[Federal Register Volume 62, Number 123 (Thursday, June 26, 1997)]
[Notices]
[Pages 34494-34497]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-16750]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration
[Docket No. 97-042; Notice 1]
RIN 2127-AF55


Auto Theft and Recovery; Preliminary Report on the Effects of the 
Anti Car Theft Act of 1992 and the Motor Vehicle Theft Law Enforcement 
Act of 1984

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

ACTION: Request for comments.

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SUMMARY: This notice announces the publication by NHTSA of a 
preliminary report for public comment pursuant to the Anti Car Theft 
Act of 1992 (codified in Chapter 331 of Title 49 of the United States 
Code), which directs the Secretary of Transportation to submit a report 
to Congress five years after the enactment of the statute (49 U.S.C. 
3311(b)). The statute requires the Department to report on the effects 
of federal regulations on auto theft and comprehensive insurance 
premiums and what changes, if any, to these regulations are 
appropriate.
    As required by the Chapter 331, the agency seeks public review and 
comment on this report prior to its submission to Congress. The report 
does not contain recommendations at this time. The Department will 
develop recommendations after a review of public comments.

DATES: Comments must be received no later than August 11, 1997.

ADDRESSES:

    Report: Interested people may obtain a copy of the report free of 
charge by sending a self-addressed mailing label to Walter Culbreath, 
Publications Ordering and Distribution Services (NAD-51), National 
Highway Traffic Safety Administration, 400 Seventh Street, SW., 
Washington, DC 20590.
    Comments: All comments should refer to the docket and notice number 
of this notice and be submitted to: Docket Section, Room 5109, Nassif 
Building, 400 Seventh Street, SW., Washington, DC 20590. [Docket hours, 
9:30 a.m.-4:00 p.m., Monday through Friday.]

FOR FURTHER INFORMATION CONTACT: Charles J. Kahane, Chief, Evaluation 
Division, Plans and Policy, National Highway Traffic Safety 
Administration, Room 5208, 400 Seventh Street, SW., Washington, DC 
20590 (202-366-2560).

SUPPLEMENTARY INFORMATION:

History

    As a result of the Department's recommendations in the 1991 report 
to Congress on the Motor Vehicle Theft Law Enforcement Act of 1984 and 
other information received by the Congress, the Anti Car Theft Act of 
1992 was enacted. This Act built on the 1984 Act in several ways: 
Federal penalties for auto theft were enhanced. A grant program was 
authorized to help state and local law enforcement agencies concerned 
with auto theft. Experts were called on to look into and report on 
motor vehicle titling, registration, and salvage (the report was 
published in February 1994). The National Motor Vehicle Title 
Information System was to be established and the states were required 
to participate in the system; the Theft Prevention Standard was 
expanded, rules were established to check if salvage or junk vehicles 
are stolen; and the Attorney General is to maintain a National Stolen 
Auto Part Information System. Selling or distributing marked parts that 
are stolen became a Federal crime. Random customs inspection to detect 
stolen vehicles being exported were allowed. A pilot study on a 
nondestructive inspection system was authorized. As in the 1984 Act, 
the Anti Car Theft Act of 1992 calls for a report to the Congress on 
the effects of the Act on trends in motor vehicle thefts and recovery. 
The report is due five years after the legislation was enacted. The 
Anti Car Theft Act requires that the five year report to Congress 
address: motor vehicle theft and recovery statistics as well as their 
collection and reliability; the extent to which motor vehicles are 
dismantled and exported; the market for stolen parts; the cost and 
benefit of marking parts; arrest and prosecution of auto theft 
offenders; the Act's effect on the cost of comprehensive insurance 
premiums; the adequacy of Federal and state theft laws; and an 
assessment of parts marking benefits for other than passenger cars. As 
in the 1984 Act, a preliminary report is to be published and announced 
in the Federal Register for comment. This 1997 report addresses that 
requirement.
    The 1992 Act's amendments on theft prevention include: expanding 
coverage to selected lines that were below the 1990/1991 median theft 
rate, and including high theft multipurpose passenger vehicles and 
light trucks that are rated at not more than 6,000 pounds gross vehicle 
weight under the provisions of the theft standard. These changes had to 
be made two years (1994) after the enactment of the Act. Three years 
later (1997), based on the Attorney General's findings, the Secretary 
of Transportation shall designate all remaining such lines of passenger 
motor vehicles (other than light-duty trucks), unless the Attorney 
General determines such additional parts marking would not 
substantially inhibit chop shop operations and vehicle thefts. By the 
end of 1999, the Attorney General shall determine if the rules have 
been effective in inhibiting chop shops and vehicle theft and send 
these findings to the Secretary. These findings are to include an 
analysis of the effectiveness of factory-installed antitheft devices as 
a substitute for parts marking.
    The rulemaking process and manufacturer comments regarding lead 
time to implement parts marking resulted in expansion of the Theft 
Prevention Standard to a selected group of low theft line vehicle lines 
and other passenger vehicles beginning with the 1997 model year.

