[Federal Register Volume 70, Number 173 (Thursday, September 8, 2005)]
[Rules and Regulations]
[Pages 53308-53311]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-17747]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 578

[Docket No. NHTSA-05-21161; Notice 2]
RIN 2127-AJ62


Civil Penalties

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

ACTION: Final rule.

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

DATES: This rule is effective on October 11, 2005. If you wish to 
submit a petition for reconsideration of this rule, your petition must 
be received by October 24, 2005.

ADDRESSES: Petitions for reconsideration should refer to the docket 
number above and be submitted to: Administrator, Room 5220, National 
Highway Traffic Safety Administration, 400 Seventh Street, SW., 
Washington, DC 20590.
    See the SUPPLEMENTARY INFORMATION portion of this document (Section 
VIII; Rulemaking Analyses and Notice) for DOT's Privacy Act Statement 
regarding documents submitted to the agency's dockets.

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

SUPPLEMENTARY INFORMATION:

[[Page 53309]]

Background

    In order to preserve the remedial impact of civil penalties and to 
foster compliance with the law, the Federal Civil Monetary Penalty 
Inflation Adjustment Act of 1990 (28 U.S.C. 2461 Notes, Pub. L. 101-
410), as amended by the Debt Collection Improvement Act of 1996 (Pub. 
L. 104-134) (referred to collectively as the ``Adjustment Act'' or, in 
context, the ``Act''), requires us and other Federal agencies to 
regularly adjust civil penalties for inflation. Under the Adjustment 
Act, following an initial adjustment that was capped by the Act, these 
agencies must make further adjustments, as warranted, to the amounts of 
penalties in statutes they administer at least once every four years. 
For further details on this adjustment process, the statutory formula, 
and the agency's history of penalty adjustments, we refer readers to 
our May 25, 2005 Notice of Proposed Rulemaking (``NPRM'') at 70 FR 
30051.

Revision of Civil Penalties Prescribed by Section 578.6

    In the NPRM, we reviewed penalties in 49 CFR 578.6, calculated 
updated penalties using the appropriate Consumer Price Index figures, 
considered the nearest higher multiple specified in the rounding 
provisions, and proposed that the penalties discussed below be 
increased.
    We received one comment on our proposal from a private individual 
who recommended that the agency impose no penalty under $1,000,000 and 
that a maximum penalty of $5,000,000 be imposed on violators of the 
provisions that we proposed to adjust. As we explained in our earlier 
notice, the amounts by which the agency can adjust its civil penalties 
are specifically prescribed by statute. Modifying our proposal as 
suggested in this comment would be inconsistent with the penalty 
provisions in the applicable statutes and with the Adjustment Act. 
Therefore, we are not making the change suggested by the commenter. 
Instead, we are adjusting the penalties as proposed in our NPRM and as 
addressed below.

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

    The agency last adjusted its civil penalties for violations of 
odometer tampering and disclosure requirements under 49 U.S.C. Chapter 
327 in 2001. Applying the formulation as set out in the NPRM, the 
adjusted civil penalty amount for violations of 49 CFR 578.6(f)(1) is 
raised from $120,000 to $130,000. As explained in the NPRM, the maximum 
civil penalty amount for single violations of 49 CFR 578.6(f)(1) 
remains at $2,200 because the inflation-adjusted figure is not yet at a 
level to be increased. See 70 FR at 30052. For similar reasons, the 
penalty amount prescribed in Section 578.6(f)(2) for a violation that 
involves the intent to defraud (the greater of three times actual 
damages or $2,000) remains the same.

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

    The civil penalties related to vehicle theft protection were last 
adjusted in 2001. Applying the appropriate inflation factor as 
described in the NPRM raises the civil penalty amount in Section 
578.6(g)(1) from $300,000 to $325,000. Id. Similarly, applying the same 
statutorily mandated formula to Section 578.6(g)(2) yields an increase 
from $120,000 to $130,000. Maximum penalties for single violations of 
49 U.S.C. 33114(a)(1)-(4) as provided under Section 578.6(g)(1) will 
remain at $1,100 because the inflation-adjusted figure is not yet at a 
level to be increased.

