[Federal Register Volume 67, Number 68 (Tuesday, April 9, 2002)]
[Proposed Rules]
[Pages 17027-17036]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-8522]


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DEPARTMENT OF JUSTICE

28 CFR Part 89

[AG ORDER No. 2570-2002]
RIN 1110-AA01


National Stolen Passenger Motor Vehicle Information System 
Regulations

AGENCY: Department of Justice.

ACTION: Proposed rule.

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SUMMARY: The United States Department of Justice (Department) is 
publishing a proposed rule to implement the National Stolen Passenger 
Motor Vehicle Information System (NSPMVIS or System) that will verify 
the theft status of salvage and junk motor vehicles and major parts 
marked with a Vehicle Identification Number (VIN) or a derivative of a 
VIN. Under specific conditions detailed in this proposed rule an 
insurance carrier selling comprehensive motor vehicle insurance 
coverage or a person engaged in the business of salvaging, dismantling, 
recycling, or repairing passenger motor vehicles must verify the theft 
status of salvage and junk motor vehicles or major parts. In addition, 
this proposed rule contains prescribed procedures under which an 
individual or entity, not engaged in the business of salvaging, 
dismantling, recycling, or repairing passenger motor vehicles, 
intending to transfer a passenger motor vehicle or passenger motor 
vehicle part, may obtain information on whether the vehicle or part is 
listed in the System as stolen.

DATES: Comments must be submitted on or before June 10, 2002.

ADDRESSES: All comments concerning this proposed rule should be mailed 
to: Stephen A. Bucar, Supervisory Special Agent, Federal Bureau of 
Investigation, CJIS Division, Module C-3, 1000 Custer Hollow Road, 
Clarksburg, West Virginia, 26306.

FOR FURTHER INFORMATION CONTACT: Supervisory Special Agent Stephen A. 
Bucar, telephone number (304) 625-2751.

SUPPLEMENTARY INFORMATION: Section 609 of the Anti Car Theft Act of 
1992, Public Law Number 102-519 (codified at 49 U.S.C. 33109), directed 
the Attorney General to establish a National Stolen Auto Part 
Information System (NSAPIS) to track and monitor stolen parts. Further 
legislation renamed the system as the National Stolen Passenger Motor 
Vehicle Information System. See Public Law 103-272 (1994).

What is the nature of the problem that needs to be addressed?

    The total cost of motor vehicle theft in the United States in 1994 
was $7.6 billion, according to the National Insurance Crime Bureau 
(NICB). This total compares to $3.2 billion in 1970 (1994 dollars), an 
increase of 134 percent. A 1995 NICB study shows that criminals in the 
1990s were utilizing more sophisticated methods in selling and 
disguising stolen vehicles and vehicle parts compared to thieves in 
previous years. The NICB study revealed that not only were stolen 
vehicles less likely to be recovered in 1995 as compared to 1970, but 
the condition of recovered vehicles also deteriorated.

What was the congressional response to the theft problem?

    In response to the continuing problem of motor vehicle theft in the 
United States, Congress passed the Anti Car Theft Act of 1992 (the 
``Act''). Among other anti-theft measures, the Act mandates the 
establishment of a national computer system to verify the theft status 
of salvage and junk motor vehicles and covered major parts.
    The Act affects salvage and junk motor vehicles and covered major 
parts. A salvage motor vehicle is a vehicle that has been damaged by 
collision, fire, flood, accident, trespass, or other incident to the 
extent that its fair salvage value plus the cost of repairing the 
vehicle for legal operation on roads or highways exceeds the fair 
market value of the vehicle prior to the incident causing the damage. A 
salvage vehicle may be rebuilt, retitled, and allowed to operate 
legally on the road. A junk motor vehicle is a vehicle that is non-
repairable, incapable of operation on roads or highways, and has no 
value except as a source of parts or scrap. The definitions for salvage 
and junk motor vehicles include any individual state and federally 
recognized tribe's definition for a vehicle that is declared a total 
loss or economically impractical to repair. The only parts affected by 
the Act (``covered major parts'') are original major parts that are 
dismantled, recycled, salvaged, or otherwise removed from motor 
vehicles and that possess a parts marking label with the 17-character 
VIN or a derivative of the VIN.
    The Act does not apply to the sale of new motor vehicles. 
Furthermore, the Act does not apply to the sale of manufacturer 
replacement parts or new after-market parts. These parts have unique 
labels that identify them as new replacement parts and are not required 
by the National Highway Traffic Safety Administration (NHTSA) to 
possess parts-marking labels with the 17-character VIN or a derivative 
of the VIN. For example, parts manufactured by parts manufacturers, 
that are distributed to replace or repair original parts, are not 
required to be inspected and checked against the NSPMVIS.
    The Act allows for civil penalties of not more than $1,000 for each 
violation of the regulations implementing the Act to a maximum of 
$250,000 for a related series of violations. The Act also allows for 
enforcement of a civil penalty of not more than $100,000 a day for each 
violation related to chop shop activity. This applies to any person who 
knowingly owns, operates, maintains, or controls a chop shop, conducts 
operations in a chop shop, or transports a passenger motor vehicle or 
passenger motor vehicle part to or from a chop shop.
    Regarding the NSPMVIS, the Act requires that the Attorney General 
of the United States, in consultation with the Secretary of 
Transportation:
(1) Establish and maintain an information system containing the

[[Page 17028]]

VIN of stolen passenger motor vehicles and the VIN or its derivative of 
stolen passenger motor vehicle parts;
(2) Prescribe by regulation procedures by which an individual or 
entity, not engaged in the business of salvaging, dismantling, 
recycling, or repairing passenger motor vehicles, intending to transfer 
a passenger motor vehicle or passenger motor vehicle part may obtain 
information as to whether the vehicle or part is listed in the System 
as stolen;
(3) Prescribe by regulation procedures by which an insurance carrier 
selling comprehensive motor vehicle insurance coverage that obtains 
possession of and intends to transfer a junk motor vehicle or a salvage 
motor vehicle, can verify whether the vehicle is listed in the System 
as stolen; and
(4) Prescribe by regulation procedures by which a person engaged in the 
business of salvaging, dismantling, recycling, or repairing passenger 
motor vehicles can verify that a major passenger motor vehicle part has 
not been listed in the System as stolen.

    The Act also directs that the parts marking program be expanded to 
cover all vehicles, with the exception of a limited number of lines for 
which waivers are granted, unless the Attorney General determines that 
parts marking does not substantially inhibit chop shop operations and 
vehicle theft.

What has the Department of Justice done to address the problem?

