[Federal Register Volume 66, Number 152 (Tuesday, August 7, 2001)]
[Rules and Regulations]
[Pages 41149-41151]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19740]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 578

[Docket No. NHTSA 2001-9404; Notice 2]
RIN 2127-AI42


Civil Penalties

AGENCY: National Highway Traffic Safety Administration (NHTSA), DOT.

ACTION: Final rule.

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

DATES: The final rule is effective September 6, 2001.

[[Page 41150]]


FOR FURTHER INFORMATION CONTACT: Taylor Vinson, Office of Chief 
Counsel, NHTSA, telephone (202) 366-5263, facsimile (202) 366-3820, 
electronic mail ``[email protected]'', 400 Seventh Street, SW, 
Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

Background

    In order to preserve the remedial impact of civil penalties and to 
foster compliance with the law, the Federal Civil Monetary Penalty 
Inflation Adjustment Act of 1990 ((``Adjustment Act''), 28 U.S.C. Sec. 
2461 note, Pub. L. 101-410), as amended by the Debt Collection 
Improvement Act of 1996 (``Collection Act,'' Pub. L. 104-134), requires 
us and other Federal agencies to regularly adjust certain civil 
penalties for inflation. Under these laws, each agency must make an 
initial inflationary adjustment for all applicable civil penalties, and 
must make further adjustments of these penalty amounts at least once 
every four years. The Collection Act limited the initial increase to 10 
percent of the penalty being adjusted.
    Our initial adjustment of civil penalties under these legislative 
authorities was published on February 4, 1997 (62 FR 5167). We 
established 49 CFR part 578, Civil Penalties, which applies to 
violations that occur on and after March 6, 1997. These adjustments 
resulted in the maximum permissible increases of 10 percent. On July 
14, 1999, we further adjusted certain penalties to enhance their 
deterrent effect (64 FR 37876), effective August 13, 1999. As we are 
now at the end of the four-year period following the initial 
adjustment, we reviewed the penalties that have remained unchanged 
since 1997, and, on May 18, 2001, proposed adjusting those penalties 
where the statutory formulae authorize it (66 FR 27621). We received 
one comment on the proposal, from the National Automobile Dealers 
Association (NADA), which confirmed our methodology. NADA ``expects 
these higher penalty figures will help to deter odometer and theft law 
violations and thus will help to protect dealers and their customers.''

Method of Calculation

    Under the Adjustment Act as amended by the Collection Act, we 
determine the inflation adjustment for each applicable civil penalty by 
increasing the maximum civil penalty amount per violation by the cost-
of-living adjustment, and then applying a rounding factor. Sec. 5(b) of 
the Adjustment Act defines the ``cost-of-living'' adjustment as:

    ``the percentage (if any) for each civil monetary penalty by 
which--
    (1) the Consumer Price Index for the month of June of the 
calendar year preceding the adjustment exceeds
    (2) the Consumer Price Index for the month of June of the 
calendar year in which the amount of such civil monetary penalty was 
last set or adjusted pursuant to law.''

    Since the adjustment will be effective before December 31, 2001, 
the ``Consumer Price Index [CPI] for the month of June of the calendar 
year preceding the adjustment'' is the CPI for June 2000. This figure 
is 172.4. NHTSA's penalties were initially adjusted in February 1997 
based on the CPI figure for June 1996, which was 156.7. The factor that 
we have used in calculating the increase, then, is 172.4 divided by 
156.7, or 1.1001914, rounded to 1.1. Any calculated increase under this 
adjustment is then subject to a specific rounding formula set forth in 
Sec. 5(a) of the Adjustment Act. Under the formula:
    Any increase shall be rounded to the nearest:
    (1) multiple of $10 in the case of penalties less than or equal to 
$100;
    (2) multiple of $100 in the case of penalties greater than $100 but 
less than or equal to $1,000;
    (3) multiple of $1,000 in the case of penalties greater than $1,000 
but less than or equal to $10,000;
    (4) multiple of $5,000 in the case of penalties greater than 
$10,000 but less than or equal to $100,000;
    (5) multiple of $10,000 in the case of penalties greater than 
$100,000 but less than or equal to $200,000; and
    (6) multiple of $25,000 in the case of penalties greater than 
$200,000.

