Civil Penalties

AGENCY:

National Highway Traffic Safety Administration (NHTSA), DOT.

ACTION:

Notice of proposed rulemaking (NPRM).

SUMMARY:

This document proposed to adjust certain civil penalties authorized for violations of odometer tampering and theft prevention statutes administered by the National Highway Traffic Safety Administration (NHTSA). The Federal Civil Monetary Penalty Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996, requires us to take this action at least every four years. The penalties that would be increased were last adjusted in March 1997.

DATES:

Comments on the proposal are due June 18, 2001.

Proposed effective date: 30 days after date of publication of the final rule in the Federal Register.

ADDRESSES:

All comments on this document should refer to the docket and notice number set forth above and be submitted to Dockets Management, Room PL-401, 400 Seventh St., SW., Washington, DC 20590. The docket room hours are from 9:30 a.m. to 5:00 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT:

Taylor Vinson, Office of Chief Counsel, NHTSA, telephone (202) 366-5263, facsimile (202) 366-3820, electronic mail “ATVinson@nhtsa.dot.gov”, 400 Seventh Street, SW, 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 ((“Adjustment Act”), 28 U.S.C. Sec. 2461 note, Public Law 101-410), as amended by the Debt Collection Improvement Act of 1996 (“Collection Act,” Pub. L. 104-134), requires us and other Federal agencies to regularly adjust certain civil penalties for inflation. Under these laws, each agency must make an initial inflationary adjustment for all applicable civil penalties, and must make further adjustments of these penalty amounts at least once every four years. The Collection Act limited the initial increase to 10 percent of the penalty being adjusted.

Our initial adjustment of civil penalties under these legislative authorities was published on February 4, 1997 (62 FR 5167). We established 49 CFR part 578, Civil Penalties, which applies to violations that occur on and after March 6, 1997. These adjustments resulted in the maximum permissible increases of 10 percent. On July 14, 1999, we further adjusted certain penalties to enhance their deterrent effect (64 FR 37876), effective August 13, 1999. As we are now at the end of the four-year period following the initial adjustment, the purpose of this notice is to review the penalties that have remained unchanged since 1997, and to propose adjusting those penalties where the statutory formulae authorize it.

Method of Calculation

Under the Adjustment Act as amended by the Collection Act, we determine the inflation adjustment for each applicable civil penalty by increasing the maximum civil penalty amount per violation by the cost-of-living adjustment, and then applying a rounding factor. Sec. 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 proposed adjustment is intended to be effective before December 31, 2001, the “Consumer Price Index [CPI] for the month of June of the calendar year preceding the adjustment” would be the CPI for June 2000. This figure is 172.4. NHTSA's penalties were initially adjusted in February 1997 based on the CPI figure for June 1996, which was 156.7. The factor that we are using in calculating the increase, then, is 172.4 divided by 156.7, or 1.1001914. We shall use 1.1 as the appropriate figure. Any calculated increase under this adjustment is then subject to a specific rounding formula set forth in Sec. 5(a) of the Adjustment Act. Under the 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.

Review of Civil Penalties Prescribed by Section 578.6

Section 578.6 contains the civil penalties authorized by the statutes that we enforce. We have reviewed these penalties, multiplied each of them by 1.1, considered the nearest higher multiple specified in the rounding provisions, and concluded that only the penalties discussed below may be increased.

Section 578.6(f) Odometer Tampering and Disclosure

The maximum civil penalty for a related series of violations of 49 U.S.C. Chapter 327 is $110,000, as specified in § 578.6(f)(1). The inflation factor raises this figure to $121,000. Under the formula, any increase in a penalty shall be rounded to the nearest multiple of $10,000 in the case of penalties greater than $100,000 but less than or equal to $200,000. Accordingly, we propose that § 576.8(f)(1) be amended to increase the maximum civil penalty to $120,000 for a related series of violations of the odometer tampering and disclosure provisions. However, the maximum civil penalty for a single violation remains at $2,200 because the inflation-adjusted figure of $2,420 is not yet at a level to be rounded to the nearest multiple of $1,000.

