[Federal Register Volume 73, Number 184 (Monday, September 22, 2008)]
[Proposed Rules]
[Pages 54544-54553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-22070]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 73, No. 184 / Monday, September 22, 2008 / 
Proposed Rules  

[[Page 54544]]



DEPARTMENT OF JUSTICE

28 CFR Part 25

[Docket No. FBI 117; AG Order No. 3000-2008]
RIN 1110-AA30


National Motor Vehicle Title Information System (NMVTIS)

AGENCY: Department of Justice.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The National Motor Vehicle Title Information System (NMVTIS) 
has been established pursuant to 49 U.S.C. 30502 and is in operation, 
or partial operation, in at least 25 states. NMVTIS is intended to 
provide authorized recipients with instant and reliable access to motor 
vehicle titling information maintained by the states. The goal of 
NMVTIS is to assist in efforts to prevent the introduction or 
reintroduction of stolen motor vehicles into interstate commerce. 
NMVTIS helps state titling agencies by verifying motor vehicle and 
title information, information on brands applied to motor vehicles, and 
information regarding whether motor vehicles have been reported stolen. 
This rule implements the NMVTIS reporting requirements imposed on junk 
yards, salvage yards, and insurance carriers pursuant to 49 U.S.C. 
30504(c). This rule also clarifies the process by which NMVTIS will be 
funded and clarifies the various responsibilities of the operator of 
NMVTIS, states, junk yards, salvage yards, and insurance carriers 
regarding NMVTIS.

DATES: Written comments must be submitted on or before November 21, 
2008.

ADDRESSES: Comments may be mailed to: James Landon, 935 Pennsylvania 
Ave., NW., Washington, DC 20535. To ensure proper handling, please 
reference FBI Docket No. 117 on your correspondence. You may submit 
comments electronically or view an electronic version of this proposed 
rule at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: David P. Lewis, 810 7th Street, NW., 
Washington, DC 20531, 202-616-6500.

SUPPLEMENTARY INFORMATION:

Posting of Public Comments

    Please note that all comments received are considered part of the 
public record and made available for public inspection online at http://www.regulations.gov. Such information includes personal identifying 
information (such as your name, address, etc.) voluntarily submitted by 
the commenter.
    If you want to submit personal identifying information (such as 
your name, address, etc.) as part of your comment, but do not want it 
to be posted online, you must include the phrase ``PERSONAL IDENTIFYING 
INFORMATION'' in the first paragraph of your comment. You also must 
locate all the personal identifying information you do not want posted 
online in the first paragraph of your comment and identify what 
information you want redacted.
    If you want to submit confidential business information as part of 
your comment but do not want it to be posted online, you must include 
the phrase ``CONFIDENTIAL BUSINESS INFORMATION'' in the first paragraph 
of your comment. You also must prominently identify confidential 
business information to be redacted within the comment. If a comment 
has so much confidential business information that it cannot be 
effectively redacted, all or part of that comment may not be posted on 
http://www.regulations.gov.
    Personal identifying information and confidential business 
information identified and located as set forth above will be placed in 
the agency's public docket file, but not posted online. If you wish to 
inspect the agency's public docket file in person by appointment, 
please see the FOR FURTHER INFORMATION CONTACT paragraph.

Background

    The Anti-Car Theft Act of 1992 (Pub. L. 102-519) required the 
Department of Transportation (DOT) to establish an information system 
intended to enable states and others to access automobile titling 
information. As part of the Anti-Car Theft Act of 1992, DOT was 
authorized to designate a third party to operate the system. Since 
1992, the American Association of Motor Vehicle Administrators (AAMVA) 
has acted in the capacity of the operator of the system. AAMVA is a 
nonprofit, tax exempt, educational association representing U.S. and 
Canadian officials who are responsible for the administration and 
enforcement of motor vehicle laws. The requirements of the Anti-Car 
Theft Act of 1992 were amended by Public Law 103-272 and the Anti-Car 
Theft Improvements Act of 1996 (Pub. L. 104-152). The Anti-Car Theft 
Improvements Act of 1996 renamed the automobile titling system the 
``National Motor Vehicle Title Information System'' (NMVTIS) and 
transferred responsibility for implementing the system from DOT to the 
Department of Justice (hereinafter, the Anti-Car Theft Act of 1992 and 
the revisions made by Public Law 103-272 and the Anti-Car Theft 
Improvements Act of 1996, codified at 49 U.S.C. 30501-30505, are 
collectively referred to as the ``Anti-Car Theft Act'').
    The purpose of NMVTIS is to provide an electronic means for 
verifying and exchanging title, brand, and theft data among motor 
vehicle administrators, law enforcement officials, prospective 
purchasers, and insurance carriers.\1\ To date, the implementation of 
NMVTIS has focused on establishing access by the states and not on 
providing access to other authorized users. Currently, 33 states are 
actively involved with NMVTIS, representing more than 60 percent of the 
U.S. motor vehicle population. Specifically, 13 states are 
participating fully in NMVTIS, 12 states are regularly providing data 
to the system, and an additional 8 states are actively taking steps to 
provide data or participate fully.\2\ States that participate fully in 
the system provide data regularly and have the ability to make NMVTIS 
inquiries before issuing a new

[[Page 54545]]

title. These states also send updates to the system when necessary. 
States that regularly provide data to the system provide data to NMVTIS 
through a batch upload process.
---------------------------------------------------------------------------

    \1\ Brands are descriptive labels regarding the status of a 
motor vehicle, such as ``junk,'' ``salvage,'' and ``flood'' 
vehicles.
    \2\ There are currently 13 states participating fully in NMVTIS: 
Arizona, Florida, Indiana, Iowa, Kentucky, Massachusetts, New 
Hampshire, Nevada, Ohio, South Dakota, Virginia, Washington, and 
Wisconsin. Twelve states are providing regular data updates to 
NMVTIS: Alabama, Georgia, Idaho, Louisiana, Nebraska, New Jersey, 
New York, North Carolina, Pennsylvania, Tennessee, Texas, and 
Wyoming. Eight states are actively taking steps to provide data or 
participate fully: Arkansas, Delaware, Montana, New Mexico, 
Oklahoma, South Carolina, Vermont, and West Virginia.
---------------------------------------------------------------------------

