[Federal Register Volume 69, Number 113 (Monday, June 14, 2004)]
[Proposed Rules]
[Pages 32963-32966]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-13056]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 578

[Docket No. NHTSA-04-17571; Notice 1]
RIN 2127-AJ32


Civil Penalties

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

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: This document proposes to increase the maximum aggregate civil 
penalties for violations of statutes and regulations administered by 
NHTSA pertaining to motor vehicle safety, bumper standards, and 
consumer information. This action would be taken pursuant to the 
Federal Civil Monetary Penalty Inflation Adjustment Act of 1990, as 
amended by the Debt Collection Improvement Act of 1996, which requires 
us to review and, as warranted, adjust penalties based on inflation at 
least every four years.

DATES: Comments on the proposal are due August 13, 2004.

ADDRESSES: All comments on this document should refer to the docket and 
notice number set forth above and be submitted to Docket Management, 
Room PL-401, 400 Seventh St., SW., Washington, DC 20590. The docket 
room hours are from 9 a.m. to 5 p.m., Monday through Friday. Comments 
may also be submitted to the docket electronically. Documents may be 
filed electronically by logging onto the Docket Management System Web 
site at http://dms.dot.gov. Click on ``Help'' to obtain instructions 
for filing the document electronically. You may also visit the Federal 
E-Rulemaking Portal at http://www.regulations.gov. Follow the online 
instructions for submitting comments.

FOR FURTHER INFORMATION CONTACT: Michael Kido, Office of Chief Counsel, 
NHTSA, telephone (202) 366-5263, facsimile (202) 366-3820, 400 Seventh 
Street, SW., Washington, DC 20590.
    Anyone is able to search the electronic form of all comments 
received into any of our dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, consumer group, etc.). You may review 
DOT's complete Privacy Act Statement in the Federal Register published 
on April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may 
visit http://dms.dot.gov.

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 (28 U.S.C. 2461 Notes, Public Law 101-
410), as amended by the Debt Collection Improvement Act of 1996, Public 
Law 104-134) (referred to collectively as the ``Adjustment Act'' or, in 
context, the ``Act''), requires us and other Federal agencies to 
regularly adjust civil penalties for inflation. Under the Adjustment 
Act, following an initial adjustment that was capped by the Act, these 
agencies must make further adjustments, as warranted, to the amounts of 
penalties in statutes they administer at least once every four years.
    NHTSA's initial adjustment of civil penalties under the Adjustment 
Act was published on February 4, 1997. 62 FR 5167. At that time, we 
codified the adjustments in 49 CFR Part 578, Civil Penalties. On July 
14, 1999, we further adjusted certain penalties involving odometer 
requirements and disclosure, consumer information, motor vehicle 
safety, and bumper standards. 64 FR 37876.On August 7, 2001, we also 
adjusted certain penalty amounts pertaining to odometer requirements 
and disclosure and vehicle theft prevention. 66 FR 41149. In addition 
to increases in authorized penalties under the Adjustment Act, the 
Transportation Recall Enhancement, Accountability, and Documentation 
(``TREAD'') Act increased penalties under the National Traffic and 
Motor Vehicle Safety Act as amended (sometimes referred to as the 
``Motor Vehicle Safety Act''). We codified those amendments on November 
14, 2000. 65 FR 68108.
    We have reviewed the amounts of civil penalties authorized in Part 
578 and propose in this notice to adjust those penalties where 
warranted under the Adjustment Act. Those civil penalties that we are 
proposing to adjust address violations pertaining to motor vehicle 
safety, bumper standards, and consumer information regarding 
crashworthiness and damage susceptibility.

