National Highway Traffic Safety Administration (NHTSA), DOT.
This final rule implements Section 5(b) of the Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act. Section 5(b) added a new section, which provides for criminal liability in circumstances where a person violates reporting requirements with the intention of misleading the Secretary of Transportation (Secretary) with respect to safety-related defects in motor vehicles or motor vehicle equipment that have caused death or serious bodily injury. To encourage the correction of incorrect or incomplete information that was reported or should have been reported to the Secretary, Section 5 Start Printed Page 38381includes a “safe harbor” provision that offers protection from criminal prosecution to persons who meet certain criteria. To qualify for this protection, the person must have lacked knowledge at the time of the violation that the violation would result in an accident causing death or serious bodily injury, and must correct any improper reports or failures to report to the Secretary within a reasonable time. This rule establishes what constitutes a “reasonable time” and a sufficient manner of “correction,” for such improper reports and failures to report information to the Secretary.
Effective Date: This final rule is effective August 23, 2001. Petitions: Petitions for reconsideration must be received on or before September 7, 2001.
You may submit petitions for reconsideration in writing to: Docket Management, Room PL-401, 400 Seventh Street, SW., Washington, DC, 20590. You may also submit your petitions for reconsideration electronically by logging onto the Dockets Management System website at http://dms.dot.gov. Click on “Help & Information” or “Help/Info” to obtain instructions for filing the document electronically. Regardless of how you submit your petition for reconsideration, include the docket number of this document on it. You may call Docket Management at 202-366-9324. You may visit the Docket from 10:00 a.m. to 5:00 p.m., Monday through Friday.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Steven Cohen, Office of Chief Counsel, NCC-10, National Highway Traffic Safety Administration, 400 Seventh Street, SW., Washington, DC, 20590, Telephone (202) 366-5263, Fax: 202-366-3820.End Further Info End Preamble Start Supplemental Information
On November 1, 2000, the TREAD Act, Public Law 106-414, was enacted in response, in part, to congressional concerns related to manufacturers' inadequate reporting to NHTSA of information regarding possible defects in motor vehicles and motor vehicle equipment, including tires. The TREAD Act expands 49 U.S.C. 30166, Inspections, investigations, and records, and provides for the Secretary to issue various rules thereunder. The authority to carry out Chapter 301 of Title 49 United States Code, under which the rules directed by the TREAD Act are to be issued, has been delegated to NHTSA's Administrator pursuant to 49 CFR 1.50.
Section 5(b) of the TREAD Act, adds a new section, 49 U.S.C. 30170, to Chapter 301. Section 30170(a)(1) establishes criminal liability for a “person who violates section 1001 of title 18 with respect to the reporting requirements of [49 U.S.C.] section 30166, with the specific intention of misleading the Secretary with respect to motor vehicle or motor vehicle equipment safety related defects that have caused death or serious bodily injury to an individual * * * .” Section 1001 of title 18 provides that whoever “* * * knowingly and willfully—(1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact; (2) makes any materially false, fictitious, or fraudulent statement or representation; or (3) makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry” in a matter within the jurisdiction of the federal government is subject to a fine and imprisonment.
Section 30170(a)(2)(A) contains a “safe harbor” provision, which states that a
person described in paragraph (1) [of 49 U.S.C. 30170(a)] shall not be subject to criminal penalties * * * if (1) at the time of the violation, such person does not know that the violation would result in an accident causing death or serious bodily injury; and (2) the person corrects any improper reports or failure to report within a reasonable time.
This safe harbor applies only to criminal liability related to 49 U.S.C. 30170(a)(1). Section 30170(a)(2)(B) requires the Secretary to “establish by regulation what constitutes a reasonable time for the purposes of [49 U.S.C. 30170(a)(2)(A)] and what manner of correction is sufficient for the purposes of [49 U.S.C. 30170(a)(2)(A)].”
On December 26, 2000 NHTSA promulgated an interim final rule on the reasonable time and manner of correction provision (65 FR 81414). The interim final rule provides violators of 49 U.S.C. 30170 who are seeking to qualify for the statute's safe harbor protection with a “reasonable time” period of 21 days, starting on the date of the report or the date that the report was due to be sent to or received by NHTSA. It also provides that the “correction” of an improper report or failure to report will be sufficient under the statute's safe harbor provision if it satisfies two requirements. First, the violator must submit to NHTSA's Chief Counsel a signed and dated document identifying (1) each previous improper report, (2) each failure to report for which protection is sought, and (3) the specific predicates under which the improper or omitted report should have been provided. Second, the violator must submit to NHTSA the complete and correct information or, if the person cannot do so, provide a detailed description of that information and/or the content of those documents and the reason why the violator cannot provide them to NHTSA.
