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Rule

Action

Final Rule.

Summary

This document increases the maximum civil penalty amounts for violations of motor vehicle safety requirements involving school buses, bumper standards, consumer information requirements, odometer tampering and disclosure requirements, and vehicle theft protection requirements. 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.

Unified Agenda

Civil Penalties

4 actions from June 15th, 2009 to March 4th, 2010

  • June 15th, 2009
  • July 15th, 2009
    • NPRM Comment Period End
  • February 2nd, 2010
  • March 4th, 2010
    • Final Rule Effective
 

Table of Contents Back to Top

DATES: Back to Top

This final rule is effective March 4, 2010.

ADDRESSES: Back to Top

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-2009-0066] by visiting the following Web site.

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, 19477-78).

FOR FURTHER INFORMATION CONTACT: Back to Top

Jessica Lang, Office of Chief Counsel, NHTSA, telephone (202) 366-5263, facsimile (202) 366-3820, 1200 New Jersey Avenue, SE., Washington, DC 20590.

SUPPLEMENTARY INFORMATION: Back to Top

Background Back to Top

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, 101), 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. 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 (sometimes referred to as the “Motor Vehicle 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, as amended, 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. Most recently, on February 25, 2008, the agency made adjustments to odometer-related violations and violations of certain administrative provisions of the Energy Policy and Conservation Act. 73 FR 9955.

The Energy Independence and Security Act of 2007 (EISA), Public Law No. 110-140, 121 Stat. 1492, 1506-07 (Dec. 19, 2007) (codified at 49 U.S.C. 32304A) established a separate penalty provision for a new consumer tire information provision. As a matter of organization, we include this penalty provision in 49 CFR 578.6(d). In order to avoid confusion with the consumer information penalty regarding crashworthiness and damage susceptibility currently in this section, we bifurcated 49 CFR 578.6(d) into two parts. The first addresses crashworthiness and damage susceptibility; the second codifies consumer tire information under EISA. We have decided to adopt text of this rule that tracks the wording in EISA; it does not interpret EISA.

On June 15, 2009, the Agency published a Notice of Proposed Rulemaking (NPRM) entitled “Civil Penalties” which proposed the adjustment of certain civil penalties for inflation. 74 FR 28204. The Agency received no comments to this NPRM.

We have reviewed the civil penalty amounts in 49 CFR Part 578 and, in this notice, adjust certain penalties under the Adjustment Act. The civil penalties that we now adjust are available for violations of: (1) The Motor Vehicle Safety Act involving school buses (single violations and a related series of violations), (2) bumper requirements (a related series of violations), (3) consumer information requirements regarding crashworthiness and damage susceptibility (a related series of violations), (4) odometer requirements including tampering and disclosure (a related series of violations), and (5) the vehicle theft protection requirements (daily violations and a series of related violations).

Method of Calculation—Adjustments Back to Top

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.

Under the Adjustment Act, the relevant Consumer Price Index (CPI) is that for the month of June of the preceding calendar year. This figure is provided by the Department of Labor and is adjusted annually using the base year 1967 = 100. The Adjustment Act uses the CPI for all urban consumers. Because the adjustment will be effective in 2010, the proper CPI is that from June 2009. The June 2009 CPI is 646.1. [1] In the NPRM, which was published in 2009, we had used the CPI for June 2008 (655.5).

Two of the penalty amounts that NHTSA now adjusts involve a related series of violations of bumper standards and of consumer information requirements regarding crashworthiness and damage susceptibility. These amounts were last adjusted in 2004 (CPI = 568.2). Accordingly, the factor that we used to calculate the increases for these penalties is 1.14 (646.1/568.2).

The other penalty amounts that NHTSA now adjusts are for single violations and a related series of violations pertaining to school bus safety, a related series of violations involving odometer tampering and disclosure, as well as single violations and a related series of violations involving vehicle theft protection. These amounts were last adjusted in 2005 (CPI = 582.6). Accordingly, the factor that we used to calculate the increases is 1.11 (646.1/582.6).

Next, using these inflation factors, increases above the current maximum penalty levels were calculated and were 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 Back to Top

Change to Maximum Penalty (Single Violations and a Related Series of Violations) Under the School Bus Safety Provisions, 49 U.S.C. Chapter 301, (49 CFR 578.6(a)(2))

The maximum civil penalty for a single violation under the school bus safety provisions is $10,000, as specified in 49 CFR 578.6(a)(2). The underlying statutory provision is 49 U.S.C. 30165(a)(2), as amended in 2005. Applying the appropriate inflation factor (1.11) raises the $10,000 to $11,100, an increase of $1,100. Under the rounding formula, any increase in a penalty's amount shall be rounded to the nearest $1,000 in the case of penalties greater than $1,000 but less than or equal to $10,000. Accordingly, we now amend Section 578.6(a)(2) to increase the maximum civil penalty for a single violation from $10,000 to $11,000.