    The Federal Bureau of Investigation (FBI), as directed by the 
Attorney General, has coordinated the policy and legislative efforts on 
the NSPMVIS since November 1993. Pursuant to 49 U.S.C. 33109(c), the 
Attorney General established the NSPMVIS Federal Advisory Committee 
(Committee) and charged it with providing recommendations and a final 
report to Congress and the Attorney General. The FBI conducted a pilot 
project and on January 31, 1996, published the ``Final Report on the 
National Stolen Passenger Motor Vehicle Information System (NSPMVIS) 
Pilot Project and National Implementation Study'' for the Attorney 
General and Congress. It also drafted immunity language providing 
limited civil immunity to system participants that was included in the 
Anti Car Theft Improvements Act of 1996. See Pub. L. No. 104-152 
(1996). A formal Memorandum of Understanding (MOU) was developed 
between the FBI and the NICB in April 1997 establishing procedures for 
and limits on the appropriate use by the NICB of the FBI's National 
Crime Information Center (NCIC) stolen vehicle and stolen vehicle part 
data (the NCIC Vehicle File) by the NICB.
    This proposed rule is being published to further the implementation 
of the NSPMVIS. It has a direct impact on the following groups: motor 
vehicle owners and consumers; motor vehicle parts dealers (including 
motor vehicle dismantlers, recyclers, repairers, and salvagers); the 
insurance industry; motor vehicle auctioneers and salvager pools (these 
groups often act as an agent of insurers to sell or transfer salvage or 
junk motor vehicles); motor vehicle manufacturers; and the law 
enforcement community. Each of these groups has interests in and 
concerns regarding a national stolen motor vehicle parts system and we 
encourage all of these organizations to submit any comments, concerns, 
or ideas regarding the overall motor vehicle theft problem or any 
aspect of this proposed rule.

What will be the role of the NSPMVIS?

    The NSPMVIS will operate as a large data exchange system for the 
purposes of establishing and verifying the theft status of salvage or 
junk motor vehicles and covered major parts by permitting the 
comparison of VINS with stolen and stolen parts data previously entered 
into the System. Participants will include motor vehicle insurers, 
dismantlers, recyclers, repairers, and salvagers. This proposed rule 
does not impose an obligation to use the System nor does it assess 
penalties for failure to use the System against individuals and 
entities not engaged in the business of salvaging, dismantling, 
recycling, or repairing passenger motor vehicles (such as the ordinary 
consumer who purchases, sells, or transfers motor vehicles and parts 
for his or her own personal use) who intend to transfer a passenger 
motor vehicle or part without verifying its theft status. However, if 
these individuals or entities wish to inquire of the System, this 
proposed rule does prescribe procedures under which they may do so.

What is the Federal Advisory Committee and what were its 
Recommendations?

    In order to solicit recommendations for establishing the NSPMVIS 
from those industries and organizations that are directly impacted by 
the System, the Act established the NSPMVIS Federal Advisory Committee 
for which the FBI provided oversight. The Committee membership included 
representatives of the insurance, dismantling, recycling, repairing, 
and salvaging industries, the NHTSA, local law enforcement, and a 
consumer advocacy group.
    The Committee convened on four separate occasions in the 
Washington, DC, area: November 18-19, 1993; April 19-20, 1994; June 14-
15, 1994; and August 16-17, 1994. It developed a set of recommendations 
on the development of the stolen motor vehicles and parts information 
system.
    The recommendations addressed System administration and design; the 
appointment of a System Administrator; law enforcement notification 
procedures should the System determine a part is stolen; and the 
documentation of inquiries in cases where no theft is indicated in the 
System. The Committee also recommended enactment of legislation 
providing a limited immunity clause for system participants. In 
addition, the Committee issued recommendations as to the level of 
security necessary to ensure the safety and reliability of the System 
and methods for ensuring the completeness, timeliness, and accuracy of 
the data entered and stored in the System. The Committee also proposed 
legislation for a uniform definition of salvage and junk motor 
vehicles. Furthermore, the Committee recommended how the theft status 
determination should occur and the methods for handling cases where the 
System cannot make a determination in a timely manner. Finally, the 
Committee recommended who should be responsible for (1) verifying 
whether covered major parts have been stolen, and (2) processing the 
checks and verifications of VINs through the System.
    The Committee's recommendations were designed to provide the key 
development and implementation criteria to which Committee members 
believe the System needs to adhere in order to maximize its 
effectiveness. The Committee members drafted these recommendations 
after thoroughly considering all of the potential issues and effects of 
the System. The recommendations of the Committee, with some 
modifications and revisions based on the NSPMVIS pilot project and 
subsequent legal opinions, represent the core requirements of this 
proposed rule.
    Through the FBI's Criminal Justice Information Services (CJIS) 
Advisory Policy Board process, the FBI initially recommended, in June 
1993, that the NICB serve as the System Administrator of the NSPMVIS. 
The NSPMVIS Federal Advisory Committee included this recommendation in 
its Final Report published in November 1994. The Attorney General 
approved this recommendation in a memorandum to the FBI, dated January 
18, 1995. In the

[[Page 17029]]

event that the NICB is not able to serve as the System Administrator, a 
successor will be recommended through the CJIS Advisory Process for the 
Attorney General to consider for approval.
    The NICB was created through a 1992 merger of the National 
Automobile Theft Bureau (NATB) and the Insurance Crime Prevention 
Institute (ICPI). The NATB was involved primarily with the prevention 
of vehicle theft and the ICPI primarily handled suspicious or 
questionable property/casualty claims.
    In order for the NICB to serve as the NSPMVIS System Administrator, 
it was necessary to create an on-line interface between the NCIC 
Vehicle File and the NICB. The CJIS Advisory Policy Board approved this 
interface and a ``mirror image'' system became operational in June 
1994, providing the NICB with the capability to process VINs against 
the NCIC Vehicle File. The NICB already serves as a central repository 
of key vehicle theft data, including theft reports, export data, and 
titling information.

What Were the Results of the Pilot Project?

