Certification; Importation of Vehicles and Equipment Subject to Federal Safety and Bumper Standards; Registered Importers of Vehicles Not Originally Manufactured To Conform With the Federal Motor Vehicle Safety Standards; Schedule of Fees Authorized by 49 U.S.C. 30141

AGENCY:

National Highway Traffic Safety Administration, DOT.

ACTION:

Request for public comment on proposed collection of information.

SUMMARY:

Before a Federal agency can collect certain information from the public, it must receive approval from the Office of Management and Budget (OMB). Under procedures established by the Paperwork Reduction Act of 1995, before seeking OMB approval, Federal agencies must solicit public comment on the proposed collection of information.

This document describes a proposed collection of information under regulations that pertain to the importation by registered importers (RIs) of motor vehicles that were not manufactured to comply with all applicable Federal motor vehicle safety and bumper standards. NHTSA has proposed certain amendments to those regulations (as found at 49 CFR parts 567, 591, 592, and 594) that would, in part, clarify the requirements applicable to RIs and applicants for RI status, as well as the procedures for suspending or revoking the registrations of RIs that violate the vehicle importation laws. The proposed regulations would require RIs to retain, for a period of ten years, records pertaining to the nonconforming vehicles they import. Under the regulations that are now in effect, RIs are required to retain that information for a period of eight years. The proposed regulations would also require RIs, and applicants for RI status, to submit to NHTSA more information than is currently required to obtain and maintain a registration. The additional information would enhance the agency's ability to ensure that RIs are conducting their business activities in accordance with applicable regulations, thereby protecting the interests of those who utilize the services of an RI to import a nonconforming motor vehicle, or who purchase a motor vehicle imported by an RI.

DATES:

Comments must be received on or before December 2, 2003.

ADDRESSES:

Comments should refer to the docket number and notice number, and be submitted to: Docket Management, Room PL-401, 400 Seventh St., SW., Washington, DC 20590 (docket hours are from 9 a.m. to 5 p.m.). 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.

FOR FURTHER INFORMATION CONTACT:

Coleman Sachs, Office of Vehicle Safety Compliance, NHTSA (202-366-3151).

SUPPLEMENTARY INFORMATION:

Under the Paperwork Reduction Act of 1995 (PRA), before an agency submits a proposed collection of information to OMB for approval, it must publish a document in the Federal Register providing a 60-day comment period and otherwise consult with members of the public and affected agencies concerning each proposed collection of information. The OMB has promulgated regulations describing what must be included in such a document. Under OMB's regulations (at 5 CFR 1320.8(d)), an agency must ask for public comment on the following:

(i) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

(ii) The accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions;

(iii) How to enhance the quality, utility, and clarity of the information to be collected; and

(iv) How to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.

Certification; Importation of Vehicles and Equipment Subject to Federal Safety and Bumper Standards; Registered Importers of Vehicles Not Originally Manufactured To Conform with the Federal Motor Vehicle Safety Standards; Schedule of Fees Authorized by 49 U.S.C. 30141

Type of Request— New Collection.

OMB Clearance Number— None.

Requested Expiration Date of Approval—June 30, 2006.

Summary of Collection of Information—Section 30112(a) of Title 49, U.S. Code prohibits, with certain exceptions, the importation into the United States of a motor vehicle manufactured after the date an applicable Federal motor vehicle safety standard (FMVSS) takes effect, unless the motor vehicle was manufactured in compliance with the standard and was so certified by its original manufacturer. Under one of the exceptions to this prohibition, found at 49 U.S.C. 30141, a nonconforming vehicle can be imported into the United States provided: (1) NHTSA decides that it is eligible for importation, based on its capability of being modified to conform to all applicable FMVSS, and (2) it is imported by an RI, or by a person who has a contract with an RI to bring the vehicle into conformity with all applicable standards. Regulations implementing this statute are found at 49 CFR parts 567, 591, 592, and 594. The regulations require a declaration to be filed (on the HS-7 Declaration Form) at the time a vehicle is imported that identifies, among other things, whether the vehicle was originally manufactured to conform to all applicable FMVSS, and if it was not, to state the basis for the importation of the vehicle. The regulations also require an RI, among other things, to furnish a bond (on the HS-474 Conformance Bond Form) at the time of entry for each nonconforming vehicle it imports, to ensure that the vehicle will be brought into conformity with all applicable safety and bumper standards within 120 days of entry or will be exported from or abandoned to the United States. After modifying the vehicle to conform to all applicable standards, the RI submits a statement of conformity to NHTSA, which issues a letter permitting the bond to be released if it is satisfied that the vehicle has been modified in the manner stated by the RI.

