Document ID: NHTSA-2007-0112-0001
Agency: nhtsa
Document Type: Proposed Rule
Title: Civil Penalties
Posted Date: 2007-09-26T04:00Z

[Federal Register: September 26, 2007 (Volume 72, Number 186)]
[Proposed Rules]               
[Page 54635-54638]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26se07-39]                         

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 578

[Docket No. NHTSA-2007-28445; Notice 1]
RIN 2127-AK07

 
Civil Penalties

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

ACTION: Notice of proposed rulemaking.

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

DATES: Comments on the proposal are due October 26, 2007.
    Proposed effective date: 30 days after date of publication of the 
final rule in the Federal Register.

ADDRESSES: You may submit comments [identified by DOT Docket ID Number 
NHTSA-2007-28445] by any of the following methods:
    If filing comments by September 27, 2007, please use:
     Web Site: http://dms.dot.gov. Follow the instructions for 

submitting comments on the Department of Transportation Docket 
Management System electronic docket site. No electronic submissions 
will be accepted between September 28, 2007, and October 1, 2007.
    If filing comments on or after October 1, 2007, use:
     Federal eRulemaking Portal: Go to http://www.regulations.gov.
 Follow the online instructions for submitting 

comments.
    Alternatively, you can file comments using the following methods:
     Mail: Docket Management Facility: U.S. Department of 
Transportation, 1200 New Jersey Avenue, SE., West Building Ground 
Floor, Room W12-140, Washington, DC 20590-0001
     Hand Delivery or Courier: West Building Ground Floor, Room 
W12-140, 1200 New Jersey Avenue, SE., between 9 a.m. and 5 p.m. ET, 
Monday through Friday, except Federal holidays.
     Fax: 202-493-2251.
    Instructions: For detailed instructions on submitting comments and 
additional information on the rulemaking process, see the Public 
Participation heading of the Supplementary Information section of this 
document. Note that all comments received will be posted without change 
to http://www.dms.dot.gov or http://www.regulations.gov, including any 
personal information provided. Please see the Privacy Act heading 
below.
    Privacy Act: Anyone is able to search the electronic form of all 
comments received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review DOT's 
complete Privacy Act Statement in the Federal Register published on 
April 11, 2000 (65 FR 19477-78).
    Docket: For access to the docket to read background documents or 
comments received, go to http://dms.dot.gov until September 27, 2007, 

or the street address listed above. The DOT docket may be offline at 
times between September 28 through September 30 to migrate to the 
Federal Docket Management System (FDMS). On October 1, 2007, the 
internet access to the docket will be at http://www.regulations.gov. 

Follow the online instructions for accessing the dockets.

FOR FURTHER INFORMATION CONTACT: Michael Kido, Office of Chief Counsel, 
NHTSA, telephone (202) 366-5263, facsimile (202) 366-3820, 1200 New 
Jersey Avenue, SE., Washington, DC 20590.

SUPPLEMENTARY INFORMATION: 

Background

    In order to preserve the remedial impact of civil penalties and to 
foster compliance with the law, the Federal Civil Monetary Penalty 
Inflation Adjustment Act of 1990 (28 U.S.C. 2461, Notes, Pub. L. 101-
410), as amended by the Debt Collection Improvement Act of 1996 (Pub. 
L. 104-134) (referred to collectively as the ``Adjustment Act'' or, in 
context, the ``Act''), requires us and other Federal agencies to adjust 
civil penalties for inflation. Under the Adjustment Act, following an 
initial adjustment that was capped by the Act, these agencies must make 
further adjustments, as warranted, to the amounts of penalties in 
statutes they administer at least once every four years.
    NHTSA's initial adjustment of civil penalties under the Adjustment 
Act was published on February 4, 1997. 62 FR 5167. At that time, we 
codified the penalties under statutes administered by NHTSA, as 
adjusted, in 49 CFR Part 578, Civil Penalties. On July 14, 1999, we 
further adjusted certain penalties. 64 FR 37876. In 2000, the 
Transportation Recall Enhancement, Accountability, and Documentation 
(``TREAD'') Act increased the maximum penalties under the National 
Traffic and Motor Vehicle Safety Act as amended (sometimes referred to 
as the ``Motor Vehicle Safety Act''). We codified those amendments in 
Part 578 on November 14, 2000. 65 FR 68108. On August 7, 2001, we also 
adjusted certain penalty amounts pertaining to odometer tampering and 
disclosure requirements and vehicle theft prevention. 66 FR 41149. On 
September 28, 2004, we adjusted the maximum penalty amounts for a 
related series of violations involving the agency's provisions 
governing vehicle safety, bumper standards, and consumer information. 
69 FR 57864. On September 8, 2005, the agency adjusted its penalty 
amounts for violations of its