    Following the completion of the work of the Committee and delivery 
of its final report in January 1995, the FBI and the NICB agreed to 
conduct a pilot project in order to test the concept and feasibility of 
the System. The pilot project began in March 1995 in Texas, and 
expanded to Illinois in July 1995. However, VINs from salvage motor 
vehicles and covered major parts were collected from all fifty states 
and checked against the NSPMVIS for the entire year. The theft rate 
during the pilot project for salvage motor vehicles and their covered 
major parts was .34 percent. This means that less than one-half of one 
percent of the salvage motor vehicles and covered major parts checked 
against the System were actually stolen.
    There are several reasons for the low theft ratio, and they do not 
necessarily accurately indicate the potential effectiveness of the 
stolen parts information system. The primary reason for the low theft 
ratio is due to the inconsistency of the current parts marking 
regulations and the corresponding state laws for recording these VIN 
numbers. Most parts dealers throughout the country inventory a motor 
vehicle and its major parts based only on the master VIN of the motor 
vehicle. All parts removed from a specific motor vehicle were checked 
against our NCIC Vehicle File based on the master VIN of the vehicle. 
Thus, if there are no stolen vehicles in a given inventory, which is 
likely because it is rare for legitimate parts dealers to purchase a 
stolen vehicle, then there will not be any identifiable stolen parts in 
that inventory.
    It is clear, however, that there are covered major parts in motor 
vehicles that possess VINs different from the master VIN of the 
vehicle. This proposed rule takes into account the necessity of a parts 
verification process that ensures that any covered major part with a 
VIN different from the master VIN is checked against the System based 
on its unique VIN and not the master VIN.
    The low theft ratio on salvage motor vehicles and parts is also 
indicative of the type of businesses that currently report salvage data 
to the NICB. The companies reporting salvage to the NICB are 
organizations that have a direct interest in reducing or eliminating 
the market for stolen parts. Thus, one would not expect to discover a 
large volume of stolen parts from processing the inventories of these 
organizations against the NCIC Vehicle File.
    It is important to note that the NSPMVIS pilot project consistently 
found ``bad VINs'' being reported to the NICB by the participants. 
``Bad VINs'' are those that do not correspond to an actual 17 character 
VIN assigned by a manufacturer. Almost four percent of all VINs 
reported to the NICB during 1995 were ``bad VINs.'' The large number of 
``bad VINs'' is due mainly to human error, including difficulty in 
reading the Mylar stickers that contain the VINs and misidentifying or 
transposing the numbers and letters during inventory or when they are 
reported to the NICB.
    Following the completion of the pilot project, the FBI submitted to 
the Attorney General and Congress a report on the pilot along with a 
national implementation study. The study explained that the goal of the 
NSPMVIS is to reduce the market for stolen major component parts. Thus, 
processing the covered inventories of all insurers and parts dealers 
against the NSPMVIS is crucial to the overall success of the system. 
With the cooperation of major associations, such as the Automotive 
Recyclers Association, which estimates that it collects VIN data from 
approximately two-thirds to three-fourths of the parts industry, the 
NSPMVIS will be assured of receiving a high level of participation with 
a minimal impact on the affected businesses. Likewise, the NICB 
receives VIN data from approximately 60 percent of the insurance 
industry so that a high level of participation can also be assured from 
this industry by utilizing existing data transfer mechanisms. One of 
the goals of the System is to make the electronic transfer of data from 
insurers and parts dealers to the NICB as simple as possible for the 
participants.
    However, there are also thousands of non-automated parts dealers 
around the country who must be included in the process. Industry 
experts suggest that as many as 80 percent of parts dealers throughout 
the country purchase fewer than 50 vehicles per month and would be 
considered small. It is the intention of the NSPMVIS and integral to 
the success of the System that the inventories of smaller dealers be 
included in the part verification process. However, since many of these 
small dealers do not have computerized inventories that can be easily 
forwarded to the NICB, telephonic and facsimile inquiries of the 
NSPMVIS will be allowed.

How Will the NSPMVIS Be Implemented?

    At this time, it is expected that the NICB will serve as the 
NSPMVIS System Administrator. As envisioned by the FBI and the NICB, 
the NSPMVIS will operate as a large data exchange system. Participants 
will conduct NSPMVIS inspections and all VIN data will be transmitted 
to the NICB by an electronic tape, E-mail, electronic file transfer, 
fax, or telephone. After automatically creating a file that retains all 
incoming VINs, the date and time of the verification request, the 
identity of the system participant from which the request was made, and 
the name and other information regarding the individual seeking 
verification of stolen passenger motor vehicle parts through a system 
participant under the NSPMVIS, the System will perform its primary 
function: checking the VINs against the mirror image of the NCIC 
Vehicle File maintained at NICB Headquarters. As a result of this 
process, any resulting theft confirmations based on the VIN inquiry 
would be identified prior to any sale or transfer of the vehicle or its 
covered major parts to the consumer.
    The NSPMVIS System Administrator will query the NCIC Vehicle File 
to determine whether there is an active theft record for any of the 
specific VINs. Depending on the result of the query, the System will 
either (1) simultaneously send a theft notice to law enforcement and 
the inquiring entity (system participant) when there is an active theft 
record for a VIN in NCIC; or, (2) automatically send a unique 
authorization number to the system participant when there is no NCIC 
theft record, allowing for the sale or transfer of the vehicle or part. 
In the case of a System theft confirmation, the following

[[Page 17030]]

message will be sent to the system participant attempting to sell or 
transfer the vehicle, or sell, transfer, or install the covered major 
parts:

    The vehicle or part queried has been reported stolen and the 
sale or transfer of this vehicle or the sale, transfer, or 
installation of this part must be terminated. Law enforcement has 
been provided the details regarding this inquiry.

    As with the file created from the incoming VINs, the NSPMVIS also 
automatically creates a results file, which retains all of the theft 
hits generated by the System, and a response file, which retains all of 
the authorizations generated by the System. Each of these files has a 
date and time stamp associated with each theft hit or authorization. 
The actual theft notices or authorization numbers are sent to the 
system participant by the same means of communication in which the 
original requests were received by the NSPMVIS. System participants are 
responsible for notifying purchasers or transferees of the 
authorization number in any written form they deem appropriate, but 
consistent with the notification requirements set out in this proposed 
rule.
    If the NSPMVIS cannot verify the VIN in a ``timely manner,'' an 
interim authorization will be provided to the system participant. Any 
organization reporting ``bad VINs'' will be notified of the incorrect 
VINs and will be required to correct the VINs prior to receiving an 
authorization to sell or transfer the vehicle or sell, transfer, or 
install the part.
    All information collected by the System Administrator as part of 
the verification request process under the NSPMVIS will be maintained 
by the System Administrator, as custodian for the FBI. The NCIC Privacy 
Act system of records notice will be modified to reflect the 
collection, maintenance, and use of this information. The records 
collected by the System Administrator will be provided to the FBI upon 
its request. In accord with the routine uses set forth in the NCIC 
Privacy Act system of records notice, the information collected by the 
System Administrator may be disclosed to criminal justice agencies to 
meet criminal justice objectives, and as otherwise provided for in 
routine uses.

What are NSPMVIS Inspections?

A. Background

    The NSPMVIS Federal Advisory Committee concluded that--in order to 
meet the intent of the law and to reduce theft successfully--it would 
be desirable for all NSPMVIS participants (insurers, salvagers, 
dismantlers, recyclers, and repairers) to inspect salvage and junk 
motor vehicles for the purpose of collecting both the master VIN of the 
vehicle and the part numbers for any covered major parts that possess 
the VIN or a derivative of the VIN. Participants would then enter this 
data into the System to verify the theft status of both vehicles and of 
covered major parts. The inspecting of major parts and the verifying of 
part theft status by all participants would be desirable because most 
salvage and junk motor vehicles enter the stream of commerce through an 
insurer or self-insured entity.
    The Anti Car Theft Act, however, does not require insurers to 
verify the theft report status of a vehicle's major parts and does not 
impose any requirements on self-insured entities. In the absence of any 
statutory direction on these points, the proposed rule does not require 
insurers or self-insured entities to inspect or report on covered major 
parts. Nevertheless, it was clear to the Committee that the 
effectiveness of the proposed rules in successfully reducing the 
incidence of car theft would be greatly enhanced if the requirement to 
report on covered major parts extended to insurers in the same way that 
it does to other NSPMVIS participants, salvagers, dismantlers, 
recyclers, and repairers. The Committee concluded that the insurance 
industry and self-insured entities that deal in salvage and junk motor 
vehicles should share responsibility for verifying the theft status of 
covered major parts. In light of these considerations, and the clear 
intent of the Act to reduce vehicle theft through a comprehensive 
reporting scheme, the Department requests comments and suggestions on a 
legislative amendment to the Act extending mandatory inspection and 
reporting of major covered parts to trade organizations, insurers, 
self-insured entities, and/or other interested parties.