Comments were received from the Tire Association of North America (TANA); Lawrence F. Henneberger, on behalf of the Motor and Equipment Manufacturers Association (MEMA) and the Original Equipment Suppliers Association (OESA); and Michael J. McKale, of Delphi Automotive Systems (Delphi), a MEMA and OESA member supporting the comment submitted by MEMA and OESA. None of the comments strongly oppose the interim final rule. However, various comments suggested that NHTSA define the term “violation,” that the “reasonable time” period should begin to toll upon discovery of the improper or misleading report, not the date of the report to NHTSA or the day it was due to be submitted to NHTSA, and that correction submitters be allowed more time, at least 30 days, under NHTSA's “reasonable time” interpretation. The agency has reviewed these comments and addresses them below.
A. Defining the Term “Violation”
The comment from MEMA/OESA, which is supported by Delphi, urges NHTSA to define the term “violation,” as used in 49 CFR 578.7(a)(1), in the rule itself. MEMA/OESA's rationale for this change is that the TREAD Act's criminal provision, 49 U.S.C. 30170, includes by reference the crime of knowingly and willfully making false statements to a Federal authority, as laid out at 18 U.S.C. 1001. It asserts that the current format requires motor vehicle industry operatives, some of whom have limited levels of legal support, to parse two statutes to determine if a criminal “violation” may have occurred and, if so, whether the “safe harbor” provision in TREAD is applicable. MEMA/OESA attempts to advance its position by noting that there is no guidance in the rule for “a manufacturer that, through inadvertence or mistake, and without the intention to do so, has omitted relevant information from a required report to NHTSA which the manufacturer subsequently discovers.” MEMA/OESA recognizes that “[t]his situation does not create criminal exposure,” but fears that “the interim safe harbor provision, with its references to ‘any improper (i.e. incorrect, incomplete, or misleading) Start Printed Page 38382report,’ could be read to imply that inadvertently ‘improper’ reports also raise criminal issues.”
NHTSA declines to engage in rulemaking with respect to the definition of “violation.” The elements of such a violation are defined by the courts, rather than NHTSA. Consistent with statutory direction, the purpose of this rule is limited to establishing by regulation what constitutes a “reasonable time” and a sufficient manner of “correction” under 49 U.S.C. 30170(a)(2). The fact that a statute or regulation references another statute or regulation does not dictate rulemaking or create an excessive burden on those who would otherwise submit a false report. Therefore, no definition of “violation” will be added to 49 CFR 578.4.
B. When To Start the “Reasonable Time” Clock
TANA commented that the “reasonable time” period to correct any improper reports or failures to report to NHTSA should run “from the date of discovery of the improper report, not the date the report was due” because “[i]t could be weeks or months before an individual discovers a mistake or omission in a report.” TANA also notes that the Environmental Protection Agency (EPA)'s Audit Policy, which NHTSA cited in the interim final rule for the criminal penalty safe harbor provision, uses “discovery” to start the clock it uses when deciding whether a violator qualifies for the EPA's limited safe harbor protections. TANA argues that “if NHTSA is truly basing this interim final rule on the framework adopted by EPA's regulations, the same terminology and time frame should be utilized.”
NHTSA did not base the interim final rule on the framework adopted by EPA's audit policy, published at 65 FR 19618 (April 11, 2000), although NHTSA did utilize EPA's time frame. EPA's audit policy and NHTSA's Criminal Penalty Safe Harbor rule generally deal with different kinds of underlying violations. EPA's policy focuses on civil penalties. In general, EPA may seek or impose civil penalties for environmental violations on a “strict liability” basis. The violator need not have any knowledge of the violations. Since the violator may not have known of the violation, EPA's policy provides an open window for reporting by allowing disclosure within a stated time period after the entity discovered that a violation occurred. In a criminal prosecution context, EPA's policy may be applied in making a “no recommendation for criminal prosecution.” However, EPA's incentive has limited applicability in this context and “will not be available, for example, where corporate officials are consciously involved in or willfully blind to violations, or conceal or condone noncompliance” or where the violation(s) cause serious harm to human health or the environment. 65 FR at 19620, 19623, 19625. Finally, EPA's policy was developed, in part, to promote self auditing, which would detect violations.
In contrast to the EPA's policy, the TREAD Act's safe harbor provision was written to apply to criminal activities, including willful concealment. The violator will have known about the violation, because the TREAD Act criminal provision includes the predicate violation of 18 U.S.C. 1001, which has a “knowingly and willfully” standard. Thus, there is no need or basis for a discovery element. Accordingly, the time period will run from date of the improper report to NHTSA or the date of the failure to report to NHTSA.