The maximum civil penalty for a related series of violations under the school bus safety provisions is $15,000,000, as specified in 49 CFR 578.6(a)(2). The underlying statutory provision is 49 U.S.C. 30165(a)(2), as amended in 2005. Applying the appropriate inflation factor (1.11) raises the $15,000,000 to $16,650,000, an increase of $1,650,000. Under the rounding formula, any increase in a penalty's amount shall be rounded to the nearest multiple of $25,000 in the case of penalties greater than $200,000. Accordingly, we now amend Section 578.6(a)(2) to increase the maximum civil penalty from $15,000,000 to $16,650,000 for a series of related violations.

Change to Maximum Penalty (Related Series of Violations) Under the Bumper Standards Provision, 49 U.S.C. Chapter 325 (49 CFR 578.6(c))

The maximum civil penalty for a related series of violations of the bumper standards provision or a regulation prescribed thereunder is $1,025,000 as specified in 49 CFR 578.6(c)(2). The underlying statutory civil penalty provision is contained in 49 U.S.C. 32507. Applying the appropriate inflation factor (1.14) raises the $1,025,000 figure to $1,168,500, an increase of $143,500. Under the rounding formula, any increase in a penalty's amount shall be rounded to the nearest multiple of $25,000 in the case of penalties greater than $200,000. In this case, the increase is $150,000. Accordingly, we now amend Section 578.6(c) to increase the maximum civil penalty from $1,025,000 to $1,175,000 for a related series of violations.

Change to Maximum Penalty (Related Series of Violations) Under the Consumer Information Regarding Crashworthiness and Damage Susceptibility Requirements, 49 U.S.C. Chapter 323 (49 CFR 578.6(d))

The maximum civil penalty for a related series of violations of the consumer information regarding crashworthiness and damage susceptibility requirements is $500,000, as specified in 49 CFR 578.6(d). The underlying statutory civil penalty provision is 49 U.S.C. 32308(b). Applying the appropriate inflation factor (1.14) raises the $500,000 figure to $570,000, an increase of $70,000. Under the rounding formula, any increase in a penalty's amount shall be rounded to the nearest multiple of $25,000 in the case of penalties greater than $200,000. In this case, the increase is $75,000. Accordingly, we now amend Section 578.6(d) to increase the maximum civil penalty from $500,000 to $575,000 for a series of related violations.

Change to Maximum Penalty (Related Series of Violations) Under the Odometer Tampering and Disclosure Requirements, 49 U.S.C. Chapter 327 (49 CFR 578.6(f))

The maximum civil penalty for a related series of violations of the odometer requirements is $130,000, as specified in 49 CFR 578.6(f)(1). The underlying statutory penalty provision is 49 U.S.C. 32709. Applying the appropriate inflation factor (1.11) raises the $130,000 to $144,300, an increase of $14,300. Under the rounding formula, any increase in a penalty's amount 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 now amend Section 578.6(f)(1) to increase the maximum civil penalty from $130,000 to $140,000 for a series of related violations.

Change to Maximum Penalty (Daily Violation and a Related Series of Violations) Under the Vehicle Theft Protection Provisions, 49 U.S.C. Chapter 331 (49 CFR 578.6(g)(1), (2))

The maximum civil penalty for a daily violation of vehicle theft protection provisions is $130,000, as specified in 49 CFR 578.6(g)(2). The underlying statutory penalty provision is 49 U.S.C. 33115. Applying the appropriate inflation factor (1.11) raises the $130,000 figure to $144,300, an increase of $14,300. Under the rounding formula, any increase in a penalty's amount 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 now amend Section 578.6(g)(2) to increase the maximum civil penalty from $130,000 to $140,000 for a daily violation.

The maximum civil penalty for a related series of violations of the vehicle theft protection provisions is $325,000, as specified in 49 CFR 578.6(g)(1). The underlying statutory penalty provisions is 49 U.S.C. 33115. Applying the appropriate inflation factor (1.11) raises the $325,000 to $360,750, an increase of $35,750. Under the rounding formula, any increase in a penalty's amount shall be rounded to the nearest multiple of $25,000 in the case of penalties greater than $200,000. Accordingly, we now amend Section 578.6(g)(1) to increase the maximum penalty from $325,000 to $350,000 for a series of related violations.

Rulemaking Analyses and Notices Back to Top

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 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 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—school bus safety), 325 (bumper standards), 323 (consumer information requirements), 327 (odometer requirements) and 331 (vehicle theft protection requirements); therefore, small businesses may be affected by the changes this final rule makes. By the amendments, 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)(2) and relating to school bus safety potentially impacts numerous entities including school bus manufacturers, school bus equipment manufacturers, school bus and equipment sellers, and schools and school systems. We do not have data on how many other entities within the ambit of 49 U.S.C.30165(a)(2) are small businesses, but the number is considerable.