Summary of Preliminary Report

    To compile this report, the Department obtained data from sources 
specified in the Act and available elsewhere, including the FBI's 
National Crime Information Center, the Justice Department's National 
Institute of Justice; the Bureau of Customs; the Highway Loss Data 
Institute, the National Information Crime Bureau; insurance companies; 
surveys of and interviews with state, county and city enforcement, 
motor vehicle administration and court officials; and autobody repair 
shops. The most recent theft data available for this report from the 
National Crime Information Center is the 1995.
    Motor vehicle theft was a growing problem in the early and mid 
1980's. In 1984, Congress enacted the Motor Vehicle Theft Law 
Enforcement Act (Public Law No. 98-547 (October 25, 1984)) in order to 
reduce the incidence of motor vehicle thefts and facilitate the tracing 
and recovery of stolen motor vehicles and parts from stolen vehicles. 
The Department of Transportation implemented the 1984 Act by issuing 
the Federal Motor Vehicle Theft Prevention Standard, which requires 
manufacturers of designated high theft passenger car lines to inscribe 
or affix the Vehicle Identification Number (VIN) onto the engine, the 
transmission, and

[[Page 34495]]

12 major body parts. As an alternative to parts marking, manufacturers 
could choose to install antitheft devices as standard equipment on 
those lines. The objective of parts marking is to allow law enforcement 
agencies to identify stolen vehicles or parts removed from stolen 
vehicles--and to deter professional thieves since they will have 
difficulty in marketing stolen marked parts and are more likely to get 
caught if they steal cars with marked parts. The high-theft car lines 
were designated in 1985, and actual parts marking began with model year 
1987.
    In 1991, the National Highway Traffic Safety Administration (NHTSA) 
presented a report to the Congress assessing the auto theft problem in 
the United States and, in particular, attempting to evaluate parts 
marking. At that time, however, only two years of theft and recovery 
data were available for cars with marked parts. Evidence of the 
effectiveness of parts marking could not be obtained through 
statistical analysis of theft and recovery rates. Nevertheless, the 
Department found wide support in 1991 for parts marking from the law 
enforcement community. Investigators believed that parts marking 
provided them with a valuable tool for detecting, apprehending, and 
prosecuting thieves. After considering the analyses, surveys and public 
comments obtained during the preparation of the 1991 report, the 
Department recommended that the theft prevention standard be continued 
with minor changes.
    In 1991-92, motor vehicle theft was still a large problem. Thefts 
had increased from 830,000 in 1984 to 1,270,000 by 1990. In search of 
stronger remedies, and in response to the Department's recommendation 
and other information, Congress enacted Public Law No. 102-519 (October 
25, 1992), the Anti Car Theft Act of 1992.
    The 1992 Act requires the Department of Transportation to provide a 
report to the Congress updating the findings of the 1991 report and 
evaluating the effects of the 1984 and 1992 Acts. As a first step, the 
Department is publishing this Preliminary Report for public review and 
issuing a notice in the Federal Register announcing a 45 day 
opportunity for public comment. Comments received will be summarized 
and discussed as part of the Final Report that will be transmitted to 
the Congress.
    The goals of this report are:
     To update the detailed statistics on motor vehicle theft 
and recovery presented in the 1991 report. For this report, theft and 
recovery data were available from 1984 through 1995, and insurance data 
from 1986 through 1992.
     To revisit the evaluation of parts marking, now that 
extensive data are available on the theft experience of cars with 
marked parts or antitheft devices. (However, since theft data were 
available only through 1995, the effectiveness of the 1992 Act as 
regards expanded coverage in 1997 and later models cannot be analyzed 
at this time.)
     To evaluate other provisions of the 1992 Anti Car Theft 
Act and the 1984 Act, focusing on changes that have occurred since the 
1991 report.
    The basic reasons for stealing cars have not changed since the 1991 
report. Cars are stolen for transportation, joyriding, export, for 
