Document ID: NHTSA-2012-0131-0003
Agency: nhtsa
Document Type: Rule
Title: Civil Penalties
Posted Date: 2012-11-27T05:00Z

[Federal Register Volume 77, Number 228 (Tuesday, November 27, 2012)]
[Rules and Regulations]
[Pages 70710-70713]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-28694]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 578

[Docket No. NHTSA-2012-0131; Notice 2]
RIN 2127-AL16

Civil Penalties

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

ACTION: Final rule.

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SUMMARY: This document increases the maximum civil penalty amounts for 
violations of motor vehicle safety requirements for the National 
Traffic and Motor Vehicle Safety Act, as amended, and violations of 
bumper standards and consumer information provisions. Specifically, 
this increases the maximum civil penalty amounts for single violations 
of motor vehicle safety requirements, a series of related violations of 
school bus and equipment safety requirements, a series of related 
violations of bumper standards, and a series of related violations of 
consumer information regarding crashworthiness and damage 
susceptibility requirements. 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 December 27, 2012.

ADDRESSES: Any petitions for reconsideration should refer to the docket 
number of this document and be submitted to: Administrator, National 
Highway Traffic Safety Administration, 1200 New Jersey Avenue SE, West 
Building, Fourth Floor, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Matthew Weisman, Office of Chief 
Counsel, NHTSA, telephone (202) 366-5834, facsimile (202) 366-3820, 
1200 New Jersey Ave, SE., Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

I. 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. Thereafter, we adjusted 
certain penalties based on the Adjustment Act and codified others based 
on other laws including the Transportation Recall Enhancement, 
Accountability, and Documentation Act.
    On May 16, 2006, NHTSA last adjusted the maximum civil penalty for 
a single violation of the Motor Vehicle Safety Act, sections 30112, 
30115, 30117 through 30122, 30123, 30125(c), 30127, or 30141 through 
30147 of Title 49 of the United States Code or a regulation thereunder, 
as specified in 49 CFR 578.6(a)(1) from $5,000 to $6,000. 71 FR 28279. 
At the same time, the agency adjusted the maximum civil penalty for a 
single violation of the Motor Vehicle Safety Act, section 30166 of 
Title 49 of the United States Code or a regulation thereunder, to 
$6,000.
    On February 10, 2010, NHTSA last adjusted the maximum civil penalty 
for a related series of violations of the Motor Vehicle Safety Act as 
amended involving school buses and school bus equipment, section 
30112(a)(1) as it involves school buses and school bus equipment and 
section 30112(a)(2) of Title 49 of the United States Code, as specified 
in 49 CFR 578.6(a)(2) from $15,000,000 to $16,650,000. 75 FR 5246.
    Also on February 10, 2010, NHTSA last adjusted the maximum civil 
penalty for a related series of violations of bumper standards, section 
32506 of Title 49 of the United States Code, as specified in 49 CFR 
578.6(c)(2) from $1,025,000 to $1,175,000. 75 FR 5246. In addition, on 
February 10, 2010, NHTSA last adjusted the maximum civil penalty for a 
related series of violations of consumer information requirements 
regarding crashworthiness and damage susceptibility, section 32308 of 
Title 49 of the United States Code, as specified in 49 CFR 578.6(d)(1) 
from $500,000 to $575,000. 75 FR 5246.
    We have reviewed the civil penalty amounts in 49 CFR part 578 and 
on September 7, 2012, published a NPRM initiating this rulemaking to 
adjust

[[Page 70711]]

certain penalties under the Adjustment Act. 77 FR 55175.

