[Federal Register Volume 71, Number 94 (Tuesday, May 16, 2006)]
[Rules and Regulations]
[Pages 28279-28282]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-4580]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 578

[Docket No. NHTSA-05-24109; Notice 2]
RIN 2127-AJ83


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 civil penalties for violations of the National 
Traffic and Motor Vehicle Safety Act, as amended (Vehicle Safety Act). 
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 NHTSA to review and, as 
warranted, adjust penalties based on inflation at least every four 
years. In addition, this document codifies amendments to the penalty 
provisions of the Vehicle Safety Act by the Safe, Accountable, 
Flexible, Efficient Transportation Equity Act--A Legacy for Users 
(SAFETEA-LU) and makes a technical correction to the text of the 
agency's penalty regulation.

DATES: This rule is effective on June 15, 2006.

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.

SUPPLEMENTARY INFORMATION: This rule amends NHTSA's regulations on 
civil penalties under the Vehicle Safety Act, 49 U.S.C. Chapter 301. As 
explained below, it makes four changes to 49 CFR Part 578 Civil and 
Criminal Penalties. These changes were proposed and explained in our 
March 9, 2006 Notice of Proposed Rulemaking (``NPRM'') at 71 FR 12156. 
There were no comments on that notice.
    First, this rule adjusts for inflation the maximum available 
penalties codified at 49 CFR 578.6(a). 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 is adjusting the maximum penalty for a single violation of 
the Vehicle Safety Act. The agency last published a rule stating the 
maximum civil penalty for a single violation or a single violation per 
day under 49 U.S.C. Chapter 301 on November 14, 2000, 65 FR 68108. This 
rule incorporated amendments to 49 U.S.C. 30165(a) in the 
Transportation Recall Enhancement, Accountability, and Documentation 
(TREAD) Act. Pub. L. 106-414, 114 Stat. 1800. In the TREAD Act, 
Congress set the maximum penalty for a single violation of the Vehicle 
Safety Act or a regulation thereunder at $5,000. The TREAD Act also set 
the maximum penalty for a violation of 49 U.S.C. 30166 or a regulation 
thereunder at $5,000 per violation per day. The agency codified these 
amounts at 49 CFR 578.6(a)(1) and (a)(2), respectively. In today's 
rule, NHTSA is adjusting these amounts from $5,000 to $6,000 based on 
the Adjustment Act, for the reasons set forth in the NPRM.
    Additionally, the agency is adjusting the maximum penalty amounts 
for a related series of violations of the Vehicle Safety Act or a 
regulation thereunder and for a related series of

[[Page 28280]]

daily violations of 49 U.S.C. 30166 or a regulation thereunder. Both 
penalty amounts were last adjusted in amendments to 49 CFR 578.6(a) on 
September 28, 2004. 69 FR 57864. After applying the formulation set out 
in the NPRM, the adjusted civil penalty amounts for these violations 
are being adjusted from $16,050,000 to $16,375,000. The basis for these 
adjustments is set forth in the NPRM.
    Second, this rule codifies the penalties added to the Vehicle 
Safety Act by the Safe, Accountable, Flexible, Efficient Transportation 
Equity Act: A Legacy for Users (SAFETEA-LU). Pub. L. 109-59, 119 Stat. 
1144, 1942-43 (2005). As explained in the NPRM, SAFETEA-LU added 
prohibitions related to the acquisition of noncomplying 15-passenger 
vans for school use and provided for associated penalties. See 71 FR at 
12157. See also Pub. L. 109-59, 119 Stat. at 1942-43. Consistent with 
the agency's practice of codifying civil penalties available under 
statutes that it administers in Part 578, NHTSA is adding a new 
provision that includes the SAFETEA-LU penalties. As added in a new 
Section 578.6(a)(2), a single violation may result in a maximum penalty 
amount of $10,000, while a related series of violations may result in a 
maximum penalty amount of $15,000,000. We have written the new penalty 
provision to parallel the language in 49 CFR 578.6(a). The new 
regulation has the meaning of the penalty provision in SAFETEA-LU.
    Third, this rule reorganizes 49 CFR 578.6(a). As adopted in 2000, 
the structure of 49 CFR 578.6(a) paralleled the structure of 49 U.S.C. 
30165(a), as amended by the TREAD Act. SAFETEA-LU amended 49 U.S.C. 
30165(a) by inserting the new penalties related to school bus 
violations as 49 U.S.C. 30165(a)(2) and by redesignating 49 U.S.C. 
30165(a)(2), which relates to violations of 49 U.S.C. 30166 or a 
regulation thereunder, as 49 U.S.C. 30165(a)(3). 119 Stat. at 1942. To 
make the regulations parallel with 49 U.S.C. 30165(a), as amended by 
SAFETEA-LU, the current Section 578.6(a)(2), which was based on 49 
U.S.C. 30165(a)(2), is being redesignated as 49 CFR 578.6(a)(3).
    Fourth, this rule amends the language in 49 CFR 578.6(a) to conform 
it to the current statutory text. Specifically, Sec. Sec.  578.6(a)(1) 
and (3), as redesignated, referred to violations of 49 U.S.C. 30123(d), 
which addresses the treatment of regrooved tires. On June 9, 1998, this 
statutory provision was redesignated as paragraph (a). See Pub. L. 105-
178, 112 Stat. 107, 467. Accordingly, we are changing the regulation to 
reflect this redesignation.