On April 10, 2003, NHTSA submitted to OMB a request for the extension of that agency's approval (assigned OMB No. 2127-0002) of the information collection that is incident to NHTSA's administration of the vehicle importation regulations at 49 CFR Parts 591 and 592, including information collected through the HS-7 Declaration Form and the HS-474 Conformance Bond Form. On June 4, 2003, OMB notified NHTSA that it had approved this extension request through June 30, 2006.

NHTSA published a Notice of Proposed Rulemaking (NPRM) to amend the vehicle import regulations on November 20, 2000 (65 FR 69810-38). If adopted, those amendments would slightly increase the information collection beyond that which was approved by OMB. The proposed amendments are intended, in part, to clarify the requirements applicable to RIs and applicants for RI status, as well as the procedures for suspending or revoking the registrations of RIs that violate the vehicle importation laws.

Record Retention for 10 Years

If the proposed amendments were adopted, RIs would be required to retain, for a period of ten years, records pertaining to the nonconforming vehicles they import (including a copy of the declaration filed for the vehicle at the time of importation, correspondence with the vehicle's owner or purchaser, identifying information on the vehicle, information to substantiate that the vehicle was brought into conformity with all applicable standards and is not subject to any outstanding safety recall campaigns, a copy of the statement certifying the vehicle's conformity that the RI furnished to NHTSA, and information on the service insurance policy procured by the RI to guarantee that it will remedy any safety-related defects or noncompliances that are determined to exist in the vehicle). Under the regulations that are now in effect, RIs are required to retain this information for a period of eight years from the vehicle's date of entry. See 49 CFR 562.6(b).

One-Time Reporting of Information on Company's Business Structure and Key Personnel

In addition, the proposed amendments would require RIs and applicants for RI status to submit, on a one-time basis, information on their form of business organization (i.e., sole proprietorship, partnership, or corporation), and, depending upon that form of organization, identifying information (including the name, address, and social security number of the RI or applicant if the RI or applicant is organized as a sole proprietorship, all partners if the RI or applicant is organized as a partnership, and all officers, directors, managers, and persons authorized to sign documents on behalf of the RI or applicant if the RI or applicant is organized as a corporation). RIs and applicants that are organized in the form of non-public corporations would also be required to submit a statement issued by the Office of the Secretary of State, or other responsible official of the State in which the RI or applicant is incorporated, certifying that the RI or applicant is a corporation in good standing. If the RI or applicant is a public corporation, it would be required to submit a copy of its latest 10-K filing with the Securities and Exchange Commission.

One-Time Reporting of Information on Facility Addresses and Telephone Numbers, Business Licenses, and Agents for Service of Process

The proposed amendments would also require RIs and applicants for RI status to submit to the agency the street address and telephone number in the United States of each of its facilities for the conformance, storage, and repair of motor vehicles and for the maintenance of records which it will use to fulfill its duties as an RI. RIs and applicants for RI status would also be required to furnish the agency with a copy of a business license or other similar document issued by an appropriate State or local authority, authorizing it to do business as an importer, modifier, or seller of motor vehicles, as applicable, or a statement by the RI or applicant that it has made a bona fide inquiry and is not required by such State or local authority to have such a license or document. RIs and applicants for RI status would also be required to submit to the agency the name of each principal of the RI or applicant who is authorized to submit conformity certifications to NHTSA and the street address of the repair, storage, or conformance facility where each such principal will be located. In addition, if the RI or applicant is not a resident of the United States, it would be required to submit to NHTSA its designation of an agent for service of process in the form required by the agency's regulations at 49 CFR 551.45.