    In 2006, the Integrated Justice Information Systems (IJIS) 
Institute, a nonprofit organization made up of technology companies, 
was asked by Department of Justice's Bureau of Justice Assistance (BJA) 
to conduct a full review of the NMVTIS system architecture to identify 
any technological barriers to NMVTIS implementation and to determine if 
any potential cost savings was available through emerging technology. 
The IJIS Institute report found that: ``* * * the NMVTIS program 
provides an invaluable benefit to state vehicle administrators and the 
public community as a whole. Advantages of the program include 
improving the state titling process, as well as providing key 
information to consumers and law enforcement agencies.''
    NMVTIS is a powerful tool for state titling agencies. Fully 
participating state titling agencies are able to use NMVTIS to prevent 
fraud by verifying the motor vehicle and title information, information 
on brands applied to a motor vehicle, and information on whether the 
motor vehicle has been reported stolen--all prior to the titling 
jurisdiction issuing a new title. In order to perform this check, these 
states run the vehicle identification number (VIN) against a national 
pointer file, which provides the last jurisdiction that issued a title 
on the motor vehicle and requests details of the motor vehicle from 
that jurisdiction, including the motor vehicle's last reported odometer 
reading.
    Verification of this data allows fully participating states to 
reduce the issuance of fraudulent titles and reduce odometer fraud. 
Once the inquiring jurisdiction receives the information, a state is 
able to decide whether to issue a title. For fully participating 
states, if a new title is issued, NMVTIS notifies the last titling 
jurisdiction that another jurisdiction has issued a title. The old 
jurisdiction then can inactivate its title record. This action allows 
fully participating jurisdictions to identify and purge inactive titles 
on a regular basis.
    NMVTIS also allows fully participating states to ensure that brands 
are not lost when a motor vehicle travels from state to state. As noted 
above, brands are descriptive labels regarding the status of a motor 
vehicle. Many brands, such as a flood vehicle brand, indicate that a 
motor vehicle may not be safe for use. Unfortunately, motor vehicles 
with brands on their titles can have their brands ``washed'' (i.e., 
removed ) from a title if the motor vehicle is retitled in another 
state that does not check with the state that issued the previous title 
to determine if it has any existing brands. Because NMVTIS keeps a 
history of brands applied by any state to the motor vehicle, it 
protects consumers by helping ensure that unsuspecting purchasers are 
not defrauded or placed at risk by purchasing an unsafe motor vehicle.

Provisions of This Proposed Rule

    The continued implementation of NMVTIS and its effectiveness 
depends on the participation and cooperation of a number of parties. 
According to a cost-benefit study conducted by the National Institute 
of Justice: ``The way NMVTIS is implemented--piecemeal, regionally, or 
nationally--will affect how criminals respond. Criminals are highly 
mobile and may avoid NMVTIS states until most of the country is covered 
by the system. Criminals use technology to their advantage, both to 
identify potential theft targets and to camouflage stolen vehicles.'' 
As a result, any states not fully participating in NMVTIS and their 
citizens may be disproportionately targeted by criminals committing 
vehicle crimes.
    Participation in NMVTIS needs to be expanded to all states. In 
addition, insurance carriers, junk yards, and salvage yards also need 
to provide certain information to NMVTIS relevant to the life-cycle of 
an automobile's title in order for NMVTIS to function as intended. The 
Anti-Car Theft Act requires junk yards, salvage yards, and insurance 
carriers to report monthly to NMVTIS on all junk and salvage 
automobiles they obtain. Pursuant to 49 U.S.C. 30504(c), the Attorney 
General is authorized to issue regulations establishing ``procedures 
and practices to facilitate reporting in the least burdensome and 
costly fashion.''
    Accordingly, this rule implements the reporting requirements 
imposed on junk yards, salvage yards, and insurance carriers pursuant 
to 49 U.S.C. 30504(c). In addition, this rule clarifies the various 
responsibilities of the operator of NMVTIS, states, junk yards, salvage 
yards, and insurance carriers under the Anti-Car Theft Act to help 
ensure its effectiveness. Finally, this rule also proposes a means by 
which user fees will be imposed to fund NMVTIS.

1. State Responsibilities

    The effectiveness of NMVTIS increases as more states begin to 
participate. NMVTIS will only be as good as the quality and quantity of 
information it contains. Consequently, all non-participating states are 
strongly urged to comply with their obligations under the Anti-Car 
Theft Act and begin reporting titling information to NMVTIS as soon as 
possible. While the immediate goal of this proposed rule is to, at a 
minimum, have all statesa providing regular data updates to NMVTIS, the 
ultimate goal is for all states to participate fully in the system by 
providing real time data updates and by making inquiries into NMVTIS 
prior to issuing new titles.
    In accordance with 49 U.S.C. 30502, NMVTIS must provide a means of 
determining whether a title is valid, where the automobile previously 
was titled, the automobile's reported mileage, if the automobile is 
titled as a junk or salvage automobile in another state, and whether 
the automobile has been reported as a junk or salvage automobile under 
49 U.S.C. 30504. Each state is required to make their titling 
information available to NMVTIS. 49 U.S.C. 30503(a). Further, each 
state is required ``to establish a practice of performing an instant 
title verification check before issuing a certificate of title.'' 49 
U.S.C. 30503(b). This proposed rule clarifies what information must be 
reported by states to NMVTIS pursuant to the Anti-Car Theft Act and 
sets out the procedures and practices that states must follow to 
provide this needed information. Pursuant to 49 U.S.C. 30503(a), states 
are required to make the titling information they maintain available 
for use in NMVTIS. Specifically, states will be required to report an 
automobile's VIN, any description of the automobile included on the 
certificate of title, the name of the individual or entity to whom the 
certificate was issued, and information from junk or salvage yard 
operators or insurance carriers regarding the acquisition of junk 
automobiles or salvage automobiles, if this information is being 
collected by the state.
    The Anti-Car Theft Act specifically covers ``automobiles'' as 
defined at 49 U.S.C. 32901(a). That definition, which is part of the 
fuel economy laws, was most recently amended by the Energy Independence 
and Security Act of 2007, Pub. L. 110-140, and generally covers 
vehicles with 4-wheels that are rated at less than 10,000 pounds gross 
vehicle weight, but excludes vehicles that operate on rails, certain 
vehicles manufactured in different stages by two or more manufacturers, 
and certain work trucks. Participating states, however, have been 
providing information to NMVTIS on other types

[[Page 54546]]

of motor vehicles \3\ possessing VINs, such as motorcycles and various 
work trucks. Information on these other types of motor vehicles is very 
useful to the users of NMVTIS. Therefore, states are strongly 
encouraged to continue reporting information on all motor vehicles 
possessing VINs in their state titling systems to NMVTIS.
---------------------------------------------------------------------------

    \3\ Pursuant to 49 U.S.C. 30102(6), a ``motor vehicle'' means a 
vehicle driven or drawn by mechanical power and manufactured 
primarily for use on public streets, roads, and highways, but does 
not include a vehicle operated only on a rail line.
---------------------------------------------------------------------------

    The Anti-Car Theft Act also requires that the operator of NMVTIS 
make available the odometer mileage that is disclosed pursuant to 49 
U.S.C. 32705 on the date the certificate of title for the automobile 
was issued and any later mileage information, if noted by the state. 
Accordingly, the rule proposes to require states to provide such 
mileage information. In addition, the rule will permit, with the 
approval of the operator and the state, the state to provide any other 
information that is included on a certificate of title or that is 
maintained by the state in relation to the certificate of title.