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 statutory adjustments of civil penalties 
under statutes that the agency enforces and codification in 49 CFR 
578.6(a) of other statutory amendments, 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 final 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 
(``SIC'') Codes. SIC Code 336211 ``Motor Vehicle Body Manufacturing'' 
applied 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.\1\
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    \1\ 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. Chapter 301 (Vehicle Safety Act) and therefore may be affected 
by the adjustments in this final 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, of the more 
than 60 light vehicle manufacturers reporting, over half are small 
businesses. Also, there are other, relatively low production light 
vehicle manufacturers that are not subject to comprehensive EWR 
reporting. Furthermore, there are about 98 registered importers. 
Equipment manufacturers are also subject to penalties under 49 U.S.C. 
30165.
    As noted throughout this preamble, this rule only increases the 
maximum penalty amounts that the agency could obtain for a single 
violation and a related series of violations of the Vehicle Safety Act 
and codifies changes that are otherwise effective based on statutory 
amendments. The rule does not set the amount of penalties for any 
particular violation or series of violations. Under the Vehicle Safety 
Act, the penalty provision requires the agency to take into account the 
size of a business when determining the appropriate penalty in an 
individual

[[Page 28281]]

case. See 49 U.S.C. 30165(b). The agency would also consider the size 
of a business 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 made do not affect our civil penalty policy under SBREFA.
    Since this regulation does not establish penalty amounts, this rule 
will not have a significant economic impact on small businesses.
    Small organizations and governmental jurisdictions are not 
significantly affected as the price of motor vehicles and equipment 
ought not change as the result of this final 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.

Executive Order 13132 (Federalism)

    Executive Order 13132 requires NHTSA to develop an accountable 
process to ensure ``meaningful and timely input by State and local 
officials in the development of regulatory policies that have 
federalism implications.'' ``Policies that have federalism 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects 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.'' Under Executive Order 13132, the agency may not issue a 
regulation with Federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute, unless 
the Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments, the agency 
consults with State and local governments, or the agency consults with 
State and local officials early in the process of developing the 
regulation. NHTSA also may not issue a regulation with Federalism 
implications and that preempts State law unless the agency consults 
with State and local officials early in the process of developing the 
regulation.
    We have analyzed this rule in accordance with the principles and 
criteria set forth in Executive Order 13132 and have determined that 
this rule does not have sufficient Federal implications to warrant 
consultation with State and local officials or the preparation of a 
Federalism summary impact statement. The rule will not have any 
substantial impact on the States, or on the current Federal-State 
relationship, or on the current distribution of power and 
responsibilities among the various local officials.

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.

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 12988 (Civil Justice Reform)

    This rule does not have a retroactive or preemptive effect. 
Judicial review of this rule may be obtained pursuant to 5 U.S.C. 702.

Paperwork Reduction Act

    NHTSA has determined that this rule will not impose any 
``collection of information'' burdens on the public, within the meaning 
of the Paperwork Reduction Act of 1995. This rulemaking action will not 
impose any filing or record keeping requirements on any manufacturer or 
any other party.

Privacy Act

    Please note that anyone is able to search the electronic form of 
all submissions received into any of our dockets by the name of the 
individual submitting the submission (or signing the submission, if 
submitted on behalf of an association, business, labor union, 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.

List of Subjects in 49 CFR Part 578

    Motor vehicle safety, Penalties.


0
In consideration of the foregoing, 49 CFR part 578 is amended as set 
forth below.

PART 578--CIVIL AND CRIMINAL PENALTIES

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

    Authority: Pub. L. 101-410, Pub. L. 104-134, Pub. L. 109-59, 49 
U.S.C. Sec. Sec.  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 redesignating paragraph (a)(2) as 
(a)(3), adding a new paragraph (a)(2), and revising paragraph (a)(1) 
and newly designated paragraph (a)(3), to read as follows:


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

    (a) Motor vehicle safety--(1) In general. A person who violates any 
of sections 30112, 30115, 30117 through 30122, 30123(a), 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 $6,000 
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 $16,375,000.
    (2) School buses. Notwithstanding paragraph (a)(1) of this section, 
a person who:
    (i) Violates section 30112(a)(1) of Title 49 United States Code by 
the manufacture, sale, offer for sale, introduction or delivery for 
introduction into interstate commerce, or importation of a school bus 
or school bus equipment (as those terms are defined in 49 U.S.C. Sec.  
30125(a)); or
    (ii) Violates section 30112(a)(2) of Title 49 United States Code, 
shall be subject to a civil penalty of not more than $10,000 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 that section. The maximum penalty under this 
paragraph for a related series of violations is $15,000,000.
    (3) 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 28282]]

penalty under this paragraph is $6,000 per violation per day. The 
maximum penalty under this paragraph for a related series of daily 
violations is $16,375,000.
* * * * *

    Issued on: May 11, 2006.
Jacqueline Glassman,
Deputy Administrator.
[FR Doc. 06-4580 Filed 5-15-06; 8:45 am]
BILLING CODE 4910-59-P