[Federal Register Volume 62, Number 188 (Monday, September 29, 1997)]
[Rules and Regulations]
[Pages 50876-50882]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-25665]
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DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 594
[Docket No. 97-046; Notice 2]
RIN 2127-AG73
Schedule of Fees Authorized by 49 U.S.C. 30141; Fee for Review
and Processing of Conformity Certificates for Nonconforming Vehicles
AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation.
ACTION: Final rule.
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SUMMARY: This rule amends NHTSA's regulations that prescribe a schedule
of fees authorized by 49 U.S.C. 30141 for various functions performed
by the agency with respect to the importation of motor vehicles. The
amendment establishes a fee for the agency's review and processing of
statements that registered importers submit to certify that vehicles
that were not originally manufactured to conform to all applicable
Federal motor vehicle safety standards have been brought into
conformity with those standards. The fee, which is set at $14.00 for
fiscal year 1998, applies to all vehicles for which conformity
certificates are submitted to NHTSA, including vehicles imported from
Canada, which currently account for over 98 percent of the
nonconforming vehicles that are processed by NHTSA.
DATES: The amendment established by this final rule will become
effective on October 29, 1997.
Any petitions for reconsideration must be received by NHTSA not
later than November 13, 1997.
ADDRESSES: Any petitions for reconsideration should refer to the docket
and notice numbers above and be submitted to: Docket Section, National
Highway Traffic Safety Administration, 400 Seventh Street, S.W.,
Washington, D.C. 20590. Docket hours are 9:30 a.m. to 4 p.m., Monday
through Friday.
FOR FURTHER INFORMATION CONTACT: For non-legal issues: Clive Van Orden,
Office of Vehicle Safety Compliance, National Highway Traffic Safety
Administration, 400 Seventh Street, S.W., Washington, D.C. 20590 (202-
366-2830). For legal issues: Coleman Sachs, Office of Chief Counsel,
National Highway Traffic Safety Administration, 400 Seventh Street,
S.W., Washington, D.C. 20590 (202-366-5238).
SUPPLEMENTARY INFORMATION:
A. Background
This rule was preceded by a notice of proposed rulemaking (NPRM)
that NHTSA published on July 15, 1997 (62 FR 37847), proposing to
establish a fee for the agency's review and processing of conformity
certificates submitted by registered importers and to set the fee for
fiscal year (FY) 1998 at $17.00 per vehicle. The NPRM stated that 49
U.S.C. 30141 permits an importer who is registered with NHTSA (a
``registered importer'') to import a motor vehicle that was not
originally manufactured to conform to all applicable Federal motor
vehicle safety standards (FMVSS), provided that NHTSA has decided that
the vehicle is eligible for importation. Once a motor vehicle has been
declared eligible for importation, it is imported under bond by a
registered importer or by an individual who has executed a contract or
other agreement with a registered importer to bring the vehicle into
compliance with applicable FMVSS. When the registered importer
completes all necessary alterations, it must certify to NHTSA that the
vehicle meets the FMVSS. See 49 U.S.C. 30146(b) and 49 CFR 592.6(e).
This is accomplished by submitting, in accordance with regulations and
guidance issued by NHTSA, a package containing photographic and
documentary evidence of the vehicle's conformance with each applicable
FMVSS. Each of these packages is reviewed by NHTSA's Office of Vehicle
Safety Compliance (OVSC) to verify the accuracy of the information it
contains. If NHTSA questions the registered importer's certification of
compliance, the registered importer is notified pursuant to 49 CFR
592.8(c) to hold the vehicle for inspection. Acceptance of the
certification ends the agency's involvement with the vehicle.
The NPRM noted that NHTSA staff expends much time reviewing and
evaluating routine compliance packages, and even more time if a package
does not indicate conformance with the FMVSS, necessitating follow-up
action.
[[Page 50877]]
Based on figures accumulated to date, NHTSA expects to review over
21,000 compliance packages in FY 1997, which will end on September 30,
1997.
B. Authority for Fee
NHTSA is authorized under 49 U.S.C. 30141(a)(3) to establish an
annual fee requiring registered importers to pay for the costs of
carrying out the registered importer program. The agency is also
authorized under this section to establish fees to pay for the costs of
processing the conformance bonds that registered importers provide, and
fees to pay for the costs of making agency decisions relating to the
importation of noncomplying motor vehicles and equipment. As stated in
the NPRM, NHTSA believes it is entitled to reimbursement under 49
U.S.C. 30141 for the costs of reviewing conformity packages submitted
by registered importers to secure the release of the conformance bonds
that cover noncomplying vehicles.