B. Requirements

    This proposed rule requires insurance carriers to inspect only for 
the master VIN on salvage and junk motor vehicles that they have 
obtained through any means. Following inspection, insurers must report 
the master VIN to the System to determine whether or not the vehicle 
has been reported stolen. Once the theft report status is verified, the 
insurers are required to provide the transferee with a uniform 
verification document in a form approved by the Attorney General. As 
previously explained, this proposed rule does not require such entities 
to inspect or verify the theft status of covered major parts.
    This proposed rule also requires salvagers, dismantlers, recyclers, 
and repairers, prior to selling, transferring, or installing covered 
major parts marked with an identification number, to inspect those 
major parts that they have obtained by any means unless the theft 
report status of a vehicle from which those parts were derived had been 
previously verified by an insurance carrier who provided a uniform 
verification document in a form approved by the Attorney General (the 
aforementioned uniform verification document provided by an insurance 
carrier exempts covered major parts derived from that vehicle from the 
NSPMVIS verification). This proposed rule also requires such entities 
then to verify the theft report status of covered major parts by using 
the VINs of those parts or their derivative vehicles as a basis for 
comparison with reported stolen vehicle or covered major part VINs on 
file in the NSPMVIS. The inspection and verification requirements will 
ensure that covered major parts are inspected prior to the repair or 
dismantling of a vehicle.

C. Voluntary inspection and reporting

    The Department encourages insurers to voluntarily conduct 
inspections of covered major parts and then to report to the NSPMVIS 
any specific parts inspected. The Department also encourages such 
entities voluntarily to report to the purchaser or transferee of the 
vehicle the identification number of specific parts the entity 
inspected and reported.

D. Marginal Costs

    The Department acknowledges that the Anti Car Theft Act's 
inspection requirement imposes some costs on the entities affected. 
Insurance carriers selling comprehensive motor vehicle insurance 
already verify the VINs of junk or salvage motor vehicles of which they 
obtain possession as a part of normal business practices. Whether or 
not a claim is honored is dependent in some cases on verifying that the 
vehicle in question is in fact the insured vehicle. The cost imposed on 
insurance carriers by the Act amounts to the administrative costs of 
conducting the theft status verification with the NSPMVIS.
    Persons engaged in the business of salvaging, dismantling, 
recycling, or repairing passenger motor vehicles already conduct some 
form of vehicle inspection and inventorying for their own business 
purposes when adding, among other items, the covered major parts to 
their inventories. As a result of that business function, they 
ordinarily

[[Page 17031]]

already have the equipment necessary to perform the NSPMVIS inspection. 
The costs imposed on these entities amount to the administrative costs 
of logging the VIN or its derivative of the covered major parts and 
conducting the theft status verification with the NSPMVIS.
    As a result, the Department believes that the additional, marginal 
costs for a NSPMVIS inspection to the affected entities should be 
minimal. These regulations require only those inspections mandated by 
statute and the reporting of relevant information that is either 
statutorily mandated or already in the custody of the affected entity. 
Further, this proposed rule suggests allowing participants to contract 
out the inspection process in order to relieve some of the burden of 
initial cash outlays that would be required if they do not presently 
possess the necessary equipment to conduct inspections and/or 
verifications.
    The FBI already operates and maintains a national information 
system, the NCIC, which includes information concerning stolen vehicles 
and vehicle parts. Currently, only the law enforcement and criminal 
justice communities may enter records into, or query, the NCIC 
database. Many people have been critical of the NCIC's effectiveness 
and law enforcement's ability to reduce thefts of stolen vehicle parts. 
Their concerns stem from the lack of stolen motor vehicle part 
information entered into the NCIC database. In the past, this data was 
scarce, in part, because the inspected parts did not contain a unique 
numerical identifier. The FBI believes that entry of such information 
into the NCIC will increase with the advent of mandatory parts marking, 
thus enabling law enforcement to be more effective in conducting these 
types of stolen motor vehicle and motor vehicle parts investigations.
    The Department requests comments and suggestions on modifications 
to this proposed rule that will further enhance flexibility in 
participating in the program and reduce participant costs, while still 
complying with the Act.

E. Program Effectiveness Issues

    In order to accurately measure the reduction in the theft of motor 
vehicle major parts as a result of the NSPMVIS, the System will need to 
be fully operational and in place for a significant period of time, 
possibly one to two years, in order to allow for full compliance and 
cooperation by all participants, especially parts dealers and law 
enforcement.
    The national implementation study also raised several issues that 
may prevent the successful implementation of the System. First, there 
is no provision in the Act for funding the NSPMVIS, system 
participants, or the states and federally recognized tribes for parts 
inspection, salvage reinspection, or law enforcement participation. In 
addition, there is no current funding for the operation of the System 
through either the FBI or the NICB. The NICB estimated that it will 
require $850,000 to administer the System in the initial year of 
operation and $400,000 in subsequent years. A second issue that might 
have an impact on the effectiveness of the System involves the lack of 
follow-up motor vehicle inspections to identify covered major parts and 
their VINs or the derivatives of their VINs. The Act specifies that 
insurance carriers need only verify the theft report status of a motor 
vehicle being transferred and provide that verification to the 
purchaser. If the vehicle is stolen, the transfer does not proceed; if 
the vehicle is not stolen, the purchaser can then rely on that 
verification to conduct additional transfers of either the vehicle 
itself or its major parts. Therefore, it is possible that an insurance 
carrier could unknowingly transfer a motor vehicle containing stolen 
parts and the transferee would, as a result, unknowingly possess and 
possibly transfer stolen parts contained within that vehicle. The fact 
that under certain circumstances the transfer of stolen items can occur 
as part of a regulated transaction designed to reduce such an 
occurrence undermines the credibility and effectiveness of the NSPMVIS.

F. Program Evaluation

    The impact and effectiveness of the NSPMVIS as a tool for reducing 
auto theft is best assessed after the System has been in operation for 
a meaningful period of time. After a review of a timely evaluation of 
the NSPMVIS and additional information on the overall auto theft issue, 
the Attorney General will, as required by 49 U.S.C. 33103(d), undertake 
a ``Long Range Review of Effectiveness'' regarding the theft prevention 
standards that require marking of covered major parts installed on 
certain vehicle lines.

G. Supplementary Solutions

    It is equally important for the law enforcement community to 
increase the entry of information concerning stolen major parts into 
NCIC in order to assemble a comprehensive database of stolen vehicle 
parts. Once the final major parts marking regulations are in effect, 
the FBI will forward information concerning the new standards to 
federal, state, and local law enforcement in order to educate those 
entities on how to identify the parts marking for missing major parts 
from a specific vehicle, as well as for recovered major parts found 
separate from the original vehicle. Once identified, those markings can 
be used to enter missing major parts into the NCIC, which provides the 
records that will populate the NSPMVIS, and to inquire as to the theft 
status of those recovered parts. Increasing the entry of stolen parts 
into the NCIC is an important goal that can be achieved quickly through 
a national cooperative effort directed at educating law enforcement.