2. Insurance Carriers

    The Anti-Car Theft Act authorized the Attorney General to issue 
regulations establishing procedures by which insurance companies must 
report monthly to NMVTIS on the junk and salvage automobiles they 
obtain. 49 U.S.C. 30504(c). Accordingly, this proposed rule clarifies 
the reporting requirements imposed on insurance carriers regarding junk 
and salvage automobiles. Salvage automobiles are defined by the Anti-
Car Theft Act to mean ``an automobile that is damaged by collision, 
fire, flood, accident, trespass, or other event, to the extent that its 
fair salvage value plus the cost of repairing the automobile for legal 
operation on public streets, roads, and highways would be more than the 
fair market value of the automobile immediately before the event that 
caused the damage.'' 49 U.S.C. 30501(7). For purposes of clarification, 
the Department of Justice has determined that this definition includes 
all automobiles found to be a total loss under the laws of the 
applicable jurisdiction or designated as a total loss by the insurance 
carrier under the terms of its policies. As a practical matter, the 
determination that an automobile is a total loss (i.e, that the 
automobile has been ``totaled'') is the logical event that should 
trigger reporting by an insurance carrier. Insurance carriers will be 
required under this proposed rule to provide NMVTIS with the VIN of 
such automobiles, the date on which the automobile was obtained or 
designated as a junk or salvage automobile, the name of the individual 
or entity from whom the automobile was obtained or who possessed it 
when the automobile was designated as a junk or salvage automobile, and 
the name of the owner of the automobile at the time of the filing of 
the report. In accordance with 49 U.S.C. 30504(b), the report must 
provide such information on ``all automobiles of the current model year 
or any of the 4 prior model years that the carrier, during the prior 
month, has obtained possession of and has decided are junk automobiles 
or salvage automobiles.''
    In addition, although not specifically required by the Anti-Car 
Theft Act or this proposed rule, this rule will permit insurance 
carriers to provide the NMVTIS operator with information on other motor 
vehicles, including older model automobiles, and other information 
relevant to a motor vehicle's title, including the reason why the 
insurance carrier obtained possession of the motor vehicle. For 
example, the insurance carrier may have obtained possession of the 
motor vehicle because it had been subject to flood, water, collision, 
or fire damage, or as a result of theft and recovery. The reporting of 
this information by insurance carriers will help reduce instances when 
thieves use the VINs of junk or salvage motor vehicles on stolen motor 
vehicles. Also, this information will be useful in making it more 
difficult for criminals to wash brands in order to defraud purchasers. 
Accordingly, the Department of Justice strongly encourages insurance 
carriers to report such additional information to the operator.

3. Junk Yards and Salvage Yards

    Under this proposed rule, junk yards and salvage yards will be 
required to provide NMVTIS with the VIN, the date the automobile was 
obtained, the name of the individual or entity from whom the automobile 
was obtained, and a statement of whether the automobile was crushed or 
disposed of, for sale or other purposes. The reporting of this 
information will be limited to junk yards and salvage yards located 
within the United States. Pursuant to the Anti-Car Theft Act, junk and 
salvage yards are defined as individuals or entities engaged in the 
business of acquiring or owning junk or salvage automobiles for resale 
in their entirety or as spare parts or for rebuilding, restoration, or 
crushing. See 49 U.S.C. 30501(5) and (8). For purposes of the reporting 
requirement imposed by this rule, the Department of Justice has 
determined that so-called ``salvage pools'' that acquire junk and 
salvage automobiles for resale are included within the scope of the 
definitions of junk and salvage yards. A salvage pool is an entity that 
acquires junk and salvage automobiles from a variety of parties and 
consolidates them for resale at a common point of sale. The pooling of 
junk and salvage automobiles attracts a large number of buyers. It is 
the Department of Justice's belief that some of these buyers purchase 
junk and salvage automobiles at salvage pools in order to acquire VINs 
that can be used on stolen motor vehicles or to create cloned motor 
vehicles for other illicit purposes.
    Pursuant to 49 U.S.C. 30504(a)(2), junk yards and salvage yards 
will not be required to submit reports to NMVTIS if they already report 
the required information to the state in which they are located and 
that state makes that information available to the operator; or if they 
are issued a verification stating that the automobile or parts from the 
automobile are not reported as stolen.

4. Lenders and Automobile Dealers

    The Anti-Car Theft Act requires the operator to make NMVTIS 
information available to prospective purchasers, including auction 
companies and entities engaged in the business of purchasing used 
automobiles. The Department believes that the scope of prospective 
purchasers also includes lenders who are financing the purchase of 
automobiles and automobile dealers. Lenders and dealers are integral 
components of the automobile purchasing and titling process. The 
Department also proposes to allow the operator to permit public and 
private entities involved in the purchasing and titling of automobiles 
to access NMVTIS if such access will assist in efforts to prevent the 
introduction or reintroduction of stolen motor vehicles and parts into 
interstate commerce. Allowing such entities to query NMVTIS information 
not only will provide a means of identifying stolen motor vehicles, but 
also will help to prevent fraud and improve public safety.

5. Responsibilities of the Operator of NMVTIS

    In accordance with 49 U.S.C. 30502, NMVTIS must provide a means of 
determining whether a title is valid, where the automobile previously 
was titled, the automobile's reported mileage, if the automobile is 
titled as a junk or salvage automobile in another state, and whether 
the automobile has

[[Page 54547]]