Because NHTSA's approval of the conformity package is a necessary
predicate to the release of these bonds, NHTSA has concluded that the
expense incurred by the agency in reviewing and processing each package
may be treated as part of the bond processing cost, for which NHTSA is
authorized to set a fee under 49 U.S.C. 30141(a)(3)(A).
Additionally, NHTSA's decision to approve the release of a bond
based on its review of a conformity package qualifies as a ``decision''
under Subchapter III of Title 49, U.S. Code, for which the agency is
authorized to set a fee under 49 U.S.C. 30141(a)(3)(B). Section
30141(e) provides that the amounts collected as fees from registered
importers under section 30141(a)(3) ``are only for use by the Secretary
of Transportation--(1) in carrying out this section and sections 30146
(a)-(c)(1), (d), and (e) and 30147(b) of this title * * *.'' NHTSA's
authority to review conformity packages is principally derived from
section 30146(c). That provision authorizes the Secretary of
Transportation to require the compliance certification submitted by a
registered importer to ``be accompanied by evidence of compliance the
Secretary considers appropriate * * *.'' In light of the fact that
section 30141(e) clearly authorizes the use of fees collected from
registered importers under section 30141(a)(3) to support NHTSA's
actions in reviewing conformity packages, NHTSA has concluded that it
is authorized under 49 U.S.C. 30141(a)(3)(B) to charge fees for that
purpose.
Even if such authority did not exist in Chapter 301 of Title 49,
U.S. Code, the Independent Offices Appropriation Act of 1952, 31 U.S.C.
9701, provides ample authority for NHTSA to impose fees that are
sufficient to recover the agency's full costs for the review and
processing of conformity packages. By reviewing the conformity package
and authorizing the release of the conformance bond that is posted upon
entry of a nonconforming vehicle, NHTSA is performing a specific
service for an identifiable beneficiary that can form the basis for the
imposition of a fee under 31 U.S.C. 9701.
Courts have long recognized that federal agencies may impose fees
under section 9701 for providing comparable services to regulated
entities. See, e.g., Seafarers International Union of North America v.
U.S. Coast Guard, 81 F.3d 179, 183 (D.C. Cir. 1996)(finding the Coast
Guard authorized to charge reasonable fees for processing applications
for merchant mariner licenses, certificates, and work documents);
Engine Manufacturers Association v. E.P.A., 20 F.3d 1177, 1180 (D.C.
Cir. 1994)(finding the E.P.A. authorized to impose a fee to recover its
costs for testing vehicles and engines for compliance with the emission
standards of the Clean Air Act); and National Cable Television
Association, Inc. v. F.C.C., 554 F.2d 1094, 1101 (D.C. Cir. 1976)
(finding the F.C.C. authorized to impose fees for issuing certificates
of compliance to cable television operators).
In view of the language and judicial construction of 31 U.S.C.
9701, NHTSA is relying on this provision as an independent source of
authority for the conformity package review fee. The agency believes
that this provision and 49 U.S.C. 30141 each provide sufficient
separate authority for this fee and the other fees that the agency has
established under 49 CFR Part 594. Section 9701 was not cited as
authority for the Part 594 fees previously established by the agency
because each of those fees was expressly authorized under the language
of 49 U.S.C. 30141 or its predecessor provision. When the prior fees
were established, NHTSA did not recognize a need to impose a fee for
the review and processing of conformity certificates because those
actions accounted for a relatively small share of the work performed by
OVSC. In the ensuing years, OVSC has devoted a substantially greater
share of its work to those efforts, so that a fee is now necessary to
offset the agency's costs for performing this work.
C. Comments
Three comments were submitted in response to the notice of proposed
rulemaking. The first of these was from Philip Trupiano of Auto
Enterprises, Inc. of Clawson, Michigan, a registered importer. In his
comment, Mr. Trupiano contends that NHTSA lacks statutory authority to
establish the proposed fee for the review and processing of conformity
packages. Specifically, Mr. Trupiano states that the action taken by
the agency on these packages cannot be characterized as a ``decision''
under Subchapter III of Title 49, U.S. Code, for which the agency is
authorized to set a fee under 49 U.S.C. 30141(a)(3)(B). Mr. Trupiano
asserts that NHTSA's claim to that effect is refuted by the letters
that the agency issues to registered importers following its review of
conformity packages, which Mr. Trupiano describes as merely
acknowledging receipt of the importer's certification and stating that
a determination of a vehicle's compliance with the FMVSS may only be
made upon actual compliance testing by NHTSA.