Method of Calculation

    Under the Adjustment Act, we determine the inflation adjustment for 
each applicable civil penalty by increasing the maximum civil penalty 
amount per violation by a cost-of-living adjustment, and then applying 
a rounding factor. Section 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 proposed adjustment is intended to be effective before 
December 31, 2004, the ``Consumer Price Index [CPI] for the month of 
June of the calendar year preceding the adjustment'' would be the CPI 
for June 2003. This figure, based on the Adjustment Act's requirement 
of using the CPI ``for all-urban consumers published by the Department 
of Labor'' is 550.4.\1\ The penalty amounts that NHTSA seeks to adjust 
based on the Act's requirements were last adjusted in 1999 for 
violations related to bumper standards and consumer information 
regarding crashworthiness and damage susceptibility and in 2000 for 
violations

[[Page 32964]]

related to motor vehicle safety. The CPI figures for June 1999 and June 
2000 were 497.9 and 516.5, respectively. Accordingly, the factors that 
we are using in calculating the increase, are 1.10 (550.4/497.9) for 
adjustments to the bumper standard and consumer information penalties 
and 1.07 (550.4/516.5) for adjustments to the motor vehicle safety 
penalties. Using 1.10 and 1.07 as the inflation factors, calculated 
increases under these adjustments are then subject to a specific 
rounding formula set forth in section 5(a) of the Adjustment Act. 28 
U.S.C. 2461, notes. Under that formula:
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    \1\ Individuals interested in deriving the CPI figures used by 
the agency may visit the Department of Labor's Consumer Price Index 
Home Page at http://www.bls.gov/cpi/home.htm. Select ``US ALL ITEMS 
1967=100--CUUR0000AA0'', select the appropriate time frame covering 
the information sought, and select ``Retrieve Data'' from the menu.
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    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

    Section 578.6 contains the civil penalties authorized for the 
statutes that we enforce. We have reviewed these penalties, applied the 
formula using the appropriate CPI figures, considered the nearest 
higher multiple specified in the rounding provisions, and tentatively 
concluded that only the penalties discussed below may be increased.

Motor Vehicle Safety Act, 49 U.S.C. Chapter 301 (49 CFR 578.6(a))

    The maximum civil penalty for a related series of violations of 
sections 30112, 30115, 30117 through 30122, 30123(d), 30125(c), 30127, 
or 30141 through 30147 of title 49 of the United States Code or a 
regulation thereunder is $15,000,000, as specified in 49 CFR 
578.6(a)(1). Likewise, the maximum penalty for a related series of 
daily violations of 49 U.S.C. 30166 or a regulation thereunder is 
$15,000,000, as specified in 49 CFR 578.6(a)(2). The agency has not 
adjusted these penalty amounts since the enactment of the TREAD Act. 
Under the rounding formula set by the Adjustment Act, any increase in a 
penalty shall be rounded to the nearest multiple of $25,000 in the case 
of penalties greater than $200,000. Applying the formula using the 
appropriate inflation factor (1.07) and the accompanying rounding 
rules, the increase in the penalty amounts would be $1,050,000. 
Accordingly, we propose that 49 CFR 578.6(a)(1) and (a)(2) be amended 
to increase the maximum civil penalty to $16,050,000 for a related 
series of motor vehicle safety violations. However, the maximum civil 
penalties for a single violation would remain at $5,000 under 49 CFR 
578.6(a) because the inflation-adjusted figures are not yet at a level 
to be increased under the Adjustment Act.

Bumper Standards, 49 U.S.C. Chapter 325 (49 CFR 578.6(c)(2))

    The agency last adjusted its civil penalties for violations of 
bumper requirements under 49 U.S.C. chapter 325 in 1999. The maximum 
civil penalty for a related series of violations of 49 U.S.C. 32506(a) 
is $925,000, as specified in 49 CFR 578.6(c)(2). Applying the 
appropriate inflation factor (1.10) to the calculation raises this 
figure to $1,017,500, an increase of $92,500. Under the rounding 
formula, any increase in a penalty's amount shall be rounded to the 
nearest multiple of $25,000 in the case of penalties greater than 
$200,000. In this case, the increase would be $100,000. Accordingly, we 
propose that section 576.8(c)(2) be amended to increase the maximum 
civil penalty to $1,025,000 for a related series of violations of the 
bumper standard provisions. However, the maximum civil penalty for a 
single violation remains at $1,100 because the inflation-adjusted 
figure is not yet at a level to be increased.

