Document ID: NHTSA-2009-0120-0019
Agency: nhtsa
Document Type: Rule
Title: Requirements and Procedures for Consumer Assistance To Recycle and Save Program
Posted Date: 2009-09-28T04:00Z

[Federal Register: September 28, 2009 (Volume 74, Number 186)]
[Rules and Regulations]               
[Page 49338-49341]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28se09-14]                         

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 599

[Docket No. NHTSA-2009-0120]
RIN 2127-AK61

 
Requirements and Procedures for Consumer Assistance To Recycle 
and Save Program

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

ACTION: Final rule.

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SUMMARY: This final rule amends the regulation implementing the 
Consumer Assistance to Recycle and Save (CARS) Program, published on 
July 29, 2009 in the Federal Register, under the CARS Act. The rule 
adds an exception process for registered dealers who were prevented 
from submitting an application for reimbursement for a qualifying 
transaction prior to the announced August 25, 2009 deadline due to 
problems associated with the CARS electronic transaction system.

DATES: This final rule is effective September 28, 2009. A request for 
an exception must be postmarked no later than October 13, 2009.

ADDRESSES: A request for exception must be made in writing and mailed 
by United States mail to the NHTSA Administrator, 1200 New Jersey Ave., 
SE., Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: For questions, you may call David 
Bonelli, NHTSA Office of Chief Counsel, telephone (202) 366-5834.

SUPPLEMENTARY INFORMATION:

Background

    This final rule amends the regulation implementing the Consumer 
Assistance to Recycle and Save (CARS) Program, published on July 29, 
2009 (74 FR 37878), with a previous amendment published on August 5, 
2009 (74 FR 38974), under the CARS Act (Pub. L. 111-32). The rule adds 
an exception process for registered dealers who were unable to submit 
an application for reimbursement for a qualifying transaction prior to 
August 25, 2009, 8 pm EDT, NHTSA's announced deadline for the program. 
As detailed below, this exception process is available only where the 
delay is attributable to action or inaction by NHTSA.
    Due to the enormous popularity of the CARS program, the available 
Federal funds were depleted in a short period of time. Based on daily 
projections of transactions, NHTSA determined that it was necessary to 
declare an August 24, 2009, 8 pm EDT deadline for completing CARS deals 
and an August 25, 2009, 8 pm EDT deadline for submitting applications 
for reimbursement. The agency received an overwhelming number of 
inquiries to the CARS hotline from dealers and consumers during the 
course of the program, and especially during the days immediately prior 
to the announced deadline. From these inquiries, we learned that 
dealers encountered problems in submitting applications for 
reimbursement as a result of problems caused by the agency's 
transaction system. Because the agency was unable to respond to and 
resolve some of these problems prior to the application deadline, some 
dealers who had made qualifying CARS deals and extended credits to 
consumers in accordance with the provisions of the rule were prevented 
from completing and submitting applications for reimbursement.
    We are aware that some of these difficulties arose because of a 
feature that automatically locks a dealer out of the CARS transaction 
system and prevents the dealer from being able to re-enter the system 
without the agency's assistance. This occurred, for example, when a 
dealer inaccurately entered its account password into the system 
multiple times. Ordinarily, the dealer's password could be reset 
through a simple telephone call to the agency for technical assistance. 
However, due to the volume of transactions and inquiries, some dealers 
may have been unsuccessful in their attempts to get their passwords 
reset prior to the deadline.
    We are aware also that some dealers were unable to submit an 
electronic application because of an automatic feature that precluded a 
submission with a State identification number, a trade-in vehicle's 
vehicle identification number (VIN), or a new vehicle's VIN

[[Page 49339]]