[[Page 54636]]

vehicle theft protection standards and those involving a related series 
of odometer-related violations. 70 FR 53308. Most recently, on May 16, 
2006, the agency adjusted its penalty amounts for violations of the 
Motor Vehicle Safety Act, as amended, and codified amendments made to 
the Motor Vehicle Safety Act by the Safe, Accountable, Flexible, 
Efficient Transportation Equity Act--A Legacy for Users (SAFETEA-LU). 
119 Stat. 1144, 1942-43 (Aug. 10, 2005).
    We have reviewed the civil penalty amounts in 49 CFR Part 578 and 
propose in this notice to adjust certain penalties under the Adjustment 
Act. Those civil penalties that we are proposing to adjust address 
penalty amounts pertaining to single violations involving (1) odometer 
tampering and disclosure and (2) administrative provisions of the 
automobile fuel economy law.

Method of Calculation--Proposed Adjustments

    Under the Adjustment Act, we first calculate the inflation 
adjustment for each applicable civil penalty by arithmetically 
increasing the maximum civil penalty amount per violation by a cost-of-
living adjustment. Section 5(b) of the Adjustment Act defines the 
``cost-of-living'' adjustment as:
    The percentage (if any) for each civil monetary penalty by which --
    (1) The Consumer Price Index for the month of June of the calendar 
year preceding the adjustment exceeds.
    (2) The Consumer Price Index for the month of June of the calendar 
year in which the amount of such civil monetary penalty was last set or 
adjusted pursuant to law.
    Since the proposed adjustment is intended to be effective before 
December 31, 2007, the ``Consumer Price Index [CPI] for the month of 
June of the calendar year preceding the adjustment'' would be the CPI 
for June 2006.\1\ This figure, based on the Adjustment Act's 
requirement of using the CPI ``for all-urban consumers published by the 
Department of Labor'' is 607.8.\2\ The penalty amounts that NHTSA 
proposes to adjust for single violations of both the agency's odometer 
tampering and disclosure requirements and certain administrative 
provisions of the Energy Policy and Conservation Act of 1975 as amended 
and recodified (EPCA), which generally regulates fuel economy, were 
last set in 1997 based on the Adjustment Act's requirements. The CPI 
figure for June 1997 is 480.2. Accordingly, the factor that we are 
using in calculating the proposed increases is 1.27 (607.8/480.2) for 
both penalty amounts.
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    \1\ We note that in the event that this rule becomes effective 
in 2008, the agency would use the CPI for June 2007 to calculate 
this adjustment.
    \2\ Individuals interested in deriving the CPI figures used by 
the agency may visit the Department of Labor's Consumer Price Index 
Home Page at http://www.bls.gov/cpi/home.htm. Scroll down to ``Most 

Requested Statistics'' and select the ``All Urban Consumers (Current 
Series)'' option, select the ``U.S. ALL ITEMS 1967=100--
CUUR0000AA0'' box, and click on the ``Retrieve Data'' button.
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    Second, using this inflation factor, increases above the current 
maximum penalty levels are calculated and are then subject to a 
specific rounding formula set forth in Section 5(a) of the Adjustment 
Act. 28 U.S.C. 2461, Notes. Under that formula:
    Any increase shall be rounded to the nearest
    (1) Multiple of $10 in the case of penalties less than or equal to 
$100;
    (2) Multiple of $100 in the case of penalties greater than $100 but 
less than or equal to $1,000;
    (3) Multiple of $1,000 in the case of penalties greater than $1,000 
but less than or equal to $10,000;
    (4) Multiple of $5,000 in the case of penalties greater than 
$10,000 but less than or equal to $100,000;
    (5) Multiple of $10,000 in the case of penalties greater than 
$100,000 but less than or equal to $200,000; and
    (6) Multiple of $25,000 in the case of penalties greater than 
$200,000.

Change to Maximum Penalty (Single Violation) Under the Odometer 
Tampering and Disclosure Provision, 49 U.S.C. Chapter 327 (49 CFR 
578.6(f)(1))

    The maximum civil penalty for a single violation of the odometer 
tampering and disclosure statutory provisions or a regulation 
prescribed thereunder is $2,200, as specified in 49 CFR 578.6(f)(1). 
See 62 FR 5167. The underlying statutory civil penalty provision is 
contained in 49 U.S.C. 32709(a). Applying the appropriate inflation 
factor (1.27) raises the $2,200 figure to $2,794, an increase of $594. 
Under the rounding formula, any increase in a penalty's amount shall be 
rounded to the nearest multiple of $1,000 in the case of penalties 
greater than $1,000 but less than or equal to $10,000. In this case, 
the increase would be $1,000. Accordingly, we propose that Section 
578.6(f)(1) be amended to increase the maximum civil penalty from 
$2,200 to $3,200 for a single violation.