Mr. Trupiano appears to have misconstrued the nature of the
decision the agency makes upon its review of a conformity package. That
decision is not whether the vehicle in fact conforms to all applicable
FMVSS, but instead whether the bond that is issued to ensure such
conformity may be released. The agency reaches its decision on whether
the bond may be released based on its review of the conformity package
submitted by the importer. If the conformity package provides
sufficient evidence that the vehicle complies with all applicable
FMVSS, NHTSA issues the release letter. As Mr. Trupiano has noted, the
letter contains the caveat that it does not constitute an agreement on
NHTSA's part that the vehicle in fact complies with all applicable
FMVSS since testing must be performed to determine compliance with many
of the standards. NHTSA's decision to release the conformance bond
based on its review of the conformity package is nonetheless a decision
under Subchapter III of Title 49, U.S. Code, for which the agency is
authorized to set a fee under 49 U.S.C. 30141(a)(3)(B).
Mr. Trupiano also asserts that 31 U.S.C. 9701 does not provide
alternate authority for establishment of the proposed fee because
paragraph (c)(2) of section 9701 states that ``[t]his section does not
affect a law of the United States--* * * prescribing bases for
determining charges * * *.'' Applying this language, Mr. Trupiano
contends that section 9701 provides no authority for the proposed fee
because Congress has elsewhere ``prescribed the bases for which fees
would be assessed for the registered importer program * * *.''
[[Page 50878]]
Mr. Trupiano's contention that 31 U.S.C. 9701 does not provide
alternate authority for the proposed fee also appears to be based on a
misreading of that statute. The only provision that Mr. Trupiano cites
in support of this contention is 49 U.S.C. 9701(c)(2), which states:
``(c) this section does not affect a law of the United States--* * *
(2) prescribing bases for determining charges, but a charge may be
redetermined under this section consistent with the prescribed bases.''
The legislative history of section 9701 reveals that it was derived
from a provision previously codified at 31 U.S.C. 483a (1976), which
stated, as one of its provisos, ``[t]hat nothing contained in this
section shall repeal or modify existing statutes prescribing bases for
calculation of any fee, charge or price * * *.'' This provision has no
bearing on 49 U.S.C. 30141(a)(3)(B), because that section merely
authorizes the establishment of fees to pay for the costs of making
decisions under Chapter 301, without prescribing any bases for the
calculation of such fees. Contrary to Mr. Trupiano's apparent
interpretation of subsection (b)(2) of 31 U.S.C. 9701, that subsection
does not preclude an agency from establishing a fee under section 9701
where other statutory authority for the establishment of the fee may
exist. The subsection instead merely states that if the other statute
prescribes a basis for determining the amount of the fee, that basis
shall be given effect.
Mr. Trupiano next challenges the finding by NHTSA in the regulatory
analysis portion of the NPRM that the proposed fee would not have a
significant economic impact on a substantial number of small
businesses, precluding the need for the agency to prepare a regulatory
flexibility analysis under the Regulatory Flexibility Act. As Mr.
Trupiano notes, this finding was predicated on the agency's belief that
importers could pass along the proposed fee, which is quite small in
comparison to the value of the vehicles to which it would apply, to the
ultimate purchasers of those vehicles. Mr. Trupiano instead contends
that vehicles imported from Canada must compete with domestically
produced versions of those vehicles and that the value of Canadian
imports, which is set by the value of their domestic counterparts,
would not be enhanced in any manner by payment of the proposed fee. As
such, Mr. Trupiano asserts that the fee would have to be absorbed by
the importer and that it could have significant cost consequences if
the volume of imports by any one importer is sufficiently high.
Additionally, Mr. Trupiano asserts that NHTSA did not provide advance
notice to registered importers or their trade association prior to
issuance of the NPRM, or seek alternatives that would reduce the cost
of processing compliance packages. The alternatives that Mr. Trupiano
identifies are: ``(1) Electronic data transfer of the conformance
package and bond release; (2) elimination of unnecessary film
photographs of the vehicles; (3) reduction in the amount of the
conformity bond required; and (4) shorter turnaround time in reviewing
the conformity packages.''
With regard to the cost impact of the proposed fee on registered
importers, NHTSA notes that Mr. Trupiano did not identify the profit
margin on which these businesses typically operate. From NHTSA's
understanding of this industry, the agency believes that the fee, which
was proposed at $17.00 but is being established in this final rule at
$14.00 on the basis of more current data, is quite low in relation to
the profit earned by the typical registered importer on each
noncomplying vehicle that it imports. Even if this fee amount could not
be passed on to the vehicle's ultimate purchaser, as Mr. Trupiano
contends, the agency believes that the registered importer could absorb
it without suffering undue financial strain. Based on informal contacts
with registered importers prior to the issuance of the NPRM, NHTSA
understood that they could reasonably accommodate a fee in the
neighborhood of twenty to twenty-five dollars. The $14.00 fee that
NHTSA is establishing in this final rule, which is based on the
agency's analysis of the costs it actually incurs in the review and
processing of conformity packages, is considerably short of this range.