repair parts, and to obtain expensive items such as stereo equipment 
for a quick profit. Since the last report to Congress, a new type of 
auto theft crime has emerged--carjacking--but the theft motives are 
still the same. Fundamentally, though, two types of auto theft may be 
recognized: (1) Professional thefts for profit, such as thefts to 
supply chop shops, retagging and retitling, or for illegal export. 
These thefts often result in a total loss to the original owner, but 
there is hope they can be deterred by remedies such as parts marking. 
They are believed to account for at least 23 percent of all thefts, and 
perhaps substantially more. (2) Nonprofessional thefts for purposes 
such as joyriding or to obtain temporary transportation. The vehicles 
are mostly recovered; on the other hand, parts marking would not appear 
as likely to deter these thefts.
    As in the 1991 report, theft and recovery data come from the FBI's 
National Crime Information Center. The data do not indicate the motives 
for individual thefts or separate the ``professional'' from the 
``nonprofessional'' thefts. Analyses based on aggregate data cannot 
identify the effectiveness of each subsection of the 1984 and 1992 
Acts, but can provide insights on the trend in thefts and recoveries.
    The principal finding of this evaluation is that the auto theft 
problem, which was growing during the mid 1980's, leveled off or even 
began to decline after 1989-90. In 1995, there were 1,180,000 motor 
vehicles stolen, a decline of seven percent from the all-time peak of 
1,270,000 experienced in both 1990 and 1992. However, the 1995 thefts 
are still 39 percent more than the 830,000 experienced in 1984. The 
theft rate per 100,000 registered vehicles increased from 543 in 1984 
to 714 in 1990, but had dropped back to 597 by 1995.
    Passenger cars account for 71 percent of all motor vehicle thefts, 
followed by light trucks--pickup trucks, sport utility vehicles and 
vans--at 24 percent. The remaining thefts are split between heavy 
trucks and motorcycles. Theft rates for all four vehicle types have 
declined since 1990.
    Recoveries of stolen vehicles have kept pace with thefts over the 
years--recovery rates have remained stable at close to 80 percent of 
thefts throughout 1984-95. Passenger cars have slightly higher recovery 
rates than light trucks. Motorcycles have substantially lower recovery 
rates than all other vehicle types, and they have gotten worse. It is 
estimated that the annual economic loss resulting from vehicle thefts--
and from the fact that many vehicles are never recovered or only 
recovered in a damaged condition--is at least $4 billion and could be 
as high as $8 billion.
    The average consumer cost of parts marking in 1995 models was $4.92 
per car. At that cost, just a two percent reduction in the theft rate 
would create consumer benefits well exceeding the cost of parts 
marking.
    Theft and recovery rates for car lines that got parts marking or 
antitheft devices in 1987 were compared to the rates for the car lines 
before 1987 and to the rates for car lines that did not get either 
remedy. However, the fact that, originally, only high-theft car lines 
got parts marking resulted in biases in the data that made it 
essentially impossible to attribute a specific percentage reduction in 
thefts or increase in recoveries to parts marking or antitheft devices. 
Still, the analyses provided four indications (hedged with caveats) 
that parts marking and antitheft devices quite possibly had beneficial 
effects at times, apparently greater than 2 percent:
     There seemed to be a conspicuous shift in theft rates in 
model years 1986-87, coinciding with the introduction of parts marking. 
Cars with marked parts had lower theft rates than expected, while those 
with unmarked parts had higher rates than expected. The effect was as 
strong as 20 percent when cars were new, but it weakened as they became 
older and seemed to have vanished by the time they were two years old. 
The latter is a noteworthy finding, since it is consistent with the 
view that many professional thieves subsequently learned how to 
obliterate the markings, and found them less of a deterrent.
     Almost all car lines had lower theft rates in their early 
1990's models than in the late 1970's models. However, the long-term 
reduction was substantially greater in the car lines that got parts

