[Federal Register Volume 69, Number 187 (Tuesday, September 28, 2004)]
[Rules and Regulations]
[Pages 57864-57867]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-21735]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 578

[Docket No. NHTSA-04-17571; Notice 2]
RIN 2127-AJ32


Civil Penalties

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

ACTION: Final rule.

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SUMMARY: This document amends NHTSA's regulation on civil penalties by 
increasing 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 
is 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: This rule is effective on October 28, 2004. If you wish to 
submit a petition for reconsideration of this rule, your petition must 
be received by November 12, 2004.

ADDRESSES: Petitions for reconsideration should refer to the docket 
number and be submitted to: Administrator, Room 5220, National Highway 
Traffic Safety Administration, 400 Seventh Street, SW., Washington, DC 
20590, with a copy to the docket.

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, Pub. L. 101-
410), as amended by the Debt Collection Improvement Act of 1996, Pub. 
L. 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 in a notice 
published on November 14, 2000. 65 FR 68108.
    On June 14, 2004, based on our review of the amounts of civil 
penalties authorized in part 578, we proposed to adjust those penalties 
where warranted under the Adjustment Act. 69 FR 32963. Our proposal 
addressed 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 adjustment will be effective before December 31, 2004, 
the ``Consumer Price Index [CPI] for the month of June of the calendar 
year preceding the adjustment'' is 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 is adjusting 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 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 used 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;

[[Page 57865]]

    (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.

Revision of Civil Penalties Prescribed by Section 578.6

    In the Notice of Proposed Rulemaking, we reviewed penalties in 
section 578.6, calculated updated penalties using the appropriate CPI 
figures, considered the nearest higher multiple specified in the 
rounding provisions, and proposed that the penalties discussed below 
may be increased.
    We received one comment on our proposal from a private individual 
who recommended that the agency impose no penalty under $500 and that a 
maximum penalty of $150,000,000 be imposed on violators of the 
provisions that we proposed to adjust. We are not modifying our 
proposal based on this comment because it is inconsistent with the 
penalty provisions in the statutes addressed in this notice and with 
the Adjustment Act. We are adjusting the penalties as proposed and as 
addressed below.

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). 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 
are amending 49 CFR 578.6(a)(1) and (a)(2) 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 will 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 
are amending section 576.8(c)(2) 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 are 
amending section 576.8(d) 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.

Rulemaking Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

    Executive Order 12866, ``Regulatory Planning and Review,'' provides 
for making determinations whether a regulatory action is 
``significant'' and therefore subject to OMB review and to the 
requirements of the Executive Order. The Order defines a ``significant 
regulatory action'' as one that is likely to result in a rule that may:

    (1) Have an annual effect on the economy of $100 million or more 
or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.

    NHTSA has considered the impact of this final rule under E.O. 12866 
and the Department of Transportation's regulatory policies and 
procedures and has determined that it is not significant. This action 
is limited to the adoption of statutorily mandated adjustments of civil 
penalties under statutes that the agency enforces, raises no novel 
issues, and does not otherwise interfere with other actions. This final 
rule does not impose any costs that would exceed the $100 million 
threshold or otherwise materially impact entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof. The agency has therefore determined this final rule to be not 
``significant'' under the Department of Transportation's regulatory 
policies and procedures.

Regulatory Flexibility Act

    We have also considered the impacts of this notice under the 
Regulatory Flexibility Act. I certify that this rule 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 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 uses size standards based on the North American Industry 
Classification System (``NAICS''),

[[Page 57866]]

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 
made by this rule. 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 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 rule 
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 rule increases only 
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 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 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 in today's rule will 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 does not establish penalty amounts, this rule 
will not have a significant economic impact on small businesses.
    Further, small organizations and governmental jurisdictions will 
not be significantly affected as the price of motor vehicles and 
equipment ought not to change as the result of this rule. As explained 
above, this action is limited to the adoption of a statutory directive, 
and has been determined to be not ``significant'' under the Department 
of Transportation's regulatory policies and procedures.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1980, as amended, 
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 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 rule does not have a retroactive or preemptive effect. A 
petition for reconsideration need not be filed prior to seeking 
judicial review, when available.

Unfunded Mandates Reform Act of 1995

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

List of Subjects in 49 CFR Part 578

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

0
1. The authority citation for 49 CFR part 578 continues to read as 
follows:

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


0
2. Section 578.6 is amended by revising paragraphs (a)(1), (a)(2), 
(c)(2), and (d) to read as follows:

PART 578--CIVIL AND CRIMINAL PENALTIES

* * * * *


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

[[Page 57867]]

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: September 22, 2004.
Jeffrey W. Runge,
Administrator.
[FR Doc. 04-21735 Filed 9-27-04; 8:45 am]
BILLING CODE 4910-59-P