With respect to the alternatives to the imposition of the proposed
fee that were identified by Mr. Trupiano, NHTSA notes that the only one
that would actually reduce the costs that NHTSA incurs in the review
and processing of conformity packages is the electronic transfer of the
bond release letter. The agency is currently studying the feasibility
of implementing such a change. The agency is also examining the issue
of allowing registered importers to transmit the contents of the
conformity package electronically. It is the agency's understanding
that any requirement for the electronic transfer of this data would
actually increase costs to many registered importers since they lack
the specialized equipment and expertise necessary to make such
transmissions. Agency costs are also likely to increase with the
electronic transfer of conformity data, as it would take longer for a
reviewer to call up photographs on a computer than to examine hard copy
photographs in a conformity package.
The principal impediment to the agency's approval of electronic
transmissions is the existing requirement for actual photographs to be
used to verify the certifications in the conformity package that the
vehicle complies with all applicable standards. NHTSA requires actual
photographs because they are less subject to manipulation than
electronically transmitted images and therefore provide a more reliable
means for identifying the vehicle that is the subject of the conformity
package and ascertaining its conformity status. Nevertheless, NHTSA is
still exploring ways to accommodate the interest in electronic
transmission that has been expressed by some registered importers.
NHTSA requires the conformance bond that accompanies the entry of a
noncomplying vehicle to be in an amount equal to 150% of the dutiable
value of the vehicle. See 49 CFR 591.8. The agency is authorized under
49 U.S.C. 30141(d)(2) to require importers to provide bonds up to that
amount. Since the full amount of the bond is released upon NHTSA's
approval of a conformity package, any reduction in the amount of the
bond should have negligible cost consequences for registered importers.
The agency believes that it is necessary for the bond to be in the full
amount authorized under section 30141(d)(2) to provide maximum
assurance that nonconforming vehicles imported under bond are brought
into compliance with all applicable standards.
Under 49 U.S.C. 30146(a), a registered importer may release custody
of a vehicle that did not conform to all applicable FMVSS at the time
of importation 30 days after it submits to NHTSA a conformity package
covering the vehicle, unless the agency notifies the importer to hold
the vehicle for inspection or notifies the importer that it has reason
to question the validity of the certification. Currently, NHTSA is
processing these packages well within the 30-day limit. Processing time
is now averaging approximately one and one-half weeks, with an
additional week taken, on average, if there is a need to communicate
with the registered importer to address any problem that the agency may
have with the package. Although the agency continually strives to
streamline its administrative processes, given current staff and
budgetary constraints, it would be difficult to achieve any significant
reduction in the present turnaround
[[Page 50879]]
time for the review and processing of conformity packages.
Mr. Trupiano next observes that NHTSA permits individuals to import
vehicles from Canada that are not certified as complying with all
applicable FMVSS provided that they furnish a letter from the vehicle's
manufacturer stating that the vehicle meets those requirements. Mr.
Trupiano contends that the agency expends many of the same resources in
processing these imports as it does for vehicles imported by registered
importers, leading him to question why it is not proposing a fee to
cover those processing costs. Through an agreement that it entered with
the U.S. Customs Service in April of this year, NHTSA's approval is no
longer necessary for the importation of Canadian vehicles for personal
use. The importer now furnishes the manufacturer's letter directly to
the Customs Service. As a consequence, there is no longer a basis for
the agency to impose a fee for processing these imports.
Mr. Trupiano's final contention is that the proposed fee ``would
serve to place an additional financial restriction on the entry of
motor vehicles from Canada, where no such equivalent fee is paid to the
Canadian government for importing a vehicle from the United States.''
As such, he asserts that the fee would constitute a non-tariff barrier
to trade prohibited under Article 309 of the North American Free Trade
Agreement (NAFTA).
Article 309 of NAFTA provides, with certain exceptions that are
beyond the scope of this discussion, that ``no Party may adopt or
maintain any prohibition or restriction on the importation of any good
of another Party * * *.'' NHTSA initially notes that the proposed fee
would be assessed for the sole purpose of allowing the agency to
recover its actual costs for the review and processing of conformity
packages. Assessment of the proposed fee would not prohibit or restrict
the entry of Canadian-certified vehicles into the United States, and,
as such, it would not violate any provision of Article 309.