been reported as a junk or salvage automobile under 49 U.S.C. 30504. 
Further, the operator of NMVTIS must make relevant information 
available to states, law enforcement officials, prospective purchasers, 
and prospective and current insurers. This rule clarifies that the 
operator of NMVTIS will be responsible for collecting the required 
information and providing the necessary access.
    In particular, the operator of NMVTIS will be responsible for 
ensuring that law enforcement agencies have access to titling 
information through NMVTIS. NMVTIS is a powerful tool to combat 
automobile theft. Before NMVTIS, a thief could steal a car, take it 
over the state line, and then get a valid title by presenting 
fraudulent ownership documentation to the new state. Thieves often 
would switch the VIN plate of a stolen motor vehicle with one from a 
junked car in order to get a valid title for the stolen car. These 
activities were possible because the states had no instant, reliable 
way of validating the information on the ownership documentation prior 
to issuing the new title. NMVTIS will provide law enforcement agencies 
with access to make inquiries to further their investigations of motor 
vehicle theft and fraud. This access will allow law enforcement 
agencies to better identify stolen motor vehicles and enhance their 
ability to identify vehicle theft rings. NMVTIS will reduce the ability 
of organized criminal organizations to obtain fraudulent vehicle 
registrations by linking state and international authorities with real-
time verification of information. This system also will provide an 
additional tool to identify and investigate international organized 
criminal and terrorist activity. NMVTIS will assist investigations of 
vehicles involved in violent crimes, smuggling (narcotics, weapons, 
undocumented aliens, and currency) and fraud.
    The operator of NMVTIS also will be responsible for ensuring that a 
means exists for allowing insurers and purchasers to access information 
prior to purchasing a motor vehicle, including information regarding 
brands and odometer readings. As noted above, motor vehicles that incur 
significant damage are considered ``junk'' or ``salvage.'' Fraud occurs 
when junk or salvage motor vehicles are presented for sale to 
purchasers without disclosure of their real condition. Not only are 
unsuspecting purchasers paying more than the motor vehicle is worth, 
they do not know if the damaged vehicles have been adequately repaired 
and are safe to drive. For example, during Hurricane Katrina, thousands 
of motor vehicles were completely flooded and many remained under water 
for weeks before flood waters subsided. Many of these flooded motor 
vehicles were taken to other states where they were cleaned and sold as 
purportedly undamaged used cars, despite the damage caused by the flood 
which jeopardizes the motor vehicles' electrical and safety systems. 
This fraud has serious consequences for not only commerce and law 
enforcement, but highway and citizen safety.
    The Department anticipates that the operator will implement a Web-
based method of permitting prospective purchasers to access NMVTIS 
information. The Department welcomes comments on whether access should 
be provided solely by the operator or the Department of Justice, or if 
Web-based access should be permitted through other public or private 
entities, including consumer groups and for-profit organizations. The 
cost for Web-based prospective purchaser inquiries likely will be 
nominal and may be combined with fees that may be charged by other 
public or private entities should that option be exercised.

6. User Fees

    Pursuant to 49 U.S.C. 30502(c), NMVTIS is to be ``paid for by user 
fees and should be self-sufficient and not be dependent on amounts from 
the United States Government. The amount of fees the operator collects 
and keeps * * * subject to annual appropriations laws, excluding fees 
the operator collects and pays to an entity providing information to 
the operator, may be not more than the costs of operating the System.'' 
Rather than charge states user fees based on the number of transactions 
they place with NMVTIS, the operator of NMVTIS currently employs a 10-
tiered fee structure. The fee a particular state is charged depends on 
which tier that state is placed based on the number of titled motor 
vehicles in that state. As a result of the great disparity between the 
states in their total number of titled motor vehicles, the per vehicle 
fee currently charged by the operator of NMVTIS ranges from less than 1 
cent per vehicle in the states with the most titled motor vehicles to 
nearly 7 cents per vehicle in the state with the lowest number of 
titled motor vehicles. This fee structure was developed by AAMVA and 
approved by their Board of Directors. As noted above, AAMVA is a 
nonprofit, tax exempt, educational association representing U.S. and 
Canadian officials who are responsible for the administration and 
enforcement of motor vehicle laws.
    This rule proposes to continue to allow the operator of NMVTIS to 
charge user fees to the states based on the total number of motor 
vehicles titled in the state, but without employing tiers. Such a pro 
rata fee structure would simplify billing for both the states and the 
operator of NMVTIS. In addition, a state would not be subject to a 
significant change in user fees if it moves from one tier to another. 
Moreover, by eliminating tiers, a state at the low end of a tier with 
fewer titled motor vehicles would no longer have to pay the same fee as 
a state at the high end of a tier with more titled motor vehicles.
    The Department of Justice also proposes to continue the practice of 
basing the state fees on the number of motor vehicles, as opposed to 
the number of automobiles, titled in a state. Participating states 
currently are providing information on motor vehicles other than 
automobiles and the total fees paid by a given state would likely be 
comparable even if the fees were based on the total number of titled 
automobiles.
    In addition, the Department of Justice proposes to allow the 
operator to charge the user fee to all states, even if a state is not a 
current participant in NMVTIS. In accordance with 49 U.S.C. 30503(a) 
and (b), each state is required to make titling information available 
to NMVTIS and conduct title verification checks before issuing a title. 
Because all states are required to participate in NMVTIS, this rule 
proposes to allow the operator to charge the user fee to all states, 
regardless of their current level of participation.
    Under this proposed rule and consistent with the Anti-Car Theft 
Act, users, such as purchasers, insurers, consumers, and other non-
governmental entities, may be charged a transaction fee for inquiries 
they make to NMVTIS. The operator would not be permitted to charge fees 
for transactions performed by fully participating states or inquiries 
made by law enforcement agencies under this proposed rule.
    The expenses to be recouped by the operator of NMVTIS through its 
fees will consist of labor costs, data center operations costs, the 
cost of providing access to authorized users, annual functional 
enhancement costs (including labor and hardware), and the cost of 
technical upgrades. AAMVA currently estimates that the annual cost of 
operating NMVTIS is approximately $5,650,000. According to DOT's 2005 
Highway Statistics, 241,193,974 vehicles were titled in the United 
States in 2005. Therefore, the cost to fund NMVTIS will be less than 3 
cents per motor vehicle title. The operator of

[[Page 54548]]

NMVTIS will inform the states of the applicable fees either through 
publication in the Federal Register or by direct notice to the states. 
AAMVA currently has contracts with the states by which fees to fund 
NMVTIS are imposed or adjusted.
    The operator will be required to recalculate its fees on at least 
an annual basis. Any fees charged to the states would be offset by 
transaction fees charged to non-governmental entities. In addition, the 
total fees charged to the states would be reduced by future funds 
awarded by the U.S. Government to the operator to assist in 
implementing the system. Any fee structure imposed by the operator must 
be approved by the Department of Justice.
    As alternatives to a non-tiered fee structure based on the total 
number of motor vehicles titled in a state, the Department welcomes 
comments on: (i) Whether the state fee should be limited solely to 
participating states; (ii) whether the state fee should be based on the 
total number of titled motor vehicles, the total number of titled 
automobiles, or some other subset of motor vehicles; (iii) whether the 
fee structure should be tiered or non-tiered; and (iv) whether all or a 
portion of the state fee should be based on the number of transactions 
conducted by a particular state.
    Although a transaction-based fee structure would be a more 
traditional basis for a user fee, such a fee structure would require 
the operator of NMVTIS to revise its billing process and would likely 
be more costly to implement. AAMVA estimates that it currently 
processes approximately 46,213,983 transactions per year. Therefore, 
the cost to fund NMVTIS would be approximately 13 cents per transaction 
under a transaction-based fee structure.
    Since Fiscal Year 1997, the Department of Justice, through BJA, has 
provided over $12 million to AAMVA for NMVTIS implementation. In Fiscal 
Year 2007, BJA invited states to apply for funding to support initial 
NMVTIS implementation. This competitive funding solicitation closed on 
July 19, 2007, with 5 states applying. BJA also invited AAMVA, the 
system operator, to apply for direct funding from BJA in Fiscal Year 
2007, to supplement state participation fees received by AAMVA, as 
authorized under the Anti-Car Theft Act, and encouraged states to apply 
through its other funding programs to enhance NMVTIS participation. As 
a result of these solicitations, funding was awarded to AAMVA to assist 
with NMVTIS implementation, and funds were awarded to the states of 
Delaware, New Mexico, South Carolina, Vermont, and Wisconsin to begin 
initial implementation or to enhance their participation. As noted 
above, funds awarded to the operator of NMVTIS will reduce the amount 
of user fees that must be imposed to implement NMVTIS.