II. Method of Calculation--Adjustments

    Under the Adjustment Act, we determine the inflation adjustment for 
each applicable civil penalty by increasing the maximum civil penalty 
amount per violation by a cost-of-living adjustment, and then applying 
a rounding factor. 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 adjustment is intended to be effective before December 
31, 2012, the ``Consumer Price Index [CPI] for the month of June of the 
calendar year preceding the adjustment'' would be the CPI for June 
2011. This figure, based on the Adjustment Act's requirement of using 
the CPI ``for all-urban consumers published by the Department of 
Labor'' is 676.162. The penalty amounts that NHTSA is adjusting based 
on the Adjustment Act's requirements were last set in 2006 for a single 
violation of the Motor Vehicle Safety Act, and in 2010 for a series of 
related violations of school bus safety requirements, a series of 
related violations of bumper standards, and a series of related 
violations of consumer information requirements regarding 
crashworthiness and damage susceptibility. The CPI figure for June of 
2006 is 607.8 and June of 2010 is 652.926
    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 ``CPI 
Databases'', ``All Urban Consumers (Current Series)'', and click on 
``Top Picks''. Next, select the ``U.S. ALL ITEMS 1967=100--
CUUR0000AA0'' box, and click on the ``Retrieve Data'' button.
    Accordingly, the factors that we are using in calculating the 
increases are 1.11 (676.162/607.8) for a single Motor Vehicle Safety 
Act violation and 1.04 (676.162/652.926) for a related series of Motor 
Vehicle Safety Act violations pertaining to school buses or school bus 
equipment, as well as for a series of related violations of bumper 
standards, and a series of related violations of consumer information 
requirements. Using these inflation factors, calculated increases under 
these adjustments 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.

III. Changes to Maximum Penalties Under the Motor Vehicle Safety Act, 
49 U.S.C. Chapter 301

Changes to 49 CFR 578.6(a)(1), (a)(3)

    The maximum civil penalty for a violation of any of sections 30112, 
30115, 30117 through 30122, 30123(a), 30125(c), 30127, or 30141 through 
30147 of Title 49 of the United States Code or a regulation prescribed 
under any of those sections is $6,000, as specified in 49 CFR 
578.6(a)(1). The underlying statutory civil penalty provision is 49 
U.S.C. 30165(a)(1). Applying the appropriate inflation factor (1.11) to 
the Adjustment Act calculation raises the $6,000 figure to $6,679, an 
increase of $679. Under the rounding formula, any increase in a 
penalty's amount shall be rounded to the nearest multiple of $1,000. In 
this case, the increase would be $1,000. Accordingly, NHTSA is amending 
Section 578.6(a)(1) to increase the maximum civil penalty from $6,000 
to $7,000 for each violation.
    The maximum civil penalty for a violation of section 30166 of Title 
49 of the United States Code or a regulation prescribed under that 
section is $6,000, as specified in 49 CFR 578.6(a)(3). The underlying 
statutory civil penalty provision is 49 U.S.C. 30165(a)(3). Applying 
the appropriate inflation factor (1.11) to the Adjustment Act 
calculation raises the $6,000 figure to $6,679, an increase of $679. 
Under the rounding formula, any increase in a penalty's amount shall be 
rounded to the nearest multiple of $1,000. In this case, the increase 
would be $1,000. Accordingly, NHTSA is amending Section 578.6(a)(3) to 
increase the maximum civil penalty from $6,000 to $7,000 per violation 
per day.

Change to 49 CFR 578.6(a)(2)

    The maximum civil penalty for a series of related violations of 
section 30112(a)(1) of Title 49 of the United States Code involving 
school buses or school bus equipment, or of the prohibition on school 
system purchases and leases of 15 passenger vans as specified in 
30112(a)(2) of Title 49 of the United States Code is $16,650,000, as 
codified in 49 CFR 578.6(a)(2). The underlying statutory civil penalty 
provision is 49 U.S.C. 30165(a)(2). Applying the appropriate inflation 
factor (1.04) to the Adjustment Act calculation raises the $16,650,000 
figure to $17,242,531, an increase of $592,531. Applying the rounding 
rules, which instruct that increases be rounded to the closest $25,000, 
produces an increase of $600,000. Accordingly, NHTSA is increasing the 
maximum penalty under Section 578.6(a)(2) to $17,250,000.