NHTSA further notes that Article 904 of NAFTA preserves the right
of each Party to the agreement to ``adopt, maintain or apply any
standards-related measure, including any such measure relating to
safety, the protection of human * * * life or health * * * and any
measure to ensure its enforcement or implementation.'' Article 904
further provides that ``[s]uch measures include those to prohibit the
importation of a good of another Party * * * that fails to comply with
the applicable requirements of those measures or to complete the
Party's approval procedures.'' The term ``standard-related measure'' is
defined in Article 915 of NAFTA as including a ``conformity assessment
procedure.'' NHTSA's review of conformity packages is therefore
governmental action that is specifically sanctioned by NAFTA and there
is nothing in that agreement that restricts the right of any Party to
impose a fee for taking such action.
The second comment was submitted by Lawrence A. Beyer, an attorney
who has represented registered importers in matters before the agency.
Mr. Beyer initially contends that the agency based its calculation of
the proposed fee on a low estimate of nonconforming vehicle imports.
Mr. Beyer characterizes the proposed fee as being based on projected
imports of 16,000 in fiscal year 1998. In contrast to this figure, Mr.
Beyer states that noncomplying imports thus far in fiscal year 1997
have averaged 1,727 per month, which translates to a total of 20,729
vehicles for the entire fiscal year, and that the existing trend is for
the volume of noncomplying vehicle imports to increase each year. Based
on these larger projected import figures, Mr. Beyer contends that NHTSA
should reduce the amount of the proposed fee.
The agency has decided to accept this recommendation. As noted in
the NPRM, the proposed fee was calculated on the basis of resources
expended by NHTSA in processing the 16,000 noncomplying vehicles for
which conformity packages were submitted in calendar year 1996. Since
issuing the NPRM, NHTSA has received more complete data on the volume
of noncomplying vehicles imported during the current fiscal year for
which conformity packages must be processed by the agency. This
indicates that 20,786 such vehicle were imported from October 1, 1996,
the first day of fiscal year 1997, through September 16, 1997. Based on
this volume, NHTSA anticipates that over 21,000 noncomplying vehicles
will be imported by the end of this fiscal year on September 30, 1997.
NHTSA has decided to use this figure in calculating the conformity
package review fee for fiscal year 1998, as opposed to the 16,000
vehicle figure identified in the NPRM. Although NHTSA has also
identified the need to increase one cost element used in calculating
the fee in light of more accurate information received since issuing
the NPRM, an overall reduction in the fee from the $17.00 originally
proposed will be realized by allocating the agency's costs over a
larger vehicle base. As noted in the NPRM, NHTSA will review the fee at
least every two years to see if further adjustments are needed. The
agency is bound to provide this review in order to insure that it
recovers no more than its actual costs for the review and processing of
conformity packages.
Mr. Beyer further contends that NHTSA failed to properly assess the
impact of the proposed fee on small entities under the Regulatory
Flexibility Act, and did not solicit the input of affected small
entities before issuing the NPRM. He additionally contends that the
proposed fee would constitute a non-tariff barrier to trade under
NAFTA. Mr. Beyer also observes that the bond release letter issued by
NHTSA states that it does not constitute agreement by the agency that
the vehicle in question in fact conforms to all applicable standards.
The agency has addressed each of these issues in its response to the
previous comment. Mr. Beyer finally contends that ``NHTSA has attempted
to bypass its decision regarding VSA-1 eligible imports'' by assigning
new eligibility numbers. Mr. Beyer asserts that ``[t]here is no
substantive difference between the compliance issues for the VSA-1
determination which was paid for in 1989, and the new codes.'' What Mr.
Beyer overlooks is that the payment that was made in 1989 covered the
import eligibility decision that NHTSA had made regarding Canadian-
certified vehicles. As noted in the NPRM, that fee is entirely distinct
from the fee the agency has proposed to recover its costs for the
review and processing of conformity packages. Given the high volume of
conformity packages that NHTSA has had to process in recent years, and
the fact that this responsibility now accounts for a large share of the
work performed by the Equipment and Imports Division of the agency's
Office of Vehicle Safety Compliance, there is clearly a need for NHTSA
to now proceed with the implementation of a fee to recover its costs
for performing this function.
The third comment was submitted by Brian Osler, Executive Director
and Counsel for the North American Automobile Trade Association. Mr.
Osler states that his association is in favor of NHTSA recovering
reasonable costs for ensuring compliance with FMVSS. However, he asks
the agency to consider waiving the requirement for the submission of
photographs to substantiate compliance certifications. The agency has
addressed this issue in its response to Mr. Trupiano's comment.