Consumer Information, 49 U.S.C. Chapter 323 (Crashworthiness and Damage 
Susceptibility (Section 578.6(d))

    The civil penalties related to consumer information regarding 
crashworthiness and damage susceptibility were last adjusted in 1999. 
Under 49 CFR 578.6(d), the maximum civil penalty for a related series 
of violations of 49 U.S.C. 32308(a) is $450,000. Applying the 
appropriate inflation factor (1.10) raises this figure to $495,000, 
which is an increase of $45,000. Under the formula, any increase in a 
penalty's amount shall be rounded to the nearest multiple of $25,000 in 
the case of penalties greater than $200,000. In this instance, the 
rounding rules provide for an increase of $50,000. Accordingly, we 
propose that section 576.8(d) be amended to increase the maximum civil 
penalty to $500,000 for a related series of violations that pertain to 
NHTSA's crashworthiness and damage susceptibility consumer information 
provisions. However, the maximum penalty for a single violation remains 
at $1,100 because the inflation-adjusted figure is not yet at a level 
to be increased.

Effective Date

    The amendments would be effective 30 days after publication of the 
final rule in the Federal Register. The adjusted penalties would apply 
to violations occurring on and after the effective date.

Request for Comments

How Do I Prepare and Submit Comments?

    Your comments must be written and in English. To ensure that your 
comments are correctly filed in the Docket, please include the docket 
number of this document in your comments.
    Your comments must not be more than 15 pages long (49 CFR 553.21). 
We established this limit to encourage you to write your primary 
comments in a concise fashion. However, you may attach necessary 
additional documents to your comments. There is no limit on the length 
of the attachments.
    Please submit two copies of your comments, including the 
attachments, to Docket Management at the beginning of this document, 
under ADDRESSES. You may also submit your comments electronically to 
the docket following the steps outlined under ADDRESSES.

How Can I Be Sure That My Comments Were Received?

    If you wish Docket Management to notify you upon its receipt of 
your comments, enclose a self-addressed, stamped postcard in the 
envelope containing your comments. Upon receiving your comments, Docket 
Management will return the postcard by mail.

How Do I Submit Confidential Business Information?

    If you wish to submit any information under a claim of 
confidentiality, you should submit the following to the Chief Counsel 
(NCC-110) at the address given at the beginning of this document under 
the heading FOR FURTHER INFORMATION CONTACT: (1) A complete copy of the 
submission; (2) a redacted copy of the submission with the confidential 
information removed; and (3) either a second complete copy or those 
portions of the submission containing the material for which 
confidential treatment is claimed and any additional information that 
you deem important to the Chief Counsel's consideration of

[[Page 32965]]

your confidentiality claim. A request for confidential treatment that 
complies with 49 CFR part 512 must accompany the complete submission 
provided to the Chief Counsel. For further information, submitters who 
plan to request confidential treatment for any portion of their 
submissions are advised to review 49 CFR part 512, particularly those 
sections relating to document submission requirements. Failure to 
adhere to the requirements of Part 512 may result in the release of 
confidential information to the public docket. In addition, you should 
submit two copies from which you have deleted the claimed confidential 
business information, to Docket Management at the address given at the 
beginning of this document under ADDRESSES.

Will the Agency Consider Late Comments?

    We will consider all comments that Docket Management receives 
before the close of business on the comment closing date indicated at 
the beginning of this notice under DATES. In accordance with our 
policies, to the extent possible, we will also consider comments that 
Docket Management receives after the specified comment closing date. If 
Docket Management receives a comment too late for us to consider in 
developing the proposed rule, we will consider that comment as an 
informal suggestion for future rulemaking action.

How Can I Read the Comments Submitted by Other People?

