
processing of compliance packages. Multiplying the annual contract cost 
for the hours worked by this contract support staff member ($86,650) by 
37 percent yields $32,060.50 in computer programming labor costs that 
are incurred by NHTSA on an annual basis in the processing of 
compliance packages. In the NPRM, NHTSA identified 18.75 percent of 
this computer programmer's time as being devoted to the processing of 
compliance packages, resulting in an annual cost of $16,246.88. At the 
time that NHTSA was preparing the NPRM, this computer programmer had 
recently begun her contract with the agency, resulting in a rough 
estimate of the time which she anticipated would be needed to process 
compliance packages. In the ensuing weeks, it has become apparent that 
the time this contractor spends in the processing of compliance 
packages was considerably underestimated, requiring adjustment to 
better reflect the hours that she actually devotes to this task. Ninety 
percent of the total hours worked by a single compliance analyst 
employed by OVSC is devoted to the review of compliance packages. 
Multiplying the annual rate of pay for this staff member ($60,092) by 
90 percent yields $54,082.80 in compliance analyst labor costs that are 
incurred by NHTSA on an annual basis in the review of compliance 
packages.
    Adding these amounts yields a total of $163,858.80 in contract and 
professional staff costs that NHTSA incurs each year for the processing 
and review of compliance packages. Dividing that amount by 21,000, the 
number of compliance packages reviewed by OVSC in fiscal year 1997, 
yields a direct cost of $7.80 for each compliance package reviewed.
    Computer costs are calculated on the following basis: NHTSA pays 
$13,800 per year to maintain a link with the Customs Service computer. 
Ninety-five percent of the agency's usage of this computer is 
associated with the review of compliance packages, resulting in a cost 
of $13,110 that can be allocated to that use. Additionally, the agency 
pays $30,000 per year for the purpose of running OVSC's computers and 
performing necessary backups of data entries. Ninety percent of this 
usage is associated with the review of compliance packages, yielding a 
cost of $27,000 that can be allocated to that use. The agency also pays 
$4,000 per year for a maintenance contract on OVSC's computers, ninety 
percent of which can also be allocated to that office's review of 
compliance packages, yielding an annual cost of $3,600. Additionally, 
NHTSA pays a $9,360 annual licensing fee for the data base management 
system that is used in the processing of compliance packages. Because 
that system is not used for any other purpose, the full annual fee can 
be allocated to that use. Adding these costs produces the sum of 
$53,070 that is spent annually on computer usage associated with the 
review of compliance packages. Dividing this sum by 21,000, which, as 
previously indicated, is the number of compliance packages reviewed by 
OVSC in fiscal year 1997, yields a direct cost of $2.53 for each 
compliance package reviewed.
    The average cost for record assembly, marking, and shipment is 
calculated at the rate of $16.56 per box. The average cost for record 
storage is calculated to be $7.92 per box for a storage period of three 
years. Based on an average of 110 records per box, these costs amount 
to 22 cents for each compliance package received by the agency. Adding 
the direct costs for contract and professional staff hours ($7.80), 
computer usage ($2.53), and record assembly, marking, shipment, and 
storage ($0.22) produces a total of $10.55 for each compliance package 
reviewed and processed by NHTSA.
    The indirect costs include a pro rata allocation of the average 
benefits of persons employed in processing and reviewing conformity 
packages. Benefits provided by NHTSA amount to eighteen percent of the 
salary earned by its employees. Multiplying the $54,082.80 in 
professional staff costs that NHTSA incurs each year for the processing 
and review of compliance packages by eighteen percent yields a figure 
of $9,734.90.
    The indirect costs also include a pro rata allocation of the costs 
attributable to the rental and maintenance of office space and 
equipment, the use of office supplies, and other overhead items. For 
fiscal year 1998, these costs are projected to average $21,131 for each 
employee and contract support staff member working at NHTSA 
headquarters. This figure was derived by dividing $13,566,000 in 
projected headquarters costs (reached by subtracting $482,000 in field 
operating costs from total agency costs of $14,048,000) by 642 
(representing 510 full time equivalent positions that are authorized 
for NHTSA headquarters plus 132 on-site contract personnel). 
Multiplying that figure by 3.02, which represents the number of 
combined contract and professional staff-years devoted annually to the 
review and processing of compliance packages, yields a figure of 
$63,815.62. Adding this figure to $9,734.90 produces the sum of 
$73,550.52, representing the total indirect costs incurred by NHTSA in 
the review and processing of compliance packages. Dividing this amount 
by 21,000, which, as previously indicated, is the number of compliance 
packages reviewed by NHTSA in fiscal year 1997, yields $3.50 in 
indirect costs for each compliance package reviewed. Adding these 
indirect costs to the $10.55 in direct costs that NHTSA incurs in the 
review and processing of each compliance package yields a total of 
$14.05 in direct and indirect costs for