D. Fee Computation
NHTSA has computed all other fees that it collects under the
authority of 49 U.S.C. 30141 on the basis of all direct
[[Page 50880]]
and indirect costs incurred by the agency in performing the function
for which the fee is charged. See 54 FR 17792, 17793 (April 25, 1989).
The Office of Management and Budget (OMB), in Circular A-25
establishing Federal policy for the assessment of user fees under 31
U.S.C. 9701, stated that such fees must be ``sufficient to recover the
full cost to the Federal Government * * * of providing the service,
resource, or good when the Government is acting in its capacity as a
sovereign.'' See 58 FR 38142, 38144 (July 15, 1993).
Applying an approach consistent with its past practices and the OMB
Circular, the agency has calculated its direct and indirect costs in
setting the fee for the review and processing of conformity
certificates as follows:
The direct costs used to calculate the fee include the estimated
cost of contract and professional staff time, computer costs, and costs
for record assembly, marking, shipment and storage.
The estimated cost of contract and professional staff time is
calculated on the basis of the full cost for time spent at the
following currently prevailing rates: Data entry--$44,410 per year;
computer programmer--$86,650 per year; compliance analyst--$60,092 per
year. Three quarters of the total hours worked by a single data entry
specialist on contract to OVSC are devoted to the processing of
compliance packages. A second data entry specialist on contract to OVSC
is engaged full time in the processing of compliance packages.
Multiplying the annual contract cost for the hours worked by these
contract support staff members ($44,410 each) by 1.75 (representing the
one data entry position devoted fully to compliance package processing
and the other in which three quarters of the total hours worked are
devoted to that function) yields $77,715.50 in data entry labor costs
that are incurred by NHTSA on an annual basis in the processing of
compliance packages. Thirty-seven percent of the total hours worked by
a single computer programmer on contract to OVSC is devoted to the
processing of compliance packages. Multiplying the annual contract cost
for the hours worked by this contract support staff member ($86,650) by
37 percent yields $32,060.50 in computer programming labor costs that
are incurred by NHTSA on an annual basis in the processing of
compliance packages. In the NPRM, NHTSA identified 18.75 percent of
this computer programmer's time as being devoted to the processing of
compliance packages, resulting in an annual cost of $16,246.88. At the
time that NHTSA was preparing the NPRM, this computer programmer had
recently begun her contract with the agency, resulting in a rough
estimate of the time which she anticipated would be needed to process
compliance packages. In the ensuing weeks, it has become apparent that
the time this contractor spends in the processing of compliance
packages was considerably underestimated, requiring adjustment to
better reflect the hours that she actually devotes to this task. Ninety
percent of the total hours worked by a single compliance analyst
employed by OVSC is devoted to the review of compliance packages.
Multiplying the annual rate of pay for this staff member ($60,092) by
90 percent yields $54,082.80 in compliance analyst labor costs that are
incurred by NHTSA on an annual basis in the review of compliance
packages.
Adding these amounts yields a total of $163,858.80 in contract and
professional staff costs that NHTSA incurs each year for the processing
and review of compliance packages. Dividing that amount by 21,000, the
number of compliance packages reviewed by OVSC in fiscal year 1997,
yields a direct cost of $7.80 for each compliance package reviewed.
Computer costs are calculated on the following basis: NHTSA pays
$13,800 per year to maintain a link with the Customs Service computer.
Ninety-five percent of the agency's usage of this computer is
associated with the review of compliance packages, resulting in a cost
of $13,110 that can be allocated to that use. Additionally, the agency
pays $30,000 per year for the purpose of running OVSC's computers and
performing necessary backups of data entries. Ninety percent of this
usage is associated with the review of compliance packages, yielding a
cost of $27,000 that can be allocated to that use. The agency also pays
$4,000 per year for a maintenance contract on OVSC's computers, ninety
percent of which can also be allocated to that office's review of
compliance packages, yielding an annual cost of $3,600. Additionally,
NHTSA pays a $9,360 annual licensing fee for the data base management
system that is used in the processing of compliance packages. Because
that system is not used for any other purpose, the full annual fee can
be allocated to that use. Adding these costs produces the sum of
$53,070 that is spent annually on computer usage associated with the
review of compliance packages. Dividing this sum by 21,000, which, as
previously indicated, is the number of compliance packages reviewed by
OVSC in fiscal year 1997, yields a direct cost of $2.53 for each
compliance package reviewed.