that was previously entered into a draft application in the CARS 
system. This feature was designed to detect multiple transactions with 
the same persons or vehicles, errors, and attempted fraud. However, the 
application of this feature also blocks transactions where the draft 
application with the same State identification number or VIN was 
entered, but never submitted as part of a completed application. This 
might occur, for example, where a dealer enters a purchaser's State 
identification number, trade-in vehicle's VIN, and/or new vehicle's VIN 
as part of an application, but the deal is never completed between the 
parties. If the same or another dealer attempts to enter this same 
purchaser or vehicle information as part of another transaction, the 
system automatically rejects the application even if the purchaser, the 
trade-in vehicle, and the new vehicle have never been part of a 
completed CARS deal.
    On most occasions where such problems occurred, a dealer was able 
to contact NHTSA officials to resolve the issue. However, due to the 
overwhelming number of transactions and inquiries that occurred as the 
application deadline approached, the agency was unable to respond to 
and resolve all dealer inquiries. As a result, some dealers may have 
been prevented from submitting an application for reimbursement, 
despite having made a qualifying CARS deal, where the dealer took 
ownership of the trade-in vehicle and transferred ownership and 
possession of the new vehicle to the purchaser.
    Today's final rule establishes an exception process by which a 
dealer may apply for reimbursement of a CARS credit if it had made a 
binding CARS deal prior to the application deadline but was prevented 
from submitting an application for reimbursement prior to the deadline 
due to a hardship caused by the agency. This exception process is 
available only to dealers, and not to consumers, as the CARS Act 
authorizes payment only to dealers. However, the process also benefits 
consumers, by enabling a dealer to seek reimbursement from the agency 
for a legitimate transaction rather than seeking return of the vehicle 
or repayment of the credit from the consumer.

Exception Process

    To qualify for the exception process, a dealer must have been 
prevented from submitting an application for reimbursement due to a 
hardship caused by the agency. Specifically, a dealer may request an 
exception if the dealer was locked out of the CARS system, contacted 
NHTSA for a password reset prior to the announced deadline, but did not 
receive a password reset. A dealer also may request an exception if its 
timely transaction was rejected by the CARS system due to a duplicate 
State identification number, trade-in vehicle VIN, or new vehicle VIN 
that was never used for a submitted CARS transaction, if the dealer 
contacted NHTSA prior to the announced deadline to resolve the issue 
but did not receive a resolution. Finally, a dealer may seek an 
exception if it was prevented from submitting a transaction by the 
announced deadline due to another hardship attributable to NHTSA's 
action or inaction, upon submission of proof and justification 
satisfactory to the Administrator.
    A request for an exception will not be granted if the dealer did 
not complete a qualifying vehicle sale/lease and trade-in vehicle 
transaction meeting the existing requirements of Sec.  599.300 and 
Sec.  599.301 prior to the August 24th deadline. A qualifying 
transaction requires that the dealer took ownership and possession of 
the trade-in vehicle and delivered ownership and possession of the new 
vehicle to the purchaser. A request for an exception also will not be 
granted if a dealer's inability to complete or submit an application 
was due to a reason other than action or inaction by NHTSA, such as 
technological difficulties in the dealer's own systems or processes. 
The exception process is not available for transactions that were 
successfully submitted on the CARS system but were subsequently 
rejected, as dealers have the opportunity to correct and resubmit their 
applications following rejection. The agency informed dealers on 
several occasions that any applications created in the system must be 
submitted, even if in incomplete form, prior to the application 
deadline, and the agency also informed the dealers that they would have 
the opportunity to correct any incomplete applications after the 
application deadline.
    A dealer seeking an exception must describe in a written statement 
the basis for the exception and provide evidence that it was prevented 
from submitting an application by the deadline due to action or 
inaction by NHTSA. Such evidence may include copies of correspondence, 
such as electronic mail, documenting that the dealer contacted the 
agency regarding issues with its application. The dealer also must 
present proof that a qualifying deal was made on or after July 1, 2009, 
but not later than August 25, 2009, 8 pm EDT, by submitting paper 
copies of all completed and signed supporting documents and 
certifications required under Sec.  599.302(c)(2) and (c)(3) of the 
rule.
    All decisions granting or denying a request for exception will be 
made by the NHTSA Administrator or his or her designee. Finally, in 
order to bring finality to the CARS accounting process, all requests 
for exception must be postmarked no later than October 13, 2009.

Statutory Basis for This Action

    This final rule makes amendments to implement the Consumer 
Assistance to Recycle and Save Act (CARS Act) (Pub. L. 111-32), which 
directs the Secretary to issue final regulations.