    You may read the comments received by Docket Management at the 
address and times given near the beginning of this document under 
ADDRESSES.
    You may also see the comments on the Internet. To read the comments 
on the Internet, take the following steps:
    (1) Go to the Docket Management System (DMS) Web page of the 
Department of Transportation (http://dms.dot.gov/).
    (2) On that page, click on ``search.''
    (3) On the next page (http://dms.dot.gov/search/), type in the 
four-digit docket number shown at the heading of this document. 
Example: if the docket number were ``NHTSA-2001-1234,'' you would type 
``1234.''
    (4) After typing the docket number, click on ``search.''
    (5) The next page contains docket summary information for the 
docket you selected. Click on the comments you wish to see.
    You may download the comments. The comments are imaged documents, 
in either TIFF or PDF format. Please note that even after the comment 
closing date, we will continue to file relevant information in the 
Docket as it becomes available. Further, some people may submit late 
comments. Accordingly, we recommend that you periodically search the 
Docket for new material.

Rulemaking Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

    We have considered the impact of this rulemaking action under 
Executive Order 12866 and the Department of Transportation's regulatory 
policies and procedures. This rulemaking document was not reviewed 
under Executive Order 12866, ``Regulatory Planning and Review.'' This 
action is limited to the proposed adoption of adjustments of 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 a final rule based on this 
proposal will not have a significant economic impact on a substantial 
number of small entities. The following provides the factual basis for 
this certification under 5 U.S.C. 605(b). The proposed amendments 
almost entirely potentially affect manufacturers of motor vehicles and 
motor vehicle equipment.
    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 were 
previously organized according to Standard Industrial Classification 
Codes (``SIC''), SIC Code 3711 ``Motor Vehicles and Passenger Car 
Bodies,'' which used a small business size standard of 1,000 employees 
or fewer. SBA now uses size standards based on the North American 
Industry Classification System (``NAICS''), Subsector 336--
Transportation Equipment Manufacturing, which provides a small business 
size standard of 1,000 employees or fewer for automobile manufacturing 
businesses. Other motor vehicle-related industries have lower size 
requirements that range between 500 and 750 employees.\2\
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    \2\ For example, according to the new SBA coding system, 
businesses that manufacture truck trailers, travel trailers/campers, 
carburetors, pistons, piston rings, valves, vehicular lighting 
equipment, motor vehicle seating/interior trim, and motor vehicle 
stamping qualify as small businesses if they employ 500 or fewer 
employees. Similarly, businesses that manufacture gasoline engines, 
engine parts, electrical and electronic equipment (non-vehicle 
lighting), motor vehicle steering/suspension components (excluding 
springs), motor vehicle brake systems, transmissions/power train 
parts, motor vehicle air-conditioning, and all other motor vehicle 
parts qualify as small businesses if they employ 750 or fewer 
employees. See http://www.sba.gov/size/sizetable.pdf for further 
details.
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    Many small businesses are subject to the penalty provisions of 49 
U.S.C. chapters 301 (motor vehicle safety), 325 (bumpers) or 323 
(consumer information) and therefore may be affected by the adjustments 
that this NPRM proposes to make. For example, based on comprehensive 
reporting pursuant to the early warning reporting (EWR) rule under the 
Motor Vehicle Safety Act, 49 CFR part 579, out of 72 reporting we are 
aware of approximately 50 light vehicle manufacturers that are small 
businesses. In addition, there are other, relatively low production 
light vehicle manufacturers that are not subject to comprehensive EWR 
reporting. Additionally, many of the more than 70 manufacturers of 
medium-heavy medium heavy vehicles and buses, the more than 150 trailer 
manufacturers, and the 12 motorcycle manufacturers providing 
comprehensive EWR reports are small businesses and there are numerous 
others that are below the production threshold for comprehensive 
reporting. There are over 6 manufacturers of child restraints and 18 
tire manufacturers that are reporting pursuant to the EWR rule. Also, 
there are numerous other low-volume specialty tire manufacturers that 
do not provide comprehensive EWR reports. Furthermore, there are about 
160 registered importers. Equipment manufacturers are also subject to 
penalties under 49 U.S.C. 30165.
    The bumper and consumer information statutes addressed by this 
proposal cover passenger motor vehicles, which are within the compass 
of the Motor Vehicle Safety Act. As a result, the discussion of the 
numbers and sizes of light vehicle manufacturers above also covers 
those statutes.
    As noted throughout this preamble, this proposed rule would only 
increase the maximum penalty amounts that the agency could obtain for 
violations of provisions related to motor vehicle safety, bumper 
standards, and certain consumer information. The proposed rule does not 
set the amount of penalties for any particular violation or series of 
violations. Under the motor vehicle safety and consumer information 
statutes, the penalty provisions require the agency to take into 
account the size of a business when determining the appropriate penalty 
in an individual case. See 49 U.S.C. 30165(b) (motor