Change to Maximum Penalty Under 49 U.S.C. 32506(a) (49 CFR 578.6(c))

    The maximum civil penalty for a series of related violations of 
bumper prohibitions, section 32506(a) of Title 49 of the United States 
Code, is $1,175,000 as specified in 49 CFR 578.6(c). The underlying 
statutory civil penalty provision is 49 U.S.C. 32507. Applying the 
appropriate inflation factor (1.04) to the Adjustment Act calculation 
raises the $1,175,000 figure to $1,216,815, an increase of $41,815. 
Applying the rounding rules, which instructs that increases be rounded 
to the closest $25,000, produces an increase of $50,000. Accordingly, 
NHTSA is increasing the maximum penalty under Section 578.6(c)(2) to 
$1,225,000.

Change to Maximum Penalty Under the Consumer Information Provisions (49 
CFR 578.6(d)(1))

    The maximum civil penalty for a series of related violations of 
consumer information provisions regarding crashworthiness and damage 
susceptibility, section 32308(a) of Title 49 of the United States Code, 
is $575,000 as specified in 49 CFR 578.6(d)(1). Applying the 
appropriate inflation factor (1.04) to the Adjustment Act calculation 
raises the $575,000 figure to $595,462, an increase of $20,462. 
Applying the rounding rules, which instruct that increases be rounded 
to the closest $25,000, produces an increase of $25,000. Accordingly, 
NHTSA is increasing the maximum penalty under Section 578.6(d)(1) to 
$600,000.

[[Page 70712]]

Codification of Penalty in the Medium and Heavy Duty Vehicle Fuel 
Efficiency Program

    The Agency's regulations provide that the maximum penalty is 
$37,500 per vehicle or engine. 49 CFR 535.9(b)(3). Consistent with the 
approach of codifying the penalties under statutes administered by 
NHTSA in Part 578, NHTSA is codifying this amount in a new subsection 
(i) of 49 CFR 578.6.

IV. Public Comments on NPRM

    NHTSA received one public comment in response to the Notice of 
Proposed Rulemaking for this rulemaking. The comment was from a private 
individual expressing support for the proposed rulemaking, noting that 
civil penalties can lose their effectiveness over time through 
inflation, and that review and amendment of penalties is necessary to 
maintain their effectiveness.

V. 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 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 and the policies of the Office of Management 
and Budget.

Regulatory Flexibility Act

    We have also considered the impacts of this notice under the 
Regulatory Flexibility Act. I certify that a 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 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.
    For example, according to the 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.
    Many small businesses are subject to the penalty provisions of 49 
U.S.C. Chapter 301 (Motor Vehicle Safety Act) and therefore may be 
affected by the adjustments made in this rulemaking. 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 vehicle 
manufacturers that are not subject to comprehensive EWR reporting. 
Furthermore, there are about 70 registered importers. Equipment 
manufacturers (including importers), entities selling motor vehicles 
and motor vehicle equipment, and motor vehicle repair businesses are 
also subject to penalties under 49 U.S.C. 30165.
    As noted throughout this preamble, this rule will only increase the 
maximum penalty amounts that the agency could obtain for a single 
violation and a related series of violations of various provisions of 
the Motor Vehicle Safety Act, as well as for a series of related 
violations of bumper standards, and a series of related violations of 
consumer information requirements for violations. Under the Motor 
Vehicle Safety Act, 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. 30165(b). The agency would 
also consider the size of a business 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 would not affect our civil penalty policy under SBREFA.
    Since this regulation does not establish penalty amounts, this rule 
will not have a significant economic impact on small businesses. Small 
organizations and governmental jurisdictions will not be significantly 
affected as the price of motor vehicles and equipment ought not 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 
proposed regulation.
    This 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 rule will generally apply to motor vehicle and motor 
vehicle equipment manufacturers (including importers), entities that 
sell motor vehicles and equipment and motor

[[Page 70713]]

vehicle repair businesses. It will have very limited applicability to 
States or local governments, as where they purchase or lease 15 
passenger vans used for certain school purposes or activities, which 
vans do not comply with federal motor vehicle safety standards for 
school buses and multifunction school activity buses. 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, Public Law 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.