Regulatory Flexibility Act

    The Attorney General, in accordance with the Regulatory Flexibility 
Act (5 U.S.C. 605(b)), has reviewed this regulation and by approving it 
certifies that this regulation will not have a significant economic 
impact on a substantial number of small entities.
    Although the reporting requirements imposed by the Anti-Car Theft 
Act will apply to all small insurance companies and small junk and 
salvage yard operators that handle junk or salvage automobiles, the 
Department believes that the incremental cost for these entities to 
collect VINs and the other required information will be minimal and 
that the rule will not have a significant economical impact on them. 
Many insurance companies and junk and salvage yards already capture 
VINs as a means of positively identifying automobiles and tracking 
inventory. The additional cost to insurance companies, junk yard 
operators, and salvage yard operators to report the collected 
information electronically to NMVTIS is not expected to exceed 1 cent 
per motor vehicle for most entities after the first year. In the first 
year only, start up investments increase this per vehicle cost to 
approximately 4 cents per vehicle. For the estimated small number of 
non-automated reporting entities, a manual reporting process may be 
required, in which case the additional cost is estimated at 96 cents 
per vehicle annually. In the first year only, the cost for these 
entities is estimated at $1.86 per vehicle due to initial investment or 
start up needs. Indeed, these costs may be significantly lower or 
possibly even eliminated altogether if insurance, salvage and junk data 
is provided through a state or third party that may already have access 
to the data and may be in a position to establish a data sharing 
arrangement with NMVTIS in order to reduce the reporting burden on 
these entities.
    Moreover, insurance companies will not be required to provide data 
on automobiles older than the four previous model years. In addition, 
junk and salvage yards will not be required to report if they already 
report the information to the state and the state makes that 
information available to the operator; or if they are issued a 
verification under 49 U.S.C. 33110 stating that the automobile or parts 
from the automobile are not reported as stolen.
    The Department has attempted to minimize the impact of the rule on 
small businesses by allowing them to use third parties to report the 
statutorily required information to NMVTIS. In addition, the monthly 
reporting requirements of this rule only apply to automobiles obtained 
by the business within the prior month.
    The Department seeks comments on the assumptions used in this 
analysis and is interested in any data that commenters can provide on 
the time and cost to collect the required information and to submit the 
information to the operator of NMVTIS.

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.
    Public comments are encouraged and will be accepted until November 
21, 2008. We request 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: James Landon, 935 Pennsylvania 
Ave., NW., Washington, DC 20535.

[[Page 54549]]

Overview of This Information Collection

    (1) Type of information collection: New collection.
    (2) Title of the form/collection: NMVTIS.
    (3) Agency form number, if any, and the applicable component of the 
Department of Justice sponsoring the collection: No form. 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 (states, motor vehicle 
insurers, junk yards, and salvage yards.
    Brief Abstract: The Department of Justice is implementing the 
NMVTIS, 49 U.S.C. 30501, et seq., by issuing regulations to establish a 
national system for verifying the titles of motor vehicles marked with 
a VIN. Under specific conditions detailed in the regulations, the 
following entities or persons must provide information: a state, 
insurance carrier, or a person or entity operating a junk yard or 
salvage yard.
    (5) An estimate of the total number of respondents and the amount 
of time estimated for an average respondent to respond: Fifty states 
and the District of Columbia, 3,000 insurance companies and 10,000 junk 
and salvage yard operators. The states and insurance companies already 
are capturing most of the data needed to be reported, and the reporting 
will be electronic, so the time to respond will be minimal. For junk 
and salvage yard operators it is estimated that it will take 
respondents an average of 30 minutes per month to respond.
    (6) An estimate of the annual total public burden (in hours) 
associated with the collection: 60,000 total burden hours.
    If additional information is required contact: Lynn Bryant, 
Department Clearance Officer, United States Department of Justice, 
Justice Management Division, Policy and Planning Staff, Patrick Henry 
Building, Suite 1600, 601 D Street, NW., Washington, DC 20530.

Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by state, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

Small Business Regulatory Enforcement Fairness Act of 1996

    This 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. This rule will not result in 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.

Executive Order 12866

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

Regulatory Impact Assessment

    In 1999, the then General Accounting Office (GAO) conducted a 
review of NMVTIS. The GAO report found that a life-cycle cost and 
benefits analysis should be performed to determine if further federal 
funding of NMVTIS was warranted. Accordingly, at the request of the 
Department of Justice, the Logistics Management Institute (LMI) 
conducted such an analysis. The 2001 LMI report found that NMVTIS would 
achieve significant net benefits if it is fully implemented in all 50 
states and the District of Columbia. In addition, the 2006 IJIS 
Institute report found that: ``* * * the NMVTIS program provides an 
invaluable benefit to state vehicle administrators and the public 
community as a whole. Advantages of the program include improving the 
state titling process, as well as providing key information to 
consumers and law enforcement agencies.'' Based on these reviews of 
NMVTIS and the Department's experience with automobile theft and fraud, 
the Department believes that the full implementation of NMVTIS should 
reduce the market for stolen motor vehicles, enhance public safety, and 
reduce fraud. This rule will serve to enhance the efficacy of NMVTIS by 
implementing the statutory reporting requirements imposed on junk and 
salvage yards and insurance carriers and clarifying the obligations of 
the states and the operator of NMVTIS.
    The operator of the NMVTIS is entitled to receive revenues from 
user fees to support the system. Currently, these fees generate 
approximately $1.5 million annually. AAMVA, however, estimates the 
annual operating cost of the system to be approximately $3,500,000 to 
$5,650,000--depending on necessary system upgrades that may be required 
and user volume. Therefore, the current AMMVA fee structure underfunds 
NMVTIS by $2,000,000 to $4,150,000 according to their estimates. 
According to the Department of Transportation's 2005 Highway 
Statistics, 241,193,974 vehicles were titled in the United States in 
2005. Therefore, the total cost to the operator to fund NMVTIS ranges 
from 1 cent to 2.3 cents per motor vehicle title titled in the U.S.
    Consequently, the average fees charged to the states by the 
operator under this proposed rule should be less than 3 cents per 
vehicle. In most cases, states that choose to integrate the NMVTIS 
processes of data provision and inquiry into their titling process 
generally incur one-time upgrade costs to establish these connections. 
In nearly every case, once a connection to the system is established, 
data transmission for uploads and inquiries is automated and occurs 
without recurring costs. With these one-time costs and state fees 
considered, the costs to states are estimated at 6 cents per vehicle. 
This scenario includes making the data available to NMVTIS via real 
time updates and making inquiries into the system prior to issuing new 
titles. While the frequency of reporting does not impact costs under 
this scenario, states can lower their upgrade costs by choosing to 
integrate the NMVTIS reporting and inquiry requirements into their 
business rules but not into their electronic titling processes. In 
these cases, states would see lower costs by establishing a regular 
reporting/data upload process but not re-engineering their own title 
information systems for real time updates. Under this scenario, instead 
of a state's title information system automatically making the NMVTIS 
inquiry, the title clerk would switch to an internet enabled PC to 
perform a Web search of NMVTIS via a secure virtual private network 
(VPN). Because this type of search is internet-based versus state title 
information system-based, no changes to the state's title information 
system is required and therefore there is no cost for this aspect of 
compliance. For the reporting aspect however (i.e., programming an 
automated batch upload process via file transfer protocol (FTP)), it is 
anticipated that states would incur reporting costs of less than 1 cent 
per vehicle.

