Document ID: NHTSA-2010-0114-0002
Agency: nhtsa
Document Type: Rule
Title: Civil Penalties
Posted Date: 2010-12-21T05:00Z

[Federal Register Volume 75, Number 244 (Tuesday, December 21, 2010)]
[Rules and Regulations]
[Pages 79978-79981]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-32008]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 578

[Docket No. NHTSA-2010-0114; Notice 2]
RIN 2127-AK78

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 
related series of violations of the National Traffic and Motor Vehicle 
Safety Act, as amended (Vehicle Safety Act) and increases the liability 
for a violation of odometer disclosure or other odometer requirements 
with intent to defraud. 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 NHTSA to 
review and, as warranted, adjust penalties based on inflation at least 
every four years.

DATES: This final rule is effective January 20, 2011.

ADDRESSES: Petitions for reconsideration should refer to the docket 
number and be submitted to: Administrator, National Highway Traffic 
Safety Administration, 1200 New Jersey Avenue, SE., West Building, 
Fourth Floor, Washington, DC 20590, with a copy to the DOT docket. 
Copies to the docket may be submitted 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.
    Privacy Act: Anyone is able to search the electronic form of all 
comments

[[Page 79979]]

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, 19477-78).

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 5167. At that time, we 
codified the penalties under statutes administered by NHTSA, as 
adjusted, in 49 CFR Part 578, Civil Penalties. Since that time, we have 
adjusted available penalties on a number of occasions. See 75 FR 49879, 
49880 (Aug. 16, 2010)
    On August 16, 2010, the Agency published a Notice of Proposed 
Rulemaking (NPRM) entitled ``Civil Penalties'' which proposed the 
adjustment for inflation of civil penalties for related series of 
violations of the Vehicle Safety Act and the liability for a violation 
of the odometer law with intent to defraud. 75 FR 49879. The Agency 
received no comments to this NPRM.
    Under the Adjustment Act, we now adjust the civil penalties 
available for related series of violations of the Vehicle Safety Act 
and an amount for a violation of odometer disclosure or other odometer 
requirements with intent to defraud.

Method of Calculation--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 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\
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    \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.
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    NHTSA now adjusts the maximum penalty for a related series of 
violations of the Vehicle Safety Act, in general, as well as those for 
violations of 49 U.S.C. 30166 or a regulation thereunder. See 49 U.S.C. 
30165(a)(1) and (a)(3). These amounts were last adjusted in 2006 (CPI = 
607.8). 71 FR 28279, 28281--82. Accordingly, the factor that we use to 
calculate these increases is 1.06 (646.1/607.8).
    NHTSA also now adjusts the odometer law's maximum penalty for 
intent to defraud. See 49 U.S.C. 32709(d), 32710(a). This amount was 
last adjusted in 1999 (CPI = 497.9). 64 FR 37876, 37878. Accordingly, 
the factor that we use to calculate this increase is 1.30 (646.1/
497.9).
    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.

Amendments to Maximum Penalties

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 Vehicle 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 related 
series of violations 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, today we amend Section 578.6(a)(1) and Section 
578.6(a)(3) of Title 49 Code of Federal Regulations to increase the 
maximum civil penalty for a related series of violations from 
$16,375,000 to $17,350,000.

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

    The liability 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 provisions are 49 
U.S.C. 32709(d)(1) and 49 U.S.C. 32710(a). 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

[[Page 79980]]

than $1,000, but less than or equal to $10,000. In this case, the 
increase would be $1,000. Accordingly, today we amend Section 
578.6(f)(2) to increase the amount 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.

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.

Regulatory Flexibility Act

    We have also considered the impacts of this notice under the 
Regulatory Flexibility Act. I certify this final 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 (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 this final rule. Entities that are potentially affected 
vary by statute and may include manufacturers of motor vehicles and 
motor vehicle equipment, sellers of vehicles and equipment, repair 
shops and others.
    The 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 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 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 final rule on civil 
penalties increases the maximum penalty amounts that the agency could 
obtain for certain violations of provisions related to motor vehicle 
safety in general and for 49 U.S.C. 30166 violations, including 
regulations thereunder. This final rule does not set the amount of 
penalties for any particular series of violations under the Vehicle 
Safety Act. Under Vehicle Safety Act, the agency takes into account the 
size of a business when determining the appropriate penalty in an 
individual case. See 49 U.S.C. 30165(c).
    Today's penalty adjustments 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. In these matters, there 
would not be a significant economic impact on small businesses.
    The amount in civil actions by state attorneys general and private 
persons for violations of the odometer statute or a regulation 
prescribed or order issued under that statute is set by statute. It 
requires intent to defraud, and is three times actual damages or, as 
set today, $3,000, whichever is greater. The statute also provides for 
costs and attorneys fees. 49 U.S.C. 32710. Thus, the $3,000 figure is 
but one aspect of costs that a violator may face. The vast majority of 
civil actions settle.
    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 final 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 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 regulation.
    This final 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, 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 final rule will not have a $100 
million effect, no Unfunded Mandates assessment will be prepared.

[[Page 79981]]

Executive Order 12778 (Civil Justice Reform)

    This final 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.

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 part 578 continues to read as follows:

    Authority:  Pub. L. 101-410, Pub. L. 104-134, 49 U.S.C. 30165, 
30170, 30505, 32304A, 32308, 32309, 32507, 32709, 32710, 32912, and 
33115 as amended; delegation of authority at 49 CFR 1.50.

0
2. Section 578.6, paragraphs (a)(1), (a)(3) and (f)(2) are revised 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 $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 for three times the actual damages or $3,000, whichever is 
greater.
* * * * *

    Issued on: December 15, 2010.
David L. Strickland,
Administrator.
[FR Doc. 2010-32008 Filed 12-20-10; 8:45 am]
BILLING CODE 4910-59-P