Reporting of Information on Recalled Vehicles

The proposed amendments would also require an RI to notify NHTSA within 30 days if it becomes aware that the manufacturer of a vehicle it has imported will not provide a remedy without charge for a defect or noncompliance that has been determined to exist in that vehicle. The agency is unaware of any circumstance to date in which a vehicle manufacturer has refused to remedy a safety-related defect or noncompliance in a vehicle imported by an RI. Should these practices continue, there will therefore be little if any need for RIs to furnish this information to NHTSA. Should a manufacturer refuse to provide a remedy, the RI would also be required to submit to the agency a copy of the notification letter it intends to send to owners of the affected vehicles to fulfill the defect and noncompliance notification requirements of 49 CFR part 577. The proposed amendments would also require an RI that provides owner notification to submit to NHTSA two progress reports on the recall campaign, containing information specified in 49 CFR 573.7(b)(1)-(4). This requirement would not apply, however, in circumstances where the vehicle's original manufacturer conducts a recall campaign that includes the vehicles imported by the RI.

One-Time Reporting of Information on Alternate Facilities

If an RI intends to use a facility not identified in its application for RI status, the proposed amendments would require it to notify NHTSA of that intent no later than 30 days before it begins to use that facility. In addition, the RI would be required to provide a description of the intended use, a sufficient number of photographs of the facility to fully depict the intended use, a copy of the lease or deed evidencing the RI's ownership or tenancy of the facility, and a copy of the license or similar document issued by an appropriate State or municipal authority stating that the RI is licensed to do business at that facility as an importer and/or modifier and/or seller of motor vehicles (or a statement that it has made a bona fide inquiry and is not required by State or local law to have such a license or permission). If an RI intends to change its street address or telephone number or discontinue use of a facility that was identified in its registration application, the proposed amendments would require it to notify NHTSA not less than 10 days before such change or discontinuance of such use, and identify the facility, if any, that will be used instead.

Deadline for Fulfilling One-Time Reporting Requirements

The proposed amendments would require those already holding RI status to submit the additional information that would have to be submitted by new applicants not later than 30 days after the effective date of the final rule adopting the amendments. However, if an RI has previously provided any of the additional information to NHTSA in its registration application, annual statement, or notification of change, it would not be required to resubmit that information under the proposed amendments. In this circumstance, the RI would be allowed to incorporate the information by reference in its response, provided it clearly indicates the date, page, and entry of the previously provided document.

Description of the Need for the Information and Proposed Use of sthe Information—NHTSA would rely on the information provided under the proposed amendments by RIs and applicants for RI status to better ensure that RIs are meeting their obligations under the statutes and regulations governing the importation of nonconforming vehicles and to make more informed decisions in conferring RI status on applicants and in permitting RI status to be retained by those currently holding registrations. In this manner, those lacking the capability to responsibly provide RI services, or who have committed or are associated with those who have committed past violations of the vehicle importation laws, could be more readily denied registration as an RI, or if they already hold such a registration, have that registration suspended or revoked when circumstances warrant such action.

Description of the Likely Respondents (Including Estimated Number and Proposed Frequency of Responses to the Collection of Information)—Currently 172 RIs are registered with NHTSA. Within 30 days from the date that a final rule adopting the amendments is published, these RIs would be required to submit information updating the information they have previously submitted to the agency, including all new information items that would be required from applicants for RI status. In recent years, NHTSA has received approximately 20 applications per year from individuals and entities seeking to acquire RI status. Over the past year, however, a number of RIs have gone out of business. From reports in the trade press, this development appears to have occurred on account of a reduction in the demand for imported used vehicles caused by currency fluctuations and the availability of incentive programs such as zero-percent financing and rebates on new cars purchased in the United States. For the first five months of this year, the number of nonconforming vehicles imported from Canada is 56 percent lower that the number imported during the first five months of 2002 (50,948 vehicles imported from January 1 through May 31 of 2003 vs. 114,930 imported in the same period of 2002). Given the profound reduction in the volume of Canadian imports, it is reasonable to assume that there will be a concomitant reduction in applications from those seeking to import such vehicles. The additional information that would be required from RIs and applicants for RI status under the proposed regulations would need to be submitted only once.

