Document ID: NHTSA-2010-0114-0001
Agency: nhtsa
Document Type: Rule
Title: Civil Penalties
Posted Date: 2010-08-16T04:00Z

[Federal Register: August 16, 2010 (Volume 75, Number 157)]
[Proposed Rules]               
[Page 49879-49882]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16au10-33]                         

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 578

[Docket No. NHTSA-2010-0114; Notice 1]
RIN 2127-AK78

 
Civil Penalties

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

ACTION: Notice of Proposed Rulemaking.

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

SUMMARY: This document proposes to increase the maximum civil penalty 
amounts for violations covering a related series of violations of the 
Vehicle Safety Act and violations of the odometer standard with intent 
to defraud. 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 September 15, 2010.

ADDRESSES: You may submit comments electronically [identified by DOT 
Docket ID Number NHTSA-2010-0114] by visiting the following Web site:
     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://www.regulations.gov. Follow the online 
instructions for accessing the dockets.

FOR FURTHER INFORMATION CONTACT: Jessica Lang, Office of Chief Counsel, 
NHTSA, telephone (202) 366-5902, 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

[[Page 49880]]

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 (also referred to as the ``Motor Vehicle Safety Act'' or 
``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 vehicle theft protection standards and those 
involving a related series of odometer-related violations. 70 FR 53308. 
On May 16, 2006, the agency adjusted its penalty amounts for violations 
of the Motor Vehicle Safety Act 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). 71 FR 28279. On February 25, 2008, the 
agency made adjustments to penalty amounts for odometer-related 
violations and violations of certain administrative provisions of the 
Energy Policy and Conservation Act. 73 FR 9955. Most recently, on 
February 2, 2010, the agency adjusted penalty amounts for violations of 
the school bus safety provisions, bumper standards provisions, consumer 
information requirements and odometer tampering and disclosure 
requirements. 75 FR 5246.
    We have reviewed the civil penalty amounts in 49 CFR part 578 and, 
in this notice, propose to adjust certain penalties under the 
Adjustment Act. The civil penalties that we propose to adjust are 
available for a related series of violations of the Motor Vehicle 
Safety Act and violations of the odometer standard with intent to 
defraud.

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.
    Because the proposed adjustment is intended to be effective before 
December 31, 2010, the ``Consumer Price Index [CPI] for the month of 
June of the calendar year preceding the adjustment'' is the CPI for 
June 2009. This figure, based on the Adjustment Act's requirement of 
using the CPI ``for all-urban consumers published by the Department of 
Labor,'' is 646.1.\1\
---------------------------------------------------------------------------

    \1\ 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.
---------------------------------------------------------------------------

    NHTSA proposes to adjust the penalty for a related series of 
violations of the Safety Act, in general, as well as Section 30166 
violations. These amounts were last adjusted in 2006 (CPI = 607.8). 
Accordingly, the factor that we use to calculate these proposed 
increases is 1.06 (646.1/607.8).
    NHTSA also proposes to adjust the odometer law's maximum penalty 
for intent to defraud. This amount was last adjusted in 1999 (CPI = 
497.9). Accordingly, the factor that we use to calculate this proposed 
increase is 1.30 (646.1/497.9).
    Next, using these inflation factors, 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.

Proposed Amendments to Maximum Penalties

Change to Maximum Penalty (a Related Series of Violations) Under the 
Motor Vehicle Safety Act in General (49 CFR 578.6(a)(1)) and Section 
30166 (49 CFR 578.6(a)(3))

    The maximum civil penalty for a related series of violations under 
the Safety Act, or a regulation issued thereunder, is $16,375,000 as 
specified in 49 CFR 578.6(a)(1). The underlying statutory provision is 
49 U.S.C. 30165(a)(1). The maximum civil penalty for a violation of 49 
U.S.C. 30166, or a regulation issued thereunder, is $16,375,000 as 
specified in 49 CFR 578.6(a)(3). The underlying statutory provision is 
49 U.S.C. 30165(a)(3).
    Applying the appropriate inflation factor (1.06) raises each of the 
$16,375,000 penalties to $17,357,500, an increase of $982,500. Under 
the rounding formula, any increase in a penalty's amount shall be 
rounded to the nearest $25,000 in the case of penalties greater than 
$200,000. Accordingly, we propose that Section 578.6(a)(1) and Section 
578.6(a)(3) each be amended to increase the maximum civil penalty for a 
related series of violations from $16,375,000 to $17,350,000.