[[Page 34496]]

marking or antitheft devices than in the car lines that did not. It is 
not so clear what happened during the crucial intervening years, the 
1980's.
     Recovery rates for 1987 cars with marked parts were 
consistently higher than for corresponding 1986 models. However, this 
one-time favorable effect consistently deteriorated after 1987.
     There was a strong reduction after 1987 in the percentage 
of vehicles that were only recovered in-part--i.e., missing their 
engine, transmission or a major body part (those which for high theft 
lines are required to have markings). There was a corresponding 
increase in percentage of vehicles recovered in-whole (no major parts 
missing) or intact. This trend was especially strong in the car lines 
with marked parts.
    Factory-installed antitheft devices were installed on far fewer car 
lines than parts marking. The findings on the effect of antitheft 
devices are generally parallel to those on parts marking, but less 
conclusive. Generally speaking, there was no strong evidence that 
factory-installed antitheft devices have a different effect than parts 
marking. No data were available for evaluating the effect of 
aftermarket antitheft devices.
    Analysis of the effect of vehicle age on theft rates showed that 
eight year old vehicles were just as likely to be stolen as current 
model year vehicles. This suggests that parts marking methods need to 
be sufficiently permanent to last up to eight years or more.
    On the whole, the analysis results seem to suggest that Chapter 
331's approach, which views both parts-marking and factory-installed 
antitheft devices as effective deterrents to automobile theft has had 
benefits. There is some indication that the effect of parts marking 
might have been greater than two percent needed for cost-effectiveness, 
at least at certain times. Also, parts marking and antitheft devices 
seem to be integral components of a larger program to combat auto 
theft. That program has, on the whole had an impact, as evidenced by 
the leveling off and reduction of theft rates after 1990.
    Collection and dissemination of theft and recovery information has 
improved since 1991, primarily because technical advances in 
communications and computer equipment made databases more complete and 
accessible to agencies needing the information. The two systems called 
for in the Anti Car Theft Act of 1992--the National Motor Vehicle Title 
Information System and the National Stolen Auto Part Information 
System--are either not completely in place or are so new that their 
effects on vehicle theft (prevention, recovery or apprehension of 
thieves) cannot be evaluated at this time.
    In tandem with the number of motor vehicle thefts, arrests for auto 
theft peaked in 1989 and have leveled off since then. In 1994, an 
estimated 200,000 were arrested for auto theft or attempted theft in 
the United States.
    While recent surveys of district attorneys and law enforcement 
agencies did not provide detailed statistical data on arrests, 
prosecutions, and convictions for auto theft, they present an even more 
encouraging picture than corresponding surveys in the earlier report. 
Since 1991, there have been moderate increases in the number of 
prosecutions under both Federal Acts. There have also been increases in 
the level of effort directed to each prosecution. Now that they have 
better evidence with which to work, both prosecutors and officers are 
willing to invest more effort at obtaining a conviction. By 1996, 
prosecutors saw an increase of over 20 percent in the number of 
prosecuted cases, and 10 percent said that theft rates had declined in 
their jurisdictions. By 1996, in contrast to almost no effect seen in 
1991, almost half of the district attorneys reported an increase in 
convictions--and most of them attributed it to the Federal Acts. 