[[Page 32966]]

vehicle safety) and 49 U.S.C. 32308(b)(3) (consumer information). While 
the bumper standards penalty provision does not specifically require 
the agency to consider the size of the business, the agency would 
consider business size under its civil penalty policy when determining 
the appropriate civil penalty amount. See 62 FR 37115 (July 10, 1997) 
(NHTSA's civil penalty policy under the Small Business Regulatory 
Enforcement Fairness Act (``SBREFA'')). The penalty adjustments that 
are being proposed would not affect our civil penalty policy under 
SBREFA. As a matter of policy, we intend to continue to consider the 
appropriateness of the penalty amount to the size of the business 
charged.
    Since this regulation would not establish penalty amounts, this 
proposal will not have a significant economic impact on small 
businesses.
    Further, small organizations and governmental jurisdictions would 
not be significantly affected as the price of motor vehicles and 
equipment ought not to change as the result of this proposed rule. As 
explained above, this action is limited to the proposed adoption of a 
statutory directive, and has been determined to be not ``significant'' 
under the Department of Transportation's regulatory policies and 
procedures.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1980, Public Law 
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 Executive Order 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. 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, Public Law 104-4 requires 
agencies to prepare a written assessment of the cost, benefits and 
other effects of proposed or final rules that include a Federal mandate 
likely to result in the expenditure by State, local, or 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.

    In consideration of the foregoing, NHTSA proposes to amend 49 CFR 
part 578 as follows:

PART 578--CIVIL AND CRIMINAL PENALTIES

    1. The authority citation for 49 CFR part 578 would continue to 
read as follows:

    Authority: Pub. L 101-410, Pub. L. 104-134, 49 U.S.C. 30165, 
30170, 30505, 32308, 32309, 32507, 32709, 32710, 32912, and 33115; 
delegation of authority at 49 CFR 1.50.

    2. Section 578.6 would be amended by revising paragraphs (a)(1), 
(a)(2), (c)(2), and (d) to read as follows:
* * * * *


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

    (a)(1) Motor vehicle safety. A person who violates any of sections 
30112, 30115, 30117 through 30122, 30123(d), 30125(c), 30127, or 30141 
through 30147 of title 49 of the United States Code or a regulation 
prescribed under any of those sections is liable to the United States 
Government for a civil penalty of not more than $5,000 for each 
violation. A separate violation occurs for each motor vehicle or item 
of motor vehicle equipment and for each failure or refusal to allow or 
perform an act required by any of those sections. The maximum civil 
penalty under this paragraph for a related series of violations is 
$16,050,000.
    (2) Section 30166. A person who violates section 30166 of title 49 
of the United States Code or a regulation prescribed under that section 
is liable to the United States Government for a civil penalty for 
failing or refusing to allow or perform an act required under that 
section or regulation. The maximum penalty under this paragraph is 
$5,000 per violation per day. The maximum penalty under this paragraph 
for a related series of violations is $16,050,000.
* * * * *
    (c) Bumper standards. (1) * * *
    (2) The maximum civil penalty under this paragraph (c) for a 
related series of violations is $1,025,000.
    (d) Consumer information regarding crashworthiness and damage 
susceptibility. A person that violates 49 U.S.C. 32308(a) is liable to 
the United States Government for a civil penalty of not more than 
$1,100 for each violation. Each failure to provide information or 
comply with a regulation in violation of 49 U.S.C. 32308(a) is a 
separate violation. The maximum penalty under this paragraph for a 
related series of violations is $500,000.
* * * * *

    Issued on: June 4, 2004.
Jacqueline Glassman,
Chief Counsel.
[FR Doc. 04-13056 Filed 6-10-04; 8:45 am]
BILLING CODE 4910-59-P