Other Issues--Technical Correction

    The agency is also amending the language in 49 CFR 578.6(g)(2) to 
achieve consistency within the text of the regulation by capitalizing 
the word ``Government'' after ``United States'' to reflect that word's 
usage within other parts of Section 578.6.

Rulemaking Analyses and Notices

Federal Civil Monetary Penalty Inflation Adjustment Act of 1990 (As 
Amended)

    As earlier discussed, the statutory basis for this final rule is 
the Federal Civil Monetary Penalty Inflation Adjustment Act of 1990 (28 
U.S.C. 2461 Notes, Pub. L. 101-410), as amended by the Debt Collection 
Improvement Act of 1996 (Pub. L. 104-34) (referred to collectively as 
the ``Adjustment Act'' or, in context, the ``Act''), which provides for 
agencies to adjust civil penalties for inflation, as warranted, at 
least once every four years. In 2001, the NHTSA last adjusted the civil 
penalties for violations of odometer tampering and disclosure 
requirements under 49 U.S.C. Chapter 327 and the civil penalties 
related to vehicle theft protection under 49 U.S.C. Chapter 331. Since 
four years have passed since 2001, under the Adjustment Act, we are now 
adjusting these civil penalties for inflation.

Executive Order 12866 and DOT Regulatory Policies and Procedures

    Executive Order 12866, ``Regulatory Planning and Review,'' provides 
for making determinations whether a regulatory action is 
``significant'' and therefore subject to OMB review and to the 
requirements of the Executive Order. The Order defines a ``significant 
regulatory action'' as one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or Tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    NHTSA has considered the impact of this final rule under E.O. 12866 
and the Department of Transportation's regulatory policies and 
procedures and has determined that it is not significant. This action 
is limited to the adoption of statutorily mandated adjustments of civil 
penalties under statutes that the agency enforces, raises no novel 
issues, and does not otherwise interfere with other actions. This final 
rule does not impose any costs that would exceed the $100 million 
threshold or otherwise materially impact entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof. The agency has therefore determined this final rule to be not 
``significant'' under the Department of Transportation's regulatory 
policies and procedures.

Regulatory Flexibility Act

    We have also considered the impacts of this notice under the 
Regulatory Flexibility Act. I certify that this rule will not have a 
significant economic impact on a substantial number of small entities. 
The following provides the factual basis for this certification under 5 
U.S.C. 605(b).
    The Small Business Administration's regulations define a small 
business in part as a business entity ``which operates primarily within 
the United States.'' 13 CFR 121.105(a). SBA's size standards were 
previously organized according to Standard Industrial Classification 
(``SIC'') Codes. SIC Code 336211 ``Motor Vehicle Body Manufacturing'' 
applied a small business size standard of 1,000 employees or fewer. SBA 
now uses size standards based on the North American

[[Page 53310]]