Stiffer sentencing was occurring in 45 percent of the convictions, 
including a 75 percent increase in jail sentences. This could be even 
higher, they report, but for prison overcrowding.
    Law enforcement agencies report the same attitudes about the 
deterrent effects of parts marking in 1996 as they did in 1991. They 
feel that auto thefts for chop shop operations will continue if there 
is a demand for a part, marked or not. But almost half of the 
investigators feel that parts marking makes professional thieves more 
cautious or even deters them completely from stealing cars with marked 
parts. All investigators thought parts marking had no effect on amateur 
thieves. Parts marking seems to have the greatest effect on chop shop 
operators because of the increased cost of ``doing business.''
    Auto theft investigators feel that parts marking is a valuable tool 
for arresting and prosecuting thieves. In 1991, they saw little or no 
effect, but by 1996, most of them felt that parts marking did assist in 
identifying and recovering stolen parts and vehicles. About three 
fourths of the law enforcement agencies in big cities said parts 
marking helped in arresting both chop shop operators and professional 
thieves. Auto theft investigators, as in 1991, still say that more 
permanent methods for parts marking are needed. Even though it is 
unlawful to remove labels from marked parts and the labels are required 
to leave evidence that they were once on the marked part, thieves have 
found methods for removing both the label and its ``footprint''. The 
investigator then has to be sufficiently knowledgeable to recognize 
that the part should have a label. Also without the label it is very 
difficult to trace the part back to the vehicle from which it was 
stolen.
    Investigations and assistance provided by NHTSA to the Justice 
Department in the prosecution of violations of criminal statutes 
concerning altering or removing markings and forfeiture of certain 
motor vehicles and motor vehicle parts, and chop shops has brought to 
the agency's attention the fact that many law enforcement officers do 
not know which vehicles must be marked, where the markings are to be 
located or which parts are to be marked. Also, investigators often are 
unaware of the replacement parts-marking requirements. The agency 
investigators feel that an education program for law enforcement 
officials on the applicable parts-marking requirements is needed.
    Data received from the Customs Service since the 1991 report, 
indicates it has improved its ability to recoup stolen vehicles.
    Insurance companies have not reported any effects of parts marking 
on insurance premiums. Some insurance companies do offer discounts on 
comprehensive premiums for vehicles equipped with certain types of anti 
theft devices. Analysis of claim payments also has not shown any 
specific effects of either parts marking or antitheft devices. 
Insurance companies report that their used part policies have not 
changed since 1986. About three fourths of the reporting companies 
encourage the use of used parts for crash repairs. Most companies rely 
on the repair shops to obtain parts from reputable sources.
    Analyses of the effectiveness of parts marking in ``high theft'' 
passenger car lines suggests that parts marking has benefits in 
reducing theft rates, and at times in increasing recovery rates. These 
benefits seem to exceed the cost of parts marking. The greatest impact 
of parts marking appears to have affected chop shops and 
``professional'' auto thieves. While more vehicles stolen for export 
are being recovered, the number recovered is too small to say that 
parts marking has helped reduce thefts for export or recovery of these 
vehicles. Given that parts marking appears to be effective in currently 
marked passenger car lines, there is no reason to doubt