H. Federally Recognized Tribes

    The Department recognizes the fact that federally recognized tribes 
in some states are issuing motor vehicle registrations and titles. This 
proposed rule applies to any motor vehicle and its parts where the 
motor vehicle has been registered and titled in the jurisdiction of a 
federally recognized tribe. As a result, references to federally 
recognized tribes are included in the definitions section and other 
relevant parts of the proposed rule.

Procedural Matters:

Initial Regulatory Flexibility Analysis

    Congress enacted the Regulatory Flexibility Act of 1980 (RFA), as 
amended, 5 U.S.C. 601-612, to ensure that Government regulations do not 
unnecessarily or disproportionately burden small entities. The RFA 
requires a regulatory flexibility analysis if a rule would have a 
significant economic impact, either detrimental or beneficial, on a 
substantial number of small entities. This proposed rule was drafted in 
a way designed to minimize the impact that it has on small business 
while meeting the Act's objectives.
    The FBI solicited recommendations for establishing the NSPMVIS from 
those industries and organizations that are directly impacted by the 
System. A Federal Advisory Committee was formed that consisted of 
representatives of the industries and entities most likely to be 
affected by the NSPMVIS. Members of this committee included 
representatives of the motor vehicle industry, the law enforcement 
community, and the insurance, dismantling, repair, recycling, and 
salvage industries. The Committee developed a set of recommendations on 
the development of the stolen parts and motor vehicle system that 
served as the basic guideline under which the NSPMVIS will be 
implemented. The burden of motor vehicle inspections cannot be shared 
fully among the

[[Page 17032]]

affected industries as initially recommended because, as previously 
discussed, the Act does not require the insurance industry to inspect a 
motor vehicle's major component parts.
    The NSPMVIS applies to salvage and junk motor vehicles and those 
covered major parts that are labeled with the master VIN or a 
derivative of that number. The only parts affected by the System are 
original major parts that are dismantled, recycled, salvaged, or 
otherwise removed from motor vehicles and that possess a parts marking 
label with the 17-character VIN or a derivative of the VIN.
    The NSPMVIS does not apply to the sale of new vehicles, 
manufacturer replacement parts, or new after-market parts. These parts 
have unique labels that identify them as new replacement parts and are 
not required by NHTSA to possess parts-marking labels. For example, 
parts manufactured by a parts manufacturer, that are distributed to 
replace or repair original parts, are not required to be inspected and 
checked against the NSPMVIS.
    Based on information from the NICB, which we anticipate will serve 
as the NSPMVIS System Administrator, it is estimated that there are 
approximately 3,000 insurance companies nationwide that transfer nearly 
2.5 million salvage and junk motor vehicles annually. The NICB 
estimates that currently 60 percent, or 1.4 million, of these salvage 
and junk vehicles contain major parts marked with the VIN that would 
ultimately be required to be inspected through the NSPMVIS. 
Furthermore, based on 1996 insurance data reported to the NICB, over 50 
percent of these motor vehicles will originate from the ten largest 
insurance groups transferring salvage and junk motor vehicles. The FBI 
also estimates that there are about 135 motor vehicle salvage pools 
that auction 2.5 million salvage and junk motor vehicles annually. In 
addition, there are an estimated 10,000 motor vehicle recyclers 
nationwide handling approximately 8 million salvage and junk vehicles 
annually.
    Because the entities presently providing salvage and recycling 
services are primarily small businesses, this proposed rule was 
developed and reviewed, where possible, with the needs and 
circumstances of small businesses specifically in mind. The Department 
has included a number of significant alternatives in this proposed rule 
that would accomplish the objectives of the Act and minimize any 
significant economic impact on small entities, such as allowing the use 
of contractors for parts inspections. It has also sought to avoid 
burdens on outside entities beyond those requirements needed to reduce 
the rate and number of motor vehicle and major motor vehicle part 
theft. Moreover, requirements have been drafted so as not to disrupt 
existing business practices. For example, inventories existing prior to 
the date of implementation are not required to be inspected, and 
covered major parts damaged to such an extent that the VIN markings are 
unreadable are also exempt from inspection. Therefore, we have 
determined under the RFA that this proposed rule would not have a 
significant economic impact on a substantial number of small entities.
    The Department is not aware of any relevant Federal rules that 
duplicate, overlap, or conflict with this proposed rule.

Executive Order 12866: Regulatory Planning and Review

    This regulation has been drafted and reviewed in accordance with 
Executive Order 12866, Regulatory Planning and Review, section 1 (b). 
The Department has determined that this rule is a ``Significant 
Regulatory Action'' under Executive Order 12866, Regulatory Planning 
and Review, section 3 (f), and accordingly this rule has been reviewed 
by the Office of Management and Budget.

Executive Order 13132: Federalism

    This proposed rule will not have a 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. Therefore, in accordance with Executive 
Order 13132, it is determined that this proposed rule does not have 
sufficient Federalism implications to warrant preparation of a 
Federalism summary impact statement.

Executive Order 12988: Civil Justice Reform

    This rule meets the applicable standards set forth in sections 3 
(a) and 3 (b) of Executive Order 12988, Civil Justice Reform.

Unfunded Mandates Reform Act of 1995

    The NICB estimates that approximately 1.5 to 3 million vehicles 
will be affected annually as a result of the NSPMVIS implementation. 
The cumulative cost per year of the System can be estimated to be only 
a small portion of the total cost of inspecting a vehicle. The FBI and 
the NICB have contacted a number of affected entities that estimate 
complete vehicle inspections to cost between $10.00 to $50.00 per 
vehicle. Since affected industries already conduct thorough vehicle 
inspections and inventorying, the additional NSPMVIS inspection 
represents only a small portion of the total cost estimate. In 
addition, equipment required to perform NSPMVIS inspections already 
exists; therefore, start-up costs are negligible. Thus, this proposed 
rule will not result in the expenditure by state, local, and tribal 
governments, in the aggregate, or by the private sector, of 
$100,000,000 or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions are deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    The FBI has solicited recommendations for establishing the NSPMVIS 
from those industries and organizations that are directly impacted by 
the System. A NSPMVIS Federal Advisory Committee was formed, composed 
of members of the motor vehicle industry and the law enforcement 
community. Committee members from insurance, repair, recycling, and 
salvage associations represented the interests of the small businesses 
that will be affected by the NSPMVIS. The Committee developed a set of 
recommendations on the development of the System, which will serve as 
the basic guideline under which the NSPMVIS will be implemented. This 
proposed rule is not a major rule as defined by section 251 of the 
Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 
804, and it will not result in an annual effect on the economy of 
$100,000,000 or more; a major increase in costs or prices; or 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of United States-based 
companies to compete with foreign-based companies in domestic and 
export markets. This proposed rule has been forwarded to the Small 
Business Administration for its review.