APA Requirements and Effective Date

    The rule is being issued without first providing a notice and an 
opportunity for public comment. Section 1302(d) of the CARS Act 
provides that ``notwithstanding'' the requirements of section 553 of 
title 5, United States Code, the Secretary shall promulgate final 
regulations to implement the Program not later than 30 days after the 
date of the enactment of this Act. Due to the enormous success and 
popularity of the CARS program, the agency closed the program and 
issued an August 25, 2009, 8 p.m. EDT deadline for submission of 
applications for reimbursement. However, the agency is aware that there 
are completed valid transactions for which dealers were unable to 
submit applications prior to the deadline. In order to ensure that 
dealers and consumers do not unwind these transactions because dealers 
were not reimbursed, the agency believes that it is important to 
promulgate an exception process for the final rule immediately. 
Therefore, the agency finds for good cause that providing notice and 
comment is impracticable and contrary to the public interest for these 
changes to the final rule. Drafting and issuing a proposed rule, 
providing a period for public comment, and addressing those comments in 
the final rule would be highly impracticable in the time available and 
would substantially inhibit the ability to make payment for granted 
exception requests.
    For the above-mentioned reasons, the agency also finds that it has 
good cause to make this rule effective fewer than 30 days after the 
publication in the Federal Register.
    We believe it is necessary to provide these amendments immediately 
to ensure that payment for valid transactions submitted under the 
exception process permitted under this rule can be made. We also note 
that this rule relieves restrictions in the original

[[Page 49340]]

final rule by permitting additional submissions of applications for 
reimbursement. It would, therefore, be inconsistent with Congressional 
intent, impracticable, and contrary to the public interest to delay the 
effective date of the regulation, which would, in turn, adversely 
affect payment for valid transactions.
    Accordingly, the effective date of this final rule is September 28, 
2009.

Regulatory Analyses and Notices

    Because of the public and Congressional interest in the CARS 
program, this rulemaking is considered significant under Executive 
Order 12866 and the Department of Transportation's Regulatory Policies 
and Procedures. It was reviewed by the Office of Management and Budget. 
The agency has discussed the relevant requirements of the Regulatory 
Flexibility Act, Executive Order 13132 (Federalism), Executive Order 
12988 (Civil Justice Reform), the National Environmental Policy Act, 
and the Unfunded Mandates Reform Act in the July 29, 2009 final rule 
cited above. This rule does not change the finding in those analyses.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et 
seq.), a person is not required to respond to a collection of 
information by a Federal agency unless the collection displays a valid 
OMB control number. As part of this final rule, the agency must request 
information from participating dealers that encountered problems in 
submitting applications for CARS transaction reimbursement prior to the 
announced August 25, 2009 deadline due to action or inaction by NHTSA. 
Today's collection of information amends a previously approved 
collection, OMB Control No. 2127-0660, to address an exemption process 
by which a dealer may apply for reimbursement of a CARS credit if it 
had made a binding CARS deal prior to the application deadline but was 
prevented from submitting the application due to a hardship caused by 
the agency.
    The agency has received approval from OMB to amend the following 
collection of information:
    Title: CARS Program; Dealer and Buyer Transaction Information.
    OMB Control No.: 2127-0660.
    Expiration date: January 31, 2010.
    NHTSA has been given OMB approval to collect an additional 2,000 
responses, for a total of 1,000 additional burden hours. The total 
number of responses under this collection is 1,352,000, for a total of 
372,350 burden hours.

Regulatory Identifier Number (RIN)

    The Department of Transportation assigns a regulation identifier 
number (RIN) to each regulatory action listed in the Unified Agenda of 
Federal Regulations. The Regulatory Information Service Center 
publishes the Unified Agenda in April and October of each year. You may 
use the RIN contained in the heading at the beginning of this document 
to find this action in the Unified Agenda.

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 the complete User Notice and Privacy Notice for Regulations.gov 
at http://www.regulations.gov/search/footer/privacyanduse.jsp.

List of Subjects in 49 CFR Part 599

    Fuel Economy, Motor vehicle safety.

0
In consideration of the foregoing, NHTSA hereby amends 49 CFR part 599 
as set forth below.

PART 599--REQUIREMENTS AND PROCEDURES FOR CONSUMER ASSISTANCE TO 
RECYCLE AND SAVE ACT PROGRAM

0
1. The authority citation for part 599 continues to read as follows:

    Authority: 49 U.S.C. 32901, Notes; delegation of authority at 49 
CFR 1.50.

0
2. Add Subpart F to read as follows:
Subpart F--Requirements and Procedures for Exceptions
Sec.
599.600 Exceptions--applicability and requirements.
599.601 Procedures for requesting exception.
599.603 Disposition of requests for exception.

Subpart F--Requirements and Procedures for Exceptions

Sec.  599.600  Exceptions--applicability and requirements.