Review of Civil Penalties Prescribed by Section 578.6

    Sec. 578.6 contains the civil penalties authorized by the statutes 
that we enforce. We have reviewed these penalties, multiplied each of 
them by 1.1, considered the nearest higher multiple specified in the 
rounding provisions, and concluded that only the penalties discussed 
below may be increased.
    Sec. 578.6(f) Odometer tampering and disclosure. The maximum civil 
penalty for a related series of violations of 49 U.S.C. Chapter 327 is 
$110,000, as specified in Sec. 578.6(f)(1). The inflation factor raises 
this figure to $121,000. Under the formula, any increase in a penalty 
shall be rounded to the nearest multiple of $10,000 in the case of 
penalties greater than $100,000 but less than or equal to $200,000. 
Accordingly, we are amending Sec. 576.8(f)(1) to increase the maximum 
civil penalty to $120,000 for a related series of violations of the 
odometer tampering and disclosure provisions. However, the maximum 
civil penalty for a single violation remains at $2,200 because the 
inflation-adjusted figure of $2,420 is not yet at a level to be rounded 
to the nearest multiple of $1,000.
    Sec. 578.6(g) Vehicle theft prevention. Under Sec. 578.6(g)(1), the 
maximum civil penalty for a related series of violations of 49 U.S.C. 
33114(a)(1-4) is $275,000. The inflation factor raises this figure to 
$302,500. Under the formula, any increase in a penalty shall be rounded 
to the nearest multiple of $25,000 in the case of penalties greater 
than $200,000. Accordingly, we are amending Sec. 576.8(g)(1)to increase 
the maximum civil penalty to $300,000 for a related series of 
violations of the vehicle theft prevention provisions. However, the 
maximum penalty for a single violation remains at $1,100.
    Under Sec. 578.6(g)(2), a person that violates 49 U.S.C. 
33114(a)(5) is liable for a civil penalty of not more than $110,000 a 
day for each violation. The inflation factor modified by the rounding 
factor results in this penalty being raised to $120,000, and we are 
amending Sec. 578.6(g)(2) to reflect this adjustment as well.

Effective Date

    The amendments are effective September 6, 2001. The adjusted 
penalties will apply to violations occurring on and after the effective 
date.

Rulemaking Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

    We have considered the impact of this rulemaking action under E.O. 
12866 and the Department of Transportation's regulatory policies and 
procedures. This rulemaking document was not reviewed under E.O. 12866, 
``Regulatory Planning and Review.'' This action is limited to the 
adoption of adjustments of certain civil penalties under statutes that 
the agency enforces, and has been determined to be not ``significant'' 
under the Department of Transportation's regulatory policies and 
procedures.

Regulatory Flexibility Act

    We have also considered the impacts of this notice under the 
Regulatory Flexibility Act. I certify that this final rule will have no 
significant economic impact on a substantial number of small entities. 
The following is my statement providing the factual basis for the

[[Page 41151]]

certification (5 U.S.C. Sec. 605(b)). The amendments primarily affect 
manufacturers of motor vehicles. Manufacturers of motor vehicles are 
generally not small businesses within the meaning of the Regulatory 
Flexibility Act.
    The Small Business Administration's regulations define a small 
business in part as a business entity ``which operates primarily within 
the United States.'' (13 CFR 121.105(a)) SBA's size standards are 
organized according to Standard Industrial Classification Codes (SIC), 
SIC Code 3711 ``Motor Vehicles and Passenger Car Bodies'' has a small 
business size standard of 1,000 employees or fewer.
    For manufacturers of passenger cars and light trucks, NHTSA 
estimates there are at most five small manufacturers of passenger cars 
in the U.S. Since each manufacturer serves a niche market, often 
specializing in replicas of ``classic'' cars, production for each 
manufacturer is fewer than 100 cars per year. Thus, there are at most 
500 cars manufactured per year by U.S. small businesses.
    In contrast, in 2001, there are approximately nine large 
manufacturers producing passenger cars, and light trucks in the U.S. 
Total U.S. manufacturing production per year is approximately 15 to 15 
and a half million passenger cars and light trucks. We do not believe 
small businesses manufacture even 0.1 percent of total U.S. passenger 
car and light truck production per year.
    Further, small organizations and governmental jurisdictions will 
not be significantly affected as the price of motor vehicles ought not 
to change as the result of this rule. As explained above, this action 
is limited to the adoption of a statutory directive, and has been 
determined to be not ``significant'' under the Department of 
Transportation's regulatory policies and procedures.
    Finally, this action will not affect our civil penalty policy under 
the Small Business Regulatory Enforcement Fairness Act (62 FR 37115, 
July 10, 1997). We shall continue to consider the appropriateness of 
any civil penalty to the size of the business charged.

Paperwork Reduction Act

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

National Environmental Policy Act

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

Executive Order 12612 (Federalism)

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

Civil Justice Reform

    This proposed rule does not have a retroactive or preemptive 
effect. Judicial review of a rule based on this proposal may be 
obtained pursuant to 5 U.S.C. Sec. 702. That section does not require 
that a petition for reconsideration be filed prior to seeking judicial 
review.

Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires 
agencies to prepare a written assessment of the cost, benefits and 
other effects of proposed or final rules that include a Federal mandate 
likely to result in the expenditure by State, local, or tribal 
governments, in the aggregate, or by the private sector, of more than 
$100 million annually. Because this rule will not have a $100 million 
effect, no Unfunded Mandates assessment will be prepared.

List of Subjects in 49 CFR Part 578

    Imports, Motor vehicle safety, Motor vehicles, Rubber and rubber 
products, Tires, Penalties.

PART 578--CIVIL PENALTIES

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

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

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


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

* * * * *
    (f) Odometer tampering and disclosure. (1) * * * The maximum civil 
penalty under this paragraph for a related series of violations is 
$120,000.
* * * * *
    (g) Vehicle theft prevention. (1) * * * The maximum penalty under 
this paragraph for a related series of violations is $300,000.
    (2) A person that violates 49 U.S.C. 33114(a)(5) is liable to the 
United States government for a civil penalty of not more than $120,000 
a day for each violation.
* * * * *

    Issued on: August 1, 2001.
L. Robert Shelton,
Executive Director.
[FR Doc. 01-19740 Filed 8-6-01; 8:45 am]
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