Change to Maximum Penalty (Single Violation) Under the Automobile Fuel 
Economy Provisions, 49 U.S.C. Chapter 329 (49 CFR 578.6(h)(1))

    The maximum civil penalty for a single violation of certain 
administrative provisions of EPCA is $11,000, as specified in 49 CFR 
578.6(h)(1). See 62 FR 5167. Specifically, Section 578.6(h)(1) applies 
a maximum penalty of $11,000 for a violation of 49 U.S.C. 32911(a), 
which applies generally to violations of 49 U.S.C. Chapter 329, 
excluding 49 U.S.C. 32902 (average fuel economy standards), 32903 
(credits for exceeding average fuel economy standards), 32908(b) (fuel 
economy labeling requirements), 32917(b) (executive agency fleet 
average fuel economy), and 32918 (retrofit devices). Section 32911(a) 
applies, for example, to inaccurate reports to NHTSA under 49 U.S.C. 
32907 and regulations promulgated thereunder. The underlying statutory 
civil penalty provision is 49 U.S.C. 32912(a). Applying the appropriate 
inflation factor (1.27) raises the $11,000 figure to $13,970, an 
increase of $2,970. Under the rounding formula, any increase in a 
penalty's amount shall be rounded to the nearest multiple of $5,000 in 
the case of penalties greater than $10,000 but less than or equal to 
$100,000. In this case, the increase would be $5,000. Accordingly, we 
propose that Sec.  578.6(h)(1) be amended to increase the maximum civil 
penalty from $11,000 to $16,000 for a single violation.

Effective Date

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

Request for Comments

How Do I Prepare and Submit Comments?

    Your comments must be written and in English. To ensure that your 
comments are correctly filed in the Docket, please include the docket 
number of this document in your comments.
    Your comments must not be more than 15 pages long (49 CFR 553.21). 
We established this limit to encourage you to write your primary 
comments in a concise fashion. However, you may attach necessary 
additional documents to your comments. There is no limit on the length 
of the attachments.
    Please submit two copies of your comments, including the 
attachments, to Docket Management at the beginning

[[Page 54637]]

of this document, under ADDRESSES. You may also submit your comments 
electronically to the docket following the steps outlined under 
ADDRESSES.

How Can I Be Sure That My Comments Were Received?

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

How Do I Submit Confidential Business Information?

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

Will the Agency Consider Late Comments?

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

How Can I Read the Comments Submitted by Other People?

    You may read the comments received by Docket Management at the 
address and times given near the beginning of this document under 
ADDRESSES.
    You may also see the comments on the Internet. To read the comments 
on the Internet, take the following steps:
    (1) Go to the Docket Management System (DMS) Web page of the 
Department of Transportation (http://dms.dot.gov/).

    (2) On that page, click on ``search.''
    (3) On the next page (http://dms.dot.gov/search/), type in the 

four-digit docket number shown at the heading of this document. 
Example: if the docket number were ``NHTSA-2006-1234,'' you would type 
``1234.''
    (4) After typing the docket number, click on ``search.''
    (5) The next page contains docket summary information for the 
docket you selected. Click on the comments you wish to see.
    You may download the comments. The comments are imaged documents, 
in either TIFF or PDF format. Please note that even after the comment 
closing date, we will continue to file relevant information in the 
Docket as it becomes available. Further, some people may submit late 
comments. Accordingly, we recommend that you periodically search the 
Docket for new material.