    (a) Applicability. (1) Eligible Requesters. To qualify for an 
exception under this subpart, a requester must be a dealer registered 
in accordance with the requirements of Sec.  599.200.
    (2) Filing deadline. A request for an exception must be postmarked 
no later than October 13, 2009.
    (3) Availability of funds. An exception shall be approved under 
this subpart only if Federal funds are available for payment.
    (4) Exclusion. No exception may be approved for an application for 
reimbursement that was successfully submitted to the CARS system.
    (b) Threshold requirements. Subject to the requirements of Sec.  
599.600(a), a registered dealer may submit a request for exception and 
seek reimbursement of a CARS credit under this subpart if the dealer:
    (1) Prior to August 24, 2009, 8 pm EDT, completed a qualifying deal 
meeting the requirements of Sec.  599.300 and Sec.  599.301;
    (2) Took ownership and possession of a trade-in vehicle and 
transferred ownership and possession of a new vehicle to the purchaser; 
and
    (3) Prior to August 25, 2009, 8 pm EDT, attempted to submit an 
application for reimbursement meeting the requirements of Sec.  
599.302, but was prevented from submitting the application for any of 
the reasons identified in Sec.  599.600(c).
    (c) Exception cases. A dealer is eligible for an exception if:
    (1) Password rejection. The dealer's account password was locked 
out and not reset by NHTSA;
    (2) Transaction rejection. The application was rejected at 
submission because the dealer entered a State identification number, a 
trade-in vehicle VIN, or a new vehicle VIN that was already entered 
into the CARS program system, but that State identification number, 
trade-in vehicle VIN, or new vehicle VIN was never used for a CARS 
deal; or
    (3) Other hardship. The dealer experienced any other hardship 
attributable to NHTSA action or inaction that the Administrator 
determines in his or her discretion should be redressed, consistent 
with the purposes of the CARS Act.

Sec.  599.601  Procedures for requesting exception.

    (a) Submission. A request for exception must be made in writing and 
mailed by United States mail to the NHTSA Administrator, 1200 New 
Jersey Ave SE., Washington, DC 20590.
    (b) Contents. The request must include paper copies of the 
following materials:
    (1) Explanation of hardship. A written explanation of a hardship 
identified in Sec.  599.600(c) that prevented the dealer from 
submitting its transaction, and the steps the dealer took to contact 
the agency and timely resolve the issue;
    (2) Proof of hardship. Documents evidencing that the dealer was 
unable to complete and submit an application for

[[Page 49341]]

reimbursement prior to the deadline because of hardship caused by 
NHTSA. Documents may include copies of correspondence with the agency;
    (3) Documentation of qualifying transaction. Paper copies of all 
supporting attachments required by Sec.  599.302(c)(2) which reveal 
that a qualifying CARS transaction, including the transfer of ownership 
and possession of the trade-in vehicle to the dealer and the delivery 
of ownership and possession of the new vehicle to the purchaser, was 
made prior to August 24, 2009, 8 p.m. EDT; and
    (4) Certifications. Paper copies of all certifications provided in 
Appendix A to this part, signed by both the dealer and the purchaser.
    (5) Evidence of prior notice to NHTSA. Evidence, if any, that the 
dealer attempted to contact NHTSA prior to August 25, 2009, 8 p.m. EDT, 
to request assistance with a problem described in Sec.  599.600(c).

Sec.  599.603  Disposition of requests for exception.

    (a) In general. Upon receipt of the request for exception, the 
agency will review the request to determine whether the exception 
should be granted and approved for payment.
    (b) Deciding official. The NHTSA Administrator or his or her 
designee shall serve as the Deciding Official for all determinations 
under this subpart.
    (c) Incomplete requests. A request for exception that fails to 
include all of the documents required under this subpart may be 
rejected without further review.
    (d) Denied requests. If the Deciding Official denies the request, 
the requester will be informed in writing of the reasons for the denial 
of the request.
    (e) Granted requests. If the Deciding Official grants the request, 
the requester will be notified by electronic mail, at the e-mail 
address identified in Sec.  599.200(c)(2)(iii), and the requester's 
application for reimbursement will be processed for payment by the 
agency as a qualifying transaction in accordance with Sec.  599.304.
    (f) No appeals. There are no appeals from the Deciding Official's 
decision.

    Issued on: September 23, 2009.
Ronald L. Medford,
Acting Deputy Administrator.
[FR Doc. E9-23335 Filed 9-23-09; 4:15 pm]

BILLING CODE 4910-59-P