The average cost for record assembly, marking, and shipment is
calculated at the rate of $16.56 per box. The average cost for record
storage is calculated to be $7.92 per box for a storage period of three
years. Based on an average of 110 records per box, these costs amount
to 22 cents for each compliance package received by the agency. Adding
the direct costs for contract and professional staff hours ($7.80),
computer usage ($2.53), and record assembly, marking, shipment, and
storage ($0.22) produces a total of $10.55 for each compliance package
reviewed and processed by NHTSA.
The indirect costs include a pro rata allocation of the average
benefits of persons employed in processing and reviewing conformity
packages. Benefits provided by NHTSA amount to eighteen percent of the
salary earned by its employees. Multiplying the $54,082.80 in
professional staff costs that NHTSA incurs each year for the processing
and review of compliance packages by eighteen percent yields a figure
of $9,734.90.
The indirect costs also include a pro rata allocation of the costs
attributable to the rental and maintenance of office space and
equipment, the use of office supplies, and other overhead items. For
fiscal year 1998, these costs are projected to average $21,131 for each
employee and contract support staff member working at NHTSA
headquarters. This figure was derived by dividing $13,566,000 in
projected headquarters costs (reached by subtracting $482,000 in field
operating costs from total agency costs of $14,048,000) by 642
(representing 510 full time equivalent positions that are authorized
for NHTSA headquarters plus 132 on-site contract personnel).
Multiplying that figure by 3.02, which represents the number of
combined contract and professional staff-years devoted annually to the
review and processing of compliance packages, yields a figure of
$63,815.62. Adding this figure to $9,734.90 produces the sum of
$73,550.52, representing the total indirect costs incurred by NHTSA in
the review and processing of compliance packages. Dividing this amount
by 21,000, which, as previously indicated, is the number of compliance
packages reviewed by NHTSA in fiscal year 1997, yields $3.50 in
indirect costs for each compliance package reviewed. Adding these
indirect costs to the $10.55 in direct costs that NHTSA incurs in the
review and processing of each compliance package yields a total of
$14.05 in direct and indirect costs for
[[Page 50881]]
each compliance package reviewed by the agency.
Based on the above factors, NHTSA is establishing $14.00 as the fee
to recover its costs for the review and processing of a compliance
package. This fee will have to be tendered with each compliance package
submitted to the agency for processing.
E. Applicability of Fee to Canadian Vehicles
As noted in the NPRM, in recent years, Canadian imports have
accounted for a growing share of NHTSA's oversight program that is
directed at the importation of nonconforming vehicles. In NHTSA's
Calendar Year 1995 Report to Congress concerning this program, the
agency stated that 15,096 of the 15,332 nonconforming vehicles that
were permanently imported into the country during that year (or over
98%) were from Canada. The report noted a continuing upward trend in
the importation of noncomplying vehicles from Canada since 1993, and
attributed that development to the exchange rate favoring the U.S. over
the Canadian dollar.
In past years, NHTSA has not collected the per vehicle import
eligibility determination fee established under 49 CFR 594.8 from the
importers of vehicles that were certified by their original
manufacturer as complying with all applicable Canadian motor vehicle
safety standards and that were eligible for importation under vehicle
eligibility number VSA-1. As NHTSA explained in a final import
eligibility decision covering Canadian-certified motor vehicles,
published on May 13, 1997 at 62 FR 26348, the per vehicle import
eligibility fee was never imposed on the importers of these vehicles
because the first importer of a Canadian-certified motor vehicle paid
the full $1560 fee that was established in 1989 to cover the agency's
costs for an eligibility decision made on the Administrator's
initiative. In the May 13, 1997 final decision, NHTSA rescinded VSA-1
as the eligibility number assigned to all eligible Canadian-certified
vehicles, and replaced it with four separate eligibility numbers (VSA-
80 through 83), based on vehicle classification and weight.
NHTSA will collect the fee established under this rule from all
importers submitting conformity packages to the agency, including the
importers of Canadian-certified vehicles eligible for importation under
VSA-80 through 83. The agency deems this action to be necessary because
the review and processing of conformity packages submitted for Canadian
imports have assumed an increasing share of the staff time within
OVSC's Equipment and Imports Division and now comprise a major portion
of the work performed by that division. The imposition of such a fee is
also consistent with OMB's policy for Federal agencies to obtain full
cost reimbursement from the recipients of agency services.
Effective Date
Section 30141(e) of Title 49, U.S. Code requires the amount of fees
imposed under section 30141(a) to be reviewed, and, if appropriate,
adjusted by NHTSA at least every two years. It also requires that the
fee for each fiscal year be established before the beginning of that
year. The fee established under this final rule will first become
effective in fiscal year 1998, which begins on October 1, 1997. NHTSA
is meeting the requirements of section 30141(e) by publishing this
final rule establishing the fee before that date. However, in keeping
with the rulemaking requirements of the Administrative Procedure Act, 5
U.S.C. 553, the final rule will not become effective until thirty days
after its publication in the Federal Register. NHTSA will not collect
the fee for any conformity certificates submitted before the final
rule's effective date.