Executive Order 12778 (Civil Justice Reform)

    This 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.

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

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

    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 is revised to read as 
follows:

    Authority: Pub. L. 101-410, Pub. L. 104-134, Pub. L. 109-59, 49 
U.S.C. 30165, 30170, 30505, 32308, 32309, 32507, 32709, 32710, 
32902, 32912, and 33115; delegation of authority at 49 CFR 1.81, 
1.95.

0
2. Section 578.6 is amended by revising paragraphs (a), (c)(2), and 
(d)(1) and adding paragraph (i) to read as follows:

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

    (a) Motor vehicle safety--(1) In general. A person who violates any 
of sections 30112, 30115, 30117 through 30122, 30123(a), 30125(c), 
30127, or 30141 through 30147 of Title 49 of the United States Code or 
a regulation prescribed under any of those sections is liable to the 
United States Government for a civil penalty of not more than $7,000 
for each violation. A separate violation occurs for each motor vehicle 
or item of motor vehicle equipment and for each failure or refusal to 
allow or perform an act required by any of those sections. The maximum 
civil penalty under this paragraph for a related series of violations 
is $17,350,000.
    (2) School buses. (A) Notwithstanding paragraph (a)(1) of this 
section, a person who:
    (i) Violates section 30112(a)(1) of Title 49 United States Code by 
the manufacture, sale, offer for sale, introduction or delivery for 
introduction into interstate commerce, or importation of a school bus 
or school bus equipment (as those terms are defined in 49 U.S.C. 
30125(a)); or
    (ii) Violates section 30112(a)(2) of Title 49 United States Code, 
shall be subject to a civil penalty of not more than $11,000 for each 
violation. A separate violation occurs for each motor vehicle or item 
of motor vehicle equipment and for each failure or refusal to allow or 
perform an act required by this section. The maximum penalty under this 
paragraph for a related series of violations is $17,250,000.
    (3) Section 30166. A person who violates section 30166 of Title 49 
of the United States Code or a regulation prescribed under that section 
is liable to the United States Government for a civil penalty for 
failing or refusing to allow or perform an act required under that 
section or regulation. The maximum penalty under this paragraph is 
$7,000 per violation per day. The maximum penalty under this paragraph 
for a related series of daily violations is $17,350,000.
* * * * *
    (c) * * *
    (2) The maximum civil penalty under this paragraph (c) for a 
related series of violations is $1,225,000.
    (d) Consumer information--(1) Crash-worthiness and damage 
susceptibility. A person who violates 49 U.S.C. 32308(a), regarding 
crashworthiness and damage susceptibility, is liable to the United 
States Government for a civil penalty of not more than $1,100 for each 
violation. Each failure to provide information or comply with a 
regulation in violation of 49 U.S.C. 32308(a) is a separate violation. 
The maximum penalty under this paragraph for a related series of 
violations is $600,000.
* * * * *
    (i) Medium- and heavy-duty vehicle fuel efficiency. The maximum 
civil penalty for a violation of the fuel consumption standards of 49 
CFR part 535 is not more than $37,500 per vehicle or engine. The 
maximum civil penalty for a related series of violations shall be 
determined by multiplying $37,500.00 times the vehicle or engine 
production volume for the model year in question within the regulatory 
averaging set.

    Issued on: November 19, 2012.
David L. Strickland,
Administrator.
[FR Doc. 2012-28694 Filed 11-26-12; 8:45 am]
BILLING CODE 4910-59-P