Paperwork Reduction Act

    The Department has submitted the following information collection 
request to the Office of Management and Budget (OMB) for review and 
approval in accordance with the procedures of the Paperwork Reduction 
Act of 1995, Public Law No. 104-13, 109 Stat. 163. The proposed 
information collection is published to obtain comments from the public 
and affected agencies.

[[Page 17033]]

    Public comments are encouraged and will be accepted until June 10, 
2002. We request written comments and suggestions from the public and 
affected agencies concerning the proposed collection of information. 
Your comments should address one or more of the following four points:
    (1) Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) Evaluate the accuracy of the agency's estimate of the burden of 
the proposed collection of information, including the validity of the 
methodology and assumptions used;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of information on those 
who are to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology, e.g., permitting electronic 
submission of responses.
    Comments and/or suggestions regarding the item(s) contained in this 
notice, especially regarding the estimated public burden and associated 
response time, should be directed to Stephen A. Bucar, Supervisory 
Special Agent, Federal Bureau of Investigation, CJIS Division, Module 
C-3, 1000 Custer Hollow Road, Clarksburg, WV 26306, (304) 625-2751.
Overview of This Information Collection:
    (1) Type of Information Collection: New collection.
    (2) Title of the Form/Collection: NSPMVIS.
    (3) Agency form number, if any, and the applicable component of the 
Department of Justice sponsoring the collection: No form. CJIS 
Division, FBI, Department of Justice.
    (4) Affected public who will be asked or required to respond, as 
well as a brief abstract: Primary: Business or other for-profit (Motor 
vehicle insurers, dismantlers, recyclers, repairers, and salvagers). 
Other: assorted motor vehicle parts dealers. Brief Abstract: The 
Department of Justice is implementing the NSPMVIS, 49 U.S.C. 33109, by 
issuing regulations to establish a national system for verifying the 
theft status of salvage and junk (non-repairable) motor vehicles and 
major parts marked with a VIN or a derivative of that number. Under 
specific conditions detailed in the regulations, the following entities 
or persons must request such verification: an insurance carrier; a 
person lawfully selling or distributing vehicle parts in interstate 
commerce; or an individual or enterprise engaged in the business of 
repairing passenger motor vehicles.
    (5) An estimate of the total number of respondents and the amount 
of time estimated for an average respondent to respond: 13,500 
respondents at an average of one hour per week to respond.
    (6) An estimate of the annual total public burden (in hours) 
associated with the collection: 702,000 total burden hours.
    If additional information is required contact: Mr. Robert B. 
Briggs, Clearance Officer, United States Department of Justice, 
Information Management and Security Staff, Justice Management Division, 
1331 Pennsylvania Avenue, Northwest, Suite 1220, Washington, DC 20530.

Plain Language

    Executive Order 12866 requires each agency to write regulations 
that are simple and easy to understand. The Presidential memorandum of 
June 2, 1998, requires that new regulations be written in plain 
language. The Department of Justice invites your comments on how to 
make this proposed rule easier to understand, including answers to 
questions such as the following:
    (1) Are the requirements in the proposed rule clearly stated?
    (2) Does the proposed rule contain technical language or jargon 
that interferes with its clarity?
    (3) Does the format of the proposed rule (grouping and order of 
sections, use of headings, paragraphing, etc.) aid or reduce its 
clarity?
    (4) Would the proposed rule be easier to understand if it was 
divided into more (or shorter) sections? (A ``section'' appears in bold 
type and is preceded by the symbol ``Sec. '' and a numbered heading, 
for example Sec. 89.1 Purpose and scope.)
    (5) Is the description of the proposed rule in the SUPPLEMENTARY 
INFORMATION section of this preamble helpful in understanding it? How 
could this description be more helpful in making the proposed rule 
easier to understand?
    Please send any comments you have on the clarity of the proposed 
rule to the address specified in the ADDRESSES section.

List of Subjects in 28 CFR Part 89

    Administrative practice and procedure, Crime, Law Enforcement, 
Motor Vehicles, and Organization and functions (Government agencies).

    Accordingly, for the reasons set forth in the preamble and pursuant 
to 49 U.S.C. 33109, Title 28 of the Code of Federal Regulations is 
proposed to be amended by adding Part 89 to read as follows:

PART 89--NATIONAL STOLEN PASSENGER MOTOR VEHICLE INFORMATION SYSTEM

Sec.
89.1  Purpose and scope.
89.2  Definitions.
89.3  The System Administrator.
89.4  Participation in the National Stolen Passenger Motor Vehicle 
Information System.
89.5  Responsibilities of insurers.
89.6  Responsibilities of persons engaged in salvaging, dismantling, 
recycling, or repairing passenger motor vehicles.
89.7  Requesting information from the National Stolen Passenger 
Motor Vehicle Information System.
89.8  Authorizations and notifications.
89.9  Certification in lieu of a system response.
89.10  Circumstances in which a verification is not required.
89.11  Contracting out the inspection process.
89.12  Notification of law enforcement.
89.13  Limited immunity.

    Authority: 49 U.S.C. 33109.


Sec. 89.1  Purpose and scope.

    (a) This part establishes the National Stolen Passenger Motor 
Vehicle Information System (NSPMVIS or System), pursuant to 49 U.S.C. 
33109, which requires the Attorney General to implement a national 
system to verify the theft status of salvage and junk motor vehicles 
and covered major parts.
    (b) This part applies to salvage and junk motor vehicles and those 
covered major parts on passenger motor vehicle lines designated by the 
National Highway Traffic Safety Administration (NHTSA). The inspection 
requirement does not apply to:
(1) New vehicles;
(2) Manufacturer replacement parts;
(3) New after-market parts; or
(4) Motor vehicles or major parts entered into the inventory of a 
system participant prior to the effective date of the System.


Sec. 89.2  Definitions.

    In this part,
    After-market Part means a vehicle component part built and 
distributed by a parts manufacturer to replace or repair a vehicle's 
original parts.
    Authorization Number means a unique number provided by the System 
Administrator to the system participant

[[Page 17034]]