Estimate of the Total Annual Reporting and Recordkeeping Burden of the Collection of Information in the Amended Regulations—It is estimated that it should take each RI and applicant for RI status approximately two hours to assemble and supply the additional information that would be required under the proposed amendments. There are currently 172 RIs in active status, and the agency receives approximately 20 applications per year from those seeking to become RIs. Based on the agency's estimate that it would take approximately 2 hours to assemble and supply the additional information that would be required under the proposed amendments, the total estimated reporting burden on the entire industry would be approximately 344 hours to comply with the one-time reporting requirement (172 importers × 2 hours = 344 hours). The total estimated reporting burden on those seeking to become RIS would be approximately 40 hours per year (20 applicants × 2 hours = 40 hours). In addition, it should take each RI that is required to conduct a safety recall campaign approximately one hour to compile information for and prepare each of the two reports it would be required to submit to the agency detailing the progress of the recall campaign. Since vehicle manufacturers in most cases include vehicles imported by RIs in their own recall campaigns, it is likely that very few of these reports would have to be prepared or submitted by RIs.

Estimate of the Total Annual Costs of the Collection of Information in the Amended Regulations—Other than the cost of the burden hours, the only additional costs associated with this information collection are those incident to the storage, for a period of an additional two years, of records pertaining to the nonconforming vehicles that each RI imports into the United States. The agency's regulations at 49 CFR 592.6(b) state that those records must consist of “correspondence and other documents relating to the importation, modification, and substantiation of certification of conformity to the Administrator.” The regulations further specify that the records to be retained must include: (1) A copy of the HS-7 Declaration Form furnished for the vehicle at the time of importation, (2) all vehicle or equipment purchase or sales orders or agreements, conformance agreements with importers other than RIs, and correspondence between the RI and the owner or purchaser of each vehicle for which the RI furnishes a certificate of conformity to NHTSA, (3) the last known name and address of the owner or purchaser of each vehicle for which the RI furnishes a certificate of conformity, and the vehicle identification number (VIN) of the vehicle, and (4) records, both photographic and documentary, reflecting the modifications made by the RI, which were submitted to NHTSA to obtain release of the conformance bond furnished for the vehicle at the time of importation. See 49 CFR 592.6(b)(1) through (b)(4).

The latter records are referred to as a “conformity package.” Most conformity packages submitted to the agency covering vehicles imported from Canada are comprised of approximately six sheets of paper (including a check-off sheet identifying the vehicle and the standards that it was originally manufactured to conform to and those that it was modified to conform to, a statement identifying the recall history of the vehicle, a copy of the HS-474 conformance bond covering the vehicle, and a copy of the mandatory service insurance policy obtained by the RI to cover its recall obligations for the vehicle). In addition, most conformity packages include photographs of the vehicle, components that were modified or replaced to conform the vehicle to applicable standards, and the certification labels affixed to the vehicle. Approximately 120 conformity packages can be stored in a cubic foot of space. Based on projected imports of 100,000 nonconforming vehicles per year, 833 cubic feet of space will be needed on an industry-wide basis to store one year's worth of conformity packages. Assuming an annual cost of $20 per cubic foot to store the information, NHTSA estimates the aggregate cost to industry for storing a year's worth of conformity packages to be $16,664 per year. Over an eight-year retention period, a member of the industry would be required to retain 36 annual units of records and over a ten-year retention period 55 annual units (assuming that one annual unit were stored in the first year, two annual units in the second year, and so on). The aggregate cost to industry of the proposed two-year increase in the record retention requirement will therefore be $316,616 (55 − 36 = 19; 19 × $16,664 = $316,616).

RIs are also required under 49 CFR 592.6(b) to retain a copy of the HS-7 Declaration Form furnished to Customs at the time of entry for each nonconforming vehicle for which they submit a conformity package to NHTSA. Paper HS-7 Declaration Forms are only filed for a small fraction of the nonconforming vehicles imported into the United States. Customs brokers file entries for most nonconforming vehicles electronically by using the Automated Broker Interface (ABI) system. For example, in Calendar year 2002, 208,942 ABI entries were made for nonconforming vehicles imported into the United States, and only 3,183 paper HS-7 Declaration Forms (representing 1.5 percent of the total) were filed for such vehicles. Because HS-7 Declaration Forms are filed for only a small fraction of the nonconforming vehicles that are imported by RIs, the proposed two-year increase in the retention period for those records will have a negligible cost impact on the industry. Because the remaining records that RIs are required to retain under 49 CFR 592.6(b) may be stored electronically, the agency anticipates that the costs incident to the storage of those records for an additional two years will also be negligible.

Authority: 44 U.S.C. 3506(c); delegation of authority at 49 CFR 1.50 and 501.8(f).