[[Page 34497]]

that it could also have benefits for other passenger vehicles.
    In conclusion, it appears that parts marking and other provisions 
of the 1984 and 1992 Acts have given the law enforcement community 
tools they can use to deter thefts, trace stolen vehicles and parts, 
and apprehend and convict thieves. Theft rates leveled off after 1989-
90 and have begun to drop. While the program to reduce auto theft has 
had an impact, there appear to be three areas with potential room for 
improvement: (1) Insurance companies and motor vehicle departments 
could take better advantage of the existing parts marking program by 
routinely requiring inspection of the markings of used parts acquired 
at body shops and used vehicles brought in for new titles. (2) To the 
extent that current parts markings can be obliterated, their long-term 
deterrent effect may be diminished. (3) Since many vehicles still do 
not have marked parts, the deterrent effect of parts marking at this 
time may be offset by increased thefts of the vehicles without marked 
parts.

Comments Sought

    In addition to any comments regarding this report and its findings 
on effectiveness in deterring or reducing motor vehicle theft or 
enhancing recoveries, comment on the following questions are sought:
     Section 33113(b)(11) of Title 49 requires the report to 
include recommendations to Congress for legislative or administrative 
action for-- (A) continuing without change the theft prevention 
standards prescribed under Chapter 331; (B) amending this chapter to 
cover more or fewer lines of passenger motor vehicles; (C) amending 
this chapter to cover other classes of motor vehicles. Please provide 
your comments on all or any one of these items, including the basis for 
your position.
     Given that the current marking methods cost the consumer 
less than $5 per vehicle and that Congress allows up to $22 per vehicle 
in 1995 dollars, are there more permanent methods for marking vehicles 
with the Vehicle Identification Number (VIN) that can be accomplished 
within the Congressionally mandated limit? Please include documentation 
on the marking method, how permanent the markings are (how difficult it 
is to remove the markings and what evidence is likely to remain that 
there were markings), cost estimates including the cost of any 
materials, equipment, tooling and labor. Please identify the economic 
year for the cost estimates. Please include a description of how the 
markings are applied including the time to mark all the major vehicle 
parts. If the information to be supplied is proprietary, application to 
the agency Chief Counsel's Office can be made.
     Are there other vehicle parts (e.g., air bags, radios) 
that should be classified as major parts and thus subject to parts 
marking? Some states allow glazing to be etched with the VIN. Should 
glazing be included as a major part and be required to be marked? 
Please provide a rationale with evidence to support any 
recommendations.
     Under the current standard, a limited number of lines are 
exempted from parts marking because the vehicles are equipped with 
factory installed antitheft devices as standard equipment. Because of 
the limited data available for evaluation, the effectiveness of 
antitheft devices as a deterrent could not be determined with much 
statistical confidence. Is there other evidence to support the 
effectiveness of antitheft devices? Please supply such evidence along 
with a description of the applicable antitheft device.
     Even though some insurance companies offer discounts for 
certain types of antitheft devices, it is unclear as to which devices 
are considered desirable for obtaining a discount. Also, what 
additional efforts are made by insurance companies to encourage parts 
marking and/or the installation of antitheft devices? What other 
measures does the insurance industry take to reduce the occurrence of 
motor vehicle theft? Please supply any supporting evidence that shows 
that these measures are helping to reduce motor vehicle theft or 
apprehending auto thieves.
    All comments received before the close of business on the comment 
closing date will be considered, and will be available for examination 
in the docket at the above address both before and after that date. To 
the extent possible, comments filed after the closing date will also be 
considered. The NHTSA will continue to file relevant information as it 
becomes available in the docket after the closing date, and it is 
recommended that interested people continue to examine the docket for 
new material.
    People desiring to be notified upon receipt of their comments in 
the rules docket should enclose a self-addressed, stamped postcard in 
the envelope with their comments. Upon receiving the comments, the 
docket supervisor will return the postcard by mail.

    Authority: 49 U.S.C. 30112, 33113(b).
William H. Walsh,
Associate Administrator for Plans and Policy.
[FR Doc. 97-16750 Filed 6-25-97; 8:45 am]
BILLING CODE 4910-59-P