that allows for the sale or transfer of the vehicle or covered major 
part.
    Chop Shop means a building, lot, facility, or other structure or 
premise at which at least one person engages in receiving, concealing, 
destroying, disassembling, dismantling, reassembling, or storing a 
passenger motor vehicle or passenger motor vehicle part that has been 
unlawfully obtained:
    (1) To alter, counterfeit, deface, destroy, disguise, falsify, 
forge, obliterate, or remove the identity of the vehicle or part, 
including the vehicle identification number or a derivative of that 
number; and
    (2) To distribute, sell, or dispose of the vehicle or part in 
interstate or foreign commerce.
    Covered Major Part means a major part marked with a vehicle 
identification number or its derivative.
    Derivative of a Vehicle Identification Number (VIN) means a 
matching portion of the vehicle identification number, generally the 
last eight characters of that number.
    Inspection means locating the master Vehicle Identification Number 
of salvage and junk motor vehicles and/or the vehicle identification 
number or its derivative of any covered major parts and verifying the 
theft status of those vehicles or parts with the System.
    Junk Motor Vehicle means a vehicle that is non-repairable. This 
term indicates a vehicle that is incapable of operation on roads or 
highways and has no value except as a source of parts or scrap. This 
definition includes any individual state and federally recognized 
tribe's definition for a vehicle that is declared a total loss or 
economically impractical to repair.
    Major Part means the engine; transmission; right front fender; left 
front fender; hood; right front door; left front door; right rear door; 
left rear door; sliding or cargo door(s); front bumper; rear bumper; 
right rear quarter panel (passenger cars); left rear quarter panel 
(passenger cars); right-side assembly (Multipurpose Passenger Vehicles 
(MPVs); left-side assembly (MPVs); pickup box, and/or cargo box (Light-
Duty Trucks); rear door(s) (both doors in case of double doors); 
decklid, tailgate, or hatchback (whichever is present); grille; the 
trunk floor pan; frame; and any other part of a passenger motor vehicle 
that the Secretary of Transportation by regulation specifies as 
comparable in design or function to any of the parts previously listed.
    Manufacturer Replacement Part means a vehicle component part built 
and distributed by a motor vehicle manufacturer to replace or repair a 
vehicle's original part.
    Manufacturer's Certificate of Origin means a document issued by the 
manufacturer of a vehicle that authenticates the vehicle's origin of 
manufacture and that is accepted by a state, federally recognized 
tribe, or country for titling application purposes.
    New After-Market Part means a vehicle component part built and 
distributed by other than the manufacturer of the original vehicle but 
which is designed to replace or repair a vehicle's original part.
    New Vehicle means any newly manufactured vehicle supported by a 
manufacturer's certificate of origin and that has not previously been 
titled in any state, federally recognized tribe, or country.
    Salvage Motor Vehicle means a vehicle that has been damaged by 
collision, fire, flood, accident, trespass, or other incident to the 
extent that its fair salvage value plus the cost of repairing the 
vehicle for legal operation on roads or highways exceeds the fair 
market value of the vehicle prior to the incident causing the damage. A 
salvage vehicle may be rebuilt, retitled, and allowed to legally 
operate on the road. This definition includes any individual state or 
federally recognized tribe's definition for a vehicle that is declared 
a total loss or economically impractical to repair.
    System means the National Stolen Passenger Motor Vehicle 
Information System.
    System Administrator means an organization approved by the Attorney 
General to have custodial possession and provide system maintenance and 
operation of the System under Attorney General oversight through the 
Federal Bureau of Investigation.
    System Participant means any person, business, or organization 
mandated to submit vehicle identification number information as 
outlined in this part.
    Theft Confirmation means that the master VIN of salvage and junk 
motor vehicles and/or the vehicle identification number or its 
derivative of any major parts have been checked against the System and 
the System has provided a notice of an active report that the vehicle 
or major part has been reported as stolen and not recovered, and that, 
as a result, it may not be sold, transferred, or installed.
    Vehicle Identification Number (VIN) means a unique identification 
number assigned to a passenger motor vehicle by a manufacturer in 
compliance with applicable regulations; the master VIN, which applies 
to the entire vehicle, is predominantly located in the upper left 
corner of the dashboard beneath the windshield.
    Vehicle Line means the name that a manufacturer of motor vehicles 
applies to a group of motor vehicle models of the same make that have 
the same body or chassis, or otherwise are similar in construction or 
design. A ``line'' may, for example, include 2-door, 4-door, station 
wagon, and hatchback vehicles of the same make.
    Verification means that the master VIN of salvage and junk motor 
vehicles and/or the vehicle identification number or its derivative of 
any major parts have been checked against the National Stolen Passenger 
Motor Vehicle Information System and the System Administrator has 
provided an authorization number to sell, transfer, or install the 
vehicle or major parts.


Sec. 89.3  The System Administrator.

    The System Administrator is the entity designated by the Attorney 
General to have custodial possession and provide maintenance and 
operation of the System under Attorney General oversight through the 
Federal Bureau of Investigation.


Sec. 89.4  Participation in the National Stolen Passenger Motor Vehicle 
Information System.

    The following individuals, businesses, or organizations, must 
participate in the System:
    (a) Any insurance carrier selling comprehensive motor vehicle 
insurance that obtains possession of and transfers a junk or salvage 
motor vehicle; and,
    (b) Any person engaged in the business of salvaging, dismantling, 
recycling, or repairing passenger motor vehicles.


Sec. 89.5  Responsibilities of insurers.

    (a) Any insurance carrier selling comprehensive motor vehicle 
insurance that obtains possession of and transfers a junk or salvage 
motor vehicle is:
    (1) Required to verify through the System whether the salvage or 
junk motor vehicle is reported as stolen and not recovered;
    (2) Required to provide to the purchaser or transferee of the 
vehicle from the insurance carrier a written response identifying the 
master VIN and verifying that the vehicle has not been reported as 
stolen or, if reported as stolen, that the carrier has recovered the 
vehicle and has proper legal title to the vehicle;
    (3) Encouraged to report to the System all major parts identified 
as missing from recovered salvage and junk motor vehicles, that an 
insurance carrier obtains possession of and transfers to a purchaser or 
transferee;

[[Page 17035]]

    (4) Encouraged to report to the System the results of any specific 
major parts inspected; and,
    (5) Encouraged to provide to the purchaser or transferee of the 
vehicle identification of the specific major parts that were inspected 
and reported to the System, and to advise the purchaser or transferee 
whether the parts were reported as stolen.
    (b) Any insurance carrier selling comprehensive motor vehicle 
insurance who honors a request under Sec. 89.7 must provide a written 
response pursuant to paragraph (b)(4) of that section verifying the 
theft status only of the vehicle or part. In addition to those 
requirements, the written form must also include the following notation 
as the first text at the top of the form: ``This System verification 
was voluntarily conducted upon request by a system participant and does 
not qualify for the provisions under 49 U.S.C. 33110(b)(2)(A) & (B) and 
49 U.S.C. 33111(b)(2), which allow for the transfer of a motor vehicle 
following an inquiry of the System where the theft status of the 
vehicle has not been established.''


Sec. 89.6  Responsibilities of persons engaged in salvaging, 
dismantling, recycling, or repairing passenger motor vehicles.

    (a) Any person engaged in the business of salvaging, dismantling, 
recycling, or repairing passenger motor vehicles may not knowingly sell 
in commerce or transfer or install a covered major part without:
    (1) Verifying through the System that the major part has not been 
reported as stolen; and,
    (2) Providing the purchaser or transferee with a written response 
identifying the VIN (or derivative of that number) of that major part 
and verifying that the major part has not been reported as stolen or, 
if reported as stolen in the System, that the participant has recovered 
that major part and has proper legal title to it; or,
    (3) Providing the purchaser or transferee with a verification from 
an insurance carrier provided in accordance with 49 U.S.C. 33110, when 
the insurance carrier has verified with the System that the vehicle 
from which the major part was derived was not reported as stolen, or 
that the insurance carrier has not established whether that vehicle has 
been stolen.
    (b) Any person engaged in the business of salvaging, dismantling, 
recycling, or repairing passenger motor vehicles who honors a request 
under Sec. 89.7 must provide a written response pursuant to paragraph 
(b)(4) of that section. In addition to these requirements, the written 
form must also include the following notation as the first text at the 
top of the form: ``This System verification was voluntarily conducted 
upon request by a system participant and does not qualify for the 
provisions under 49 U.S.C. 33110(b)(2)(A) & (B) and 49 U.S.C. 
33111(b)(2), which allow for the transfer of a motor vehicle following 
an inquiry of the System where the theft status of the vehicle has not 
been established.''