[[Page 50881]]

each compliance package reviewed by the agency.
    Based on the above factors, NHTSA is establishing $14.00 as the fee 
to recover its costs for the review and processing of a compliance 
package. This fee will have to be tendered with each compliance package 
submitted to the agency for processing.

E. Applicability of Fee to Canadian Vehicles

    As noted in the NPRM, in recent years, Canadian imports have 
accounted for a growing share of NHTSA's oversight program that is 
directed at the importation of nonconforming vehicles. In NHTSA's 
Calendar Year 1995 Report to Congress concerning this program, the 
agency stated that 15,096 of the 15,332 nonconforming vehicles that 
were permanently imported into the country during that year (or over 
98%) were from Canada. The report noted a continuing upward trend in 
the importation of noncomplying vehicles from Canada since 1993, and 
attributed that development to the exchange rate favoring the U.S. over 
the Canadian dollar.
    In past years, NHTSA has not collected the per vehicle import 
eligibility determination fee established under 49 CFR 594.8 from the 
importers of vehicles that were certified by their original 
manufacturer as complying with all applicable Canadian motor vehicle 
safety standards and that were eligible for importation under vehicle 
eligibility number VSA-1. As NHTSA explained in a final import 
eligibility decision covering Canadian-certified motor vehicles, 
published on May 13, 1997 at 62 FR 26348, the per vehicle import 
eligibility fee was never imposed on the importers of these vehicles 
because the first importer of a Canadian-certified motor vehicle paid 
the full $1560 fee that was established in 1989 to cover the agency's 
costs for an eligibility decision made on the Administrator's 
initiative. In the May 13, 1997 final decision, NHTSA rescinded VSA-1 
as the eligibility number assigned to all eligible Canadian-certified 
vehicles, and replaced it with four separate eligibility numbers (VSA-
80 through 83), based on vehicle classification and weight.
    NHTSA will collect the fee established under this rule from all 
importers submitting conformity packages to the agency, including the 
importers of Canadian-certified vehicles eligible for importation under 
VSA-80 through 83. The agency deems this action to be necessary because 
the review and processing of conformity packages submitted for Canadian 
imports have assumed an increasing share of the staff time within 
OVSC's Equipment and Imports Division and now comprise a major portion 
of the work performed by that division. The imposition of such a fee is 
also consistent with OMB's policy for Federal agencies to obtain full 
cost reimbursement from the recipients of agency services.

Effective Date

    Section 30141(e) of Title 49, U.S. Code requires the amount of fees 
imposed under section 30141(a) to be reviewed, and, if appropriate, 
adjusted by NHTSA at least every two years. It also requires that the 
fee for each fiscal year be established before the beginning of that 
year. The fee established under this final rule will first become 
effective in fiscal year 1998, which begins on October 1, 1997. NHTSA 
is meeting the requirements of section 30141(e) by publishing this 
final rule establishing the fee before that date. However, in keeping 
with the rulemaking requirements of the Administrative Procedure Act, 5 
U.S.C. 553, the final rule will not become effective until thirty days 
after its publication in the Federal Register. NHTSA will not collect 
the fee for any conformity certificates submitted before the final 
rule's effective date.