Rulemaking Analyses and Notices
1. Executive Order 12866 (Federal Regulatory Planning and Review) and
DOT Regulatory Policies and Procedures
This rule was not reviewed under E.O. 12866. NHTSA has analyzed
this rule and determined that it is not ``significant'' within the
meaning of the Department of Transportation's regulatory policies and
procedures.
2. Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act, NHTSA has
evaluated the effects of this action on small entities. Based upon this
evaluation, I certify that the amendment resulting from this rulemaking
will not have a significant economic impact on a substantial number of
small entities. Although most registered importers would qualify as
small businesses within the meaning of the Regulatory Flexibility Act,
the agency has no reason to believe that these companies could not pay
the fee established under this rule. This fee will in all likelihood be
passed along to the purchaser of the vehicle for which a conformity
package is submitted to NHTSA for review. Most nonconforming vehicles
that are imported into the United States are of very recent vintage,
and many would be considered luxury models. Given the nominal amount of
the fee established under this rule, especially when viewed in relation
to the purchase price of the vehicles to which it pertains, it will not
appreciably increase the purchase price of those vehicles and is
unlikely to have any significant impact on their importation and sale.
For that reason, registered importers and small businesses, small
organizations, and small governmental units that purchase motor
vehicles will not be significantly affected by the proposed fee.
Accordingly, no regulatory flexibility analysis has been prepared.
3. Executive Order 12612 (Federalism)
This action has been analyzed in accordance with the principles and
criteria contained in Executive Order 12612, and it has been determined
that the rule does not have sufficient Federalism implications to
warrant preparation of a Federalism Assessment. No State laws will be
affected.
4. National Environmental Policy Act
The agency has considered the environmental implications of this
rule in accordance with the National Environmental Policy Act of 1969
and determined that the rule would not significantly affect the human
environment.
5. Civil Justice Reform
This rule does not have any retroactive effect. It does not repeal
or modify any existing Federal regulations. A petition for
reconsideration or other administrative proceeding will not be a
prerequisite to an action seeking judicial review of this rule. This
rule does not preempt the states from adopting laws or regulations on
the same subject, except that it will preempt a state regulation that
is in actual conflict with the Federal regulation or makes compliance
with the Federal regulation impossible or interferes with the
implementation of the Federal statute.
List of Subjects in 49 CFR Part 594
Administrative practice and procedure, Imports, Motor vehicle
safety.
In consideration of the foregoing, Part 594, Schedule of Fees
Authorized by 49 U.S.C. 30141, in Title 49 of the Code of Federal
Regulations is amended as follows:
PART 594--[AMENDED]
1. The authority citation for Part 594 is amended to read as
follows:
[[Page 50882]]
Authority: 49 U.S.C. 30141, 31 U.S.C. 9701; delegation of
authority at 49 CFR 1.50.
2. Section 594.5 is amended by redesignating paragraphs (g) and (h)
as paragraphs (h) and (i), respectively, and by adding a new paragraph
(g), to read as follows:
Sec. 594.5 Establishment and payment of fees.
* * * * *
(g) A fee for the review and processing of a conformity certificate
shall be submitted with each certificate of conformity furnished to the
Administrator.
3. A new section 594.10 is added to part 594, to read as follows:
Sec. 594.10 Fee for review and processing of conformity certificate.
(a) Each registered importer shall pay a fee based on the agency's
direct and indirect costs for the review and processing of each
certificate of conformity furnished to the Administrator pursuant to
Sec. 591.7(e) of this chapter.
(b) The direct costs attributable to the review and processing of a
certificate of conformity include the estimated cost of contract and
professional staff time, computer usage, and record assembly, marking,
shipment and storage costs.
(c) The indirect costs attributable to the review and processing of
a certificate of conformity include a pro rata allocation of the
average benefits of persons employed in reviewing and processing the
certificates, and a pro rata allocation of the costs attributable to
the rental and maintenance of office space and equipment, the use of
office supplies, and other overhead items.
(d) For certificates of conformity submitted on and after October
29, 1997, the fee is $14.00.
* * * * *
Issued on: September 23, 1997.
Kenneth N. Weinstein,
Associate Administrator for Safety Assurance.
[FR Doc. 97-25665 Filed 9-26-97; 8:45 am]
BILLING CODE 4910-59-P