[[Page 54550]]

Assuming the reporting costs for states are 0.005 cents per vehicle and 
that 241,193,974 vehicles are titled in the United States, the 
Department estimates that the reporting costs for states is 
approximately $1,205,970.
    The incremental cost to insurance companies and junk and salvage 
yard operators that handle junk or salvage automobiles also is expected 
to be low. Many insurance companies and junk and salvage yards already 
capture VINs as a means of positively identifying automobiles and 
tracking inventory. Additionally, for both the insurance sector and the 
junk/salvage industry, many companies are already reporting much of the 
required data to independent third parties who have indicated a 
willingness to pass this data on to DOJ for NMVTIS use.
    According to the National Insurance Crime Bureau (NICB), it is 
estimated that there are approximately 321 insurance groups 
representing approximately 3,000 insurers that report an estimated 2.4 
million salvage and total loss records annually (based on the most 
recent three-year average). Furthermore, based on 2007 insurance data, 
over 60% of these motor vehicles will originate from the ten largest 
insurance groups. These 3,000 insurers would then be responsible for 
reporting this total loss information to NMVTIS if not already reported 
to a state or to a third party that agrees to provide the data to 
NMVTIS. In those cases where the data is already reported to a state or 
to a cooperating third party, there is no additional cost to insurance 
carriers. In cases where this data is not currently reported to a 
cooperating third party or state, the carrier would be required to 
report the data to NMVTIS. With the assumption that the data is already 
collected and in a format that is exportable, and assuming that NMVTIS 
would establish a reporting mechanism involving a simple FTP-based 
solution, the cost to insurance carriers is similar to the state 
reporting costs of less than 1 cent per vehicle. The FBI previously has 
estimated that approximately 10.5 million junk and salvage vehicles are 
handled each year. Assuming that it costs insurance carriers 
approximately 0.005 cents per vehicle to report and that the insurance 
carriers are required to report on all 10.5 million junk and salvage 
vehicles, then the reporting costs to insurance carriers will be 
approximately $52,500 annually.
    Similarly, junk and salvage yard operators that already are 
reporting to cooperating third parties would not be required to report 
separately. Thus, NMVTIS would impose no additional burden. For those 
entities not voluntarily reporting to a cooperating third party, a 
separate reporting mechanism would be established. Depending on the 
type of mechanism established (e.g., FTP-based solution, form-fax 
solution, etc.), the costs will vary. It is assumed that all junk and 
salvage yard operators already collect much of the information required 
under the rule and therefore it is only the transmission of this data 
to NMVTIS that will result in costs. The table below summarizes these 
cost estimates.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                      Total first year
                                                             Initial                              Annual    Total annual  average     costs (includes
             Yard size                 Reporting method     investment   Annual ongoing labor    vehicle       labor costs per       initial investment
                                                              costs             costs            volume*           vehicle            costs and annual
                                                                                                                                        labor costs)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small (non-automated).............  Fax..................           90  12 hours per year/           1-200  96 cents.............  $1.86.
                                                                         $96.00.
Small (automated).................  FTP..................            0  24 minutes per year/         1-200  3 cents..............  3 cents.
                                                                         $3.12.
Medium............................  FTP..................            0  24 minutes per year/       201-500  <1 cent..............  <1 cent.
                                                                         $3.12.
Large.............................  FTP..................          250  24 minutes per year/     501-7,800  <1 cent..............  6 cents.
                                                                         $3.12.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(* Note: Per vehicle costs based on an average annual vehicle volumes.)

    While it is difficult to estimate how many junk/salvage yards are 
not automated, the National Salvage Vehicle Reporting Program (NSVRP) 
and other industry representatives estimate that nearly all have some 
form of data collection even if they do not have automation in place. 
The NSVRP has discussed with many of the inventory management vendors 
the assistance that can be made available to establish reliable 
reporting protocols through its voluntary and independent efforts 
within the industry. If such assistance is available from these 
vendors, nearly all junk/salvage yards will have some form of 
automation and be capable of exporting and sending monthly reports 
electronically.
    In cases in which small junk and salvage yards have no form of 
automation or computerized files, the Departments assumed that a fax 
process would be needed. This paper-based process would likely incur 
additional labor costs that would bring the estimated per vehicle costs 
for this small number of businesses to approximately 0.96 cents per 
vehicle (annual labor costs). However, according to industry 
representatives, the number of junk/salvage yards of this size are 
relatively few (estimated at 20 percent of licensed junk and salvage 
yards) and the number of these few businesses without any automation is 
even lower (expected to be less than 1,700 licensed businesses in the 
U.S.). These businesses would not incur these costs if already 
reporting this data to a state or another cooperating third party.
    Assuming that small junk and salvage yards handle approximately 
170,000 vehicles annually (at $0.96 per vehicle annual labor costs) and 
that the remaining junk and salvage yards handle 10,330,000 vehicles 
annually (at an average labor cost of 1 cent per vehicle), then the 
Department estimates that their annual reporting costs will be 
approximately $266,500.
    The Department anticipates that the cost for Web-based prospective 
purchaser inquiries will be nominal. Similarly, the cost to law 
enforcement to access NMVTIS also is expected to be minimal assuming 
law enforcement is not charged any direct transaction costs. Law 
enforcement will access NMVTIS through their existing infrastructure. 
The only cost will be to the operator of the system based on the number 
of inquiries received from law enforcement. The expected cost to the 
operator is less than 12 cents per inquiry.
    The Department of Justice also considered possible alternatives to 
those proposed in the rule. Indeed, pursuant to 49 U.S.C. 30504(c), the 
Attorney General was required to establish ``procedures and practices 
to facilitate reporting in the least burdensome and costly fashion'' on 
insurance carriers