Change to Maximum Penalty for Violation With Intent To Defraud Under 
the Odometer Standards Provision, 49 U.S.C. Chapter 327 (49 CFR 
578.6(f)(2))

    The maximum civil penalty for a violation of the odometer statute, 
49 U.S.C. Chapter 327, or a regulation or order, with intent to defraud 
is three times the actual damages or $2,000, whichever is greater, as 
specified in 49 CFR 578.6(f)(2). The underlying statutory provision is 
49 U.S.C. 32709. Applying the appropriate inflation factor (1.30) 
raises the $2,000 figure to $2,600, an increase of $600. 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)(2) be 
amended to increase the maximum civil penalty for a violation of the 
statute or a regulation prescribed or order issued thereunder with 
intent to defraud from three times the actual damages or $2,000, 
whichever is greater, to three times the actual damages or $3,000, 
whichever is greater.

[[Page 49881]]

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 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, go to http://www.regulations.gov and follow the on-
line instructions provided.
    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 Small Business Administration (SBA) 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 
Title 49 U.S.C. Chapters 301 (motor vehicles in general and Section 
30166) and 327 (odometer requirements); therefore, small businesses may 
be affected by the proposed adjustments in this NPRM. Entities that are 
potentially affected by the proposed amendments vary by statute and may 
include manufacturers of motor vehicles and motor vehicle equipment, 
sellers of vehicles and equipment, repair shops and others.
    The proposed adjustment to penalty amounts in 49 U.S.C. 
30165(a)(1), relating to motor vehicle safety, in general, and in 49 
U.S.C. 30165 (a)(3), relating to Section 30166, potentially impacts 
numerous entities including manufacturers, sellers and importers of 
motor vehicles and motor vehicle equipment. We do not have data on how 
many other entities within the ambit of 49 U.S.C. 30165(a)(1) and 
(a)(3) are small businesses, but the number is considerable.
    The proposed adjustment to penalty amounts in Chapter 327 relating 
to odometer requirements potentially impacts a number of small 
businesses including repair businesses, used car dealers, businesses 
that are lessors of

[[Page 49882]]

vehicles, auction houses, and entities making devices that could change 
an odometer's mileage. Although we do not have information on how many 
of these entities are small businesses, we believe a large percentage 
are small businesses.
    As noted throughout this preamble, this proposed rule on civil 
penalties would only increase the maximum penalty amounts that the 
agency could obtain for certain violations of provisions related to 
motor vehicle safety, in general, Section 30166 violations, and 
odometer violations with intent to defraud. This proposed rule does not 
set the amount of penalties for any particular violation or series of 
violations. Under the statute for motor vehicle safety, 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(c). The statute for odometers does not 
directly address small business size as a consideration, but does 
require consideration of ``any effect on the ability to continue doing 
business.'' 49 U.S.C. 32709(a)(3)(B). The agency would consider the 
size of the business in such a calculation.
    The penalty adjustments that are being proposed would not affect 
our civil penalty policy under the Small Business Regulatory 
Enforcement Fairness Act (SBREFA). See 62 FR 37115 (July 10, 1997). As 
a matter of policy, we intend to continue to consider the 
appropriateness of the penalty amount to the size of the business 
charged.
    Because this proposed regulation would not establish penalty 
amounts, it 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 to 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 Section 6 of 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. 
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.

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

    Motor vehicle safety, Penalties.

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

PART 578--CIVIL AND CRIMINAL PENALTIES

    1. The authority citation for 49 CFR part 578 is amended to read as 
follows:

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

    2. Section 578.6, paragraphs (a)(1), (a)(3) and (f)(2) are revised 
to read as follows:

PART 578--CIVIL AND CRIMINAL PENALTIES

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

    (a) * * *
    (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 $6,000 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.
* * * * *
    (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 
$6,000 per violation per day. The maximum penalty under this paragraph 
for a related series of daily violations is $17,350,000.
* * * * *
    (f) * * *
    (2) A person that violates 49 U.S.C. Chapter 327 or a regulation 
prescribed or order issued thereunder, with intent to defraud, is 
liable to the United States Government for a civil penalty of three 
times the actual damages or $3,000, whichever is greater.
* * * * *

    Issued on: August 10, 2010.
O. Kevin Vincent,
Chief Counsel.
[FR Doc. 2010-20094 Filed 8-13-10; 8:45 am]
BILLING CODE 4910-59-P