Rulemaking Analyses and Notices

1. Executive Order 12866 (Federal Regulatory Planning and Review) and 
DOT Regulatory Policies and Procedures
    This rule was not reviewed under E.O. 12866. NHTSA has analyzed 
this rule and determined that it is not ``significant'' within the 
meaning of the Department of Transportation's regulatory policies and 
procedures.
2. Regulatory Flexibility Act
    In accordance with the Regulatory Flexibility Act, NHTSA has 
evaluated the effects of this action on small entities. Based upon this 
evaluation, I certify that the amendment resulting from this rulemaking 
will not have a significant economic impact on a substantial number of 
small entities. Although most registered importers would qualify as 
small businesses within the meaning of the Regulatory Flexibility Act, 
the agency has no reason to believe that these companies could not pay 
the fee established under this rule. This fee will in all likelihood be 
passed along to the purchaser of the vehicle for which a conformity 
package is submitted to NHTSA for review. Most nonconforming vehicles 
that are imported into the United States are of very recent vintage, 
and many would be considered luxury models. Given the nominal amount of 
the fee established under this rule, especially when viewed in relation 
to the purchase price of the vehicles to which it pertains, it will not 
appreciably increase the purchase price of those vehicles and is 
unlikely to have any significant impact on their importation and sale. 
For that reason, registered importers and small businesses, small 
organizations, and small governmental units that purchase motor 
vehicles will not be significantly affected by the proposed fee. 
Accordingly, no regulatory flexibility analysis has been prepared.
3. Executive Order 12612 (Federalism)
    This action has been analyzed in accordance with the principles and 
criteria contained in Executive Order 12612, and it has been determined 
that the rule does not have sufficient Federalism implications to 
warrant preparation of a Federalism Assessment. No State laws will be 
affected.
4. National Environmental Policy Act
    The agency has considered the environmental implications of this 
rule in accordance with the National Environmental Policy Act of 1969 
and determined that the rule would not significantly affect the human 
environment.
5. Civil Justice Reform
    This rule does not have any retroactive effect. It does not repeal 
or modify any existing Federal regulations. A petition for 
reconsideration or other administrative proceeding will not be a 
prerequisite to an action seeking judicial review of this rule. This 
rule does not preempt the states from adopting laws or regulations on 
the same subject, except that it will preempt a state regulation that 
is in actual conflict with the Federal regulation or makes compliance 
with the Federal regulation impossible or interferes with the 
implementation of the Federal statute.

List of Subjects in 49 CFR Part 594

    Administrative practice and procedure, Imports, Motor vehicle 
safety.

    In consideration of the foregoing, Part 594, Schedule of Fees 
Authorized by 49 U.S.C. 30141, in Title 49 of the Code of Federal 
Regulations is amended as follows:

PART 594--[AMENDED]

    1. The authority citation for Part 594 is amended to read as 
follows:


[[Page 50882]]


    Authority: 49 U.S.C. 30141, 31 U.S.C. 9701; delegation of 
authority at 49 CFR 1.50.

    2. Section 594.5 is amended by redesignating paragraphs (g) and (h) 
as paragraphs (h) and (i), respectively, and by adding a new paragraph 
(g), to read as follows:


Sec. 594.5  Establishment and payment of fees.

* * * * *
    (g) A fee for the review and processing of a conformity certificate 
shall be submitted with each certificate of conformity furnished to the 
Administrator.
    3. A new section 594.10 is added to part 594, to read as follows:


Sec. 594.10  Fee for review and processing of conformity certificate.

    (a) Each registered importer shall pay a fee based on the agency's 
direct and indirect costs for the review and processing of each 
certificate of conformity furnished to the Administrator pursuant to 
Sec. 591.7(e) of this chapter.
    (b) The direct costs attributable to the review and processing of a 
certificate of conformity include the estimated cost of contract and 
professional staff time, computer usage, and record assembly, marking, 
shipment and storage costs.
    (c) The indirect costs attributable to the review and processing of 
a certificate of conformity include a pro rata allocation of the 
average benefits of persons employed in reviewing and processing the 
certificates, and a pro rata allocation of the costs attributable to 
the rental and maintenance of office space and equipment, the use of 
office supplies, and other overhead items.
    (d) For certificates of conformity submitted on and after October 
29, 1997, the fee is $14.00.
* * * * *
    Issued on: September 23, 1997.
Kenneth N. Weinstein,
Associate Administrator for Safety Assurance.
[FR Doc. 97-25665 Filed 9-26-97; 8:45 am]
BILLING CODE 4910-59-P