Section 578.6(g) Vehicle Theft Prevention

Under § 578.6(g)(1), the maximum civil penalty for a related series of violations of 49 U.S.C. 33114(a)(1-4) is $275,000. The inflation factor raises this figure to $302,500. Under the formula, any increase in a penalty shall be rounded to the nearest multiple of $25,000 in the case of penalties greater than $200,000. Accordingly, we propose that Sec. 576.8(g)(1) be amended to increase the maximum civil penalty to $300,000 for a related series of violations of the vehicle theft prevention provisions. However, the maximum penalty for a single violation remains at $1,100.

Under § 578.6(g)(2), a person that violates 49 U.S.C. 33114(a)(5) is liable for a civil penalty of not more than $110,000 a day for each violation. The inflation factor modified by the rounding factor results in this penalty being raised to $120,000, and we are proposing this adjustment as well.

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.

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 three copies of your complete submission, including the information you claim to be confidential business information, to the Chief Counsel, NHTSA (NCC-30), at the address given at the beginning of this document under FOR FURTHER INFORMATION CONTACT. 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. When you send a comment containing information claimed to be confidential business information, you should include a cover letter setting forth the information specified in our confidential business information regulation, 49 CFR Part 512.

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. Because we must issue a final rule not later than June 30, 2002, and a proposed rule in the interim, we are unlikely to extend the comment closing dates for this notice or for the proposed rule. However, 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, take the following steps:

(1) Go to the Docket Management System (DMS) Web page of the Department of Transportation ( http://dms.dot.gov/).

(2) On that page, click on “search.”

(3) On the next page ( http://dms.dot.gov/search/),, type in the four-digit docket number shown at the heading of this document. Example: if the docket number were “NHTSA-2001-1234,” you would type “1234.”

(4) After typing the docket number, click on “search.”

(5) The next page contains docket summary information for the docket you selected. Click on the comments you wish to see.

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 have no significant economic impact on a substantial number of small entities.

The following is my statement providing the factual basis for the certification (5 U.S.C. 605(b)). The proposed amendments primarily affect manufacturers of motor vehicles. Manufacturers of motor vehicles are generally not small businesses within the meaning of the Regulatory Flexibility Act.

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 are organized according to Standard Industrial Classification Codes (SIC), SIC Code 3711 “Motor Vehicles and Passenger Car Bodies” has a small business size standard of 1,000 employees or fewer.

For manufacturers of passenger cars and light trucks, NHTSA estimates there are at most five small manufacturers of passenger cars in the U.S. Since each manufacturer serves a niche market, often specializing in replicas of “classic” cars, production for each manufacturer is fewer than 100 cars per year. Thus, there are at most 500 cars manufactured per year by U.S. small businesses.

In contrast, in 2001, there are approximately nine large manufacturers producing passenger cars, and light trucks in the U.S. Total U.S. manufacturing production per year is approximately 15 to 15 and a half million passenger cars and light trucks. We do not believe small businesses manufacture even 0.1 percent of total U.S. passenger car and light truck production per year.

Further, small organizations and governmental jurisdictions would not be significantly affected as the price of motor vehicles 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.

Finally, this action would not affect our civil penalty policy under the Small Business Regulatory Enforcement Fairness Act (62 FR 37115, July 10, 1997). We shall continue to consider the appropriateness of the penalty to the size of the business charged.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1980 (Pub. L. 96-511), we state that there are no requirements for information collection associated with this rulemaking action.

National Environmental Policy Act

We have also analyzed this rulemaking action under the National Environmental Policy Act and determined that it has no significant impact on the human environment.

Executive Order 12612 (Federalism)

We have analyzed this proposed rule in accordance with the principles and criteria contained in Executive Order 12612, and have determined that it has no significant federalism implications to warrant the preparation of a Federalism Assessment.

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.

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 rule will not have a $100 million effect, no Unfunded Mandates assessment will be prepared.

List of Subjects in 49 CFR Part 578

• Imports
• Motor vehicle safety
• Motor vehicles
• Rubber and Rubber Products
• Tires
• Penalties

1. The authority citation for 49 CFR Part 578 would continue to read as follows:

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

2. Section 578.6 would be amended by revising the last sentence of paragraph (f)(1), the last sentence of paragraph (g)(1), and paragraph (g)(2) to read as follows:

PART 578—CIVIL AND CRIMINAL PENALTIES