[[Page 54551]]

and junk and salvage yards. Because of the statutory requirements 
imposed by the Anti-Car Theft Act, however, the Department of Justice 
did not have many options regarding the information that must be 
provided and the scope of the entities that must report the required 
information. In particular, the information required to be reported by 
the proposed rule is mandated by the Anti-Car Theft Act. The Department 
also considered various alternatives for funding NMVTIS, such as a 
tiered-based fee structure and a transaction-based fee structure. The 
Department believes that the proposed non-tiered fee structure based on 
the total number of motor vehicles titled in a state is preferable to 
these alternatives because it complies with the Anti-Car Theft Act and 
minimizes any burden imposed on reporting entities.
    With regard to all sector reporting requirements, in most cases 
reducing the reporting timelines from monthly to semi-annually or less 
will not significantly reduce costs due to the benefits of automated 
processes. Additionally, the costs that this reduced reporting would 
incur by enabling theft and fraud to continue far outweighs the 
benefits. Consumers, states, law enforcement, and others need to know 
as soon as possible when a vehicle is reported as totaled or salvage to 
prevent the vehicle from being turned over to another state or consumer 
with a clean title. Moreover, a monthly reporting cycle is expressly 
required by statute.
    The Department welcomes input from the public regarding the costs 
and benefits of the proposed provisions in this rule.

Executive Order 13132

    In accordance with section 6 of Executive Order 13132, the 
Department of Justice has determined that this rule does not have 
sufficient federalism implications to warrant a federalism summary 
impact statement. The rule does not impose substantial direct 
compliance costs on State and local governments and does not preempt 
State law. In formulating this rule, the Department has worked closely 
with AAMVA regarding the implementation of NMVTIS.

Executive Order 12988

    This rule meets the applicable standards set forth in sections 3(a) 
and 3(b)(2) of Executive Order 12988, Civil Justice Reform.

List of Subjects in 28 CFR Part 25

    Crime, Law enforcement, Motor vehicles safety, Motor vehicles, 
Reporting and recordkeeping requirements, Transportation.

    Accordingly, by virtue of the authority vested in me as Attorney 
General, including 5 U.S.C. 301 and 28 U.S.C. 509 and 510 and, for the 
reasons set forth in the preamble, part 25 of chapter I of Title 28 of 
the Code of Regulations is proposed to be amended as follows:

PART 25--DEPARTMENT OF JUSTICE INFORMATION SYSTEMS

    1. The Authority citation for part 25 is revised to read as 
follows:

    Authority: Pub. L. 103-159, 107 Stat. 1536, 49 U.S.C. 30501-
30505; Pub. L. 101-410, 104 Stat. 890, as amended by Pub. L. 104-
134, 110 Stat. 1321.

    2. Part 25 is amended by adding subpart B to read as follows:
Subpart B--National Motor Vehicle Title Information System (NMVTIS)
Sec.
25.51 Purpose and authority.
25.52 Definitions.
25.53 Responsibilities of the Operator of NMVTIS.
25.54 Responsibilities of the States.
25.55 Responsibilities of Insurance Carriers.
25.56 Responsibilities of Junk yards and Salvage yards.

Subpart B--National Motor Vehicle Title Information System (NMVTIS)


Sec.  25.51  Purpose and authority.

    The purpose of this subpart is to establish policies and procedures 
implementing the National Motor Vehicle Title Information System 
(NMVTIS) in accordance with Title 49 U.S.C. 30502.


Sec.  25.52  Definitions.

    For purposes of this subpart B:
    Automobile has the same meaning given that term in 49 U.S.C. 
32901(a).
    Certificate of title means a document issued by a state showing 
ownership of an automobile.
    Insurance carrier means an individual or entity engaged in the 
business of underwriting automobile insurance.
    Junk automobile means an automobile that--
    (1) Is incapable of operating on public streets, roads, and 
highways; and
    (2) Has no value except as a source of parts or scrap.
    Junk yard means an individual or entity engaged in the business of 
acquiring or owning junk automobiles for--
    (1) Resale in their entirety or as spare parts; or
    (2) Rebuilding, restoration, or crushing.
    Motor Vehicle has the same meaning given that term in 49 U.S.C. 
3102(6).
    NMVTIS means the National Motor Vehicle Title Information System.
    Operator means the individual or entity authorized or designated as 
the operator of NMVTIS under 49 U.S.C. 30502(b), or the office 
designated by the Attorney General, if there is no authorized or 
designated individual or entity.
    Purchaser means the individual or entity buying an automobile or 
financing the purchase of an automobile. For purposes of this subpart, 
purchasers include auction companies or entities engaged in the 
business of purchasing used automobiles, lenders financing the purchase 
of new or used automobiles, and automobile dealers.
    Salvage automobile means an automobile that is damaged by 
collision, fire, flood, accident, trespass, or other event, to the 
extent that its fair salvage value plus the cost of repairing the 
automobile for legal operation on public streets, roads, and highways 
would be more than the fair market value of the automobile immediately 
before the event that caused the damage. Salvage automobiles include 
automobiles determined to be a total loss under the law of the 
applicable jurisdiction or designated as a total loss by an insurer 
under the terms of its policies.
    Salvage yard means an individual or entity engaged in the business 
of acquiring or owning salvage automobiles for--
    (1) Resale in their entirety or as spare parts; or
    (2) Rebuilding, restoration, or crushing.
    State means a state of the United States or the District of 
Columbia.
    Total loss means that the cost of repair plus projected supplements 
plus projected diminished resale value plus rental reimbursement 
expense exceeds the cost of buying the damaged automobile at its pre-
accident value, minus the proceeds of selling the damaged automobile 
for salvage.
    VIN means the vehicle identification number;


Sec.  25.53  Responsibilities of the Operator of NMVTIS.