C. Changing the Time Period From 21 Days to 30 or More Days
MEMA/OESA, supported by Delphi, also proposes increasing the “reasonable time” period from 21 days to “at least 30 calendar days,” especially since the interim final rule requires that NHTSA be in receipt of the correction submission by the end of the 21 days. MEMA/OESA's rationale for this change is that there are “wide disparities in size, sophistication and legal support among motor vehicle and vehicle parts manufacturers,” and it may take extra time for a smaller industry participant to consult with corporate or individual counsel about the implications of submitting the corrected information and admitting a felony violation. MEMA/OESA recognizes that 21 days may be reasonable time to make a correction where there is only limited civil penalty exposure (e.g., the EPA's Audit Policy is used only to determine civil penalties based on the gravity of the violation, not penalties based on the violator's economic benefit and/or any criminal penalties), but it argues that at least 30 calendar days are required in situations involving criminal liability exposure, as here. MEMA/OESA urges that 49 CFR 578.7(b) be amended accordingly.
In adopting the 21-day time period in the interim final rule, NHTSA considered its own rules and experiences with the current motor vehicle and motor vehicle equipment defects program, as well as comparable safe harbor policies used by other federal agencies, to delineate what constitutes a “reasonable time” in a safe harbor rule that requires a person to correct any improper reports or failure to report. NHTSA attempted to reach a balance that still satisfied the agency's motor vehicle safety mission under Chapter 301 by minimizing the time that NHTSA is performing its safety responsibilities using an incorrect or incomplete factual record. We sought a time period that would be short enough to address public safety concerns and to generate an urgency in the violator designed to compel potential correctors to come forward before the time period expires, and yet not be so short as to discourage corrective actions that otherwise would have been taken or be unusable in real world situations.
Even though we do not agree with all of MEMA/OESA's reasoning, NHTSA has decided to adopt MEMA/OESA's request to increase the 21-day period to 30 days. Based on our experiences and the EPA's reported experiences under its Audit Policy, we believe that 21 days ordinarily would be a sufficient time for violators to correct their improper actions. Nonetheless, we are willing to make reasonable accommodations in light of concerns of small businesses, and the requested nine additional days would not significantly undercut the agency's ability to perform its public safety mission. Therefore, the “reasonable time” period for corrections of improper reports or failures to report will be not more than thirty (30) calendar days after the date of the report to the agency or the failure to report, as the case may be.
Regulatory Analyses and Notices
1. Executive Order 12866 and DOT Regulatory Policies and Procedures
NHTSA considered the impact of this rulemaking action under Executive Order 12866 and the Department of Transportation's regulatory policies and procedures. This rulemaking was not reviewed under Executive Order 12866, “Regulatory Planning and Review.” This rulemaking is not considered “significant” under the Department of Transportation's regulatory policies and procedures. The impacts of this rule are expected to be so minimal as not to warrant preparation of a full regulatory evaluation because this provision only involves a safe harbor for criminal sanctions associated with a criminal provision that NHTSA does not expect to be invoked often.
2. Regulatory Flexibility Act
We have also considered the impact of this notice under the Regulatory Flexibility Act. I certify that this rule Start Printed Page 38383will have no significant economic impact on a substantial number of small entities. As stated above, this provision only involves a safe harbor for criminal penalties which NHTSA does not expect to be invoked often.
3. National Environmental Policy Act
We have analyzed this proposal for the National Environmental Policy Act and determined that it would not have any significant impact on the quality of the human environment.
4. Paperwork Reduction Act
NHTSA has determined that this imposes new collection of information burdens within meaning of the Paperwork Reduction Act of 1995 (PRA). NHTSA began the process of requesting a 3-year clearance for this collection when we published the interim final rule in the Federal Register (65 FR 81414), and provided a 60-day public comment period for the issues listed in OMB regulations 5 CFR 1320.8(d)(i)-(iv). Concurrently, pursuant to 5 CFR 1320.13, Emergency Processing, NHTSA asked the Office of Management and Budget (OMB) for a temporary emergency clearance for this collection. This emergency PRA approval was granted on January 25, 2001 and is effective through June 30, 2001. Because no PRA-related comments were received by NHTSA or OMB, NHTSA has submitted a request for a 3-year clearance for this collection to OMB.
5. Executive Order 13132 (Federalism)
Executive Order 13132 on “Federalism” requires us 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.” The Executive Order defines this phrase 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.” This rule, which defines terms in a safe harbor provision for criminal penalties for a person who acts with the specific intention of misleading the Secretary regarding safety defects in motor vehicles or motor vehicle equipment, will not have substantial direct effect 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. This rule making does not have those implications because it applies to those persons who are required by 49 U.S.C. 30166 to provide information to NHTSA.