Sec. 89.7  Requesting information from the National Stolen Passenger 
Motor Vehicle Information System.

    (a) An individual or entity who is neither an insurance carrier nor 
engaged in the business of salvaging, dismantling, recycling, or 
repairing passenger motor vehicles, who intends to transfer a passenger 
motor vehicle or passenger motor vehicle major part, may request from 
an insurance carrier or a person engaged in the business of salvaging, 
dismantling, recycling, or repairing passenger motor vehicles that a 
verification with the System voluntarily be performed to determine 
whether the vehicle or major part is reported as stolen.
    (b) Any system participant may, but is not required to, respond to 
such a request pursuant to this section provided the following 
procedures are followed:
    (1) Any requestor of a System verification must appear in person.
    (2) Prior to any verification with the System of the theft status 
of a motor vehicle or part, the system participant must confirm the 
identity of the requestor by checking two forms of identification to be 
provided by the requestor. One form of identification must be a 
photographic identification.
    (3) Prior to any verification with the System of the theft status 
of a motor vehicle or part, the system participant must record the 
identity of the requestor including full name, date of birth, current 
telephone number, and current address. This information must be 
communicated in full to the System Administrator as part of the 
verification request.
    (4) Any system participant, including insurance carriers selling 
comprehensive motor vehicle insurance, who honor requests under this 
section must provide a written response that conforms to the 
requirements contained in Secs. 89.5 and 89.6 as determined by the 
character of the subject item to be verified with the System.
    (c) The provisions established by 49 U.S.C. 33110(b)(2)(A) & (B) 
and 49 U.S.C. 33111(b)(2) do not apply to verifications conducted 
pursuant to this section.


Sec. 89.8  Authorizations and notifications.

    (a) Any person engaged in the business of salvaging, dismantling, 
recycling, or repairing passenger motor vehicles must provide 
verification to whomever the participant transfers or sells any covered 
major part.
    (b) Insurance carriers selling comprehensive motor vehicle 
insurance must provide verification to whomever they transfer or sell 
any salvage or junk motor vehicle.
    (c) A system participant may provide the verification required by 
this part in any written format it chooses, provided the verification:
    (1) Identifies the vehicle's VIN or the applicable major part's VIN 
or its derivative; and,
    (2) In the case of an insurance carrier selling comprehensive motor 
vehicle insurance, states that the System was checked and that the 
subject motor vehicle has not been reported as stolen or, if reported 
as stolen, that the carrier has recovered the vehicle or major parts 
and has proper legal title to the vehicle or major parts; or,
    (3) In the case of a person engaged in the business of salvaging, 
dismantling, recycling, or repairing passenger motor vehicles, states 
that the System was checked and that the major part has not been 
reported as stolen.


Sec. 89.9  Certification in lieu of a System response.

    System participants may transfer a motor vehicle or major part in 
those instances where the System cannot provide a response within a 
timely manner. A ``timely manner'' is defined to be a response by the 
end of the next federal business day for any inquirer (system 
participant) who has made a ``reasonable effort'' to verify the status 
of a vehicle or a major part. A ``reasonable effort'' is defined as 
attempting to gain access to the System during normal business hours 
and providing the correct vehicle or major part information. In those 
instances where the System cannot provide a verification in a timely 
manner, the System Administrator must provide a certificate to the 
system participant, or a designated contracting agent, which permits 
the transfer of the vehicle or major part.


Sec. 89.10  Circumstances in which a verification is not required.

    (a) The verification requirement does not apply to:
(1) The transfer of new vehicles;
(2) The transfer of manufacturer replacement parts;

[[Page 17036]]

(3) The transfer of new after-market parts;
(4) The subsequent transfer of a motor vehicle, the transferor of which 
has received, within the previous 180 days, a verification in 
accordance with 49 U.S.C. 33110 from an insurance carrier selling 
comprehensive motor vehicle insurance that the vehicle has not been 
reported as stolen;
(5) The subsequent transfer of a major part removed from a motor 
vehicle, the transferor of which has received, within the previous 180 
days, a verification in accordance with 49 U.S.C. 33110 from an 
insurance carrier selling comprehensive motor vehicle insurance that 
the vehicle has not been stolen; or,
(6) The subsequent transfer of a motor vehicle or major part, the 
transferor of which has received a certificate pursuant to Sec. 89.9 
stating that the system participant has not been able to establish 
whether that vehicle or major part has been stolen.
    (b) System participants may sell or transfer a motor vehicle or 
major part in those instances in which the motor vehicle or major parts 
are damaged to such an extent that the VIN markings are inaccessible. 
VIN markings are ``inaccessible'' if the system participant has 
conducted a thorough examination of the salvage or junk motor vehicle 
and covered major parts and has not been able to locate the VIN 
markings. In this instance, the seller or transferee of the motor 
vehicle or major part must report the inaccessibility to the System and 
provide, in lieu of the authorization, a System-generated certificate 
to the purchaser or transferee that the inspection could not be 
completed.


Sec. 89.11  Contracting out the inspection process.

    System participants will be allowed to contract out the inspection 
process, but any system participant that contracts out inspections must 
still be identified to the purchaser or transferee by the contracted 
entity. If a system participant contracts out the inspection tasks, 
then the contracted entity must perform verifications for the motor 
vehicle and all covered major parts as would be required of the 
contracting system participant. In addition, any regulatory obligations 
imposed on the system participant by this part extend to the contracted 
entity, including those under Sec. 89.7, and their adherence thereto by 
the contracted entity becomes the responsibility of the system 
participant.


Sec. 89.12  Notification of law enforcement.

    (a) The System will provide automatic notification on stolen 
vehicle and major part theft confirmations to:
    (1) A law enforcement agency having investigative jurisdiction over 
the locality in which the inquiring system participant is located; and
    (2) The law enforcement agency originally reporting the vehicle or 
major part theft.
    (b) If the system participant receives a theft notification message 
from the NSPMVIS, the transaction involving that motor vehicle or major 
part must be terminated, unless the system participant is an insurance 
carrier that has recovered the vehicle and has proper legal title to 
the vehicle.
    (c) Additional notifications may be needed, as provided in the 
Privacy Act systems notice for the National Crime Information Center.


Sec. 89.13  Limited immunity.

    Any person performing any activity under this part in good faith 
and with the reasonable belief that such activity was in accordance 
with this part shall be immune from any civil action respecting such 
activity that is seeking money damages or equitable relief in any court 
of the United States or a State.

    Dated: April 3, 2002.
John Ashcroft,
Attorney General.
[FR Doc. 02-8522 Filed 4-8-02; 8:45 am]
BILLING CODE 4410-02-P