    (a) The operator shall make available:
    (1) To a participating state on request of that state, information 
in NMVTIS about any automobile;
    (2) To a Government, state, or local law enforcement official on 
request of that official, information in NMVTIS about a particular 
automobile, junk yard, or salvage yard;
    (3) To a prospective purchaser of an automobile on request of that 
purchaser,

[[Page 54552]]

information in NMVTIS about that automobile; and
    (4) To a prospective or current insurer of an automobile on request 
of that insurer, information in NMVTIS about the automobile.
    (b) NMVTIS shall permit a user of the system to establish instantly 
and reliably:
    (1) The validity and status of a document purporting to be a 
certificate of title;
    (2) Whether an automobile bearing a known VIN is titled in a 
particular state;
    (3) Whether an automobile known to be titled in a particular state 
is or has been a junk automobile or a salvage automobile;
    (4) For an automobile known to be titled in a particular state, the 
odometer mileage disclosure required under 49 U.S.C. 32705 for that 
automobile on the date the certificate of title for that automobile was 
issued and any later mileage information, if noted by the state; and
    (5) Whether an automobile bearing a known VIN has been reported as 
a junk automobile or a salvage automobile under 49 U.S.C. 30504.
    (c) The operator is authorized to seek and accept additional 
information from state and public and private entities which is 
relevant to the titling of automobiles and to assist in efforts to 
prevent the introduction or reintroduction of stolen motor vehicles and 
parts into interstate commerce. The operator, however, may not collect 
any social security account numbers as part of any of the information 
provided by any state or public or private entity. The operator also 
may allow public and private entities that provide information to 
NMVTIS to query the system if such access will assist in efforts to 
prevent the introduction or reintroduction of stolen motor vehicles and 
parts into interstate commerce.
    (d) The means by which access is provided by the operator to users 
of NMVTIS must be approved by the Department of Justice.
    (e) The operator may establish and collect user fees from the 
states and users of NMVTIS to pay for its operation, but the operator 
may not collect fees in excess of the costs of the operating the 
system. The expenses to be recouped by the operator of NMVTIS will 
consist of labor costs, data center operations costs, the cost of 
providing access to authorized users, annual functional enhancement 
costs (including labor and hardware), and the cost of technical 
upgrades. User fees collected from states should be based on the 
states' pro rata share of the total number of titled motor vehicles. 
All states, regardless of their level of participation, may be charged 
this user fee. Transaction fees, other than fees based on the number of 
motor vehicles titled by a state, may not be collected from a fully 
participating state, but transaction fees may be collected from other 
users of NMVTIS. No fees should be charged for inquiries from law 
enforcement agencies. The operator will be required to recalculate the 
user fees on at least an annual basis. Any user fee structure 
established by the operator must be established with the approval of 
the Department of Justice. The operator of NMVTIS will inform the 
states of the applicable user fees either through publication in the 
Federal Register or by direct notice to the states.
    (f) The operator will establish procedures and practices to 
facilitate reporting to NMVTIS in the least burdensome and costly 
fashion. If the operator is not the Department of Justice, the operator 
must provide an annual report to the Department of Justice detailing 
the fees it collected and how it expended such fees and other funds 
appropriated to operate NMVTIS.


Sec.  25.54  Responsibilities of the States.

    (a) By no later than June 1, 2009, each state shall provide, or 
cause to be provided by an agent or third party, to the designated 
operator and in a format acceptable to the operator, titling 
information for all automobiles maintained by the state. The titling 
information provided to NMVTIS must include the following:
    (1) VIN;
    (2) Any description of the automobile included on the certificate 
of title;
    (3) The name of the individual or entity to whom the certificate 
was issued; and
    (4) Information from junk or salvage yard operators or insurance 
carriers regarding the acquisition of junk automobiles or salvage 
automobiles, if this information is being collected by the state.
    (5) For an automobile known to be titled in a particular state, the 
odometer mileage disclosure required under 49 U.S.C. 32705 for that 
automobile on the date the certificate of title for that automobile was 
issued and any later mileage information, if noted by the state.
    (b) With the approval of the operator and the state, the titling 
information provided to NMVTIS may include any other information 
included on the certificates of title and any other information the 
state maintains in relation to these titles.
    (c) Each state shall perform an instant title verification check 
through NMVTIS before issuing a certificate of title to an individual 
or entity claiming to have purchased an automobile from an individual 
or entity in another state. The check will consist of--
    (1) Communicating to the operator--
    (i) The VIN of the automobile for which the certificate of title is 
sought;
    (ii) The name of the state that issued the most recent certificate 
of title for the automobile; and
    (iii) The name of the individual or entity to whom the certificate 
of title was issued; and
    (2) Giving the operator an opportunity to communicate to the 
participating state the results of a search of the information.


Sec.  25.55  Responsibilities of Insurance Carriers.

    (a) By no later than June 1, 2009, and on a monthly basis as 
designated by the operator, any individual or entity acting as an 
insurance carrier conducting business within the United States shall 
provide, or cause to be provided on its behalf, to the operator and in 
a format acceptable to the operator, a report that contains an 
inventory of all automobiles of the current model year or any of the 
four prior model years that the carrier, during the past month, has 
obtained possession of and has decided are junk automobiles or salvage 
automobiles. An insurance carrier shall report on any automobiles that 
it has determined to be a total loss under the law of the applicable 
jurisdiction or designated as a total loss by the insurance company 
under the terms of its policies.
    (b) The inventory must contain the following information:
    (1) VIN;
    (2) The date on which the automobile was obtained or designated as 
a junk or salvage automobile;
    (3) The name of the individual or entity from whom the automobile 
was obtained or who possessed it when the automobile was designated as 
a junk or salvage automobile; and
    (4) The name of the owner of the automobile at the time of the 
filing of the report.
    (c) Insurance carriers are strongly encouraged to provide the 
operator with information on other motor vehicles or other information 
relevant to a motor vehicle's title, including the reason why the 
insurance carrier obtained possession of the motor vehicle. For 
example, the insurance carrier may have obtained possession of a motor 
vehicle because it had been subject to flood, water, collision, or fire 
damage, or as a result of theft and recovery. The provision of 
information provided by an insurance carrier under this paragraph

[[Page 54553]]

must be pursuant to a means approved by the operator.


Sec.  25.56  Responsibilities of Junk yards and Salvage yards.

    (a) By no later than June 1, 2009, and continuing on a monthly 
basis as designated by the operator, any individual or entity engaged 
in the business of operating a junk yard or salvage yard within the 
United States shall provide, or cause to be provided on its behalf, to 
the operator and in a format acceptable to the operator, an inventory 
of all junk automobiles or salvage automobiles obtained by that entity 
in the prior month.
    (b) The inventory shall include the following information:
    (1) VIN;
    (2) The date the automobile was obtained;
    (3) The name of the individual or entity from whom the automobile 
was obtained;
    (4) A statement of whether the automobile was crushed or disposed 
of, for sale or other purposes.
    (c) Junk and Salvage yards, however, are not required to report 
this information if they already report the information to the state 
and the state makes that information available to the operator; if they 
are issued a verification under 49 U.S.C. 33110 stating that the 
automobile or parts from the automobile are not reported as stolen.
    (d) Junk and Salvage yards are encouraged to provide the operator 
with similar information on motor vehicles other than automobiles that 
they obtain that possess VINs.

    Dated: September 16, 2008.
Michael B. Mukasey,
Attorney General.
[FR Doc. E8-22070 Filed 9-19-08; 8:45 am]
BILLING CODE 4410-02-P