6. Civil Justice Reform
This rule does not have a retroactive or preemptive effect. Judicial review of the 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.
7. 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 tribunal governments, in the aggregate, or by the private sector, of more than $100 million annually. Because this rule will not have a $100 million annual effect, no Unfunded Mandates assessment is necessary and one will not be prepared.
Executive Order 12866 and the President's memorandum of June 1, 1998, require each agency to write all rules in plain language. Application of the principles of plain language includes consideration of the following questions:
—Have we organized the material to suit the public's needs?
—Are the requirements in the rule clearly stated?
—Does the rule contain technical language or jargon that is not clear?
—Would a different format (grouping and order of sections, use of headings, paragraphing) make the rule easier to understand?
—Would more (but shorter) sections be better?
—What else could we do to make the rule easier to understand?
If you have any responses to these questions, please include them in your comments.
Submission of Petitions
How Can I Influence NHTSA's Thinking on This Rule?
In developing this rule, we tried to address the public comments and anticipated concerns of all our stakeholders. We welcome your views on all aspects of this rule. If you believe that NHTSA should reconsider any aspect of this rule, please follow the suggestions below:
Explain your views and reasoning as clearly as possible.
- Provide solid information to support your views.
- If you estimate potential numbers of reports or costs, explain how you arrived at the estimate.
- Tell us which parts of the rule you support, as well as those with which you disagree.
- Provide specific examples to illustrate your concerns.
- Offer specific alternatives.
- Refer your comments to specific sections of the rule, such as the units or page numbers of the preamble, or the regulatory sections.
- Be sure to include the name, date, and docket number with your petition.
How Do I Prepare and Submit a Petition?
Your petition must be written and in English. To ensure that it is correctly filed in the Docket, please include the docket number of this document in your petition.
Your petition 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 address given above under ADDRESSES.
Petition may also be submitted to the docket electronically by logging onto the Dockets Management System website at http://dms.dot.gov. Click on “Help & Information” or “Help/Info” to obtain instructions for filing the document electronically.
How Can I Be Sure That My Petition Was Received?
If you wish Docket Management to notify you upon its receipt of your petition, enclose a self-addressed, stamped postcard in the envelope containing your petition. Upon receiving your petition, 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 copies of your complete submission, including the information you claim to be confidential business information, to the Chief Counsel (NCC-30), NHTSA, at the address given above under FOR FURTHER INFORMATION CONTACT. In addition, you should submit two copies, from which you have deleted the claimed confidential Start Printed Page 38384business information, to Docket Management at the address given above 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 Petitions?
We will consider all petitions that Docket Management receives before the close of business on the closing date indicated above under DATES. To the extent possible, we will also consider petitions that Docket Management receives after that date. If Docket Management receives a petition late, we will consider that petition as an informal suggestion for future rulemaking action.
How Can I Read the Petitions Submitted by Other People and Other Materials Relevant to This Rulemaking?
You may view the materials in the docket for this rulemaking on the Internet. These materials include the written comments submitted by other interested persons and the preliminary regulatory evaluation prepared by this agency. You may read them at the address given above under ADDRESSES. The hours of the Docket are indicated above in the same location.
You may also see the comments and materials on the Internet. To read them 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 beginning of this document. Example: If the docket number were “NHTSA-2000-1234,” you would type “1234.” After typing the docket number, click on “search.”
(4) On the next page, which contains docket summary information for the materials in the docket you selected, click on the desired comments. You may download the comments.
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.Start List of Subjects
List of Subjects in 49 CFR Part 578
- Motor vehicle safety
- Reporting and recordkeeping requirements
PART 578—CIVIL AND CRIMINAL PENALTIESEnd Part Start Amendment Part
1. The authority citation for part 578 continues to read as:End Amendment Part Start Amendment Part
2. Amend § 578.7 by revising paragraph (b) to read as follows:End Amendment Part
(b) Reasonable time. A correction is considered to have been performed within a reasonable time if the person seeking protection from criminal liability makes the correction to any improper (i.e., incorrect, incomplete, or misleading) report not more than thirty (30) calendar days after the date of the report to the agency and corrects any failure to report not more than thirty (30) calendar days after the report was due to be sent to or received by the agency, as the case may be, pursuant to 49 U.S.C. 30166, including a regulation, requirement, request or order issued thereunder. In order to meet these reasonable time requirements, all submissions required by this section must be received by NHTSA within the time period specified in this paragraph, and not merely mailed or otherwise sent within that time period.
Issued on: July 17, 2001.
L. Robert Shelton,
[FR Doc. 01-18248 Filed 7-23-01; 8:45 am]
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