Industry Classification System (``NAICS''), Subsector 336--
Transportation Equipment Manufacturing, which provides a small business 
size standard of 1,000 employees or fewer for automobile manufacturing 
businesses. Other motor vehicle-related industries have lower size 
requirements that range between 500 and 750 employees.\1\
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    \1\ For example, according to the new SBA coding system, 
businesses that manufacture truck trailers, travel trailers/campers, 
carburetors, pistons, piston rings, valves, vehicular lighting 
equipment, motor vehicle seating/interior trim, and motor vehicle 
stamping qualify as small businesses if they employ 500 or fewer 
employees. Similarly, businesses that manufacture gasoline engines, 
engine parts, electrical and electronic equipment (non-vehicle 
lighting), motor vehicle steering/suspension components (excluding 
springs), motor vehicle brake systems, transmissions/power train 
parts, motor vehicle air-conditioning, and all other motor vehicle 
parts qualify as small businesses if they employ 750 or fewer 
employees. See http://www.sba.gov/size/sizetable.pdf for further 
details.
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    Many small businesses are subject to the penalty provisions of 49 
U.S.C. Chapters 327 (odometer disclosure and tampering) and, to a 
lesser extent, 331 (vehicle theft protection). Consequently, these 
entities may be affected by the adjustments that this rule makes. For 
example, based on comprehensive reporting pursuant to the early warning 
reporting (``EWR'') rule under the Motor Vehicle Safety Act, 49 CFR 
part 579, of the more than 60 light vehicle manufacturers reporting, 
over half are small businesses. Also, there are other, relatively low 
production light vehicle manufacturers that are not subject to 
comprehensive EWR reporting. Furthermore, there are about 130 
registered importers.
    As noted throughout this preamble, this rule only increases the 
maximum penalty amounts that the agency could obtain for violations of 
provisions related to the odometer and theft protection provisions 
enforced by NHTSA. The rule does not set the amount of penalties for 
any particular violation or series of violations. Under the vehicle 
theft protection statute, the penalty provision requires the agency to 
take into account the size of a business when determining the 
appropriate penalty in an individual case. See 49 U.S.C. 33115(a)(3) 
(vehicle theft protection--entity's size shall be considered). While 
the odometer disclosure and tampering statutory penalty provision does 
not specifically require the agency to consider the size of the 
business, the statute requires the agency to consider the impact of the 
penalty on an entity's ability to continue doing business. 49 U.S.C. 
32709(a)(3)(B). The agency would also consider business size under its 
civil penalty policy when determining the appropriate civil penalty 
amount. See 62 FR 37115 (July 10, 1997) (NHTSA's civil penalty policy 
under the Small Business Regulatory Enforcement Fairness Act 
(``SBREFA'')). The penalty adjustments in the rule would not affect our 
civil penalty policy under SBREFA. As a matter of policy, we intend to 
continue to consider the appropriateness of the penalty amount to the 
size of the business charged.
    Since this regulation does not establish penalty amounts, the rule 
will not have a significant economic impact on small businesses.
    Further, small organizations and governmental jurisdictions would 
not be significantly affected as the price of motor vehicles and 
equipment ought not to change as the result of this rule. As explained 
above, this action is limited to the adoption of a statutory directive, 
and has been determined to be not ``significant'' under the Department 
of Transportation's regulatory policies and procedures.

Executive Order 13132 (Federalism)

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

Unfunded Mandates Reform Act of 1995

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

National Environmental Policy Act

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

Executive Order 12988 (Civil Justice Reform)

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

Paperwork Reduction Act

    NHTSA has determined that this final rule will not impose any 
``collection of information'' burdens on the public, within the meaning 
of the Paperwork Reduction Act of 1995. This rulemaking action will not 
impose any filing or record keeping requirements on any manufacturer or 
any other party.

Privacy Act

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

List of Subjects in 49 CFR Part 578

    Motor vehicle safety, Penalties.

[[Page 53311]]


0
In consideration of the foregoing, 49 CFR part 578 is amended as set 
forth below.

PART 578--CIVIL AND CRIMINAL PENALTIES

0
1. The authority citation for 49 CFR part 578 continues to read as 
follows:

    Authority: Pub. L. 101-410, Pub. L. 104-134, Pub. L. 106-414, 49 
U.S.C. 30165, 30170, 30505, 32308, 32309, 32507, 32709, 32710, 
32912, and 33115; delegation of authority at 49 CFR 1.50.

0
2. Section 578.6 is amended by revising, in paragraph (f)(1), the third 
sentence; revising, in paragraph (g)(1), the third sentence; and 
revising paragraph (g)(2), to read as follows:


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

* * * * *
    (f) Odometer tampering and disclosure. (1) * * * The maximum civil 
penalty under this paragraph for a related series of violations is 
$130,000.
* * * * *
    (g) Vehicle theft protection. (1) * * * The maximum penalty under 
this paragraph for a related series of violations is $325,000.
    (2) A person that violates 49 U.S.C. 33114(a)(5) is liable to the 
United States Government for a civil penalty of not more than $130,000 
a day for each violation.
* * * * *

    Issued on: September 1, 2005.
Jacqueline Glassman,
Deputy Administrator.
[FR Doc. 05-17747 Filed 9-7-05; 8:45 am]
BILLING CODE 4910-59-P