Rulemaking Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

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

Regulatory Flexibility Act

    We have also considered the impacts of this notice under the 
Regulatory Flexibility Act. I certify that a final rule based on this 
proposal will not have a significant economic impact on a substantial 
number of small entities. The following provides the factual basis for 
this certification under 5 U.S.C. 605(b). The proposed amendments 
almost entirely potentially affect manufacturers of motor vehicles and 
motor vehicle equipment.
    The Small Business Administration's regulations define a small 
business in part as a business entity ``which operates primarily within 
the United States.'' 13 CFR 121.105(a). SBA's size standards were 
previously organized according to Standard Industrial Classification 
(SIC) Codes. SIC Code 336211 ``Motor Vehicle Body Manufacturing'' 
applied a small business size standard of 1,000 employees or fewer. SBA 
now uses size standards based on the North American Industry 
Classification System (NAICS), Subsector 336--Transportation Equipment 
Manufacturing, which provides a small business size standard of 1,000 
employees or fewer for automobile manufacturing businesses. Other motor 
vehicle-related industries have lower size requirements that range 
between 500 and 750 employees.
    Many small businesses are subject to the penalty provisions of the 
odometer laws in 49 U.S.C. Chapter 327. Some small businesses are 
subject to the EPCA provisions in 49 U.S.C. Chapter 329 and therefore 
may be affected by the adjustments that this NPRM proposes to make. As 
noted throughout this preamble, this proposed rule would increase only 
the maximum penalty amounts that the agency could obtain for a single 
violation of the odometer tampering and disclosure provisions and 
administrative provisions of EPCA. The proposed rule does not set the 
amount of penalties for any particular violation or series of 
violations. Under the odometer laws, the applicable penalty provision 
requires the agency to take into account the ability to pay and any 
effect on the ability to continue doing business when determining the 
appropriate civil penalty in an individual case. See 49 U.S.C. 
32709(a)(3)(B). Although EPCA does not provide for consideration of 
business size, it contains a provision for the compromise or remittitur 
of penalties for violations of 49 U.S.C. 32911(a). See 49 U.S.C. 
32912(a) and 32913(a). The agency would also consider the size of a 
business under its civil penalty policy when determining the 
appropriate civil penalty amount for violations of 49 U.S.C. 32701 et 
seq. or 49 U.S.C. 32911(a). See 62 FR 37115 (July 10, 1997) (NHTSA's 
civil penalty policy under the Small Business Regulatory Enforcement 
Fairness Act (SBREFA)). The penalty adjustments that are being proposed 
would not affect our civil penalty policy under SBREFA.

[[Page 54638]]

    Since this proposed regulation would not establish penalty amounts, 
this proposal will not have a significant economic impact on small 
businesses.
    Small organizations and governmental jurisdictions would not be 
significantly affected as the price of motor vehicles and equipment 
ought not change as the result of this proposed rule. As explained 
above, this action is limited to the proposed adoption of a statutory 
directive, and has been determined to be not ``significant'' under the 
Department of Transportation's regulatory policies and procedures.

Executive Order 13132 (Federalism)

    Executive Order 13132 requires NHTSA to develop an accountable 
process to ensure ``meaningful and timely input by State and local 
officials in the development of regulatory policies that have 
federalism implications.'' ``Policies that have federalism 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.'' Under Executive Order 13132, the agency may not issue a 
regulation with Federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute, unless 
the Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments, the agency 
consults with State and local governments, or the agency consults with 
State and local officials early in the process of developing the 
proposed regulation.
    This proposed rule will not 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, as specified in Executive Order 13132. 
The reason is that this proposed rule would apply to motor vehicle 
manufacturers, and not to the States or local governments. Thus, the 
requirements of Section 6 of the Executive Order do not apply.

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 proposed rule will not have a $100 
million effect, no Unfunded Mandates assessment will be prepared.

National Environmental Policy Act

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

Executive Order 12778 (Civil Justice Reform)

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

Paperwork Reduction Act

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

List of Subjects in 49 CFR Part 578

    Imports, Motor vehicle safety, Motor vehicles, Rubber and Rubber 
Products, Tires, Penalties.

PART 578--CIVIL AND CRIMINAL PENALTIES

    In consideration of the foregoing, 49 CFR Part 578 would be amended 
as set forth below.
    1. The authority citation for 49 CFR Part 578 would continue to 
read as follows:

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

    2. Section 578.6 would be amended by revising paragraphs (f)(1) and 
(h)(1) 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) A person that violates 
49 U.S.C. Chapter 327 or a regulation prescribed or order issued 
thereunder is liable to the United States Government for a civil 
penalty of not more than $3,200 for each violation. A separate 
violation occurs for each motor vehicle or device involved in the 
violation. The maximum civil penalty under this paragraph for a related 
series of violations is $130,000.
* * * * *
    (h) Automobile fuel economy. (1) A person that violates 49 U.S.C. 
32911(a) is liable to the United States Government for a civil penalty 
of not more than $16,000 for each violation. A separate violation 
occurs for each day the violation continues.
* * * * *

    Issued on: September 21, 2007.
Anthony M. Cooke,
Chief Counsel.
[FR Doc. E7-19019 Filed 9-25-07; 8:45 am]

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