The adjustment to penalty amounts in Chapter 325 relating to bumper standards and to penalty amounts in Chapter 323 involving crashworthiness, damage susceptibility and country of origin labeling potentially impacts manufacturers of passenger motor vehicles and, in some instances, equipment manufacturers as variously included and defined in the statutes and regulations. We estimate that of the light vehicle manufacturers reporting under the early warning program (EWR), 49 CFR Part 579, six are small businesses. We recognize that there are other, relatively low production light vehicle manufacturers that are not subject to comprehensive EWR reporting. In addition, these statutes cover other entities, but we do not have information on the number of small businesses.

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.

The adjustment to penalty amounts in Chapter 331 relating to theft prevention potentially impact manufacturers of regulated passenger motor vehicle parts in passenger motor vehicles, some multi-purpose vehicles, and some light trucks in high theft lines. It also impacts other entities including salvaging, repair and chop shops. As previously stated, of themanufacturers of passenger vehicles reporting under the EWR program, three are small businesses. Although we do not have data on the numbers of salvaging, repair or chop shops, we believe many are small businesses.

Finally, the new tire fuel efficiency information program under 49 U.S.C. 32304A may affect a number of entities. We note that there are 28 tire manufacturers, none of which is a small business. There are estimated to be over 60,000 tire dealers and retailers; though we do not have exact estimates, we believe a substantial number 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 school bus safety, bumper standards, certain consumer information, odometer tampering and disclosure, and vehicle theft prevention. It also codifies the penalty provisions set out in 49 U.S.C. 32308(c). This final rule does not set the amount of penalties for any particular violation or series of violations. Under the statutes for motor vehicle safety/school buses, consumer information, and vehicle theft prevention, the penalty provisions require 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) (school bus safety); 49 U.S.C. 32308(b)(3) (consumer information); 49 U.S.C. 33115(a)(3) (vehicle theft prevention). 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. While the bumper standards penalty provision does not specifically require the agency to consider the size of the business, the agency would consider business size under its civilpenalty policy when determining the appropriate civil penalty amount. See 62 FR 37115(July 10, 1997) (NHTSA's civil penalty policy under the Small Business Regulatory Enforcement Fairness Act (SBREFA)).

The penalty adjustments in this final rule do not affect our civil penalty policy under SBREFA. 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 regulation does not establish penalty amounts, this final rule will not have a significant economic impact on small businesses.

Small organizations and governmental jurisdictions will 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 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 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 No. 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.

Executive Order 12778 (Civil Justice Reform)

This rule does not have a retroactive or preemptive effect. Judicial review of this rule 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 Back to Top

begin regulatory text

In consideration of the foregoing, 49 CFR Part 578 is amended as set forth below.

PART 578—CIVIL AND CRIMINAL PENALTIES Back to Top

1.Revise the authority citation for 49 CFR Part 578 to read as follows:

Authority:

Pub. L. No. 101-410, Pub. L. No. 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.

2.In § 578.6, revise paragraphs (a)(2)(ii), (c)(2), (d), (f)(1), (g)(1) and (g)(2), to read as follows:

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

(a) * * *

(2) * * *

(ii) Violates section 30112(a)(2) of Title 49 United States Code, shall be subject to a civil penalty of not more than $11,000 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 this section. The maximum penalty under this paragraph for a related series of violations is $16,650,000.

* * * * *

(c) * * *

(2) The maximum civil penalty under this paragraph (c) for a related series of violations is $1,175,000.

(d) Consumer information—(1) Crashworthiness and damage susceptibility. A person that violates 49 U.S.C. 32308(a), regarding crashworthiness and damage susceptibility, is liable to the United States Government for a civil penalty of not more than $1,100 for each violation. Each failure to provide information or comply with a regulation in violation of 49 U.S.C. 32308(a) is a separate violation. The maximum penalty under this paragraph for a related series of violations is $575,000.

(2) Consumer tire information. Any person who fails to comply with the national tire fuel efficiency program under 49 U.S.C. 32304A is liable to the United States Government for a civil penalty of not more than $50,000 for each violation.

* * * * *

(f) * * *

(1) A person that violates 49 U.S.C. Chapter 327 or a regulation prescribed or order issued thereunder is liable to the United States Government for a civil penalty of not more than $3,200 for each violation. A separate violation occurs for each motor vehicle or device involved in the violation. The maximum civil penalty under this paragraph for a related series of violations is $140,000.

* * * * *

(g) * * *

(1) A person that violates 49 U.S.C. 33114(a)(1)-(4) is liable to the United States Government for a civil penalty of not more than $1,100 for each violation. The failure of more than one part of a single motor vehicle to conform to an applicable standard under 49 U.S.C. 33102 or 33103 is only a single violation. The maximum penalty under this paragraph for a related series of violations is $350,000.

(2) A person that violates 49 U.S.C. 33114(a)(5) is liable to the United States Government for a civil penalty of not more than $140,000 a day for each violation.

* * * * *

end regulatory text

Issued on: January 26, 2010.

David L. Strickland,

Administrator.

[FR Doc. 2010-1957 Filed 2-1-10; 8:45 am]

BILLING CODE 4910-59-P

Footnotes Back to Top

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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